Syntec Construction Public Company Limited and its Subsidiaries

Transcription

1 Syntec Construction Public Company Limited and its Subsidiaries Interim for the three-month and nine-month periods ended 30 September 2017 and Independent auditor s report on review of interim financial information

2 Independent Auditor s Report on Review of Interim Financial Information To the Board of Directors of Syntec Construction Public Company Limited I have reviewed the accompanying consolidated and separate statements of financial position of Syntec Construction Public Company Limited and its subsidiaries, and of Syntec Construction Public Company Limited, respectively, as at 30 September 2017, the consolidated and separate statements of comprehensive income for the three-month and nine-month periods ended 30 September 2017, the consolidated and separate statement of changes in equity and cash flows for the nine-month period ended 30 September 2017, and condensed notes ( interim financial information ). Management is responsible for the preparation and presentation of this interim financial information in accordance with Thai Accounting Standard 34, Interim Financial Reporting. My responsibility is to express a conclusion on this interim financial information based on my review. Scope of Review I conducted my review in accordance with the Thai Standard on Review Engagements 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Thai Standards on Auditing and consequently does not enable me to obtain assurance that I would become aware of all significant matters that might be identified in an audit. Accordingly, I do not express an audit opinion. Conclusion Based on my review, nothing has come to my attention that causes me to believe that the accompanying interim financial information is not prepared, in all material respects, in accordance with Thai Accounting Standard 34, Interim Financial Reporting. Other matters The consolidated and separate statements of financial position of Syntec Construction Public Company Limited and its subsidiaries, and of Syntec Construction Public Company Limited, respectively, as at 31 December 2016, which are included as a comparative information, were audited by another auditor in the same office who expressed an unqualified opinion on those in his report dated 28 February The consolidated and separate statements of comprehensive income for the three-month and nine-month periods ended 30 September 2016, and the consolidated and separate statement of changes in equity and cash flows for the nine-month period ended 30 September 2016, which

3 are included as a comparative information, were reviewed by another auditor in the same office, whose report dated 14 November 2016 stated that nothing has come to his attention that causes him to believe that those interim financial information was not prepared, in all material respects, in accordance with Thai Accounting Standard 34, Interim Financial Reporting. (Maliwan Phahuwattanakorn) Certified Public Accountant Registration Number 4701 NPS Siam Audit Limited Bangkok 10 November

4 Statement of financial position As at 30 September 2017 Assets Note 30 September 31 December 30 September 31 December (Unaudited) (Unaudited) Current assets Cash and cash equivalents 341, , , ,675 Current investments 6 1,362,290 1,249,057 1,336,503 1,208,713 Trade accounts receivables 5, 7 867, , , ,092 Other current receivables 5, 8 81,381 54,098 79,938 61,029 Current retention receivables under construction contracts 9 150, , , ,005 Unbilled construction in progress , , , ,440 Current portion of long-term loans 5, ,000 Inventories , , , ,448 Advance payments to subcontractors 184, , , ,827 Total current assets 3,861,832 3,707,016 3,751,705 3,669,229 Non-current assets Available-for-sale investments 5 605, , , ,268 Investments in associate Investment in subsidiaries ,010, ,000 Other long-term investments 5, 14 48,371 48,371 48,371 48,371 Non-current retention receivables under construction contracts 9 377, , , ,798 Long-term loans 5, ,000 40,000 Investment properties , , , ,523 Property, plant and equipment 17 3,987,561 4,019, , ,920 Leasehold right , , , ,133 Intangible assets 19 11,254 12,772 5,855 6,491 Withholding tax 40, ,534 34, ,165 Pledged deposit at bank 122, , , ,562 Other non-current assets 25,218 36,139 19,913 35,051 Total non-current assets 5,636,457 5,816,204 3,521,217 3,557,282 Total Assets 9,498,289 9,523,220 7,272,922 7,226,511 The accompanying notes are an integral part of these. 3

5 Statement of financial position As at 30 September 2017 Liabilities and equity Note 30 September 31 December 30 September 31 December (Unaudited) (Unaudited) Current liabilities Bank overdrafts , Trade accounts payables 5, , , , ,261 Other current payables 5, , , , ,926 Current portion of creditors under rehabilitation plan 25,513 26,580 25,513 26,580 Current portion of long-term loans , , Current portion of finance lease liabilities 9,642 29,839 9,642 29,839 Other short-term loans , ,000 Advances received from customers under construction contracts , , , ,590 Retention payables from subcontractors 5 317, , , ,191 Undue value added tax 102,809 71, ,809 71,300 Accrued income tax 11,659-11,659 - Other current provisions 27 28,059 25,748 28,059 25,748 Other current liabilities 24,920 29,320 8,180 8,816 Total current liabilities 2,327,701 2,920,381 2,133,586 2,732,251 Non-current liabilities Long-term loans 25 1,559,650 1,590, Deferred tax liabilities 20 21,649 20,279 21,649 20,279 Non-current provisions for employee benefits , , , ,570 Other non-current provisions 27 54,075 29,384 54,075 29,384 Deposit from customers 24,980 20, Total non-current liabilities 1,817,688 1,800, , ,233 Total liabilities 4,145,389 4,721,028 2,362,724 2,918,484 The accompanying notes are an integral part of these. 4

6 Statement of financial position As at 30 September 2017 Liabilities and equity Note 30 September 31 December 30 September 31 December (Unaudited) (Unaudited) Shareholders' equity Share capital 28 Authorized share capital 1,600,000 1,600,000 1,600,000 1,600,000 Issued and paid share capital 1,600,000 1,600,000 1,600,000 1,600,000 Share premium Share premium on ordinary shares Discount from changes in the ownership interests in subsidiary 2.6 (6,870) Retained earnings Appropriated Legal reserve 160, , , ,551 Unappropriated 31 2,744,100 2,218,651 2,843,469 2,281,836 Other components of shareholders' equity 5 306, , , ,616 Total equity attributable to owners of the parent 4,803,959 4,244,842 4,910,198 4,308,027 Non-controlling interests , , Total shareholders' equity 5,352,900 4,802,192 4,910,198 4,308,027 Total liabilities and shareholders' equity 9,498,289 9,523,220 7,272,922 7,226,511 The accompanying notes are an integral part of these. 5

7 Statements of comprehensive income (Unaudited) Three-month period Three-month period ended 30 September ended 30 September Note Revenues Contract revenues 2,293,447 1,956,413 2,293,446 1,956,413 Room service revenues 93, ,135 29,587 28,341 Interest income 695 1,451 1,218 2,387 Reversal of allowance for doubtful accounts 7, 9, 10-9,717-9,717 Other income 27,528 28,198 15,236 17,602 Total revenues 2,414,944 2,099,914 2,339,487 2,014,460 Expenses Contract costs 1,839,896 1,549,000 1,842,885 1,548,395 Room service costs 65,011 62,248 22,032 19,754 Distribution costs 7,616 9,580 4,080 4,123 Administrative expenses 151, , ,527 91,347 Other expenses 24, , Finance costs 16,382 19, ,778 Total expenses 2,104,590 1,757,923 2,011,118 1,665,988 Share of loss of associate 12 (11) (12) - - Profit before income tax expense 310, , , ,472 Income tax expense 20 66,313 67,744 66,313 67,745 Profit for the period 244, , , ,727 Other comprehensive income Components of other comprehensive income that will be reclassified to profit or loss Gains on remeasurement investments held as available-for-sale 5 48,862 3,759 48,862 3,759 Income tax relating to components of other comprehensive income that will be reclassified to profit or loss (9,773) (752) (9,773) (752) Total components of other comprehensive income that will be reclassified to profit or loss 39,089 3,007 39,089 3,007 Other comprehensive income for the period, net of tax 39,089 3,007 39,089 3,007 Total comprehensive income for the period 283, , , ,734 The accompanying notes are an integral part of these. 6

8 Statements of comprehensive income (Unaudited) Three-month period Three-month period ended 30 September ended 30 September Note Profit (loss) attributable to :- Owners of the parent 252, , , ,727 Non - controlling interests (8,564) (2,152) - - Profit for the period 244, , , ,727 Total comprehensive income (loss) attributable to :- Owners of the parent 291, , , ,734 Non - controlling interests (8,564) (2,152) - - Total comprehensive income for the period 283, , , ,734 Earnings per share Basic (in Baht) The accompanying notes are an integral part of these. 7

9 Statements of comprehensive income (Unaudited) Nine-month period Nine-month period ended 30 September ended 30 September Note Revenues Contract revenues 6,470,031 5,384,418 6,489,959 5,384,418 Room service revenues 294, ,730 89,599 84,666 Interest income 4,135 6,061 7,785 9,062 Compensation for damages 34-58,510-58,510 Reversal of allowance for doubtful accounts 7, 9, 10-40,821-40,821 Other income 66,337 59,270 41,270 40,059 Total revenues 6,834,703 5,781,810 6,628,613 5,617,536 Expenses Contract costs 5,146,180 4,343,726 5,161,452 4,343,121 Room service costs 196, ,064 65,099 60,574 Distribution costs 23,209 20,611 12,087 12,234 Administrative expenses 434, , , ,024 Other expenses 33,831 18,228 24,994 18,785 Finance costs 49,417 46,791 1,372 14,278 Total expenses 5,883,906 4,919,638 5,626,448 4,738,016 Share of loss of associate 12 (31) (34) - - Profit before income tax expense 950, ,138 1,002, ,520 Income tax expense , , , ,525 Profit for the period 751, , , ,995 Other comprehensive income Components of other comprehensive income that will be reclassified to profit or loss Gains on remeasurement investments held as available-for-sale 5 48, ,401 48, ,401 Income tax relating to components of other comprehensive income that will be reclassified to profit or loss (9,773) (25,080) (9,773) (25,080) Total components of other comprehensive income that will be reclassified to profit or loss 39, ,321 39, ,321 Other comprehensive income for the period, net of tax 39, ,321 39, ,321 Total comprehensive income for the period 790, , , ,316 The accompanying notes are an integral part of these. 8

10 Statements of comprehensive income (Unaudited) Nine-month period Nine-month period ended 30 September ended 30 September Note Profit (loss) attributable to :- Owners of the parent 766, , , ,995 Non - controlling interests (15,215) (7,518) - - Profit for the period 751, , , ,995 Total comprehensive income (loss) attributable to :- Owners of the parent 805, , , ,316 Non - controlling interests (15,215) (7,518) - - Total comprehensive income for the period 790, , , ,316 Earnings per share Basic (in Baht) The accompanying notes are an integral part of these. 9

11 Stataments of changes in equity (Unaudited) Other components Total equity Issued and of shareholders' equity attributable to paid Share premium Retained earnings Available-for-sale owners of Non-controlling Total Note share capital on ordinary shares Legal reserve Unappropriated investments parent interests shareholders' equity For the nine-month period ended 30 September 2016 Balance at 1 January ,600, ,739 1,585, ,227 3,436, ,727 3,612,273 Transection with owner, recorded directly in equity :- Contributions by and distribution to owners of the Company Dividends to owner of the Company (191,966) - (191,966) - (191,966) Total contributions by and distributions to owners of the Company (191,966) - (191,966) - (191,966) Changes in ownership interest in subsidiaries : Acquisition for non - controlling interests without a change in control , ,000 Total changes in ownership interest in subsidiaries , ,000 Total transaction with owner, recorded directly in equity (191,966) - (191,966) 400, ,034 Comprehensive income for the period Profit , ,963 (7,518) 699,445 Other comprehensive income , , ,321 Total comprehensive income (loss) for the period , , ,284 (7,518) 799,766 Transfer to legal reserve ,850 (35,850) Balance as at 30 September ,600, ,589 2,064, ,548 4,051, ,209 4,620,073 The accompanying notes are an integral part of these. 10

12 Stataments of changes in equity (Unaudited) For the nine-month period ended 30 September 2017 Discount Other components Total equity Issued and from changes of shareholders' equity attributable to paid Share premium in the ownership Retained earnings Available-for-sale owners of Non-controlling Total Note share capital on ordinary shares interests in subsidiary Legal reserve Unappropriated investments parent interests shareholders' equity Balance at 1 January ,600, ,551 2,218, ,616 4,244, ,350 4,802,192 Transaction with owner, recorded directly in equity :- Contributions by and distribution to owners of the Company Dividends to owner of the Company (239,979) - (239,979) - (239,979) Total contributions by and distributions to owners of the Company (239,979) - (239,979) - (239,979) Changes in ownership interest in subsidiaries : Purchase of additional investment in subsidiary (6,870) (6,870) (57,194) (64,064) Acquisition for non-controlling interests without a change in control ,000 64,000 Total changes in ownership interest in subsidiaries - - (6,870) (6,870) 6,806 (64) Total transaction with owner, recorded directly in equity - - (6,870) - (239,979) - (246,849) 6,806 (240,043) Comprehensive income for the period Profit , ,877 (15,215) 751,662 Other comprehensive income ,089 39,089-39,089 Total comprehensive income (loss) for the period ,877 39, ,966 (15,215) 790,751 Transfer to legal reserve ,449 (1,449) Balance as at 30 September ,600, (6,870) 160,000 2,744, ,705 4,803, ,941 5,352,900 The accompanying notes are an integral part of these. 11

13 Stataments of changes in equity (Unaudited) For the nine-month period ended 30 September 2016 Other components Issued and of shareholders' equity paid Share premium on Retained earnings Available-for-sale Total Note share capital ordinary shares Legal reserve Unappropriated investments shareholders' equity Balance at 1 January ,600, ,739 1,623, ,227 3,474,605 Transaction with owner, recorded directly in equity :- Contributions by and distribution to owners of the Company Dividends to owner of the Company (191,966) - (191,966) Total contributions by and distributions to owners of the Company (191,966) - (191,966) Total Transaction with owner, recorded directly in equity (191,966) - (191,966) Comprehensive income for the period Profit , ,995 Other comprehensive income , ,321 Total comprehensive income for the period , , ,316 Transfer to legal reserve ,850 (35,850) - - Balance as at 30 September ,600, ,589 2,112, ,548 4,099,955 The accompanying notes are an integral part of these. 12

14 Stataments of changes in equity (Unaudited) For the nine-month period ended 30 September 2017 Other components Issued and of shareholders' equity paid Share premium on Retained earnings Available-for-sale Total Note share capital ordinary shares Legal reserve Unappropriated investments shareholders' equity Balance at 1 January ,600, ,551 2,281, ,616 4,308,027 Transaction with owner, recorded directly in equity :- Contributions by and distribution to owners of the Company Dividends to owner of the Company (239,979) - (239,979) Total contributions by and distributions to owners of the Company (239,979) - (239,979) Total Transaction with owner, recorded directly in equity (239,979) - (239,979) Comprehensive income for the period Profit , ,061 Other comprehensive income ,089 39,089 Total comprehensive income for the period ,061 39, ,150 Transfer to legal reserve - - 1,449 (1,449) - - Balance as at 30 September ,600, ,000 2,843, ,705 4,910,198 The accompanying notes are an integral part of these. 13

15 Statements of cash flows (Unaudited) Nine-month period Nine-month period ended 30 September ended 30 September Note Cash flows from operating activities Profit for the period 751, , , ,995 Adjustments to reconcile profit to cash receipts (payments) Reversal of allowance for doubtful accounts (58) (40,821) (58) (40,821) Doubtful debts expense , ,831 Bad debt expense - 5,405-5,405 Depreciation and amortization 271, , , ,207 Interest income (4,135) (6,061) (7,785) (9,062) Interest expense 49,417 46,791 1,372 14,278 Loss on write-off of withholding tax Gain on disposal and write off of equipment (4,630) (2,230) (5,310) (2,241) Unrealized gains from changes in fair value of available-for-sale investments (10,362) (10,082) (9,919) (9,897) Unrealized gain on exchange rate (1,067) (611) (1,067) (611) Loss on devaluation of investment in subsidiary Share of loss of associate Provision for losses on constructions project 11,000 76,233 11,000 76,233 Provision for litigation 24,691-24,691 - Provision for employee benefit 18,290 16,807 17,425 14,818 Additional prior year tax expense 8, Tax expense 199, , , ,525 1,314,818 1,172,235 1,218,362 1,097,209 Changes in operating assets and liabilities Trade accounts receivable (12,122) 449,726 (15,209) 453,369 Other current receivables (28,732) (36,754) (20,633) (12,403) Retention receivable under construction contract (37,496) 25,807 (37,496) 25,807 Unbilled construction in progress (480,755) 131,254 (480,755) 131,254 Inventories 6,153 (9,298) 6,352 (8,528) Advance payments to subcontractors 283,873 (220,497) 283,873 (220,497) Other non-current assets 10,921 15,267 15,138 15,768 Trade accounts payable 14, ,708 3, ,566 Advance received under construction contracts (234,317) 284,513 (234,317) 284,513 Undue value added tax 31,509 (43,892) 31,509 (43,892) Deposit receipt from customers 13,556 44, Retention payable from subcontractors 2,196 7,356 2,196 7,356 Other current payables (236,738) (132,510) (233,327) (158,017) The accompanying notes are an integral part of these. 14

16 Statements of cash flows (Unaudited) Nine-month period Nine-month period ended 30 September ended 30 September Note Other current liabilities (636) 128 (636) 128 Payment of provision for losses on constructions project (8,689) - (8,689) - Payment of provision for litigation - (31,800) - (31,800) Payment of employee benefit (581) - (581) - Cash generated from operating activities 637,617 1,793, ,991 1,666,833 Withholding tax received 206, ,845 - Payment of additional prior year tax (2,590) Withholding tax paid (203,380) (181,061) (195,846) (178,536) Net cash from operating activities 637,679 1,612, ,990 1,488,297 Cash flows from investing activities Interest received 4,530 6,997 8,455 9,978 Purchase of current investments (1,640,636) (2,024,239) (1,640,636) (1,954,231) Proceeds from current investments 1,537,765 1,478,067 1,522,765 1,478,067 Payment of investments in subsidiaries 2.6, (200,064) (599,400) Proceeds from short-term loans to related parties ,000 Payment of long-term loans to related parties - - (73,000) (50,000) Proceeds from long-term loans to related parties ,000 - Pledged deposit at bank 17, ,324 17, ,324 Purchase of property, plant and equipment (221,958) (2,636,966) (100,159) (129,228) Purchase of intangible assets (2,733) (11,083) (1,567) (2,981) Sales of equipment 7,101 6,023 7,101 6,023 Net cash used in investing activities (298,763) (3,060,877) (286,937) (1,091,448) Cash flows from financing activities Interest paid (48,599) (47,980) (451) (15,437) Dividends paid (239,979) (191,966) (239,979) (191,966) Bank overdrafts (889) 7, Proceeds from short-term loan from financial institutions - 160, ,000 Payment of short-term loan fromfinancial institutions - (160,000) - (160,000) Proceeds from short-term loan - 25, Payment of short-term loan (160,000) (25,000) (160,000) - Proceeds from long-term loans - 1,550, Payment of long-term loans (28,280) (16,891) - - Payment of redemption of debentures - (350,000) - (350,000) The accompanying notes are an integral part of these. 15

17 Statements of cash flows (Unaudited) Nine-month period ended 30 September Nine-month period ended 30 September Note Finance lease payment (20,197) (30,807) (20,197) (30,807) Proceeds from non-controlling interests 64, , Payment for non - controlling interests 2.6 (64,064) Net cash from (used in) financing activities (498,008) 1,319,911 (420,627) (588,210) Net decrease in cash and cash equivalents (159,092) (128,621) (168,574) (191,361) Cash and cash equivalents at 1 January 500, , , ,412 Cash and cash equivalents at 30 September 341, , , ,051 The accompanying notes are an integral part of these. 16

18 Notes to the interim Note Contents 1 General information 2 Basis of preparation of interim 3 Significant accounting policies 4 Seasonal operations 5 Related parties 6 Current investments 7 Trade accounts receivables 8 Other current receivables 9 Retention receivables under construction contracts 10 Unbilled construction in progress 11 Inventories 12 Investment in associate 13 Investments in subsidiaries 14 Other long-term investments 15 Long-term loans 16 Investment properties 17 Property, plant and equipment 18 Leasehold right 19 Intangible assets 20 Deferred tax 21 Bank overdrafts and short-term loans from financial institution 22 Trade accounts payables 23 Other current payables 24 Other short-term loans 25 Long - term loans 26 Non-current provisions for employee benefit 27 Provisions 28 Share capital 29 Segment information 30 Earnings per share 31 Dividends 32 Financial instruments 33 Commitments with non-related parties 34 Contingent liabilities and assets 35 Reclassification of accounts 17

19 Notes to the interim These notes form an integral part of the interim. The interim were authorized for issue by the Board of Directors on 10 November General information Syntec Construction Public Company Limited ( the Company ) is incorporated in Thailand and has its registered office at 555/7-11 Sukhumvit Soi 63 (Ekamai), Sukhumvit Road, Klongton Nua, Wattana, Bangkok and a branch office located at 61 Soi Langsuan, Lumpini, Pathumwan, Bangkok. The Company was listed on the Stock Exchange of Thailand on 12 February The Company s major shareholders who hold more than 10% of total paid share capital as at 30 September 2017 were as follows: (% of total paid share capital) Phahusuth Group The principal activities of the Company are construction and real estate development for room service or service apartment. Details of the Company s subsidiaries were as follows: Ownership interest (%) As at As at Country of 30 September 31 December Name of entity Type of business incorporation Direct subsidiaries 1) SCR Asset Management Co., Ltd. 2) Natural Ville Service Apartment and Management Co., Ltd. Service apartment or real estate development for rental Personnel management for hotel, service apartment and other properties 3) CSM Capital Partners Co., Ltd. Service apartment or real estate development for rental 2 Basis of preparation of interim 2.1 Statement of compliance Thailand Thailand Thailand The interim are prepared on a condensed basis in accordance with Thai Accounting Standard (TAS) No. 34 (revised 2016) Interim Financial Reporting; guidelines promulgated by the Federation of Accounting Professions (FAP); and related applicable rules and regulations of the Thai Securities and Exchange Commission. 18

20 Notes to the interim The interim are prepared to provide an update on the for the year ended 31 December The do not include all of the financial information required for full annual but focus on new activities, events and circumstances to avoid repetition of information previously reported. Accordingly, these interim should be read in conjunction with the of the Company and the subsidiaries for the year ended 31 December New financial reporting standards The FAP has issued new and revised TFRS which are effective for annual accounting periods beginning on or after 1 January The application of these new and revised TFRS does not have any material effect on the accounting policies, methods of computation, financial performance or position of the Group/Company. 2.3 Functional and presentation currency The interim are prepared and presented in Thai Baht, which is the Group s / Company s functional currency. All financial information presented in Thai Baht has been rounded in the notes to the to the nearest thousand/million unless otherwise stated. 2.4 Use of estimates and judgments The preparation of interim in conformity with TFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. In preparing these interim, the significant judgments made by management in applying the Group/Company accounting policies and the key sources of estimation uncertainty were the same as those that applied to the of the Company and its subsidiaries for the year ended 31 December Judgements Information about judgements made in applying accounting policies that have the most significant effects on the amount recognized in the is included in the following notes: Notes 5, 12, 13 and 14 Calculated the recoverable amount of investments Assumptions and estimation uncertainties Information about significant areas of estimation uncertainties that have a significant risk of resulting in a material adjustments to the amounts recognised in the is included in the following notes: 19

21 Notes to the interim Notes 5, 12, 13 and 14 Note 20 Note 26 Note 27 Note 34 Allowance for impairment of investments Current and deferred taxation and utilization of tax losses Assumptions relating to discount rate, salary increase rate, employee turnover rate, mortality rate and disability rate Estimation of construction project costs, provision for losses on construction projects Provisions for contingent liabilities from litigation Measurement of fair values The Group/Company has an established framework with respect to the measurement of fair values. This includes a valuation team that has overall responsibility for overseeing all significant fair value measurements, including Level 3 fair values, and reports directly to the chief financial officer. The valuation team regularly reviews significant unobservable inputs and valuation adjustments. If third party information, such as broker quotes or pricing services, is used to measure fair values, then the valuation team assesses the evidence obtained from the third parties to support the conclusion that such valuations meet the requirements of TFRS, including the level in the fair value hierarchy in which such valuations should be classified. Significant valuation issues are reported to the Group/Company Audit Committee. Measuring the fair value of an asset or a liability, the Group/Company uses market observable data as far as possible. Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows: Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs). If the inputs used to measure the fair value of an asset or liability might be categorised in different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirely in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement. The Group/Company recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred. Further information about the assumptions made in measuring fair values is included in the following notes: Note 32 Financial instruments 20

22 Notes to the interim 2.5 Change in accounting estimate The Board of Directors Meeting of the Company held on 20 April 2017 resolved to approve the Company reviewed the useful life of machinery and construction equipment by prospective method since 1 January 2017 as follows: Machinery and construction equipment Useful lives Formerly New Basis of review (Years) Condition determined by engineer The review of useful lives of those assets resulted to decrease in depreciation for the three-month and nine-month periods ended 30 September 2017 by Baht 0.70 million and Baht 2.40 million, respectively, in the consolidated and separate. 2.6 Acquisition of non-controlling interests At the acquisition of non-controlling interests date, the Group measures any non-controlling interest at its proportionate interest in the identifiable net assets of the acquiree. Changes in the Group s interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions under discount from changes in the ownership interests in subsidiary (please see note 13 to the interim ). The Board of Directors Meeting of the Company held on 20 June 2017 approved the Company acquired 640,000 ordinary shares of SCR Asset Management Co., Ltd ( the subsidiary ) from the former shareholder in the price of Baht 100 per share. On 22 June 2017, the Company acquired an additional 16% interest in SCR Asset Management Co., Ltd. of Baht million in cash, resulting in increasing its ownership from 52% to 68%. The carrying amount of SCR Asset Management Co., Ltd. s net assets in the Group s financial statements on the date of acquisition was Baht 357 million. The Group recognized a decrease in non-controlling interests of Baht 57 million due to change in the Company s ownership interest in SCR Asset Management Co., Ltd. The effects of changes in the Group s ownership interest in SCR Asset Management Co., Ltd. were as follows: Group s ownership interest at 1 January ,870 Effect of increase in Group s ownership interest Cash paid for acquiring non-controlling interest in the subsidiary 64,064 Discount from changes in the ownership interests in subsidiary (6,870) 57,194 Share of comprehensive income for the period For the period from 1 January 2017 to 30 June 2017 (recognize in proportion of 52%) 2,011 For the period from 1 July 2017 to 30 September 2017 (recognize in proportion of 68%) (1,127)

23 Notes to the interim Increase in Group s ownership interest from the increasing in share capital of the subsidiary (recognize in proportion of 68% of Baht 200 million) (please see note 13 to the interim ) 136,000 Group s ownership interest at 30 September 2017 (in proportion of 68%) 377, The consolidated and separate for the three-month and nine-month periods ended 30 September 2017 and 2016 included the investment and share of loss of an associate, which had been accounted for by equity method amounted to Baht 0.01 million and Baht 0.01 million, and Baht 0.03 million and Baht 0.03 million, respectively, in the consolidated financial statements, based on of such associate, which had been reviewed by the other auditor. In addition, the Company had no obligation under the guarantee for such associate and an allowance for impairment of investment in the above mentioned associate was set up as at 30 September 2017 and 31 December 2016 in the amount of Baht 10 million and Baht 10 million, respectively, in the separate. Please also see note 12 to the interim financial statements. However, the values of the investments in the associate was immaterial. 3 Significant accounting policies The Group / Company have significant accounting policies and methods of computation applied in these interim are consistent with those applied in the for the year ended 31 December Seasonal operations Revenue of the Group / Company is subject to seasonal and economic environment. 5 Related parties For the purposes of these, parties are considered to be related to the Group / Company if the Group / Company has the ability, directly or indirectly, to control or joint control the party or exercise significant influence over the party in making financial and operating decisions or vice versa, or where the Group / Company and the party are subject to common control or common significant influence. Related parties may be individuals or other entities. Relationships with related parties were as follows: Name of entities Subsidiaries Country of incorporation/ nationality Nature of relationships 1. SCR Asset Management Co., Ltd. Thailand Subsidiary, 68% shareholding in 2017 and 52% shareholding in 2016, and some common directors 2. Natural Ville Service Apartment and Management Co., Ltd. Thailand Subsidiary, 99.97% shareholding and some common directors 22

24 Notes to the interim Name of entities Country of incorporation/ nationality Nature of relationships 3. CSM Capital Partners Co., Ltd. Thailand Subsidiary, 60% shareholding and some common directors Associate 1. Natural Hotel Sukhumvit Co., Ltd Thailand Associate, 25% shareholding Joint ventures 1. SVK Joint venture Thailand Joint venture, 51% portion of joint venture and cease operations Related companies 1. Bangkok Expressway and Metro Thailand Related company, 0.49% shareholding Public Company Limited 2. Mivan (Thailand) Co., Ltd. Thailand Related company as a venture in Syntec-Mivan Joint Venture 3. Siam Syntec Planner Co., Ltd. Thailand Related company, some common directors 4. Tate Enterprise Co., Ltd. Thailand Related company, some common shareholder 5. N&J Assets Management Co., Ltd. Thailand Related company, some common directors 6. Narai Phand Co., Ltd. Thailand Related company, directors related to the director of the Company 7. N & J Hospitality Co., Ltd. Thailand Related company, directors related to the director of the Company 8. Pink Cafe Co., Ltd. Thailand Related company, directors related to the director of the Company 9. Safe Series Co., Ltd. Thailand Related company, shareholder as a key management personnel of the Company 10. Wrightman Corporation Co., Ltd. Thailand Related company, key management personnel (in 2017) or common shareholders (in 2016) with the Company and subsidiary, directors related to the shareholder and same management who manages the Company s branch. 11. Mankongsangtong Holding Co., Ltd. Thailand Related company, common shareholders 12. Thonglor Management Co., Ltd. Thailand Related company, shareholder related to the Company s directors. 13. Wealthy Living Co.,Ltd. Thailand Related company, shareholder related to the Company s directors. 14. Chuaphaibul Steel Co., Ltd. Thailand Related company, directors related to the director or shareholder of the Company 23

25 Notes to the interim Name of entities Country of incorporation/ nationality Nature of relationships 15. Wrightman Restaurant Co., Ltd. Thailand Related company, some common shareholder Related persons 1. Yuwanit Pisantanakul Thailand Related person, related to the Company s directors 2. Chanida Asdathorn Thailand Related person, as shareholder and director of the subsidiary 3. Four related persons Thailand Related persons, as the Company s directors, shareholders, key management personnel or related to the key management personnel 4. Key management personnel Thailand Persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly including any director of the Group/Company (whether executive or otherwise). The pricing policies for particular types of transactions are explained further below: Pricing policies Sale of steel and others Invoice price (at cost) Interest income MLR and MLR 2.75 per annum Contract revenues Cost price plus profit margin not less than 12% Contract costs Market price Purchase of steel Market price Management fee for service apartment Contract price on the basis determined by the related parties concerned which approximated the market rate Service expenses Contract price on the basis determined by the related concerned which was not higher than employment rate Consulting fee for security system Contract price on the basis determined by the related concerned Administrative expenses Market price Rental expenses Contract price on the basis determined by the related concerned which approximated the market rate Interest expenses 3.00% per annum Directors benefit expenses represented meeting allowance and director bonus Approval from the Company s directors and shareholders Directors and management benefit expenses represented salary and bonus Approval from the Company s directors and shareholders 24

26 Notes to the interim Significant transactions for the three-month and nine-month periods ended 30 September 2017 and 2016 with related parties were summarized as follows: For three-month Revenue Subsidiaries Sale of steel Rendering of service and others - - 1, Interest income ,019 Related companies Rental and service expenses 1,696 6,408 1, Other service expenses 2, Expenses Subsidiaries Management fee for service apartment - - 6,708 6,863 Related companies Contract costs 40,100 31,284 40,100 31,284 Management fee for service apartment 10,546 3,766 6,288 - Space rental and services Consulting fee for security system - 1,500-1,500 Other service expense 1,329 8,701 1,329 3,499 Purchase of steel 31,313-30,468 - Interest expenses Related persons Interest expenses Key management personal Key management personnel compensation Short-term employee benefits 11,795 10,203 11,795 10,203 Post-employment benefits Total key management personnel compensation 12,211 10,686 12,211 10,686 For nine-month Revenue Subsidiaries Contract revenues ,929 - Sale of steel - - 1, Rendering of service and others - - 5, Interest income - - 3,837 3,111 25

27 Notes to the interim For nine-month Related companies Rental and service expenses 3,222 6,697 3, Other service expenses 8, Expenses Subsidiaries Management fee for service apartment ,022 21,145 Related companies Contract costs 134,969 80, ,969 80,256 Management fee for service apartment 28,174 5,907 15,388 - Space rental and services 1,233 1,233 1,233 1,233 Consulting fee for security system 2,328 4,425 2,328 4,425 Other service expense 11,014 16,384 11,014 15,612 Purchase of steel 86,968-86,123 - Interest expenses Related persons Interest expenses Key management personal Key management personnel compensation Short-term employee benefits 34,934 30,903 34,934 30,903 Post-employment benefits 1,248 1,546 1,248 1,546 Total key management personnel compensation 36,182 32,449 36,182 32,449 Balance as at 30 September 2017 and 31 December 2016 with related parties were as follows: Trade accounts receivables - related parties 30 September 31 December 30 September 31 December Subsidiaries SCR Asset Management Co., Ltd - - 9,944 - Wrightman Corporation Co., Ltd. 2, Total 2,580-9,958-26

28 Notes to the interim Other receivables - related parties 30 September 31 December 30 September 31 December Other receivables and advances Joint ventures SVK Joint Venture 11,099 11,099 11,099 11,099 Syntec Mivan Joint Venture 2,491 2,491 2,491 2,491 Subsidiaries SCR Asset Management Co.,Ltd ,902 Natural Ville Service Apartment and Management Co., Ltd ,455 19,234 CSM Capital Partners Co., Ltd - - 1,506 6 Related company Wrightman Corporation Co., Ltd. - 1, Wrightman Restaurant Co., Ltd Related persons Key management personnel Total 14,007 14,706 43,696 37,732 Less allowance for doubtful accounts (13,590) (13,590) (13,590) (13,590) Net 417 1,116 30,106 24,142 Related persons Key management personnel Advance to directors 11, , Advance to project managers 5,381 4,850 5,381 4,850 Net 16,653 5,217 16,653 5,217 As at 30 September 2017 and 31 December 2016, advance to project managers in the amount of Baht 5.38 million and Baht 4.85 million, respectively, represented the petty cash for construction projects in the amount of Baht 50,000 to Baht 100,000 per a project. Short-term loans to related parties Movements of short-term loans to related parties for the nine-month periods ended 30 September 2017 and 2016 were as follows: At 1 January - - Increase during the period - 30,000 Decrease during the period - (30,000) At 30 September

29 Notes to the interim Investments in associate and subsidiaries were detailed in notes 12 and 13 to the interim financial statements. Available for sale investments and separate 30 September December 2016 Cost Fair value Cost Fair value Other related company Bangkok Expressway and Metro Public Company Limited 221, , , ,268 Add valuation adjustment 383, ,520 - Net 605, , , ,268 Movements during the nine-month periods ended 30 September 2017 and 2016 were as follows: and separate At 1 January 556, ,282 Valuation adjustment 48, ,401 At 30 September 605, ,683 Unrealized gain from changes in fair value of investments for the period presented in shareholder s equity net of income tax 39, ,321 Long-term loans to related parties 30 September 31 December 30 September 31 December Subsidiary SCR Asset Management Co., Ltd , ,000 Other related company Gentech Engineering Co., Ltd. 4,956 4,956 4,956 4,956 Total 4,956 4,956 29, ,956 Less allowance for doubtful accounts (4,956) (4,956) (4,956) (4,956) Long-term loans, net , ,000 Less current portion of longterm loans (85,000) Net ,000 40,000 28

30 Notes to the interim As at 30 September 2017 and 31 December 2016, the Company had long-term loans to a subsidiary ( SCR Asset Management Co., Ltd. ) of Baht 25 million and Baht 125 million, respectively, represented long-term loans under 1 loan agreements and 4 loan agreements, respectively, requiring payable on demand. The principal and interest will be repaid within 2 years, interest charged at MLR % and MLR % per annum, respectively. Long-term loans to other related company had no contract and interest bearing. Movements of long-term loans to related parties for the nine-month periods ended 30 September 2017 and 2016 were as follows: At 1 January 4,956 4, ,956 89,956 Increase during the period ,000 20,000 Decrease during the period - - (173,000) - At 30 September 4,956 4,956 29, ,956 Trade accounts payables related parties 30 September 31 December 30 September 31 December Other related companies N &J Assets Management Co., Ltd N&J Hospitality Co., Ltd Tate Enterprise Co., Ltd Safe Series Co., Ltd. 13,911-13,911 - Chuaphaibul Steel Co., Ltd. 22,110 22,074 22,110 22,074 Total 36,297 23,230 36,297 23,230 Other current payables related parties 30 September 31 December 30 September 31 December Subsidiary Natural Ville Service Apartment and Management Co., Ltd ,768 17,087 Other related parties Thonglor Management Co., Ltd. 5,299 4,

31 Notes to the interim 30 September 31 December 30 September 31 December Wealthy Living Co.,Ltd. - 2,292-2,292 Wrightman Corporation Co., Ltd. 1,715 1, Wrightman Restaurant Co., Ltd. 1,022-1,022 - Chuaphaibul Steel Co., Ltd Total 8,051 7,746 16,565 19,863 Short-term loans from related persons 30 September 31 December 30 September 31 December Related persons Yuwanit Pisantanakul - 10,000-10,000 Chanida Asdathorn - 70,000-70,000 Total - 80,000-80,000 As at 31 December 2016, short-term loans from related persons in the amount of Baht 80 million represented the Company s promissory notes issued to a financial institution due on 26 May 2017 with interest rate at 3% per annum. Subsequently, such financial institution discounted promissory notes without recourse to two related persons. On 15 and 17 March 2017, the Company made the repayment of such loan in full amount. Movements of short-term loans to related persons for the nine-month periods ended 30 September 2017 and 2016 were as follows: At 1 January 80,000-80,000 - Increase during the period - 25, Decrease during the period (80,000) (25,000) (80,000) - At 30 September Retention payables from subcontractors 30 September 31 December 30 September 31 December Other related parties Safe Series Co., Ltd. 4,416 4,156 4,416 4,156 Total 4,416 4,156 4,416 4,156 30

32 Notes to the interim The commitments with related parties The Ordinary General Meeting of Shareholders of the Company held on 28 April 2017 resolved the approval of directors remunerations for the year 2017 which were represented the meeting allowance of Baht 16,000 per time per head, and the annual audit committee directors remunerations of Baht 300,000 per head. The Ordinary General Meeting of Shareholders of the Company held on 29 April 2016 resolved the approval of directors remunerations for the year 2016, which represented the meeting allowance of Baht 14,000 per time per head, and the annual remunerations for audit committee directors of Baht 220,000 per head. Significant agreements with related parties Subsidiaries On 18 October 2013, the Company had entered into a service agreement with Natural Ville Service Apartment and Management Co., Ltd. ( the subsidiary ) to provide the properties management including to manage building and land with furnishings, systems and facilities of the Natural Ville Project such as to service to tenants or customer and personnel management. The agreement has been effective from 25 October 2013 onward, requiring a monthly management service fee of Baht 2,000,000 (management service fee included salaries and other administration expenses) and other disbursements to be approved by the Company. On 31 March 2016, the Company had entered into a service agreement with SCR Asset Management Co., Ltd ( the subsidiary ). The agreement has been effective from April 2016 to March 2017, requiring a monthly service fee of Baht 100,000. Subsequently, on 31 March 2017, the Company renewed the service agreement for a period of 1 year from April 2017 to March On 19 May 2017, the Company had entered into the construction management agreement with a subsidiary ( SCR Asset Management Co., Ltd ) for the Somerset Central Siracha project, totalling Baht 62 million. Until 30 September 2017, the revenue realized in the amount of Baht 20 million, the remaining amounted to Baht 42 million. On 1 July 2017, the Company had entered into a service agreement with CSM Capital Partners Co., Ltd ( the subsidiary ). The agreement has been effective from January 2017 to December 2017, requiring a monthly service fee of Baht 500,000. Related companies On 3 November 2014, the Company had entered into a office space rental agreement with a related company ( N & J Asset Management Co., Ltd. ) for use as offices, meeting rooms, and seminars rooms for a period of 3 years from 1 November 2014 to 31 October 2017 with monthly rental of Baht 120,759 and renewal option when the end of the rental agreement. 31

33 Notes to the interim On 1 August 2015, the Company had entered into the operating and managing agreement with a related company (Wrightman Corporation Co., Ltd.) for a period from 1 August 2015 to 31 October 2020 in order to manage service apartment, prepare the financial documents, budget and prepare annual marketing plan of branch of the Company with the basic fee at rate 2% of total revenues and incentive fee 3-5% of gross operating profit. On 1 April 2016, the SCR Asset Management Co., Ltd. ( the subsidiary ) had entered into a service agreement with a related company (Wrightman Corporation Co., Ltd.) for a period from 1 April 2016 to 31 March 2017 to act as a representative of a subsidiary in managing service apartment, preparing financial report and annual budget. Management fee was calculated from all expenses of the agent based on the number of rooms and hotel employee expense. On 12 February 2016, CSM Capital Partners Co., Ltd ( the subsidiary ) entered into a service agreement with a related company (Thonglor Management Co., Ltd.) for a period from 1 April 2016 to 31 March 2017 to manage on Eight Thonglor project with the monthly service fee as follows: - Management fee at the rate 2% of total revenue of retail shops; - Incentive fee at the rate of 4% net of profit in the project of retail shops; - Corporation fee on service area at a fixed rate of Baht 250,000 per month. As of 10 November 2017, the subsidiary has been in the process of the agreement renewal. On 1 February 2016, the Company had entered into a consulting agreement with a related company ( Wealthy Living Co.,Ltd. ) for a period from 1 February 2016 to 31 January 2017, to obtain the consult for security, marketing and procurement with a monthly rate of Baht 500,000. Subsequently, 1 February 2017, the Company had renewed the agreement for a period from 1 February 2017 to 31 January 2018 with the monthly rate of Baht 540,000. Subsequently, on 1 May 2017, the Company terminated the above agreement. 6 Current investments 30 September December 2016 Cost Fair value Cost Fair value Bills of exchange 180, , , ,000 Mutual fund debt securities 1,171,823 1,182,185 1,130,315 1,139,057 Total 1,351,928 1,362,290 1,240,315 1,249, September December 2016 Cost Fair value Cost Fair value Bills of exchange 180, , , ,000 Mutual fund debt securities 1,146,479 1,156,398 1,090,308 1,098,713 Total 1,326,584 1,336,503 1,200,308 1,208,713 32