ANNUAL REPORT
2012
DEVELOPMENT/ENGINEERING/CONSTRUCTION/INVESMENT
FOCUS DEVELOPMENT AND CONSTRUCTION PUBLIC COMPANY LIMITED
Content 2 3 5 8 9 13 14 28 35 36 44 45 75
Message from Chairman Audit Committee Explanation General Information Financial Information and Structure of Revenues Risk Factors List of Shareholders Management Structure Details of Directors and Executives Connected transaction Explanation and Analysis of Financial Position and Operating Performance Audit Report of Certified Public Accountant Financial Statements and Notes to Financial Statements Remuneration for Auditors
ANNUAL REPORT 2012
Focus Development and Construction Public Company Limited
Our Mission Committed to being professional in construction and property development to meet Customers’ satisfaction while taking into account changes in technology, society, and the environment
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Focus Development and Construction Public Company Limited
Message from Chairman
In 2012, the Thai economy still has to cope with several risk factors such as the prolonged financial crisis in Europe and the increase of oil price due to the tensions in the Middle East together with domestic uncertainties in politics and the high production costs from the adjustment of minimum wage. Therefore, economic and industrial policies have to be formulated to support the economic development with the objective of increasing the productivity based on the knowledge and effectiveness of the labor. This will increase the competitiveness of the country in the future. The Thai economy is expected to continue to grow in 2013 supported by the government spending and exports. In addition, the budget for the government’s long term water management plan of 350 billion Baht is also expected to be implemented. The Board of Directors has the policy to formulate the strategic direction to meet the dynamic environment by developing quality project to meet the expectation of our customers, improving the quality of our service for our existing and new customers. The company also emphasizes in cost and liquidity management to support our business expansion. Risk mitigation and effective management would be the key to achieve the objectives of the company. Management with transparency with good corporate code of conduct will also continue to be our mission. Moreover, the company also supports CSR (Corporate Social Responsibility) Activities with the strong intention of taking care of the society and environment. On behalf of the Board of Directors, I would like to thank our shareholders, customers, and business partners for your continued support. I also would like to thank all of our staffs for their dedication and hard working. I am confident that with the continued support and cooperation, the company will continue to expand satisfactorily.
Anucha Sihanatkathakul Chairman of the Board
ANNUAL REPORT 2012
Focus Development and Construction Public Company Limited
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Report of the Audit Committee to Shareholders To Shareholders of Focus Development and Construction Public Company Limited The Company’s Audit Committee comprises three independent directors, who are not the members of the Company’s Management. The term of the Audit Committee lasts two years, from March 1st, 2012 to April 30th, 2014. The directors are expertise in finance, law, accounting, organizational management and have never been the Company’s advisors or have had any conflicts of interest with the Company before as follow :
1. Mr. Michael de 2. Mr. Phasunsook 3. Mr. Pornsanong
Santiesteban Ayanaputra Tuchinda
Chairman of Audit Committee Audit Director Audit Director
Thereby, Miss. Sarinda Watwathin carries out duties as Secretary of Audit Committee.
Each member of the Audit Committee is an independent director, and possesses all the qualification required by the Stock Exchange of Thailand. Moreover, entrusted by the Company’s Board of Directors to bear responsibilities and to perform duties, the Audit Committee’s members perform their duties in accordance with the requirements of the Stock Exchange of Thailand. In 2012, the Audit Committee held four meetings, and one meeting with the auditors, but without the Management’s participation. The Audit Committee submitted the reports of every meeting to the Board of Directors, which can be summarized into important points as follows: Reviewing the 2012 quarterly and annual financial statements which have been reviewed and inspected by certified public accountants prior to submitting to the Board of Directors and prior to being publicized to shareholders and general public, with the auditor’s explanation for every question. All auditors’ suggestions would be applied in compliance with the law and general accepted accounting standard, together with the adequate disclosure of the information in the financial statement to the shareholders and other related persons.
Reviewing the disclosure of inter-transaction and issues that may cause the conflict of interest Reviewing the appropriation of the internal and assets control system of the Company Considering, suggesting and advising about the auditing plans of the internal audit department
focusing on objectives and scope of auditing that covers risks in each work unit
Reviewing the operations and suggestions of internal auditors, proposed for the management’s implementation Reviewing the performance of the auditors in their functions during the past year. Recommendation to appoint the auditors and fix the remuneration of auditors to the Board of Directors
The Auditor Committee has concluded that the Company’s financial statement is prepared in accordance with the general accepted accounting standard, and the disclosure of the information in the financial statement is accurate. The Company has also paid attention to the good corporate governance policy that was responding to the regulations of the Stock Exchange of Thailand and other related laws. ANS Audit Co., Ltd, an independent auditor appointed by Focus Development and Construction Public Company Limited attests that this report of the 2013 financial statements is prepared in accordance with applicable law as required by the Stock Exchange of Thailand and being paid with the consultation fee in the amount of 500,000 baht.
(Mr. Michael de Santiesteban) Chairman of Audit Committee
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Focus Development and Construction Public Company Limited
Board of Directors
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01 Mr. Anucha Sihanatkathakul Chairman of the Board 02 Mr. Jeremy Lakemire King Vice Chairman 03 Mr. Michael de Santiesteban Director and Chairman of
Audit Director 04 Mr. Pornsanong Tuchinda Director and Audit Director
05 Mr. Phasunsook Ayanaputra Director and Audit Director 06 Mr. Nontawat Thongmee Director and Managing Director 07 Pol.Maj.Gen. Sunthorn Boonruan Director 08 Lt.Gen. Thavalya Prapapant Director
09 Mr. Thomas C. Thompson Director 10 Mr. Patrick M. Davenport
Director 11 Mr. Tanakorn Leelasiri Director 12 Mr. Tanavich Chindapradist Director
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Focus Development and Construction Public Company Limited
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General Information Focus Development and Construction Public Company Limited Company’s Registration Number 0107545000331 (original number:40854500706) Location 25, Alma link Building, 9th Floor, Soi Chidlom, Ploenchit Road,Lumpini Sub-district, Patumwan District, Bangkok 10330 Telephone : 0-2650-3063-4, 0-2650-3105-9 Fax : 0-2650-3065-6 E-mail : info@focus-pcl.com www.focus-pcl.com Main contractor: General Construction by conducting businesses as Main contractor, Subcontractor, or Joint Venture or Consortium. The construction projects customers include government agencies, state enterprises, and private sectors. Registered Capital 400,000,000.00 Baht, dividing into 400,000,000.00 ordinary shares, at 1.00 Baht per share Paid-up Capital 125,579,000.00 Baht, dividing into 125,579,000.00 ordinary shares, at 1.00 Baht per share Reference: Securities’ Registrar Thailand Securities Depository (Thailand) Company Limited 62 The Stock Exchange of Thailand Building, Rachadapisek Road, Klongtoey, Bangkok 10110 Telephone : 0-2229-2800 Fax : 0-2654-5427 Mr. Udom Thanuratapong, C.P.A. License No. 8501 Auditor ANS Audit Company Limited (as of December 31st 2012) 100/72, 22nd Floor, Wong Wanich B Building, Rama IX Road, Huay Kwang District, Bangkok 10310 Telephone : 0-2645-0109 Fax : 0-2645-0110 Legal Consultants -None-
DEVELOPMENT/ENGINEERING/CONSTRUCTION/INVESTMENT
Project : Nissan Showroom RAMA II and Maintenance Service Center
Project : Focus Ploenchit (Condominium)
Project : Kanyarat Lakeview (Condominium)
Project : Focus on Saladaeng (Condominium)
Project : Railway Stations for Red Line Rail System Bangsue - Talingchan Project : W District (Trunc C)
Project : Esplanade Cineplex (Ngamwongwan – Khae Rai) Project : The Nest Ploenchit (Condominium)
Project : Phuphatara Khaoyai (Condominium)
Project : EQUINOX Phahol-Vibha (Condominium)
Project : WIND Ratchayothin
Project : Area C0 Development Project
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Focus Development and Construction Public Company Limited
Financial Information and Structure of Revenues
COMMITTED TO BEING PROFESSIONAL IN CONSTRUCTION
Financial Information (Unit : Million Baht) 2012 Total Assets 700.09 Total Liabilities 527.25 Total Shareholders’ Equity 172.84 Revenue from Construction 894.49 Revenue from Real Estate Development 207.10 Total Revenues 1,105.98 Net loss for the year 64.55 Financial Ratio 2012 Liquidity Ratio (times) 1.21 Net Profit Ratio (%) 5.84 ROE (%) 46.21 ROA (%) 11.08 Basic Net Profit (loss) Per Share (Baht) 0.52 Dividend Payout Ratio (%) Debt to Equity Ratio (times) 3.05 Book Value Per Share (Baht)
1.38
2011 464.82 358.27 106.55 548.15 49.41 602.92 12.45 2011 0.99 2.06 13.07 3.37 0.10 3.36
2010 274.63 190.73 83.90 225.82 233.03 (59.22) 2010 1.30 (25.41) (53.41) (28.89) (0.47) 2.27
0.85
0.67
Structure of Revenues 2012 2011 2010 Business Category Revenues % Revenues % Revenues % 1. Revenues from 894.49 80.88 548.15 90.92 225.82 96.91 Construction 2. Revenue from 207.10 18.72 49.41 8.19 Real Estate Development 3. Other incomes 4.39 0.40 5.36 0.89 7.21 3.09 Total 1,105.98 100.00 602.92 100.00 233.03 100.00
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Risk Factors Business Operation Risk
1. Risk of Economy and Political
The fluctuating world economy due to the problem of public debts in the EU countries as well as
the financial problems of the United States badly affects the Thai economy. Furthermore, other internal risk factors including the trends of oil’s prices, consumer goods, construction material; the interest rates; and the factor of internal political change which requires a close monitor, affect construction projects of the government, the efficiency in spending the budget, and confidence of the private sector, which is an important factor for investors from both the public and private sectors when making a decision to invest particularly in mega projects. In 2012, the Thai economy grew 5.5% from 2011. This high level of economic growth could be attributed to the limitation of the problem in the manufacturing sector, as a result of the flooding, being gradually resolved, as well as investments from the private sector, which were back at the level prior to the flooding period. Moreover, government’s policies helped to stimulate domestic spending, while public consumption and investments helped the economy to recover. The Thai economy in 2013 shows a trend to grow at 5.2%, propelled by public and external demands which are still expected to increase, partly from the effect of government’s spending and long-term water management plan which the government is expected to increasingly invest in 2013. To increase income and decrease dependency on construction businesses, the Company has expanded its operation to real estate development. In terms of construction businesses, the Company has begun to accept more variety of projects, such as the construction of condominiums, industrial plants, offices, hotels, schools, centers for sale and services of automobiles, and department stores etc.
2. Risk of Competition
Due to lot of construction companies, the competition in the construction business is unavoidably
high. Even after the project acquisition, the entrepreneurs will still have to face many uncontrollable factors in construction that can thwart the progress of the project causing the delay in the schedule as stated in the contract. In order to deal and manage this type of risk more effectively, the Company has come up with proper policies and plans to mitigate the damages that may have occurred from the aforementioned risk by setting up a department that will be directly responsible for new business acquisition and oversee all operations such as participating in price bidding, sending representatives to negotiate with the business for new projects to ensure regular incomes and to monitor them closely to keep the cost in check in accordance with the Company’s budget plan.
3. Risk of Real Estate Business
The flooding which occurred in the last quarter of 2011 interrupted the real estate market, extended
into the first quarter of 2012, which was the period of general reconstruction and repairing of the damaged houses. Because of that, the real estate market particularly in high-rise buildings or condominiums attracted more consumers. This was particularly so with condominiums locating along the BTS sky train tracks in the perimeter areas not too far from the city, and close to large amenities such as department stores, hospitals, and main roads. As a result, business operators who have land in these locations invested in high rise rather than low rise level building projects.
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Focus Development and Construction Public Company Limited
At the same time, real estate businesses were affected by the lack of construction material which were sold at high prices as the public sector had to rush with the renovation of a large number of roads, bridges and buildings, causing the cost of constructing new condominiums to rise, which in turn hiked up the sale prices of these condominiums in the future. Consumers would be more careful and thorough when choosing to buy a home, particularly about the location. This in turn would prolong the time for them to make a decision to buy a home in the future.
Real estate risks that effect directly to the Company’s business operation 1. Risk of Land Acquisition: The Company will search for the land plot with high potential with reasonable price for building the condominium located near the heart of the city along the BTS sky train and MRT subway that may not be able to do so posing the first risk in this regard. The Company has engaged a network or many real estate agents to reduce the possibility of not being able to find the potential site for the project in the long run. 2. Risk of changes in rules and regulations in the laws pertaining to real estate business: The changes in the rules and regulations stated in the laws relevant to the real estate project will pose certain risks to the Company. These include the limitation in land usages allocated to certain purposes or specific types of business, height limits, construction specification modes such as distances between the buildings, property boundary with neighboring lands space as well as complaints that may have due to future problems from changes in the requirements in the laws demanded by the government when the land plot is still under the Company’s tenure and in the process of filing for permissions to the relevant authorities. To reduce the risks, before buying new land for developing the Company tries to keep and updates all limitations of the state laws and regulations involving land utilization together with the project’s feasibility study. 3. Risk of unachieved sale target: The Company will identify the size and the number of units to be developed in each project to meet the needs of the targeted group of customers. This will be done by estimating the potential total sale deriving from sale and marketing, and through close inspection of the market. Nonetheless, if the market conditions are not conducive, the total sale might not reach the projected level, or might not even reach the break-even point. This could adversely affect the financial status of the Company. Therefore, the Company has cut the risks of having non-active sale units by clearly identifying marketing and sale strategies by focusing on the targeted group of customers and effectively controlling all the costs.
Management and Operation Risk
1. Risk of New Project Acquisition and Contract
The Company has a major source of income from construction business either as a main or
subcontractors appointed by government organizations or business enterprises. The amount of contracts obtained is determined by many factors such the economic conditions, price competition and so forth. The indication whether or when the Company would be appointed is uncertain because of the time in the bidding process and the selection criteria of the suitable contractor are time consuming. The amount of income is largely determined by the size, the length of time and the actual construction in the process, and time that the landowner could clear the construction site before the Company can start the work process together with the design adjustment. To tackle these problems, the Company has appointed the administrative
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committee to make guidelines for planning, decision making, and solving problems related to the projects during the time within the contract.
2. Risk of changes in Construction Material Prices
The change in prices of construction material is a factor that directly affects the cost of the project.
The Company has precautionary and preventive measures, as well as close monitoring systems in order to reduce the effects from the fluctuation of prices of construction material. For example, the Company might attempt to purchase construction material in bulk, to pay in cash in order to receive discounts, or to pay a deposit to order construction material in advance and to fix the prices. The Company has considered these risks from an early period of the job-seeking process. The Company has estimated the prices by always factoring in the appropriate risks from the change in prices of construction material. Moreover, the Company has increased efficiency of the sale department in order to find a supplier that offers good terms and conditions for payment and is reliable.
3. Risk of Labor Scarcity
Due to the government’s policy of increasing the minimum wage to 300 baht a day, which has
been effective since April 1st, 2012 in 7 provinces; Bangkok, Nonthaburi, Pathumtani, Samutprakarn, Samutsakorn, Nakornpathom, and Phuket, and effective since January 1st, 2013 in the remaining provinces, as well as the policy to keep the minimum wage at 300 baht for 2 years from 2014-2015.
The increase in minimum wage does not apply to any particular age groups or occupations. Therefore, it causes workers to relocate to workplaces which offer higher pay, which in turn results in labor scarcity particularly with skilled labor, which has become increasingly difficult to find. As a result, the costs of hiring labor and contractors have increased. Nonetheless, the Company is likely to cut the risk of labor scarcity by hiring greater number of sub-contractors to be sufficient for the existing jobs, as well as by preparing Thai and legal foreign labor and improving the efficiency of existing workers. At the same time, the Company also attempts to adjust the construction plans with clients so that they are in accordance with the feasibility of the projects and the construction methods, by using machines and completed construction materials, as well as new techniques to replace old ones in order to cut the number of production processes and lower the labor cost. For new project acquisition, the Company has already factored in the increase in new minimum wage and included it in the cost.
4. Risk of Engineer Dependent
Construction business relies heavily on knowledge and personal expertise from project director,
project manager and project supervising engineer who possess necessary abilities to control and manage the projects. The loss of capable engineers would definitely affect the Company’s ability to acquire the future projects and their operation. To maintain these valuable engineers, the Company has implemented its policies in human resources management with appropriate remuneration to reduce the turnover rate and provide trainings to reward the staff.
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Financial Risks
1. Risk of Bad Debt
The failure in the collection of payment for its construction projects caused by the clients lacking its
liquidity, having the financial problem or even from the dissatisfaction with the construction. Having taken this type of risk into consideration, it’s imperative to sign the contract with clients having good potential, reliability and favorable financial records.
2. Risk of Lack of Cash Flow
The construction companies and property developers have to have sufficient cash to run the project.
This cash is used to purchase construction material and to pay the workers. This circulating cash flow derives partly from the capital of the Company, and the financial institutions. Moreover, the Company has negotiated for more restricted terms of payment with clients before signing the contracts for each project, such as advance payment from clients at the rate of 5-20% of the total project cost, giving appropriate credit to clients, as well as the following and precipitating the efficient collection of income in order to ensure the Company’s liquidity.
3. Risk of the Investors
The risk of unable to pay dividend in 2012 on December 31st, 2012: The Company received
the profit of 64.55 million baht, but still incurred an accumulated loss by 6.87 million baht, which makes the Company unable to pay dividend to the shareholders as stated by the law, and the Shareholders faced the risk of not receiving dividend in accordance with the set policy of dividend payment.
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List of Shareholders Structure of Capital
Registered Capital
The company has the registered capital of 400 million baht, dividing into 400 million ordinary shares with the par value of 1 baht. And the paid-up capital is 125 million baht, dividing into 125 million ordinary shares with the par value of 1.00 baht per share.
Shareholders
List of the first 10 major shareholders as of April 30, 2012 No. List of Shareholders Number of Shares % of Shareholding 1. Mrs. Naparat Sihanatkathakul 43,385,800 34.709 2. RBS Coutts Bank Ltd, Singapore Branch 9,753,300 7.803 3. Thailand Securities Depository Company (Thailand) Co., Ltd. 7,600,500 6.08 for Depositors 4. Mr. Virat Udomsinwattana 6,375,000 5.10 5. UBS AG Singapore, Branch-Pb Securities Client Custody 6,245,000 5.00 6. DBS Vickers Securities (Singapore) PTE LTD 6,217,200 4.974 7. Mr. Theepat Sutabute 4,000,000 3.20 8. Mr. Montree Sihanatkathakul 3,927,500 3.14 9. Mrs. Vijitra Ratanapian 3,000,000 2.40 10. HSBC Private Bank (Suisse) Sa, Hong Kong Branch 1,940,000 1.56
Major shareholder who has significant influence on determining company policy or the operation of business
Mrs. Naparat Sihanatkathakul is the major shareholder of the company but she does not participate in the management. Her relationship is a sister of Mr. Anucha Sihanatkathakul who participates in the management.
Dividend payment policy
The company has the policy to pay dividend at minimum 40% of the net profit and the payment must be approved at the shareholders’ meeting with the exception of the necessary for the use of fund with the purpose of the business expansion. However, at the end of year 2012, the company had total accumulated loss of 6.87 million baht, therefore, the dividend cannot be paid to the shareholders according to the law.
Estimating Department
Cost Control Department
Service Maintenance Department
Quality Assurance & Safety Department
Contract Administration Department
Finance Department
Business Development Department
Construction Department
Accounting Department
Finance & Accounting Division
Construction Committee
Business Support
Managing Division
Board of Directors
Organization Chart
Engineering Division
Executive & Investment Committee
Remuneration Committee
Management Structure
Equipment Control Department
Customer & Investor Relation Affair Department
Purchasing Department
Legal Department
General Administration, Human Resources & Information Technology
Administration Division
Internal Audit Department
Audit Committee
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Director Structure of the Company Director Structure of the Company comprises of 5 committees namely Board of Directors, Audit Committee, Remuneration Committee, Investment Committee, Construction Management Committee, detailed as follow:
Board of Directors
Board of Directors of the Company as of December 31st, 2012 comprises of 12 members and Board Meeting attendances are summarized on below; 1 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12.
Name - Surname Mr. Anucha Sihanatkathakul Mr. Jeremy Lakemire King Mr. Michael de Santiesteban Mr. Phasunsook Ayanaputra Mr. Pornsanong Tuchinda Pol.Maj.Gen. Sunthorn Boonruan Lt.Gen. Thavalya Prapapant Mr. Thomas C. Thompson Mr. Patrick M. Davenport Mr. Nontawat Thongmee Mr. Tanakorn Leelasiri Mr. Tanavich Chindapradist
Position
Attendance (times)
Chairman of the Board Vice Chairman Director Director Director Director Director Director Director Director and Managing Director Director Director
5/5 5/5 4/5 5/5 3/5 4/5 3/5 4/5 5/5 4/5 5/5 0/5
Secretary of the Board of Directors: The Company appointed Mr. Chalermpat Hongprasertkul as the Company’s Secretary due to his appropriate qualifications, experiences, and have undertaken the secretary training program organized by the Thai Listed Companies Association. The Secretary of the Board of Directors has duties and responsibilities in four areas, as follows: 1. Meetings, such as organize meetings for the Board of Directors and Shareholders, preparing for meetings, meeting agendas, meeting invitations, related documentation, annual reports, and minutes of meetings, as well as ensuring that the Company’s operation is carried out in accordance with the resolutions of the Shareholders, such as the registration of the change of registration with the Ministry of Commerce. 2. Registration, all document filing such as the registrations of Directors, reports all of the company’s interest by Company’s Board of Directors and Management, meeting documents, and reports for meetings of the Board of Directors and Shareholders. 3. To provide advice for the Board of Directors to operate in accordance with all relevant rules, law and regulations, as well as principles of good corporate governance. 4. To contact and coordinate with external parties, and acting as the contact person with the Securities and Exchange Commission Thailand and the Stock Exchange of Thailand, as well as to provide information for them in accordance with all related law and regulations. Moreover, the Secretary shall coordinate the receiving of comments and suggestions from Shareholders or other Stakeholders such as customers, submitted to the Board of Directors and Management for consideration.
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Focus Development and Construction Public Company Limited
Notes :
Directors, who were authorized to perform on behalf of the company, were Mr. Anucha Sihanat kathakul, Mr. Nontawat Thongmee, Mr. Jeremy King. Any two of three may sign together with the company’s seal affixed. Resolution of Annual General Meeting of Shareholders for year 2012 on April 30th, 2012 approved the re-election of 4 directors retiring by rotation as directors for another term. 1. Mr. Jeremy Lakemire King 2. Lt.Gen. Thavalya Prapapant 3. Mr. Pornsanong Tuchinda 4. Mr. Phasunsook Ayanaputra
Scope of Authority and Responsibilities of Board of Directors 1. Director must perform the duties in accordance with laws, objectives, and regulations of the company, including resolutions of Shareholders’ Meetings. 2. Director must not be one of the shareholders in partnerships or one of the Boards members of private companies, which conduct similar business and compete with the company except that director has informed in Shareholders’ Meeting before appointment. 3. Director must inform the company immediately in case that director has any interests in the contract done with the company or in case that director holds increasing or decreasing number of shares or debentures of the Company or subsidiaries. 4. Board of Directors has power to delegate the authorities to or appoint certain number of directors to be directors in certain committee in order to perform one or more duties. However, Board of Directors may empower authorized directors to act on behalf of the company to perform any duties for the company except the following duties which could be done after the approval from Shareholders’ Meeting. (1) Anything that could be done after the approval from Shareholders’ Meeting according to laws. (2) Transactions that director has conflict of interest and those are in the scope of laws or regulations of Securities and Exchange Commission that requires the approval from Shareholders’ Meeting.
Except for the following cases that must be approved from the Board’s Meeting and Shareholders Meeting with the votes no less than three out of four of total voting rights of shareholders attended the meeting, namely, increase of capital, decrease of capital, issuance of debentures, sale or transfer of parts or all of businesses of the company to other persons, purchase or receipt of businesses of other companies to be parts of the company, and amendment of memorandum of association or article of association of the company, etc. However, for transactions that director or any person has conflict, interest, or conflict of interest with the company, such director does not have any authority to approve the undertaking of such transactions.
Audit Committee
Audit Committee as of December 31st, 2012 comprises of 3 members and Audit Committee Meeting attendances in 2012 are summarized on below; Name - Surname 1 Mr. Michael de Santiesteban 2. Mr. Phasunsook Ayanaputra 3. Mr. Pornsanong Tuchinda
Position
Attendance (times)
Chairman of Audit Committee Audit Director Audit Director
4/4 4/4 3/4
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Term of Audit Committee
Term of Audit committee is 2 years from March 1st, 2012 to April 30th, 2014, and must hold meeting at least 4 times a year.
Scope of Authority and Responsibilities of Audit Committee 1. To review that the Company has accurate and adequate financial reporting. 2. To review that the Company has suitable and efficient internal control system and internal audit system. 3. To determine independence of an internal audit office including agreement of appointment, transfer and dismissal of the chief of the internal audit office or any other unit in charge of internal audit. 4. To review that the Company comply with laws concerning securities and exchange, regulations of the Stock Exchange of Thailand, and other laws related to the Company’s business. 5. To consider, select and nominate independent persons to be the Company’s auditor, and propose such person’s fees, as well as to attend a non-management meeting with the auditor at least once a year. 6. To consider that connected transactions or transactions that may have conflicts of interests are complied with the laws and the regulations of the Stock Exchange of Thailand in order to ensure that they are reasonable and for the best benefit of the Company. 7. To prepare the Audit Committee’s Report and have it disclosed in the Company’s Annual Report, to which must be signed by the Audit Committee’s Chairperson and consist of at least the following information; a. An opinion on the accuracy, completeness and reliability of the Company’s financial report. b. An opinion on the adequacy of the Company’s internal control system. c. An opinion on compliance with the laws concerning securities and exchange, the regulations of the Stock Exchange of Thailand, or other laws related to the Company’s business. d. An opinion on the suitability of the auditor. e. An opinion on transactions that may have conflicts of interests. f. The amount of times of the Audit Committee meetings, and its attendance record of each committee member. g. An opinion or overview comment that the Audit Committee perceived from its performance under the charter. h. Other transactions that the shareholders and general investors should know under its scope of duties and responsibilities assigned by the Board of Directors. 8. In carrying out the Audit Committee’s duties, if it found or has any suspects that there are transactions or the following doings which may have a considerable impact on the Company’s financial status and performance; it should report them to the Board of Directors in order to correct them within a suitable time frame set by the Audit Committee; a. Transactions causing conflicts of interests. b. Fraud or irregularity or have key mistakes in the internal control system. c. Breach of laws concerning securities and exchange, regulations of the Stock Exchange of Thailand, and other laws related to the Company’s business If the Board of Directors or its executives failed to arrange to have them corrected within due course, any member of the Audit Committee may report such transactions or doings to the Securities and Exchange Commission or the Stock Exchange of Thailand.
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9. To support and follow up that the Company has effective risk management system. 10. To improve the Charter of the Audit Committee and present it to the Board of Directors for approvals. 11. To perform any other matters as assigned by the Board of Directors with the Audit Committee’s agreement under the Company’s Articles of Association and laws.
Independent Directors
The company currently has 12 directors of which 8 qualified as independent directors which comply with the standard of the company and the Stock Exchange of Thailand. The number of independent directors is not less than one-third (1/3) of total Directors. Details are as follows;
1 2. 3. 4. 5. 6. 7. 8.
Name - Surname
Mr. Michael de Mr. Phasunsook Mr. Pornsanong Pol.Maj.Gen. Sunthorn Lt.Gen. Thavalya Mr. Tanavich Mr. Thomas C, Mr. Patrick M.
Santiesteban Ayanaputra Tuchinda Bungruang Prapapant Chindapradist Thompson Davenport
Qualifications of Independent Director
The definition of independent director of the Company according to the notification of the Stock Exchange of Thailand regarding Qualifications and Scope of Work of the Audit Committee (No.1), 1999. An independent director and/or a member of the Audit Committee of the Company shall possess the qualification as follows; (a) Not hold shares in excess of one percent of the total number of voting shares of the Company or the Company’s parent company, subsidiary, associated company, major shareholder, or any person having controlling power over the Company, whilst the number of shares held by any related person of such an in independent director must also be counted. (b) Not be and have not been a director participating in management role of the Company, or an employee or an officer of the Company, or an advisor of the Company which receives regular salary from the Company, and not be and have not been a person having controlling power over the Company or the Company’s parent company, subsidiary, or associated company, or a subsidiary of another company in the same level of the Company, unless such an independent director has not been a person referred to above for at least two years prior to the date on which the application for being an independent director is filed with the SEC, provided always that such restriction or prohibition shall not apply to an independent director who has been a governmental officer or an advisor of a government authority, which is the major shareholder of the Company or the person having controlling power over the Company. (c) Not be a person having relationship either through blood or lineage or legal registration as a father, mother, spouse, sibling or child, including as a spouse of a child of any management person or major shareholder of the Company or the Company’s subsidiary, or of any person having power to control the Company or the Company’s subsidiary, or of the person being nominated to be a management person of or a person having power to control the Company or the Company’s subsidiary.
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(d) Not have and have not had any business relationship with the Company or the Company’s parent company, subsidiary, associated company, or major shareholder, or with the person having power to control the Company that may have conflict of interest, in the manner in which his/her independent discretion might be affected, and not be and have not been a substantial shareholder of or a person having power to control the person that has business relationship with the Company, or the Company’s parent company, subsidiary, associated company, or major shareholder, or the person having power to control the Company unless such an independent director has not been a person referred to above for at least two years prior to the date on which the application for being an independent director is filed with the SEC. Business relationship referred to in the first paragraph above shall mean to include any ordinary course of business or trade for business engagement purpose, any lease taking or lease out of any property, any transaction relating to asset or service, any financial support or acceptance of financial support by way of either borrowing, lending, guaranteeing or collateral providing or any other manner similar thereto that could result to an obligation required to be performed by the applicant or the party thereto in an amount of three percent or more of the net tangible asset value of the applicant or twenty million baht or more, whichever is lesser. In light of this, the method for calculation of the value of connected transaction pursuant to the Capital Market Supervising Committee’s Notification, Re: Regulations in respect of an Entering into a Connected Transaction shall be applied mutatis mutandis for the purpose of calculation of such amount of debt of the applicant, provided that the amount of debt incurred during the past one year prior to the date on which such a business relationship with such person exists. (e) Not be and have not been an auditor of the Company or the Company’s parent company, subsidiary, associated company, or major shareholder, or of any of the person having power to control the Company, and not be and have not been a substantial shareholder of, a person having power to control over, or a partner of any auditing firm or office in which the auditor of the Company, or the Company’s parent company, subsidiary, or major shareholder, or the person having power to control the Company is working, unless such an independent director has not been a person referred to above for at least two years prior to the date on which the application for being an independent director is filed with the SEC. (f) Not be and have not been a professional advisor, including legal or financial advisor who obtains fee more than two million baht a year from the Company or the Company’s parent company, subsidiary, associated company, or major shareholder, or from the person having power to control the Company, and not be and have not been a substantial shareholder of, a person having power to control over, or a partner of any of such professional service provider firm or office, unless such an independent director has not been a person referred to above for at least two years prior to the date on which the application for being an independent director is filed with the SEC. (g) Not is a director appointed as a representative of a director of the Company, a representative of a major shareholder of the Company, or a representative of a shareholder of the Company which is a related person of the major shareholder of the Company. (h) Not have any characteristics by which his/her independent comment or opinion on the Company’s operation may be affected. If a person having qualifications stated in (a) to (g) above is appointed as an independent director of the Company, such appointed independent director may be assigned by the Company’s Board of Directors to make decision in respect of business operation of the Company, or the Company’s parent company, subsidiary or associated company, or a of subsidiary another company in the same level of the Company, the major shareholder of the Company, or the person
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ANNUAL REPORT 2012
Focus Development and Construction Public Company Limited
having controlling power over the Company, provided that such decision making by such appointed independent director must always be made on a collective decision basis.
Remuneration Committee
Remuneration Committee as of December 31st, 2012 comprises of 3 members as follow; Name – Surname 1 Mr. Phasunsook Ayanaputra 2. Mr. Pornsanong Tuchinda 3. Mr. Michael de Santiesteban
Position Chairman of the Remuneration Committee Remuneration Director Remuneration Director
Attendance (times) 2/2 1/2 2/2
Qualifications of Remuneration Committees 1. The members of Remuneration Committees shall be the company’s directors who have been appointed by the Company Committees. 2. The number of Remuneration Committees shall consist of at least 3 people and consist of no less than half of its total members who are qualified as independent committees, in which the Chairman of Remuneration Committees shall also be the independent committee. 3. The Remuneration Committees shall be qualified as Non-Executive Directors in order to prevent the conflict of interest and devote themselves for the duty of remuneration committees. 4. The Remuneration Committees shall nominate any member of Remuneration Committees or any employee to be the secretary of Remuneration Committees.
Term of Remuneration Committee
Term of Remuneration Committee is 3 years, the term commencing from May 9th, 2011 to May 9th, 2014.
Scope of Authority and Responsibilities of Remuneration Committees 1. Providing the guideline and reviewing any method of remuneration payment, including the annual bonus and the meeting allowance, whether it is monetary or not, any fringe benefits provided to any committee, managing director, chief executive officer and any sets of subcommittees appointed by the Board of Committees and offering it to the Board of Committees for consideration. 2. Determining the criteria for assessing the performance of the Chairman, managing director for purpose of setting their remuneration before offering to the Board of Committees for annual consideration. 3. Considering any conditions if there are any securities (or share subscription warrant) offered to any committee and officer, including considering the appropriateness and giving the resolution if any committee or officer is allocated the securities more than 5% of total allocated securities, provided no any member of the Remuneration Committees shall be allocated the securities more than 5% and then they are entitled to pass any resolution. 4. Reporting any progress and performance to the Board of Committees all the times after holding the Remuneration Committees’ meeting and reporting the performance of the last year to the shareholders through the Company’s annual report and the annual ordinary shareholder meeting. 5. Reviewing the Charter of the Remuneration Committees and offering it to the Board of Committees for the approval for purpose of proper adjustment and update. 6. Performing of any other duties assigned by the Board of Committees;
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According to the duty performance under the scope of their power and authority, the Remuneration Committees are able to invite the Management Division, heads of any working units or relevant officers to give their opinion, related and necessary information in the meeting. Besides, for performing the duties under the scope of their power and authority specified herein, the Remuneration Committees can ask for any advice from the independent consultants or other specialists if, in their opinion, it is necessary and proper to do so. However, the Company shall be responsible for all expenses.
Investment Committee
Investment Committee as of December 31st, 2012 comprises of 5 members as follow; 1. 2. 3. 4. 5.
Name - Surname Mr. Anucha Sihanatkathakul Mr. Jeremy Lakemire King Mr. Nontawat Thongmee Mr. Tanakorn Leelasiri Mrs. Wilaiporn Siripoorikan
Position Chairman of the Executive and Investment Vice Chairman of the Executive and Investment Executive and Investment Director Executive and Investment Director Executive and Investment Director
Investment Committee’s Responsibility 1. Set forth method and strategy on investment. 2. Consider and approve investment on instruments and securities of each type under the Investment Procedure required by company. 3. Consider and select the instruments and security that are invest able in accordance with the Investment Procedure required by company. 4. Consider acquisition and distribution of the invest able securities under the Investment Procedure required by company 5. Handle report on investment situation. 6. Handle other matters as assigned.
Scope of Responsibilities of Investment Committee 1. Make an investment on short-term security or trading portfolio amounted not exceeding 25 million baht under amount limit of not exceeding 50 million baht. 2. Make an investment on long-term security or stock security amounted not exceeding 25 million baht or accounted for 5% of paid-up capital under amount limit of not exceeding 50 million baht. 3. Make an investment on large-scale and costly properties under make amount limit of not exceeding 50 million baht.
Construction Management Committee
Construction Committee as of December 31st, 2012 comprises of 4 members as follow; 1. 2. 3. 4.
Name – Surname Mr. Anucha Sihanatkathakul Mr. Nontawat Thongmee Mr. Tanakorn Leelasiri Mrs. Wilaiporn Siripoorikan
Position Chairman of the Construction Managing Director Assistant Managing Director Assistant Managing Director
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Scope of Authority and Responsibilities of Construction Management Committee
Board of Directors delegated the authorities to Executive Committee as an authorized person, to work on behalf of the company within the scope and conditions as follow; 1. To operate and manage the company’s operation in accordance with the objectives, rules, and resolutions undertaken at Shareholders Meeting and Management Committee Meeting in all cases. 2. To approve general issues such as the purchase of vehicles, machines, construction material under the value of 5 million baht. 3. To approve the operation of projects of value higher than 100 million baht but not over 700 million baht, which are normally construction projects. This duty includes the granting of approval for the project, the purchase of construction material, and the employment of contractors; each of which has value not higher than 20 million baht. 4. To set organization, management and Executive Committee structure to cover all details of selection, training, recruitment, and lay off of engineers and other employees of the company. 5. To prepare, propose, and recommend business directions and strategies of the company to Board of Directors for approval. 6. To set business plans and management authority, to approve annual budget and expenditure for business operation, to implement business plans and strategies in accordance with the policies and business directions approved by Board of Directors. 7. To undertake any duties as assigned by the Board of Directors at any certain time. 8. Executive Committee does not have authority to approve or to involve in or to undertake any businesses or transactions that the executive committee member or other persons may have any conflicts, interests, or conflicts of interests with the company.
Management Team
Management Team as of December 31st, 2012 comprises of 4 members as follow; 1. 2. 3. 4.
Name – Surname Position Mr. Anucha Sihanatkathakul Chairman of Executive Director Mr. Nontawat Thongmee Managing Director Mr. Tanakorn Leelasiri Assistant Managing Director of Administration Division Mrs. Wilaiporn Siripoorikan Assistant Managing Director Financial and Accounting Division Scope of Authority and Responsibilities of Managing Director
Managing Director has authority as manager to manage and control normal business operation of the company and has authority to approve normal transactions of the company. However, the approval of bidding of construction projects must be in accordance with scope of authority under authority table, which is approved by Board of Directors of the company. Besides, Managing Director also has authorities to perform any duties that are assigned by according to the company’s structure. Managing Director is able to assign other persons who are considered appropriate to undertake necessary and appropriate management or operation duties for Managing Director according to judgment of Managing Director.
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However, Managing Director or any persons authorized by Managing Director do not have authority to approve or to involve in or to undertake any businesses or transactions that Managing Director or other persons may have any conflicts, interests, or conflicts of interests with the company.
Director and Executive Nomination
The company did not have Nominating Committee to recruit any candidates for the posts of Directors of the Company. However, the company’s Board was in charge for considering candidates based on experience, knowledge, capability and qualification according to the law of Public Company Limited B.E. 1992 and notifications of Securities and Exchange Commission as well as other relevance regulation. The name list of director candidates was proposed by Shareholders Meeting. However, the company’s Board was responsible for the operation of the company under control of Shareholders Meetings and regulations of the company. The selection and appointment criteria of the company are as follow; 1. One shareholder has voting right according to number of shares hold, as one share is eligible for one vote. 2. The selection of Director may vote of each individual director for one time or vote of more of directors for one time depending on the resolution of Shareholders Meeting at each time of vote. Each shareholder has the voting right of one person for one vote and transferring the vote to any person is not acceptable. 3. To vote in the election of Directors. Each nominating Director has to receive more than 50% of the total votes from Shareholders who attend the meeting and have the right to vote. In the event of equal number of votes, the Chairman of the meeting will make the final decision.
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Focus Development and Construction Public Company Limited
Remuneration for Directors and Executive
Monetary Remuneration
Remuneration for Company’s Directors, Audit Committee and Remuneration Committee
The Company’s committees consists of 12 members and the Company determines the monetary remuneration for its directors, audit committee and remuneration committee for 2012 as briefly mentioned below;
Name-Surname 1. Mr. Anucha Sihanatkathakul 2. Mr. Jeremy Lakemire King 3. Mr. Michael de Santiesteban
Position Chairman of the Board Vice Chairman
Director and Chairman of Audit Committee 4. Mr. Phasunsook Ayanaputra Director and Audit Director 5. Mr. Pornsanong Tuchinda Director and Audit Director 6. Pol. Maj.Gen. Sunthorn Boonruang Director 7. Lt.Gen. Thavalya Prapapant Director 8. Mr. Thomas C. Thompson Director 9. Mr. Patrick M. Davenport Director 10. Mr. Tanakorn Leelasiri Director 11. Mr. Tanavich Chindapradist Director 12. Mr. Nontawat Thongmee Director and Managing Director Total
Remuneration Committee Audit Board of Director Committee Meeting Fee Bonus Meeting Fee Meeting Fee Director 62,500 50,000 40,000
50,000
20,000
-
50,000 30,000 40,000 30,000 40,000 50,000 50,000 40,000
40,000 30,000 -
25,000 10,000 -
-
482,500
120,000
55,000
-
Note: Resolution of the Annual General Meeting of Shareholders for year 2012 approved Directors Bonus as a whole totaling not more than 3,500,000 baht. However, the Board of Directors’ meeting held on November 9th, 2012 passed the resolution to omit directors’ bonus for the year 2012 to the Board of Directors total 1,100,000 baht.
Total Remuneration for Executive Directors and Executives
In 2012, the remuneration for Chairman of Executive Committees and Executives, totaling 4 persons were in the amount of 8,221,200 baht.
Other Remuneration
Allocation of ESOP Warrant
The Company was approved by the Extraordinary General Meeting of shareholders no. 1/2008 to allocate the warrant to its directors, executives and employees for 12,500,000 units (offering price was 0.00 baht per unit), at the exercise price which was valued at 3 baht per unit. By the way, a warrant is eligible to subscribe an ordinary share and the warrant was valid for 5 years of the date issuing and offering.
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Objectives
Providing the opportunity to any directors, executives and employees to jointly own the company, motivating, and rewarding their performance and benefits provided to the Company by them
Qualification of Company’s directors and employees who were to be allocated Warrants 1. Any directors and/or regular employees of the Company, excluding any contract employees. 2. Any exception other than clause 1. shall be offered to the Management Team and/or the Remuneration Committees for consideration as the special case. 3. Number of warrants allocated to each of the Company’s committees and/or officers under the Management Team determination do not have to be equal, however it depends on: Position work experience Working performance and potential Benefits contributed to the Company
Details of Warrant to purchase ordinary shares of the company to directors and employees; Date of warrant offered June 16th, 2009 The first exercise date July 31st, 2010 The last exercise date June 15th, 2014
Offering Period : At the end of the 1st year, the accumulated conversion rights amount not to exceed 20%. At the end of the 2nd year, the accumulated conversion rights amount not to exceed 40%. At the end of the 3rd year, the accumulated conversion rights amount not to exceed 60%. At the end of the 4th year, the accumulated conversion rights amount not to exceed 80%. At the end of the 5th year, the accumulated conversion rights amount not to exceed 100%.
On another matter, Directors and personnel exercised their right to change the warrants to purchase shares into shares, which totaled up to 579,000 shares on October 31st, 2012, and the Company registered to increase its capital by 125,579,000 baht with the Ministry of Commerce on November 7th, 2012.
Number of allocate warrants to directors as at October 2nd, 2008 Name - surname Mr. Anucha Sihanatkathakul Mr. Jeremy Lakemire King Mr. Nontawat Thongmee Pol.Maj.Gen. Sunthorn Boonruang Lt.Gen. Thavalya Prapapant Mr. Pornsanong Tuchinda Mr. Phasunsook Ayanaputra Mr. Michael De Santiesteban Mr. Thomas C. Thompson Mr. Patrick M. Davenport
Position Chairman of the Board Vice Chairman Managing Director Director Director Director Director Director Director Director
Number of allocate warrant 2,080,000 2,080,000 1,080,000 480,000 480,000 480,000 480,000 280,000 280,000 280,000
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Focus Development and Construction Public Company Limited
Number of allocate warrants to executives as at October 2nd, 2008 Name - surname
Mr. Tanakorn Leelasiri Mrs. Wilaiporn Siripoorikan Note:
Position Assistant Managing Director of Administration Division Assistant Managing Director Finance and Accounting Division
Number of allocate warrant 800,000 800,000
1. Two executives, namely Mr. Anucha Sihanatkathakul (Chairman of the Board) and Mr. Nontawat Thongmee (Managing Director) are allocated the warrant which will be provided to any directors. 2. Mr. Thanakorn Leelasiri was appointed to be a Director and was registered with the Ministry of Commerce on October 26th, 2009, after he was given the warrant for management.
Corporate Governance The company had policy to comply with guideline on corporate governance for directors of listed company set by the Stock Exchange of Thailand (Attach 3 follow details) and the Committee of the company shall be understood roles and responsibilities. For example, director had to comply with laws and regulations of the company, had integrity and responsibility to shareholders, and had intention to continuous conducting the business. Director had to set policies and business directions of the company, and was responsible for the preparation of financial reports for the control of management to efficiently and effectively operate the business under determined policies. In addition, the company appointed the Remuneration Committee to determine the reasonable reward, but appointing the Nominating Committee remained undone by company, considers that, currently, the consideration and decision making of this issue could effectively be conducted by The Company’s Board and Executive Board of the company. However, the company has Independent Committee and Audit Committee to help monitoring internal control system of the Company in order for the company operation to be transparent and for the highest profits to the company and shareholders. In addition, a criterion for the selection of Independent Director was in accordance with regulation of Stock Exchange of Thailand on the qualification of Independent Director. Examples of criteria are that independent director shall not hold position as management or full-time employee of the company, shall not be managing director or manager who has authority to take action on behalf of the company, and shall be independent from major shareholders, management, and related parties.
Control of the Use of Inside Information The company passed the policies to protect the use of inside information by director or executive for their own benefits as follow; 1. Prohibit the director, executive, including spouse and children who are not yet of legal age, using the inside information to purchase, sell, transfer, or receive the company’s securities before those information is disclosed to public especially within 1 month before financial statements are disclosed to public. Besides, after the information is disclosed to public, the aforementioned persons would not purchase or sell securities until the public has acknowledged that information for a certain appropriate period of time.
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2. Acknowledge the director and executive, the responsibility to report their ownership of the company’s securities, including those of the spouse and children who are not yet of legal age and regarding the report of the company’s shares holder by director, management, including spouse and children who are not yet of legal age, that may have any chances to purchase, sell, transfer, or receive securities of the company as prescribed in notification of Securities and Exchange Commission.
Company’s Personnel
As of December 31st, 2012 the Company has 156 employees as listed below: Description Engineer Architect Head office Field Total
Regular Employee (person) 39 4 38 72 153
Contract Employee (person) 3 3
Total (person) 39 4 38 75 156
Note: As of December 31st, 2012 the Company has 569 daily paid workers; For the last 3 years, the Company has no any significant labor disputes. The total remuneration for 2010, 2011 and 2012 provided to the employees was in the amount of 49.38 million baht, 53.35 million baht and 65.72 million baht respectively. The said remuneration consists of salary, overtime, bonus and other payment. The Company’s policy enhances to continuously improve its personnel of all levels regarding the aspects of knowledge and competence, both engineer and any staff of other positions. Moreover, the Management Division is aware that its personnel are deemed as a value and vital resource, so that the Company’s policy determines to enhance and support its personnel at all levels to the improvement of knowledge, skill and positive attitude towards their working. Previously, the Company sent its personnel to attend the training courses in various fields which conform to their function, both inside and outside of the Company, whether they are provided by the public or private agency, such as the project of construction danger acknowledging enhancement and protection measures under the law regarding working safety, project of construction risk management for reducing any loss, and construction planning and period determination project, etc. Accordingly, such projects can increase the competence and effectiveness for their working, decrease any mistakes or trial and error, and enhance any personnel to gain more knowledge, vocational progress and working satisfactoriness leading to the corporate development and achievement of the operative objectives under the state of technology change and strong business competition.
54
Name - Surname Age Position (year)
1. Mr. Anucha Sihanatkathakul Chairman of the Board (Director who is authorized of the company)
No.
Directors Certification Program (DCP), Thai Institute of Directors (IOD) 4/2000
(Fellow Member), Thai Institute of Directors (IOD) 2/2001
B.A. (Accounting & Management), Houston Baptist University, Texas, U.S.A.
M.B.A (Finance), University of Houston, Texas, U.S.A.
Education Background -
-
Percent of Shareholding in the Family company (%) Relationship
2001 - 2005
2001 - 2005
2004 - 2006 2004 - 2005
2005 - 2006
2002 - present 1998 - present 1989 - present 2007 - 2009 2003 - 2007 1999 - 2006
2003 - present
2007 - present 2006 - present
2008 - present 2008 - present 2008 - present 2007 - present
20011- present
20011- present 20011- present 20011- present 20011- present 20011- present
Period
Name of Unit / Company/ Business Type (5)
Amata B. Grimm Power 1 Co., Ltd. / Electricity Generating Amata B. Grimm Power 2 Co., Ltd. / Electricity Generating Amata Power (Rayong) Co., Ltd. / Electricity Generating Amata B. Grimm Power 1 (Rayong) Co., Ltd. Amata B. Grimm Power 2 (Rayong) Co.,Ltd. / Electricity Generating Executive Chairman Data In Motion Co., Ltd. / Distribute Wi Net & Wi Fi Equipments Director Amata Power Co., Ltd. / Electricity Generating Director Amata Water Co., Ltd. / Water & Utilities Director Amata Hong Kong Co., Ltd. / Investment Director and Chairman Amata Corporation Pcl. / Industrial Estate Development of the Audit Committee Director Amata (Vietnam) Co., Ltd. / Industrial Estate Development Chairman of the Data Technology Co., Ltd. / Consult, Design and Director Distribute Computer Equipments Executive Chairman Focus Development and Construction Pcl. / Construction & Property Development Director Focus Environmental Co., Ltd. / Construction & Engineering Director Capital Focus Co., Ltd. / Investment Director Moon Dance Development Co., Ltd. / Property Development Executive Vice Chairman Syrus Securities Pcl. / Securities Executive Chairman Syrus Securities Pcl. / Securities Director PTTEP Exploration and Production Pcl. / Exploration and Production Special Advisor The Committee on Finance, Banking and Financial Institutions, The Senate Advisor Sub Committee on Banking and Financial Institutions, Specialist The Senate The Committee on Finance, Banking and Financial Director Institutions, The Senate Thai Oil Power Co., Ltd. / Electricity Generating Director Nava Leasing Pcl. / Leasing
Director Director Director Director Director
Position
Work experience during the past 5 years
Details of Directors, Executives, and Company’s Authorized office (As of December 31, 2012)
28 ANNUAL REPORT 2012
Focus Development and Construction Public Company Limited
50
50
78
3. Mr. Nontawat Thongmee Managing Director (Director who is authorized of the company)
4. Lt.Gen Thavalya Prapapant Director
Name - Surname Age Position (year)
2. Mr. Jeremy Lechemere King Vice Chairman (Director who is authorized of the company)
No.
Directors Accreditation Program (DAP), Thai Institute of Directors (IOD) 8/2004 (year 2004)
Bachelor of Civil Engineering Worcester Polytechnic Institute, MA, U.S.A.
Royal Thai Army War College, Institute of Advanced military Studies
Army Engineer Curriculum for Colonel, Army Engineer School, Bhanurangsi Camp, Ratchaburi
Directors Certification Program (DCP), Thai Institute of Directors (IOD) 44/2004
B.B.A.Campbell University U.S.A.
M.B.A., Southeastern University U.S.A.
Law Degree, Nottingham University
Education Background
-
-
-
-
-
-
Percent of Shareholding in the Family company (%) Relationship
1997 – present
Focus Engineering and Construction Pcl. / Construction Raimon Land Pcl. / Real Estate Development Brooker Group Pcl. / Research and Real Estate Advisor
Focus Development and Construction Pcl. / Construction / Property Development Knight Asia Co., Ltd. Siam Knight Fund Management Securities Co., Ltd.
Name of Unit / Company/ Business Type (5)
Focus Development and Construction Pcl. / Construction / Property Development Advisor to Executive Intech Co., Ltd. / Machinery Sales Agent Business Director
Director and Managing Focus Development and Construction Director Pcl. / Construction / Property Development Director Focus Environmental Co., Ltd. / Construction
Vice Chairman Executive Vice Chairman Chairman and CEO. Chief Executive and Managing Director Director Executive Director Director
Position
2003 – present Director
2003 - present
2004 - present
2007 - 2008 2002 - 2006 2001 - 2006
2008 - present 1996 - present 1996 - present
Period
Work experience during the past 5 years
Focus Development and Construction Public Company Limited
ANNUAL REPORT 2012
29
Education Background
*0.32
*0.525
-
-
Position
Director and Audit Director
Nov. 09 - present Chairman of Director May. 08 - present Director and Audit Director Feb. 07 - present Member of Nominating and Remuneration Committee Jan. 07- present Director 2007 - present Executive Chairman Dec. 08 - Nov. 09 Chairman of Director 2005 - Apr. 08 Independent Director and Audit Director 2005 - Feb.08 Independent Director and Audit Director 2005 - 2006 Independent Director and Chairman of Audit Committee 2004 - 2005 Chairman of Director
2003 - 2006
2006 - present Director
Period
Nava Leasing Pcl. / Car Leasing
GE Money Retail Bank Pcl. / Commercial Bank
Bank of Ayudhya Pcl. / Commercial Bank Triple P Development Co., Ltd. Ayudhya Fund Management Securities Co., Ltd Focus Engineering and Construction Pcl. / Construction / Real Estate Development Syrus Securities Pcl. / Securities
Ayudhya Securities Pcl. / Securities Focus Development and Construction Pcl. / Construction / Property Development Bank of Ayudhya Pcl. / Commercial Bank
Focus Development and Construction Pcl. / Construction / Property Development Focus Engineering and Construction Pcl. / Construction
Name of Unit / Company/ Business Type (5)
Work experience during the past 5 years
Remark * Mrs. Lawan Boonruang (Pol.Maj.Gen.Sunthorn Boonruang’s spouse) holds the company shares of 0.52
Audit Committee Program (ACP), Thai Institute of Directors (IOD)
Director Certification Program (DCP), Thai Institute of Directors (IOD)
Directors Accreditation Program (DAP), Thai Institute of Directors (IOD) 29/2004 (year 2004)
6. Mr. Pornsanong 52 Master Degree of Finance Tuchinda and Management Director and Babson College, Chairman of Audit Massachusetts, U.S.A Committee Bachelor Degree of Economics and Political Science University of Michigan U.S.A.
Directors Accreditation Program (DAP), Thai Institute of Directors (IOD) 8/2004 (year 2004)
M.P.A., Indiana University U.S.A.
76 Bachelor of Political Science, Royal Police Cadet Academy
Name - Surname Age Position (year)
5. Pol.Maj.Gen. Sunthorn Boonruang Director
No.
Percent of Shareholding in the Family company (%) Relationship
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Focus Development and Construction Public Company Limited
61
8. Mr. Patrick Michael 47 Davenport Director
9. Mr. Thomas C. Thompson Director
Education Background
-
-
-
-
-
-
Position
Director Director Director
1998 - present
Partner
Feb. 08 - present Director
2006 - present 2004 - present 1997 - present
Sep. 08 - present Director
May.08 - present Chairman of Remuneration Committee 2006 – present Independent Director and Audit Director 1992 - present Partner
Period
Focus Development and Construction Pcl. / Construction / Property Development ACH Investment Pte, Ltd
Focus Development and Construction Pcl. / Construction / Property Development Rubfila International Limited Knight Asia Co., Ltd. Zaurus Investments Limited
Focus Development and Construction Pcl. / Construction / Real Estate Development Siam Premier International Law Office Limited
Focus Development and Construction Pcl. / Construction / Property Development
Name of Unit / Company/ Business Type (5)
Work experience during the past 5 years
ANNUAL REPORT 2012
Directors Accreditation Program (DAP),Thai Institute Of Directors (IOD) 74/2008 (year 2008)
BA Economics Columbia University 1978, USA
Msc Economics London School of Economics 1979
Director Certification Program (DCP), Thai Institute of Directors (IOD) 123/2009 (year 2009)
Bachelor of International Relation with a minor in Asian History, James Madison College, Michigan State University
Directors Accreditation Program (DAP), Thai Institute of Directors (IOD) 81/2009 (year 2009)
Bachelor of Law, Chulalongkorn University
Thai Barrister at Law, BAR Association
53 Master of Law Program (LLM), University of Iowa, U.S.A.
Name - Surname Age Position (year)
7. Mr. Phasunsook Ayanaputra Director and Chairman of Remuneration Committee
No.
Percent of Shareholding in the Family company (%) Relationship
Focus Development and Construction Public Company Limited
31
11. Mr. Tanakorn 53 Leelasiri Director and Assistant Managing Director of Administration Division
48
Name - Surname Age Position (year)
10. Mr. Michael de Santiesteban Director and Audited Director
No.
Mini MBA. Certificate, Faculty of Business Administration, Kasetsart University, No.33, 2004
Directors Certification Program (DCP), Thai Institute of Directors (IOD) 44/2004 (year 2004)
Bachelor Degree of Political Science, Public Administration, Thammasat University
Master Degree of Sociology, Thammasat University
Directors Accreditation Program (DAP), Thai Institute Of Directors (IOD) 74/2008 (year 2008)
Master’s Public Policy, Minor Statistics, Georgetown University Presidential Scholar
Education Background
0.0002
-
-
-
Percent of Shareholding in the Family company (%) Relationship Position
Focus Engineering and Construction Pcl. / Construction 2001 – 2005
Assistant Managing Director of Support Division And Acting Manager of General Administration, Human Resources and Information Technology Department
Focus Engineering and Construction Pcl. / Construction Director, Assistant Managing Director of Business Support Division, Secretary to the Board of Directors, Acting Manager of General Administration, Human Resources and Information Technology Department
Focus Development and Construction Pcl. / Construction / Property Development Focus Development and Construction Pcl. / Construction / Property Development
UBS AG Singapore
Focus Development and Construction Pcl. / Construction / Property Development Focus Development and Construction Pcl. / Construction / Property Development Bank Julius Baer
Name of Unit / Company/ Business Type (5)
2005 - 2007
2007 - present Assistant Managing Director of Administration Division, Acting Manager of General Administration, Human Resources and Information Technology Department, Acting of Manager of Equipment Control Department and Acting of Manager of Purchasing Department
Oct. 09 - present Director
Feb. 08 - present Director and Chairman of Audit Director May.08 - present Director of Remuneration 2007 - present Managing Director Senior Advisor 2004 - 2007 Executive Director
Period
Work experience during the past 5 years
32 ANNUAL REPORT 2012
Focus Development and Construction Public Company Limited
13. Mrs. Wilaiporn Siripoorikan Assistant Managing Director of Finance and Accounting Division
Education Background
45 M.B.A., Finance, University of the Thai Chamber of Commerce
Bachelor Degree of Science in Mathematics, King Mongkut University of Technology Thonburi
Master Degree of Science in Administration, Boston University
Master Degree of Science in Business Economics, Bentley College
43 Ph.D. in Public Administration, Suan Dusit University
Name - Surname Age Position (year)
12. Mr. Tanavich Chindapradist Director
No.
0.0002
-
-
-
Percent of Shareholding in the Family company (%) Relationship Position
2002 - 2005
2005 - present
Sep.93 - present Apr.97 - present Jan.01 - present Jan.01 - present Jan.02 - present Jan.06 - present Oct.06 - Sep.07
Focus Development and Construction Pcl. / Construction / Property Development Atwise Consulting Co., Ltd. Kasetsart University Burapha University Chiangmai University RamKhamHaeng University Logistics Time Magazine Strategic and Planning Office, Ministry of Energy
Name of Unit / Company/ Business Type (5)
Assistant Managing Focus Development and Construction Pcl. / Construction / Director of Finance and Property Development Accounting Division Manager of Finance and Focus Engineering and Construction Pcl. / Construction Accounting Department
Managing Director Special instructor Special instructor Special instructor Special instructor Writer Specialist on National Energy Planning
Oct.09 - present Director
Period
Work experience during the past 5 years
Focus Development and Construction Public Company Limited
ANNUAL REPORT 2012
33
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ANNUAL REPORT 2012
Focus Development and Construction Public Company Limited
Details of Director, Executive Director and Executive Position in other related companies (as of December 31st, 2012) Focus Development and Construction Public Focus Environmental Capital focus Company Limited Company Limited Company Limited
1. Mr. Anucha
Sihanatkathakul
2. Mr. Nontawat Thongmee 3. Mr. Jeremy King 4. Lt.Gen. Thavalya Prapapant 5. Pol.Maj.Gen. Sunthorn Boonruang 6. Mr. Pornsanong Tuchinda 7. Mr. Phasunsook Ayanaputra 8. Mr. Patrick M. Davenport 9. Mr. Thomas C. Thompson 10. Mr. Michael De Santiesteban
#, /, ♠, •
/
/, ♦, • , / / / / , +, /,+, / / /, ++,
/
11. Mr. Tanakorn 12. Mr. Tanavich
Leelasiri Chindapradist
/, • /
13. Mrs. Wilaiporn
Siripoorikan
•
Remark :
# Chairman of the Board ♠ Chairman of Construction Committee ♦ Managing Director + Audit Director Chairman of Remuneration Committee
Vice Chairman
/ Director ++ Chairman of Audit Committee • Executive Remuneration Director
/
ANNUAL REPORT 2012
Focus Development and Construction Public Company Limited
35
Connected transactions List of names of persons, who may have the conflict of interests, with connected transactions for the year ended December 31, 2012 Name of person who may have conflict of interests 1. Night Assets (Thailand) Co., Ltd.
Relationship
Mr. Jeremy Lechemere
King is an authorized signatory of Focus Development and Construction Public Company Limited
Type/size of transaction
Necessity and reasonability of the transaction
The company bought a ‘Focus on Night Assets (Thailand) Co., Ltd. Saladaeng’ condominium unit, bought the unit at the same the Company’s project, at price as other clients 6,118,900 baht.
Mr. Patrick M. Davenport
is the director of Focus Development and Construction Public Company Limited
Both are the directors and authorized signatories of Night Assets (Thailand) Co., Ltd.
2. Mr. Anucha Sihanatkathakul Mr. Anucha Sihanatkathakul is a director and an authorized signatory of Focus Development and Construction Public Company Limited
Mr. Anucha Sihanatkathakul Mr. Anucha Sihanatkathakul bought two ‘Focus on Saladaeng’ bought the unit at the same condominium units, the price as other clients Company’s project. The first unit cost 6,877, 320 baht and the second was 6,665, 400 baht.
3. Mr. Tanakorn Leelasiri
Mr. Tanakorn Leelasiri bought a ‘Focus on Saladaeng’ condominium unit, the Company’s project, at 3,103,425 baht.
4. Ms. Annie Guat Khuan Chew
Mr. Tanakorn Leelasiri is an executive and a director of Focus Development and Construction Public Company Limited Ms. Annie Guat Khuan Chew is married to Mr. Thomas C. Thomson, who is a director of Focus Development and Construction Public Company Limited
Mr. Tanakorn Leelasiri bought the unit at the same price as other clients
Ms. Annie Guat Khuan Chew Ms. Annie Guat Khuan Chew bought two ‘Focus on Saladaeng’ bought the unit at the same condominium units, the price as other clients Company’s project. The first unit cost 5,640, 600 baht and the second was 5,743, 400 baht.
Remark : Focus means Focus Development and Construction Public Company Limited
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ANNUAL REPORT 2012
Focus Development and Construction Public Company Limited
Explanation and Analysis of Financial Position and Results of Operations Results of Operations In 2012, following the great flooding event, the recovery from flood damages and government’s economic stimulating policy has been a thrust moving the domestic economy; the industrial production has recovered continuously and many plants have resumed to its normal production situation while the production has been speeded up in responsiveness to the pending orders. Besides, the private demand has recovered vigorously and resumed to the normal situation as it has been before flooding event. It is anticipated that private investment will grow in accordance with the entrepreneurs’ investment schemes so as to accommodate the customer needs that are expected to be growing, including to the real estate markets like condominium is expected to be more popular, especially those condominiums situated surrounding and nearby the BTS, the vicinity not away from the urban area, proximity to the supermarkets, hospitals, and main roads. In 2012, the company undertakes the construction and buildings like factory and condominium, for instances, the food and beverage manufacturing plant, Nakhonprathom, the Nest Ploenchit Bangkok, etc. The company earns the larger portion of income from the construction business as major source of earning than a year earlier. In addition, the company has income derived from transfer of ownership for the Focus On Saladaeng Condominium from most customers, resulted that the company’s revenues from two business valued of 1,101.59 million Baht, increased by 504.03 million Baht, or increased by 84.35% as compared to the past year; 597.56 million Baht, resulting the company has net profit of 64.55 million Baht, or 5.84% of overall incomes. However, the company continues to focus on development of potentials in both performance quality and human resource quality in rendering the standard service and on-time delivery to the customers. The company has primarily sought for both government and private employments. In addition, upon making a decision, the company is conscious of the risk factors when undertaking the jobs and the individual customer’s payment ability; this is to minimize the contingent risks of failure of collection. In addition, the company has been truly committed to pursue on the real estate development continuously following the introduction of the initial residence project under the name “Focus On Saladaeng”, and transfer of ownership to the customers has been mainly carried out from the late 2011 to 2012. To further a continuity of the real estate business, the company has developed and launched the second project under the name “Focus Ploenchit”, located at Soi. Sukhumvit 2, Sukhumvit Rd, Bankok. It is 8-floor condominium and one underground floor. It is expected to start constructing by the third quarter of the year 2013. Thus, the company will earn income from real estate development business along together with construction business.
Incomes Regarding the company’s income structure from the past to 2009, the company has operated the construction business only, and since 2010 the company has launched the construction works along together with real estate development business.
ANNUAL REPORT 2012
Focus Development and Construction Public Company Limited
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(Unit: Million Baht) Sources of Incomes
Construction business Real estate development Others Total
2012
894.49 207.10 4.39 1,105.98
80.88% 18.72% 0.40% 100.00%
2011
548.14 49.41 5.36 602.91
90.92% 8.19% 0.89% 100.00%
2010
225.82 7.21 233.03
96.91% 0.00% 3.09% 100.00%
Construction Business
The company has been recognized as medium-scale constructor; providing a service of construction and construction engineering in general; for examples design, structural and architectural construction, structural engineering, environmental engineering system, e.g. office buildings, bridges, resorts, hospitals, residence, schools, dormitory, industrial plants, road, bridge works, piping system, waste water treatment system, rail work, railway station works, and other utility works. Company’s income depends on aspects of work and workloads undertaken at different periods. The company has policy to undertake both government and private employment, based on the reasonable remuneration and reliable potential employers with good financial position. Regarding to income recognition, the company has recognized income according to the completion of the phased construction, referring to the survey of the completed works under the project engineer’s assessment. A period of construction for both government and private employment lasts approximately 1-2 years or higher depending on the value of the project. Income generated from construction business in 2012, 2011, and 2010 was 80.88%, 90.92% and 96.91% of overall revenues respectively. In 2012, the company earned income from construction business valued of 894.49 million Baht, increased by 346.35 million Baht, or 63.18% as compared to 548.14 million Baht in 2011. Mainly, income generated from construction business included station building, suburban rail system construction (Red Line) Bangsue-Talingchan, and Equinox Condo.
Real Estate Development Business
The company has recognized incomes from units sold for condominium project upon completion of the construction under the agreement, and transfer of risk and significant benefit as owner of goods to the buyers. Following entering into the real estate business in 2010 with 8-floor condominium and 62 units under the title “Focus On Saladaeng”, and gradually transfer the ownership to the buyers by the fourth quarter of the year 2011 to 2012, income portion in the real estate business in 2012 and 2011 accounted for 18.72% and 8.19% of total income.
As of 31 December 2012, the company has a transaction value with agreement as follows. (Unit: Million Baht) Project
Focus On Saladaeng Focus Ploenchit
Amount
Per Total sale (%)
268.17 9.05
Total sale of Project
93.80 1.13
285.89 800.35
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ANNUAL REPORT 2012
Focus Development and Construction Public Company Limited
Expenditures The company’s cost and expenditures include contracting cost, real estate development cost, administrative cost, financial cost, income tax cost. Constructing cost comprises constructing materials, sub-construction wage, labor wages, overhead expenses, and so on. Real estate development cost comprises the cost of land acquisition, land development cost, material costs, labor wag, and project direct related expenses, and loan interest in relating to the real estate development and acquisition.
In 2012 and 2011, the company’s cost has been categorized by business as follows.
Construction Business Cost: as the company’s 2012 income has increased higher than the past year, accounted for 346.35 million Baht. Constructing cost increases with increased income recognition; the constructing cost increased from 92.73% in 2011 to 94.10% in 2012. Some projects have been affected owing to the 2011 great flood; the company incurred additional expenses for repairing and expediting the works in order to complete in due time. The company has to adjust the construction budgets accordingly with the actual cost incurred, thereby affecting that constructing cost has increased. Real estate development cost: in 2012, the company has transferred the ownership for the Focus On Saladaeng to the customers mostly, resulted that income from real estate development business increases by 157.69 million Baht from the year 2011. Thus, selling cost has been recognized accordingly with the condominium units that have been transfer of the ownership to the customers. In 2012 and 2011, selling cost was 67.79% and 67.88% respectively. Besides, the selling cost varies with the different selling price of each unit. (Unit: Million Baht) 2012 Description
Construction
Income 894.49 100% Cost 841.65 94.10% Gross Profit 52.84 5.90%
2011 Real Estate
207.10 100% 140.40 67.79% 66.70 32.21%
Construction
Real Estate
548.14 100% 49.41 100% 508.31 92.73% 33.54 67.88% 39.83 7.27% 15.87 32.12%
Increase (Decrease) Construction Real Estate
346.35 333.34 13.01
157.69 106.86 50.83
In 2012, administrative expense was 54.11 million Baht, increased by 7.21 million Baht or 15.37% as compared to the year 2011 of 46.90 million Baht. Because of advertisement and public relation to introduce the residence project, “Focus Ploenchit”, the company incurred such expenses before construction and was included in the account as administrative cost. In 2012, the company has financial cost amounted of 4.26 million Baht, increased by 2.54 million Baht or 147.67% as compared to the year 2011 of 1.72 million Baht. As the company has registered mortgage the “Focus Ploenchit” and its existing premises and what may incur in the future, totaled 365 million Baht. In 2012, partial loan spent to buy the land property valued 52.30 million Baht. Because the construction has not been launched, the interest incurred is recorded as financial cost. In 2012, the company has taxation cost amounted of 1.01 million Baht, which calculation is based on the rate set out by the Royal Decree according to the Fiscal Code on Reduction and Exemption of Revenue Tax No.530 B.E.2554 dated on December 14, 2011; the Corporate income tax decreases from 30 percent of net profit to 23 percent of net profit for the initial accounting cycle beginning on or after January 1, 2012 , and 20 percent of net profit for the second accounting cycle beginning on or after January 1, 2013 onwards.
ANNUAL REPORT 2012
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Focus Development and Construction Public Company Limited
Net Profit (Loss) The company earned a profit from operating results as of the ended 31st December 2012 valued 64.55 million Baht or 5.84% of total revenue as compared to the same period of the year 2011, 12.44 million Baht, or 2.06% of total revenues, net profit increased by 52.11 million Baht or accounted for 418.89%. The main causes of the significant changes include. 1. Income generated from construction business increased by 346.35 million Baht as resulted that the company had undertaken the new projects; e.g. the Kanyarat Lakeville Condominium, Khonkaen, and the foods and beverages manufacturing plant, Nakhonprathom, which the company has gradually recognized the income by the 2nd quarter 2012, including the in-process construction succeeding from the past year with progress as planned construction schedule. 2. The company has transferred an ownership of the condominium to customers in the Focus On Saladaeng, valued of 207.10 million Baht, resulted that the company earns the gross profit of 66.70 million Baht or 32.21%. (Unit: Million Baht) Description
Total revenues Total cost Administrative cost Financial cost Income tax expense Profit for the year
2012
2011
1,105.98 982.05 54.11 4.26 1.01 64.55
602.91 541.85 46.90 1.72 12.44
Increase (Decrease)
503.07 440.20 7.21 2.54 1.01 52.11
83.44% 81.24% 15.37% 147.67% 100.00% 418.89%
Financial Position The company’s 2012 financial position as compared to the year 2011 has some significant changes as follows.
1. Asset Analysis
The company has consolidated assets as of 31st December 2012 valued 700.09 million Baht, increased by 235.27 million Baht or accounted for 50.62% as compared to the consolidated assets in 2011, 464.82 million Baht. In 2012, the company has current assets valued 566.70 million Baht or accounted for 80.95% of overall assets. The important transactions include as follows. 1.1. Cash and cash equivalent is of 30.59 million Baht, increased by 18.17 million Baht or 146.30% as compared to the year 2011, 12.42 million Baht, as resulted that the company received payment from account receivables by the late 2012. 1.2 Account receivables, other receivables, and unbilled receivables, but not charged, totaled of 274.29 million Baht or accounted for 48.40% of current assets; divided into 128.36 million Baht account receivables, 0.28 million Baht other receivables, and 145.65 million Baht unbilled recivables, but not charged, increased 100 million Baht or accounted for 57.37% as compared to the year 2011, 174.30 million Baht, as resulted that the company earns income from construction business in 2012, which increases by 346.35 million Baht from the past year; including 128.36 million Baht account receivables in 2012, account receivable aged of under 3 month
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ANNUAL REPORT 2012
Focus Development and Construction Public Company Limited
valued 108.89 million Baht, account receivable aged of 3-6 months value 19.47 million Baht. Debt collection period in 2012 is 39 days. 1.3. Real estate development cost is of 225.33 million Baht, increased by 89.12 million Baht as compared to the year 2011, 136.21 million Baht, as resulted from the company acquired the land plot located in Soi. Sukhumvit 2 and the Focus on Saladaeng project development cost, amounted 209.07 million Baht and Focus on Saladaeng project development cost for units that have not been transferred an ownership amounted of 16.26 million Baht.
The company has registered mortgage the “Focus Ploenchit� and its existing premises and what
may incur in the future as overdraft guarantee of 5 million Baht, long-term loan of 335 million Baht, and the letter of guarantee of 25 million Baht. 1.5 Non-current assets are of 133.39 million Baht, increased by 20.74 million Baht or 18.41% as compared to the year 2011. The company has the corporate withholding tax income in 2012 amounted 23.37 million Baht and 13.67 million Baht in 2011 as refunded by the Revenue Department in 2013. (Unit: Million Baht) Description
2012
2011
30.59
12.42
18.17
146.30%
Trade and other receivables
128.64
107.60
21.04
19.55%
Unbilled receivables
145.65
66.69
78.96
118.40%
Cost of property development
225.33
136.21
89.12
65.43%
Total current assets
566.70
352.17
214.53
60.92%
Total non-current assets
133.39
112.65
20.74
18.41%
Total assets
700.09
464.82
235.27
50.62%
Cash and cash equivalent
Increase (Decrease)
2. Liability Analysis
As of the end of the year 2012, the company has total liabilities amounted of 527.25 million Baht, increased by 168.98 million Baht or 47.16% as compared to the year 2011, 358.27 million Baht as detailed below. 2.1 Bank Overdrafts and short-term loan borrowed from financial institutions, valued of 114.91 million Baht, increased by 89.99 million Baht, or 361.11% as compared to the year 2011, 24.92 million Baht , as resulted from the company has some projects on sale in the promissory notes worth 15 million Baht, and issues the promissory notes worth 100 million Bah to pay for Soi Sukhumvit 2 land which payment due by the beginning of the year 2013. 2.2 Trade payables and other creditors are of 179.43 million Baht, increased by 102.99 million Baht or 134.73% as compared to the year 2011, 76.44 million Baht. In addition, the estimated cost is of 52.64 million Baht, increased by 16.92 million Baht or 47.37% as compared to the year 2011, 35.72 million Baht, as resulted from the increasing order quantity or subcontractor according to the increasing income and constructing cost. 2.3 Liabilities within 1-year payment due is of 0.63 million Baht, decreased by 56.51 million Baht as compared to the year 2011, 57.14 million Baht because the company repays the domestic banks the loan debts as to the loan agreements, and has released the mortgage for Focus On Saladaeng .
ANNUAL REPORT 2012
Focus Development and Construction Public Company Limited
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2.4 Advance receipt is of 81.20 million Baht, decreased by 55.29 million Baht, or 40.51% as compared to the past year, 136.49 million Baht, as resulted from the company receives the amount in advance for construction from employer, and has gradually been rebated out of the works value that is completely handled on each installment. In addition, the company receives the booking amount and installment amount from customers who have not been transferred an ownership for the Focus On Saladaeng and the Focus Ploenchit. 2.5 Long-term loan from the financial institutions increases by 52.30 million Baht as compared to the year 2011. The loan from domestic banks for purpose of paying for land in Focus Ploenchit project. (Unit: Million Baht) Description
2012
2011
Bank Overdraft and short-term loan from financial institutions
114.91
24.92
89.99
361.11%
Trade and other payables
179.43
76.44
102.99
134.73%
0.63
57.14
(56.51)
(98.90%)
Estimated cost
52.64
35.72
16.92
47.37%
Retention payables
28.08
15.06
13.02
86.45%
Advances received
81.20
136.49
(55.29)
(40.51%)
469.25
354.02
115.23
32.55%
Long-term loan from financial institutions
52.30
-
52.30
100%
Total non-current liabilities
58.00
4.25
527.25
358.27
Current portion of debts
Total current liabilities
Total liabilities
Increase (Decrease)
53.75 1,264.70% 168.98
47.16%
3. Shareholder’s Equity Analysis
The company’s shareholders’ equity as of the ended December 31, 2012 is of 172.84 million Baht increased by 66.29 million Baht or 62.21% as compared to that of the year 2011, 106.55 million Baht with the following significant changes. 3.1 By the fourth quarter of the year 2012, there are 579,000 units of the warrant holders who exercise a right to convert the warrants to ordinary shares of 579,000 unit at par value of 3.00 Baht each, and the company has pursued on registering the changes in paid-in capitals as resulted of such an exercise of right at the Minister of Commerce, from amount of 125 million Baht to 125.58 million Baht on November 7, 2012. 3.2 As of the ended December 31, 2012, the company earns net profit of 64.55 million Baht from operating results, resulting the retained loss reduces to 6.87 million Baht. (Unit: Million Baht) Description
2012
2011
Authorized share
400.00
400.00
-
0.00%
Paid-up share capital
125.58
125.00
0.58
0.46%
Premium on ordinary shares
54.13
52.97
1.16
2.19%
Defieit
(6.87)
(71.42)
64.55
90.38%
172.84
106.55
66.29
62.21%
Total of shareholder’s equity
Increase (Decrease)
42
ANNUAL REPORT 2012
Focus Development and Construction Public Company Limited
4. Cash Flow Analysis
The statement of cash flow demonstrates the changing cash from operating activities, investing activities, and financing activities at the end of the fiscal year. As of the ended 31 December 2012, cash and cash equivalent remains 30.59 million Baht, increased by 18.17 million Baht or 146.30% as compared to the past year, 12.42 million Baht as below detailed 4.1. Net cash flow spent on operating activity is of 56.20 million Baht, as resulted from decrease in the advance receipts in the real estate business, amounted of 43.17 million Baht and the company has transferred an ownership in the Focus On Saladaeng to customers. Advance received from construction business values of 12.11 million Baht. 4.2. Net cash flow spent on investing activity is of 8.29 million Baht; including 11.21 million Baht spent on buying equipments and vehicles and sold the machines amounted of 4.67 million Baht, which the company earned 1.57 million Baht profits from selling such equipments. 4.3. Net cash flow from financing activity is of 82.66 million Baht, including short-term loan from the banks through issuance of the promissory notes and long-term loan, totally amounted 152.30 million Baht to pay for Soi Sukhumvit 2 land. In addition, the company repays the bank the long-term loan for the Focus On Saladaeng development amounted of 56.80 million Baht, according to loan agreement due, and the company pays the loan interest in 2012 totaled of 4.11 million Baht. (Unit: Million Baht) Description
2012
2011
(56.20)
(47.55)
Net cash flow provided by (used in) investing activities
(8.29)
21.76
Net cash flow provided by financing activities
82.66
32.54
50.12
154.03%
Cash and cash equivalent at beginning of year
12.42
5.67
6.75
119.05%
Cash and cash equivalent increased in 2012
18.17
6.75
11.42
169.18%
Cash and cash equivalent at end of year
30.59
12.42
18.17
146.30%
Net cash flow used in operating activities
5. Financial Ratio Analysis
Increase (Decrease)
8.65
18.19%
(30.05) (138.10%)
In 2012, the company shows the financial ratio analysis as follow.
5.1 Liquidity ratio in 2012 is of 1.21 times, better liquidity than the year 2011, 0.99 times, as resulted from the company earns income from highly-valued construction project, thereby delivery of works and installment-based collection is highly-valued accordingly. Debt collection period averages 39 days, shorter than the past year; 43 days, meanwhile the company pays the trade payables under the terms and conditions on ordering, with debt payment period averages 47 days, later than the past year, 35 days, thereby resulting that the company has a good liquidity condition and good cash flow.
ANNUAL REPORT 2012
Focus Development and Construction Public Company Limited
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5.2. Profitability ratio – the company has gross profit from the real estate development business at 32.21 percent. Even though the construction business has the gross profits is not as high as to the real estate development business, the company’s growth has been succeeded from the construction business. Thus, the company has still undertaken the construction works as main business along together with real estate development business; that is meant to additional channel of income distribution.
Key factors and influence on operation and financial position in the future
Industrial Factors
As construction business is a type of service business, the factors influencing the company’s operation in the future include need for services of the customers and service users, which investment policies set out by the government and private sectors are influential to determine the construction workloads. Nonetheless, the key factors influencing the company’s operation may include the ability of the company’s Board of Directors, executives, and work teams in supplying the company the new construction projects. Besides, the workloads and project values have to be associated with the current capital provided by the company. The company’s major sources of funding include company’s capital, loan borrowed from the commercial banks and financial institutions. In addition, the company needs to control the constructing cost; for examples, constructing materials cost, logistics cost, labor cost, administrative cost, and financial cost appropriately. In spite of the real estate business is a lucrative business; there are several factors that might have affected the operation, for examples, ability to procure the land at reasonable price consistently with the prospective customers’ need.
Changes in major shareholders
Even established in 1989, the company subsequently has changes in its major shareholders; Naparat Sihanartgathakul Group becomes a major shareholder, together with changes in the executives and administrative policies and undertaking of construction works since 2000. The company’s construction policy has not focused on any construction industry in particular, resulted that the company’s revenue ratio has not been steady over the past years. However, the company has a plan to join bidding and undertaking of a number of the private constructions, which at company’s discretion; the employers are potential in making payment while the company has been offered the reasonable rewards. Furthermore, the company has specialized in construction and it’s likely that the company will be offered the employment; the company’s engineers are highly-skilled in construction and buildings, the company’s executives and engineers are competent in giving advice and consultation about structural design, contracting materials, and constructing techniques that ensure of cost-efficient high-quality construction that has been entrusted and accepted by various customer groups.
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ANNUAL REPORT 2012
Focus Development and Construction Public Company Limited
AUDITOR’S REPORT To the Board of Directors and Shareholders of Focus Development and Construction Public Company Limited I have audited the accompanying financial statements of Focus Development and Construction Public Company Limited which comprise the statement of financial position as at December 31, 2012, and the statement of comprehensive income, statement of changes in shareholders’ equity and statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with Thai Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with Thai Standards on Auditing. Those standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.
Opinion
In my opinion, the financial statements present fairly, in all material respects, the financial position of Focus Development and Construction Public Company Limited as at December 31, 2012, and its financial performance and cash flows for the year then ended in accordance with Thai Financial Reporting Standards.
ANS Audit Co., Ltd. Bangkok, February 22, 2013
Udom Thanuratpong Certified Public Accountant Registration Number 8501
ANNUAL REPORT 2012
Focus Development and Construction Public Company Limited
45
STATEMENTS OF FINANCIAL POSITION
AS AT DECEMBER 31, 2012 AND 2011 Baht
Note ASSETS
2012
2011
3
CURRENT ASSETS
Cash and cash equivalents
5
30,588,904
12,418,047
Trade and other receivables
6
128,642,545
107,601,676
Work in progress
17
7,872,593
5,849,545
Unbilled receivables
17
145,650,227
66,694,759
Cost of property development
7
225,329,603
136,214,928
Other current assets
28,616,458
23,397,623
566,700,330
352,176,578
Total Current Assets
NON-CURRENT ASSETS
Restricted bank deposits
8
20,722,853
25,071,503
Building and equipment
9
23,112,103
23,501,896
Intangible asset
300,517
-
Other non-current assets
89,259,735
64,074,381
Total Non-current Assets
133,395,208
112,647,780
TOTAL ASSETS
700,095,538
464,824,358
10
The accompanying notes are an integral part of the financial statements.
ANNUAL REPORT 2012
46
Focus Development and Construction Public Company Limited
STATEMENTS OF FINANCIAL POSITION (Contiuned) AS AT DECEMBER 31, 2012 AND 2011
Baht
Note LIABILITIES AND SHAREHOLDERS’ EQUITY
2012
2011
3
CURRENT LIABILITIES
Bank overdrafts and short-term loans from financial institutions
11
114,907,945
24,919,604
Trade and other payables
12
179,843,177
76,438,357
Current portion of debts
15
629,228
57,142,926
Estimated cost
52,641,507
35,718,312
Retention payables
28,078,128
15,062,325
Advances received
81,203,992
136,486,039
Other current liabilities
11,944,141
8,250,692
469,248,118
354,018,255
4
Total Current Liabilities
NON-CURRENT LIABILITIES
Long-term loans from financial institutions
13
52,300,000
-
Long-term liabilities under finance lease
14
1,205,479
471,770
Employee benefit obligations
16
4,499,250
3,783,732
58,004,729
4,255,502
527,252,847
358,273,757
Total Non-current Liabilities Total Liabilities
The accompanying notes are an integral part of the financial statements.
ANNUAL REPORT 2012
Focus Development and Construction Public Company Limited
47
STATEMENTS OF FINANCIAL POSITION (Contiuned) AS AT DECEMBER 31, 2012 AND 2011
Baht
Note
2012
2011
400,000,000
400,000,000
18, 19
125,579,000
125,000,000
18, 20
54,131,155
52,973,155
2
(6,867,464)
(71,422,554)
Total Shareholders’ Equity
172,842,691
106,550,601
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
700,095,538
464,824,358
SHAREHOLDERS’ EQUITY
Share capital
Authorized share capital: 400,000,000 ordinary shares, Baht 1 par value
Premium on ordinary shares
Deficit
Issued and paid-up share capital: 125,579,000 ordinary shares in 2012 and 125,000,000 ordinary shares in 2011, Baht 1 per share
The accompanying notes are an integral part of the financial statements.
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ANNUAL REPORT 2012
Focus Development and Construction Public Company Limited
STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011
Baht
Note
2012
2011
17 4
894,486,945 207,098,765 1,101,585,710
548,146,921 49,408,465 597,555,386
17,21 21
(841,647,496) (140,401,637) (982,049,133) 119,536,577 4,394,519 (54,105,776) (4,261,828) 65,563,492 (1,008,402) 64,555,090
(508,306,507) (33,541,252) (541,847,759) 55,707,627 5,362,638 (46,899,165) (1,724,738) 12,446,362 12,446,362
-
13,202,014 13,202,014
64,555,090
25,648,376
3 Revenue from sales and services Revenues from construction Revenue from sales Total Cost of sales and services Cost of construction Cost of sales Total Gross profit Other income Administrative expenses Finance cost Profit before income tax expense Income tax expense Profit for the year
4,21 22 23
Other comprehensive income : Gain on remeasuring available-for-sale investments Other comprehensive income Total comprehensive income Earnings per share Basic earnings per share
3
0.52
0.10
Weighted average number of ordinary shares (Shares)
3
125,107,574
125,000,000
The accompanying notes are an integral part of the financial statements.
18,19
2
1,158,000 54,131,155
52,973,155
125,000,000
579,000 125,579,000
52,973,155 52,973,155
125,000,000 125,000,000
Issued and paid-up Premium on share capital ordinary shares
64,555,090 (6,867,464)
12,446,362 (71,422,554)
(80,866,530) (3,002,386) (83,868,916)
Deficit
-
13,202,014 -
(13,202,014) (13,202,014)
Other components of shareholders’ equity Other comprehensive income (loss) Available-for-sale investments
1,737,000 64,555,090 172,842,691
25,648,376 106,550,601
83,904,611 (3,002,386) 80,902,225
Total
Baht
ANNUAL REPORT 2012
The accompanying notes are an integral part of the financial statements.
Beginning balance as at January 1, 2011 Effects of changes in accounting policies Adjusted balance Changes in shareholders’ equity Total comprehensive income Balance as at December 31, 2011 Changes in shareholders’ equity Issued ordinary shares from exercise of warrants Total comprehensive income Balance as at December 31, 2012
Note
FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011
STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
Focus Development and Construction Public Company Limited
49
50
ANNUAL REPORT 2012
Focus Development and Construction Public Company Limited
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011 Baht CASH FLOWS FROM OPERATING ACTIVITIES Profit before income tax expense Adjustments to reconcile profit before income tax expense to net cash provided by (used in) operating activities Depreciation and amortization Provision incurred from the employee benefit liabilities Reversal of estimate cost overrun Doubtful debt (reversal) Gain on disposal of investments (Gain) loss on disposal of assets Interest income Interest expenses Profit from operating activities before change in operating assets and liabilities Change in operating assets (increase) decrease Trade and other receivables Work in progress Unbilled receivables Cost of property development Other current assets Restricted bank deposits Other non-current assets Change in operating liabilities increase (decrease) Trade and other payables Estimated cost Retention payables Advances received Other current liabilities Cash generated from operations
The accompanying notes are an integral part of the financial statements.
2012
2011
65,563,492
12,446,362
11,427,669 715,518 20,239 (1,572,775) (772,661) 3,761,828
9,824,730 781,346 (741,515) (168,917) (2,004,495) 349,263 (1,375,139) 1,724,738
79,143,310
20,836,373
(21,197,413) (2,023,048) (78,955,468) (89,114,675) (5,218,835) 4,348,650 (7,303,468)
(73,982,703) 1,737,707 (34,582,355) (52,750,506) (11,429,554) (1,197,945) (10,534,951)
103,755,631 16,923,195 13,015,804 (55,282,048) 3,693,449 (38,214,916)
47,345,397 9,046,397 8,259,496 57,023,676 5,094,846 (35,134,122)
ANNUAL REPORT 2012
Focus Development and Construction Public Company Limited
51
STATEMENTS OF CASH FLOWS (Contiuned) FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011
Baht
Interest received Withholding tax refund Income tax paid Net cash used in operating activities CASH FLOWS FROM INVESTING ACTIVITIES Disposal of investments Purchase of equipment Purchase of intangible assets Disposal of equipment Net cash provided by (used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES Increase (decrease) in bank overdrafts Increase in short-term loans from financial institutions Proceed from long-term loans from financial institutions Repayment of long-term loans from financial institutions Repayment of liabilities under finance lease Proceed from issued ordinary shares from exercise of warrants Interest paid Net cash provided by financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year
2012
2011
929,205 5,473,252 (24,383,779) (56,196,238)
1,251,468 (13,669,309) (47,551,963)
(9,740,484) (329,200) 1,775,701 (8,293,983)
33,041,132 (11,282,510) 21,758,622
(8,601,042) 98,589,383 78,800,000 (83,307,000) (444,624) 1,737,000 (4,112,639) 82,661,078 18,170,857 12,418,047 30,588,904
8,601,042 12,820,863 53,000,000 (37,232,554) (171,738) (4,472,874) 32,544,739 6,751,398 5,666,649 12,418,047
Non-Cash items: In year 2012 1.) Cost of property development increased during the year partially due to depreciation in the amount of Baht 0.05 million. 2.) The Company purchased vehicles in the amount of Baht 1.93 million by cash payment in the amount of Baht 0.46 million and by entering into a finance lease agreement for the remaining. In year 2011 1.) Cost of property development increased during the year partially due to interest expenses from loans in the amount of Baht 3.12 million and depreciation in the amount of Baht 0.53 million. 2.) The Company purchased vehicles in the amount of Baht 0.64 million by cash payment in the amount of Baht 0.16 million and by entering into a finance lease agreement for the remaining. The accompanying notes are an integral part of the financial statements.
52
ANNUAL REPORT 2012
Focus Development and Construction Public Company Limited
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011
1. GENERAL INFORMATION Focus Development and Construction Public Company Limited, “the Company” was incorporated in Thailand under the Civil and Commercial Code on March 30, 1989, and engages as a construction contractor and a real estate business. On November 4, 2002, the Company was incorporated as a juristic company under the Public Limited Company Act. On October 5, 2004, the Company was listed in the Market for Alternative Investments (mai) on the Stock Exchange of Thailand. The registered office of the Company is located at 25, 9th Floor, Alma Link Building, Soi Chidlom, Ploenchit Road, Lumpini, Patumwan, Bangkok.
2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS The accompanying financial statements are prepared in accordance with Thai Financial Reporting Standards (“TFRS”) including related interpretations and guidelines promulgated by the Federation of Accounting Professions (“FAP”) in accordance with generally accepted accounting principles in Thailand. The presentation of the financial statements has been made in compliance with the stipulations of the Notification of the Department of Business Development dated September 28, 2011, issued under the Accounting Act B.E. 2543. The accompanying financial statements have been prepared in the Thai language and expressed in Thai Baht. Such financial statements have been prepared for domestic reporting purposes. For the convenience of the readers not conversant with the Thai language, an English version of the financial statements has been provided by translating from the Thai version of the financial statements. The preparation of the financial statements in accordance with Thai Financial Reporting Standards (“TFRS”) requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying amounts of assets and liabilities that are not readily apparent from other sources. Subsequent actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised, if the revision affects only that period, and in the period of the revision and future periods, if the revision affects both current and future periods. The changes in accounting policies as at January 1, 2011 In the year 2011, the Company has adopted new and revised TFRS which such transition affected the financial statements reflected from the adoption of TAS No. 19 “Employee Benefits”.
ANNUAL REPORT 2012
Focus Development and Construction Public Company Limited
53
New and revised Thai Financial Reporting Standards not yet effective The Company has not yet adopted the new and revised Thai Financial Reporting Standards as follows: a) Thai Accounting Standards (TAS), Thai Financial Reporting Standards (TFRS), Thai Interpretation (TI) and guidelines which are effective for the financial statements for the period beginning on or after January 1, 2013 as follows: TAS/TFRS/TI/FAP’s Announcement TAS 12 TAS 20 (revised 2009) TAS 21 (revised 2009) TFRS 8 TI 10 TI 21 TI 25 No. 34/2555
Topic Income Taxes Accounting for Government Grants and Disclosures of Government Assistance The Effects of Changes in Foreign Exchange Rate Operating Segments Government Assistance – No Specific Relation to Operating Activities Income Taxes – Recovery of Revalued Non-Depreciable Assets Income Taxes – Changes in the Tax Status of an Enterprise or its Shareholders Accounting Treatment Guidance for Transfers of Financial Assets
The management of the Company has assessed the effects of these TAS, TFRS, TI and guideline, and believes that they will not have any significant impact on the financial statements for the year in which they are initially applied except as follows: TAS 12 – Income taxes The main change introduced by TAS 12 is the requirement to account for deferred tax assets and liabilities in the Company’s financial statements. Deferred tax assets and liabilities are the amounts of income taxes recoverable and payable, respectively, in future periods in respect of temporary differences between the carrying amount of the liability or asset in the statement of financial position and the amount attributed to that liability or asset for tax purposes; and the carry forward of unused tax losses. Currently, the Company does not recognise deferred tax in the financial statements. The Company will adopt TAS 12 with effective from January 1, 2013. The effects of the change will be recognised retrospectively in the financial statements and the statement of financial position as at December 31, 2012 and January 1, 2012 and the statement of comprehensive income for the year ended December 31, 2012 will be adjusted accordingly. The management estimates that the impact on the financial statements as at January 1, 2012 and for the year ended December 31, 2012 will be as follows: Baht December 31, 2012 January 1, 2012 The statements of financial position Increase in deferred tax assets Decrease in deficit Increase in shareholders’ equity
5,114,006 (5,114,006) 5,114,006
17,389,137 (17,389,137) 17,389,137
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ANNUAL REPORT 2012
Focus Development and Construction Public Company Limited
Baht 2012 The statement of comprehensive income for the year ended December 31, 2012 Decrease in total comprehensive income for the year
(12,275,131)
Decrease in basic earnings per share (Baht per share)
(0.10)
b) Thai Financial Reporting Interpretations (TFRI) and TI which are effective for the financial statements for the period beginning on or after January 1, 2014 as follows: TFRI/TI
Topic
TFRI 4
Determining whether an Arrangement contains a Lease
TFRI 12
Service Concession Arrangements
TFRI 13
Customer Loyalty Programmes
TI 29
Service Concession Arrangements: Disclosures
The management of the Company is assessing the impacts of these interpretations on the financial statements for the year in which they are initially applied.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The measurement bases used in preparing the financial statements Other than those disclosed in other outlines in the summary of significant accounting policies and other notes to the financial statements, the financial statements are prepared on the historical cost basis. Revenues Revenue excludes value added taxes or other sales taxes and is arrived at after deduction of trade discounts. Revenues from sale property Sales of residential condominium units are recognised as revenue when the construction works are completed and the significant risks and rewards of ownerships have been transferred to the buyer. Revenues from construction Contract revenue includes the initial amount agreed in the contract plus any variations in contract work, claims and incentive payments to the extent that it is probable that they will result in revenue and can be measured reliably. As soon as the outcome of a construction contract can be estimated reliably, contract revenue and expenses are recognised in the statement of comprehensive income in proportion to the stage of completion of the contract. The stage of completion is assessed by reference to surveys of work performed. When the outcome of a construction contract cannot be estimated reliably, contract revenue is recognized only to the extent of contract costs incurred that are likely to be recoverable. An expected loss on a contract is recognized immediately in the statement of comprehensive income. The completed part of construction, which has not yet been delivered for acceptance or for billing, is recorded as unbilled receivables.
ANNUAL REPORT 2012
Focus Development and Construction Public Company Limited
55
Work in progress Work in progress is stated at cost less allowance for impairment losses (if any). Rental income Rental income under operating leases is recognized in the statement of comprehensive income on a straight-line basis over the term of the lease. Lease incentives granted are recognized as an integral part of the total rental income. Contingent rentals are recognized as income in the accounting period in which they are earned. Other income and interest income are recognized as it accrues. Expenses Expenses are recognized in the statement of comprehensive income as it accrues. Operating leases Payments made under operating leases are recognized in the statement of comprehensive income on a straight-line basis over the term of the lease. Lease incentives received are recognized in the statement of comprehensive income as an integral part of the total lease payments made. Contingent rentals are charged to the statement of comprehensive income in the accounting period in which they are incurred. Finance costs Interest expenses and similar costs are charged to the statement of comprehensive income in the period in which they are incurred, except to the extent that they are capitalized as being directly attributable to the acquisition, construction or production of an asset which necessarily takes a substantial period of time to be prepared for its intended use or sale. The interest component of finance lease payments is recognized in the statement of comprehensive income using the effective interest rate method. Employee benefits Short-term benefits The Company recognized salaries, wages, bonus and social security contribution as expenses when incurred. Post-employment benefits – defined benefit plan The employee benefits liabilities for severance payment as the labor law is recognised as a charge to results of operations over the employee’s service period. It is calculated by estimating the amount of future benefit earned by employees in return for service provided to the Company in the current and future periods, with such benefit being discounted to determine the present value. The reference point for setting the discount rate is the yield rate of government bonds as at the reporting date. The calculation is performed by actuarial technique using the Projected Unit Credit Method. When the employee benefits are improved, the portion of the increased benefit relating to past service by employees is recognized in the statement of comprehensive income on a straight-line basis over the average period until the benefits become vested. When the actuarial assumptions are changed, the Company recognizes all actuarial gains (losses) in the profit or loss in the period in which they arise.
56
ANNUAL REPORT 2012
Focus Development and Construction Public Company Limited
Cash and cash equivalents Cash and cash equivalents are cash on hand, call deposits and short-term investments with high liquidity net of restricted bank deposits. Trade and other receivables Trade and other receivables are stated at their invoice value less allowance for doubtful accounts. Trade and other receivables are stated at the net realizable value. The Company recorded allowance for doubtful accounts that is provided for the estimated losses that may be incurred in collection of receivables. The allowance is generally based on collection experiences and analysis of debtor aging. In determined an allowance for doubtful accounts, the management needs to make judgment for estimated losses for each outstanding debtor. The allowances for doubtful accounts are determined through a combination of analysis of debt aging, collection experience, and taking into account change in the current economic conditions. However, the use of different estimates and assumptions could affect the amounts of allowances for receivable losses and adjustments to the allowances may therefore be required in the future. Investments Marketable equity securities held for trading are stated at fair value, with any resultant gain or loss recognized in the statement of comprehensive income. Long-term investments in marketable equity securities represent available-for-sale securities and are stated at fair value. Gain and loss on valuation of securities is included in the shareholders’ equity. Equity securities which are not marketable securities are stated at cost less impairment losses (if any). The moving average method is used to determine the cost of each security at the time of sale. Cost of property development Cost of property development is stated at cost net of allowance for impairment of asset (if any) and presented netted after written-off to cost of sales. Project cost consists of acquisition cost of land, development expenses, materials, wages and direct expenses of the project including interest expense occurring from borrowing to finance the project development before the project is completed. Cost of property development is stated at the lower of cost or net realizable value. In determining the cost of residential condominium units sold, the anticipated total development costs (taking into account actual costs incurred to date) are attributed to residential condominium units sold on the basis of the salable area. Selling expenses directly associated with projects, such as specific business tax and transfer fee are recognized when sale incurred.
ANNUAL REPORT 2012
Focus Development and Construction Public Company Limited
57
Building and equipment Building and equipment are stated at cost less accumulated depreciation and allowance for impairment (if any). Depreciation Depreciation is computed by the straight–line method based on the estimated useful lives of assets as follows:
Construction Machinery Technician’s tools and equipment Furniture and office equipment Vehicles and equipment
Years 5 5 5 5 5
Depreciation is included in determining income and no depreciation is provided to construction in progress. Repairs and maintenance are charged to the statement of comprehensive income during the financial year in which they are incurred. The cost of major renovations is included in the carrying amount of the asset when it is probable that future economic benefits will be more than one period. Major renovations are depreciated over the remaining useful life of the related asset. Gains and losses on disposals are determined by comparing the proceeds with carrying amount and are included in operating profit. The direct expenses concerned with the assets include interest paid from the borrowing for the acquisitions of the above assets before completion of the assets are recognized as cost of the assets. Intangible asset Intangible asset is stated at cost less accumulated amortization and allowance for decline in value (if any), which is computed by the straight–line method based on the useful lives of asset 5 years. Impairment of assets The Company will consider the impairment of assets when there are incidents or changes in the environment which indicate that the book value of the assets is higher than the recoverable amount (the higher of net selling price of the particular assets or its value in use). The impairment review, will consider the impairment of an individual asset or a “cash generating unit”. In the case that the book value of the asset is higher than its recoverable amount, the Company will recognize the loss from impairment of the asset in the statement of comprehensive income. The Company then will reverse the loss from impairment of assets previously recognized when there are indications that impairment will discontinue or will diminish by such recording in other income. The loss from the revision, however, must not exceed the book value of the assets (net of depreciation and amortization) as if the Company has never before recognized loss from impairment of assets in the previous year.
58
ANNUAL REPORT 2012
Focus Development and Construction Public Company Limited
Finance lease Leases which substantially transfer all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalized at the inception of the lease at the lower of the fair value of the leased property or the present value of the minimum lease payments. Each lease payment is allocated to the principal and to the finance charges so as to achieve a constant rate on the finance balance outstanding. The outstanding rental obligations, net of finance charges, are included in other long-term payables. The interest element of the finance cost is charged to the statement of comprehensive income over the lease period. The property, plant or equipment acquired under finance leasing contract is depreciated over the shorter of the useful life of the asset or the lease term. Provisions A provision is recognized in the statement of financial position when the Company has a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Significant judgements and estimates are as follows: Commercial disputes and litigation The Company has contingent liabilities as a result of commercial disputes and litigation. The Company’s management has used judgment to assess of the results of the commercial disputes and litigation and believes that no loss will be occurred. Therefore no provision is recorded as at the statement of financial position date. However, actual results could differ from the estimates. Estimated construction project costs The Company estimates costs of construction projects based on details of the construction work, taking into account the volume and value of construction materials to be used in the project, labour costs and other miscellaneous costs to be incurred to completion of service, taking into account the direction of the movement in these costs. Estimates are reviewed regularly or whenever actual costs differ significantly from the figures used in the original estimates. Provision for losses on construction projects Management applies judgement in estimating the loss they expect to be realised on each construction project, based on estimates of anticipated costs that take into account the progress of the project and actual costs incurred to date, together with fluctuations in costs of construction materials, labour and the current situation. Provision for penalty from delay delivery The Company has provision incurred from delay delivery. The management applied judgement in estimating the penalty based on contract rate and the period of delay project work. The Company has recorded provision for penalty from delay delivery in the financial statements. However, actual results could differ from the estimates.
ANNUAL REPORT 2012
Focus Development and Construction Public Company Limited
59
Income tax Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted at the end of the reporting period. Basic earnings per share Basic earnings per share for the years ended December 31, 2012 and 2011 is calculated by dividing net profit for the years by the weighted average number of ordinary shares outstanding during the years as follows: For the years ended December 31, 2012 and 2011. Baht 2011
2012 Net profit for the years (Baht)
64,555,090
12,446,362
125,000,000
125,000,000
107,574
-
125,107,574
125,000,000
0.52
0.10
Weighted average number of ordinary shares (shares) Issued ordinary shares at the beginning of the years Effect of shares issued during the years Weighted average number of ordinary shares (shares) Basic earnings per share (Baht) Diluted earnings per share Diluted earnings per share for the years ended December 31, 2012 and 2011 is calculated by dividing the net profit of ordinary shareholders by the sum of the weighted average number of ordinary shares outstanding during the years plus the weighted average number of shares to be issued for the exercise of all dilutive potential ordinary shares into ordinary shares, without any consideration. The calculation assumes that the holders will exercise dilutive potential ordinary shares into ordinary shares when the exercise price is lower than fair value of ordinary shares. However, the average fair value of the Company’s ordinary shares for the years ended December 31, 2012 and 2011 is lower than the exercise price. Therefore, the Company does not include the result of equivalent ordinary shares for calculating diluted earnings per share. The basic earnings per share and the diluted earnings per share are as follows: For the years ended December 31, 2012 and 2011 Baht Shares Baht per share Net profit Weighted average number Earnings per of ordinary shares share 2012 2011 2012 2011 2012 2011 Earnings per share Basic earnings per shares 64,555,090 12,446,362 Effect of dilutive potential ordinary shares Diluted earnings per share 64,555,090 12,446,362
125,107,574 125,000,000 125,107,574 125,000,000
0.52 0.52
0.10 0.10
60
ANNUAL REPORT 2012
Focus Development and Construction Public Company Limited
4. TRANSACTIONS AND BALANCES WITH RELATED PARTIES The Company had transactions with related parties. These parties were related through common shareholders and/or directorships. The significant transactions with related parties as included in the financial statements are determined at the prices in line occurring in the normal course of business based on the market price in general or the price as stipulated in the agreement if no market price exists. The significant balances of assets, liabilities, and other transactions that occurred with those parties are shown as follows: The significant related party transactions for the years ended December 31, 2012 and 2011 were as follows: Baht 2012 2011 Directors’ remuneration Director 647,500 615,000 Sale of investment Perasia (Thailand) Limited 4,480,986 Revenue from sale Knight Assets (Thailand) Limited 6,141,475 Director 6,699,000 10,017,835 Related person 11,448,050 The significant balances with related parties as at December 31, 2012 and 2011 were as follows: 2012 Deposits and unearned revenues Knight Assets (Thailand) Limited Director Perasia (Thailand) Limited
120,000
Baht 2011 1,304,000 1,507,000 -
Key management personnel compensation Key management personnel compensation for the year ended December 31, 2012 and 2011 consisted of: Baht 2012 2011 Short-term benefits 8,456,100 7,748,780 Post-employment benefits 424,902 342,992 Total key management personnnel compensation 8,881,002 8,091,772 The Company opened a presale condominium Focus Ploenchit which has a transaction with 1 related person as at December 31, 2012 with the sale amount and price condition as follows: In Thousands Baht Value of contract Advance received Price Condition 13,752 120 Same price and condition as general customers
ANNUAL REPORT 2012
Focus Development and Construction Public Company Limited
61
Nature of relationship Name
Country
Relation
Type of relation
Knight Assets (Thailand) Limited
Thailand
Related compan
Co-director
Perasia (Thailand) Limited
Thailand
Related compan
Co-director
Bases of measurement for inter company revenues and expenses Directors’ remuneration Sale of investment Revenue from sales
Pricing Polices As determined at the rate approved by the directors and the shareholders Cost plus return from agreement Same price and condition as general customers
5. CASH AND CASH EQUIVALENTS Cash and cash equivalents as at December 31, 2012 and 2011 consisted of: 2012 Cash
Baht 2011
1,504,449
625,201
Saving deposit accounts
28,908,393
11,698,924
Current deposit accounts
20,000
19,000
156,062
74,922
30,588,904
12,418,047
Fixed deposit Total
Cash and cash equivalents of the Company as at December 31, 2012 and 2011 were denominated entirely in Thai Baht.
6. TRADE AND OTHER RECEIVABLES
Trade and other receivables as at December 31, 2012 and 2011 consisted of: 2012 Trade accounts receivable Others Trade and other receivables
Baht 2011
128,359,073
107,375,660
283,472
226,016
128,642,545
107,601,676
As at December 31, 2012 and 2011, the Company had outstanding balances of trade accounts receivable aged by number of months as follows: Baht 2012 2011 Less than or equal to 3 months More than 3 to 6 months Total
108,887,193
107,375,660
19,471,880
-
128,359,073
107,375,660
62
ANNUAL REPORT 2012
Focus Development and Construction Public Company Limited
7. COST OF PROPERTY DEVELOPMENT Costs of property development as at December 31, 2012 and 2011 were as follows: 2012 Condominium Project - Focus Ploenchit Land Cost of property development Condominium Project - Focus on Saladaeng Land Cost of property development Borrowing cost capitalised Total Less Recognition cost of sale Net
Baht 2011
206,189,053 2,884,860
-
65,701,164 105,962,794 3,123,664 383,861,535 (158,531,932) 225,329,603
65,701,164 94,849,246 3,123,664 163,674,074 (27,459,146) 136,214,928
The Company’s land of Focus on Saladaeng project including existing construction and to be constructed in the future was mortgaged to secure bank overdraft in the amount of Baht 5 million, long-term loan in the amount of Baht 116.50 million and letter of guarantee facilities in the amount of Baht 10 million. Presently, the Company had cancelled security for all credit facilities and released the mortgage to the land of Focus on Saladaeng project. (see Notes 11 and 13). The Company’s land of Focus Ploenchit project including existing construction and to be constructed in the future was mortgaged to secure bank overdraft in the amount of Baht 5 million, long-term loan in the amount of Baht 335 million and letter of guarantee facilities in the amount of Baht 25 million (see Notes 11 and 13). As at December 31, 2012, the amounts of the sale according to the sale’s contracts were as follows: (Unit: In Million Baht) The amount of the sale according in agreement to buy and sale Project Amount Percentage per total sale Total sale of project Focus on Saladaeng 268.17 93.80 285.89 Focus Ploenchit 9.05 1.13 800.35
8. RESTRICTED BANK DEPOSITS
Restricted bank deposits with obligation as at December 31, 2012 in the amount of Baht 20.72 million (In year 2011: Baht 25.07 million), were pledged as collateral for credit lines from financial institution as follow (see Note 11 and 13): 1) Bank overdraft facilities in the amount of Baht 3 million. 2) Projects’ facilities of promissory note in the amount of Baht 249.00 million (In year 2011: Baht 185.00 million). 3) Letter of guarantee facilities in the amount of Baht 661.53 million (In year 2011: Baht 405.54 million).
Cost As at January 1, 2011 Purchases/transfer in Disposals/transfer out Sale As at December 31, 2011 Purchases/transfer in Disposals/transfer out Sale As at December 31, 2012 Accumulated depreciation As at January 1, 2011 Depreciation Disposals/transfer out Sale As at December 31, 2011 Depreciation Disposals/transfer out Sale As at December 31, 2012 42,692,128 3,620,000 46,312,128 2,130,000 (4,672,897) 43,769,231 32,329,752 4,708,812 37,038,564 5,072,930 (4,672,893) 37,438,601
751,086 751,086 751,086
Machinery
751,087 751,087 751,087
Construction
Building and equipment as at December 31, 2012 and 2011 consisted of:
9. BUILDING AND EQUIPMENT
11,556,387 3,285,947 (1,499,490) 13,342,844 3,854,876 (149,894) 17,047,826
19,056,146 4,180,245 (1,814,579) 21,421,812 5,083,502 (260,210) 26,245,104
Technician’s tools and equipment
5,786,281 1,320,287 (579,962) 6,526,606 1,564,674 (127,092) 7,964,188
8,803,194 2,018,078 (614,136) 10,207,136 1,937,317 (220,398) 11,924,055
Furniture and office equipment
5,166,403 509,684 5,676,087 906,506 6,582,593
6,337,257 1,807,663 8,144,920 2,062,000 10,206,920
Vehicles and equipment
55,589,909 9,824,730 (2,079,452) 63,335,187 11,398,986 (276,986) (4,672,893) 69,784,294
77,639,812 11,625,986 (2,428,715) 86,837,083 11,212,819 (480,608) (4,672,897) 92,896,397
Total
Baht
Focus Development and Construction Public Company Limited
ANNUAL REPORT 2012
63
1 1 1 1
Owned assets
Assets under finance leases
As at December 31, 2011
Owned assets
Assets under finance leases
As at December 31, 2012
Net book value
Construction
6,330,630
-
6,330,630
9,273,564
-
9,273,564
Machinery
9,197,278
-
9,197,278
8,078,969
-
8,078,969
Technician’s tools and equipment
3,959,867
-
3,959,867
3,680,529
-
3,680,529
Furniture and office equipment
3,624,327
2,527,581
1,096,746
2,468,833
1,032,887
1,435,946
Vehicles and equipment
23,112,103
2,527,581
20,584,522
23,501,896
1,032,887
22,469,009
Total
Baht
64 ANNUAL REPORT 2012
Focus Development and Construction Public Company Limited
ANNUAL REPORT 2012
Focus Development and Construction Public Company Limited
Baht 2011
2012 Depreciation for the years ended December 31 was included in Cost of propety development Cost of construction Administrative expenses Total
65
48,477 5,838,961 5,511,548 11,398,986
533,934 3,677,946 5,612,850 9,824,730
33,123,670
32,747,423
As at December 31 the carrying amount before accumulated depreciation which have been depreciated and still in use
Lessor Office rental and service agreement
Third party
As at December 31, 2012 Service rate per month Period (In Million Baht) 3 years
0.35
Note -
10. OTHER NON-CURRENT ASSETS Other non-current assets as at December 31, 2012 and 2011 consisted of: 2012 Other receivables Deposit Retention receivables Withholding tax Total Less Allowance for doubtful debts Net
6,914,453 13,539,187 51,326,988 37,044,687 108,825,315 (19,565,580) 89,259,735
Baht 2011 6,297,987 12,355,369 45,823,805 19,142,561 83,619,722 (19,545,341) 64,074,381
Retention receivables are warranty monies deducted retention by the customers at the rate of 5% - 10% of the contract amount. Retention for the not completed construction project will be returned to the Company after the Company completed the work and upon expiry of the warranty period as stated in the contract.
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ANNUAL REPORT 2012
Focus Development and Construction Public Company Limited
Movement of allowance for doubtful debts for the years ended December 31, 2012 and 2011 were as follows: Baht 2012 2011 Beginning balance 19,545,341 19,714,258 Add Doubtful debts (reversal) 20,239 (168,917) Ending balance 19,565,580 19,545,341
11. BANK OVERDRAFTS AND SHORT–TERM LOANS FROM FINANCIAL INSTITUTIONS Bank overdrafts and short–term loans from financial institutions as at December 31, 2012 and 2011 consisted of: Baht 2012 2011 Bank overdrafts 8,601,042 Promissory notes 100,000,000 Promissory notes - against payment 14,907,945 16,318,562 Total 114,907,945 24,919,604 The Company has credit facilities with financial institutions consisted of: Facilities (Million Baht) 2012 2011 23.00 23.00 991.68 844.00 283.00 205.00 1,297.68 1,072.00
Type Bank overdrafts Letter of guarantee Promissory notes Total
Referred interest rate (% per annum) 2012 2011 MOR, Fixed deposit MOR, Fixed deposit MLR, MOR MLR, MOR
As at December 31, 2012 the Company has collateral as follows: Facilities (Million Baht) 3.00 15.00 5.00 756.80
Type Bank overdrafts Letter of guarantee
25.00 209.88 249.00
Promissory notes
20.00
14.00
Collateral Company’s fixed deposit (see Note 8). Personal guarantee by a third party. Mortgaged by Focus Ploenchit project (see Note 7). Company’s fixed deposit (see Note 8) and/or transferred account receivable rights received from some projects. Mortgaged by Focus Ploenchit project (see Note 7). No collateral. Company’s fixed deposit (see Note 8) and/or transferred account receivable rights received from some projects. Transferred deposit rights received as collateral in according to condition of agreement when the credit facilities are withdrawal. No collateral.
A third party are guarantee without charging for compensation from collateral and guarantee.
ANNUAL REPORT 2012
Focus Development and Construction Public Company Limited
67
12. TRADE AND OTHER PAYABLES Trade and other payables as at December 31, 2012 and 2011 consist of: Baht 2011 63,430,134 13,008,223 76,438,357
2012 163,528,528 16,314,649 179,843,177
Accounts payable Accrued expenses Total
13. LOANS FROM FINANCIAL INSTITUTIONS Loans from financial institutions as at December 31, 2012 and 2011 consisted of: Baht 2011
2012 Loans from financial institutions Less Current portion Long-term loans from financial institutions
52,300,000 52,300,000
56,807,000 (56,807,000) -
The details of loans from financial institutions: Facilities (Million Baht) Lenders
2012
2011
Period
Bank
-
116.50 Dec. 2010 - Aug. 2012
Bank
-
3.00 May. 2011 - July. 2012
Bank
335.00
- June. 2012 - June. 2015
Total
335.00
119.50
Referred interest rate per annum
Repayment
MLR - 0.50 Payment of principal at 70 percent from sale contract when transfer right of residential condominium unit and interest paid on a monthly basis MLR
Monthly principal repayment of Baht 0.20 million and monthly interest repayment.
MLR-1.25 Payment of principal at 70 percent from sale contract when transfer right of residential condominium unit and interest paid on a monthly basis
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ANNUAL REPORT 2012
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Movements of loans from financial institutions for the years ended December 31, 2012 and 2011 were as follows: Baht 2012 2011 Beginning balance Increase Decrease Ending balance
56,807,000
41,039,554
78,800,000 (83,307,000) 52,300,000
53,000,000 (37,232,554) 56,807,000
Credit facilities for loan from financial institution in the amount of Baht 116.50 million, which the Company mortgaged land together with construction on Focus on Saladaeng project (see Note 7). Presently, the Company had fully repaid the debt and released the mortgage to the land of Focus on Saladaeng project. Credit facilities for loan from financial institution in the amount of Baht 335.00 million, which the Company mortgaged land together with construction at Focus Ploenchit project (see Note 7). Credit facilities for loan from financial institution in the amount of Baht 3 million, which the Company pledged Company’s fixed deposit (see Note 8). Presently, the Company had fully repaid the debt.
14. LIABILITIES UNDER FINANCE LEASE Liabilities under finance lease as at December 31, 2012 and 2011 consisted of: Baht 2012 Year 1 2-5
Present value of minimum lease payments 629,228 1,205,479 1,834,707
Interest 68,544 72,589 141,133
Minimum lease payments 697,772 1,278,068 1,975,840 Baht
2011 Year 1 2-5
Present value of minimum lease payments 335,926 471,770 807,696
Interest 34,878 26,454 61,332
Minimum lease payments 370,804 498,224 869,028
The Company entered into the finance lease agreements for vehicles and office equipment. The payment is on monthly basis in the amount of Baht 0.07 million per month within 48 installments. The current portion of liabilities under the finance lease agreements in the amount of Baht 0.63 million (In year 2011: Baht 0.34 million) was presented under current liabilities (see Note15).
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Focus Development and Construction Public Company Limited
69
15. CURRENT PORTION OF LIABILITIES Current portion of liabilities as at December 31, 2012 and 2011 consisted of: Note Loan from financial institution Liabilities under finance lease Total
13 14
2012 - 629,228 629,228
Baht 2011 56,807,000 335,926 57,142,926
16. EMPLOYEE BENEFITS Movement of the present value of employee benefit obligations for the years ended December 31, 2012 and 2011 as follows: Baht 2012 2011 Post-employment benefit plan Present value of employee benefit obligations as at January 1 3,783,732 3,002,386 Employee benefit expenses in the statements of comprehensive income : Current service cost 823,034 661,254 Interest cost 151,348 120,092 Actuarial gain recognised (258,864) - Present value of employee benefit obligations as at December 31 4,499,250 3,783,732 Employee benefits obligations in the statements of financial position as at December 31, 2012 and 2011 consisted of: Baht 2012 2011 Post-employment benefit plan Present value of obligation
4,499,250
3,783,732
Employee benefits obligations - recognised in statements of financial position
4,499,250
3,783,732
The Company made defined benefit plan in accordance with severance payment as the labor law which entitled retired employee within work service period in various rates, such as more than 10 years to receive severance payment not less than 300 days or 10 months of the last month salary.
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ANNUAL REPORT 2012
Focus Development and Construction Public Company Limited
The principal actuarial assumptions (expressed as weighted averages) are as follows: Discount rate Future salary increases Turnover rate Disability rate Retirement age Mortality rate
4.00% 5.00% 22.28% 5.00% of Thai Mortality Ordinary Table 60 years Thai Mortality Ordinary Table 1997
17. CONSTRUCTION CONTRACTS As at December 31, 2012 and 2011 construction contracts were as follows:
Baht 2012 894,486,945
Revenue from construction recognized as revenue in the year ** Cost of construction incurred and recognized profit (less recognized loss) up to the end of the year * 1,669,238,848 Advances received 76,336,368 Gross amount due from customers for contract work presented as an asset 157,009,251 Gross amount due to customers for contract work presented as a liability Retentions 38,019,250 Note: The amount presented above is not included value added tax. * Accumulated amount of project recognized up to the end of the year. ** Amount of project recognized during the year.
2011 548,146,921 848,234,501 88,444,398 72,544,305 32,516,067
18. SHARE CAPITAL
In the fourth quarter of 2012, the holders of warrants had exercised their 579,000 warrants to be ordinary shares at exercise price of Baht 3 per share which caused the Company having share premium in the amount of Baht 1.16 million (see Notes 19 and 20). The Company registered the change in paid-up share capital from Baht 125.00 million to Baht 125.58 million with the Ministry of Commerce on November 7, 2012.
19. WARRANTS
On June 16, 2009, the Company issued the warrants as follows: 1.) Issuance and sales of warrants of 62,499,638 units to the Company’s existing shareholders at a ratio 2 ordinary shares per 1 unit of warrant. The offering price was Baht 0 per unit. Term of warrants is not exceeding 5 years from the date of issuing of warrants. Exercise price is fixed at Baht 3 per share and exercise ratio of 1 unit of warrant to purchase ordinary shares of 1 share. The warrant holders are able to exercise the warrants on the last business day of January, April, July, and October throughout the term of the warrants. The first exercise date was on July 31, 2009, and the last exercise date shall be at the end of term of warrants, which is on June 15, 2014.
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Focus Development and Construction Public Company Limited
2.) Issuance and sales of warrants of 12,500,000 units to the Company’s directors and employees in accordance with the Employee Stock Option Program (ESOP). The offering price was Baht 0 per unit. Term of warrants is not exceeding 5 years from the date of issuing of warrants at the exercise price is fixed at Baht 3 per share and exercise ratio of 1 unit of warrant to purchase ordinary shares of 1 share. The warrant holders are able to exercise the warrants on the last business day of January, April, July, and October throughout the term of the warrants. The first exercise date was on July 31, 2010, and the last exercise date shall be at the end of term of warrants, which is on June 15, 2014 (see Note 28).
In October 2012, the holders of warrants had exercised their 579,000 warrants to be ordinary shares. As at December 31, 2012 the outstanding warrants were 11,921,000 units.
20. SHARE PREMIUM Section 51 of the Public Limited Companies Act B.E. 2535 requires companies to set aside share subscriptions received in excess of the par value of the shares issued to a reserve account (“share premium”). Share premium is not available for dividend distribution.
21. EXPENSES BY NATURE
Significant expenses by nature for the years ended December 31, 2012 and 2011 were as follows:
Baht
Salary, wage and other welfare Rental and service expense Depreciation and amortization
2012 143,775,856 7,747,041 11,427,669
2011 171,266,802 5,659,172 9,824,730
22. FINANCE COSTS Finance costs for the years ended December 31, 2012 and 2011 consisted of:
Baht Interest expenses Bank charge Interest capitalised Total
2012
2011
3,761,828 500,000 - 4,261,828
4,848,402 (3,123,664) 1,724,738
23. INCOME TAX
Income tax for the year ended December 31, 2012 were calculated at a rate specified by the Revenue Department on accounting profit (loss) after adjusting certain conditions and any adjustment to tax payable in respect of previous periods according to the Revenue Code. The Company recorded the corporation income tax as expense within the financial period and recorded the accrued portion as liabilities in the statements of financial position. For the year ended December 31, 2011, the Company had no income tax liabilities because the Company had taxable loss.
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ANNUAL REPORT 2012
Focus Development and Construction Public Company Limited
Income tax reduction
Royal Decree No. 530 B.E. 2554 dated December 14, 2011 grants a reduction in the corporate income tax rate from 30% to 23% on net profit for the accounting period beginning on or after January 1, 2012, and will be reduced to 20% on net profit for the two consecutive accounting periods beginning on or after January 1, 2013 onwards.
24. COMMITMENTS AND CONTINGENT LIABILITIES As at December 31, 2012 the Company had commitments and contingent liabilities as follows: 24.1 24.2
Letters of guarantee issued by banks of Baht 421.65 million (see Note 11). Commitments for payment under agreement as follows: 24.2.1 Payment under officer rental and service agreement (see Note 9) as follows: Period Rental and service expense (In Thousands Baht) 1 year 4,186 2 - 3 year 2,965 24.2.2 Payment under construction contract in the amount of Baht 208.57 million. 24.2.3 Payment under property development project in the amount of Baht 21.72 million. 24.2.4 Payment under compensation for sale as specific rate in the contract. 24.2.5 Payment under service agreement per month in the amount of Baht 0.27 million.
25. SEGMENT INFORMATION The Company operate a construction contractor and development of real estate business. The Company operate in a single geographic area-Thailand for the years ended December 31, 2012 and 2011 were classified as follows: Baht
Construction 2012 2011
Property development 2012 2011
Total 2012
2011
Revenues 894,486,945 548,146,921 207,098,765 49,408,465 1,101,585,710 597,555,386 Cost (841,647,496) (508,306,507) (140,401,637) (33,541,252) (982,049,133) (541,847,759) Gross profit 52,839,449 39,840,414 66,697,128 15,867,213 119,536,577 55,707,627 Other income 4,394,519 5,362,638 Administrative expenses (54,105,776) (46,899,165) Finance cost (4,261,828) (1,724,738) Profit before income tax expense 65,563,492 12,446,362 Income tax expense (1,008,402) Profit for the year 64,555,090 12,446,362 Other comprehensive income : Gain on remeasuring available-for-sale investments - 13,202,014 Other comprehensive income - 13,202,014 Total comprehensive income 64,555,090 25,648,376
ANNUAL REPORT 2012
Focus Development and Construction Public Company Limited
73
Baht Assets Trade and other receivables Work in progress Unbill receivables Cost of property development Building and equipment Total assets Liabilities Trade and other payables Estimated cost Advance received Loans from financial institutions Total liabilities
Construction 2012 2011 128,642,545 7,872,593 145,650,227 - 23,112,103 474,765,935
Property development 2012 2011
107,601,676 5,894,545 66,694,759 - 225,329,603 136,214,928 22,980,099 521,797 328,087,633 225,329,603 136,736,725
178,595,543 71,733,691 47,726,086 31,557,396 76,336,369 88,444,398
Total 2012
2011
128,642,545 107,601,676 7,872,593 5,894,545 145,650,227 66,694,759 225,329,603 136,214,928 23,112,103 23,501,896 700,095,538 464,824,358
1,247,634 4,704,666 179,843,177 76,438,357 4,915,421 4,160,916 52,641,507 35,718,312 4,867,623 48,041,641 81,203,992 136,486,039
15,537,173 26,655,530 152,300,000 55,407,000 167,837,173 82,062,530 363,922,169 245,959,534 163,330,678 112,314,223 527,252,847 358,273,757
26. DISCLOSURES OF FINANCIAL INSTRUMENTS The Company does not speculate or engage in the trading of any derivative financial instruments. Capital management The Board of Directors’ policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Board monitors the return on capital, which the Company defines as result from operating activities divided by total shareholders’ equity and also monitors the level of dividends to ordinary shareholders. Credit risk Credit risk is the risk arising from failure of customers or counter parties to meet their contractual obligations. Credit risk occurs when the party fails to fulfill the contractual agreement, which may eventually cause financial losses. The Company has determined a risk protection policy through analysis of the customer and counter parties’s financial status, and also defines the policy for credit approval and debt collection period. Credit of the Company is the credit for construction services and trade provided to the customers that is the general customary trading practice. Interest rate risk Interest rate risk is the uncertainty in value of financial assets and liabilities or net interest income as a result of the fluctuation of the market interest rate.
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ANNUAL REPORT 2012
Focus Development and Construction Public Company Limited
Most of the interest rates of financial assets and liabilities of the Company are floating rates, which are based on market rates such as the interest rate for the outstanding clients of a commercial bank, savings interest rate or other benchmark floating rates. Fair value Fair value is the value which the Company expects to receive from disposing of financial assets, or the value that the Company expects to pay for redemption of financial debt by using the market value or the appraisal value of the general financial market methodology. The fair value of financial assets and liabilities is close to the carrying value in the financial statements (Approximate Carrying Value).
27. LITIGATION On February 28, 2012, the Company was sued by another company, for repayment of goods in the amount of Baht 1.40 million. On August 30, 2012, the Court ordered the Company to pay in the amount of Baht 0.18 million to the debtor with interest at the rate of 7.5% per annum from the filing date. The Company submitted an appeal to the Appeal Court. At present, the case is in the process of the Appeal Court’s consideration.
28. EVENT AFTER THE REPORTING PERIOD In January 2013, the holders of warrants had exercised their 192,000 warrants to be ordinary shares. The Company registered the changes in paid–up share capital with the Ministry of Commerce on February 6, 2013.
29. APPROVAL OF THE FINANCIAL STATEMENTS These financial statements were authorised for issue by the Company’s Board of Directors on February 22, 2013.
ANNUAL REPORT 2012
Focus Development and Construction Public Company Limited
75
Remuneration for Auditors 1. Audit Fee The Company and its subsidiaries paid the following audit fees:
The Company’s auditor, totaling..0... Baht in the last financial year.
The Auditor’s Audit firm and individual or firms relating to the Auditor and Audit firm, totaling......490,000.-..... baht in the last financial year 2. Non-Audit Fees Company and its subsidiaries paid for other services, namely: ..None… The Company’s Auditor, totaling ...0…Baht in the previous financial year, and future payments arising from agreed, but unfinished services in the past financial year totaling ..0..Baht. The Auditor’s Audit firm and individual or firms relating to the Audit and Audit Company, totaling..0...Baht in the last financial year, and future payments arising from agreed but unfinished services in the past financial year totaling..0..Baht.
FOCUS DEVELOPMENT AND CONSTRUCTION PUBLIC COMPANY LIMITED 9th Fl. Alma Link Building, 25 Soi Chidlom Ploenchit, Lumpini, Patumwan, Bangkok 10330, Thailand Tel: 0-2650-3105-9 :0-2650-3063-4 Fax: 0-2650-3065-6 www.focus-pcl.com