The Siam Cement Public Company Limited and its Subsidiariesscc.listedcompany.com/misc/FS/20131111-SCC-FS3Q2013-EN.pdf2013/11/11 · The Siam Cement Public Company Limited and its

The Siam Cement Public Company Limited and its Subsidiaries

Interim consolidated financial statements for the three-month and nine-month periods ended

30 September 2013 and

Independent auditor’s report on review of interim financial information

Independent auditor’s report on review of interim financial information To the Board of Directors of The Siam Cement Public Company Limited I have reviewed the accompanying consolidated statement of financial position of The Siam Cement Public Company Limited and its subsidiaries as at 30 September 2013; the consolidated income statements, statements of comprehensive income for three-month and nine-month periods ended 30 September 2013, changes in shareholders’ equity and cash flows for the nine-month periods ended 30 September 2013; and condensed notes (“interim financial information”). Management is responsible for the preparation and presentation of this interim financial information in accordance with Thai Accounting Standard 34, “Interim Financial Reporting”. My responsibility is to express a conclusion on this interim financial information based on my review. Scope of Review I conducted my review in accordance with the Thai Standard on Review Engagements 2410, “Review of Interim Financial Information Performed by the Independent Auditor of the Entity”. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Thai Standards on Auditing and consequently does not enable me to obtain assurance that I would become aware of all significant matters that might be identified in an audit. Accordingly, I do not express an audit opinion. Conclusion Based on my review, nothing has come to my attention that causes me to believe that the accompanying interim financial information is not prepared, in all material respects, in accordance with Thai Accounting Standard 34, “Interim Financial Reporting”. (Supot Singhasaneh) Certified Public Accountant Registration No. 2826 KPMG Phoomchai Audit Ltd. Bangkok 11 November 2013

The Siam Cement Public Company Limited and its SubsidiariesConsolidated statements of financial position

As at 30 September 2013 and 31 December 2012

Assets Note 30 September 31 December

2013 2012

(Unaudited)

Current assets

Cash and cash equivalents 7 21,629,273 25,063,843

Temporary investments 7 6,293,123 7,676,825

Trade and other receivables 5, 6 49,616,845 42,877,155

Short-term loans to related parties 5 139,950 136,649

Inventories 53,739,575 48,890,393

Other current assets 5,265,305 4,621,630

Total current assets 136,684,071 129,266,495

Non-current assets

Available-for-sale investments 7 12,470,705 12,047,665

Investments in associates 8 66,832,532 64,963,620

Investments in jointly-controlled entities 8 775,050 611,342

Other long-term investments 3,471,168 3,286,204

Long-term loans to related parties 5 137,380 137,330

Investment property 1,454,449 1,474,316

Property, plant and equipment 179,249,036 165,291,891

Goodwill 4 10,163,266 3,801,073

Intangible assets 6,035,482 4,869,762

Deferred tax assets 4,341,871 4,301,372

Other non-current assets 4,944,747 5,522,066

Total non-current assets 289,875,686 266,306,641

Total assets 426,559,757 395,573,136

(in thousand Baht)

The accompanying notes are an integral part of these financial statements.

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Liabilities and shareholders' equity Note 30 September 31 December

2013 2012

(Unaudited)

Current liabilities

Bank overdrafts and short-term loans

from financial institutions 9 14,076,298 13,771,241

Trade and other payables 5 52,223,844 45,471,243

Current portion of long-term debts 9 8,089,722 5,218,306

Current portion of debentures 10 19,934,363 29,910,500

Short-term loans from related parties 5 87,899 105,408

Income tax payable 1,737,413 2,304,102

Other current liabilities 1,470,795 1,949,803

Total current liabilities 97,620,334 98,730,603

Non-current liabilities

Long-term debts 9 26,902,402 30,297,537

Debentures 10 111,187,678 96,272,906

Deferred tax liabilities 2,927,103 2,472,467

Employee benefit liabilities 11 6,089,297 5,565,786

Other non-current liabilities 1,299,863 1,111,178

Total non-current liabilities 148,406,343 135,719,874

Total liabilities 246,026,677 234,450,477

(in thousand Baht)


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Liabilities and shareholders' equity 30 September 31 December

2013 2012

(Unaudited)

Shareholders' equity

Share capital

Authorised share capital 1,600,000 1,600,000

Issued and paid-up share capital 1,200,000 1,200,000

Retained earnings

Appropriated

Legal reserve 160,000 160,000

General reserve 10,516,000 10,516,000

Unappropriated 151,627,281 137,500,107

Other components of equity (7,139,782) (6,190,001)

Total equity attributable to owners of the parent 156,363,499 143,186,106

Non-controlling interests 24,169,581 17,936,553

Total shareholders’ equity 180,533,080 161,122,659

Total liabilities and shareholders' equity 426,559,757 395,573,136

(in thousand Baht)


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The Siam Cement Public Company Limited and its SubsidiariesConsolidated income statements For the three-month periods ended 30 September 2013 and 2012 (Unaudited)

Note 2013 2012

Revenue from sales 5 113,859,525 104,285,915

Cost of sales 5 (94,023,093) (88,804,158)

Gross profit 19,836,432 15,481,757

Other income 4, 5, 8 3,152,053 1,703,643

Profit before expenses 22,988,485 17,185,400

Selling expenses (3,863,807) (4,092,115)

Administrative expenses (6,550,985) (5,300,687)

Total expenses (10,414,792) (9,392,802)

Profit from operations 12,573,693 7,792,598

Share of profit of associates and jointly-controlled entities 1,309,489 568,138

Profit before finance costs and income tax expense 13,883,182 8,360,736

Finance costs (2,013,385) (1,239,240)

Profit before income tax expense 11,869,797 7,121,496

Income tax expense (1,454,110) (1,500,163)

Profit for the period 10,415,687 5,621,333

Profit (loss) attributable to

Owners of the parent 9,792,968 6,415,517

Non-controlling interests 622,719 (794,184)

10,415,687 5,621,333

Basic earnings per share (in Baht)

Attributable to owners of the parent 14 8.16 5.35

(in thousand Baht)


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The Siam Cement Public Company Limited and its SubsidiariesConsolidated statements of comprehensive income For the three-month periods ended 30 September 2013 and 2012 (Unaudited)

2013 2012


Other comprehensive income

Foreign currency translation differences (1,636,689) (554,498)

Gains on remeasuring available-for-sale investments 473,916 698,389

Share of other comprehensive income of associates

and jointly-controlled entities 135,025 (306,012)

Income tax on other comprehensive income (95,640) (56,573)

Other comprehensive income for the period,

net of income tax (1,123,388) (218,694)

Total comprehensive income for the period 9,292,299 5,402,639

Total comprehensive income (loss) attributable to


Non-controlling interests 520,453 (825,748)

9,292,299 5,402,639

(in thousand Baht)


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The Siam Cement Public Company Limited and its SubsidiariesConsolidated income statements For the nine-month periods ended 30 September 2013 and 2012 (Unaudited)

Note 2013 2012

Revenue from sales 5 329,839,377 307,711,290

Cost of sales 5 (275,854,680) (266,207,070)

Gross profit 53,984,697 41,504,220

Other income 4, 5, 8 8,830,455 6,563,803

Profit before expenses 62,815,152 48,068,023

Selling expenses (11,696,515) (12,138,564)

Administrative expenses (18,152,040) (15,651,650)

Total expenses (29,848,555) (27,790,214)

Profit from operations 32,966,597 20,277,809

Share of profit of associates and jointly-controlled entities 5,004,990 602,571

Profit before finance costs and income tax expense 37,971,587 20,880,380

Finance costs (4,879,304) (4,685,267)

Profit before income tax expense 33,092,283 16,195,113

Income tax expense (4,080,770) (3,717,875)


Profit (loss) attributable to


Non-controlling interests 498,813 (4,190,546)

29,011,513 12,477,238

Basic earnings per share (in Baht)

Attributable to owners of the parent 14 23.76 13.89

(in thousand Baht)


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The Siam Cement Public Company Limited and its SubsidiariesConsolidated statements of comprehensive income For the nine-month periods ended 30 September 2013 and 2012 (Unaudited)

2013 2012


Other comprehensive income

Foreign currency translation differences (1,667,746) (514,869)

Gains on remeasuring available-for-sale investments 373,798 164,875

Defined benefit plan actuarial losses (16) -

Share of other comprehensive income of associates

and jointly-controlled entities (79,734) (646)

Income tax on other comprehensive income (77,668) 53,996

Other comprehensive income for the period,

net of income tax (1,451,366) (296,644)

Total comprehensive income for the period 27,560,147 12,180,594

Total comprehensive income (loss) attributable to


Non-controlling interests 315,898 (4,264,715)

27,560,147 12,180,594

(in thousand Baht)


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The Siam Cement Public Company Limited and its SubsidiariesConsolidated statements of changes in shareholders' equity

For the nine-month periods ended 30 September 2013 and 2012 (Unaudited)

Other components of equity

Changes in ownership

Retained earnings Other comprehensive income interests in

Appropriated Unappropriated Gains on Share of other subsidiaries / associates Total equity

Issued and Currency remeasuring comprehensive that do not result in attributable to Non- Total

paid-up Legal General translation available-for-sale income a loss of control or owners of controlling shareholders’

Note share capital reserve reserve differences investments of associates significant influence the parent interests equity

(in thousand Baht)

Balance at 1 January 2012 1,200,000 160,000 10,516,000 128,738,156 (1,822,964) 1,495,903 (88,158) - 140,198,937 22,769,628 162,968,565

Transactions with owners, recorded directly

in shareholders’ equity

Contributions by and distributions to

owners of the parent

Dividends 15 - - - (13,774,363) - - - - (13,774,363) (643,547) (14,417,910)

Total contributions by and distributions to

owners of the parent - - - (13,774,363) - - - - (13,774,363) (643,547) (14,417,910)

Changes in ownership interests in subsidiaries / associates

Acquisition and increase in capital of

non-controlling interests without a change

in control or significant influence - - - - - - - (5,811,990) (5,811,990) (455,167) (6,267,157)


non-controlling interests with a change

in control or significant influence - - - - - - - - - 452,215 452,215

Total changes in ownership interests in subsidiaries / associates - - - - - - - (5,811,990) (5,811,990) (2,952) (5,814,942)

Total transactions with owners, recorded directly

in shareholders’ equity - - - (13,774,363) - - - (5,811,990) (19,586,353) (646,499) (20,232,852)

Comprehensive income for the period

Profit or loss - - - 16,667,784 - - - - 16,667,784 (4,190,546) 12,477,238

Other comprehensive income - - - - (413,774) 191,945 (646) - (222,475) (74,169) (296,644)

Total comprehensive income for the period - - - 16,667,784 (413,774) 191,945 (646) - 16,445,309 (4,264,715) 12,180,594

Balance at 30 September 2012 1,200,000 160,000 10,516,000 131,631,577 (2,236,738) 1,687,848 (88,804) (5,811,990) 137,057,893 17,858,414 154,916,307


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The Siam Cement Public Company Limited and its SubsidiariesConsolidated statements of changes in shareholders' equity


Other components of equity

Changes in ownership

Retained earnings Other comprehensive income interests in

Appropriated Unappropriated Gains on Share of other subsidiaries / associates Total equity

Issued and Currency remeasuring comprehensive that do not result in attributable to Non- Total

paid-up Legal General translation available-for-sale income a loss of control or owners of controlling shareholders’

Note share capital reserve reserve differences investments of associates significant influence the parent interests equity

(in thousand Baht)

Balance at 1 January 2013 1,200,000 160,000 10,516,000 137,500,107 (2,454,532) 2,312,296 (174,769) (5,872,996) 143,186,106 17,936,553 161,122,659

Transactions with owners, recorded directly

in shareholders' equity

Contributions by and distributions to

owners of the parent

Dividends 15 - - - (14,337,988) - - - - (14,337,988) (675,531) (15,013,519)

Total contributions by and distributions to

owners of the parent - - - (14,337,988) - - - - (14,337,988) (675,531) (15,013,519)

Changes in ownership interests in subsidiaries / associates


non-controlling interests without a change

in control or significant influence - - - - - - - 271,132 271,132 5,195,800 5,466,932


non-controlling interests with a change

in control or significant influence - - - - - - - - - 1,396,861 1,396,861

Total changes in ownership interests in subsidiaries / associates - - - - - - - 271,132 271,132 6,592,661 6,863,793

Total transactions with owners, recorded directly

in shareholders' equity - - - (14,337,988) - - - 271,132 (14,066,856) 5,917,130 (8,149,726)

Comprehensive income for the period

Profit or loss - - - 28,512,700 - - - - 28,512,700 498,813 29,011,513

Other comprehensive income - - - (47,538) (1,479,947) 291,707 (32,673) - (1,268,451) (182,915) (1,451,366)

Total comprehensive income for the period - - - 28,465,162 (1,479,947) 291,707 (32,673) - 27,244,249 315,898 27,560,147

Balance at 30 September 2013 1,200,000 160,000 10,516,000 151,627,281 (3,934,479) 2,604,003 (207,442) (5,601,864) 156,363,499 24,169,581 180,533,080


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The Siam Cement Public Company Limited and its SubsidiariesConsolidated statements of cash flows


2013 2012

Cash flows from operating activities


Adjustments for

Depreciation and amortisation 11,565,217 10,430,812

Interest income (799,422) (1,033,860)

Interest expense 5,513,139 5,496,380

Unrealised gain on foreign currency exchange (19,545) (43,386)

Allowance for decline in value of inventories (reversal) (73,072) 100,626

Dividend income (2,907,724) (1,712,053)

Employee benefit expense 514,514 401,304

Share of profit of associates and jointly-controlled entities (5,004,990) (602,571)

Income tax expense 4,080,770 3,717,875

Gain on revaluation of investments and others (1,661,140) (658,678)

Profit provided by operating activities before changes in

operating assets and liabilities 40,219,260 28,573,687

Decrease (increase) in operating assets

Trade and other receivables (4,048,350) (8,049,957)

Inventories (2,581,926) (5,447,957)

Other current assets (433,378) (291,885)

Other non-current assets 326,242 (31,878)

Net increase in operating assets (6,737,412) (13,821,677)

(in thousand Baht)


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Note 2013 2012

Increase (decrease) in operating liabilities

Trade and other payables 4,006,279 12,701,910

Other current liabilities (666,387) (11,277)

Employee benefit liabilities (151,003) (163,155)

Other non-current liabilities (38,381) (153,594)

Net increase in operating liabilities 3,150,508 12,373,884

Cash generated from the operations 36,632,356 27,125,894

Income tax paid (4,803,966) (6,369,412)

Net cash provided by operating activities 31,828,390 20,756,482

Cash flows from investing activities

Interest received 783,290 1,064,805

Dividends received 5,310,081 6,118,082

Temporary investments 1,388,478 (5,255,774)

Available-for-sale investments (7,653,720) (10,865,044)

Investments in associates, jointly-controlled entities

and other companies (932,045) (2,739,445)

Net cash outflow on acquisition of subsidiaries 4 (7,020,714) (3,553,239)

Proceeds from sales and return of investments 8,051,345 26,168,512

Income tax paid from sales of investments - (816,413)

Purchases of property, plant and equipment, and intangible assets (20,354,816) (12,062,167)

Proceeds from sales of property, plant and equipment 91,334 230,506

Payments received on loans to (loans to) related parties (116,556) 211,674

Currency translation differences (961,497) (725,679)

Net cash used in investing activities (21,414,820) (2,224,182)

(in thousand Baht)


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2013 2012

Cash flows from financing activities

Borrowings

Interest paid (5,682,467) (5,460,282)

Decrease in bank overdrafts and short-term loans

from financial institutions (1,781,550) (1,246,728)

Proceeds from (payment of) short-term loans from related parties (79,348) 807,170

Proceeds from long-term debts 6,544,316 6,755,775

Payments of long-term debts (6,648,252) (5,025,007)

Payments of finance lease (525,868) (371,462)

Proceeds from issuance of debentures 24,956,595 24,976,424

Redemption of debentures (20,017,960) (19,980,252)

Net increase (decrease) in borrowings (3,234,534) 455,638

Dividends paid

Dividends paid to owners of the parent (14,337,989) (13,774,363)

Dividends paid to non-controlling interests (593,635) (463,195)

Total dividends paid (14,931,624) (14,237,558)

Acquisition and increase in capital of non-controlling interests 4,318,018 (7,875,033)

Net cash used in financing activities (13,848,140) (21,656,953)

Net decrease in cash and cash equivalents (3,434,570) (3,124,653)

Cash and cash equivalents at beginning of the period 25,063,843 22,679,806

Cash and cash equivalents at end of the period 21,629,273 19,555,153

Supplementary information for cash flows

Non-cash transactions

Outstanding payable from purchases of property, plant, equipment

and intangible assets 497,728 135,950

Subscriptions receivable from increase in capital

(according to non-controlling interests proportion) 1,111,379 1,608,891

(in thousand Baht)


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The Siam Cement Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and nine-month periods ended 30 September 2013 (Unaudited)

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Note Contents

1 General information 2 Basis of preparation of the interim consolidated financial statements 3 Changes in accounting policies 4 Acquisitions of business and change of status to subsidiaries 5 Related parties 6 Trade and other receivables 7 Other investments 8 Investments in associates and jointly-controlled entities 9 Interest-bearing liabilities 10 Debentures 11 Employee benefit liabilities 12 Segment information 13 Income tax expense 14 Basic earnings per share 15 Dividends 16 Commitments and contingent liabilities 17 Other 18 Events after the reporting period 19 Thai Financial Reporting Standards (TFRSs) not yet adopted


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These notes form an integral part of the interim financial statements. The interim financial statements issued for Thai statutory and regulatory reporting purposes are prepared in the Thai and English languages, and were approved and authorised for issue by the audit committee, as appointed by the Board of Directors of the Company, on 11 November 2013.

1 General information The Siam Cement Public Company Limited, the “Company”, is incorporated in Thailand and has its registered office at 1 Siam Cement Road, Bangsue, Bangkok 10800, Thailand. The Company was listed on the Stock Exchange of Thailand on 25 April 1975. The Company and its subsidiaries, the “Group”, is an industrial group which operates core businesses of SCG Chemicals, SCG Paper and SCG Cement-Building Materials.

2 Basis of preparation of the interim consolidated financial statements

(a) Statement of compliance The interim consolidated financial statements are prepared on a condensed basis in accordance with Thai Accounting Standard (TAS) No. 34 (revised 2009) “Interim Financial Reporting”; guidelines promulgated by the Federation of Accounting Professions (FAP); and applicable rules and regulations of the Thai Securities and Exchange Commission.

The interim consolidated financial statements are prepared to provide an update on the consolidated financial statements for the year ended 31 December 2012. They do not include all of the financial information required for full annual consolidated financial statements but focus on new activities, events and circumstances to avoid repetition of information previously reported. Accordingly, these interim consolidated financial statements should be read in conjunction with the consolidated financial statements of the Group for the year ended 31 December 2012. The FAP has issued the following new and revised TFRSs that are relevant to the Group’s operations which effective for accounting periods beginning on or after 1 January 2013:

TFRSs Topic TAS 12 Income Taxes TAS 21 (revised 2009) The Effects of Changes in Foreign Exchange Rates TFRS 8 Operating Segments The adoption of these TFRSs is disclosed in note 3. In addition to the above new and revised TFRSs, as at 30 September 2013 the FAP had issued a number of new and revised TFRSs which are effective for financial statements beginning on or after 1 January 2014 and have not been adopted in the preparation of these interim consolidated financial statements. Those new and revised TFRSs that are relevant to the Group’s operations are disclosed in note 19.


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Except for accounting policy discussed in note 3, the accounting policies and methods of computation applied in these interim consolidated financial statements are consistent with those applied in the financial statements for the year ended 31 December 2012.

(b) Functional and presentation currency

The interim consolidated financial statements are prepared and presented in Thai Baht, which is the Group’s functional currency. All financial information presented in Thai Baht has been rounded in the notes to the financial statements to the nearest million unless otherwise stated.

(c) Use of estimates and judgements The preparation of interim consolidated financial statements in conformity with TFRSs requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. In preparing these interim consolidated financial statements, the significant judgements made by management in applying the Group’s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for the year ended 31 December 2012 and included in the following note: Note 4 Acquisitions of business and change of status to subsidiaries Note 11 Discount rate, salary increase rate, employee turnover rate and mortality rate

(d) Basis of consolidation The interim consolidated financial statements for the three-month and nine-month periods ended 30 September 2013 and 2012 include the accounts of The Siam Cement Public Company Limited and its subsidiaries. Subsidiaries included in the consolidated financial statements are as follows: 1. Subsidiaries in SCG Chemicals 2. Subsidiaries in SCG Paper 3. Subsidiaries in SCG Cement-Building Materials 4. Subsidiaries in other segment All significant intercompany transactions with subsidiaries included in the consolidated financial statements have been eliminated.

3 Changes in accounting policies (a) Overview

From 1 January 2013, consequent to the adoption of new and revised TFRSs as set out in note 2, the Group has changed its accounting policies in the following areas: • Accounting for income tax • Accounting for the effects of changes in foreign exchange rates • Presentation of information on operating segments


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Details of the new accounting policies adopted by the Group are included in notes 3(b) to 3(d) below. Other new and revised TFRSs did not have any impact on the accounting policies, financial position or performance of the Group.

(b) Accounting for income tax

The principal change introduced by TAS 12 “Income Taxes” is the requirement to account for deferred tax assets and liabilities in the financial statements. The measurement of deferred tax reflects the tax consequences that would follow the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. The Group adopted TAS 12 with effect from 1 January 2013, which did not have significant impact on the financial statements.

(c) Accounting for the effects of changes in foreign exchange rates From 1 January 2013, the Group has adopted TAS 21 (revised 2009) “The Effects of Changes in Foreign Exchange Rates”. The principal change introduced by TAS 21 is the introduction of the concept of functional currency, which is defined as the currency of the primary economic environment in which the entity operates. TAS 21 requires the entity to determine its functional currency and translate foreign currency items into its functional currency, reporting the effects of such translation in accordance with the provisions of TAS 21. Foreign currencies are defined by TAS 21 as all currencies other than the entity’s functional currency. Management has determined that the functional currency of the Company is Thai Baht and that the adoption of TAS 21 from 1 January 2013 has not had a significant impact on the Group’s reported financial position, financial performance and cash flows of the Group.

(d) Presentation of information on operating segments

From 1 January 2013, the Group has adopted TFRS 8 “Operating Segments”. The new policy for presentation of information on operating segments, together with information on the previous policy, is given below. The new policy has been applied retrospectively and segment information included in the 2012 financial statements, which are included in the Group’s 2013 interim consolidated financial statements for comparative purposes, has been re-presented accordingly. The change in policy only impacts presentational aspects and has no impact on the financial position, the financial performance and cash flows of the Group. TFRS 8 introduces the “management approach” to segment reporting. It requires a change in the presentation and disclosure of segment information based on the internal reports regularly reviewed by the Group’s Chief Operating Decision Maker in order to assess each segment’s performance and to allocate resources to those segments. Previously the Group presented segment information in respect of its business segments in accordance with TAS 14 “Segment Reporting”. The change in basis of presentation and disclosure of segment information has no material impact on segment information previously presented in the consolidated financial statements of the Group.


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4 Acquisitions of business and change of status to subsidiaries

Acquisitions of business

In the second quarter of 2013, the Group had acquired the businesses as the following;

• SCG Cement-Building Materials acquired 85% of the ordinary shares of Prime Group Joint Stock Company (Prime Group) (a leading ceramic tiles business in Vietnam) which consists of 24 subsidiaries for a cash consideration of Baht 5,215 million.

• SCG Paper acquired 75% of ordinary shares in both Dyna Packs Company Limited (Dyna) and Orient Containers Company Limited (Orient) (Thai producers of corrugated containers) for a cash consideration of Baht 286 million.

In the third quarter of 2013, SCG Paper had acquired 90% of the ordinary shares of PT Primacorr Mandiri (Primacorr) (Indonesia producer of corrugated container) for a cash consideration of Baht 303 million.

The acquisition qualifies for treatment as a business combination in accordance with TFRS 3 (revised 2009) “Business Combinations”, which requires that the assets acquired, liabilities and contingent liabilities assumed be recorded at their fair values on acquisition date, together with goodwill, if any. In the third quarter of 2013, the determination of the fair values of Prime Group, Dyna, Orient and Primacorr has been completed, and the carrying amount of the assets acquired and liabilities assumed were adjusted accordingly.

In 2013, the Group incurred acquisition cost of Baht 40 million which had been included in administrative expenses in the Group’s consolidated income statement.


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The subsidiaries’ net assets and liabilities at acquisition date comprised the following:

PrimeGroup Dyna Orient Primacorr Total

(in million Baht)Cash and cash equivalents 34 2 24 - 60 Trade receivables 183 240 133 66 622 Inventories 1,323 20 32 61 1,436 Other current assets 420 1 1 3 425 Property, plant and equipment 2,644 127 377 189 3,337 Intangible assets 15 - - - 15 Other non-current assets 69 3 14 1 87 Interest-bearing loans and borrowings (1,666) (312) (389) (81) (2,448) Trade payables (280) (30) (175) (35) (520) Other current liabilities (406) (10) (6) (16) (438) Other non-current liabilities (6) (1) (1) - (8) Carrying amounts of net identifiable assets and liabilities 2,330 40 10 188 2,568 Add fair value adjustments (360) 51 88 52 (169)

Less non-controlling interests (486) (23) (25) (24) (558) Recognised value of net assets acquisition 1,484 68 73 216 1,841 Goodwill 3,731 47 98 87 3,963 Total consideration transferred 5,215 115 171 303 5,804 Cash acquired (34) (2) (24) - (60) Net cash outflows 5,181 113 147 303 5,744 Less accrued investment and other specified purpose deposit in bank (1,121) Net cash outflows in 2013 4,623

The Group has continuously determined its review of fair values of the business acquired within one year from the acquisition date, taking into accounts additional information, facts as well as circumstances that existed at the acquisition date. Consequently the Group will adjust the provisional fair values or recognise any additional assets or liabilities that existed at the acquisition date, and the adjustments on accounting transactions of such acquisition will be made.


20

Change of status to subsidiaries

In the third quarter of 2013, the financial statements of the Group of Siam Sanitary Ware Company Limited (SSW) and The Siam Sanitary Fittings Company Limited (SSF), companies incorporated in Thailand (a manufacturer of sanitary ware and fittings products), have been included in the Group’s consolidated financial statements as a result of shareholders’ restructuring. The Group’s ownerships (direct and indirect) are increasing from 36% and 45% to 71% and 91%, respectively. As the result, the Group has significant management control over its financial and operating policies since 2 July 2013. The transaction value is Baht 2,597 million, resulting in the Group determined the fair value of the previously held equity interest in SSW and SSF prior to the change status of associates to subsidiaries.

(in million Baht) Fair value of previously held equity interest 2,576 Less carrying amount of investment at equity method (1,049)

Gain on revaluation of investment 1,527 The subsidiaries’ net assets and liabilities at the acquisition date comprised the following:

(in million Baht)

Cash and cash equivalents 284 Trade receivables 700 Inventories 898 Other current assets 131 Property, plant and equipment 1,565 Intangible assets 44 Other non-current assets 68 Interest-bearing loans and borrowings (45) Trade payables (438) Other current liabilities (397) Other non-current liabilities (181) Carrying amounts of net identifiable assets and liabilities 2,629 Add fair value adjustments 1,258 Less non-controlling interests (858) Less fair value of previously held equity interest (2,576) Recognised value of net assets acquisition 453 Goodwill 2,144 Total consideration transferred 2,597 Cash acquired (284) Net cash outflow 2,313


21

The assets and liabilities since acquisition date of these companies have been included in the Group’s consolidated financial statements for the period ended 30 September 2013. Since acquisition date, those subsidiaries contributed revenue from sales of Baht 5,442 million to the Group’s operating results. If the acquisition had occurred on 1 January 2013, management estimates that consolidated revenue from sales would have been Baht 333,982 million for the nine-month period ended 30 September 2013.

5 Related parties

Parties are considered to be related to the Group if the Group has the ability, directly or indirectly, to control, common control or joint control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa. Significant transactions with related parties for the three-month and nine-month periods ended 30 September and the pricing policies are summarised as follows:

Three-month periods

Nine-month periods

2013 2012 2013 2012 Pricing policies (in million Baht) Associates Purchases 4,332 4,685 13,250 14,940 Market price Service fee 537 383 1,416 1,172 Market price Revenue from sales 20,393 12,408 51,584 40,515 Market price Service income and others 191 304 823 943 Market price Management fee and others 287 353 1,374 1,114 Mainly based on percentage

of revenue from sales Dividend income 238 138 2,486 3,290 Upon declaration Other Purchases 682 826 2,206 2,226 Market price Revenue from sales 237 238 689 822 Market price Service income and others 27 26 79 66 Market price Management fee and others 96 113 306 333 Mainly based on percentage

of revenue from sales Dividend income 51 53 2,538 1,508 Upon declaration


22

Balances as at 30 September 2013 and 31 December 2012 with related parties were as follows: Trade receivables

30 September 31 December 2013 2012 (in million Baht)

Associates

Siam Polyethylene Co., Ltd. 1,936 1,600 PT Chandra Asri Petrochemical Tbk 1,497 668 Siam Styrene Monomer Co., Ltd. 967 614 Thai MMA Co., Ltd. 634 432 Siam Synthetic Latex Co., Ltd. 542 482 Bangkok Synthetics Co., Ltd. 499 594 PT Styrindo Mono Indonesia 275 135 Grand Siam Composites Co., Ltd. 235 270 Mitsui Advanced Composites (Zhongshan) Co., Ltd. 185 30 The Siam Gypsum Industry (Saraburi) Co., Ltd. 73 32 SCG Plastics (Shanghai) Co., Ltd. 55 21 Siam Toppan Packaging Co., Ltd. 53 46 Siam Global House Public Company Limited 47 32 Binh Minh Plastics Joint Stock Company 39 17 Tien Phong Plastics Joint Stock Company 29 5 TCG Rengo Subang (M) Sdn. Bhd. 25 - Other companies 159 262 7,250 5,240 Other Siam Yamato Steel Co., Ltd. 86 84 Other companies 11 9 97 93 Total 7,347 5,333


23

Other receivables

30 September 31 December 2013 2012 (in million Baht) Associates Siam Polyethylene Co., Ltd. 401 8 Siam Synthetic Latex Co., Ltd. 220 - Siam Kubota Corporation Co., Ltd. 214 291 Riken (Thailand) Co., Ltd. 87 2 Siam Lemmerz Co., Ltd. 82 2 Siam Styrene Monomer Co., Ltd. 51 - Siam Mitsui PTA Co., Ltd. 33 45 Thai MMA Co., Ltd. 28 25 Grand Siam Composites Co., Ltd. 25 29 Other companies 120 153 1,261 555 Other Michelin Siam Group Co., Ltd. 154 205 Siam Yamato Steel Co., Ltd. 37 6 Other companies 10 22 201 233 Total 1,462 788 Short-term loans to related parties

30 September 31 December 2013 2012 (in million Baht) Associates PT M Class Industry 96 94 GTC Technology International, LP 39 38 Other companies 5 5 Total 140 137 Long-term loans to related parties

30 September 31 December

2013 2012

(in million Baht) Associate Mariwasa Holdings, Inc. 137 137


24

Movements during the nine-month periods ended 30 September on loans to related parties were as follows:

2013 2012 (in million Baht)

Short-term At 1 January 137 154 Increase 3 6 Decrease - (9) Change of status to subsidiary - (13) At 30 September 140 138

Long-term At 1 January 137 401 Increase 5 34 Decrease (5) (294) Increase through business combination - 102 Change of status to subsidiary - (109) At 30 September 137 134

Trade payables

30 September 31 December 2013 2012 (in million Baht) Associates Siam Polyethylene Co., Ltd. 1,162 371 PT Chandra Asri Petrochemical Tbk 453 515 Mehr Petrochemical Company (P.J.S.C.) 282 579 Thai MMA Co., Ltd. 273 164 Siam Kubota Corporation Co., Ltd. 270 260 Bangkok Synthetics Co., Ltd. 226 257 The Siam Gypsum Industry (Saraburi) Co., Ltd. 137 79 IT One Co., Ltd. 66 44 Thai PET Resin Co., Ltd. 59 111 Siam Synthetic Latex Co., Ltd. 57 16 Jumbo Barges and Tugs Co., Ltd. 55 73 The Siam Gypsum Industry (Songkhla) Co., Ltd. 25 14 Siam Styrene Monomer Co., Ltd. 23 29 Other companies 42 107 3,130 2,619 Other Siam Yamato Steel Co., Ltd. 187 221 Other companies 5 1 192 222 Total 3,322 2,841


25

Other payables

30 September 31 December 2013 2012 (in million Baht) Associates IT One Co., Ltd. 53 48 Other companies 12 12 Total 65 60 Short-term loans from related parties

30 September 31 December 2013 2012 (in million Baht) Other PT Trans-Pacific Polyethylene Indonesia 74 72 Other companies 14 33 Total 88 105 Movements during the nine-month periods ended 30 September on short-term loans from related parties were as follows:

2013 2012 (in million Baht)

At 1 January 105 93 Increase 19 874 Decrease (36) (66) At 30 September 88 901 Key management compensation

Three-month periods Nine-month periods 2013 2012 2013 2012 (in million Baht)

For the periods ended 30 September Short-term employee benefits 97 94 259 251 Post-employment benefits 4 4 15 12 Total 101 98 274 263


26

6 Trade and other receivables Note 30 September 31 December 2013 2012 (in million Baht) Trade receivables Related parties 5 7,347 5,333 Other companies 36,159 32,264 Less allowance for doubtful accounts 809 821 Net 35,350 31,443 42,697 36,776 Other receivables Related parties 5 1,462 788 Other companies 5,458 5,313 6,920 6,101 Total 49,617 42,877

2013 2012 (in million Baht) Doubtful debts expense (bad debts recovery) for the - three-month periods ended 30 September 12 9 - nine-month periods ended 30 September 14 (4)

30 September 31 December 2013 2012 (in million Baht) Trade receivables Related parties Within credit terms 7,306 5,280 Overdue: Less than 3 months 39 49 3 - 6 months 1 3 Over 6 - 12 months 1 1 Total 7,347 5,333


27

30 September 31 December 2013 2012 (in million Baht) Other companies Within credit terms 32,307 28,316 Overdue: Less than 3 months 2,726 2,806 3 - 6 months 208 308 Over 6 - 12 months 172 81 Over 12 months 746 753 36,159 32,264 Less allowance for doubtful accounts 809 821 Net 35,350 31,443 Total 42,697 36,776

The normal credit term granted by the Group is 30 - 90 days.

7 Other investments 30 September 31 December 2013 2012 (in million Baht) Cash and cash equivalents (Private funds) 55 67 Temporary investments Fixed deposits with financial institutions 5 1,690 Available-for-sale debt securities (Private funds) 6,288 5,987 Total 6,293 7,677 Available-for-sale investments Available-for-sale debt securities (Private funds) 5,710 5,696 Marketable equity securities 6,761 6,352 Total 12,471 12,048 In the first quarter of 2011, the Company established private funds and engaged totalling 6 local and foreign independent assets management companies to manage cash balance of the Company. As at 30 September 2013, the Company remains engaged totalling 3 local independent assets management companies, the private funds had invested in debt securities totalling Baht 12,053 million which have high liquidity and rating as investment grade with return rates from 2.50% to 4.31% per annum.


28

8 Investments in associates and jointly-controlled entities Movements during the nine-month periods ended 30 September in investments in associates and jointly-controlled entities accounted for using the equity method were as follows:

2013 2012 (in million Baht) At 1 January 65,575 55,747 Share of net profit of investments - equity method 5,005 602 Increase in investments 760 2,739 Dividend income (2,486) (3,290) Disposals and return from capital (194) (342) Change of status to associate 24 - Change of status to subsidiaries (1,049) (149) Others (27) (19) At 30 September 67,608 55,288 At 31 December 65,575 Investments in associates and jointly-controlled entities as at 30 September 2013 and 31 December 2012 and dividends from these investments for the nine-month periods ended 30 September 2013 and 2012 were as follows:

Total direct /indirect holding Paid-up capital Cost method Equity method Dividend income30 Sep 31 Dec 30 Sep 31 Dec 30 Sep 31 Dec 30 Sep 31 Dec 30 Sep 30 Sep2013 2012 2013 2012 2013 2012 2013 2012 2013 2012

(%) (in million Baht)AssociatesSCG ChemicalsPT Chandra Asri Petrochemical Tbk 30 30 10,629 10,629 12,910 12,894 12,028 12,037 - - Bangkok Synthetics Co., Ltd. 26 26 1,173 1,173 2,036 2,036 6,720 6,703 305 458 Siam Styrene Monomer Co., Ltd. 50 50 4,755 4,755 2,375 2,375 4,921 3,508 - - Siam Mitsui PTA Co., Ltd. 50 50 4,800 4,800 2,372 2,372 3,842 4,093 - 1,043 Thai MMA Co., Ltd. 47 47 5,590 5,590 2,571 2,571 3,319 3,632 823 1,265 Siam Polyethylene Co., Ltd. 50 50 4,455 4,455 2,183 2,183 2,599 2,892 - 7 Siam Synthetic Latex Co., Ltd. 50 50 5,789 5,789 2,788 2,788 1,480 1,541 - - Grand Siam Composites Co., Ltd. 46 46 64 64 167 167 917 989 416 191 Tien Phong Plastics Joint Stock Company 22 21 652 652 738 702 826 751 31 15 Siam Polystyrene Co., Ltd. 50 50 995 995 493 493 798 734 - 12 Binh Minh Plastics Joint Stock Company 19 19 682 525 642 642 755 686 21 32 Riken (Thailand) Co., Ltd. 32 32 120 120 42 42 507 527 114 - Mitsui Advanced Composites (Zhongshan) Co., Ltd. 20 20 596 596 119 119 288 276 58 55 Siam Tohcello Co., Ltd. 45 45 592 444 266 200 261 203 - - GTC Technology International, LP 25 25 191 191 107 107 205 186 - - Thai MFC Co., Ltd. 45 45 200 200 87 87 192 183 18 3 Thai PET Resin Co., Ltd. 20 20 900 900 180 180 172 183 - 16 PT Siam Maspion Terminal 50 50 327 327 163 163 148 161 - - Mehr Petrochemical Company (P.J.S.C.) 39 39 1,335 1,335 801 801 144 433 - - GTC Technology US, LLC 25 25 102 102 160 160 111 139 - - SD Group Service Co., Ltd. 50 50 78 78 38 38 109 109 - - Other companies 80 80 48 47 120 125 13 18

44,105 43,800 31,286 31,167 40,462 40,091 1,799 3,115


29

Total direct /indirect holding Paid-up capital Cost method Equity method Dividend income30 Sep 31 Dec 30 Sep 31 Dec 30 Sep 31 Dec 30 Sep 31 Dec 30 Sep 30 Sep2013 2012 2013 2012 2013 2012 2013 2012 2013 2012

(%) (in million Baht)SCG PaperSiam Nippon Industry Paper Co., Ltd. 44 44 1,100 495 495 223 497 219 - - Siam Toppan Packaging Co., Ltd. 48 48 500 500 245 245 368 364 3 1 TCG Rengo Subang (M) Sdn. Bhd. 17 - 804 - 201 - 183 - - - Saha Green Forest Co., Ltd. 25 25 190 190 48 48 43 44 - - Other companies 263 263 105 105 - - - -

2,857 1,448 1,094 621 1,091 627 3 1

SCG Cement-Building MaterialsSiam Global House Public Company Limited 30 31 2,613 2,152 9,414 9,414 9,690 9,454 12 - Sekisui-SCG Industry Co., Ltd. 49 49 2,325 2,325 1,139 1,139 796 898 - - The Siam Gypsum Industry Co., Ltd. 29 29 150 150 46 46 628 627 193 54 Jumbo Barges and Tugs Co., Ltd. 37 32 399 399 175 145 217 185 3 - Noritake SCG Plaster Co., Ltd. 40 40 405 405 134 134 178 192 - - Anhui Conch-SCG Refractory Co., Ltd. 30 30 497 497 148 148 159 142 - - Thai Prosperity Terminal Co., Ltd. 50 50 63 63 31 31 54 58 5 5 Green Siam Resources Corporation 40 40 95 95 38 38 49 50 - - PT M Class Industry 28 28 222 222 106 106 33 38 - - CPAC Monier (Laos) Co., Ltd. 50 38 21 21 11 11 26 23 - - CMPI Holding, Inc. 20 20 55 55 11 11 21 21 - - Mariwasa Holdings, Inc. 40 40 267 267 94 94 20 22 - - Siam Sanitary Ware Co., Ltd. - 36 - 60 - 50 - 705 26 39 The Siam Sanitary Fittings Co., Ltd. - 45 - 200 - 66 - 371 20 7 TOTO Manufacturing (Thailand) Co., Ltd. - 40 - 920 - 368 - 227 - - Other companies 300 300 85 85 36 39 - 2

7,412 8,131 11,432 11,886 11,907 13,052 259 107

OtherSiam Kubota Corporation Co., Ltd. 40 40 2,739 2,739 1,120 1,120 9,085 7,242 109 - Thai Engineering Products Co., Ltd. 30 30 85 85 76 76 1,392 1,171 42 - Musashi Auto Parts Co., Ltd. 21 21 200 200 42 42 691 501 - - Siam AT Industry Co., Ltd. 30 30 240 240 72 72 675 652 42 16 Aisin Takaoka Foundry Bangpakong Co., Ltd. 30 30 475 475 142 142 474 474 45 17 The Nawaloha Industry Co., Ltd. 30 30 300 300 90 90 423 420 28 6 The Siam Nawaloha Foundry Co., Ltd. 25 25 308 308 74 74 338 328 9 5 Muang Thong United Co., Ltd. 30 30 120 120 120 120 116 130 - - Siam Lemmerz Co., Ltd. 30 30 110 107 294 293 93 181 82 23 IT One Co., Ltd. 20 20 80 80 16 16 86 95 68 -

4,657 4,654 2,046 2,045 13,373 11,194 425 67

Jointly-controlled entitiesSCG ChemicalsLong Son Petrochemicals Co., Ltd. 44 44 1,646 1,646 758 758 601 611 - -

SCG Cement-Building MaterialsSCG Nichirei Logistics Co., Ltd. 51 - 342 - 174 - 174 - - -

Total 61,019 59,679 46,790 46,477 67,608 65,575 2,486 3,290


30

In the second quarter of 2013, the status of TCG Rengo Subang (M) Sdn. Bhd. has been changed from subsidiary to associate since the Group partially sold its 52.50% interest in the ordinary shares to Rengo Group. In the third quarter of 2013, the Group sold its 40% interest in the ordinary shares of TOTO Manufacturing (Thailand) Company Limited to TOTO Group. As a result, the Group recorded profit before income tax amounting to Baht 174 million, which was presented under the caption of “Other income” in the consolidated income statement for the three-month and nine-month periods ended 30 September 2013. Common stock dividend payments In the first quarter of 2013, the Board of Directors Meeting of Siam Global House Public Company Limited approved dividend payment of cash dividend and common stock dividend with the date of dividend payment on 3 May 2013. The Group is entitled to receive common stock dividend of approximately 112 million shares at the par value Baht 1 per share, totalling approximately Baht 112 million.

In the second quarter of 2013, the Annual General Meeting of the Shareholders of Binh Minh Plastics Joint Stock Company approved dividend payment of cash dividend and common stock dividend with the date of dividend payment on 5 July 2013. The Group is entitled to receive common stock dividend of approximately 2.14 million shares at the par value VND 10,000 per share, totalling approximately Baht 32 million.

9 Interest-bearing liabilities

In 2013, the Group entered into loan agreements with local financial institutions amounted to Baht 12,800 million and had already drawn down Baht 6,500 million with average interest rate at 4.4% to 4.5% per annum. Condition under the agreement includes maintaining the shareholding structure for which the financial institutions will consider reviewing the conditions under the agreement if the structure had been changed.

Additionally, the business acquisition, as disclosed in note 4, interest-bearing liabilities of a subsidiary have been included in the Group’s consolidated financial statements as at 30 September 2013 in the following:

The Group in Vietnam entered into various long-term loan agreements amounted to VND 43,312 million (equivalent to Baht 65 million) with average interest rate 15% to 16% per annum and had liability under finance lease amounted to VND 1,759 million (equivalent to Baht 3 million) with average interest rate 13% to 15% per annum. Moreover, it had various short-term loan agreements with financial institutions amounted to VND 354,621 million (equivalent to Baht 532 million) with average interest rate 9% to 10% per annum. Long-term loan agreements were guaranteed by its property, plant and equipment with carrying value of Baht 1,648 million.

A subsidiary in Indonesia entered into a short-term loan agreement with financial institution amounted to Rupiah 26,472 million (equivalent to Baht 72 million) with average interest rate at 10.5% per annum. Also the subsidiary in Thailand had short-term loan agreements with financial institutions amounted to Baht 414 million with average interest rate 3.4% to 3.7% per annum.


31

10 Debentures As at 30 September 2013, the Company had issued unsubordinated and unsecured debentures totalling Baht 131,500 million (31 December 2012: Baht 127,460 million), as follows:

Fair Value * 30 September 31 December Interest Rate 30 September 31 December

Debentures No. 2013 2012 (% p.a.) Term Maturity Date 2013 2012 (in million Baht)

Debentures - The Siam Cement Public Company Limited No. 1/2009 - 20,000 5.15 4 years 1 April 2013 - 1,004 No. 2/2009 10,000 10,000 4.15 4 years 1 October 2013 1,005 1,016 No. 1/2010 10,000 10,000 3.85 4 years 1 April 2014 1,004 1,013 No. 2/2010 5,000 5,000 3.85 4 years 1 October 2014 1,008 1,008 No. 1/2011 15,000 15,000 4.00 4 years 1 April 2015 1,015 1,025 No. 2/2011 10,000 10,000 4.50 4 years 1 November 2015 1,024 1,037 No. 1/2012 25,000 25,000 4.15 4 years 1 April 2016 1,019 1,020 No. 2/2012 25,000 25,000 4.15 4 years 1 November 2016 1,012 1,006 No. 3/2012 6,500 6,500 4.40 7 years 12 October 2019 1,014 1,028 No. 1/2013 25,000 - 4.00 4 years 1 April 2017 1,008 - Total 131,500 126,500

Convertible Debentures - Thai-German Ceramic Industry Public Company Limited (TGCI) ** No. 1/2008 - 960 1st - 2nd year

MLR - 3.50 3rd - 5th year MLR - 3.00

5 years 1 August 2013 - 952

Total 131,500 127,460 Less Debentures held by subsidiaries 378 1,277 Net 131,122 126,183 Less Current portion 19,934 29,910 Net 111,188 96,273

* Latest price (Baht per unit: 1 unit = Baht 1,000) as at 30 September 2013 and 31 December 2012.

** Debenture holders have the option to convert the debentures into TGCI shares at the rate of Baht 1.45 per share of TGCI, subject to adjustments which is specified in the agreement. The holders can exercise the option after 2 years from the issuance date of the debentures.


32

11 Employee benefit liabilities

The Group operates post-employment benefit and pension plans based on the requirement of the Thai Labour Protection Act B.E. 2541 to provide retirement benefits and other long term benefits to employees based on pensionable remuneration and length of service. Employee benefit liabilities in consolidated statements of financial position as at 30 September 2013 and 31 December 2012 30 September 31 December 2013 2012 (in million Baht) Post-employment benefits

Legal severance payments plan 5,129 4,657

Pension 45 56 Other long-term employee benefits 706 647 Other employee benefits 261 258 Total 6,141 5,618 Less Plan assets of foreign subsidiaries 52 52 Net 6,089 5,566 Movements in the present value of the defined benefit obligations 2013 2012 (in million Baht) For the nine-month periods ended 30 September Defined benefit obligations at 1 January 5,360 3,603 Benefits paid (62) (49) Current service costs and interest 463 316 Translation differences (62) (1) Acquisitions through business combinations 181 88

Losses from adjustment on defined benefit liabilities - 1

Defined benefit obligations at 30 September 5,880 3,958

Movements in the fair value of plan assets of foreign subsidiaries

2013 2012 (in million Baht) For the nine-month periods ended 30 September

Plan assets at 1 January 52 19 Contributions paid into the plan 6 8 Benefits paid (6) - Increase through business combinations - 25 Plan assets at 30 September 52 52


33

Consolidated statements of comprehensive income Recognised in profit or loss Three-month periods Nine-month periods 2013 2012 2013 2012 (in million Baht) For the periods ended 30 September Current service costs 102 61 311 172 Interest on obligation 52 48 152 144 Actuarial losses - 1 - 3 Total 154 110 463 319

Expenses recognised in profit or loss included in the following; Cost of sales 54 26 136 96 Administrative expenses 100 84 327 223 Total 154 110 463 319 Principal actuarial assumptions at the reporting date Defined benefit obligations 30 September 31 December 2013 2012 (%) Discount rate - Thailand 3.20 - 4.58 3.20 - 4.58 - Vietnam 10.50 10.50 - Other 5.72 - 7.00 5.72 - 7.00 Salary increase rate 3.00 - 8.70 3.00 - 8.70 Employee turnover rate 0.50 - 20.00 * 0.50 - 20.00 * Mortality rate 25.00, 30.00, 50.00

of TMO2008 ** 25.00, 30.00, 50.00

of TMO2008 ** * Upon the length of service ** Reference from TMO2008: Thai Mortality Ordinary Table 2008 Plan assets of foreign subsidiaries 30 September 31 December 2013 2012 (%) Discount rate 5.96, 6.40 5.96, 6.40 Expected return on plan assets 4.00, 7.00 4.00, 7.00


34

12 Segment information Segment information is presented in respect of the Group’s business segments. The primary format, business segments, is based on the Group’s management and internal reporting structure. Segment assets, revenues and results of operations include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Before 2013, the Group presented the business consists of SCG Chemicals, SCG Paper, SCG Cement, SCG Building Materials, SCG Distribution and SCG Investment. In the first Quarter of 2013, the Board of Directors of the Company has approved the business restructuring of its subsidiaries in SCG Cement, SCG Building Materials and SCG Distribution. These three main businesses have recently been consolidated into a single market-facing entity, and named as SCG Cement-Building Materials. As a result, the presentation of business segment was changed to four segments. Business segments The Group comprises the following main business segments: SCG Chemicals Manufacture and sale of olefins, polyolefins and other chemical products. SCG Paper Manufacture and sale of printing and writing paper, gypsum linerboard,

industrial paper, corrugated boxes and securities document. SCG Cement-Building Materials

Manufacture and sale of grey cement, ready-mixed concrete, white cement, dry mortar, roof tiles, concrete paving blocks, ceramic tiles, sanitary wares and sanitary fittings. Distribution of cement, building and decorative products of the Group companies through distributors, as well as importing fuel products, waste paper and scrap iron.

Other Jointly invest with leading companies in other businesses, mainly

agricultural machine, automotive parts and components and steel, as well as other services.

The Group has retrospectively adjusted segment information presented in 2012 to be in accordance with Thai Financial Reporting Standards No. 8 (TFRS 8) “Operating Segments”. The segment information is used by management to evaluate the performance of segments and to allocate resources. The Group evaluates operating performance based on EBITDA.


35

Information relating to business segments for the nine-month periods ended 30 September were as follows:

Total assets Revenue from sales EBITDA (1)

30 Sep 31 Dec 1 Jan - 30 Sep 1 Jan - 30 Sep

2013 2012 2013 2012 2013 2012

(in million Baht)

Consolidated SCG 426,560 395,573 329,839 307,711 45,491 33,999

Business Segments

SCG Chemicals 184,035 176,837 161,668 154,290 14,885 6,798

SCG Paper 62,499 58,439 44,285 43,026 7,526 6,858

SCG Cement-Building Materials 146,659 129,818 130,976 116,365 19,897 17,994

Other 226,455 215,586 72 110 3,261 2,507

Depreciation and

amortisation

1 Jan - 30 Sep 1 Jan - 30 Sep2013 2012 2013 2012

(in million Baht)

Consolidated SCG 28,513 16,668 11,565 10,431

Business Segments

SCG Chemicals 9,060 2,505 4,096 4,093

SCG Paper 3,165 2,962 2,826 2,485

SCG Cement-Building Materials 12,799 10,228 4,531 3,773

Other 3,688 1,191 112 80

Profit for the period (2)

(1) Represents profit before share of profit of associates, finance costs, income tax expense, depreciation and

amortisation and includes dividends from associates.

(2) Represents profit for the period attributable to owners of the parent.


36

Operating results of business segments SCG Cement-

SCG Chemicals SCG Paper Building Materials30 Sep 31 Dec 30 Sep 31 Dec 30 Sep 31 Dec2013 2012 2013 2012 2013 2012

(in million Baht)

statements of financial positionCurrent assets 54,277 46,423 20,970 19,927 43,171 38,736 Investments and long-term loans 47,842 47,073 1,108 645 13,719 14,669 Property, plant and equipment 75,441 76,600 38,271 35,833 74,847 67,598 Other non-current assets 6,475 6,741 2,150 2,034 14,922 8,815 Total assets 184,035 176,837 62,499 58,439 146,659 129,818

Short-term loans 46,502 37,932 15,077 15,674 33,255 39,254 Other current liabilities 25,180 25,404 6,242 5,403 24,152 18,444 Long-term loans 29,682 34,093 1,622 342 892 1,260 Other non-current liabilities 2,548 2,539 1,315 1,237 5,165 4,586 Total liabilities 103,912 99,968 24,256 22,656 63,464 63,544 Shareholders' equity 80,123 76,869 38,243 35,783 83,195 66,274 Total liabilities and shareholders' equity 184,035 176,837 62,499 58,439 146,659 129,818

IntersegmentOther Elimination Consolidated SCG

30 Sep 31 Dec 30 Sep 31 Dec 30 Sep 31 Dec2013 2012 2013 2012 2013 2012

(in million Baht)

statements of financial positionCurrent assets 102,226 109,600 (83,960) (85,420) 136,684 129,266 Investments and long-term loans 117,075 101,401 (96,057) (82,742) 83,687 81,046 Property, plant and equipment 2,495 1,162 (11,805) (15,901) 179,249 165,292 Other non-current assets 4,659 3,423 (1,266) (1,044) 26,940 19,969 Total assets 226,455 215,586 (193,088) (185,107) 426,560 395,573

Short-term loans 20,155 30,643 (72,801) (74,498) 42,188 49,005 Other current liabilities 2,980 3,362 (3,122) (2,888) 55,432 49,725 Long-term loans 111,188 96,260 (5,294) (5,385) 138,090 126,570 Other non-current liabilities 1,302 813 (13) (25) 10,317 9,150 Total liabilities 135,625 131,078 (81,230) (82,796) 246,027 234,450 Shareholders' equity 90,830 84,508 (111,858) (102,311) 180,533 161,123 Total liabilities and shareholders' equity 226,455 215,586 (193,088) (185,107) 426,560 395,573

Information from

Information from


37

SCG Cement- SCG Chemicals SCG Paper Building Materials1 Jan - 30 Sep 1 Jan - 30 Sep 1 Jan - 30 Sep

2013 2012 2013 2012 2013 2012(in million Baht)

Information from income statementsRevenue from sales External customers 161,076 153,799 43,294 42,113 125,397 111,689 Intersegment 592 491 991 913 5,579 4,676 Total Revenue from sales 161,668 154,290 44,285 43,026 130,976 116,365 Cost of sales (148,193) (150,378) (35,506) (34,757) (99,238) (87,161) Gross profit 13,475 3,912 8,779 8,269 31,738 29,204 Other income 1,375 1,225 431 342 2,801 1,525 Profit before expenses 14,850 5,137 9,210 8,611 34,539 30,729 Operating expenses (5,860) (5,547) (4,513) (4,239) (17,906) (16,615) Profit (loss) before finance costs and income tax expense 8,990 (410) 4,697 4,372 16,633 14,114 Finance costs (1,470) (1,327) (449) (483) (1,062) (1,004) Profit (loss) before income tax expense 7,520 (1,737) 4,248 3,889 15,571 13,110 Income tax expense (1,002) (396) (664) (636) (2,608) (2,811) Profit (loss) after income tax expense 6,518 (2,133) 3,584 3,253 12,963 10,299 Share of profit (loss) of associates and jointly-controlled entities 2,113 (301) 10 2 287 340 Profit (loss) for the period 8,631 (2,434) 3,594 3,255 13,250 10,639

Profit (loss) attributable to:Owners of the parent 9,060 2,505 3,165 2,962 12,799 10,228 Non-controlling interests (429) (4,939) 429 293 451 411

8,631 (2,434) 3,594 3,255 13,250 10,639


38

IntersegmentOther Elimination Consolidated SCG

1 Jan - 30 Sep 1 Jan - 30 Sep 1 Jan - 30 Sep2013 2012 2013 2012 2013 2012

(in million Baht)Information from income statementsRevenue from sales External customers 72 110 - - 329,839 307,711 Intersegment - - (7,162) (6,080) - - Total Revenue from sales 72 110 (7,162) (6,080) 329,839 307,711 Cost of sales (41) (88) 7,123 6,177 (275,855) (266,207) Gross profit 31 22 (39) 97 53,984 41,504 Other income 4,411 3,748 (187) (276) 8,831 6,564 Profit before expenses 4,442 3,770 (226) (179) 62,815 48,068 Operating expenses (1,717) (1,410) 148 21 (29,848) (27,790) Profit before finance costs and income tax expense 2,725 2,360 (78) (158) 32,967 20,278 Finance costs (1,974) (2,025) 76 154 (4,879) (4,685) Profit before income tax expense 751 335 (2) (4) 28,088 15,593 Income tax expense 335 295 (142) (170) (4,081) (3,718) Profit after income tax expense 1,086 630 (144) (174) 24,007 11,875 Share of profit of associates and jointly-controlled entities 2,602 561 (7) - 5,005 602 Profit for the period 3,688 1,191 (151) (174) 29,012 12,477

Profit (loss) attributable to:Owners of the parent 3,688 1,191 (199) (218) 28,513 16,668 Non-controlling interests - - 48 44 499 (4,191)

3,688 1,191 (151) (174) 29,012 12,477


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13 12Income tax expense As at 30 September 2013 and 31 December 2012, no liability has been recognised in respect of temporary differences associated with investments in subsidiaries and jointly-controlled entities, where the Group is in a position to control the timing of the reversal of the temporary differences and it is probable that such difference will not reverse in the foreseeable future.

14 Basic earnings per share The calculation of basic earnings per share for the three-month and the nine-month periods ended 30 September was based on the profit for the period attributable to owners of the parent and the number of ordinary shares outstanding during the periods as follows: For the three-month periods ended 30 September 2013 2012

(in million Baht / million shares) Profit for the period attributable to owners of the parent 9,793 6,416 Number of ordinary shares outstanding 1,200 1,200 Basic earnings per share (in Baht) 8.16 5.35 For the nine-month periods ended 30 September 2013 2012 (in million Baht / million shares) Profit for the period attributable to owners of the parent 28,513 16,668 Number of ordinary shares outstanding 1,200 1,200 Basic earnings per share (in Baht) 23.76 13.89

15 14BDividends At the Annual General Meeting of the Shareholders of the Company held on 30 March 2012, the shareholders resolved to declare total dividends for the year 2011 at Baht 12.50 per share, totalling approximately Baht 15,000 million. The interim dividend was paid at the amount of Baht 5.50 per share to the shareholders entitled to receive the dividends, totalling Baht 6,594 million, and was paid on 25 August 2011. The final dividend was paid at the amount of Baht 7.00 per share to the shareholders entitled to receive the dividends, totalling Baht 8,388 million, and was paid on 26 April 2012. At the Annual General Meeting of the Shareholders of the Company held on 27 March 2013, the shareholders resolved to declare total dividends for the year 2012 at Baht 11.00 per share, totalling approximately Baht 13,200 million. The interim dividend was paid at the amount of Baht 4.50 per share to the shareholders entitled to receive the dividends, totalling Baht 5,386 million, and was paid on 23 August 2012. The final dividend was paid at the amount of Baht 6.50 per share to the shareholders entitled to receive the dividends, totalling Baht 7,769 million, and was paid on 25 April 2013. At the Board of Directors’ Meeting of the Company held on 31 July 2013, the directors approved to pay interim dividend for the year 2013 at Baht 5.50 per share to the shareholders entitled to receive the dividends, totalling Baht 6,569 million and was paid on 29 August 2013.


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16 Commitments and contingent liabilities

30 September

31 December

2013 2012 (in million Baht) a) Guarantees on loans of non-consolidated related parties 1,329 2,289 b) Bank guarantees issued by banks to government, state enterprises and private sectors 1,393 1,200 c) Unused letters of credit 3,088 959 d) Commitments - for purchase of raw material contracts 75,741 69,522 - for rental and service agreements 1,985 2,104 - for purchasing land, construction and installation of machinery and implementation project 11,089 2,637

Commitment for construction and installation of machinery included construction of cement plant in Indonesia is amounted to US Dollar 195 million, equivalent to Baht 5,898 million for the entire project. However, as at 30 September 2013, there has been construction cost occurred totalling US Dollar 51 million, equivalent to Baht 1,389 million

e) Contingent liability for the assessment from the Revenue Department and others amounted to Baht

141 million (31 December 2012: Baht 141 million) (Since the cases are under the consideration of the Courts and the outcome is uncertain, the Group has not yet recorded such contingent liability in the consolidated financial statements).

f) In the first quarter of 2009, the Company lodged a complaint with the police officers against an

ex-employee for the theft (form of ordinary share certificate) and the forgery of 672,000 Company’s ordinary share certificates. In the second quarter of 2009, the Company was notified by the Civil Court that the heirs and the estate administrator of the shareholder whose shares were forged (“plaintiff”) filed a civil lawsuit against the Company and relevant individuals and juristic persons for compensation.

In the fourth quarter of 2011, the Civil Court had the judgement that the ex-employee committed a tort against the plaintiff and ordered him to return the shares or pay the cash for shares prices together with interest until fully paid, and the dividend which the plaintiff should have received. In addition, the court also decided that the Company, as the employer, shall be jointly liable to the plaintiff. Therefore, the Company has recorded the provision for compensation in the consolidated statement of financial position as at 30 September 2013 of Baht 303 million (31 December 2012: Baht 286 million). In addition, the Company and the plaintiff has each appealed the judgement of the Civil Court to the Appeal Court.


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g) The Group entered into forward contracts and swap contracts with several local and foreign banks to hedge against the risk from payment of borrowings, payment for goods, machinery and equipment purchased and money received from sales of goods. The details of the contracts are as follows:

Contract amount Swap Loan Currency Equivalent to Baht 30 Sep 31 Dec 30 Sep 31 Dec 2013 2012 2013 2012 (in million) (in million Baht)

US Dollars 221 20 6,593 701

The above contracts will be gradually due within April 2020 (31 December 2012: due within December 2015).

Contract amount

Forward Receivable Forward Payable

Currency Equivalent to

Baht

Currency Equivalent to

Baht 30 Sep 31 Dec 30 Sep 31 Dec 30 Sep 31 Dec 30 Sep 31 Dec 2013 2012 2013 2012 2013 2012 2013 2012 (in million) (in million Baht) (in million) (in million Baht)

US Dollars 1,449 722 44,713 21,947 77 254 2,374 7,819 Euro 11 17 458 675 5 6 208 257 Yen 18 4 6 2 285 452 92 176 Others - - 53 12 - - 99 9 Total 45,230 22,636 2,773 8,261

The above contracts will be gradually due within November 2014 (31 December 2012: due within December 2013).

h) The Group entered into interest rate swap contracts with various foreign banks to hedge against the

risk of interest on foreign loans of US Dollars 254 million (31 December 2012: US Dollars 305 million), whereby exchanging floating interest rates based on LIBOR with fixed interest rates from 2.67% to 4.98% per annum (31 December 2012: from 2.67% to 4.98% per annum).

i) The Company entered into cross currency swap and interest rate swap contract with a local bank to

hedge against the risk in exchange rates and interest rate amounting to US Dollars 213 million (31 December 2012: US Dollars 213 million) and to swap interest rate into fixed interest rate at 3.86% per annum (31 December 2012: fixed interest rate at 3.86% per annum).

j) The Group had entered into commodity and freight swap contracts with various local banks and foreign banks to hedge against the risk of price changes amounting to US Dollars 97 million, equivalent to Baht 3,047 million (31 December 2012: US Dollars 37 million, equivalent to Baht 1,124 million).

k) A joint venture has entered into the contract for purchasing raw materials from a certain company

in Vietnam with the contract period of 17 years.


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17 Other a) On 29 September 2009, the Central Administrative Court ordered 8 governments authorities to

order the temporary suspension of the projects or activities representing a total of 76 projects in the Map Ta Phut Industrial Estate and vicinity of Rayong Province. Thereafter, the Supreme Administrative Court and the Central Administrative Court ordered the 12 projects to resume construction. However, the 64 projects were still suspended according to the order of the Central Administrative Court, including 18 projects totalling approximately Baht 57,500 million which mainly are joint ventures projects of SCG Chemicals.

On 2 September 2010, the Central Administrative Court delivered its judgment to revoke permits of the projects, for which such permits were issued after the Constitution B.E. 2550 came into force, and fall within the list of 11 types of serious impact projects issued on 31 August 2010 by the Ministry of Natural Resources and Environment. As a result of the judgment, almost all projects of the Group which are considered as non-serious impact projects are able to continue their operations, except for 1 project of the Group which fall within the list. Around the end of 2012, such project has complied with the paragraph 2 of Article 67 of the Constitution B.E. 2550. The Industrial Estate Authority of Thailand (IEAT) was of the opinion that the project has fulfilled the requirements and accordingly, IEAT has submitted the issue to the prosecutor, requesting the prosecutor to request the Supreme Administrative Court to revoke the temporary suspension order in order to allow the project to resume construction. On 1 April 2013, the prosecutor has filed the petition to the Supreme Administrative Court. Currently, the petition is being review by the Supreme Administrative Court.

At present, the plaintiffs and the government authorities have already appealed the judgment of the Central Administrative Court to the Supreme Administrative Court.

b) In the third quarter of 2013, SCG Paper Public Company Limited (SCG Paper) has signed a Memorandum of Understanding with Nippon Paper Industries Company Limited (NPI), company incorporated in Japan, to form a strategic joint venture to collaboratively enhance the competitiveness of Fibrous Chain. This joint venture will involve NPI’s equity injection for a 30% stake in SCG Paper’s Fibrous Chain. Subject to terms and conditions to be agreed upon in the joint venture agreement, the transaction is expected to conclude within the second quarter of 2014.

18 Events after the reporting period

a) On 1 October 2013, the Company issued Debenture No. 2/2013, valued not exceeding Baht 20,000 million. Term of the new debenture is for 4 years, with interest rate of 4.25% per annum and payable quarterly, maturing on 1 October 2017. Subscription of this debenture is to replace the debenture No. 2/2009 amounting to Baht 10,000 million to be retired for redemption and for supporting future investments.

b) At the Board of Directors’ Meeting held on 30 October 2013, the directors approved to pay the 2013 interim dividends for SCG 100 Anniversary at the rate of Baht 3 per share to the shareholders entitled to receive dividends totalling approximately Baht 3,600 million and is scheduled for payment on 28 November 2013.

c) The Group has entered into swap contracts with several local banks to hedge against the risk from payment of borrowings amounting to US Dollar 63 million, equivalent to Baht 1,941 million.

d) In November 2013, the subsidiaries in Vietnam has repaid entirely of long-term loans, liability under finance lease, and short-term loans amounted to VND 399,692 million (equivalent to Baht 600 million). As a result, a redemption of assets guaranteed as collateral, as disclosed in note 9, has been made.


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19 Thai Financial Reporting Standards (TFRSs) not yet adopted

The Group has not adopted the new and revised TFRSs that have been issued as of the reporting date but are not yet effective. These new and revised TFRSs will become effective for annual financial periods beginning on or after 1 January in the year indicated in the following table:

TFRSs Topic Effective

Year TFRS 4 Insurance Contracts 2016 TAS 12 (revised 2012) Income Taxes 2014 TFRIC 1 Changes in Existing Decommissioning, Restoration and

Similar Liabilities 2014

TFRIC 4 Determining whether an Arrangement contains a Lease 2014 TFRIC 5 Rights to Interests arising from Decommissioning,

Restoration and Environmental Rehabilitation Funds 2014

TFRIC 7 Applying the Restatement Approach under TAS 29 Financial Reporting in Hyperinflationary Economies

2014

TFRIC 10 Interim Financial Reporting and Impairment 2014 TFRIC 12 Service Concession Arrangements 2014 TFRIC 13 Customer Loyalty Programmes 2014 TFRIC 17 Distributions of Non-cash Assets to Owners 2014 TFRIC 18 Transfers of Assets from Customers 2014 TIC 15 Operating Leases-Incentives 2014 TIC 27 Evaluating the Substance of Transactions Involving the

Legal Form of a Lease 2014

TIC 29 Service Concession Arrangements: Disclosures 2014 TIC 32 Intangible Assets-Web Site Costs 2014

Management has made a preliminary assessment of the potential initial impact on the consolidated financial statements of these new and revised TFRSs and expects that there will be no material impact on the financial statements in the period of initial application.

Documents

The Siam Cement Public Company Limited and its Subsidiariesscc.listedcompany.com/misc/FS/20131111-SCC-FS3Q2013-EN.pdf2013/11/11 · The Siam Cement Public Company Limited and its