SNC Former Public Company Limited and Its Subsidiaries

SNC Former Public Company Limited and its Subsidiaries

Interim financial statements for the three-month and six-month periods ended 30 June 2018 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 SNC Former Public Company Limited

I have reviewed the accompanying consolidated and separate statements of financial position of SNC Former Public Company Limited and its subsidiaries, and of SNC Former Public Company Limited, respectively, as at 30 June 2018; the consolidated and separate statements of comprehensive income, changes in equity and cash flows for the three-month and six-month periods ended 30 June 2018; 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 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”.

(Vilaivan Pholprasert) Certified Public Accountant Registration No. 8420

KPMG Phoomchai Audit Ltd. Bangkok 1 August 2018

SNC Former Public Company Limited and its Subsidiaries Statement of financial position

Consolidated financial Separate financial statements statements 30 June 31 December 30 June 31 December Assets Note 2018 2017 2018 2017 (Unaudited) (Unaudited) (in thousand Baht) Current assets Cash and cash equivalents 773,842 505,386 78,864 46,540 Trade and other receivables 3,4 1,086,684 1,065,374 127,722 141,394 Short-term loans to related parties 3 15,179 15,899 682,212 954,260 Inventories 324,768 317,034 16,968 22,478 Other current assets 166,639 164,737 5,590 8,760 Total current assets 2,367,112 2,068,430 911,356 1,173,432

Non-current assets Investments in associate 6 50,339 59,091 51,450 51,450 Investments in subsidiaries 7 - - 1,420,309 1,120,629 Investment properties 8 203,319 173,608 72,964 77,507 Property, plant and equipment 9 2,349,773 2,449,061 269,249 290,627 Intangible assets 49,469 37,525 12,379 1,719 Deferred tax assets 25,189 27,352 9,009 9,529 Other non-current assets 37,606 44,354 34,235 41,807 Total non-current assets 2,715,695 2,790,991 1,869,595 1,593,268

Total assets 5,082,807 4,859,421 2,780,951 2,766,700

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

2 SNC Former Public Company Limited and its Subsidiaries Statement of financial position

Consolidated financial Separate financial statements statements 30 June 31 December 30 June 31 December Liabilities and equity Note 2018 2017 2018 2017 (Unaudited) (Unaudited) (in thousand Baht) Current liabilities Short-term loans from financial institutions - 30,000 - - Trade and other payables 3,10 1,321,078 1,109,971 142,372 133,598 Current portion of deferred income 15,742 23,422 - - Current portion of accounts payable - acquisition of assets 49,295 13,722 804 267 Current portion of long-term loans from financial institutions 234,784 247,804 126,840 139,860 Short-term loans from related parties 3 - - 45,000 125,500 Income tax payable 13,254 8,164 7,995 1,705 Other current liabilities 20,627 20,105 3,585 2,169 Total current liabilities 1,654,780 1,453,188 326,596 403,099

Non-current liabilities Deferred income 51,423 52,508 - - Long-term loans from financial institutions 344,499 455,865 198,850 256,240 Deferred tax liabilities 4,179 4,321 - - Provisions for employee benefits 57,244 56,000 17,856 18,880 Other non-current liabilities 4,078 3,967 - - Total non-current liabilities 461,423 572,661 216,706 275,120

Total liabilities 2,116,203 2,025,849 543,302 678,219

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

3 SNC Former Public Company Limited and its Subsidiaries Statement of financial position

Consolidated financial Separate financial statements statements 30 June 31 December 30 June 31 December Liabilities and equity 2018 2017 2018 2017 (Unaudited) (Unaudited) (in thousand Baht) Equity Share capital: Authorised share capital 287,777 287,777 287,777 287,777

Issued and paid-up share capital 287,777 287,777 287,777 287,777 Share premium on ordinary shares 1,213,596 1,213,596 1,213,596 1,213,596 Retained earnings Appropriated Legal reserve 75,823 73,823 30,140 30,140 Unappropriated 1,212,937 1,076,362 706,136 556,968 Equity attributable to owners of the parent 2,790,133 2,651,558 2,237,649 2,088,481 Non-controlling interests 176,471 182,014 - - Total equity 2,966,604 2,833,572 2,237,649 2,088,481

Total liabilities and equity 5,082,807 4,859,421 2,780,951 2,766,700

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

4 SNC Former Public Company Limited and its Subsidiaries Statement of comprehensive income (Unaudited)

Consolidated financial Separate financial statements statements Three-month period ended Three-month period ended 30 June 30 June Note 2018 2017 2018 2017 (in thousand Baht) Continuing operations Revenues from sales of goods and rendering of services 3 1,601,002 2,056,265 183,692 265,633 Cost of sales and rendering of services 3 (1,379,911) (1,816,393) (152,111) (232,675) Gross profit 221,091 239,872 31,581 32,958

Interest income 3 1,452 978 8,576 14,693 Other income 3 29,853 13,412 20,813 3,135 Dividend income from subsidiaries 3, 7 - - 19,980 37,500 Distribution costs (23,121) (22,327) (4,875) (6,362) Administrative expenses 3 (79,868) (89,059) (15,062) (47,882) Direct expenses arising from investment properties (9,247) (8,317) (8,436) (8,171) Directors and management benefit expenses 3 (7,356) (8,730) (986) (942) Finance costs 3 (8,697) (11,873) (5,809) (10,982) Share of profit (loss) of investments in associate (3,369) 432 - - Profit before income tax expense from continuing operations 120,738 114,388 45,782 13,947 Tax income (expense) (11,862) 3,189 (4,800) 7,417 Profit for the period from continuing operations 108,876 117,577 40,982 21,364

Discontinued operation Loss for the period from discontinued operation, net of tax 5 - (725) - - Profit for the period 108,876 116,852 40,982 21,364

Other comprehensive income Other comprehensive income for the period, net of tax ---- Total comprehensive income for the period 108,876 116,852 40,982 21,364

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

5 SNC Former Public Company Limited and its Subsidiaries Statement of comprehensive income (Unaudited)

Consolidated financial Separate financial statements statements Three-month period ended Three-month period ended 30 June 30 June Note 2018 2017 2018 2017 (in thousand Baht) Profit (loss) attributable to: Owners of the parent 107,878 116,934 40,982 21,364 Non-controlling interests 998 (82) -- Profit for the period 108,876 116,852 40,982 21,364

Total comprehensive income attributable to: Owners of the parent 107,878 116,934 40,982 21,364 Non-controlling interests 998 (82) - - Total comprehensive income for the period 108,876 116,852 40,982 21,364

Basic (loss) earnings per share (in Baht) Basic earnings per share from continuing operations 13 0.375 0.408 0.142 0.074 Basic loss per share from discontinued operation 5 - (0.002) - -

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

6 SNC Former Public Company Limited and its Subsidiaries Statement of comprehensive income (Unaudited)

Consolidated financial Separate financial statements statements Six-month period ended Six-month period ended 30 June 30 June Note 2018 2017 2018 2017 (in thousand Baht) Continuing operations Revenues from sales of goods and rendering of services 3 3,841,684 4,487,795 418,172 524,783 Cost of sales and rendering of services 3 (3,319,768) (4,007,561) (351,050) (466,364) Gross profit 521,916 480,234 67,122 58,419

Interest income 3 2,066 1,383 17,638 27,837 Other income 3 56,137 35,983 36,717 13,525 Dividend income from subsidiaries 3, 7 - - 249,980 37,500 Distribution costs (48,545) (49,937) (11,806) (13,033) Administrative expenses 3 (166,230) (192,124) (24,394) (60,551) Direct expenses arising from investment properties (20,044) (16,443) (19,233) (16,297) Directors and management benefit expenses 3 (14,740) (18,498) (1,060) (2,057) Finance costs 3 (17,120) (22,267) (11,882) (19,474) Share of loss of investments in associate 6 (8,752) (143) - - Profit before income tax expense from continuing operations 304,688 218,188 303,082 25,869 Tax income (expense) 11 (20,747) (1,927) (10,025) 3,857 Profit for the period from continuing operations 283,941 216,261 293,057 29,726

Discontinued operation Loss for the period from discontinued operation, net of tax 5 - (1,759) - - Profit for the period 283,941 214,502 293,057 29,726

Other comprehensive income Other comprehensive income for the period, net of tax ---- Total comprehensive income for the period 283,941 214,502 293,057 29,726

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

7 SNC Former Public Company Limited and its Subsidiaries Statement of comprehensive income (Unaudited)

Consolidated financial Separate financial statements statements Six-month period ended Six-month period ended 30 June 30 June Note 2018 2017 2018 2017 (in thousand Baht) Profit attributable to: Owners of the parent 282,464 214,147 293,057 29,726 Non-controlling interests 1,477 355 - - Profit for the period 283,941 214,502 293,057 29,726

Total comprehensive income attributable to: Owners of the parent 282,464 214,147 293,057 29,726 Non-controlling interests 1,477 355 - - Total comprehensive income for the period 283,941 214,502 293,057 29,726

Basic (loss) earnings per share (in Baht) Basic earnings per share from continuing operations 13 0.982 0.748 1.018 0.103 Basic loss per share from discontinued operation 5 - (0.004) - -

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

8 SNC Former Public Company Limited and its Subsidiaries Statement of changes in equity (Unaudited)

Consolidated financial statements Retained earnings Equity Issued and Share premium attributable to Non- paid-up on Legal owners of controlling Total Note share capital ordinary shares reserve Unappropriated parent interests equity (in thousand Baht) Six-month period ended 30 June 2017 Balance at 1 January 2017 287,777 1,213,596 71,323 942,788 2,515,484 215,336 2,730,820

Transactions with owners, recorded directly in equity Contributions by and distributions to owners of the parent Dividends 14 - - - (115,111) (115,111) (13,000) (128,111) Total contributions by and distributions to owners of the parent - - - (115,111) (115,111) (13,000) (128,111)

Change in ownership interests in subsidiaries Acquisition of non-controlling interests without a change in control 7 - - - (34,950) (34,950) 33,825 (1,125) Acquisition of non-controlling interests with a change in control 7 - - - (68) (68) (56) (124) Total transactions with owners, recorded directly in equity - - - (150,129) (150,129) 20,769 (129,360)

Comprehensive income for the period Profit or loss - - - 214,147 214,147 355 214,502 Other comprehensive income ------Total comprehensive income for the period - - - 214,147 214,147 355 214,502

Transfer to legal reserve - - 2,500 -2,500 - - -

Balance at 30 June 2017 287,777 1,213,596 73,823 1,004,306 2,579,502 236,460 2,815,962

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

9 SNC Former Public Company Limited and its Subsidiaries Statement of changes in equity (Unaudited)

Consolidated financial statements Retained earnings Equity Issued and Share premium attributable to Non- paid-up on Legal owners of controlling Total Note share capital ordinary shares reserve Unappropriated parent interests equity (in thousand Baht) Six-month period ended 30 June 2018 Balance at 1 January 2018 287,777 1,213,596 73,823 1,076,362 2,651,558 182,014 2,833,572

Transactions with owners, recorded directly in equity Contributions by and distributions to owners of the parent Dividends 14 - - - (143,889) (143,889) (7,020) (150,909) Total contributions by and distributions to owners of the parent - - - (143,889) (143,889) (7,020) (150,909)

Comprehensive income for the period Profit or loss - - - 282,464 282,464 1,477 283,941 Other comprehensive income ------Total comprehensive income for the period - - - 282,464 282,464 1,477 283,941

Transfer to legal reserve --2,000 -2,000 - - -

Balance at 30 June 2018 287,777 1,213,596 75,823 1,212,937 2,790,133 176,471 2,966,604

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

10 SNC Former Public Company Limited and its Subsidiaries Statement of changes in equity (Unaudited)

Separate financial statements Retained earnings Issued and Share premium paid-up on Legal Total Note share capital ordinary shares reserve Unappropriated equity (in thousand Baht) Six-month period ended 30 June 2017 Balance at 1 January 2017 287,777 1,213,596 30,140 478,143 2,009,656

Transactions with owners, recorded directly in equity Contributions by and distributions to owners of the parent Dividends 14 - - - (115,111) (115,111) Total contributions by and distributions to owners of the parent - - - -115,111 -115,111

Comprehensive income for the period Profit or loss --- 29,726 29,726 Other comprehensive income ----- Total comprehensive income for the period - - - 29,726 29,726

Balance at 30 June 2017 287,777 1,213,596 30,140 392,758 1,924,271

The accompanying notes are an integral part of these financial statements. 11 SNC Former Public Company Limited and its Subsidiaries Statement of changes in equity (Unaudited)

Separate financial statements Retained earnings Issued and Share premium paid-up on Legal Total Note share capital ordinary shares reserve Unappropriated equity (in thousand Baht) Six-month period ended 30 June 2018 Balance at 1 January 2018 287,777 1,213,596 30,140 556,968 2,088,481

Transactions with owners, recorded directly in equity Contributions by and distributions to owners of the parent Dividends 14 - - - (143,889) (143,889) Total contributions by and distributions to owners of the parent - - - -143,889 -143,889

Comprehensive income for the period Profit or loss --- 293,057 293,057 Other comprehensive income ----- Total comprehensive income for the period - - - 293,057 293,057

Balance at 30 June 2018 287,777 1,213,596 30,140 706,136 2,237,649

The accompanying notes are an integral part of these financial statements. 12 SNC Former Public Company Limited and its Subsidiaries Statement of cash flows (Unaudited)

Consolidated financial Separate financial statements statements Six-month period ended Six-month period ended 30 June 30 June 2018 2017 2018 2017 (in thousand Baht) Cash flows from operating activities Profit for the period 283,941 214,502 293,057 29,726 Adjustments to reconcile profit (loss) to cash receipts (payments) Tax expense 20,747 1,222 10,025 (3,857) Finance costs 17,120 22,267 11,882 19,474 Depreciation of property, plant and equipment 146,367 162,050 21,118 24,096 Depreciation of investment properties 4,802 4,305 3,936 3,935 Amortisation of intangible assets 3,927 3,962 198 194 (Reversal of) impairment losses on assets 6,677 (1,189) 6,677 (1,189) Impairment losses of investment in subsidiary - - 320 35,000 (Reversal of) provisions for employee benefits 2,691 (1,540) 423 942 Unrealised (gain) loss on exchange 383 527 - (1) Share of loss of investments in associate, net of tax 8,752 143 - - (Gain) loss on disposal of investment in associate - (785) - 1,394 Bad and doubful debts expenses 798 34 914 - (Reversal of) losses on inventories devaluation (818) (2,381) 70 (3,032) Gain on disposal of property, plant and equipment (774) (900) (4) (814) Loss on written-off of property, plant and equipment 2,768 - - - Dividend income - - (249,980) (37,500) Interest income (2,066) (1,458) (17,638) (27,837) 495,315 400,759 80,998 40,531 Changes in operating assets and liabilities Trade and other accounts receivables -15,240 4,010 14,548 64,630 Inventories -6,916 -60,989 5,440 9,780 Other current assets -1,852 -58,578 3,170 4,635 Other non-current assets 6,748 304 7,572 -2,119 Trade and other payables 204,700 211,398 9,827 56,605 Employee benefits paid -1,447 -2,042 -1,447 -1,861 Other current liabilities 522 -11,165 1,416 -8,631 Deferred income -8,765 -10,425 - - Other non-current liabilities 111 105 - - Net cash generated from operating activities 673,176 473,377 121,524 163,570 Tax paid -13,636 -5,424 -3,215 -1,820 Net cash from operating activities 659,540 467,953 118,309 161,750

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

13 SNC Former Public Company Limited and its Subsidiaries Statement of cash flows (Unaudited)

Consolidated financial Separate financial statements statements Six-month period ended Six-month period ended 30 June 30 June 2018 2017 2018 2017 (in thousand Baht) Cash flows from investing activities Proceeds from sale of investments in associate - 18,606 - 18,606 Acquisition of investments in subsidiary - - (300,000) (182,375) Proceeds from sale of property, plant and equipment 784 11,570 56 12,434 Acquisition of property, plant and equipment (62,704) (144,348) (12,555) (9,536) Acquisition of intangible assets (8,641) (520) (3,628) (388) Proceeds from repayment of loans to related parties - 1,125 488,400 1,789,125 Loans to related parties (173) (399) (217,245) (1,873,899) Dividend income - - 249,980 37,500 Interest received 2,065 1,458 16,741 27,837 Net cash from (used in) investing activities (68,669) (112,508) 221,749 (180,696)

Cash flows from financing activities Payment of change in ownership interest in subsidiaries without a change in control - (1,249) - - Proceeds from loans from financial institutions 535,000 2,737,000 475,000 2,677,000 Repayment of loans from financial institutions (689,386) (2,708,917) (545,410) (2,603,360) Proceeds from short-term loans from related parties - - 66,000 324,000 Repayment of short-term loans from related parties - - (146,500) (203,000) Dividends to owners of the parent (150,909) (128,111) (143,889) (115,111) Interest paid (17,120) (22,267) (12,935) (19,474) Net cash from (used in) financing activities (322,415) (123,544) (307,734) 60,055

Net increase in cash and cash equivalents 268,456 231,901 32,324 41,109 Cash and cash equivalents at 1 January 505,386 404,851 46,540 54,412 Cash and cash equivalents at 30 June 773,842 636,752 78,864 95,521

Non-cash transactions Liabilities from construction of plant and purchase of equipment 35,779 42,502 1,291 1,416 Transfer property, plant and equipment to investment properties 35,120 - - - Transfer property, plant and equipment to intangible assets 7,230 - 7,230 -

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

14 SNC Former Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2018 (Unaudited)

Note Contents

1 General information 2 Basis of preparation of the interim financial statements 3 Related parties 4 Trade and other receivables 5 Discontinued operation 6 Investments in associate 7 Investments in subsidiaries 8 Investment properties 9 Property, plant and equipment 10 Trade and other payables 11 Income tax expense 12 Segment information 13 Earnings per share 14 Dividends 15 Financial instruments 16 Commitments with non-related parties 17 Event after the reporting period 18 Reclassification of accounts

15 SNC Former Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2018 (Unaudited)

These notes form an integral part of the interim financial statements.

The interim financial statements issued for Thai regulatory reporting purposes are prepared in the Thai language. These English language financial statements have been prepared from the Thai language statutory financial statements, and were approved and authorised for issue by the Board of Directors on 1 August 2018.

1 General information

SNC Former Public Company Limited, the “Company”, is incorporated in Thailand and has its registered office at 333/3 Moo 6, Bangphriang sub district, Bang bo district, Samutprakarn. The Company has 1 branch in Samutprakarn and 1 branch in Chonburi.

The Company was listed on the Stock Exchange of Thailand in October 2004.

The Company’s major shareholder was SNC Holding Company Limited (31.62% shareholding), incorporated in Thailand.

The principal businesses of the Company and its subsidiaries, the “group”, are engaged in the manufacturing of component parts for cooling machines, component parts for air conditioners for automobile, contract manufacturing and assembly of air conditioners for household use, manufacturing of heat pump for water heat pump and manufacturing of insulation copper price kit used for the installation of cooling machine and foam pipe insulation.

2 Basis of preparation of the interim financial statements

(a) Statement of compliance

The interim financial statements are prepared on a condensed basis in accordance with Thai Accounting Standard (TAS) No. 34 (revised 2017) 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 financial statements are prepared to provide an update on the financial statements for the year ended 31 December 2017. They do not include all of the financial information required for full annual financial statements but focus on new activities, events and circumstances to avoid repetition of information previously reported. Accordingly, these interim financial statements should be read in conjunction with the financial statements of the Company and its subsidiaries for the year ended 31 December 2017.

The accounting policies and methods of computation applied in these interim financial statements are consistent with those applied in the financial statements for the year ended 31 December 2017 except that the Group has adopted all the new and revised TFRS that are effective for annual periods beginning on or after 1 January 2018. The adoption of these new and revised TFRS did not have any material effect on the accounting policies, methods of computation, financial performance or position of the Group.

In addition to the above new and revised TFRS, the FAP has TFRS 15 Revenue from Contracts with Customers which is effective for annual periods beginning on or after 1 January 2019. The Group has not early adopted this standard in preparing these interim financial statements.

16 SNC Former Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2018 (Unaudited)

TFRS 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognised. Revenue should be recognised when (or as) an entity transfers control over goods or services to a customer, measured at the amount to which the entity expects to be entitled. It replaces existing revenue recognition standards as follows: - TAS 11 (revised 2017) Construction Contracts, - TAS 18 (revised 2017) Revenue, - TSIC 31 (revised 2017) Revenue-Barter Transactions Involving Advertising Services, - TFRIC 13 (revised 2017) Customer Loyalty Programmes, - TFRIC 15 (revised 2017) Agreements for the Construction of Real Estate, and - TFRIC 18 (revised 2017) Transfers of Assets from Customers.

Management is presently considering the potential impact of adopting and initially applying TFRS 15 on the consolidated and separate financial statements.

(b) Functional and presentation currency

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

The preparation of interim financial statements in conformity with TFRS 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 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 financial statements for the year ended 31 December 2017.

Measurement of fair values

The Group has an established control framework with respect to the measurement of fair values. This includes a valuation team that has overall responsibility for overseeing all significant fair value measurements, including Level 3 fair values, and reports directly to the chief financial officer.

The valuation team regularly reviews significant unobservable inputs and valuation adjustments. If third party information, such as broker quotes or pricing services, is used to measure fair values, then the valuation team assesses the evidence obtained from the third parties to support the conclusion that these valuations meet the requirements of TFRS, including the level in the fair value hierarchy in which the valuations should be classified.

Significant valuation issues are reported to the Group’s Audit Committee.

When measuring the fair value of an asset or a liability, the Group uses observable market data as far as possible. Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:

 Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.  Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).  Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

17 SNC Former Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2018 (Unaudited)

If the inputs used to measure the fair value of an asset or liability might be categorised in different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.

3 Related parties

For the purposes of these financial statements, parties are considered to be related to the Group if the Group has the ability, directly or indirectly, to control or joint control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Group and the party are subject to common control or common significant influence. Related parties may be individuals or other entities.

Relationships with subsidiaries and associates are described in notes 6 and 7. Relationship with key management and other related parties were as follows:

Country of incorporation/ Name of entities nationality Nature of relationships

Directors and management Thai and Persons having authority and responsibility Japanese for planning, directing and controlling the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of the Group.

The pricing policies for transactions with related parties are explained further below:

Transactions Pricing policies Sales of goods Cost and cost plus margin Purchases of goods Cost and cost plus margin Rendering of services Actual incurred cost Receiving of services Actual incurred cost Rental income Cost plus margin Sales of property, plant and equipment Net book value Purchases of property, plant and equipment Net book value Interest income Agreed rate based on market price Interest expense Agreed rate based on market price Dividend income Declared rate

18 SNC Former Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2018 (Unaudited)

Significant transactions for the three-month and six-month periods ended 30 June 2018 and 2017 with related parties were as follows:

Consolidated Separate financial statements financial statements Three-month period ended 30 June 2018 2017 2018 2017 (in thousand Baht) Subsidiaries Sales of goods - - 975 11,703 Purchases of goods - - 9,194 33,646 Receiving of services --- 32 Sales of machinery and equipment -- 55 90 Purchases of machinery and equipment - - 5,016 - Interest income - - 8,213 14,387 Interest expense - - 616 3,759 Dividend income - - 19,980 37,500

Associate Sales of goods 1,592 4,226 - - Purchases of goods 28 3 - - Rendering of services 1,466 451 - - Receiving of services 225 197 - - Rental income 2,080 630 - - Interest income 150 150 150 -

Directors and management Directors and management benefit expenses Short-term benefits 7,189 8,556 887 840 Post-employment benefits 167 174 99 102 Total directors and management benefit expenses 7,356 8,730 986 942

Consolidated Separate financial statements financial statements Six-month period ended 30 June 2018 2017 2018 2017 (in thousand Baht) Subsidiaries Sales of goods - - 4,324 25,079 Purchases of goods - - 28,662 77,043 Receiving of services - - 5 37 Sales of machinery and equipment - - 25,255 5,044 Purchases of machinery and equipment - - 5,016 - Interest income - - 17,085 27,329 Interest expense - - 2,159 6,663 Dividend income - - 249,980 37,500

Associate Sales of goods 3,262 6,860 - - Purchases of goods 28 3 - - Rendering of services 2,216 713 - - Receiving of services 491 399 - - Rental income 4,060 1,260 - - Interest income 298 298 298 298

19 SNC Former Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2018 (Unaudited)

Consolidated Separate financial statements financial statements Six-month period ended 30 June 2018 2017 2018 2017 Directors and management Directors and management benefit expenses Short-term benefits 14,407 18,149 863 1,852 Post-employment benefits 333 349 197 205 Total directors and management benefit expenses 14,740 18,498 1,060 2,057

Balances as at 30 June 2018 and 31 December 2017 with related parties were as follows:

Consolidated Separate Trade accounts receivable - related parties financial statements financial statements 30 30 30 31 June December June December 2018 2017 2018 2017 (in thousand Baht) Subsidiaries Paradise Plastic Co., Ltd. - - 124 2,269

Associate SNC Atlantic Water Heater Asia Co., Ltd. 1,368 1,101 - - 1,368 1,101 124 2,269 Less allowance for doubtful accounts --- - Net 1,368 1,101 124 2,269

Consolidated Separate Other receivables - related parties financial statements financial statements 30 30 30 31 June December June December 2018 2017 2018 2017 (in thousand Baht) Subsidiaries SNC Pyongsan Evolution Co., Ltd. - - 1,873 1,808 SNC Cooling Supply Co., Ltd. - - 4,357 2,990 Immortal Parts Co., Ltd. - - 84 3,275 Paradise Plastic Co., Ltd. - - 8,023 27,246 Ultimate Parts Co., Ltd. - - - 259 Infinity Parts Co., Ltd. - - - 415 Odin Power Co., Ltd. - - - 122 SNC Fukui Holy Insulation Co., Ltd. - - 138 139 SNC Creativity Anthology Co., Ltd. - - 1,150 - Meisou SNC Precision Co., Ltd. - - 188 - SNC Atlantic Heat Pump Co., Ltd. - - 15 -

Associate SNC Atlantic Water Heater Asia Co., Ltd. 1,736 937 - -

Director Mr. Seiji Kinoshita 85 173 85 173 1,821 1,110 15,913 36,427 Less allowance for doubtful accounts (21) - (21) - Net 1,800 1,110 15,892 36,427 20 SNC Former Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2018 (Unaudited)

Short-term loans to related Interest rate Consolidated Separate parties financial statements financial statements 30 31 30 31 June December June December 2018 2017 2018 2017 2018 2017 (% per annum) (in thousand Baht) Subsidiaries SNC Pyongsan Evolution Co., Ltd. 4.80 4.80 - - 396,033 394,361 SNC Santec Co., Ltd. 4.80 4.80 - - 19,605 19,605 SNC Creativity Anthology Co., Ltd. 4.80 4.80 - - 259,500 532,500 SNC Fukui Holy Insulation Co., Ltd. 4.80 4.80 - - 11,500 11,500

Associate SNC Atlantic Water Heater Asia Co., Ltd. 4.80 4.80 12,500 12,500 12,500 12,500

Director Mr. Seiji Kinoshita 4.80 4.80 3,572 3,399 3,572 3,399 16,072 15,899 702,710 973,865 Less allowance for doubtful accounts (893) - (20,498) (19,605) Short-term loans to related parties, net 15,179 15,899 682,212 954,260

Movements during the six-month periods ended 30 June 2018 and 2017 of short-term loans to related parties were as follows:

Consolidated Separate Short-term loans to related parties financial statements financial statements Six-month period ended 30 June 2018 2017 2018 2017 (in thousand Baht) Subsidiaries At 1 January - - 938,361 966,361 Increase - - 217,072 1,873,500 Decrease - - (488,400) (1,788,000) At 30 June - - 667,033 1,051,861

Associate At 1 January 12,500 12,500 12,500 12,500 At 30 June 12,500 12,500 12,500 12,500

Director and management At 1 January 3,399 4,125 3,399 4,125 Increase 173 399 173 399 Decrease - (1,125) - (1,125) Allowance for doubtful accounts (893) - (893) - At 30 June 2,679 3,399 2,679 3,399

Total short-term loans to related parties At 1 January 15,899 16,625 954,260 982,986 Increase 173 399 217,245 1,873,899 Decrease - (1,125) (488,400) (1,789,125) Allowance for doubtful accounts (893) - (893) - At 30 June 15,179 15,899 682,212 1,067,760

21 SNC Former Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2018 (Unaudited)

Consolidated Separate Trade account payable - related parties financial statements financial statements 30 31 30 31 June December June December 2018 2017 2018 2017 (in thousand Baht) Subsidiaries Immortal Parts Co., Ltd. - - 3,406 2,797 Paradise Plastic Co., Ltd. - - 250 4,314 SNC Pyongsan Evolution Co., Ltd. - - 264 -

Associate SNC Atlantic Water Heater Asia Co., Ltd. 30 - - - Total 30 - 3,920 7,111

Consolidated Separate Other payables - related parties financial statements financial statements 30 31 30 31 June December June December 2018 2017 2018 2017 (in thousand Baht) Subsidiaries SNC Cooling Supply Co., Ltd. - - - 725 Immortal Parts Co., Ltd. - - - 194 Paradise Plastic Co., Ltd. - - 20 6 SNC Creativity Anthology Co., Ltd. - - - 48

Associate SNC Atlantic Water Heater Asia Co., Ltd. 152 122 - - Total 152 122 20 973

Separate Short-term loans from related parties Interest rate financial statements 30 31 June December 2018 2017 2018 2017 (% per annum) (in thousand Baht) Subsidiaries Immortal Part Co. Ltd. 4.80 4.80 45,000 34,000 SNC Cooling Supply Co., Ltd. 4.80 4.80 - 82,000 Paradise Plastic Co., Ltd 4.80 4.80 - 9,500 Total short-term loans from related parties 45,000 125,500

22 SNC Former Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2018 (Unaudited)

Movements during the six-month periods ended 30 June 2018 and 2017 of short-term loans from related parties were as follows:

Separate Short-term loans from related parties financial statements Six-month period ended 30 June 2018 2017 (in thousand Baht) Subsidiaries At 1 January 125,500 215,123 Increase 66,000 324,000 Decrease (146,500) (203,000) At 30 June 45,000 336,123

4 Trade and other receivables

Consolidated Separate financial statements financial statements 30 31 30 31 June December June December Note 2018 2017 2018 2017 (in thousand Baht) Trade accounts receivable Related parties 3 1,368 1,101 124 2,269 Other parties 1,071,860 1,050,392 106,498 97,387 Total 1,073,228 1,051,493 106,622 99,656 Less allowance for doubtful accounts - (116) - - Net 1,073,228 1,051,377 106,622 99,656

Other receivables Related parties 3 1,821 1,110 15,913 36,427 Other parties 11,656 12,887 5,208 5,311 Total 13,477 13,997 21,121 41,738 Less allowance for doubtful accounts (21) - (21) - Net 13,456 13,997 21,100 41,738 Total trade and other receivables 1,086,684 1,065,374 127,722 141,394

2018 2017 2018 2017 (in thousand Baht) (Reversal) Bad and doubtful debts expense for the three-month period ended 30 June 21 34 21 - six-month period ended 30 June (95) 34 21 -

23 SNC Former Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2018 (Unaudited)

Aging analyses for trade accounts receivable were as follows:

Consolidated Separate financial statements financial statements 30 31 30 31 June December June December 2018 2017 2018 2017 (in thousand Baht) Related parties Within credit terms * 1,368 1,101 124 2,269 1,368 1,101 124 2,269 Less allowance for doubtful accounts - - - - 1,368 1,101 124 2,269 Other parties Within credit terms * 1,050,004 1,046,724 106,498 96,653 Overdue ** Less than 3 months 11,136 3,204 - 734 3-6 months 10,720 464 - - 1,071,860 1,050,392 106,498 97,387 Less allowance for doubtful accounts - (116) - - 1,071,860 1,050,276 106,498 97,387 Total 1,073,228 1,051,377 106,622 99,656

The normal credit terms granted by the Group range from 30 days to 150 days. * Within credit terms means that it was not over the date that the Company and the customer agreed to receive payment. ** Overdue means that the payment receipt date agreed between the Company and the customer has already passed.

5 Discontinued operation

In September 2017, the Company sold all investments in Toptech Diamond Tools Co., Ltd., a subsidiary. This segment was not a discontinued operation or classified as held for sale as at 30 June 2017. The comparative statement of comprehensive income has been re-presented to show the discontinued operations separately from continuing operations.

Consolidated financial statements Three-month period ended 30 June 2017 (in thousand Baht) Results of discontinued operation Revenues from sales of goods and rendering of services 21,469 Other income 174 Costs of sales and rendering of services (18,889) Distribution costs (1,100) Administrative expenses (3,084) Results from operating activities (1,430) Tax expense 705 Results from operating activities, net of income tax (725)

Loss per share (in Baht): Basic loss per share (0.002)

24 SNC Former Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2018 (Unaudited)

The loss for the three-month period ended 30 June 2017 from discontinued operation of Baht 0.73 million was attributable to the owners of the Company of Baht 0.48 million.

Consolidated financial statements Six-month period ended 30 June 2017 (in thousand Baht) Results of discontinued operation Revenues from sales of goods and rendering of services 42,360 Other income 235 Costs of sales and rendering of services (36,507) Distribution costs (2,105) Administrative expenses (6,447) Results from operating activities (2,464) Tax expense 705 Results from operating activities, net of income tax (1,759)

Loss per share (in Baht): Basic loss per share (0.004)

The loss for the six-month period ended 30 June 2017 from discontinued operation of Baht 1.76 million was attributable to the owners of the Company of Baht 1.16 million.

Consolidated financial statements Six-month period ended 30 June 2017 (in thousand Baht) Cash flows from (used in) discontinued operation Net cash from operating activities 8,654 Net cash used in investing activities (425) Net cash from discontinued operation 8,229

Effect of disposal on the financial position of the Group Cash and cash equivalents 47,945 Trade and other receivables 12,171 Inventories 7,371 Property, plant and equipment 124,506 Intangible assets 447 Other assets 3,337 Trade and other payables (15,682) Deferred tax liabilities (5,836) Provisions for employee benefits (1,230) Other liabilities (299) Net assets and liabilities 172,730

Consideration received, satisfied in cash 105,000

25 SNC Former Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2018 (Unaudited)

6 Investments in associate

Consolidated Separate financial statements financial statements Six-month period ended 30 June 2018 2017 2018 2017 (in thousand Baht) Associate At 1 January 59,091 46,262 51,450 42,050 Share of net losses of associate (8,752) (143) - - Disposals - (17,821) - (20,000) At 30 June 50,339 28,298 51,450 22,250

Disposal of associates

On 17 April 2017, the Group sold all shares of Fuso Industries (Thailand) Co., Ltd., an associate of the Group, to a non-related company for a consideration of Baht 18.61 million. The Group and the Company recognised gain on disposal of investment of Baht 0.79 million in consolidated financial statement and loss on disposal of investment of Baht 1.39 million in the separated financial statement. The Group received this investment disposal on 28 April 2017.

SNC Former Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2018 (Unaudited)

Investments in associate as at 30 June 2018 and 31 December 2017, and dividend income from those investments for the six-month periods ended 30 June 2018 and 2017 were as follows:

Consolidated financial statements Dividend income for the Type of Ownership Equity - net of six-month period business interest Paid-up capital Cost Equity Impairment impairment ended 30 3130313031 30 313031303130 30 June December June December June December June December June December June December June June 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 (%) (in thousand Baht) Associate SNC Atlantic Water Manufacturing Heater Asia Co., Ltd. and selling of air-to-water heat pump 49.00 49.00 105,000 105,000 51,450 51,450 50,339 59,091 - - 50,339 59,091 - - Total 51,450 51,450 50,339 59,091 - - 50,339 59,091 - -

SNC Former Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2018 (Unaudited)

Separate financial statements Ownership At cost - net of Dividend income for the interest Paid-up capital Cost Impairment impairment six-month period ended 30 31 30 31 30 31 30 31 30 31 30 30 June December June December June December June December June December June June 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 (%) (in thousand Baht) Associate SNC Atlantic Water Heater Asia Co., Ltd. 49.00 49.00 105,000 105,000 51,450 51,450 --51,450 51,450 - - Total 51,450 51,450 --51,450 51,450 - -

The associate was incorporated in Thailand.

28 SNC Former Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2018 (Unaudited)

7 Investments in subsidiaries

Separate financial statements Six-month period ended 30 June 2018 2017 (in thousand Baht) At 1 January 1,120,629 1,105,470 Acquisitions 300,000 182,375 Less Allowance for impairment of investment in subsidiary (320) (35,000) At 30 June 1,420,309 1,252,845

Acquisition

On 22 January 2018, SNC Creativity Anthology Co., Ltd. registered additional ordinary shares of 3,000,000 shares, with a par value of Baht 100 per shares. The Company had invested in these additional shares, amounting to Baht 300 million. The proportion of ownership remain unchanged.

On 16 June 2017, SSM Automation Co., Ltd. registered additional ordinary shares of 1,500,000 shares, with a par value of Baht 100 per share. The Group had invested in these additional shares, amounting to Baht 150 million, increasing its ownership from 51.20% to 74.37%.

On 17 May 2017, Meisou SNC Precision Co., Ltd. registered additional ordinary shares of 200,000 shares, with a par value of Baht 100 per share. The Group had invested in these additional shares, amounting to Baht 20 million, increasing its ownership from 88% to 93.33%.

On 28 April 2017, the Group had invested in Meisou SNC Precision Co., Ltd. additional called-up at 75% of 150,000 shares totaling Baht 11.25 million, with a par value of Baht 100 per share.

On 20 April 2017, the Group acquired non-controlling interest in Meisou SNC Precision Co., Ltd., from non-related company, called-up at 25% of 45,000 shares totaling Baht 1.13 million with a par value of Baht 100 per share, increasing its ownership from 70% to 88%.

Impairment loss on investment in subsidiaries

International Techno Pipe Co., Ltd, the subsidiary, has ceased its operation and is in process of dissolution. The Company recognised impairment loss on investment in subsidiary in the separate statement of comprehensive income for the six-month period ended 30 June 2018, amounting to Baht 0.32 million.

At the extraordinary general meeting of the shareholders of SNC Fukui Holy Insulation Co., Ltd. No. 1/2017, the Group’s subsidiary, the shareholders approved to discontinued subsidiary’s operation because the current production level does not reach break-even point and the past operation did not succeed as planned. The Company recognised loss on investment in subsidiary in the separate statement of comprehensive income for six-month period ended 30 June 2017, amounting to Baht 35 million.

29 SNC Former Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2018 (Unaudited)

Acquisition of indirect subsidiary

On 2 February 2017, Odin power Co., Ltd, the subsidiary, made an investment in Yalafahsaard Co., Ltd. (not operated) of all 179,998 shares, with a par value of Baht 100 per share from a director (called-up at 25%, totalling Baht 4.5 million). On the said date, the Company obtained indirect controlling interest of Yalafahsaard Co., Ltd. Therefore, it became an indirect subsidiary with indirect ownership of 55% and the Group obtained an increase in non-controlling interests of Baht 0.06 million. The Company believes this investment will extend business opportunity in alternative energy power business. Subsequently, on 6 February 2017, Yalafahsaard Co., Ltd. had an additional called- up at 75% of 179,998 shares totalling Baht 13.5 million and registered additional ordinary shares of 1,320,000 shares, with a par value of Baht 100 per share. These shares were sold to existing shareholders, Odin Power Co., Ltd. Consequently, Yalafahsaard Co., Ltd. held registered ordinary shares of 1,500,000 shares, with a par value of Baht 100 per share totalling Baht 150 million which is called-up and fully paid 100%. The proportion of ownership remain unchanged.

30 SNC Former Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2018 (Unaudited)

Investments in subsidiaries as at 30 June 2018 and 31 December 2017, and dividend income from those investments for the six-month periods ended 30 June 2018 and 2017 were as follows:

Separate financial statements Ownership At cost - net of Dividend income Type of business interest Paid-up capital Cost Impairment impairment for the six-month periods ended 30 31 30 31 30 31 30 31 30 31 30 30 June December June December June December June December June December June June 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 (%) (in thousand Baht) Direct subsidiaries SNC Pyongsan Evolution Manufacturing of cooling Co., Ltd. parts and manufacturing and assembly of cooling machines 99.99 99.99 220,000 220,000 212,010 212,010 - - 212,010 212,010 - - SNC Santec Co., Ltd. Under liquidation process 80.00 80.00 20,000 20,000 16,000 16,000 (16,000) (16,000) - -- - SNC Cooling Supply Manufacturing automotive Co., Ltd. air conditioner parts 99.99 99.99 30,000 30,000 30,000 30,000 - - 30,000 30,000 105,000 - Immortal Parts Co., Ltd. Production of cooling parts 99.99 99.99 70,000 70,000 70,000 70,000 - - 70,000 70,000 125,000 - Paradise Plastic Co., Ltd. Manufacturing plastic parts for electric appliance and automobile 99.99 99.99 30,000 30,000 29,999 29,999 - - 29,999 29,999 - - International Techno Pipe Ceasing the operation Co., Ltd. 99.99 99.99 320 320 320 320 (320) - - 320 - 500 SNC Creativity Manufacturing household Anthology Co., Ltd. and automotive air conditioner parts 99.99 99.99 700,000 400,000 700,000 400,000 - - 700,000 400,000 - - SNC Atlantic Heat Pump Manufacturing of heat pump Co., Ltd. for water heat pump 74.00 74.00 45,000 45,000 33,300 33,300 - - 33,300 33,300 19,980 37,000 SNC Fukui Holy Ceasing the operation Insulation Co., Ltd. 70.00 70.00 50,000 50,000 35,000 35,000 (35,000) (35,000) - - - - Meisou SNC Precision Manufacturing of mold used Co., Ltd. for manufacturing tools 94.55 94.55 55,000 55,000 52,000 52,000 (52,000) (52,000) - - - -

31 SNC Former Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2018 (Unaudited)

Indirect subsidiaries Ultimate Parts Co., Ltd. Manufacturing of cooling parts 99.99 99.99 40,000 40,000 ------Infinity Parts Co., Ltd. Manufacturing of cooling parts 99.99 99.99 20,000 20,000 ------Yalafahsaard Co., Ltd. Generating biomass electric plant garbage 55.00(*) 55.00(*) 150,000 150,000 ------Odin Myanmar Co., Ltd. Investing in alternative power plant 55.00(**) 55.00(**) 10,000 10,000 ------Total ------

All subsidiaries were incorporated in Thailand. (*) Be subsidiary as at 2 February 2017. (**) Be subsidiary as at 30 November 2017.

32 SNC Former Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2018 (Unaudited)

8 Investment properties

Consolidated Separate financial statements financial statements Six-month period ended 30 June 2018 2017 2018 2017 (in thousand Baht) Cost At 1 January 255,230 255,230 153,724 153,724 Transfer from property, plant and equipment 39,513 -- - At 30 June 294,743 255,230 153,724 153,724

Depreciation and impairment losses At 1 January 81,622 72,922 76,217 68,281 Depreciation charge for the period 4,802 4,305 3,936 3,935 Impairment losses 607 - 607 - Transfer from property, plant and equipment 4,393-- - At 30 June 91,424 77,227 80,760 72,216

Net book value At 1 January 173,608 182,308 77,507 85,443 At 30 June 203,319 178,003 72,964 81,508

The investment properties were land and factory for lease to associate and had fair value of Baht 61.60 million, which comprised of fair value of the factory of Baht 54.95 million and land of Baht 6.65 million, appraised by the independent valuer during 2018 using replacement cost approach for factory and market approach for land.

Another investment property was land held for a currently undetermined future use which had total fair value of Baht 117.70 million. The fair value was determined by the independent valuer during 2018 using market approach.

Another investment property was building held for lease to the third party which had fair value of Baht 166.34 million. The fair value was determined by the independent valuer during 2018 using market approach.

33 SNC Former Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2018 (Unaudited)

9 Property, plant and equipment

Acquisitions, disposals and transfers of property, plant and equipment during the six-month periods ended 30 June 2018 and 2017 were as follows:

Consolidated financial statements Six-month period ended 30 June 2018 2017 Increase Decrease Increase Decrease (Acquisitions (Disposals (Acquisitions (Disposals and and transfers and and transfers transfers in out - net book transfers in out - net book - at cost) value) - at cost) value) (in thousand Baht) Land and land improvement 6,015 (3,153) 28,904 - Buildings and building improvements 176,721 (43,148) 23,512 - Machinery and equipment 82,269 (1,620) 72,254 (4,416) Furniture and office equipment 1,382 (46) 2,663 (24) Vehicles - - 3,850 (2,068) Assets under construction and installation 25,440 (198,183) 69,598 (42,844) Total 291,827 (246,150) 200,781 (49,352)

Separate financial statements Six-month period ended 30 June 2018 2017 Increase Decrease Increase Decrease (Acquisitions (Disposals (Acquisitions (Disposals and and transfers and and transfers transfers in out - net book transfers in out - net book - at cost) value) - at cost) value) (in thousand Baht) Buildings and building improvements 30 (4,454) 2,678 - Machinery and equipment 11,781 (1,668) 4,167 (8,944) Furniture and office equipment 455 - 685 (608) Vehicles - - 3,850 (2,068) Assets under construction and installation 827 (7,230) - (2,134) Total 13,093 (13,352) 11,380 (13,754)

Restriction under loan agreements with financial institution

The Company entered into two loan agreements with a local financial institution. The agreements specified that the Company committed to the bank that the Company will make no commitment with third parties related to the Company’s machineries for both aforesaid loan agreements.

34 SNC Former Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2018 (Unaudited)

10 Trade and other payables

Consolidated Separate financial statements financial statements 30 31 30 31 June December June December Note 2018 2017 2018 2017 (in thousand Baht) Trade accounts payable Related parties 3 30 - 3,920 7,111 Other parties 1,150,448 988,359 111,275 109,691 Total 1,150,478 988,359 115,195 116,802

Other payables Related parties 3 152 122 20 973 Other parties 170,448 121,490 27,157 15,823 Total 170,600 121,612 27,177 16,796 Total trade and other payables 1,321,078 1,109,971 142,372 133,598

11 Income tax expense

Income tax expense is recognised based on management’s best estimate of the weighted average annual income tax rate expected for the full financial year multiplied by the pre-tax income of the interim reporting period. The Group’s consolidated effective tax rate in respect of continuing operations for the six-month period ended 30 June 2018 was 7% (The Group’s consolidated effective tax rate for the six-month period ended 30 June 2017: 0.9%). This effective tax rate differs from the corporate income tax rate principally because the Group has significant profit for the six-month periods ended 30 June 2018 and 2017 from promotional privileges and this profit is exempted from corporate income tax. In addition, there are the different treatments for accounting and taxation purposes of certain items of income and expense during the six-month periods ended 30 June 2018 and 2017.

12 Segment information

The Group has three reportable segments, as described below, which are the Group’s strategic divisions. The strategic divisions offer different products and services, and are managed separately because they require different technology and marketing strategies. For each of the strategic divisions, the chief operating decision maker (CODM) reviews internal management reports on at least a quarterly basis. The following summary describes the operations in each of the Group’s reportable segments.

• Segment 1 Manufacturing of component parts for automobile use. • Segment 2 Manufacturing and assembly of electric appliances. • Segment 3 Manufacturing of component parts of electric appliances.

None of other operations meets the quantitative thresholds for determining reportable segments in 2018 or 2017.

Information regarding the results of each reportable segment is included below. Performance is measured based on segment profit before tax and finance costs, as included in the internal management reports that are reviewed by the Group’s CODM. Segment profit before tax and finance costs is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries.

35 SNC Former Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2018 (Unaudited)

Manufacturing of Electric appliances component parts Manufacturing and Manufacturing of Other Discontinued for automobile use assembly component parts segments Operation Eliminations Total Three-month period ended 30 June 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 (in thousand Baht) Revenue from external customers 322,355 332,622 453,345 824,748 824,035 890,042 1,267 8,853 - 21,469 - - 1,601,002 2,077,734 Inter-segment revenue 12 774 987 1,031 53,032 98,957 608 7,916 - 865 (54,639) (109,543) - - Total segment revenues 322,367 333,396 454,332 825,779 877,067 988,999 1,875 16,769 - 22,334 (54,639) (109,543) 1,601,002 2,077,734

Segment results 35,821 34,298 7,099 1,512 87,967 101,853 1,917 (12,539) - (725) - - 132,804 124,399 Unallocated expenses Finance costs (8,697) (11,873) Share of gain (loss) of investments in associate (3,369) 432 Tax income (expense) (11,862) 3,894 Profit for the period 108,876 116,852

36 SNC Former Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2018 (Unaudited)

Manufacturing of Electric appliances component parts Manufacturing and Manufacturing of Other Discontinued for automobile use assembly component parts segments Operation Eliminations Total Six-month period ended 30 June 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 (in thousand Baht) Revenue from external customers 699,166 685,345 1,345,710 1,971,808 1,791,312 1,812,264 5,496 18,378 - 42,360 - - 3,841,684 4,530,155 Inter-segment revenue 152 2,555 1,261 3,040 175,688 235,472 2,015 8,137 - 2,138 (179,116) (251,342) - - Total segment revenues 699,318 687,900 1,346,971 1,974,848 1,967,000 2,047,736 7,511 26,515 - 44,498 (179,116) (251,342) 3,841,684 4,530,155

Segment results 84,250 67,568 44,693 (462) 207,387 195,027 (5,770) (22,240) - (1,759) - - 330,560 238,134 Unallocated expenses Finance costs (17,120) (22,267) Share of loss of investments in associate (8,752) (143) Tax expense (20,747) (1,222) Profit for the period 283,941 214,502

37 SNC Former Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2018 (Unaudited)

13 Earnings per share

The calculations of basic earnings per share for the three month and six-month periods ended 30 June 2018 and 2017 were based on the profit for the period attributable to ordinary shareholders of the Company and the number of ordinary shares outstanding during the period as follows:

For the three-month Consolidated period ended financial statements 30 June 2018 2017 Continuing Discontinued Continuing Discontinued operations operation Total operations operation Total (in thousand Baht / thousand shares) Profit (loss) for the period attributable to ordinary shareholders of the Company (basic) 107,878 - 107,878 117,412 (478) 116,934 Number of ordinary shares outstanding 287,777 - 287,777 287,777 287,777 287,777

Earnings (loss) per share (basic) (in Baht) 0.375 - 0.375 0.408 (0.002) 0.406

Separate For the three-month period financial statements ended 30 June 2018 2017 (in thousand Baht / thousand shares) Profit for the period attributable to ordinary shareholders of the Company (basic) 40,982 21,364 Number of ordinary shares outstanding 287,777 287,777

Earnings per share (basic) (in Baht) 0.142 0.074

38 SNC Former Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2018 (Unaudited)

For the six-month Consolidated period ended financial statements 30 June 2018 2017 Continuing Discontinued Continuing Discontinued operations operation Total operations operation Total (in thousand Baht / thousand shares) Profit (loss) for the period attributable to ordinary shareholders of the Company (basic) 282,464 - 282,464 215,308 (1,161) 214,147 Number of ordinary shares outstanding 287,777 - 287,777 287,777 287,777 287,777

Earnings (loss) per share (basic) (in Baht) 0.982 - 0.982 0.748 (0.004) 0.744

Separate For the six-month period financial statements ended 30 June 2018 2017 (in thousand Baht / thousand shares) Profit for the period attributable to ordinary shareholders of the Company (basic) 293,057 29,726 Number of ordinary shares outstanding 287,777 287,777

Earnings per share (basic) (in Baht) 1.018 0.103

14 Dividends

Dividend Dividend Dividend payment Dividend Approved by paid per share date (in thousand (in Baht) Baht) SNC Former Public Company Limited Dividend paid from Annual General Meeting the profit of last of shareholders six months of 2017 on 30 March 2018 143,889 0.50 30 April 2018

Dividend paid from Annual General Meeting the profit of last of shareholders six months of 2016 on 30 March 2017 115,111 0.40 28 April 2017

39 SNC Former Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2018 (Unaudited)

Dividend Dividend Dividend payment Dividend Approved by paid per share date (in thousand (in Baht) Baht) SNC Atlantic Heat Pump Company Limited Dividend paid from Annual General Meeting the profit of last of shareholders six months of 2017 on 21 April 2018 27,000 60.00 25 April 2018

Dividend paid from Annual General Meeting the profit of last of shareholders six months of 2016 On 17 April 2017 50,000 111.11 25 April 2017

15 Financial instruments

Determination of fair values for financial assets and financial liabilities not measured at fair value

Most of financial assets and liabilities of the Group were short-term. The fair value of financial assets and liabilities is taken to approximate the carrying value as determined in the statement of financial position.

The fair value of long-term loans is taken to approximate the carrying amount stated in the accounts because of interest on loans approximates to market rates.

16 Commitments with non-related parties

Consolidated Separate financial statements financial statements 30 31 30 31

June December June December 2018 2017 2018 2017 (in thousand Baht) Capital commitments Contracted but not provided for: Buildings and other constructions 3,380 - - - Machinery and equipment 24,671 13,674 - 3,948 Total 28,051 13,674 - 3,948

Future minimum lease payments under non-cancellable operating leases Within one year 40,161 57,522 18,240 23,803 After one year but within five years 66,105 68,419 46,485 42,259 After five years 49,391 50,183 49,391 50,183 Total 155,657 176,124 114,116 116,245

40 SNC Former Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2018 (Unaudited)

Consolidated Separate financial statements financial statements 30 31 30 31

June December June December 2018 2017 2018 2017 (in thousand Baht) Other commitments Unused letters of credit to guarantee payments due to creditors 8,968 19,239 - - Bank guarantees for land rental, electricity used and others 31,506 49,515 20,435 39,644 Total 40,474 68,754 20,435 39,644

17 Events after the reporting period

On 1 August 2018, the Board of Directors’ meeting of the Company No.4/2018 approved the appropriation of the interim dividend of Baht 0.50 per share, amounting to Baht 143.89 million from the profit of the first six months of 2018. The dividend will be paid to shareholders on 31 August 2018.

18 Reclassification of accounts

Certain accounts in the statement of comprehensive income for the three-month and six-month periods ended 30 June 2018, which are included in the 2018 interim financial statements for comparative purposes, have been reclassified to conform to the presentation in the 2018 interim financial statements.

2017 Consolidated financial statements Before Discontinued After reclass Reclass Operation reclass (Note 5) (in thousand Baht) Statement of comprehensive income - Three-month period ended 30 June 2018 Cost of sales and rendering of services (1,834,015) (1,267) 18,889 (1,816,393) Administrative expenses (94,420) 2,277 3,084 (89,069) Direct expenses arising from investment properties - (8,317) - (8,317) Directors and management benefit expenses (16,037) 7,307 - (8,730) -

41 SNC Former Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2018 (Unaudited)

2017 Separate financial statements Before After reclass Reclass reclass (in thousand Baht) Statement of comprehensive income - Three-month period ended 30 June 2018 Administrative expenses (55,861) 7,979 (47,882) Direct expenses arising from investment properties - (8,171) (8,171) Directors and management benefit expenses (1,134) 192 (942) -

2017 Consolidated financial statements Before Discontinued After reclass Reclass Operation reclass (Note 5) (in thousand Baht) Statement of comprehensive income - Six-month period ended 30 June 2017 Cost of sales and rendering of services (4,041,383) (2,685) 36,507 (4,007,561) Administrative expenses (199,629) 1,058 6,447 (192,124) Direct expenses arising from investment properties - (16,443) - (16,443) Directors and management benefit expenses (36,568) 18,070 - (18,498) -

2017 Separate financial statements Before After reclass Reclass reclass (in thousand Baht) Statement of comprehensive income - Six-month period ended 30 June 2018 Administrative expenses (76,445) 15,894 (60,551) Direct expenses arising from investment properties - (16,297) (16,297) Directors and management benefit expenses (2,460) 403 (2,057) -

The reclassifications have been made because, in the opinion of management, the new classification is more appropriate to the Group’s business.