24.89% of the Company’S Share (31 December 2015: 23.86%)
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Contents Page Message from the Board of Directors ................................................................................................................................ 1 Audit Committee Report ..................................................................................................................................................... 3 General Information ............................................................................................................................................................ 5 Major Accomplishments of the Company .......................................................................................................................... 8 Financial Highlights ............................................................................................................................................................ 9 Management Discussion and Analysis (MD&A) .............................................................................................................. 11 Nature of Business ........................................................................................................................................................... 17 Marketing and Competition .............................................................................................................................................. 25 Risk Factors ...................................................................................................................................................................... 29 Organization Chart ........................................................................................................................................................... 32 Shareholding Structure and Management ....................................................................................................................... 33 Report on Compliance with Principles of Good Corporate Governance ........................................................................ 46 Corporate Social Responsibility ....................................................................................................................................... 56 Report of Independent Auditor and Financial Statements .............................................................................................. 59 Message from the Board of Directors from 3,000 square meters to 12,000 square meters. The 2016 world economy was similar to that last year. Global 1st phase construction had already commenced on 14 economy continued to slow down due to a decline of oil July 2016 and was expected to complete and start the price as a result of excess supply, albeit a slight increase operation of the 1st phase on the 7,000 square meters in oil price around the end of the year attributable to space in October 2017. The 2nd phase on the 5,000 OPEC production cut for the first time in eight years. square meters space was expected to complete and start Financial market also fluctuated due to China’s the operation in July 2018. devaluation of its yuan currency in January as well as the UK’s leaving of the European Union (Brexit) in June. Besides, the Company planned to develop a new project Additionally, dollar currency and interest rate in the US still in form of community mall on Rajvithi Road, Dusit, with a tended to increase, causing a capital outflow from the salable space of 6,500 square meters. It would be in form developing countries, including Thailand. of a 2-storey lifestyle shopping center plus 1-storey underground parking lot in expectation of future light red 2016 economic situation in Thailand was driven by the line and purple line subways. In addition, such area was government spending and investment in the infrastructure surrounded by various schools, hospitals and corporates for transportation. Tourism sector continued to grow in such as SuanSunandhaRajabhat University, SuanDusit spite of an impact from a decrease in the number of University, Saint Gabriel’s College, St. Francis Xavier tourists from China due to a crackdown of zero-dollar tour. School, Vajira Hospital and the companies under Household spending also rose attributable to the Boonrawd group, etc. Target customers were working government’s tax measure to stimulate domestic spending age, students, collegians, parents and residents in the in April and December. Consumption also earned surrounding areas. The project was expected to benefits from a recovery of farmers’ income as draught complete within 2018. situation eased up and prices of the agricultural produces increased. Moreover, an investment from the private The Esplanade project was planned to expand the space sector improved compared to that in the previous year. for more restaurants to support the number of customers However, overall domestic economy was still confronted in the shopping center from the AIA Capital Center with risk factors from the recovery of global economy due Building and the Stock Exchange of Thailand Building to an uncertainty in the US economic policy after the which was officially opened on Monday, 4 January 2016. president election and the uncertainty of politics in Thailand. This, thus, affected an investment decision of An operating performance of Mega Bangna project was the foreign and domestic investors. As such, the continually outstanding. In 2016, the project adjusted the Company took precaution against the development of tenant mix to enhance and better fulfil the customers’ projects to suit current economic situation. requirement, e.g. Sizzler, Eve and boy, Loft, Tsuruha, True Sphere, Miniso, etc. As such, net profit from normal The development of an extension of the Market Place operation rose 36% from THB 468 million in 2015 to THB Nanglinchee project resulted from a 30-year renewal of 635 million (the Company recognized the revenues the leasing contract of current plot of land and the according to the 49% shareholding proportion). Mega surrounding plots. The rental area would be expanded Bangna project planned to develop the surrounding areas SIAM FUTURE DEVELOPMENT PLC. 1 ANNUAL REPORT 2016 into Mega City, a mixed-use project comprising office However, this year the Company emphasized on a building, hotel and residence. The 1st phase would be the renovation of the existing shopping centers with good development of the expansion and building in front of the performance which could expand additional salable project next to Kanjanaphisek Road. The building would space to expand the existing customer base and to earn have seven floors with total space of approximately continuous income for the benefit of all stakeholders in a 57,000 square meters. The first three floors would be long run. retail space with the area of approximately 11,000 square meters. The remaining space would be parking lots of The Company’s accomplishment as aforementioned was approximately 1,200 cars. Tops Market would be an the result of dedication, commitment and cooperation anchor tenant, plus retail shops of more than 40 shops. from all groups of business alliances of the Company. The construction had commenced since September 2016 The Board of Directors would like to convey a sincere and was expected to complete and start the operation in appreciation to shareholders, suppliers, customers, th the 4 quarter of 2017. financial institutions, financial advisors and all employees for their continuous trust and support in the past and As at 31 December 2016, the Company had 22 projects in going forward. total with total rental space of 408,563 square meters. It mainly focused on adjusting the shops as well as developing and improving the existing projects to support the surrounding customers. The Board of Directors had acted professionally and with quality under precaution as a result of domestic economy fluctuation which was slowly recovered. Branch (Mr. Oranop Jantaraprapa) expansion, thus, needed to be considered more carefully. It also acted with ethical and governance transparency. Chairman SIAM FUTURE DEVELOPMENT PLC. 2 ANNUAL REPORT 2016 Audit Committee Report Dear Shareholders of Siam Future Development PLC. The Audit Committee of Siam Future Development Public Compliance with the Securities and Exchange Law, Company Limited consists of three independent directors.In regulations of the Stock Exchange of Thailand and laws 2016 there were five meetings of the Audit Committee, all of related to the Company’s business: The Audit Committee which being participated by all members of the Audit has reviewed the compliance with the Securities and Committee. In the meeting, the Audit Committee discussed Exchange Law, regulations of the Stock Exchange of with the management, auditor and internal auditor, and Thailand and laws related to the Company’s business, and provided their opinion as well as advice independently in has regularly followed up on the approach of improvement the way it should be. The Audit Committee reported the of the management. The Audit Committee is of the opinion operating results in four meetings of the Board of Directors, that the Company complies with the Securities and main points and opinions of which as follows: Exchange Law, regulations of the Stock Exchange of Thailand and laws related to the Company’s business. Accuracy, completeness and creditability of the financial reports: The Audit Committee has reviewed quarterly Potential conflict of interest transactions: The Audit financial statements, annual financial statements, material Committee has placed