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The effect from changing accounting policy

BackMar 03, 2008

SF 084/08

3 March 2008

Subject: Clarification of the effect from changing Accounting Policy for investments in Subsidiaries

To: President The Stock Exchange of Thailand

Siam Future Development Public Company Limited would like to clarify the effect from changing Accounting Policy for investment as follows:

In order to follow the accounting standard TAS 44 (amendment 2006) - "Consolidated Financial Statements and Accounting for Investments in Subsidiaries" and TAS 45 (amendment 2006) - Investment in Associated Company, effective on 1 January 2007, the Company has changed an accounting treatment from the equity method to historical method for investments in subsidiaries and associates. The Company has applied retrospective adjustments for this change to the comparative company financial statements which lead to unequal of Net Profit on the Consolidated Financial Statements and on the Company Financial Statements. For the year ended 31 December 2007, Net Profit on the Consolidated Financial Statements equals t0 Baht 307.73 Million but Baht 244.57 Million on the Company Financial Statements respectively. The Company would like to clarify more in details as follows:

1. Changing in this accounting policy leads the decrease in Net Profit on the Company Financial Statements for the year ended 31 December 2007 by Baht 63.16 Million; as a result of excluding the share of profit (loss) of investments - equity method and the decrease in Net Profit for the year ended by Baht 284.59 Million from the retrospective adjustments on the Company Financial Statements for year ended 31 December 2006.

2. The effects from adjustments to Balance Sheet of the Company Financial Statements for the year ended 31 December 2007 are as follows: Investments in subsidiaries and retained earnings decrease by Baht 458.12 Million which leads the retained earning of Baht 152.03 Million shown on Statements of changes in shareholders' equity of the Company Financial Statements.

However, changing in accounting policy affects the accounting transaction of investments in subsidiaries presented on the Company Financial Statements only, not affect the preparation of the Consolidated Financial Statements and fundamental factors of operating the business of the Company.

Please be informed accordingly.

 

Sincerely Yours,

 

(Mr. Somnuk Pojkasemsin)
President

Attachments

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