chememan public company limited and its subsidiaries...

Chememan Public Company Limited and its subsidiaries Review report and interim consolidated financial statements For the three-month and nine-month periods ended 30 September 2018

Independent Auditor’s Report on Review of Interim Financial Information

To the Shareholders of Chememan Public Company Limited

I have reviewed the accompanying consolidated statement of financial position of Chememan

Public Company Limited and its subsidiaries as at 30 September 2018, the related consolidated

statements of comprehensive income for the three-month and nine-month periods ended

30 September 2018, and the related consolidated statements of changes in shareholders’ equity,

and cash flows for the nine-month period then ended, as well as the condensed notes to the

consolidated financial statements. I have also reviewed the separate financial information of

Chememan Public Company Limited for the same period. 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.

Khitsada Lerdwanna

Certified Public Accountant (Thailand) No. 4958

EY Office Limited

Bangkok: 12 November 2018

Chememan Public Company Limited and its subsidiaries

Statements of financial position

As at 30 September 2018

Note 30 September 2018 31 December 2017 30 September 2018 31 December 2017

(Unaudited (Audited) (Unaudited (Audited)

but reviewed) but reviewed)

Assets

Current assets

Cash and cash equivalents 4 80,296 45,734 38,691 14,157

Trade and other receivables 5 367,852 388,466 387,031 381,545

Current portion of accounts receivable

under installment sales 6 4,160 2,164 4,160 2,164

Inventories 284,571 279,913 233,336 243,286

Other current assets 21,833 22,726 21,362 22,495

Total current assets 758,712 739,003 684,580 663,647

Non-current assets

Restricted bank deposits 513 560 - -

Accounts receivable under installment sales

- net of current portion 6 45,809 49,864 45,809 49,864

Long-term loan to related party 3 - - 4,179 4,216

Investments in subsidiaries 7 - - 128,108 128,108

Investments in joint ventures 8 82,226 13,853 93,923 15,083

Property, plant and equipment 9 2,388,922 2,256,313 2,363,368 2,225,135

Ore reserve 10 102,754 107,516 102,754 107,516

Advance payments for construction of

plant and machinery 107,317 6,655 107,317 6,655

Intangible assets 7,784 7,990 - -

Deferred tax assets 36,196 27,445 26,564 13,714

Other non-current assets 8,268 7,327 5,256 5,271

Total non-current assets 2,779,789 2,477,523 2,877,278 2,555,562

Total assets 3,538,501 3,216,526 3,561,858 3,219,209

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

Consolidated financial statements

(Unit: Thousand Baht)

Separate financial statements


Statements of financial position (continued)





Liabilities and shareholders' equity

Current liabilities

Short-term loans from financial institutions 11 230,000 263,872 230,000 263,872

Trade and other payables 12 299,810 329,889 284,248 302,414

Current portion of liabilities under

finance lease agreements 21,829 24,410 21,731 24,410

Current portion of long-term loans 13 52,093 71,766 52,093 71,766

Other current liabilities 28,901 33,634 22,568 31,520

Total current liabilities 632,633 723,571 610,640 693,982

Non-current liabilities

Liabilities under finance lease agreements,

net of current portion 48,410 58,927 48,155 58,927

Long-term loans, net of current portion 13 604,105 1,136,755 604,105 1,136,755

Provision for long-term employee benefits 14 62,703 57,231 61,644 56,326

Deferred tax liabilities 338 664 338 651

Other non-current liabilities 14,364 16,678 14,325 16,541

Total non-current liabilities 729,920 1,270,255 728,567 1,269,200

Total liabilities 1,362,553 1,993,826 1,339,207 1,963,182






Statements of financial position (continued)





Shareholders' equity

Share capital

Registered

1,000 million ordinary shares of Baht 1 each 1,000,000 1,000,000 1,000,000 1,000,000

Issued and fully paid up

960 million ordinary shares of Baht 1 each 15

(31 December 2017: 720 million ordinary shares

of Baht 1 each) 960,000 720,000 960,000 720,000

Share premium 15 736,843 77,000 736,843 77,000

Capital surplus on share-based payment 28,997 28,997 28,997 28,997

Retained earnings

Appropriated - statutory reserve 56,300 56,300 56,300 56,300

Unappropriated 407,537 340,500 440,511 373,730

Other components of shareholders' equity (18,735) (5,466) - -

Equity attributable to owners of the Company 2,170,942 1,217,331 2,222,651 1,256,027

Non-controlling interests of the subsidiary 5,006 5,369 - -

Total shareholders' equity 2,175,948 1,222,700 2,222,651 1,256,027

Total liabilities and shareholders' equity 3,538,501 3,216,526 3,561,858 3,219,209

- - - -


Directors




(Unaudited but reviewed)


Statement of comprehensive income

Note 2018 2017 2018 2017

Profit or loss

Revenues

Sales 587,804 513,089 530,922 450,492

Other income 5,822 5,597 4,073 5,480

Total revenues 593,626 518,686 534,995 455,972

Expenses

Cost of sales 394,204 328,771 368,191 292,809

Selling expenses 114,774 101,771 96,540 81,391

Administrative expenses 43,678 55,805 35,021 45,582

Loss on exchange rate 4,505 1,659 4,503 1,682

Total expenses 557,161 488,006 504,255 421,464

Profit before share of loss from investments in

joint ventures, finance cost and income tax expenses 36,465 30,680 30,740 34,508

Share of loss from investments in joint ventures 8 (1,101) (154) - -

Profit before finance cost and income tax expenses 35,364 30,526 30,740 34,508

Finance cost (20,187) (15,855) (20,179) (15,855)

Profit before income tax expenses 15,177 14,671 10,561 18,653

Income tax benefits 16 4,395 3,009 6,320 2,939

Profit for the period 19,572 17,680 16,881 21,592

Other comprehensive income

Other comprehensive income to be reclassified

to profit or loss in subsequent periods

Exchange differences on translation of financial statements

in foreign currency - net of income tax (10,654) (497) - -

Other comprehensive income for the period (10,654) (497) - -

Total comprehensive income for the period 8,918 17,183 16,881 21,592


For the three-month period ended 30 September 2018

(Unit: Thousand Baht, except earnings per share expressed in Baht)

Consolidated financial statements Separate financial statements



Statement of comprehensive income (continued)

Note 2018 2017 2018 2017

Profit attributable to:

Equity holders of the Company 19,624 17,725 16,881 21,592

Non-controlling interests of the subsidiary (52) (45)

19,572 17,680

Total comprehensive income attributable to:



8,918 17,183

Earnings per share 17

Basic earnings per share

Profit attributable to equity holders of the Company 0.02 0.02 0.02 0.03




For the three-month period ended 30 September 2018



Statement of comprehensive income

Note 2018 2017 2018 2017

Profit or loss

Revenues

Sales 1,831,460 1,620,460 1,662,730 1,449,183

Other income 11,986 12,991 8,248 12,476

Gain on exchange rate 567 - 570 -

Total revenues 1,844,013 1,633,451 1,671,548 1,461,659

Expenses

Cost of sales 1,222,342 1,009,713 1,140,690 924,939

Selling expenses 338,844 323,088 280,913 263,411

Administrative expenses 122,384 160,873 96,703 131,171

Loss on exchange rate - 1,645 - 1,736

Total expenses 1,683,570 1,495,319 1,518,306 1,321,257

Profit before share of loss from investments in

joint ventures, finance cost and income tax expenses 160,443 138,132 153,242 140,402

Share of loss from investments in joint ventures 8 (3,066) (182) - -

Profit before finance cost and income tax expenses 157,377 137,950 153,242 140,402

Finance cost (49,139) (45,864) (49,121) (45,923)

Profit before income tax expenses 108,238 92,086 104,121 94,479

Income tax benefits (expenses) 16 6,575 (1,364) 10,660 (1,478)

Profit for the period 114,813 90,722 114,781 93,001


Other comprehensive income to be reclassified

to profit or loss in subsequent periods

Exchange differences on translation of financial statements

in foreign currency - net of income tax (13,408) (1,259) - -

Other comprehensive income for the period (13,408) (1,259) - -

Total comprehensive income for the period 101,405 89,463 114,781 93,001


For the nine-month period ended 30 September 2018





Statement of comprehensive income (continued)

Note 2018 2017 2018 2017

Profit attributable to:



114,813 90,722

Total comprehensive income attributable to:



101,405 89,463

Earnings per share 17

Basic earnings per share

Profit attributable to equity holders of the Company 0.13 0.13 0.13 0.14







Statement of changes in shareholders' equity


Other components of equity


Exchange differences Total equity Equity attributable

Capital surplus on translation of attributable to to non-controlling

Issued and paid-up on share-based Appropriated financial statements owners of interests of

share capital Share premium payment - statutory reserve Unappropriated in foreign currency the Company the subsidiary Total

Balance as at 1 January 2017 650,000 - 28,997 45,000 342,321 (2,369) 1,063,949 6,351 1,070,300

Profit for the period - - - - 90,895 - 90,895 (173) 90,722

Other comprehensive income for the period - - - - - (689) (689) (570) (1,259)

Total comprehensive income for the period - - - - 90,895 (689) 90,206 (743) 89,463

Increase share capital 70,000 77,000 - - - - 147,000 - 147,000

Interim dividend paid (Note 18) - - - - (100,100) - (100,100) - (100,100)

Transferred to retained earnings - - - 6,000 (6,000) - - - -

Balance as at 30 September 2017 720,000 77,000 28,997 51,000 327,116 (3,058) 1,201,055 5,608 1,206,663

Balance as at 1 January 2018 720,000 77,000 28,997 56,300 340,500 (5,466) 1,217,331 5,369 1,222,700

Profit for the period - - - - 115,037 - 115,037 (224) 114,813

Other comprehensive income for the period - - - - - (13,269) (13,269) (139) (13,408)

Total comprehensive income for the period - - - - 115,037 (13,269) 101,768 (363) 101,405

Increase share capital (Note 15) 240,000 659,843 - - - - 899,843 - 899,843

Interim dividend paid (Note 18) - - - - (48,000) - (48,000) - (48,000)

Balance as at 30 September 2018 960,000 736,843 28,997 56,300 407,537 (18,735) 2,170,942 5,006 2,175,948

-


Retained earnings


Equity attributable to owners of the Company




Statement of changes in shareholders' equity (continued)


Capital surplus

Issued and paid-up on share-based Appropriated

share capital Share premium payment - statutory reserve Unappropriated Total

Balance as at 1 January 2017 650,000 - 28,997 45,000 379,562 1,103,559

Total comprehensive income for the period - - - - 93,001 93,001

Increase share capital 70,000 77,000 - - - 147,000

Interim dividend paid (Note 18) - - - - (100,100) (100,100)

Transferred to retained earnings - - - 6,000 (6,000) -

Balance as at 30 September 2017 720,000 77,000 28,997 51,000 366,463 1,243,460

Balance as at 1 January 2018 720,000 77,000 28,997 56,300 373,730 1,256,027

Total comprehensive income for the period - - - - 114,781 114,781

Increase share capital (Note 15) 240,000 659,843 - - - 899,843

Interim dividend paid (Note 18) - - - - (48,000) (48,000)

Balance as at 30 September 2018 960,000 736,843 28,997 56,300 440,511 2,222,651

-



Retained earnings




2018 2017 2018 2017

Cash flows from operating activities

Profit before tax 108,238 92,086 104,121 94,479

Adjustments to reconcile profit before tax to

net cash provided by (paid from) operating activities

Depreciation and amortisation 137,154 118,704 132,992 114,197

Doubtful accounts - 431 - -

Loss on sales of plant and equipment 2,347 899 2,347 899

Write-off property, plant and equipment 1,600 1,747 1,600 1,747

Long-term employee benefits expenses 5,553 6,309 5,318 5,421

Unrealised loss on exchange 1,961 4,006 5,033 3,590

Unrealised loss on forward contract 86 - 86 -

Share of loss from investments in joint ventures 3,066 182 - -

Interest income (2,004) (2,001) (2,161) (2,205)

Interest expenses 49,139 44,549 49,121 44,606

Profit from operating activities before

changes in operating assets and liabilities 307,140 266,912 298,457 262,734

Operating assets (increase) decrease

Trade and other receivables 19,147 36,899 (10,096) 41,269

Inventories (4,658) (33,075) 9,950 (28,651)

Accounts receivable under installment sales 1,613 5,628 1,613 5,628

Other current assets 1,298 (4,939) 1,537 (4,883)

Other non-current assets (941) 109 15 (271)

Operating liabilities increase (decrease)

Trade and other payables (23,390) (35,483) (11,413) (43,191)

Other current liabilities (4,729) 6,555 (8,948) 6,621

Other non-current liabilities (2,876) (2,636) (2,778) (1,933)

Cash flows from operating activities 292,604 239,970 278,337 237,323

Cash paid for interest expenses (45,631) (44,940) (45,616) (44,997)

Cash paid for income tax (495) (15,875) (495) (15,875)

Cash receipt from withholding tax refundable - 1,040 - 1,040

Net cash flows from operating activities 246,478 180,195 232,226 177,491


Cash flow statement






2018 2017 2018 2017

Cash flows from investing activities

Decrease in loan to related party - - - 427

Increase in investments in subsidiary company - - - (2,178)

Increase in investments in joint ventures (78,840) (10,049) (78,840) (10,049)

Cash paid for advance payments for

construction of plant and machinery (107,317) (7,643) (107,317) (7,643)

Acquisition of property, plant and equipment (262,004) (270,693) (261,335) (270,450)

Acquisition of intangible asset - (906) - -

Interest income 2,004 4,200 2,161 4,404

Cash receipt from sales of property, plant

and equipment 328 62 328 62

Net cash flows used in investing activities (445,829) (285,029) (445,003) (285,427)

Cash flows from financing activities

Decrease in short-term loans

from financial institutions (33,872) (247,812) (33,872) (247,812)

Cash paid for liabilities under finance lease agreements (20,347) (26,689) (20,347) (26,689)

Cash receipt from long-term loans 659,440 1,220,970 659,440 1,220,970

Repayment of long-term loans (1,214,000) (857,814) (1,214,000) (857,814)

Cash paid for loan front-end fee (3,250) (6,070) (3,250) (6,070)

Cash receipt from loan from shareholder - 1,214,000 - 1,214,000

Repayment of loan from shareholder - (1,214,000) - (1,214,000)

Repayment of loans from related parties - - - (9,101)

Proceeds from increase in share capital 921,600 147,000 921,600 147,000

Cash paid for direct costs related to share offering (24,260) - (24,260) -

Interim dividend paid (48,000) (100,100) (48,000) (100,100)

Net cash flows from financing activities 237,311 129,485 237,311 120,384

Decrease in translation adjustments (3,398) (1,573) - -

Net increase in cash and cash equivalents 34,562 23,078 24,534 12,448

Cash and cash equivalents at beginning of period 45,734 43,108 14,157 12,723

Cash and cash equivalents at end of period 80,296 66,186 38,691 25,171

- -

Supplemental cash flow information

Non-cash transactions

Transfer advance payments for construction of plant

and machinery to property, plant and equipment 6,655 4,536 6,655 4,536

Increased in account payable from acquisition of assets 6,289 - 6,289 -

Assets acquired under finance lease agreements 7,249 62,458 6,896 62,458




Cash flow statement (continued)



1


Notes to interim consolidated financial statements

For the three-month and nine-month periods ended 30 September 2018

1. General information

1.1 Basis for the preparation of interim financial statements

These interim financial statements are prepared in accordance with Thai Accounting

Standard No. 34 Interim Financial Reporting, with the Company choosing to present

condensed interim financial statements. However, the Company has presented the

statements of financial position, comprehensive income, changes in shareholders' equity,

and cash flows in the same format as that used for the annual financial statements.

The interim financial statements are intended to provide information additional to that

included in the latest annual financial statements. Accordingly, they focus on new

activities, events and circumstances so as not to duplicate information previously reported.

These interim financial statements should therefore be read in conjunction with the latest

annual financial statements.

The interim financial statements in Thai language are the official statutory financial

statements of the Company. The interim financial statements in English language have

been translated from the Thai language financial statements.

1.2 Basis of consolidation

These interim consolidated financial statements include the financial statements of

Chememan Public Company Limited (“the Company”) and its subsidiaries (“the subsidiaries”)

and have been prepared on the same basis as that applied for the consolidated financial

statements for the year ended 31 December 2017, with no changes in the shareholding

structure of subsidiaries.

1.3 New financial reporting standards

(a) Financial reporting standards that became effective in the current year

During the period, the Company and its subsidiaries have adopted the revised financial

reporting standards and interpretations (revised 2017) which are effective for fiscal years

beginning on or after 1 January 2018. These financial reporting standards were aimed at

alignment with the corresponding International Financial Reporting Standards with most

of the changes and clarifications directed towards disclosures in the notes to financial

statements. The adoption of these financial reporting standards does not have any

significant impact on the Company and its subsidiaries’ financial statements.


2

(b) Financial reporting standards that will become effective in the future

During the period, the Federation of Accounting Professions issued the financial reporting

standard TFRS 15 Revenue from Contracts with Customers, which is effective for fiscal

years beginning on or after 1 January 2019 and a set of 5 standards related to financial

instruments, which are effective for fiscal years beginning on or after 1 January 2020.

Key principles of these standards are summarised below. TFRS 15 Revenue from Contracts with Customers

TFRS 15 supersedes TAS 11 Construction Contracts and TAS 18 Revenue, together with

related Interpretations. Entities are to apply this standard to all contracts with customers

unless those contracts fall within the scope of other standards. The standard establishes

a five-step model to account for revenue arising from contracts with customers, with

revenue being recognized at an amount that reflects the consideration to which an entity

expects to be entitled in exchange for transferring goods or services to a customer.

The standard requires entities to exercise judgement, taking into consideration all of the

relevant facts and circumstances when applying each step of the model.

The management of the Company and its subsidiaries is currently evaluating the impact

of this standard to the financial statements in the year when it is adopted.

Thai Financial Reporting Standards related to financial instruments

The set of TFRSs related to financial instruments consists of five accounting standards

and interpretations, as follows:

Financial reporting standards:

TFRS 7 Financial Instruments: Disclosures

TFRS 9 Financial Instruments

Accounting standard:

TAS 32 Financial Instruments: Presentation

Financial Reporting Standard Interpretations:

TFRIC 16 Hedges of a Net Investment in a Foreign Operation

TFRIC 19 Extinguishing Financial Liabilities with Equity Instruments

These TFRSs related to financial instruments make stipulations relating to the

classification of financial instruments and their measurement at fair value or amortised cost

(taking into account the type of instrument, the characteristics of the contractual cash flows

and the Company’s business model), calculation of impairment using the expected credit

loss method, and hedge accounting. These include stipulations regarding the presentation

and disclosure of financial instruments. When the TFRSs related to financial instruments

are effective, some accounting standards, interpretations and guidance which are

currently effective will be cancelled.


3

The management of the Company and its subsidiaries is currently evaluating the impact

of these standards to the financial statements in the year when they are adopted.

2. Significant accounting policies

The interim financial statements are prepared using the same accounting policies and

methods of computation as were used for the financial statements for the year ended

31 December 2017.

3. Related party transactions

During the periods, the Company and its subsidiaries had significant business

transactions with related parties. Such transactions, which are summarised below, arose

in the ordinary course of business and were concluded on commercial terms and bases

agreed upon between the Company and its subsidiaries and those related parties.

(Unit: Million Baht)

For the three-month periods ended 30 September

Consolidated

financial statements

Separate

financial statements Pricing policy

2018 2017 2018 2017

Transactions with subsidiaries

(Eliminated from the consolidated financial statements)

Sales of goods - - 85 61 Mutual agreed prices

Services expenses - - 3 3 Contract price


For the nine-month periods ended 30 September

Consolidated


Separate

financial statements Pricing policy

2018 2017 2018 2017

Transactions with subsidiaries

(Eliminated from the consolidated financial statements)

Sales of goods - - 256 187 Mutual agreed prices

Services expenses - - 8 7 Contract price

Transactions with joint venture

Service income 1 - - - Contract price

Transactions with related company

(related by common director)

Services expenses 1 1 1 1 Contract price

Transactions with shareholder

Interest expenses - 6 - 6 5.70% and 5.76% per annum


4

The balances of the accounts as at 30 September 2018 and 31 December 2017

between the Company and those related parties are as follows.


Consolidated


Separate


30 September

2018

31 December

2017

30 September

2018

31 December

2017

Trade receivables - related party (Note 5)

Subsidiary - - 94,658 71,302

Other receivables - related parties (Note 5)

Subsidiaries - - 66 66

Joint venture 349 - 111 -

Management and directors 305 - 305 -

Total other receivables - related parties 654 - 482 66

Other payables - related parties (Note 12)

Subsidiaries - - 1,486 1,512

Related companies

(related by common director) 41 40 41 40

Total other payables - related parties 41 40 1,527 1,552

Advance receipt - related party (Note 12)

Subsidiary - - 7,212 7,272

Loan to related party

As at 30 September 2018 and 31 December 2017, the balance of loans to related party

and the movement of such loan to are as follows.



Long-term loan to related party Relationship

31 December

2017

Increase

during the

period

Decrease

during the

period

Unrealised loss

from translation

of foreign

currency

30 September

2018

Northman Company Limited Subsidiary 4,216 - - (37) 4,179

Total 4,216 - - (37) 4,179

The long-term loans to Northman Company Limited of USD 0.13 million (31 December

2017: outstanding balance of USD 0.13 million) bearing interest at the rate MLR

per annum, the loans were repaid in year 2020 and year 2024.


5

Directors and management’s benefits

During the three-month and nine-month periods ended 30 September 2018 and 2017,

the Company and its subsidiaries had employee benefit expenses payable to their

directors and management as below.



Consolidated


Separate


2018 2017 2018 2017

Short-term employee benefits 23,739 22,583 21,283 19,903

Post-employment benefits 1,651 1,475 1,508 1,446

Total 25,390 24,058 22,791 21,349



Consolidated


Separate


2018 2017 2018 2017

Short-term employee benefits 70,984 66,531 63,517 58,359

Post-employment benefits 4,546 4,224 4,532 4,138

Total 75,530 70,755 68,049 62,497

4. Cash and cash equivalents


Consolidated


Separate


30 September

2018

31 December

2017

30 September

2018

31 December

2017

Cash 238 233 230 226

Bank deposits 80,058 45,501 38,461 13,931

Total 80,296 45,734 38,691 14,157

As at 30 September 2018, bank deposits in saving accounts and fixed deposits carried

interests between 0.04 and 1.67 percent per annum (31 December 2017: between 0.04

and 1.53 percent per annum).


6

5. Trade and other receivables


Consolidated


Separate


30 September

2018

31 December

2017

30 September

2018

31 December

2017

Trade receivables - related party

Aged on the basis of due dates

Not yet due - - 94,658 71,302

Total trade receivables - related party - - 94,658 71,302

Trade receivables - unrelated parties

Aged on the basis of due dates

Not yet due 290,991 292,684 232,831 228,475

Past due

Up to 3 months 19,605 39,875 10,034 28,984

3 - 6 months 3,340 770 - 10

6 - 12 months - - - -

Over 12 months - 9 - -

Total trade receivables - unrelated parties 313,936 333,338 242,865 257,469

Total trade receivables 313,936 333,338 337,523 328,771

Other receivables

Prepaid expense 8,977 7,564 6,997 5,768

Advance and other receivables - related parties 654 - 482 66

Advance and other receivables - unrelated parties 44,285 47,564 42,029 46,940

Total other receivables 53,916 55,128 49,508 52,774

Total trade and other receivables 367,852 388,466 387,031 381,545

As at 30 September 2018, the Company has advance payments for goods to a company

in Vietnam amounting to Baht 37 million (31 December 2017: Baht 42 million) that is

included in the advance and other receivables - unrelated parties. This company is the

same company in the account receivable under installment sales machine agreement

as described in Note 6 to the financial statements. This company uses such machine

to manufacture goods to sell to the Company.


7

6. Accounts receivable under installment sales

As at 30 September 2018, net receivables of the Company under installment sales

machine agreements amounted to Baht 50 million (31 December 2017: Baht 52 million).

The terms of the agreements are generally 10 years and interest is charged at 4.65

percent per annum. The details are as follows.


Consolidated and Separate financial statements

30 September 2018 31 December 2017

Less than

1 year 1 - 5 years

More than

5 years Total

Less than

1 year 1 - 5 years

More than

5 years Total

Accounts receivable under

installment sales 6,436 34,531 18,598 59,565 4,541 32,156 26,805 63,502

Unearned interest income (2,276) (6,482) (838) (9,596) (2,377) (7,459) (1,638) (11,474)

Accounts receivable under

installment sales - net 4,160 28,049 17,760 49,969 2,164 24,697 25,167 52,028

7. Investments in subsidiaries

Company’s name Currency Paid-up capital Shareholding percentage Cost

30 September

2018

31 December

2017

30 September

2018

31 December

2017

30 September

2018

31 December

2017

(%) (%) Thousand

Baht

Thousand

Baht

Tubkwang Co., Ltd.

(Ceases its operation)

Thousand

Baht

1,875 1,875 99.99 99.99 1,875 1,875

Chememan Australia Pty. Ltd. Thousand AUD 3,220 3,220 99.99 99.99 95,674 95,674

Northman Company Limited Million VND 2,336 2,336 100.00 100.00 3,721 3,721

Chememan International Pte. Ltd.

(On the process of termination)

Thousand

USD

300 300 100.00 100.00 9,240

9,240

Chememan Lao Company

Limited

Thousand

USD

500 500 60.00 60.00 10,742

10,742

Chememan India Private

Limited

Thousand

INR

16,897 16,897 99.99 99.99 8,825 8,825

Total 130,077 130,077

Less: Allowance for impairment in value of investments (1,969) (1,969)

128,108 128,108

No dividend was received from the subsidiaries during the nine-month periods ended

30 September 2018 and 2017.


8

8. Investments in joint ventures

8.1 Detail of investments in joint ventures

Investments in joint ventures represent investments in entities which are jointly controlled

by the Company and other companies. Details of these investments are as follows. (Unit: Thousand Baht)


Company’s name

Nature of

business

Country of

incorporation

Shareholding percentage Cost

Carrying amounts based

on equity method

30 September

2018

31 December

2017

30 September

2018

31 December

2017

30 September

2018

31 December

2017

Siriman Chemicals

India Private Limited

Manufacture

and distribute of

lime products

India

(%)

50

(%)

50

30,861

28

30,559

-

Easternbulk Lime

Products Private

Limited

Manufacture

and distribute of

lime products

India 50 50 63,062 15,055 59,404 14,189

Less: Exchange differences on translation adjustments - - (7,737) (336)

Total 93,923 15,083 82,226 13,853



Company’s name

Nature of

business

Country of

incorporation

Shareholding percentage Cost

30 September

2018

31 December

2017

30 September

2018

31 December

2017

(%) (%)

Siriman Chemicals India

Private Limited

Manufacture and

distribute of

lime products

India 50 50 30,861 28

Easternbulk Lime Products

Private Limited

Manufacture and

distribute of

lime products

India 50 50 63,062 15,055

Total 93,923 15,083

8.2 Share of loss

During the three-month and nine-month periods ended 30 September 2018 and 2017,

the Company recognised its share of loss from investments in the joint ventures in the

consolidated financial statements as follows.



For the three-month

periods ended

30 September

For the nine-month

periods ended

30 September

Company’s name 2018 2017 2018 2017

Siriman Chemicals India Private Limited 6 - (274) (28)

Easternbulk Lime Products Private Limited (1,107) (154) (2,792) (154)

Total (1,101) (154) (3,066) (182)


9

During the current period, the Company made an additional investment in 500,331

ordinary shares from an increase in share capital of Easternbulk Lime Products Private

Limited, at a price of INR 200 per share, totaling INR 100 million or equivalent to

Baht 48 million. The Company still had a 50% interest in such company.

During the current period, the Company made an additional investment in 6.5 million

ordinary shares from an increase in share capital of Siriman Chemicals India Private

Limited, at a price of INR 10 per share, totaling INR 65 million or equivalent to Baht

31 million. The Company still had a 50% interest in such company.

9. Property, plant and equipment

Movements of the property, plant and equipment account for the nine-month period

ended 30 September 2018 are summarised below.


Consolidated


Separate


Net book value as at 1 January 2018 2,256,313 2,225,135

Acquisitions during period - at cost 269,619 268,597

Capitalised interest 2,141 2,141

Disposal/write-off during period-net book value at

disposal/write-off date (4,275) (4,275)

Depreciation for the period (132,392) (128,230)

Exchange differences on translation adjustments (2,484) -

Net book value as at 30 September 2018 2,388,922 2,363,368

During the nine-month period ended 30 September 2018, the Company capitalised interest

amounting to Baht 2 million to the costs of plant, machinery and equipment construction

(2017: None). These borrowing costs arose on loans obtained for general purpose and

used in these projects, and were determined based on the weighted average interest rates

of these loans, at 3.35% to 4.20% per annum.

As at 30 September 2018, the Company and its subsidiary had motor vehicles under finance

lease agreements with net book value amounting Baht 91 million (31 December 2017: Baht

112 million) (the Company only: Baht 90 million (31 December 2017: Baht 112 million)).

As at 30 September 2018, the Company has mortgaged its land and structures thereon

and machinery with net book value of approximately Baht 1,284 million (31 December

2017: Baht 1,271 million) as collateral against credit facilities received from financial

institution.


10

10. Ore reserve

The balance represents the acquisition cost of the concession to operate business

related to the industrial mining of limestone and related development costs.

The movement for the nine-month period ended 30 September 2018 is summarised

below.


Consolidated and Separate


Net book value as at 1 January 2018 107,516

Amortisation for the period (4,762)

Net book value as at 30 September 2018 102,754

Under the conditions of the above concession, the Company’s mining operations must

comply with the approved mining plans, and environmental protection and rehabilitation

regulations, and with the regulations and conditions stipulated in the concession.

On 6 August 2014, the Company entered into an agreement to pay special benefits to

the government for the extending of a concession period. The concession period is

25 years, which will expire in 2040.

11. Short-term loans from financial institutions


Interest rate

(% per annum)



30 September

2018

31 December

2017

30 September

2018

31 December

2017

Short-term loans from financial institutions 3.35 3.85 - 4.20 230,000 263,872

Total 230,000 263,872

12. Trade and other payables


Consolidated


Separate


30 September

2018

31 December

2017

30 September

2018

31 December

2017

Trade payables - unrelated parties 141,467 143,196 124,860 143,196

Other payables - related parties 41 40 1,527 1,552

Other payables - unrelated parties 97,667 124,744 96,869 92,890

Accrued expenses - unrelated parties 58,462 61,180 51,833 57,022

Advance receipt - related party - - 7,212 7,272

Advance receipt - unrelated parties 2,173 729 1,947 482

Total trade and other payable 299,810 329,889 284,248 302,414


11

13. Long-term loans

Movements of the long-term loans account for the nine-month period ended 30 September

2018 are summarised below.




Balance as at 1 January 2018 1,208,521

Add: Loan during in period 659,440

Less: Repayment of loan as due date (24,280)

Less: Repayment of loan before due date (1,189,720)

Less: Deferred loans front-end fee (3,250)

Add: Amortisation loans front-end fee 5,487

Balance as at 30 September 2018 656,198

Less: Portion due within one year (52,093)

Long-term loan, net of current portion 604,105

On 2 April 2018, the Company made early repayment of, its long-term loan of Baht 530

million using cash received from Initial Public Offering described in Note 15 to the

financial statements.

During the current period, the Company entered into an agreement with a local financial

institution granting a new long-term loan of Baht 1,300 million, with the objective of

reducing the Company’s finance costs and increasing its working capital.

On 27 September 2018, the Company had drawn down the first tranche of the loan of

Baht 659 million to repay all outstanding principal and interest of the existing long-term

loan. On 24 October 2561, the Company drew down the second tranche of the loan of

Baht 300 million.

Under the new long-term loan agreement, require the Company to be repaid loan

principal in quarterly installments and carries interest at MLR less 2.95% per annum.

The loan is secured by the mortgage of the Company’s land and structures thereon and

most of its machinery. The Company is required to maintain debt to equity and debt

service coverage ratios in accordance with the agreement.


12

14. Provision for long-term employee benefits

Movements of the provision for long-term employee benefits for the nine-month period

ended 30 September 2018 are summarised below.


Consolidated


Separate


Balance as at 1 January 2018 57,231 56,326

Increase during the period 5,553 5,318

Exchange differences on translation adjustments (81) -

Balance as at 30 September 2018 62,703 61,644

15. Share Capital

During 14 to 16 March 2018, the Company made an Initial Public Offering of 240 million

additional ordinary shares at a price of Baht 3.84 per share and received full settlement of

the additional share capital on 19 March 2018. Direct costs attributable to the share offering

net of income tax, amounting to Baht 22 million, are presented as a deduction from the

premium on ordinary shares in the statement of financial position. The Company registered

the increase in its paid-up capital with the Ministry of Commerce on 19 March 2018.

The Stock Exchange of Thailand (SET) has approved the listing of the ordinary shares

of the Company as securities on the Stock Exchange of Thailand (SET), to be traded

from 21 March 2018.

16. Income tax

Interim corporate income tax was calculated on profit before income tax for the period,

using the estimated effective tax rate for the year.

Income tax expenses for the three-month and nine-month periods ended 30 September

2018 and 2017 are made up as follows.



Consolidated


Separate


2018 2017 2018 2017

Current income tax

Interim corporate income tax charge - (2,525) - (2,525)

Deferred tax

Relating to origination and reversal of temporary

differences (4,395) (484) (6,320) (414)

Income tax benefits reported in the statements

of comprehensive income (4,395) (3,009) (6,320) (2,939)



13


Consolidated


Separate


2018 2017 2018 2017

Current income tax

Interim corporate income tax charge 2,503 - 2,503 -

Adjustment in respect of income tax of previous year - 1,414 - 1,414

Deferred tax

Relating to origination and reversal of temporary

differences (9,078) (50) (13,163) 64

Income tax expenses (benefits) reported in

the statements of comprehensive income (6,575) 1,364 (10,660) 1,478

17. Earnings per share

Basic earnings per share is calculated by dividing profit for the period attributable to

equity holders of the Company (excluding other comprehensive income) by the weighted

average number of ordinary shares issue during the period, after adjusting the number

of shares for the three-month and nine-month periods ended 30 September 2017 to

reflect the impact of the change in par value. In this respect, the number of ordinary

shares was adjusted as if the share spilt had occurred at the beginning of the first

reporting period.

The following table sets forth the computation of basic earnings per share.


Consolidated


Separate


2018 2017 2018 2017

Profit for the periods attributable to

equity holders the Company

(Thousand Baht) 19,624 17,725 16,881 21,592

Weighted average number of ordinary

shares (Thousand shares) 960,000 720,000 960,000 720,000

Earnings per share (Baht) 0.02 0.02 0.02 0.03


Consolidated


Separate


2018 2017 2018 2017

Profit for the periods attributable to

equity holders the Company

(Thousand Baht) 115,037 90,895 114,781 93,001

Weighted average number of ordinary

shares (Thousand shares) 892,308 677,949 892,308 677,949

Earnings per share (Baht) 0.13 0.13 0.13 0.14


14

18. Dividends

Dividends Approved by

Dividends paid

(Million Baht)

Dividend per share

(Baht)

Interim dividends for the earning

of the promoted operation from

1 January 2017 to 31 March

2017 and for the year 2016

and 2015

Board of Directors’

meeting on 12 May

2017

100.1 0.77

Total dividend for 2017 100.1 0.77

Interim dividends for the earning

of the promoted operation from

1 January 2018 to 30 June

2018

Board of Directors’

meeting on 7 August

2018

48.0

0.05

Total dividend for 2018 48.0 0.05

19. Segment information

The Company and its subsidiaries’ business operations involve 2 geographic segments:

(1) The Company which is incorporated in Thailand, manufactures and distributes of lime

products. (2) The subsidiaries which are incorporated in overseas and distribute lime

products.

The following tables present revenue and profit information regarding the Company and

its subsidiaries’ operating segments for the three-month and nine-month periods ended

30 September 2018 and 2017.


15



Geographic segment

located in Thailand

Geographic segment

located in overseas Eliminated transactions

Consolidated


2018 2017 2018 2017 2018 2017 2018 2017

Revenues from external customers 446 390 141 123 - - 587 513

Intersegment revenues 85 60 - - (85) (60) - -

Total revenues 531 450 141 123 (85) (60) 587 513

Segment operating profit 163 159 30 29 - (3) 193 185

Unallocated income and expenses:

Other income 6 6

Selling expenses (115) (102)

Administrative expenses (43) (56)

Loss on exchange rate (4) (2)

Share of loss from investments

in joint ventures (1) -

Financial cost (20) (16)

Income tax benefits 4 3

Profit for the period 20 18


16



Geographic segment

located in Thailand

Geographic segment

located in overseas Eliminated transactions

Consolidated


2018 2017 2018 2017 2018 2017 2018 2017

Revenues from external customers 1,407 1,262 424 358 - - 1,831 1,620

Intersegment revenues 256 187 - - (256) (187) - -

Total revenues 1,663 1,449 424 358 (256) (187) 1,831 1,620

Segment operating profit 522 525 91 85 (4) 1 609 611

Unallocated income and expenses:

Other income 12 13

Selling expenses (339) (323)

Administrative expenses (122) (161)

Gain (loss) on exchange rate 1 (2)

Share of loss from investments

in joint ventures (3) -

Financial cost (49) (46)

Income tax benefits (expenses) 6 (1)

Profit for the period 115 91


17

20. Commitments and contingent liabilities

20.1 Capital commitments

1) The Company had capital commitments relating to the construction of plant and

acquisition of machinery and equipment as follows.



Currency 30 September 2018 31 December 2017

Million Baht 170.1 89.0

Million USD 0.6 -

Million EUR 2.4 0.1

2) As at 30 September 2018, the Company had capital commitment amounting to INR

6.4 million (31 December 2017: INR 71.4 million) in respect of the uncalled portion

of investments in subsidiary and joint venture in India.

20.2 Operating lease and service commitments

1) The Company and its subsidiaries have entered into lease agreements in respect

of the lease of office building space and other service agreements. Future minimum

rentals and service fees payable under these agreements are as follows.


Consolidated


Separate


30 September

2018

31 December

2017

30 September

2018

31 December

2017

Payable:

In up to 1 year 26.9 23.4 22.4 19.1

In over 1 and up to 5 years 21.3 17.7 20.0 13.0

2) The Company has entered into marketing service agreements with two subsidiaries

as follows.

(2.1) Northman Company Limited whereby the Company is committed to pay

service fee amounting VND 375 million per month in the year 2018. The term

of the agreement can be extended with the mutual agreement of the parties.

(2.2) Chememan India Private Limited whereby the Company is committed to pay

service fee amounting USD 25,000 per quarter for the fourth quarter of 2018.

The term of the agreement can be extended with the mutual agreement of

the parties.


18

3) The Company has entered into a long-term agreement with a local company for

purchase of gas at prices and in quantity stipulated in the agreement. The agreement

will expire in 2019.

4) The Company is committed to make contributions to the funds on the bases and at

the rates stipulated in an appendix to the concession agreement. In addition, the

Company must comply with the rules and conditions stipulated in the concession

agreement.

5) The subsidiary entered into agreements with an overseas government agency

which granted the subsidiary rights to explore for mineral resources. The subsidiary

is committed to pay expenses and contributions to various funds on the bases and

at the rates stipulated in the agreements. In addition, the subsidiary must comply

with the rules and conditions stipulated in such agreements.

20.3 Guarantees

As at 30 September 2018 and 31 December 2017, the Company and its subsidiaries

have outstanding bank guarantees as follows.

Currency

Consolidated


Separate


30 September

2018

31 December

2017

30 September

2018

31 December

2017

Guarantee tax refund Million Baht 4.3 4.3 4.3 4.3

Guarantee electricity use Million Baht 15.0 12.0 15.0 12.0

Guarantee performance and others Million Baht 10.3 11.5 10.3 11.5

Guarantee land lease agreement Thousand

AUD

22 22 - -

21. Foreign currency risk

The Company and its subsidiaries’ exposure to foreign currency risk arises mainly from

trading transactions and borrowings that are denominated in foreign currencies.

As at 30 September 2018 and 31 December 2017, the balances of financial assets and

liabilities denominated in foreign currencies are summarised below.


Foreign currency Financial assets Financial liabilities Average exchange rate

30 September

2018

31 December

2017

30 September

2018

31 December

2017

30 September

2018

31 December

2017

(Million) (Million) (Million) (Million) (Baht per 1 foreign currency unit)

USD 6.0 5.6 - 0.2 32.3619 32.6407

INR 0.1 0.1 - - 0.4412 0.5032


19


Foreign currency Financial assets Financial liabilities Average exchange rate

30 September

2018

31 December

2017

30 September

2018

31 December

2017

30 September

2018

31 December

2017

(Million) (Million) (Million) (Million) (Baht per 1 foreign currency unit)

USD 5.8 5.5 0.3 0.4 32.3619 32.6407

AUD 4.1 2.9 - - 23.3211 25.4364

INR 0.1 0.1 - - 0.4412 0.5032

As at 30 September 2018, foreign exchange contract outstanding are summarised

below.

Consolidated and Separate financial statements

Contractual exchange rate Contractual

Foreign currency Bought amount Sold amount Bought Sold maturity date

(Million) (Million) (Baht per 1 foreign currency unit)

Euro 0.2 - 38.0000 - November

2018

22. Subsequent event

On 1 October 2018, the Company had invested in 50,000 ordinary shares of Easternbulk

Lime Products Private Limited, at price of INR 200 per share, totaling INR 10 million or

approximate Baht 5 million. The Company still had a 50% interest in such company.

23. Approval of interim financial statements

These interim financial statements were authorised for issue by the Company’s

authorised directors on 12 November 2018.

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