KCE Electronics Public Company Limited and its subsidiaries

KCE Electronics Public Company Limited

and its subsidiaries

Condensed interim financial statements

for the three-month andsix-month periods ended

30June 2019

and

Independent auditor’s review report

Independent auditor’s report on review of interim financial information

To the Board of Directors of KCE Electronics Public Company Limited

I have reviewed the accompanying consolidated and separate statements of financial position of KCE

Electronics Public Company Limited and its subsidiaries, and of KCE Electronics Public Company Limited,

respectively, as at 30June 2019, the consolidated and separate statements of comprehensive income for the

three-month and six-month periods ended 30 June 2019, the consolidated and separate statement of changes

in equity and cash flows for the six-month period ended 30June 2019; 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 informationis not prepared, in all material respects, in accordance with Thai Accounting

Standard 34, “Interim Financial Reporting”.

(Chokechai Ngamwutikul)

Certified Public Accountant

Registration No. 9728

KPMG Phoomchai Audit Ltd.

Bangkok

13 August 2019

KCE Electronics Public Company Limited and its subsidiariesStatement of financial position

30 June 31 December 30 June 31 December

Assets Note 2019 2018 2019 2018

(Unaudited) (Unaudited)

Current assets

Cash and cash equivalents 1,080,359 1,382,872 119,900 189,078

Trade and other current receivables 5 2,993,686 3,272,676 2,229,111 2,680,417

Inventories 6 2,758,815 3,191,809 1,297,421 1,357,168

Other current assets 65,802 69,360 27,177 32,622

Total current assets 6,898,662 7,916,717 3,673,609 4,259,285

Non-current assets

Investments in an associate 7 28,259 41,081 1,540 1,540

Investments in subsidiaries 8 - - 2,842,720 2,842,720

Contract costs 15 148,617 82,262 115,456 52,673

Investment properties 162,359 163,441 189,418 190,681

Property, plant and equipment 9 9,245,176 9,363,934 5,543,263 5,513,072

Goodwill 10 153,517 153,517 - -

Intangible assets 266,746 283,533 98,914 105,564

Deferred tax assets 64,860 57,603 - -

Other non-current assets 46,325 58,920 31,421 47,820

Total non-current assets 10,115,859 10,204,291 8,822,732 8,754,070

Total assets 17,014,521 18,121,008 12,496,341 13,013,355

Consolidated financial Separate financial

statements statements

(in thousand Baht)

The accompanying notes form an integral part of the interim financial statements.2



Liabilities and equity Note 2019 2018 2019 2018


Current liabilities

Bank overdrafts and short-term

borrowings from financial institutions 11 2,101,007 2,201,866 1,418,583 1,562,278

Trade and other current payables 12 2,075,112 2,795,570 1,786,644 2,075,344

Current portion of long-term borrowings 11 192,534 168,052 120,447 58,666

Current portion of liabilities under

hire-purchase and

finance lease agreements 11 3,356 4,222 2,329 2,994

Income tax payable 22,442 24,903 4,159 -

Other current liabilities 1,584 1,584 - -

Total current liabilities 4,396,035 5,196,197 3,332,162 3,699,282

Non-current liabilities

Long-term borrowings 11 532,444 658,974 499,666 578,389

Liabilities under

hire-purchase and

finance lease agreements 11 4,023 5,436 3,954 4,957

Deferred tax liabilities 61,765 70,713 1,300 8,444

Non-current provisions

for employee benefits 13 246,755 182,585 99,682 74,437

Total non-current liabilities 844,987 917,708 604,602 666,227

Total liabilities 5,241,022 6,113,905 3,936,764 4,365,509



(in thousand Baht)




Liabilities and equity Note 2019 2018 2019 2018


Equity

Share capital 14

Authorised share capital 591,397 586,397 591,397 586,397

Issued and paid-up share capital 586,397 586,397 586,397 586,397

Share premium 1,906,510 1,906,510 1,906,510 1,906,510

Retained earnings

Appropriated

Legal reserve 59,140 58,743 59,140 58,743

Unappropriated 9,230,170 9,448,010 6,006,529 6,095,195

Other components of equity (67,177) (48,853) 1,001 1,001

Equity attributable to owners of

the Company 11,715,040 11,950,807 8,559,577 8,647,846

Non-controlling interests 58,459 56,296 - -

Total equity 11,773,499 12,007,103 8,559,577 8,647,846

Total liabilities and equity 17,014,521 18,121,008 12,496,341 13,013,355

(in thousand Baht)




KCE Electronics Public Company Limited and its subsidiariesStatement of comprehensive income (Unaudited)

Note 2019 2018 2019 2018

Revenues 4

Revenues from sale of goods and

rendering of services 15 2,992,758 3,643,251 1,619,883 2,090,372

Dividend income from subsidiaries - - 387,419 255,852

Dividend income from an associate - - 20,018 16,889

Other income 16 23,880 48,989 28,391 9,839

Total revenues 3,016,638 3,692,240 2,055,711 2,372,952

Expenses 4

Cost of sale of goods and rendering of services 2,424,693 2,628,913 1,384,909 1,632,599

Distribution costs 114,975 150,545 76,489 111,297

Administrative expenses 16 300,488 320,871 125,635 150,295

Finance costs 16,439 27,838 9,877 17,627

Total expenses 2,856,595 3,128,167 1,596,910 1,911,818

Share of profit of investments in an associate 4,996 4,743 - -

Profit before income tax 165,039 568,816 458,801 461,134

Tax (expense) income 17 (1,939) (6,275) 742 8,261

Profit for the period 163,100 562,541 459,543 469,395

Other comprehensive income

Items that will be reclassified subsequently

to profit or loss

Exchange differences on translating

financial statements (15,991) 17,738 - -

Other comprehensive income (expense) for the

period, net of tax (15,991) 17,738 - -

Total comprehensive income for the period 147,109 580,279 459,543 469,395

(in thousand Baht)



Three-month periods ended Three-month periods ended

30 June 30 June



2019 2018 2019 2018

Profit attributable to:

Owners of the Company 159,014 557,963 459,543 469,395


Profit for the period 163,100 562,541 459,543 469,395

Total comprehensive income attributable to:

Owners of the Company 143,023 575,701 459,543 469,395


Total comprehensive income for the period 147,109 580,279 459,543 469,395

Earnings per share

Basic earnings per share (in Baht) 0.14 0.48 0.39 0.40



Three-month periods ended Three-month periods ended

30 June 30 June

(in thousand Baht)



Note 2019 2018 2019 2018

(restated)

Revenues 4

Revenues from sale of goods and

rendering of services 15 6,106,672 7,083,449 3,424,565 4,083,756

Dividend income from subsidiaries 8 - - 387,419 994,089

Dividend income from an associate 7 - - 20,018 16,889

Gain on previously-held equity interest

in an associate prior to change of status

to subsidiary 3 - 65,701 - -

Other income 16 64,744 142,475 55,750 88,487

Total revenues 6,171,416 7,291,625 3,887,752 5,183,221

Expenses 4

Cost of sale of goods and rendering of services 4,881,812 5,180,299 2,905,142 3,212,193

Distribution costs 234,650 315,478 161,135 228,077

Administrative expenses 583,885 622,103 242,490 279,964

Finance costs 32,431 56,711 19,471 38,731

Total expenses 5,732,778 6,174,591 3,328,238 3,758,965

Share of profit of investments in an associate 10,350 8,314 - -

Profit before income tax 448,988 1,125,348 559,514 1,424,256

Tax (expense) income 17 (14,328) (16,616) (2,747) 7,500

Profit for the period 434,660 1,108,732 556,767 1,431,756

Other comprehensive income

Items that will be reclassified subsequently

to profit or loss

Exchange differences on translating

financial statements (18,324) 11,718 - -

Other comprehensive income (expense) for the

period, net of tax (18,324) 11,718 - -

Total comprehensive income for the period 416,336 1,120,450 556,767 1,431,756

Six-month periods ended

30 June 30 June

(in thousand Baht)






2019 2018 2019 2018

(restated)

Profit attributable to:

Owners of the Company 427,593 1,099,585 556,767 1,431,756



Total comprehensive income attributable to:

Owners of the Company 409,269 1,111,303 556,767 1,431,756


Total comprehensive income for the period 416,336 1,120,450 556,767 1,431,756

Earnings per share

Basic earnings per share (in Baht) 0.36 0.94 0.47 1.22


(in thousand Baht)


Six-month periods ended Six-month periods ended

30 June 30 June


KCE Electronics Public Company Limited and its subsidiariesStatement of changes in equity (Unaudited)

Excess of investments

arising from additional

purchases of investments

in subsidiaries

at a price higher

than the net

book value of Change in Equity

Issued and Translation the subsidiaries percentage of Total other attributable to

paid-up Share Legal financial at the holding in components of owners of Non-controlling Total

share capital premium reserve Unappropriated statements acquisition date subsidiaries equity the Company interests equity

Six-month period ended 30 June 2018

Balance at 1 January 2018 586,397 1,906,510 58,743 8,732,167 (18,600) (38,558) 2,031 (55,127) 11,228,690 45,617 11,274,307

Transactions with owners,

recorded directly in equity

Contributions by and distributions

to owners of the Company

Dividends - - - (643,782) - - - - (643,782) (15,337) (659,119)

Total contributions by and distributions to

owners of the Company - - - (643,782) - - - - (643,782) (15,337) (659,119)

Changes in ownership interests in subsidiaries

Increase of non-controlling interests

with a change in control - - - - - - - - - 11,904 11,904

Total changes in ownership interests in subsidiaries - - - - - - - - - 11,904 11,904

Total transactions with owners,

recorded directly in equity - - - (643,782) - - - - (643,782) (3,433) (647,215)

Comprehensive income for the period - restated

Profit or loss - - - 1,099,585 - - - - 1,099,585 9,147 1,108,732

Other comprehensive income - - - - 11,718 - - 11,718 11,718 - 11,718

Total comprehensive income for the period - restated - - - 1,099,585 11,718 - - 11,718 1,111,303 9,147 1,120,450

Balance at 30 June 2018 - restated 586,397 1,906,510 58,743 9,187,970 (6,882) (38,558) 2,031 (43,409) 11,696,211 51,331 11,747,542

Consolidated financial statements

Other components of shareholders' equity

Retained earnings

(in thousand Baht)

The accompanying notes form an integral part of the interim financial statements. 9


Excess of investments

arising from additional

purchases of investments

in subsidiaries

at a price higher

than the net

book value of Change in Equity

Issued and Translation the subsidiaries percentage of Total other attributable to

paid-up Share Legal financial at the holding in components of owners of Non-controlling Total

Note share capital premium reserve Unappropriated statements acquisition date subsidiaries equity the Company interests equity


Balance at 1 January 2019 586,397 1,906,510 58,743 9,448,010 (12,326) (38,558) 2,031 (48,853) 11,950,807 56,296 12,007,103





Dividends 18 - - - (645,036) - - - - (645,036) (4,904) (649,940)


owners of the Company - - - (645,036) - - - - (645,036) (4,904) (649,940)

Changes in ownership interests in subsidiaries

Total transactions with owners,

recorded directly in equity - - - (645,036) - - - - (645,036) (4,904) (649,940)

Comprehensive income for the period

Profit or loss - - - 427,593 - - - - 427,593 7,067 434,660

Other comprehensive income - - - - (18,324) - - (18,324) (18,324) - (18,324)

Total comprehensive income for the period - - - 427,593 (18,324) - - (18,324) 409,269 7,067 416,336

Transfer to legal reserve - - 397 (397) - - - - - - -

Balance at 30 June 2019 586,397 1,906,510 59,140 9,230,170 (30,650) (38,558) 2,031 (67,177) 11,715,040 58,459 11,773,499


Other components of shareholders' equity

Retained earnings

(in thousand Baht)



Issued and

paid-up Share Total

share capital premium Legal reserve Unappropriated equity


Balance at 1 January 2018 586,397 1,906,510 58,743 5,208,533 7,760,183





Dividends - - - (643,782) (643,782)


owners of the Company - - - (643,782) (643,782)


Profit or loss - - - 1,431,756 1,431,756

Total comprehensive income for the period - - - 1,431,756 1,431,756

Balance at 30 June 2018 586,397 1,906,510 58,743 5,996,507 8,548,157

Separate financial statements

(in thousand Baht)

Retained earnings



Other components

of equity

Change in

Issued and percentage of

paid-up Share holding in Total

Note share capital premium Legal reserve Unappropriated subsidiaries equity


Balance at 1 January 2019 586,397 1,906,510 58,743 6,095,195 1,001 8,647,846





Dividends 18 - - - (645,036) - (645,036)


owners of the Company - - - (645,036) - (645,036)


Profit or loss - - - 556,767 - 556,767

Total comprehensive income for the period - - - 556,767 - 556,767

Transfer to legal reserve - - 397 (397) - -

Balance at 30 June 2019 586,397 1,906,510 59,140 6,006,529 1,001 8,559,577

(in thousand Baht)


Retained earnings


KCE Electronics Public Company Limited and its subsidiaries

Statement of cash flows (Unaudited)

2019 2018 2019 2018

(restated)

Cash flows from operating activities


Adjustments to reconcile profit

to cash receipts (payments)

Share of profit of investments in an associate (10,350) (8,314) - -

Depreciation for plant and equipment

and investment properties 490,006 465,044 249,947 227,098

Amortisation 18,452 17,502 7,523 7,107

Amortisation on contract costs 12,804 - 9,689 -

Doubtful debts expense - 614 - -

Allowance for inventories devaluation 21,657 4,919 9,669 7,033

Loss (gain) on disposal of machinery and equipment 62 (443) (422) 17,834

Loss (gain) from write-off of equipment (3,075) 274 62 273

(Reversal of) allowance for impairment losses on assets (80) 2,264 - -

Provision for employee benefit 67,548 8,028 28,356 2,866

Unrealised loss on exchange rate

and hedging activities 10,767 27,077 3,949 387

Gain on previously-held equity interest in associate

prior to change of status to subsidiary - (65,701) - -

Dividends income from subsidiaries - - (387,419) (994,089)

Dividends income from associate - - (20,018) (16,889)

Interest expense 28,980 51,697 18,204 37,115

Tax expense (income) 14,328 16,616 2,747 (7,500)

1,085,759 1,628,309 479,054 712,991

Changes in operating assets and liabilities

Trade and other current receivables 220,010 392,088 397,552 (397,162)

Inventories 411,338 (296,176) 50,078 (119,785)

Other current assets 8,615 (11,679) 5,737 18,542

Contract costs (79,159) - (72,472) -

Other non-current assets 3,903 17,181 (1,047) (7,765)

Trade and other current payables (687,270) (732,955) (228,375) 186,353

Employee benefit paid (3,377) (5,355) (3,111) (3,133)

Net cash generated from operating 959,819 991,413 627,416 390,041

Taxes paid (13,534) (18,791) (1,781) (1,634)

Net cash from operating activities 946,285 972,622 625,635 388,407


30 June 30 June

(in thousand Baht)





KCE Electronics Public Company Limited and its subsidiaries

Statement of cash flows (Unaudited)

2019 2018 2019 2018

(restated)

Cash flows from investing activities

Proceeds from disposals of machinery and equipment 23,742 479 2,352 4

Acquisition of property, plant and equipment (390,921) (414,132) (271,981) (336,172)

Acquisition of intangible assets (1,665) (2,233) (873) (1,049)

Net cash inflow (outflow) on acquisition of subsidiary - 94,631 - (160,687)

Dividend received from subsidiaries - - 387,419 994,089

Dividend received from an associate 20,018 16,889 20,018 16,889

Net cash from (used in) investing activities (348,826) (304,366) 136,935 513,074

Cash flows from financing activities

Interest paid (29,856) (53,632) (19,550) (38,788)

Increase (decrease) in bank overdrafts

and short-term borrowings from financial institutions (105,081) 976,113 (151,786) 436,378

Repayment of liabilities under hire-purchase and

finance lease agreements (2,279) (2,318) (1,668) (841)

Proceeds from long-term borrowings - 291,850 - 291,850

Repayment of long-term borrowings (96,697) (1,145,752) (13,708) (1,037,831)

Dividend paid (649,940) (659,119) (645,036) (643,782)

Net cash used in financing activities (883,853) (592,858) (831,748) (993,014)

Net increase (decrease) in cash and cash equivalents

before effect of exchange rates (286,394) 75,398 (69,178) (91,533)

Effect of exchange rate changes on balances held

in foreign currencies (16,119) 19,623 - -

Net increase (decrease) in cash and cash equivalents (302,513) 95,021 (69,178) (91,533)

Cash and cash equivalents at 1 January 1,382,872 1,139,701 189,078 453,313

Cash and cash equivalents at 30 June 1,080,359 1,234,722 119,900 361,780

Supplemental disclosure of cash flows information

1) Non-cash related transactions for investing activities

Net (increase) decrease in other current receivables

from disposals of machinery and equipment - - 2,272 (15,303)

Net increase (decrease) in trust receipts from purchases of

machinery and equipment 16,113 (3,240) 16,113 -

Net decrease in other current payables

from purchases of machinery and equipment (28,806) (129,756) (29,135) (140,284)


(in thousand Baht)


Six-month periods ended Six-month periods ended

30 June 30 June


KCE Electronics Public Company Limitedand its subsidiaries Notes tothe condensedinterim financial statements

For the three-month andsix-month periods ended 30 June 2019 (Unaudited)

15

Note Contents

1 General information

2 Basis of preparation of the interim financial statements

3 Acquisition of subsidiary

4 Related parties

5 Trade and other current receivables

6 Inventories

7 Investment in associate

8 Investments in subsidiaries

9 Property, plant and equipment

10 Goodwill

11 Interest-bearingliabilities

12 Trade and other current payables

13 Non-current provisions for employee benefit

14 Share capital

15 Segment informationand disaggregation of revenue

16 Gain (loss) on exchange rate and hedging activities

17 Income tax

18 Dividend

19 Financial instruments

20 Commitments

21 Events after the reporting period 22 Thai Financial Reporting Standards (TFRS) not yet adopted

23 Reclassification of accounts



16

Thesenotes 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

financial statements,and were approved and authorised for issue by the Board of Directors on

13 August 2019.

1 General information

The principal activities of the Company are the manufacture and distribution of electric printed circuit

board products. Details of the Company’s subsidiaries as at 30June 2019 and 31 December 2018are

given in notes 4 and 8.

2 Basis of preparation of the interim financial statements

(a) Statement of compliance

The condensed interim financial statements are presented in the same format as the annual financial

statements and prepared its notes to the interim financial statements are presented on a condensed basis

(“interim financial statements”) accordance with Thai Accounting Standard (TAS) No. 34 Interim

Financial Reporting, guidelines promulgated by the Federation of Accounting Professions 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 2018. 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 2018.

(b) Use of judgements, estimates and accounting policies

In preparing these interim financial statements, judgements and estimates are made by management in

applying the Group’s accounting policies.Actual results may differ from these estimates. Theaccounting

policies, methods of computation and the key sources of estimation uncertainty were the same as those

that applied to the financial statements for the year ended 31 December 2018, except for revenue

recognition which requires additional judgement in determining the timing of the transfer of control - at a

point in time or over time - according to the requirements of TFRS 15 which the Group has initially

adoptedto replace TAS 18 Revenue (“TAS 18”) and related interpretations.

Under TFRS 15, the Group recognises revenue when a customer obtains control of the goods or

services in an amount that reflects the consideration to which the Group expects to be entitled to. In

addition, judgement is required in determining the timing of the transfer of control for revenue

recognition - at a point in time or over time. Whereas, under TAS 18, the Group recognises revenue

from sale of goods when the significant risks and rewards of ownership of the goods have been

transferred to the buyer, and recognises revenue from rendering of services by reference to the stage of

completion of the transaction at the end of the reporting period. No revenue is recognised if there is

continuing management involvement with the goods or there are significant uncertainties regarding

recovery of the consideration due. Such change in accounting policy has no material impacts on the

financial statements.

In addition, the Group has not early adopted a number of new and revised TFRSs which are not yet

effective for the current period in preparing theseinterim financial statements. Those new and revised

TFRS that are relevant to the Group’s operations are disclosed in note 22.



17

3 Acquisition of subsidiary

On 3 January 2018, the Group obtained control of an associate, KCE America, Inc., which is engaged

in the business of sale agent in foreign countries, and has a subsidiary, KCE America Partner

Company Limited, which its business is rental building, by acquiring additional ordinary shares at the

proportion of 45%, amounting to US 4.95 million dollar or equivalent to Baht 160.7 million, resulting

in the Group's total controlling interest inKCE America, Inc. increase from 50% to 95%, and indirect

controlling interest in KCE America Partner Company Limited at 95%. On such date, KCE America,

Inc. has changed status from associate to direct subsidiary, and KCE America Partner Company

Limited is indirect subsidiary of the Group. Taking control of such companies will enable the Group to

align the subsidiaries’ policy and market strategy with those of the Group.

The fair value of the previously-held equity interest in associate prior to the change of status to

subsidiary are as follow:

Fair value

as originally

reported

Remeasurement

adjustments

Fair value

(Restated)

(in thousand Baht)

Fair value of previously-held equity interest in

associate prior to the change of status to subsidiary

123,889

24,876

148,765

Less carrying amount of investment at equity method (72,161) - (72,161)

Translation reserve transferred to profit or loss

which has been recognised in the statement of

comprehensive income

(10,903)

-

(10,903)

Gain on previously-held equity interest in associate

prior to the change of status to subsidiary

40,825

24,876

65,701

The following summarises the major classes of consideration transferred, and the recognised amounts

of assets acquired and liabilities assumed at the acquisition date:

Consideration transferred

Fair Value

(in thousand Baht)

Cash 160,687

Total 160,687



18

Identifiable assets acquired and liabilities assumed

The fair value of property, plant and equipment has been determined provisionally by independent

valuation.

During the fourth quarter of 2018, the Group had completed the fair value assessment of the net assets

acquired and adjusted the fair value from new information obtain within one year from the acquisition

date about facts and circumstances that existed at the acquisition date. Therefore, the interim financial

statements for six-month period ended as at 30June 2018, which are included in the 2019 interim

financial statements for comparative purposes, was restated on such matter.

The goodwill is attributable mainly to the marketing skills and technical talent of KCE America, Inc.

and KCE America Partner Company Limited’s work force, and the synergies expected to be achieved

from integrating them into the Group's business. None of the goodwill recognised is expected to be

deductible for income tax purposes.

The trade receivables comprise gross contractual amounts of Baht 391.8 million, of which Baht 1.9

million was expected to be uncollectible at the acquisition date.

Fairvalues Fair

Carrying Fair value as originally Remeasurement values

amounts adjustments reported adjustments (Restated)

(in thousand Baht)

Cash and cash equivalents 255,318 - 255,318 - 255,318

Trade and other current

receivable

395,760 -

395,760

49,753

445,513

Inventories 198,102 - 198,102 - 198,102

Property, plant andequipment 30,923 136,867 167,790 - 167,790

Intangible assets 1,730 - 1,730 - 1,730

Other assets 17,981 - 17,981 - 17,981

Trade and other current

payable

(754,063)

-

(754,063) -

(754,063)

Long-term borrowing from

financial institution

(17,585)

-

(17,585) -

(17,585)

Deferred tax assets (liabilities) 1,780 (28,742) (26,962) - (26,962)

Total identifiable net assets 129,946 108,125 238,071 49,753 287,824

Interest in acquired business (%) 95 95 95

Net Identifiable assets acquired

and liabilities assumed

226,168

47,265

273,433

Less fair value of previously-held equity interest in associate

prior to the change of status to subsidiary (123,889) (24,876) (148,765)

102,279 22,389 124,668

Goodwillarising from the acquisition 58,408 (22,389) 36,019

Total Consideration 160,687 - 160,687

(in thousand Baht)

Net cash acquired with the subsidiary 255,318

Cash paid (160,687)

Net cash inflow (outflow) on acquisition of subsidiary 94,631



19

4 Related parties

Relationships with subsidiaries and associates are described in notes 7and 8.

Significant transactions for the three-month andsix-month periods ended 30Junewith related parties

were as follows:

Consolidated

financial statements

Separate


For the three-month period ended 30June 2019 2018 2019 2018

(in thousand Baht)

Subsidiaries

Sales of goods - - 404,804 458,963

Sales of property, plant and equipment - - 1,981 4,184

Rendering of service - - 19,114 29,294

Rental income - - 1,109 1,342

Other income - - 3,260 2,856

Purchases of goods - - 559,309 694,461

Dividend income - - 387,419 255,852

Commission expense - - 25,835 33,175

Other expenses - - 2,695 7,732

Associate

Purchases of raw materials 29,384 47,651 21,110 35,544

Purchases of property, plant and equipment 2,056 1,470 8 -

Dividend income 20,018 16,889 20,018 16,889

Other expenses 512 583 - -

Key management personnel

Key management personnel compensation

Short-term employee benefit 33,545 37,043 13,314 12,916

Total key management personnel

compensation 33,545 37,043 13,314 12,916



20

Consolidated


Separate


For the six-month period ended 30 June 2019 2018 2019 2018

(in thousand Baht)

Subsidiaries

Sales of goods - - 864,338 936,874

Sales of property, plant and equipment - - 2,008 15,303

Rendering of service - - 44,784 53,773

Rental income - - 2,218 2,684

Other income - - 7,277 6,598

Purchases of goods - - 1,168,231 1,366,328

Purchases of property, plant and equipment - - 19,773 -

Dividend income - - 387,419 994,089

Commission expense - - 55,304 61,285

Other expenses - - 2,793 16,404

Associate

Sales of goods 1,139 - - -

Purchases of raw materials 52,261 84,584 35,544 60,520

Purchases of property, plant and equipment 2,188 1,470 8 -

Dividend income 20,018 16,889 20,018 16,889

Other expenses 747 1,549 211 966

Key management personnel

Key management personnel compensation

Short-term employee benefit 67,484 66,465 26,361 24,604

Total key management personnel

compensation 67,484 66,465 26,361 24,604

Balances as at 30June 2019 and 31 December 2018with related parties were as follows:

Trade receivables - related parties

Consolidated


Separate


30 31 30 31

June December June December

2019 2018 2019 2018

(in thousand Baht)

Subsidiaries - - 683,447 962,148

Total - - 683,447 962,148

Other current receivables - related parties

Consolidated


Separate


30 31 30 31


2019 2018 2019 2018

(in thousand Baht)

Subsidiaries - - 27,089 24,170

Associate - 1,723 - 943

Total - 1,723 27,089 25,113



21

Trade payables - related parties

Consolidated


Separate


30 31 30 31


2019 2018 2019 2018

(in thousand Baht)

Subsidiaries - - 940,703 1,027,065

Associate 24,823 23,150 18,982 16,304

Total 24,823 23,150 959,685 1,043,369

Other payables for purchase of machineries

and equipment - related parties

Consolidated


Separate


30 31 30 31


2019 2018 2019 2018

(in thousand Baht)

Associate 2,023 726 8 195

Total 2,023 726 8 195

Other current payables - related parties

Consolidated


Separate


30 31 30 31


2019 2018 2019 2018

(in thousand Baht)

Subsidiaries - - 48 84

Total - - 48 84



22

5 Trade and other current receivables

Consolidated


Separate


30 31 30 31


Note 2019 2018 2019 2018

(in thousand Baht)

Trade receivables

Related parties 4 - - 683,447 962,148

Other parties 2,964,686 3,247,040 1,508,539 1,686,173

Total 2,964,686 3,247,040 2,191,986 2,648,321

Less allowance for doubtful

accounts

(2,474)

(2,578) - -

Net 2,962,212 3,244,462 2,191,986 2,648,321

Other current receivables

Related parties 4 - 1,723 27,089 25,113

Other parties 31,474 26,491 10,036 6,983

Total 31,474 28,214 37,125 32,096

Total trade and other current

receivables

2,993,686

3,272,676

2,229,111

2,680,417

For the three-month period ended

30 June

2019

2018

2019

2018

(in thousand Baht)

Difference from changes in foreign

currency exchange rate (65)

-

-

-

Bad and doubtful debts expense - 614 - -

For the six-month period ended

30 June

2019

2018

2019

2018

(in thousand Baht)

Difference from changes in foreign

currency exchange rate (104)

-

-

-

Bad and doubtful debts expense - 614 - -



23

Aging analysis for trade receivables were as follows:

Consolidated


Separate


30 31 30 31


2019 2018 2019 2018

(in thousand Baht)

Related parties

Within credit terms - - 419,429 534,649

Overdue:

Less than 3 months - - 247,272 301,787

3 - 6 months - - 16,746 123,901

6 - 12 months - - - 1,811

Over 12 months - - - -

- - 683,447 962,148

Less allowance for doubtful accounts - - - -

- - 683,447 962,148

Other parties

Within credit terms 2,102,022 2,176,414 1,204,944 1,238,080

Overdue:

Less than 3 months 839,801 907,232 303,595 429,886

3 - 6 months 21,638 131,760 - 16,308

6 - 12 months 614 27,417 - 1,899

Over 12 months 611 4,217 - -

2,964,686 3,247,040 1,508,539 1,686,173

Less allowance for doubtful accounts (2,474) (2,578) - -

2,962,212 3,244,462 1,508,539 1,686,173

Net 2,962,212 3,244,462 2,191,986 2,648,321

The normal credit terms granted by the Group range from 30 days to 160 days.

6 Inventories

Inventories as at 30June 2019 included finished goods (made to order) of Baht 589 million

(31 December 2018:Baht 610 million) in the consolidated financial statements and Baht383 million

(31 December 2018: Baht 339 million) in the separate financial statements, which had been delivered

to the customers’ warehouses but the title of the inventory shall remain with the Group until the

customers’ requisition to their production process. The Group will receive the payment for these

inventories after the customers’ requisition to their production process, and following conditions

within the periods specified in the agreements.

As at 30June 2019, the allowance for decline in value in inventory of the Groupand the Company

amounting to Baht 80.5million and Baht 14.9 million, respectively (31 December 2018: Baht 58.9

million and Bhat 5.2 million, respectively).

KCE Electronics Public Company Limitedand its subsidiaries Notes to the condensedinterim financial statements


24

7 Investment in associate

Investment in associate as at 30June 2019 and 31 December 2018and dividend income from investments for the six-month periods ended 30Junewere as

follows:


Type of

business

Country of

incorporation

Ownership

interest

Paid-up capital

Cost

Equity

30 31 30 31 30 31 30 31

June December June December June December June December

2019 2018 2019 2018 2019 2018 2019 2018

(%) (in thousand Baht)

Associate

KCE Taiwan Co., Ltd. (1) Taiwan 49.00 49.00 NTD3,000,000 NTD 3,000,000 1,540 1,540 28,259 41,081

Total 1,540 1,540 28,259 41,081

(1) Foreign raw materials and machinery sourcing representative of the Group

Share of profit from investment in associate for the six-month period ended 30June 2019was calculated by using the unreviewed financial statements of the

associates as the management of the Company considered that the share of profit from investment of the said associate has no material impact to the

consolidated financial statements of the Company and its subsidiaries and the said associate is located overseas and the Company has no power to direct the

financial and operating policies of the companies, including the review of the financial statements.


Ownership

interest

Paid-up capital

Cost

Impairment

Cost - net

Dividend income

30 31 30 31 30 31 30 31 30 31 30 31

June December June December June December June December June December June June

2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018


Associate

KCE Taiwan Co., Ltd. 49.00 49.00 NTD 3,000,000 NTD 3,000,000 1,540 1,540 - - 1,540 1,540 20,018 16,889

Total 1,540 1,540 - - 1,540 1,540 20,018 16,889



25

8 Investments in subsidiaries

Investments in subsidiaries as at 30June 2019 and 31 December 2018,and dividend income from investmentsfor the six-month periods ended 30Junewere as

follows:


Type of

business

Ownership

Interest

Paid-up capital

Cost

Warrant granted to

subsidiaries’ directors and

employees

Total

Dividend income

30 31 30 31 30 31 30 31 30 31 30 30

June December June December June December June December June December June June

2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018


Direct subsidiaries

KCE Technology Co., Ltd. (1) 100.00 100.00 1,600,000 1,600,000 1,600,000 1,600,000 23,536 23,536 1,623,536 1,623,536 200,000 672,000

K.C.E. International Co., Ltd. (1) 99.99 99.99 100,000 100,000 185,395 185,395 13,193 13,193 198,588 198,588 49,997 77,496

Chemtronic Technology

(Thailand) Co., Ltd. (2) 94.75 94.75 48,000 48,000 227,810 227,810 1,885 1,885 229,695 229,695 22,740 45,480

Chemtronic Product Co., Ltd. (2) 94.96 94.96 80,000 80,000 75,968 75,968 - - 75,968 75,968 - -

Thai Laminate Manufacturer

Co., Ltd. (3) 74.80 74.80 250,000 250,000 368,460 368,460 13,971 13,971 382,431 382,431 23,375 98,175

KCE (Thailand) Co., Ltd. (4) 60.00 60.00 3,600 3,600 2,160 2,160 1,066 1,066 3,226 3,226 5,400 12,960

KCE Singapore Pte., Ltd. (5) 75.00 75.00 SGD 500,000 SGD 500,000 168,267 168,267 - - 168,267 168,267 36,064 29,913

KCE America, Inc. (5) 70.00 70.00 USD 50,000 USD 50,000 161,009 161,009 - - 161,009 161,009 49,843 58,065

Total 2,789,069 2,789,069 53,651 53,651 2,842,720 2,842,720 387,419 994,089

Indirect subsidiaries

Chemtronic Chemical Co., Ltd. (2) 93.57 93.57 4,800 4,800 - - - - - - - -

CTC Chemical Co., Ltd. (2) 94.35 94.35 4,800 4,800 - - - - - - - -

KCE America Partner Co., Ltd. (6) 70.00 70.00 USD 302,257 USD 302,257 - - - - - - - -

(1) The manufacture and distribution of electric printed circuit board products (2) The manufacture and distribution of chemicals products

(3) The manufacture and distribution of prepreg and laminate products (4) The domestic sale representative

(5) The foreign sale representative (6) Rental building

All subsidiaries were incorporated in Thailandexcept KCE Singapore Pte.,Ltd. which was incorporated in Singapore, KCE America, Inc.and KCE America Partner Co., Ltd.,

which both were incorporated in America.



26

9 Property, plant and equipment

Acquisitions, disposals and transfers of property, plant and equipment during the six-month period

ended 30June 2019 and 2018 were as follows:

For the six-month period ended

30 June

Consolidated financial

statements

Separate


Note 2019 2018 2019 2018 (in thousand Baht)

Net book value at 1 January 9,363,934 9,509,952 5,513,072 5,534,903

Acquisitions during the

period – cost

371,758

319,755

273,480

238,199

Acquisition through business

combinations 3

-

167,790

-

-

Disposals during the period

- net book value at the

disposal date

(22,659)

(15,613)

(1,991)

(33,413)

Depreciation for the period (488,923) (463,961) (248,685) (225,835)

Transfer 24,203 (8,153) 7,387 (7,050)

Difference from changes in

foreign currency exchange

rate

(3,217)

2,102

-

-

(Reversal of) impairment losses 80 (2,264) - -

Net book value at30 June 9,245,176 9,509,608 5,543,263 5,506,804

9.1 The Company and its two subsidiaries, K.C.E. International Co., Ltd. and Thai Laminate

Manufacturer Co., Ltd., entered into negative pledge memorandums which are part of bank overdrafts

and loans agreements. Under these memorandums, the Company and its subsidiaries are not allowed

to dispose of, transfer, mortgage or provide any lien on their assets, as stipulated in such

memorandums.

9.2 The subsidiaries have mortgaged and pledged the following property, plant and equipment.

9.2.1 KCE Technology Co., Ltd. hasmortgagedits land and construction thereon and pledged its

machinery as at 31 December 2018 with a total net book value of Baht 1,129 million as

collateral for loans facilities from banks, as described in Note 11. During May 2019, the

Company has redeemedmortgaged its land and construction thereon and pledged its

machinery.

9.2.2 Chemtronic Technology (Thailand) Co., Ltd. has mortgaged its land with a total net book

value as at 30June 2019 of Baht 69 million (31 December 2018: Baht 69 million), as collateral

for loans from banks, as described in Note 11.

9.2.3 KCE Singapore Pte., Ltd. has mortgaged its office building with a total net book value as at

30June 2019 of Baht 143million (31 December 2018: Baht 146 million), as collateral for loans

from banks, as described in Note 11.

9.2.4 ChemtronicProducts Co., Ltd. has mortgaged its construction thereon and pledged its

machinery and equipment with a total net book value as at 30June 2019 of Baht 88 million

(31 December 2018: Baht 63 million), as collateral for loans from banks, as described in Note 11.

9.2.5 KCE America Partner Co., Ltd has mortgaged its land and construction with a total net book

value as at 30June 2019 of Baht 156 million (31 December 2018: Baht 160 million), as

collateral for loans from banks, as described in Note 11.



27

10 Goodwill

For the six-month period ended 30 June Consolidated financial statements

Note 2019 2018

(in thousand Baht)

Cost

At 1 January 153,517 117,498

Acquisitions through business combinations 3 - 36,019

At 30 June 153,517 153,517

Impairment losses

At 1 January - -

Impairment loss - -

At 30 June - -

Net book value

At 1 January 153,517 117,498

At 30 June 153,517 153,517

11 Interest-bearing liabilities

Consolidated


Separate


30 31 30 31


2019 2018 2019 2018

(in thousand Baht)

Current

Bank overdraftsfrom financial

institutions - secured 3,909

-

3,909

-

Short-term borrowings from financial

institutions - secured 290,000

650,000

210,000

460,000

Packing credits - secured 1,644,472 1,239,591 1,184,472 1,066,760

Trust receipts - secured 162,626 312,275 20,202 35,518

Total bank overdrafts and short-term

borrowings from financial institutions 2,101,007 2,201,866 1,418,583 1,562,278

Current portion of long-term borrowings

from financial institutions - secured 192,534 168,052 120,447 58,666

Current portion of liabilities under

hire-purchase and finance lease agreements 3,356 4,222 2,329 2,994

Total current interest-bearing liabilities 2,296,897 2,374,140 1,541,359 1,623,938



28

Consolidated


Separate


30 31 30 31


2019 2018 2019 2018

(in thousand Baht)

Non-current

Long-term borrowings from

financial institution - secured 532,444

658,974

499,666

578,389

Liabilities under hire-purchase and finance

lease agreements 4,023 5,436 3,954 4,957

Total non-current interest-bearing liabilities 536,467 664,410 503,620 583,346

Total 2,833,364 3,038,550 2,044,979 2,207,284

11.1 Under the long-term borrowings agreement from financial institutions of KCE Electronics

Public Company Limited, the Company has to comply with certain conditions, including

maintaining debt to equity ratio of not more than 2:1 and debt service coverage ratio (DSCR)

of not less than 1.25:1.

11.2-. Long-term borrowings from financial institutions of KCE Technology Co., Ltd., a subsidiary,

which are in US Dollar, with a LIBOR (London Interbank Offered Rate) plus rates as specified

in agreements.

Moreover, long-term borrowings from financial institutions of KCE Technology Co., Ltd., a

subsidiary, are in Baht andhas an interest rate swap agreement from a floating interest rate of

THBFIX (3 months) plus fixed percent per annum to Eurofixed interest rate per annum.

The subsidiary has to comply with certain conditions, including maintaining debt service

coverage ratio (DSCR) of not less than 1.25:1 and debt to equity ratio of not more than 2.

11.3-. Long-term borrowings from financial institutions of Chemtronic Technology (Thailand) Co., Ltd.,

a subsidiary, are secured by mortgage of subsidiary’s land. Under the loan agreement, the

subsidiary has to comply with certain conditions, including maintaining debt to equity ratio of

not more than 1.

11.4 Long-term borrowings from financial institutions of KCE Singapore Pte., Ltd., a subsidiary, are

secured by mortgage of subsidiary’s office building. Under the loan agreement, the

subsidiaryhas to comply with certain conditions, including maintaining gearing ratio not to be

more than 1.

11.5 Long-term borrowings from financial institutions of Thai Laminate Manufacturer Co., Ltd., a

subsidiary, are in US Dollar, with a LIBOR (London Interbank Offered Rate) plus rates as specified

in agreements, the subsidiaryhas to comply with certain conditions, including maintaining debt

service coverage ratio of not less than 1.25 and debt to equity ratio of not more than 2.

11.6 Long-term borrowings from financial institutions of Chemtronic Products Co., Ltd.,a subsidiary,

are secured by mortgage of subsidiary’s construction and pledged its machinery and

equipment. Under the loan agreement, the subsidiary has to comply with certain conditions,

including maintaining debt to equity ratio of not more than 2.

11.7 Long-term borrowings from financial institutions of KCE America Partner Co., Ltd.,an

indirect subsidiary, are in US Dollar, with a fixed interest rate as specified in agreement. The



29

loans are secured by the mortgage of the subsidiary’s land and construction. Under the loan

agreement, the subsidiary has to comply with certain conditions.

Movements during the six-month period ended 30Juneof long-term borrowings were as follows:

For the six-month period

ended 30 June

Consolidated

financial statements Separate


Note 2019 2018 2019 2018 (in thousand Baht)

Balance at 1 January 827,026 2,354,137 637,055 2,031,008

Increase - 291,850 - 291,850

Acquisitions through business

combinations

3

-

17,585

-

-

Decrease (96,697) (1,145,752) (13,708) (1,037,831)

Unrealised (gain)loss on

exchange rate

(4,508)

31,203

(3,234)

30,241

Translation adjustment (843) 248 - -

Balance at 30 June 724,978 1,549,271 620,113 1,315,268

12 Trade and other current payables

Consolidated


Separate


30 31 30 31


Note 2019 2018 2019 2018

(in thousand Baht)

Trade payables

Related parties 4 24,823 23,150 959,685 1,043,369

Other parties 1,378,337 1,850,386 436,405 545,369

Other payables for purchase of

machinery and equipment

Related parties 4 2,023 726 8 195

Other parties 182,024 212,127 149,531 178,479

Other current payables

Related parties 4 - - 48 84

Other parties 99,610 104,865 34,220 40,231

Accrued expenses 388,295 604,316 206,747 267,617

Total trade and other current

payables 2,075,112 2,795,570

1,786,644

2,075,344

13 Non-current provisions for employee benefit

On 5 April 2019, the Labor Protection Act was amended to include a requirement that an employee

who is terminated after having been employed by the same employer for an uninterrupted period of

twenty years or more, receives severance payment of 400 days of wages at the most recent rate. The

Group has therefore amended its retirement plan in accordance with the changes in the Labor

Protection Act in the second quarter of 2019. As a result of this change, the provision for retirement

benefits as at 30 June 2019 as well as past service cost recognised during the three-month and six-

month periods then ended in the consolidated and separate financial statements increased by an

amount of Baht 54.7 million and Baht 23.4 million, respectively.



30

14 Share capital

For the six-month period

ended30 June Par value 2019 2018

per share Number Amount Number Amount

(in Baht) (thousand shares / in thousand Baht)

Authorised

At 1 January

- ordinary shares 1 - - 586,397 586,397

- ordinary shares 0.5 1,172,794 586,397 - -

Split shares

- from Baht 1 to Baht 0.5 1 - - (586,397) (586,397)

- from Baht 1 to Baht 0.5 0.5 - - 1,172,794 586,397

Increase of authorised share

capital

0.5

10,000

5,000

-

-

At 30 June

- ordinary shares 0.5 1,182,794 591,397 1,172,794 586,397

Issued and paid-up

At 1 January

- ordinary shares 1 - - 586,397 586,397

- ordinary shares 0.5 1,172,794 586,397 - -

Split shares

- from Baht 1 to Baht 0.5 1 - - (586,397) (586,397)

- from Baht 1 to Baht 0.5 0.5 - - 1,172,794 586,397

At 30 June

- ordinary shares 0.5 1,172,794 586,397 1,172,794 586,397

Change in par value of the registered share capital

At the Annual General Meeting of the Company’s shareholders held on 26 April 2018, the Company’s

shareholders approved the change in par value of the registered share capital at ratio 1:2 from

Baht 1.00 per share to Baht 0.50 per share by increasing the number of shares from 586.4 million

shares to 1,172.8 million shares. The Company registered the change in par value with the Ministry of

Commerce on 16 May 2018.

Increasing of registered capital

On 25 April 2019, the Company’s shareholders at the Annual General Meeting approved the increase

of the Company’s authorised share capital in the amount of Baht 5,000,000 from the authorised share

capital of Baht 586,396,798 to Baht 591,396,798 by issuing 10,000,000 new ordinary shares atBaht

0.50 par value per share. The Company registered the said increase of authorised share capital with the

Ministry of Commerce on 8May 2019.



31

15 Segment informationand disaggregation of revenue

The Company and its subsidiaries’ operations mainly involve business segments in manufacture and sale of prepreg and laminate products, printed circuit

board, and chemical products with production facilities in Thailand and operate in both local and overseas markets. Financial information of the Company and

its subsidiaries by business for the three-month and six-month periods ended 30June is as follows:


For the three-month periods ended 30June 2019 and 2018

Printed Circuit Board business

Prepreg and Laminate

business America Europe Asia Total

Chemical

business Eliminating entries Total

2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018

(in thousand Baht)

Information about reportable

segments

Revenues from external customers 27,753 16,450 514,968 1,198,634 1,328,373 1,743,582 1,045,003 584,150 2,888,344 3,526,366 76,661 100,435 - - 2,992,758 3,643,251

Inter-segment revenues 503,886 654,655 302,024 - - - 693,927 1,318,848 995,951 1,318,848 23,917 31,655 (1,523,754) (2,005,158) - -

Total revenues 531,639 671,105 816,992 1,198,634 1,328,373 1,743,582 1,738,930 1,902,998 3,884,295 4,845,214 100,578 132,090 (1,523,754) (2,005,158) 2,992,758 3,643,251

Disaggregation of revenue Revenue from sales 531,639 671,105 816,992 1,198,634 1,328,373 1,743,582 1,714,227 1,856,586 3,859,592 4,798,802 100,578 132,090 (1,499,051) (1,958,746) 2,992,758 3,643,251

Revenue from rendering of services - - - - - - 24,703 46,412 24,703 46,412 - - (24,703) (46,412) - -

Total 531,639 671,105 816,992 1,198,634 1,328,373 1,743,582 1,738,930 1,902,998 3,884,295 4,845,214 100,578 132,090 (1,523,754) (2,005,158) 2,992,758 3,643,251

Timing of revenue recognition

At a point in time 531,639 671,105 816,992 1,198,634 1,328,373 1,743,582 1,738,930 1,902,998 3,884,295 4,845,214 100,578 132,090 (1,523,754) (2,005,158) 2,992,758 3,643,251

Total 531,639 671,105 816,992 1,198,634 1,328,373 1,743,582 1,738,930 1,902,998 3,884,295 4,845,214 100,578 132,090 (1,523,754) (2,005,158) 2,992,758 3,643,251



32


For the three-month periods ended 30 June 2019 and 2018




Chemical

business Eliminating entries

Total

2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018

(in thousand Baht)

Segment operating profit 67,539 63,665 530,381 972,832 40,738 52,917 (70,593) (75,076) 568,065 1,014,338

Unallocated profit and

expenses:

Other income 23,880 48,989

Distribution costs (114,975) (150,545)

Administrative expenses (300,488) (320,871)

Finance costs (16,439) (27,838)

Share of profit from

investments in associates 4,996 4,743

Tax expense (1,939) (6,275)

Profit for the period 163,100 562,541

For the three-month period ended 30June 2019, the Group had total revenues which were converted to US dollar amounted to US dollar 95 million (2018: US dollar

116 million).



33


For the six-month periods ended 30June 2019 and 2018




Chemical

business Eliminating entries Total

2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018

(in thousand Baht)

Information about reportable

segments

Revenues from external customers 51,522 32,714 925,126 2,217,754 2,890,860 3,573,065 2,081,301 1,072,220 5,897,287 6,863,039 157,863 187,696 - - 6,106,672 7,083,449

Inter-segment revenues 1,093,274 1,323,789 603,791 - - - 1,454,949 2,590,887 2,058,740 2,590,887 51,973 61,917 (3,203,987) (3,976,593) - -

Total revenues 1,144,796 1,356,503 1,528,917 2,217,754 2,890,860 3,573,065 3,536,250 3,663,107 7,956,027 9,453,926 209,836 249,613 (3,203,987) (3,976,593) 6,106,672 7,083,449

Disaggregation of revenue

Revenue from sales 1,144,796 1,356,503 1,528,917 2,217,754 2,890,860 3,573,065 3,476,370 3,579,311 7,896,147 9,370,130 209,836 249,613 (3,144,107) (3,892,797) 6,106,672 7,083,449

Revenue from rendering of services - - - - - - 59,880 83,796 59,880 83,796 - - (59,880) (83,796) - -

Total 1,144,796 1,356,503 1,528,917 2,217,754 2,890,860 3,573,065 3,536,250 3,663,107 7,956,027 9,453,926 209,836 249,613 (3,203,987) (3,976,593) 6,106,672 7,083,449


At a point in time 1,144,796 1,356,503 1,528,917 2,217,754 2,890,860 3,573,065 3,536,250 3,663,107 7,956,027 9,453,926 209,836 249,613 (3,203,987) (3,976,593) 6,106,672 7,083,449

Total 1,144,796 1,356,503 1,528,917 2,217,754 2,890,860 3,573,065 3,536,250 3,663,107 7,956,027 9,453,926 209,836 249,613 (3,203,987) (3,976,593) 6,106,672 7,083,449



34


For the six-month periods ended 30 June 2019 and 2018




Chemical

business Eliminating entries

Total

2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018

(in thousand Baht)

Segment operating profit 126,956 124,909 1,151,634 1,815,434 85,676 94,195 (139,406) (131,388) 1,224,860 1,903,150

Unallocated profit and

expenses:

Gain on previously-held equity

interest in associateprior to

change of status to subsidiary

- 65,701

Other income 64,744 142,475

Distribution costs (234,650) (315,478)

Administrative expenses (583,885) (622,103)

Finance costs (32,431) (56,711)

Share of profit from

investments in associates 10,350 8,314

Tax expense (14,328) (16,616)

Profit for the period 434,660 1,108,732

Segment assets as at 30June 2019/

31 December 2018 2,006,444 2,219,532

22,319,515 20,576,980 574,808 545,563 (7,886,246) (5,221,067) 17,014,521 18,121,008

Segment liabilities as at 30June2019/

31 December 2018 736,424 980,400

6,679,163 7,820,321 100,074 100,644 (2,274,639) (2,787,460) 5,241,022 6,113,905

For the six-month period ended 30 June 2019, the Group had total revenues which were converted to US dollar amounted to US dollar 195 million (2018: US dollar

225 million).



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Separated financial statements

Reportable segment


America Europe Asia Total

2019 2018 2019 2018 2019 2018 2019 2018

(in thousand Baht)

For the three-month period ended 30 June

Total revenues 234,500 387,632 928,560 1,275,812 456,823 426,928 1,619,883 2,090,372

Revenue from sales 234,500 387,632 928,560 1,275,812 437,721 397,661 1,600,781 2,061,105 Revenue from rendering of services - - - - 19,102 29,267 19,102 29,267 Total 234,500 387,632 928,560 1,275,812 456,823 426,928 1,619,883 2,090,372


At a point in time 234,500 387,632 928,560 1,275,812 456,823 426,928 1,619,883 2,090,372 Total 234,500 387,632 928,560 1,275,812 456,823 426,928 1,619,883 2,090,372

Separated financial statements

Reportable segment


America Europe Asia Total

2019 2018 2019 2018 2019 2018 2019 2018

(in thousand Baht)

For the six-month period ended 30 June

Total revenues 470,810 732,251 1,973,333 2,497,235 980,422 854,270 3,424,565 4,083,756

Revenue from sales 470,810 732,251 1,973,333 2,497,235 935,638 800,497 3,379,781 4,029,983 Revenue from rendering of services - - - - 44,784 53,773 44,784 53,773 Total 470,810 732,251 1,973,333 2,497,235 980,422 854,270 3,424,565 4,083,756


At a point in time 470,810 732,251 1,973,333 2,497,235 980,422 854,270 3,424,565 4,083,756 Total 470,810 732,251 1,973,333 2,497,235 980,422 854,270 3,424,565 4,083,756


For the three-month and six-month periods ended 30 June 2019 (Unaudited)

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Contract Balances

The following table provides information about receivables, contract assets and contract liabilities

from contracts with customers.

Consolidated


Separate


Note

30June

2019

1 January

2019

30June

2019

1 January

2019

(in thousand Baht)

Trade accounts receivable – net 5 2,962,212 3,244,462 2,191,986 2,648,321

Contract costs 148,617 82,262 115,456 52,673

Contract costs

The expense paid to obtain the long-term contracts are considered as incremental costs to obtain a

contract. Accordingly, the Group capitalises them and amortises them on a systematic basis that is

consistent with the pattern of revenue recognition.

The amount of amortisation which is included in the consolidated statement of comprehensive income

for the three-month and six-month periods ended 30 June 2019 were Baht 12.8 million(2018: nil) and

the separate statement of comprehensive income for the three-month and six-month periods then

ended were Baht 9.7 million (2018: nil). There was no impairment loss recognised from the said

assets.

The Group recognises the incremental costs of obtaining a contract as an expense when incurred if the

expected amortisation period is one year or less.

16 Gain (loss) on exchange rate and hedgingactivities

Consolidated


Separate


2019 2018 2019 2018

(in thousand Baht)

For the three-month period ended 30 June

Included in other income

- Gain on exchange rate and

hedging activities - net

3,116

30,901

13,334

-

Included in administrative expense

- Loss on exchange rate and


-

-

-

(5,689)

For the six-month period ended 30 June

Included in other income

- Gain on exchange rate and


23,504

96,921

23,132

51,197

17 Income tax

Income tax is recognised based on management’s best estimate of the weighted average annual

income tax rate expected for the full financial year applied to the pre-tax income of the interim period.

For the three-month period ended 30June 2019and 2018, there was no material change in effective tax

rate.



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18 Dividends

On 25 April 2019, the Company’s shareholders at the Annual General Meeting approved dividend

payment to common shareholders based on operating results from 1 July 2018 to 31 December 2018 at

Baht 0.55 per share, totaling Baht 645 million. The dividend was paid on 9 May 2019.

19 Financial instruments

Carrying amounts and fair values

The following table shows the carrying amounts and fair values of financial assets and financial

liabilities. It does not include fair value information for financial assets and financial liabilities not

measured at fair value if the carrying amount is a reasonable approximation of fair value.

Consolidated


Separate


Carrying Fair Carrying Fair

amount value amount value

(in thousand Baht)

Financial assets(liabilities) not

measured at fair value

30June 2019

Foreign currency forward contracts (3,383) (2,359) - -

Cross currency and interest rate

swap contract 3,692 4,318 - -

31 December 2018

Foreign currency forward contracts (503) 23 - -

Cross currency and interest rate

swap contract 2,659 3,924 - -

Financial assets(liabilities)

measured at fair value

30June 2019

Commodities hedge agreements - - - -

31 December 2018

Commodities hedge agreements 1,057 485 - -

Measurement of fair values

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).



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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.

The Group determines Level 2 fair value for foreign currency forward contracts, cross currency and

interest rate swap contract, and commodities hedge agreements by reference to the value quotes

announce by the financial institutions.

Most of financial assets and liabilities of the Group were short-term.-The fair value of financial assets

and liabilities are taken to approximate the carrying value as determined in the statement of financial

position.

The fair value of long-term borrowings are taken to approximate the carrying value because most of

these financial instruments bear interest at market rate.

20 Commitments

Consolidated


Separate


30 31 30 31


2019 2018 2019 2018

(in thousand Baht)

Capital commitments

Contracted but not provided for

buildings and other constructions 3,341 2,835 - -

Unrecognised purchase orders for

machinery and equipment 35,419 174,130 33,635 170,079

Total 38,760 176,965 33,635 170,079

Future minimum lease payments under

non-cancellable operating lease

Within one year 34,311 20,033 19,283 1,419

After one year but within five years 4,003 3,822 2,570 2,240

Total 38,314 23,855 21,853 3,659

Other commitments

Unrecognised purchase orders for raw

materials 664,739 937,035 89,391 107,602

Bank guarantees 47,619 50,853 46,301 49,299

Total 712,358 987,888 135,692 156,901

Forward exchange contracts As at 30 June 2019, the Group had outstanding forward exchange contracts as follows:


Currency Amount Maturity date Contract exchange rate

(Thousand) (Per unit of

foreign currency)

Buying contract

US dollar 4,256 3July 2019 -30December 2019 Baht 30.7019 -32.3750



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As at 31 December 2018, the Group had outstanding forward exchange contracts as follows:


Currency Amount Maturity date Contract exchange rate

(Thousand) (Per unit of

foreign currency)

Buying contract

US dollar 1,702 21 March 2019 - 26 June 2019 Baht 32.2050-32.4600

Selling contract

US dollar 600 9 April 2019 Baht 32.6200

As at 30 June 2019 and 31 December 2018, the Company had no outstanding forward exchange

contracts.

Cross currency and interest rate swap agreement

KCE Technology Co., Ltd, a subsidiary, had a cross currency and interest rate swap agreement with a

local financial institution for the period from 1 November 2016 to 29 November 2019 by which the

subsidiary agreed to swap the currency and interest rate of borrowing of Baht 250 million (equivalent

to EUR 6.4 million) with a Thai Baht floating interest rate of THBFIX (3 months) plus fixed percent

per annum to EUR fixed interest rate per annum. As at 30June 2019, the subsidiary had outstanding

balance of borrowing amounted to Baht 42 million (equivalent to EUR 1.1 million).

Commodity hedge agreements

As at 30June 2019, the Group had no outstanding copper swap agreements.

As at 31 December 2018, the Group had outstanding copper swap agreements, of which details are

presented below:

Commodity’s market price

Type of good Quantity Contract price As at 31 December 2018 Maturity date

(Ton) (US dollars per ton)

Buying contract

Copper 60 5,850 - 6,150 5,965 31 January 2019

Selling contract

Copper 60 6,250 5,964 31 January 2019

As at 30June 2019 and 31 December 2018, the Company had no outstanding copper swap agreements.

21 Events after the reporting period

On 13 August 2019, the meeting of the Company’s Board of Directors approved interim dividend

payment to the ordinary shareholders at Baht 0.40 per share. The dividend will be paid on 9 September

2019 and recognised dividend payment in the third quarter of the current year.



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22Thai Financial Reporting Standards (TFRS) not yet adopted

A number of new and revised TFRS which relevant to the Group’s operations are expected to have

significant impact on the consolidated and separate financial statements on the date of initial

application. Those TFRS become effective for annual financial reporting periods beginning on or after

1 January 2020of the following years.

TFRS Topic

TFRS 7* Financial Instruments: Disclosures

TFRS 9* Financial Instruments

TFRS 16 Leases

TAS 32* Financial Instruments: Presentation

TFRIC 16* Hedges of a Net Investment in a Foreign Operation

TFRIC 19* Extinguishing Financial Liabilities with Equity Instruments

* TFRS - Financial instruments standards

(a) TFRS - Financial instruments standards

These TFRSs establish requirements related to definition, recognition, measurement, impairment

and derecognition of financial assets and financial liabilities, including accounting for derivatives

and hedge accounting. When these TFRSs are effective, some accounting standards, interpretations

and guidance which are currently effective will be cancelled.

(b) TFRS 16 Leases

TFRS 16 introduces a single lessee accounting model for lessees. A lessee recognises a right-of-use

asset and a lease liability. There are recognition exemptions for short-term leases and leases of low-

value items. Lessor accounting remains similar to the current standard, i.e. lessors continue to

classify leases as finance or operating leases. When this TFRS is effective, some accounting

standards and interpretations which are currently effective will be cancelled.

Management is presently considering the potential impact of adopting and initially applying those

TFRSs on the financial statements.



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23Reclassification of accounts

Certain accounts in the statement of financial position as at 31 December 2018 which are included in

the 2019 interim financial statements for comparative purposes, have been reclassified to conform to

the presentation in the 2019 interim financial statements. These reclassifications have principally been

made following changes in accounting policies consequent to the adoption of new and revised TFRS

as disclosed in note 2. Other significant reclassifications were as follows:

2018

Consolidated


Separate


Before

reclass.

Reclass.

After

reclass.

Before

reclass.

Reclass.

After

reclass.

(in thousand Baht)

Statement of financial

position as at

31 December 2018

Other current assets 122,033 (52,673) 69,360 85,295 (52,673) 32,622

Contract costs - 82,262 82,262 - 52,673 52,673

Other non-current assets 88,509 (29,589) 58,920 - - -

- -

The reclassifications have been made because, in the opinion of management, the new classification is

more appropriate to the Group’s business.

KCE Electronics Public Company Limited and its subsidiaries

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