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
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
KCE Electronics Public Company Limited and its subsidiariesStatement of financial position
30 June 31 December 30 June 31 December
Liabilities and equity Note 2019 2018 2019 2018
(Unaudited) (Unaudited)
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
Consolidated financial Separate financial
statements statements
(in thousand Baht)
The accompanying notes form an integral part of the interim financial statements.3
KCE Electronics Public Company Limited and its subsidiariesStatement of financial position
30 June 31 December 30 June 31 December
Liabilities and equity Note 2019 2018 2019 2018
(Unaudited) (Unaudited)
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)
Consolidated financial Separate financial
statements statements
The accompanying notes form an integral part of the interim financial statements.4
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)
Consolidated financial Separate financial
statements statements
Three-month periods ended Three-month periods ended
30 June 30 June
The accompanying notes form an integral part of the interim financial statements.5
KCE Electronics Public Company Limited and its subsidiariesStatement of comprehensive income (Unaudited)
2019 2018 2019 2018
Profit attributable to:
Owners of the Company 159,014 557,963 459,543 469,395
Non-controlling interests 4,086 4,578 - -
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
Non-controlling interests 4,086 4,578 - -
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
Consolidated financial Separate financial
statements statements
Three-month periods ended Three-month periods ended
30 June 30 June
(in thousand Baht)
The accompanying notes form an integral part of the interim financial statements.6
KCE Electronics Public Company Limited and its subsidiariesStatement of comprehensive income (Unaudited)
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)
Consolidated financial Separate financial
statements statements
Six-month periods ended
The accompanying notes form an integral part of the interim financial statements.7
KCE Electronics Public Company Limited and its subsidiariesStatement of comprehensive income (Unaudited)
2019 2018 2019 2018
(restated)
Profit attributable to:
Owners of the Company 427,593 1,099,585 556,767 1,431,756
Non-controlling interests 7,067 9,147 - -
Profit for the period 434,660 1,108,732 556,767 1,431,756
Total comprehensive income attributable to:
Owners of the Company 409,269 1,111,303 556,767 1,431,756
Non-controlling interests 7,067 9,147 - -
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
Consolidated financial Separate financial
(in thousand Baht)
statements statements
Six-month periods ended Six-month periods ended
30 June 30 June
The accompanying notes form an integral part of the interim financial statements.8
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
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
Note share capital premium reserve Unappropriated statements acquisition date subsidiaries equity the Company interests equity
Six-month period ended 30 June 2019
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
Transactions with owners,
recorded directly in equity
Contributions by and distributions
to owners of the Company
Dividends 18 - - - (645,036) - - - - (645,036) (4,904) (649,940)
Total contributions by and distributions to
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
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. 10
KCE Electronics Public Company Limited and its subsidiariesStatement of changes in equity (Unaudited)
Issued and
paid-up Share Total
share capital premium Legal reserve Unappropriated equity
Six-month period ended 30 June 2018
Balance at 1 January 2018 586,397 1,906,510 58,743 5,208,533 7,760,183
Transactions with owners,
recorded directly in equity
Contributions by and distributions
to owners of the Company
Dividends - - - (643,782) (643,782)
Total contributions by and distributions to
owners of the Company - - - (643,782) (643,782)
Comprehensive income for the period
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
The accompanying notes form an integral part of the interim financial statements. 11
KCE Electronics Public Company Limited and its subsidiariesStatement of changes in equity (Unaudited)
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
Six-month period ended 30 June 2019
Balance at 1 January 2019 586,397 1,906,510 58,743 6,095,195 1,001 8,647,846
Transactions with owners,
recorded directly in equity
Contributions by and distributions
to owners of the Company
Dividends 18 - - - (645,036) - (645,036)
Total contributions by and distributions to
owners of the Company - - - (645,036) - (645,036)
Comprehensive income for the period
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)
Separate financial statements
Retained earnings
The accompanying notes form an integral part of the interim financial statements. 12
KCE Electronics Public Company Limited and its subsidiaries
Statement of cash flows (Unaudited)
2019 2018 2019 2018
(restated)
Cash flows from operating activities
Profit for the period 434,660 1,108,732 556,767 1,431,756
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
Six-month periods ended
30 June 30 June
(in thousand Baht)
Consolidated financial Separate financial
statements statements
Six-month periods ended
The accompanying notes form an integral part of the interim financial statements.13
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)
Consolidated financial Separate financial
(in thousand Baht)
statements statements
Six-month periods ended Six-month periods ended
30 June 30 June
The accompanying notes form an integral part of the interim financial statements.14
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
KCE Electronics Public Company Limitedand its subsidiaries Notes tothe condensedinterim financial statements
For the three-month andsix-month periods ended 30 June 2019 (Unaudited)
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.
KCE Electronics Public Company Limitedand its subsidiaries Notes tothe condensedinterim financial statements
For the three-month andsix-month periods ended 30 June 2019 (Unaudited)
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
KCE Electronics Public Company Limitedand its subsidiaries Notes tothe condensedinterim financial statements
For the three-month andsix-month periods ended 30 June 2019 (Unaudited)
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
KCE Electronics Public Company Limitedand its subsidiaries Notes tothe condensedinterim financial statements
For the three-month andsix-month periods ended 30 June 2019 (Unaudited)
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
financial statements
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
KCE Electronics Public Company Limitedand its subsidiaries Notes tothe condensedinterim financial statements
For the three-month andsix-month periods ended 30 June 2019 (Unaudited)
20
Consolidated
financial statements
Separate
financial statements
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
financial statements
Separate
financial statements
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
financial statements
Separate
financial statements
30 31 30 31
June December June December
2019 2018 2019 2018
(in thousand Baht)
Subsidiaries - - 27,089 24,170
Associate - 1,723 - 943
Total - 1,723 27,089 25,113
KCE Electronics Public Company Limitedand its subsidiaries Notes tothe condensedinterim financial statements
For the three-month andsix-month periods ended 30 June 2019 (Unaudited)
21
Trade payables - related parties
Consolidated
financial statements
Separate
financial statements
30 31 30 31
June December June December
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
financial statements
Separate
financial statements
30 31 30 31
June December June December
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
financial statements
Separate
financial statements
30 31 30 31
June December June December
2019 2018 2019 2018
(in thousand Baht)
Subsidiaries - - 48 84
Total - - 48 84
KCE Electronics Public Company Limitedand its subsidiaries Notes tothe condensedinterim financial statements
For the three-month andsix-month periods ended 30 June 2019 (Unaudited)
22
5 Trade and other current receivables
Consolidated
financial statements
Separate
financial statements
30 31 30 31
June December June December
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 - -
KCE Electronics Public Company Limitedand its subsidiaries Notes tothe condensedinterim financial statements
For the three-month andsix-month periods ended 30 June 2019 (Unaudited)
23
Aging analysis for trade receivables were as follows:
Consolidated
financial statements
Separate
financial statements
30 31 30 31
June December June December
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
For the three-month andsix-month periods ended 30 June 2019 (Unaudited)
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:
Consolidated financial statements
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.
Separate 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
(%) (in thousand Baht)
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
KCE Electronics Public Company Limitedand its subsidiaries Notes to the condensedinterim financial statements
For the three-month andsix-month periods ended 30 June 2019 (Unaudited)
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:
Separate financial statements
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
(%) (in thousand Baht)
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.
KCE Electronics Public Company Limitedand its subsidiaries Notes to the condensedinterim financial statements
For the three-month andsix-month periods ended 30 June 2019 (Unaudited)
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
financial statements
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.
KCE Electronics Public Company Limitedand its subsidiaries Notes to the condensedinterim financial statements
For the three-month andsix-month periods ended 30 June 2019 (Unaudited)
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
financial statements
Separate
financial statements
30 31 30 31
June December June December
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
KCE Electronics Public Company Limitedand its subsidiaries Notes to the condensedinterim financial statements
For the three-month andsix-month periods ended 30 June 2019 (Unaudited)
28
Consolidated
financial statements
Separate
financial statements
30 31 30 31
June December June December
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
KCE Electronics Public Company Limitedand its subsidiaries Notes to the condensedinterim financial statements
For the three-month andsix-month periods ended 30 June 2019 (Unaudited)
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
financial statements
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
financial statements
Separate
financial statements
30 31 30 31
June December June December
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.
KCE Electronics Public Company Limitedand its subsidiaries Notes to the condensedinterim financial statements
For the three-month andsix-month periods ended 30 June 2019 (Unaudited)
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.
KCE Electronics Public Company Limitedand its subsidiaries Notes to the condensedinterim financial statements
For the three-month andsix-month periods ended 30 June 2019 (Unaudited)
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:
Consolidated financial statements
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
KCE Electronics Public Company Limitedand its subsidiaries Notes to the condensedinterim financial statements
For the three-month andsix-month periods ended 30 June 2019 (Unaudited)
32
Consolidated financial statements
For the three-month periods ended 30 June 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)
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).
KCE Electronics Public Company Limitedand its subsidiaries Notes to the condensedinterim financial statements
For the three-month andsix-month periods ended 30 June 2019 (Unaudited)
33
Consolidated financial statements
For the six-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 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
Timing of revenue recognition
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
KCE Electronics Public Company Limitedand its subsidiaries Notes to the condensedinterim financial statements
For the three-month andsix-month periods ended 30 June 2019 (Unaudited)
34
Consolidated financial statements
For the six-month periods ended 30 June 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)
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).
KCE Electronics Public Company Limitedand its subsidiaries Notes to the condensedinterim financial statements
For the three-month andsix-month periods ended 30 June 2019 (Unaudited)
35
Separated financial statements
Reportable segment
Printed Circuit Board business
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
Timing of revenue recognition
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
Printed Circuit Board business
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
Timing of revenue recognition
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
KCE Electronics Public Company Limitedand its subsidiaries Notes to the condensedinterim financial statements
For the three-month and six-month periods ended 30 June 2019 (Unaudited)
36
Contract Balances
The following table provides information about receivables, contract assets and contract liabilities
from contracts with customers.
Consolidated
financial statements
Separate
financial statements
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
financial statements
Separate
financial statements
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
hedging activities - net
-
-
-
(5,689)
For the six-month period ended 30 June
Included in other income
- Gain on exchange rate and
hedging activities - net
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.
KCE Electronics Public Company Limitedand its subsidiaries Notes to the condensedinterim financial statements
For the three-month and six-month periods ended 30 June 2019 (Unaudited)
37
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
financial statements
Separate
financial statements
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).
KCE Electronics Public Company Limitedand its subsidiaries Notes to the condensedinterim financial statements
For the three-month and six-month periods ended 30 June 2019 (Unaudited)
38
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
financial statements
Separate
financial statements
30 31 30 31
June December June December
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:
Consolidated financial statements
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
KCE Electronics Public Company Limitedand its subsidiaries Notes to the condensedinterim financial statements
For the three-month and six-month periods ended 30 June 2019 (Unaudited)
39
As at 31 December 2018, the Group had outstanding forward exchange contracts as follows:
Consolidated financial statements
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.
KCE Electronics Public Company Limitedand its subsidiaries Notes to the condensedinterim financial statements
For the three-month and six-month periods ended 30 June 2019 (Unaudited)
40
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.
KCE Electronics Public Company Limitedand its subsidiaries Notes to the condensedinterim financial statements
For the three-month and six-month periods ended 30 June 2019 (Unaudited)
41
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
financial statements
Separate
financial statements
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.