AUDITOR S REPORT ON THE REVIEW OF THE INTERIM FINANCIAL INFORMATION

Transcription

1 AUDITOR S REPORT ON THE REVIEW OF THE INTERIM FINANCIAL INFORMATION To the Shareholders and the Board of Directors of Thai Union Group Public Company Limited I have reviewed the interim consolidated of Thai Union Group Public Company Limited and its subsidiaries, and the interim separate of Thai Union Group Public Company Limited. These comprise the consolidated and separate statement of financial position as at 30 September 2017, and the consolidated and separate statements of income and comprehensive income for the three-month and nine-month periods then ended and the related consolidated and separate statements of changes in equity and cash flows for the nine-month period then ended, and the condensed notes to the interim consolidated and separate. Management is responsible for the preparation and presentation of this interim consolidated and separate financial information in accordance with Thai Accounting Standard 34, Interim Financial Reporting. My responsibility is to express a conclusion on this interim consolidated and separate based on my review. Scope of review I conducted my review in accordance with the Thai Standard on Review Engagements 2410, Review of interim 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 consolidated and separate is not prepared, in all material respects, in accordance with Thai Accounting Standard 34, Interim Financial Reporting. PricewaterhouseCoopers ABAS Ltd. Somchai Jinnovart Certified Public Accountant (Thailand) No Bangkok 6 November 2017

2 THAI UNION GROUP PUBLIC COMPANY LIMITED INTERIM CONSOLIDATED AND SEPARATE FINANCIAL INFORMATION 30 SEPTEMBER 2017

3 Statement of Financial Position As at 30 September 2017 (Unaudited) (Audited) (Unaudited) (Audited) 30 September 31 December 30 September 31 December Notes Thousand Thousand Thousand Thousand Assets Current assets Cash and cash equivalents 7 1,098, , ,071 13,404 Trade and other receivables, net 8, 23 18,109,227 16,412,244 4,201,543 3,962,669 Short-term loans to related parties 23 57,120-7,660,870 7,331,581 Inventories, net 9 42,155,317 39,626,191 5,658,346 4,769,795 Current portion of derivative contracts receivables 618, , , ,351 Other current assets 1,292,740 1,176, , ,439 Assets of disposal group classified as held-for-sale 10 47,857 1,032, Total current assets 63,378,848 60,078,524 18,116,401 16,794,239 Non-current assets Restricted deposits with financial institutions 1,417 1, Investments in subsidiaries ,541,704 27,851,936 Investments in associates 11 10,392,795 10,492, , ,293 Investments in joint ventures , , Other long-term investments 13 2,396,304 2,655,007 2,372,698 2,627,527 Long-term loans to related parties 23 11,512,098 12,361,592 38,336,039 40,263,658 Long-term loans to third parties 4,078 10, Property, plant and equipment, net 12 24,592,656 23,280,566 4,420,689 4,254,411 Intangible assets, net 12 16,880,248 15,935,933 1,083, ,554 Goodwill 14 14,166,930 13,646, Derivative contracts receivables, net 1,619,781 1,713,481 1,619,782 1,713,482 Deferred tax assets 798, ,258 17,020 17,709 Other non-current assets 1,072, , , ,963 Total non-current assets 84,063,790 82,286,939 77,569,476 78,493,533 Total assets 147,442, ,365,463 95,685,877 95,287,772 Director Director The accompanying notes are an integral part of these consolidated and separate. 2

4 Statement of Financial Position (continued) As at 30 September 2017 (Unaudited) (Audited) (Unaudited) (Audited) 30 September 31 December 30 September 31 December Notes Thousand Thousand Thousand Thousand Liabilities and equity Current liabilities Bank overdrafts and short-term loans from financial institutions 15 15,376,548 36,905,656 4,335,388 28,638,929 Trade and other payables 16, 23 20,688,247 17,428,944 5,057,748 3,512,941 Short-term loans from related parties 23 90,600 77,000 1,839, ,957 Current portion of long-term loans from financial institutions, net , , , ,910 Current portion of debentures, net 18-2,499,835-2,499,835 Current portion of finance lease liabilities, net 19 50,443 82,308 5,772 12,241 Income tax payables 63, , Current portion of derivative contracts payables 529, , , ,595 Other current liabilities 192, ,045 83,931 83,722 Liabilities of disposal group classified as held-for-sale 10 41,302 89, Total current liabilities 38,002,429 59,241,853 12,499,998 36,543,130 Non-current liabilities Long-term loans from financial institutions, net 17 14,576, ,325 14,103, ,941 Debentures, net 18 36,217,546 24,417,199 36,217,546 24,417,199 Finance lease liabilities, net , ,439 16,239 20,080 Employee benefit obligations 2,020,128 1,916, , ,667 Deferred tax liabilities 4,715,454 4,499, Derivative contracts payables, net 262,729 1,037, ,729 1,037,913 Other non-current liabilities 2,913,352 2,644, , ,216 Total non-current liabilities 60,873,881 35,687,674 51,688,434 27,225,016 Total liabilities 98,876,310 94,929,527 64,188,432 63,768,146 The accompanying notes are an integral part of these consolidated and separate. 3

5 Statement of Financial Position (continued) As at 30 September 2017 (Unaudited) (Audited) (Unaudited) (Audited) 30 September 31 December 30 September 31 December Thousand Thousand Thousand Thousand Liabilities and equity (continued) Equity Share capital Authorised share capital 5,971,815,496 ordinary shares at a par value of 0.25 per share 1,492,954 1,492,954 1,492,954 1,492,954 Issued and paid-up share capital 4,771,815,496 ordinary shares at a par value of 0.25 per share 1,192,954 1,192,954 1,192,954 1,192,954 Premium on share capital 19,948,329 19,948,329 19,948,329 19,948,329 Retained earnings Appropriated - legal reserve 149, , , ,295 Unappropriated 28,148,473 26,528,035 10,078,879 10,275,437 Other components of equity (4,909,362) (4,575,938) 127,988 (46,389) Equity attributable to owners of the parent 44,529,689 43,242,675 31,497,445 31,519,626 Non-controlling interests 4,036,639 4,193, Total equity 48,566,328 47,435,936 31,497,445 31,519,626 Total liabilities and equity 147,442, ,365,463 95,685,877 95,287,772 The accompanying notes are an integral part of these consolidated and separate. 4

6 Statement of Income (Unaudited) For the three-month period ended 30 September September 30 September 30 September 30 September Notes Thousand Thousand Thousand Thousand Sales 23 35,185,452 35,049,643 5,542,252 5,355,410 Cost of sales 23 (30,527,512) (30,112,997) (4,978,408) (4,835,935) Gross profit 4,657,940 4,936, , ,475 Gain on exchange rates 275, ,365 41,484 Dividend income , ,322 Other income , , , ,734 Profit before expenses 5,520,496 5,117,701 2,150,118 2,017,015 Selling expenses (1,614,283) (1,603,962) (222,848) (162,272) Administrative expenses (1,725,127) (1,461,860) (442,070) (355,296) Other expenses (4,979) (6,621) (202) (49,089) Net loss on exchange rates - (30,226) - - Operating profit 2,176,107 2,015,032 1,484,998 1,450,358 Finance costs (546,724) (391,806) (433,885) (280,816) Profit before share of profit from investments in associates and joint ventures 1,629,383 1,623,226 1,051,113 1,169,542 Share of profit from investments in associates and joint ventures 132, , Profit before income tax 1,761,643 1,776,187 1,051,113 1,169,542 Income tax 20 89,550 (19,719) (1,276) 2,720 Profit for the period from continuing operations 1,851,193 1,756,468 1,049,837 1,172,262 Gain (loss) for the period from discontinued operation 10 9,764 (3,051) - - Profit for the period 1,860,957 1,753,417 1,049,837 1,172,262 Profit attributable to: Owners of the parent From continuing operations 1,727,080 1,597,476 1,049,837 1,172,262 From discontinued operation 9,764 (3,051) - - 1,736,844 1,594,425 1,049,837 1,172,262 Non-controlling interests 124, , Profit for the period 1,860,957 1,753,417 1,049,837 1,172,262 Earnings per share for profit attributable to the owners of the parent Earnings per share () 22 Basic earnings per share From continuing operations From discontinued operation Total basic earnings per share The accompanying notes are an integral part of these consolidated and separate. 5

7 Statement of Comprehensive Income (Unaudited) For the three-month period ended 30 September September 30 September 30 September 30 September Thousand Thousand Thousand Thousand Profit for the period 1,860,957 1,753,417 1,049,837 1,172,262 Other comprehensive income (expenses): Items that will not be reclassified subsequently to profit or loss - Increase (decrease) in other reserves (64,736) 35, Total items that will not be reclassified subsequently to profit or loss (64,736) 35, Items that will be reclassified subsequently to profit or loss - Exchange differences on translation, net of income tax 15,444 (124,315) Change in fair value of available-for-sale investments, net of income tax (200,089) (380,485) (200,093) (380,598) - Change in fair value of available-for-sale investments, net of income tax - subsequently reclassified (25,356) - (25,356) - Total items that will be reclassified subsequently to profit or loss (210,001) (504,800) (225,449) (380,598) Other comprehensive income (expenses) for the period, net of income tax (274,737) (469,715) (225,449) (380,598) Total comprehensive income for the period 1,586,220 1,283, , ,664 Total comprehensive income attributable to: Owners of the parent 1,458,744 1,117, , ,664 Non-controlling interests 127, , Total comprehensive income for the period 1,586,220 1,283, , ,664 The accompanying notes are an integral part of these consolidated and separate. 6

8 Statement of Income (Unaudited) 30 September 30 September 30 September 30 September Notes Thousand Thousand Thousand Thousand Sales 5, ,429, ,660,381 15,908,060 14,483,956 Cost of sales 23 (87,773,493) (85,264,466) (14,438,130) (13,138,274) Gross profit 13,656,437 15,395,915 1,469,930 1,345,682 Gain on exchange rates 904, , ,234 72,046 Dividend income 23 16,253-2,182,934 2,244,579 Other income 23 1,471, ,827 1,669,754 1,317,639 Profit before expenses 16,049,360 16,562,559 5,939,852 4,979,946 Selling expenses (4,707,646) (4,993,560) (555,484) (491,684) Administrative expenses (5,122,698) (4,832,673) (1,267,906) (1,185,198) Other expenses (15,192) (29,315) (6,361) (74,720) Operating profit 6,203,824 6,707,011 4,110,101 3,228,344 Finance costs (1,607,469) (1,066,726) (1,291,302) (734,802) Profit before share of profit from investments in associates and joint ventures 4,596,355 5,640,285 2,818,799 2,493,542 Share of profit from investments in associates and joint ventures , , Profit before income tax 5,117,901 5,885,174 2,818,799 2,493,542 Income tax 20 (131,520) (862,842) (9,113) 15,366 Profit for the period from continuing operations 4,986,381 5,022,332 2,809,686 2,508,908 Loss for the period from discontinued operation 10 (34,703) (190,348) - - Profit for the period 4,951,678 4,831,984 2,809,686 2,508,908 Profit attributable to: Owners of the parent From continuing operations 4,651,549 4,542,644 2,809,686 2,508,908 From discontinued operation (34,703) (190,348) - - 4,616,846 4,352,296 2,809,686 2,508,908 Non-controlling interests 334, , Profit for the period 4,951,678 4,831,984 2,809,686 2,508,908 Earnings per share for profit attributable to the owners of the parent Earnings per share () 22 Basic earnings per share From continuing operations From discontinued operation (0.01) (0.04) - - Total basic earnings per share The accompanying notes are an integral part of these consolidated and separate. 7

9 Statement of Comprehensive Income (Unaudited) 30 September 30 September 30 September 30 September Thousand Thousand Thousand Thousand Profit for the period 4,951,678 4,831,984 2,809,686 2,508,908 Other comprehensive income (expenses): Items that will not be reclassified subsequently to profit or loss - Actuarial gain, net of income tax 12, Increase (Decrease) in other reserves (142,729) 74, Total items that will not be reclassified subsequently to profit or loss (130,028) 74, Items that will be reclassified subsequently to profit or loss - Exchange differences on translation, net of income tax (324,867) (791,766) Change in fair value of available-for-sale investments, net of income tax 199,741 (380,827) 199,733 (380,598) - Change in fair value of available-for-sale investments, net of income tax - subsequently reclassified (25,356) - (25,356) - Total items that will be reclassified subsequently to profit or loss (150,482) (1,172,593) 174,377 (380,598) Other comprehensive income (expenses) for the period, net of income tax (280,510) (1,098,218) 174,377 (380,598) Total comprehensive income for the period 4,671,168 3,733,766 2,984,063 2,128,310 Total comprehensive income attributable to: Owners of the parent 4,336,226 3,324,694 2,984,063 2,128,310 Non-controlling interests 334, , Total comprehensive income for the period 4,671,168 3,733,766 2,984,063 2,128,310 The accompanying notes are an integral part of these consolidated and separate. 8

10 Statement of Changes in Equity (Unaudited) Attributable to owners of the parent Retained earnings Other components of equity Changes Changes in Total equity Issued and Premium Appropriated Exchange in value of ownership Total other attributable Nonpaid-up on share - Legal differences on available-for-sale Other interest in components to owners of controlling share capital capital reserve Unappropriated translation investments reserves subsidiaries of equity the parent interests Total equity Thousand Thousand Thousand Thousand Thousand Thousand Thousand Thousand Thousand Thousand Thousand Thousand Notes Opening balance as at 1 January ,192,954 19,948, ,295 24,309, ,782 (1,890) (9,821) (1,156,761) (383,690) 45,216,222 2,753,572 47,969,794 Net decrease in non-controlling interests from change in investment in subsidiary (68,655) (1,317,406) (1,317,406) (1,386,061) (339,911) (1,725,972) Acquisition of non-controlling interests through business combination ,877,499 1,877,499 Options over non-controlling interests through business combination (1,877,499) - (1,877,499) (1,877,499) - (1,877,499) Dividend payment (2,985,997) (2,985,997) (372,727) (3,358,724) Total comprehensive income for the period ,352,296 (721,150) (380,827) 74,375 - (1,027,602) 3,324, ,072 3,733,766 Closing balance as at 30 September ,192,954 19,948, ,295 25,606,978 63,632 (382,717) (1,812,945) (2,474,167) (4,606,197) 42,291,359 4,327,505 46,618,864 Opening balance as at 1 January ,192,954 19,948, ,295 26,528,035 (70,299) (48,660) (1,885,400) (2,571,579) (4,575,938) 43,242,675 4,193,261 47,435,936 Net decrease in non-controlling interests from change in investment in subsidiary (42,968) (42,968) (42,968) (96,554) (139,522) Dividend payment (3,006,244) (3,006,244) (395,010) (3,401,254) Total comprehensive income for the period ,626,682 (322,112) 174,385 (142,729) - (290,456) 4,336, ,942 4,671,168 Closing balance as at 30 September ,192,954 19,948, ,295 28,148,473 (392,411) 125,725 (2,028,129) (2,614,547) (4,909,362) 44,529,689 4,036,639 48,566,328 The accompanying notes are an integral part of these consolidated and separate. 9

11 Statement of Changes in Equity (Unaudited) Retained earnings Other components of equity Issued and Premium Changes in value of Total other paid-up on share Appropriated available-for-sale components Total share capital capital - Legal reserve Unappropriated investments of equity equity Note Thousand Thousand Thousand Thousand Thousand Thousand Thousand Opening balance as at 1 January ,192,954 19,948, ,295 9,917, ,208,263 Dividend payment (3,006,244) - - (3,006,244) Total comprehensive income for the period ,508,908 (380,598) (380,598) 2,128,310 Closing balance as at 30 September ,192,954 19,948, ,295 9,420,349 (380,598) (380,598) 30,330,329 Opening balance as at 1 January ,192,954 19,948, ,295 10,275,437 (46,389) (46,389) 31,519,626 Dividend payment (3,006,244) - - (3,006,244) Total comprehensive income for the period ,809, , ,377 2,984,063 Closing balance as at 30 September ,192,954 19,948, ,295 10,078, , ,988 31,497,445 The accompanying notes are an integral part of these consolidated and separate. 10

12 Statement of Cash Flows (Unaudited) 30 September 30 September 30 September 30 September Notes Thousand Thousand Thousand Thousand Cash flows from operating activities Profit before income tax From continuing operations 5,117,901 5,885,174 2,818,799 2,493,542 From discontinued operation 10 (34,705) (190,667) - - Total 5,083,196 5,694,507 2,818,799 2,493,542 Adjustment items 24 2,950,554 3,187,949 (1,629,681) (1,568,917) Changes in operating assets and liabilities 24 (1,844,468) (475,238) 670,807 (535,625) Income tax paid 24 (696,968) (1,271,409) (8,483) (16,376) Net cash receipts from operating activities 5,492,314 7,135,809 1,851, ,624 Cash flows from investing activities Decrease in restricted deposits with financial institutions - 8, Proceeds from disposals of assets of disposal group classified as held-for-sale 768, Purchases of property, plant and equipment (3,316,717) (2,683,026) (422,503) (430,935) Purchases of intangible assets (612,814) (231,668) (587,892) (179,464) Proceeds from disposals of property, plant and equipment and intangible assets 52,987 40,955 15,383 12,397 Cash payment for business combinations, net of cash acquired - (1,794,095) - (1,604,866) Cash payment for investments in subsidiaries (689,768) - Cash payment for investments in associates 11 (26,947) (679,719) - (679,719) Cash payment for investments in joint ventures 11 (93,270) (137,700) - - Cash payment for other long-term investments (828) (2,343,775) (500) (2,340,937) Proceeds from sale of other long-term investments 459,332 6, ,062 - Net cash receipts from (payments for) short-term loans to related parties (57,120) 30,600 (774,608) (3,952,055) Cash receipts from long-term loans to related parties and third parties 23 6,392 8,151 1,649,270 14,230,572 Cash payments from long-term loans to related parties and third parties 23 (81) (197) (109,710) (21,012,065) Interest received 100,891 19, , ,126 Dividend received 154, ,437 2,182,934 2,244,579 Net cash receipts (payments) from investing activities (2,565,331) (7,630,502) 2,389,041 (13,119,367) Cash flows from financing activities Net cash receipts from (payments for) short-term loans from financial institutions (21,505,080) (4,102,526) (24,314,623) 3,577,346 Net cash receipts from (payments for) short-term loans from related parties 13,600 11, ,032 1,353,021 Cash receipts from long-term loans from financial institutions 17 14,694,977 14,469 14,269,000 - Repayments for long-term loans from financial institutions 17 (648,188) (1,419,977) (558,700) (1,222,300) Deferred financial costs paid 17 (83,429) - (83,429) - Cash receipts from debenture issuance 18 12,000,000 12,642,843 12,000,000 12,642,843 Repayments for debenture issuance 18 (2,500,000) (1,950,000) (2,500,000) (1,950,000) Debenture issuance costs paid 18 (22,144) (20,554) (22,144) (20,554) Interest paid and other finance costs paid (1,138,278) (912,509) (834,453) (577,409) Cash paid for finance lease liabilities (87,892) (48,377) (10,309) (12,235) Cash paid for non-controlling interests from change in investment in subsidiary 11 (139,522) (1,746,745) - - Receipts from non-controlling interests for additional share capital in a subsidiary - 89, Dividends paid to the owners of the parent (3,006,202) (2,981,664) (3,006,202) (3,001,886) Dividends paid to non-controlling interests (393,090) (372,727) - - Net cash receipts (payments) for financing activities (2,815,248) (797,239) (4,134,828) 10,788,826 Net increase (decrease) in cash and cash equivalents 111,735 (1,291,932) 105,655 (1,957,917) Cash and cash equivalents - opening balance 7 730,859 2,590,306 13,404 2,092,174 Exchange gain (loss) on cash and cash equivalents 14,300 (23,769) 12 (18,519) Cash and cash equivalents - closing balance 7 856,894 1,274, , ,738 Non-cash items Payable balances from purchase of property, plant and equipment (included in trade and other payables) , , ,424 35,346 The accompanying notes are an integral part of these consolidated and separate. 11

13 1 General information Thai Union Group Public Company Limited (the Company) is a public limited company, which is listed on the Stock Exchange of Thailand, and is incorporated and domiciled in Thailand. The current address of the Company s registered office is at 72/1 Moo 7, Sethakit 1 Road, Tambon Tarsrai, Amphur Muang, Samutsakorn. The Company has 13 branches in Bangkok and Samutsakorn. For reporting purposes, the Company and its subsidiaries are referred to as the Group. The Company operates its business in Thailand and its subsidiaries conduct businesses in Thailand and overseas countries. The principal activities of the Company and the subsidiaries in Thailand are the manufactures and sales of frozen, chilled and canned seafood. Local subsidiaries are also engaged in the packaging, printing and pet food businesses. The principal operations of the overseas subsidiaries consist of the following businesses. The subsidiaries in America are the manufacturers and distributors of lobster and other seafood products, and the importer of shrimp and other frozen seafood products for sales to restaurant chains, retailers and wholesalers. The subsidiaries in Europe are the manufacturers and distributors of ambient and chilled seafood products to countries in Europe, America and Australia under their trademarks. The subsidiaries in Asia are the manufacturer and distributor of seafood in Vietnam and China. This interim consolidated and separate was authorised for issue by the Board of Directors on 6 November This interim consolidated and separate has been reviewed, not audited. 2 Basis of preparation of interim The interim has been prepared in accordance with Thai Accounting Standard 34 Interim Financial Reporting. The primary (statement of financial position, statement of income, statement of comprehensive income, statement of changes in equity and statement of cash flows) is presented in a format consistent with the annual financial statements complying with Thai Accounting Standard 1 Presentation of Financial Statements. The notes to the interim are prepared in a condensed format. Additional notes are presented as required by the Securities and Exchange Commission under the Securities and Exchange Act. The interim should be read in conjunction with the annual financial statements for the year ended 31 December Comparative figures have been adjusted to conform with changes in presentation in the current year. An English-language version of the interim consolidated and separate has been prepared in accordance with the interim that is in the Thai language. In the event of a conflict or a difference in interpretation between the two languages, the Thai-language interim shall prevail. 12

14 3 Summary of accounting policies The accounting policies used in the preparation of the interim are consistent with those used in the annual financial statements for the year ended 31 December Costs that are incurred unevenly during the financial year are anticipated or deferred in the interim report only if it would also be appropriate to anticipate or defer such costs at the end of the financial year. Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual profit or loss. Revised accounting standards and financial reporting standards Revised accounting standards and financial reporting standards which are effective for the accounting periods beginning on or after 1 January 2017 and relevant to the Group are as follows: TAS 1 (revised 2016) TAS 16 (revised 2016) TAS 19 (revised 2016) TAS 27 (revised 2016) TAS 28 (revised 2016) TAS 34 (revised 2016) TAS 38 (revised 2016) TFRS 5 (revised 2016) TFRS 11 (revised 2016) Presentation of financial statements Property, plant and equipment Employee benefits financial statements Investments in associates and joint ventures Interim financial reporting Intangible assets Non-current assets held for sale and discontinued operations Joint arrangements TAS 1 (revised 2016), the amendments provide clarifications on a number of issues, including: - Materiality - an entity should not aggregate or disaggregate information in a manner that obscures useful information. Where items are material, sufficient information must be provided to explain the impact on the financial position or performance. - Disaggregation and subtotals - line items specified in TAS 1 may need to be disaggregated where this is relevant to an understanding of the entity s financial position or performance. There is also new guidance on the use of subtotals. - Notes - confirmation that the notes do not need to be presented in particular order. - Other comprehensive income (OCI) arising from investments accounted for under the equity method - the share of OCI arising from equity-accounted investments is grouped based on whether the items will or will not subsequently be reclassified to profit or loss. Each group should then be presented as a single line item in the statement of other comprehensive income. TAS 16 (revised 2016), key amendments are 1) the amendments clarify that depreciation of an item of property, plant and equipment based on revenue generated by using the asset is not appropriate and 2) the amendments include bearer plants in scope of TAS 16. TAS 19 (revised 2016), the amendments clarify that when determining the discount rate for post-employment benefit obligations, it is the currency that the liabilities are denominated in that is important and not the country where they arise. TAS 27 (revised 2016), the amendments allow an entity a policy choice to account for investments in subsidiaries, joint ventures and associates in its separate financial statements using the equity method as described in TAS 28. While current TAS 27 allows entities to measure their investments in subsidiaries, joint ventures and associates either at cost or at fair value (when announced). The election can be made independently for each category of investment (subsidiaries, joint ventures and associates). Entities wishing to change to the equity method must do so retrospectively. The Company accounts for investments in subsidiaries, joint ventures and associates in its separate financial statements using the cost method and has not changed the policy. 13

15 3 Summary of accounting policies (continued) Revised accounting standards and financial reporting standards (continued) Revised accounting standards and financial reporting standards which are effective for the accounting periods beginning on or after 1 January 2017 and relevant to the Group are as follows (continued): TAS 28 (revised 2016), the amendments allow an entity which is not an investment entity, but has an interest in an associate or joint venture which is an investment entity, a policy choice when applying the equity method of accounting. The entity may choose to retain the fair value measurement applied by the investment entity associate or joint venture, or to unwind the fair value measurement and instead perform a consolidation at the level of the investment entity associate or joint venture. TAS 34 (revised 2016), the amendments clarify that what is meant by the reference in the standard to 'information disclosed elsewhere in the interim financial report'; entities taking advantage of the relief must provide a cross-reference from the interim to the location of that information and make the information available to users on the same terms and at the same time as the interim. TAS 38 (revised 2016), the amendments include a rebuttable presumption that the amortisation of intangible assets based on revenue is inappropriate. This presumption can be overcome if either the intangible asset is expressed as a measure of revenue (i.e. where a measure of revenue is the limiting factor on the value that can be derived from the asset), or it can be shown that revenue and the consumption of economic benefits generated by the asset are highly correlated. TFRS 5 (revised 2016), the amendments clarify that when an asset (or disposal group) is reclassified from 'held for sale' to 'held for distribution' or vice versa, this does not constitute a change to a plan of sale or distribution and does not have to be accounted for as such. TFRS 11 (revised 2016), the amendments clarify that 1) the accounting for the acquisition of an interest in a joint operation where the activities of the operation constitute a business. They require an investor to apply the principles of business combination accounting and 2) existing interests in the joint operation are not remeasured on acquisition of an additional interest, provided joint control is maintained. The Group s management has assessed and considered that the above revised standards do not have significant impact to the Group. Revised financial reporting standards are effectively for annual periods beginning on or after 1 January 2018 which have significant changes and are relevant to the Group. The Group has not yet adopted these revised standards. TAS 7 (revised 2017) Statement of cash flows TAS 7 (revised 2017), the amendments require additional disclosure of changes in liabilities arising from financing activities. This includes changes arising from cash and non-cash. 4 Estimates The preparation of interim requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates. In preparing this interim, the significant judgements made by management in applying the Group s accounting policies and the key sources of uncertain estimation were the same as those applied to the consolidated financial statements for the year ended 31 December

16 5 Segment information The Global Leadership Team (GLT) is the Group s chief operating decision-maker. Management has determined the operating segments based on the information reviewed by the GLT for the purposes of allocating resources and assessing performance. For management purposes, the Group are organised into business units based on its products and have three reportable segments as follows: - Ambient seafood - Frozen and chilled seafood and related businesses - Pet food, value-added and other businesses The Group have no operating segments that have been aggregated to form the above reportable operating segments. The chief operating decision maker monitors the operating results of the business units separately for the purpose of making decisions about resource allocation and assessing performance. The Group measures segment performance based on gross profit on a consistent basis with that uses to measure gross profit in the financial statements. Transactions between operating segments are recorded in a manner similar to transactions with third parties. These transactions are eliminated for the interim consolidated. The following tables present revenue and gross profit information regarding the Group s operating segments for the nine-month periods ended 30 September 2017 and For the nine-month period ended 30 September 2017 Ambient seafood Thousand Frozen and chilled seafood and related businesses Thousand (Unaudited) Pet food, valueadded and other businesses Thousand Total reportable segments Thousand Eliminations Thousand Total Thousand External customers 47,091,141 40,812,839 13,525, ,429, ,429,930 Inter-segment 8,788,796 5,450,488 3,300,713 17,539,997 (17,539,997) - Total revenue 55,879,937 46,263,327 16,826, ,969,927 (17,539,997) 101,429,930 Results Segment gross profit 7,366,275 3,621,378 2,603,362 13,591,015 65,422 13,656,437 Selling and administrative expenses (9,830,344) Other expenses (15,192) Operating profit (not including other income) 3,810,901 Finance costs (1,607,469) Share of profits from investments in associates and joint ventures 521,546 Other income 2,392,923 Profit before income tax 5,117,901 Income tax (131,520) Profit for the period from continuing operations 4,986,381 Loss for the period from discontinued operation (34,703) Profit for the period 4,951,678 15

17 5 Segment information (continued) The following tables present revenue and gross profit information regarding the Group s operating segments for the nine-month periods ended 30 September 2017 and 2016 (continued). For the nine-month period ended 30 September 2016 Ambient seafood Thousand Frozen and chilled seafood and related businesses Thousand (Unaudited) Pet food, valueadded and other businesses Thousand Total reportable segments Thousand Eliminations Thousand Total Thousand External customers 47,190,986 40,515,637 12,953, ,660, ,660,381 Inter-segment 6,911,120 4,615,495 3,714,320 15,240,935 (15,240,935) - Total revenue 54,102,106 45,131,132 16,668, ,901,316 (15,240,935) 100,660,381 Results Segment gross profit 8,445,109 3,491,254 3,319,673 15,256, ,879 15,395,915 Selling and administrative expenses (9,826,233) Other expenses (29,315) Operating profit (not including other income) 5,540,367 Finance costs (1,066,726) Share of profits from investments in associates and joint ventures 244,889 Other income 1,166,644 Profit before income tax 5,885,174 Income tax (862,842) Profit for the period from continuing operations 5,022,332 Loss for the period from discontinued operation (190,348) Profit for the period 4,831,984 Geographic information Revenue from external customers is based on locations of the customers. financial information (Unaudited) For the nine-month periods ended 30 September Thousand Thousand Revenue from external customers Thailand 9,668,068 8,248,905 The United States of America 38,232,557 39,299,278 Japan 6,270,073 6,231,159 European countries 32,890,185 33,401,161 Others 14,369,047 13,479,878 Total revenue from external customers 101,429, ,660,381 Major customer During the nine-month periods ended 30 September 2017 and 2016, the Group had no major customer with revenues of 10 percent or more of the Group s revenue. 16

18 6 Fair value Fair value estimation The table below analyses financial assets and liabilities carried at fair value or disclosed its fair value, by valuation method. The different levels have been defined as follows: Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) Level 3: Inputs for the assets or liability that are not based on observable market data (that is, unobservable inputs) The following table presents the Group s and the Company s financial assets and liabilities that are measured at fair value at 30 September 2017 and 31 December (Unaudited) As at 30 September 2017 Level 1 Level 2 Level 3 Total Thousand Thousand Thousand Thousand Asset measured at fair value Available-for-sale financial assets Equity instruments 2,391, ,391,081 (Audited) As at 31 December 2016 Level 1 Level 2 Level 3 Total Thousand Thousand Thousand Thousand Asset measured at fair value Available-for-sale financial assets Equity instruments 2,650, ,650,641 (Unaudited) As at 30 September 2017 Level 1 Level 2 Level 3 Total Thousand Thousand Thousand Thousand Asset measured at fair value Available-for-sale financial assets Equity instruments 2,371, ,371,198 (Audited) As at 31 December 2016 Level 1 Level 2 Level 3 Total Thousand Thousand Thousand Thousand Asset measured at fair value Available-for-sale financial assets Equity instruments 2,626, ,626,527 Above investments are presented as other long-term investments in the statement of financial position (Note 13). There were no transfers between such levels during the period. 17

19 7 Cash and cash equivalents (Unaudited) (Audited) (Unaudited) (Audited) As at 30 September 31 December 30 September 31 December Thousand Thousand Thousand Thousand Cash on hands 5,131 6, Deposits with financial institutions 1,092, , ,230 12,517 Fixed deposits due within 3 months , Total cash and cash equivalents 1,098, , ,071 13,404 Less Bank overdrafts (Note 15) (241,116) (245,263) - - Total cash and cash equivalents per statement of cash flows 856, , ,071 13,404 8 Trade and other receivables, net (Unaudited) (Audited) (Unaudited) (Audited) As at 30 September 31 December 30 September 31 December Thousand Thousand Thousand Thousand Trade receivables 15,492,926 15,231,996 2,863,697 3,417,501 Less Allowance for doubtful accounts (422,321) (433,857) (35,761) (30,237) Trade receivables, net 15,070,605 14,798,139 2,827,936 3,387,264 Accrued interest income - related parties (Note 23) 900, , , ,514 Accrued interest income - third parties 255, ,246 - Other receivables - related parties 38,317 53,905 4, ,992 Other receivables - third parties 792, ,130 63,858 - Prepaid expenses 501, ,223 70,151 52,508 Tax coupons 64,929 89,312 60,045 78,196 Accrued income 50,165 75,334 31,258 16,670 Advance payments 435, ,945 29,677 77,525 Total trade and other receivables, net 18,109,227 16,412,244 4,201,543 3,962,669 18

20 8 Trade and other receivables, net (continued) Outstanding trade receivables can be analysed as follows: (Unaudited) (Audited) (Unaudited) (Audited) As at 30 September 31 December 30 September 31 December Thousand Thousand Thousand Thousand Trade receivables - third parties Not yet due 11,804,304 11,274, , ,214 Up to 3 months 2,887,870 2,922, , , months 115, ,541 25,299 64, months 94,533 61,011 12,239 2,794 Over 12 months 387, ,399 29,641 27,576 15,289,189 15,013,623 1,202,129 1,462,964 Less Allowance for doubtful accounts (422,321) (433,857) (35,761) (30,237) 14,866,868 14,579,766 1,166,368 1,432,727 Trade receivables - related parties (Note 23) Not yet due 75,529 67,143 1,365,114 1,610,120 Up to 3 months 128, , , , months ,256 4, , ,373 1,661,568 1,954,537 Trade receivables, net 15,070,605 14,798,139 2,827,936 3,387,264 9 Inventories, net (Unaudited) (Audited) (Unaudited) (Audited) As at 30 September 31 December 30 September 31 December Thousand Thousand Thousand Thousand Finished goods, net 24,211,660 23,806,750 2,727,599 1,867,952 Work in process, net 448, ,393 6,734 - Raw materials and consumables, net 10,394,463 9,633,381 2,092,048 1,979,711 Ingredients and packaging, net 1,937,055 1,534, , ,802 Goods in transit 4,419,370 3,594, , ,629 Spare parts, net 744, ,252 24,722 22,701 Total inventories, net 42,155,317 39,626,191 5,658,346 4,769,795 As at 30 September 2017, the Group and the Company have provided allowances for net realisable value and obsolescence in the interim consolidated and separate in the amount of 1, million and million, respectively (as at 31 December 2016: million and million, respectively). As at 30 September 2017, the Group have pledged certain inventories of million with financial institutions to secure their credit facilities (as at 31 December 2016: million) (Note 15). 19

21 10 Non-current assets and liabilities classified as held-for-sale and discontinued operation In December 2016, the Group announced its intention to divest fishing fleet business in Ghana. The subsidiary comprises this segment is reported in the financial statements as a discontinued operation. The Sales Contract and Memorandum of Understanding were signed for the sales of vessels in December The Group completed the divestiture of the fishing fleets on 2 August The assets and liabilities classified as disposal group held-for-sale as at 30 September 2017 are mainly equipment, inventory, other assets and other liabilities. Financial information relating to fishing fleet business operations for the nine-month periods ended 30 September 2017 and 2016 is set out below. The statement of income and statement of cash flow distinguish discontinued operations from continuing operations. Comparative figures have been restated Statement of cash flows for discontinued operation The results of cash flows for the nine-month periods ended 30 September 2017 and 2016 are as follow: financial information (Unaudited) For the nine-month periods ended 30 September Thousand Thousand Cash flows from operating activities 308, ,445 Cash flows from investing activities 713,354 (42,944) Cash flows from financing activities (454,373) (71,977) Net cash flows 567,227 18, Assets of disposal group classified as held-for-sale (Unaudited) (Audited) As at 30 September 31 December Thousand Thousand Property, plant and equipment 1, ,910 Inventory 14,949 59,216 Others 31,607 41,335 Total assets of disposal group classified as held-for-sale 47,857 1,032,461 20

22 10 Non-current assets and liabilities classified as held-for-sale and discontinued operation (continued) 10.3 Liabilities of disposal group classified as held-for-sale (Unaudited) (Audited) As at 30 September 31 December Thousand Thousand Trade and other payables 37,064 73,658 Provisions 5,005 14,745 Others (767) 716 Total liabilities of disposal group classified as held-for-sale 41,302 89,119 In accordance with TFRS 5, as at 30 September 2017, the Group have provided allowance for impairment on the assets held-for-sale of million. The fair value is measured based on expected sales price less cost to sell for equipment and spare parts Cumulative income or expenses recognised in other comprehensive income relating to disposal group classified as held-for-sale (Unaudited) (Audited) As at 30 September 31 December Thousand Thousand Exchange differences on translation 2,891 (866) 10.5 Cumulative income or expenses recognised in profit and loss relating to disposal group classified as held-for-sale Analysis of the result of discontinued operation, and the result recognised on the re-measurement of assets or disposal group, is as follows: financial information (Unaudited) For the three-month periods ended 30 September Thousand Thousand Sales 77,913 78,185 Gross profit 152, Selling and administrative expenses (36,771) - Operating profit 115, Finance costs (3,223) (752) Other expenses (102,735) (5,780) Profit (Loss) before income tax 9,762 (5,701) Income tax 2 2,650 Profit (Loss) after income tax 9,764 (3,051) 21

23 10 Non-current assets and liabilities classified as held-for-sale and discontinued operation (continued) 10.5 Cumulative income or expenses recognised in profit and loss relating to disposal group classified as held-for-sale (continued) financial information (Unaudited) For the nine-month periods ended 30 September Thousand Thousand Sales 123, ,840 Gross profit (loss) 152,876 (182,081) Selling and administrative expenses (81,353) - Operating profit (loss) 71,523 (182,081) Finance costs (3,223) (2,285) Other expenses (103,005) (6,301) Loss before income tax (34,705) (190,667) Income tax Loss after income tax (34,703) (190,348) 11 Investments in subsidiaries, associates and joint ventures (Unaudited) (Audited) (Unaudited) (Audited) As at 30 September 31 December 30 September 31 December Thousand Thousand Thousand Thousand Subsidiaries ,541,704 27,851,936 Associates 10,392,795 10,492, , ,293 Joint ventures 627, , Total investments in subsidiaries, associates and joint ventures 11,019,855 11,118,781 29,376,997 28,687,229 The amounts recognised in the statement of income are as follows: For the nine-month periods ended (Unaudited) (Unaudited) (Unaudited) (Unaudited) 30 September Thousand Thousand Thousand Thousand Associates 612, , Joint ventures (90,650) (36,962) - - Total share of profit from investments in associates and joint ventures 521, ,

24 11 Investments in subsidiaries, associates and joint ventures (continued) 11.1 Investments in subsidiaries Details of investments in subsidiaries in the interim separate are as follows: Country of Company s name Nature of business incorporation Paid-up capital Shareholding percentage Cost Dividends received 30 September 2017 Million 31 December 2016 Million 30 September 2017 % 31 December 2016 % 30 September 2017 Thousand 31 December 2016 Thousand 30 September 2017 Thousand 31 December 2016 Thousand Thai Union Manufacturing Manufacturer and exporter Thailand ,648,407 2,648,407 1,076, ,628 Co., Ltd. (TUM) of canned tuna and pet food Songkla Canning Plc. Manufacturer and exporter Thailand ,006,664 2,006, , ,386 of canned seafood Thai Union Seafood Co., Ltd. Manufacturer and exporter Thailand , , ,060 18,360 of frozen shrimp T-Holding Co., Ltd. Distributor of food products Thailand ,699 20, Thai Union Feedmill Co., Ltd. Manufacturer and distributor Thailand , , , ,100 (TFM) of animal feeds Thai Union Graphic Co., Ltd. Printing manufacturer Thailand ,019 96, Thai Union North America, Holding company USA USD USD ,741,316 11,741, Inc. (TUNA) Thai Union Investment Holding company Mauritius EUR 0.5 EUR ,046 20,046-1,308,989 Holding Co., Ltd. (TUIH) Pakfood Plc. Manufacturer and distributor Thailand ,331,470 1,331, ,542 of frozen foods & aquatic animal Seafood International Distributor of food products United Arab AED 0.1 AED One FZCO Emirates Thai Union China Co., Ltd. Distributor of food products China USD 8 USD ,084 36, Thai Union Online Shop E-Commerce Thailand ,000 1, Co., Ltd. Thai Union European Seafood 1 S.A. Holding company Luxembourg EUR 212 EUR ,008,108 9,504, Total 28,541,704 27,851,936 2,079,215 3,035,005 23

25 11 Investments in subsidiaries, associates and joint ventures (continued) 11.1 Investments in subsidiaries (continued) The movements of investments in subsidiaries during the period are as follows: Thousand Opening net book value (audited) 27,851,936 Additions, net 689,768 Closing net book value (unaudited) 28,541,704 During the period, Thai Union China Co., Ltd. called for paid-up capital of totalling USD 5.45 million or equivalent to million. In the second quarter of 2017, the Company and a wholly-owned foreign subsidiary entered into the Contribution Agreement to perform a contribution in kind of the amount of Euro million, equivalent to million by converting its loan receivables to investment. Companies under subsidiaries included in the preparation of the interim consolidated are: Country of Percentage of Company s name Nature of business incorporation shareholding 30 September December 2016 % % Held by subsidiaries Thai Union Investments North Holding company USA America LLC (100% held by TUNA) Tri-Union Seafoods, LLC Manufacturer & USA (100% held by TUNA) distributor of canned tuna and seafood Tri-Union Frozen Products, Inc. Importer and USA (TUFP) (100% held by TUNA) distributor of frozen seafood US Pet Nutrition, LLC (USPN) Manufacturer & USA (99% held by TUNA and 1% distributor of held by Tri-Union Seafoods, LLC) premium pet food Asian-Pacific Can Co., Ltd. Manufacturer & Thailand (99% held by Songkla distributor of Canning Plc.) packaging for food products Yueh Chyang Canned Food Co., Ltd. Manufacturer & Vietnam (98.51% held by Songkla distributor of canned Canning Plc.) tuna and seafood 24

26 11 Investments in subsidiaries, associates and joint ventures (continued) 11.1 Investments in subsidiaries (continued) Companies under subsidiaries included in the preparation of the interim consolidated are (continued): Country of Percentage of Company s name Nature of business incorporation shareholding 30 September December 2016 % % Held by subsidiaries (continued) Thai Union France Holding 2 SAS Holding company France (TUFH) (100% held by Thai Union European Seafood 1 S.A.) (Merged in September 2017) Thai Union Europe Headquarters activity France (100% held by Thai Union European Seafood 1 S.A., 2016: 100% held by Thai Union France Holding 2 SAS) MW Brands Seychelles Limited Exporter of canned Seychelles (100% held by Thai Union tuna Europe) Etablissements Paul Paulet SAS Manufacturer, France (100% held by Thai Union Europe) importer, distributor and exporter of canned seafood European Seafood Investment Portugal (100% held by Thai Union Europe, 2016: 74% held by Thai Union Europe and 26% held by Thai Union France Holding 2 SAS) Manufacturer and exporter of canned sardines and mackerel Portugal Pioneer Food Cannery Limited Manufacturer of Ghana (100% held by Etablissements Paul canned tuna Paulet SAS) Mareblu SRL (100% held by Thai Union Europe, 2016: 74% held by Thai Union Europe and 26% held by Thai Union France Holding 2 SAS) Importer and distributor of canned seafood Italy UK Seafood Investments Limited Holding company United (100% held by Thai Union Europe) Kingdom Indian Ocean Tuna Limited Manufacturer and Seychelles (60% held by Thai Union Europe) exporter of canned tuna 25