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 June 2017, and the consolidated and separate statements of income and comprehensive income for the three-month and six-month periods then ended and the related consolidated and separate statements of changes in equity and cash flows for the six-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 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 7 August 2017

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

3 Statement of Financial Position As at 30 June 2017 Separate (Unaudited) (Audited) (Unaudited) (Audited) 30 June 31 December 30 June 31 December Notes Thousand Thousand Thousand Thousand Assets Current assets Cash and cash equivalents 7 610, ,122 21,649 13,404 Trade and other receivables, net 8, 23 18,076,803 16,412,244 3,893,687 3,962,669 Short-term loans to related parties 23 33,150-6,497,713 7,331,581 Inventories, net 9 40,417,978 39,626,191 4,933,487 4,769,795 Current portion of derivative contracts receivables 640, , , ,351 Other current assets 1,030,969 1,176, , ,439 Assets of disposal group classified as held-for-sale ,892 1,032, Total current assets 61,274,221 60,078,524 15,784,937 16,794,239 Non-current assets Restricted deposits with financial institutions 1,417 1, Investments in subsidiaries ,429,715 27,851,936 Investments in associates 11 10,438,584 10,492, , ,293 Investments in joint ventures , , Other long-term investments 13 3,051,317 2,655,007 3,027,853 2,627,527 Long-term loans to related parties 23 11,723,583 12,361,592 38,768,889 40,263,658 Long-term loans to third parties 7,853 10, Property, plant and equipment, net 12 23,814,127 23,280,566 4,346,659 4,254,411 Intangible assets, net 12 16,547,677 15,935, , ,554 Goodwill 14 14,026,186 13,646, Derivative contracts receivables, net 1,591,394 1,713,481 1,591,394 1,713,482 Deferred tax assets 761, ,258 18,296 17,709 Other non-current assets 1,023, , , ,963 Total non-current assets 83,611,798 82,286,939 78,233,251 78,493,533 Total assets 144,886, ,365,463 94,018,188 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 June 2017 Separate (Unaudited) (Audited) (Unaudited) (Audited) 30 June 31 December 30 June 31 December Notes Thousand Thousand Thousand Thousand Liabilities and equity Current liabilities Bank overdrafts and short-term loans from financial institutions 15 13,372,157 36,905,656 3,453,099 28,638,929 Trade and other payables 16, 23 19,894,378 17,428,944 4,583,431 3,512,941 Short-term loans from related parties 23 79,400 77, , ,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 92,931 82,308 7,767 12,241 Income tax payable 196, , Current portion of derivative contracts payables 539, , , ,595 Other current liabilities 256, ,045 33,989 83,722 Liabilities of disposal group classified as held-for-sale 10 79,906 89, Total current liabilities 35,249,731 59,241,853 9,445,868 36,543,130 Non-current liabilities Long-term loans from financial institutions, net 17 14,772, ,325 14,720, ,941 Debentures, net 18 36,261,036 24,417,199 36,261,036 24,417,199 Finance lease liabilities, net , ,439 16,156 20,080 Employee benefit obligations 2,025,201 1,916, , ,667 Deferred tax liabilities 4,662,213 4,499, Derivative contracts payables, net 276,295 1,037, ,295 1,037,913 Other non-current liabilities 2,879,775 2,644, , ,216 Total non-current liabilities 61,036,673 35,687,674 52,372,282 27,225,016 Total liabilities 96,286,404 94,929,527 61,818,150 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 June 2017 Separate (Unaudited) (Audited) (Unaudited) (Audited) 30 June 31 December 30 June 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 27,938,610 26,528,035 10,556,023 10,275,437 Other components of equity (4,622,695) (4,575,938) 353,437 (46,389) Equity attributable to owners of the parent 44,606,493 43,242,675 32,200,038 31,519,626 Non-controlling interests 3,993,122 4,193, Total equity 48,599,615 47,435,936 32,200,038 31,519,626 Total liabilities and equity 144,886, ,365,463 94,018,188 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 June 2017 Separate 30 June 30 June 30 June 30 June Notes Thousand Thousand Thousand Thousand Sales 23 34,817,599 34,401,212 5,113,792 4,894,338 Cost of sales 23 (30,148,629) (28,937,983) (4,647,156) (4,472,123) Gross profit 4,668,970 5,463, , ,215 Gain on exchange rates 40,053 31, ,449 11,289 Dividend income 23 16,236-1,325, ,178 Other income , , , ,202 Profit before expenses 5,127,495 5,892,759 2,473,552 1,457,884 Selling expenses (1,558,421) (1,725,161) (168,630) (166,990) Administrative expenses (1,484,033) (1,640,992) (387,170) (443,550) Other expenses (11,938) (22,436) (6,441) (26,016) Operating profit 2,073,103 2,504,170 1,911, ,328 Finance costs (563,203) (303,163) (447,876) (236,075) Profit before share of profit from investments in associates and joint ventures 1,509,900 2,201,007 1,463, ,253 Share of profit from investments in associates and joint ventures 123,207 35, Profit before income tax 1,633,107 2,236,499 1,463, ,253 Income tax 20 (22,015) (493,225) (10,181) 12,722 Profit for the period from continuing operations 1,611,092 1,743,274 1,453, ,975 Loss for the period from discontinued operation (80,162) (37,821) - - Profit for the period 1,530,930 1,705,453 1,453, ,975 Profit attributable to: Owners of the parent From continuing operations 1,491,385 1,564,869 1,453, ,975 From discontinued operation (80,162) (37,821) - - 1,411,223 1,527,048 1,453, ,975 Non-controlling interests 119, , Profit for the period 1,530,930 1,705,453 1,453, ,975 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 (0.02) (0.01) - - 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 June 2017 Separate 30 June 30 June 30 June 30 June Thousand Thousand Thousand Thousand Profit for the period 1,530,930 1,705,453 1,453, ,975 Other comprehensive income (expenses): Items that will not be reclassified subsequently to profit or loss - Actuarial gain, net of income tax 12, Decrease in other reserves (3,092) (31,345) - - Total items that will not be reclassified subsequently to profit or loss 9,609 (31,345) - - Items that will be reclassified subsequently to profit or loss - Exchange differences on translation, net of income tax 536,185 (499,947) Change in fair value of availablefor-sale investments, net of income tax 435, ,950 - Total items that will be reclassified subsequently to profit or loss 972,135 (499,946) 435,950 - Other comprehensive income (expenses) for the period, net of income tax 981,744 (531,291) 435,950 - Total comprehensive income for the period 2,512,674 1,174,162 1,889, ,975 Total comprehensive income attributable to: Owners of the parent 2,392,464 1,084,478 1,889, ,975 Non-controlling interests 120,210 89, Total comprehensive income for the period 2,512,674 1,174,162 1,889, ,975 The accompanying notes are an integral part of these consolidated and separate. 6

8 Statement of Income (Unaudited) financial information Separate 30 June 30 June 30 June 30 June Notes Thousand Thousand Thousand Thousand Sales 5, 23 66,244,478 65,610,738 10,365,808 9,128,546 Cost of sales 23 (57,245,981) (55,151,469) (9,459,722) (8,302,339) Gross profit 8,998,497 10,459, , ,207 Gain on exchange rates 629, , ,869 30,562 Dividend income 23 16,236-1,325,288 1,358,257 Other income , ,772 1,097, ,905 Profit before expenses 10,528,864 11,475,084 3,789,734 2,962,931 Selling expenses (3,093,363) (3,389,598) (332,636) (329,412) Administrative expenses (3,397,571) (3,370,813) (825,836) (829,902) Other expenses (10,213) (22,694) (6,159) (25,631) Operating profit 4,027,717 4,691,979 2,625,103 1,777,986 Finance costs (1,060,745) (674,920) (857,417) (453,986) Profit before share of profit from investments in associates and joint ventures 2,966,972 4,017,059 1,767,686 1,324,000 Share of profit from investments in associates and joint ventures ,286 91, Profit before income tax 3,356,258 4,108,987 1,767,686 1,324,000 Income tax 20 (221,070) (843,123) (7,837) 12,646 Profit for the period from continuing operations 3,135,188 3,265,864 1,759,849 1,336,646 Loss for the period from discontinued operation 10 (44,467) (187,297) - - Profit for the period 3,090,721 3,078,567 1,759,849 1,336,646 Profit attributable to: Owners of the parent From continuing operations 2,924,469 2,945,168 1,759,849 1,336,646 From discontinued operation (44,467) (187,297) - - 2,880,002 2,757,871 1,759,849 1,336,646 Non-controlling interests 210, , Profit for the period 3,090,721 3,078,567 1,759,849 1,336,646 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) Separate 30 June 30 June 30 June 30 June Thousand Thousand Thousand Thousand Profit for the period 3,090,721 3,078,567 1,759,849 1,336,646 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 (77,993) 39, Total items that will not be reclassified subsequently to profit or loss (65,292) 39, Items that will be reclassified subsequently to profit or loss - Exchange differences on translation, net of income tax (340,311) (667,451) Change in fair value of availablefor-sale investments, net of income tax 399,830 (342) 399,826 - Total items that will be reclassified subsequently to profit or loss 59,519 (667,793) 399,826 - Other comprehensive income (expenses) for the period, net of income tax (5,773) (628,503) 399,826 - Total comprehensive income for the period 3,084,948 2,450,064 2,159,675 1,336,646 Total comprehensive income attributable to: Owners of the parent 2,877,482 2,207,303 2,159,675 1,336,646 Non-controlling interests 207, , Total comprehensive income for the period 3,084,948 2,450,064 2,159,675 1,336,646 The accompanying notes are an integral part of these consolidated and separate. 8

10 Statement of Changes in Equity (Unaudited) Retained earnings Attributable to owners of the parent 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 increase in non-controlling interests from change in investment in subsidiary 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 (1,479,263) (1,479,263) (190,272) (1,669,535) Total comprehensive income for the period ,757,871 (589,516) (342) 39,290 - (550,568) 2,207, ,761 2,450,064 Closing balance as at 30 June ,192,954 19,948, ,295 25,587, ,266 (2,232) (1,848,030) (1,156,751) (2,811,747) 44,066,773 4,683,703 48,750,476 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 interest from change in investment in subsidiary (34,401) (34,401) (34,401) (74,026) (108,427) Dividend payment (1,479,263) (1,479,263) (333,579) (1,812,842) Total comprehensive income for the period ,889,838 (334,193) 399,830 (77,993) - (12,356) 2,877, ,466 3,084,948 Closing balance as at 30 June ,192,954 19,948, ,295 27,938,610 (404,492) 351,170 (1,963,393) (2,605,980) (4,622,695) 44,606,493 3,993,122 48,599,615 The accompanying notes are an integral part of these consolidated and separate. 9

11 Statement of Changes in Equity (Unaudited) Separate 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 (1,479,263) - - (1,479,263) Total comprehensive income for the period ,336, ,336,646 Closing balance as at 30 June ,192,954 19,948, ,295 9,775, ,065,646 Opening balance as at 1 January ,192,954 19,948, ,295 10,275,437 (46,389) (46,389) 31,519,626 Dividend payment (1,479,263) - - (1,479,263) Total comprehensive income for the period ,759, , ,826 2,159,675 Closing balance as at 30 June ,192,954 19,948, ,295 10,556, , ,437 32,200,038 The accompanying notes are an integral part of these consolidated and separate. 10

12 Statement of Cash Flows (Unaudited) financial Separate information 30 June 30 June 30 June 30 June Notes Thousand Thousand Thousand Thousand Cash flows from operating activities Profit before income tax From continuing operations 3,356,258 4,108,987 1,767,686 1,324,000 From discontinued operation 10 (44,467) (184,966) - - Total 3,311,791 3,924,021 1,767,686 1,324,000 Adjustments for: Depreciation expenses 12 1,238,398 1,308, , ,295 Amortisation expenses , ,370 11,702 5,725 Amortisation of discount/premium from derivative contracts (65,961) (169,595) (51,955) (149,210) (Reversal of) Allowance for doubtful accounts (9,296) (21,900) 3,680 (558) (Reversal of) Allowance for diminution in value of inventories 163,453 (224,838) 8,692 (54,939) Allowance for loss on impairment of assets 12 43,349 29, Employee benefit obligations 134,498 98,628 35,891 33,135 Loss on disposals of assets of disposal group classified as held-for-sale 22, (Gain) loss on disposals and write-offs of property, plant and equipment and intangible assets, net 38,192 (9,886) 6,159 (10,624) Share of profit from investments in associates and joint ventures 11 (389,286) (91,928) - - (Gain) loss on exchange rates 260, , ,557 (8,819) Dividend income (16,236) - (1,325,288) (1,358,257) Finance costs 1,060, , , ,986 Interest income (540,637) (96,206) (846,674) (502,726) 5,369,685 6,000, ,414 (78,992) Changes in operating assets and liabilities - (Increase) Decrease in trade and other receivables (1,206,520) (1,304,874) 598, ,491 - (Increase) Decrease in inventories (1,313,964) 706,564 (172,384) (657,391) - (Increase) Decrease in other current assets 196, ,953 39,614 (8,693) - (Increase) Decrease in other non-current assets (149,187) (195,185) 19,438 (594) - Increase (Decrease) in trade and other payables 2,028,534 1,716, , ,712 - Increase (Decrease) in other current liabilities (220,840) (90,521) (17,099) (51,276) - Increase (Decrease) in other non-current liabilities 15,304 (24,547) 21,754 10,985 - Cash paid for employee benefit obligations (14,365) (40,857) (554) (1,642) Cash flows receipts from operations 4,704,700 6,922,936 2,059, ,600 - Income tax paid (429,270) (935,998) (4,607) (7,408) Net cash receipts from operating activities 4,275,430 5,986,938 2,054, ,192 The accompanying notes are an integral part of these consolidated and separate. 11

13 Statement of Cash Flows (Unaudited) (continued) financial information Separate 30 June 30 June 30 June 30 June Notes Thousand Thousand Thousand Thousand 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 495, Purchases of property, plant and equipment (2,025,255) (1,506,587) (315,137) (245,023) Proceeds from disposals of property, plant and equipment 31,025 35,538 15,584 12,133 Purchases of intangible assets (389,369) (62,509) (355,224) (39,374) Proceeds from disposals of intangible assets Cash payment for business combinations, net of cash acquired - (1,794,095) - (1,806) Cash payment for investments in subsidiaries (577,779) - Cash payment for investments in associates 11 (26,947) (384) - (384) Cash payment for investments in joint ventures 11 (44,744) (137,700) - - Cash payment for other long-term investments (708) (1,112) (500) (1,000) Proceeds from sale of other long-term investments 4,268 6, Net cash receipts from (payments for) short-term loans to related parties (33,150) 30, ,452 (518,184) Cash receipts from long-term loans to related parties ,214,478 13,648,103 Cash payments from long-term loans to related parties (43,540) (14,992,346) Cash receipts from long-term loans to third parties 2,618 2, Cash payments from long-term loans to third parties (80) (199) - - Interest received 62,715 16, , ,270 Dividend received 84,011 36,347 1,309,052 1,358,257 Net cash receipts (payments) from investing activities (1,839,737) (3,365,680) 2,215,783 (466,354) The accompanying notes are an integral part of these consolidated and separate. 12

14 Statement of Cash Flows (Unaudited) (continued) financial information Separate 30 June 30 June 30 June 30 June Notes Thousand Thousand Thousand Thousand Cash flows from financing activities Net cash payments for short-term loans from financial institutions (23,391,268) (3,709,834) (25,194,939) (1,696,914) Net cash receipts from (payments for) short-term loans from related parties 2,400 3,600 (520,490) (8,850) Cash receipts from long-term loans from financial institutions 17 14,269,054 5,252 14,269,000 - Repayments for long-term loans from financial institutions 17 (308,274) (344,611) (225,000) (225,000) Deferred financial costs paid 17 (83,429) - (83,429) - Cash receipts from debenture issuance 18 12,000,000 2,642,843 12,000,000 2,642,843 Repayments for debenture issuance 18 (2,500,000) - (2,500,000) - Debenture issuance costs paid 18 (22,144) (8,469) (22,144) (8,469) Interest paid (551,806) (458,354) (486,735) (341,528) Other finance costs paid (145,762) (108,613) (11,069) (3,765) Cash paid for finance lease liabilities (51,514) (30,292) (8,397) (7,386) Cash paid for non-controlling interests from change in investment in subsidiary 11 (108,427) (231) - - Receipts from non-controlling interests for additional share capital in a subsidiary Dividends paid to the owners of the parent (1,479,067) (1,474,769) (1,479,067) (1,474,769) Dividends paid to non-controlling interests (332,412) (190,350) - - Net cash payments for financing activities (2,702,649) (3,673,444) (4,262,270) (1,123,838) Net increase (decrease) in cash and cash equivalents (266,956) (1,052,186) 8,234 (1,017,000) 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 7,885 (34,518) 11 (14,378) Cash and cash equivalents - closing balance 7 471,788 1,503,602 21,649 1,060,796 Non-cash items Payable balances from purchase of property, plant and equipment (included in trade and other payables) , , ,066 36,569 The accompanying notes are an integral part of these consolidated and separate. 13

15 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 11 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 7 August 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. 14

16 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 Separate 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. 15

17 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. 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

18 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 six-month periods ended 30 June 2017 and For the six-month period ended 30 June 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 30,979,945 26,318,262 8,946,271 66,244,478-66,244,478 Inter-segment 5,768,386 3,133,833 2,165,817 11,068,036 (11,068,036) - Total revenue 36,748,331 29,452,095 11,112,088 77,312,514 (11,068,036) 66,244,478 Results Segment gross profit 4,811,780 2,236,967 1,861,616 8,910,363 88,134 8,998,497 Selling and administrative expenses (6,490,934) Other expenses (10,213) Operating profit (not including other income) 2,497,350 Finance costs (1,060,745) Share of profits from investments in associates and joint ventures 389,286 Other income 1,530,367 Profit before income tax 3,356,258 Income tax (221,070) Profit for the period from continuing operations 3,135,188 Loss for the period from discontinued operation (44,467) Profit for the period 3,090,721 17

19 5 Segment information (continued) The following tables present revenue and gross profit information regarding the Group s operating segments for the six-month periods ended 30 June 2017 and 2016 (continued). For the six-month period ended 30 June 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 32,299,640 25,536,303 7,774,795 65,610,738-65,610,738 Inter-segment 4,661,151 1,894,471 2,596,176 9,151,798 (9,151,798) - Total revenue 36,960,791 27,430,774 10,370,971 74,762,536 (9,151,798) 65,610,738 Results Segment gross profit 6,026,159 2,234,734 1,934,182 10,195, ,194 10,459,269 Selling and administrative expenses (6,760,411) Other expenses (22,694) Operating profit (not including other income) 3,676,164 Finance costs (674,920) Share of profits from investments in associates and joint ventures 91,928 Other income 1,015,815 Profit before income tax 4,108,987 Income tax (843,123) Profit for the period from continuing operations 3,265,864 Loss for the period from discontinued operation (187,297) Profit for the period 3,078,567 Geographic information Revenue from external customers is based on locations of the customers. financial information (Unaudited) For the six-month periods ended 30 June Thousand Thousand Revenue from external customers Thailand 5,351,218 5,203,179 The United States of America 25,338,115 25,367,502 Japan 4,217,574 4,000,262 European countries 21,706,912 22,409,836 Others 9,630,659 8,629,959 Total revenue from external customers 66,244,478 65,610,738 Major customer During the six-month periods ended 30 June 2017 and 2016, the Group had no major customer with revenues of 10 percent or more of the Group s revenue. 18

20 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 financial assets and liabilities that are measured at fair value at 30 June 2017 and 31 December (Unaudited) As at 30 June 2017 Level 1 Level 2 Level 3 Total Thousand Thousand Thousand Thousand Asset measured at fair value Available-for-sale financial assets Equity instrument 3,046, ,046,223 (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 instrument 2,650, ,650,641 Above investment is presented as other long-term investments in the statement of financial position (Note 13). There were no transfers between such levels during the period. 7 Cash and cash equivalents Separate (Unaudited) (Audited) (Unaudited) (Audited) As at 30 June 31 December 30 June 31 December Thousand Thousand Thousand Thousand Cash on hands 4,870 6, Current and savings accounts 604, ,127 20,797 12,517 Fixed deposits due within 3 months , Total cash and cash equivalents 610, ,122 21,649 13,404 Less Bank overdrafts (Note 15) (138,443) (245,263) - - Total cash and cash equivalents per statement of cash flows 471, ,859 21,649 13,404 19

21 8 Trade and other receivables, net Separate (Unaudited) (Audited) (Unaudited) (Audited) As at 30 June 31 December 30 June 31 December Thousand Thousand Thousand Thousand Trade receivables 16,135,310 15,231,996 2,822,750 3,417,501 Less Allowance for doubtful accounts (420,656) (433,857) (33,917) (30,237) Trade receivables, net 15,714,654 14,798,139 2,788,833 3,387,264 Accrued interest income - related parties (Note 23) 685, , , ,514 Accrued interest income - third parties 155, ,700 - Other receivables - related parties 40,332 53,905 79, ,992 Other receivables - third parties 468, ,130 47,791 - Prepaid expenses 604, ,223 73,207 52,508 Tax coupon 66,903 89,312 56,908 78,196 Accrued income 24,768 75,334 14,341 16,670 Advance payments 315, ,945 32,221 77,525 Total trade and other receivables, net 18,076,803 16,412,244 3,893,687 3,962,669 Outstanding trade receivables can be analysed as follows: Separate (Unaudited) (Audited) (Unaudited) (Audited) As at 30 June 31 December 30 June 31 December Thousand Thousand Thousand Thousand Trade receivables - third parties Not yet due 12,538,008 11,274, , ,214 Up to 3 months 2,766,442 2,922, , , months 102, ,541 10,116 64, months 90,992 61,011 8,827 2,794 Over 12 months 381, ,399 29,503 27,576 15,878,597 15,013,623 1,166,469 1,462,964 Less Allowance for doubtful accounts (420,656) (433,857) (33,917) (30,237) 15,457,941 14,579,766 1,132,552 1,432,727 Trade receivables - related parties (Note 23) Not yet due 114,729 67,143 1,226,673 1,610,120 Up to 3 months 141, , , , months 22-65,252 4, , ,373 1,656,281 1,954,537 Trade receivables, net 15,714,654 14,798,139 2,788,833 3,387,264 20

22 9 Inventories, net Separate (Unaudited) (Audited) (Unaudited) (Audited) As at 30 June 31 December 30 June 31 December Thousand Thousand Thousand Thousand Finished goods, net 22,354,784 23,806,750 2,005,775 1,867,952 Work in process, net 405, ,393 5,726 - Raw materials and consumables, net 10,638,289 9,633,381 2,000,333 1,979,711 Ingredients and packaging, net 1,850,187 1,534, , ,802 Goods in transit 4,409,842 3,594, , ,629 Spare parts, net 758, ,252 24,881 22,701 Total inventories, net 40,417,978 39,626,191 4,933,487 4,769,795 As at 30 June 2017, the Group and the Company have provided allowance for net realisable value in the interim consolidated and separate in the amount of million and million, respectively (as at 31 December 2016: million and million, respectively). As at 30 June 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). 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 June 2017 and as at 31 December 2016 are mainly vessels, equipment, inventory, other assets and other liabilities. Financial information relating to fishing fleet business operations for the six-month periods ended 30 June 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. 21

23 10 Non-current assets and liabilities classified as held-for-sale and discontinued operation (continued) 10.1 Statement of cash flows for discontinued operation The results of cash flows for the six-month periods ended 30 June 2017 and 2016 are as follow: financial information (Unaudited) For the six-month periods ended 30 June Thousand Thousand Cash flows from operating activities 87,247 (4,573) Cash flows from investing activities 446,967 (7,762) Cash flows from financing activities (552,069) 16,887 Net cash flows (17,855) 4, Assets of disposal group classified as held-for-sale (Unaudited) (Audited) As at 30 June 31 December Thousand Thousand Property, plant and equipment 369, ,910 Inventory 56,579 59,216 Others 38,588 41,335 Total assets of disposal group classified as held-for-sale 464,892 1,032, Liabilities of disposal group classified as held-for-sale (Unaudited) (Audited) As at 30 June 31 December Thousand Thousand Trade and other payables 72,174 73,658 Provisions 7,732 14,745 Others Total liabilities of disposal group classified as held-for-sale 79,906 89,119 In accordance with TFRS 5, the assets and liabilities held-for-sale were written down to their fair value less cost to sell of million for the six-month period ended 30 June The fair value is measured based on expected sales price for the vessels and spare parts. 22

24 10 Non-current assets and liabilities classified as held-for-sale and discontinued operation (continued) 10.4 Cumulative income or expenses recognised in other comprehensive income relating to disposal group classified as held-for-sale (Unaudited) (Audited) As at 30 June 31 December Thousand Thousand Exchange differences on translation 2,017 (866) 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 six-month periods ended 30 June Thousand Thousand Sales 45,919 86,655 Gross profit (loss) 385 (182,912) Selling and administrative expenses (44,582) - Operating loss (44,197) (182,912) Finance costs - (1,533) Other expenses (270) (521) Loss before income tax (44,467) (184,966) Income tax - (2,331) Loss after income tax (44,467) (187,297) 23

25 11 Investments in subsidiaries, associates and joint ventures Separate (Unaudited) (Audited) (Unaudited) (Audited) As at 30 June 31 December 30 June 31 December Thousand Thousand Thousand Thousand Subsidiaries ,429,715 27,851,936 Associates 10,438,584 10,492, , ,293 Joint ventures 625, , Total investments in subsidiaries, associates and joint ventures 11,063,757 11,118,781 29,265,008 28,687,229 The amounts recognised in the statement of income are as follows: Separate For the six-month periods ended (Unaudited) (Unaudited) (Unaudited) (Unaudited) 30 June Thousand Thousand Thousand Thousand Associates 432, , Joint ventures (43,591) (28,932) - - Total share of profit from investments in associates and joint ventures 389,286 91,

26 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 June 2017 Million 31 December 2016 Million 30 June 2017 % 31 December 2016 % 30 June 2017 Thousand 31 December 2016 Thousand 30 June 2017 Thousand 31 December 2016 Thousand Thai Union Manufacturing Manufacturer and exporter Thailand ,648,407 2,648, , ,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 , ,000 73, ,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 ,095 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 28,429,715 27,851,936 1,276,052 3,035,005 25

27 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: Separate Thousand Opening net book value (audited) 27,851,936 Additions, net 577,779 Closing net book value (unaudited) 28,429,715 In the first quarter of 2017, Thai Union China Co., Ltd. called for paid-up capital of totalling USD 2.1 million or equivalent to million. On 28 April 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 June 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 (95.04% held by Songkla distributor of canned Canning Plc.) tuna and seafood Thai Union France Holding 2 SAS Holding company France TUFH) (100% held by Thai Union European Seafood 1 S.A.) 26

28 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 June December 2016 % % Held by subsidiaries (continued) Thai Union Europe Headquarters activity France (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 Manufacturer and Portugal (74% held by Thai Union Europe exporter of canned and 26% held by Thai Union sardines and France Holding 2 SAS) mackerel Pioneer Food Cannery Limited Manufacturer of Ghana (100% held by Etablissements Paul canned tuna Paulet SAS) Mareblu SRL Importer and Italy (74% held by Thai Union Europe distributor of and 26% held by Thai Union canned seafood France Holding 2 SAS) 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 John West Foods Limited (100% held by UK Seafood Investments Limited) Importer and distributor of canned seafood United Kingdom Irish Seafood Investments Limited (100% held by Thai Union Europe) Importer and distributor of canned seafood Ireland