PTT Global Chemical Public Company Limited and its Subsidiaries Interim financial statements For the three-month and six-month periods ended 30 June 2014 and Independent auditor’s report on review of interim financial information
Independent Auditor’s Report on Review of Interim Financial Information To the Board of Directors of PTT Global Chemical Public Company Limited
I have reviewed the accompanying consolidated and separate statements of financial position of PTT Global Chemical Public Company Limited and its subsidiaries, and of PTT Global Chemical Public Company Limited, respectively, as at 30 June 2014; the consolidated and separate statements of income, comprehensive income for the three-month and six-month periods ended 30 June 2014, the consolidated and separate statements of changes in equity and cash flows for the six-month period ended 30 June 2014; and condensed notes (“interim financial information”). Management is responsible for the preparation and presentation of this interim financial information in accordance with Thai Accounting Standard 34, “Interim Financial Reporting”. My responsibility is to express a conclusion on this interim financial information based on my review. Scope of Review I conducted my review in accordance with the Thai Standard on Review Engagements 2410, “Review of Interim Financial Information Performed by the Independent Auditor of the Entity”. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Thai Standards on Auditing and consequently does not enable me to obtain assurance that I would become aware of all significant matters that might be identified in an audit. Accordingly, I do not express an audit opinion. Conclusion Based on my review, nothing has come to my attention that causes me to believe that the accompanying interim financial information is not prepared, in all material respects, in accordance with Thai Accounting Standard 34, “Interim Financial Reporting”.
Emphasis of Matters Without qualifying my conclusion, I draw attention to notes 5 to the interim financial statements. Finalisation of the valuation of net assets of a foreign entity which the Company acquired on 23 December 2013 was completed in the 2nd quarter of 2014. The consolidated statement of financial position as at 31 December 2013 which are included as comparative information, have been adjusted as described in notes 5.
(Vairoj Jindamaneepitak) Certified Public Accountant Registration No. 3565 KPMG Phoomchai Audit Ltd. Bangkok 6 August 2014
2
PTT Global Chemical Public Company Limited and its Subsidiaries Statement of financial position
Consolidated financial statements
Assets
Note
Separate financial statements
30 June
31 December
30 June
31 December
2014
2013
2014
2013
(Unaudited)
(Restated)
(Unaudited) (in Baht)
Current assets Cash and cash equivalents Current investments Trade accounts receivable and notes receivable Other receivables
7,8 7
Inventories
8,993,783,511
18,582,200,903
5,240,887,072
10,703,289,676
23,257,178,897
25,801,559,665
22,184,580,000
24,675,521,000
52,752,843,166
58,387,949,936
43,028,156,305
49,711,065,844
2,859,557,980
3,391,441,083
2,636,168,718
2,633,140,574
53,963,149,559
50,239,792,354
43,485,848,526
39,937,558,590
Short-term loans to related parties
7
-
-
743,742,604
842,000,000
Current portion of long-term loans to related parties
7
-
-
1,974,226,540
37,000,000
Receivable from Oil Fuel Fund Value-added tax receivable Derivatives Other current assets Non-current assets held for sale
521,930,895
811,183,718
521,930,895
811,183,718
1,896,495,721
1,943,315,306
1,223,927,167
1,364,182,553
177,097,018
50,976,856
161,146,194
6,042,175
1,252,106,653
1,306,872,744
1,142,300,639
1,030,742,383
53,122,110
-
Total current assets
145,727,265,510
160,515,292,565
Non-current assets
145,115,373,248
160,891,396,938
-
-
122,342,914,660
131,751,726,513
Investments in subsidiaries
7,9
-
-
42,636,328,524
42,071,912,790
Investments in jointly-controlled entity
7,9
-
-
210,000,000
210,000,000
Investments in associates
7,10
9,717,499,660
9,717,499,660
Other long-term investments Long-term loans to related parties
Goodwill Land leasehold right Intangible assets Derivatives Deferred tax assets Other non-current assets
12,548,692,958
701,960,175
707,616,819
7
Long-term loans to other parties Property, plant and equipment
12,972,092,546
11
-
-
290,738,392
290,738,392
3,166,905,634
4,853,012,537
832,310,212
773,175,328
-
230,394,495,297
230,933,988,430
179,014,235,829
179,596,460,697
10,985,056,502
10,981,702,179
7,009,726,812
7,009,726,812
1,010,456,486
1,048,302,498
859,609,522
898,209,202
10,663,650,536
10,437,604,810
6,399,562,714
5,908,268,546
68,876,694
33,526,953
65,052,453
13,050,856
641,405,234
698,845,539
-
-
-
3,804,647,966
4,031,567,241
2,312,403,520
2,496,539,579
Total non-current assets
272,074,951,648
272,195,022,755
251,682,063,060
253,065,419,071
Total assets
417,802,217,158
432,710,315,320
374,024,977,720
384,817,145,584
The accompanying notes are an integral part of these financial statements. 3
PTT Global Chemical Public Company Limited and its Subsidiaries Statement of financial position
Consolidated financial statements
Liabilities and equity
Note
Separate financial statements
30 June
31 December
30 June
31 December
2014
2013
2014
2013
(Unaudited)
(Restated)
(Unaudited) (in Baht)
Current liabilities Bank overdraft and short-term loans from financial institutions
4,699,956,823
4,598,869,012
-
-
Trade accounts payable
7,12
44,099,807,737
45,654,942,312
39,397,654,049
39,635,191,981
Other payables
7,13
7,430,985,727
8,219,243,556
4,073,068,698
5,007,294,848
Payables to contractors
7
3,378,441,712
3,125,859,492
3,247,713,359
2,950,373,658
Short-term loans from related parties
7
2,220,761,747
1,237,545,524
Short-term loans from other party
-
-
30,775,995
-
-
-
Current portion of long-term loans from financial institutions
5,280,044,076
4,757,633,027
3,343,043,170
3,168,819,861
16,554,965
16,870,258
9,773,143,988
15,064,682,465
9,773,143,988
15,064,682,465
Income tax payable
630,881,507
1,282,210,879
544,953,797
1,201,628,777
Derivatives
324,054,169
208,445,704
292,106,015
122,079,742
44,343,768
118,025,794
44,343,768
118,025,794
44,884,178
175,471,474
75,753,874,645
83,222,253,973
62,936,788,591
68,554,112,241
41,022,553,781
40,740,927,062
31,292,802,179
32,183,186,439
Current portion of long-term loans from other party Current portion of debentures
Short-term provision
3
Other current liabilities Total current liabilities
-
-
-
48,469,591
Non-current liabilities Long-term loans from financial institutions Long-term loans from other parties
2,182,622,827
2,165,632,086
42,666,739,232
52,878,120,050
42,666,739,232
52,878,120,050
Deferred tax liabilities
4,095,217,939
4,216,410,660
2,847,482,135
2,941,838,307
Employee benefit obligations
3,334,301,653
3,267,899,913
1,417,142,773
1,353,469,815
126,895,527
129,574,958
126,895,528
129,574,958
Debentures
Derivatives Long-term provisions Other non-current liabilities Total non-current liabilities Total liabilities
6
841,777,873
-
-
-
-
-
730,139,193
731,688,528
182,589,752
190,958,872
95,000,248,025
104,130,253,257
78,533,651,599
89,677,148,441
170,754,122,670
187,352,507,230
141,470,440,190
158,231,260,682
The accompanying notes are an integral part of these financial statements. 4
PTT Global Chemical Public Company Limited and its Subsidiaries Statement of financial position
Consolidated financial statements
Liabilities and equity
Separate financial statements
30 June
31 December
30 June
31 December
2014
2013
2014
2013
(Unaudited)
(Restated)
(Unaudited) (in Baht)
Equity Share capital Authorised share capital
45,088,491,170
45,088,491,170
45,088,491,170
45,088,491,170
Issued and paid-up share capital
45,088,491,170
45,088,491,170
45,088,491,170
45,088,491,170
Share premium
36,978,396,897
36,978,396,897
36,978,396,897
36,978,396,897
Surplus on business combination
11,745,983,030
11,745,983,030
13,121,061,611
13,121,061,611
4,512,930,269
4,512,930,269
4,512,930,269
4,512,930,269
807,802,564
807,802,564
807,802,564
807,802,564
12,446,994,126
12,446,994,126
12,446,994,126
12,446,994,126
129,629,453,171
125,510,274,149
119,598,860,893
113,630,208,265
1,262,873,273
1,411,870,394
242,472,924,500
238,502,742,599
4,575,169,988
6,855,065,491
Total equity
247,048,094,488
245,357,808,090
232,554,537,530
226,585,884,902
Total liabilities and equity
417,802,217,158
432,710,315,320
374,024,977,720
384,817,145,584
Retained earnings Appropriated Legal reserve Loan repayment reserve Projects expansion reserve Unappropriated Other components of equity Equity attributable to owners of the Company Non-controlling interests
(Mr. Bowon Vongsinudom) Chief Executive Officer
The accompanying notes are an integral part of these financial statements. 5
232,554,537,530 -
226,585,884,902 -
PTT Global Chemical Public Company Limited and its Subsidiaries Statement of income (Unaudited)
Note
Consolidated financial statements
Separate financial statements
Three-month period ended 30 June
Three-month period ended 30 June
2014
2013
2014
2013
(in Baht)
Revenue from sale of goods and services
7
153,281,964,878
112,738,656,538
135,736,743,675
90,053,505,486
Cost of sale of goods and services
7
(142,429,055,348)
(103,211,971,847)
(127,109,443,565)
(86,173,665,588)
Gross profit
10,852,909,530
9,526,684,691
8,627,300,110
3,879,839,898
Investment income
7
205,908,865
405,040,472
2,074,680,375
24,762,102,582
Other income
7
368,309,947
510,392,485
339,562,496
368,879,730
Selling expenses
7
(672,671,084)
(702,330,454)
(143,495,274)
(115,293,122)
Administrative expenses
7
(2,660,342,974)
(2,475,436,062)
(1,698,525,095)
(1,671,960,983)
Provisions for business restructuring
6
(2,239,153,040)
Net derivative gain (loss)
484,225,324
Net foreign exchange loss Finance costs
7
Share of profit (loss) of associates
10
Profit before income tax expense Reversal of income tax (expense) Profit for the period
(528,614,061)
468,988,344
(341,895,809)
(1,679,456)
(1,778,494,727)
(18,599,989)
(1,831,075,938)
(1,302,679,391)
(1,524,761,312)
(1,128,294,223)
(1,407,116,730)
289,745,890 5,324,573,611
15
-
(599,216,470)
(21,923,198) 3,410,557,834 508,949,965
8,521,616,744 (494,919,386)
23,643,479,628 335,709,159
4,725,357,141
3,919,507,799
8,026,697,358
23,979,188,787
6,085,175,677
4,171,636,113
8,026,697,358
23,979,188,787
Profit (loss) attributable to: Owners of the Company Non-controlling interests
6
Profit for the period
Basic earnings per share
(1,359,818,536)
(252,128,314)
-
-
4,725,357,141
3,919,507,799
8,026,697,358
23,979,188,787
1.35
0.93
1.78
5.32
16
The accompanying notes are an integral part of these financial statements. 6
PTT Global Chemical Public Company Limited and its Subsidiaries Statement of comprehensive income (Unaudited)
Consolidated financial statements
Separate financial statements
Three-month period ended 30 June
Three-month period ended 30 June
2014
2013
2014
2013
(in Baht)
Profit for the period
4,725,357,141
3,919,507,799
12,613,527
1,320,615,900
8,026,697,358
23,979,188,787
Other comprehensive income (loss) Foreign currency translation differences for foreign operations
-
-
-
-
-
-
Effective portion of changes in fair value of cash flow hedges
(11,580,366)
-
Other comprehensive income (loss) for the period, net of income tax
1,033,161
1,320,615,900
4,726,390,302
5,240,123,699
8,026,697,358
23,979,188,787
Owners of the Company
6,121,969,885
5,109,382,526
8,026,697,358
23,979,188,787
Non-controlling interests
(1,395,579,583)
Total comprehensive income for the period
Total comprehensive income (loss) attributable to:
Total comprehensive income for the period
4,726,390,302
The accompanying notes are an integral part of these financial statements. 7
130,741,173 5,240,123,699
8,026,697,358
23,979,188,787
PTT Global Chemical Public Company Limited and its Subsidiaries Statement of income (Unaudited)
Note
Consolidated financial statements
Separate financial statements
Six-month period ended 30 June
Six-month period ended 30 June
2014
2013
2014
2013
(in Baht)
Revenue from sale of goods and services
7
300,647,723,584
254,956,749,276
265,173,673,991
207,968,467,943
Cost of sale of goods and services
7
(280,074,751,571)
(230,635,617,364)
(248,903,139,930)
(196,332,334,750)
20,572,972,013
24,321,131,912
16,270,534,061
11,636,133,193
Gross profit
Investment income
7
496,610,192
795,231,352
2,500,555,187
25,376,797,937
Other income
7
687,277,002
925,396,331
753,848,978
636,406,153
Selling expenses
7
(1,316,125,532)
(1,363,412,385)
(290,063,306)
(239,021,619)
Administrative expenses
7
(5,452,984,195)
(4,704,625,408)
(3,267,625,968)
(3,025,219,476)
Provisions for business restructuring
6
(2,239,153,040)
Net derivative gain (loss) Net foreign exchange gain (loss) Finance costs
7
Share of profit (loss) of associates
10
Profit before income tax expense Income tax expense Profit for the period
-
-
1,053,036,239
(50,069,702)
969,841,163
15,782,397
224,878,065
(123,977,927)
245,854,566
(225,511,681)
(2,734,545,438) 530,714,580 11,822,679,886
15
-
(971,658,694)
(3,030,108,264) (39,554,815) 16,730,011,094 (710,959,292)
(2,386,064,560) 14,796,880,121 (804,870,209)
(2,788,766,670) 31,386,600,234 (756,925,617)
10,851,021,192
16,019,051,802
13,992,009,912
30,629,674,617
12,380,752,705
16,246,624,172
13,992,009,912
30,629,674,617
Profit (loss) attributable to: Owners of the Company Non-controlling interests
6
Profit for the period
Basic earnings per share
(1,529,731,513)
(227,572,370)
10,851,021,192
16,019,051,802
2.75
3.60
16
The accompanying notes are an integral part of these financial statements. 8
13,992,009,912
3.10
30,629,674,617
6.79
PTT Global Chemical Public Company Limited and its Subsidiaries Statement of comprehensive income (Unaudited)
Consolidated financial statements
Separate financial statements
Six-month period ended 30 June
Six-month period ended 30 June
2014
2013
2014
2013
13,992,009,912
30,629,674,617
(in Baht)
Profit for the period
10,851,021,192
16,019,051,802
Other comprehensive income (loss) Foreign currency translation differences for foreign operations
(164,373,975)
(69,621,010)
-
-
-
-
-
-
Effective portion of changes in fair value of cash flow hedges
(63,173,056)
-
Other comprehensive income (loss) for the period, net of income tax Total comprehensive income for the period
(227,547,031)
(69,621,010)
10,623,474,161
15,949,430,792
13,992,009,912
30,629,674,617
12,231,755,584
16,238,331,494
13,992,009,912
30,629,674,617
Total comprehensive income (loss) attributable to: Owners of the Company Non-controlling interests Total comprehensive income for the period
(1,608,281,423) 10,623,474,161
The accompanying notes are an integral part of these financial statements. 9
(288,900,702) 15,949,430,792
13,992,009,912
30,629,674,617
PTT Global Chemical Public Company Limited and its Subsidiaries Statement of changes in equity (Unaudited)
Consolidated financial statements Retained earnings
Issued and
Note
Other components of equity Total
Equity
Surplus on
Loans
Projects
Currency
Change in
other
attributable to
Non-
repayment
expansion
translation
investment
components
owners of
controlling
Total
reserve
reserve
changes
holding
of equity
the Company
interests
equity
341,818,224
10,998,638
352,816,862
222,432,615,365
paid-up
Share
business
share capital
premium
combination
Legal reserve
Unappropriated (in Baht)
Six-month period ended 30 June 2013 Balance at 1 January 2013
45,088,491,170
36,978,396,897
12,086,007,975
4,512,930,269
807,802,564
12,446,994,126
110,159,175,502
15,611,979,173
238,044,594,538
Transactions with owners, recorded directly in equity Contributions by and distributions to owners of the Company Dividends to owners of the Company
17
-
-
-
-
-
-
(11,044,485,073)
-
-
-
(11,044,485,073)
(791,580,000)
(11,836,065,073)
-
-
-
-
-
-
(11,044,485,073)
-
-
-
(11,044,485,073)
(791,580,000)
(11,836,065,073)
Recognition of non-controlling interests in investment in subsidiaries
-
-
-
-
-
-
Increase in investment holding in subsidiary
-
-
-
-
-
-
Total contributions by and distributions to owners of the Company
Changes in ownership interests in subsidiaries
9
90,657,854
-
(10,998,638)
Disposal of investment in subsidiary
-
-
(340,024,945)
-
-
-
340,024,945
-
Total changes in ownership interests in subsidiaries
-
-
(340,024,945)
-
-
-
430,682,799
-
(10,998,638)
(10,998,638)
-
-
(340,024,945)
-
-
-
(10,613,802,274)
-
(10,998,638)
(10,998,638)
Profit (loss)
-
-
-
-
-
-
16,246,624,172
Other comprehensive income (loss)
-
-
-
-
-
-
-
-
-
-
-
-
Total transactions with owners, recorded directly in equity
-
(10,998,638) -
79,659,216 79,659,216 (10,964,825,857)
99,929,684 (4,723,692,015)
99,929,684 (4,644,032,799)
(3,302,410,369)
(3,302,410,369)
(7,926,172,700)
(7,846,513,484)
(8,717,752,700)
(19,682,578,557)
Comprehensive income (loss) for the period
Total comprehensive income (loss) for the period
Balance at 30 June 2013
45,088,491,170
36,978,396,897
11,745,983,030
4,512,930,269
807,802,564
12,446,994,126
The accompanying notes are an integral part of these financial statements. 10
16,246,624,172
115,791,997,400
-
-
-
(8,292,678)
-
(8,292,678)
(8,292,678)
-
(8,292,678)
333,525,546
-
333,525,546
16,246,624,172 (8,292,678) 16,238,331,494
227,706,121,002
(227,572,370) (61,328,332) (288,900,702)
6,605,325,771
16,019,051,802 (69,621,010) 15,949,430,792
234,311,446,773
PTT Global Chemical Public Company Limited and its Subsidiaries Statement of changes in equity (Unaudited)
Consolidated financial statements Retained earnings
Issued and
Note
Other components of equity
Surplus on
Loans
Projects
Currency
repayment
expansion
translation
reserve
reserve
changes
paid-up
Share
business
share capital
premium
combination
Legal reserve
Unappropriated
Total
Equity
other
attributable to
Non-
Cash flow
components
owners of
controlling
Total
hedges
of equity
the Company
interests
equity
47,794,681
1,411,870,394
238,502,742,599
(in Baht) Six-month period ended 30 June 2014 Balance at 1 January 2014 Effect from fair value recognition though business acquisition
45,088,491,170 5
Balance at 1 January 2014 (Restated)
45,088,491,170
36,978,396,897 36,978,396,897
11,745,983,030 11,745,983,030
4,512,930,269 4,512,930,269
807,802,564
12,446,994,126
807,802,564
12,446,994,126
125,510,274,149 125,510,274,149
1,364,075,713 1,364,075,713
47,794,681
1,411,870,394
238,502,742,599
6,730,525,176
245,233,267,775
124,540,315
124,540,315
6,855,065,491
245,357,808,090
Transactions with owners, recorded directly in equity Contributions by and distributions to owners of the Company Dividends to owners of the Company
17
-
-
-
-
-
-
(8,023,357,284)
-
-
-
(8,023,357,284)
(556,093,946)
(8,579,451,230)
-
-
-
-
-
-
(8,023,357,284)
-
-
-
(8,023,357,284)
(556,093,946)
(8,579,451,230)
Total contributions by and distributions to owners of the Company
Changes in ownership interests in subsidiaries Recognition of non-controlling interests in investment in subsidiary Increase in investment holding in subsidiary
9
Total changes in ownership interests in subsidiaries
-
-
-
-
-
-
-
-
-
(4,953,060)
(4,953,060)
-
-
-
-
-
-
(238,216,399)
-
-
-
-
(238,216,399)
-
(110,567,074)
(348,783,473)
-
-
-
-
-
-
(238,216,399)
-
-
-
(238,216,399)
(115,520,134)
(353,736,533)
-
-
-
-
-
-
(8,261,573,683)
-
-
-
(8,261,573,683)
(671,614,080)
(8,933,187,763)
12,380,752,705
-
12,380,752,705
Total transactions with owners, recorded directly in equity
Comprehensive income (loss) for the period Profit (loss)
-
-
-
-
-
-
Other comprehensive income (loss)
-
-
-
-
-
-
-
-
-
-
-
-
Total comprehensive income (loss) for the period
Balance at 30 June 2014
45,088,491,170
36,978,396,897
11,745,983,030
4,512,930,269
807,802,564
12,446,994,126
The accompanying notes are an integral part of these financial statements. 11
12,380,752,705
129,629,453,171
-
-
(85,824,065)
(63,173,056)
(148,997,121)
(85,824,065)
(63,173,056)
(148,997,121)
1,278,251,648
(15,378,375)
1,262,873,273
(148,997,121)
(1,529,731,513) (78,549,910)
10,851,021,192 (227,547,031)
12,231,755,584
(1,608,281,423)
10,623,474,161
242,472,924,500
4,575,169,988
247,048,094,488
PTT Global Chemical Public Company Limited and its Subsidiaries Statement of changes in equity (Unaudited)
Separate financial statements Retained earnings Issued and
Note
Surplus on
paid-up
Share
business
share capital
premium
combination
Legal reserve
Loans
Projects
repayment
expansion
reserve
reserve
Total Unappropriated
equity
(in Baht) Six-month period ended 30 June 2013 Balance at 1 January 2013
45,088,491,170
36,978,396,897
13,505,861,611
4,512,930,269
807,802,564
12,446,994,126
86,954,575,227
200,295,051,864
Transactions with owners, recorded directly in equity Contributions by and distributions to owners of the Company Dividends to owners of the Company
17
-
-
-
-
-
-
(11,044,485,073)
(11,044,485,073)
-
-
-
-
-
-
(11,044,485,073)
(11,044,485,073)
Disposal of investment in subsidiary
-
-
(384,800,000)
-
-
-
384,800,000
-
Total change in ownership interests in subsidiary
-
-
(384,800,000)
-
-
-
384,800,000
-
-
-
(384,800,000)
-
-
-
(10,659,685,073)
(11,044,485,073)
Profit
-
-
-
-
-
-
30,629,674,617
30,629,674,617
Other comprehensive income
-
-
-
-
-
-
-
-
-
-
-
-
Total contributions by and distributions to owners of the Company
Change in ownership interests in subsidiary
Total transactions with owners, recorded directly in equity
Comprehensive income for the period
Total comprehensive income for the period
Balance at 30 June 2013
45,088,491,170
36,978,396,897
13,121,061,611
The accompanying notes are an integral part of these financial statements. 12
4,512,930,269
807,802,564
12,446,994,126
-
-
30,629,674,617
30,629,674,617
106,924,564,771
219,880,241,408
PTT Global Chemical Public Company Limited and its Subsidiaries Statement of changes in equity (Unaudited)
Separate financial statements Retained earnings Issued and
Note
Surplus on
paid-up
Share
business
share capital
premium
combination
Legal reserve
Loans
Projects
repayment
expansion
reserve
reserve
Total Unappropriated
equity
113,630,208,265
226,585,884,902
(in Baht) Six-month period ended 30 June 2014 Balance at 1 January 2014
45,088,491,170
36,978,396,897
13,121,061,611
4,512,930,269
807,802,564
12,446,994,126
Transactions with owners, recorded directly in equity Contributions by and distributions to owners of the Company Dividends to owners of the Company Total contributions by and distributions to owners of the Company
17
-
-
-
-
-
-
(8,023,357,284)
(8,023,357,284)
-
-
-
-
-
-
(8,023,357,284)
(8,023,357,284)
13,992,009,912
13,992,009,912
Comprehensive income for the period Profit
-
-
-
-
-
-
Other comprehensive income
-
-
-
-
-
-
-
-
-
-
-
-
Total comprehensive income for the period
Balance at 30 June 2014
45,088,491,170
36,978,396,897
13,121,061,611
The accompanying notes are an integral part of these financial statements. 13
4,512,930,269
807,802,564
12,446,994,126
-
-
13,992,009,912
13,992,009,912
119,598,860,893
232,554,537,530
PTT Global Chemical Public Company Limited and its Subsidiaries Statement of cash flows (Unaudited) Consolidated financial statements
Separate financial statements
Six-month period ended 30 June
Six-month period ended 30 June
2014
2013
2014
2013
(in Baht) Cash flows from operating activities Profit for the period
10,851,021,192
16,019,051,802
13,992,009,912
30,629,674,617
8,661,743,802
8,173,978,438
6,049,251,182
4,704,992,982
(2,500,555,187)
(25,376,797,937)
2,386,064,560
2,788,766,670
Adjustments for Depreciation and amortisation Investment income Finance costs
(496,610,192)
3,030,108,264
Unrealised loss on derivative Unrealised (gain) loss on exchange rate
(795,231,352)
2,734,545,438 10,934,702
622,070,145
76,278,793
514,004,274
(76,874,565)
307,492,663
(105,198,320)
370,601,674
(893,656)
20,958,119
(Reversal of) allowance for doubtful accounts
-
-
Loss from written-off of assets
59,803,996
50,329,764
11,116,116
5,266
(Reversal of) allowance for loss on decline in value of inventories
(3,200,548)
31,514,502
(22,346,146)
-
Gain from disposal of investment in subsidiary
-
Loss from capital reduction in subsidiary
-
Provisions for business restructuring
2,239,153,040
Allowance for impairment of assets
(29,373,661) -
-
33,206,938
105,379,995
16,330,524
(Gain) loss on disposal of property, plant and equipment
25,314,071
(23,455,008)
11,527,428
Short-term provision
44,343,768
Provision for employee benefit
160,738,609
202,291,070
44,343,768
262,802,982 614,759 (19,000,450) -
78,793,121
68,301,156
(6,754,724)
(6,852,446)
Realised deferred pipeline income and equipment and other income Share of (gain) loss of associates, net of income tax expense
(5,947,182) (530,714,580)
Change in investment holding in subsidiary
9,282,646
Gain from change in investment holding in associate Income tax expense
-
(6,027,066) 39,554,815 (51,157,017)
-
-
-
-
-
-
971,658,694
710,959,292
804,870,209
756,925,617
24,687,506,173
28,408,444,765
20,835,731,236
14,694,039,164
5,798,979,073
16,150,787,941
6,994,257,266
16,197,029,105
Changes in operating assets and liabilities Trade accounts receivable and notes receivable Other receivables Inventories
(124,865,170) (3,847,792,306)
Value-added tax receivable
370,778,004 (3,546,193,832)
(531,994,654) (3,553,390,430)
328,763,796 (3,290,321,996)
47,219,836
(159,837,436)
140,255,387
138,711,195
323,046,398
537,008,191
159,431,616
532,630,118
(369,787,123)
(839,385,538)
(132,516,591)
(628,204,699)
Trade accounts payable
(1,209,881,861)
(5,602,916,372)
99,192,132
Other payables
(1,344,885,897)
(1,120,819,650)
(839,517,703)
Other current assets Other non-current assets
Other current liabilities Employee benefit obligations
(8,185,158,432) (920,534,711)
99,005,643
71,744,809
(31,769,079)
3,288,332
(55,640,383)
(40,990,468)
(15,120,163)
(8,560,067)
Other non-current liabilities
70,773,381
63,078,399
17,813,656
5,195,703
Cash generated from operating activities
24,073,677,764
34,291,698,813
23,142,372,673
18,866,877,508
Income tax paid
(1,675,066,198)
(1,518,563,704)
(1,553,006,366)
(1,324,094,704)
Net cash from operating activities
22,398,611,566
32,773,135,109
21,589,366,307
17,542,782,804
The accompanying notes are an integral part of these financial statements. 14
PTT Global Chemical Public Company Limited and its Subsidiaries Statement of cash flows (Unaudited) Consolidated financial statements
Separate financial statements
Six-month period ended 30 June
Six-month period ended 30 June
2014
2013
2014
2013
(in Baht) Cash flows from investing activities Interest received
576,032,779
611,742,389
710,553,379
974,820,447
85,863,798
258,821,618
1,525,263,798
5,977,346,618
(4,943,006,885)
(4,874,494,538)
Dividends received Purchase of property, plant and equipment
(8,533,973,965)
Sale of property, plant and equipment (Increase) decrease in current investments
11,925,906 2,325,978,328
(7,417,522,676) 79,768,329 (9,214,236,500)
Increase in other long-term investment
-
Proceeds from short-term loans to related parties
-
-
Proceeds from long-term loans to related parties
-
Increase in short-term loans to related parties
-
Increase in long-term loans to related parties Increase in long-term loans to other parties Purchase of intangible assets
(35,621,080) (414,234,596)
Proceeds from capital distribution in subsidiary
-
Cash outflow for investment in subsidiary and jointly-controlled entity
-
(70,565,170)
2,852,051 2,275,138,313 -
25,243,882 (9,252,936,500) -
280,000,000
400,000,000
-
361,000,000
3,291,000,000
-
(181,930,176)
(100,000,000)
(658,719,387)
(660,158,636)
(363,265,195) (438,211,322)
-
(313,315,221) -
(103,967,589) 787,161
(4,786,974,062)
(564,415,734)
(4,790,611,530)
(5,984,028,830)
(21,340,442,589)
(1,506,579,862)
(9,112,970,685)
Finance costs paid
(2,906,702,353)
(3,167,197,541)
(2,647,323,524)
(2,922,518,487)
Dividend paid
(8,369,731,229)
(11,355,234,936)
(8,023,357,284)
(11,044,485,073)
(116,854,553)
(93,180,878)
(61,347,348)
Net cash used in investing activities Cash flows from financing activities
Finance lease payments Proceeds from bank overdraft and short-term loans from financial institutions
(133,128,112) 2,604,298,473
Proceeds from short-term loans from related parties
-
Proceeds from short-term loans from other party Proceeds from long-term loans from financial institutions
30,875,378
1,609,501,240 -
9,957,386,671
7,000,000,000
54,534,641
4,956,927
Proceeds from long-term loans from other party Repayment of short-term loans from related party
-
-
Repayment of bank overdraft and short-term loans from financial institutions
(2,475,887,922)
(1,354,656,123)
Repayment of long-term loans from financial institutions
(9,154,192,884)
(10,123,677,167)
(16,299,334)
(11,745,916)
Repayment of long-term loans from other party Repayment of debenture Purchase of treasury shares in subsidiary Net cash used in financing activities
(15,000,000,000)
-
(358,066,118)
-
(25,766,912,789)
(17,514,908,069)
1,125,000,000 7,768,750,000 (141,783,777) (8,492,241,667) (15,000,000,000) (25,504,137,130)
1,874,128,390 7,000,000,000 (9,583,577,167) (14,737,799,685)
Net decrease in cash and cash equivalents
(9,352,330,053)
(6,082,215,549)
(5,421,350,685)
(6,307,987,566)
Cash and cash equivalents at 1 January
18,582,200,903
31,269,311,119
10,703,289,676
19,002,725,615
Effect of exchange rate changes on balances held in foreign currencies at end of period
(236,087,339)
(316,968,177)
(41,051,919)
7,218,251
Decrease in cash and cash equivalents from disposal of investment in subsidiary Cash and cash equivalents at 30 June
8,993,783,511
The accompanying notes are an integral part of these financial statements. 15
(3,139,166,099) 21,730,961,294
5,240,887,072
12,701,956,300
PTT Global Chemical Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2014 (Unaudited) Note
Contents
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
General information Basis of preparation of the interim financial statements Impact of oil spill incident Presentation of financial statements Acquisition of business Business restructuring of Vencorex group Related parties Trade accounts receivable and notes receivable Investments in subsidiaries and jointly-controlled entity Investments in associates Property, plant and equipment Trade accounts payable Other payables Segment information Income tax expense Basic earnings per share Dividends Commitments with non-related parties Litigation Events after the reporting period
16
PTT Global Chemical Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2014 (Unaudited) These notes form an integral part of the interim financial statements. The interim financial statements issued for Thai regulatory reporting purposes are prepared in the Thai language. These English language financial statements have been prepared from the Thai language statutory financial statements, and were approved and authorised for issue by the Board of Directors on 6 August 2014.
1
General information PTT Global Chemical Public Company Limited, “PTTGC”, arose from the amalgamation between PTT Chemical Public Company Limited, “PTTCH”, and PTT Aromatics and Refining Public Company Limited, “PTTAR”, which was registered on 19 October 2011 in accordance with the Public Company Limited Act, B.E. 2535 (1992). The Board of Governors of the SET approved the listing of the Company on the day that the Registrar accepted the registration of the amalgamation on 19 October 2011. The Company is a company in the PTT Public Company Limited (“PTT”) group of companies. PTT is incorporated in Thailand and is the major shareholder of the Company, holding 48.89% of the Company’s issued and paid-up share capital. PTT Global Chemical Public Company Limited, the “Company”, is incorporated in Thailand and has its registered offices as follows: Head Office
: 555/1, Energy Complex, Building A, 14th - 18th Floor, Vibhavadi-Rangsit Road, Chatuchak, Bangkok, Thailand
Branch 1 (Rayong office Branch)
: 59, Radniyom Road, Tambon Noenphra, Amphoe Mueang Rayong, Rayong, Thailand
Branch 2 (Olefin I-1 Road Branch)
: 14, I-1 Road, Tambon Map Ta Phut, Amphoe Mueang Rayong, Rayong, Thailand
Branch 3 (Olefin I-2 Road Branch)
: 9, I-4 Road, Tambon Map Ta Phut, Amphoe Mueang Rayong, Rayong, Thailand
Branch 4 (Aromatics 1 Branch)
: 4, I-2 Road, Tambon Map Ta Phut, Amphoe Mueang Rayong, Rayong, Thailand
Branch 5 (Aromatics 2 Branch)
: 98/9, Rayong 3191 Road, Tambon Map Ta Phut, Amphoe Mueang Rayong, Rayong, Thailand
Branch 6 (Refining Branch)
: 8, I-8 Road, Tambon Map Ta Phut, Amphoe Mueang Rayong, Rayong, Thailand
Branch 7 (Jetty and Buffer Tank Farm Branch)
: 19, Rong Pui Road, Tambon Map Ta Phut, Amphoe Mueang Rayong, Rayong, Thailand 17
PTT Global Chemical Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2014 (Unaudited) Branch 8 (Aromatics reserve Branch)
: 11, I-4 Road, Tambon Map Ta Phut, Amphoe Mueang Rayong, Rayong, Thailand
Branch 9 (Lab Service Center Branch)
: 24/9, Pakorn Songkrao-Rat Road, Tambon Map Ta Phut, Amphoe Mueang Rayong, Rayong, Thailand
Branch 10 (Applications & Quality Assurance Center Branch)
: 123, Suntowers Building B, 40th Floor, Soi Chaoey Phuang, VibhavadiRangsit Road, Chomphon, Chatuchak , Bangkok, Thailand.
Branch 11 (Olefin 3 Branch)
: 8, Phadang Road, Tambon Map Ta Phut, Amphoe Mueang Rayong, Rayong, Thailand
Branch 12 (Polyethylene Branch)
: 8, Map Ta Phut Industrial Estate, I-10 Road, Tambon Map Ta Phut, Amphoe Mueang Rayong, Rayong, Thailand
The principal businesses of the Company are production and distribution of ethylene, propylene polyethylene and biochemical products. By-products are mixed C4, pyrolysis gasoline, cracker bottom and tail gas and refining and provision of integrated petroleum products and production and distribution of aromatics products with plans to proceed with the production of aromatic products. Minor activities are production and distribution of electricity, water, steam and other utilities. In addition, the Company also operates production support facilities such as jetty and buffer tank farm services for liquid chemical, oil and gas. Details of the Company’s subsidiaries and jointly - controlled entities as at 30 June 2014 and 31 December 2013 were as follows:
Name of the entity
Type of business
Direct subsidiaries Bangkok Polyethylene Plc. Manufacturing and (in process of liquidation) distributing petrochemical products
Country of incorporation
Ownership interest (%) 30 31 June December 2014 2013
Thailand
100
100
Bio Creation Co., Ltd.
Manufacturing and distributing, health and nutrition products
Thailand
100
100
Bio Spectrum Co., Ltd.
Manufacturing and distributing biochemical products
Thailand
100
100
TOC Glycol Co., Ltd.
Manufacturing and distributing petrochemical products
Thailand
100
100
18
PTT Global Chemical Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2014 (Unaudited)
Name of the entity
Type of business
Direct subsidiaries (continue) Thai Oleochemicals Manufacturing and Co., Ltd. distributing biochemical products
Country of incorporation
Ownership interest (%) 30 31 June December 2014 2013
Thailand
100
100
Thai Tank Terminal Limited
Service for the storage and handling of liquid chemicals, oil and gas
Thailand
51
51
Thai Styrenics Co., Ltd.
Manufacturing and distributing petrochemical products
Thailand
100
100
PTT Polyethylene Co., Ltd. (in process of liquidation)
Manufacturing and distributing petrochemical products
Thailand
100
100
PTT Maintenance and Engineering Co., Ltd.
Maintenance factory and engineering services
Thailand
60
60
Auria BioChemicals Co., Ltd. (54% Direct interest and 39% Indirect interest)
Research and development of bio-based chemicals
Thailand
93
87
NPC Safety and Environmental Service Co., Ltd.
Safety and environmental services
Thailand
100
100
PTT Chemical International Pte. Ltd.
Holding and operating international business
Singapore
100
100
PTT Phenol Co., Ltd.
Manufacturing and distributing petrochemical products
Thailand
100
100
Manufacturing and distributing biochemical products
Thailand
100
100
Services rendering to the Group
Thailand
100
100
Indirect subsidiaries Thai Fatty Alcohols Co., Ltd. PTT Chemical International (Asia Pacific ROH) Ltd.
19
PTT Global Chemical Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2014 (Unaudited)
Name of the entity
Type of business
Country of incorporation
Ownership interest (%) 30 31 June December 2014 2013
Indirect subsidiaries (continue) Myriant Corporation Research and development of bio-based chemicals
United States of America
84
72
PTTGC International (USA) Inc.
Holding and operating international business
United States of America
100
100
PTTGC International (Netherlands) B.V.
Holding and operating international business
Netherlands
100
100
Vencorex Holding
Manufacturing and distributing chemical specialties
France
51
51
Thailand
50
50
Malaysia
50
50
Jointly-controlled entity Thai Ethoxylate Co., Ltd.
Manufacturing and distributing petrochemical products
Indirect jointly-controlled entities Emery Oleochemicals (M) Manufacturing and Sdn. Bhd. distributing biochemical products Emery Specialty Chemicals Sdn. Bhd.
Manufacturing and distributing chemical specialties
Malaysia
50
50
NatureWorks LLC
Manufacturing and distributing bioplastic products
United States of America
50
50
2
Basis of preparation of the interim financial statements
(a)
Statement of compliance The interim financial statements are prepared on a condensed basis in accordance with Thai Accounting Standard (TAS) No. 34 (revised 2012) Interim Financial Reporting; guidelines promulgated by the Federation of Accounting Professions (FAP); and applicable rules and regulations of the Thai Securities and Exchange Commission.
20
PTT Global Chemical Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2014 (Unaudited) The interim financial statements are prepared to provide an update on the financial statements for the year ended 31 December 2013. They do not include all of the financial information required for full annual financial statements but focus on new activities, events and circumstances to avoid repetition of information previously reported. Accordingly, these interim financial statements should be read in conjunction with the financial statements of the Company and its subsidiaries for the year ended 31 December 2013. The accounting policies and methods of computation applied in these interim financial statements are consistent with those applied in the financial statements for the year ended 31 December 2013 except that the Group/Company has adopted all the new and revised TFRS that are effective for annual periods beginning on or after 1 January 2014. The adoption of these new and revised TFRS did not have any material effect on the accounting policies, methods of computation, financial performance or position of the Group or the Company. (b)
Functional and presentation currency The interim financial statements are presented in Thai Baht, which is the Company’s functional currency. All financial information presented in Thai Baht has been rounded in the notes to the financial statements to the nearest million unless otherwise stated.
(c)
Use of estimates and judgements The preparation of interim financial statements in conformity with TFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. In preparing these interim financial statements, the significant judgements made by management in applying the Group’s/Company’s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the financial statements for the year ended 31 December 2013.
3
Impact of oil spill incident On 27 July 2013, leakage in the flexible hose was found at Single point Mooring near Map Ta Phut seaport while discharging crude oil from a vessel to the Refinery. The leakage resulted in oil spilling into the sea. Remediation efforts were carried out by the Company, government authorities and private sector to clean up the oil slick. Currently, the oil slick has been eliminated. The Company also has established several short, medium and long term rehabilitation plans to help the environment and assist the local communities affected. Although the provision recognised is currently the most reliable estimate of expenditures required to settle certain present obligations there might be additional future expenditures. The Company will recognise liabilities for these obligations when they meet the relevant criteria and can be reliably measured. As at 30 June 2014, the management and insurance company are in the process of negotiation of the additional reimbursement claim covered by insurance of the Company. During July 2014, the number of people filed a lawsuit against the Company as described in note 20.
21
PTT Global Chemical Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2014 (Unaudited) 4
Presentation of financial statements From 1 January 2014, the Group has started to present all items of recognized income and expense in the statement of income from single-step to multiple-step in order to clearly present the details of financial performance in the statement of income. However, this change is only impacts presentation aspects and has no impact on reported profit or earnings per share.
5
Acquisition of business Myriant Corporation, United States of America TFRS required Management to make preliminary assessment of the fair values of the assets, liabilities and contingent liabilities specified at the acquisition date. The Group hired an independent appraiser to determine the fair value of assets and liabilities acquired during the measurement period, which must not exceed one year from the acquisition date to reflect new information obtained about facts and circumstances that existed as of the acquisition date. Finalisation of the valuation of net assets of Myriant Corporation which the Company acquired on 23 December 2013 was completed in the 2nd quarter of 2014. The following summarises the major classes of consideration transferred, and the recognised amounts of assets acquired and liabilities assumed at the acquisition date: Book value Cash and cash equivalents 220 Inventories 25 Accounts receivable 389 Property, plant and equipment 2,540 Intangible assests Long term loan to other party 673 Trade accounts payable (82) Other payables (389) Long term loan from related party (2,660) Long term loan from other party (1,582) Deferred tax liabilities Other assets/(liabilities), net (207) Net identifiable assets and liabilities (1,073) Less: non-controlling interests Net assets acquired Goodwill Less: Fair value of the Group’s interest in Myriant prior to business combination as of 23 December 2013 Total consideration Cash acquired Net consideration transferred - net
Fair value adjustments (in million Baht) 1 1,343 985 28 (825) 1,532
Fair value 220 26 389 3,883 985 673 (82) (389) (2,660) (1,554) (825) (207) 459 (128) 331 741 (854) 218 (220) (2)
The consolidated statement of financial position as at 31 December 2013 compared in these interim financial statements has been restated to reflect new information obtained about facts and circumstances that existed as of the acquisition date.
22
PTT Global Chemical Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2014 (Unaudited) On 2 January 2014, Myriant had purchased shares from the existing shareholders. As a result, the percentage of shareholding in Myriant increased from 72.21% to 84.18% as described in note 9.
6
Business restructuring of Vencorex Group During the 2nd quarter of 2014, Vencorex Group (“Vencorex”) which is incorporated in France has undertaken a business restructuring to improve the production unit of TDI (Toluene Diisocyanate) in France to HDI (Hexamethylene Diisocyanate) which is higher value product from 2016 onward. As a result of the restructuring, Vencorex recognised impairment charges and expenses relating to a provision totalling EUR 50.2 million or Baht 2,239 million of which attributable to owners of the Company 51% amounting to Baht 1,142 million. The business restructuring is aligned with the Company’s strategy to develop TDI technology and manufacturing processes in Asia. The impairment charges and expenses relating to the restructuring provision recognised in the consolidated statement of income for the three-month and six-month periods ended 30 June 2014 were as follows: Consolidated financial statements Note Impairment charges Property, plant and equipment Intangible assets Inventories Expenses relating to provisions Redundancy costs Cost of dismantling and restoring the site Total provisions for business restructuring
(in million Baht)
11
629 217 2,239
Attributable to owners of the Company Attributable to non-controlling interests Total provisions for business restructuring
7
1,181 101 111
1,142 1,097 2,239
Related parties For the purposes of these financial statements, parties are considered to be related to the Group/Company if the Group/Company has the ability, directly or indirectly, to control or joint control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Group/Company and the party are subject to common control or common significant influence. Related parties may be individuals or other entities. Relationship with key management and other related parties were as follows: Name of entities
PTT Plc.
Country of incorporation / nationality
Nature of relationships
Thailand
Major shareholder, some common directors and management and the Company’s director as a management
23
PTT Global Chemical Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2014 (Unaudited) Name of entities
Country of incorporation / nationality
Nature of relationships
TOC Glycol Co., Ltd.
Thailand
Subsidiary, 100% shareholding and the Company’s management as a director
Thai Tank Terminal Limited
Thailand
Subsidiary, 51% shareholding, some common directors and the Company’s management as a director
Thai Styrenics Co., Ltd.
Thailand
Subsidiary, 100% shareholding and the Company’s management as a director
Thai Oleochemicals Co., Ltd.
Thailand
Subsidiary, 100% shareholding and the Company’s management as a director
Bangkok Polyethylene Plc. (in process of liquidation)
Thailand
Subsidiary, 100% shareholding
Bio Creation Co., Ltd.
Thailand
Subsidiary, 100% shareholding and the Company’s management as a director
Bio Spectrum Co., Ltd.
Thailand
Subsidiary, 100% shareholding
PTT Polyethylene Co., Ltd. (in process of liquidation)
Thailand
Subsidiary, 100% shareholding
PTT Phenol Co., Ltd.
Thailand
Subsidiary, 100% shareholding and the Company’s management as a director
PTT Maintenance and Engineering Co., Ltd.
Thailand
Subsidiary, 60% shareholding and the Company’s management as a director
Auria BioChemicals Co., Ltd.
Thailand
Subsidiary, 54% shareholding by the Company and 46% shareholding by a subsidiary of the Company’s subsidiary
NPC Safety and Environmental Service Co., Ltd.
Thailand
Subsidiary, 100% shareholding and the Company’s management as a director
PTT Chemical International Pte. Ltd.
Singapore
Subsidiary, 100% shareholding, some common directors and the Company’s management as a director
Thai Fatty Alcohols Co., Ltd.
Thailand
Subsidiary of the Company’s subsidiary, 100% shareholding by the Company’s subsidiary and the Company’s management as a director
24
PTT Global Chemical Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2014 (Unaudited) Name of entities
PTT Chemical International (Asia Pacific ROH) Ltd.
Country of incorporation / nationality Thailand
Nature of relationships
Subsidiary of the Company’s subsidiary, 100% shareholding by the Company’s subsidiary, some common directors and the Company’s management as a director
Myriant Corporation
United States of America
Subsidiary of the Company’s subsidiary, 84% shareholding by the Company’s subsidiary and the Company’s management as a director
PTTGC International (Netherlands) B.V.
Netherlands
Subsidiary of the Company’s subsidiary, 100% shareholding by the Company’s subsidiary and the Company’s management as a director
PTTGC International (USA) Inc.
United States of America
Subsidiary of the Company’s subsidiary, 100% shareholding by the Company’s subsidiary, some common management and the Company’s management as a director
France
Subsidiary of subsidiary of the Company’s subsidiary, 51% shareholding by subsidiary of the Company’s subsidiary and the Company’s management as a director
Vencorex Holding
Vencorex (Thailand) Co., Ltd.
Thailand
Subsidiary of subsidiary of subsidiary of the Company’s subsidiary, 100% shareholding by subsidiary of subsidiary of the Company’s subsidiary
Thai Ethoxylate Co., Ltd.
Thailand
Jointly - controlled entity, 50% shareholding and the Company’s management as a director
Emery Oleochemicals (M) Sdn. Bhd.
Malaysia
Jointly - controlled entity of the Company’s subsidiary, 50% shareholding by the Company’s subsidiary, some common management and the Company’s management as a director
Emery Specialty Chemicals Sdn. Bhd.
Malaysia
Jointly - controlled entity of the Company’s subsidiary, 50% shareholding by the Company’s subsidiary, some common management and the Company’s management as a director
25
PTT Global Chemical Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2014 (Unaudited) Name of entities
Emeryoleo Specialties (M) Sdn. Bhd.
NatureWorks LLC
Country of incorporation / nationality Malaysia
United States of America
Nature of relationships
Subsidiary of jointly - controlled entity of the Company’s subsidiary, 100% shareholding by jointly - controlled entity of the Company’s subsidiary. Jointly - controlled entity of subsidiary of the Company’s subsidiary, 50% shareholding by subsidiary of the Company’s subsidiary and the Company’s management as a director
NatureWorks Asia Pacific Co., Ltd.
Thailand
Global Power Synergy Co., Ltd.
Thailand
Associate, 30% shareholding, some common directors and the Company’s management as a director
Thai Petroleum Pipeline Co., Ltd.
Thailand
Shareholding by the Company’s major shareholder
Dhipaya Insurance Plc.
Thailand
Shareholding by the Company’s major shareholder
Thai Oil Plc.
Thailand
Shareholding by the Company’s major shareholder
Bangchak Petroleum Plc.
Thailand
Shareholding by the Company’s major shareholder
Business Services Alliance Co., Ltd.
Thailand
Shareholding by the Company’s major shareholder, the Company and two Company’s associates, each of 25% shareholding of preferred stock
PTT Natural Gas Distribution Co., Ltd.
Thailand
Shareholding by the Company’s major shareholder
PTT Retail Services Co., Ltd.
Thailand
Subsidiary of the Company’s related party that has shareholding by the Company’s major shareholder
PTT Retail Management Co., Ltd.
Thailand
Subsidiary of the Company’s related party that has shareholding by the Company’s major shareholder
26
Subsidiary of jointly - controlled entity of subsidiary of the Company’s subsidiary, 100% shareholding by jointly - controlled entity of subsidiary of the Company’s subsidiary
PTT Global Chemical Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2014 (Unaudited) Name of entities
Country of incorporation / nationality
Nature of relationships
PTTEP Siam Limited
Thailand
Subsidiary of the Company’s related party that has shareholding by the Company’s major shareholder
PTTEP International Limited
Thailand
Subsidiary of the Company’s related party that has shareholding by the Company’s major shareholder
PTT Exploration and Production Plc.
Thailand
Shareholding by the Company’s major shareholder and some common directors
PTT Tank Terminal Co., Ltd.
Thailand
Shareholding by the Company’s major shareholder
PTT Polymer Marketing Co., Ltd.
Thailand
Associate, 25% shareholding, shareholding by the Company’s major shareholder, some common directors and the Company’s management as a director
PTT Polymer Logistic Co., Ltd.
Thailand
Shareholding by the Company’s major shareholder
PTT Asahi Chemical Co., Ltd.
Thailand
Shareholding by the Company’s major shareholder and some common directors
PTT International Co., Ltd.
Thailand
Shareholding by the Company’s major shareholder
PTT Energy Solution Co., Ltd.
Thailand
Associate, 20% shareholding, shareholding by the Company’s major shareholder and the Company’s management as a director
PTT MCC Biochem Co., Ltd.
Thailand
Jointly - controlled entity of the Company’s major shareholder
PTT LNG Co., Ltd.
Thailand
Shareholding by the Company’s major shareholder
PTT ICT Solutions Co., Ltd.
Thailand
Associate, 40% shareholding and the Company’s management as a director
Rayong Olefins Co., Ltd.
Thailand
Shareholding by the Company’s major shareholder
Vinythai Plc.
Thailand
Associate, 25% shareholding and the Company’s management as a director
Star Petroleum Refining Plc.
Thailand
Shareholding by the Company’s major shareholder and some common directors
27
PTT Global Chemical Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2014 (Unaudited) Name of entities
Country of incorporation / nationality
Nature of relationships
Community Partnership Association
Thailand
Some common directors
Amata Natural Gas Distribution Co., Ltd.
Thailand
Subsidiary of the Company’s related party that has shareholding by the Company’s major shareholder
Eastern Fluid Transport Co., Ltd.
Thailand
Associate, 15% shareholding, 15% shareholding by the Company’s subsidiary and the Company’s management as a director
HMC Polymers Co., Ltd.
Thailand
The Company’s shareholder and the Company’s management as a director
Energy Complex Co., Ltd.
Thailand
Jointly - controlled entity of the Company’s major shareholder and related party
IRPC Plc.
Thailand
Shareholding by the Company’s major shareholder and some common directors
Alliance Petrochemical Investment (Singapore) Pte. Ltd.
Singapore
The Company’s management as a director
PTT Green Energy Pte. Ltd.
Singapore
Shareholding by the Company’s major shareholder
PTT International Trading Pte. Ltd.
Singapore
Shareholding by the Company’s major shareholder
Carigali-PTTEPI Operating Company Sdn. Bhd.
Malaysia
Jointly - controlled entity of subsidiary of the Company’s related party that has shareholding by the Company’s major shareholder
The pricing policies for particular types of transactions are explained further below: Transactions
Pricing policies
Sale of goods Rendering of services Purchase of goods/raw materials/ services Interest on loan
Contract price / Regional market price / World market price Contract price Contract price / Market price Average cost of fund / Contractually agreed rate
28
PTT Global Chemical Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2014 (Unaudited) Significant transactions for the three-month and six-month periods ended 30 June 2014 and 2013 with related parties were as follows:
Three-month period ended 30 June
Consolidated Separate financial statements financial statements 2014 2013 2014 2013 (in million Baht)
Major shareholder Sales of goods or rendering of services Purchases of goods or receiving of services Other income Other expense
56,729 95,533 27 29
37,124 66,927 34 31
55,273 95,192 23 23
35,367 60,759 18 21
Subsidiaries Sales of goods or rendering of services Purchases of goods or receiving of services Interest income Dividend income Other income Interest expense Other expense
-
-
5,779 616 149 1,546 137 16 170
9,998 5,336 213 23,794 141 37 452
Jointly-controlled entity Dividend income Other income Other expense
-
-
114 6 2
133 5 -
Associates Sales of goods or rendering of services Purchases of goods or receiving of services Interest income Dividend income Other income Other expense
23,477 2,382 19 88
16,468 2,307 53 44 93
22,717 1,341 80 19 85
4,474 489 53 256 20 74
Other related parties Sales of goods or rendering of services Purchases of goods or receiving of services Other income Other expense
24,506 11,284 2 144
13,692 7,051 106 149
23,719 11,105 2 99
13,236 6,908 4 82
80
76
43
49
1
2
1
1
-
(52)
-
(52)
44
(2)
Key management personnel Key management personnel compensation Short-term benefits Post-employment benefits and other long term benefits Reversal of short-term benefits for the year 2012 Total key management personnel compensation
81
29
26
PTT Global Chemical Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2014 (Unaudited)
Six-month period ended 30 June
Consolidated Separate financial statements financial statements 2014 2013 2014 2013 (in million Baht)
Major shareholder Sales of goods or rendering of services Purchases of goods or receiving of services Other income Other expense
113,262 205,328 52 46
97,575 164,610 51 81
110,472 204,768 43 33
93,878 152,042 34 57
Subsidiaries Sales of goods or rendering of services Purchases of goods or receiving of services Interest income Dividend income Other income Interest expense Other expense
-
-
9,478 1,092 289 1,546 297 27 344
20,523 9,733 443 23,794 278 71 651
Jointly-controlled entities Dividend income Other income Other expense
-
-
114 11 2
133 9 -
Associates Sales of goods or rendering of services Purchases of goods or receiving of services Interest income Dividend income Other income Other expense
45,221 4,381 38 169
36,042 3,595 95 93 170
43,607 2,605 105 37 164
9,927 969 95 286 38 145
Other related parties Sales of goods or rendering of services Purchases of goods or receiving of services Other income Other expense
47,357 19,875 44 292
32,133 13,546 120 274
45,430 19,426 38 206
31,127 12,701 17 151
231
193
127
106
3
8
2
2
-
(52)
-
(52)
Key management personnel Key management personnel compensation Short-term benefits Post-employment benefits and other long term benefits Reversal of short-term benefits for the year 2012 Total key management personnel compensation
234
30
149
129
56
PTT Global Chemical Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2014 (Unaudited) Balances as at 30 June 2014 and 31 December 2013 with related parties were as follows: Trade accounts receivable - related parties
Consolidated Separate financial statements financial statements 30 31 30 31 June December June December 2014 2013 2014 2013 (in million Baht)
Major shareholder PTT Plc. Subsidiaries TOC Glycol Co., Ltd. Thai Oleochemicals Co., Ltd. Thai Tank Terminal Limited Thai Styrenics Co., Ltd. PTT Phenol Co., Ltd. Associates Global Power Synergy Co., Ltd. PTT Polymer Marketing Co., Ltd. Vinythai Plc. Other related parties PTT Polymer Logistic Co., Ltd. Thai Oil Plc. Star Petroleum Refining Plc. PTTEP Siam Limited PTT Exploration and Production Plc. PTT Asahi Chemical Co., Ltd. IRPC Plc. HMC Polymers Co., Ltd. PTT International Trading Pte. Ltd. Bangchak Petroleum Plc. PTT Tank Terminal Co., Ltd. PTTEP International Limited Total Less allowance for doubtful accounts Net
15,511
16,113
15,060
15,423
-
-
815 17 6 3 1,278
722 17 6 3 2,131
16 6,706 300
7 7,023 992
6,482 296
6,773 986
1 21 714 7 3 173 3,352 474 3,143 911 35 2 31,369 31,369
7 23 755 9 3 103 3,495 470 6,094 58 141 1 35,294 35,294
701 3,342 473 3,143 911 4 32,531 32,531
731 3,449 468 6,094 58 4 36,865 36,865
Consolidated Separate financial statements financial statements 2014 2013 2014 2013 (in million Baht) Bad and doubtful debts expense for the - three-month period ended 30 June - six-month period ended 30 June
-
31
-
-
-
PTT Global Chemical Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2014 (Unaudited) Other receivables - related parties
Consolidated Separate financial statements financial statements 30 31 30 31 June December June December 2014 2013 2014 2013 (in million Baht)
Major shareholder PTT Plc. Subsidiaries Bio Creation Co., Ltd. PTT Chemical International (Asia Pacific ROH) Ltd. PTT Maintenance and Engineering Co., Ltd. TOC Glycol Co., Ltd. Thai Fatty Alcohols Co., Ltd. Thai Oleochemicals Co., Ltd. Thai Tank Terminal Limited NPC Safety and Environmental Service Co., Ltd. PTT Phenol Co., Ltd. Vencorex Holding Vencorex (Thailand) Co., Ltd. Auria BioChemicals Co., Ltd. Myriant Corporation Jointly - controlled entities Thai Ethoxylate Co., Ltd. NatureWorks LLC NatureWorks Asia Pacific Co., Ltd. Emery Oleochemicals (M) Sdn. Bhd. Emeryoleo Specialties (M) Sdn. Bhd. Associates Global Power Synergy Co., Ltd. PTT Polymer Marketing Co., Ltd. PTT ICT Solutions Co., Ltd. PTT Energy Solution Co., Ltd. Eastern Fluid Transport Co., Ltd. Other related parties PTT Tank Terminal Co., Ltd. PTT Asahi Chemical Co., Ltd. PTT International Co., Ltd. PTT Polymer Logistics Co., Ltd. Thai Oil Plc. IRPC Plc. Star Petroleum Refining Plc. PTTEP Siam Limited PTTEP International Limited Dhipaya Insurance Plc. HMC Polymers Co., Ltd. Business Services Alliance Co., Ltd. Bangchak Petroleum Plc. Total Less allowance for doubtful accounts Net 32
364
289
334
259
-
-
1
2
-
-
3 90 26 1 22 582 7 4 5 8 1 323
3 87 28 1 12 362 14 9 5 4 1 54
-
-
4 1 2 1
5 2 1 1 1
197 1 91 20 -
538 4 13 7
5 1 91 20 -
344 4 13 4
175 12 1 1 1 3 40 1 276 4 4 1,191 1,191
19 9 2 1 2 1 2 1 3 690 1 13 1,595 1,595
1 40 236 1,809 1,809
2 1 600 13 1,832 1,832
PTT Global Chemical Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2014 (Unaudited) Consolidated Separate financial statements financial statements 2014 2013 2014 2013 (in million Baht) Bad and doubtful debts expense for the - three-month period ended 30 June - six-month period ended 30 June Loans to related parties
-
Interest rate
-
-
-
Consolidated Separate financial statements financial statements 30 31 30 31 June December June December 2014 2013 2014 2013 (in million Baht)
2014 2013 (% per annum) Short-term loans Subsidiaries Thai Styrenics Co., Ltd. 4.98 5.08-5.11 NPC Safety and Environmental Service Co., Ltd. 4.98 5.08-5.11 Vencorex Holding 6.50 Total Less allowance for doubtful accounts Short-term loans to related parties, net
-
-
530
660
-
-
182 32 744 744
182 842 842
-
-
1,428 446
1,789 454
Total Less current portion due within one year Less allowance for doubtful accounts Long-term loans to related parties, net
-
-
3,267 5,141 (1,974) 3,167
2,647 4,890 (37) 4,853
Summary of loans to related parties Short-term loans Current portion due within one year Long-term loans Total Less allowance for doubtful accounts Total loans to related parties, net
-
-
744 1,974 3,167 5,885 5,885
842 37 4,853 5,732 5,732
Long-term loans Subsidiaries Thai Oleochemicals Co., Ltd. Vencorex Holding Myriant Corporation
4.98 6.00 greater of the U.S. Prime Rate plus margin or fixed rate
5.08-5.11 6.00 greater of the U.S. Prime Rate plus margin or fixed rate
33
PTT Global Chemical Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2014 (Unaudited) Consolidated Separate financial statements financial statements 2014 2013 2014 2013 (in million Baht) Bad and doubtful debts expense for the - three-month period ended 30 June - six-month period ended 30 June
-
-
-
-
Movements during the six-month periods ended 30 June 2014 and 2013 of loans to related parties were as follows: Loans to related parties
Consolidated Separate financial statements financial statements 2014 2013 2014 2013 (in million Baht)
Short-term loans Subsidiaries At 1 January Increase Decrease At 30 June Long-term loans Subsidiaries At 1 January Increase Decrease Effect of change in exchange rates Indirect associate At 1 January Increase Decrease Effect of change in exchange rates Less current portion due within one year At 30 June
-
-
842 182 (280) 744
1,905 100 (400) 1,605
-
-
4,890 659 (361) (47) 5,141
16,991 297 (3,291) 7 14,004
-
1,220 363 33 1,616 1,616
5,141 (1,974) 3,167
1,220 363 33 15,620 (6,527) 9,093
Consolidated Separate financial statements financial statements 30 31 30 31 June December June December 2014 2013 2014 2013 (in million Baht) 42,636 42,072
Investments in subsidiaries (Note 9) Investments in jointly-controlled entity (Note 9) Investments in associates (Note 10)
12,972
34
12,549
210 9,717
210 9,717
PTT Global Chemical Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2014 (Unaudited) Trade accounts payable - related parties
Consolidated Separate financial statements financial statements 30 31 30 31 June December June December 2014 2013 2014 2013 (in million Baht)
Major shareholder PTT Plc. Subsidiaries Thai Oleochemicals Co., Ltd. PTT Phenol Co., Ltd. Associate Global Power Synergy Co., Ltd. Other related parties Rayong Olefins Co., Ltd. Star Petroleum Refining Plc. PTT Asahi Chemical Co., Ltd. IRPC Plc. HMC Polymers Co., Ltd. PTT International Trading Pte. Ltd. Bangchak Petroleum Plc. Total
34,477
33,850
34,415
33,753
-
-
41 6
40 1
479
1,199
10 1,202 2,426 16 38,595
710 2,771 106 51 9 38,640
843 10 1,202 18 2,590 16 39,156
Other payable - related parties
1,987 710 17 2,771 106 51 9 39,501
Consolidated Separate financial statements financial statements 30 31 30 31 June December June December 2014 2013 2014 2013 (in million Baht)
Major shareholder PTT Plc. Subsidiaries PTT Maintenance and Engineering Co., Ltd. TOC Glycol Co., Ltd. Thai Oleochemicals Co., Ltd. Thai Tank Terminal Limited NPC Safety and Environmental Service Co., Ltd. PTT Phenol Co., Ltd. Thai Styrenics Co., Ltd. PTT Chemical International (Asia Pacific ROH) Ltd. Myriant Corporation Vencorex (Thailand) Co., Ltd. Jointly - controlled entities Emery Oleochemicals (M) Sdn. Bhd. NatureWorks LLC Associates Global Power Synergy Co., Ltd. Vinythai Plc. PTT ICT Solutions Co., Ltd. PTT Polymer Marketing Co., Ltd. PTT Energy Solution Co., Ltd. 35
189
171
183
155
-
-
128 18 14 81 33 2 2
155 24 22 107 50 6 2
-
-
38 1 2
37 -
-
-
1 1
-
3 11 93 2 19
3 13 40 1 9
1 10 88 2 19
2 11 37 1 9
PTT Global Chemical Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2014 (Unaudited) Other payable - related parties (continue)
Consolidated Separate financial statements financial statements 30 31 30 31 June December June December 2014 2013 2014 2013 (in million Baht)
Other related parties PTT Polymer Logistics Co., Ltd. Dhipaya Insurance Plc. Thai Oil Plc. IRPC Plc. Energy Complex Co., Ltd. Star Petroleum Refining Plc. Business Services Alliance Co., Ltd. PTT Asahi Chemical Co., Ltd. PTT International Trading Pte. Ltd. Total
221 2 1 11 10 60 1 7 630
Payables to contractor - related parties
219 7 11 2 10 69 7 562
193 1 11 10 49 7 895
189 2 11 2 10 46 7 885
Consolidated Separate financial statements financial statements 30 31 30 31 June December June December 2014 2013 2014 2013 (in million Baht)
Major shareholder PTT Plc. Subsidiary PTT Maintenance and Engineering Co., Ltd. Associate PTT ICT Solutions Co., Ltd. Other related parties Dhipaya Insurance Plc. Business Services Alliance Co., Ltd. Total
36
2
1
-
-
-
-
522
473
28
51
28
51
2 32
15 1 68
550
524
PTT Global Chemical Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2014 (Unaudited) Loans from related parties
Interest rate
2014 2013 (% per annum) Short-term loans Subsidiaries TOC Glycol Co., Ltd. 2.34-3.06 2.71-3.10 Thai Oleochemicals Co., Ltd. 2.34-3.06 Total loans from related parties
Consolidated financial statements 30 June 2014
Separate financial statements
31 30 December June 2013 2014 (in million Baht) -
-
1,096 1,125 2,221
31 December 2013
1,238 1,238
Movements during the six-month periods ended 30 June 2014 and 2013 of loans from related parties were as follows: Consolidated Separate financial statements financial statements 2014 2013 2014 2013 (in million Baht)
Six-month period ended 30 June Subsidiaries At 1 January Increase Decrease At 30 June
-
-
1,238 1,125 (142) 2,221
3,936 1,874 5,810
Significant agreements with related parties As at 30 June 2014, the Company has significant agreements with related parties as follows: Olefins Sales Agreements The Company has 4 Ethylene sales and purchase agreements with a major shareholder and 2 related parties. Selling prices are determined based on prices prevailing in the world market, Ethane price and Ethylene price in the world market. These agreements are for the periods from 7 years to 15 years, commencing from the effective date specified in each agreement. One agreement that is expired in July 2015 is automatically renewable except for advance cancellation not less than 1 year through written notice by each party. Other three agreements will expire in August 2021, in December 2021 and in May 2022. The Company has 2 Propylene sales and purchase agreements with 2 related parties. Selling prices are determined based on Polypropylene and Propylene prices in the world market. These agreements are for the periods from 12 years to 15 years, commencing from the effective date specified in each agreement and expiring in December 2016 and in December 2024. By Product sales and purchase Agreements The Company has a Hydrogen sales and purchase agreement with a related party. Selling price in each agreement is determined based on Natural Gas price for the industry. The agreement is for the period of 15 years, commencing from the date as specified in the agreement and expiring in March 2024. The Company has a Tail Gas sales and purchase agreement with a related party. Selling price is determined based on Natural Gas price for the industry. The agreement is for the period of 15 years, commencing from the date as specified in the agreement and expiring in July 2022. 37
PTT Global Chemical Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2014 (Unaudited) Utilities and Other Services Agreements The Company has 2 Power Supply agreements with 2 related parties. Selling prices in these agreements are determined based on reference price from the Provincial Electricity Authority. These agreements are for the period of 15 years, commencing from the date as specified in each agreement and expiring in December 2016 and in September 2028. The Company has 2 Utilities agreements covering electricity, steam and demineralised water with a related party. These agreements are for the periods from 10 years to 15 years, commencing from the date as specified in each agreement and expiring in December 2016 and December 2021. The Company and certain related parties have various Utilities agreements covering electricity, steam and water with a related party. These agreements are for the periods of 15 years to 20 years, commencing from the date as specified in each agreement and expiring from December 2021 to February 2031. These agreements can be renewed for the period of 5 years with the terms and conditions agreed by both parties. The Company has a Product Transportation agreement with a related party. The agreement is for the period of 3 years, commencing from the date as specified in the agreement and expiring in December 2018. The agreement is automatically renewable for another period of 3 years except for advance cancellation through written notice by each party, not exceeding a total period of 15 years. Feedstock and Fuel Gas sales and purchase Agreements The Company has a LPG sales and purchase agreement with a major shareholder. Selling prices are determined based on the Polypropylene price. The agreement is for the period of 15 years, commencing from the date as specified in the agreement and expiring in May 2021. The Company has a Natural Gas sales and purchase agreement with a major shareholder. Selling prices are determined based on fuel oil prices. The agreement is for the period of 20 years, commencing from the date as specified in the agreement and expiring in December 2018. The agreement is renewable for the period of 4 years, by providing not less than 1 year advance written notice to the counterparty. The Company has 2 Natural Gas sales and purchase agreements with a major shareholder. Selling prices are determined based on gas price as specified in the agreement and on the Thailand Producer Price Index (PPI). These agreements are for the period of 10 years, commencing from the date as specified in each agreement and expiring in May 2018 and December 2018. The Company and a related party have 2 Natural Gas sales and purchase agreements with a major shareholder. Selling price in an agreement based on gas price as specified in the agreement and another agreement is determined based on the Thailand Producer Price Index. These agreements are for the periods from 10 years to 15 years, commencing from the date as specified in each agreement and expiring between November 2019 and July 2023. The Company has a Benzene sales and purchase agreement with a related party. Selling price is determined based on the benzene price as specified in the agreement. The agreement is for the period of 15 years, commencing from the date as specified in the agreements and expiring in March 2024.
38
PTT Global Chemical Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2014 (Unaudited) The Company has a Natural Gas Liquid sales and purchase agreement with a major shareholder. Selling price is determined based on the standard price of Naphtha in the region. The agreement is for the period of 15 years, commencing from the date as specified in the agreement and expiring in May 2021. The agreement is renewable for the period of 5 years with the agreement of both parties. The Company has 2 Ethane, Propane and LPG sales and purchase agreements with a major shareholder. Selling price in an agreement is determined based on the Polyethylene and Polypropylene price and another agreement is determined based on the Polyethylene price. These agreements have been extended and consequently will expire in December 2020. The Company has 2 LPG sales and purchase agreements with a major shareholder. Selling prices are determined based on Polypropylene price. These agreements are for the period of 8 years, commencing from the date as specified in each agreement and expiring in December 2020. The Company has an Ethane sales and purchase agreement with a major shareholder. Selling price is determined based on prices prevailing in the high density Polyethylene price in the world market. The agreement is for the period of 15 years, commencing from the date as specified in the agreement and expiring in January 2025. The agreement is renewable for 5 years, by providing not less than 1 year advance written notice to the counterparty. The Company has an Ethane Rich Gas sales and purchase agreement with a related party. Selling price is determined based on prevailing prices of Polyethylene and Polypropylene in the region. This agreement is for the period of 10 years and will expire in January 2021. From 1 August 2012, the Company has entered into the adjustment of the pricing formula in the sales and purchase agreements of petrochemical natural gas feedstock with a major shareholder. Petroleum Product Offtake Agreement The Company has a Petroleum Product sales and purchase agreement with a major shareholder and another company. For domestic sales, the product price reflects prices prevailing in Thailand for products of a similar quality that are sold in or imported to Thailand. For export sales, the product price reflects the prevailing international spot price for that product. These agreements are for the period of 18 years, commencing from the date as specified in the agreement and expiring in February 2024. The agreement is automatically renewable except for advance cancellation through written notice by each party. Expansion Phase Product Offtake Agreement The Company has an expansion phase product offtake agreement with a major shareholder, whereas a major shareholder agree to purchase 100% of the volume of refined petroleum products produce by reforming and upgrading complexes. As specified in the Product Offtake Agreement, at least 50% of such volume will be sold at a competitive domestic market price and the remainder sold at a competitive export market price or other mutually agreed price. The agreement is for the period of 18 years, commencing from the date as specified in the agreement and expiring in February 2024. The agreement is automatically renewable except for advance cancellation through written notice by each party.
39
PTT Global Chemical Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2014 (Unaudited) Long-term Crude Oil and Other Raw materials Supply Agreements The Company entered into 2 supply agreements for crude oil and other raw materials with a major shareholder, the reference price being based on market price of crude oil and other raw materials. These agreements are for the periods of 15 years and 20 years, and will expire in December 2016 and February 2024. The agreements are automatically renewable except for advance cancellation through written notice by each party. Crack Spread Swap Agreements The Company has entered into crack spread swap agreements with a major shareholder to hedge the Company’s oil refinery margin. Under the agreements the floating amount of the basket refinery margin, (calculated based on the Singapore price of refined petroleum products, Gasoil, Kerosene and Fuel Oil against the price of Dubai crude oil), is swapped for a fixed amount of the basket refinery margin for a fixed quantity per month. Under the agreement, the Company shall make payment or receive of the crack spread difference according to terms and conditions stipulated in the agreements. Crude Oil and Feedstock Time Spread Agreements The Company has entered into crude oil and feedstock time spread agreements to mitigate price risk with a major shareholder, calculated based on the difference of the average price of crude oil and feedstock for the current month and the price of the following month. The Company shall make payment or receive of the difference according to terms and conditions stipulated in the agreements. Sales and Purchase Aromatics Product Agreements The Company, a major shareholder, related parties and various other companies have entered into raw material and product sales and purchase agreements. The sales and purchase prices of raw material and product are based on the prices specified in the agreements. These agreements are for the periods from 1 year to 15 years from the agreement date and expiring from 2014 to 2023. The agreements are automatically renewable except for an advance cancellation period of 3 months to 2 years through written notice by each party. Polyethylene Sales and Purchase Agreements The Company and a related party have the Polyethylene sales and purchase agreements with a related party. The Company agreed to sell all Polyethylene to a related party for distributing to the customers in the market. Under the agreement, the Polyethylene pricing structure is changed to link to the Polyethylene product price, which the Company sells to end customers, adjusted by the appropriate marketing expenses for fairness to both parties. These agreements are for the periods of 15 years, commencing from the effective date as specified in each agreement. Two agreements will expire in December 2021, one agreement will expire in January 2022 and another will expire in September 2023. Loan Agreements The Company has an unsecured loan lending agreement with a related party for the long-term credit facility of Baht 2,676 million. This loan bears interest at the rate of the Company’s average cost of funds. This loan is repayable in semi-annually instalments, commencing from June 2012 and due within 10 years.
40
PTT Global Chemical Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2014 (Unaudited) The Company have 5 secured loan lending agreements with a related party for the long-term credit facility of USD 101.1 million. The loan bears interest at the greater of United States Prime Rate plus margin or fixed rate. These long-term loans are repayable at the end of the loan agreement in March 2015, June 2015, July 2015 and March 2016. The Company has an unsecured loan lending agreement with a related party for the long-term credit facility of EUR 60 million. The loan bears interest at fixed rate. This long-term loan is repayable at the end of the loan agreement in July 2017. In addition, the Company has an interim loan agreement with the credit facility of EUR 10 million (attributable to the Company EUR 5.1 million). The facility bears interest at fixed rate. This facility is repayable at the end of the loan agreement in September 2014 or the date of shareholder meeting approving a capital increase at least EUR 10 million. The Company has unsecured short-term lending agreements for the period of 3 years through Liquidity Management System “LMS” with a related party with the credit facility of Baht 1,000 million. This loan bears interest at the rate of the Company’s average cost of funds. The Company has unsecured short-term lending agreements for the period of 3 years through Liquidity Management System “LMS” with a related party with the credit facility of Baht 3,100 million. This loan bears interest at the rate of the Company’s average cost of funds. The Company has unsecured short-term borrowing agreements for the period of 3 years through Liquidity Management System “LMS” with a related party with the credit facility of Baht 4,000 million. This loan bears interest at the rate of the Company’s average return on current investment minus 0.25% per annum. The Company has unsecured short-term borrowing agreements for the period of 3 years through Liquidity Management System “LMS” with a related party with the credit facility of Baht 2,500 million. This loan bears interest at the rate of the Company’s average return on current investment minus 0.25% per annum. The Company provides unsecured short-term loans to 2 related parties by receiving the promissory notes amounting to Baht 712 million. The loans bear interest at the rate of the Company’s average cost of funds. The promissory notes are for the period of 3 months and are renewable. The Company has an uncommitted and unsecured short-term Inter-Company Borrowing & Lending agreement (ICBL) for the period of 1 year with a major shareholder with the borrowing and lending credit facility of Baht 5,000 and Baht 2,000 million respectively. The agreement will expire on 19 December 2014. This facility bears interest based on market rate referenced to BIBOR or LIBOR plus interest rate spread by taking into account the return on short-term investment, short-term interest rate and the credit ratings of the Company or the borrowing company. Service Agreements The Company has Shared Service agreements with 11 related parties for the provision of general services. All of these agreements are effective from the date as specified in the agreements and are automatically renewable until either party agrees to terminate with 3 months written notice. The service charges will be agreed in the fourth quarter of each year.
41
PTT Global Chemical Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2014 (Unaudited) The Company has a Technical Services agreement with a related party. Under the contract, the Company agreed to obtain certain technical advisory services, limited to 2,100 service hours in each year. The agreement duration is 5 years, including the initial service fee as specified in the agreement which will be adjusted in line with the increase in the labour cost index. The agreement can be renewed for another 5 years. The Company has Management and Engineering agreement, Design, Supply, Construction and Installation agreement, Inspection of Construction, Equipment and Machinery agreement and Management and Maintenance Work agreement with a related party. These agreements are for the periods from 6 months to 5 years and 4 months, commencing from the date as specified in the agreement and expiring in February 2017. The Company has 3 Services agreements to have the right to lay the pipelines for delivery of raw material and product on pipeline structure with a major shareholder. These agreements are for the period of 15 years from the agreement date and will expire in June 2025. The Company has a Project Management Consultancy Services agreement with a related party to Convert Heavy Gas to Olefins Feedstock Project. The agreement is for the period of 28 months and will expire in March 2015. The Company has a Security Service and Fire Protection agreement with a related party. The agreement is to provide security and fire protection service to assets, employees and visitors in the location of the Company. The agreement is for the period of 3 years and will expire in December 2014. The Company has 2 Warehouse Management agreements with a related party. The agreements are for the period of 10 years and will expire in December 2019. These agreements are renewable by providing not less than 30 days written notice to the counterparty. The Company has Tank Maintenance Service agreement with a related party. The agreement duration is 2 years and 3 months and will expire in July 2015. The Company has entered into Information and Communication Technology Service agreement with a related party. A related party will provide Information Technology system maintenance and support services, system structure and data center management, system supporting and advisory, including system design and development to meet the Company’s requirements. This agreement is for the period of 5 years, commencing from the date as specified in the agreement and expired in December 2018. The Company has the engineering, procurement, and construction contract for the Aromatics 2 Debottlenecking Project with a related party and another party. This agreement is for the period 2 years and will expire in September 2015. Rental Agreements The Company has Office Rental and Service agreement with a related party. The agreement is for the period of 2 years and will expire in September 2014 with rental and service rate and conditions as stipulated in the agreement. The Company has entered into Land Lease agreement with a major shareholder to operate jetty and buffer tank farm services. The agreement is for the period of 22 years and 6 months, commencing from the date signed in the agreement by both parties, with land lease rate and condition as specified in the agreement, and will expire in December 2037. 42
PTT Global Chemical Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2014 (Unaudited) 8
Trade accounts receivable and notes receivable
Note Related parties Other parties Total Less allowance for doubtful accounts Net
7
Consolidated Separate financial statements financial statements 30 31 30 31 June December June December 2014 2013 2014 2013 (in million Baht) 31,369 35,294 32,531 36,865 21,464 23,178 10,516 12,865 52,833 58,472 43,047 49,730 (80) (84) (19) (19) 52,753 58,388 43,028 49,711 Consolidated Separate financial statements financial statements 2014 2013 2014 2013 (in million Baht)
Bad and doubtful debts expense for the - three-month period ended 30 June - six-month period ended 30 June
(2) (1)
8 21
-
-
Aging analyses for trade accounts receivable were as follows: Consolidated Separate financial statements financial statements 30 31 30 31 June December June December 2014 2013 2014 2013 (in million Baht) Related parties Within credit terms Overdue: Less than 3 months 3 - 6 months 6 - 12 months Over 12 months Less allowance for doubtful accounts Net
43
31,356
35,265
32,531
36,865
12 1 31,369 31,369
28 1 35,294 35,294
32,531 32,531
36,865 36,865
PTT Global Chemical Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2014 (Unaudited) Consolidated Separate financial statements financial statements 30 31 30 31 June December June December 2014 2013 2014 2013 (in million Baht) Other parties Within credit terms Overdue: Less than 3 months 3 - 6 months 6 - 12 months Over 12 months Less allowance for doubtful accounts Net Total
20,779
22,539
10,496
12,845
592 8 10 75 21,464 (80) 21,384 52,753
550 10 24 55 23,178 (84) 23,094 58,388
1 19 10,516 (19) 10,497 43,028
1 19 12,865 (19) 12,846 49,711
The normal credit term granted by the Group/Company ranges from 15 days to 90 days.
9
Investments in subsidiaries and jointly-controlled entity Separate financial statements 2014 2013 (in million Baht)
Six-month period ended 30 June Subsidiaries At 1 January Acquisition Loss from capital reduction in subsidiary Capital distribution Disposal At 30 June Jointly-controlled entity At 1 January Acquisition Disposal At 30 June Total At 1 January Acquisition Loss from capital reduction in subsidiary Capital distribution Disposal At 30 June
44
42,072 564 42,636
68,155 4,790 (263) (15) (4,500) 68,167
210 210
210 210
42,282 564 42,846
68,365 4,790 (263) (15) (4,500) 68,377
PTT Global Chemical Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2014 (Unaudited) Investments in subsidiaries and jointly-controlled entity as at 30 June 2014 and 31 December 2013, and dividend income for the six-month periods ended 30 June 2014 and 2013 were as follows: Separate financial statement Ownership interest 30 31 June December 2014 2013 (%) Subsidiaries Bangkok Polyethylene Plc. (In process of liquidation) Bio Creation Co., Ltd. Bio Spectrum Co., Ltd. TOC Glycol Co., Ltd. Thai Oleochemicals Co., Ltd. PTT Polyethylene Co., Ltd. (In process of liquidation) NPC Safety and Environmental Service Co., Ltd. PTT Maintenance and Engineering Co., Ltd. Thai Tank Terminal Limited Thai Styrenics Co., Ltd. PTT Chemical International Pte. Ltd. PTT Phenol Co., Ltd. Auria BioChemicals Co., Ltd. Jointly-controlled entity Thai Ethoxylate Co., Ltd. Total
Paid-up capital 30 31 June December 2014 2013
Cost 30 June 2014
31 December 2013
Impairment At cost - net 30 31 30 31 June December June December 2014 2013 2014 2013 (in million Baht)
Fair value of listed securities 30 31 June December 2014 2013
Dividend income for the six-month periods ended 30 30 June June 2014 2013
100 100 100 100 100
100 100 100 100 100
1,700 92 146 5,395 7,400
1,700 92 146 5,395 7,400
1 92 146 5,395 7,400
1 92 146 5,395 7,400
(41) -
(41) -
1 92 105 5,395 7,400
1 92 105 5,395 7,400
-
-
971 -
2,142 1,834
100
100
22,000
22,000
-
-
-
-
-
-
-
-
-
18,874
100
100
165
165
165
165
-
-
165
165
-
-
-
-
60 51 100 100 100 54
60 51 100 100 100 54
137 900 190 17,447 9,406 90
137 900 190 17,288 9,001 90
82 459 190 17,447 12,251 49
82 459 190 17,288 11,846 49
(1,000) -
(1,000) -
82 459 190 16,447 12,251 49
82 459 190 16,288 11,846 49
-
-
575 -
14 552 378 -
43,677
43,113
(1,041)
(1,041)
42,636
42,072
-
-
1,546
23,794
50
50
420
420
-
210
210
-
-
210
210
-
-
114
133
210 43,887
210 43,323
(1,041)
(1,041)
210 42,846
210 42,282
-
-
114 1,660
133 23,927
45
PTT Global Chemical Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2014 (Unaudited) Change in investment in subsidiaries On 2 January 2014, Myriant Corporation ("Myriant") has purchased shares from the existing shareholders totalling 3,406,569 shares and subsequently cancelled of those purchased shares. As a result, the group’s shareholding in Myriant changed from 72.21% to 84.18%. On 9 January 2014, PTT Phenol Co., Ltd. has called for paid-up capital from the capital increase by the Extraordinary Meeting of shareholders held on 11 July 2013 at Baht 18 per share, 22.52 million shares, totalling Baht 405.4 million, of which fully received in January 2014. On 27 June 2014, PTT Chemical International Pte. Ltd. has called for paid-up capital from the capital increase by the Board of Directors Meeting held on 27 April 2012 to invest in Emery Specialties (M) Sdn. Bhd. The share capital was registered and called at USD 4.88 million (4.88 million shares at USD 1 par value), of which fully received in June 2014. At the Board of Directors Meeting of PTT Chemical International Pte. Ltd. held on 27 April 2012, the Board approved to increase the registered share capital for an amount of USD 27.5 million, to invest in Emery Specialties (M) Sdn. Bhd. The share capital was registered and called at USD 3.26 million (3.26 million shares at USD 1 par value), of which fully received in February 2013. At the Board of Directors Meeting of the Company held on 15 March 2013, the Board approved to establish Auria BioChemicals Co., Ltd. (“Auria”) with Myriant Corporation (“Myriant”) to conduct Bio-based Chemicals research and development activities. Subsequently, Auria is incorporated in Thailand with the registered share capital of Baht 90 million on 3 May 2013. The Company holds 54% interest with investment cost totaling Baht 48.6 million and Myriant holds 46% interest. At the Board of Directors Meeting of the Company held on 26 April 2013, the Board approved the 40% share acquisition of an interest in PTT Phenol Co., Ltd. (“PPCL”) from PTT Plc. The Company signed the share sales and purchase agreement of 37.01 million shares, amounting to Baht 4,644 million. Sales and purchase transaction was completed in May 2013. At the Extra Ordinary General Meeting of shareholders of Bio Creation Co., Ltd. held on 27 May 2013, the shareholders approved the reduction of registered capital from Baht 560 million, 5.6 million shares to Baht 140 million, 1.4 million shares, at Baht 100 par value with the issued and paid-up capital at Baht 66 per share. As a result, the issued and paid-up capital decreased from Baht 369.6 million to Baht 92.4 million. The reduction of issued and paid-up capital of Baht 277.2 million has been offset a deficit in retained earnings, totalling Baht 262.8 million and paid the remaining balance totalling Baht 14.4 million to shareholder. Dividends paid by subsidiaries and jointly-controlled entity At the Annual General Meeting of the shareholders of Thai Ethoxylate Co., Ltd. held on 2 April 2014, the shareholders approved the appropriation of dividends of Baht 54.50 per share, amounting to Baht 228.90 million. The dividend was paid to the shareholders in May 2014. At the Annual General Meeting of the shareholders of TOC Glycol Co., Ltd. held on 24 April 2014, the shareholders approved the appropriation of dividends of Baht 33 per share, amounting to Baht 1,780.35 million, of which amounting to Baht 1,079 million, was paid as an interim dividend in 2013. The remaining dividend at the rate of Baht 13 per share, amounting to Baht 701.35 million was paid to the shareholders in April 2014.
46
PTT Global Chemical Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2014 (Unaudited) At the Annual General Meeting of the shareholders of Thai Tank Terminal Ltd. held on 27 April 2014, the shareholders approved the appropriation of dividends of Baht 125.33 per share, amounting to Baht 1,128 million. The dividend, amounting to Baht 400 million, was paid to the shareholders in July 2014, and the remaining balance of dividend, amounting to Baht 728 million, will be paid to the shareholders within 2014 depending upon the Subsidiary’s cash flow. At the Board of Directors Meeting of TOC Glycol Co., Ltd. held on 29 May 2014, the Board approved the appropriation of interim dividends of Baht 5 per share, amounting to Baht 269.75 million.The dividend was paid to the shareholders in May 2014. At the Annual General Meeting of the shareholders of Thai Tank Terminal Ltd. held on 5 April 2013, the shareholders approved the appropriation of dividends of Baht 120.22 per share, amounting to Baht 1,082 million. The dividend was paid to the shareholders in July 2013 and January 2014. At the Board of Directors Meeting of PTT Phenol Co., Ltd. held on 11 April 2013, the Board approved the appropriation of interim dividends of Baht 630 million and set up legal reserve of 5% of retained earnings at the end of 2012 or equivalent to Baht 204.45 million. The dividend was paid to the shareholders in July 2013. At the Annual General Meeting of the shareholders of PTT Polyethylene Co., Ltd. held on 19 April 2013, the shareholders approved the appropriation of dividends of Baht 43 per share, amounting to Baht 9,460 million, of which Baht 26 per share, amounting to Baht 5,720 million, was paid as an interim dividend in 2012. The remaining dividend at the rate of Baht 17 per share, amounting to Baht 3,740 million was paid to the shareholders in April 2013. At the Annual General Meeting of the shareholders of TOC Glycol Co., Ltd. held on 25 April 2013, the shareholders approved the appropriation of dividends of Baht 78 per share, amounting to Baht 4,208 million, of which amounting to Baht 2,374 million, was paid as an interim dividend. The remaining dividend at the rate of Baht 34 per share, amounting to Baht 1,834 million was paid to the shareholders in April 2013. At the Annual General Meeting of the shareholders of Thai Ethoxylate Co., Ltd. held on 25 April 2013, the shareholders approved the appropriation of dividends of Baht 63.25 per share, amounting to Baht 266 million. The dividend was paid to the shareholders in May 2013. At the Annual General Meeting of the shareholders of PTT Maintenance and Engineering Co.,Ltd. held on 29 April 2013, the shareholders approved the appropriation of dividends of Baht 11.75 per share, amounting to Baht 24 million. The dividend was paid to the shareholders in May 2013. At the Board of Director Meeting of PTT Polyethylene Co., Ltd. held on 20 June 2013, the Board approved the appropriation of interim dividends of Baht 67.53 - 69.80 per share, amounting to Baht 14,856.6 - 15,356.0 million and has assigned Managing Director to finalise the final payment. Subsequently on 30 June 2013, Managing Director approved the interim dividend of Baht 68.79 per share, amounting to Baht 15,133.8 million. The dividend was paid to the shareholders in July 2013. At the Board of Director Meeting of Bangkok Polyethylene Plc. held on 21 June 2013, the Board approved the appropriation of interim dividends of Baht 12.20 - 13.32 per share, amounting to Baht 2,074.0 - 2,264.4 million and has assigned Managing Director to finalise the final payment. Subsequently on 30 June 2013, Managing Director approved the interim dividend of Baht 12.60 per share, amounting to Baht 2,142 million. The dividend was paid to the shareholders in July 2013.
47
PTT Global Chemical Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2014 (Unaudited) Others At the Annual General Meeting of shareholders of the Company held on 4 April 2013, the shareholders approved the entire business transfer and other activities in relation to the matter of Bangkok Polyethylene Plc. (“BPE”) and PTT Polyethylene Co., Ltd. (“PTTPE”). Both companies are the Company’s subsidiaries. Subsequently on 1 July 2013, the entire business transferred of BPE and PTTPE to the Company is completed under the law and the Company will proceed with the dissolution of BPE and PTTPE accordingly.
10
Investments in associates Consolidated Separate financial statements financial statements 2014 2014 2013 2013 (in million Baht)
Six-month period ended 30 June
At 1 January Share of net profit (loss) of equityaccounted associates Acquisitions Dividend income Gain from change in investment holding Effect of change in exchange rates At 30 June
48
12,549
6,151
9,717
3,399
530 (107) 12,972
(40) 5,616 (288) 51 (100) 11,390
9,717
4,500 7,899
PTT Global Chemical Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2014 (Unaudited)
Investments in associates as at 30 June 2014 and 31 December 2013, and dividend income from those investments for the six-month periods ended 30 June 2014 and 2013 were as follows: Consolidated financial statements Ownership interest 30 31 June December 2014 2013 (%) Associates PTT Polymer Marketing Co., Ltd. Vinythai Plc. Eastern Fluid Transport Co., Ltd. PTT ICT Solutions Co., Ltd. PTT Energy Solution Co., Ltd. Global Power Synergy Co., Ltd. Total
Paid-up capital 30 31 June December 2014 2013
Cost 30 June 2014
Equity
31 December 2013
30 June 2014
Impairment 31 30 31 December June December 2013 2014 2013 (in million Baht)
Equity - net 30 31 June December 2014 2013
Dividend income for the six-month periods ended 30 30 June June 2014 2013
25
25
40
40
10
10
224
223
-
-
224
223
23
-
25
25
7,111
7,111
3,297
3,297
4,262
4,205
-
-
4,262
4,205
19
254
23 40 20
23 40 20
10 150 150
10 150 150
2 60 30
2 60 30
19 326 37
19 303 38
-
-
19 326 37
19 303 38
5 24 2
4 30 -
30
30
11,237
11,237
6,318 9,717
6,318 9,717
8,104 12,972
7,761 12,549
-
-
8,104 12,972
7,761 12,549
34 107
288
49
PTT Global Chemical Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2014 (Unaudited)
Separate financial statements Ownership interest 30 31 June December 2014 2013 (%) Associates PTT Polymer Marketing Co., Ltd. Vinythai Plc. Eastern Fluid Transport Co., Ltd. PTT ICT Solutions Co., Ltd. PTT Energy Solution Co., Ltd. Global Power Synergy Co., Ltd. Total
25 25
25 25
Paid-up capital 30 31 June December 2014 2013
40 7,111
40 7,111
Cost 30 June 2014
10 3,297
31 December 2013
10 3,297
Impairment At cost - net 30 31 30 31 June December June December 2014 2013 2014 2013 (in million Baht) -
-
10 3,297
10 3,297
Fair value of listed securities 30 31 June December 2014 2013
3,157
3,108
Dividend income for the six-month periods ended 30 30 June June 2014 2013
23 19
253
15
15
10
10
2
2
-
-
2
2
-
-
3
3
40 20
40 20
150 150
150 150
60 30
60 30
-
-
60 30
60 30
-
-
24 2
30 -
30
30
11,237
11,237
6,318
6,318
-
-
6,318
6,318
-
-
34
-
9,717
9,717
-
-
9,717
9,717
3,157
3,108
105
286
50
PTT Global Chemical Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2014 (Unaudited) 11
Property, plant and equipment Acquisitions, disposals and transfers of property, plant and equipment during the six-month periods ended 30 June 2014 and 2013 were as follows:
Six-month period ended 30 June Land and improvement Buildings and buildings improvement Plant, machinery, factory equipment and tools Furniture, fixtures and equipment Vehicles Asset under construction Total
Six-month period ended 30 June Land and improvement Buildings and buildings improvement Plant, machinery, factory equipment and tools Furniture, fixtures and equipment Vehicles Asset under construction Total
12
Consolidated financial statements Acquisitions and Disposals and transfers in transfers out impairment at cost net book value of assets 2014 2013 2014 2013 2014 2013 (in million Baht) 44 5 4 225 4 491
957
272
412
37
-
4,309 188 11 8,457 13,500
2,672 98 22 7,793 11,547
17 6 4,772 5,071
16,735 22 7 3,391 20,792
1,064 52 1,157
-
Separate financial statements Acquisitions and Disposals and transfers in transfers out Impairment at cost net book value of assets 2014 2013 2014 2013 2014 2013 (in million Baht) 41 2 4 430
14
-
1
-
-
2,440 121 8 5,006 8,046
1,469 63 8 4,381 5,937
14 3,236 3,254
3 1 6 1,486 1,497
-
-
Trade accounts payable
Note Related parties Other parties Total
7
51
Consolidated Separate financial statements financial statements 30 31 30 31 June December June December 2014 2013 2014 2013 (in million Baht) 39,156 39,501 38,595 38,640 4,944 6,154 803 995 44,100 45,655 39,398 39,635
PTT Global Chemical Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2014 (Unaudited) 13
Other payables
Accrued operating expenses Accrued interest expenses Other payables Deposits and advances received Retention payables Current portion of finance lease liabilities Withholding tax payable Other tax payable Others Total
14
Consolidated Separate financial statements financial statements 30 31 30 31 June December June December 2014 2013 2014 2013 (in million Baht) 3,317 3,914 1,346 2,017 517 806 500 700 2,061 1,991 1,631 1,715 75 107 15 8 356 322 145 87 227 234 128 151 149 211 133 174 176 169 150 131 553 465 25 24 7,431 8,219 4,073 5,007
Segment information The Group has significant business segments which offer different products and services, and are managed separately. For each of the business segments, the chief operating decision maker (CODM) reviews internal management reports on at least a quarterly basis. The operations in each of the Group’s reportable segments have 7 reportable segments as described below. Segment 1 Segment 2 Segment 3 Segment 4 Segment 5 Segment 6 Segment 7
Refinery and Shared facilities Aromatics Olefins and Derivatives EO-Based Performance Green Chemicals High Volume Specialties Services and Others
Performance information of each reportable segment is measured based on segment profit before interest expense, tax, depreciation and amortisation which as included in the internal management reports that are reviewed by the Group’s CODM. Management believes that using profit before interest expense, tax, depreciation and amortisation to measure performance is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries.
52
PTT Global Chemical Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2014 (Unaudited)
Information about reporting segments for the three-month period ended 30 June 2014 Refinery & Shared facilities
Olefins & Aromatics
Derivatives
EO-Based
Green
High Volume
Service &
Chemicals
Specialties
Others
Elimination
Total
(in million Baht) External revenues
70,893
29,344
30,453
4,495
8,647
8,856
594
-
153,282
4,704
19,140
5,240
1
326
15
959
(30,385)
-
Total segment revenues
75,597
48,484
35,693
4,496
8,973
8,871
1,553
(30,385)
153,282
Cost of sale and service
72,896
47,908
26,966
3,476
7,827
8,441
1,119
(30,343)
138,290
178
389
915
101
912
2,703
308
(211)
5,295
2,952
205
7,895
947
292
(2,163)
355
(6)
10,477
Inter-segment revenues
Selling and administrative expenses Profit (loss) before tax expense, finance costs, depreciation and amortisation Interest income
5
2
9
11
12
11
321
(165)
206
Finance costs
133
159
389
2
269
101
463
(213)
1,303
Depreciation and amortisation
783
791
1,490
256
386
642
89
(21)
4,416
-
-
-
-
-
-
1,741
(1,741)
-
Dividend income Share of profit (loss) of equity- accounted associates
-
-
65
-
-
-
230
(5)
290
48
10
3
5
-
15
(17)
7
71
Profit (loss) before tax
2,089
(733)
6,093
705
(351)
(2,880)
2,078
(1,676)
5,325
Profit (loss) for reportable segment
2,029
(736)
5,777
703
(320)
(1,485)
1,813
(1,696)
6,085
Other
53
PTT Global Chemical Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2014 (Unaudited)
Information about reporting segments for the three-month period ended 30 June 2013 Refinery & Shared facilities
Olefins & Aromatics
Derivatives
EO-Based
Green
High Volume
Service &
Chemicals
Specialties
Others
Elimination
Total
(in million Baht) External revenues
40,559
25,995
25,469
4,258
7,005
8,790
663
-
112,739
2,658
15,462
5,511
-
208
-
1,001
(24,840)
-
Total segment revenues
43,217
41,457
30,980
4,258
7,213
8,790
1,664
(24,840)
112,739
Cost of sale and service
43,607
38,621
22,869
3,287
6,247
8,453
953
(24,654)
99,383
130
303
887
126
785
480
722
(614)
2,819
3
2,536
7,447
868
256
(91)
268
179
11,466
Inter-segment revenues
Selling and administrative expenses Profit (loss) before tax expense, finance costs, depreciation and amortisation Interest income
54
138
158
11
10
20
271
(257)
405
Finance costs
218
244
430
9
59
117
701
(253)
1,525
Depreciation and amortisation
901
821
1,326
190
300
579
98
(27)
4,188
-
-
-
-
-
-
24,186
(24,186)
-
Dividend income Share of profit (loss) of equity- accounted associates Other Profit (loss) before tax Profit (loss) for reportable segment
-
-
(3)
-
(142)
-
116
7
(22)
166
(138)
(882)
18
(12)
(122)
(1,726)
(29)
(2,725)
(896)
1,471
4,964
698
(247)
(889)
22,316
(24,006)
3,411
(1,053)
1,176
5,355
694
58
(514)
22,429
(23,973)
4,172
54
PTT Global Chemical Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2014 (Unaudited)
Information about reporting segments for the six-month period ended 30 June 2014 Refinery & Shared facilities
Olefins & Aromatics
Derivatives
EO-Based
Green
High Volume
Service &
Chemicals
Specialties
Others
Elimination
Total
(in million Baht) External revenues
140,397
58,563
58,290
7,678
17,221
17,285
1,214
-
300,648
8,322
37,813
9,270
1
623
15
1,814
(57,858)
-
Total segment revenues
148,719
96,376
67,560
7,679
17,844
17,300
3,028
(57,858)
300,648
Cost of sale and service
144,294
94,700
50,791
6,265
15,407
16,191
2,204
(57,786)
272,066
316
722
1,669
257
1,902
3,212
752
(431)
8,399
4,787
986
15,246
1,209
663
(1,974)
581
(23)
21,475
Inter-segment revenues
Selling and administrative expenses Profit (loss) before tax expense, finance costs, depreciation and amortisation Interest income Finance costs Depreciation and amortisation
9
5
23
22
24
25
705
(316)
497
348
383
762
3
492
205
926
(384)
2,735
1,557
1,565
2,900
466
717
1,269
186
(42)
8,618
Dividend income
-
-
-
-
-
-
1,765
(1,765)
-
Share of profit (loss) of equity- accounted associates
-
-
100
-
-
-
430
1
531
Other
128
26
121
5
(9)
43
352
7
673
Profit (loss) before tax
3,019
(931)
11,828
767
(531)
(3,380)
2,721
(1,670)
11,823
Profit (loss) for reportable segment
2,973
(924)
11,244
753
(420)
(1,810)
2,255
(1,690)
12,381
55
PTT Global Chemical Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2014 (Unaudited) Information about reporting segments for the six-month period ended 30 June 2013 Refinery & Shared facilities
Olefins & Aromatics
Derivatives
EO-Based
Green
High Volume
Service &
Chemicals
Specialties
Others
Elimination
Total
(in million Baht) External revenues
104,181
55,820
53,623
8,420
14,017
17,535
1,361
-
254,957
6,917
32,453
11,313
-
370
-
2,176
(53,229)
-
Total segment revenues
111,098
88,273
64,936
8,420
14,387
17,535
3,537
(53,229)
254,957
Cost of sale and service
110,007
80,943
47,811
6,301
12,276
16,559
2,222
(52,944)
223,175
258
599
1,588
229
1,460
982
1,218
(945)
5,389
1,546
6,749
15,919
1,939
808
116
601
207
27,885
Inter-segment revenues
Selling and administrative expenses Profit before tax expense, finance costs, depreciation and amortisation Interest income
145
274
280
23
20
36
546
(529)
795
Finance costs
418
484
896
20
115
223
1,398
(524)
3,030
1,641
1,646
2,621
377
577
1,111
221
(54)
8,140
-
-
-
-
-
-
24,216
(24,216)
-
Depreciation and amortisation Dividend income Share of profit (loss) of equity- accounted associates
-
-
80
-
(279)
-
162
(3)
(40)
(51)
(272)
(89)
6
(14)
29
(350)
1
(740)
Profit (loss) before tax
(419)
4,621
12,673
1,571
(157)
(1,153)
23,556
(23,962)
16,730
Profit (loss) for reportable segment
(593)
4,266
12,403
1,563
148
(677)
23,085
(23,948)
16,247
Other
56
PTT Global Chemical Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2014 (Unaudited) Refinery & Shared facilities
Aromatics
Olefins & EO-Based Green High Volume Derivatives Performance Chemicals Specialties (in million Baht)
Services & Others
Elimination
Total
At 30 June 2014 Segment assets
104,750
80,052
131,871
16,831
30,927
37,480
65,782
(49,891)
417,802
At 31 December 2013 Segment assets
105,904
91,803
133,943
16,303
30,811
40,871
68,342
(55,615)
432,362
57
PTT Global Chemical Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2014 (Unaudited) 15
Income tax expense Income tax expense is calculated from pre-tax income of the interim period multiplied by the weighted average annual income tax rate expected for the year based on management’s best estimate. The Group’s consolidated effective tax rate in respect of continuing operations for the six-month period ended 30 June 2014 was 8.21% (2013: 4.25%). This change in effective tax rate was caused mainly by a significant portion of the Group and Company's profit was derived from promoted activities for which concessionary tax rates apply / which are not subject to tax.
16
Basic earnings per share The calculation of basic earnings per share for the three-month and six-month periods ended 30 June 2014 and 2013 were based on the profit for the periods attributable to ordinary shareholders of the Company and the weighted average number of ordinary shares outstanding during the periods as follows:
Three-month period ended 30 June Profit attributable to ordinary shareholders of the Company (basic) Weighted average number of ordinary shares outstanding (basic)
Consolidated Separate financial statements financial statements 2014 2013 2014 2013 (in million Baht / million shares) 6,085.18
4,171.64
8,026.70
23,979.19
4,508.85
4,508.85
4,508.85
4,508.85
1.35
0.93
1.78
5.32
Earnings per share (basic) (in Baht)
Six-month period ended 30 June Profit attributable to ordinary shareholders of the Company (basic) Weighted average number of ordinary shares outstanding (basic)
Consolidated Separate financial statements financial statements 2014 2013 2014 2013 (in million Baht / million shares) 12,380.75
16,246.62
13,992.01
30,629.67
4,508.85
4,508.85
4,508.85
4,508.85
2.75
3.60
3.10
6.79
Earnings per share (basic) (in Baht)
58
PTT Global Chemical Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2014 (Unaudited) 17
Dividends At the Annual General Meeting of the shareholders of the Company held on 8 April 2014, the shareholders approved the appropriation of annual dividend from 2013 performance at Baht 3.40 per share, amounting to Baht 15,330 million. The Company had paid interim dividend of the first half year of 2013 at Baht 1.62 per share, amounting to Baht 7,304 million on 16 August 2013. The remaining dividend was paid for the second half year of 2013 at Baht 1.78 per share, amounting to Baht 8,026 million. The dividend amounting to Baht 8,023 million was paid to the rightful shareholders in April 2014. At the Annual General Meeting of the shareholders of the Company held on 4 April 2013, the shareholders approved the appropriation of annual dividend from 2012 performance at Baht 3.40 per share, amounting to Baht 15,329 million. The Company had paid interim dividend of the first half year of 2012 at Baht 0.95 per share, amounting to Baht 4,282 million on 17 September 2012. The remaining dividend was paid for the second half year of 2012 at Baht 2.45 per share, amounting to Baht 11,047 million. The dividend amounting to Baht 11,044 million was paid to the rightful shareholders in April 2013.
18
Commitments with non-related parties Consolidated Separate financial statements financial statements 30 31 30 31 June December June December 2014 2013 2014 2013 (in million Baht) Capital commitments Contracted but not provided for Land Plant, machinery and equipment Buildings Others Total Non-cancellable operating lease commitments Within one year After one year but within five years After five years Total Other commitments Unused letters of credits Bank guarantees Forward contracts Swap contracts Guarantees for credit facilities and bank guarantees Other agreements Total
59
16 12,829 15 93 12,953
16 13,568 89 235 13,908
16 5,332 8 72 5,428
16 4,526 89 117 4,748
202 252 362 816
169 162 223 554
11 66 39 116
22 74 40 136
53 4,074 33,382 20,050
358 2,978 11,325 3,786
53 845 29,160 19,682
53 843 7,021 2,813
555 4,445 62,559
333 3,303 22,083
555 1,310 51,605
333 1,626 12,689
PTT Global Chemical Public Company Limited and its Subsidiaries Notes to the interim financial statements For the three-month and six-month periods ended 30 June 2014 (Unaudited) 19
Litigation On 3 December 2009, a company filed for arbitration against PTT Plc. (“PTT”) and the Company as a producer to perform according to purchase and sales of raw materials agreement, of which the said company has been committed by PTT, or to compensate for damages of approximately Baht 13,805 million. On 8 March 2010, the dispute was thrown out of the case-list by the arbitration ruling that the Company was not a party to the contract. Subsequently, on 27 August 2010, the said company filed a civil suit against PTT and the Company as a producer to perform according to purchase and sales of raw materials agreement, of which the said company has been committed by PTT, or to compensate for damages of approximately Baht 9,380 million. In this regards, the Company filed objections against the indictment with the civil court on the basis that the Company was not a party to the contract. On 18 March 2013, the Civil Court called to hear the decision of the arbitration between such Company and PTT. Since the arbitration process has not yet finalised, the Civil Court therefore considered to postpone the hearing decision of arbitration to 21 May 2013. Subsequently, on 21 May 2013, the Civil Court considered that the arbitration process between such company and PTT has not yet finalized; therefore, they has temporary thrown out of the case-list until the final decision has been reached under arbitration process. Then, either party or both parties can resubmit the case to the Civil Court for further trail. The Company believes that the outcome of the consideration will not result in any liability to the Company, and therefore, has not provided against any loss that may result from this matter in the financial statements.
20
Events after the reporting period During July 2014, the number of people in Rayong filed for Civil Court against the Company to claim the extra compensation from oil spill incident on 27 July 2013, approximately Baht 60 million, plus interest of 7.5% per annum. The Civil Court fixes the day for settlement of dispute on 1 September 2014 and due to our process of defending against the Plaintiffs’ allegation. During 28 – 29 July and 4 – 7 August 2014, the Company offered for sale of 7-years unsubordinated and unsecured Debentures with a debenture holders' representative in the name-registered certificate in an amount of up to 10 million units at the offering price of Baht 1,000 per unit. The aggregate offering amount of the debentures is Baht 10 billion. The debentures were offered to public investors (exclusive of institutional investors). The Company intends to use the proceeds from the sale of the debentures for the Company's strategic investment and/or general corporate purposes and/or refinancing of existing debentures or debt. The debentures bear interest at a fixed rate of 4.5% per annum. The issue date of the debentures is 8 August 2014.
60