GENERAL ANNOUNCEMENT::ANNOUNCEMENT BY SUBSIDIARY, IFS CAPITAL (THAILAND) PUBLIC COMPANY LIMITED
Issuer & Securities
Issuer/ Manager
IFS CAPITAL LIMITED
Securities
IFS CAPITAL LIMITED - SG1A35000706 - I49
Stapled Security
No
Announcement Details
Announcement Title
General Announcement
Date &Time of Broadcast
05-May-2020 23:36:20
Status
New
Announcement Sub Title
Announcement by Subsidiary, IFS Capital (Thailand) Public Company Limited
Announcement Reference
SG200505OTHRA2C9
Submitted By (Co./ Ind. Name)
Chionh Yi Chian/Angeline Ng
Designation
Company Secretary/Assistant Company Secretary
Description (Please provide a detailed description of the event in the box below)
Please see attached announcement issued by IFS Capital (Thailand) Public Company Limited on its First Quarter 2020 Results.
Attachments
IFST_1Q%202020%20Results.pdf
Total size =159K MB
REVIEW REPORT ON INTERIM FINANCIAL INFORMATION
OF THE INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
TO THE BOARD OF DIRECTORS
IFS CAPITAL (THAILAND) PUBLIC COMPANY LIMITED
We have reviewed the statement of financial position of IFS Capital (Thailand) Public Company Limited as at March 31, 2020 and the related statements of comprehensive income, changes in shareholders' equity and cash flows for the three-month period then ended and the condensed notes to the financial statements. The Company's management is responsible for the preparation and fair presentation of this interim financial information in accordance with Thai Accounting Standard No. 34 "Interim Financial Reporting". Our responsibility is to express a conclusion on this interim financial information based on our review.
Scope of Review
We conducted our review in accordance with Thai Standard on Review Engagements 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity." A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Thai Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the aforementioned interim financial information has not been prepared in all material respects, in accordance with Thai Accounting Standard No. 34 "Interim Financial Reporting".
Nisakorn Songmanee | |
Certified Public Accountant (Thailand) | |
BANGKOK | Registration No. 5035 |
May 5, 2020 | DELOITTE TOUCHE TOHMATSU JAIYOS AUDIT CO., LTD. |
IFS CAPITAL (THAILAND) PUBLIC COMPANY LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT MARCH 31, 2020
UNIT : BAHT | ||||
"Unaudited" | ||||
Notes | As at | As at | ||
March 31, | December 31, | |||
2020 | 2019 | |||
ASSETS | ||||
CURRENT ASSETS | ||||
Cash and cash equivalents | 388,791,394 | 364,123,985 | ||
Factoring receivables | 5 | 3,089,640,164 | 3,271,358,391 | |
Current portion of hire purchase receivables | 6 | 2,966,682 | 2,854,404 | |
Current portion of lease contract receivables | 7 | 88,907,190 | 90,901,162 | |
Inventory finance receivables | 8 | 131,560,275 | 156,381,176 | |
Other current assets | 12,236,308 | 6,401,066 | ||
Total Current Assets | 3,714,102,013 | 3,892,020,184 | ||
NON-CURRENT ASSETS | ||||
Bank deposits held as collateral | 161,531 | 161,183 | ||
Hire purchase receivables | 6 | 1,091,232 | - | |
Lease contract receivables | 7 | 97,572,924 | 88,669,621 | |
Plant and equipment | 9 | 27,523,043 | 28,953,003 | |
Investment properties | 9 | 66,178,887 | 67,338,041 | |
Other intangible assets | 857,600 | 920,369 | ||
Deferred tax assets | 32,936,024 | 34,495,183 | ||
Other non-current assets | 900,925 | 473,390 | ||
Total Non-current Assets | 227,222,166 | 221,010,790 | ||
TOTAL ASSETS | 3,941,324,179 | 4,113,030,974 | ||
See condensed notes to the financial statements
FINANCIAL_STATEMENTS 5/5/2020 11:13 PM
IFS CAPITAL (THAILAND) PUBLIC COMPANY LIMITED
STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT MARCH
UNIT : BAHT | ||||
"Unaudited" | ||||
Notes | As at | As at | ||
March 31, | December 31, | |||
2020 | 2019 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||
CURRENT LIABILITIES | ||||
Short-term borrowings from financial institutions | 10 | 2,055,000,000 | 2,210,000,000 | |
Current portion of long-term borrowings | 11 | 134,720,000 | 146,720,000 | |
Other current liabilities | 69,278,539 | 92,049,299 | ||
Total Current Liabilities | 2,258,998,539 | 2,448,769,299 | ||
NON-CURRENT LIABILITIES | ||||
Long-term borrowings | 11 | 91,580,000 | 120,260,000 | |
Provisions for employee benefits | 32,421,403 | 31,383,168 | ||
Other non-current liabilities | 762,750 | 762,750 | ||
Total Non-current Liabilities | 124,764,153 | 152,405,918 | ||
TOTAL LIABILITIES | 2,383,762,692 | 2,601,175,217 |
FINANCIAL_STATEMENTS 5/5/2020 11:13 PM
IFS CAPITAL (THAILAND) PUBLIC COMPANY LIMITED
STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT MARCH 31, 2020
UNIT : BAHT | |||
"Unaudited" | |||
Notes | As at | As at | |
March 31, | December 31, | ||
2020 | 2019 | ||
LIABILITIES AND SHAREHOLDERS' EQUITY (CONTINUED) | |||
SHAREHOLDERS' EQUITY | |||
SHARE CAPITAL | |||
Authorized share capital | |||
493,500,000 ordinary shares of Baht 1 each | 493,500,000 | 493,500,000 | |
Issued and paid-up share capital | |||
493,499,975 ordinary shares of Baht 1 each | 493,499,975 | 493,499,975 | |
ADDITIONAL PAID-UP CAPITAL | |||
Premium on ordinary shares | 31,746,399 | 31,746,399 | |
RETAINED EARNINGS | |||
Appropriated | |||
Legal reserve | 49,350,000 | 49,350,000 | |
Unappropriated | 982,965,113 | 937,259,383 | |
TOTAL SHAREHOLDERS' EQUITY | 1,557,561,487 | 1,511,855,757 | |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 3,941,324,179 | 4,113,030,974 | |
See condensed notes to the financial statements
FINANCIAL_STATEMENTS 5/5/2020 11:13 PM
IFS CAPITAL (THAILAND) PUBLIC COMPANY LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2020
"UNAUDITED"
UNIT : BAHT | ||||
Note | 2020 | 2019 | ||
REVENUES | ||||
Factoring income | 68,625,283 | 71,121,420 | ||
Hire purchase income | 66,106 | 165,436 | ||
Finance lease income | 4,009,893 | 4,130,049 | ||
Factoring commission and service fees | 24,930,836 | 25,586,098 | ||
Other income | 12,415,106 | 10,107,546 | ||
Total Revenues | 110,047,224 | 111,110,549 | ||
EXPENSES | ||||
Selling expenses | 5,133,857 | 5,355,890 | ||
Administrative expenses | 26,413,969 | 24,230,343 | ||
Management benefit expenses | 12 | 8,421,775 | 8,273,627 | |
Reversal of doubtful accounts | (3,410,716) | (1,509,910) | ||
Finance cost | 13,185,020 | 17,215,918 | ||
Total Expenses | 49,743,905 | 53,565,868 | ||
PROFIT BEFORE INCOME TAX EXPENSE | 60,303,319 | 57,544,681 | ||
INCOME TAX EXPENSE | 11,593,089 | 11,504,143 | ||
PROFIT FOR THE PERIODS | 48,710,230 | 46,040,538 | ||
OTHER COMPREHENSIVE INCOME | - | - | ||
TOTAL COMPREHENSIVE INCOME FOR THE PERIODS | 48,710,230 | 46,040,538 | ||
BASIC EARNINGS PER SHARE | BAHT | 0.10 | 0.09 | |
WEIGHTED AVERAGE NUMBER OF | ||||
ORDINARY SHARES | SHARES | 493,499,975 | 493,499,975 |
See condensed notes to the financial statements
FINANCIAL_STATEMENTS 5/5/2020 11:13 PM
IFS CAPITAL (THAILAND) PUBLIC COMPANY LIMITED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2020 "UNAUDITED"
UNIT : BAHT | |||||||||
Issued and | Premium on | Retained Earnings | Total | ||||||
Paid-up | Ordinary | Appropriated | Unappropriated | Shareholders' | |||||
Share Capital | Shares | Legal Reserve | Equity | ||||||
Beginning balance as at January 1, 2019 | 493,499,975 | 31,746,399 | 49,350,000 | 789,579,395 | 1,364,175,769 | ||||
Changes during the period | |||||||||
Total comprehensive income | - | - | - | 46,040,538 | 46,040,538 | ||||
Ending balance as at March 31, 2019 | 493,499,975 | 31,746,399 | 49,350,000 | 835,619,933 | 1,410,216,307 | ||||
Beginning balance as at January 1, 2020 | 493,499,975 | 31,746,399 | 49,350,000 | 937,259,383 | 1,511,855,757 | ||||
Effect of change in accounting policy | - | - | - | (3,004,500) | (3,004,500) | ||||
Balance as at January 1, 2020 after adjustment | 493,499,975 | 31,746,399 | 49,350,000 | 934,254,883 | 1,508,851,257 | ||||
Changes during the period | |||||||||
Total comprehensive income | - | - | - | 48,710,230 | 48,710,230 | ||||
Ending balance as at March 31, 2020 | 493,499,975 | 31,746,399 | 49,350,000 | 982,965,113 | 1,557,561,487 | ||||
See condensed notes to the financial statements
FINANCIAL_STATEMENTS 5/5/2020 11:13 PM
IFS CAPITAL (THAILAND) PUBLIC COMPANY LIMITED
STATEMENT OF CASH FLOWS
FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2020
"UNAUDITED"
UNIT : BAHT | |||
Notes | 2020 | 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Income before income tax expenses | 60,303,319 | 57,544,681 | |
Adjustments for : | |||
Doubtful accounts | (4,191,817) | (1,509,910) | |
Loss on bad debts written-off | 781,101 | - | |
Interest expenses | 13,075,012 | 17,086,073 | |
Employment benefits expense | 1,038,235 | 983,559 | |
Depreciation and amortization | 2,740,527 | 3,039,273 | |
73,746,377 | 77,143,676 | ||
Operating assets (increase) decrease | |||
Factoring receivables | 190,309,341 | 179,776,213 | |
Hire purchase receivables | (1,207,329) | 2,908,143 | |
Lease contract receivables | (11,190,040) | (7,862,793) | |
Inventory finance receivables | 20,920,533 | (4,217,049) | |
Amount due from related companies | - | (250) | |
Other current assets | (5,835,242) | (3,805,396) | |
Bank deposits held as collateral | (348) | - | |
Other non-current assets | (427,535) | 123,250 | |
Operating liabilities increase (decrease) | |||
Amount due to a related companies | - | 29,522 | |
Other current liabilities | (31,686,087) | (14,847,091) | |
Cash received from operating activities | 234,629,670 | 229,248,225 | |
Interest paid | (14,193,618) | (16,798,278) | |
Net cash provide by operating activities | 220,436,052 | 212,449,947 | |
FINANCIAL_STATEMENTS 5/5/2020 11:13 PM
IFS CAPITAL (THAILAND) PUBLIC COMPANY LIMITED
STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2020
"UNAUDITED"
UNIT : BAHT | ||||
Notes | 2020 | 2019 | ||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||
Cash paid for purchases of plant and equipment | (48,850) | (44,940) | ||
Cash paid for purchases of other intangible assets | (39,793) | - | ||
Net cash used in investing activities | (88,643) | (44,940) | ||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||
Cash paid for short-term borrowings | ||||
to financial institutions | 4.2 | (4,470,000,000) | (4,585,000,000) | |
Cash received from short-term borrowings | ||||
from financial institutions | 4.2 | 4,315,000,000 | 4,340,000,000 | |
Cash paid for long-term borrowings | 4.2 | (40,680,000) | (32,000,000) | |
Cash received from long-term borrowings | 4.2 | - | 100,000,000 | |
Net cash used in financing activities | (195,680,000) | (177,000,000) | ||
Net increase in cash and cash equivalents | 24,667,409 | 35,405,007 | ||
Cash and cash equivalents at the beginning of the periods | 364,123,985 | 362,988,332 | ||
Cash and cash equivalents at the end of the periods | 4.1 | 388,791,394 | 398,393,339 | |
See condensed notes to the financial statements
FINANCIAL_STATEMENTS 5/5/2020 11:13 PM
IFS CAPITAL (THAILAND) PUBLIC COMPANY LIMITED CONDENSED NOTES TO THE FINANCIAL STATEMENTS
FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2020 "UNAUDITED"
1. GENERAL INFORMATION AND THE COMPANY'S OPERATION
IFS Capital (Thailand) Public Company Limited (the "Company") was incorporated in March 1991, under the laws of Thailand and registered as a Public Company Limited with the Ministry of Commerce on April 18, 2007. The Company's office is located at 20th floor Lumpini Tower, 1168/55 Rama IV Road, Tungmahamek, Sathorn, Bangkok. The business activities of the Company are factoring, hire purchase, leasing businesses and office rental.
The major shareholders are IFS Capital Holdings (Thailand) Limited with 36.64% and IFS Capital Limited (registered in Singapore) with 36.49% shareholdings. The Company's ultimate shareholder is Phillip Asset Pte. Ltd. (registered in Singapore).
The Company has been foreign and submitted the request to do business under Section 17 of the Foreign Business Act B.E. 2542 and obtained the license of foreign business operations dated July 3, 2009 from the Department of Business Development to do business in category 3 (21) service business as follows:
- Factoring
- Leasing and hire purchase businesses only to the existing customers committed under the leasing and hire purchase agreements
Thus, the Company has to comply with the conditions specified in the certificate of foreign business operations.
On November 27, 2009, the Company had reapplied for a permission to operate a business under annex 3 (21): service businesses of leasing and hire purchase of vehicles and machineries used in industry, tools used in transport of goods, vessels and carriages used in agriculture to new clients and on April 8, 2010, the Company had obtained the approval from the Department of Business Development.
Subsequently, on June 18, 2015 and June 26, 2016, the Company had applied for a permission to operate a business under annex 3 (21): service businesses of office rental including utility and facility with other company and on September 23, 2015 and July 22, 2016, respectively, the Company had obtained the approval from the Department of Business Development.
Coronavirus Disease 2019 Pandemic
The Coronavirus disease 2019 ("COVID-19") pandemic is continuing to evolve, resulting in an economic slowdown and adversely impacting most businesses and industries. This situation may bring uncertainties and have an impact on the environment in which the group operates. Nevertheless, the Company's management will continue to monitor the ongoing development and regularly assess the financial impact in respect of valuation of assets, provisions and contingent liabilities.
IFS20Q1 05/05/2020 22:30
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2. BASIS FOR PREPARATION AND PRESENTATION OF THE INTERIM FINANCIAL STATEMENTS
- The interim financial statements are prepared in Thai Baht and in compliance with Thai Accounting Standard No. 34 (Revised 2019) "Interim Financial Reporting" and accounting practices generally accepted in Thailand. The Company present the condensed notes to interim financial statements and the additional information is disclosed in accordance with the regulations of the Office of the Securities and Exchange Commission.
- The statements of financial position as at December 31, 2019, presented herein for comparison, have been derived from the financial statements of the Company for the year then ended which had been previously audited.
- The unaudited results of operations presented in the three-month period ended March 31, 2020 are not necessarily an indication nor anticipation of the operating results for the full year.
- Certain financial information which is normally included in the annual financial statements prepared in accordance with TFRS, but which is not required for interim reporting purposes, has been omitted. Therefore, the interim financial statements for the three-month period ended March 31, 2020 should be read in conjunction with the audited financial statements for the year ended December 31, 2019.
- Thai Financial Reporting Standards affecting the presentation and disclosure in the current period financial statements
During the period, the Company has adopted the revised and new financial reporting standards and guidelines on accounting issued by the Federation of Accounting Professions which become effective for fiscal years beginning on or after January 1, 2020. These financial reporting standards were aimed at alignment with the corresponding International Financial Reporting Standards, with most of the changes directed towards revision of wording and terminology, and provision of interpretations and accounting guidance to users of standards. The adoption of these financial reporting standards does not have any significant impact on the Company's financial statements, except the following financial reporting standard:
Group of Financial Instruments Standards
In the current year, the Company has initially applied Group of Financial Instruments Standards. The Company has elected to recognize the cumulative effect of initially adopting of TFRS 9 as an adjustment to the opening balance of retained earnings of the reporting period.
TFRS 9 introduced new requirements for: - The classification and measurement of financial assets and financial liabilities;
- Impairment of financial assets; and
- General hedge accounting.
IFS20Q1 05/05/2020 22:30
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The Company has applied TFRS 9 in accordance with the transition provisions set out in TFRS 9.
(a) Classification and measurement of financial assets
The date of initial application is January 1, 2020. Accordingly, the Company has applied the requirements of TFRS 9 to instruments that continue to be recognized as at January 1, 2020 and has not applied the requirements to instruments that have already been derecognized as at January 1, 2020. Comparative amounts in relation to instruments that continue to be recognized as at January 1, 2020 have not been restated.
All recognized financial assets that are within the scope of TFRS 9 are required to be measured subsequently at amortized cost or fair value on the basis of the entity's business model for managing the financial assets and the contractual cash flow characteristics of the financial assets.
None of the other reclassifications of financial assets have had any impact on the Company's financial position, profit or loss, other comprehensive income or total comprehensive income in either year.
(b) Impairment of financial assets
In relation to the impairment of financial assets, TFRS 9 requires an expected credit loss model. The expected credit loss model requires the Company to account for expected credit losses and changes in those expected credit losses at each reporting date to reflect changes in credit risk since initial recognition of the financial assets. In other words, it is no longer necessary for a credit event to have occurred before credit losses are recognized.
Specifically, TFRS 9 requires the Company to recognize a loss allowance for expected credit losses on;
- Factoring receivables
- Hire purchase receivables
- Lease contract receivables
- Inventory finance receivables and
- Financial guarantee contracts to which the impairment requirement of TFRS 9 apply.
In particular, TFRS 9 requires the Company to measure the loss allowance for a financial instrument at an amount equal to the lifetime expected credit losses (ECL) if the credit risk on that financial instrument has increased significantly since initial recognition. However, if the credit risk on a financial instrument has not increased significantly since initial recognition, the Company is measured the loss allowance for that financial instrument at an amount equal to 12months ECL. TFRS 9 also requires a simplified approach for measuring the loss allowance at an amount equal to lifetime ECL for receivables. However, the Company applies a general approach for measuring the loss allowance at an amount equal to lifetime ECL for factoring receivables, hire purchase receivables, lease contract receivables, inventory finance receivables and financial guarantee contracts in certain circumstances.
IFS20Q1 05/05/2020 22:30
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Because the Company has elected to recognize the cumulative effect as an adjustment of retained earnings at the date of initial application, for the purpose of assessing whether there has been a significant increase in credit risk since initial recognition of financial instruments that remain recognized on the date of initial application of TFRS 9.
The result of the assessment is as follows:
Items existing as at January 1, 2020 that are subject to the impairment provisions of TFRS 9
Factoring receivables
Hire purchase receivables
Lease contract receivables
Inventory finance receivables
Unit: Baht Cumulative additional (decrease) loss allowance
recognized on
January 1, 2020
(6,103,559)
166
4,208,399
4,899,494
3,004,500
The additional credit loss allowance of Baht 3.00 million as at January 1, 2020 has been recognized against retained earnings, resulting in a decrease in retained earnings. The additional loss allowance is charged against the respective asset or provision for financial guarantee.
(c) Classification and measurement of financial liabilities
A significant change introduced by TFRS 9 in the classification and measurement of financial liabilities relates to the accounting for changes in the fair value of a financial liability designated as at FVTPL attributable to changes in the credit risk of the issuer.
Specifically, TFRS 9 requires that the changes in the fair value of the financial liability that is attributable to changes in the credit risk of that liability be presented in other comprehensive income, unless the recognition of the effects of changes in the liability's credit risk in other comprehensive income would create or enlarge an accounting mismatch in profit or loss. Changes in fair value attributable to a financial liability's credit risk are not subsequently reclassified to profit or loss, but are instead transferred to retained earnings when the financial liability is derecognized.
The application of TFRS 9 has had no impact on the classification and measurement of the Company's financial liabilities.
(d) Disclosure in relation to the initial application of TFRS 9
There were no financial assets or financial liabilities which the Company has elected to designated as at FVTPL at the date of initial application of TFRS 9.
IFS20Q1 05/05/2020 22:30
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(e)Impact of initial application of TFRS 9 on financial position
The table below show the amount of adjustment for each financial statement line item affected by the application of TFRS 9 for the current year.
Unit: Baht | ||||||
Impact on assets and equity | As previously | TFRS 9 adjustments | As restated | |||
as at 31 December 2019 | reported | (increase/ decrease) | ||||
Factoring receivables | ||||||
3,271,358,391 | (6,103,559) | 3,265,254,832 | ||||
Hire purchase receivables | 2,854,404 | 166 | 2,854,570 | |||
Lease contract receivables | 179,570,783 | 4,208,399 | 183,779,182 | |||
Inventory finance receivables | 156,381,176 | 4,899,494 | 161,280,670 | |||
Total effect on net assets | 3,004,500 | |||||
Retained earnings | 937,259,383 | (3,004,500) | 934,254,883 | |||
Total effect on equity | (3,004,500) |
The application of TFRS 9 has had no impact on the cash flows of the Company.
In addition, the Federation of Accounting Professions has announced two Accounting Treatment Guidances, which have been announced in the Royal Gazette on 22 April 2020, detail as follows:
Accounting Treatment Guidance on "The temporary relief measures for entities supporting their debtors who effected from the situations that affected Thailand's economy"
The objective of this accounting treatment guidance is to grant the temporary relief measures for entities helping their debtors who effected from the situations that affected Thailand's economy with the helping period during January 1, 2020 to December 31, 2021 or until there are any changes from the Bank of Thailand, which require the compliance for such changes. The entities who support their debtors and elect to apply this accounting treatment guidance should be comply with all relief measures specified in this accounting treatment guidance.
The Company has not adopted such accounting treatment guidance in the preparation of the interim financial statements for the three-month period ended March 31, 2020.
Accounting Treatment Guidance on "The temporary relief measures for additional accounting alternatives to alleviate the impacts from COVID-19 outbreak"
This accounting treatment guidance is the option for all entities applying Financial Reporting Standards for Publicly Accountable Entities. The entities getting impact from COVID-19 and have to prepare financial statements during the period which
IFS20Q1 05/05/2020 22:30
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COVID-19 situation still be highly uncertainty as at the end of reporting period. This may cause the entities' management to use the critical judgment in the estimation or the measurement and recognition of accounting transactions. The entities can apply this accounting treatment guidance for the preparation of financial statements with the reporting period ending within the period from January 1, 2020 to December 31, 2020.
The Company has not adopted such accounting treatment guidance in the preparation of the interim financial statements for the three-month period ended March 31, 2020.
3. SIGNIFICANT ACCOUNTING POLICIES
The interim financial statements have been prepared based on the basis, accounting policies and method of computation consistent with those used in the financial statements for the year ended December 31, 2019, except the adoption of new and revised Thai Financial Reporting Standards as described in Note 2. Accounting policies which significantly changed are as follows:
Financial instruments
Financial assets and financial liabilities are recognized in the Company's statement of financial position when the Company becomes a party to the contractual provisions of the instrument.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.
Financial assets
All recognized financial assets are measured subsequently in their entirely at either amortized cost or fair value, depending on the classification of the financial assets.
Impairment of financial assets
The Company always recognizes lifetime ECL for trade receivables, contract assets and lease receivables. The expected credit losses on these financial assets are estimated using a provision matrix based on the Company's historical credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both the current as well as the forecast direction of conditions at the reporting date, including time value of money where appropriate.
For all other financial instruments, the Company recognizes lifetime ECL when there has been a significant increase in credit risk since initial recognition. However, if the credit risk on the financial instrument has not increased significantly since initial recognition, the Company measures the loss allowance for that financial instrument at an amount equal to 12-month ECL.
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Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12-month ECL represents the portion of lifetime ECL that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.
Measurement and recognition of expected credit losses
The measurement of expected credit losses is a function of the probability of default, loss given default (i.e. the magnitude of the loss if there is a default) and the exposure at default. The assessment of the probability of default and loss given default is based on historical data adjusted by forward-looking information. As for the exposure at default, for financial assets, this is represented by the asset's gross carrying amount at the reporting date; for financial guarantee contracts, the exposure includes the amount drawn down as at the reporting date, together with any additional amounts expected to be drawn down in the future by default date determined based on historical trend, the Company's understanding of the specific future financing needs of the debtors, and other relevant forward-looking information.
For a financial guarantee contracts, as the Company is required to make payments only in the event of a default by the debtor in accordance with the terms of the instrument that is guaranteed, the expected loss allowance is the expected payments to reimburse the holder for a credit loss that it incurs less any amounts that the Company expects to receive from the holder, the debtor or any other party.
If the Company has measured the loss allowance for a financial instrument at an amount equal to lifetime ECL in the previous reporting period, but determines at the current reporting date that the conditions for lifetime ECL are no longer met, the Company measures the loss allowance at an amount equal to 12-month ECL at the current reporting date, except for assets for which simplified approach was used.
4. SUPPLEMENTARY DISCLOSURE OF CASH FLOWS INFORMATION
4.1 Cash and cash equivalents as at March 31, 2020 and 2019 consist of the following:
2020 | 2019 | |
Baht | Baht | |
Cash on hands | 30,000 | 30,000 |
Cash at banks - current accounts | 11,828,931 | 17,061,397 |
Cash at banks - savings accounts | 376,932,463 | 381,301,942 |
388,791,394 | 398,393,339 |
4.2 Change in liabilities from financing activities as at March 31, 2020, consist of the following:
Cash flows from financing activities
IFS20Q1 05/05/2020 22:30
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Balances | Cash | Cash | Balances |
as at | received | paid | as at |
January 1, | March 31, | ||
2020 | 2020 | ||
Baht | Baht | Baht | Baht |
Short-term borrowings from | |||||||
financial institutions | 2,210,000,000 | 4,315,000,000 | (4,470,000,000) | 2,055,000,000 | |||
Long-term borrowings | 266,980,000 | - | (40,680,000) | 226,300,000 | |||
Total | 2,476,980,000 | 4,315,000,000 | (4,510,680,000) | 2,281,300,000 |
5. FACTORING RECEIVABLES
Factoring receivables as at March 31, 2020 and December 31, 2019 consist of the following:
As at | As at | ||||
March 31, | December 31, | ||||
2020 | 2019 | ||||
Baht | Baht | ||||
Factoring receivables | 4,005,974,516 | 4,134,869,583 | |||
Less | Allowance for doubtful accounts | (63,509,590) | (72,100,704) (*) | ||
3,942,464,926 | 4,062,768,879 | ||||
Less | Factoring payables | (852,824,762) | (791,410,488) | ||
Factoring receivables, net | 3,089,640,164 | 3,271,358,391 |
- As at December 31, 2019, the Company has provided for the allowance for doubtful accounts on a collective basis for factoring receivables which were classified as normal and overdue for less than 3 months which amounted to Baht 3,700,817.
Factoring receivables as at March 31, 2020 was classified by staging as follows:
As at March 31, 2020 | ||||||||||
Stage 1 | Stage 2 | Stage 3 | Total | |||||||
Baht | Baht | Baht | Baht | |||||||
Factoring receivables | 3,664,850,037 | 275,967,010 | 65,157,469 | 4,005,974,516 | ||||||
Less | Allowance for doubtful | (183,513) | (212,539) | (63,113,538) | (63,509,590) | |||||
accounts | ||||||||||
3,664,666,524 | 275,754,471 | 2,043,931 | 3,942,464,926 |
Factoring receivables as at December 31, 2019 was classified by aging as follows:
As at | |
December 31, | |
2019 | |
Baht | |
Current | 2,948,279,369 |
Overdue : | |
Not more than 3 months | 1,107,450,683 |
Over 3 months but not more than 6 months | 11,113,260 |
Over 6 months but not more than 12 months | 7,589,594 |
Debtors subject to legal proceedings | 60,436,677 |
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LessAllowance for doubtful accounts | (72,100,704) |
4,062,768,879 |
In June 2019, the Supreme Court judged the Company to win the lawsuit against customers. The Company received cash from prosecution totaling by Baht 71.25 million. The Company reversed allowance for doubtful accounts for factoring receivables and inventory finance receivables amounted to Baht 45.05 million and Baht 10.00 million, respectively, and recognized the remaining balance amounted to Baht 16.20 million in other income in the statements of comprehensive income for the year ended December 31, 2019.
6. HIRE PURCHASE RECEIVABLES
Hire purchase receivables as at March 31, 2020 and December 31, 2019 consist of the following:
As at | As at | ||||
March 31, | December 31, | ||||
2020 | 2019 | ||||
Baht | Baht | ||||
Outstanding contract price | 4,312,126 | 2,960,903 | |||
LessUnearned financing income | (246,720) | (102,826) | |||
4,065,406 | 2,858,077 | ||||
LessAllowance for doubtful accounts | (7,492) | (3,673) (*) | |||
Due within one year | 4,057,914 | 2,854,404 | |||
3,157,126 | 2,960,903 | ||||
LessUnearned financing income | (190,444) | (102,826) | |||
LessAllowance for doubtful accounts | - | (3,673) | |||
Current portion of hire purchase receivables, net | 2,966,682 | 2,854,404 | |||
Hire purchase receivables, net | 1,091,232 | - |
- As at December 31, 2019, the Company has provided for the allowance for doubtful accounts on a collective basis for hire purchase receivables which were classified as normal and overdue for less than 3 months which amounted to Baht 3,673.
Hire purchase receivables as at March 31, 2020 was classified by staging as follows:
As at March 31, 2020 | ||||||||||
Stage 1 | Stage 2 | Stage 3 | Total | |||||||
Baht | Baht | Baht | Baht | |||||||
Hire purchase receivables | 4,065,406 | - | - | 4,065,406 | ||||||
LessAllowance for doubtful accounts | (7,492) | - | - | (7,492) | ||||||
4,057,914 | - | - | 4,057,914 |
Hire purchase receivables as at December 31, 2019 was classified by aging as follows:
As at
December 31,
2019
Baht
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Current | 574,684 |
Overdue : | 2,283,393 |
Not more than 3 months | |
LessAllowance for doubtful accounts | (3,673) |
2,854,404 |
7. LEASE CONTRACT RECEIVABLES
Lease contract receivables as at March 31, 2020 and December 31, 2019 consist of the following:
As at | As at | |||
March 31, | December 31, | |||
2020 | 2019 | |||
Baht | Baht | |||
Outstanding contract price | 318,912,244 | 307,890,952 | ||
LessDeposits on long-term lease contracts | (105,354,550) | (106,065,859) | ||
Less | Unearned financing income | (21,975,645) | (20,651,983) | |
191,582,049 | 181,173,110 | |||
LessAllowance for doubtful accounts | (5,101,935) | (1,602,327) (*) | ||
186,480,114 | 179,570,783 | |||
Due within one year | 131,021,870 | 135,828,211 | ||
Less | Deposits on long-term lease contracts | (29,436,475) | (33,021,898) | |
Less | Unearned financing income | (12,678,205) | (11,905,151) | |
Current portion of lease contract receivables, net | 88,907,190 | 90,901,162 | ||
Lease contract receivables, net | 97,572,924 | 88,669,621 |
- As at December 31, 2019, the Company has provided for the allowance for doubtful accounts on a collective basis for lease contract receivables which were classified as normal and overdue for less than 3 months which amounted to Baht 231,084.
Lease contract receivables as at March 31, 2020 was classified by staging as follows:
As at March 31, 2020 | ||||||||||
Stage 1 | Stage 2 | Stage 3 | Total | |||||||
Baht | Baht | Baht | Baht | |||||||
Lease contract receivables | 158,202,465 | 29,020,517 | 4,359,067 | 191,582,049 | ||||||
LessAllowance for doubtful accounts | (1,772,641) | (2,539,620) | (789,674) | (5,101,935) | ||||||
156,429,824 | 26,480,897 | 3,569,393 | 186,480,114 |
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Lease contract receivables as at December 31, 2019 was classified by aging as follows:
As at | |
December 31, | |
2019 | |
Baht | |
Current | 158,893,422 |
Overdue : | |
Not more than 3 months | 16,140,524 |
More than 12 months | 6,139,164 |
LessAllowance for doubtful accounts | (1,602,327) |
179,570,783 |
8. INVENTORY FINANCE RECEIVABLES
Inventory finance receivables as at March 31, 2020 and December 31, 2019 consist of the following:
As at | As at | ||||
March 31, | December 31, | ||||
2020 | 2019 | ||||
Baht | Baht | ||||
Inventory finance receivables | 139,291,089 | 160,211,622 | |||
LessAllowance for doubtful accounts | (7,730,814) | (3,830,446) (*) | |||
Inventory finance receivables, net | 131,560,275 | 156,381,176 |
- As at December 31, 2019, the Company has not provide the allowance for doubtful accounts on a collective basis for inventory finance receivables which were classified as normal and overdue for less than 3 months.
Inventory finance receivables as at March 31, 2020 was classified by staging as follows:
Stage 1 | As at March 31, 2020 | |||||||||
Stage 2 | Stage 3 | Total | ||||||||
Baht | Baht | Baht | Baht | |||||||
Inventory finance receivables | 122,683,646 | 12,776,997 | 3,830,446 | 139,291,089 | ||||||
LessAllowance for doubtful accounts | (3,384,531) | (515,837) | (3,830,446) | (7,730,814) | ||||||
119,299,115 | 12,261,160 | - | 131,560,275 |
Inventory finance receivables as at December 31, 2019 was classified by aging as follows:
As at | |
December 31, | |
2019 | |
Baht | |
Current | 156,381,176 |
Overdue : | |
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Over 6 months but not more than 12 months | 1,108,542 |
Debtors subject to legal proceedings | 2,721,904 |
LessAllowance for doubtful accounts | (3,830,446) |
156,381,176 |
9. INVESTMENT PROPERTY
In March 2019, the Company transferred partial of condominium at cost and net book value of Baht 25.51 million and Baht 21.92 million, respectively, from plant and equipment to investment property because of change in purpose from owner-occupation to investing in the future.
As at March 31, 2020 and December 31, 2019, fair value of investment property of the Company which amounted to Baht 131.14 millionin each year.
10. SHORT-TERM BORROWINGS FROM FINANCIAL INSTITUTIONS
Short-term borrowings from financial institutions as at March 31, 2020 and December 31, 2019 consist of the following:
As at | As at | |
March 31, | December 31, | |
2020 | 2019 | |
Baht | Baht | |
Promissory notes | 2,055,000,000 | 2,210,000,000 |
As at March 31, 2020 and December 31, 2019, the Company has short-term borrowings from financial institutions which bear interest rates at 2.00% to 2.70% per annum and 2.10% to 3.10% per annum, respectively. The Company has to comply with the conditions specified in the loan agreements with each financial institutions in that the Company should maintain its financial covernants.
11. LONG-TERM BORROWINGS
Long-term borrowings as at March 31, 2020 and December 31, 2019 consist of the following:
As at | As at | |||
March 31, | December 31, | |||
2020 | 2019 | |||
Baht | Baht | |||
Long-term borrowings | 226,300,000 | 266,980,000 | ||
Current portion of long-term borrowings | (134,720,000) | (146,720,000) | ||
91,580,000 | 120,260,000 |
As at March 31, 2020 and December 31, 2019, the Company entered into long-term borrowings at the floating interest rates 2.28% to 4.00% per annum and 3.62% to 4.00% per annum, respectively, and are repayable quarterly installments, the last installment of such
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borrowings fall due in October 2022. The Company has to comply with the conditions specified in the loan agreements with each financial institutions in that the Company should maintain its financial covenants.
12. RELATED PARTY TRANSACTIONS
The accompanying financial statements include certain transactions with related companies. The relationship may be that of shareholding or the companies may have the same group of shareholders or directors. The financial statements reflect the effects of these transactions in the normal business practice, and the price rates, interest rates, terms and conditions are considered to be at arms length, for related party as at the date received by the Board or the shareholders approved.
Significant transactions with related parties for the three-month periods ended March 31, 2020 and 2019 are as follows:
2020 | 2019 | |||
Management benefit expenses | Baht | Baht | ||
Short-term benefits | 8,197,950 | 8,060,250 | ||
Post-employment benefits | 209,897 | 197,133 | ||
Other long-term benefits | 13,928 | 16,244 | ||
8,421,775 | 8,273,627 |
13. COMMITMENTS
As at March 31, 2020 and December 31, 2019, the Company has the committed credit facility agreements with financial institutions for general corporate funding requirements as follows:
As at | As at | |
March 31, | December 31, | |
2020 | 2019 | |
Baht | Baht | |
Total credit facilities | 5,239,000,000 | 5,197,000,000 |
As at March 31, 2020 and December 31, 2019, the Company had utilized the letter of credit amounting to Baht 5.64 million and Baht 9.36 million, respectively, for factoring, hire purchase and leasing contract. However, as at March 31, 2020 and December 31, 2019, the Company had unused such credit facilities with financial institutions totaling Baht 2,520 million and Baht 2,306 million, respectively.
14. FINANCIAL INFORMATION BY SEGMENT
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The business segment results are prepared based on the Management of the company. The operating results by business segment provided to Chief Operating Decision Maker to make decisions about allocating resources to, and assessing the performance of, operating segments is measured in accordance with Thai Financial Reporting Standard.
The business segments are described below:
Factoring business: is a short-term borrowings that provides liquidity to the business immediately and enables the business to increase its turnover in the form of buying accounts receivable. The factoring facility is applicable to both domestic and international sales.
Hire purchase and Leasing business: are long-term borrowings for invested in business industry.
Others: encompasses a range of activities from corporate decisions, income and expenses not attributed to the business segments described.
For the three-month periods ended March 31, 2020 and 2019, there is no revenue from a single external customer contributed 10% or more to the Company's total revenue.
The financial statements by business segment for the three-month periods ended March 31,
2020 and 2019 were as follow:
Unit : Thousand Baht | ||||||||||||||||||||||||||||
For the three-month periods ended March 31, 2020 | For the three-month periods ended March 31, 2019 | |||||||||||||||||||||||||||
Factoring | Hire | Others | Total | Factoring | Hire | Others | Total | |||||||||||||||||||||
business | purchase | business | purchase | |||||||||||||||||||||||||
and Leasing | and Leasing | |||||||||||||||||||||||||||
business | business | |||||||||||||||||||||||||||
Income from operations | 93,556 | 4,076 | - | 97,632 | 96,708 | 4,295 | - | 101,003 | ||||||||||||||||||||
Other income | 11,723 | 692 | - | 12,415 | 9,410 | 698 | - | 10,108 | ||||||||||||||||||||
Total income | 105,279 | 4,768 | - | 110,047 | 106,118 | 4,993 | - | 111,111 | ||||||||||||||||||||
Selling and administrative | ||||||||||||||||||||||||||||
expenses | 38,238 | 1,732 | - | 39,970 | 36,159 | 1,701 | - | 37,860 | ||||||||||||||||||||
Doubtful accounts | ||||||||||||||||||||||||||||
(reversal) | (3,487) | 76 | - | (3,411) | (1,338) | (172) | - | (1,510) | ||||||||||||||||||||
Finance cost | 12,614 | 571 | - | 13,185 | 16,442 | 774 | - | 17,216 | ||||||||||||||||||||
Total operation expenses | 47,365 | 2,379 | - | 49,744 | 51,263 | 2,303 | - | 53,566 | ||||||||||||||||||||
Profit before income tax | 57,914 | 2,389 | - | 60,303 | 54,855 | 2,690 | - | 57,545 | ||||||||||||||||||||
Income tax expenses | 11,622 | (29) | - | 11,593 | 10,774 | 730 | - | 11,504 | ||||||||||||||||||||
Net profit for the periods | 46,292 | 2,418 | - | 48,710 | 44,081 | 1,960 | - | 46,041 | ||||||||||||||||||||
Unit : Thousand Baht | ||||||||||||||||||||||||||||
As at March 31, 2020 | As at December 31, 2019 | |||||||||||||||||||||||||||
Factoring | Hire | Others | Total | Factoring | Hire | Others | Total | |||||||||||||||||||||
business | purchase | business | purchase | |||||||||||||||||||||||||
and Leasing | and Leasing | |||||||||||||||||||||||||||
business | business | |||||||||||||||||||||||||||
Total assets | 3,221,200 | 190,538 | 529,586 | 3,941,324 | 3,427,740 | 182,425 | 502,866 | 4,113,031 |
15. EVENT AFTER THE REPORTING PERIOD
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On April 1, 2020, the Board of Directors Meeting passed the resolutions to pay interim dividend at the rate of Baht 0.235 per to share to shareholders for 493,499,975 shares, totaling
Baht 115.97 million. Such dividend was paid on April 30, 2020.
16. APPROVAL OF THE INTERIM FINANCIAL STATEMENTS
These interim financial statements have been approved for issue by the authorized director of the Company on May 5, 2020.
IFS20Q1 05/05/2020 22:30
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IFS Capital Limited published this content on 05 May 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 06 May 2020 00:43:06 UTC