General Announcement::Announcement by Subsidiary, IFS Capital (Thailand) Public Company Limited

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

06-Aug-2020 19:35:06

Status

New

Announcement Sub Title

Announcement by Subsidiary, IFS Capital (Thailand) Public Company Limited

Announcement Reference

SG200806OTHRWA38

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 Second Quarter 2020 Results.

Attachments

SGX%20Announcement%20-%20IFST%20-%20Second%20Quarter%202020%20Results.pdf

Total size =842K 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 June 30, 2020 and the related statements of comprehensive income for the three-month and six-month periods ended June 30, 2020, and the related statements of changes in shareholders' equity and cash flows for six-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
August 6, 2020	DELOITTE TOUCHE TOHMATSU JAIYOS AUDIT CO., LTD.

IFS CAPITAL (THAILAND) PUBLIC COMPANY LIMITED

STATEMENT OF FINANCIAL POSITION

AS AT JUNE 30, 2020

				UNIT : BAHT
		"Unaudited"
	Notes	As at		As at
		June 30,		December 31,
		2020	2019
ASSETS
CURRENT ASSETS
Cash and cash equivalents		357,854,021	364,123,985
Factoring receivables	5	2,334,658,573	3,271,358,391
Current portion of hire purchase receivables	6	2,158,459	2,854,404
Current portion of lease contract receivables	7	80,451,054	90,901,162
Inventory finance receivables	8	118,615,445	156,381,176
Other current assets		7,912,478	6,401,066
Total Current Assets		2,901,650,030	3,892,020,184
NON-CURRENT ASSETS
Bank deposits held as collateral		161,799	161,183
Hire purchase receivables	6	833,535	-
Lease contract receivables	7	82,135,719	88,669,621
Plant and equipment	9	26,205,636	28,953,003
Investment properties	9	65,019,732	67,338,041
Other intangible assets		791,642	920,369
Deferred tax assets		34,269,595	34,495,183
Other non-current assets		652,150	473,390
Total Non-current Assets		210,069,808	221,010,790
TOTAL ASSETS		3,111,719,838	4,113,030,974

See condensed notes to the financial statements

IFS CAPITAL (THAILAND) PUBLIC COMPANY LIMITED

STATEMENT OF FINANCIAL POSITION (CONTINUED)

AS AT JUNE 30, 2020

				UNIT : BAHT
		"Unaudited"
	Notes	As at		As at
		June 30,		December 31,
		2020	2019
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Short-term borrowings from financial institutions	10	1,265,000,000	2,210,000,000
Other current payables	16	35,002,711	60,951,731
Current portion of long-term borrowings	11	140,080,000	146,720,000
Other current liabilities	16	21,470,154	31,097,568
Total Current Liabilities		1,461,552,865	2,448,769,299
NON-CURRENT LIABILITIES
Long-term borrowings	11	141,540,000	120,260,000
Provisions for employee benefits		33,459,617	31,383,168
Other non-current liabilities		-	762,750
Total Non-current Liabilities		174,999,617	152,405,918
TOTAL LIABILITIES		1,636,552,482	2,601,175,217

IFS CAPITAL (THAILAND) PUBLIC COMPANY LIMITED

STATEMENT OF FINANCIAL POSITION (CONTINUED)

AS AT JUNE 30, 2020

			UNIT : BAHT
	"Unaudited"
Notes	As at		As at
	June 30,		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	900,570,982	937,259,383
TOTAL SHAREHOLDERS' EQUITY	1,475,167,356	1,511,855,757
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	3,111,719,838	4,113,030,974

See condensed notes to the financial statements

IFS CAPITAL (THAILAND) PUBLIC COMPANY LIMITED STATEMENT OF COMPREHENSIVE INCOME

FOR THE THREE-MONTH PERIOD ENDED JUNE 30, 2020

"UNAUDITED"

			UNIT : BAHT
Notes	2020	2019
REVENUES
Factoring income	60,545,652	74,390,730
Hire purchase income	80,242	148,942
Finance lease income	3,707,492	4,684,997
Factoring commission and service fees	21,056,365	26,413,896
Other income	9,692,180	27,190,206
Total Revenues	95,081,931	132,828,771

EXPENSES

Selling expenses
Administrative expenses
Management benefit expenses	12
Expected credit losses
Reversal of doubtful accounts	5
Finance cost
Total Expenses

PROFIT BEFORE INCOME TAX EXPENSE

INCOME TAX EXPENSE

PROFIT FOR THE PERIODS

OTHER COMPREHENSIVE INCOME

TOTAL COMPREHENSIVE INCOME FOR THE PERIODS

BASIC EARNINGS PER SHARE	BAHT
WEIGHTED AVERAGE NUMBER OF
ORDINARY SHARES	SHARES

4,000,020	6,610,384
23,869,810	30,831,539
10,468,774	10,478,828
3,788,569	-
-	(47,949,562)
11,065,974	18,552,240
53,193,147	18,523,429
41,888,784	114,305,342
8,310,421	22,879,188
33,578,363	91,426,154
-	-
33,578,363	91,426,154
0.07	0.19
493,499,975	493,499,975

See condensed notes to the financial statements

IFS CAPITAL (THAILAND) PUBLIC COMPANY LIMITED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2020

"UNAUDITED"

			UNIT : BAHT
Notes	2020	2019
REVENUES
Factoring income	129,170,935	145,512,150
Hire purchase income	146,348	314,378
Finance lease income	7,717,385	8,815,046
Factoring commission and service fees	45,987,201	51,999,994
Other income	22,107,286	37,297,752
Total Revenues	205,129,155	243,939,320

EXPENSES

Selling expenses
Administrative expenses
Management benefit expenses	12
Expected credit losses
Reversal of doubtful accounts	5
Finance cost
Total Expenses

PROFIT BEFORE INCOME TAX EXPENSE

INCOME TAX EXPENSE

PROFIT FOR THE PERIODS

OTHER COMPREHENSIVE INCOME

TOTAL COMPREHENSIVE INCOME FOR THE PERIODS

BASIC EARNINGS PER SHARE	BAHT
WEIGHTED AVERAGE NUMBER OF
ORDINARY SHARES	SHARES

9,133,877	11,966,274
50,283,779	55,061,882
18,890,549	18,752,455
377,853	-
-	(49,459,472)
24,250,994	35,768,158
102,937,052	72,089,297
102,192,103	171,850,023
19,903,510	34,383,331
82,288,593	137,466,692
-	-
82,288,593	137,466,692
0.17	0.28

493,499,975 493,499,975

See condensed notes to the financial statements

IFS CAPITAL (THAILAND) PUBLIC COMPANY LIMITED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2020 "UNAUDITED"

									UNIT : BAHT
	Notes	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		-	-	-	137,466,692	137,466,692
Dividends paid	13.2	-	-	-	(83,894,996)	(83,894,996)
Ending balance as at June 30, 2019		493,499,975	31,746,399	49,350,000	843,151,091	1,417,747,465
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	2.5	-	-	-	(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		-	-	-	82,288,593	82,288,593
Dividends paid	13.1	-	-	-	(115,972,494)	(115,972,494)
Ending balance as at June 30, 2020		493,499,975	31,746,399	49,350,000	900,570,982	1,475,167,356

See condensed notes to the financial statements

IFS CAPITAL (THAILAND) PUBLIC COMPANY LIMITED

STATEMENT OF CASH FLOWS

FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2020

"UNAUDITED"

			UNIT : BAHT
Notes	2020	2019
CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax expenses	102,192,103	171,850,023
Adjustments for :
Expected credit losses	377,853	-
Reversal of doubtful accounts	-	(49,459,472)
Interest expenses	24,022,322	35,464,777
Employment benefits expense (Reverasal)	2,076,449	(6,080,878)
Depreciation and amortization	5,312,471	5,950,706
	133,981,198	157,725,156
Operating assets (increase) decrease
Factoring receivables	944,913,374	179,373,445
Hire purchase receivables	(140,137)	7,338,086
Lease contract receivables	9,215,463	(25,587,876)
Inventory finance receivables	33,940,916	(12,353,913)
Amount due from related companies	-	19,550
Other current assets	(1,511,412)	(6,255,925)
Bank deposits held as collateral	(616)	(608)
Other non-current assets	(178,760)	(67,612)
Operating liabilities increase (decrease)
Amount due to a related companies	-	29,522
Other current payables	(25,108,583)	-
Other current liabilities	(3,940,178)	(12,037,309)
Other non-current liabilities	(762,750)	-
Cash received from operating activities	1,090,408,515	288,182,516
Interest expense paid	(24,862,760)	(35,834,459)
Interest tax paid	(25,365,157)	(21,504,261)
Net cash provide by operating activities	1,040,180,598	230,843,796

IFS CAPITAL (THAILAND) PUBLIC COMPANY LIMITED

STATEMENT OF CASH FLOWS (CONTINUED)

FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 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		(69,218)	-
Net cash used in investing activities		(118,068)	(44,940)
CASH FLOWS FROM FINANCING ACTIVITIES
Cash paid for short-term borrowings
to financial institutions	4.2	(7,825,000,000)	(9,250,000,000)
Cash received from short-term borrowings
from financial institutions	4.2	6,880,000,000	9,115,000,000
Cash paid for long-term borrowings	4.2	(85,360,000)	(76,340,000)
Cash received from long-term borrowings	4.2	100,000,000	100,000,000
Cash paid for dividend		(115,972,494)	(83,894,996)
Net cash used in financing activities		(1,046,332,494)	(195,234,996)
Net increase (decrease) in cash and cash equivalents		(6,269,964)	35,563,860
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	357,854,021	398,552,192

See condensed notes to the financial statements

IFS CAPITAL (THAILAND) PUBLIC COMPANY LIMITED CONDENSED NOTES TO THE FINANCIAL STATEMENTS

FOR THE THREE-MONTH AND SIX-MONTH PERIODS ENDED JUNE 30, 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:

1. Factoring
2. 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.

- 2 -

2. BASIS FOR PREPARATION AND PRESENTATION OF THE INTERIM FINANCIAL STATEMENTS

1. 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.
2. 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.
3. The unaudited results of operations presented in the three-month and six-month periods ended June 30, 2020 are not necessarily an indication nor anticipation of the operating results for the full year.
4. 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 and six-month periods ended June 30, 2020 should be read in conjunction with the audited financial statements for the year ended December 31, 2019.
5. 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:
6. 1. The classification and measurement of financial assets and financial liabilities;
   2. Impairment of financial assets; and
   3. General hedge accounting.

- 3 -

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;

1. Factoring receivables
2. Hire purchase receivables
3. Lease contract receivables
4. Inventory finance receivables and
5. 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 12‑months ECL. 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.

- 4 -

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) General hedge accounting

The general hedge accounting requirements the three types of hedge accounting. In addition, the effectiveness test has been assessed. Disclosure requirements about the Company's risk management activities have also been introduced.

- 5 -

TFRS 9 requires hedging gains and losses to be recognized as an adjustment to the initial carrying amount of non-financial hedged items (basis adjustment). In addition, transfers from the hedging reserve to the initial carrying amount of the hedged item are not reclassification adjustments under TAS 1 "Presentation of Financial Statements" and hence they do not affect other comprehensive income. Hedging gains and losses subject to basis adjustments are categorized as amounts that will not be subsequently reclassified to profit or loss in other comprehensive income.

The application of the TFRS 9 hedge accounting requirements has had no other impact on the results and financial position of the Company for the current years.

(e) 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.

(f) Impact of initial application of TFRS 9 on financial position

The table below show the amount of adjustment in the financial statements 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	3,277,461,950
Hire purchase receivables	2,854,404	(166)	2,854,238
Lease contract receivables	179,570,783	(4,208,399)	175,362,384
Inventory finance receivables	156,381,176	(4,899,494)	151,481,682
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.

- 6 -

The Company has elected to apply the temporary relief measures as follows:

The measurement of expected credit losses in cases where the Company use a general approach. The Company has considered to lightly weight on forward-looking information relating to the temporary crisis and prefer the information reflecting ability of debt payment from historical experience.

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 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 and six-month periods ended June 30, 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:

Accounting policies which has been effective after January 1, 2020 onwards

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.

- 7 -

Impairment of financial assets

The Company always recognizes lifetime ECL for factoring receivables, hire purchase receivables, lease contract receivables and inventory finance 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.

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.

Write-off policy

The Company writes off a financial asset when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery, e.g. when the debtor has been placed under liquidation or has entered into bankruptcy proceedings, or in the case of trade receivables, when the amounts are over two years past due, whichever occurs sooner. Financial assets written off may still be subject to enforcement activities under the Company's recovery procedures, taking into account legal advice where appropriate. Any recoveries made are recognized in profit or loss.

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 financial assets, the expected credit loss is estimated as the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the Company expects to receive, discounted at the original effective interest rate. For a lease receivable, the cash flows used for determining the expected credit losses is consistent with the cash flows used in measuring the lease receivable in accordance with TFRS 16 "Leases".

- 8 -

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.

Accounting policies which has been effective before January 1, 2020

Allowance for doubtful accounts

Allowance for doubtful accounts is an estimate of the debts which may prove to be uncollectible. Based on review of the current status of each receivable, the Company sets up the allowance for doubtful accounts as follows:

	Percentage of receivable
Overdue up to 3 months not over 6 months	20
Overdue up to 6 months not over 12 months	50
Overdue up to 12 months	100

In addition, the Company had determined to set up the allowance for doubtful accounts on a collective basis for factoring, hire purchase, lease contract receivables and inventory finance receivables which are classified as normal and overdue less than 3 months which have similar credit risk characteristics assessed based on the historical loss experience of each loan category (see Notes 5, 6, 7 and 8).

Critical Judgements in Applying Accounting Policies

Expected credit losses are measured as an allowance equal to 12-month ECL for stage 1 assets, or lifetime ECL for stage 2 or stage 3 assets. An asset moves to stage 2 when its credit risk has increased significantly since initial recognition. TFRS 9 does not define what constitutes a significant increase in credit risk. In assessing whether the credit risk of an asset has significantly increased the Company takes into account qualitative and quantitative reasonable and supportable forward looking information.

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4. SUPPLEMENTARY DISCLOSURE OF CASH FLOWS INFORMATION

4.1 Cash and cash equivalents as at June 30, 2020 and 2019 consist of the following:

	2020		2019
	Baht	Baht
Cash on hands	30,000		30,000
Cash at banks - current accounts	16,454,489		19,224,352
Cash at banks - savings accounts	341,369,532		379,297,840
	357,854,021		398,552,192

4.2 Change in liabilities from financing activities as at June 30, 2020, consist of the following:

			Cash flows from financing activities
	Balances	Cash		Cash		Balances
	as at	received		paid		as at
	January 1,					June 30,
	2020					2020
	Baht	Baht		Baht		Baht
Short-term borrowings from
financial institutions	2,210,000,000		6,880,000,000	(7,825,000,000)	1,265,000,000
Long-term borrowings	266,980,000		100,000,000		(85,360,000)		281,620,000
Total	2,476,980,000		6,980,000,000		(7,910,360,000)		1,546,620,000

5. FACTORING RECEIVABLES

Factoring receivables as at June 30, 2020 and December 31, 2019 consist of the following:

	As at			As at
	June 30,			December 31,
	2020	2019
	Baht			Baht
Factoring receivables	3,059,499,059	4,134,869,583
LessAllowance for expected credit losses	(63,887,148)	-
Allowance for doubtful accounts (*)	-	(72,100,704)
	2,995,611,911			4,062,768,879
LessFactoring payables	(660,953,338)	(791,410,488)
Factoring receivables, net	2,334,658,573			3,271,358,391

1. 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.

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Factoring receivables as at June 30, 2020 was classified by staging as follows:

		As at June 30, 2020		Unit : Baht
	Factoring		Recognized amount		Allowance
	receivables		as allowance for		for expected
			expected credit losses		credit losses
Low credit risk receivables	2,777,184,514	2,153,160,388	97,944
Significant increase in credit risk receivables	217,434,050	179,172,648	177,079
Default receivables in credit risk	64,880,495		63,612,125		63,612,125
Total	3,059,499,059		2,395,945,161		63,887,148

Factoring receivables as at June 30, 2020 and December 31, 2019 were classified by aging as follows:

	As at		As at
	June 30,		December 31,
	2020	2019
	Baht		Baht
Current	2,117,055,062	2,948,279,369
Overdue:	860,193,765
Not more than 3 months	1,107,450,683
Over 3 months but not more than 6 months	16,829,896	11,113,260
Over 6 months but not more than 12 months	5,541,771	7,589,594
Debtors subject to legal proceedings	59,878,565	60,436,677
LessAllowance for expected credit losses	(63,887,148)	-
Allowance for doubtful accounts	-		(72,100,704)
	2,995,611,911	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 statement of comprehensive income.

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6. HIRE PURCHASE RECEIVABLES

Hire purchase receivables as at June 30, 2020 and December 31, 2019 consist of the following:

		As at			As at
		June 30,			December 31,
		2020	2019
		Baht			Baht
Outstanding contract price	3,164,692	2,960,903
LessUnearned financing income	(166,478)	(102,826)
		2,998,214			2,858,077
LessAllowance for expected credit losses	(6,220)	-
Allowance for doubtful accounts (*)	-	(3,673)
Due within one year	2,991,994			2,854,404
2,298,442			2,960,903
LessUnearned financing income	(133,763)	(102,826)
Allowance for expected credit losses	(6,220)	-
Allowance for doubtful accounts	-	(3,673)
Current portion of hire purchase receivables, net	2,158,459			2,854,404
Hire purchase receivables, net		833,535			-

1. 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 June 30, 2020 was classified by staging as follows:

					As at June 30, 2020			Unit : Baht
		Hire purchase			Recognized amount			Allowance
		receivables			as allowance for			for expected
					expected credit losses			credit losses
Low credit risk receivables	1,917,269	2,080,652	3,752
Significant increase in credit risk receivables	1,080,945	1,084,040	2,468
Default receivables in credit risk	-	-	-
Total		2,998,214			3,164,692			6,220

Hire purchase receivables as at June 30, 2020 and December 31, 2019 were classified by aging as follows:

	As at			As at
	June 30,			December 31,
	2020	2019
	Baht			Baht
Current	1,917,269	574,684
Overdue:	1,080,945	2,283,393
Not more than 3 months
LessAllowance for expected credit losses	(6,220)	-
Allowance for doubtful accounts	-	(3,673)
	2,991,994			2,854,404

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7. LEASE CONTRACT RECEIVABLES

Lease contract receivables as at June 30, 2020 and December 31, 2019 consist of the following:

	As at		As at
	June 30,		December 31,
	2020	2019
	Baht		Baht
Outstanding contract price	291,529,121	307,890,952
LessDeposits on long-term lease contracts	(102,359,410)	(106,065,859)
Unearned financing income	(17,993,165)		(20,651,983)
	171,176,546	181,173,110
LessAllowance for expected credit losses	(8,589,773)	-
Allowance for doubtful accounts (*)	-		(1,602,327)
	162,586,773		179,570,783
Due within one year	119,119,998	135,828,211
LessDeposits on long-term lease contracts	(28,551,901)	(33,021,898)
Unearned financing income	(10,117,043)		(11,905,151)
Current portion of lease contract receivables, net	80,451,054		90,901,162
Lease contract receivables, net	82,135,719		88,669,621

1. 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 June 30, 2020 was classified by staging as follows:

			As at June 30, 2020			Unit : Baht
		Lease contract			Recognized amount			Allowance
		receivables			as allowance for			for expected
					expected credit losses			credit losses
Low credit risk receivables	125,837,437	139,051,520	1,200,752
Significant increase in credit risk receivables	36,979,932	99,288,289	4,989,235
Default receivables in credit risk	8,359,177	8,359,177	2,399,786
Total		171,176,546			246,698,986			8,589,773

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Lease contract receivables as at June 30, 2020 and December 31, 2019 were classified by aging as follows:

	As at			As at
	June 30,			December 31,
	2020	2019
	Baht			Baht
Current	164,554,592	158,893,422
Overdue:	2,719,271
Not more than 3 months	16,140,524
Over 3 months but not more than 6 months	2,350,880	-
More than 12 months	1,551,803	6,139,164
LessAllowance for expected credit losses	(8,589,773)	-
Allowance for doubtful accounts	-	(1,602,327)
	162,586,773			179,570,783

8. INVENTORY FINANCE RECEIVABLES

Inventory finance receivables as at June 30, 2020 and December 31, 2019 consist of the following:

		As at			As at
		June 30,			December 31,
		2020	2019
		Baht			Baht
Inventory finance receivables	126,270,706	160,211,622
LessAllowance for expected credit losses	(7,655,261)	-
Allowance for doubtful accounts (*)	-	(3,830,446)
Inventory finance receivables, net		118,615,445			156,381,176

1. 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 June 30, 2020 was classified by staging as follows:

			As at June 30, 2020			Unit : Baht
		Inventory finance			Recognized amount as			Allowance
		receivables			allowance for expected			for expected
					credit losses			credit losses
Low credit risk receivables	111,217,952	111,217,952	2,540,792
Significant increase in credit risk receivables	10,357,030	10,357,030	418,745
Default receivables in credit risk	4,695,724	4,695,724	4,695,724
Total		126,270,706			126,270,706			7,655,261

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Inventory finance receivables as at June 30, 2020 and December 31, 2019 were classified by aging as follows:

	As at			As at
	June 30,			December 31,
	2020	2019
	Baht			Baht
Current	107,437,250	156,381,176
Overdue:
Not more than 3 months	15,308,399	-
Over 6 months but not more than 12 months	-	1,108,542
More than 12 months	803,153
Debtors subject to legal proceedings	2,721,904	2,721,904
LessAllowance for expected credit losses	(7,655,261)	-
Allowance for doubtful accounts	-	(3,830,446)
	118,615,445			156,381,176

9. INVESTMENT PROPERTIES

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 June 30, 2020 and December 31, 2019, fair value of investment property of the Company amounted to Baht 111.77 million and Baht 131.14 million, respectively.

10. SHORT-TERM BORROWINGS FROM FINANCIAL INSTITUTIONS

Short-term borrowings from financial institutions as at June 30, 2020 and December 31, 2019 consist of the following:

	As at	As at
	June 30,	December 31,
	2020	2019
	Baht	Baht
Promissory notes	1,265,000,000	2,210,000,000

As at June 30, 2020 and December 31, 2019, the Company has short-term borrowings from financial institutions which bear interest rates at 1.76% to 2.90% 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 has to maintain its financial covernants.

- 15 -

11. LONG-TERM BORROWINGS

Long-term borrowings as at June 30, 2020 and December 31, 2019 consist of the following:

	As at			As at
	June 30,			December 31,
	2020	2019
	Baht			Baht
Long-term borrowings	281,620,000	266,980,000
Current portion of long-term borrowings	(140,080,000)	(146,720,000)
	141,540,000			120,260,000

As at June 30, 2020 and December 31, 2019, the Company entered into long-term borrowings with financial institutions at the floating interest rates 2.87% to 4.00% per annum and 3.62% to 4.00% per annum, respectively, and are repayable quarterly installments, the last installment of such borrowings fall due in April 2023. The Company has to comply with the conditions specified in the loan agreements with each financial institution in that the Company has to 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 and six-month periods ended June 30, 2020 and 2019 are as follows:

	For the three-month		For the six-month
	periods ended		periods ended
	June 30,		June 30,
	2020	2019	2020	2019
Management benefit expenses	Baht		Baht		Baht		Baht
Short-term benefits	10,244,950	10,265,450	18,442,900	18,325,700
Post-employment benefits	209,898	197,134	419,795	394,267
Other long-term benefits	13,926	16,244	27,854	32,488
	10,468,774		10,478,828		18,890,549		18,752,455

- 16 -

1. DIVIDENDS PAID
2. 1. On April 1, 2020, the Board of Directors Meeting passed the resolutions to pay interim dividend at the rate of Baht 0.235 per share to shareholders for 493,499,975 shares, totaling Baht 115,972,494. Such dividend was paid on April 30, 2020. Additionally, the Ordinary Shareholder's Meeting has acknowledged the interim dividend payment on June 29, 2020.
   2. On April 22, 2019, the Ordinary Shareholder's Meeting passed the resolutions to pay dividend of Baht 0.17 per share on 493,499,975 shares, totaling Baht 83,894,996. Such dividend was paid on May 17, 2019.
3. COMMITMENTS

As at June 30, 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
	June 30,	December 31,
	2020	2019
	Baht	Baht
Total credit facilities	5,330,000,000	5,197,000,000

As at June 30, 2020 and December 31, 2019, the Company had utilized the letter of credit with financial institutions amounting to Baht 1.00 million and Baht 9.36 million, respectively, for factoring, hire purchase and leasing contract. However, as at June 30, 2020 and December 31, 2019, the Company had unused such credit facilities with financial institutions totaling Baht 3,423 million and Baht 2,306 million, respectively.

15. FINANCIAL INFORMATION BY SEGMENT

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.

- 17 -

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 account receivables. 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 and six-month periods ended June 30, 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 and six-month periods ended June 30, 2020 and 2019 were as follow:

														Unit : Thousand Baht
		For the three-month period ended June 30, 2020		For the three-month period ended June 30, 2019
		Factoring		Hire		Others		Total		Factoring		Hire		Others		Total
		business		purchase						business		purchase
				and Leasing								and Leasing
				business								business
Income from operations	81,602	3,788	-	85,390	100,805	4,834	-	105,639
Other income	9,063		629		-		9,692		26,417		773		-		27,190
Total income	90,665	4,417	-	95,082	127,222	5,607	-	132,829
Selling and administrative
expenses	36,564	1,774	-	38,338	45,894	2,027	-	47,921
Expected credit losses	302	3,487	-	3,789	-	-	-	-
Doubtful accounts
(reversal)	-	-	-	-	(49,257)	1,307	-	(47,950)
Finance cost	10,551		515		-		11,066		17,772		780		-		18,552
Total operation expenses	47,417	5,776	-	53,193	14,409	4,114	-	18,523
Profit before income tax
expenses	43,248	(1,359)	-	41,889	112,813	1,493	-	114,306
Income tax expenses
(income)	8,460	(150)	-	8,310	23,903	(1,023)	-	22,880
Net profit (loss)
for the periods		34,788		(1,209)		-		33,579		88,910		2,516		-		91,426

- 18 -

																											Unit : Thousand Baht
			For the six-month period ended June 30, 2020				For the six-month period ended June 30, 2019
			Factoring				Hire		Others		Total				Factoring				Hire		Others		Total
			business				purchase										business				purchase
						and Leasing													and Leasing
							business															business
Income from operations	175,158	7,864			-			183,022	197,512	9,129			-		206,641
Other income	20,786		1,321			-			22,107		35,827		1,471			-		37,298
Total income	195,944	9,185			-			205,129	233,339	10,600			-		243,939
Selling and administrative
expenses	74,802	3,506			-			78,308	82,053	3,728			-		85,781
Expected credit losses
(reversal)	(3,185)	3,563			-			378	-	-			-		-
Doubtful accounts
(reversal)	-	-			-			-	(50,595)	1,135			-		(49,460)
Finance cost	23,165		1,086			-			24,251		34,214		1,554			-		35,768
Total operation expenses	94,782	8,155			-			102,937	65,672	6,417			-		72,089
Profit before income tax
expenses	101,162	1,030			-			102,192	167,667	4,183			-		171,850
Income tax expenses
(income)	20,082		(179)			-			19,903		34,676		(293)			-		34,383
Net profit for the periods	81,080		1,209			-			82,289		132,991		4,476			-		137,467
																											Unit : Thousand Baht
							As at June 30, 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	2,453,274			165,579			492,867			3,111,720			3,427,740			182,425				502,866			4,113,031

16. RECLASSIFICATIONS

A reclassification has been made in the statement of financial position as at December 31, 2019, to conform to the classification used in the statement of financial position as at June 30, 2020 as follows:

Item	Previous presentation	Current presentation	Amount
			Baht
Accrued expenses	Other current liabilities	Other current payables	60,951,731

17. APPROVAL OF THE INTERIM FINANCIAL STATEMENTS

These interim financial statements have been approved for issue by the authorized director of the Company on August 6, 2020.