Haad Thip Public Company Limited and its subsidiary
Notes to the interim financial statements
For the three-month and six-month periods ended 30 June 2014 (Unaudited)
Note
Contents
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
General information
Basis of preparation of the interim financial statements
Seasonal operations
Related parties
Trade accounts receivable
Investment in subsidiary
Investment properties
Property, plant and equipment
Interest-bearing liabilities
Trade accounts payable
Segment information
Income tax expense
Promotional privileges
Basic earnings per share
Dividends
Agreement
Commitments with non - related parties
Contingent liability
13
Haad Thip Public Company Limited and its subsidiary
Notes to the interim financial statements
For the three-month and six-month periods ended 30 June 2014 (Unaudited)
These notes form an integral part of the interim financial statements.
The financial statements issued for Thai statutory and regulatory reporting purposes are prepared in
the Thai language. These English language financial statements have been prepared from the Thai
language statutory financial statements, and were approved and authorised for issue by the Board of
Directors on 11 August 2014.
1
General information
Haad Thip Public Company Limited, the “Company”, is incorporated in Thailand and has its
registered office at 87/1, Kanchanavanich Road, Thambol Banphru, Amphur Hadyai, Songkhla,
Thailand.
The Company was listed on the Stock Exchange of Thailand in December 1988.
The Company’s major shareholders during the financial period were Rattakul family (35.31%
shareholding), and Coca-Cola SABCO (Pty) Ltd. (24.12% shareholding) which was incorporated in
South Africa.
The principal businesses of the Company are manufacturing and distribution of soft drinks. Detail of
the Company’s subsidiary as at 30 June 2014 and 31 December 2013 is given in note 6.
2
Basis of preparation of the interim financial statements
(a)
Statement of compliance
The interim financial statements are prepared on a condensed basis in accordance with Thai
Accounting Standard (TAS) No. 34 (revised 2012) Interim Financial Reporting; guidelines
promulgated by the Federation of Accounting Professions (FAP); and applicable rules and
regulations of the Thai Securities and Exchange Commission.
The interim financial statements are prepared to provide an update on the financial statements for
the year ended 31 December 2013. They do not include all of the financial information required for
full annual financial statements but focus on new activities, events and circumstances to avoid
repetition of information previously reported. Accordingly, these interim financial statements should
be read in conjunction with the financial statements of the Company and its subsidiary for
the year ended 31 December 2013.
The accounting policies and methods of computation applied in these interim financial statements are
consistent with those applied in the financial statements for the year ended 31 December 2013 except
that the Group has adopted all the new and revised TFRS that are effective for annual periods
beginning on or after 1 January 2014. The adoption of these new and revised TFRS did not have any
material effect on the accounting policies, methods of computation, financial performance or position
of the Group.
(b)
Functional and presentation currency
The interim financial statements are presented in Thai Baht, which is the Group’s functional currency.
All financial information presented in Thai Baht has been rounded to the nearest thousand unless
otherwise stated.
14
Haad Thip Public Company Limited and its subsidiary
Notes to the interim financial statements
For the three-month and six-month periods ended 30 June 2014 (Unaudited)
(c)
Use of estimates and judgements
The preparation of interim financial statements in conformity with TFRS requires management to make
judgements, estimates and assumptions that affect the application of accounting policies and the
reported amounts of assets, liabilities, income and expenses. Actual results may differ from these
estimates.
In preparing these interim financial statements, the significant judgements made by management in
applying the Group’s accounting policies and the key sources of estimation uncertainty were the same
as those that applied to the financial statements for the year ended 31 December 2013.
3
Seasonal operations
The Group is subject to seasonal sales revenue from soft drink products. The majority of sales revenue
and expenditure are normally derived during the summer season.
4
Related parties
For the purposes of these financial statements, parties are considered to be related to the Group if the
Group has the ability, directly or indirectly, to control or joint control the party or exercise significant
influence over the party in making financial and operating decisions, or vice versa, or where the Group
and the party are subject to common control or common significant influence. Related parties may be
individuals or other entities.
Relationships with subsidiary are described in note 6. Relationship with key management and other
related parties were as follows:
Name of entities
Coca-Cola SABCO (Pty) Ltd.
Haadyai Nakarin Co.,Ltd.
Key management personnel
Country of
incorporation
/nationality
Nature of relationships
South Africa
Thailand
Thai
Major shareholder
Common director
Persons having authority and responsibility for
planning, directing and controlling the
activities of the entity, directly or indirectly,
including any director (whether executive or
otherwise) of the Group
The pricing policies for particular types of transactions are explained further below:
Transactions
Purchase of containers
Sales of land
Sales of machinery and equipment
Service fee for area utilisation
Key management personnel compensation
Pricing policies
Cost plus margin
Contractually agreed price
Contractually agreed price
Contractually agreed price
As defined by the Group’s policy
15
Haad Thip Public Company Limited and its subsidiary
Notes to the interim financial statements
For the three-month and six-month periods ended 30 June 2014 (Unaudited)
Significant transactions for the three-month and six-month periods ended 30 June 2014 and 2013 with
related parties were as follows:
Three-month period ended 30 June
Subsidiary
Purchase of containers
Service fee for area utilisation
Key management
Key management personnel
compensation
Short-term benefits
Post-employment benefits
Total key management personnel
compensation
Other related party
Sale of land
Six-month period ended 30 June
Subsidiary
Purchase of containers
Sales of machinery and equipment
Service fee for area utilisation
Key management
Key management personnel
compensation
Short-term benefits
Post-employment benefits
Total key management personnel
compensation
Other related party
Sale of land
Consolidated
Separate
financial statements
financial statements
2014
2013
2014
2013
(in thousand Baht)
-
-
119,941
660
85,632
670
13,925
838
13,055
170
13,925
838
13,055
170
14,763
13,225
14,763
13,225
56,748
-
56,748
-
Consolidated
Separate
financial statements
financial statements
2014
2013
2014
2013
(in thousand Baht)
-
-
218,721
1,320
117,516
57,970
1,290
25,508
1,676
23,928
340
25,508
1,676
23,928
340
27,184
24,268
27,184
24,268
56,748
-
56,748
-
16
Haad Thip Public Company Limited and its subsidiary
Notes to the interim financial statements
For the three-month and six-month periods ended 30 June 2014 (Unaudited)
Balances as at 30 June 2014 and 31 December 2013 with related parties were as follows:
Other receivable - related party
Consolidated
Separate
financial statements
financial statements
31 December
31 December
30 June
30 June
2014
2013
2014
2013
(in thousand Baht)
Subsidiary
Southern Rocks Co., Ltd.
Trade account payable
- related party
-
-
1,097
16,559
Consolidated
Separate
financial statements
financial statements
31 December
31 December
30 June
30 June
2014
2013
2014
2013
(in thousand Baht)
Subsidiary
Southern Rocks Co., Ltd.
-
-
94,781
40,540
Significant agreements with related parties
Land sale and purchase agreement
In April 2013, the Company sold the land to a related company with sale price of Baht 56.7 million.
The Company recorded gain from sales of land of Baht 26.5 million in the statements of income for the
three-month and six-month periods ended 30 June 2013 and transferred the revaluation surplus of
disposed assets of Baht 26.8 million to the retained earnings.
Sales of machinery and equipment agreement
On 30 November 2012, the Company entered into a sale of machinery and equipment agreement with its
subsidiary. The subsidiary has agreed to pay at the amounts as stipulated in the agreement.
Service agreements for area utilisation
The Company has entered into service agreements for area utilisation with its subsidiary for Hadyai
factory and Phoonpin factory of which the agreements have terms of 6 years and 8 years, respectively.
The subsidiary has agreed to pay service fees at the amounts as stipulated in the agreements.
5
Trade accounts receivable
Other parties
Less allowance for doubtful accounts
Net
Bad and doubtful debts expenses
(reversal) for
the three-month period ended
30 June
the six-month period ended
30 June
Consolidated
Separate
financial statements
financial statements
31 December
31 December
30 June
30 June
2014
2013
2014
2013
(in thousand Baht)
484,796
566,915
484,796
566,915
(728)
(1,639)
(728)
(1,639)
484,068
565,276
484,068
565,276
(796)
(92)
(796)
(92)
(911)
60
(911)
60
17
Haad Thip Public Company Limited and its subsidiary
Notes to the interim financial statements
For the three-month and six-month periods ended 30 June 2014 (Unaudited)
Aging analyses for trade accounts receivable were as follows:
Consolidated
Separate
financial statements
financial statements
31 December
31 December
30 June
30 June
2014
2013
2014
2013
(in thousand Baht)
Other parties
Within credit terms
Overdue:
Less than 3 months
3 - 6 months
6 - 12 months
Over 12 months
Less allowance for doubtful accounts
Net
471,006
541,539
471,006
541,539
10,945
1,675
442
728
484,796
(728)
484,068
22,610
456
671
1,639
566,915
(1,639)
565,276
10,945
1,675
442
728
484,796
(728)
484,068
22,610
456
671
1,639
566,915
(1,639)
565,276
The normal credit term granted by the Group ranges from 7 days to 90 days.
6
Investment in subsidiary
Separate
financial statements
2014
2013
(in thousand Baht)
59,497
19,249
40,248
59,497
59,497
Six-month period ended 30 June
At 1 January
Acquisitions
At 30 June
In February 2012, the Company invested in 99,996 shares of Southern Rocks Co., Ltd., at par value of
Baht 100 per share, amounting to Baht 10 million, representing 99.99% shareholding.
In October 2012, Southern Rocks Co., Ltd., registered with the Ministry of Commerce, an increase of
registered share capital of Baht 37 million from Baht 10 million to Baht 47 million by increasing the
number of shares from 100,000 shares to 470,000 shares with par value of Baht 100 per share, 25% shares
subscription was called up in December 2012. In February 2013, the subsidiary called up for the
remaining amount of the share subscription.
In June 2013, Southern Rocks Co., Ltd., registered with the Ministry of Commerce, an increase in
registered share capital of Baht 50 million from Baht 47 million to Baht 97 million by increasing the
number of shares from 470,000 shares to 970,000 shares with par value of Baht 100 per share, 25% shares
subscription was called up in June 2013.
As at 30 June 2014 and 31 December 2013, the Company had commitments for the purchase of
investment to such subsidiary which has not yet been called up amounting to Baht 37.5 million.
18
Haad Thip Public Company Limited and its subsidiary
Notes to the interim financial statements
For the three-month and six-month periods ended 30 June 2014 (Unaudited)
Investment in subsidiary as at 30 June 2014 and 31 December 2013, and dividend income from the investment for the six-month periods ended 30 June 2014 and
2013, were as follows:
Separate financial statements
Type of
business
Subsidiary
Southern Rocks
Co., Ltd.
Manufacture
and distribute
plastic bottles
and semifinished
plastic bottles
Ownership
interest
30
31
June
December
2014
2013
(%)
99.99
99.99
Total
Paid-up capital
30
31
June
December
2014
2013
59,500
59,500
Cost
30
June
2014
59,497
59,497
The subsidiary was incorporated in Thailand.
19
31
December
2013
59,497
59,497
Impairment
30
31
June
December
2014
2013
(in thousand Baht)
-
-
At cost- net
30
31
June
December
2014
2013
59,497
59,497
59,497
59,497
Dividend income for the
six - month period ended
30
30
June
June
2014
2013
21,419
21,419
-
Haad Thip Public Company Limited and its subsidiary
Notes to the interim financial statements
For the three-month and six-month periods ended 30 June 2014 (Unaudited)
7
Investment properties
Investment properties as at 30 June 2014 and 31 December 2013, represented land held for future
project which had an appraised value of Baht 52.8 million as shown in the appraiser’s reports dated
5 to 18 March 2010 by Siam Appraisal and Services Co., Ltd., a firm of independent professional
valuers, considering of open market value on an existing use basis.
In April 2013, the Company sold the investment property at cost of Baht 3.2 million to other party for
sale price of Baht 42.1 million which resulted gain from sales of land of Baht 38.9 million.
8
Property, plant and equipment
Acquisitions, disposals and transfers of property, plant and equipment during the six-month periods
ended 30 June 2014 and 2013 were as follows:
Six-month period ended 30 June
Land
Land improvements
Buildings and structures
and leasehold improvements
Machinery and equipment
Furniture and office equipment
Vehicles
Containers
Promotional equipment
Assets under construction
and installation
Total
Consolidated financial statements
2014
2013
Acquisitions
Disposals
Acquisitions
Disposals
and
and transfers
and
and transfers
transfers in
out - net book
transfers in
out - net
- at cost
value
- at cost
book value
(in thousand Baht)
4
17,492
17,308
20,093
25,638
3,062
8,579
31,785
123,961
20
-
-
-
35
425,410
21,167
24,502
11,456
12,573
42
1
349
-
424,232
919,396
408,595
439,187
21
19
286
52,576
52,881
30,200
-
Haad Thip Public Company Limited and its subsidiary
Notes to the interim financial statements
For the three-month and six-month periods ended 30 June 2014 (Unaudited)
Six-month period ended 30 June
Land
Land improvements
Buildings and structures
and leasehold improvements
Machinery and equipment
Furniture and office equipment
Vehicles
Containers
Promotional equipment
Assets under construction
and installation
Total
9
Separate financial statements
2014
2013
Acquisitions
Disposals
Acquisitions
Disposals
and
and transfers
and
and transfers
transfers in
out - net book
transfers in
out - net
- at cost
value
- at cost
book value
(in thousand Baht)
4
17,492
16,640
17,679
25,638
3,062
8,579
31,785
120,879
-
21
30,200
-
-
361,714
13,735
24,502
11,456
12,572
48,388
8,637
987
349
-
405,208
829,208
376,356
464,917
19
286
51,909
52,214
Interest-bearing liabilities
As at 30 June 2014, the Group and the Company had unutilised credit facilities totaling Baht 519.5
million and Baht 459.0 million, respectively (31 December 2013: Baht 607.7 million and Baht 539.6
million, respectively).
During the six-month period ended 30 June 2014, the Group and the Company additionally drewdown
long-term loans from a local financial institution from credit lines of which the loan agreements have
been entered into in 2012 as follows:
Credit
Drewdown
facility lines
amount
(in million Baht)
550
420
17
110
17
The Company
Subsidiary
Under the terms of the long-term loan agreements, the Group has to comply with certain conditions,
such as maintaining the debt to equity ratio, the debt covenant ratio and loan for construction of
building, purchase machinery and equipment as prescribed. The Group also assigned the benefits of an
insurance policy covering the above assets as collateral for the partial secured interest-bearing
liabilities.
As at 30 June 2014, a portion of the Group’s and the Company’s land, buildings, machinery and
equipment with carrying value totaling approximately Baht 543.6 million and Baht 501.3 million,
respectively (31 December 2013: Baht 542.5 million and Baht 498.5 million, respectively) were
mortgaged and pledged as collateral for the credit facilities obtained from a local bank. The Group also
assigned the benefits of an insurance policy covering a portion of the Group’s property and equipment
to a local bank as collateral for credit facilities obtained from the same bank.
21
Haad Thip Public Company Limited and its subsidiary
Notes to the interim financial statements
For the three-month and six-month periods ended 30 June 2014 (Unaudited)
10
Trade accounts payable
Note
Related party
Other parties
Total
11
4
Consolidated
Separate
financial statements
financial statements
30 June
31 December
30 June
31 December
2014
2013
2014
2013
(in thousand Baht)
94,781
40,540
331,208
362,785
287,451
346,790
331,208
362,785
382,232
387,330
Segment information
The Group operates in a single line of business as manufacturing and distribution of soft drinks,
therefore, management considers that the Group has only one major business segment. In addition, the
Group solely distributes in 14 provinces in Southern Thailand, therefore, management considers that
the Group has only one major geographic segment.
12
Income tax expense
According to the Royal Decree No. 492 B.E. 2553 dated 16 January 2010 and No. 566 B.E. 2556 dated
10 July 2013, the Group has been granted reduction in the corporate income tax rate to 3% of taxable
profit, to juristic companies or partnership whose place of business is located in the exclusive
development zone and whose revenue derived from manufacturing, selling of goods or rendering service
occurred within the exclusive development zone, starting from the accounting period of 2010 which
begins on or after 1 January 2010 until the accounting period of 2014 ending or after 31 December 2014.
13
Promotional privileges
By virtue of the provisions of the Industrial Investment Promotion Act of B.E. 2520, the subsidiary has
been granted privileges by the Board of Investment relating to semi-plastic bottles (Preform) and plastic bottles
(PET) businesses. The privileges granted include:
(a)
exemption from payment of import duty on machinery approved by the Board;
(b)
exemption from payment of income tax for certain operations for a period of eight years from the
date on which the income is first derived from such operations.
As a promoted company, the subsidiary must comply with certain terms and conditions prescribed in the
promotional certificates.
22
Haad Thip Public Company Limited and its subsidiary
Notes to the interim financial statements
For the three-month and six-month periods ended 30 June 2014 (Unaudited)
14
Basic earnings per share
The/calculation/of/basic/earnings/per/share/for/the/three-month/and/six-month/periods/ended/30/June
2014 and 2013 were based on the profit for the period attributable to equity holders of the Company and
the number of ordinary shares outstanding during the period by the weighted average method as follows:
For the three-month period ended
30 June
Profit attributable to equity holders of
the Company (basic)
Weighted average number of ordinary
shares outstanding (basic)
Basic earnings per share (in Baht)
For the six-month period ended
30 June
Profit attributable to equity holders of
the Company (basic)
Number of ordinary shares outstanding
at 1 January
Effect of shares issued on 8 February
Weighted average number of ordinary
shares outstanding (basic)
Basic earnings per share (in Baht)
15
Consolidated
Separate
financial statements
financial statements
2014
2013
2014
2013
(in thousand Baht / thousand shares)
59,461
67,733
54,169
53,132
199,218
0.30
199,218
0.34
199,218
0.27
199,218
0.27
Consolidated
Separate
financial statements
financial statements
2014
2013
2014
2013
(in thousand Baht / thousand shares)
75,218
111,222
40,915
92,215
199,218
-
166,015
26,232
199,218
-
166,015
26,232
199,218
0.38
192,247
0.58
199,218
0.21
192,247
0.48
Dividends
At the annual general meeting of the shareholders of the Company held on 24 April 2014, the
shareholders approved the appropriation of dividend of Baht 0.40 per share, amounting to Baht 79.7
million. The dividend was paid to the shareholders in May 2014.
At the annual general meeting of the shareholders of the Company held on 26 April 2013, the
shareholders approved the appropriation of dividend of Baht 0.30 per share, amounting to Baht 59.8
million. The dividend was paid to the shareholders in May 2013.
23
Haad Thip Public Company Limited and its subsidiary
Notes to the interim financial statements
For the three-month and six-month periods ended 30 June 2014 (Unaudited)
16
Agreement
The Exclusive Distribution License Agreement
The Company and two suppliers (altogether “Licensees”) entered into the Exclusive Distribution License
Agreement with a customer (“Licensor”), whereby the licensor permits the licensees to sell exclusively
fountain products in the stores of the licensor for a period of 4 years commencing from 1 March 2004 to
29 February 2008, which could be extended effectively for a further period of 4 years. The licensees
agreed to pay the marketing support fee at rates based on the purchase quantity of the licensor, as
stipulated in the agreement. If there is an extension of term of 4 years, the licensees have to pay the
marketing support fee annually in addition to the aforementioned marketing support fee. In consideration
thereof, the Company, as a licensee, has an obligation to pay the marketing support fee in proportion to
its sales amount.
On 1 January 2014, the licensees and the licensor entered into the memorandum of agreement, whereby
the licensor permits the licensees to sell fountain products in the stores of the licensor. The memorandum
of agreement has affected every parties from 1 January 2014 until the Exclusive Distribution License
Agreement has been signed by every parties. In consideration thereof, the Company, as a licensee, has an
obligation to pay the marketing support fee at rates based on the purchase quantity of the licensor, as
stipulated in the memorandum of agreement.
17
Commitments with non - related parties
Consolidated
Separate
financial statements
financial statements
30 June
31 December
30 June
31 December
2014
2013
2014
2013
(in thousand Baht)
Non-cancellable operating lease
commitments
Within one year
After one year but within five years
After five years
Total
5,561
1,686
376
7,623
4,156
657
430
5,243
5,561
1,686
376
7,623
4,156
657
430
5,243
Operating lease commitments

Long-term land lease agreements for the construction of a warehouse and other structures for the
period of thirty years expiring in February 2024 which can be extended for another period of thirty
years for one agreement, and for the period of twenty years expiring in October 2023 for another
agreement.

Lease agreements for advertising billboards, expiring in various periods up to June 2017.

Lease agreements for restaurant business for a period of one year expiring in September 2015.

Lease agreement for land and office building for a period of three years expiring in September 2014.

Lease agreements covering the vehicles for the periods of three to five years expiring in various
periods up to March 2019.
24
Haad Thip Public Company Limited and its subsidiary
Notes to the interim financial statements
For the three-month and six-month periods ended 30 June 2014 (Unaudited)

18
Lease agreements covering the equipment for the periods of three to five years expiring in various
periods up to December 2018.
Contingent liability
As at 30 June 2014, the Group and the Company were contingently liable for letters of guarantee issued
by a local bank in favor of certain government agencies, state enterprises and companies totaling
approximately Baht 147.5 million and Baht 147.5 million, respectively (31 December 2013: Baht 144.5
million and Baht 142.1 million, respectively), mainly in respect of excise tax and the use of electricity.
These letters of guarantee are collateralised by the mortgage and pledge of a portion of the Company’s
land, buildings, machinery and equipment as discussed in note 9.
25