Page 1

Asia Green Energy Public Company Limited and its subsidiaries Report and consolidated financial statements 31 December 2012


Independent Auditor's Report To the Shareholders of Asia Green Energy Public Company Limited I have audited the accompanying consolidated financial statements of Asia Green Energy Public Company Limited and its subsidiaries, which comprise the consolidated statement of financial position as at 31 December 2012, and the related consolidated statements of comprehensive income, changes in shareholders’ equity and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information, and have also audited the separate financial statements of Asia Green Energy Public Company Limited for the same period. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with Thai Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with Thai Standards on Auditing. Those standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.


Opinion In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Asia Green Energy Public Company Limited and its subsidiaries and of Asia Green Energy Public Company Limited as at 31 December 2012, and their financial performance and cash flows for the year then ended, in accordance with Thai Financial Reporting Standards. Emphasis of matter I draw attention to Note 28 to the financial statements, during the current year, the Company has reclassified investment properties transactions related to the preparation of the prior year’s separate financial statements as at 31 December 2011, as presented herein for comparative purposes. However, the Company has not reclassified them in the separate financial statements as at 1 January 2011 for comparative purposes because the Company purchased such investment properties during the year 2011, and there is therefore no effect to the separate financial statements as at 1 January 2011. We believe that the adjustments made to such financial statements are reasonable and have been appropriately applied. Other matter The consolidated financial statements of Asia Green Energy Public Company Limited and its subsidiaries, and the separate financial statements of Asia Green Energy Public Company Limited for the year ended 31 December 2011 were audited by another auditor who, under his report dated 27 February 2012, expressed an unqualified opinion on those financial statements, drawing attention to the Company and its subsidiaries adopted the revised and new accounting standards issued by the Federation of Accounting Professions, and applied them in its preparation and presentation of the financial statements.

Khitsada Lerdwana Certified Public Accountant (Thailand) No. 4958

Ernst & Young Office Limited Bangkok: 14 February 2013

2


Asia Green Energy Public Company Limited and its subsidiaries Statement of financial position As at 31 December 2012 (Unit: Baht) Consolidated financial statements Note

2012

2011

Separate financial statements 2012

2011

Assets Current assets Cash and cash equivalents

7

182,933,361

250,564,845

89,634,611

240,777,682

Trade and other receivables

8

652,162,033

584,551,982

658,100,470

587,282,582

Short-term loans to subsidiaries

6

-

-

10,700,000

38,700,000

Inventories

9

1,447,051,347

1,503,262,254

1,446,344,646

1,502,792,692

34,648,090

41,638,117

17,479,129

28,992,446

2,316,794,831

2,380,017,198

2,222,258,856

2,398,545,402

Other current assets Total current assets Non-current assets Restricted bank deposits

10

92,115,656

78,247,680

92,115,656

78,247,680

Investments in subsidiaries

11

-

-

174,599,145

90,989,700

Investment properties

12

-

-

207,860,500

202,643,000

Property, plant and equipment

13

831,624,361

699,411,068

326,075,052

332,998,684

-

4,175,812

-

4,175,812

Intangible assets

1,149,538

1,937,389

1,149,538

1,937,389

Deposits and guarantee

1,323,062

11,952,974

1,294,637

11,860,574

Other non-current assets

1,820,488

1,049,588

-

-

928,033,105

796,774,511

803,094,528

722,852,839

3,244,827,936

3,176,791,709

3,025,353,384

3,121,398,241

Advance payment for purchases of land

Total non-current assets Total assets

The accompanying notes are an integral part of the financial statements.


Asia Green Energy Public Company Limited and its subsidiaries Statement of financial position (continued) As at 31 December 2012 (Unit: Baht) Consolidated financial statements Note

Separate financial statements

2012

2011

2012

2011

14

1,449,957,663

1,481,694,370

1,449,957,663

1,481,694,370

Trade and other payables

15

283,919,577

256,851,473

299,182,526

250,051,187

Short-term loans from subsidiary

6

-

-

20,000,000

-

16

8,690,203

6,298,613

6,220,438

3,855,118

17

57,898,958

25,829,954

36,609,560

24,771,053

-

26,477,226

-

26,134,099

4,552,497

2,345,603

1,796,424

2,164,521

1,805,018,898

1,799,497,239

1,813,766,611

1,788,670,348

16

14,384,677

5,824,817

7,404,189

5,824,817

17

302,007,705

230,314,387

189,010,146

201,724,069

10,036,779

7,580,332

9,844,388

7,416,514

326,429,161

243,719,536

206,258,723

214,965,400

2,131,448,059

2,043,216,775

2,020,025,334

2,003,635,748

Liabilities and shareholders' equity Current liabilities Bank overdrafts and short-term loans from financial institutions

Current portion of liabilities under finance lease agreements Current portion of long-term loans Income tax payable Other current liabilities Total current liabilities Non-current liabilities Liabilities under finance lease agreements, net of current portion Long-term loans, net of current portion Provision for long-term employee benefits Total non-current liabilities Total liabilities

The accompanying notes are an integral part of the financial statements.


Asia Green Energy Public Company Limited and its subsidiaries Statement of financial position (continued) As at 31 December 2012 (Unit: Baht) Consolidated financial statements Note

2012

2011

Separate financial statements 2012

2011

Shareholders' equity Share capital

18

Registered 1,408,031,224 ordinary shares of Baht 0.25 each

352,007,806

280,945,000

352,007,806

280,945,000

329,314,661

205,864,419

329,314,661

205,864,419

6,698,125

200,557,444

6,698,125

200,557,444

455,582,099

308,687,062

455,582,099

308,687,062

26,451,773

20,586,442

26,451,773

20,586,442

294,674,622

397,708,265

187,281,392

382,067,126

-

-

-

1,112,394,402

1,133,403,632

1,005,328,050

1,117,762,493

985,475

171,302

-

-

Total shareholders' equity

1,113,379,877

1,133,574,934

1,005,328,050

1,117,762,493

Total liabilities and shareholders' equity

3,244,827,936

3,176,791,709

3,025,353,384

3,121,398,241

-

-

-

-

(31 December 2011: 1,123,780,000 ordinary shares of Baht 0.25 each) Issued and fully paid-up 1,317,258,644 ordinary shares of Baht 0.25 each (31 December 2011: 823,457,676 ordinary shares of Baht 0.25 each) Share subscriptions receipt in advance Share premium Retained earnings Appropriated-statutory reserve Unappropriated Other components of shareholders' equity

(326,878)

Equity attributable to owners of the Company Non-controlling interests of the subsidiaries

The accompanying notes are an integral part of the financial statements.

Directors


Asia Green Energy Public Company Limited and its subsidiaries Statement of comprehensive income For the year ended 31 December 2012 (Unit: Baht) Consolidated financial statements

Separate financial statements

2012

2011

2012

2011

4,371,628,867

5,243,938,649

4,369,320,393

5,239,561,797

Exchange gain

19,481,590

17,717,181

19,481,591

17,717,181

Others

13,171,877

11,580,799

14,547,095

8,093,723

4,404,282,334

5,273,236,629

4,403,349,079

5,265,372,701

4,063,324,177

4,592,522,710

4,151,842,883

4,589,323,519

Selling and servicing expenses

185,680,745

191,023,409

197,680,545

203,023,409

Administrative expenses

117,513,828

104,506,688

111,844,759

102,775,498

4,366,518,750

4,888,052,807

4,461,368,187

4,895,122,426

37,763,584

385,183,822

(58,019,108)

370,250,275

Finance cost

(59,210,615)

(57,052,683)

(58,044,372)

(57,672,629)

Profit (loss) before income tax expenses

(21,447,031)

328,131,139

(116,063,480)

312,577,646

(2,785,363)

(67,678,759)

(24,232,394)

260,452,380

(330,180)

-

-

-

Other comprehensive income for the year

(330,180)

-

-

-

Total comprehensive income for the year

(24,562,574)

260,452,380

Revenues Sales and services income Other income

Total revenues Expenses Cost of sales and services

Total expenses Profit (loss) before finance cost and income tax expenses

Income tax expenses Profit (loss) for the year

(116,063,480)

(63,542,190) 249,035,456

Other comprehensive income: Exchange differences on translation of financial statements in foreign currency

The accompanying notes are an integral part of the financial statements.

(116,063,480)

249,035,456


Asia Green Energy Public Company Limited and its subsidiaries Statement of comprehensive income (continued) For the year ended 31 December 2012 (Unit: Baht) Consolidated financial statements Note

2012

2011

Separate financial statements 2012

2011

Profit (loss) attributable to: Equity holders of the Company

(24,311,389)

Non-controlling interests of the subsidiaries

78,995

260,347,289

(116,063,480)

249,035,456

(116,063,480)

249,035,456

105,091

(24,232,394)

260,452,380

(24,638,267)

260,347,289

Total comprehensive income attributable to: Equity holders of the Company Non-controlling interests of the subsidiaries

Earnings per share

75,693

105,091

(24,562,574)

260,452,380

(0.02)

0.25

(0.09)

0.24

(0.02)

0.20

(0.09)

0.19

21

Basic earnings per share Profit (loss) attributable to equity holders of the Company Diluted earnings per share Profit (loss) attributable to equity holders of the Company

The accompanying notes are an integral part of the financial statements.


Asia Green Energy Public Company Limited and its subsidiaries Cash flow statement For the year ended 31 December 2012 (Unit: Baht) Consolidated financial statements Note

2012

2011

Separate financial statements 2012

2011

Cash flows from operating activities Profit (loss) before tax

(21,447,031)

328,131,139

(116,063,480)

312,577,646

34,879,844

32,603,386

27,267,050

27,138,639

Adjustments to reconcile profit (loss) before tax to net cash provided by (paid from) operating activities: Depreciation and amortisation Allowance for doubtful accounts/bad debt (reversal) Decrease of inventory to net realisable value

948,672 9

40,131,464

(511,017) -

948,672

(511,017)

40,131,464

-

Loss (gain) on sales/write-off of plant and equipment

1,034,524

(3,679,256)

2,256,390

187,324

Provision for long-term employee benefits

2,456,447

2,259,869

2,427,874

2,233,606

26,088

1,748,072

26,088

1,748,072

1,178,361

-

-

-

-

-

59,210,615

Unrealised loss on exchange Write-off withholding tax deducted at source Interest income Interest expenses

(1,564,780)

(1,803,490)

57,052,683

58,044,372

57,672,629

118,418,984

417,604,876

13,473,650

399,243,409

(68,629,864)

(192,479,398)

(70,498,222)

(194,258,964)

16,079,443

(224,714,300)

16,316,582

(225,023,963)

Profit from operating activities before changes in operating assets and liabilities Operating assets (increase) decrease Trade and other receivables Inventories Other current assets Deposits and guarantee Other non-current assets

6,326,068

6,512,104

11,672,288

14,257,921

10,629,912

(8,227,176)

10,565,937

(8,227,176)

(770,900)

1,679,552

-

-

26,253,388

50,678,434

49,378,029

51,778,645

1,367,849

22,851,714

109,674,880

73,905,806

29,996,529

56,941,577

(61,936,634)

(56,626,889)

(57,702,372)

(57,752,413)

(29,776,990)

(49,988,898)

(26,293,069)

(46,195,456)

17,961,256

(32,709,981)

(53,998,912)

(47,006,292)

Operating liabilities increase (decrease) Trade and other payables Other current liabilities Cash from operating activities Cash paid for interest expenses

(911,735)

19,171,705

Cash paid for corporate income tax and withholding tax deducted at source Net cash from (used in) operating activities

The accompanying notes are an integral part of the financial statements.


Asia Green Energy Public Company Limited and its subsidiaries Cash flow statement (continued) For the year ended 31 December 2012 (Unit: Baht) Consolidated financial statements 2012

2011

Separate financial statements 2012

2011

Cash flows from investing activities Cash receipt from short-term loans to subsidiaries

-

-

78,000,000

-

Interest income from short-term loans to subsidiaries

-

-

225,301

-

Decrease (increase) in short-term loans to subsidiaries

-

-

Increase in restricted bank deposits

(13,867,976)

Increase in investment in subsidiary Acquisition of property, plant and equipment

(154,919,618)

Acquisition of investment properties Proceeds from sales of plant and equipment

(344,713,727)

(13,867,976) (83,609,445)

5,633,960 (662,465) -

(25,510,733)

(15,642,676)

(1,041,688)

(202,643,000)

-

-

15,247,663

12,177,110

12,247,663

560,748

738,480

-

-

-

Cash received from non-controlling interest Net cash used in investing activities

(662,465)

(50,000,000)

(152,801,451)

(333,199,082)

(83,556,878)

(212,753,433)

(31,736,707)

81,824,698

(31,736,707)

81,824,698

Cash flows from financing activities Increase (decrease) in bank overdrafts and short-term loans from financial institutions Increase (decrease) in short-term loan from subsidiaries

-

-

20,000,000

(84,000,000)

Cash receipt from long-term loans

131,714,655

156,554,469

23,801,625

126,905,250

Repayment of long-term loans

(27,952,333)

(4,744,906)

(24,677,041)

(4,744,906)

(8,115,761)

(12,344,229)

(4,604,195)

(5,338,820)

Proceeds from increase in share capital

4,221,859

372,524,931

4,221,859

372,524,931

Cash receipt from share subscriptions

6,698,125

-

6,698,125

-

Repayment of liabilities under finance lease agreements

Cash paid for cost of share subscriptions

-

Dividend paid

(7,290,947)

Net cash from (used in) financing activities

67,538,891

(1,218,308) (2,437,493) 590,159,162

(7,290,947) (13,587,281)

(2,437,493) 483,515,352

(330,180)

-

Net increase (decrease) in cash and cash equivalents

(67,631,484)

224,250,099

(151,143,071)

223,755,627

Cash and cash equivalents at beginning of year

250,564,845

26,314,746

240,777,682

17,022,055

Cash and cash equivalents at end of year

182,933,361

250,564,845

89,634,611

240,777,682

Decrease in translation adjustments

-

-

(1,218,308)

-

-

Supplemental cash flows information: Non cash items Purchases of equipment under finance lease agreements

19,067,211

5,163,513

8,548,887

514,063

Transfers advance payment for purchases of land to asset

4,175,812

-

4,175,812

-

The accompanying notes are an integral part of the financial statements.


Asia Green Energy Public Company Limited and its subsidiaries Statement of changes in shareholders' equity For the year ended 31 December 2012 (Unit: Baht) Consolidated financial statements Equity attributable to owners of the Company Other components of equity Exchange differences on

Issued and

Note

Balance as at 1 January 2011

Cash receipt

fully paid-up

from share

share capital

subscriptions

140,000,000

Retained earnings Share premium

Appropriated

translation of

Total equity

Equity attributable

financial

attributable to

to non-controlling

Total

statements in

owners of

interests of

shareholders'

Unappropriated

foreign currency

the Company

the subsidiaries

equity

-

181,927,615

14,000,000

168,254,605

-

504,182,220

66,211

504,248,431

Increase share capital

18

43,989,732

-

126,759,447

-

-

-

170,749,179

-

170,749,179

Cash receipt from share subscriptions

18

-

200,557,444

-

-

-

-

200,557,444

-

200,557,444

Stock dividend

24

21,874,687

-

-

-

(21,874,687)

-

-

-

-

Dividend paid

24

-

-

-

-

(2,432,500)

-

-

-

-

-

Total comprehensive income for the year Transferred to statutory reserve Balance as at 31 December 2011

-

-

-

6,586,442

205,864,419

200,557,444

308,687,062

20,586,442

260,347,289 (6,586,442) 397,708,265

-

(2,432,500) 260,347,289

105,091

(2,432,500) 260,452,380

-

-

-

-

-

1,133,403,632

171,302

1,133,574,934 -

Balance as at 1 January 2012

205,864,419

200,557,444

308,687,062

20,586,442

397,708,265

-

1,133,403,632

171,302

1,133,574,934

(200,557,444)

Increase share capital

18

57,884,266

146,895,037

-

-

-

4,221,859

-

4,221,859

Cash receipt from share subscriptions

18

-

6,698,125

-

-

-

-

6,698,125

-

6,698,125

Stock dividend

24

65,565,976

-

-

-

-

-

-

-

Dividend paid

24

(65,565,976)

-

-

-

-

(7,290,947)

Total comprehensive income for the year

-

-

-

-

(24,311,389)

Transferred to statutory reserve

-

-

-

5,865,331

(5,865,331)

Increase in non-controlling interests of the subsidiary Balance as at 31 December 2012

-

-

-

-

-

329,314,661

6,698,125

455,582,099

26,451,773

294,674,622

(326,878) (326,878)

(7,290,947)

-

(7,290,947)

(24,638,267)

75,693

(24,562,574)

-

-

-

-

738,480

738,480

1,112,394,402

985,475

1,113,379,877 -

The accompanying notes are an integral part of the financial statements.


Asia Green Energy Public Company Limited and its subsidiaries Statement of changes in shareholders' equity (Continued) For the year ended 31 December 2012 (Unit: Baht) Separate financial statements

Note

Issued and

Cash receipt

fully paid-up

from share

share capital

subscriptions

Balance as at 1 January 2011

Total Retained earnings Share premium

Appropriated

shareholders'

Unappropriated

equity

140,000,000

-

181,927,615

14,000,000

163,925,299

499,852,914

Increase share capital

18

43,989,732

-

126,759,447

-

-

170,749,179

Cash receipt from share subscriptions

18

-

200,557,444

-

-

-

200,557,444

Stock dividend

24

21,874,687

-

-

-

(21,874,687)

Dividend paid

24

-

-

-

-

(2,432,500)

Total comprehensive income for the year

-

-

-

-

Transferred to statutory reserve

-

-

-

6,586,442

Balance as at 31 December 2011

205,864,419

200,557,444

308,687,062

20,586,442

382,067,126

1,117,762,493

Balance as at 1 January 2011

205,864,419

200,557,444

308,687,062

20,586,442

382,067,126

1,117,762,493

(200,557,444)

146,895,037

-

-

4,221,859

-

6,698,125

249,035,456 (6,586,442)

(2,432,500) 249,035,456 -

Increase share capital

18

57,884,266

Cash receipt from share subscriptions

18

-

6,698,125

-

-

Stock dividend

24

65,565,976

-

-

-

(65,565,976)

Dividend paid

24

-

-

-

-

(7,290,947)

(7,290,947)

Total comprehensive income for the year

-

-

-

-

(116,063,480)

(116,063,480)

Transferred to statutory reserve

-

-

-

5,865,331

(5,865,331)

329,314,661

6,698,125

455,582,099

26,451,773

Balance as at 31 December 2012

187,281,392

-

1,005,328,050 -

The accompanying notes are an integral part of the financial statements.


Asia Green Energy Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2012 1.

General information Asia Green Energy Public Company Limited (“the Company”) is a public company incorporated and domiciled in Thailand. Its major shareholders are Kuansataporn family. The Company is principally engaged in distribution of coal for industrial use. The registered office of the Company is at 273/1 Rama II Road, Samaedum, Bangkhuntien, Bangkok. The Company currently has 4 branches located in 4 provinces such as Samutsakorn, Petchburi, Ayudthaya and Chonburi (closed branch on August 2012).

2.

Basis of preparation

2.1

The financial statements have been prepared in accordance with accounting standards enunciated under the Accounting Professions Act B.E. 2547 and their presentation has been made in compliance with the stipulations of the Notification of the Department of Business Development dated 28 September 2011, issued under the Accounting Act B.E. 2543. The financial statements in Thai language are the official statutory financial statements of the Company. The financial statements in English language have been translated from the Thai language financial statements. The financial statements have been prepared on a historical cost basis except where otherwise disclosed in the accounting policies.

2.2

Basis of consolidation a)

The consolidated financial statements include the financial statements of Asia Green Energy Public Company Limited (“the Company”) and the following subsidiary companies (“the subsidiaries”):

Company’s name

Nature of business

Country of

Percentage of

incorporation

shareholding 2012

2011

Percent

Percent

A.G.E. Transport Co., Ltd.

Transportation and management

Thailand

99

99

AGE Terminal Co., Ltd.

Water transportation and port services,

Thailand

100

100

Indonesia

99

-

cargo services and extraction of coal PT. AGE RESOURCES

Not yet commenced operation

1


b)

Subsidiaries are fully consolidated, being the date on which the Company obtains control, and continue to be consolidated until the date when such control ceases.

c)

The financial statements of the subsidiaries are prepared using the same significant accounting policies as the Company.

d)

The assets and liabilities in the financial statements of overseas subsidiary companies are translated to Baht using the exchange rate prevailing on the end of reporting period, and revenues and expenses translated using monthly average exchange rates. The resulting differences are shown under the caption of “Exchange differences on translation of financial statements in foreign currency� in the statements of changes in shareholders’ equity.

e)

Material balances and transactions between the Company and its subsidiary companies have been eliminated from the consolidated financial statements.

f)

Non-controlling interests represent the portion of profit or loss and net assets of the subsidiaries that are not held by the Company and are presented separately in the consolidated profit or loss and within equity in the consolidated statement of financial position.

2.3

The separate financial statements, which present investments in subsidiaries under the cost method, have been prepared solely for the benefit of the public.

3.

New accounting standards not yet effective The Federation of Accounting Professions issued the following new/revised accounting standards that are effective for fiscal years beginning on or after 1 January 2013. Accounting standards: TAS 12

Income Taxes

TAS 20 (revised 2009)

Accounting for Government Grants and Disclosure of Government Assistance

TAS 21 (revised 2009)

The Effects of Changes in Foreign Exchange Rates

Financial Reporting Standard: TFRS 8

Operating Segments

Accounting Standard Interpretations: SIC 10

Government Assistance - No Specific Relation to Operating Activities

SIC 21

Income Taxes - Recovery of Revalued Non-Depreciable Assets

SIC 25

Income Taxes - Changes in the Tax Status of an Entity or its Shareholders

2


The Company’s management believes that these accounting standards will not have any significant impact on the financial statements for the year when they are initially applied, except for the following accounting standard. TAS 12 Income Taxes This accounting standard requires an entity to identify temporary differences, which are differences between the carrying amount of an asset or liability in the accounting records and its tax base, and to recognize deferred tax assets and liabilities under the stipulated guidelines. The management of the Company and its subsidiaries expect the adoption of this accounting standard to have the effect of increasing brought-forward retained earnings of the year 2013 to the Company and its subsidiaries by approximately Baht 24 million (the Company only: approximately Bath 24 million). In addition, the Federation of Accounting Professions has issued Notification No. 30/2555 - 34/2555, published in the Royal Gazette on 17 January 2013, mandating the use of accounting treatment guidance and accounting standard interpretations as follows. Effective date Accounting Treatment Guidance for Transfers of Financial Assets

1 January 2013

Accounting Standard Interpretation: SIC 29

Service Concession Arrangements:

1 January 2014

Disclosures Financial Reporting Standard Interpretations: TFRIC 4

Determining whether an Arrangement

1 January 2014

contains a Lease TFRIC 12

Service Concession Arrangements

1 January 2014

TFRIC 13

Customer Loyalty Programmes

1 January 2014

The management of the Company and its subsidiaries believe that these accounting standards will not have any significant impact on the financial statements for the year when they are initially applied.

3


4.

Significant accounting policies

4.1

Revenue recognition Sales of goods Sales of goods are recognised when the significant risks and rewards of ownership of the goods have passed to the buyer. Sales are the invoiced value, excluding value added tax, of goods supplied after deducting discounts and allowances. Rendering of services Service revenue is recognised when services have been rendered taking into account the stage of completion. Interest income Interest income is recognised on an accrual basis based on the effective interest rate.

4.2

Cash and cash equivalents Cash and cash equivalents consist of cash in hand and at banks, and all highly liquid investments with an original maturity of three months or less and not subject to withdrawal restrictions.

4.3

Trade and other receivables Trade and other receivables are stated at the net realisable value. Allowance for doubtful accounts is provided for the estimated losses that may be incurred in collection of receivables. The allowance is generally based on collection experience and analysis of debt aging.

4.4

Inventories Finished goods are valued at the lower of average cost and net realisable value. Such cost includes all production costs and attributable factory overheads. Raw materials, chemicals, spare parts and factory supplies are valued at the lower of average cost and net realisable value and are charged to production costs whenever consumed.

4.5

Investments Investments in subsidiaries are accounted for in the separate financial statements using the cost method.

4


4.6

Investment properties Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are stated at cost less accumulated depreciation and allowance for loss on impairment (if any). On disposal of investment properties, the difference between the net disposal proceeds and the carrying amount of the asset is recognised in profit or loss in the period when the asset is derecognised.

4.7

Property, plant and equipment/Depreciation Land is stated at cost. Buildings and equipment are stated at cost or revalued amount less accumulated depreciation and allowance for loss on impairment of assets (if any). Depreciation of plant and equipment is calculated by reference to their costs on the straight-line basis over the following estimated useful lives: Land improvement

-

10 years

Buildings and building improvement

-

5 - 20 years

Machinery and equipment

-

5 - 10 years

Furniture and office equipment

-

5 years

Motor vehicles

-

5 - 10 years

Depreciation is included in determining income. No depreciation is provided on land and assets under installation and under construction. An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on disposal of an asset is included in profit or loss when the asset is derecognised. 4.8

Borrowing costs Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the respective assets. All other borrowing costs are expensed in the period they are incurred. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

5


4.9

Intangible assets The intangible assets are carried at cost less any accumulated amortisation and any impairment losses (if any). Intangible assets with finite lives are amortised on a systematic basis over the economic useful life and tested for impairment whenever there is an indication that the intangible assets may be impaired. The amortisation period and the amortisation method of such intangible assets are reviewed at least at each financial year end. The amortisation expense is charged to profit or loss. Intangible assets of the Company and its subsidiaries with finite useful lives comprise of computer software, and have useful lives of 5 years.

4.10 Related party transactions Related parties comprise enterprises and individuals that control, or are controlled by, the Company and its subsidiaries, whether directly or indirectly, or which are under common control with the Company and its subsidiaries. They also include associated companies and individuals which directly or indirectly own a voting interest in the Company and its subsidiaries that gives them significant influence over the Company and its subsidiaries, key management personnel, directors, and officers with authority in the planning and direction of the operations of the Company and its subsidiaries. 4.11 Long-term leases Leases of equipment which transfer substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the lower of the fair value of the leased assets and the present value of the minimum lease payments. The outstanding rental obligations, net of finance charges, are included in long-term payables, while the interest element is charged to profit or loss over the lease period. The assets acquired under finance leases is depreciated over the useful life of the assets. Operating lease payments are recognised as an expense in profit or loss on a straight line basis over the lease term. 4.12 Foreign currencies Transactions in foreign currencies are translated into Baht at the exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated into Baht at the exchange rate ruling at the end of reporting period. Gains and losses on exchange are included in determining income. 6


4.13 Impairment of assets At the end of each reporting period, the Company and its subsidiaries perform impairment reviews in respect of the property, plant and equipment and other intangible assets whenever events or changes in circumstances indicate that an asset may be impaired. An impairment loss is recognised when the recoverable amount of an asset, which is the higher of the asset’s fair value less costs to sell and its value in use, is less than the carrying amount. An impairment loss is recognised in profit or loss. In the assessment of asset impairment if there is any indication that previously recognised impairment losses may no longer exist or may have decreased, the Company and its subsidiaries estimate the asset’s recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognised. The increased carrying amount of the asset attributable to a reversal of an impairment loss shall not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in profit or loss. 4.14 Employee benefits Short-term employee benefits Salaries, wages, bonuses and contributions to the social security fund are recognised as expenses when incurred. Post-employment benefits Defined contribution plans The Company, its subsidiaries and its employees have jointly established a provident fund. The fund is monthly contributed by employees and by the Company and its subsidiaries. The fund’s assets are held in a separate trust fund and the contributions of the Company and its subsidiaries are recognised as expenses when incurred. Defined benefit plans The Company and its subsidiaries have obligations in respect of the severance payments it must make to employees upon retirement under labor law. The Company and its subsidiaries treat these severance payment obligations as a defined benefit plan.

7


The obligation under the defined benefit plan is determined by a professionally qualified independent actuary based on actuarial techniques, using the projected unit credit method. The defined benefits liability comprises the present value of the defined benefit obligation less unrecognised past service cost and unrecognised actuarial gains or losses. For the first-time adoption of TAS 19 Employee Benefits in 2011, the Company elected to recognise the transitional liability, which exceeds the liability that would have been recognised at the same date under the previous accounting policy, through an adjustment to the beginning balance of retained earnings in 2011. 4.15 Provisions Provisions are recognised when the Company and its subsidiaries have a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. 4.16 Income tax Income tax is provided in the accounts at the amount expected to be paid to the taxation authorities, based on taxable profits determined in accordance with tax legislation. 5.

Significant accounting judgements and estimates The preparation of financial statements in conformity with financial reporting standards at times requires management to make subjective judgements and estimates regarding matters that are inherently uncertain. These judgements and estimates affect reported amounts and disclosures; and actual results could differ from these estimates. Significant judgements and estimates are as follows: Leases In determining whether a lease is to be classified as an operating lease or finance lease, the management is required to use judgement regarding whether significant risk and rewards of ownership of the leased asset has been transferred, taking into consideration terms and conditions of the arrangement.

8


Allowance for doubtful accounts In determining an allowance for doubtful accounts, the management needs to make judgement and estimates based upon, among other things, past collection history, aging profile of outstanding debts and the prevailing economic condition. Post-employment benefits under defined benefit plans The obligation under the defined benefit plan is determined based on actuarial techniques. Such determination is made based on various assumptions, including discount rate, future salary increase rate, mortality rate and staff turnover rate. 6.

Related party transactions During the years, the Company and its subsidiaries had significant business transactions with related parties. Such transactions, which are summarised below, arose in the ordinary course of business and were concluded on commercial terms and bases agreed upon between the Company, its subsidiaries and those related parties. (Unit: Million Baht) Consolidated

Separate

financial statements

financial statements

2012

2011

2012

Pricing policy

2011

Transactions with subsidiary companies (eliminated from the consolidated financial statements) Rental income

-

-

2.4

-

Interest income

-

-

1.6

1.8

Contract prices Rate at 2.5% and 6.2% per annum (2011: Rate at 2.5% and 7.1% per annum)

Transportation expenses

-

-

397.5

365.7

Market price

Interest expenses

-

-

0.1

1.0

Management fee

-

-

12.0

12.0

-

3.9

-

-

Services income

2.3

1.6

-

1.6

Transportation expenses

4.2

3.9

-

-

Utility expenses

0.8

0.9

0.8

0.9

Cost

Rental expenses

4.0

3.9

4.0

3.9

Contract prices

Rate at 2.5% per annum Contract prices

Transactions with related companies Sales and services income

Market price Agree between parties Market price

9


The balances of the accounts as 31 December 2012 and 2011 between the Company, its subsidiaries and those related companies are as follows: (Unit: Thousand Baht) Consolidated

Separate

financial statements

financial statements

2012

2012

2011

2011

Trade and other receivables - related parties (Note 8) Trade receivables Subsidiary Related parties (owned by director and shareholders) Total trade receivables - related parties

-

-

-

3

488

651

-

-

488

651

-

3

-

-

6,732

3,609

-

-

6,732

3,609

488

651

6,732

3,612

-

-

10,700

38,700

-

-

10,700

38,700

-

-

33,307

28,024

942

31

-

-

942

31

33,307

28,024

-

-

30,888

34,906

306

52

288

-

306

52

31,176

34,906

1,248

83

64,483

62,930

-

-

20,000

-

-

-

20,000

-

Other receivables Subsidiaries Total other receivables - related parties Total trade and other receivables- related parties

Short-term loans to subsidiaries Subsidiaries Total short-term loans to subsidiaries

Trade and other payables - related parties (Note 15) Trade payables Subsidiary Related parties (owned by director and shareholders) Total trade payables - related parties

Other payables Subsidiary Related parties (owned by director and shareholders) Total other payables - related parties Total trade and other payables - related parties

Short-term loans from subsidiary Subsidiary Total short-term loans from subsidiary

10


Short-term loans to subsidiaries and short-term loans from subsidiary As at 31 December 2012 and 2011, the balance of short-term loans from/to between the Company and its subsidiaries and the movement are as follows: (Unit: Thousand Baht) Separate financial statements Short-term loans

Balance as at

Increase

Decrease

Balance as at

31 December 2011

during the year

during the year

31 December 2012

to subsidiaries

Related by

A.G.E. Transport Co., Ltd.

Subsidiary

18,700

-

(8,000)

10,700

AGE Terminal Co., Ltd.

Subsidiary

20,000

50,000

(70,000)

-

38,700

50,000

(78,000)

10,700

Total

The short-term loans to subsidiaries have interest charge at rate 2.5% and 6.2% per annum (2011: rate 2.5% and 7.1% per annum) with repayment at call. (Unit: Thousand Baht) Separate financial statements Short-term loans from subsidiary AGE Terminal Co., Ltd.

Related by

Balance as at

Increase

Decrease

Balance as at

31 December 2011

during the year

during the year

31 December 2012

Subsidiary

Total

-

20,000

-

20,000

-

20,000

-

20,000

The short-term loans from subsidiary have interest charge at rate 2.5% per annum with repayment at call. Directors and management’s benefits During the year ended 31 December 2012 and 2011, the Company and its subsidiaries had short-term employee benefits and post-employment benefits expenses payable to their directors and management totaling Baht 17 million and Baht 15 million, respectively. 7.

Cash and cash equivalents (Unit: Thousand Baht) Consolidated financial statements 2012 Cash

2011

Separate financial statements 2012

2011

298

231

228

192

Bank deposits

182,635

250,334

89,407

240,586

Total

182,933

250,565

89,635

240,778

As at 31 December 2012, bank deposits in saving accounts carried interests between 0.6 and 0.7 percent per annum (2011: between 0.5 and 0.7 percent per annum).

11


8.

Trade and other receivables (Unit: Thousand Baht) Consolidated

Separate

financial statements

financial statements

2012

2012

2011

2011

Trade receivables - related parties (Note 6) Aged on the basis of due dates Not yet due Past due up to 3 months Total trade receivables - related parties

488

-

-

3

-

651

-

-

488

651

-

3

509,821

431,277

509,719

431,277

115,380

151,682

115,380

151,682

24,493

-

24,493

-

596

208

596

208

4,628

3,999

4,628

3,999

654,918

587,166

654,816

587,166

Trade receivables - unrelated parties Aged on the basis of due dates Not yet due Past due Up to 3 months 3 - 6 months 6 - 12 months Over 12 months Total Less: Allowance for doubtful debts

(5,156)

(4,207)

(5,156)

(4,207)

Total trade receivables - unrelated parties, net

649,762

582,959

649,660

582,959

Total trade receivables - net

650,250

583,610

649,660

582,962

916

102

915

82

-

-

1,788

5

520

430

317

220

-

-

4,944

3,604

476

410

476

410

1,912

942

8,440

4,321

652,162

584,552

658,100

587,283

Other receivables Other receivables - unrelated parties Advances - related parties (Note 6) Advances - unrelated parties Interest receivable from subsidiaries (Note 6) Other interest receivable Total other receivables Total trade and other receivables - net

12


9.

Inventories (Unit: Thousand Baht) Consolidated financial statements Reduce cost to net Cost

realisable value

2012

2011

2012

Finished goods

640,771

608,420

(40,131)

Raw materials in transits

844,661

893,110

1,750 1,487,182

Inventories-net

2011

2012

2011

-

600,640

608,420

-

-

844,661

893,110

1,732

-

-

1,750

1,732

1,503,262

(40,131)

-

1,447,051

1,503,262

Spare parts and factory supplies Total

(Unit: Thousand Baht) Separate financial statements Reduce cost to net Cost

realisable value

2012

2011

Finished goods

640,771

608,420

Raw materials in transits

844,661

893,110

1,044

1,263

1,486,476

1,502,793

2012

Inventories-net

2011

2012

2011

-

600,640

608,420

-

-

844,661

893,110

-

-

1,044

1,263

-

1,446,345

1,502,793

(40,131)

Spare parts and factory supplies Total

10.

(40,131)

Restricted bank deposits The outstanding balance is fixed deposits which were pledged as collateral to secure its credit facilities as mentioned in Note 14 and Note 17 to the financial statements.

11.

Investment in subsidiaries Details of investment in subsidiaries as presented in separate financial statements are as follows: Company’s name

Paid-up capital 2012

Shareholding percentage

2011

2012

2011

Cost 2012

2011

(Thousand Baht) (Thousand Baht) A.G.E. Transport Co., Ltd.

Baht 1 million

Baht 1 million

99

99

990

990

AGE Terminal Co., Ltd.

Baht 100 million

Baht 90 million

100

100

100,500

90,000

PT. AGE RESOURCES

USD 2 million

-

99

-

73,109

-

174,599

90,990

Total

13


No dividend was received from the above subsidiary companies during the year ended 31 December 2012 and 2011. On 14 May 2012, the Company’s Board of Directors Meeting passed a resolution to approve the increase of the registered capital of a subsidiary from Baht 90 million (0.9 million ordinary shares of Baht 100 each) to Baht 132 million (1.32 million ordinary shares of Baht 100 each), through the issuance of 0.42 million additional ordinary shares with a par value of Baht 100 each, for offer to existing shareholders at Baht 100 per share, of which Baht 25 per share is to be initially called up. In May 2012, the subsidiary received called up capital totaling Baht 10 million. The subsidiary registered the increase of its capital with the Ministry of Commerce on 18 May 2012. The subsidiary's share capital increase has not resulted in any change in the Company’s interest in the equity of the subsidiary. During the year 2012, the Company acquired shares in PT. AGE Resources with a value of USD 2.4 million, or approximately Baht 73 million, representing 99% of its share capital. This company has not yet commenced operation. 12.

Investment properties Investment properties of the Company as at 31 December 2012 and 2011 represent the book value of the Company’s plot of land which held for rental benefits. These plots of land were rent by a subsidiary for its business operation. (Unit: Thousand Baht) Separate financial statements 2012 Net book value as at 1 January 2012 Acquisitions during year - at cost Net book value as at 31 December 2012

2011

202,643

-

5,218

202,643

207,861

202,643

As at 31 December 2012, the fair value of the investment property has been determined based on Market Approach performed by an accredited independent valuer is amounting to Baht 210 million. The Company has pledged investment properties amounting to approximately Baht 201 million (2011: Baht 199 million) as collateral against credit facilities received from financial institutions as mentioned in Note 14 and Note 17 to the financial statements.

14


13.

Property, plant and equipment (Unit: Thousand Baht) Consolidated financial statements Assets under Land and

Buildings

Machinery

Furniture

land

and building

and

and office

Motor

installation and under

improvement

improvement

equipment

equipment

vehicles

construction

Total

Cost: 1 January 2011

224,963

66,628

62,653

11,115

Additions

203,499

1,699

3,172

1,733

Disposals

-

-

-

Transfers 31 December 2011 Additions Disposals/write-off Transfers

(612)

102,523

4,980

472,862

4,459

135,793

350,355

(13,350)

-

(13,962)

1,774

458

4,062

17

-

430,236

68,172

69,887

12,865

93,632

134,462

809,255

25,384

2,045

908

2,387

16,448

130,991

178,163

32,277

(2,500) 125,985

(12,967)

(31)

18,200

203

(9,303) -

(6,311)

(1,057)

-

(25,858)

(176,665)

-

Capitalised interest

-

-

-

-

-

4,424

4,424

31 December 2012

487,897

193,703

76,028

15,424

100,777

92,155

965,984

16,167

15,763

18,586

4,599

28,439

-

83,554

3,745

5,977

7,532

2,249

8,516

-

28,019

-

-

(1,575)

-

(1,729)

Accumulated depreciation: 1 January 2011 Depreciation for the year Depreciation on disposals 31 December 2011

-

(154)

19,912

21,586

26,118

6,848

35,380

-

109,844

3,751

7,812

7,730

2,529

12,270

-

34,092

(1,543)

(3,558)

(4,475)

-

(9,576)

23,663

27,855

30,290

9,377

43,175

-

134,360

31 December 2011

410,324

46,587

43,769

6,017

58,252

134,462

699,411

31 December 2012

464,234

165,848

45,738

6,047

57,602

92,155

831,624

Depreciation for the year Depreciation on disposals/write-off 31 December 2012

-

-

Net book value:

Depreciation for the year 2011 (Baht 25 million included in manufacturing cost, and the balance in selling and administrative expenses)

28,019

2012 (Baht 28 million included in manufacturing cost, and the balance in selling and administrative expenses)

34,092

15


(Unit: Thousand Baht) Separate financial statements Assets under Land and

Buildings

Machinery

Furniture

installation

land

and building

and

and office

Motor

and under

improvement

improvement

equipment

equipment

vehicles

construction

Total

Cost: 1 January 2011 Additions

224,963

65,965

62,473

10,637

45,157

3,073

412,268

856

1,699

3,173

1,698

4,459

4,273

16,158

Disposals

-

-

-

-

Transfers

1,774

458

4,062

17

-

227,593

68,122

69,708

12,352

47,325

1,035

426,135

20,166

987

788

1,553

10,566

-

34,060

31 December 2011 Additions Disposals/write-off

-

(6,103)

-

(2,291)

(6,311)

(1,035)

-

(2,500)

(12,967)

247,759

66,609

57,529

13,905

51,788

-

437,590

16,167

15,588

18,528

4,445

13,653

-

68,381

3,745

5,976

7,496

2,158

6,923

-

26,298

-

-

-

-

(1,543)

-

(1,543)

19,912

21,564

26,024

6,603

19,033

-

93,136

3,751

6,032

7,335

2,348

7,014

-

26,480

(1,543)

(3,558)

(3,000)

-

(8,101)

23,663

26,053

29,801

8,951

23,047

-

111,515

31 December 2011

207,681

46,558

43,684

5,749

28,292

1,035

332,999

31 December 2012

224,096

40,556

27,728

4,954

28,741

-

326,075

31 December 2012

-

(2,291)

(22,605)

Accumulated depreciation: 1 January 2011 Depreciation for the year Depreciation on disposals 31 December 2011 Depreciation for the year Depreciation on disposals/write-off 31 December 2012

-

-

Net book value:

Depreciation for the year 2011 (Baht 20 million included in manufacturing cost, and the balance in selling and administrative expenses)

26,298

2012 (Baht 20 million included in manufacturing cost, and the balance in selling and administrative expenses)

26,480

As at 31 December 2012, a subsidiary had an outstanding balance of work under construction of a new plant of approximately Baht 21 million (2011: Baht 89 million). Construction of the plant has been financed with a loan from a financial institution and borrowing costs totaling approximately Baht 4 million were capitalised during the year ended 31 December 2012 (2011: Baht 1 million). The weighted average rate used to determine the amount of borrowing costs eligible for capitalisation was 5%. As at 31 December 2012, the Company and its subsidiary had vehicles under finance lease agreements with net book values amounting to Baht 20 million (2011: Baht 30 million).

16


As at 31 December 2012, certain plant and equipment items have been fully depreciated but are still in use. The gross carrying amount before deducting accumulated depreciation of those assets amounted to approximately Baht 2 million (2011: Baht 4 million). The Company has pledged a plot of land amounting to Baht 376 million (2011: Baht 374 million), which consists of operating land amounting to Baht 175 million (2011: Baht 175 million) and investment properties amounting to Baht 201 million (2011: Baht 199 million) (as mentioned in Note 12 to the financial statements), as collateral for credit facilities received from financial institutions, as mentioned in Note 14 and Note 17 to the financial statements. 14.

Bank overdrafts and short-term loans from financial institutions (Unit: Thousand Baht) Consolidated / Separate Interest rate

financial statements

2012

2011

(percent per annum)

(percent per annum)

-

7.6

Trust receipts

0.8 - 3.4

Short-term loans

3.5 - 3.9

Bank overdrafts

Total

2012

2011

-

4,846

3.5 - 4.3

1,179,958

1,056,848

3.6 - 4.1

270,000

420,000

1,449,958

1,481,694

As at 31 December 2012, the Company and its subsidiary had the overdrafts and short-term loans facilities from financial institutions amounting to Baht 4,020 million (2011: Baht 3,990 million). The bank overdrafts and short-term loans from financial institutions of the Company and its subsidiary are secured by the pledges of fixed deposits and mortgages of land of the Company.

17


15. Trade and other payables (Unit: Thousand Baht) Consolidated

Separate

financial statements

financial statements

2012 Trade payables - related parties (Note 6) Trade payables - unrelated parties Other payables - related parties (Note 6) Other payables - unrelated parties

Advance receipt Accrued expenses Total trade and other payables

16.

2012

2011

942

31

33,307

28,024

250,745

216,743

218,346

153,661

306

52

31,075

34,858

6,487

2,576

79

741

-

-

101

48

2,558

2,247

1,954

2,107

709

2,188

355

1,846

22,173

33,014

13,966

28,766

283,920

256,851

299,183

250,051

Accrued interest - related party (Note 6) Accrued interest - unrelated parties

2011

Liabilities under finance lease agreements (Unit: Thousand Baht) Consolidated

Separate

financial statements

financial statements

2012

2012

2011

2011

Liabilities under finance lease agreements

25,407

13,541

14,959

11,063

Less: Deferred interest expenses

(2,332)

(1,417)

(1,335)

(1,383)

Total

23,075

12,124

13,624

9,680

Less: Current portion due within one year

(8,690)

(6,299)

(6,220)

(3,855)

14,385

5,825

7,404

5,825

Liabilities under finance lease agreements - net of current portion

The Company and its subsidiary have entered into the finance lease agreements with leasing companies for rental of motor vehicles for use in their operation, whereby they are committed to pay rental on a monthly basis. The terms of the agreements are generally between 3 and 5 years. Future minimum lease payments required under the finance lease agreements were as follows: (Unit: Thousand Baht) Consolidated financial statements Less than 1 year

1 - 5 years

Total

2012

2011

2012

2011

2012

2011

Future minimum lease payments

10,007

6,954

15,400

6,587

25,407

13,541

Deferred interest expenses

(1,317)

(2,332)

(1,417)

23,075

12,124

(655)

(1,015)

(762)

Present value of future minimum lease payments

8,690

6,299

14,385

5,825

18


(Unit: Thousand Baht) Separate financial statements Less than 1 year

Future minimum lease payments

1 - 5 years

Total

2012

2011

2012

2011

2012

2011

7,062

4,476

7,897

6,587

14,959

11,063

(1,335)

(1,383)

13,624

9,680

Deferred interest expenses

(842)

(621)

(493)

(762)

Present value of future minimum lease 6,220

payments

17.

3,855

7,404

5,825

Long-term loans The Company and its subsidiary have long-term loans agreement with commercial banks as follows: (Unit: Thousand Baht) Interest rate

Loans

Facility 1

(percent per annum)

MLR

Repayment schedule

Repayment in monthly

Consolidated

Separate

financial statements

financial statements

2012

2012

2011

2011

-

1,786

-

1,786

83,884

97,804

83,884

97,804

141,736

126,905

141,736

126,905

134,287

29,649

-

-

Total

359,907

256,144

225,620

226,495

Less: Current portion due within one year

(57,899)

(25,830)

(36,610)

(24,771)

Long-term loans - net of current portion

302,008

230,314

189,010

201,724

installments commencing October 2007, with the final installment due in September 2012 Facility 2

MLR - 1.0

Repayment in monthly installments commencing January 2012, with the final installment due in December 2018

Facility 3

MLR - 2.5

Repayment in monthly installments commencing July 2012, with the final installment due in June 2019

Facility 4

MLR - 2.5

Repayment in monthly

(subsidiary)

installments commencing November 2012, with the final installment due in October 2019

19


Movements in the long-term loan account during the year ended 31 December 2012 are summarised below. (Unit: Thousand Baht) Consolidated

Separate

financial statements

financial statements

Balance as at 1 January 2012

256,144

226,495

Add: Increase in loan

131,715

23,802

Less: Repayment of loan

(27,952)

(24,677)

Balance as at 31 December 2012

359,907

225,620

The loans of the Company and its subsidiary are secured by pledges of fixed deposits and mortgages of land and investment properties of the Company. The above loan agreements include covenants and restrictions imposed by the lenders pertaining to among other things, the holdings of the principal shareholders, restrictions on mortgages, pledges or rights of claim over assets, and the maintenance of certain financial ratios. As at 31 December 2012, the Company was unable to maintain certain financial ratios stipulated in the loan agreement. Under the agreement, the lender therefore has the right to call for immediate repayment in full, to not allow the Company to withdraw or make any payments from bank accounts that are pledged with the lender, and certain other rights stipulated in the loan agreement. The Company has negotiated with its lender and, on 28 December 2012, received a letter from its lender approving a waiver from compliance with the above conditions. As at 31 December 2012, the long-term credit facilities of the Company and its subsidiaries which have not yet been drawn down amounted to Baht 11 million (2011: Baht 143 million).

20


18.

Share capital/Warrants -

Share capital a) At the ordinary shareholders’ meeting No.1/2011 held on 22 April 2011, the shareholders passed resolutions to approve the increase of the Company’s registered capital and the allotment of 30,625,000 new ordinary shares, with 21,875,000 new ordinary shares with Baht 1 par value to be allocated to support the distribution of a stock dividend and 8,750,000 new ordinary shares with Baht 1 par value to be allocated to support the rights adjustment to the warrants (AGEW1) due to the stock dividend payment. The Company registered the additional share capital with the Ministry of Commerce on 3 May 2011. b) The extraordinary shareholders’ meeting 1/2011, held on 14 September 2011, passed a resolution approving a reduction in the par value of the shares from Baht 1 per share to Baht 0.25 per share (changing share capital from 280,945,000 ordinary shares with Baht 1 par value to 1,123,780,000 ordinary shares with Baht 0.25 par value). The Company registered the change in its share capital with the Ministry of Commerce on 19 September 2011. c) A summary of the resolutions passed on 27 April 2012 by the Annual General Meeting of the shareholders is as follows:

-

Approved a reduction of the registered share capital of the Company by 313 shares with a par value of Baht 0.25 and an increase of the Company’s registered capital by 284,251,537 shares with a par value of Baht 0.25 per share, with allocation of 262,263,928 new ordinary shares to a reserve for dividend payment and 21,987,609 new ordinary shares to a reserve for the rights adjustment on the warrants due to the stock dividend payment to the shareholders.

-

Approved the appropriation of profit and distribution of a dividend in respect of the net income of the year 2011, consisting of 262,263,928 ordinary shares with a par value Baht 0.25 per share to be allocated in a ratio of 1 dividend share for every 4 existing shares, at a rate of Baht 0.0625 per share, and a cash dividend of Baht 0.00695 per share. The total stock and cash dividend payment shall thus be equivalent to a dividend of Baht 0.06945 per share, or a total of Baht 72,856,919.

21


During the years 2012 and 2011, warrants were exercised to purchase new ordinary shares as follows: Consolidated/Separate financial statements Date of registration of Increase in share

additional shares

Increase in paid up

premium - ordinary

from warrant exercise

share capital from

shares from warrant

with the Ministry of

warrant exercise

exercise

Commerce

(Thousand Baht)

(Thousand Baht)

Exercised during June 2011

43,990

126,759

Total for year 2011

43,990

126,759

Exercised during December 2011

56,400

144,157

1,484

2,738

57,884

146,895

2,355

4,343

Exercised during June 2012 Total for year 2012

Exercised during December 2012* *

8 July 2011

10 January 2012 17 July 2012

11 January 2013

The Company recorded cash receipts from the exercise of warrants as share subscriptions received in advance since the Company registered the increase in paid-up share capital resulting from such exercise with the Ministry of Commerce on a date after the end of the reporting period

-

Warrants The Company has granted warrants to its existing shareholders (AGE-W1), and directors and employees (AGE-ESOP1), for no consideration. A summary of the warrants granted is presented below.

Approved by

Date of original grant No. of warrants granted (units) Life of warrants (years)

AGE-W1

AGE-ESOP1

Extraordinary

Extraordinary

General Meeting

General Meeting

of the Shareholders

of the Shareholders

No. 1/2010

No. 1/2010

14 February 2011

In process

70,000,000 *

5,320,000

3

5 since issue and sell offer

Semi-annually

-

First exercise date

June 2011

-

Final exercise date

13 February 2014

-

3.556 **

1.000 **

1:1.125 **

1:1 **

Exercisable

Exercise price per 1 ordinary share (Baht) Exercise ratio (warrants to ordinary shares)

22


*

The number of warrants was changed to 248,036,460 units in accordance with a resolution of the extraordinary shareholders’ meeting No.1/2011 held on 14 September 2011

** To adjust the exercise ratio and price of the Company's warrants to 1 warrant convertible to 1.406 ordinary shares at a price of Baht 0.711, and the exercise ratio and price of warrants allocated to directors and employees of the Company and its subsidiaries (AGE-ESOP1) to 1 warrant convertible to 1.406 ordinary shares at a price of Baht 0.25, in accordance with a resolution of the Annual General Meeting of the shareholders held on 27 April 2012.

This portion of the Company’s warrants to its existing shareholders (AGE-W1) was registered as listed securities on the Market for Alternative Investment (MAI) on 14 February 2011. Presented below is a summary of warrant activity: (Unit: Thousand Unit) AGE-W1 No. of warrants issued

70,000

Exercised during June 2011

(7,991)

Outstanding warrants before change in number of warrants

62,009

Outstanding of warrants after change in number of warrants

248,036

Exercised during December 2011

19.

(200,531)

Exercised during June 2012

(4,224)

Exercised during December 2012

(6,700)

Outstanding warrants as at 31 December 2012

36,581

Statutory reserve Pursuant to Section 116 of the Public Limited Companies Act B.E. 2535, the Company is required to set aside to a statutory reserve at least 5 percent of its net profit after deducting accumulated deficit brought forward (if any), until the reserve reaches 10 percent of the registered capital. The statutory reserve is not available for dividend distribution.

20.

Expenses by nature Significant expenses by nature are as follows: (Unit: Thousand Baht) Consolidated

Separate

financial statements

financial statements

2012

2011

2012

2011

Salary and wages and other employee benefits

85,847

76,435

72,818

69,149

Depreciation and amortisation

34,883

32,603

27,267

27,139

Rental expenses from operating lease agreements

38,928

34,394

26,351

34,394

3,161,921

3,200,861

3,161,921

3,200,861

Raw materials and consumables used Changes in inventories of finished goods

(32,351)

(25,040)

(32,351)

(25,040)

23


21.

Earnings per share Basic earnings per share is calculated by dividing profit (loss) for the year attributable to equity holders of the Company (excluding other comprehensive income) by the weighted average number of ordinary shares in issue during the year, after adjusting the number of ordinary shares to reflect the impact of the stock dividend as discussed in note 24 to the financial statements. The prior year’s basic earnings per share has been recalculated as if the stock dividend had been distributed and incurred at the beginning of the earliest period reported. Diluted earnings per share is calculated by dividing profit (loss) for the year attributable to equity holders of the Company (excluding other comprehensive income) by the weighted average number of ordinary shares in issue during the year plus the weighted average number of ordinary shares which would need to be issued to convert all dilutive potential ordinary shares into ordinary shares. The calculation assumes that the conversion took place either at the beginning of the year or on the date the potential ordinary shares were issued. In addition, the number of ordinary shares reflecting the impact of the stock dividend as discussed in note 24 to the financial statements and the changing of par value are already adjusted in calculations of diluted earnings per share. The prior year’s diluted earnings per share has been recalculated as if the stock dividend had been distributed and incurred at the beginning of the earliest period reported. The following table sets for the computation of basic and diluted earnings per share: Consolidated financial statements

Profit (loss)

Weighted average

Earnings

number of ordinary shares

per share

2012

2011

2012

2011

2012

2011

(Thousand

(Thousand

(Thousand

(Thousand

(Baht)

(Baht)

Baht)

Baht)

shares)

shares)

(24,311)

260,347

1,307,882

1,049,509

-

49,439

232,499

260,347

1,357,321

1,282,008

Basic earnings per share Profit (loss) attributable to equity holders of the Company

(0.02)

0.25

(0.02)

0.20

Effect of dilutive potential ordinary shares Warrants

-

Diluted earnings per share Profit (loss) attributable to ordinary shareholders assuming the conversion of warrants to ordinary shares

(24,311)

24


Separate financial statements

Profit (loss)

Weighted average

Earnings

number of ordinary shares

per share

2012

2011

2012

2011

2012

2011

(Thousand

(Thousand

(Thousand

(Thousand

(Baht)

(Baht)

Baht)

Baht)

shares)

shares)

249,035

1,307,882

1,049,509

-

49,439

232,499

249,035

1,357,321

1,282,008

Basic earnings per share Profit (loss) attributable to equity holders of the Company

(116,063)

(0.09)

0.24

(0.09)

0.19

Effect of dilutive potential ordinary shares Warrants

-

Diluted earnings per share Profit (loss) attributable to ordinary shareholders assuming the conversion of warrants to ordinary shares

(116,063)

There is no calculation of diluted loss per share for the year ended 31 December 2012 as such calculation would decrease loss per share. 22.

Segment information The Company’s operations consist of the import and sale of coal for domestic industrial use. For the year ended 31 December 2012, export sales of the Company represented approximately 23 percent (2011: 29 percent) of total sales. Its subsidiaries’ main operations are the provision of transportation and other related services to the Company. These services are considered to be related to the import and sale of coal business. As a result, all of the revenues, profit (loss) and assets as reflected in these financial statements pertain to the aforementioned business segment and geographic area.

23.

Provident fund The Company, its subsidiary and employees have participated in AIA Master Pool Registered Provident Fund as approved by Ministry of Finance in accordance with the Provident Fund Act B.E. 2530. Employees, the Company and its subsidiary contributed to the fund monthly at the rates of 2 percent of basic salary. The fund, which is managed by American International Assurance Company Limited, will be paid to employees upon termination in accordance with the fund rules. During the year 2012, the Company and its subsidiary contributed Baht 0.7 million (Separate financial statements: Baht 0.7 million) to the fund (2011: Baht 0.6 million, Separate financial statements: Baht 0.6 million).

25


24.

Dividends/Stock dividends Dividend per Dividends

Approved by

Final dividend for 2010

Cash dividend

share

Stock dividend

share

(Million Baht)

(Baht)

(Million Baht)

(Baht)

Annual General Meeting of the shareholders on 22 April 2011

Total for year 2011

Final dividend for 2011

2

0.01

22

0.13

2

0.01

22

0.13

7

0.01

66

0.06

7

0.01

66

0.06

Annual General Meeting of the shareholders on 27 April 2012

Total for year 2012

25.

Dividend per

Commitments and contingent liabilities

25.1 Capital commitments As at 31 December 2012, the Company and a subsidiary had capital commitments of approximately Baht 62 million (2011: Baht 109 million), relating to the purchase of land and the construction of port. 25.2 Operating lease commitments The Company has entered into several lease agreements in respect of the lease of land and office space rental with a related party and the lease and service related to operation with other companies. The terms of the agreements are generally between 1 and 5 years. Operating lease agreements are non-cancellable. Future minimum lease payments required under these non-cancellable operating leases contracts were as follows. (Unit: Million Baht) As at 31 December 2012

2011

in up to 1 year

14

9

In over 1 and up to 5 years

7

3

Payable:

25.3 Commitments related to agreements to purchase steam coal The Company has entered into agreements with foreign coal mining company whereby it is committed to purchase steam coal from such company in quantities and at prices that can be adjusted dependent on the quality of the coal, in accordance with the formula stipulated in the agreements. 26


25.4 Guarantees a)

As at 31 December 2012, there were outstanding bank guarantees of Baht 5 million issued by the banks on behalf of the Company and its subsidiary in respect of certain performance bonds as required in the normal course of business. Mostly of these letters of guarantee to guarantee electricity use.

b)

The Company has commitments in respect of its guarantees of loans of a subsidiary amounting to Baht 1,050 million (2011: Baht 1,050 million). In addition, the subsidiary has commitments in respect of its guarantees of loans of the Company amounting to Bath 559 million.

25.5 Letter of Credit As at 31 December 2012, the Company has outstanding commitments of approximately Baht 495.5 million and USD 0.4 million (2011: USD 4.5 million) under letter of credit, relating to purchasing of raw materials. 26.

Financial instruments

26.1 Financial risk management The financial instruments of the Company and its subsidiaries, as defined under Thai Accounting Standard No. 107 “Financial Instruments: Disclosure and Presentations�, principally comprise cash and cash equivalents, trade and other receivables, loans, investment, bank overdrafts and short-term loans from financial institutions, trade and other payables and long-term loans. The financial risks associated with these financial instruments and how they are managed is described below. Credit risk The Company and its subsidiaries are exposed to credit risk primarily with respect to trade and other receivables and loans. The Company and its subsidiaries manage the risk by adopting appropriate credit control policies and procedures and therefore do not expect to incur material financial losses. In addition, the Company and its subsidiaries do not have high concentrations of credit risk since they have a large customer base. The maximum exposure to credit risk is limited to the carrying amounts of trade and other receivables as stated in the statements of financial position. Interest rate risk The Company and its subsidiaries are exposed to interest rate risk relate primarily to their cash at banks, bank overdrafts and short-term loans from financial institutions and longterm borrowings. However, since most the financial assets and liabilities of the Company and its subsidiaries bear floating interest rates or fixed interest rates which are close to the market rate, the interest rate risk is expected to be minimal. 27


Significant financial assets and liabilities classified by type of interest rate are summarised in the table below, with those financial assets and liabilities that carry fixed interest rates further classified based on the maturity date, or the repricing date if this occurs before the maturity date. (Unit: Million Baht) As at 31 December Consolidated financial statements Fixed interest rates

With 1 year 2012

2011

Over 1 and

Floating interest

Non-interest

up to 5 years

rate

bearing

2012

2011

2012

2011

2012

Effective Total

2011

2012

interest rate

2011

2012

2011

(% per annum) Financial assets Cash and cash equivalents

-

-

-

-

123

31

60

220

183

251

0.6 - 0.7

0.5 - 0.7

Trade and other receivables

-

-

-

-

-

-

652

585

652

585

-

-

Restricted bank deposits

-

-

-

-

92

78

-

-

92

78

0.5 - 3.0

0.5 - 2.7

-

-

-

-

215

109

712

805

927

914

financial institutions

-

-

-

-

1,450

1,482

-

-

1,450

1,482

0.8 - 3.9

3.5 - 7.6

Trade and other payables

-

-

-

-

-

-

284

257

284

257

-

-

Liabilities under finance lease agreements

9

6

14

6

-

-

-

-

23

12

1.9 - 4.5

1.9 - 4.5

Long-term loans

-

-

-

-

360

256

-

-

360

256

5.1 - 7.2

5.0 - 6.2

9

6

14

6

1,810

1,738

284

257

2,117

2,007

Financial liabilities Bank overdrafts and short-term loans from

28


(Unit: Million Baht) As at 31 December Separate financial statements Fixed interest rates

With 1 year 2012

2011

Over 1 and

Floating interest

Non-interest

up to 5 years

rate

bearing

2012

2011

2012

2011

2012

Effective Total

2011

2012

interest rate

2011

Financial assets

2012

2011

(% per annum)

Cash and cash equivalents

-

-

-

-

49

31

40

210

89

241

0.6 - 0.7

0.5 - 0.7

Trade and other receivables

-

-

-

-

-

-

658

587

658

587

-

-

11

39

-

-

-

-

-

-

11

39

2.5

2.5

-

-

-

-

92

78

-

-

92

78

0.5 - 3.0

0.5 - 2.7

11

39

-

-

141

109

698

797

850

945

financial institutions

-

-

-

-

1,450

1,482

-

-

1,450

1,482

0.8 - 3.9

3.5 - 7.6

Trade and other payables

-

-

-

-

-

-

299

250

299

250

-

-

Short-term loans from subsidiary

20

-

-

-

-

-

-

-

2.5

-

Liabilities under finance lease agreements

6

4

8

6

-

-

-

-

14

10

1.9 - 4.5

1.9 - 4.5

Long-term loans

-

-

-

-

226

226

-

-

226

226

5.1 - 7.2

5.0 - 6.2

26

4

8

6

1,676

1,708

292

250

2,009

1,968

Loans to subsidiaries Restricted bank deposits

Financial liabilities Bank overdrafts and short-term loans from

20

-

29


Foreign currency risk The Company’s exposure to foreign currency risk arises mainly from purchasing or trading. As at 31 December 2012, the Company had outstanding balances of assets and liabilities denominated in significant foreign currency amounting to approximately USD 3 million and USD 6 million, respectively (2011: liabilities in significant foreign currency amounting to approximately USD 4 million), which have not yet been hedged against foreign exchange risk (The majority of these liabilities are repayable within 1 year). 26.2 Fair values of financial instruments Since the majority of the financial instruments of the Company and its subsidiaries are short-term in nature or bear floating interest rates, their fair value is not expected to be materially different from the amounts presented in statements of financial position. A fair value is the amount for which an asset can be exchanged or a liability settled between knowledgeable, willing parties in an arm’s length transaction. The fair value is determined by reference to the market price of the financial instrument or by using an appropriate valuation technique, depending on the nature of the instrument. 27.

Capital management The primary objective of capital management of the Company and its subsidiaries are to ensure that they have appropriate capital structure in order to support their business and maximise shareholder value. As at 31 December 2012, the Group's debt-to-equity ratio was 1.9:1 (2011: 1.8:1) (the Company's was 2.0:1 (2011: 1.8:1)).

28.

Reclassification During the current year, the Company has reclassified investment properties transactions related to the preparation of the separate financial statements. Investment property was previously recognised under the caption of Property, Plant and Equipment, and measured using the cost model, while under the new accounting policy, the Company separately presents investment property and measures it using the cost model. The Company also reclassified these transactions in the separate financial statements as at 31 December 2011 for comparative purposes. However, the Company has not reclassified them in the separate financial statements as at 1 January 2011 because the Company purchased such investment properties during the year 2011, and there is therefore no effect to the separate financial statements as at 1 January 2011. The reclassification has no effect to the previously reported profit or shareholders’ equity.

30


The above reclassifications as at 31 December 2011 are detailed below. (Unit: Thousand Baht) Separate financial statements 31 December 2011 As reclassified

29.

As previously reported

Investment properties

202,643

-

Property, plant and equipment

332,999

535,642

Approval of financial statements These financial statements were authorised for issue by the Company’s Board of Directors on 14 February 2013.

31

Age 12  

AGE_2012 ASIA GREEN ENERGY PCL Annual Report 2012

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