SCG Packaging Public Company Limited First 10 major ...scgp.listedcompany.com/misc/ar/ar2019-en/doc.pdf · as the US-China trade war, oil prices fluctuations, and volatility of the

SCG Packaging Public Company Limited

Company Profile

Registration No. 0107537000921

Head Office Address 1 Siam Cement Road, Bangsue, Bangkok 10800

Business Type The Company generates revenue from holding shares in other

companies (Holding Company), operating core business for

packaging solutions provider which are organized into two main

operating segments: integrated packaging chain and fibrous chain,

also other relating businesses.

Initial Registered Capital (as at the registration date of conversion into the Public Limited

Company on March 24, 1994)

Registered Capital: 1,000 Million Baht

Paid-up Capital: 1,000 Million Baht

Issued and paid up ordinary shares of: 100 Million shares

Issued and paid up preference shares: - None -

Par value of 10 Baht per share

Present Registered Capital Registered capital: 4,500 Million Baht

Paid-up capital: 3,126 Million Baht

Issued and paid up ordinary shares of: 3,126 Million shares



Website www.scgpackaging.com

Share Registrar Tel: +66 2586 2894

Fax: +66 2586 3007

E-mail: [email protected]

Investors can find further information regarding the Company from the Registration Statement for Securities Offering (Form 69-1) and Prospectus which has been disclosed at www.sec.or.th or www.scgpackaging.com.

First 10 major Shareholders (As of December 31, 2019)

ShareholdersNo. of Ordinary

Shares (Issued and Paid-up)

Percent of Total Shares

1. The Siam Cement Public Company Limited 3,095,882,660 99.037

2. Mr. Taewan Tantichattanont 2,320,000 0.074

3. Randery Burahmakan Company Limited 1,872,000 0.060

4. Ms. Orapin Thidarat 1,634,000 0.052

5. Mr. Man Nana 1,563,200 0.050

6. Roman Catholic Mission of Bangkok 1,068,960 0.034

7. Mr. U-thane Tantichattanont 1,000,000 0.032

8. Mr. Somsak Nana 931,440 0.030

9. Mr. Pipatpong Israsena Na Ayudhya 528,880 0.017

10. Mr. Yuph Nana 499,440 0.016

11. Other Shareholders 18,699,420 0.598

Total 3,126,000,000 100.000

CONTENTS

Financial overview SCG Packaging Public Company Limited and its Subsidiaries

2

SCG Packaging Public Company Limited and Its Key Subsidiaries

5

Message from the Board of Directors

6

The Audit Committee’s Report

8

The Governance and Nomination Committee’s Report

10The Remuneration Committee’s Report

11

2019 Operating Results SCG Packaging Public Company Limited and its Subsidiaries

12

Sustainable Development Performance 2019

16

A Sustainable World through Circular Economy

20

Management Structure

22

2019 Consolidated Financial Statements of SCG Packaging Public Company Limited and its Subsidiaries

45

2019 Financial Statements of SCG Packaging Public Company Limited

153

Holding Company in Subsidiaries, Associates, and Other Companies

218

2010

8,843

50,127 52,46358,439

65,14173,987

83,218 85,36991,312 93,246

51,71454,839

57,430 59,13564,614

70,90774,542

81,45587,255

139,51389,070

8,518 8,554 9,189 9,42210,499 10,554

12,082

14,56615,036

5,269

6,066

4,425

3,2853,2253,1943,4183,332

3,1233,290

2011 2012 2013 2014 2015 2016 2017 2018 2019 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Financial Overview SCG Packaging Public Company Limited and its Subsidiaries

Unit : Million Baht

Profit Before Finance Costs, Income Tax Expense, Depreciation and Amortization - EBITDA

Total Assets

Profit Attributable to Owners of the Parent

Revenue from Sales

Annual Report 2019 SCG Packaging Public Company Limited2

2010

8,843

50,127 52,46358,439

65,14173,987

83,218 85,36991,312 93,246

51,71454,839

57,430 59,13564,614

70,90774,542

81,45587,255

139,51389,070

8,518 8,554 9,189 9,42210,499 10,554

12,082

14,56615,036

5,269

6,066

4,425

3,2853,2253,1943,4183,332

3,1233,290

2011 2012 2013 2014 2015 2016 2017 2018 2019 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Financial Overview SCG Packaging Public Company Limited and its Subsidiaries

Unit : Million Baht

2019 2018 2017 2016 2015

Statements of Income1

Revenue 89,911 87,770 82,862 75,128 71,598

Costs and expenses 83,024 79,661 76,888 70,799 67,114

EBITDA 15,036 14,566 12,082 10,554 10,499

Profit attributable to owners of the parent 5,269 6,066 4,425 3,285 3,225

Statements of Financial Position

Assets 139,513 93,246 91,312 85,369 83,218

Liabilities 76,697 39,986 35,661 32,617 34,892

Total equity attributable to owners of the parent 42,952 40,441 42,891 40,402 38,339

Total shareholders’ equity 62,816 53,260 55,651 52,752 48,326

Share Information

Total number of shares issued2 (Million Shares)

3,126 3,126 3,126 3,126 3,126

Book value per share2 (Baht) 13.74 12.94 13.72 12.92 12.26

Basic earnings per share2 (Baht) 1.69 1.94 1.42 1.05 1.03

Proposed dividends per share2, 3 (Baht) 0.98 0.50 2.50 0.25 0.25

Financial Ratio

Dividends payout ratio (%) 57.9 25.8 176.6 23.8 24.2

Profit on revenue from sales (%) 5.9 7.0 5.4 4.4 4.5

Return on assets (%) 4.5 6.6 5.0 3.9 4.1

Return on equity attributable to owners of the parent (%) 12.6 14.6 10.6 8.3 8.7

Remarks: 1 Included financial performance of Fajar since July 2019 and Visy (Thailand) since September 20192 In 2019, there is a change to par value of the ordinary shares of the company and an issuance of stock dividend. This has caused the number of the ordinary shares increase from 156.3 million shares

to 3,126 million shares. The numbers of the ordinary shares used in financial calculation during 2015-2018 period are adjusted to reflect those changes as if the change in par value of the ordinary share

and the issuance of stock dividend had occurred since the beginning of the respective reporting period.3 The proposed full year dividend of 0.98 baht per share is calculated from

1) Interim dividend in an amount of 1.11111111 baht per share on 1,563 million ordinary shares

2) Final dividend in an amount of 0.42 baht per share on 3,126 million ordinary shares

3

SCG Packaging Public Company Limited and Its Key Subsidiaries

Integrated Packaging Chain

1. Fiber-Based Packaging • Thai Containers Group Co., Ltd. • D-In Pack Co., Ltd. • Dyna Packs Co., Ltd. • Tawana Container Co., Ltd. • Thai Containers Khonkaen Co., Ltd. • Thai Containers Rayong Co., Ltd. • Precision Print Co., Ltd. • SCGP Solutions Co., Ltd. • Orient Containers Co., Ltd. • Alcamax Packaging (Vietnam) Co., Ltd.(Vietnam) • AP Packaging (Hanoi) Co., Ltd. (Vietnam) • New Asia Industries Co., Ltd. (Vietnam) • Packamex (Vietnam) Co., Ltd. (Vietnam) • PT Indocorr Packaging Cikarang (Indonesia) • PT Indoris Printingdo (Indonesia) • PT Primacorr Mandiri (Indonesia) • TCG Rengo (S) Ltd. (Singapore) (on process of liquidation)

2. Performance and Polymer Packaging • Conimex Co., Ltd. • TC Flexible Packaging Co., Ltd. • Prepack Thailand Co., Ltd. • Visy Packaging (Thailand) Limited • SCGP-T Plastics Co., Ltd. • SCGP Rigid Plastics Co., Ltd. • Tin Thanh Packing Joint Stock Company (Vietnam)

3. Packaging Paper • Thai Cane Paper Public Company Limited • Siam Kraft Industry Co., Ltd. • PT Dayasa Aria Prima (Indonesia) • PT Fajar Surya Wisesa Tbk. (Indonesia) • SCGP Solutions (Singapore) Pte. Ltd. (Singapore) • United Pulp and Paper Co., Inc. (Philippines) • Vina Kraft Paper Co., Ltd. (Vietnam)

Fibrous Chain

1. Forestry Business • The Siam Forestry Co., Ltd.

2. Pulp and Paper Products • Thai Union Paper Public Company Limited (on process

of liquidation) • Thai Paper Co., Ltd. • Phoenix Pulp & Paper Public Company Limited • Phoenix Utilities Co., Ltd. • Interpress Printers Sendirian Berhad (Malaysia)

Other Businesses

• Invenique Co., Ltd. • SKIC International Co., Ltd. • SCG Paper Energy Co., Ltd. • SCGP Excellence Training Center Co., Ltd.

5

Message from the Board of Directors SCG Packaging Public Company Limited

The economies of Southeast Asia continue to grow at a strong and healthy pace, relative to other regions, while the global economy has recently encountered dramatic challenges such as the US-China trade war, oil prices fluctuations, and volatility of the capital markets and currency rates.

The packaging industry in Southeast Asia witnessed healthy growth in 2019, driven by competitive product and service exports, favorable demographics with increased purchasing power of the working class, and other lifestyle changes. All of these factors have led to the growth of packaging offering for the variety of consuming behaviors, namely convenient packaging, environmentally friendly packaging, and transportation packaging especially for E-Commerce industry. Moreover, industrial factors, such as the growth of the electronics and electric appliance sector in Vietnam, the vibrant food, beverage and consumer goods industries, as well as the growing footwear and textile industries in Indonesia, have all played important roles. Another factor behind these growths has been the relocation of Chinese manufacturing base to Southeast Asia.

Domestic packaging demand within Thailand in 2019 slightly increased, attributed to the resilient growth of consumer products, the emerging E-Commerce business, as well as the increasing need for environmentally friendly packaging, while

the export sector slowed due to the prolonged US-China trade war, and the appreciation of the Thai Baht.

The company continues to focus on expanding its investments in the Southeast Asia region, and works towards improving the organization’s efficiency to respond to quick pace of changes through more competitive supply chain offerings such as integrated packaging solutions. With the company’s efforts, total revenue from sales in 2019 registered at 89,070 million baht, representing a 2% increase from last year, in which sales from Southeast Asia (excluded Thailand) was accounted for 30% of the total revenue. Earnings was 5,269 million baht, a 13% decrease from last year, attributed to lower selling price of the fibrous chain and the adjustment of employee benefits as a result of the amendment to the Thai Labor Law of 338 million baht.

Maintained Market-Leading Position by Continuously Expanding Investment in the Region

The company expanded its investment through the acquisition of the 55% stakes in PT. Fajar Surya Wisesa Tbk. (“Fajar”), a leading paper packaging business in Indonesia, with the investment valued at 20,817 million baht and the acquisition


of the 80% stakes in Visy Packaging (Thailand) Company Limited (“Visy (Thailand)”), the high technology thermoformed food packaging company supplying to world class food companies, with the investment valued at 4,305 million baht.

Accelerating Growth with the Initial Public Offering (IPO)

The company has submitted its filings to the Securities and Exchange Commission to issue and offer new shares through the Initial Public Offering (IPO) at the amount of not exceeding 30% of the company’s total paid up capital after its capital increase. The net proceeds from the IPO will be used for business expansion for continued growth within the region, for financial restructuring that will allow future business expansion, as well as for providing better agility in business management.

Innovative Products and Services as Integrated Packaging Solutions

The company continues to focus on developing new products, services and technologies that delivers a variety of packaging solutions to enhance our customers’ brand perception. This is in addition to the efficient supply chain offerings that fulfill the consumer’s behaviors in an environmentally friendly manner. An example of this is OptiBreathTM, a packaging solution that prolongs shelf-life of fresh fruits and vegetable through the use of film technology that controls the flow of air and vapor which is suited to different type of fruits and vegetables. Another example is Fest, an environmentally friendly food safety packaging made from eucalyptus pulp, which can be heated in a microwave and is biodegradable within 60 days. These examples

show the company’s commitment to offer quality packaging solutions that meet our customers’ differentiated needs.

Human Resources, Society, and Environment

The company continues to place its tremendous focus on developing its personnel’s skills to competitively deliver the integrated packaging solutions and fostering strong organizational culture, as well as improving the work processes for maximum efficacy through the use of Artificial Intelligence (AI) and automation technologies. There is also the emphasis on the increasing use of environmentally friendly energy through the conversion of waste from the manufacturing process into electricity for internal use, as is the case with the “Ban Rang Plub Community Model”, which the company has been providing supports for the past 5 years and has been awarded the first prize at the national Zero Waste Community Project Contest 2019, organized by the Department of Environmental Quality Promotion. Knowledge from this project will be transferred to other communities to promote further cooperation and the eventual growth of trash management networks at district levels.

The Board of Directors would like to express our gratitude to all shareholders and other relevant parties for the continued trust and support you have placed with the company. We would like to assure that the company will continue to develop its organization effectiveness and drive towards success with strong adherence to good governance, furthering the company’s prosperity, maintaining its leading position in the Southeast Asia region, as well as to embed the Circular Economy principle into the work processes throughout the supply chain as the key foundation to build sustainable business growth for the company.

Bangkok, January 28, 2020

(Mr. Prasan Trairatworrakul) (Mr. Wichan Jitpukdee) Chairman Chief Executive Officer

7

The Audit Committee’s Report SCG Packaging Public Company Limited

According to the resolution of the Board of Directors made on 21 June 2019, the Audit Committee was formed to independently perform its duties, in accordance to the Audit Committee Charter. In 2019, the Audit Committee convened eight times, with the 100% attendance rate of its members. The key highlights of these meetings are summarized as follows:

1. Review of the Financial Statements: The Audit Committee reviewed both the quarterly and 2019 annual financial statements of SCG Packaging Public Company Limited (or “SCGP”), and the consolidated financial statements of SCGP and its subsidiaries. These financial statements were prepared in accordance to the Thai Financial Reporting Standards, which conforms to the International Financial Reporting standards. The Committee reviewed material issues and special items, and obtained sufficient clarification from the external auditors and the management to confirm that the financial statements and the noted disclosures in the financial statements complies with the relevant laws and financial reporting standards. The Audit Committee then endorsed the financial statements reviewed and audited by SCGP’s external auditors without reservation.

2. Review of Connected Transactions or Potential Conflict of Interest: The Audit Committee outlined the scope of connected transactions and reviewed connected transactions and other transactions that may result in conflict of interest. The results suggested that SCGP’s transactions are in line with the policies of connected transaction and the outlined scope.

3. Review of Corporate Governance: SCGP continues to conduct its business in accordance with sustainable development and corporate governance principles, with reference to international standards including Organization for Economic Co-operation and Development (OECD), Thailand Securities and Exchange Commission (SEC), Stock Exchange of Thailand (SET), and Thai Institute of Directors Association (IOD). The Audit Committee reviewed the policies and governance guidelines, the efficiency and

effectiveness of good governance. The body concluded that the directors, the management and employees strictly complied with the policy by having the Board of Directors and the management as the role model. This commitment was further extended to the suppliers of SCGP through the supplier Code of Conduct as guidelines. The aim is to encourage our suppliers to behave as good citizens and conduct their businesses in such a way that they address societal and environmental concerns that are beyond the basic legal requirements.

4. Review of Risk Management Assessment System: The Audit Committee reviewed the efficiency and effectiveness of SCGP’s risk management process, and assigned SCGP Risk Management Committee to roll out the structures, core working team, policies, strategies, risk management frameworks, and risk management plans, in addition to the review of risk profile and nationwide risk management monitoring.

5. Review of Internal Control System: The Audit Committee reviewed the results of the internal control assessment, both operational and information technology systems, as reported by the Internal Audit Office and prescribed by its charter. The assessment was in compliance with the sufficiency internal control assessment recommended by the Securities and Exchange Commission (SEC). The Committee concluded that SCGP had sufficient internal controls that are appropriate for the company’s business operations. The management focused on creating employee awareness to promote moral principles, ethical behavior, code of conduct and anti-corruption activities by building the proactive preventive system. The domain comprises Ethics e-Testing, e-Policy e-Testing, risk management and control practices in accordance with “Three Lines of Defense” model. Workshops were organized for the business units to equip staffs at all levels to better understand all relevant aspects of risks, impacts, and key internal controls.


6. The Internal Audit: The Audit Committee conducted its annual review of the Audit appointed Charter and the Internal Audit office Charter, and appointed the Audit Office Director. In 2019, the Audit Office scrutinized, both operational and information technology systems for 45 projects in total. The findings concluded that there are no material issue concerns. Furthermore, the Audit Office introduced digital technology related projects such as Data Analytics Robotic Process Automation (RPA) for use in data creation and analysis. The Audit Office created the internal control documents entitled “System Development and Outsourcing System Development with Agile Methodology”, and provided consultation for risk management and key area controls for companies that use new application in operation systems, etc. Quality Assurance Review (QAR) was assessed by an independent expert.

7. Review of Complaint and Whistleblowing Investigations: SCGP developed the Whistleblowing System to enable employees and external parties to report non-compliance. External parties may complain non-compliance directly to www.scgpackaging.com. This is in addition to contacts through phone calls, e-mails and letters to the Independent Committee, the Audit Committee, the Internal Audit Office, and the Corporate Secretary Office. Findings from the investigation were taken into consideration for determination of future procedure and preventive guidelines. The Audit Committee

also reviewed measures and formulated preventive anti-corruption measures for possible frauds across systems, standard-based corruption investigations, risk assessment are appropriated with continuous business operation.

8. Appointment of the External Auditor and Review of the Audit Fee for 2020: KPMG Phoomchai Audit Ltd. has been selected and appointed as the external audit firm of SCGP from 2018 to 2022. Based on the satisfactory results of their performance appraisal and their qualification as independent auditors, the external auditors possess professional expertise, knowledge, capability and experience in auditing SCGP’s businesses, and share knowledge related to business in addition to auditing. Therefore, the Audit Committee recommended the Board of Directors to seek approval at the shareholders’ meeting for the appointment of Mr. Wairoj Jindamaneepitak, Certified public Accountant Registration No. 3565; or Miss Thanyalux Keadkaew, Certified public Accountant Registration No. 8179; or Miss Dusanee Yimsuwan, Certified public Accountant Registration No. 10235, of KPMG Phoomchai Audit Ltd. as the Company’s auditors for the year 2020.

On behalf of the Audit Committee

(Mrs. Khaisee Nuengsikhaphean)Chairman of the Audit Committee

9

The Governance and Nomination Committee’s Report SCG Packaging Public Company Limited

The Board of Directors resolved to appoint the Governance and Nomination Committee, effective November 25, 2019, thereby extricating it from the Nomination, Remuneration, and Governance Committee, previously established to fulfill the roles and responsibilities prescribed by the Board of Directors, which included proposing governance policies and guidelines and nominating qualified candidates for directorship.

In 2019, the Governance and Nomination Committee convened a total of two meetings, with an attendance record of 100%. The significant duties performed by the Committee, which were in line with its scope of responsibilities defined in the Governance and Nomination Committee Charter, in 2019 can be summarized as follows:

1. Recommendations of policies and guidance with regard to the Corporate Governance of SCG Packaging

In 2019, the Board of Directors resolved to approve the recommendations of the Governance and Nomination Committee to establish and review the governance policies and guidance of SCG Packaging, both in preparation for the Initial Public Offering (IPO) and the listing of its common shares in the Stock Exchange of Thailand (SET) and in an effort to foster awareness and promote adherence to SCG Packaging Corporate Governance Principles and Code of Conduct among the employees. Relevant initiatives included the following:

• Adopted the Corporate Governance Code for Listed Companies 2017 (CG Code), issued by the Securities and Exchange Commission (SEC), as practical and valuable to the business context of SCG Packaging to ensure sustainable value creation. The duties of the Board of Directors stipulated in the CG Code were also included in the Board of Directors Charter.

• Established the core values, code of conduct, and governance structure of SCG Packaging, drew up charters for the Board of Directors and all Sub-committees, defined the roles and responsibilities of the CEO, and formulated policies, measures, and guidelines relevant to organizational management in accordance with corporate governance principles, with the goal of providing guidance for the directors, executives, and employees in pursuing fair and transparent business conduct and management, enabling them to generate returns and create long term value for shareholders, foster

confidence and trust in all stakeholders, and sustainably enhance the company’s competitive capability. These have been compiled and included in the Corporate Governance Handbook, which is regularly reviewed and updated, and the policies approved by the Board of Directors are published on the company’s website.

2. Review of the structure and composition of the Board of Directors and the qualifications of directors

Reviewed the structure and composition of the company’s Board of Directors and Sub-committees, including the number and qualifications of directors appropriate for the company’s business management and the qualification requirements of independent directors, which were more stringent than those stipulated by the Capital Market Supervisory Board.

3. Nomination of candidates to fill additional director positions and replace retiring directors in 2020

Nominated a list of qualified candidates for directorship and independent directorship to be reviewed and proposed to the General Meeting of Shareholders by the Board of Directors for appointment as directors to fill additional director positions and replace retiring directors in 2020, in compliance with the Corporate Governance Codes for listed companies set forth by SET and SEC as well as other relevant international principles. In addition, the Committee also promoted a greater breadth and diversity of knowledge, experience, perspective, and business vision in the Board composition to stay in keeping with the strategies and business conduct of SCG Packaging.

On behalf of the Governance and Nomination Committee

(Mr. Chalee Chantanayingyong)

Chairman of the Governance and Nomination Committee


The Remuneration Committee’s Report SCG Packaging Public Company Limited

The Remuneration Committee performed their duties as prescribed in the Charter of the Remuneration Committee by the Board of Directors with prudence, fairness, and rationality. In doing so, the Committee considered and compared the remunerations of other listed companies and leading corporations within similar industries or comparable size.

In 2019, the Committee convened three times, with the 100% attendance rate of its directors. Their primary aim was to consider the remuneration of the Board of Directors and Sub-committees, before proposing the findings to the Board and the Shareholders’ Meeting for approval. The Committee also considered the remuneration of the Company’s CEO and top executives, in order to align each respective package with the performance of each executive and SCG’s operating results, while retaining SCG’s leadership within the industry.

Furthermore, the Remuneration Committee also provided their views and recommendations to the Management of the company, with regard to human resources management, in the efforts to foster increased morale while retaining highly capable employees with the company.

On behalf of the Remuneration Committee

(Mr. Chumpol Nalamlieng) Chairman of the Remuneration Committee

11

2019 Operating Results SCG Packaging Public Company Limited and its Subsidiaries

Operating ResultsIn 2019, total revenue from sales of SCG Packaging Public Company Limited amounted to 89,070 million baht, an increase of 2% from 2018. EBITDA was 15,036 million baht, an increase of 3% from the previous year, mainly from the consolidation of the operating results of PT Fajar Surya Wisesa Tbk. and Visy Packaging (Thailand) Ltd. Profit for the year 2019 was 5,269 million baht, 13% decrease from the previous year attributed to lower selling price of the fibrous chain and the adjustment of employee benefits as a result of the amendment to the Thai Labor Law of 338 million baht.

Integrated Packaging Chain: Total revenue from sales was 72,006 million baht, an increase of 5% compared to the previous year and EBITDA was 13,758 million baht, an increase of 13%, mainly due to higher export volume and the consolidation of Fajar’s and Visy Packaging Thailand’s operating results.

Fibrous Chain: Total revenue from sales was 18,794 million baht, a 9% decrease from the previous year, and EBITDA was 1,208 million baht, a 46% decrease from the previous year, mainly due to lower selling price of printing and writing paper and pulp.

Market and CompetitionIn 2019, the packaging industry in Thailand slightly expanded compared to the last year, due to the growth of food, beverage and consumers products, E-Commerce industry and increasing demand for environmentally-friendly packaging, while the export segment still slowed down because of the prolonged trade war between the US and China and continuous surging of Thai baht. The demand in the printing and writing paper industry slightly lessened compared to the last year, since the consumer’s behavior shifted to digital technology.

Business Growth and InvestmentExpanded our investment through the acquisition of 55% stakes in PT Fajar Surya Wisesa Tbk., a leading paper packaging business in Indonesia, with the investment valued at 20,817 million baht. The aquisition of major stakes in Fajar will help propel the expansion of packaging business in Southeast Asia region, especially in Indonesia, which has ample growth opportunity in the future.

Acquired 80% stakes in Visy Packaging (Thailand) Ltd., the high- technology thermoformed food packaging company supplying to world class food companies, with the investment valued at 4,305 million baht, for a more variety of packaging products to better meet customer’s requirements.

Restructured our rigid polymer packaging business, with Toppan Printing Company Limited, a Japanese packaging company, investing in SCGP-T Plastics Company Limited, a holding company in the rigid polymer packaging business which holds 75% stakes in Conimex Company Limited. Toppan’s high skills and expertise in production techniques will help strengthen the operation as well as expand the customer base.

The company has submitted its filings to the Securities and Exchange Commission to issue and offer new shares through the Initial Public Offering (IPO) at the amount of not exceeding


30% of the company’s total paid-up capital after its capital increase. The net proceeds from the IPO will be used for business expansion for continued growth within the region, for financial restructuring that will allow future business expansion, as well as for providing better agility in business management.

Human Resources DevelopmentAdjusted organizational structure and assign responsibilities to executives and employees, mainly considering the organization’s competency in responding to the customer’s needs, as well as encourage the people capability enhancement, both in concept idea and expertise, to make employees in all levels understand the operational concept, focusing on customer centricity and meeting their needs accurately and quickly.

Improved the processes, methods and models using Artificial Intelligence (AI) and automation technologies, as well as developed skills for the related employees to understand how to work with the machines and technologies completely and safely, leading to the organizational effectiveness.

Planned the talent management and development system consistent to the succession plan to make the future executives prepared in the aspects of business, expertise and influential speaking, and being a role model by supporting learning from experienced people in the organization and focusing on self-learning.

Reinforced the cross-cultural management through strong corporate culture reflected behavior encouragement for all levels of employees to recognize and comply with the SCG’s business operation ideology in consideration off the cultural diversity and see the importance of diversity.

Product, Service and Solution DevelopmentThe company focuses on innovative solutions development to meet the various requirements comprehensively according to the changed consumer behaviors while still being environmentally friendly. Its main developing products are as follows:

• Developed “Fest Chill” in the environmentally friendly packaging brand of Fest. The product is made of natural pulp and coated with strengthening agents. It can be heated and cooled, and recycled in accordance with the Circular Economy.

• Developed “Fest Bio” in the environmentally friendly packaging brand of Fest. The product is made of natural pulp, can be heated and cooled and is biodegradable within 60 days.

• Developed polymer packaging in the brand of “OptiBreathTM” that prolongs the freshness of fruits and vegetables, with the film technology controlling the level of gas and vapor passing in and out proper for each type of fruits and vegetables, such as coconuts, mangoes and orchids, lessening the wastes and transportation limitations. Also, co-developed “Spout Pouch” with Mahidol University to store liquid foods for people with swallowing difficulty. It took two years in researching and testing before it proceeds with the manufacture and distribution processes. Moreover, developed “Retort Packaging” that can stand the heat from high temperature sterilization process to prolong the foods without refrigeration and is easy to use, suitable for fast-paced consumer lifestyle in the present.

13

• Developed digital printing packaging. The printing system used is direct printing from the work data, skipping the conventional mold preparation and lessening the production time. It can be printed on a variety of material, giving sharp images and avoiding the minimum limits.

• Developed lighter-weighed paper, while the strength remains the same or higher, using Nano Technology. It lessens the resources used in the manufacturing process and increases the ratio of recycled pulp used in the process.

• Co-developed packaging solutions to S&P for the second consecutive year in designing special packaging for moon cakes with the concept of “Lamps in the Moonlight”, being made of beautifully designed and strong material containing recycled paper. The packages are reusable and brought into the recycling process for the maximum resource utilization.

• Co-developed packaging solutions to Tesco Lotus, offering the service to collect and take the used paper packaging from Tesco Lotus to recycle and manufacture reusable paper bags as an integrated program. It aims to create

the closed-loop system to encourage the packaging that meets the consumer’s usage requirements and solves the environmental problems at the same time, according to SCG Circular Way.

Production Process DevelopmentInstalled Solar Farms and Solar Floating to generate solar electricity, reducing fossil fuel energy consumption and greenhouse gas emission about 9,800 ton CO

2e/year, and reused

the treated wastewater in some kinds of activities, such as washing machinery and watering trees, reducing water usage up to 1,550,000 m3/year for the maximum energy utilization.

Awards and Achievement in 2019SCG Packaging Public Company Limited and Thai Containers Group Co., Ltd. received awards as following:


• Global contest: WorldStar Packaging Awards 2019 from World Packaging Organization (WPO) in 3 awards: - Luxury Packaging 1 award - Food Packaging 1 award - Point of Purchase 1 award

• Regional contest: AsiaStar Packaging Awards 2019 from Asian Packaging Federation (APF) in 5 awards: - Consumer Packaging 2 awards - Point of Purchase 2 awards - Eco Packaging 1 award

• National contest: ThaiStar Packaging Awards 2019 from the Department of Industrial Promotion, Ministry of Industry in 10 awards:. - Consumer Packaging 3 awards - Point of Purchase 5 awards - Eco Packaging 2 awards

Thai Cane Paper Public Company Limited, Kanchanaburi Plant and Prachinburi Plant received The Prime Minister’s Industry Award 2019, in the category of Social Responsibility, organized by the Ministry of Industry.

Thai Cane Paper Public Company Limited, Kanchanaburi Plant and Prachinburi Plant received CSR-DIW Continuous Award 2019, organized by the Ministry of Industry.

Thai Cane Paper Public Company Limited, Kanchanaburi Plant received The Award Ceremony for Outstanding Establishment Labour Relations and Labour Welfare 2019, organized by the Ministry of Labour.

Siam Kraft Industry Co., Ltd., Wangsala Plant was awarded first runner-up prize in ASEAN Coal Awards in the category of Excellence Coal Management, organized by the Ministry of Energy.

152019 Operating ResultsSCG Packaging Public Company Limited and its Subsidiaries

1. Green Manufacturing

2. Upstream Supply Chain 3. Downstream Supply Chain

4. Sustainable Development Support

Sustainable Development Performance 2019

SCG Packaging has established the operational policy according to the sustainable development method, in consideration of risks and opportunities in the sustainable work improvement for the organization. The business operation strategy is set to ensure business growth in the fast changing situations. Short-term and long-term demands and expectations of all stakeholders are also taken into consideration to create economic, social and environmental balance.

SCG Packaging Sustainable Supply ChainSCG Packaging adheres to the development plan throughout the supply chain to create sustainability for the business operation, society and environment, with steps as follows:

1. Green Manufacturing Process • Improve the manufacturing process effectively and

efficiently for Operational Excellence, by defining indicators and goals of each issue, both in short-term and long-term, and applying the management system and standards, such as Environmental Management System (ISO 14001), Occupational Health and Safety Management System (ISO 45001), Energy Management System (ISO 50001), Guidance on Social Responsibility (ISO 26000), Total Quality Management, Total Productive Maintenance and Integrated Business Excellence (IBE). There are also Environmental Performance Assessment Program (EPAP) and Safety Performance Assessment Program (SPAP) organized by SCG to boost confidence in stakeholders related to environmental, occupational health and safety operations.

• Join the Green Industry Support and Development Program by the Ministry of Industry and Eco Factory Program by the Federation of Thai Industries, according to Thailand’s industry development policy, towards the economic, social and environmental balance in the concept of sustainable development.

• Commit to develop employees and business partners. In 2015, SCG set up SCG Learning Council to create more effective learning system. Then, the system and standards have been applied to its business expansion to Southeast Asia Region for sustainable development up to the same standard.


Sustainable Development Issue Evaluation Steps

1Gather the sustainable development issue throughout the supply chain (raw material supply/manufacture/transportation and distribution/product and service usage)

2Evaluate the importance of the issue by the impact to stakeholders

• Hold a workshop with representatives from all the departments related directly to each group of stakeholders to assess the impact levels.

• Hold a sub-meeting with each department to review the importance level analyzed from the viewpoint of the outside stakeholders.

3 Evaluate the importance of the issue by the impact to the Company

• Hold a workshop with representatives from all the departments and experts to analyze and prioritize the importance from SCG Packaging’s viewpoint and the possible impacts or business opportunities.

4 Prioritize the importance of the issue in the overview

• Prepare the table of importance levels of the issue from the viewpoint of the stakeholders.

• Hold a clarification meeting with every department to hear opinions and review the prioritization result for the sustainable development issue.

• Present the prioritization result to SCG Packaging’s Sustainable Development Committee.

• SCG Sustainable Development Practice• International Practice (GRI, DJSI, WBCSD and others)• Public meeting with expert in various fields• Employee satisfaction survey• Community satisfaction survey• Organization image survey• Whistleblowing channels• Organizational risk evaluation

2. Upstream Supply Chain Management Improvement • Perform environmentally-friendly procurement operation

and business partner security warranty to strengthen the business partners’ sustainable development.

3. Value Addition for Manufacturers and Downstream Supply Chain • Provide value-added, environmentally-friendly products and services to sustainably meet the customer’s requirements.

4. Sustainable Development Method Promotion Support • With “Commitment to Social Responsibility” as its

ideology, SCG Packaging provides assistance and support methods for stronger society even though it does not directly involve or relate.

Sustainable DevelopmentIn order to properly manage the sustainable development, as well as to get the organization and society prepared, SCG Packaging collects and prioritize the sustainable development in relation to its business operation, referring to the Global Reporting Initiative (GRI) standards and using the cooperation procedure in prioritize the sustainable development. Thus, the issue management appropriately meets the stakeholder’s requirements.

17

0 1 2 3 4 5 6 7 8

1

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Priority for Business

• Safety• Product Stewardship (CE)• Energy Management• Water Management• Customer Engagement• Community Engagement

Prio

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for

Sta

keho

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s

Safety

CommunityEngagement

Energy Management

Water Managment

CustomerEngagement

Product Stewardship

Supply Chain Managment

Ethics &Integrity

Climate Change

Fair Tax

Human CaptialDevelopment

Occupational Health

Emissions

RecyclingStrategy

Social

Environment

Economic

Biodiversicity &

Ecosystem

Waste Managment

Labor Practice & Human Rights

SCG Packaging Materiality Matrix

Sustainable Development Projects in 2019Social and Community Development Project • The Challenge - Packaging Design Contest

The company organized “The Challenge - Packaging Design Contest 2018” consecutively since 2016 to provide a stage for young designers to showcase their packaging design talents and to equip them with insights into customer-centric marketing, which can be adopted as a design concept to meet the requirements of the package users. Leading customers also cooperate in determining the topic of the contest and judge the contest. The winning design will be further developed for use in the market.

Community Economy, Job and Income Creation Project • Local community’s job and income creation project

The company encouraged a sustainable income for communities surrounding the plants through training of basket weaving from paper band; waste from paper manufacturing processes which can be designed into bags, baskets and decorative items, as well as provided multiple channels for sales, adding values to waste and promoting communities’ economic growth sustainably.

Environmental Conservation Projects • Energy and climate change management

The company is committed to reduce energy consumption and greenhouse emission, aiming to achieve the goal by improving the efficiency of energy consumption in manufacturing process and increasing the proportion of renewable and alternative energy to lessen the fossil fuel dependency. Moreover, it reviewed the ways to reduce impact from waste and looked for the way to utilize the company’s typical raw material, i.e., waste rejects paper (RCP) sorting, black liquor from pulp manufacturing process and biogas from wastewater treatment system are being used as fuel for company power generation.

• Water managementThe company continuously improved water utilization efficiency by analyzing water balance and sought to improve company’s water usage, such as manufacturing process adjustment, machinery modification and new equipment installation. In addition, by improving the wastewater treatment process to recycle treated water. Modern and high-tech biological treatment systems are effectively selected and installed to assure treatment efficiency prior to recycling treated wastewater in manufacturing process and providing to neighboring community to help lessen cultivation costs and make income for farmers, and also to support the community during water scarcity period or drought situation. The company’s Water Management for Agriculture Project has delivered the treated wastewater to agricultural areas in Ratchaburi, Kanchanaburi and Prachinburi Provinces.

• Ban Pong Circular Economy Community ProjectAccording to the Circular Economy, the company provided knowledge and equipment regarding waste management to Ban Rang Plub Community, which received the first prize in the National Zero Waste Community Project Contest 2019, organized by the Department of Environmental Quality. It also extended the knowledge about waste management to other communities in Ban Pong district with the purpose for community members to be knowledgeable and able to manage waste in their own communities, leading to cleanliness and order in the area for the people’s health and hygiene and environment; to promote cooperation and establish the district community waste management network in which its members participate in solving the waste management problems of Thailand.

18Annual Report 2019 SCG Packaging Public Company Limited

Green Procurement Purchase

GHG Emission Reduction

Lost Time Injury Frequency Rate (Employee/Contractor)

Environmental Expense and Investment

"SCG eco value" Products and Services

Water Withdrawal Reduction

Energy Consumption Reduction

Alternative Energy

% of non-hazardous/hazardous waste landfilled

Business partners who passed the environmental, social and governance risk assessment

5,114 million baht

489,050

7.02

3.76 petajoules

0.104/0.136 cases per 200,000 man-hours

1,383 scholarships in 56 schools

14 products

100%

14.4%

0/0(of suppliers with procurement spendingover 1 million baht.)

(compared with BAU at the base year of 2007)

10.3%(Compared with BAU at the base year 2014)

(compared with BAU at the base year of 2007)

of revenue from sales

8.4% 30.6%

Recycled Water

Support community products

Number of Career Development Center in community

Support municipal waste management program in community Tree Plantation

Support community for jobs and income from weaving handicraft products

Research and Innovation Spending

Sharing Opportunities, Drawing the Future Program

12%

million cubic meter

tons of carbon dioxide equivalent

1,080 million baht

378 million baht

5,157,418 baht

27 centers 21 communities 24,618 trees

1,183,000 baht1,012Check Dams

45 projects

Scholarship Program

1.2%

Important SD Operating Results Year 2019

Sustainable Development Performance 2019 19

> >

>>>

>

Recycle

Resource Use

Design

Produce

Distribute

ProductUse

Implementation of Circular Economy

in the company

Raw Materials

A Sustainable World through Circular Economy

Circular EconomyThe economic system revolves around a cycle of renewal for end-of-life materials and energy with appropriate processes to circulate resources within the system. Thus, the Circular Economy is not just about repeatable recycles, but comprehensive models which starting at planning and designing for natural resources, manufacturing, consumption, waste management, to reusing in order to restore or repurpose materials in their life cycles instead of being discarded at the end of consumption. In addition, this can also provide sustainability for society, economy, and environment.

SCG Packaging and Sustainable Principles of Circular EconomyThe company conducts business in accordance with Circular Economy principles while aiming to continuously become a regional leading company on Circular Economy.


Product Design Process • Develop and implement Lightweight G Technology to

improve resource efficiency and eco-friendly aspects. • Develop micro flute to reduce quantity of paper. • Develop recyclable paper bags from recycled paper. • Produce paper food packaging in order to satisfy customers

who start to be green conscious than ever.

Manufacturing Process • Focus on delivering efficiency and sustainability in manufacturing process, for example, using more renewable energy, reusing production waste, reducing overall waste and materials used in the manufacturing process, and using recycled paper in a higher ratio.

• Increase utilization of renewable energy or green energy in manufacturing process, for example, starting to use biogas from anaerobic treatment system and biomass energy as an alternative energy source in manufacturing plants.

• Produce energy from biomass, for example, tree bark from paper mills.

• Utilize solar energy system installed on building’s roofs as an alternative energy source in plants as well as energy for biomass production.

Storage and Recycling Process • Develop a platform for collection and distribution of

information to upgrade storage capacity for returned packaging from end users. The company has cooperated with Doozy Pack and Tesco Lotus to promote and increase used packaging collecting point from customers.

• Join with Tesco Lotus in encouraging consumers to recycle used plastic PET. Used paper packaging in Tesco Lotus’s distribution center is also collected.

• Launch “Paper-X” application on smartphones to enable consumers and retailers to schedule the company to collect recycled paper to be processed at the company’s recycling center.

Implementation Process • Produce “OptiBreathTM” flexible packaging which helps

preserve humidity to prolong freshness of vegetables and fruits, reduce number of food garbage in households and stores, and reduce greenhouse gas (Carbon Footprint).

• Produce “Fest” as alternative eco-friendly food packaging.

21

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22Annual Report 2019 SCG Packaging Public Company Limited

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The Board of Directors

Composition of the Board of Directorscomprises the following 10 members:

Directors Position1. Mr. Prasarn Triratvorakul Chairman and Independent Director

2. Mr. Cholanat Yanaranop Vice Chairman

3. Mr. Chumpol NaLamlieng Independent Director

4. Mrs. Kaisri Nuengsigkapian Independent Director

5. Mr. Chalee Chantanayingyong Independent Director

6. Mrs. Pongpen Ruengvirayudh Independent Director

7. Professor Kitipong Urapeepatanapong Independent Director

8. Mr. Tanawong Areeratchakul Director

9. Mr. Thammasak Sethaudom Director

10. Mr. Wichan Jitpukdee Chief Executive Officer

Remarks:

- The directors authorized to sign for and with binding effect on the company are any two directors jointly sign their names together.

- Directors number 1 - 9 are Non-excutive Directors .

- Director number 10 is an Excutive Director.

The Sub-committees

DirectorsThe Audit Committee

(3 members)

The Governance and Nomination Committee

(3 members)

The Remuneration Committee

(3 members)

1. Mr. Prasarn Trairatvorakul - - -2. Mr. Cholanat Yanaranop - Member Member3. Mr. Chumpol NaLamlieng - - Chairman4. Mrs. Kaisri Nuengsigkapian Chairman - -5. Mr. Chalee Chantanayingyong Member Chairman -6. Mrs. Pongpen Ruengvirayudh Member - Member7. Professor Kitipong

Urapeepatanapong - Member -8. Mr. Tanawong Areeratchakul - - -9. Mr. Thammasak Sethaudom - - -10. Mr. Wichan Jitpukdee - - -

Remarks:

- Directors number 1, 3, 4, 5, 6 and 7 meet all the requirements specified in the company’s list of qualifications of an independent director, which are more stringent than the qualifications stipulated by

the Capital Market Supervisory Board.

- Directors number 4 and 6 are knowledgeable and highly competent to be responsible for reviewing the company’s financial statements.

23

Board of Director’s Profile

Mr. Prasarn Trairatvorakul Age 67 years Director qualified as an Independent Director (From August 26, 2019)Position Chairman

Independent Director

Date of Appointment as a DirectorJune 21, 2019

Education/Training • Doctor of Business Administration, Harvard University,

Massachusetts, USA • Master in Business Administration, Harvard University,

Massachusetts, USA • Master of Engineering in Industrial Engineering and

Management, Asian Institute of Technology, Thailand • Bachelor of Engineering in Electrical Engineering (First Class

Honors), Chulalongkorn University • Honorary Doctor of Philosophy, National Institute of

Development Administration • Honorary Doctor of Economics, Chulalongkorn University • Honorary Doctor of Economics, The University of the Thai

Chamber of Commerce • Honorary Doctor of Economics, Khon Kaen University • Honorary Doctor of Business Administration, Rajamangala

University of Technology Suvarnabhumi

Expertise • Business or Core Industries of Other Large Industries • Administration and Large Organization Management • Economics, Investment, Policy Setting and Strategic Planning • Marketing, Accounting and Finance • Corporate Governance and Risk Management

Director Training • The Role of the Chairman Program (RCP) 2/2001, Thai

Institute of Directors Association • Director Certification Program (DCP) 21/2002, Thai Institute

of Directors Association • Ethical Leadership Program (ELP) 2/2015, Thai Institute of

Directors Association • Board Nomination and Compensation Program (BNCP)

5/2018, Thai Institute of Directors Association

Board Member/Management of Other Listed Company in Thailand (2)Since 2019 Chairman, Pruksa Holding Public Company

Limited (Director qualified as an Independent Director effective from 2016)

Since 2017 Independent Director, The Siam Cement Public Company Limited (Director qualified as an Independent Director effective from August 26, 2019)

Position in Other Company/Organization/Institution (14)Since 2019 Chairman, Central Retail Corporation Public

Company LimitedSince 2018 Chairman, Equitable Education FundSince 2018 Director, Siam Sindhorn Co., Ltd.Since 2018 Director, CPB Equity Company LimitedSince 2018 Director, Prince of Songkla UniversitySince 2018 Distinguished Scholar, Faculty of Commerce

and Accountancy, Chulalongkorn UniversitySince 2017 Member, Asset Management Committee of

Vajiravudh CollegeSince 2017 Member, Committee on King’s Scholarships for

Thai Buddhist MonksSince 2017 Chairman of the Council of Trustees and the

Board of Directors, Thailand Development Research Institute (TDRI)

Since 2016 Senior Advisor, CENTRAL GroupSince 2016 Member, Property Management Committee,

Chulalongkorn UniversitySince 2016 Advisor, Board of InvestmentSince 2015 Advisor, Crown Property BureauSince 1998 Director, Thai Red Cross Society

5-year Past Experiences and/or Remarkable Positions2017 - 2019 Chairman, Economic Reform Committee2017 - 2019 Director, Education Reform Committee2017 - 2019 Chairman, Public Procurement Committee2015 - 2019 Director, National Anti-Corruption

Commission2015 - 2019 Director, Committee to Enhance

Competitiveness of the Nation2014 - 2019 Director, State Enterprise Supervisory Board2010 - 2015 Governor, The Bank of Thailand2004 - 2010 President, KASIKORNBANK Public Company

Limited1999 - 2003 Secretary-General, The Securities and Exchange

Commission, Thailand

Shareholdings (Ordinary Shares) (as at December 31, 2019)Held personally: - None -Held by spouse or minor children: - None -

Family Relationship among Directors and Executives - None -


Mr. Cholanat Yanaranop Age 60 yearsPositions Vice Chairman

Member of the Governance and Nomination Committee Member of Remuneration Committee


Education/Training • Master of Chemical Engineering, Imperial College London, UK • Bachelor of Environmental Chemical Engineering, (Second

Class Honours), Salford University, Manchester, UK • Advanced Management Program (AMP), Harvard Business

School, USA • Inno-Leadership Program, INSEAD • Top Executives Program, Class 16, Capital Market Academy • TEA 5, Thailand Energy Academy


Director Training • Directors Accreditation Program (DAP) 39/2005, Thai

Institute of Directors Association • Role of the Chairman Program (RCP) 38/2016, Thai

Institute of Directors Association

Board Member/Management of Other Listed Company in Thailand- None -

Position in Other Company/Organization/Institution (11)Since 2019 Advisor, PT Chandra Asri Petrochemical Tbk.,

Indonesia*Since 2018 Director, SENFI Swiss GmbHSince 2017 Director, SENFI UK LimitedSince 2016 Director, Siam Bioscience Company LimitedSince 2016 Director, Apexcela Company LimitedSince 2014 Director, SENFI Norway AS (Norner Holding AS)Since 2009 Advisor, Thai Institute of Chemical Engineering

and Applied ChemistrySince 2008 Director, Long Son Petrochemicals Company

LimitedSince 2006 Director, BST Elastomers Company LimitedSince 2006 Director, Bangkok Synthetics Company LimitedSince 2006 Director, Petroleum Institute of Thailand

5-year Past Experiences and/or Remarkable Positions2017 - 2019 Executive Vice President, The Siam Cement

Public Company limited2015 - 2016 Vice President, Community Partnerships

Association2014 - 2016 Senior Vice President, The Siam Cement Public

Company Limited2013 - 2015 President, Community Partnerships

Association2012 - 2019 Chairman, Thai Plastic and Chemicals Public

Company Limited2011 - 2019 Commissioner, PT Chandra Asri Petrochemical

Tbk., Indonesia*2008 - 2019 Authorized Representative at the Members

Council, Long Son Petrochemicals Company Limited, Vietnam

2007 - 2019 President, Chemicals Business2007 - 2008 President, The Thai Institute of Chemical

Engineering and Applied Chemistry2005 - 2010 Director, PTT Chemical Public Company

Limited


Family Relationship among Directors and Executives- None -

Remark: *Listed in the Stock Exchange of Indonesia

25Management Structure

Mr. Chumpol NaLamlieng Age 72 years Director qualified as an Independent Director (From June 21, 2019) Positions Independent Director

Chairman of the Remuneration Committee


Education/Training • MBA, Harvard Business School, USA • B.S. Mechanical Engineering, University of Washington, USA

Expertise • Business or Core Industries of SCG and Other Large

Industries • Administration and Large Organization Management • Economics, Investment, Policy Setting and Strategic

Planning • Foreign Affairs • Law • Marketing, Accounting and Finance • Information Technology • Corporate Governance and Risk Management

Director Training • Role of the Chairman Program (RCP) 2/2001, Thai Institute

of Directors Association

Board Member/Management of Other Listed Company in Thailand (1)Since 2014 Independent Director and Chairman of the

Remuneration Committee, The Siam Cement Public Company Limited

Position in Other Company/Organization/Institution (3)Since 2017 Director, CPB Equity Company LimitedSince 2012 Director, Kempin Siam Company Limited Since 2010 Director, Siam Sindhorn Company Limited

5-year Past Experiences and/or Remarkable Positions2012 - 2017 Director, Kempinski International SA2007 - 2016 Independent Director and Chairman of the

Nomination, Compensation and Corporate Governance Committee, The Siam Commercial Bank Public Company Limited

2005 - 2009 Director, British Airways Public Company Limited

2004 - 2011 Chairman, Singapore Telecommunication Company Limited

1993 - 2005 President, The Siam Cement Public Company Limited




Mrs. Kaisri Nuengsigkapian Age 58 years Director qualified as an Independent Director (From June 1, 2019)Positions Independent Director

Chairman of the Audit Committee


Education/Training • Master of Business Administration, Thammasat

University • Bachelor of Accounting, Thammasat University • Certified Public Accountant

Expertise • Administration and Large Organization Management • Accounting and Finance • Corporate Governance and Risk Management

Director Training • Director Certification Program (DCP), Class 0/2000, Thai

Institute of Directors Association (IOD) • The Role of The Chairman Program (RCP), Class 30/2013,

Thai Institute of Directors Association (IOD) • The Role of the Compensation Committee Program (RCC),

Class 16/2013 Thai Institute of Directors Association (IOD) • Advanced Audit Committee Program (AACP), Class

35/2019, Thai Institute of Directors Association (IOD)

Board Member/Management of Other Listed Company in Thailand (1)Since 2016 Chairman of the Board of Directors and

Chairman of Executive Committee, Mc Group Public Company Limited

Position in Other Company/Organization/Institution (5)Since 2019 Chairman, Buono (Thailand) Company

LimitedSince 2018 Directors, Thai Institute of Directors AssociationSince 2016 Member of Corporate Governance Committee,

The Bank of ThailandSince 2016 Director and Treasurer, Rakkaew

FoundationSince 2016 Director, TOP T 2015 Company Limited

5-year Past Experiences and/or Remarkable Positions2018 - 2019 Independent Director and Member of the

Audit Committee, SCG Ceramics Public Company Limited

2016 - 2017 Advisor, The Securities and Exchange Commission, Thailand

2010 - 2014 Director, The Stock Exchange of Thailand2003 - 2015 President, KPMG Phoomchai Holdings

Company Limited

Shareholdings (Ordinary Shares) (as at December 31, 2019)Held personally: - None -Held by spouse or minor children - None -



Mr. Chalee Chantanayingyong Age 63 years Director qualified as an Independent Director (From June 21, 2019)Positions Independent Director

Chairman of the Governance and Nomination Committee Member of the Audit Committee


Education/Training • Master in Business Administration (Finance), Texas A&M

University, USA • Bachelor of Business Administration (Money and Banking),

Thammasat University • Top Executive Program, Class 5, Capital Market Academy • Top Executive Program in Commerce and Trade, Class 5,

Commerce Academy, University of the Thai Chamber of Commerce

Expertise • Supervision in Listed Companies, Financial Advisory, Auditor,

Asset Management Company and Good Governance • Supervision in Commercial Bank and Financial Institutions

Director Training • Director Certification Program (DCP) 7/2001, Thai Institute

of Directors Association • Facilitator for Director Accreditation Program (DAP) and

Audit Committee Program (ACP), Thai Institute of Directors Association

Board Member/Management of Other Listed Company in Thailand - None -

Position in Other Company/Organization/Institution (6)Since 2019 Chairman, Disciplinary Sub-Committee,

Thailand Clearing House Company LimitedSince 2019 Chairman, Appealing Committee, Thailand

Futures Exchange Public Company LimitedSince 2019 Member, Appealing Committee, The Stock

Exchange of ThailandSince 2018 Member, Equitable Education FundSince 2017 Member, Financial Institutions Policy

Committee, The Bank of ThailandSince 2013 Member, the Anti-Corruption Organization of

Thailand

5-year Past Experiences and/or Remarkable Positions2017 - 2018 Chairman, Audit Committee, The Bank of

Thailand2015 - 2018 Member, Corporate Governance Committee,

The Bank of Thailand2015 - 2018 Director, The Bank of Thailand2009 - 2015 Deputy Secretary-General, The Securities and

Exchange Commission, Thailand




Ms. Pongpen Ruengvirayudh Age 64 years Director qualified as an Independent Director (From June 21, 2019)Positions Independent Director

Member of the Audit Committee Member of the Remuneration Committee


Education/Training • Master of Business Administration (Finance), Katholieke

University, Belgium • Master of Accounting Program (Accounting), Thammasat

University • Bachelor of Accounting (Accounting), Thammasat

University • Advanced Management Program, Wharton School of

Management, USA • Top Executives Program, Class 3, Capital Market Academy • Thammasat Leadership Program, Class 3, Thammasat

University • Programs related to International Portfolio Investment,

Risk Management, Monetary Policy and Central Bank

Expertise • Accounting and Finance • Investment and Investment Strategy • Risk Management

Director Training • Director Certification Program (DCP) 262/2018, Thai



Position in Other Company/Organization/Institution (5)Since 2019 Chairman, Sub-Committee on Investment

Seeking Benefits from Money and Assets Supervision, Equitable Education Fund

Since 2018 Member, Risk Management Sub-Committee, Government Pension Fund

Since 2017 Chairman, Supervisory Board of The ABF Thailand Bond Index Fund, The Bank of Thailand

Since 2016 Member, Investment Management Sub-Committee, Social Security Fund

Since 2016 Chairman, Sukhumvit Asset Management Company Limited

5-year Past Experiences and/or Remarkable Positions2018 Director, Board of Directors, Government

Savings Bank2015 - 2016 Governor’s Advisor, The Bank of Thailand2013 - 2017 Member, The 19th National Wage Committee,

Ministry of Labour2012 - 2015 Director, Board of Directors, Government

Pension Fund2012 - 2015 Director, Board of Directors, The Bank of

Thailand Member, Monetary Policy Committee, The Bank of Thailand Member, Financial Institutions Policy Committee, The Bank of Thailand Deputy Governor, Monetary Stability, The Bank of Thailand

2010 - 2011 Assistant Governor, Financial Markets Operations Group, The Bank of Thailand

2009 - 2010 Senior Director, Risk Management Policy Department, Financial Institutions Policy Group, The Bank of Thailand

2005 - 2009 Senior Director, Financial Markets and Reserve Management Department, Financial Markets Operations Group, The Bank of Thailand




Professor Kitipong Urapeepatanapong Age 64 years Director qualified as an Independent Director (From August 21, 2019)Positions Independent Director

Member of the Governance and Nomination Committee

Date of Appointment as a DirectorAugust 21, 2019

Education/Training • LL.M., The University of British Columbia, Canada • Master of Laws, Chulalongkorn University • Admitted as Thai Barrister-at-law • Bachelor of Laws (Second Class Honors), Chulalongkorn

University • Top Executive Program in Commerce and Trade, Class 1,

Commerce Academy, University of the Thai Chamber of Commerce

• Senior Executives Program, Class 4, Capital Market Academy

• Director Executive Program, School of Management, Yale University

• Certificate of Completion on Company Directors, Australian Institute of Company Directors

• Certificate Executive Program, Kellogg School of Management, Northwestern University

Expertise • Capital Market Law, Tax Law, Merger and Acquisition,

Restructuring and Family Business

Director Training • Role of the Chairman Program (RCP) 21/2009, Thai


Board Member/Management of Other Listed Company in Thailand (1)Since 2019 Independent Director and Member of the

Enterprise Risk Management Committee, Pruksa Holding Public Company Limited

Position in Other Company/Organization/Institution (13)Since 2019 Member of the Professional Expert of Steering

Committee, Office of the National Higher Education, Science, Research and Innovation Policy Council

Since 2019 Director, The Stock Exchange of ThailandSince 2019 Director, Rachakarn Asset Management

Company LimitedSince 2018 Director, Thai Institute of Directors AssociationSince 2018 Member, the Professional Expert Committee,

National Commission for Justice Administration Development

Since 2017 Chairman, Cheevamitr Social Enterprise Company Limited

Since 2017 Director, The Hub 99 Company LimitedSince 2017 Vice President, National Reform Committee on

LegalSince 2012 Chairman, Tax and Regulatory Commission,

Thai Chamber of CommerceSince 2009 Chairman, Baker & McKenzie Company LimitedSince 1999 Director, Siam Piwat Retail Holding Company LimitedSince 1999 Executive Director, Siampiwat Company LimitedSince 1993 Director, Business Strategic Holding Company

Limited

5-year Past Experiences and/or Remarkable Positions2014 - 2015 Member, National Reform Council1999 Independent Director, Krung Thai Bank Public

Company Limited



Remark: In taking the directorship post of Professor Kitipong Urapeepatanapong, who currently are the Chairman, Director and Shareholder of Baker & McKenzie Ltd. (BM), which is the company providing

legal services to the company and its affiliates with the receipt for such service fees exceeding Baht 2 million per annum, the Board of Directors, excluding Professor Kitipong Urapeepatanapong,

has extensively and thoroughly considered the principle of Fiduciary Duty and duties with responsibilities, care, and loyalty of directors under Section 89/7 of the Securities and Exchange Act, B.E.

2535 (as amended), and thus agreed that his current engagement has no effect on neither the performance as an independent director nor the duty to independently render his opinion; and

his proven strong legal knowledge, expertise and extensive experience in tax law, corporate law, securities law, business law and other regulations relating to the company’s businesses, could

be essential to support the company’s operation, future expansion, business management to be in compliance with laws onwards, as well as to benefit and strengthen the professionalism to

perform duties as the company’s director.


Mr. Tanawong Areeratchakul Age 56 yearsPosition Director

Date of Appointment as a DirectorMarch 23, 2015

Education/Training • Bachelor of Engineering, Electrical Engineering, King

Mongkut’s University of Technology Thonburi • Advanced Management Program (AMP), Harvard Business

School, USA

Expertise • Business or Core Industries of Other Large Industries • Administration and Large Organization Management • Economics, Investment, Policy Setting and Strategic

Planning • Marketing, Accounting and Finance • Corporate Governance and Risk Management

Director Training • Director Accreditation Program (DAP) 149/2018, Thai


Board Member/Management in Other Listed Company (1)Since 2019 President, Chemicals Business, The Siam

Cement Public Company Limited

Position in Other Company/Organization/Institution (2)Since 2019 President Commissioner, PT Fajar Surya Wisesa

Tbk., Indonesia*Since 2018 Sub-committee, Royal Project Foundation

Chairman and Director of SCG’s subsidiaries, associates, and other companies which are non-listed in the Stock Exchange of Thailand, as assigned

5-year Past Experiences and/or Remarkable Positions2015 - 2019 Chairman, Thai Cane Paper Public Company

Limited2015 - 2019 Chairman, Phoenix Pulp & Paper Public

Company Limited2015 - 2019 Chairman, Thai Containers Group Company

Limited2015 - 2019 President, Packaging Business, The Siam

Cement Public Company Limited2015 - 2017 Committee, Thai Listed Companies Association2014 - 2018 Executive Director, the Electronic Transactions

Development Agency (Public Organization)2012 - 2015 Vice President - Corporate Administration,

The Siam Cement Public Company Limited





Mr. Thammasak Sethaudom Age 50 yearsPosition Director

Date of Appointment as a DirectorOctober 1, 2018

Education/Training • Master of Business Administration, London Business

School, United Kingdom (Distinction) • Bachelor of Engineering, Electrical Engineering,

Chulalongkorn University • Management Development Program, The Wharton School

of the University of Pennsylvania, USA • Executive Development Program, Columbia University, USA • Change Management, GE • Total Quality Management for Executive, JUSE, Japan • Marketing for Management, Kellogg School, USA • Leadership Coaching, APM Group • Innovation Management Program, Dupont, USA • Orientation Course – CFO Focus on Financial Reporting

Class 3/2018 • Advanced Management Program (AMP), Harvard Business

School, USA


Director Training • Director Certification Program (DCP) 159/2019, Thai


Board Member/Management of Other Listed Company in Thailand (1)Since 2018 Vice President - Finance and Investment & CFO,

The Siam Cement Public Company Limited

Position in Other Company/Organization/Institution (2)Since 2019 Director, Thai Listed Companies AssociationSince 2018 Commissioner, PT Chandra Asri Petrochemical

Tbk., Indonesia*

Director of SCG’s subsidiaries, associates, and other companies which are non-listed in the Stock Exchange of Thailand, as assigned

5-year Past Experiences and/or Remarkable Positions2012 - 2018 General Director, Long Son Petrochemicals

Company Limited2008 - 2012 Deputy General Director, Long Son

Petrochemicals Company Limited2004 - 2010 Business Development and Corporate Planning

Director, Chemicals Business2000 - 2004 eCommerce and eBusiness Manager,

Chemicals Business





Mr. Wichan Jitpukdee Age 53 yearsPositions Director

Chief Executive Officer


Education/Training • Bachelor in Industrial Engineering, Chiang Mai University • Diploma in Pulp & Paper Technology, The University of

Auckland, New Zealand • Advanced Management Program (AMP), Harvard Business

School, USA • Top Executive Program in Commerce and Trade (TEPCoT#10),

University of the Thai Chamber of Commerce • Top Executives Program, Class 29, Capital Market Academy

Expertise • Business or Core Industries of SCG and Other Large Industries • Administration and Large Organization Management • Economics, Investment, Policy Setting and Strategic Planning • Marketing and Finance • Corporate Governance and Risk Management

Director Training • Director Accreditation Program (DAP), Thai Institute of

Directors Association


Position in Other Company/Organization/Institution (1)Since 2019 Director, Thai Chamber of CommerceSince 2019 President Commissioner, PT Fajar Surya Wisesa

Tbk., Indonesia*

Other Position in SCG Packaging • Chairman and Director of SCG Packaging’s subsidiaries,

associates and other companies which are non-listed in the Stock Exchange of Thailand, as assigned by the company

5-year Past Experiences and/or Remarkable Positions2019 President, Packaging Business, The Siam

Cement Public Company Limited2018 - 2019 Managing Director, Thai Containers Group

Company Limited2017 - 2018 President, The Thai Pulp and Paper Industries

Association2014 - 2019 Managing Director, Siam Kraft Industry

Company Limited2011 - 2014 President & CEO, United Pulp and Paper

Company Limited, the Philippines2011 Director, Procurement Office, Siam Kraft

Industry Company Limited2010 - 2011 Director, Corporate Sustainable Development,

SCG Paper Public Company Limited2007 - 2010 Vice President - Manufacturing, United Pulp and

Paper Company Limited, the Philippines





Report of Changes in Securities Holdings of Directors

Directors


AffiliatedCompanies

Ordinary Shares (Shares)

Ordinary Shares (Shares)

Debentures (Units)

As atJanuary 1,

2019

As atDecember

31, 2019

Increase/(decrease)

during financial

year

As atJanuary1, 2019

As atDecember

31, 2019

Increase/(decrease)

during financial

year

As atJanuary1, 2019

As atDecember

31, 2019

Increase/(decrease)

during financial

year

1. Mr. Prasarn Triratvorakul - - - - - - 5,000** 5,000** -

2. Mr. Cholanat Yanaranop - - - 33,500* 33,500* - 49,000** 51,000** 2,000**

3. Mr. Chumpol NaLamlieng - - - 201,000* 201,000* - 51,000** 20,000** (31,000**)

4. Mrs. Kaisri Nuengsigkapian - - - - - - - - -

5. Mr. Chalee Chantanayingyong - - - - - - - - -

6. Mrs. Pongpen Ruengvirayudh - - - - - - - - -

7. Professor Kitipong Urapeepatanapong

- - - - - - 2,000** 2,000** -

8. Mr. Tanawong Areeratchakul - - - - - - - - -

9. Mr. Thammasak Sethaudom - - - - - - - - -

10. Mr. Wichan Jitpukdee - - - - - - - - -Remarks:

According to the Public Limited Companies Act, an “affiliated company” means a public limited company with a relationship to a private company, a public limited company, or companies in the

following manners:

- Any company that has the authority to control the appointment and removal of directors with full management authority or that has majority management authority.

- Holds more than 50% of issued shares.

* Ordinary Shares of The Siam Cement Public Company Limited

** Debentures of The Siam Cement Public Company Limited


SCG Packaging Management Committee

Composition of Management Committee as at February 1, 2020, comprises the following 7 members:

Names Position

1. Mr. Wichan Jitpukdee Chief Executive Officer

2. Mr. Sangchai Wiriyaumpaiwong Chief Operating Officer - Packaging Paper Business

3. Mr. Suchai Korprasertsri Chief Operating Officer - Consumer and Industrial Packaging Business

4. Mr. Karan Tejasen Chief Operating Officer - Performance and Polymer Packaging Business

5. Mr. Wichan Charoenkitsupat Chief Operating Officer - Fibrous Business

6. Mr. Danaidej Ketsuwan Chief Regional Officer

7. Mr. Kulachet Dharachandra Chief Financial Officer


Management Structure

Management Committee’s Profile

Mr. Wichan Jitpukdee Age 53 yearsPositions Director


Education/Training • Bachelor of Engineering (Industrial Engineering), Chiang Mai

University • Diploma in Pulp & Paper Technology, The University of

Auckland, New Zealand • Advanced Management Program (AMP), Harvard Business

School, USA • Top Executive Program in Commerce and Trade (TEPCoT#10),

University of the Thai Chamber of Commerce • Top Executives Program, Class 29, Capital Market Academy


Director Training • Director Accreditation Program (DAP) 163/2019, Thai Institute



Position in Other Company/Organization/Institution (2)Since 2019 Director of Executive Board, Thai Chamber of

CommerceSince 2019 President Commissioner, PT Fajar Surya Wisesa

Tbk., Indonesia*

Other Position in SCG Packaging • Chairman and Director of SCG Packaging’s subsidiaries,

associates and other companies which are non-listed as assigned by the company

5-year Past Experiences and/or Remarkable Positions2019 President, Packaging Business, The Siam Cement

Public Company Limited2018 - 2019 Managing Director, Thai Containers Group Company

Limited2017 - 2018 President, The Thai Pulp and Paper Industries

Association2014 - 2019 Managing Director, Siam Kraft Industry

Company Limited2011 - 2014 President & CEO, United Pulp and Paper

Company Limited, the Philippines2011 Director, Procurement Office, Siam Kraft

Industry Company Limited2010 - 2011 Director, Corporate Sustainable Development,

SCG Paper Public Company Limited2007 - 2010 Vice President - Manufacturing, United Pulp and

Paper Company Limited, the Philippines





Mr. Sangchai Wiriyaumpaiwong Age 57 yearsPositions Chief Operating Officer - Packaging Paper Business

Managing Director, Siam Kraft Industry Co., Ltd.

Education/Training • Bachelor of Chemical Engineering, King Mongkut’s University

of Technology Thonburi • Advanced Management Program (AMP), Harvard Business

School, USA

Expertise • Business or Core Industries of Other Large Industries • Administration and Large Organization Management • Economics, Investment, Policy Setting and Strategic

Planning • Marketing, Accounting and Finance • Corporate Governance and Risk Management




Position in Other Company/Organization/Institution (1)Since 2019 Commissioner, PT Fajar Surya Wisesa Tbk.,

Indonesia*

Other Position in SCG Packaging • Director of SCG Packaging’s subsidiaries, associates and

other companies which are non-listed as assigned by the company

5-year Past Experiences and/or Remarkable Positions2018 - 2019 Managing Director, Thai Cane Paper Public

Company Limited2018 - 2019 Managing Director, Siam Kraft Industry

Company Limited2014 - 2018 Managing Director, Vina Kraft Paper Company

Limited, Vietnam





Mr. Suchai Korprasertsri Age 52 yearsPositions Chief Operating Officer - Consumer and Industrial Packaging Business

Managing Director, Thai Containers Group Co., Ltd.

Education/Training • Master of Business Administration, Thammasat

University • Bachelor of Engineering (Industrial Engineering),

Chulalongkorn University • Advanced Management Program (AMP), Harvard Business

School, USA

Expertise • Business or Pulp, Paper and Packaging Industries • Administration and Large Organization Management • Economics, Investment, Policy Setting and Strategic Planning • Marketing, Accounting and Finance • Corporate Governance and Risk Management


Institute of Directors Association • Director Certification Program (DCP) 141/2011, Thai



Position in Other Company/Organization/Institution- None -



5-year Past Experiences and/or Remarkable Positions2017 Corporate Marketing Director, SCG Packaging Public

Company Limited2017 Marketing Director and Domestic Marketing Director

(Assignment), Siam Kraft Industry Company Limited2016 Domestic Marketing Director, Siam Kraft Industry

Company Limited2015 General Manager - TCPB/TCCB, Thai Containers

Group Company Limited2013 Regional Operations Director, Thai Containers

Group Company Limited




Mr. Karan Tejasen Age 51 yearsPositions Chief Operating Officer - Performance and Polymer Packaging Business

Managing Director, TC Flexible Packaging Co., Ltd.

Education/Training • Master of Business Administration (Finance), Sasin

Graduate Institute of Business Administration of Chulalongkorn University

• Bachelor of Engineering (Electrical Engineering), Chulalongkorn University

• Advanced Management Program (AMP), Harvard Business School, USA





Position in Other Company/Organization/Institution (2) • Director and Treasurer, Plastic Industry Club, The Federation

of Thai Industries • Director, Thailand Institute of Packaging and Recycling

Management for Sustainable Environment, The Federation of Thai Industries



5-year Past Experiences and/or Remarkable Positions2013 Business Integration Director, Thai Containers

Group Company Limited2012 Director-Regional Operations, Thai Containers

Group Company Limited2010 Director and General Manager, Thai Containers

Group Company Limited2009 Marketing Director, Siam Kraft Industry Company

Limited




Mr. Wichan Charoenkitsupat Age 55 yearsPositions Chief Operating Officer - Fibrous Business

Managing Director, Phoenix Pulp & Paper Public Company Limited

Education/Training • MSC., Paper Science and Engineering, Western Michigan

University, USA • Bachelor of Science (Chemical Engineering), Chulalongkorn

University • Bachelor of Economics (Human Resource Economics),

Ramkhamhaeng University • Advanced Management Program (AMP), IMD business

school (IMD), Switzerland

Expertise • Business or Core Industries of Other Large Industries • Administration and Large Organization Management • Economics, Investment, Policy Setting and Strategic Planning • Production, Research and Development, Marketing, Accounting

and Finance • Corporate Governance and Risk Management







5-year Past Experiences and/or Remarkable Positions2014 President & CEO, United Pulp and Paper,

the Philippines2013 Director, Wang Sala Plant, Siam Kraft Industry

Company Limited2010 Managing Director, Thai Union Paper Industry

Company Limited2006 Director, Product & Technology Development Center,





Mr. Danaidej Ketsuwan Age 47 yearsPositions Chief Regional Officer

President & CEO, United Pulp and Paper Co., Inc., the Philippines

Education/Training • Master of Business Administration, Sloan School of Management,

Massachusetts Institute of Technology, USA • Bachelor of Science, Mechanical Engineering, University of

California, Berkeley, USA






Other Position in SCG Packaging • Director of SCG Packaging’s subsidiaries, associates

and other companies which are non-listed as assigned by the company, including Country Director for the Philippines

5-year Past Experiences and/or Remarkable Positions2013 - 2018 Director, Business Planning Office, SCG Packaging

Public Company Limited




Mr. Kulachet Dharachandra Age 46 yearsPosition Chief Financial Officer

Education/Training • Bachelor of Engineering (Chemicals Engineering),

Chulalongkorn University

Expertise • Business or Core Industries of Other Large Industries • Administration and Large Organization Management • Economics, Investment, Policy Setting and Strategic Planning • Marketing, Accounting and Finance • Corporate Governance and Risk Management • Overseas assignment

Director Training - None -





5-year Past Experiences and/or Remarkable Positions2016 - 2019 Vice President Director and Chief Operating

Officer, PT. Chandra Asri Petrochemical Tbk., Indonesia*

2013 - 2016 Director, Corporate Planning Office, The Siam Cement Public Company Limited

2012 - 2013 Director, Finance and Investment Office, SCG Chemicals Company Limited

2010 - 2012 Director, Business Development Office, SCG Chemicals Company Limited

2009 - 2010 Deputy Manager, Business Development Office, SCG Chemicals Company Limited

2005 - 2009 Coordination Manager, Iran Project, SCG Chemicals Company Limited





Remuneration of the Board of Directors and Executives

Remuneration of the Board of Directors The 1/2019 Extraordinary General Meeting of Shareholders on June 21, 2019 resolved to remunerate the Board of the Directors and the sub-committees in the form of fixed monthly and annual fees and meeting allowance, effective June 1, 2019 onwards, as follows:

Board of Directors/Sub-committees Position

Fixed fee (Baht)

Meeting allowance (Baht/person/

meeting)Monthly Annual

The Board of Directors Chairman 150,000 - -(1 Chairman / 9 Directors) Director 100,000 - -

The Audit Committee Chairman - 150,000 45,000(1 Chairman / 2 Members) Member - 100,000 30,000

The Nomination, Remuneration, and Governance Committee* Chairman - 120,000 30,000(1 Chairman / 3 Members) Member - 100,000 20,000

Remark: *The remuneration rates for the Nomination, Remuneration, and Governance Committee were in effect until November 24, 2019.

To enhance the efficiency and effectiveness of the nomination of qualified candidates to replace directors due to retire and leaving office under other circumstances; the determination of remuneration for the Board of Directors, the sub-committees, and the top executives of the company; and the recommendation of governance policies and guidelines for the company and its subsidiaries, the Board of Directors Meeting No. 214 (10/2019) on October 26, 2019 resolved to appoint two sub-committees, namely the Governance and Nomination Committee and the Remuneration Committee, in place of the Nomination, Remuneration, and Governance Committee. The meeting also agreed to propose the same rate of remuneration for the two sub-committees to the General Meeting of Shareholders for approval, effective November 25, 2019 onwards or until the General Meeting of Shareholders resolved to change it as proposed by the Nomination, Remuneration, and Governance Committee. The 2/2019 Extraordinary General Meeting of Shareholders on November 25, 2019 resolved to approve the following rates as proposed by the Board of the Directors:

Chairman: Fixed annual fee of 120,000 Baht and meeting allowance of 30,000 Baht per meeting Member: Fixed annual fee of 100,000 Baht and meeting allowance of 20,000 Baht per meeting/person

The remuneration for the Board of Directors and the Audit Committee was maintained at the rates approved by the 1/2019 Extraordinary General Meeting of Shareholders on June 21, 2019.As of November 25, 2019, the remuneration for the Board of Directors and the sub-committees is as follows.

Directors Position

Fixed Fee (Baht)

Attendance Fee

(Baht/person/ meeting)Monthly Yearly

Board of Directors Chairman 150,000 - -(1 Chairman / 9 Directors) Member 100,000 - -

The Audit Committee Chairman - 150,000 45,000(1 Chairman / 2 Members) Member - 100,000 30,000

The Governance and Nomination committee Chairman - 120,000 30,000(1 Chairman / 2 Members) Member - 100,000 20,000

The Remuneration committee Chairman - 120,000 30,000(1 Chairman / 2 Members) Member - 100,000 20,000


The Remuneration for the Board of Directors and the Sub-committees in 2019 (January 1 - December 31, 2019)

Director

The Board of Directors

(11 members)

The Audit Committee (3 members)

The Governance and Nomination

Committee*(3 members)

TheRemunerationCommittee*(3 members)

The Nomination Remuneration

and Governance Committee**(4 members)

Total (Baht)

1. Mr. Prasarn Triratvorakul 940,000 - - - - 940,000

2. Mr. Cholanat Yanaranop 700,000 - 30,054 50,054 50,435 830,544

3. Mr. Chumpol NaLamlieng 633,333 - - 72,065 66,522 771,920

4. Mrs. Kaisri Nuengsigkapian 700,000 443,767 - - - 1,143,767

5. Mr. Chalee Chantanayingyong 633,333 291,096 42,065 - 50,435 1,016,929

6. Mrs. Pongpen Ruengvirayudh 633,333 291,096 - 50,054 50,435 1,024,918

7. Professor Kitipong Urapeepatanapong 435,484 - 30,054 - - 465,538

8. Mr. Tanawong Areeratchakul 700,000 - - - - 700,000

9. Mr. Thammasak Sethaudom 700,000 - - - - 700,000

10. Mr. Wichan Jitpukdee 700,000 - - - - 700,000

11. Mr. Roongrote Rangsiyopash 115,000 - - - - 115,000

Total 6,890,483 1,025,959 102,173 172,173 217,827 8,408,616

Remarks:

1. Director number 1 assumed the Chairmanship since June 27, 2019 (assumed membership of the Board of Directors during June 21 - 26, 2019)

2. Director number 3 assumed the Chairmanship of the Remuneration Committee since November 25, 2019 (assumed the Chairmanship of the Governance, Nomination and Remuneration Committee

during August 5 - November 24, 2019)

3. Director number 4 assumed the Chairmanship of the Audit Committee since June 27, 2019 (assumed membership of the Audit Committee during June 1 - 26, 2019)

4. Director number 5 assumed the Chairmanship of Governance and Nomination Committee since November 25, 2019 (assumed the membership of the Nomination, Remuneration and Governance

Committee during August 5 - November 24, 2019)

5. Director number 11 assumed the directorship and the Chairmanship of the Board of Directors until June 23, 2019, therefore, he received remuneration paid during June 1 - 23, 2019.

6. The Board of Directors Meeting No. 214 (10/2019), held on October 26, 2019, passed resolutions as follows:

* Appointed two Sub-committees, namely the Governance and Nomination Committee and the Remuneration Committee, in place of the Nomination, Remuneration and Governance Committee,

effective from November 25, 2019 onwards.

** Dissolved the Nomination, Remuneration and Governance Committee [established on August 5, 2019 by a passed resolution from the Board of Directors Meeting No. 211 (7/2019), effective from

November 25, 2019 onwards.]

Top Executive Remuneration 2019

Benefit-in-cashFor the year ended December 31, 2019, the total remuneration of 85,936,508 Baht was paid in cash to the Top Executives (exclude from remuneration paid for being the Directors), comprised monthly salary, bonus, and variable pay.

Benefit-in-kindFor the year ended December 31, 2019, the company made contributions of 7,543,638 Baht to the provident fund for the executives as the employees of the company.


2019 Consolidated Financial Statements

of SCG Packaging Public Company Limited and its Subsidiaries

Independent auditor’s report To the Shareholders of SCG Packaging Public Company Limited

Opinion

I have audited the consolidated financial statements of SCG Packaging Public Company Limited and its subsidiaries

(the “Group”), which comprise the consolidated statement of financial position as at 31 December 2019 and 2018,

the consolidated income statement and statements of comprehensive income, changes in shareholders’ equity

and cash flows for years then ended, and notes, comprising a summary of significant accounting policies and other

explanatory information.

In my opinion, the accompanying consolidated financial statements present fairly, in all material respects,

the financial position of the Group as at 31 December 2019 and 2018, its financial performance and cash flows for

years then ended in accordance with Thai Financial Reporting Standards (TFRSs).

Basis for Opinion

I conducted my audit in accordance with Thai Standards on Auditing (TSAs). My responsibilities under those standards

are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section

of my report. I am independent of the Group in accordance with the Code of Ethics for Professional Accountants

issued by the Federation of Accounting Professions that is relevant to my audit of the consolidated financial

statements, and I have fulfilled my other ethical responsibilities in accordance with these requirements. I believe

that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.

Other Information

Management is responsible for the other information. The other information comprises the information included

in the annual report, but does not include the consolidated financial statements and my auditor’s report thereon.

My opinion on the consolidated financial statements does not cover the other information and I do not express

any form of assurance conclusion thereon.

In connection with my audit of the consolidated financial statements, my responsibility is to read the other

information and, in doing so, consider whether the other information is materially inconsistent with the

consolidated financial statements or my knowledge obtained in the audit, or otherwise appears to be materially

misstated. If, based on the work I have performed, I conclude that there is a material misstatement of this other

information, I am required to report that fact. I have nothing to report in this regard.


Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements

in accordance with TFRSs, and for such internal control as management determines is necessary to enable the

preparation of consolidated financial statements that are free from material misstatement, whether due to fraud

or error.

In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to

continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern

basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no

realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Group’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

My objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole

are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes

my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted

in accordance with TSAs will always detect a material misstatement when it exists. Misstatements can arise from

fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected

to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with TSAs, I exercise professional judgment and maintain professional skepticism

throughout the audit. I also:

• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due

to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence

that is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material

misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion,

forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit 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

Group’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and

related disclosures made by management.

47

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Consolidated statement of financial positionSCG Packaging Public Company Limited and its Subsidiaries

Assets Note 2019 2018

Current assets

Cash and cash equivalents 6 4,393,845 2,095,349

Current investments 565,508 803,011

Trade and other current receivables 5, 7 15,198,020 13,704,103

Advance payment for assets 1,715,782 131,654

Short-term loans to related parties 5 4,601 127,152

Current portion of long-term loan to related party 5 - 92,738

Inventories 8 13,276,136 12,894,256

Other current assets 229,431 226,011

Total current assets 35,383,323 30,074,274

Non-current assets

Investments in associates 9 770,754 729,740

Other long-term investments 16,192 16,192

Other non-current receivables 5 980,633 768,513

Investment property 11 187,400 185,575

Property, plant and equipment 12 82,863,567 58,378,647

Goodwill 13 17,612,266 2,289,836

Other intangible assets 14 814,032 307,716

Deferred tax assets 15 744,955 378,649

Others non-current assets 139,923 117,043

Total non-current assets 104,129,722 63,171,911

Total assets 139,513,045 93,246,185

(Prasarn Trairatvorakul)

For and on behalf of the Board of Directors

(Wichan Jitpukdee)

31 December

(in thousand Baht)

Chairman Chief Executive Officer

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



Liabilities and shareholders' equity Note 2019 2018

Current liabilities

Bank overdrafts and short-term borrowings from financial institutions 17 7,131,509 4,312,464

Trade and other current payables 5, 18 10,058,564 8,573,666

Current portion of long-term borrowings from financial institutions 17 2,183,635 151,996

Current portion of finance lease liabilities 19 87,801 13,823

Short-term borrowings from related parties 5 33,827,196 23,415,700

Current income tax payable 604,793 529,798

Short-term provisions 120,546 194,026

Total current liabilities 54,014,044 37,191,473

Non-current liabilities

Long-term borrowings from financial institutions 17 16,318,425 587,129

Finance lease liabilities 19 35,337 15,327

Deferred tax liabilities 15 2,873,568 216,694

Non-current provisions for employee benefits 20 3,375,357 1,905,638

Other non-current liabilities 80,319 70,193

Total non-current liabilities 22,683,006 2,794,981

Total liabilities 76,697,050 39,986,454

31 December

(in thousand Baht)




Liabilities and shareholders' equity Note 2019 2018

Shareholders' equity

Share capital 21

Authorized share capital

- Ordinary share 4,500,000 1,563,000

Issued and paid share capital

- Ordinary share 3,126,000 1,563,000

Share premium 22 1,935,000 1,935,000

Retained earnings

Appropriated

Legal reserve 22 218,600 156,300

General reserve 3,000 3,000

Unappropriated 41,929,779 40,145,205

Other components of shareholders' equity (4,260,330) (3,361,868)

Total equity attributable to owners of the parent 42,952,049 40,440,637

Non-controlling interests 10 19,863,946 12,819,094

Total shareholders’ equity 62,815,995 53,259,731

Total liabilities and shareholders' equity 139,513,045 93,246,185

31 December

(in thousand Baht)



Consolidated income statementSCG Packaging Public Company Limited and its Subsidiaries

Note 2019 2018

Revenue from sales 5 89,069,867 87,254,869

Cost of sales 5 (71,651,345) (69,074,282)

Gross profit 17,418,522 18,180,587

Gain on exchange rate 127,474 151,930

Other income 5, 12 713,740 363,021

Profit before expenses 18,259,736 18,695,538

Distribution costs 5, 24 (4,800,607) (4,964,650)

Administrative expenses 5, 25 (4,425,364) (4,582,826)

Employee benefit expense from the amended

severance pay of the Labor Law 20 (527,368) -

Total expenses (9,753,339) (9,547,476)

Profit from operations 8,506,397 9,148,062

Finance costs 5 (1,618,817) (1,039,637)

Share of profit (loss) of associates 9 52,728 (14,603)

Profit before income tax 6,940,308 8,093,822

Tax expense 27 (1,049,048) (1,267,522)

Profit for the year 5,891,260 6,826,300

Profit attributable to:

Owners of the parent 5,268,511 6,065,539

Non-controlling interests 10 622,749 760,761

5,891,260 6,826,300

Basic earnings per share (in Baht)

Attributable to owners of the parent 29 1.69 1.94

Year ended 31 December

(in thousand Baht)



Consolidated statement of comprehensive income SCG Packaging Public Company Limited and its Subsidiaries

Note 2019 2018


Other comprehensive income

Components of other comprehensive income

that will be reclassified to profit or loss

Exchange differences on translating financial statement (1,146,562) (319,990)


that will not be reclassified to profit or loss

Defined benefit plan actuarial losses 20 (200,672) (343,227)

Share of other comprehensive income of associate 9 118 (519)

Income tax relating to components of other comprehensive income

that will not be reclassified to profit or loss 27 38,683 66,578

Total components of other comprehensive income

that will not be reclassified to profit or loss (161,871) (277,168)

Other comprehensive income for the year, net of tax (1,308,433) (597,158)

Total comprehensive income for the year 4,582,827 6,229,142

Total comprehensive income attributable to

Owners of the parent 4,332,205 5,557,199

Non-controlling interests 250,622 671,943

4,582,827 6,229,142

(in thousand Baht)




Cons

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Consolidated statement of cash flowsSCG Packaging Public Company Limited and its Subsidiaries

Note 2019 2018

Cash flows from operating activities


Adjustments for

Tax expense 1,049,048 1,267,522

Depreciation and amortization 5,990,773 5,381,693

Bad debt and doubtful debts expenses 32,264 42,556

Loss on inventories devaluation 93,441 170,457

Employee benefit expense 849,854 239,433

Unrealized gains on foreign currency exchange (164,169) (9,060)

Share of loss (profit) of associates 9 (52,728) 14,603

Loss on sales of investments and other - 9,500

Impairment losses on property, plant and equipment

and other intangible assets 36,623 24,126

Loss (gain) on sales of property, plant and equipment

and other intangible assets (277,002) 16,357

Dividend income - (10,762)

Interest income (114,132) (61,135)

Interest expense 1,650,495 988,501

Cash flows generated from operations before

changes in operating assets and liabilities 14,985,727 14,900,091

Decrease in operating assets

Trade and other current receivables 2,421,719 169,792

Inventories 2,199,320 292,545

Other current assets and other non-current assets 57,185 113,974

Net decrease in operating assets 4,678,224 576,311


(in thousand Baht)




Note 2019 2018

Increase (decrease) in operating liabilities

Trade and other current payables (1,979,544) (286,597)

Provision for employee benefits (151,434) (172,760)

Other current liabilities and other non-current liabilities 55,121 8,268

Net decrease in operating liabilities (2,075,857) (451,089)

Net cash flows generated from operations 17,588,094 15,025,313

Income tax paid (1,573,937) (773,180)

Net cash flows provided by operating activities 16,014,157 14,252,133

Cash flows from investing activities

Acquisition of subsidiaries, net of cash acquired 4 (24,022,251) (451,470)

Proceeds from sales of investment - 257,309

Current investments (715,963) (555,809)

Proceeds from sales of property, plant and equipment

and other intangible assets 520,723 151,256

Acquisition of property, plant and equipment (7,914,253) (6,870,171)

Acquisition of investment property - (64,411)

Acquisition of other intangible assets (87,290) (77,220)

Proceeds from (repayment of) short-term loans to related parties 114,156 (126,341)

Proceed from current portion of long-term loan to related party 92,738 -

Dividends received 11,832 26,634

Interest received 110,056 51,080

Net cash flows used in investing activities (31,890,252) (7,659,143)


(in thousand Baht)




Note 2019 2018

Cash flows from financing activities

Proceeds from change in ownership interests in subsidiaries

that do not result in a loss of control 193,777 -

Payments of changes in ownership interests in subsidiaries

that do not result in a loss of control 4 (192,187) (640,017)

Proceeds from (payments of) borrowings

Increase (decrease) in bank overdrafts and short-term borrowings

from financial institutions 36,317 (933,029)

Increase in short-term borrowing from related parties 10,415,065 7,919,137

Proceeds from long-term borrowings from financial institutions 13,136,727 351,489

Payments of long-term borrowings from financial institutions (1,576,976) (3,307,059)

Payments of finance lease liabilities (65,136) (140,960)

Net increase in borrowings 21,945,997 3,889,578

Dividends paid

Dividends paid to owners of the parent (1,736,667) (7,815,000)

Dividends paid to non-controlling interests (221,294) (254,454)

Total dividends paid (1,957,961) (8,069,454)

Interest paid (1,732,722) (1,012,063)

Net cash flows provided by (used in) financing activities 18,256,904 (5,831,956) Net increase in cash and cash equivalents 2,380,809 761,034

Effect of exchange rate changes on cash and cash equivalents (82,313) (49,322)

Cash and cash equivalents at beginning of the year 2,095,349 1,383,637

Cash and cash equivalents at end of the year 4,393,845 2,095,349


(in thousand Baht)




2019 2018

Supplementary information for cash flows

Non-cash transactions

Account payables from purchase of assets 978,808 538,639

Accrued investments 961,368 181,783

Stock dividends 1,563,000 -


(in thousand Baht)



Notes to the financial statements SCG Packaging Public Company Limited and its Subsidiaries

For the year ended 31 December 2019 and 2018

Note Contents

1 General information

2 Basis of preparation of the financial statements

3 Significant accounting policies

4 Acquisitions of business and changes in ownership interests in subsidiaries

5 Related parties

6 Cash and cash equivalents

7 Trade and other current receivables

8 Inventories

9 Investments in associates

10 Non-controlling interests

11 Investment property

12 Property, plant and equipment

13 Goodwill

14 Other intangible assets

15 Deferred tax assets (deferred tax liabilities)

16 Changes in liabilities arising from financing activities

17 Bank overdrafts and borrowings from financial institutions

18 Trade and other current payables

19 Finance lease liabilities

20 Non-current provisions for employee benefits

21 Share capital

22 Reserves and other components of shareholders’ equity

23 Business segment information

24 Distribution costs

25 Administrative expenses

26 Employee benefit expenses

27 Income tax

28 Promotional privileges

29 Basic earnings per share

30 Dividends




Note Contents

31 Agreements

32 Financial instruments

33 Commitments and contingent liabilities

34 Capital management

35 Others

36 Events after the reporting period

37 Thai Financial Reporting Standards (TFRSs) that have been issued but are not yet effective




These notes form an integral part of the consolidated financial statements.

The consolidated financial statements issued for Thai statutory and regulatory reporting purposes are

prepared in the Thai and English languages, and were approved and authorized for issue by the audit

committee, as appointed by the Board of Directors of the Company, on 18 February 2020.


SCG Packaging Public Company Limited, the “Company”, is a company incorporated in Thailand.

The head office of the Company is located at 1 Siam Cement Road, Bangsue, Bangkok 10800, Thailand.

The parent company is The Siam Cement Public Company Limited. It was incorporated in Thailand.

The Company and its subsidiaries, the “Group” are mainly engaged in the manufacturing of packaging paper,

packaging, pulp and printing and writing paper.

Details of the Company’s subsidiaries, which have significant operations and were included in the

consolidated financial statements, are as follows:

2019 2018

Direct / Indirect Holding (%)

Registered in Thailand

Siam Kraft Industry Co., Ltd. 100 100

SCGP Excellence Training Center Co., Ltd. 100 100

SCG Paper Energy Co., Ltd. 100 100

SCGP Solutions Co., Ltd. 100 100

SCGP Rigid Plastics Co., Ltd. 100 -

Thai Cane Paper Public Company Limited 98.20 98.20

Visy Packaging (Thailand) Limited 80 -

Precision Print Co., Ltd. 75 75

Thai Containers Group Co., Ltd. 70 70

Thai Containers Khonkaen Co., Ltd. 70 70

Thai Containers Rayong Co., Ltd. 70 70




2019 2018


Dyna Packs Co., Ltd. 70 70

Orient Containers Co., Ltd. 70 70

D-In Pack Co., Ltd. 70 70

Phoenix Pulp & Paper Public Company Limited 69.58 69.58

Phoenix Utilities Co., Ltd. 69.58 69.58

Thai Paper Co., Ltd. 69.58 69.58

The Siam Forestry Co., Ltd. 69.58 69.58

Thai Union Paper Public Company Limited* 69.55 69.55

TC Flexible Packaging Co., Ltd. 52.50 52.50

SCGP-T Plastics Co., Ltd. 51 100

Tawana Container Co., Ltd. 50.40 50.40

Conimex Co., Ltd. 38.25 75

Prepack Thailand Co., Ltd. 37.80 37.80

Registered in Philippines

United Pulp and Paper Co., Inc.** 99.70 99.70

Paperlink Inter-Trade Corporation** - 99.70

Registered in Vietnam

Vina Kraft Paper Co., Ltd. 70 70

New Asia Industries Co., Ltd. 70 70

Alcamax Packaging (Vietnam) Co., Ltd. 70 70

AP Packaging (Hanoi) Co., Ltd. 70 70

Packamex (Vietnam) Co., Ltd. 70 70

Tin Thanh Packing Joint Stock Company 47.24 47.24

Registered in Singapore

SCGP Solutions (Singapore) Pte. Ltd. 100 100

TCG Rengo (S) Limited* 70 70

* Currently in the liquidation process.

** Paperlink Inter-Trade Corporation amalgamate with United Pulp and Paper Co., Inc. which has already been completed on 25 November 2019.




2019 2018


Registered in Indonesia

PT Indocorr Packaging Cikarang 70 56

PT Indoris Printingdo 69.97 69.97

PT Primacorr Mandiri 67.90 67.90

PT Fajar Surya Wisesa Tbk. 55.24 -

PT Dayasa Aria Prima 55.23 -

Registered in Malaysia

Interpress Printers Sendirian Berhad 68.30 68.30

Most of the above subsidiaries were established in Thailand unless otherwise stated. There was no material

change in the percentage of holding from 2018, except as discussed in note 4.

During 2019, the Group acquired the ordinary shares of PT Fajar Surya Wisesa Tbk. and subsidiary, which is

incorporated in Indonesia, and Visy Packaging (Thailand) Limited, which is incorporated in Thailand. These

companies are included in the Group’s consolidated financial statements, as discussed in note 4.


(a) Statement of compliance

The consolidated financial statements are prepared in accordance with Thai Financial Reporting Standards

(“TFRSs”) and guidelines promulgated by the Federation of Accounting Professions.

The new and revised TFRSs are effective for annual accounting periods beginning on or after 1 January 2019.

The initial application of these new and revised TFRSs has resulted in no material impact on the Group’s

accounting policies, calculation method, financial performance and position.

The Group has initially applied TFRS 15 Revenue from Contracts with Customers (“TFRS 15”) since 1 January

2019. TFRS 15 establishes a comprehensive framework for determining how much and when revenue is




recognized. It replaced TAS 18 Revenue (“TAS 18”), TAS 11 Construction Contracts (“TAS 11”) and related

interpretations.

Under TFRS 15, the Group recognizes revenue when a customer obtains control of the goods or services in

an amount that reflects the consideration to which the Group expects to be entitled to. In addition,

judgment is required in determining the timing of the transfer of control for revenue recognition - at a point

in time or over time. The Group has a timing of revenue recognition mainly from sales of goods which is

recognized at a point in time.

In addition, the Group has not early adopted a number of new and revised TFRS which are not yet effective

for the current period in preparing these financial statements. Those new and revised TFRSs that are relevant

to the Group’s operations are disclosed in note 37.

(b) Basis of measurement

The consolidated financial statements have been prepared on the historical cost basis except for the

following material items in the consolidated statements of financial position:

• contingent consideration assumed in a business combination are measured at fair value.

• biological assets are measured at fair value less cost to sell.

• defined benefit obligations are measured at the present value of non-current provisions for defined

benefit plans.

(c) Functional and presentation currency

The consolidated financial statements are prepared and presented in Thai Baht, which is the Company’s

functional currency. All financial information presented in Thai Baht has been rounded in the notes to

the financial statements to the nearest thousand unless otherwise stated.




(d) Use of estimates and judgments

The preparation of financial statements in conformity with TFRSs requires management to make judgments,

estimates and assumptions that affect the application of the Group’s accounting policies. Actual results may

differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates

are recognized prospectively.

Information about significant areas of estimation uncertainty and critical assumptions in applying accounting

policies that have the most significant effect on the amount recognized in the financial statements is

included in the following notes:

Note 4 Acquisition of subsidiary: fair value of the consideration transferred

(including contingent consideration) and fair value of the assets acquired

and liabilities assumed;

Note 9, 11, 12, 13 and 14 Impairment test: key assumptions underlying recoverable amounts;

Note 7, 8, 9, 11, 12, 13 and 14 Measurement of the recoverable amounts of each asset and cash-

generating units;

Note 15 and 27 Recognition of deferred tax assets: availability of future taxable profit

against which deductible temporary differences and tax losses carried

forward can be utilized;

Note 20 Measurement of non-current provision for defined benefit plans: key

actuarial assumptions; and

Measurement of fair values

A number of the Group’s accounting policies and disclosures require the measurement of fair values, for

both financial and non-financial assets and liabilities.




The Group has an established framework with respect to the measurement of fair values. This includes a

valuation team that has overall responsibility for overseeing all significant fair value measurements, including

Level 3 fair values, and reports directly to the CFO.

The valuation team regularly reviews significant unobservable inputs and valuation adjustments. If third party

information, such as broker quotes or pricing services, is used to measure fair values, then the valuation

team assesses the evidence obtained from the third parties to support the conclusion that these valuations

meet the requirements of TFRS, including the level in the fair value hierarchy in which these valuations

should be classified.

Significant valuation issues are reported to the Group’s Audit Committee.

When measuring the fair value of an asset or a liability, the Group uses observable market data as far as

possible. Fair values are categorized into different levels in a fair value hierarchy based on the inputs used

in the valuation techniques as follows:

• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities that the

entity can access at the measurement date.

• Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or

liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

• Level 3: inputs are unobservable inputs for the asset or liability.

If the inputs used to measure the fair value of an asset or liability might be categorized in different levels of

the fair value hierarchy, then the fair value measurement is categorized in its entirety in the same level of

the fair value hierarchy as the lowest level input that is significant to the entire measurement.

The Group recognizes transfers between levels of the fair value hierarchy at the end of the reporting period

during which the change has occurred.

Further information about the assumptions made in measuring fair values is included in the following notes:

• Note 4 Acquisitions of business and changes in ownership interests in subsidiaries;

• Note 11 Investment property; and

• Note 32 Financial instruments.





The accounting policies set out below have been consistently applied to all periods presented in these

financial statements.

(a) Basis of consolidation

The consolidated financial statements relate to the Group and the Group’s interests in associates.

Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealized income or expenses arising from intra-group

transactions, are eliminated. Unrealized gains arising from transactions with equity-accounted investees are

eliminated against the investment to the extent of the Group’s interest in the investee. Unrealized losses

are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of

impairment.

Subsidiaries

Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has

rights to, variable returns from its involvement with the entity and has the ability to affect those returns

through its power over the entity. The financial statements of subsidiaries are included in the consolidated

financial statements from the date on which control commences until the date on which control ceases.

Non-controlling interests

At the acquisition date, the Group measures any non-controlling interest at its proportionate interest in the

identifiable net assets of the acquiree.

Changes in the Group’s interest in a subsidiary that do not result in a loss of control are accounted for as

equity transactions.




Loss of control

When the Group loses control over a subsidiary, it derecognizes the assets and liabilities of the subsidiary,

and any related non-controlling interests and other components of equity. Any resulting gain or loss is

recognized in profit or loss. Any interest retained in the former subsidiary is measured at fair value when

control is lost.

Interests in equity-accounted investees

The Group’s interests in equity-accounted investees comprise interests in associates.

Associates are those entities in which the Group has significant influence, but not control, over the financial

and operating policies.

Interests in associates are accounted for using the equity method. They are initially recognized at cost, which

includes transaction costs. Subsequent to initial recognition, the consolidated financial statements include

the Group’s share of the profit or loss and other comprehensive income of equity-accounted investees,

until the date on which significant influence ceases.

Business combinations

The Group applies the acquisition method for all business combinations when control is transferred to

the Group, as described in subsidiaries section, other than those with entities under common control.

The acquisition date is the date on which control is transferred to the acquirer. Judgment is applied in

determining the acquisition date and determining whether control is transferred from one party to another.

In a business combination achieved in stages, the Group shall remeasure its previously held equity interest

of investment in the acquiree to its acquisition-date fair value and recognize the resulting gain or loss in

profit or loss.




Goodwill is measured as the fair value of the consideration transferred including the recognized amount of any

non-controlling interest in the acquiree, less the fair value amount of the identifiable assets acquired and

liabilities assumed, all measured as of the acquisition date. Any gain on bargain purchases is recognized in

profit for the period immediately.

Consideration transferred includes the fair values of the assets transferred, liabilities incurred by

the Group to the previous owners of the acquiree, and equity interests issued by the Group. Consideration

transferred also includes the fair value of any contingent consideration and share-based payment awards of

the acquiree that are replaced mandatorily in the business combination.

A contingent liability of the acquiree is assumed in a business combination only if such a liability represents

a present obligation and arises from a past event, and its fair value can be measured reliably.

Transaction costs that the Group incurs in connection with a business combination, such as legal fees, and

other professional and consulting fees are expensed as incurred.

If the initial accounting for a business combination is incomplete by the end of the reporting period in which

the combination occurs, the Group reports provisional amounts for the items for which the accounting is

incomplete. Those provisional amounts are adjusted during the measurement period, or additional assets

or liabilities are recognized, to reflect new information obtained about facts and circumstances that existed

at the acquisition date that, if known, would have affected the amounts recognized at that date.

(b) Foreign currencies

Foreign currency transactions

Transactions in foreign currencies are translated to the respective functional currencies of the Group entities

at the foreign exchange rates at the dates of the transactions.

Monetary assets and liabilities denominated in foreign currencies at the end of the reporting period are

translated to the functional currencies at the exchange rates at that date. Foreign exchange differences are

recognized in profit or loss.




Non-monetary assets and liabilities which include those arising from the payment or receipt of advance

consideration measured at cost in foreign currencies are translated to the functional currency at the

exchange rates at the dates of the transactions.

Non-monetary assets and liabilities measured at fair value in foreign currencies are translated to the

functional currency at the exchange rates at the dates on which the fair value was measured.

Foreign operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on

acquisition, are translated to Thai Baht at the exchange rates at the end of reporting period.

Goodwill and fair value adjustments arising on the acquisition of foreign operations are stated at exchange

rates at the date of the transaction for acquisition occurred before the date 1 January 2013, and stated at

exchange rates at the end of reporting period for acquisition beginning on or after 1 January 2013.

The revenues and expenses of foreign operations are translated to Thai Baht at rates approximating the

exchange rates at the dates of the transactions and using the weighted average method.

Foreign exchange differences arising on translation are recognized in other comprehensive income and

presented in other components of equity until disposal of the foreign operation, except to extent that the

translation difference is allocated to non-controlling interests.

When a foreign operation is disposed of in its entirety or partially such that control or significant influence is

lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to

profit or loss as part of the gain or loss on disposal. If the Group disposes of part of its interest in a subsidiary

but retains control, then the relevant proportion of the cumulative amount is reattributed to non-controlling

interests. When the Group disposes of only part of an associate while retaining significant influence, the

relevant proportion of the cumulative amount is reclassified to profit or loss.

When the settlement of a monetary item receivable from or payable to a foreign operation is neither

planned nor likely in the foreseeable future, foreign exchange gains and losses arising from such a monetary




item are considered to form part of a net investment in a foreign operation and are recognized in other

comprehensive income, and presented in other components of equity until disposal of the foreign operation.

(c) Cash and cash equivalents

Cash and cash equivalents in the statements of cash flows comprise cash on hand, saving deposits, current

deposits and highly liquid short-term investments that are readily convertible to known amounts of cash

and which are subject to an insignificant risk of changes in value.

In addition, bank overdrafts that are repayable on demand are a component of financing activities for the

purpose of the statement of cash flows.

(d) Trade and other receivables and contract assets

A receivable is recognized when the Group has an unconditional right to receive consideration. If revenue

has been recognized before the Group has an unconditional right to receive consideration, the amount is

presented as a contract asset.

A receivable and a contract asset are measured at fair value less allowance for doubtful accounts which are

assessed on analysis of payment histories and future expectations of customer payments. Bad debts are

written off when incurred.

(e) Inventories

Inventories are measured at the lower of cost and net realizable value.

Cost is calculated using the following formula:

Finished goods - at standard costs which approximate actual production costs

Merchandise - at average cost

Goods in process - at standard cost

Raw materials, spare parts,

stores, supplies and others

-

at average cost




Cost comprises all costs of purchase, costs of conversion and other costs incurred in bringing

the inventories to their present location and condition. In the case of manufactured inventories and goods

in process, cost includes an appropriate share of overheads based on normal operating capacity.

Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs

to complete and to make the sale.

(f) Non-current assets classified as held for sale

Non-current assets (or disposal groups comprising assets and liabilities) are classified as held for sale if it is

highly probable that they will be recovered primarily through sale rather than through continuing use which

are available for immediate sale and measured at the lower of their carrying amount and fair value less cost

to sell. Any impairment loss on a disposal group is allocated first to goodwill, and then to remaining assets

and liabilities on a pro rata basis, except that no loss is allocated to inventories, financial assets and deferred

tax assets. Impairment losses on initial classification as held for sale or held for distribution and subsequent

gains and losses on remeasurement are recognized in profit or loss.

Once non-current assets classified as held for sale are no longer depreciated or amortized, and any

equity-accounted investee is no longer equity accounted.

(g) Biological assets

Biological assets are measured at fair value less costs to sell (the incremental cost directly attributable to

the disposal of a biological asset), except for the case where the fair value cannot be measured reliably,

there are measured at cost less accumulated depreciation and impairment losses. Gain or losses on changes

in fair value less costs to sell are recognized in profit or loss.




(h) Investments

Investments in associates

Investments in associates in the consolidated financial statements are accounted for using the equity method.

Investments in other debt and equity securities

Equity securities which are not marketable are stated at cost less any accumulated impairment losses.

Disposal of investments

On disposal of an investment, the difference between net disposal proceeds and the carrying amount together

with the associated cumulative gain or loss that was reported in equity is recognized in profit or loss.

If the Group disposes of part of its holding of a particular investment, the deemed cost of the part sold is

determined using the weighted average method applied to the carrying amount of the total holding of the

investment.

(i) Investment property

Investment properties are properties which are held to earn rental income, for capital appreciation or for

both, but not for sale in the ordinary course of business, use in the production or supply of goods or services

or for administrative purposes.

Investment properties are measured at cost less accumulated depreciation and accumulated impairment losses.

Cost includes expenditure that is directly attributable to the acquisition of the investment property. The

cost of self-constructed investment property includes the cost of materials and direct labor, and other costs

directly attributable to bringing the investment property to a working condition for its intended use and

capitalized borrowing costs of a qualifying assets.




Depreciation is charged to profit or loss on a straight-line basis over the estimated useful lives of each

property. The estimated useful lives are as follows:

Land improvements 20 years

Buildings and structures 5, 20 years

Reclassification to property, plant and equipment

When the use of an investment property changes such that it is reclassified as property, plant and

equipment, its carrying amount at the date of reclassification becomes its cost for subsequent accounting.

(j) Finance lease

The Group recognized finance leases as assets and liabilities in the consolidated statement of financial

position at amounts equal to the fair value of the leased property or, if lower, the present value of the

minimum lease payments, each determined at the inception of the lease. Lease payments are apportioned

between the finance charge and the reduction of the outstanding liabilities. The finance charge is allocated

to the periods during the lease term so as to produce a constant periodic rate of interest on the remaining

balance of the liability for each period.

(k) Property, plant and equipment

Owned assets

Property, plant and equipment are measured at cost less accumulated depreciation and accumulated

impairment losses.

Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-

constructed assets includes the cost of materials and direct labor, any other costs directly attributable to

bringing the assets to the location and condition necessary for it to be capable of operating for their intended

use, the costs of dismantling and removing the items and restoring the site on which they are located and

capitalized borrowing costs of a qualifying asset. Licensed software that is integral to the functionality of the

related equipment is capitalized as part of that equipment.




When parts of an item of property, plant and equipment have different consumption patterns and useful

lives, they are accounted for as separate items (major components) of property, plant and equipment.

Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds

from disposal with the carrying amount of property, plant and equipment, and are recognized in profit or loss.

Leased assets Leases in terms of which the Group substantially assumes all the risk and rewards of ownership are classified as

finance leases. Property, plant and equipment acquired by way of finance leases is capitalized at the lower of its fair

value or the present value of the minimum lease payments at the inception of the lease, less accumulated

depreciation and accumulated impairment losses. Lease payments are apportioned between the finance charges

and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the

liability. Finance charges are charged directly to the profit or loss.

Reclassification to investment property When the use of a property changes from owner-occupied to investment property, its carrying amount is

recognized and reclassified as investment property. Subsequent costs The cost of replacing a part of an item of property, plant and equipment, including major inspections, is

recognized in the carrying amount of the item if it is probable that the future economic benefits embodied

within the part will flow to the Group, and its cost can be measured reliably. The carrying amount of the

replaced part is derecognized. The costs of the day-to-day servicing of property, plant and equipment are

recognized in profit or loss as incurred. Depreciation Depreciation is calculated based on the depreciable amount, which is the cost of property, plant and

equipment, or other amount substituted for cost, less its residual value.


component of an item of property, plant and equipment. The estimated useful lives are as follows:




Land improvements 5 - 33 years

Buildings and structures 5 - 40 years

Machinery and equipment 3 - 30 years

Furniture, fixtures and office equipment 3 - 20 years

Transportation and equipment 3 - 10 years For three particular subsidiaries, Phoenix Pulp & Paper Public Company Limited, The Siam Forestry Co., Ltd.

and Thai Cane Paper Public Company Limited, depreciation of property, plant and equipment has been

computed by the following methods over the periods as follows:

- Phoenix Pulp & Paper Public Company Limited

Depreciation method

Land improvements 5 - 30 years Straight-line

Buildings and structures

- Acquired prior to 1 January 2002 30 years Sinking Fund

- Acquired from 1 January 2002 5 - 40 years Straight-line

Machinery and equipment 15 years Sinking Fund

Certain machinery and equipment 5 - 25 years Straight-line

Furniture, fixtures and office equipment 3, 5 years Straight-line

Transportation and equipment 5 years Straight-line

Bearer plant 5 years Straight-line

- The Siam Forestry Co., Ltd.

Depreciation method

Bearer plant Actual production in each month




- Thai Cane Paper Public Company Limited

Depreciation

method

Land improvements 5 - 20 years Straight-line

Buildings and structures 5 - 20, 40 years Straight-line

Production machinery

- Kanchanaburi Mill Estimated production capacity of 1.92 million tons

- Prachinburi Mill Estimated production capacity of 5.25 million tons

Machinery and equipment 5 - 25 years Straight-line

Furniture and fixtures 5 - 10 years Straight-line

Transportation and equipment 5, 10 years Straight-line

The effect of using the above different depreciation methods on the consolidated financial statements is

insignificant.

Depreciation for the finance lease assets is charged as expense for each accounting period. The depreciation

method for leased assets is consistent with that for depreciable assets that are owned.

No depreciation is provided on freehold land or assets under construction.

Depreciation methods, useful lives and residual values are reviewed at each reporting period and adjusted

if appropriate.

(l) Goodwill and other intangible assets

Goodwill

Goodwill that arises upon the acquisition of subsidiaries is included in intangible assets. The measurement of

goodwill at initial recognition is described in note 3 (a). Subsequent to initial recognition, goodwill is measured

at cost less accumulated impairment losses. In respect of equity-accounted investees, the carrying amount of

goodwill is included in the carrying amount of the investment, and an impairment loss on such an investment

is not allocated to any assets.




Research and development

Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical

knowledge and understanding, is recognized in profit or loss as incurred.

Development activities involve a plan or design for the production of new or substantially improved products

and processes. Development expenditure is capitalized only if development costs can be measured reliably,

the product or process is technically and commercially feasible, future economic benefits are probable, and

the Group intends to and has sufficient resources to complete development and to use or sell the asset. The

expenditure capitalized includes the cost of materials, direct labor, overhead costs that are directly attributable

to preparing the asset for its intended use, and capitalized borrowing costs of a qualifying asset. Other

development expenditure is recognized in profit or loss as incurred.

Capitalized development expenditure is measured at cost less accumulated amortization and accumulated

impairment losses.

Other intangible assets

Other intangible assets that are acquired by the Group, which have finite useful lives, are measured at cost

less accumulated amortization and accumulated impairment losses.

Subsequent expenditure

Subsequent expenditure is capitalized only when it increases the future economic benefits embodied

in the specific asset to which it relates. All other expenditure, including expenditure on internally generated

goodwill and brands, is recognized in profit or loss as incurred.

Amortization

Amortization is calculated based on the cost of the asset, or other amount substituted for cost, less its

residual value.




Amortization is recognized in profit or loss on a straight-line basis and units of production over the estimated

useful lives of intangible assets, other than goodwill, from the date that they are available for use, since this

most closely reflects the expected pattern of consumption of the future economic benefits embodied in

the asset.

The estimated useful lives are as follows:

Depreciation method

Software licenses and others 3 - 10 years Straight-line

Technology licenses and knowhow 15 years Straight-line

Customer contracts and relationship 5 years Contractual agreement

No amortization is provided on assets under development.

Amortization methods, useful lives and residual values are reviewed at each reporting period and adjusted

if appropriate.

(m) Impairment

The carrying amounts of the Group’s assets are reviewed at the end of each reporting period to determine

whether there is any indication of impairment. If any such indication exists, the assets’ recoverable amounts

are estimated. For goodwill and intangible assets that have indefinite useful lives or are not yet available for

use, the recoverable amount is estimated each year at the same time.

An impairment loss is recognized if the carrying amount of an asset or its cash-generating unit exceeds its

recoverable amount. The impairment loss is recognized in profit or loss unless it reverses a previous

revaluation credited to equity, in which case it is charged to equity.

Calculation of recoverable amount

The recoverable amount of a non-financial asset is the greater of the asset’s value in use and fair value less

costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value




using a pre-tax discount rate that reflects current market assessments of the time value of money and the

risks specific to the asset.

Reversals of impairment

An impairment loss in respect of financial asset is reversed if the subsequent increase in recoverable amount

can be related objectively to an event occurring after the impairment loss was recognized in profit or loss.

An impairment loss in respect of goodwill is not reversed. Impairment losses recognized in prior periods in

respect of other non-financial assets are assessed at each reporting period for any indications that the loss

has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates

used to determine the recoverable amount. An impairment loss is reversed only to the extent that the

asset’s carrying amount does not exceed the carrying amount that would have been determined, net of

accumulated depreciation or accumulated amortization, if no impairment loss had been recognized.

(n) Trade and other payables

Trade and other payables are stated at cost.

(o) Contract liabilities

A contract liability is the obligation to transfer goods or services to the customer. A contract liability is

recognized when the Group receives or has an unconditional right to receive non-refundable consideration

from the customer before the Group recognizes the related revenue.

(p) Employee benefits

Defined contribution plans

Obligations for contributions to defined contribution plans are expensed as the related service is provided.




Defined benefit plans

The Group’s net obligation in respect of defined benefit plans is calculated separately for each plan by

estimating the amount of future benefit that employees have earned in the current and prior periods,

discounting that amount.

The calculation of defined benefit obligations is performed by a qualified actuary using the projected unit

credit method which is based on actuarial valuation method.

Remeasurements of the net defined benefit liability, actuarial gain or loss are recognized in other

comprehensive income. The Group determines the interest expense on the net defined benefit liability for

the period by applying the discount rate used to measure the defined benefit obligation at the beginning of

the annual period, taking into account any changes in the net defined benefit liability during the period

as a result of contributions and benefit payments. Net interest expense and other expenses related to

defined benefit plans are recognized in profit or loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that

relates to past service or the gain or loss on curtailment is recognized immediately in profit or loss. The

Group recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.

Other long-term employee benefits

The Group’s net obligation in respect of long-term employee benefits is the amount of future benefit that

employees have earned in return for their service in the current and prior periods. That benefit is discounted

to determine its present value. Remeasurements are recognized in profit or loss in the period in which they

arise.

Termination benefits

Termination benefits are expensed at the earlier of when the Group can no longer withdraw the offer of

those benefits and when the Group recognizes costs for a restructuring. If benefits are not expected to be

settled wholly within 12 months of the end of the reporting period, then they are discounted.




Short-term employee benefits

Short-term employee benefits are expensed as the related service is provided. A liability is recognized for

the amount expected to be paid if the Group has a present legal or constructive obligation to pay this

amount as a result of past service provided by the employee and the obligation can be estimated reliably.

(q) Provisions

A provision is recognized if, as a result of a past event, the Group has a present legal or constructive

obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be

required to settle the obligation. Provisions are determined by discounting the expected future cash flows

at a pre-tax rate that reflects current market assessments of the time value of money and

the risks specific to the liability. The unwinding of the discount is recognized as finance costs.

(r) Revenue

Revenue is recognized when a customer obtains control of the goods or services in an amount that reflects the

consideration to which the Group expects to be entitled, excluding those amounts collected on behalf of third

parties, value added tax or other sales taxes and is after deduction of any trade discounts and volume rebates.

Sale of goods and rendering of services

Revenue from sales of goods is recognized when a customer obtains control of the goods, generally on

delivery of the goods to the customers. For contracts that permit the customers to return the goods, revenue

is recognized to the extent that it is highly probable that a significant reversal in the amount of cumulative

revenue recognized will not occur. Therefore, the amount of revenue recognized is adjusted for estimated

returns, which are estimated based on the historical data.

Revenue for rendering of services is recognized as services are provided on the basis of stage of completion

of the transaction.

For bundled packages, the Group accounts for individual products and services separately if they are distinct

(i.e. if a product or service is separately identifiable from other items and a customer can benefit from it) or

the multiple services are rendered in different reporting periods. The consideration received is allocated




based on their relative stand-alone selling prices which are determined based on the price list at which

the Group sells the products and services in separate transactions.

Granting options to purchase additional goods or services

The consideration received are allocated based on the relative stand-alone selling price of the products

and the loyalty points. The amount allocated to the loyalty points is recognized as contract liabilities and

revenue is recognized when loyalty points are redeemed, the likelihood of the customer redeeming the

loyalty points becomes remote or option expire. The stand-alone selling prices of the points is estimated

based on discount provided to customers and the likelihood that the customers will redeem the points,

and the estimate shall be reviewed at the end of the reporting period.

Interest and dividend income

Interest income is recognized in profit or loss using the effective interest method. Dividend income is recognized

in profit or loss on the date the Group’s right to receive payments is established.

Royalty fee income

Royalty fee income is recognized throughout the royalty period.

(s) Expenses

Operating leases

Payments made under operating leases are recognized in profit or loss on a straight line basis over

the term of the lease. Lease incentives received are recognized in profit or loss as an integral part of

the total lease expense, over the term of lease.

Contingent lease payments are accounted for by revising the minimum lease payments over

the remaining term of the lease when the lease adjustment is confirmed.




Determining whether an arrangement contains a lease

At inception of an arrangement, the Group determines whether such an arrangement is or contains a lease.

A specific asset is the subject of a lease if fulfilment of the arrangement is dependent on the use of that

specified asset. An arrangement conveys the right to use the asset if the arrangement conveys to the Group

the right to control the use of the underlying asset.

At inception or upon reassessment of the arrangement, the Group separates payments and other

consideration required by such an arrangement into those for the lease and those for other elements on the

basis of their relative fair values. If the Group concludes for a finance lease that it is impracticable to separate

the payments reliably, an asset and a liability are recognized at an amount equal to the fair value of the

underlying asset. Subsequently, the liability is reduced as payments are made and an imputed finance charge

on the liability is recognized using the Group’s incremental borrowing rate.

Finance costs

Finance costs comprise interest expense on borrowings, unwinding of the discount on provisions and

contingent consideration, and dividends on preference shares classified as liabilities.

Borrowing costs that are not directly attributable to the acquisition, construction or production of

a qualifying asset are recognized in profit or loss using the effective interest method.

Early retirement expense

The Group offered certain qualifiable employees the option to take early retirement from the Group. Eligible

employees who accept the offer are paid a lump sum amount which is calculated based on

a formula using their final month’s pay, number of years of service or the number of remaining months before

normal retirement as variables. The Group records expenses on early retirement upon mutual acceptance.

(t) Income tax

Income tax expense for the year comprises current and deferred tax. Current and deferred tax are recognized in profit

or loss except to the extent that they relate to items recognized directly in equity or in other comprehensive income.




Current tax

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax

rates enacted or substantially enacted at the end of the reporting period, and any adjustment to tax payable

in respect of previous years.

Deferred tax

Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and

liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not

recognized for the following temporary differences: the initial recognition of goodwill; the initial recognition

of assets or liabilities in a transaction that is not a business combination and that affects neither accounting

nor taxable profit or loss; and differences relating to investments in subsidiaries to the extent that it is

probable that they will not reverse in the foreseeable future. Deferred tax is measured at the tax rates

that are expected to be applied to the temporary differences when they reverse, using tax rates enacted or

substantively enacted at the end of the reporting period.

The measurement of deferred tax reflects the tax consequences that would follow the manner in which the

Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and

liabilities.

In determining the amount of current and deferred tax, the Group takes into account the impact of uncertain

tax positions and whether additional taxes and interest may be due. The Group believes that its accruals for

tax liabilities are adequate for all open tax years based on its assessment of many factors, including

interpretations of tax law and prior experience. This assessment relies on estimates and assumptions and

may involve a series of judgments about future events. New information may become available that causes

the Group to change its judgment regarding the adequacy of existing tax liabilities; such changes to tax

liabilities will impact tax expense in the period that such a determination is made.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities

and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity,

or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their

tax assets and liabilities will be realized simultaneously.




A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available

against which the temporary differences can be utilized. Future taxable profits are determined based on

the reversal of relevant taxable temporary differences. If the amount of taxable temporary differences is

insufficient to recognize a deferred tax asset in full, then future taxable profits, adjusted for reversals of

existing temporary differences, are considered, based on the business plans for individual subsidiaries in

the Group. Deferred tax assets are reviewed at the end of each reporting period and reduced to the extent

that it is no longer probable that the related tax benefit will be realized.

(u) Derivative financial instruments

Financial assets and financial liabilities carried on the statement of financial position include cash and cash

equivalents, trade and other receivables and payables, long-term receivables, loans, investments, and borrowings.

The Group operates internationally and is exposed to risks from changes in foreign exchange rates. The Group

uses derivative financial instruments to mitigate those risks. All gains and losses on hedge transactions are

recognized in profit or loss in the same period as the exchange differences on the items covered by the hedge.

(v) Business segment reporting

Segment results that are reported to the Group’s Chief Operating Decision Maker include items directly

attributable to a segment as well as those that can be allocated on a reasonable basis.




4 Acquisitions of business and changes in ownership interests of subsidiaries

Year 2019

(a) Acquisitions

During the year 2019, the Group acquired significant businesses as follows:

(1) PT Fajar Surya Wisesa Tbk. and its subsidiary, Indonesia

On 28 June 2019, a subsidiary company in Packaging Business acquired 55.004% of ordinary shares of

PT Fajar Surya Wisesa Tbk. (“Fajar”), which is a leading Indonesian packaging paper company and which

is also listed on the Indonesia Stock Exchange, for a total consideration of Rupiah 9.6 trillion equivalent

to approximately Baht 20,817 million.

Obtaining control in Fajar will allow the Group to enhance its ASEAN growth platform, especially in

Indonesia that provides tremendous future growth opportunity for Packaging business.

(2) Visy Packaging (Thailand) Limited, Thailand

On 30 August 2019, a subsidiary company in Packaging Business acquired 80% of ordinary shares of Visy

Packaging (Thailand) Limited (“Visy Thailand”). Visy Thailand is Asia’s leading producer of

thermoformed barrier food packaging which is also recyclable, serving established global brand

owners that require high quality packaging products. Also, the acquired company possesses global

scale with a highly-automated production facility, including proprietary technology to produce

packaging that can preserve food and fruit, as well as an integrated process to minimize waste, for a

total consideration of Baht 4,305 million.

Obtaining control in Visy Thailand further reinforces the Group’s continued growth and capabilities

as a total packaging solution provider, especially in the Asian food and fruit segments where the

world’s major plantations are based.

With respect to the above acquisitions, the Group has engaged independent appraisers to determine the fair

values of net assets and liabilities acquired. As at 31 December 2019, the determination of the fair values

has been completed, and the assets acquired and liabilities assumed were recognized accordingly.




The Group has continuously determined its review of fair values of the business acquired within one year

from the acquisition date, taking into accounts additional information, facts as well as circumstances that

existed at the acquisition date. Consequently, the adjustments on accounting transaction of such acquisition

will be made.

Assets acquired and liabilities assumed at the acquisition date were as follows:

Note Fair Value

Fajar

Visy

Thailand

Total

(in million Baht)

Cash and cash equivalents 295 23 318

Trade and other current receivables 3,932 263 4,195

Inventories 2,594 235 2,829

Investment property 11 - 44 44

Property, plant and equipment 12 22,550 1,406 23,956

Other intangible assets 14 3 528 531

Deferred tax assets 15 38 - 38

Non-current assets 745 19 764

Interest-bearing borrowings 16 (9,421) (75) (9,496)

Trade and other current payables (3,167) (154) (3,321)

Deferred tax liabilities 15 (2,523) (163) (2,686)

Non-current liabilities (586) (10) (596)

Net identifiable assets and liabilities 14,460 2,116 16,576

Less non-controlling interests (6,506) (423) (6,929)

Recognized value of net assets acquired 7,954 1,693 9,647

Goodwill 13 12,863 2,612 15,475

Total consideration transferred 20,817 4,305 25,122

Cash acquired (318)

Net cash outflows 24,804

Less cash in escrow account (922)

Net cash outflows in 2019 23,882




Cash in escrow account amounting to Baht 922 million are presented net of accrued investment and will be

released when certain conditions are met within March 2020.

The assets, liabilities and operating results since acquisition date of those subsidiaries have been included in

the Group’s consolidated financial statements for the year ended 31 December 2019. The subsidiaries

contributed revenue from sales of Baht 9,044 million and profit for the period of Baht 637 million to

the Group’s operating results. If the acquisition had occurred on 1 January 2019, management estimates

that consolidated revenue from sales would have been Baht 99,831 million and consolidated profit for the

period would have been Baht 6,275 million.

The Group incurred acquisition costs totaling Baht 43 million which have been included in administrative

expenses in the consolidated income statement.

(b) Change in ownership interests in subsidiaries

• In the second quarter of 2019, the Group has restructured its stake in rigid packaging business by having

Toppan Printing Company Limited, a Japanese packaging company, join in SCGP-T Plastics Company

Limited (“SCGP-T”), a holding company for the rigid packaging business. With this portfolio

adjustment, a transaction valued of Baht 194 million, the Group’s investment in SCGP-T has

decreased from 100% to 51%. The Group recognised an increase in non-controlling interests of

Baht 200 million, SCGP-T has remained a consolidated subsidiary of the Group.

• During the year 2019, the Group increased its interest in PT Indocorr Packaging Cikarang

(“Indocorr”) from 80% to 100% and its interest in PT Fajar Surya Wisesa Tbk. (“Fajar”) from

55.004% to 55.235%.

The following summarizes the effect of the change in the Group’s ownership interests:

(in million Baht)

Carrying amount of non-controlling interests acquired 113

Less Consideration paid to non-controlling interests (192)

Decrease in equity attributable to owners of the Group

from additional investments in subsidiaries

(79)




Year 2018

(a) Acquisitions

During the year 2018, the Group acquired the significant business as follows:

Interpress Printers Sendirian Berhad, Malaysia

On 19 January 2018, a subsidiary company in Packaging business acquired 68% of shares in Interpress Printers

Sendirian Berhad (“IPSB”), which is a sector-leading food-grade paper packaging company, highly accredited

and vetted by the global leading fast food restaurant chain, located in Malaysia, for a total consideration of

Ringgit 63 million or equivalent to approximately Baht 511 million.

Obtaining control in IPSB emphasizes the Group’s commitment in becoming a total packaging solutions

provider in ASEAN countries and will further enhance the overall portfolio while exhibiting its potential to

serve the burgeoning region’s fast food consumption, evolving lifestyle and preferences of consumers.

According to the above acquisitions, the Group has engaged an independent appraiser to determine the fair

values of net assets and liabilities acquired. As at 31 December 2018, the determination of the fair values

has been completed, and the carrying amount of the assets acquired and liabilities assumed were recorded

accordingly.

The Group has continuously determined its review of fair values of the business acquired within one year

from the acquisition date, taking into accounts additional information, facts as well as circumstances that

existed at the acquisition date. Consequently, the adjustments on accounting transaction of such acquisition will

be made.




Assets acquired and liabilities assumed at the acquisition date were as follows:

Fair Value

IPSB

(in million Baht)

Cash and cash equivalents 2

Trade and other current receivables 161

Inventories 57

Property, plant and equipment 347

Interest-bearing debts (244)

Trade and other current payables (28)

Other non-current liabilities (13)

Net identifiable assets and liabilities 282

Less non-controlling interests (89)

Recognized value of net assets acquired 193

Goodwill 318

Total consideration transferred 511

Cash acquired (2)

Net cash outflows 509

Less accrued investments (88)

Net cash outflows in 2018 421

The Group has agreed to pay a total consideration of Baht 88 million to the former shareholder. The remaining

balance of Baht 39 million will be released when certain conditions are achieved within May 2021.

The assets, liabilities and operating results since acquisition date of those subsidiaries have been included

in the Group’s consolidated financial statements for the year ended 31 December 2018. The subsidiaries

contributed revenue from sales of Baht 502 million and loss for the period of Baht 4 million to the Group’s

operating results. If the acquisition had occurred on 1 January 2018, management estimates that

consolidated revenue from sales would have been Baht 87,304 million and consolidated profit for the

period would have been Baht 6,069 million.

The Group incurred acquisition costs totalling Baht 9 million which have been included in administrative

expenses in the consolidated income statement.




(b) Change in ownership interests in a subsidiaries

During the year 2018, the Group had purchased additional shares in Dyna Packs Co., Ltd. and Orient Containers

Co., Ltd. increasing its stake from 75% to 100%, in PT Primacorr Mandiri increasing its stake from 90% to 97%,

in PT Indoris Printingdo increasing its stake from 90% to 99.95% and in Thai Cane Paper Public Company

Limited increasing its stake from 94.54% to 98.20%.

The following summarizes the effect of the change in the Group’s ownership interests:

(in million Baht)

Carrying amount of non-controlling interests acquired 401

Less consideration paid to non-controlling interests (639)

Decrease in equity attributable to owners of the Group

from additional investments in subsidiaries

(238)

5 Related parties

Parties are considered to be related to the Group if the Group has the ability, directly or indirectly, to control

the party or exercise significant influence over the party in making financial and operating decisions, or vice versa.

Relationships with related parties were as follows:

Name of entities

Country of

incorporation

/nationality

Nature of relationships

The Siam Cement Public Company Limited Thailand Ultimate parent company

SCG International Corporation Co., Ltd.

(Formerly SCG Trading Corporation Co., Ltd.)

Thailand A subsidiary of The Siam Cement Public Company Limited

SCG International Vietnam Co., Ltd.

(Formerly SCG Trading Vietnam Co., Ltd.)

Vietnam A subsidiary of The Siam Cement Public Company Limited

PT SCG International Indonesia

(Formerly PT SCG Trading Indonesia)

Indonesia A subsidiary of The Siam Cement Public Company Limited

The Siam Fibre-Cement Group Co., Ltd. Thailand A subsidiary of The Siam Cement Public Company Limited

SCG Ceramics Public Company Limited Thailand A subsidiary of The Siam Cement Public Company Limited




Name of entities

Country of

incorporation

/nationality


Nawa Plastics Industries Co., Ltd. Thailand A subsidiary of The Siam Cement Public Company Limited

Sosuco Ceramic Co., Ltd. Thailand A subsidiary of The Siam Cement Public Company Limited

Siam Sanitary Ware Industry Co., Ltd. Thailand A subsidiary of The Siam Cement Public Company Limited

Prime Group Joint Stock Company Vietnam A subsidiary of The Siam Cement Public Company Limited

SCG Logistics Management Co., Ltd. Thailand A subsidiary of The Siam Cement Public Company Limited

The Siam Fibre-Cement Co., Ltd. Thailand A subsidiary of The Siam Cement Public Company Limited

SCG Cement-Building Materials Co., Ltd. Thailand A subsidiary of The Siam Cement Public Company Limited

SCG Marketing Philippines, Inc. Philippines A subsidiary of The Siam Cement Public Company Limited

SCG Chemicals Co., Ltd. Thailand A subsidiary of The Siam Cement Public Company Limited

The Concrete Products and Aggregate Co., Ltd. Thailand A subsidiary of The Siam Cement Public Company Limited

SCG Cement Co., Ltd. Thailand A subsidiary of The Siam Cement Public Company Limited

PT SCG Indonesia Indonesia A subsidiary of The Siam Cement Public Company Limited

SCG International (Philippines) Corporation Co., Ltd.

(Formerly SCG Trading Philippines Inc.)

Philippines A subsidiary of The Siam Cement Public Company Limited

SCI Eco Services Co., Ltd. Thailand A subsidiary of The Siam Cement Public Company Limited

SCG Performance Chemicals Co., Ltd. Thailand A subsidiary of The Siam Cement Public Company Limited

SCG International USA Inc.

(Formerly SCG Trading USA Inc.)

USA A subsidiary of The Siam Cement Public Company Limited

Rayong Olefins Co., Ltd. Thailand A subsidiary of The Siam Cement Public Company Limited

SCG Vietnam Co., Ltd. Vietnam A subsidiary of The Siam Cement Public Company Limited

Nawa Intertech Co., Ltd. Thailand A subsidiary of The Siam Cement Public Company Limited

Siam Toppan Packaging Co., Ltd. Thailand An associate of SCG Packaging Public Company Limited

Siam Nippon Industrial Paper Co., Ltd. Thailand An associate of SCG Packaging Public Company Limited

Saha Green Forest Co., Ltd. Thailand An associate of SCG Packaging Public Company Limited

P&S Holding Corporation Philippines An associate of SCG Packaging Public Company Limited

The Siam Gypsum Industry (Saraburi) Company Limited Thailand An associate of The Siam Cement Public Company Limited

The Siam Gypsum Industry (Songkhla) Company Limited Thailand An associate of The Siam Cement Public Company Limited

Thai MFC Co., Ltd. Thailand An associate of The Siam Cement Public Company Limited

Siam Polyethylene Co., Ltd. Thailand An associate of The Siam Cement Public Company Limited




Name of entities

Country of

incorporation

/nationality


Siam Synthetic Latex Co., Ltd. Thailand An associate of The Siam Cement Public Company Limited

IT One Co., Ltd. Thailand An associate of The Siam Cement Public Company Limited

Nippon Paper Industries Co., Ltd. Japan Common directors with Phoenix Pulp & Paper Public

Company Limited

Rengo Co., Ltd. Japan Common directors with Thai Containers Group Co., Ltd.

Asia Cement Public Company Limited Thailand Common directors with The Siam Cement Public Company

Limited

On 31 May 2018, SCG Packaging Public Company Limited (a subsidiary of The Siam Cement Public Company

Limited) sold 19,567,240 ordinary shares of Thai British Security Printing Public Company Limited (17.79% of

total issued and paid-up shares capital of the Company) to Miss Suthida Mongkolsuthi.




The pricing policies for particular types of transactions are explained further below:

Transactions Pricing policies

Revenue from sales Market price

Purchases Market price

Intellectual properties fees Percentage of revenue from sales

Expenses Market price and contract rate

Dividends income Upon declaration

Interest expense Contract rate

Significant transactions for the years ended 31 December with related parties were as follows:

2019 2018

(in thousand Baht)

Parent

Revenue from sales 16,538 15,505

Intellectual properties fees 271,616 299,044

Interest expense 1,255,622 777,839

Expenses 882,335 922,360

Associates

Revenue from sales 669,084 979,015

Dividends income 11,832 15,872

Purchases 294,741 356,275

Others

Revenue from sales 3,508,031 3,499,653

Purchases 7,264,188 7,368,578

Expenses 2,893,051 2,804,819

Dividend income - 10,762




Balances as at 31 December with related parties were as follows:

Trade receivables

2019 2018

(in thousand Baht)

Parent

The Siam Cement Public Company Limited 1,712 1,849

Associates

Siam Toppan Packaging Co., Ltd. 30,572 39,313

Siam Nippon Industrial Paper Co., Ltd. 15,042 40,323

Saha Green Forest Co., Ltd. 867 1,801

Others

SCG International Corporation Co., Ltd. 82,065 85,077

SCG International Vietnam Co., Ltd. 73,252 22,975

The Siam Gypsum Industry (Saraburi) Co., Ltd. 41,786 97,469

PT SCG International Indonesia 31,126 49,795

Siam Fibre Cement Group Co., Ltd. 17,567 1,520

The Siam Gypsum Industry (Songkhla) Co., Ltd. 10,681 15,753

Asia Cement Public Company Limited 10,434 23,186

SCG Ceramics Public Company Limited 8,973 6,222

Nawaplastic Industries Co., Ltd. 8,550 5,192

Sosuco Ceramics Co., Ltd. 5,354 5,104

Thai MFC Co., Ltd. 4,967 13,269

Siam Sanitary Ware Industry Co., Ltd. 4,374 5,876

Siam Polyethylene Co., Ltd. 4,204 4,173

Prime Group Joint Stock Company 3,633 5,268

SCG Logistics Management Co., Ltd. 509 10,205

The Siam Fibre-Cement Co., Ltd 21 24,389

Others 23,448 25,894

Total 379,137 484,653




Other current receivables

2019 2018

(in thousand Baht)

Parent


Associates


P&S Holdings Corporation 11,305 1,608

Saha Green Forest Co., Ltd. 419 4

Siam Toppan Packaging Co., Ltd. 129 128

Others

SCG Cement-Building Material Co., Ltd. 2,341 4,047

SCG Marketing Philippines, Inc. 2,275 768

SCG Chemicals Co., Ltd. 1,638 1,339


Nawaplastic Industries Co., Ltd. 1,188 521

The Concrete Products and Aggregate Co., Ltd. 682 1,565

SCG Cement Co., Ltd. 401 2,433

PT SCG International Indonesia 257 1,373

Nippon Paper Industries Co., Ltd. - 4,230

Others 6,803 9,112

Total 129,227 108,623

Short-term loans

2019 2018

(in thousand Baht)

Others

PT SCG Indonesia 4,601 3,502

SCG Marketing Philippines, Inc. - 123,650

Total 4,601 127,152




Long-term loan

2019 2018

(in thousand Baht)

Other

Mariwasa-Siam Ceramic, Inc. - 92,738

Movements during the years on loans to related parties were as follows:

2019 2018

(in thousand Baht)

Short-term

At 1 January 127,152 811

Increase 17,539 128,867

Decrease (140,090) (2,526)

At 31 December 4,601 127,152

Long-term

At 1 January 92,738 98,333

Decrease (92,738) (5,595)

At 31 December - 92,738 Advance payment from software licence fee, long-term receivable and deposit shown under other non-current receivables

2019 2018

(in thousand Baht)

Parent


Associate


Total 368,013 406,901




Trade payables

2019 2018

(in thousand Baht)

Associates



Others


SCG Logistics Management Co., Ltd. 237,412 230,901

SCG International Vietnam Co., Ltd. 180,987 143,002

SCG International (Philippines) Corporation Co., Ltd. 49,499 53,049

SCI Eco Services Co., Ltd. 25,150 32,334

Rengo Co., Ltd. 22,575 74,560

Siam Synthetic Latex Co., Ltd. 18,626 25,222

SCG Performance Chemicals Co., Ltd. 18,022 24,735

PT SCG International Indonesia 12,543 69

SCG International USA Inc. 9,120 74,178

IT One Co., Ltd. 8,211 8,802

Rayong Olefins Co., Ltd. 5,829 22,467

Others 22,433 26,994

Total 1,020,867 1,336,324




Other current payables

2019 2018

(in thousand Baht)

Parent


Associates



Siam Nippon Industrial Paper Co., Ltd. 67 3,299

Others

Nippon Paper Industries Co., Ltd. 38,998 40,499

SCG Ceramics Public Company Limited 15,020 -

Siam Sanitary Ware Industry Co., Ltd. 7,590 1,380

SCG Vietnam Co., Ltd. 3,312 -

Nawa Intertech Co., Ltd. 2,517 120

SCG International Corporation Co., Ltd. 2,149 148

SCI Eco Services Co., Ltd. 2,140 88

Others 6,878 3,473

Total 211,963 257,124

Short-term borrowings

2019 2018

(in thousand Baht)

Parent

The Siam Cement Public Company Limited 33,756,240 23,309,752

Others


Total 33,827,196 23,415,700




Movements during the years on short-term borrowings from related parties were as follows:

2019 2018

(in thousand Baht)

At 1 January 23,415,700 15,496,563

Increase 36,476,305 27,174,575

Decrease (26,064,809) (19,255,438)

At 31 December 33,827,196 23,415,700

The Board of Directors and key management compensation

2019 2018

(in thousand Baht)

For the years ended 31 December

Short-term employee benefits 94,414 121,160

Post-employment benefits 18,354 10,584

Total 112,768 131,744

The Board of Directors and key management compensation comprises the remuneration paid to the directors

of SCG Packaging Public Company Limited under the articles of the Company and the remuneration paid to

the management as staff expenses in terms of salary, bonus, variable pay, others and contribution to defined

contribution plans.

6 Cash and cash equivalents

2019 2018

(in thousand Baht)

Cash on hand 61,574 133,004

Cash at banks - current accounts 1,660,516 529,971

Cash at banks - saving accounts 1,128,059 745,684

Highly liquid short-term investment 1,543,696 686,690

Total 4,393,845 2,095,349




7 Trade and other current receivables

Note 2019 2018

(in thousand Baht)

Trade receivables

Related parties 5 379,137 484,653

Other companies 13,406,949 12,203,668

Less allowance for doubtful accounts (156,835) (152,948)

Net 13,250,114 12,050,720

13,629,251 12,535,373



Other companies 1,439,542 1,060,107

1,568,769 1,168,730

Total 15,198,020 13,704,103

For the year ended 31 December

Bad and doubtful debts expenses 32,264 42,556

Bad debts recovery (3,772) (3,269)




2019 2018

(in thousand Baht)

Trade receivables

Related parties

Within credit terms 363,840 460,006

Overdue:

Less than 3 months 15,287 24,647

3 - 6 months 10 -

Total 379,137 484,653

Other companies

Within credit terms 11,774,041 11,186,863

Overdue:

Less than 3 months 1,444,297 823,613

3 - 6 months 37,913 38,279

Over 6 - 12 months 6,275 6,229

Over 12 months 144,423 148,684

13,406,949 12,203,668

Less allowance for doubtful accounts (156,835) (152,948)

Net 13,250,114 12,050,720

Total 13,629,251 12,535,373

The normal credit term granted by the Group is 30 - 90 days.




8 Inventories

2019 2018

(in thousand Baht)

Finished goods 4,128,493 3,975,384

Goods in process 966,692 749,897

Raw materials 4,031,065 3,834,292

Spare parts, stores, supplies and others 3,605,673 2,940,161

Goods in transit 977,173 1,759,412

Total 13,709,096 13,259,146

Less allowance for decline in value (432,960) (364,890)

Net 13,276,136 12,894,256

Cost of inventories recognized as an expense in cost of sales: 71,543,307 69,089,513

Write-down to net realizable value 178,733 48,532

Reversal of write-down (71,872) (64,795)

Changes in inventories of finished goods and goods in process (369,904) 114,345

Raw materials and supplies used 35,238,582 30,161,119


Movements for the years ended 31 December in investments in associates accounted for using

the equity method were as follows:

2019 2018

(in thousand Baht)

At 1 January 729,740 760,734

Share of net profit (loss) of investments - equity method 52,728 (14,603)

Share of other comprehensive income of investment - equity method 118 (519)

Dividend income (11,832) (15,872)

At 31 December 770,754 729,740


Not

es t

o th

e fin

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al s

tate

men

ts

SCG

Pac

kagi

ng P

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Com

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Lim

ited

and

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For

the

year

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1 Dec

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, wer

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To

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l

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Eq

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met

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Di

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com

e

20

19

20

18

20

19

20

18

20

19

20

18

20

19

20

18

20

19

20

18

(%

)

(in th

ousa

nd B

aht)

Asso

ciat

es

Siam

Top

pan

Pack

agin

g Co

., Lt

d.

49

49

500,

000

50

0,00

0

245,

000

24

5,00

0

430,

231

426,

446

9,45

7

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Siam

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. 31

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31

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Saha

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. 17

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17

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190,

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47

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63

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2,

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4,75

0

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26

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8

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10

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1

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1

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4 72

9,74

0 11

,832

15

,872




Immaterial associates

The following is summarized financial information for the Group’s interest in immaterial associates based

on the amounts reported in the Group’s consolidated financial statements:

2019 2018

(in thousand Baht)

Carrying amount of interests in immaterial associates 770,754 729,740

Group’s share of:

- Profit (loss) for the year from continuing operations 52,728 (14,603)

- Other comprehensive income for the year 118 (519)

- Total comprehensive income for the year 52,846 (15,122)

10 Non-controlling interests

The following table summarizes the information relating to each of the Group’s subsidiaries that has

a material non-controlling interest, before any intra-group eliminations:

Phoenix Pulp & Thai PT Fajar

Paper Public Containers Surya Wisesa

Company Limited Group Co., Ltd. Tbk.*

(in thousand Baht)

Non-controlling interests at 31 December 2019

Non-controlling interest percentage 30.42% 30.00% 44.76%

Current assets 6,854,079 4,675,657 6,007,852

Non-current assets 19,153,282 11,289,766 14,703,278

Current liabilities (3,548,932) (5,661,055) (8,153,703)

Non-current liabilities (1,093,064) (630,549) (5,014,272)

Net assets 21,365,365 9,673,819 7,543,155

Carrying amount of non-controlling interest 6,499,344 2,902,146 3,376,316




Phoenix Pulp & Thai PT Fajar

Paper Public Containers Surya Wisesa

Company Limited Group Co., Ltd. Tbk.*

(in thousand Baht)

For the year ended 31 December 2019

Revenue 6,992,032 16,864,353 8,570,868

Profit (loss) for the year (249,762) 548,191 553,552

Other comprehensive income for the year (14,197) (47,807) (12,589)

Total comprehensive income for the year (263,959) 500,384 540,963


Profit (loss) for the year:

- Attributable to owners of the parent (173,784) 383,734 305,324

- Attributable to non-controlling interest (75,978) 164,457 248,228

Other comprehensive income for the year:

- Attributable to owners of the parent (9,878) (33,465) (6,936)

- Attributable to non-controlling interest (4,319) (14,342) (5,653)

(263,959) 500,384 540,963

Cash flows from operating activities 445,662 1,494,862 (2,955,508)

Cash flows from investing activities 439,060 (1,213,413) (903,683)

Cash flows from financing activities (795,387) (292,976) 3,786,729

Net increase (decrease) in cash

and cash equivalents

89,335

(11,527)

(72,462)

Dividends to non-controlling interest 66,630 41,520 -

* Income statement for the six-month period during June - December 2019.




Phoenix Pulp &

Paper Public Thai Containers

Company Limited Group Co., Ltd.

(in thousand Baht)

Non-controlling interests at 31 December 2018

Non-controlling interest percentage 30.42% 30.00%

Current assets 7,324,709 4,565,757

Non-current assets 19,600,435 10,754,705

Current liabilities (4,017,396) (5,603,232)

Non-current liabilities (1,059,278) (405,395)

Net assets 21,848,470 9,311,835

Carrying amount of non-controlling interest 6,646,305 2,793,551


Revenue 8,031,725 16,374,743

Profit for the year 614,454 918,575

Other comprehensive income for the year (47,858) (58,634)

Total comprehensive income for the year 566,596 859,941


Profit for the year:

- Attributable to owners of the parent 427,537 643,003

- Attributable to non-controlling interest 186,917 275,572

Other comprehensive income for the year:

- Attributable to owners of the parent (33,300) (41,044)

- Attributable to non-controlling interest (14,558) (17,590)

566,596 859,941

Cash flows from operating activities 1,071,094 898,191

Cash flows from investing activities 191,364 (1,020,446)

Cash flows from financing activities (1,191,954) 126,355

Net increase in cash and cash equivalents 70,504 4,100

Dividends to non-controlling interest 55,392 124,560





Note

Land and land

improvements

(in thousand Baht)

Cost

At 1 January 2018 129,670

Acquisitions through business combinations 4 64,411

Transfer from property, plant and equipment 12 32,352

Transfer to other current assets (12,753)

At 31 December 2018 213,680

Acquisitions through business combinations 43,681

Transfer to property, plant and equipment 12 (38,305)

At 31 December 2019 219,056

Accumulated depreciation

At 1 January 2018 23,389

Depreciation charge for the year 4,716

At 31 December 2018 28,105

Depreciation charge for the year 3,551

At 31 December 2019 31,656

Carrying amount

As at 31 December 2018 185,575

As at 31 December 2019 187,400

Investment property was revalued as at 31 December 2019 at open market values on an existing use basis.

The fair value was Baht 506 million (2018: Baht 480 million).

The fair value measurement for investment property has been categorized as a Level 3 fair value based on

the inputs to the valuation technique used, which are discounted cash flows and market approach.


Not

es t

o th

e fin

anci

al s

tate

men

ts

SCG

Pac

kagi

ng P

ublic

Com

pany

Lim

ited

and

its S

ubsi

diar

ies

For

the

year

end

ed 3

1 Dec

embe

r 20

19 a

nd 2

018

12

Prop

erty

, pla

nt a

nd e

quip

men

t

Fu

rnitu

re,

La

nd a

nd

M

achi

nery

fixtu

res

and

Tran

spor

tation

la

nd

Bu

ildin

gs a

nd

an

d

offic

e

and

Co

nstru

ction

impr

ovem

ents

st

ruct

ures

equi

pmen

t

equi

pmen

t

equi

pmen

t

in pr

ogres

s

Bear

er p

lant

Tota

l

(in th

ousa

nd B

aht)

Cost

At 1

Janu

ary

2018

4,

129,

832

17,1

27,8

20

10

9,18

7,58

2 1,

770,

322

44

5,93

0 6,

206,

727

11,2

13

138,

879,

426

Acqu

isitio

n th

roug

h bu

sines

s

co

mbi

natio

ns

-

16,

311

50

1,57

3 12

,588

2,50

8 -

-

532,

980

Addi

tions

16

4,27

9 2

46,0

60

1,9

69,3

91

65,

749

4

17

4,2

34,1

94

7,6

65

6,6

87,7

55

Disp

osal

s/w

ritte

n of

f (2

,044

) (1

5,86

3)

(1,6

62,9

26)

(105

,396

) (2

9,23

3)

(3,0

56)

- (1

,818

,518

) Tr

ansf

er to

inve

stm

ent p

rope

rty

(32,

352)

-

-

-

- -

-

(32,

352)

Tr

ansf

er to

oth

er c

urre

nt a

sset

s

-

(224

,840

)

(2,

866)

(3

,904

)

- -

-

(231

,610

) Tr

ansf

ers

in (o

ut)

89,1

60

624

,173

4,6

63,6

73

6

1,57

8

11,

983

(5,4

81,9

51)

4,5

09

(26,

875)

Cu

rrenc

y tra

nsla

tion

diffe

renc

es

(35,

315)

(5

8,46

8)

(3

60,4

40)

(6

,351

) (1

,211

)

(546

)

- (4

62,3

31)

At 3

1 De

cem

ber 2

018

4,31

3,56

0 17

,715

,193

114,

295,

987

1,79

4,58

6

430,

394

4,95

5,36

8 23

,387

14

3,52

8,47

5 Ac

quisi

tion

thro

ugh

busin

ess

co

mbi

natio

ns

3

,520

,309

1,

773,

589

24

,566

,269

1

58,8

72

18

1,01

7

1,4

94,6

95

- 31

,694

,751

Ad

ditio

ns

31,

234

269,

797

2,06

2,39

3 70

,626

11

,435

4,

745,

672

281

7,19

1,43

8 Di

spos

als/

writ

ten

off

(1,8

21)

(23,

238)

(8

47,0

70)

(20,

370)

(3

3,21

9)

(4,9

22)

- (9

30,6

40)

Tran

sfer

from

inve

stm

ent p

rope

rty

38,3

05

-

-

-

-

-

- 38

,305

Tr

ansf

er to

oth

er c

urre

nt a

sset

s -

-

(6,3

95)

-

- -

-

(6,3

95)

Tran

sfer

s in

(out

) 64

,035

49

7,27

7

2,99

6,05

0

50,3

96

3,

989

(3

,369

,468

) 18

,016

26

0,29

5 Cu

rrenc

y tra

nsla

tion

diffe

renc

es

(40,

439)

(1

55,7

20)

(9

81,2

81)

(6

,097

) (4

,820

)

(62,

617)

- (1

,250

,974

) At

31

Dece

mbe

r 201

9 7,

925,

183

20,0

76,8

98

14

2,08

5,95

3 2,

048,

013

58

8,79

6 7,

758,

728

41,6

84

180,

525,

255


Not

es t

o th

e fin

anci

al s

tate

men

ts

SCG

Pac

kagi

ng P

ublic

Com

pany

Lim

ited

and

its S

ubsi

diar

ies

For

the

year

end

ed 3

1 Dec

embe

r 20

19 a

nd 2

018

Fu

rnitu

re,

La

nd a

nd

M

achi

nery

fixtu

res

and

Tran

spor

tation

la

nd

Bu

ildin

gs a

nd

an

d

offic

e

and

Co

nstru

ction

impr

ovem

ents

st

ruct

ures

equi

pmen

t

equi

pmen

t

equi

pmen

t

in pr

ogres

s

Bear

er p

lant

Tota

l

(in th

ousa

nd B

aht)

Accu

mul

ated

dep

reci

atio

n an

d

ac

cum

ulat

ed im

pairm

ent l

osse

s At

1 Ja

nuar

y 20

18

1,0

81,6

03

9

,002

,688

6

9,95

6,35

7

1

,388

,192

301

,617

-

6,1

27

81,

736,

584

Ac

quisi

tion

thro

ugh

busin

ess

com

bina

tions

-

1

3,91

3

1

61,0

34

1

1,13

3

48

5

- -

1

86,5

65

Depr

ecia

tion

char

ge fo

r the

yea

r 1

02,8

91

527

,834

4

,487

,521

1

41,4

38

41,

355

-

3,3

94

5,3

04,4

33

Impa

irmen

t los

ses

-

9,

688

14

,438

-

-

-

- 24

,126

Di

spos

als/

writ

ten

off

(193

) (1

3,98

8)

(1,5

04,6

90)

(103

,272

) (2

8,83

8)

- -

(1,6

50,9

81)

Tran

sfer

to o

ther

cur

rent

ass

ets

- (1

45,7

64)

(2,7

18)

(3,5

69)

- -

- (1

52,0

51)

Curre

ncy

trans

latio

n di

ffere

nces

(2

,980

) (3

2,78

9)

(251

,185

) (1

1,08

0)

(814

) -

- (2

98,8

48)

At 3

1 De

cem

ber 2

018

1,1

81,3

21

9,3

61,5

82

72,

860,

757

1

,422

,842

3

13,8

05

- 9

,521

8

5,14

9,82

8 Ac

quisi

tion

thro

ugh

busin

ess

com

bina

tions

-

670,

534

6,83

6,12

9 94

,471

13

7,62

8

- -

7,73

8,76

2 De

prec

iatio

n ch

arge

for t

he y

ear

99,1

22

620,

844

4,95

8,23

9 14

7,32

5 48

,211

- 3,

457

5,87

7,19

8 Im

pairm

ent l

osse

s -

- 34

,033

-

-

2,

590

-

36,6

23

Disp

osal

s/w

ritte

n of

f (1

21)

(21,

229)

(7

82,2

26)

(19,

766)

(2

9,59

3)

-

- (8

52,9

35)

Tran

sfer

to o

ther

cur

rent

ass

ets

- -

(5

,670

)

- -

-

- (5

,670

)

Tran

sfer

s in

(out

) (1

3,22

8)

36,5

75

267,

745

7,03

8 (7

97)

-

327

29

7,66

0 Cu

rrenc

y tra

nsla

tion

diffe

renc

es

(2,0

25)

(59,

783)

(5

09,7

58)

(4,4

92)

(3,7

20)

-

-

(579

,778

) At

31

Dece

mbe

r 201

9 1

,265

,069

10

,608

,523

83

,659

,249

1,

647,

418

46

5,53

4

2

,590

13

,305

9

7,66

1,68

8


Not

es t

o th

e fin

anci

al s

tate

men

ts

SCG

Pac

kagi

ng P

ublic

Com

pany

Lim

ited

and

its S

ubsi

diar

ies

For

the

year

end

ed 3

1 Dec

embe

r 20

19 a

nd 2

018

* Th

ese

incl

ude

mac

hine

ry a

cqui

red

unde

r fin

ancia

l lea

se w

ith c

arry

ing

amou

nt B

aht 1

,644

mill

ion

at 3

1 De

cem

ber 2

019

(201

8: B

aht 5

0 m

illio

n).

In 2

019,

the

Grou

p ca

pita

lized

bor

row

ing

cost

s re

latin

g to

the

acqu

isitio

n of

the

prop

erty

, pla

nt a

nd e

quip

men

t wer

e ca

pita

lized

as

part

of th

e co

st o

f con

stru

ctio

n in

pro

gres

s,

amou

ntin

g to

Bah

t 81

mill

ion

(201

8: B

aht 2

5 m

illio

n), r

ates

of i

nter

est c

apita

lized

at 1

.95%

- 5.

45%

per

ann

um (2

018:

1.9

0% -

5.65

% p

er a

nnum

).

Durin

g 20

19, t

he G

roup

had

inco

me

from

sal

es o

f som

e as

sets

in S

inga

pore

from

a b

usin

ess

whi

ch w

as te

rmin

ated

in Ju

ne 2

018.

The

gro

up re

cogn

ized

a ga

in o

n sa

le o

f fixe

d

asse

ts a

mou

ntin

g to

Bah

t 260

mill

ion

in th

e co

nsol

idat

ed in

com

e st

atem

ent f

or th

e ye

ar e

nded

31

Dece

mbe

r 201

9.

For

the

purp

ose

of im

pairm

ent

test

ing

of p

rope

rty, p

lant

and

equ

ipm

ent

of t

he G

roup

whe

re in

dica

tors

occu

rred,

the

rec

over

able

am

ount

was

bas

ed o

n its

val

ue in

use

,

dete

rmin

ed b

y di

scou

ntin

g th

e fu

ture

cas

h flo

ws

whi

ch in

clud

ed e

stim

ates

for f

ive y

ears

and

a te

rmin

al g

row

th ra

te th

erea

fter.

The

term

inal

gro

wth

rate

was

det

erm

ined

bas

ed

on th

e lo

ng-te

rm c

ompo

und

annu

al E

BITD

A gr

owth

rate

est

imat

ed b

y m

anag

emen

t. Di

scou

nt ra

te w

as d

eter

min

ed b

y us

ing

wei

ghte

d av

erag

e co

st o

f cap

ital o

f the

Gro

up.

Fu

rnitu

re,

La

nd a

nd

M

achi

nery

fixtu

res

and

Tran

spor

tation

la

nd

Bu

ildin

gs a

nd

an

d

offic

e

and

Co

nstru

ction

impr

ovem

ents

st

ruct

ures

equi

pmen

t

equi

pmen

t

equi

pmen

t

in pr

ogres

s

Bear

er p

lant

Tota

l

(in th

ousa

nd B

aht)

Carr

ying

am

ount

At 3

1 De

cem

ber 2

018

3,13

2,23

9

8,35

3,61

1

41,4

35,2

30*

37

1,74

4

116,

589

4,

955,

368

13

,866

58,3

78,6

47

At 3

1 De

cem

ber 2

019

6,66

0,11

4

9,46

8,37

5

58,4

26,7

04*

40

0,59

5

123,

262

7,

756,

138

28

,379

82,8

63,5

67




13 Goodwill

Note 2019 2018

(in thousand Baht)

At 1 January 2,289,836 1,994,878

Acquisitions through business combinations 4 15,475,019 318,504

Currency translation differences (152,589) (23,546)

At 31 December 17,612,266 2,289,836

For the purpose of impairment testing of goodwill of the Group, the recoverable amount was based on its

value in use, determined by discounting the future cash flows which included estimates for five years and

a terminal growth rate thereafter. The terminal growth rate was determined based on the long-term

compound annual EBITDA growth rate estimated by management. Discount rate was determined by using

weighted average cost of capital of the Group.

14 Other intangible assets

Technology Customer Software licenses and contracts and licenses knowhow relationship Total (in thousand Baht) Cost At 1 January 2018 936,393 - - 936,393 Additions 77,220 - - 77,220 Disposals/written off (4,371) - - (4,371) Transfers in 26,875 - - 26,875 Currency translation differences (331) - - (331) At 31 December 2018 1,035,786 - - 1,035,786 Acquisition through business combinations

67,948

374,341

153,597

595,886

Additions 75,313 - - 75,313 Disposals/written off (9,610) - - (9,610) Transfers in 10,108 - - 10,108 Currency translation differences (2,928) - - (2,928) At 31 December 2019 1,176,617 374,341 153,597 1,704,555




Technology Customer Software licenses and contracts and licenses knowhow relationship Total (in thousand Baht) Accumulated amortization At 1 January 2018 659,983 - - 659,983 Amortization charge for the year 72,544 - - 72,544 Disposals/written off (4,295) - - (4,295) Currency translation differences (162) - - (162) At 31 December 2018 728,070 - - 728,070 Acquisition through business combinations

64,403

-

-

64,403

Amortization charge for the year 77,624 24,081 8,319 110,024 Disposals/written off (9,598) - - (9,598) Currency translation differences (2,376) - - (2,376) At 31 December 2019 858,123 24,081 8,319 890,523 Carrying amount At 31 December 2018 307,716 - - 307,716 At 31 December 2019 318,494 350,260 145,278 814,032

15 Deferred tax assets (deferred tax liabilities)

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax assets

and liabilities, and they relate to income taxes levied by the same tax authority on the same taxable entity,

and are included in the consolidated statements of financial position as follows:

2019 2018

(in thousand Baht)

Deferred tax assets 744,955 378,649

Deferred tax liabilities (2,873,568) (216,694)

Net (2,128,613) 161,955




Movements in total deferred tax assets and liabilities during the year were as follows:

Credited (charged) to

other Increase

At 1 profit comprehensive through Currency At 31

January or loss income business translation December

2018 (Note 27) combinations differences 2018

(in thousand Baht)

Deferred tax assets

Loss carry forward 83,863 (56,067) - - - 27,796

Trade receivables 28,748 (8,144) - - - 20,604

Inventories 54,453 34,927 - - - 89,380

Property, plant and equipment 39,137 (12,310) - - (134) 26,693

Provisions for employee benefits 309,125 18,824 65,805 - (1,708) 392,046

Others 859 (5) - - (2) 852

Total 516,185 (22,775) 65,805 - (1,844) 557,371

Deferred tax liabilities

Property, plant and equipment 339,317 35,285 - 13,435 (173) 387,864

Others 41,891 (34,339) - - - 7,552

Total 381,208 946 - 13,435 (173) 395,416

Net 134,977 (23,721) 65,805 (13,435) (1,671) 161,955





other Increase

At 1 profit comprehensive through Currency At 31

January or loss income business translation December

2019 (Note 27) combinations differences 2019

(in thousand Baht)

Deferred tax assets

Loss carry forward 27,796 221,119 - 38,618 (335) 287,198

Trade receivables 20,604 6,454 - - (1) 27,057

Inventories 89,380 15,255 - 6,241 (43) 110,833

Property, plant and equipment 26,693 (4,686) - - 116 22,123

Provisions for employee benefits 392,046 137,085 38,139 144,303 (2,237) 709,336

Others 852 2,681 - - (71) 3,462

Total 557,371 377,908 38,139 189,162 (2,571) 1,160,009

Deferred tax liabilities

Property, plant and equipment 387,864 55,489 - 2,727,285 1,603 3,172,241

Other intangible assets - (32) - 106,011 (3) 105,976

Others 7,552 (741) - 3,599 (5) 10,405

Total 395,416 54,716 - 2,836,895 1,595 3,288,622

Net 161,955 323,192 38,139 (2,647,733) (4,166) (2,128,613)




The deductible temporary differences and unused tax losses that the Group have not been recognized as

deferred tax assets (liabilities) are as the following items:

2019 2018 (in thousand Baht)

Temporary differences

- Trade receivables 46,848 57,417 - Inventories 622 5,522

- Provisions for employee benefits 92,159 96,368

- Property, plants and equipment 3,328 22,624 - Others 67,957 29,058

Unused tax losses 449,646 140,677

Total 660,560 351,666

The deductible temporary differences do not expire under current tax legislation and the tax losses which

would be expired within 2024. The Group has not recognized these items in deferred tax assets.

As at 31 December 2019 and 2018, no deferred tax liability has been recognized in respect of temporary

differences associated with investments in subsidiaries, where the Group is in a position to control the timing

of the reversal of the temporary differences and it is probable that such difference will not reverse in the

foreseeable future.

16 Changes in liabilities arising from financing activities

Note

Bank overdrafts

and

short-term borrowings

Long-term borrowings

Finance

lease liabilities Total

(in thousand Baht)

Balance at 1 January 2019 27,728,164 739,125 29,150 28,496,439 Changes from financing cash flows 10,451,382 11,559,751 (65,136) 21,945,997

Changes arising from obtaining subsidiaries 4 2,923,100 6,412,714 160,282 9,496,096

The effect of changes in foreign exchange rates (143,941) (209,530) (1,158) (354,629)

Balance at 31 December 2019 40,958,705 18,502,060 123,138 59,583,903




17 Bank overdrafts and borrowings from financial institutions

2019 2018

(in thousand Baht)

Current

Bank overdrafts and short-term borrowings from financial institutions

Unsecured 7,131,509 4,312,464

Total 7,131,509 4,312,464

Current portion of long-term borrowings from financial institution

Secured 2,037,784 -

Unsecured 145,851 151,996

Current portion of long-term borrowings 2,183,635 151,996

9,315,144 4,464,460

Non-current

Long-term borrowings from financial institutions

Secured 3,405,857 -

Unsecured 12,912,568 587,129

16,318,425 587,129

Total 25,633,569 5,051,589

The currency denomination of interest-bearing debts, as at 31 December 2019 were as follows:


Thai Baht 14,462,270 3,171,799

US Dollars 7,677,933 514,189 Indonesian Rupiah 2,051,454 -

Vietnamese Dong 899,652 1,036,250

Malaysian Ringgit 426,313 329,351 Philippines Peso 115,947 -

Total 25,633,569 5,051,589




The periods to maturity of interest-bearing liabilities, excluding finance lease liabilities, as at

31 December 2019 were as follows:

2019 2018

(in thousand Baht)

Within one year 9,315,143 4,464,460

After one year but within five years 15,597,076 527,656

After five years 721,350 59,473

Total 25,633,569 5,051,589

As at 31 December 2019, bank overdrafts and short-term borrowings from financial institutions of the Group

has an average interest rate from 1.28% to 9.75% per annum (31 December 2018: 1.58% to 5.70%

per annum).

As at 31 December 2019, long-term borrowings from financial institutions of the Group has an average

interest rate from 2.40% to 12.11% per annum (31 December 2018: 3.50% to 6.97% per annum).

The collateral of the secured interest-bearing liabilities from the business acquisition in Indonesia as at

31 December 2019 consists of property, plant and equipment with a carrying value of Baht 9,633 million.

The Group has to comply with certain covenants. As at 31 December 2019, the Group is in compliance with

all the terms and conditions of the loans agreement. The Group has already signed facility agreement for

unsecured long-term borrowings from financial institutions with principal amount totaling US Dollars 180

million and Indonesian Rupiah 700,000 million to refinance existing loans.

As at 31 December 2019, the Group had unutilized credit facilities totaling Baht 15,125 million. In January 2020, the Company has drawn-down under loan agreements for Baht 14,500 million.




18 Trade and other current payables

Note 2019 2018

(in thousand Baht)

Trade payables

Related parties 5 1,020,867 1,336,324

Other parties 6,436,244 5,484,711

7,457,111 6,821,035



Other parties 2,389,490 1,495,507

2,601,453 1,752,631

Total 10,058,564 8,573,666

19 Finance lease liabilities

Subsidiaries entered into leased machinery and equipment agreements. Lease terms are for a period of

3 - 5 years. Finance lease liabilities as at 31 December are as follows:

Principal Interest Payments

(in thousand Baht)

Year 2019

Within one year 87,801 8,998 96,799

After one year but within five years 35,337 1,663 37,000

Total 123,138 10,661 133,799

Year 2018

Within one year 13,823 1,050 14,873

After one year but within five years 15,327 666 15,993

Total 29,150 1,716 30,866





The Group operates defined benefit plans based on the requirement of the Thai Labor Protection Act B.E.

2541 to provide retirement benefits and other long-term benefits to employees based on pensionable

remuneration and length of service.

The defined benefit plans expose the Group to actuarial risks, such as longevity risk, current risk, interest

rate risk and market (investment) risk.

Non-current provisions for employee benefits in consolidated statement of financial position as at 31 December

2019 2018

(in thousand Baht) Post-employment benefits

Legal severance payments plan 3,248,040 1,800,293

Pension 46,027 41,682 Other long-term employee benefits 92,437 86,224

Total non-current provisions for defined benefit plans 3,386,504 1,928,199

Other employee benefits 10,552 -

Total 3,397,056 1,928,199 Less plan assets of foreign subsidiaries (21,699) (22,561)

Total non-current provisions for employee benefits - net 3,375,357 1,905,638

Movement in the present value of non-current provisions for defined benefits plans


Non-current provisions for defined benefit plans at 1 January 1,928,199 1,508,125

Included in profit or loss

Current service costs 165,863 88,992

Interest on obligation 109,898 54,128 Actuarial losses 15,472 9,029

Transfer of employee benefit obligations from related party 13,547 -

Past service cost from the amended severance pay of the Labor Law 527,368 -

832,148 152,149




2019 2018

(in thousand Baht)

Included in other comprehensive income

Actuarial losses 200,672 343,401 Currency translation differences (11,926) (12,054)

188,746 331,347

Others

Benefits paid (139,803) (71,668)

Acquisition through business combinations 577,214 - Others - 8,246

437,411 (63,422)

Non-current provisions for defined benefit plans at 31 December 3,386,504 1,928,199

On 5 April 2019, the Labor Protection Act has already been announced in Royal Gazette that became

effective on 5 May 2019 to include a requirement that an employee who is terminated after having been

employed by the same employer for an uninterrupted period of twenty years or more, receives severance

payment of 400 days of wages at the most recent rate, which is increased from the maximum rate of 300

days. The Group recognized the effect of this change as the expense amounted to Baht 527 million in

consolidated income statement, resulting in the decrease in net profit amounted to Baht 338 million.

Movements in the fair value of plan assets of foreign subsidiaries

2019 2018

(in thousand Baht)

Plan assets at 1 January 22,561 26,184

Contributions paid into the plan 7,315 4,786

Benefits paid (7,315) (8,211)

Expected return on plan assets - 1,261

Actuarial gains - 174

Currency translation differences (862) (1,633)

Plan assets at 31 December 21,699 22,561




Actuarial losses (gains) recognized in other comprehensive income as of the end of the reporting period

arising from:

2019 2018

(in thousand Baht)


Demographic assumptions (1,348) 69,614

Financial assumptions 158,479 21,726

Experience adjustment 43,541 251,887

Total 200,672 343,227

Actuarial assumptions

Principal actuarial assumptions as of the end of the reporting period

2019 2018

(%)


Discount rate *

- Thailand 1.46 - 1.90 2.67 - 3.51

- Vietnam 4.01 5.10

- Indonesia 7.5 - 8.05 5.40 - 8.60

- Philippines 5.50 6.17

Salary increase rate 2.00 - 8.00 3.00 - 7.00

Employee turnover rate ** 2.00 - 50.00 0.00 - 30.00

Mortality rate *** 50.00, 100.00 50.00, 100.00

of TMO2017 of TMO2017

* Market yields on government’s bonds for legal severance payments plan and pension

** Upon the length of service

*** Reference from TMO2017: Thai Mortality Ordinary Table 2017




Sensitivity analysis

Reasonably possible changes at the end of the reporting period to one of the relevant actuarial assumptions,

holding other assumptions constant, would have affected the non-current provisions for defined benefit

plans by the amounts shown below.

Effect on the non-current provisions for defined benefit plans at 31 December

Increase (decrease)

2019 2018

(in thousand Baht)

Discount rate

0.50% increase (147,956) (90,188)

0.50% decrease 161,670 98,360

Salary increase rate

1.00% increase 322,451 193,545

1.00% decrease (276,639) (166,651)

Employee turnover rate

10.00% increase (74,066) (44,674)

10.00% decrease 77,347 46,603

Although the analysis does not take account of the full distribution of cash flows expected under the plan,

it does provide an approximation of the sensitivity of the assumptions shown.

Plan assets of foreign subsidiaries

2019 2018

(%)


Discount rate 5.50 6.17




21 Share capital

2019 2018

Par Number Number

Value of shares Value of shares Value

(in Baht) (in thousand shares / thousand Baht) (in thousand shares / thousand Baht)

Authorized

At 1 January

- ordinary shares 10 - - 156,300 1,563,000

Reduction in par value

- ordinary shares 1 1,563,000 1,563,000 - -

Increase of new shares

- ordinary shares 1 2,937,000 2,937,000 - -

At 31 December

- ordinary shares 10 - - 156,300 1,563,000

- ordinary shares 1 4,500,000 4,500,000 - -

Issued and paid-up

At 1 January

- ordinary shares 10 - - 156,300 1,563,000


- ordinary shares 1 1,563,000 1,563,000 - -


- ordinary shares 1 1,563,000 1,563,000 - -

At 31 December

- ordinary shares 10 - - 156,300 1,563,000

- ordinary shares 1 3,126,000 3,126,000 - -




On November 25, 2019, at the extraordinary general meeting of shareholders of the Company, shareholders

approved as follows;

1. Reduction in par value of the Company’s shares, from Baht 10 per share, totaling 156,300,000 shares to

Baht 1 per share, totaling 1,563,000,000 shares. As a result, the number of authorized shares, and issued and

paid-up shares increased by 1,406,700,000 shares. The authorized share capital and issued and paid-up

share capital of the Company remain unchanged. The Company completed the registration of the change

with the Ministry of Commerce on 25 November 2019.

2. Increasing of authorized share capital of the Company from Baht 1,563 million to Baht 4,500 million by

issuing stock dividends of 1,563,000,000 shares at par value of Baht 1 per share in the ratio of 1 current

share per 1 dividend share and issuing new ordinary shares of 1,374,000,000 shares at par value of Baht

1 per share. The Company completed the registration of the change with the Ministry of Commerce on

25 November 2019.

22 Reserves and other components of shareholders’ equity

Share premium

Section 51 of the Public Companies Act B.E. 2535 requires companies to set aside share subscription monies

received in excess of the par value of the shares issued to a reserve account (“share premium”). Share

premium is not available for dividend distribution.

Legal reserve

Section 116 of the Public Companies Act B.E. 2535 requires that a company shall allocate not less than 5%

of its annual net profit, less any accumulated losses brought forward (if any), to a reserve account (“legal

reserve”), until this account reaches an amount not less than 10% of the registered authorized capital.

The legal reserve is not available for dividend distribution.

Currency translation differences

The currency translation differences account within equity comprises all foreign currency differences arising

from the translation of the financial statements of the Group’s foreign operations until disposal of

investment.




23 Business segment information

Segment information is presented in respect of the Group’s business segments. The primary format, business

segments, is based on the Group’s management and internal reporting structure.

Segment assets, revenues and results of operations include items directly attributable to a segment as well

as those that can be allocated on a reasonable basis.

Business segments

The Group comprises the following main business segments:

Integrated Packaging Chain Manufacture and sale of packaging paper, various types of packaging, including

fiber-based packaging and performance and polymer packaging (flexible

packaging and rigid packaging);

Fibrous Chain Manufacture and sale of pulp, dissolving pulp, printing and writing paper and

food service products; and

Other Holding company

The business segment information is used by management to evaluate the performance of segments and

to allocate resources. The Group evaluates operating performance based on EBITDA.

Information relating to business segments for years ended 31 December was as follows:


Not

es t

o th

e fin

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al s

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men

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SCG

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year

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Tota

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113,

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66

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27

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69

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13

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9,41

8,07

3

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1,72

8,49

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1,

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266,

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15

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)

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)

10,7

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9,

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Long

-term

bor

row

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3,98

7,80

1

27

4,82

9

365,

961

32

7,62

7

12,0

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-

--

16,3

53,7

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60

2,45

6

Oth

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5,31

8,25

9

1,

474,

455

704,

891

55

0,47

1

306,

094

16

7,59

9

--

6,32

9,24

4

2,

192,

525

Tota

l liab

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s60

,187

,882

29,7

39,4

05

4,

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393

5,20

2,32

7

46

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23,6

63,8

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(3

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0,93

3)

(18,

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76

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39,9

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54

Shar

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ders

’ equ

ity53

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36,6

98,6

21

21

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21,8

92,9

86

23

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23,8

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62

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53,2

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Tota

l lia

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' equ

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3,69

2,34

5

66,4

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26

25,9

44,0

41

27,0

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13

69,8

61,0

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56

(69,

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(4

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0)

139,

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93

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Cons

olid

ated

(in th

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nd B

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Inte

grat

ed P

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Inte

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Chain

Fibro

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Info

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year

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2019

2018

2019

2018

2019

2018

2019

2018

2019

2018

Info

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ion

from

inco

me

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t

Reve

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from

sal

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Ext

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44,6

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19

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7

349,

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1,

349,

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-

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l rev

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-

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(2

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89

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54,8

69

Cost

of s

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245,

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(5

3,76

6,60

7)

(17,

483,

358)

(1

7,64

8,38

8)

--

2,07

7,40

3

2,

340,

713

(71,

651,

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(6

9,07

4,28

2)

Gros

s pr

ofit

15,7

60,4

16

14

,815

,936

1,31

0,67

3

3,

097,

602

--

347,

433

26

7,04

9

17,4

18,5

22

18

,180

,587

Oth

er in

com

e91

4,17

9

614,

117

22

2,95

3

139,

907

3,

154,

113

9,

515,

791

(3

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,031

)

(9

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,864

)

84

1,21

4

514,

951

Prof

it be

fore

exp

ense

s16

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,595

15,4

30,0

53

1,

533,

626

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7,50

9

3,

154,

113

9,51

5,79

1

(3

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(9

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)

18

,259

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18,6

95,5

38

Ope

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)

(2

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)

(2

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(1

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,573

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(1

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)

1,

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1,49

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6

(9

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(9

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,476

)

Prof

it be

fore

fina

nce

cost

and

inco

me

tax

9,07

4,58

4

8,

292,

334

(546

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)

702,

771

1,

522,

540

8,14

1,58

6

(1

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,195

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(7

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)

8,

506,

397

9,14

8,06

2

Finan

ce c

ost

(1,2

37,2

71)

(757

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)

(82,

462)

(8

6,91

7)

(299

,440

)

(195

,404

)

356

10

0

(1,6

18,8

17)

(1,0

39,6

37)

Prof

it be

fore

inco

me

tax

7,83

7,31

3

7,

534,

918

(628

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)

615,

854

1,

223,

100

7,94

6,18

2

(1

,543

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)

(7

,988

,529

)

6,

887,

580

8,10

8,42

5

Tax

expe

nse

(1,2

22,8

21)

(1,2

10,8

71)

155,

075

(6

9,69

0)

22,5

48

(2

1,18

8)

(3,8

50)

34,2

27

(1

,049

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)

(1

,267

,522

)

Prof

it af

ter i

ncom

e ta

x6,

614,

492

6,32

4,04

7

(4

73,9

19)

54

6,16

4

1,24

5,64

8

7,

924,

994

(1,5

47,6

89)

(7,9

54,3

02)

5,83

8,53

2

6,

840,

903

Shar

e of

pro

fit (l

oss)

of a

ssoc

iates

--

39,4

85

(3

1,75

4)

13,2

43

17

,151

--

52,7

28

(1

4,60

3)

Prof

it fo

r the

per

iods

6,61

4,49

2

6,

324,

047

(434

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Geographical segment

The Group has expanded its investment and operating in foreign countries. All significant revenue from sales

and non-current assets based on geography is presented in this information. Segment revenue is based on

the geographical location of customers and segment non-current assets are based on the geographical

location of the assets.

Geographical segment information

Revenue from sales Non-current assets

2019 2018 2019 2018

(in thousand Baht)

Thailand 50,800,749 53,239,701 55,042,618 50,809,531

Vietnam 10,543,127 12,588,791 6,618,906 7,157,397

Indonesia 8,594,958 2,248,781 36,821,744 897,276

Philippines 3,447,985 4,532,188 1,899,849 1,166,116

Others 15,683,048 14,645,408 1,094,148 1,131,454

Total 89,069,867 87,254,869 101,477,265 61,161,774

Major customer

The Group has no revenue from one customer for the amount over 10% of the Group’s total revenue from

sales for 2019 and 2018.




24 Distribution costs

2019 2018

(in thousand Baht)

Freight and commission expenses 3,090,286 3,128,160

Salary, welfare and employee expenses 797,842 844,527

Custom, insurance expense and intellectual properties fees 334,694 354,057

Sales promotion and advertising expenses 223,947 277,663

Rent, depreciation and amortization 94,034 120,058

Others 259,804 240,185

Total 4,800,607 4,964,650


2019 2018

(in thousand Baht)

Salary, welfare and employee expenses 2,451,551 2,535,031

Professional and consultant fees 577,981 536,498

Service expenses 344,270 336,352

IT fees 298,308 278,274

Rent, depreciation and amortization 281,932 253,700

Loss from decline in value of inventory - 185,720

Idle costs 68,287 65,111

Others 403,035 392,140

Total 4,425,364 4,582,826





2019 2018

(in thousand Baht)

Salaries and wages 7,811,125 7,235,438

Contribution to defined contribution plans 449,068 420,226

Contribution to defined benefit plans 818,601 152,149

Early retirement expenses 23,705 85,590

Others 922,963 780,059

Total 10,025,462 8,673,462

The Group has provident fund plans to provide retirement and gratuity benefits to employees upon

resignation at 5% to 10% of the employee’s salaries, depending on the length of employment.

The defined contribution plans comprise provident funds established by the Group for its employees

in addition to the above provident fund. The provident funds were registered with the Ministry of Finance

under the Provident Fund Act B.E. 2530. Membership to the funds is on a voluntary basis. Contributions are

made monthly by the employees at 2% to 15% of their basic salaries and by the Company at 5% to 13%

of the members’ basic salaries, depending on the length of employment.

27 Income tax

Income tax recognized in profit or loss

Note 2019 2018

(in thousand Baht)

Current tax

Current tax expense 1,383,451 1,233,316

Under (over) provided in prior years (11,211) 10,485

1,372,240 1,243,801

Deferred tax

Movements in temporary differences 15 (323,192) 23,721

Total 1,049,048 1,267,522




Income tax recognized in other comprehensive income

2019 2018

(in thousand Baht)

Actuarial losses (38,683) (66,578)

Reconciliation of effective tax rate

For the years ended 31 December 2019 and 2018, the Group’s effective tax rate is not equal to the statutory

tax rate of 20% under the Revenue Code because income tax expense is calculated from accounting profit

adjusted by non-deductible expenses, deducted income or expense exemption under the Revenue Code

and utilized the tax losses carried forward from prior years and also had the exempted net profit from the

promoted business.

2019 2018

Rate

(%)

(in thousand

Baht)

Rate

(%)

(in thousand

Baht)


Share of loss (profit) of associates (52,728) 14,603

6,887,580 8,108,425

Income tax using the Thai corporation tax rate 20 1,377,516 20 1,621,685

Tax rates in foreign jurisdictions 64,825 73,756

Income not subject to tax (44,567) (5,684)

Tax privileges (408,357) (456,352)

Expenses deductible at a greater amount (55,233) (57,301)

Expenses not deductible for tax purposes and others 182,192 46,302

Prior year revenue subject to tax in current year - 34,638

Tax losses increase (decrease) 267,075 (23,728)

Current tax expense 1,383,451 1,233,316

Under (over) provided in prior years (11,211) 10,485

Movement in temporary differences (323,192) 23,721

Income tax expense 15 1,049,048 16 1,267,522




28 Promotional privileges

By virtue of the provisions of the Investment Promotion Act of B.E. 2520, the Group was granted the following

privileges.

50% Deduction

Exemption from of normal

corporate income corporate income

tax for 8 years from tax for 5 years from

Thai Containers Rayong Co., Ltd.

Manufacture of corrugated paper and cartons 4 January 2009 4 January 2017

Visy Packaging (Thailand) Limited

Manufacture of plastics sheet and plastics product 23 September 2009 23 September 2017

Manufacture of plastic containers 18 July 2013 18 July 2021

Manufacture of plastic containers 4 July 2014 4 July 2022

Manufacture of plastic containers 29 August 2015 29 August 2023

Manufacture of plastics sheet and plastics product 6 July 2017 6 July 2025

50% Deduction

of normal

corporate income

tax for 3 years from

Thai Containers Group Co., Ltd.

Alternative energy (Chonburi) 4 September 2018

Alternative energy (Prachinburi) 4 September 2018

Thai Containers Khonkaen Co., Ltd.

Alternative energy 21 August 2019




Exemption from

corporate income


Phoenix Utilities Co., Ltd.

Manufacture of electricity and steam 1 April 2011

The Siam Forestry Co., Ltd.

Eucalyptus forest plantation 19 June 2013

Siam Kraft Industry Co., Ltd.

Manufacture of kraft paper 17 March 2011

Manufacture of kraft paper 21 September 2011

Manufacture of kraft paper 15 December 2012

Thai Cane Paper Public Company Limited

Manufacture of kraft paper 21 May 2013

Manufacture of kraft paper 21 February 2014

SCG Paper Energy Co., Ltd.

Power management 1 November 2017

Electricity production 19 October 2018

Electricity production 1 June 2019

Thai Containers Group Co., Ltd.

Manufacture of corrugated paper 3 October 2011

Manufacture of corrugated paper 1 October 2012

Manufacture of corrugated paper 9 June 2017

Precision Print Co., Ltd.

Manufacture of printing 10 August 2015




Exemption from

corporate income


Thai Paper Co., Ltd.

Manufacture of coated plastic - Hygienic 29 July 2012

Exemption from

corporate income



Manufacture of glassine paper 11 April 2017

Prepack Thailand Co., Ltd.

Manufacture of printing 7 March 2016

Exemption from

corporate income


Phoenix Pulp & Paper Public Company Limited

Manufacture of dissolving pulp 10 February 2015

Manufacture of Pulp 22 July 2017

Manufacture of hygienic food packaging 22 March 2018


Manufacture of Pulp 17 February 2016

Manufacture of hygienic food packaging 3 November 2016

Manufacture of hygienic food packaging 2 March 2018




Exemption from

corporate income


Siam Kraft Industry Co., Ltd.

Manufacture of gypsum paper 21 May 2015

Manufacture of industrial paper bag 22 September 2015 Vina Kraft Paper Co., Ltd. also obtained privileges from a government agency in Vietnam to pay income tax

at a reduced rate of 15% of taxable profits for the first 12 years starting from the first year of operation, and

exemption from corporate income tax for 3 years from the year that profit is first reported and 50%

deduction of the said corporate income tax for 7 years thereafter. Vina Kraft Paper Co., Ltd. also obtained privileges from a government agency in Vietnam for Expanding capacity project

No.2 to pay income tax at a reduced rate of 10% of taxable profits for the first 6 years starting from the first year of

operation, and exemption from corporate income tax for 2 years from the year that profit is first reported.

New Asia Industries Co., Ltd. also obtained privileges from a government agency in Vietnam to pay income

tax at a reduced rate of 15% of taxable profits until 2021.

Alcamax Packaging (Vietnam) Co., Ltd. also obtained privileges from a government agency in Vietnam to pay

income tax at a reduced rate of 15% of taxable profits until 2027.

AP Packaging (Hanoi) Co., Ltd. also obtained privileges from a government agency in to pay income tax at

a reduced rate of 10% of taxable profits until 2052.

As promoted companies, the Group must comply with certain conditions and restrictions provided

for in the promotional certificates.





The calculations of basic earnings per share for the years ended 31 December was based on the profit for

the years attributable to owners of the parent and the weighted average number of ordinary shares

outstanding during the years, after adjusting the number of ordinary shares in proportion to the change in

the number of shares as a result of the stock split and distribution of stock dividend disclosed in note 21

and 30. The number of ordinary shares used in the calculation are adjusted as if such change had occurred

at the beginning of the earliest reporting period as follows:

2019 2018

(in thousand Baht / thousand shares) Profit for the year attributable to ordinary shareholders

of the Company 5,268,511 6,065,539

Weighted average number of ordinary shares outstanding

at 1 January 156,300 156,300

Effect of reduction in par value 1,406,700 1,406,700 Effect of stock dividend 1,563,000 1,563,000

Weighted average number of ordinary shares outstanding

at 31 December 3,126,000 3,126,000

Basic earnings per share (in Baht) 1.69 1.94

30 Dividends The dividends paid by the Company to the shareholders are as follows:

Approval date Payment schedule

Dividend rate

per share Amount (Baht) (in million Baht)

2019

Annual dividend 2018 26 March 2019 25 April 2019 10.00 1,563 Interim dividend 25 November 2019 6 December 2019 1.11111111 1,737

Total 11.11111111 3,300

2018

Annual dividend 2017 23 March 2018 20 April 2018 50.00 7,815




On 25 November 2019, at the extraordinary general meeting of shareholders of the Company, they passed

resolution to approve the interim dividend payment, details are as follows;

1. Pay dividend by ordinary shares of 1,563,000,000 shares at par value of Baht 1 per share, in the ratio

of 1 current share per 1 dividend share.

2. Pay dividend by cash at Baht 0.11111111 per share, totaling Baht 174 million.

31 Agreements As at 31 December, the Group had:

(a) Lease agreements for cars with local companies. The terms of the leases are up to 2020 through 2024

with the annual rental fees of Baht 115 million.

(b) Lease agreements for land, building, structure and others with local companies. The terms of the

leases are up to 2020 through 2037 with the annual rental fees of Baht 229 million.

(c) A subsidiary entered into a lease agreement with a government entity for the use of a parcel of land

situated at Ubolrat Settlement Area, Khon Kaen Province as its plant site. The agreement is for

a period of 3 years (with annual rental of Baht 7 million).

(d) A subsidiary entered into a lease agreement with an associate covering the land where its

factory is located. The agreement has a period of 50 years commencing from 2003, renewal for

another 25 years with the annual rental fee of Peso 19.2 million.

(e) Land leasehold agreement with a foreign company as its plant site. The agreement has a period of

50 years commencing from January 2007. The Company already paid rental in advance amounting to

US Dollars 4.8 million which present included under “Other non-current receivables” in the statement

of financial position.

(f) A subsidiary entered into a lease agreement with a foreign company covering the land where its

factory is located. The agreement has a period of 25 years commencing from December 1996. The

Company already paid rental in advance amounting to US Dollars 1.2 million which present included

under “Other non-current receivables” in the statement of financial position.




(g) Three subsidiaries entered into lease agreements with foreign companies covering the land where

their factories are located. Agreements have a period of 49 years commencing from April 1997. The

Company already paid rental in advance amounting to US Dollars 2.6 million which present included


(h) A subsidiary entered into lease agreements with foreign companies covering the land where its factory

is located. Agreements have a remaining period of 37 years expiring in the year 2053. The Company

already paid rental in advance amounting to Vietnamese Dong 40,241 million which present included


(i) A subsidiary has entered into a lease agreement with foreign company covering the land where its

factory is located. The agreement has a period of 6 years commencing from 2019, renewal for another

3 years with the annual rental fee of Malaysian Ringgit 2.28 million.

(j) A subsidiary has entered into agreements with a foreign company for the delivery and loading of

Woodchips to Vessel. As at 31 December 2019, the subsidiary is committed to sell and deliver the

Woodchips in volume equivalent to approximately 48,000 BDMT per year. The agreement period is

for 12 years with the commencement date in December 2034.

(k) A subsidiary has entered into agreements with a local company for provide Biofuel to delivery point.

As at 31 December 2019, the subsidiary is committed to sell and deliver the Biofuel in volume

equivalent to approximately 73,000 tons per year. The agreement period is for 25 years with the

commencement date in August 2037.


Liquidity risk

The Group monitors its liquidity risk and maintains a level of cash and cash equivalents deemed adequate

to finance the Group’s operations and to mitigate the effects of fluctuations in cash flows.




Credit risk

Credit risk arises from the possibility that customers may not be able to settle obligations to the Group as

per contracts which may cause financial loss. The Group has a policy to protect this risk by assessing the

credit of customers, defining the credit limit, asking for bank guarantees and/or personnel guarantees, credit

terms, controlling credit utilization and reviewing collections. Fair value of receivables which are presented

in the statement of financial position is the balances net of allowance for doubtful accounts.

Interest rate risk

Interest rate risk arises from the changing of interest rates in the market, which may effect current and future

operations of the Group. Management believes that the interest rate risk is minimal, hence, the Group does

not have any hedging agreement to protect such risk.

The effective interest rates of loans receivable as at 31 December and the periods in which the loans

receivables mature were as follows:

Loans receivable

After 1 year

Effective interest

rates

Within

1 year

but within

5 years

After

5 years

Total

(% per annum) (in million Baht)

2019

Current

Short-term loans 3.50 - 4.30 5 - - 5

2018

Current

Short-term loans 3.80 - 4.80 127 - - 127

Long-term loans 3.40 93 - - 93

Total 220 - - 220




The effective interest rates of interest-bearing financial liabilities as at 31 December and the periods in which

those liabilities mature were as follows:

Financial liabilities

After 1 year Effective interest

rates Within 1 year

but within 5 years

After 5 years

Total

(% per annum) (in million Baht) 2019 Current Bank overdraft and MMR, MLR minus 0.50, short-term borrowings Cost of fund plus

from financial institutions

(0.50 - 2.00), LIBOR plus (1.25 - 3.00),

1.28 - 9.50 7,132 - - 7,132 Short-term borrowings from related parties 3.50 - 8.70 33,827 - - 33,827 Long-term borrowings MLR minus 2.75, from related parties Cost of fund plus

(0.65 - 0.67)

LIBOR 3-6 months plus (1.20 - 3.75), VNIBOR plus 0.50, JIBOR plus 4.40,

4.35 - 10.90 2,184 - - 2,184

Finance lease liabilities 3.78, 7.00, 10.25 - 15.00, 21.60 88 - - 88

Non-current Long-term borrowings MLR minus 2.75, from financial

institutions Cost of fund plus

(0.65 - 3.78), LIBOR 3-6 months

plus (1.20 - 3.75), VNIBOR plus 0.50 JIBOR plus 4.40,

1.75 - 10.90

-

15,597

721

16,318 Finance lease liabilities 3.78, 7.00, 10.25 - 15.00, 21.60 - 35 - 35 Total 43,231 15,632 721 59,584




After 1 year

Effective interest rate

Within 1 year

but within 5 years

After 5 years

Total

(% per annum) (in million Baht) 2018 Current Bank overdrafts and MMR, MOR minus 1.75, short-term borrowings Cost of fund plus from financial

institutions (0.50 - 0.75), 1.58 - 5.70

4,312

-

-

4,312

Short-term borrowings 3.75 23,416 - - 23,416 from related parties Long-term borrowings MLR minus from financial (0.50 - 2.35), institutions Cost of fund plus 0.75, VNIBOR plus 0.50, 3.65 152 - - 152 Finance lease liabilities 1.04 - 3.78, 6.10, 21.60 14 - - 14 Non-current Long-term borrowings MLR minus from financial (0.50 - 2.35), institutions Cost of fund plus (0.65 - 1.75), VNIBOR plus 0.50, 3.65 - 528 59 587 Finance lease liabilities 1.04 - 3.78, 6.10, 21.60 - 15 - 15 Total 27,894 543 59 28,496

Foreign exchange risk

Foreign currency risk arises from the fluctuation of foreign exchange rates.

The Group has a policy to enter into forward exchange contracts to manage foreign exchange risk related

to assets and liabilities denominated in foreign currencies.




Fair values of financial assets and liabilities

The fair value of current portion of financial assets and liabilities are taken to approximate the carrying value

due to the relatively short-term maturity of these financial instruments.

The fair value of long-term borrowings carrying a floating rate, which is considered to be market rate, are

taken to approximate their fair values.

Other financial assets and liabilities not stated above had the fair and carrying value at 31 December as

follows:

2019 2018

Carrying Fair value Carrying Fair value

amount Level 2 amount Level 2

(in million Baht)

Current

Long-term borrowings 12,041 12,041 - -

Forward exchange contracts*

Forward receivable 1,759 1,748 827 818

Forward payable 1,788 1,755 1,070 1,059

* The fair value of forward exchange contracts were calculated using the rates initially quoted by the

Group’s bankers which were based on market conditions existing at the end of the reporting period to

reflect current fair values of the contracts.

The Group determines Level 2 fair values for debt securities using a discounted cash flow technique, which

uses contractual cash flows and a market-related discount rate.

Level 2 fair values for simple over-the-counter derivative financial instruments are based on broker quotes.

Those quotes are tested for reasonableness by discounting expected future cash flows using market interest

rate for a similar instrument at the measurement date. Fair values reflect the credit risk of the instrument

and include adjustments to take account of the credit risk of the Group and counterparty when appropriate.




33 Commitments and contingent liabilities

As at 31 December 2019, the Group had:

(a) The purchase and installation of machinery and equipment of Baht 4,571 million (2018: Baht

1,873 million).

(b) The purchase of raw material of Baht 648 million (2018: Baht 35 million).

(c) Outstanding forward exchange contracts for foreign currencies against Thai Baht as follows:

Contract amount

Forward Receivable Forward Payable

Currency Equivalent to Baht Currency Equivalent to Baht

2019 2018 2019 2018 2019 2018 2019 2018

(in million) (in million Baht) (in million) (in million Baht)

US Dollars 57 25 1,715 822 47 24 1,458 769

Yen 93 - 27 - 299 23 85 7

Yuan 3 - 13 - - - 1 -

Euro - - 1 - 7 8 241 293

Other 3 5 3 1

Total 1,759 827 1,788 1,070

The above contracts are due within November 2020 (2018: due within December 2019).

(d) Contingent liability for letter of guarantees issued by local banks for the Group to government

organizations of Baht 85 million (2018: Baht 67 million).

(e) Contingent liability for borrowings guarantees issued by a local bank for the Group to associate which

limit is not exceed Baht 264 million (2018: Baht 330 million).





The management of the Group has the capital management policy to maintain a strong capital base by

emphasis on planning and determining the operating strategies resulting in good business’s performance

and sustained good cash flows management. In addition, the Group considers investing in projects which

have good rate of return, appropriate working capital management, maintain a strong financial position and

appropriate investment structure as to maintain sustained future operations of the business and to maintain

shareholders, investors, creditors and others interest’s confidence.

35 Others

On 26 October 2019, The Board of Directors’ Meeting No. 214 (10/2019) has approved the plan to issue and

offer newly issued ordinary shares in the Company as an initial public offering (IPO) and to list the ordinary

shares in the Company on the Stock Exchange of Thailand. The portion of the shares to be offered for sale

in the IPO will not exceed 30% of the Company’s paid-up capital after its capital increase.

On 17 December 2019, the Company submitted to Thai SEC a registration statement and draft prospectus

for the IPO. In connection with the IPO, the Company will issue and offer no more than 1,374,000,000

ordinary shares with a par value of 1 Thai Baht per share.


(a) At the Board of Directors’ Meeting of the Company held on 28 January 2020, the directors proposed

for approval at the Annual General Meeting of Shareholders, the payment of a dividend for 2019 at the

rate of Baht 0.42 per share, amounting to Baht 1,313 million and is scheduled for payment on 23 April

2020. The dividend is subject to the approval of the Shareholders at the Annual General Meeting to be

held on 24 March 2020.

(b) On 31 January 2020 United Pulp and Paper Co., Inc. (“UPPC”), a subsidiary has entered into a conditional

share subscription agreement with Rengo Co., Ltd. whereby Rengo will subscribe to the newly issued

shares at the total value of approximately Baht 2,500 million. The Group’s investment in UPPC will

decrease from 99.7% to 74.7%, UPPC will remain consolidated subsidiary of the Group. The transaction

is expected to be completed in the second quarter of 2020.





The new and revised TFRSs, which are relevant to the Group’s operations, become effective for the financial

statements in annual reporting periods beginning on or after 1 January 2020. The Group does not adopt

these TFRSs early. The new TFRSs are as follows:

TFRS Topic

TFRS 7* Financial Instruments: Disclosures

TFRS 9* Financial Instruments

TFRS 16 Leases

TAS 32* Financial Instruments: Presentation

TFRIC 16* Hedges of a Net Investment in a Foreign Operation

TFRIC 19* Extinguishing Financial Liabilities with Equity Instruments

* TFRSs - Financial instruments standards

(a) TFRSs - Financial instruments standards

These TFRSs - Financial instruments standards establish requirements related to definition, recognition,

measurement, impairment and derecognition of financial assets and financial liabilities, including

accounting for derivatives and hedge accounting. When these TFRSs are effective, some accounting

standards, interpretations and guidance which are currently effective will be cancelled. The impact

from adoption of TFRSs - Financial instruments depends on the Group’s financial instruments by

following TFRSs - Financial instruments as follows:

(1) Classification - Financial assets

TFRS 9 classifies financial assets into three categories: measured at amortized cost, fair value

to other comprehensive income (FVOCI) and fair value to profit or loss (FVTPL). The standard

eliminates the existing classification of held-to-maturity debt securities, available-for-sale securities,

trading securities and general investment as specified by TAS 105. The classification under TFRS 9

will be based on the cash flow characteristics of the financial asset and the business model in

which they are managed. Under TFRS 9, derivatives will be measured at FVTPL. It shall replace




current accounting policies of the Group on recognition of revaluation exchange rate at the end

of period or when the derivatives were exercised.

The Group made an assessment of classification - Financial assets under TFRS 9. This adoption has

no material effect on the consolidated financial statements of the Group.

(2) Measurement at amortized cost

Under TFRS 9, interest income and interest expenses recognized from all financial assets and financial

liabilities measured at amortized cost shall be calculated using effective interest rate method. The

adoption of TFRS 9 has no material effect on the consolidated financial statements of the Group.

(3) Impairment - Financial assets

TFRS 9 introduces forward-looking Expected Credit Loss (“ECL”) model whereas currently the

Group estimates allowance for doubtful account by analyzing payment histories and future

expectation of customer payment. TFRS 9 requires consideration about how changes in economic

factors affect ECLs, which is determined on a probability-weighted basis.

The new impairment model will apply to financial assets measured at amortized cost or FVOCI,

except for investments in equity instruments.

The Group made an assessment of the impairment of financial assets under TFRS 9. This adoption

has no material effect on the consolidated financial statements of the Group.

(4) Classification - Financial liabilities

TFRS 9 introduces a new classification and measurement approach for financial liabilities consisting

of two principal classification categories: amortized cost and FVTPL. A financial liability is classified as

financial liabilities measured at FVTPL if it is held for trading, a derivative or designated as such on

the initial recognition.




The Group classified other financial liabilities which are not held for trading or derivative measured

at amortized cost. The adoption of TFRS 9 has no material effect on the group’s consolidated


(5) Hedge accounting

TFRS 9 introduces guidance on hedge accounting while current TFRSs are silent. There are three

hedge accounting models and the type of model applied depends on the hedged exposures

consisting of a fair value exposure, a cash flow exposure or a foreign currency exposure on a net

investment in a foreign operation. Under TFRS 9, the Group is required to ensure that hedge

accounting relationships are aligned with the Group’s risk management objectives and strategy and to

apply a more qualitative and forward-looking approach to assess hedge effectiveness. Accordingly,

TFRS 9 provides an option to apply hedge accounting when the transactions are qualified. At the

initial date of the first time adoption, the Group has no effect on this matter.

Transition

The Group applied these TFRSs for the first time by adjusting the cumulative impact to retained

earnings on 1 January 2020 with no restatement of comparative information.

(b) TFRS 16 Leases

TFRS 16 introduces a single lessee accounting model for lessees. A lessee recognizes a right-of-use asset

and a lease liability. There are recognition exemptions for short-term leases and leases of low-value

items. Lessor accounting remains to the current standard. When this TFRS is effective, some accounting

standards and interpretations which are currently effective will be cancelled. Currently, the Group

recognizes payments made under operating leases in income statement on a straight-line basis over

the term of the lease.

The Group made an assessment of TFRS 16 adoption. On 1 January 2020, the Group recognized the

increase in right-of-use assets approximately Baht 1,900 million while the prepaid rental expenses

decrease approximately Baht 500 million and affect to increase in lease liabilities approximately Baht

1,400 million. The nature of expenses related to those leases will change as the Group will recognize

depreciation of right-of-use assets and interest expenses on lease liabilities.




Transition

The Group applied TFRS 16 for the first time on 1 January 2020 using the modified retrospective

approach, by recognizing right-of-use assets and lease liabilities with no restatement of comparative

information.



Independent auditor’s report

To the Shareholders of SCG Packaging Public Company Limited

Opinion

I have audited the financial statements of SCG Packaging Public Company Limited (the “Company”), which

comprise the statement of financial position as at 31 December 2019 and 2018, the income statement and

statements of comprehensive income, changes in shareholders’ equity and cash flows for the years then ended,

and notes, comprising a summary of significant accounting policies and other explanatory information.

In my opinion, the accompanying financial statements present fairly, in all material respects, the financial position

of the Company as at 31 December 2019 and 2018, its financial performance and cash flows for the year then

ended in accordance with Thai Financial Reporting Standards (TFRSs).

Basis for Opinion

I conducted my audit in accordance with Thai Standards on Auditing (TSAs). My responsibilities under those

standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section

of my report. I am independent of the Company in accordance with the Code of Ethics for Professional Accountants

issued by the Federation of Accounting Professions that is relevant to my audit of the financial statements, and

I have fulfilled my other ethical responsibilities in accordance with these requirements. I believe that the audit

evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.

Other Information

Management is responsible for the other information. The other information comprises the information included

in the annual report, but does not include the financial statements and my auditor’s report thereon.

My opinion on the financial statements does not cover the other information and I do not express any form

of assurance conclusion thereon.

In connection with my audit of the financial statements, my responsibility is to read the other information and,

in doing so, consider whether the other information is materially inconsistent with the financial statements or my

knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work I have

performed, I conclude that there is a material misstatement of this other information, I am required to report that

fact. I have nothing to report in this regard.


Responsibilities of Management and Those Charged with Governance for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with

TFRSs, 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.

In preparing the financial statements, management is responsible for assessing the Company’s ability to continue

as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis

of accounting unless management either intends to liquidate the Company or to cease operations, or has no

realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements

My objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from

material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes my opinion.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance

with TSAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error

and are considered material if, individually or in the aggregate, they could reasonably be expected to influence

the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with TSAs, I exercise professional judgment and maintain professional skepticism

throughout the audit. I also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or

error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient

and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting

from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional

omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit 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 Company’s internal control.

155



• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based

on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may

cast significant doubt on the Company’s ability to continue as a going concern. If I conclude that a material

uncertainty exists, I am required to draw attention in my auditor’s report to the related disclosures in the

financial statements or, if such disclosures are inadequate, to modify my opinion. My conclusions are based

on the audit evidence obtained up to the date of my auditor’s report. However, future events or conditions

may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures,

and whether the financial statements represent the underlying transactions and events in a manner that

achieves fair presentation.

I communicate with those charged with governance regarding, among other matters, the planned scope and timing

of the audit and significant audit findings, including any significant deficiencies in internal control that I identify

during my audit.

I also provide those charged with governance with a statement that I have complied with relevant ethical

requirements regarding independence, and to communicate with them all relationships and other matters

that may reasonably be thought to bear on my independence, and where applicable, related safeguards.

(Thanyalux Keadkeaw)

Certified Public Accountant


KPMG Phoomchai Audit Ltd.

Bangkok

18 February 2020


Statement of financial position


31 December

Assets Note 2019 2018

Current assets

Cash and cash equivalents 8,580 5,673

Other current receivables 4, 5 254,306 193,394

Short-term loans to related parties 4, 23 33,950,895 17,862,997

Other current assets 125,649 22,142

Total current assets 34,339,430 18,084,206

Non-current assets

Investments in associates 6 350,121 350,121

Investments in subsidiaries 7 34,447,438 28,398,365

Other non-current receivables 14,110 11,555 Investment property 8 297,733 299,572

Property, plant and equipment 9 213,341 225,595

Intangible assets 10 30,623 30,107

Deferred tax asset 11 59,099 34,602

Other non-current assets 29,038 44,608

Total non-current assets 35,441,503 29,394,525

Total assets 69,780,933 47,478,731

(Mr. Prasarn Trairatvorakul)

Chairman

(in thousand Baht)

For and on behalf of the Board of Directors

(Mr. Wichan Jitpukdee)





• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based

on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may

cast significant doubt on the Company’s ability to continue as a going concern. If I conclude that a material

uncertainty exists, I am required to draw attention in my auditor’s report to the related disclosures in the

financial statements or, if such disclosures are inadequate, to modify my opinion. My conclusions are based

on the audit evidence obtained up to the date of my auditor’s report. However, future events or conditions

may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures,

and whether the financial statements represent the underlying transactions and events in a manner that

achieves fair presentation.

I communicate with those charged with governance regarding, among other matters, the planned scope and timing

of the audit and significant audit findings, including any significant deficiencies in internal control that I identify

during my audit.

I also provide those charged with governance with a statement that I have complied with relevant ethical

requirements regarding independence, and to communicate with them all relationships and other matters

that may reasonably be thought to bear on my independence, and where applicable, related safeguards.

(Thanyalux Keadkeaw)

Certified Public Accountant


KPMG Phoomchai Audit Ltd.

Bangkok

18 February 2020




31 December

Liabilities and shareholders’ equity Note 2019 2018

Current liabilities

Other current payables 4, 12 249,573 139,425

Short-term borrowings from related parties 4, 23 33,907,033 23,343,402

Current provisions for employee benefits 17,009 13,439

Total current liabilities 34,173,615 23,496,266

Non-current liabilities

Long-term borrowings from financial institutes 13, 23 12,000,000 -

Non-current provisions for employee benefits 14 295,507 159,578

Other non-current liabilities 10,587 8,021

Total non-current liabilities 12,306,094 167,599

Total liabilities 46,479,709 23,663,865

(in thousand Baht)





31 December

Liabilities and shareholders’ equity Note 2019 2018

Shareholders’ equity

Share capital 15

Authorized share capital

- Ordinary share 4,500,000 1,563,000

Issued and paid share capital

- Ordinary share 3,126,000 1,563,000

Share premium 16 1,935,000 1,935,000

Retained earnings

Appropriated

Legal reserve 16 218,600 156,300

General reserve 3,000 3,000

Unappropriated 18,018,624 20,157,566

Total shareholders’ equity 23,301,224 23,814,866

Total liabilities and shareholders’ equity 69,780,933 47,478,731

(in thousand Baht)



Income statement



Note 2019 2018

Dividend income 4, 6, 7 1,566,377 7,824,862

Service income 4, 27 1,532,035 1,462,451

Other income 4, 27 55,197 228,149

Gain on exchange rate 504 329

Total revenues before expenses 3,154,113 9,515,791

Administrative expenses 4, 17 (1,580,778) (1,374,205)

Employee benefit expense from the amended severance pay of the Labor Law 14, 18 (50,795) -

Total expenses (1,631,573) (1,374,205)

Profit before finance costs and income tax 1,522,540 8,141,586

Finance costs 4 (299,440) (195,404)


Tax income (expenses) 19 22,548 (21,188)


Basic earnings per share (in Baht) 20 0.40 2.54

(in thousand Baht)



Statement of comprehensive income



Note 2019 2018


Other comprehensive income


that will not be reclassified to profit or loss

Defined benefit plan actuarial losses 14 (28,246) (80,963)Income tax relating to components of other comprehensive income that will not be reclassified to profit or loss 19 5,623 16,193 Other comprehensive income for the year, net of tax (22,623) (64,770)

Total comprehensive income for the year 1,223,025 7,860,224

(in thousand Baht)



Sta

tem

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f ch

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are

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G P

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sha

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81,

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Com

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Pro

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-

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7,924

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7,924

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(64,77

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7,86

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Statement of cash flows



2019 2018

Cash flows from operating activities


Adjustments for

Tax expenses (income) (22,548) 21,188

Depreciation and amortization 40,533 41,646

Employee benefit expense 127,139 16,062

Bad and doubtful debts expenses 261 16,963

Unrealized losses (gains) on foreign currency exchange (1) 115

Gain on sales of investment - (173,185)

Losses (gains) on sales of property, plant and equipment (230) 26

Dividend income (1,566,377) (7,824,862)

Interest income (966,849) (582,567)

Interest expense 1,266,285 777,944 Cash flows generated from operations

before changes in operating assets and liabilities 123,861 218,324

Increase in operating assets

Other current receivables and other non-current receivables (50,703) (54,262)

Other current asset (71,800) -

Net increase in operating assets (122,503) (54,262)

(in thousand Baht)






Note 2019 2018

Increase (decrease) in operating liabilities

Other current payables 101,970 21,572

Provisions for employee benefits (23,860) (2,381)Other non-current liabilities 768 -

Net increase in operating liabilities 78,878 19,191

Net cash flows generated from operations 80,236 183,253

Income tax paid (11,100) (6,879)

Net cash flows provided by operating activities 69,136 176,374

Cash flows from investing activities

Investment in subsidiaries 7 (6,049,073) (1,324,099)

Proceeds from sales of property, plant and equipment 5,648 22

Acquisition of investment property - (64,261)

Acquisition of property, plant and equipment (23,866) (20,442)

Acquisition of intangible assets (11,827) (10,531)

Proceeds from sales of other investment - 257,309

Payments of short-term loans to related parties (16,087,898) (6,715,410)

Dividends received 1,566,377 7,824,862

Interest received 953,764 578,324

Net cash flows provided by (used in) investing activities (19,646,875) 525,774

(in thousand Baht)






2019 2018

Cash flows from financing activities

Proceeds from short-term borrowings from related parties 10,563,631 7,884,785

Proceeds from long-term borrowings from financial institutes 12,000,000 -

Dividends paid (1,734,869) (7,815,147)

Interest paid (1,248,116) (770,816)

Net cash flows provided by (used in) financing activities 19,580,646 (701,178)

Net increase in cash and cash equivalents 2,907 970

Cash and cash equivalents at beginning of the year 5,673 4,703 Cash and cash equivalents at end of the year 8,580 5,673

Supplementary information for cash flows

Non-cash transactions

Account payables from purchases of assets 2,207 5,526

Stock dividends 1,563,000 -

(in thousand Baht)



Notes to the financial statements


For the years ended 31 December 2019 and 2018

Note Contents




4 Related parties

5 Other current receivables


7 Investments in subsidiaries


9 Property, plant and equipment

10 Intangible assets

11 Deferred tax asset (deferred tax liability)

12 Other current payables

13 Borrowings from financial institutes


15 Share capital

16 Reserves



19 Income tax


21 Dividends

22 Lease agreements



25 Others

26 Event after the reporting period

27 Reclassification of accounts






These notes form an integral part of the financial statements.

The financial statements issued for Thai statutory and regulatory reporting purposes are prepared in the Thai

and English languages, and were approved and authorized for issue by the audit committee, as appointed

by the Board of Directors of the Company, on 18 February 2020.


SCG Packaging Public Company Limited, the “Company”, is incorporated in Thailand.

The head office of the Company is located at 1 Siam Cement Road, Bangsue, Bangkok 10800, Thailand.

The parent company is The Siam Cement Public Company Limited. It is incorporated in Thailand.

The Company is engaged in investment.


(a) Statement of compliance

The financial statements are prepared in accordance with Thai Financial Reporting Standards (“TFRSs”) guidelines

promulgated by the Federation of Accounting Professions.

The new and revised TFRSs are effective for annual accounting periods beginning on or after 1 January 2019.

The initial application of these new and revised TFRSs has resulted in no material impact on the

Company’s accounting policies, calculation method, financial performance and position.

The Company has initially applied TFRS 15 Revenue from Contracts with Customers (“TFRS 15”) since

1 January 2019. TFRS 15 establishes a comprehensive framework for determining how much and when

revenue is recognized. It replaced TAS 18 Revenue (“TAS 18”).

Under TFRS 15, the Company recognizes revenue when a customer obtains control of the goods or services

in an amount that reflects the consideration to which the Company expects to be entitled to.





In addition, judgment is required in determining the timing of the transfer of control for revenue

recognition - at a point in time or over time. The Company has a timing of revenue recognition mainly from

intellectual property income, management fees for administration and service income which are recognized

over time.

In addition, the Company has not early adopted a number of new and revised TFRS which are not yet

effective for the current period in preparing these financial statements. Those new and revised TFRSs

that are relevant to the Company’s operations are disclosed in note 28.

(b) Basis of measurement

The financial statements have been prepared on the historical cost basis except for the following material

item in the statements of financial position: defined benefit obligations are measured at the present value of

non-current provisions for defined benefit plans.

(c) Functional and presentation currency

The financial statements are prepared and presented in Thai Baht, which is the Company’s functional

currency. All financial information presented in Thai Baht has been rounded in the notes to the financial

statements to the nearest thousand unless otherwise stated.

(d) Use of estimates and judgments

The preparation of financial statements in conformity with TFRSs requires management to make judgements,

estimates and assumptions that affect the application of the Company’s accounting policies. Actual results

may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates

are recognized prospectively.

Information about significant areas of estimation uncertainty and critical assumptions in applying accounting

policies that have the most significant effect on the amount recognized in the financial statements is

included in the following notes:





Note 5, 6, 7, 8, 9 and 10 Measurement of the recoverable amounts of each asset and cash-

generating units;

Note 11 and 19 Recognition of deferred tax assets: availability of future taxable

profit against which deductible temporary differences and tax losses

carried forward can be utilized; and

Note 14 Measurement of non-current provision for defined benefit plans:

- key actuarial assumptions.

Measurement of fair values

A number of the Company’s accounting policies and disclosures require the measurement of fair values, for

both financial and non-financial assets and liabilities.

The Company has an established framework with respect to the measurement of fair values. This includes

a valuation team that has overall responsibility for overseeing all significant fair value measurements,

including Level 3 fair values, and reports directly to the CFO.

The valuation team regularly reviews significant unobservable inputs and valuation adjustments. If third party

information, such as broker quotes or pricing services, is used to measure fair values, then the valuation

team assesses the evidence obtained from the third parties to support the conclusion that these valuations

meet the requirements of TFRS, including the level in the fair value hierarchy in which these valuations

should be classified.

Significant valuation issues are reported to the Company’s Audit Committee.

When measuring the fair value of an asset or a liability, the Company uses observable market data as far as

possible. Fair values are categorized into different levels in a fair value hierarchy based on the inputs used

in the valuation techniques as follows:

• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can

access at the measurement date.

• Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability,

either directly (i.e. as prices) or indirectly (i.e. derived from prices).

• Level 3: inputs are unobservable inputs for the asset or liability.





If the inputs used to measure the fair value of an asset or liability might be categorized in different levels of

the fair value hierarchy, then the fair value measurement is categorized in its entirety in the same level of

the fair value hierarchy as the lowest level input that is significant to the entire measurement.

The Company recognizes transfers between levels of the fair value hierarchy at the end of the reporting

period during which the change has occurred.

Further information about the assumptions made in measuring fair values is included in the following notes:

• Note 8 Investment property; and

• Note 23 Financial instruments.


The accounting policies set out below have been consistently applied to all periods presented in these


(a) Foreign currencies

Foreign currency transactions

Transactions in foreign currencies are translated to functional currency at the foreign exchange rates at the

dates of the transactions.

Monetary assets and liabilities denominated in foreign currencies at the end of the reporting period

are translated to the functional currencies at the exchange rates at that date. Foreign exchange differences

are recognized in profit or loss.

Non-monetary assets and liabilities which include arising from the payment or receipt of advance

consideration measured at cost in foreign currencies are translated to the functional currency at the

exchange rates at the dates of the transactions.

(b) Cash and cash equivalents

Cash and cash equivalents in the statements of cash flows comprise cash on hand, saving deposits, current

deposits and highly liquid short-term investments that are readily convertible to known amounts of cash

and which are subject to an insignificant risk of changes in value.





In addition, bank overdrafts that are repayable on demand are a component of financing activities for the

purpose of the statement of cash flows.

(c) Other receivables and contract assets

A receivable is recognized when the Company has an unconditional right to receive consideration. If revenue

has been recognised before the Company has an unconditional right to receive consideration, the amount

is presented as a contract asset.

A receivable and a contract asset are measured at value less allowance for doubtful accounts which

are assessed on analysis of payment histories and future expectations of customer payments. Bad debts

are written off when incurred.

(d) Investments

Investment in associates and subsidiaries

Investments in associates and subsidiaries in the financial statements are accounted for using the cost

method less any accumulated impairment losses.

Disposal of investments

On disposal of an investment, the difference between net disposal proceeds and the carrying amount

is recognized in profit or loss.

If the Company disposes of part of its holding of a particular investment, the deemed cost of the part sold

is determined using the weighted average method applied to the carrying amount of the total holding of

the investment.

(e) Investment property

Investment properties are properties which are held to earn rental income, for capital appreciation or for

both, but not for sale in the ordinary course of business, use in the production or supply of goods or services

or for administrative purposes.

Investment properties are measured at cost less accumulated depreciation and accumulated impairment losses.





Cost includes expenditure that is directly attributable to the acquisition of the investment property.

The cost of self-constructed investment property includes the cost of materials and direct labor, and other

costs directly attributable to bringing the investment property to a working condition for its intended use

and capitalized borrowing costs of a qualifying asset.


property. The estimated useful lives are as follows:

Land improvements 20 years

Building and structures 5, 20 years

Reclassification to property, plant and equipment

When the use of an investment property changes such that it is reclassified as property, plant and

equipment, its carrying amount at the date of reclassification becomes its cost for subsequent accounting.

(f) Property, plant and equipment

Property, plant and equipment are measured at cost less accumulated depreciation and accumulated

impairment losses.

Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of

self-constructed assets includes the cost of materials and direct labor, any other costs directly attributable

to bringing the asset to the location and condition necessary for it to be capable of operating for their

intended use, the costs of dismantling and removing the items and restoring the site on which they

are located, and capitalized borrowing costs of a qualifying asset. Licensed software that is integral to the

functionality of the related equipment is capitalized as part of that equipment.

When parts of an item of property, plant and equipment have different consumption patterns and useful lives,

they are accounted for as separate items (major components) of property, plant and equipment.

Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the

proceeds from disposal with the carrying amount of property, plant and equipment, and are recognized

in profit or loss.





Reclassification to investment property

When the use of a property changes from owner-occupied to investment property, its carrying amount

is recognized and reclassified as investment property.

Subsequent costs

The cost of replacing a part of an item of property, plant and equipment, including major inspections,

is recognized in the carrying amount of the item if it is probable that the future economic benefits embodied within

the part will flow to the Company, and its cost can be measured reliably. The carrying amount of the replaced part

is derecognized. The costs of the day-to-day servicing of property, plant and equipment are recognized in profit or

loss as incurred.

Depreciation

Depreciation is calculated based on the depreciable amount, which is the cost of property, plant and

equipment, or other amount substituted for cost, less its residual value.


component of an item of property, plant and equipment. The estimated useful lives are as follows:

Land improvements 5, 20 years

Building and structures 5, 10, 20 years

Machinery and equipment 5, 10, 15, 20 years

Transportation equipment 5, 10 years

Furniture, fixtures and office equipment 3, 5, 20 years

No depreciation is provided on freehold land or assets under construction.

Depreciation methods, useful lives and residual values are reviewed at each financial year-end and adjusted

if appropriate.





(g) Intangible assets

Intangible assets that are acquired by the Company, which have finite useful lives, are measured at cost less

accumulated amortization and accumulated impairment losses.

Subsequent expenditure

Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in

the specific asset to which it relates.

Amortization

Amortization is calculated based on the cost of the asset, or other amount substituted for cost, less its

residual value.

Amortization is recognized in profit or loss on a straight-line basis over the estimated useful lives of intangible

assets from the date that they are available for use, since this most closely reflects the expected pattern of

consumption of the future economic benefits embodied in the asset.

The estimated useful lives are as follows:

Software licenses 3, 5, 10 years

No amortization is provided on assets under development.

Amortization methods, useful lives and residual values are reviewed at each reporting period and adjusted

if appropriate.

(h) Impairment

The carrying amounts of the Company’s assets are reviewed at the end of each reporting period to

determine whether there is any indication of impairment. If any such indication exists, the assets’





recoverable amounts are estimated. For goodwill and intangible assets that have indefinite useful lives or

are not yet available for use, the recoverable amount is estimated each year at the same time.

An impairment loss is recognized if the carrying amount of an asset or its cash-generating unit exceeds its

recoverable amount. The impairment loss is recognized in profit or loss unless it reverses a previous

revaluation credited to equity, in which case it is charged to equity.

Calculation of recoverable amount

The recoverable amount of a non-financial asset is the greater of the asset’s value in use and fair value less

costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value

using a pre-tax discount rate that reflects current market assessments of the time value of money and

the risks specific to the asset.

Reversals of impairment

An impairment loss in respect of a financial asset is reversed if the subsequent increase in recoverable

amount can be related objectively to an event occurring after the impairment loss was recognized in profit

or loss.

Impairment losses recognized in prior periods in respect of other non-financial assets are assessed at each

reporting period for any indications that the loss has decreased or no longer exists. An impairment loss

is reversed if there has been a change in the estimates used to determine the recoverable amount.

An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the

carrying amount that would have been determined, net of accumulated depreciation or accumulated

amortization, if no impairment loss had been recognized.

(i) Other payables

Other payables are stated at cost.





(j) Contract liabilities

A contract liability is the obligation to transfer goods or services to the customer. A contract liability

is recognized when the Company receives or has an unconditional right to receive non-refundable

consideration from the customer before the Company recognizes the related revenue.

(k) Employee benefits

Defined contribution plans

Obligations for contributions to defined contribution plans are expensed as the related service is provided.

Defined benefit plans

The Company’s net obligation in respect of defined benefit plans is calculated separately for each plan by

estimating the amount of future benefit that employees have earned in the current and prior periods,

discounting that amount.

The calculation of defined benefit obligations is performed by a qualified actuary using the projected unit

credit method which is based on actuarial valuation method.

Remeasurements of the net defined benefit liability, actuarial gain or loss are recognized in other

comprehensive income. The Company determines the interest expense on the net defined benefit liability

for the period by applying the discount rate used to measure the defined benefit obligation at the beginning

of the annual period, taking into account any changes in the net defined benefit liability during the period

as a result of contributions and benefit payments. Net interest expense and other expenses related to

defined benefit plans are recognized in profit or loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that

relates to past service or the gain or loss on curtailment is recognized immediately in profit or loss.

The Company recognizes gains and losses on the settlement of a defined benefit plan when the settlement

occurs.





Other long-term employee benefits

The Company’s net obligation in respect of long-term employee benefits is the amount of future benefit

that employees have earned in return for their service in the current and prior periods. That benefit

is discounted to determine its present value. Remeasurements are recognized in profit or loss in the period

in which they arise.

Termination benefits

Termination benefits are expensed at the earlier of when the Company can no longer withdraw the offer of

those benefits and when the Company recognizes costs for a restructuring. If benefits are not expected to

be settled wholly within 12 months of the end of the reporting period, then they are discounted.

Short-term employee benefits

Short-term employee benefits are expensed as the related service is provided. A liability is recognized for

the amount expected to be paid if the Company has a present legal or constructive obligation to pay this

amount as a result of past service provided by the employee and the obligation can be estimated reliably.

(l) Provisions

A provision is recognized if, as a result of a past event, the Company has a present legal or constructive

obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be

required to settle the obligation. Provisions are determined by discounting the expected future cash flows

at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific

to the liability. The unwinding of the discount is recognized as finance cost.

(m) Revenue

Revenue excludes value added taxes.





Service fee income

Intellectual property income, management fees for administration and service income are recognized

throughout the royalty period.

Rental income

Rental income is recognized in profit or loss on a straight-line basis over the term of the rent.

Lease incentives granted are recognized as expenses in which they are incurred.

Interest and dividend income

Interest income is recognized in profit or loss using the effective interest method. Dividend income

is recognized in profit or loss on the date the Company’s right to receive payments is established.

(n) Expenses

Operating leases

Payments made under operating leases are recognized in profit or loss on a straight line basis over the term

of the lease. Lease incentives received are recognized in profit or loss as an integral part of the total lease

expense, over the term of lease.

Contingent lease payments are accounted for by revising the minimum lease payments over the remaining

term of the lease when the lease adjustment is confirmed.

Finance costs

Finance costs comprise interest expense on borrowings, unwinding of the discount on provisions and

contingent consideration.

Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying

asset are recognized in profit or loss using the effective interest method.





Early retirement expenses

The Company offered certain qualifiable employees the option to take early retirement from the Company.

Eligible employees who accept the offer are paid a lump sum amount which is calculated based on a formula

using their final month’s pay, number of years of service or the number of remaining months before normal

retirement as variables. The Company records expenses on early retirement upon mutual acceptance.

(o) Income tax

Income tax expense for the year comprises current and deferred tax. Current and deferred tax are recognized

in profit or loss except to the extent that they relate to items recognized directly in equity or in other

comprehensive income.

Current tax

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax

rates enacted or substantially enacted at the end of the reporting period, and any adjustment to tax payable

in respect of previous years.

Deferred tax

Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and

liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not

recognized for the following temporary differences: the initial recognition of goodwill; the initial recognition

of assets or liabilities in a transaction that is not a business combination and that affects neither accounting

nor taxable profit or loss; and differences relating to investments in subsidiaries and joint ventures to the

extent that it is probable that they will not reverse in the foreseeable future. Deferred tax is measured at

the tax rates that are expected to be applied to the temporary differences when they reverse, using tax rates

enacted or substantively enacted at the end of the reporting period.

The measurement of deferred tax assets and liabilities reflects the tax consequences that would follow the

manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying

amount of its assets and liabilities.





In determining the amount of current and deferred tax, the Company takes into account the impact of

uncertain tax positions and whether additional taxes and interest may be due. The Company believes that

its accruals for tax liabilities are adequate for all open tax years based on its assessment of many factors,

including interpretations of tax law and prior experience. This assessment relies on estimates and

assumptions and may involve a series of judgments about future events. New information may become

available that causes the Company to change its judgment regarding the adequacy of existing tax liabilities;

such changes to tax liabilities will impact tax expense in the period that such a determination is made.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities

and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or

on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax

assets and liabilities will be realized simultaneously.

A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available

against which the temporary differences can be utilized. Future taxable profits are determined based on the

reversal of relevant taxable temporary differences. If the amount of taxable temporary differences

is insufficient to recognize a deferred tax asset in full, then future taxable profits, adjusted for reversals of

existing temporary differences, are considered, based on the business plans for individual subsidiaries in the

Company. Deferred tax assets are reviewed at the end of each reporting period and reduced to the extent

that it is no longer probable that the related tax benefit will be realized.

4 Related parties

Parties are considered to be related to the Company if the Company has the ability, directly or indirectly,

to control the party or exercise significant influence over the party in making financial and operating

decisions, or vice versa.

Relationships with related parties were as follows:

Name of entities

Country of

incorporation /

nationality


The Siam Cement Public Company Limited Thailand Ultimate parent company

Siam Kraft Industry Co., Ltd. Thailand Subsidiary, direct ownership interest

Phoenix Pulp & Paper Public Company Limited Thailand Subsidiary, direct ownership interest





Name of entities

Country of

incorporation /

nationality


Thai Cane Paper Public Company Limited Thailand Subsidiary, direct ownership interest

Thai Containers Group Co., Ltd. Thailand Subsidiary, direct ownership interest

Invenique Co., Ltd. Thailand Subsidiary, direct ownership interest

United Pulp and Paper Co., Inc. Philippines Subsidiary, direct ownership interest

SCGP Excellence Training Center Co., Ltd. Thailand Subsidiary, direct ownership interest

SCG Paper Energy Co., Ltd. Thailand Subsidiary, direct ownership interest

SCGP Solutions Co., Ltd. Thailand Subsidiary, direct ownership interest

SCGP-T Plastics Co., Ltd. Thailand Subsidiary, direct ownership interest

SCGP Solutions (Singapore) Pte. Ltd. Singapore Subsidiary, direct ownership interest

SCGP Rigid Plastics Company Limited Thailand Subsidiary, direct ownership interest

Phoenix Utilities Co., Ltd. Thailand Subsidiary, indirect ownership interest

Thai Containers Khonkaen Co., Ltd. Thailand Subsidiary, indirect ownership interest

Thai Containers Rayong Co., Ltd. Thailand Subsidiary, indirect ownership interest

The Siam Forestry Co., Ltd. Thailand Subsidiary, indirect ownership interest

Thai Paper Co., Ltd. Thailand Subsidiary, indirect ownership interest

Thai Wanabhum Co., Ltd. Thailand Subsidiary, indirect ownership interest

Siam Panawes Co., Ltd. Thailand Subsidiary, indirect ownership interest

Thai Panaboon Co., Ltd. Thailand Subsidiary, indirect ownership interest

Thai Panaram Co., Ltd. Thailand Subsidiary, indirect ownership interest

Panas Nimit Co., Ltd. Thailand Subsidiary, indirect ownership interest

Suanpa Rungsris Co., Ltd. Thailand Subsidiary, indirect ownership interest

Thai Panadorn Co., Ltd. Thailand Subsidiary, indirect ownership interest

Thai Panason Co., Ltd. Thailand Subsidiary, indirect ownership interest

Tawana Container Co., Ltd. Thailand Subsidiary, indirect ownership interest

Dyna Packs Co., Ltd. Thailand Subsidiary, indirect ownership interest

Orient Containers Co., Ltd. Thailand Subsidiary, indirect ownership interest

D-In Pack Co., Ltd. Thailand Subsidiary, indirect ownership interest

TC Flexible Packaging Co., Ltd. Thailand Subsidiary, indirect ownership interest

Prepack Thailand Co., Ltd. Thailand Subsidiary, indirect ownership interest

Precision Print Co., Ltd. Thailand Subsidiary, indirect ownership interest





Name of entities

Country of

incorporation /

nationality


Conimex Co., Ltd. Thailand Subsidiary, indirect ownership interest

SKIC International Co., Ltd. Thailand Subsidiary, indirect ownership interest

Visy Packaging (Thailand) Limited Thailand Subsidiary, indirect ownership interest

Vina Kraft Paper Co., Ltd. Vietnam Subsidiary, indirect ownership interest

New Asia Industries Co., Ltd. Vietnam Subsidiary, indirect ownership interest

Alcamax Packaging (Vietnam) Co., Ltd. Vietnam Subsidiary, indirect ownership interest

AP Packaging (Hanoi) Co., Ltd. Vietnam Subsidiary, indirect ownership interest

Packamex (Vietnam) Co., Ltd. Vietnam Subsidiary, indirect ownership interest

Tin Thanh Packing Joint Stock Company Vietnam Subsidiary, indirect ownership interest

TCG Rengo (S) Limited* Singapore Subsidiary, indirect ownership interest

Paperlink Inter-Trade Corporation** Philippines Subsidiary, indirect ownership interest

PT Primacorr Mandiri Indonesia Subsidiary, indirect ownership interest

PT Indoris Printingdo Indonesia Subsidiary, indirect ownership interest

PT Indocorr Packaging Cikarang Indonesia Subsidiary, indirect ownership interest

PT Fajar Surya Wisesa Tbk. Indonesia Subsidiary, indirect ownership interest

Interpress Printers Sendirian Berhad Malaysia Subsidiary, indirect ownership interest

Siam Toppan Packaging Co., Ltd. Thailand Associate, direct ownership interest

P&S Holdings Corporation Philippines Associate, direct ownership interest

Sahagreen Forest Co., Ltd. Thailand Associate, indirect ownership interest

Siam Nippon Industrial Paper Co., Ltd. Thailand Associate, indirect ownership interest

PT SCG Indonesia Indonesia Subsidiary of The Siam Cement Public

Company Limited

SCG Vietnam Co., Ltd. Vietnam Subsidiary of The Siam Cement Public

Company Limited

SCG Legal Counsel Limited Thailand Subsidiary of The Siam Cement Public

Company Limited

* Currently in the liquidation process.

**Paperlink Inter-Trade Corporation amalgamate with United Pulp and Paper Co., Inc. which has already been completed on

25 November 2019.





Significant transactions with related parties for the years ended 31 December and the pricing policies are

summarized as follows:

2019 2018 Pricing Policies

(in thousand Baht)

Parent

Rental and service expense 194,986 191,124 Contract rate and percentage of

service provided

Interest expense 1,255,622 777,839 Contract rate

Subsidiaries

Rental income 30,341 28,779 Contract rate

Intellectual property income 7,404 7,553 Percentage of net sales

Management fee income and 1,522,432 1,451,422 Service provided and percentage of

Service charges income net sales

Dividend income 1,556,920 7,802,977 Upon declaration

Interest income 966,849 582,567 Contract rate

Interest expense 392 106 Contract rate

Associates

Dividend income 9,457 11,123 Upon declaration

In the income statement for the year ended 31 December 2019, the Company presents finance costs of

Baht 289 million (2018: Baht 195 million), which is comprised of interest expense from related parties and

finance charges of Baht 1,256 million (2018: Baht 778 million) and interest income from related parties of

Baht 967 million (2018: Baht 583 million).





Balances as at 31 December with related parties were as follows:


2019 2018

(in thousand Baht)

Parent


Subsidiaries

Siam Kraft Industry Co., Ltd. 77,567 56,992

Thai Containers Group Co., Ltd. 30,399 19,071

Vina Kraft Paper Co., Ltd. 24,822 26,432

Thai Paper Co., Ltd. 15,697 18,494

United Pulp and Paper Co., Inc. 15,003 9,143

SCGP Solutions (Singapore) Pte. Ltd. 13,174 -

Phoenix Pulp & Paper Public Company Limited 10,056 12,949

Thai Cane Paper Public Company Limited 8,128 8,824

SCGP Rigid Plastics Company Limited 7,034 -

Tin Thanh Packing Joint Stock Company 5,212 -

SCGP Excellence Training Center Co., Ltd. 3,134 3,638

The Siam Forestry Co., Ltd. 2,344 1,603

Others 11,065 12,377

Total 229,031 172,994





Short-term loans to related parties

2019 2018

(in thousand Baht)

Subsidiaries

Siam Kraft Industry Co., Ltd. 29,631,410 13,194,544

Thai Containers Group Co., Ltd. 3,740,011 3,704,207

SCG Paper Energy Co., Ltd. 579,474 826,452

SCGP-T Plastics Co., Ltd. - 137,794

Total 33,950,895 17,862,997

Movements during the years on short-term loans to related parties were as follows:

2019 2018

(in thousand Baht)

At 1 January 17,862,997 11,147,587

Increase 42,426,889 32,824,094

Decrease (26,338,991) (26,108,684)

At 31 December 33,950,895 17,862,997

Advance payment from software licence fee shown under other non-current receivables 2019 2018 (in thousand Baht) Parent







2019 2018

(in thousand Baht)

Parent


Subsidiaries

Siam Kraft Industry Co., Ltd. 5,048 3,598

SCGP Excellence Training Center Co., Ltd. 2,152 697

Others

SCG Vietnam Co., Ltd. 3,312 3,561


SCG Legal Counsel Limited 1,162 2,937

Others 2,826 2,925

Total 59,179 58,641

Short-term borrowings from related parties

2019 2018

(in thousand Baht)

Parent

The Siam Cement Public Company Limited 33,756,240 23,309,751

Subsidiaries

SCGP Rigid Plastics Company Limited 98,357 -

SCGP Excellence Training Center Co., Ltd. 28,452 27,553

Invenique Co., Ltd. 15,319 5,267

SCGP-T Plastics Co., Ltd. 8,322 -

SCGP Solutions Co., Ltd. 343 831

Total 33,907,033 23,343,402





Movements during the years on short-term borrowings from related parties were as follows:

2019 2018

(in thousand Baht)

At 1 January 23,343,402 15,458,617

Increase 40,569,245 21,258,580

Decrease (30,005,614) (13,373,795)

At 31 December 33,907,033 23,343,402

The Board of Directors and key management compensation

2019 2018

(in thousand Baht)


Short-term employee benefits 82,730 94,956

Post-employment benefits 16,556 8,609

Total 99,286 103,565

The Board of Directors and key management compensation comprises the remuneration paid to the directors

of SCG Packaging Public Company Limited under the articles of the Company and the remuneration paid to

the management as staff expenses in terms of salary, bonus, variable pay, others and contribution to defined

contribution plans.





5 Other current receivables

Note 2019 2018

(in thousand Baht)


Other parties 25,275 20,400

Total 254,306 193,394

Other current receivables as at 31 December were as follows:

2019 2018

(in thousand Baht)

Accrued service income 192,409 152,529

Accrued interest income 29,111 16,027

Others 32,786 24,838

Total 254,306 193,394


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7 Investments in subsidiaries

Movements for the years ended 31 December in investments in subsidiaries accounted for using the cost

method were as follows:

2019 2018

(in thousand Baht)

At 1 January 28,398,365 27,027,254

Acquisitions and additional investments 6,049,073 1,371,111

At 31 December 34,447,438 28,398,365

In January 2018, the Company registered SCGP Solutions (Singapore) Pte. Ltd. which is virtually owned

100% totaling Ringgit 61 million or equivalent to approximately Baht 492 million.

In February 2018, the Company had paid-up increased share capital of SCGP-T Plastics Co., Ltd. for

1,480,000 shares at 100 Baht per share totaling Baht 148 million. The Company has already been registered

with the Ministry of Commerce on 6 March 2018.

In March 2018, the Company had paid-up increased share capital of SCGP Solutions Co., Ltd.

for 1,690,000 shares at 100 Baht per share totaling Baht 169 million. The Company has already been

registered with the Ministry of Commerce on 23 March 2018.

In March 2018, the Company had paid-up increased share capital of SCGP Solutions (Singapore) Pte. Ltd. for 9,200,000

shares totaling Ringgit 28 million or equivalent to approximately Baht 225 million and in July 2018, for

399,999 shares totaling Singapore Dollar 399,999 or equivalent to approximately Baht 10 million.

In December 2018, the Company had repurchased shares of Thai Cane Paper Public Company Limited

(“TCP”) from Sa Ha Sit Import and Export (Thailand) Co., Ltd. and other minority shareholders which

consisted of 13,089,234 ordinary shares at Baht 25 per share totaling Baht 327 million. As a result, the

Company’s ownership was increased from 94.54% to 98.20%.

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In February 2019, the Company registered SCGP Rigid Plastics Company Limited (“SCGPRP”) which is virtually

owned 100% totaling Baht 1 million. In March 2019, the Company had paid-up increased share capital of

SCGPRP for 4,990,000 shares at 100 Baht per share totaling Baht 499 million. The Company has already

been registered with the Ministry of Commerce on 27 March 2019.

In April 2019, SCGP-T Plastics Co., Ltd. (“SCGP-T”) sold increased share capital for 1,431,500 shares at 100

Baht per share totaling Baht 143 million to Toppan Printing Co., Ltd. As a result, the Company ownership

was decreased from 100% to 51%. In May 2019, the Company had paid-up increased share capital of

SCGP-T for 478,125 shares at 100 Baht per share totaling Baht 48 million. The Company has already been

registered with the Ministry of Commerce on 16 May 2019.

In June 2019, SCGP Solutions (Singapore) Pte. Ltd. had increased share capital for 927,400,330 shares or

approximately Baht 20,888 million. The Company had paid-up increased share capital for 69,400,000 shares totaling

United States Dollar 50,000,000 and Singapore Dollar 400,000 or equivalent to approximately Baht 1,598 million.

The remaining shares have been purchased by Siam Kraft Industry Co., Ltd.

In August 2019, the Company had initial paid-up increased share capital of SCGP Rigid Plastics Company Limited

for 57,400,000 shares at 68 Baht per share totaling Baht 3,903 million. The Company has already been registered

with the Ministry of Commerce on 3 September 2019.


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43

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11

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33

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31

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380,

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49

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9 14

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5

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1 De

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019

31,3

20

48,1

73

114,

700

409

4,67

7 14

,062

21

3,34

1





10 Intangible assets

Software

licenses

Software development

licenses cost Total

(in thousand Baht)

Cost

At 1 January 2018 72,549 9,990 82,539

Additions 3,351 7,180 10,531

Transfer in (out) 7,743 (7,522) 221

At 31 December 2018 83,643 9,648 93,291

Additions 2,540 9,287 11,827

Transfer in (out) 5,552 (9,223) (3,671)

At 31 December 2019 91,735 9,712 101,447

Accumulated amortization

At 1 January 2018 58,003 - 58,003

Amortization charge for the year 5,181 - 5,181

At 31 December 2018 63,184 - 63,184

Amortization charge for the year 7,640 - 7,640

At 31 December 2019 70,824 - 70,824

Carrying amount

At 31 December 2018 20,459 9,648 30,107

At 31 December 2019 20,911 9,712 30,623

No

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3 55

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33

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95

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31

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(276

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019

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71

83,5

82

237,

475

560

47,2

13

-

380,

701

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At 3

1 De

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ber 2

018

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57

50,3

49

123,

459

504

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9 14

,807

22

5,59

5

At 3

1 De

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019

31,3

20

48,1

73

114,

700

409

4,67

7 14

,062

21

3,34

1





11 Deferred tax asset (deferred tax liability)

Deferred tax asset and liability are offset if there is a legally enforceable right to offset current tax asset and

liability, and they relate to income taxes levied by the same tax authority on the same taxable entity, and

are included in the statement of financial position as follows:

2019 2018

(in thousand Baht)

Deferred tax asset 59,101 34,603

Deferred tax liability (2) (1)

Net 59,099 34,602

Movements in total deferred tax asset and liability during the years were as follows:

Credited to

At profit other At

1 January or loss comprehensive 31 December

2018 income 2018

(Note 19)

(in thousand Baht)

Deferred tax asset

Provisions for employee benefits 17,842 568 16,193 34,603

Deferred tax liability

Unrealized gain on foreign

currency exchange (55)

54 -

(1)

Net 17,787 622 16,193 34,602






At profit other At

1 January or loss comprehensive 31 December

2019 income 2019

(Note 19)

(in thousand Baht)

Deferred tax asset

Provisions for employee benefits 34,603 18,875 5,623 59,101

Deferred tax liability

Unrealized gain on foreign

currency exchange (1)

(1) -

(2)

Net 34,602 18,874 5,623 59,099

The deductible temporary differences and unused tax losses that the Company have not recognized as

deferred tax assets are as the following items:

2019 2018

(in thousand Baht)

Temporary differences

- Other current receivables 16,963 16,963

- Investment in subsidiaries 64,035 64,035

Unused tax losses 333,690 -

Total 414,688 80,998

The unused tax losses on which the Company has not recognized deferred tax assets are the tax losses

which do not expire under tax legislation and would be expired within 2024.





12 Other current payables

2019 2018

(in thousand Baht)

Accrued expenses 88,798 48,486

Withholding tax payable 41,269 43,549

Accrued interest 39,138 20,969

Value added tax payable 6,922 4,768

Account payables from purchases of assets 2,207 5,526

Others 71,239 16,127

Total 249,573 139,425

13 Borrowings from financial institutes

As of 18 November 2019, the Company entered into loan agreements with various local financial institutions

for Baht 26,500 million. In 2019, the Company has drawn-down under the loan agreements amounting to

Baht 12,000 million. The interest rates were 2.355% and 2.50% per annum.

In January 2020, the Company has drawn-down under loan agreements for Baht 14,500 million.


The Company operates defined benefits plans based on the requirement of the Thai Labor Protection Act

B.E. 2541 to provide retirement benefits and other long-term benefits to employees based on pensionable

remuneration and length of service.

The defined benefit plans expose the Company to actuarial risks, such as longevity risk, interest rate risk and

market risk.





Non-current provisions for employee benefits in statement of financial position as at 31 December

2019 2018

(in thousand Baht)

Post-employment benefits - legal severance payments plan 288,374 154,350

Other long-term employee benefits 7,133 5,228

Total 295,507 159,578

Movements in the present value of non-current provisions for defined benefit plans

2019 2018

(in thousand Baht)

Non-current provisions for defined benefit plans at 1 January 159,578 75,451

Included in profit or loss

Current service costs 12,689 4,036

Interest on obligation 7,055 2,679

Actuarial losses 889 1,841

Past service cost from the amended severance pay of the Labor Law 50,795 -

Transfer of non-current provisions for employee benefits 46,436 -

117,864

8,556

Included in other comprehensive income

Actuarial losses 28,246 80,963

Other

Benefits paid (10,181) (5,392)

Non-current provisions for defined benefit plans at 31 December 295,507 159,578





On 5 April 2019, the Labor Protection Act has already been announced in Royal Gazette that became effective

on 5 May 2019 to include a requirement that an employee who is terminated after having been employed by

the same employer for an uninterrupted period of twenty years or more, receives severance payment of 400

days of wages at the most recent rate, which is increased from the maximum rate of 300 days. The Company

recognized the effect of this change as the expense amounted to Baht 51 million in income statement, resulting

in the decrease in net profit amounted to Baht 41 million.

Actuarial losses (gains) recognized in other comprehensive income as of the end of the reporting period arising

from:

2019 2018

(in thousand Baht)


Demographic assumptions (109) 48,181

Financial assumptions 18,069 2,406

Experience adjustment 10,286 30,376

Total 28,246 80,963

Actuarial assumptions

Principal actuarial assumptions as of the end of the reporting period

2019 2018

(%)


Discount rate* 1.70 - 1.74 3.02 - 3.09

Salary increase rate 2.00 - 7.00 3.00 - 7.00

Employee turnover rate** 4.00 - 9.00 4.00 - 10.00

Mortality rate*** 100.00 of TMO 2017 100.00 of TMO 2017

* Market yields on government’s bonds for legal severance payments plan

** Upon the length of service

*** Reference from TMO2017: Thai Mortality Ordinary Table 2017


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15 Share capital

2019 2018

Par Number Number

Value of shares Value of shares Value

(in Baht) (in thousand shares /

thousand Baht)

(in thousand shares /

thousand Baht)

Authorized

At 1 January

- ordinary shares 10 - - 156,300 1,563,000


- ordinary shares 1 1,563,000 1,563,000 - -


- ordinary shares 1 2,937,000 2,937,000 - -

At 31 December

- ordinary shares 10 - - 156,300 1,563,000

- ordinary shares 1 4,500,000 4,500,000 - -

Issued and paid-up

At 1 January

- ordinary shares 10 - - 156,300 1,563,000


- ordinary shares 1 1,563,000 1,563,000 - -


- ordinary shares 1 1,563,000 1,563,000 - -

At 31 December

- ordinary shares 10 - - 156,300 1,563,000

- ordinary shares 1 3,126,000 3,126,000 - -


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2019 2018

(in thousand Baht)

Salary, welfare and personnel expenses 1,080,087 931,991

Service expenses 122,647 114,364

Rent, depreciation and amortization expenses 101,126 90,147

Professional and consultant fees 98,102 75,862

IT fees 59,516 50,472

Others 119,300 111,369

Total 1,580,778 1,374,205


2019 2018

(in thousand Baht)

Salary and wages 817,667 749,973

Contribution to defined contribution plans 64,428 55,702

Contribution to defined benefit plans 67,069 8,556

Welfares and others 130,923 117,760

Employee benefit expense from the amended

severance pay of the Labor Law 50,795 -

Total 1,130,882 931,991

The defined contribution plans comprise provident funds established by the Company for its employees

in addition to the above provident fund. The provident funds were registered with the Ministry of Finance

under the Provident Fund Act B.E. 2530. Membership to the funds is on a voluntary basis. Contributions

are made monthly by the employees at 2% to 15% of their basic salaries and by the Company at 5% to

13% of the members’ basic salaries, depending on the length of employment.





19 Income tax

Income tax recognized in profit or loss

Note 2019 2018

(in thousand Baht)

Current tax

Current tax - 24,943

Over provided in prior years (3,674) (3,133)

(3,674) 21,810

Deferred tax

Movements in temporary differences 11 (18,874) (622)

Total (22,548) 21,188

Income tax recognized in other comprehensive income

2019 2018

(in thousand Baht)

Actuarial losses (5,623) (16,193)





Reconciliation of effective tax rate

For the years ended December 31, 2019 and 2018, the Company’s effective tax rate is not equal to the statutory

tax rate of 20% under the Revenue Code because income tax expense is calculated from accounting profit

adjusted by non-deductible expenses, deducted income or expense exemption under the Revenue Code.

2019 2018

Rate

(%)

(in thousand

Baht)

Rate

(%)

(in thousand

Baht)


Income tax using the Thai corporation tax rate 20 244,620 20 1,589,236

Income not subject to tax (313,275) (1,562,820)

Expenses deductible at a greater amount (21,219) (6,373)

Expenses not deductible for tax purposes 25,175 6,422

Prior year expenses deductible for tax purposes (2,039) (1,522)

Tax loss 66,738 -

Current tax - 24,943

Over provided in prior years (3,674) (3,133)

Movement in temporary differences (18,874) (622)

Income tax expense (benefits) - (22,548) 0.27 21,188


The calculations of basic earnings per share for the years ended 31 December was based on the profit for

the years attributable to owners of the parent and the weighted average number of ordinary shares

outstanding during the years, after adjusting the number of ordinary shares in proportion to the change in

the number of shares as a result of the stock split and distribution of stock dividend disclosed in note 15

and 21. The number of ordinary shares used in the calculation are adjusted as if such change had occurred

at the beginning of the earliest reporting period as follows:





Note 2019 2018

(in thousand Baht / thousand shares)

Profit for the year attributable to ordinary

shareholders of the Company 1,245,648 7,924,994

Weighted average number of ordinary shares

outstanding at 1 January 156,300 156,300

Effect of reduction in par value 15 1,406,700 1,406,700

Effect of stock dividend 15 1,563,000 1,563,000

Weighted average number of ordinary shares

outstanding at 31 December 3,126,000 3,126,000

Basic earnings per share (in Baht) 0.40 2.54

21 Dividends

The dividends paid by the Company to the shareholders are as follows:

Approval date Payment schedule

Dividend rate

per share Amount

(Baht) (in million Baht)

2019


Interim dividend 25 November 2019 6 December 2019 1.11111111 1,737

Total 11.11111111 3,300

2018


On 25 November 2019, at the Extra ordinary general meeting of shareholders of the Company, they passed

resolution to approve the interim dividend payment, detail are as follows;





1. Pay dividend by ordinary shares of 1,563,000,000 shares at par value of Baht 1 per share, in the ratio of

1 current share per 1 dividend share.

2. Pay dividend by cash at Baht 0.11111111 per share, totaling Baht 174 million.

22 Lease agreements

(a) The Company entered into lease agreements with related parties covering the land where its buildings

are located. These agreements will be gradually due within October 2022. Under the terms of these

agreements, the Company has to pay annual rental as follows:

2019 2018

(in thousand Baht)

Within one year 3,749 1,800

After one year but within five years 4,561 -

Total 8,310 1,800

(b) The various car lease agreements. These agreements will be gradually due within November 2024.

Under the terms of these agreements, the Company has to pay annual rental as follows:

2019 2018

(in thousand Baht)

Within one year 15,724 12,325

After one year but within five years 23,733 20,437

Total 39,457 32,762


Liquidity risk

The Company monitors its liquidity risk and maintains a level of cash and cash equivalents deemed adequate

to finance the Company’s operations and to mitigate the effects of fluctuations in cash flows.





Interest rate risk

Interest rate risk arises from the changing of interest rates, which may effect current and future operations

of the Company. Management believes that the interest rate risk is minimal, hence, the Company does not

have any hedging agreement to protect such risk.

The effective interest rates of loans receivables as at 31 December and the periods in which the loans

receivables mature were as follows:

Loans receivable

After 1 year

Effective interest

rates

Within

1 year

but within

5 years

Total

(% per annum) (in thousand Baht)

2019

Current

Short-term loans

to related parties

3.50 - 3.75 33,950,895

-

33,950,895

2018

Current

Short-term loans

to related parties

3.75

17,862,997

-

17,862,997

The effective interest rates of interest-bearing financial liabilities as at 31 December and the periods in which

those liabilities mature were as follows:





Financial liabilities

After 1 year

Effective interest

rates

Within

1 year

but within

5 years

Total

(% per annum) (in thousand Baht)

2019

Current


from related parties

0.50 - 3.75

33,907,033

-

33,907,033

Non-current

Long-term borrowings from

financial institutions 2.355, 2.50 - 12,000,000 12,000,000

Total 33,907,033 12,000,000 45,907,033

2018

Current


from related parties

0.50 - 3.75

23,343,402

-

23,343,402

Foreign exchange risk

The Company’s exposure to foreign exchange risk relates principally to its receivables and payables which

are denominated in foreign currencies. However, as at 31 December 2019 and 2018, the Company does not

have material foreign currency risk.

Fair value of financial assets and liabilities

Since the majority of the financial assets and liabilities classified as short-term and loans are bearing interest

at rates closed to current market rate, the management believes that as at 31 December 2019 and 2018,

the carrying amount of the Company’s financial instruments does not materially differ from their aggregate

fair value.






The management of the Company has the capital management policy to maintain a strong capital base by

emphasis in planning and determining the operating strategies resulting in good business’s performance and

sustain good cash flows management. In addition, the Company considers investing in projects which have

good rate of return, appropriate working capital management, maintain a strong financial position and

appropriate investment structure as to maintain sustain future operations of the business and to maintain

shareholders, investors, creditors and others interest’s confidence.

25 Others

On 26 October 2019, The Board of Directors’ Meeting No. 214 (10/2019) has approved the plan to issue and

offer newly issued ordinary shares in the Company as an initial public offering (IPO) and to list the ordinary

shares in the Company on the Stock Exchange of Thailand. The portion of the shares to be offered for sale

in the IPO will not exceed 30% of the Company’s paid-up capital after its capital increase.

On 17 December 2019, the Company submitted to Thai SEC a registration statement and draft prospectus

for the IPO. In connection with the IPO, the Company will issue and offer no more than 1,374,000,000

ordinary shares with a par value of 1 Thai Baht per share.


At the Board of Directors’ Meeting of the Company held on 28 January 2020, the directors proposed for

approval at the Annual General Meeting of Shareholders, the payment of a dividend for 2019 at the rate of

Baht 0.42 per share, amounting to Baht 1,313 million and is scheduled for payment on 23 April 2020. The

dividend is subject to the approval of the Shareholders at the Annual General Meeting to be held on

24 March 2020.





27 Reclassification of accounts

Certain accounts in the 2018 financial statement have been reclassified to conform to the presentation in

the 2019 financial statements were as follows:

Before

reclassification

Reclassification

After

reclassification

(in thousand Baht)

Statement of income


Service income 1,287,578 174,873 1,462,451

Other income 403,022 (174,873) 228,149


The new and revised TFRSs, which are relevant to the Company’s operations, become effective for the

financial statements in annual reporting periods beginning on or after 1 January 2020. The Company does

not adopt these TFRSs early. The new TFRSs are as follows:

TFRS Topic

TFRS 7* Financial Instruments: Disclosures

TFRS 9* Financial Instruments

TFRS 16 Lease

TAS 32* Financial Instruments: Presentation

TFRIC 16* Hedges of a Net Investment in a Foreign Operation

TFRIC 19* Extinguishing Financial Liabilities with Equity Instruments

* TFRS - Financial instruments standards





(a) TFRS - Financial instruments standards

These TFRS - Financial instruments standards establish requirements related to definition, recognition,

measurement, impairment and derecognition of financial assets and financial liabilities, including

accounting for derivatives and hedge accounting. When these TFRS are effective, some accounting

standards, interpretations and guidance which are currently effective will be cancelled. The impact from

adoption of TFRS - Financial instruments depends on the Company’s financial instruments by following

TFRS - Financial instruments as follows:

(1) Classification - Financial assets

TFRS 9 classifies financial assets into three categories: measured at amortized cost, fair value to

other comprehensive income (FVOCI) and fair value to profit or loss (FVTPL). The standard eliminates

the existing classification of held-to-maturity debt securities, available-for-sale securities, trading

securities and general investment as specified by TAS 105. The classification under TFRS 9 will be based

on the cash flow characteristics of the financial asset and the business model in which they are managed.

Under TFRS 9, derivatives will be measured at FVTPL. It will replace current accounting policies of the

Company on recognition of adjustment value at the exchange rate at the end of period or when

the derivatives were exercised.

The Company has made assessment of classification - Financial assets under TFRS 9. This adoption has no

material effect on the financial statements of the Company.

(2) Measurement at amortized cost

Under TFRS 9, interest income and interest expenses recognized from all financial assets and financial

liabilities measured at amortized cost shall be calculated using effective interest rate method. The adoption

of TFRS 9 has no material effect on the financial statements of the Company.

(3) Impairment - Financial assets

TFRS 9 introduces forward-looking “expected credit loss” (ECL) model whereas currently the Company

estimates allowance for doubtful account by analyzing payment histories and future expectation of





customer payment. TFRS 9 requires consideration about how changes in economic factors affect ECLs,

which will be determined on a probability-weighted basis.

The new impairment model will apply to financial assets measured at amortized cost or FVOCI, except

for investments in equity instruments.

The Company has made assessment the impairment of financial assets under TFRS 9. This adoption has no

material effect on the financial statements of the Company.

(4) Classification - Financial liabilities

TFRS 9 introduces a new classification and measurement approach for financial liabilities consisting of two

principal classification categories: amortized cost and FVTPL. A financial liability is classified as financial

liabilities measured at FVTPL if it is held for trading, a derivative or designated as such on the initial recognition.

The Company classified other financial liabilities which are not held for trading or derivative measured at

amortized cost. The adoption of TFRS 9 has no material effect on the financial statements of the Company.

(5) Hedge accounting

TFRS 9 introduces guidance on hedge accounting while current TFRSs are silent. There are three hedge

accounting models and the type of model applied depends on the hedged exposures consisting of a fair

value exposure, a cash flow exposure or a foreign currency exposure on a net investment in a foreign

operation. Under TFRS 9, the Company is required to ensure that hedge accounting relationships are aligned

with the Company’s risk management objectives and strategy and to apply a more qualitative and forward-

looking approach to assess hedge effectiveness. Accordingly, TFRS 9 provides an option to apply hedge

accounting when the transactions are qualified. At the initial date of first time adoption, the Company has no

effect on this matter.





Transition

The Company applied these TFRS for the first time by adjusting the cumulative impact to retained earnings on

1 January 2020 with no restatement of comparative information.

(b) TFRS 16 Leases

TFRS 16 introduces a single lessee accounting model for lessees. A lessee recognizes a right-of-use asset

and a lease liability. There are recognition exemptions for short-term leases and leases of low-value

items. Lessor accounting remains to the current standard. When this TFRS is effective, some accounting

standards and interpretations which are currently effective will be cancelled. Currently, the Company

recognizes payments made under operating leases in income statement on a straight-line basis over the

term of the lease.

The Company made assessment of TFRS 16 adoption. On 1 January 2020, the Company recognized the

increase in right-of-use assets approximately Baht 114 million which affect to increase in lease liabilities

approximately Baht 114 million. The nature of expenses related to those leases will change because

the Company will recognize depreciation of right-of-use assets and interest expenses on lease liabilities.

Transition

The Company applied TFRS 16 for the first time on 1 January 2020 using the modified retrospective

approach, by recognizing right-of-use assets and lease liabilities with no restatement of comparative

information.


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Company Profile


Head Office Address 1 Siam Cement Road, Bangsue, Bangkok 10800

Business Type The Company generates revenue from holding shares in other

companies (Holding Company), operating core business for

packaging solutions provider which are organized into two main

operating segments: integrated packaging chain and fibrous chain,

also other relating businesses.

Initial Registered Capital (as at the registration date of conversion into the Public Limited

Company on March 24, 1994)

Registered Capital: 1,000 Million Baht

Paid-up Capital: 1,000 Million Baht

Issued and paid up ordinary shares of: 100 Million shares



Present Registered Capital Registered capital: 4,500 Million Baht

Paid-up capital: 3,126 Million Baht

Issued and paid up ordinary shares of: 3,126 Million shares



Website www.scgpackaging.com

Share Registrar Tel: +66 2586 2894

Fax: +66 2586 3007

E-mail: [email protected]

Investors can find further information regarding the Company from the Registration Statement for Securities Offering (Form 69-1) and Prospectus which has been disclosed at www.sec.or.th or www.scgpackaging.com.

First 10 major Shareholders (As of December 31, 2019)

ShareholdersNo. of Ordinary

Shares (Issued and Paid-up)

Percent of Total Shares

1. The Siam Cement Public Company Limited 3,095,882,660 99.037

2. Mr. Taewan Tantichattanont 2,320,000 0.074

3. Randery Burahmakan Company Limited 1,872,000 0.060

4. Ms. Orapin Thidarat 1,634,000 0.052

5. Mr. Man Nana 1,563,200 0.050

6. Roman Catholic Mission of Bangkok 1,068,960 0.034

7. Mr. U-thane Tantichattanont 1,000,000 0.032

8. Mr. Somsak Nana 931,440 0.030

9. Mr. Pipatpong Israsena Na Ayudhya 528,880 0.017

10. Mr. Yuph Nana 499,440 0.016

11. Other Shareholders 18,699,420 0.598

Total 3,126,000,000 100.000

Documents

SCG Packaging Public Company Limited First 10 major ...scgp.listedcompany.com/misc/ar/ar2019-en/doc.pdf · as the US-China trade war, oil prices fluctuations, and volatility of the