Esso Thailand Public : Financial Statement for First Quarter

ESSO (THAILAND) PUBLIC COMPANY LIMITED

INTERIM CONSOLIDATED AND SEPARATE FINANCIAL INFORMATION (UNAUDITED)

31 MARCH 2020

AUDITOR'S REPORT ON THE REVIEW OF THE INTERIM FINANCIAL INFORMATION

To the Shareholders and the Board of Directors of Esso (Thailand) Public Company Limited

I have reviewed the interim consolidated financial information of Esso (Thailand) Public Company Limited and its subsidiaries, and the interim separate financial information of Esso (Thailand) Public Company Limited. These comprise the consolidated and separate statements of financial position as at 31 March 2020, the related consolidated and separate statements of comprehensive income, changes in equity, and cash flows for the three-month period then ended, and the condensed notes to the interim financial information. Management is responsible for the preparation and presentation of this interim consolidated and separate financial information in accordance with Thai Accounting Standard 34, "Interim Financial Reporting". My responsibility is to express a conclusion on this interim consolidated and separate financial information based on my review.

Scope of review

I conducted my review in accordance with the Thai Standard on Review Engagements 2410, "Review of interim financial information performed by the independent auditor of the entity". A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Thai Standards on Auditing and consequently does not enable me to obtain assurance that I would become aware of all significant matters that might be identified in an audit. Accordingly, I do not express an audit opinion.

Conclusion

Based on my review, nothing has come to my attention that causes me to believe that the accompanying interim consolidated and separate financial information is not prepared, in all material respects, in accordance with Thai Accounting Standard 34, "Interim Financial Reporting".

PricewaterhouseCoopers ABAS Ltd.

Pongthavee Ratanakoses

Certified Public Accountant (Thailand) No. 7795

Bangkok

7 May 2020

Esso (Thailand) Public Company Limited

Statement of Financial Position

As at 31 March 2020

(All amounts in Baht thousand unless otherwise stated)

			Consolidated	Separate
			financial information	financial information
			Unaudited		Audited	Unaudited		Audited
			31 March		31 December	31 March		31 December
	Notes	2020	2019		2020	2019
Assets
Current assets
Cash and cash equivalents			669,357	276,683		669,357	276,683
Trade receivables, net	8		4,560,909	6,464,042		4,560,909	6,464,042
Amounts due from related parties	14 f	-	-		99,168	50,526
Inventories, net			15,135,967	19,085,170		15,135,967	19,085,170
Other receivables, net			2,278,742	1,377,578		2,278,742	1,377,578
Other current assets	4		2,406,551	4,774,725		2,595,351	4,957,208
Total current assets			25,051,526		31,978,198		25,339,494		32,211,207
Non-current assets
Financial assets measured at fair value
through other comprehensive income	4, 7		850,500	-		850,500	-
Available-for-sale investments	4, 7		-	1,350,000		-	1,350,000
Investments in an associate			2,305,628	2,206,905		1,729,360	1,729,360
Investments in subsidiaries			-	-		114,589	114,589
Long-term loans to related parties	14 g	-	-		3,251,994	3,251,419
Property, plant and equipment, net	10		25,336,377	25,599,800		21,131,487	21,394,910
Right-of-use assets, net	4, 10		3,627,322	-		3,701,527	-
Intangible assets, net	10		184,750	181,174		184,750	181,174
Deferred income tax assets, net			3,205,912	1,500,999		3,093,676	1,388,763
Prepaid rental and deferred charges	4		342,452	1,725,830		648,908	2,118,327
Other non-current assets			1,860,442	1,699,723		1,860,442	1,699,723
Total non-current assets			37,713,383		34,264,431		36,567,233		33,228,265
Total assets			62,764,909		66,242,629		61,906,727		65,439,472
Director …………………………………………………

The accompanying notes on pages 9 to 22 form part of this interim financial information.

2

Esso (Thailand) Public Company Limited

Statement of Financial Position

As at 31 March 2020

(All amounts in Baht thousand unless otherwise stated)

			Consolidated	Separate
			financial information	financial information
			Unaudited		Audited	Unaudited		Audited
			31 March		31 December	31 March		31 December
	Notes	2020	2019		2020	2019
Liabilities and equity
Current liabilities
Bank overdrafts and short-term borrowings
from financial institutions	11		6,660,291	6,488,377		6,660,291	6,488,377
Trade and other payables			3,999,644	5,020,169		3,999,204	5,019,720
Amounts due to related parties	14 f	10,313,553	8,091,234		10,313,413	8,101,318
Current portion of long-term borrowings
from financial institutions	11		1,416,667	1,466,667		1,416,667	1,466,667
Current portion of long-term borrowings
from related parties	14 h	1,533,333	1,633,333		1,533,333	1,633,333
Short-term loans from related parties	14 h	13,662,637	13,188,379		13,663,536	13,189,278
Current income tax payables			1,336	632		-	-
Current portion of lease liabilities	4		207,986	-		233,092	-
Short-term provisions for employee benefits			883,792	787,070		883,792	787,070
Total current liabilities			38,679,239		36,675,861		38,703,328		36,685,763
Non-current liabilities
Long-term borrowings
from financial institutions	11		1,500,000	1,816,667		1,500,000	1,816,667
Long-term loans from related parties	14 h	2,041,667	2,350,000		2,046,479	2,350,756
Lease liabilities	4		1,904,774	-		1,934,572	-
Long-term provisions
for employee benefits			3,225,916	3,280,326		3,225,916	3,280,326
Other non-current liabilities			1,836	1,845		1,836	1,845
Total non-current liabilities			8,674,193		7,448,838		8,708,803		7,449,594
Total liabilities			47,353,432		44,124,699		47,412,131		44,135,357

The accompanying notes on pages 9 to 22 form part of this interim financial information.

3

Esso (Thailand) Public Company Limited

Statement of Financial Position

As at 31 March 2020

(All amounts in Baht thousand unless otherwise stated)

	Consolidated	Separate
	financial information	financial information
	Unaudited		Audited	Unaudited		Audited
	31 March		31 December	31 March		31 December
	2020	2019		2020	2019
Liabilities and equity (continued)
Equity
Share capital
Authorised share capital
3,467,916,666 ordinary shares
with par value of Baht 4.9338 each	17,110,007	17,110,007		17,110,007	17,110,007
Issued and paid-up share capital
3,460,858,000 ordinary shares
with paid-up value of Baht 4.9338 each	17,075,181	17,075,181		17,075,181	17,075,181
Share premium	4,031,711	4,031,711		4,031,711	4,031,711
Retained earnings
Appropriated
Legal reserve	1,000,901	1,000,901		1,000,901	1,000,901
Unappropriated	(6,476,769)	(169,916)		(7,393,461)	(983,542)
Other components of equity	(226,981)	172,619		(219,736)	179,864
Equity attributable to owners of the parent	15,404,043		22,110,496		14,494,596		21,304,115
Non-controlling interests	7,434		7,434		-		-
Total equity	15,411,477	22,117,930		14,494,596	21,304,115
Total liabilities and equity	62,764,909		66,242,629		61,906,727		65,439,472

The accompanying notes on pages 9 to 22 form part of this interim financial information.

4

Esso (Thailand) Public Company Limited

Statement of Comprehensive Income

For the three-month period ended 31 March 2020 (All amounts in Baht thousand unless otherwise stated)

		Consolidated		Separate
		financial information		financial information
		Unaudited		Unaudited		Unaudited		Unaudited
		31 March		31 March		31 March		31 March
	Notes	2020		2019		2020		2019
Revenue from sales and services	6	38,710,856	45,959,005	38,710,856	45,959,005
Subsidy from Oil Fuel Fund	6	675,097	75,589	675,097	75,589
Cost of sales and services		(45,830,348)		(43,375,071)		(45,833,905)		(43,378,463)
Gross profit		(6,444,395)	2,659,523	(6,447,952)	2,656,131
Selling expenses		(1,408,684)	(1,371,316)	(1,458,836)	(1,418,490)
Administrative expenses		(68,917)		(84,153)		(68,797)		(84,153)
(Loss) profit from sales	6	(7,921,996)	1,204,054	(7,975,585)	1,153,488
Other income		5,550	3,041	5,550	3,041
Interest income		731	803	49,373	47,749
Finance costs		(93,943)	(68,364)	(94,270)	(68,389)
Share of profit from an associate		98,723		113,426		-		-
(Loss) profit before income tax		(7,910,935)	1,252,960	(8,014,932)	1,135,889
Income tax credit (expense)	9	1,604,082		(225,822)		1,605,013		(225,188)
(Loss) profit for the period		(6,306,853)	1,027,138	(6,409,919)	910,701
Other comprehensive (loss) income
for the period, net of tax:
Items that will not be reclassified to profit or loss
Changes in fair value of equity investments
at fair value through other comprehensive income		(399,600)	-	(399,600)	-
Item that will be reclassified subsequently
to profit or loss
Changes in fair value of available-for-sale
investments		-	81,000	-	81,000
Total comprehensive (loss) income
for the period		(6,706,453)	1,108,138	(6,809,519)	991,701
(Loss) profit attributable to:
Owners of the parent		(6,306,853)	1,027,138	(6,409,919)	910,701
Non-controlling interests		-		-		-		-
		(6,306,853)	1,027,138	(6,409,919)	910,701
Total comprehensive (loss) income
attributable to:
Owners of the parent		(6,706,453)	1,108,138	(6,809,519)	991,701
Non-controlling interests		-		-		-		-
		(6,706,453)	1,108,138	(6,809,519)	991,701

(Loss) earnings per share for (loss) profit attributable to the equity holders of the parent

(expressed in Baht per share)

Basic (loss) earnings per share	(1.82)	0.30	(1.85)	0.26

The accompanying notes on pages 9 to 22 form part of this interim financial information.

5

Esso (Thailand) Public Company Limited

Statement of Changes in Equity

For the three-month period ended 31 March 2020

(All amounts in Baht thousand unless otherwise stated)

											Consolidated financial information (Unaudited)
											Attributable to owners of the parent
													Other components of equity
							Retained earnings				Other comprehensive income
																Measurement of
																equity investments					Total
																at fair value	Share of other		Total		attributable
			Issued and						Unappropriated							through other	comprehensive		other		to owners		Non-
			paid-up		Share		Appropriated		- retained		Available-for-		Provisions for	comprehensive	income of		components		of the		controlling		Total
	Note	share capital		premium		- legal reserve		earnings		sale investments		employee benefits	income	an associate		of equity		parent		interests		equity
Opening balance at 1 January 2019
		17,075,181	4,031,711	1,000,901	3,241,873	1,150,200	(673,022)			-		(2,180)	474,998	25,824,664	7,434	25,832,098
Changes in equity for the period
Total comprehensive income			-	-	-	1,027,138	81,000	-			-		-	81,000	1,108,138	-	1,108,138
Closing balance at 31 March 2019
		17,075,181	4,031,711	1,000,901	4,269,011	1,231,200	(673,022)			-		(2,180)	555,998	26,932,802	7,434	26,940,236
Opening balance at 1 January 2020
- as reported			17,075,181		4,031,711		1,000,901		(169,916)		1,051,200		(871,336)			-		(7,245)		172,619		22,110,496		7,434		22,117,930
Retrospective adjustments from changes
in accounting policy	4		-		-		-		-		(1,051,200)		-			1,051,200		-		-		-		-		-
Opening balance at 1 January 2020
- restated			17,075,181		4,031,711		1,000,901		(169,916)		-		(871,336)			1,051,200		(7,245)		172,619		22,110,496		7,434		22,117,930
Changes in equity for the period
Total comprehensive loss			-		-		-		(6,306,853)		-		-			(399,600)		-		(399,600)		(6,706,453)		-		(6,706,453)
Closing balance at 31 March 2020			17,075,181		4,031,711		1,000,901		(6,476,769)		-		(871,336)			651,600		(7,245)		(226,981)		15,404,043		7,434		15,411,477

The accompanying notes on pages 9 to 22 form part of this interim financial information.

6

Esso (Thailand) Public Company Limited

Statement of Changes in Equity

For the three-month period ended 31 March 2020

(All amounts in Baht thousand unless otherwise stated)

									Separate financial information (Unaudited)
													Other components of equity
							Retained earnings		Other comprehensive income
															Measurement of
															equity investments
															at fair value		Total
			Issued and						Unappropriated						through other		other
			paid-up		Share		Appropriated		- retained		Available-for-		Provisions for		comprehensive		components		Total
	Note		share capital		premium		- legal reserve		earnings		sale investments		employee benefits		income		of equity		equity
Opening balance at 1 January 2019			17,075,181	4,031,711	1,000,901	2,452,481	1,150,200	(673,022)	-	477,178	25,037,452
Changes in equity for the period
Total comprehensive income			-	-	-	910,701	81,000	-	-	81,000	991,701
Closing balance at 31 March 2019			17,075,181	4,031,711	1,000,901	3,363,182	1,231,200	(673,022)	-	558,178	26,029,153
Opening balance at 1 January 2020
- as reported			17,075,181		4,031,711		1,000,901		(983,542)		1,051,200		(871,336)		-		179,864		21,304,115
Retrospective adjustments from changes
in accounting policy	4		-		-		-		-		(1,051,200)		-		1,051,200		-		-
Opening balance at 1 January 2020
- restated			17,075,181		4,031,711		1,000,901		(983,542)		-		(871,336)		1,051,200		179,864		21,304,115
Changes in equity for the period
Total comprehensive loss			-		-		-		(6,409,919)		-		-		(399,600)		(399,600)		(6,809,519)
Closing balance at 31 March 2020			17,075,181		4,031,711		1,000,901		(7,393,461)		-		(871,336)		651,600		(219,736)		14,494,596

The accompanying notes on pages 9 to 22 form part of this interim financial information.

7

Esso (Thailand) Public Company Limited

Statement of Cash Flows

For the three-month period ended 31 March 2020 (All amounts in Baht thousand unless otherwise stated)

			Consolidated	Separate
			financial information		financial information
			Unaudited		Unaudited	Unaudited		Unaudited
			31 March		31 March	31 March		31 March
	Notes	2020	2019		2020	2019
Cash flows from operating activities
Cash generated from operations	12		1,117,786	1,428,879		1,140,181	1,438,008
Interest paid			(49,769)	(46,549)		(49,769)	(46,549)
Income tax received (paid)			12,508	(9,094)		12,684		(8,867)
Net cash generated from operating activities			1,080,525	1,373,236		1,103,096	1,382,592
Cash flows from investing activities
Loan payments received from related parties	14 g	-	-		-	50
Loans made to related parties	14 g	-	-		(575)	(13,556)
Purchase of property, plant and equipment			(414,361)	(348,326)		(414,361)	(348,326)
Purchase of intangible assets	10		(7,754)	(3,357)		(7,754)	(3,357)
Payments for right-of-use assets			(56,000)	-		(56,000)	-
Proceeds from disposal of property, plant and equipment			3,040	5,490		3,040	5,490
Interest received			731		803		731		797
Net cash used in investing activities			(474,344)	(345,390)		(474,919)	(358,902)
Cash flows from financing activities
Net proceeds (payments on) from short-term borrowings			171,914	(2,222,748)		171,914	(2,222,748)
Payments on long-term borrowings			(366,667)	(350,000)		(366,667)	(350,000)
Net proceeds from short-term loans from related parties			445,862	2,289,104		445,862	2,289,104
Payments on long-term loans from related parties			(408,333)	(575,000)		(408,480)	(575,123)
Proceeds from long-term loans from related parties			-	-		4,203	4,279
Payments on lease liabilities			(56,283)		-		(82,335)		-
Net cash used in financing activities			(213,507)		(858,644)		(235,503)		(854,488)
Net increase in cash and cash equivalents			392,674	169,202		392,674	169,202
Cash and cash equivalents at the beginning of the period			276,683		482,648		276,683		482,648
Cash and cash equivalents at the end of the period			669,357		651,850		669,357		651,850

The accompanying notes on pages 9 to 22 form part of this interim financial information.

8

Esso (Thailand) Public Company Limited

Condensed Notes to the Interim Financial Information (Unaudited)

For the interim period ended 31 March 2020

(All amounts in Baht thousand unless otherwise stated)

1 General information

Esso (Thailand) Public Company Limited ("the Company") is a public limited company incorporated and domiciled in Thailand. The address of its registered office is 3195/17-29 Rama IV Road, Klongton, Klongtoey, Bangkok, 10110.

The Company listed on the Stock Exchange of Thailand ("SET") on 6 May 2008.

The Company and its subsidiaries (together "the Group") are involved in the refining and marketing of petroleum products, which includes a network of retail service stations. The Group operates a refinery and chemical manufacturing plant in Sriracha, Thailand. The Group also operates distribution facilities and oil terminals throughout Thailand. The Group's products are sold through a network of retail service stations, directly to industrial customers, and through export. Additionally, the Group is involved in the sale of chemical products to both domestic and overseas customers.

The Company is a subsidiary of ExxonMobil Group which holds 65.99% of the Company's shares.

This interim consolidated and separate financial information was authorised for issue by the Board of Directors on 7 May 2020.

2 Basis of preparation

The interim consolidated and separate financial information has been prepared in accordance with Thai Accounting Standard (TAS) no. 34, Interim Financial Reporting and other financial reporting requirements issued under the Securities and Exchange Act.

The interim financial information should be read in conjunction with the annual financial statements for the year ended 31 December 2019.

For the period ended 31 March 2020, loss for the period of the Group was Baht 6,307 million and, as at the same period ended date, the current liabilities of the Group exceeded the current assets by Baht 13,628 million. The Group currently has adequate financing sources to generate operational cash flow and to enable the payment of liabilities when they become due as follows: (1) uncommitted borrowing facilities from related companies and financial institutions in the amount of Baht 72,833 million, and (2) the ability to offer Baht 11,500 million of bills of exchange in a revolving program as approved by the Securities and Exchange Commission. Even though the aforementioned situation exists, the Group continuously operates and considers operational and financial plans in order to ensure an ability to continue its operations as a going concern in accordance with the demand and supply of relevant industries of the Group. In addition, the Group places importance on and closely monitors the situations. Accordingly, the consolidated and separate financial statements have been prepared on a going concern basis and do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or to amounts or classification of liabilities that may be necessary if the going concern basis of preparing the consolidated and separate financial statements is not appropriate.

An English version of the interim consolidated and separate financial information has been prepared from the interim financial information that is in the Thai language. In the event of a conflict or a difference in interpretation between the two languages, the Thai language interim financial information shall prevail.

3 Accounting policies

The accounting policies used in the preparation of the interim financial information are consistent with those used in the annual financial statements for the year ended 31 December 2019, except as described in note 4.

9

Esso (Thailand) Public Company Limited

Condensed Notes to the Interim Financial Information (Unaudited)

For the interim period ended 31 March 2020

(All amounts in Baht thousand unless otherwise stated)

4 Adoption of new financial reporting standards and changes in accounting policies

The Group has adopted financial reporting standards relating to financial instruments (TAS 32, TFRS 7 and TFRS 9) and leases standard (TFRS 16) retrospectively from 1 January 2020, but has not restated comparatives for the 2019 reporting period, as permitted in the standards. The reclassifications and adjustments arising from the new requirements are therefore recognised in the opening Statement of Financial Position on 1 January 2020.

The other new and amended Thai Financial Reporting Standards effective for the accounting periods beginning on or after 1 January 2020 do not have material impact on the Group.

The following tables show the adjustments made to the amount recognised in each line item in the statement of financial position upon adoption of the financial reporting standards relate to financial instruments (TAS 32 and TFRS 9) and leases standard (TFRS 16):

			Consolidated financial information
		As at	TAS 32 and TFRS 9	TFRS 16	As at
		31 December 2019	Reclassifications	Reclassifications	1 January 2020
		Previously reported	and adjustments	and adjustments	Restated
Assets
Current assets
Other current assets	4,774,725	-	(141,336)	4,633,389
Total current assets	4,774,725	-	(141,336)	4,633,389
Non-current assets
Financial assets measured at
fair value through other
comprehensive income	-	1,350,000	-	1,350,000
Available-for-sale
investments	1,350,000	(1,350,000)	-		-
Right-of-use assets, net	-	-	3,582,743	3,582,743
Prepaid rental and
deferred charges	1,725,830	-	(1,367,374)	358,456
Total non-current assets	3,075,830	-	2,215,369	5,291,199
Total assets	7,850,555	-	2,074,033	9,924,588
Liabilities
Current liabilities
Current portion of lease
liabilities	-	-	207,579	207,579
Total current liabilities	-	-	207,579	207,579
Non-current liabilities
Lease liabilities	-	-	1,866,454	1,866,454
Total non-current liabilities	-	-	1,866,454	1,866,454
Total liabilities		-	-	2,074,033	2,074,033

10

Esso (Thailand) Public Company Limited

Condensed Notes to the Interim Financial Information (Unaudited)

For the interim period ended 31 March 2020

(All amounts in Baht thousand unless otherwise stated)

			Separate financial information
		As at	TAS 32 and TFRS 9	TFRS 16	As at
		31 December 2019	Reclassifications	Reclassifications	1 January 2020
		Previously reported	and adjustments	and adjustments	Restated
Assets
Current assets
Other current assets	4,957,208	-	(141,336)	4,815,872
Total current assets	4,957,208	-	(141,336)	4,815,872
Non-current assets
Financial assets measured at
fair value through other
comprehensive income	-	1,350,000	-	1,350,000
Available-for-sale
investments	1,350,000	(1,350,000)	-		-
Right-of-use assets, net	-	-	3,663,306	3,663,306
Prepaid rental and
deferred charges	2,118,327	-	(1,367,292)	751,035
Total non-current assets	3,468,327	-	2,296,014	5,764,341
Total assets	8,425,535	-	2,154,678	10,580,213
Liabilities
Current liabilities
Current portion of lease
liabilities	-	-	233,632	233,632
Total current liabilities	-	-	233,632	233,632
Non-current liabilities
Lease liabilities	-	-	1,921,046	1,921,046
Total non-current liabilities
		-	-	1,921,046	1,921,046
Total liabilities		-	-	2,154,678	2,154,678

The adjustments and reclassifications above are summarized below;

Financial instruments

The adoption of the new financial reporting standards on financial instruments mainly affects the Group's accounting treatment as follows;

Classification and measurement of investments in equity instruments

The Group has elected to reclassify all its equity investments not held for trading to financial assets measured at fair value through other comprehensive income which previously classified as available-for-sale investments. As a result, assets with a fair value of Baht 1,350 million were reclassified from available-for-sale investment to financial assets measured at fair value through other comprehensive income on 1 January 2020.

11

Esso (Thailand) Public Company Limited

Condensed Notes to the Interim Financial Information (Unaudited)

For the interim period ended 31 March 2020

(All amounts in Baht thousand unless otherwise stated)

Leases

On adoption of TFRS 16, the Group recognised lease liabilities in relation to leases which had previously been classified as operating leases under the principles of TAS 17 Leases. As at 1 January 2020, these liabilities were measured at the present value of the remaining lease payments, discounted using the lessee's incremental borrowing rate. The Group's incremental borrowing rates applied to the lease liabilities on 1 January 2020 for 1-5 years lease term and over than 5 years lease term were 1.53% and 1.84%, respectively.

		Consolidated
		financial	Separate financial
		information	information
Operating lease commitments disclosed as at 31 December 2019	2,497,817	7,400,590
Less:	Discounted using the lessee's incremental borrowing rate	(245,801)	(247,848)
Less:	Non-qualified leases	(177,983)	(177,983)
Less:	Variable lease payments	-	(4,820,081)
Lease liability recognised as at 1 January 2020	2,074,033	2,154,678
Current lease liabilities	207,579	233,632
Non-current lease liabilities	1,866,454	1,921,046
		2,074,033	2,154,678

Variable leases are from the leases of land from the Company's subsidiaries under lease agreements effective in 2018. Rental was a variable lease payments as a cost plus basis over 30 years lease term. Therefore, it will not be included in the measurement of lease liabilities.

The Group measured right-of use assets at the amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments relating to that lease recognised in the statement of financial position as at 31 December 2019. There were no onerous lease contracts that would have required an adjustment to the right-of-use assets at the date of initial application.

The recognised right-of-use assets relate to the following types of assets:

		Consolidated	Separate
		financial information	financial information
		31 March	1 January	31 March	1 January
		2020	2020	2020		2020
Properties	3,627,322	3,582,743	3,701,527		3,663,306
Total right-of-use assets		3,627,322	3,582,743	3,701,527		3,663,306

Practical expedients applied

In applying TFRS 16 for the first time for the lease contract available before 1 January 2020, the Group has used the following practical expedients permitted by the standard:

• the use of a single discount rate to a portfolio of leases with reasonably similar characteristics
• the operating leases with less than 12 months remaining lease term as at 1 January 2020 be defined as short-term leases
• the exclusion of initial direct costs for the measurement of the right-of-use asset at the date of initial application, and
• the election not to reassess whether a contract is, or contains a lease as defined under TFRS 16 at the date of initial application but relied on its assessment made applying TAS 17 and TFRIC 4 Determining whether an Arrangement contains a Lease.

12

Esso (Thailand) Public Company Limited

Condensed Notes to the Interim Financial Information (Unaudited)

For the interim period ended 31 March 2020

(All amounts in Baht thousand unless otherwise stated)

Changes in accounting policies from adoption of the financial reporting standards related to financial instruments and leases

Investments and other financial assets

Classification and measurements

From 1 January 2020, the Group classifies its financial assets as follows:

• those to be measured subsequently at fair value either through profit or loss (FVPL) or through other comprehensive income (FVOCI)
• those to be measured at amortised cost

The Group initially recognises a financial asset on trade date at its fair value plus transaction costs that are directly attributable to the acquisition of the financial asset.

Equity instruments

All equity instruments held must be irrevocably classified to two measurement categories; i) at fair value through profit or loss, or ii) at fair value through other comprehensive income without subsequent recycling to profit or loss. The classification of equity instruments is considered on investment-by-investment basis. Dividends from such investment continue to be recognised in profit or loss as other income.

Impairment

From 1 January 2020, the Group assesses expected credit loss on a forward looking basis for its financial assets carried at FVOCI and at amortised cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk, except trade receivables which the Group applies the simplified approach in determining its expected credit loss.

Leases

The group leases office building, equipment and various plots of land on which retail service stations are operated under lease agreement. The lease terms generally range between 3 to 30 years, and may have the renewal option at the end of the lease period.

Before 2020 financial year, leases were classified as operating leases. Payments made under operating leases were charged to profit or loss on a straight-line basis over the period of the lease.

From 1 January 2020, leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the group. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The right-of-use asset is depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis.

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the lease payments.

The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be determined, the Group's incremental borrowing rate is used, being the rate that the Group would have to pay to borrow the funds necessary to obtain an asset of similar value in a similar economic environment with similar terms and conditions.

Right-of-use assets are measured at cost comprising the amount of the initial measurement of lease liability and any lease payments made at or before the commencement date. Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less.

13

Esso (Thailand) Public Company Limited

Condensed Notes to the Interim Financial Information (Unaudited)

For the interim period ended 31 March 2020

(All amounts in Baht thousand unless otherwise stated)

5 Estimates

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, not necessarily equal the related actual results.

In preparing this interim financial information, the significant judgements made by management in applying the group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements and the separate financial statements for the year ended 31 December 2019.

6 Segment and revenue information

As at 31 March 2020, the Group is organised into two main business segments, namely:

• Downstream, which includes the refining and marketing of petroleum products; and
• Petrochemicals, which includes the manufacturing and marketing of chemical products

Total segment revenue

Inter-segment revenue

Total revenue

Segment loss from sales

Revenue from contracts with customers Timing of revenue recognition

• At a point in time
• Over time

Total

Other revenue not from contracts with customers

Total revenue

Total segment revenue

Inter-segment revenue

Total revenue

Segment profit from sales

Revenue from contracts with customers Timing of revenue recognition

• At a point in time
• Over time

Total

Other revenue not from contracts with customers

Total revenue

Consolidated financial information

For the three-month period ended 31 March 2020

Downstream	Petrochemicals	Total
40,878,298	4,179,323	45,057,621
(3,556,304)	(2,115,364)		(5,671,668)
37,321,994	2,063,959	39,385,953
(7,570,608)	(351,388)		(7,921,996)
36,599,779	2,063,907	38,663,686
13,383	52	13,435
36,613,162	2,063,959	38,677,121
708,832		-	708,832
37,321,994	2,063,959	39,385,953

Consolidated financial information

For the three-month period ended 31 March 2019

Downstream	Petrochemicals	Total
46,502,249	7,551,858	54,054,107
(4,928,915)	(3,090,598)	(8,019,513)
41,573,334	4,461,260	46,034,594
981,781	222,273	1,204,054
41,504,870	4,448,981	45,953,851
12,741	12,279	25,020
41,517,611	4,461,260	45,978,871
55,723	-	55,723
41,573,334	4,461,260	46,034,594

14

Esso (Thailand) Public Company Limited

Condensed Notes to the Interim Financial Information (Unaudited)

For the interim period ended 31 March 2020

(All amounts in Baht thousand unless otherwise stated)

7 Fair value

Fair value estimation

The table below demonstrates financial instruments carried at fair value, by the valuation method. The different levels have been defined as follows:

• Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
• Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices).
• Level 3: Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs).

The following table presents the Group's financial assets that are measured and recognised at fair value Level 1 at 31 March 2020 and 31 December 2019.

		Consolidated and Separate
		financial information
		31 March	31 December
		2020	2019
Financial assets measured at fair value through
other comprehensive income
Equity securities	850,500		-
Available-for-sale investments
Equity securities		-	1,350,000
Total		850,500		1,350,000

The Group and the Company have no financial assets that are measured at fair value Level 2 or 3. There were no changes in valuation techniques during the periods.

8 Trade receivables, net

Outstanding trade receivables, as at 31 March 2020 and 31 December 2019, are analysed as follows:

		Consolidated and Separate
		financial information
		31 March	31 December
		2020	2019
Current	4,399,323	6,354,026
Overdue:
- Less than 3 months	151,485	103,953
- 3 to 6 months	6,452	3,835
- 6 to 12 months	3,348	1,928
- Over 12 months	33,353	33,005
		4,593,961	6,496,747
Less: Allowance for doubtful account (Note 12)	(33,052)	(32,705)
Total		4,560,909	6,464,042

15

Esso (Thailand) Public Company Limited

Condensed Notes to the Interim Financial Information (Unaudited)

For the interim period ended 31 March 2020

(All amounts in Baht thousand unless otherwise stated)

9 Income tax expense

Income tax expense for three-month period ended 31 March 2020 and 31 March 2019 are as follows:

		Consolidated		Separate
		financial information	financial information
		31 March	31 March	31 March	31 March
		2020		2019	2020		2019
Current income tax	931		202,934		-		202,300
Deferred income tax	(1,605,013)		22,888	(1,605,013)			22,888
Income tax (credit) expense		(1,604,082)		225,822	(1,605,013)			225,188

The interim income tax credit and expense are accrued based on management's estimate using the tax rate that would be applicable to expected total annual earnings. The estimated average annual tax rate used is 20%.

10 Property, plant and equipment, net, right-of-use assets, net and intangible assets, net

Movements of property, plant and equipment, right-of-use assets and intangible assets for three-month period ended

31 March 2020 are as follows:

		Consolidated financial information
		Property, plant and	Right-of-use	Intangible
		equipment	assets	assets
Opening net book value	25,599,800			-	181,174
Adjustment from adoption of TFRS 16
on 1 January 2020 (Note 4)		-	3,582,743			-
Additions	248,808		141,602		7,754
Disposals	(5,104)			-		-
Depreciation and amortization	(507,127)		(97,023)		(4,178)
Closing net book value		25,336,377		3,627,322		184,750

		Separate financial information
		Property, plant and	Right-of-use	Intangible
		equipment	Assets	assets
Opening net book value	21,394,910			-	181,174
Adjustment from adoption of TFRS 16
on 1 January 2020 (Note 4)		-	3,663,306			-
Additions	248,808		141,602		7,754
Disposals	(5,104)			-		-
Depreciation and amortization	(507,127)		(103,381)		(4,178)
Closing net book value		21,131,487		3,701,527		184,750

Right-of-use assets as at 31 March 2020 comprise of leasehold land and leasehold building.

16

Esso (Thailand) Public Company Limited

Condensed Notes to the Interim Financial Information (Unaudited)

For the interim period ended 31 March 2020

(All amounts in Baht thousand unless otherwise stated)

11 Borrowings from financial institutions

Movements of borrowings for three-month period ended 31 March 2020 and 31 March 2019 are as follows:

For the three-month period ended

Beginning balance

Net movement of borrowings

Ending balance

Consolidated and Separate

financial information

31 March 31 March

20202019

9,771,711 7,896,189

(194,753) (2,572,748)

9,576,958 5,323,441

From January to March 2020, the decrease in borrowings of Baht 195 million consists of the following:

• Net increase in revolving short-term loans of Baht 171 million.
• Repayment of 5-year loan by installments of Baht 50 million.
• Repayment of 3-year loan by installments of Baht 125 million.
• Repayment of 3-year loan by installments of Baht 108 million.
• Repayment of 3-year loan by installments of Baht 83 million.

From January to March 2019, the decrease in borrowings of Baht 2,573 million consists of the following:

• Net decrease in revolving short-term loans of Baht 1,724 million.
• Net decrease in Bills of Exchange of Baht 499 million.
• Repayment of 5-year loan by installments of Baht 50 million.
• Repayment of 5-year loan by installments of Baht 50 million.
• Repayment of 3-year loan by installments of Baht 125 million.
• Repayment of 3-year loan by installments of Baht 125 million.

17

Esso (Thailand) Public Company Limited

Condensed Notes to the Interim Financial Information (Unaudited)

For the interim period ended 31 March 2020

(All amounts in Baht thousand unless otherwise stated)

12 Cash generated from operations
		Consolidated	Separate
		financial information	financial information
For the three-month period ended	31 March	31 March	31 March	31 March
		2020	2019	2020		2019
(Loss) Profit before income tax expense	(7,910,935)		1,252,960	(8,014,932)			1,135,889
Adjustments for:
Depreciation (Note 10)	604,150		493,853	610,508			493,853
Amortisation (Note 10)	4,178		7,882	4,178			7,882
Allowance for doubtful account (Note 8)	347		-	347			-
Write-down of inventory to net realisable value	422,463		-	422,463			-
Loss on disposal of property,
plant and equipment	2,064		3,750	2,064			3,750
Share of profit from an associate	(98,723)		(113,426)		-		-
Interest income	(731)		(803)	(49,373)			(47,749)
Finance costs	93,943		68,364	94,270			68,389
Net unrealised foreign exchange loss	239,471		86,090	239,471			86,090
Changes in working capital
Trade receivables	1,916,794		(1,212,332)	1,916,794			(1,212,332)
Amount due from related parties		-	50		-		-
Inventories	3,526,740		(2,155,845)	3,526,740			(2,155,845)
Other receivables	(901,150)		954,063	(901,150)			954,063
Other current assets	2,355,439		(154,085)	2,349,173			(182,338)
Prepaid rental and deferred charges	(125,332)		(109,979)	(39,208)			(19,251)
Other non-current assets	(160,719)		205	(160,719)			205
Trade and other payables	(857,067)		468,000	(857,060)			480,354
Amount due to related parties	1,964,550		1,822,093	1,954,311			1,807,009
Provisions for employee benefits	42,313		18,104	42,313			18,104
Other non-current liabilities	(9)	(65)	(9)		(65)
Cash generated from operations	1,117,786		1,428,879	1,140,181			1,438,008
					Consolidated and Separate
					financial information
Non-cash transactions				31 March	31 March
					2020		2019
Acquisition of property, plant and equipment				127,484			138,220

13 Commitments and contingencies

1. Capital commitments
   As at 31 March 2020 and 31 December 2019, the Group had capital commitments amounting to Baht 562 million and Baht 640 million, respectively.
2. Contingent liabilities
   As at 31 March 2020, the Group had contingent liabilities in respect to bank guarantees arising in the ordinary course of business, amounting to Baht 67 million (31 December 2019: Baht 70 million) to third parties. It is not anticipated that any material liabilities will arise from these bank guarantees.

18

Esso (Thailand) Public Company Limited

Condensed Notes to the Interim Financial Information (Unaudited)

For the interim period ended 31 March 2020

(All amounts in Baht thousand unless otherwise stated)

14 Related-party transactions

ExxonMobil Asia Holding Private Limited acquired 65.43% of the shares from ExxonMobil International Holdings Incorporated and 0.56% of the shares from other companies within the ExxonMobil Group on 28 November 2014.

Therefore, the Group is controlled by ExxonMobil Asia Holding Private Limited incorporated in Singapore, which owns 65.99% of the Company's shares as at 31 March 2020. The ultimate holding company is Exxon Mobil Corporation incorporated in the United States of America.

(a)	Sales of goods and services
			Consolidated and Separate
			financial information
	For the three-month period ended	31 March	31 March
			2020	2019
	Sales of goods and services
	- Other related parties	2,178,618	2,640,510
	Total		2,178,618	2,640,510

Sales of goods and services between related parties are based on market prices and primarily relate to the sale of petroleum and petrochemical products.

(b) Purchases of goods and services
		Consolidated and Separate
		financial information
For the three-month period ended	31 March	31 March
		2020	2019
Purchase of goods
- Other related parties	25,195,796	30,374,559
Purchase of services
- An associate	190,194	200,255
Total		25,385,990	30,574,814

Purchases of goods from related parties primarily relate to the purchase of crude oil, petroleum and petrochemical products. Purchases of services from an associate relate to the provision of pipeline transportation services for the Group's products. Purchases of goods and services are based on market prices.

(c)	Expenses
			Consolidated		Separate
			financial information	financial information
	For the three-month period ended	31 March	31 March	31 March	31 March
			2020		2019	2020		2019
	Expenses paid to:
	- Subsidiaries		-		-	54,725		53,569
	- Other related parties	930,473			858,472	929,800		857,051
	Total		930,473			858,472	984,525		910,620

Expenses primarily relate to the provision of support services and are charged on either a cost or cost plus basis.

19

Esso (Thailand) Public Company Limited

Condensed Notes to the Interim Financial Information (Unaudited)

For the interim period ended 31 March 2020

(All amounts in Baht thousand unless otherwise stated)

(d) Finance costs, net
		Consolidated		Separate
		financial information	financial information
For the three-month period ended	31 March	31 March	31 March	31 March
		2020		2019	2020		2019
Interest income received from:
- Subsidiaries		-		-	48,642		46,951
Total		-		-	48,642		46,951
Interest expenses paid to:
- Subsidiaries		-		-	327		26
- Other related parties	52,062			38,907	52,062		38,907
Total		52,062			38,907	52,389		38,933

Interest charges and interest income are based on market rates at the time the agreements were entered.

(e)	Key management compensation
			Consolidated and Separate
			financial information
	For the three-month period ended	31 March	31 March
			2020	2019
	Salaries and other short-term employee benefits	19,321	17,495
	Post-employment benefits	5,239	4,558
	Total		24,560	22,053

The above information is prepared in accordance with the Securities and Exchange Commission's regulations. This includes the managing director, the first four managers reporting to the managing director as well as all managers at the same level.

1. Outstanding balances arising from sales/purchases of goods/services and expenses

		Consolidated	Separate
		financial information	financial information
		31 March	31 December	31 March	31 December
		2020	2019	2020	2019
Amount due from:
- Subsidiaries		-	-	99,168		50,526
- Other related parties		-	-		-	-
Total		-	-	99,168		50,526
Amount due to:
- Subsidiaries		-	-	21	10,269
- Other related parties	10,313,553		8,091,234	10,313,392		8,091,049
Total		10,313,553		8,091,234	10,313,413		8,101,318

Amounts due from related parties relate primarily to interest receivables on long-term loans (Note 14g).

The amounts due to related parties reflect a net payable which arises mainly from the purchase and sales of crude oil, petroleum and petrochemical products under standard industry terms.

20

Esso (Thailand) Public Company Limited

Condensed Notes to the Interim Financial Information (Unaudited)

For the interim period ended 31 March 2020

(All amounts in Baht thousand unless otherwise stated)

1. Loans to related parties

		Consolidated	Separate
		financial information	financial information
		31 March	31 December	31 March	31 December
		2020	2019	2020	2019
Long-term loans to:
- Subsidiaries	-	-	3,251,994	3,251,419
Total		-	-	3,251,994	3,251,419

Movements in long-term loans to related parties are analysed as follows:

For the three-month period ended

Beginning balance

Loans advanced during the period Loan repayments received

Ending balance

Separate

financial information

31 March 31 March

20202019

3,251,419 3,035,705

57513,556 -(50)

3,251,994 3,049,211

Long-term loans to related parties are unsecured. They bear interest based on the minimum lending rate of Bangkok Bank Public Company Limited.

(h)	Loans from related parties
			Consolidated	Separate
			financial information	financial information
			31 March	31 December	31 March	31 December
			2020	2019	2020	2019
	Current:
	Short-term loans from:
	- Subsidiaries		-	-	899	899
	- Other related parties	13,662,637		13,188,379	13,662,637	13,188,379
	Total	13,662,637		13,188,379	13,663,536	13,189,278
	Current portion of long-term loans from:
	- Other related parties	1,533,333		1,633,333	1,533,333	1,633,333
	Total	15,195,970		14,821,712	15,196,869	14,822,611
	Non-current:
	Long-term loans from:
	- Subsidiaries		-	-	4,812	756
	- Other related parties	2,041,667		2,350,000	2,041,667	2,350,000
	Total		2,041,667		2,350,000	2,046,479	2,350,756
	Movements in loans from related parties are analysed as follows:
			Consolidated	Separate
			financial information	financial information
	For the three-month period ended	31 March	31 March	31 March	31 March
			2020	2019	2020	2019
	Beginning balance	17,171,712		7,449,161	17,173,367	7,451,279
	Additional borrowings	1,539,423		2,444,409	1,543,626	2,448,688
	Loans repaid during the period	(1,473,498)		(720,974)	(1,473,645)	(721,097)
	Ending balance		17,237,637		9,172,596	17,243,348	9,178,870

21

Esso (Thailand) Public Company Limited

Condensed Notes to the Interim Financial Information (Unaudited)

For the interim period ended 31 March 2020

(All amounts in Baht thousand unless otherwise stated)

Short-term loans from other related parties include:

• Revolving loan from a related party totaling Baht 11,342 million out of facility size Baht 12,000 million at the end of March 2020.
• Short-termloan from a related party under Loan and Current Account Agreement totaling Baht 2,321 million at the end of March 2020.

Short-term loans from related parties are unsecured. They have no fixed term of repayment and bear interest based on the adjusted minimum lending rate of Bangkok Bank Public Company Limited or Bangkok Interbank Offered Rate (BIBOR).

Long-term loans from other related parties include:

• A 5-year loan of Baht 6,000 million which was obtained in September 2015 and is repayable in 20 quarterly installments commencing from January 2016 to October 2020. The loan bears interest at 1-month (BIBOR) rate plus a margin. As at 31 March 2020, the outstanding loan balance was Baht 300 million, which is payable in 2020.
• A 3-year loan of Baht 700 million which was obtained in June 2019 and is repayable in 12 quarterly installments commencing from September 2019 to June 2022. The loan bears interest at 3-months (BIBOR) rate plus a margin. As at 31 March 2020, the outstanding loan balance was Baht 525 million, of which Baht 233 million is payable within 1 year.
• A 3-year loan of Baht 3,000 million which was obtained in November 2019 and is repayable in 12 quarterly installments commencing from February 2020 to November 2022. The loan bears interest at 1-month (BIBOR) rate plus a margin. As at 31 March 2020, the outstanding loan balance was Baht 2,750 million, of which Baht 1,000 million is payable within 1 year.

Long-term loans from related parties bear interest based on the adjusted minimum lending rate of Bangkok Bank Public Company Limited or Bangkok Interbank Offered Rate (BIBOR).

22