ZEN CORPORATION GROUP PUBLIC COMPANY LIMITED AND …Company Limited and its subsidiaries, and of Zen...

ZEN CORPORATION GROUP PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES Interim Financial Information For the Period Ended September 30, 2019 and Report on Review of Interim Financial Information Performed by the Independent Auditor

REPORT ON REVIEW OF INTERIM FINANCIAL INFORMATION PERFORMED BY THE INDEPENDENT AUDITOR To the Board of Directors of Zen Corporation Group Public Company Limited I have reviewed the accompanying consolidated and separate statements of financial position of Zen Corporation Group Public Company Limited and its subsidiaries, and of Zen Corporation Group Public Company Limited as at September 30, 2019, the consolidated and separate statements of comprehensive income for the three-month and nine-month periods ended September 30, 2019, and the consolidated and separate statements of changes in shareholders’ equity and cash flows for the nine-month period ended September 30, 2019, and condensed explanatory notes (“interim financial information”). Management is responsible for the preparation and fair presentation of this interim financial information in accordance with Thai Accounting Standard No. 34 “Interim Financial Reporting”. My responsibility is to express a conclusion on this interim financial information based on my reviews. Scope of Review I conducted my reviews in accordance with Thai Standard on Review Engagements 2410 “Review of Interim Financial Information Performed by the Independent Auditor of the Entity”. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Thai Standards on Auditing and consequently does not enable 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 on the reviewed interim financial information. Conclusion Based on my reviews, nothing has come to my attention that causes me to believe that the accompanying interim financial information does not present fairly, in all material respects, in accordance with Thai Accounting Standard No. 34 “Interim Financial Reporting”. (Mr. Apichart Sayasit) Certified Public Accountant, Registration No. 4229 Baker Tilly Audit and Advisory Services (Thailand) Ltd. Bangkok November 11, 2019

ZEN CORPORATION GROUP PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES

STATEMENT OF FINANCIAL POSITION

AS AT SEPTEMBER 30, 2019

A S S E T S

September 30, 2019 December 31, 2018 September 30, 2019 December 31, 2018

"Unaudited" "Unaudited"

Notes "Reviewed" "Audited" "Reviewed" "Audited"

CURRENT ASSETS

Cash and cash equivalents 368,930 142,601 306,978 66,071

Trade and other current receivables 4, 5 84,219 44,308 21,316 24,842

Short-term loans to subsidiaries 4 - - 165,816 170,240

Inventories - net 6, 24 82,553 107,662 - -

Current tax asset 10,099 9,341 5,483 3,712

Other current assets 4, 7 25,300 15,366 7,572 3,560

Total Current Assets 571,101 319,278 507,165 268,425

NON-CURRENT ASSETS

Investments in subsidiaries - at cost 8 - - 723,816 453,816

Property, plant and equipment - net 9, 13, 15, 24 841,605 722,788 372,213 342,337

Goodwill 181,956 181,956 - -

Other intangible assets - net 10 88,020 90,729 9,996 7,151

Leasehold rights - net 11 41,833 48,437 - -

Deferred tax assets 12 33,358 26,438 7,660 1,170

Refundable deposits 4, 22 193,980 163,508 6,393 1,800

Other non-current assets 20,195 10,852 5,452 1,740

Total Non-Current Assets 1,400,947 1,244,708 1,125,530 808,014

TOTAL ASSETS 1,972,048 1,563,986 1,632,695 1,076,439

In Thousand Baht

Consolidated Financial Statements Separate Financial Statements

The accompanying notes to interim financial statements are an integral part of these interim financial statements. 2




LIABILITIES AND SHAREHOLDERS' EQUITY




CURRENT LIABILITIES

Short-term borrowings from financial institutions - net 9, 13, 24 - 629,817 - 629,817

Trade and other current payables 4, 14 279,773 236,845 21,119 3,613

Short-term borrowings from subsidiaries 4 - - 177,405 78,291

Current portion of liabilities under finance lease contracts 9, 15 579 1,302 579 1,302

Current income tax payable 3,013 12,739 - -

Accrued expenses 4 87,825 67,588 21,699 16,597

Current portion of deferred income of membership fee 14,538 12,065 - -

Current portion of deferred income of initial fee 6,381 3,018 - -

Current provision for liabilities from loyalty programmes 16 4,763 3,829 - -

Retention payables 18,479 18,032 837 143

Other current liabilities 38,436 22,963 1,967 3,625

Total Current Liabilities 453,787 1,008,198 223,606 733,388

NON-CURRENT LIABILITIES

Liabilities under finance lease contracts - net 9, 15 441 1,282 441 1,282

Non-current provision for employee retirement benefit 17 16,934 12,205 6,682 4,681

Non-current provision for decommissioning costs 9 63,502 51,111 6,273 2,578

Deferred income of membership fee - net of current portion 5,315 4,753 - -

Deferred income of initial fee - net of current portion 11,564 8,142 - -

Other non-current liabilities 10,822 9,682 - -

Total Non-Current Liabilities 108,578 87,175 13,396 8,541

Total Liabilities 562,365 1,095,373 237,002 741,929

In Thousand Baht






LIABILITIES AND SHAREHOLDERS' EQUITY (Continued)




SHAREHOLDERS' EQUITY

Share capital

- Authorized share capital, ordinary share

300,000,000 shares at Baht 1 par value 300,000 300,000 300,000 300,000

- Issued and paid share capital, ordinary share

300,000,000 shares as at September 30, 2019 and

225,000,000 shares as at December 31, 2018

at Baht 1 per share 18 300,000 225,000 300,000 225,000

Share premium on ordinary shares 18 955,388 78,333 955,388 78,333

Surplus on business combination under common control 147,821 145,001 - -

Retained earnings

- Appropriated for legal reserve 19 30,000 30,000 30,000 30,000

- Unappropriated (Deficit) (23,527) (9,723) 110,305 1,177

Equity Attributable to Owners of the Parent 1,409,682 468,611 1,395,693 334,510

Non-controlling interests 1 2 - -

Total Shareholders' Equity 1,409,683 468,613 1,395,693 334,510

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 1,972,048 1,563,986 1,632,695 1,076,439

In Thousand Baht



ZEN CORPORATION GROUP PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES "UNAUDITED"

STATEMENT OF COMPREHENSIVE INCOME "REVIEWED"

FOR THE THREE-MONTH PERIOD ENDED SEPTEMBER 30, 2019

Notes 2019 2018 2019 2018

REVENUES 4

Revenues from sales and services 759,507 736,039 - -

Franchise fee income 22,013 15,231 - -

Management fee income and others - - 60,851 62,236

Dividend income 8 - - - 94,499

Other income 11,727 5,722 2,643 2,138

Total Revenues 793,247 756,992 63,494 158,873

EXPENSES

Costs of sales and services 4

- Costs of foods and beverages 280,337 266,378 - -

- Others 330,990 301,128 - -

Distribution costs 28,621 22,663 - -

Administrative expenses 4 126,729 114,553 72,861 62,144

Finance costs 4 45 6,092 616 6,447

Total Expenses 766,722 710,814 73,477 68,591

Profit (Loss) before Tax 26,525 46,178 (9,983) 90,282

Tax income (expense) 12 (4,376) (8,504) 2,038 318

PROFIT (LOSS) FOR THE PERIOD 22,149 37,674 (7,945) 90,600

TOTAL COMPREHENSIVE INCOME

(LOSS) FOR THE PERIOD 22,149 37,674 (7,945) 90,600

Profit (loss) for the period attributable to:

Owners of the parent 22,149 37,674 (7,945) 90,600

Non-controlling interests - - - -

22,149 37,674 (7,945) 90,600

Total comprehensive income (loss)

for the period attributable to:

Owners of the parent 22,149 37,674 (7,945) 90,600

Non-controlling interests - - - -

22,149 37,674 (7,945) 90,600

Basic Earnings (Loss) per Share

Attributable to Owners of the Parent 21 0.07 0.26 (0.03) 0.62

In Thousand Baht




STATEMENT OF COMPREHENSIVE INCOME "REVIEWED"

FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2019

Notes 2019 2018 2019 2018

REVENUES 4

Revenues from sales and services 2,208,981 2,142,009 - -

Franchise fee income 53,376 49,299 - -

Management fee income and others - - 177,099 193,072

Dividend income 8 - - 212,859 94,499

Other income 26,544 34,993 7,961 8,629

Total Revenues 2,288,901 2,226,301 397,919 296,200

EXPENSES

Costs of sales and services 4

- Costs of foods and beverages 821,015 772,072 - -

- Others 931,739 887,809 - -

Distribution costs 73,279 81,402 - -

Administrative expenses 4 359,371 332,356 188,505 174,139

Finance costs 4 3,666 18,854 5,526 19,721

Total Expenses 2,189,070 2,092,493 194,031 193,860

Profit before Tax 99,831 133,808 203,888 102,340

Tax income (expense) 12 (12,385) (25,061) 6,490 (3,263)

PROFIT FOR THE PERIOD 87,446 108,747 210,378 99,077

TOTAL COMPREHENSIVE INCOME

FOR THE PERIOD 87,446 108,747 210,378 99,077

Profit for the period attributable to:

Owners of the parent 87,446 108,748 210,378 99,077

Non-controlling interests - (1) - -

87,446 108,747 210,378 99,077

Total comprehensive income for the period

attributable to:

Owners of the parent 87,446 108,748 210,378 99,077

Non-controlling interests - (1) - -

87,446 108,747 210,378 99,077

Basic Earnings per Share

Attributable to Owners of the Parent 21 0.30 0.76 0.73 0.70

In Thousand Baht




STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY "REVIEWED"


Surplus Equity

Issued on business attributable to

and paid-up Share premium combination under Appropriated for Unappropriated owners of Non-controlling Total shareholders'

Notes share capital on ordinary shares common control legal reserve (Deficit) the parent interests equity

Balance as at January 1, 2018 140,625 78,333 144,371 14,063 (11,822) 365,570 (1) 365,569

Disposal of discount on purchases of fixed assets

from companies under common control - - 568 - - 568 - 568

Total comprehensive income for the period - - - - 108,748 108,748 (1) 108,747

Increase in share capital 18 84,375 - - - - 84,375 - 84,375

Appropriated for legal reserve 19 - - - 6,000 (6,000) - - -

Dividend payments 20 - - - - (124,313) (124,313) - (124,313)

Balance as at September 30, 2018 225,000 78,333 144,939 20,063 (33,387) 434,948 (2) 434,946

Balance as at January 1, 2019 225,000 78,333 145,001 30,000 (9,723) 468,611 2 468,613

Disposal of discount on purchases of fixed assets

from companies under common control - - 2,820 - - 2,820 - 2,820

Total comprehensive income for the period - - - - 87,446 87,446 - 87,446

Increase in share capital 18 75,000 877,055 - - - 952,055 - 952,055

Dividend payments 20 - - - - (101,250) (101,250) (1) (101,251)

Balance as at September 30, 2019 300,000 955,388 147,821 30,000 (23,527) 1,409,682 1 1,409,683

Consolidated Financial Statements (In Thousand Baht)

Retained earnings (Deficit)



STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (Continued) "REVIEWED"


Issued

and paid-up Share premium Appropriated for Total shareholders'

Notes share capital on ordinary shares legal reserve Unappropriated equity

Balance as at January 1, 2018 140,625 78,333 14,063 42,921 275,942

Total comprehensive income for the period - - - 99,077 99,077

Increase in share capital 18 84,375 - - - 84,375

Appropriated for legal reserve 19 - - 6,000 (6,000) -

Dividend payments 20 - - - (124,313) (124,313)

Balance as at September 30, 2018 225,000 78,333 20,063 11,685 335,081

Balance as at January 1, 2019 225,000 78,333 30,000 1,177 334,510

Total comprehensive income for the period - - - 210,378 210,378

Increase in share capital 18 75,000 877,055 - - 952,055

Dividend payments 20 - - - (101,250) (101,250)

Balance as at September 30, 2019 300,000 955,388 30,000 110,305 1,395,693

Separate Financial Statements (In Thousand Baht)

Retained earnings



STATEMENT OF CASH FLOWS "REVIEWED"


2019 2018 2019 2018

CASH FLOWS FROM OPERATING ACTIVITIES:

Profit for the period 87,446 108,747 210,378 99,077

Adjustments to reconcile profit for the period to

net cash provided by (used in) operating activities:

Depreciation and amortization 138,521 125,016 9,433 9,164

Loss (gain) on sales of fixed assets (596) 641 (841) (1)

Write-off fixed assets 4,046 3,202 2,015 -

Gain on sales of other intangible assets (13) - - -

Write-off other intangible assets 898 - - -

Write-off inventories 714 913 - -

Allowance for deteriorated inventories 1,936 793 - -

Recognition of membership fee income - net (9,627) (3,934) - -

Recognition of initial fee income - net (8,256) (5,393) - -

Reversal of provision for decommissioning costs (1,934) (17,266) (648) -

Provision for employee retirement benefit 5,482 4,423 2,700 2,360

Provision for liabilities from loyalty programmes 934 1,033 - -

Finance costs 3,666 18,854 5,526 19,721

Dividend income - - (212,859) (94,499)

Interest income (1,363) (899) (7,608) (6,280)

Tax expense (income) 12,385 25,061 (6,490) 3,263

Decrease (Increase) in Operating Assets:

Trade and other current receivables (39,911) (4,534) 3,526 (274)

Inventories 22,459 494 - -

Other current assets (9,720) (8,177) (3,777) (3,322)

Refundable deposits (30,472) (11,152) (4,593) (434)

Increase (Decrease) in Operating Liabilities:

Trade and other current payables 17,503 (32,057) 10,784 2,443

Retention payables 447 2,426 694 (27)

Accrued expenses 20,312 856 5,093 3,630

Other current liabilities 15,473 100 (1,658) 6,649

Deferred income of membership fee 12,662 9,849 - -

Deferred income of initial fee 15,041 7,783 - -

Other non-current liabilities 1,140 1,089 - -

Cash refund from withholding income tax deducted at sources - 2,170 - 902

Employee retirement benefit paid (753) - (699) -

Tax paid (39,132) (36,455) (5,483) (5,906)

Net Cash Provided by Operating Activities 219,288 193,583 5,493 36,466

In Thousand Baht




STATEMENT OF CASH FLOWS (Continued) "REVIEWED"


2019 2018 2019 2018

CASH FLOWS FROM INVESTING ACTIVITIES:

Proceeds from sales of fixed assets 14,340 1,955 2,477 7

Proceeds from sales of other intangible assets 22 - - -

Increase in investment in shares of subsidiary - - (270,000) (19,900)

Cash received from short-term loans to subsidiaries - - 1,179,173 1,236,766

Short-term loans to subsidiaries - - (1,174,749) (1,250,161)

Purchases of fixed assets (218,394) (45,644) (30,734) (6,756)

Purchases of other intangible assets (4,984) (2,185) (3,516) (2,003)

Decommissioning costs paid (774) (2,051) (490) -

Dividend received - - 212,859 94,499

Interest received 1,149 649 7,373 6,168

Net Cash Provided by (Used in) Investing Activities (208,641) (47,276) (77,607) 58,620

CASH FLOWS FROM FINANCING ACTIVITIES:

Cash received from short-term borrowings from financial institutions 490,000 2,755,000 490,000 2,755,000

Cash received from short-term borrowings from subsidiaries - - 1,066,900 877,211

Repayment of short-term borrowings from financial institutions (1,120,000) (2,815,000) (1,120,000) (2,815,000)

Repayment of short-term borrowings from subsidiaries - - (967,786) (825,168)

Repayment of liabilities under finance lease contracts (1,591) (706) (1,591) (706)

Cash received from shareholders for share capital 975,000 84,375 975,000 84,375

Payment of expenses relating to increase in share capital (22,945) - (22,945) -

Dividend paid (101,251) (124,313) (101,250) (124,313)

Finance costs paid (3,531) (17,981) (5,307) (18,801)

Net Cash Provided by (Used in) Financing Activities 215,682 (118,625) 313,021 (67,402)

NET INCREASE IN CASH AND CASH EQUIVALENTS 226,329 27,682 240,907 27,684

CASH AND CASH EQUIVALENTS

AT BEGINNING OF PERIOD 142,601 133,657 66,071 86,949

CASH AND CASH EQUIVALENTS AT END OF PERIOD 368,930 161,339 306,978 114,633


In Thousand Baht



STATEMENT OF CASH FLOWS (Continued) "REVIEWED"


2019 2018 2019 2018

SUPPLEMENTAL DISCLOSURES OF CASH FLOW

INFORMATION:

1) Cash and cash equivalents consisted of:

- Cash on hand 6,851 7,767 41 53

- Cash in banks - current accounts 50,787 40,415 1,355 2,841

- Cash in banks - savings accounts 311,292 113,157 305,582 111,739

Total 368,930 161,339 306,978 114,633

2) Fixed assets increased from:

- Cash payments 218,394 45,644 30,734 6,756

- Other current payables - net 24,875 31,206 5,955 -

- Non-current provision for decommissioning costs (Note 9) 15,099 2,106 4,833 -

- Finance lease contract - 1,660 - 1,660

Total 258,368 80,616 41,522 8,416

3) Other intangible assets increased from:

- Cash payments 4,984 2,185 3,516 2,003

- Other current payables - net 550 - 767 -

Total 5,534 2,185 4,283 2,003

In Thousand Baht



ZEN CORPORATION GROUP PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES Notes to Interim Financial Statements September 30, 2019 (Unaudited/Reviewed)

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Note Contents 1 General information 2 Basis for preparation of the interim financial statements and principles of consolidation 3 Significant accounting policies 4 Transactions with related parties 5 Trade and other current receivables 6 Inventories - net 7 Other current assets 8 Investments in subsidiaries - at cost 9 Property, plant and equipment - net 10 Other intangible assets - net 11 Leasehold rights - net 12 Deferred tax assets 13 Short-term borrowings from financial institutions - net 14 Trade and other current payables 15 Liabilities under finance lease contracts - net 16 Current provision for liabilities from loyalty programmes 17 Non-current provision for employee retirement benefit 18 Share capital and share premium on ordinary shares 19 Legal reserve 20 Dividend payments 21 Basic earnings (loss) per share attributable to owners of the parent 22 Long-term lease agreements 23 Operating segments 24 Commitment and contingent liabilities 25 Approval of interim financial statements

ZEN CORPORATION GROUP PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES Notes to Interim Financial Statements (Continued) September 30, 2019 (Unaudited/Reviewed)

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1. GENERAL INFORMATION Zen Corporation Group Public Company Limited (“the Company”) was incorporated as a limited company in Thailand on December 1, 2014. The Company essentially provides management service to its subsidiaries. The Stock Exchange of Thailand has approved the listing of the Company’s 300 million ordinary shares with a par value of Baht 1 as securities to be traded on the Stock Exchange of Thailand, effective from February 20, 2019. As at September 30, 2019 and December 31, 2018, the major shareholders of the Company is Mr. Sakkanon Chirathivat and Ms. Jomkwan Chirathivat, who directly and indirectly owned totalling 66.92% and 89.22% of the Company’s authorized share capital, respectively. The registered head office address of the Company is located at 662 Soi On Nut 17, Kwang Suanluang, Khet Suanluang, Bangkok, Thailand. For reporting purposes, the Company and its subsidiaries are collectively called “the Group". Details of the Company’s subsidiaries as at September 30, 2019 and December 31, 2018 are additionally given in Note 8. Details are as follows:

Paid-up Share Capital (In Million Baht)

Proportionate (%)

Nature of Business

September 30,

2019

December 31, 2018

Type of Holding

September 30,

2019

December 31, 2018

Zen Restaurant Holding Co., Ltd. Restaurants 300.0 30.0 Direct 99.99 99.99 Tokyo Concept Co., Ltd. Restaurants 25.0 25.0 Direct 99.99 99.99 Aka Interfood Co., Ltd. Restaurants 80.0 80.0 Direct 99.99 99.99 Gyu Grill Group Co., Ltd. Restaurants 30.0 30.0 Direct 99.99 99.99 Zen Supply Chain Management Sales and services Co., Ltd. of food 17.5 17.5 Direct 99.99 99.99 Zen & Spicy Co., Ltd. Restaurants/ owner of franchise 20.0 20.0 Direct 99.99 99.99 Spice Synergy Co., Ltd. Owner of trademark/ servicemark 5.0 5.0 Direct 99.99 99.99 2. BASIS FOR PREPARATION OF THE INTERIM FINANCIAL STATEMENTS AND PRINCIPLES OF CONSOLIDATION (a) Statement of Compliance

The Group maintains the official accounting records in Thai Baht and in the Thai language in conformity with Thai Financial Reporting Standards (“TFRS”). Accordingly, the interim financial statements are intended solely to present the financial positions, financial performance and cash flows in accordance with TFRS.

The interim financial statements have been prepared for providing an update on the financial statements for the year ended December 31, 2018. They focus on new activities, events and circumstances to avoid repetition of information previously reported. Accordingly, these interim financial statements should be read in conjunction with the financial statements for the year ended December 31, 2018.

The accompanying interim financial statements are prepared under the historical cost convention except for those specified in the notes to the interim financial statements.

For the convenience of the readers, the Group has been prepared an English translation of the interim financial statements from the Thai language interim financial statements, which are issued solely for domestic financial reporting purposes.


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(b) Principles of Consolidation Subsidiaries are those entities controlled by the Company. Control exists when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affects these returns through its power over the entity. The financial statements of the subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.

Significant transactions among the Group have been eliminated in the consolidated interim financial statements.

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

(c) Uses of Estimates and Judgements

The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expense. Actual results may differ from these estimates.

In preparing these interim financial statements, the significant judgements made by management in applying the Group’s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the financial statements for the year ended December 31, 2018.

3. SIGNIFICANT ACCOUNTING POLICIES

3.1 The accounting policies and methods of computation applied in these interim financial statements are consistent with those applied in the financial statements for the year ended December 31, 2018, except that the Group has adopted all the new and/or revised Thai Financial Reporting Standards that are effective for annual periods beginning on or after January 1, 2019.

3.2 Accounting standards that became effective in the current accounting period. The Group disclosed the accounting standards, financial reporting standards, accounting standard interpretations and financial reporting standard interpretations that are effective for fiscal years beginning on or after January 1, 2019, in the Notes to financial statements for the year ended December 31, 2018. The Group’s management has assessed the effects of the above accounting standards, financial reporting standards, accounting standard interpretations and financial reporting standard interpretations, and believes that they do not have a significant impact to the interim financial information for the three-month and nine-month periods ended September 30, 2019. The major change is that the Group has initially adopted Thai Financial Reporting Standard No. 15 “Revenue from Contracts with Customers”, which replaced Thai Accounting Standard No. 11 “Construction Contracts”, Thai Accounting Standard No. 18 “Revenue” and related interpretations. Thai Financial Reporting Standard No. 15 “Revenue from Contacts with Customers” requires 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, judgement is required in determining the timing of the transfer of control for revenue recognition - at a point in time or over time. Whereas, under Thai Accounting Standard No. 18 “Revenue”, the Group recognized revenue from sale of goods when the significant risks and rewards of ownership of the goods have been transferred to the buyer, and recognized revenue from rendering of services by reference to the stage of completion of the transaction at the end of the reporting period. No revenue was recognized if there was continuing management involvement with the goods or there were significant uncertainties regarding recovery of the consideration due. Such change in accounting policy has no material impacts on the financial statements.


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4. TRANSACTIONS WITH RELATED PARTIES For the purposes of these financial statements, parties are considered to be related to the Group if the Group has the ability, directly or indirectly, to control or joint control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Group and the party are subject to common control or common significant influence. Related parties may be individuals or other entities. Relationships between the Company and its subsidiaries are disclosed in Note 1. For relationship with key management and other related parties were as follows:

Name of entities

Country of incorporation/

nationality

Nature of relationships Food Gimmick Co., Ltd.

Thailand Related party, some common directors and

shareholders are close members of family of the Group’s directors and shareholders

Stork (Thailand) Co., Ltd. Sudtrara Suite Co., Ltd. Chef Best Co., Ltd. Thailand Related party, common shareholder Crazy Spicy Group Co., Ltd. Thailand Related party, a director is a close member of family of

a shareholder of the Company The pricing policies for transactions with related parties are explained further below:

Transactions Pricing policies

Purchases of food materials Mutual negotiation Management fee and others Contractually agreed prices Rental and service fee expenses Contractually agreed prices Purchase of fixed assets Mutual negotiation Sales of fixed assets Mutual negotiation Interest income Borrowing rate plus 0.5% per annum Interest expense At the fixed interest rate of 1.05% per annum Management benefit expenses As defined by the nomination and remuneration committee but not exceeding the

amount approved by shareholders The significant transactions with related parties for each of the three-month periods ended September 30, 2019 and 2018 were as follows: In Thousand Baht Consolidated Financial Statements Separate Financial Statements 2019

2018 2019 2018

Management fee income and others Subsidiaries - - 60,851 62,236 Dividend income Subsidiaries - - - 94,499 Interest income Subsidiaries - - 2,287 1,669 Other income Subsidiaries - - 3 - Revenue from sales Related parties 2 - - -


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In Thousand Baht Consolidated Financial Statements Separate Financial Statements 2019

2018 2019 2018

Purchases of food materials Related parties - 1,901 - - Purchase of fixed assets Subsidiaries - - 2 - Rental and service fee expenses Related parties 551 961 - - Related person - 217 - - Total 551 1,178 - - Other expenses Subsidiaries - - 7,203 1 Related parties - 4 - - Related person - 280 - 280 Total - 284 7,203 281 Interest expense Subsidiaries - - 570 356 Directors and management remuneration Short-term benefits 8,287 9,658 8,287 9,658 Long-term benefits 359 175 359 175 Total 8,646 9,833 8,646 9,833 The significant transactions with related parties for each of the nine-month periods ended September 30, 2019 and 2018 were as follows: In Thousand Baht Consolidated Financial Statements Separate Financial Statements 2019

2018 2019 2018

Management fee income and others Subsidiaries - - 177,099 193,072 Dividend income Subsidiaries - - 212,859 94,499 Franchise fee income Related party - 6 - - Interest income Subsidiaries - - 6,538 5,618 Other income Subsidiaries - - 3 1,944 Related party - 12 - - Total - 12 3 1,944 Sales of fixed assets Subsidiary - - 40 -


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In Thousand Baht Consolidated Financial Statements Separate Financial Statements 2019

2018 2019 2018

Revenue from sales Related parties 13 141 - - Purchases of food materials Related parties 3,919 5,995 - - Purchases of fixed assets Subsidiaries - - 2 - Related party 69 - - - Total 69 - 2 - Rental and service fee expenses Related parties 2,430 2,662 - - Related person 432 670 - - Total 2,862 3,332 - - Other expenses Subsidiaries - - 7,528 89 Related parties 29 13 - - Related person 2 580 - 580 Total 31 593 7,528 669 Interest expense Subsidiaries - - 1,860 868 Directors and management remuneration Short-term benefits 25,748 27,460 25,748 27,460 Long-term benefits 1,094 523 1,094 523 Total 26,842 27,983 26,842 27,983 Significant balances as at September 30, 2019 and December 31, 2018 with related parties were as follows: In Thousand Baht Consolidated Financial Statements Separate Financial Statements September 30,

2019 December 31,

2018 September 30,

2019 December 31,

2018 Other Current Receivables Subsidiaries:

Zen Restaurant Holding Co., Ltd. - - 8,461 10,119 Tokyo Concept Co., Ltd. - - 3,643 4,288 Aka Interfood Co., Ltd. - - 5,811 6,028 Gyu Grill Group Co., Ltd. - - 476 599 Zen Supply Chain Management Co., Ltd. - - 182 1,058 Zen & Spicy Co., Ltd. - - 2,468 2,718 Spice Synergy Co., Ltd. - - 32 32

Total other current receivables - - 21,073 24,842


18

In Thousand Baht Consolidated Financial Statements Separate Financial Statements September 30,

2019 December 31,

2018 September 30,

2019 December 31,

2018 Refundable Deposits Related parties:

Food Gimmick Co., Ltd. 2,667 2,667 - - Chef Best Co., Ltd. 280 280 - -

Total related parties 2,947 2,947 - - Related person 210 210 - - Total refundable deposits 3,157 3,157 - - Trade Payables Related parties:

Food Gimmick Co., Ltd. 264 310 - - Stork (Thailand) Co., Ltd. - 851 - - Chef Best Co., Ltd. - 110 - -

Total related parties 264 1,271 - - Related person 1 71 - - Total trade payables 265 1,342 - - Other Current Payables Subsidiaries:

Gyu Grill Group Co., Ltd. - - 7,100 - Zen Restaurant Holding Co., Ltd. - - 77 35 Zen Supply Chain Management Co., Ltd. - - 21 28 Zen & Spicy Co., Ltd. - - 3 23 Tokyo Concept Co., Ltd. - - 2 -

Total other current payables - - 7,203 86 Accrued Interest Receivables (included in other current assets) Subsidiaries:

Gyu Grill Group Co., Ltd. - - 130 148 Tokyo Concept Co., Ltd. - - 125 27 Zen Supply Chain Management Co., Ltd. - - 357 307 Zen & Spicy Co., Ltd. - - 94 137 Aka Interfood Co., Ltd. - - 2 - Zen Restaurant Holding Co., Ltd. - - - 68

Total accrued interest receivables - - 708 687 Accrued Interest Payables (included in accrued expenses) Subsidiaries:

Zen Restaurant Holding Co., Ltd. - - 160 - Spice Synergy Co., Ltd. - - 2 17 Aka Interfood Co., Ltd. - - - 61

Total accrued interest payables - - 162 78


19

In Thousand Baht Interest Rate

(% Per annum) Consolidated

Financial Statements Separate

Financial Statements September 30,

2019 December 31,

2018 September 30,

2019 December 31,

2018 September 30,

2019 December 31,

2018 Short-term Loans to Subsidiaries:

Gyu Grill Group Co., Ltd. 4.15 4.15 - - 38,219 41,345 Tokyo Concept Co., Ltd. 4.15 4.15 - - 42,089 8,957 Zen Supply Chain Management Co., Ltd. 4.15 4.15 - - 44,625 54,191 Zen & Spicy Co., Ltd. 4.15 4.15 - - 30,655 43,744 Aka Interfood Co., Ltd. 4.15 - - - 10,228 - Zen Restaurant Holding Co., Ltd. - 4.15 - - - 22,003

Total - - 165,816 170,240 Movements of short-term loans to subsidiaries during the nine-month period ended September 30, 2019 were as follows: In Thousand Baht

Consolidated Financial Statements

Separate

Financial Statements Short-term Loans to Subsidiaries As at January 1, 2019 - 170,240 Increase - 1,174,749 Decrease - (1,179,173) As at September 30, 2019 - 165,816 In Thousand Baht Interest Rate

(% Per annum) Consolidated


Financial Statements September 30,

2019 December 31,

2018 September 30,

2019 December 31,

2018 September 30,

2019 December 31,

2018 Short-term Borrowings from Subsidiaries:

Zen Restaurant Holding Co., Ltd. 1.05 - - - 174,661 - Spice Synergy Co., Ltd. 1.05 1.05 - - 2,744 17,531 Aka Interfood Co., Ltd. - 1.05 - - - 60,760

Total - - 177,405 78,291 Movements of short-term borrowings from subsidiaries during the nine-month period ended September 30, 2019 were as follows: In Thousand Baht

Consolidated Financial Statements

Separate

Financial Statements Short-term Borrowings from Subsidiaries As at January 1, 2019 - 78,291 Increase - 1,066,900 Decrease - (967,786) As at September 30, 2019 - 177,405


20

5. TRADE AND OTHER CURRENT RECEIVABLES As at September 30, 2019 and December 31, 2018, the trade and other current receivables were detailed as follows: In Thousand Baht Consolidated Financial Statements Separate Financial Statements September 30,

2019 December 31,

2018 September 30,

2019 December 31,

2018 Trade receivables - Other companies 66,172 37,974 - - Other current receivables - Related parties - - 21,073 24,842 - Other companies 18,047 6,334 243 - Total other current receivables 18,047 6,334 21,316 24,842 Total 84,219 44,308 21,316 24,842 As at September 30, 2019 and December 31, 2018, the aging analysis of trade and other current receivables were detailed as follows: In Thousand Baht Consolidated Financial Statements Separate Financial Statements

September 30,

2019 December 31,

2018 September 30,

2019 December 31,

2018 Trade receivables Within credit-term 20,264 25,851 - - Overdue - Not over 3 months 31,793 11,891 - - - Over 3 months to 6 months 8,525 186 - - - Over 6 months to 12 months 5,590 46 - - Total trade receivables 66,172 37,974 - - Other current receivables Within credit-term 12,655 4,467 21,297 24,842 Overdue - Not over 3 months 4,532 1,441 17 - - Over 3 months to 6 months 683 409 2 - - Over 6 months to 12 months 177 17 - - Total other current receivables 18,047 6,334 21,316 24,842 Total 84,219 44,308 21,316 24,842


21

6. INVENTORIES - Net In Thousand Baht Consolidated Financial Statements Separate Financial Statements

September 30,

2019 December 31,

2018 September 30,

2019 December 31,

2018 Food materials 50,174 74,430 - - Beverages 2,404 3,262 - - Consumable supplies 33,906 31,965 - - Total 86,484 109,657 - - Less: Allowance for deteriorated inventories (3,931) (1,995) - - Net 82,553 107,662 - - Cost of inventories recognized as an expense during the period/year 714 - - - Allowance for deteriorated inventories during the period/year 1,936 1,575 - - 7. OTHER CURRENT ASSETS In Thousand Baht Consolidated Financial Statements Separate Financial Statements September 30,

2019 December 31,

2018 September 30,

2019 December 31,

2018 Input tax pending 3,822 3,663 322 368 Prepaid expenses 11,097 4,789 3,950 1,863 Refundable deposits within one year 4,161 3,217 1,284 - Others 6,220 3,697 2,016 1,329 Total 25,300 15,366 7,572 3,560 8. INVESTMENTS IN SUBSIDIARIES - At Cost As at September 30, 2019 and December 31, 2018, the investments in subsidiaries were as follows:

Paid Share Capital (In Million Baht)

Proportionate (%)

In Thousand Baht

Cost Value Separate Financial Statements

September 30, December 31, September 30, December 31, September 30, December 31, 2019 2018 2019 2018 2019 2018

Zen Restaurant Holding Co., Ltd. 300.0 30.0 99.99 99.99 300,000 30,000 Tokyo Concept Co., Ltd. 25.0 25.0 99.99 99.99 25,000 25,000 Aka Interfood Co., Ltd. 80.0 80.0 99.99 99.99 80,000 80,000 Gyu Grill Group Co., Ltd. 30.0 30.0 99.99 99.99 29,999 29,999 Zen Supply Chain Management Co., Ltd. 17.5 17.5 99.99 99.99 17,500 17,500 Zen & Spicy Co., Ltd. 20.0 20.0 99.99 99.99 20,000 20,000 Spice Synergy Co., Ltd. 5.0 5.0 99.99 99.99 251,317 251,317 Total 723,816 453,816


22

At the Board of Directors’ meeting of the Company held on January 21, 2019, the Board of Directors approved: a) additional investment in shares of Zen Restaurant Holding Co., Ltd. (subsidiary) regarding to the increase in authorized share

capital of such subsidiary from Baht 30,000,000 (divided into 300,000 ordinary shares at Baht 100 par value) to Baht 300,000,000 (divided into 3,000,000 ordinary shares at Baht 100 par value). Such subsidiary registered the capital increase with the Ministry of Commerce on January 30, 2019.

b) the appropriation of interim dividend of Zen Restaurant Holding Co., Ltd. (subsidiary) at Baht 240 per share for ordinary shares

of 300,000 shares, totalling Baht 72 million. c) the appropriation of interim dividend of Tokyo Concept Co., Ltd. (subsidiary) at Baht 110.80 per share for ordinary shares of

250,000 shares, totalling Baht 27.7 million. d) the appropriation of interim dividend of Aka Interfood Co., Ltd. (subsidiary) at Baht 28.75 per share for ordinary shares of

800,000 shares, totalling Baht 23 million. e) the appropriation of interim dividend of Spice Synergy Co., Ltd. (subsidiary) at Baht 30.60 per share for ordinary shares of

500,000 shares, totalling Baht 15.3 million. The above interim dividends of the subsidiaries were paid to the subsidiaries’ shareholders in January and February 2019. At the Board of Directors’ meeting of the Company held on February 28, 2019, the Board of Directors approved: a) the appropriation of interim dividend of Zen Restaurant Holding Co., Ltd. (subsidiary) at Baht 4.67 per share for ordinary shares

of 3,000,000 shares, totalling Baht 14.0 million. b) the appropriation of interim dividend of Tokyo Concept Co., Ltd. (subsidiary) at Baht 26 per share for ordinary shares of 250,000

shares, totalling Baht 6.5 million. c) the appropriation of interim dividend of Aka Interfood Co., Ltd. (subsidiary) at Baht 8.75 per share for ordinary shares of 800,000

shares, totalling Baht 7 million. The above interim dividends of the subsidiaries were paid to the subsidiaries’ shareholders in March 2019. At the Board of Directors’ meeting of the Company held on May 13, 2019, the Board of Directors approved: a) the appropriation of interim dividend of Zen Restaurant Holding Co., Ltd. (subsidiary) at Baht 7.50 per share for ordinary shares

of 3,000,000 shares, totalling Baht 22.5 million. b) the appropriation of interim dividend of Tokyo Concept Co., Ltd. (subsidiary) at Baht 29 per share for ordinary shares of 250,000

shares, totalling Baht 7.25 million. c) the appropriation of interim dividend of Aka Interfood Co., Ltd. (subsidiary) at Baht 22 per share for ordinary shares of 800,000

shares, totalling Baht 17.6 million. The above interim dividends of the subsidiaries were paid to the subsidiaries’ shareholders in July 2019.


23

9. PROPERTY, PLANT AND EQUIPMENT - Net Movements of property, plant and equipment during the nine-month period ended September 30, 2019 were as follows: In Thousand Baht Consolidated


Financial Statements

Net book value as at January 1, 2019 722,788 342,337 Additions 258,368 41,522 Disposals and write-off (14,970) (3,651) Depreciation charge for the period (124,581) (7,995)

Net book value as at September 30, 2019 841,605 372,213

All of the Company’s land and certain assets of a subsidiary, which have net book value as at September 30, 2019 and December 31, 2018 totalling Baht 342.6 million, were mortgaged to secure for credit facilities and short-term borrowings from a local financial institution as discussed in Note 13.

Certain vehicles of the Company are under finance lease contracts as discussed in Note 15. Non-current provision for decommissioning costs

Movements of non-current provision for decommissioning costs during the nine-month period ended September 30, 2019 were as follows: In Thousand Baht Consolidated



Balance as at January 1, 2019 51,111 2,578 Additions 15,099 4,833 Reversal (1,934) (648) Paid (774) (490) Balance as at September 30, 2019 63,502 6,273 10. OTHER INTANGIBLE ASSETS - Net Movements of other intangible assets during the nine-month period ended September 30, 2019 were as follows: In Thousand Baht Consolidated



Net book value as at January 1, 2019 90,729 7,151 Additions 5,534 4,283 Disposals and write-off (907) - Amortization charge for the period (7,336) (1,438) Net book value as at September 30, 2019 88,020 9,996


24

11. LEASEHOLD RIGHTS - Net Movements of leasehold rights during the nine-month period ended September 30, 2019 were as follows: In Thousand Baht Consolidated



Net book value as at January 1, 2019 48,437 - Amortization charge for the period (6,604) - Net book value as at September 30, 2019 41,833 - 12. DEFERRED TAX ASSETS The details of deferred tax assets in the consolidated financial statements as at September 30, 2019 are as follows: Consolidated Financial Statements (In Thousand Baht) Credited (Charged) to

January 1, 2019

Profit for the period

Other comprehensive income for the

period September 30,

2019 Deferred tax assets Tax loss carry-forwards 12,185 1,885 - 14,070 Allowance for deteriorated inventories 399 387 - 786 Provision for employee retirement benefit 2,441 946 - 3,387 Provision for liability from loyalty programmes 766 187 - 953 Rental expense 1,253 (287) - 966 Depreciation - decommissioning costs 7,562 356 - 7,918 Deferred income of initial fee 1,832 1,537 - 3,369 Unearned income - 1,909 - 1,909 Total 26,438 6,920 - 33,358 The details of deferred tax assets in the separate financial statements as at September 30, 2019 are as follows: Separate Financial Statements (In Thousand Baht) Credited (Charged) to

January 1, 2019 Loss for the

period

Other comprehensive income for the

period September 30,

2019 Deferred tax assets Tax loss carry-forwards - 6,152 - 6,152 Provision for employee retirement benefit 936 400 - 1,336 Depreciation - decommissioning costs 234 (62) - 172 Total 1,170 6,490 - 7,660


25

Tax expense (income) for each of the three-month periods ended September 30, 2019 and 2018 consisted of: In Thousand Baht Consolidated Financial Statements Separate Financial Statements 2019 2018 2019 2018 Current tax: Corporate tax for the period 3,846 9,596 - (138) Deferred taxes : Add (less) : Tax effect from deferred tax of temporary differences - Tax loss carry-forwards 3,918 (345) (2,347) - - Allowance for deteriorated inventories (130) (19) - - - Allowance for impairment of assets 369 - 369 - - Provision for employee retirement benefit (320) (295) (167) (157) - Provision for liability from loyalty programmes (101) (63) - - - Rental expense 133 (168) - - - Depreciation - decommissioning costs (129) (44) 107 (23) - Deferred income of initial fee (1,301) (158) - - - Unearned income (1,909) - - - Tax expense (income) 4,376 8,504 (2,038) (318) Tax expense (income) for each of the nine-month periods ended September 30, 2019 and 2018 consisted of: In Thousand Baht Consolidated Financial Statements Separate Financial Statements 2019 2018 2019 2018 Current tax: Corporate tax for the period 19,305 25,649 - 3,825 Deferred taxes : Add (less) : Tax effect from deferred tax of temporary differences - Tax loss carry-forwards (1,885) (832) (6,152) - - Allowance for deteriorated inventories (387) (159) - - - Provision for employee retirement benefit (946) (884) (400) (471) - Provision for liability from loyalty programmes (187) (207) - - - Rental expense 287 (279) - - - Depreciation - decommissioning costs (356) 2,329 62 (91) - Deferred income of initial fee (1,537) (556) - - - Unearned income (1,909) - - - Tax expense (income) 12,385 25,061 (6,490) 3,263


26

Reconciliations between tax expense (income) and accounting profit (loss) multiplied by the applicable tax rates for each of the three-month periods ended September 30, 2019 and 2018 are as follows: In Thousand Baht Consolidated Financial Statements Separate Financial Statements 2019 2018 2019 2018 Accounting profit (loss) before tax 26,525 46,178 (9,983) 90,282 Income tax rates at 15% and 20% 5,298 9,256 (1,997) 18,056 Add : Tax effect of permanent difference of - Non-deductible expenses 334 1,118 7 613 - Additional tax deduction expenses (1,532) (1,617) (48) (87) - Exemption of dividend income - - - (18,900) - Depreciation - discount on business combination under common control 276 (253) - - Tax expense (income) 4,376 8,504 (2,038) (318) Reconciliations between tax expense (income) and accounting profit multiplied by the applicable tax rates for each of the nine-month periods ended September 30, 2019 and 2018 are as follows: In Thousand Baht Consolidated Financial Statements Separate Financial Statements 2019 2018 2019 2018 Accounting profit before tax 99,831 133,808 203,888 102,340 Income tax rates at 15% and 20% 19,898 26,566 40,777 20,468 Add : Tax effect of permanent difference of - Non-deductible expenses 1,124 3,760 25 1,877 - Additional tax deduction expenses (4,457) (4,780) (131) (182) - Exemption of dividend income - - (42,572) (18,900) - Expenses relating to the share offering for capital increase (4,589) - (4,589) - - Depreciation - discount on business combination under common control 409 (485) - - Tax expense (income) 12,385 25,061 (6,490) 3,263 13. SHORT-TERM BORROWINGS FROM FINANCIAL INSTITUTIONS - Net In Thousand Baht Interest Rate (% p.a.) Consolidated Financial Statements Separate Financial Statements September 30, December 31, September 30, December 31, September 30, December 31, 2019 2018 2019 2018 2019 2018 Promissory notes - 3.3 - 3.8 - 630,000 - 630,000 Less : Deferred loan arrangement fee

-

(183)

-

(183) Net - 629,817 - 629,817


27

Movements of short-term borrowings from financial institutions for the nine-month period ended September 30, 2019 are as follows:

In Thousand Baht Consolidated



As at January 1, 2019 630,000 630,000 Additional borrowing during the period 490,000 490,000 Repayment during the period (1,120,000) (1,120,000) As at September 30, 2019 - -

In February 2019, the Company has fully repaid short-term borrowings from financial institutions by using proceeds from capital increase from initial public offering. As at September 30, 2019 and December 31, 2018, the Group obtained credit facilities from 2 local financial institutions as follows:

Credit Line (Million Baht)

Type of Credit Facilities September 30,

2019 December 31,

2018

Interest Rate

Repayment Term

Credit facilities of the Company from the first financial institution

a) Term loan (for land, purchase of assets from related company and investment in shares of Gyu Grill Group Co., Ltd.)

- 380 Minimum Loan Rate minus 2.75% per annum

1) The Company can drawdown the short-term borrowing, by issuing a promissory note as an evidence, at the first time within the year 2016 and the Company will drawdown the short-term borrowing for the last time within 24 months after the first drawdown from the bank, which final maturity date will be within 24 months after the first drawdown. Subsequently on October 16, 2018, such credit facility is extended to be drawndown within September 30, 2019.

2) The Company can issue a promissory note in the bank’s format with term not more than 90 days or subject to the Bank’s concurrence.

3) The Company can renew promissory note that is matured subject to the Bank’s concurrence.

b) Short-term borrowings

including letter of credit, trust receipt and letter of guarantee

190 190 - Short-term borrowings at Minimum Loan Rate minus 2.6% per annum

- Other credit facilities at the rates as indicated in each agreement

- Short-term borrowings - principals will be repayable at call but no later than 180 days.

- Other credit facilities are repayable as indicated in each agreement.

c) Overdraft 10 10 Minimum Overdraft Rate

Repayable at call


28

Credit Line (Million Baht)

Type of Credit Facilities September 30,

2019 December 31,

2018

Interest Rate

Repayment Term

d) Short-term borrowing (for supporting the dividend payment)

- 200 Minimum Loan Rate minus 2.95% per annum

1) The Company can drawdown the short-term borrowing, by issuing a promissory note as an evidence, at the first time within October 2017 and the Company will drawdown the short-term borrowing for the last time within 18 months after the first drawdown from the bank, which final maturity date will be within 18 months after the first drawdown. Subsequently on October 16, 2018, such credit facility is extended to be drawndown within September 30, 2019.

2) The Company can issue a promissory note in the bank’s format with term not more than 90 days or subject to the Bank’s concurrence.

3) The Company can renew promissory note that is matured subject to the Bank’s concurrence.

Total 200 780

Joint credit facility of the Group from the second financial institution

e) Short-term borrowing (for working capital)

100 100 Minimum Loan Rate minus 3% per annum

Repayable at call

Grand total 300 880 These credit facilities a) - d) are collateralized by all of the Company’s land and certain assets of a subsidiary as discussed in Note 9 and additionally guaranteed by another subsidiary as discussed in Note 24. In addition, the Company has to maintain the significant conditions of loan agreements such as maintaining the proportion of shareholders and certain financial ratios, i.e. interest bearing debt/earnings before interest, tax, depreciation and amortization ratio, etc. Subsequently on October 30, 2019, the Company has entered to amendment agreement with such financial institution to revise certain portion credit facilities of short-term borrowings including letter of credit, trust receipt and letter of guarantee to be overdraft line of Baht 20 million, including release certain significant conditions of loan agreements such as maintaining the proportion of shareholders and certain financial ratios. The credit facility e) is unsecured.


29

14. TRADE AND OTHER CURRENT PAYABLES In Thousand Baht Consolidated Financial Statements Separate Financial Statements September 30,

2019 December 31,

2018 September 30,

2019 December 31,

2018 Trade payables - Related parties 265 1,342 - - - Other companies 198,179 188,505 - - Other current payables - Related parties - - 7,203 86 - Other companies 81,329 46,998 13,916 3,527 Total 279,773 236,845 21,119 3,613 15. LIABILITIES UNDER FINANCE LEASE CONTRACTS - Net In Thousand Baht


Year September 30,

2019 December 31,

2018 September 30,

2019 December 31,

2018 2019 175 1,531 175 1,531 2020 702 1,108 702 1,108 2021 293 293 293 293 Total minimum lease payments 1,170 2,932 1,170 2,932 Less: Deferred interest (150) (348) (150) (348) Present value of net minimum lease payments 1,020 2,584 1,020 2,584 Less: Portion due within one year - net deferred interest (579) (1,302) (579) (1,302) Net 441 1,282 441 1,282 16. CURRENT PROVISION FOR LIABILITIES FROM LOYALTY PROGRAMMES Movements of current provision for liabilities from loyalty programmes for the nine-month period ended September 30,2019 are as follows: In Thousand Baht Consolidated



As at January 1, 2019 3,829 - Additions 3,904 - Utilized (2,587) - Write-off (383) - Balance as at September 30, 2019 4,763 -


30

17. NON-CURRENT PROVISION FOR EMPLOYEE RETIREMENT BENEFIT In Thousand Baht Consolidated



Defined benefit obligations as at January 1, 2019 12,205 4,681 Current service cost 4,514 2,403 Interest cost 211 80 Past service cost from change in defined benefit plan 757 217 Benefit paid (753) (699) Defined benefit obligations as at September 30, 2019 16,934 6,682 Expenses recognized in profit for each of the three-month periods ended September 30, 2019 and 2018 are as follows: In Thousand Baht Consolidated Financial Statements Separate Financial Statements 2019 2018 2019 2018 Current service cost 1,527 1,419 807 764 Interest cost 72 56 28 23 Total 1,599 1,475 835 787 Expenses recognized in profit for each of the nine-month periods ended September 30, 2019 and 2018 are as follows: In Thousand Baht Consolidated Financial Statements Separate Financial Statements 2019 2018 2019 2018 Current service cost 4,514 4,257 2,403 2,290 Interest cost 211 166 80 70 Past service cost from change in defined benefit plan 757 - 217 - Total 5,482 4,423 2,700 2,360 Actuarial assumptions Consolidated/Separate Financial Statements Discount rate 2.23% per annum Future salary increase 5% per year Employee turnover 0% - 59% Disability rate 5% of Thai Mortality Table Year 2017 Mortality rate 100% of Thai Mortality Table Year 2017 On April 5, 2019, the Labor Protection Act (No. 7) B.E. 2562 (dated April 4, 2019) was announced in the Government Gazette and it will become effective 30 days after its publication, to include a requirement that an employee who is terminated after having been employed by the same employer for an uninterrupted period of 20 years or more, receives severance payment of 400 days of wages at the most recent rate, which is increased from the former maximum rate of 300 days. The Group recorded past service cost from change in such defined benefit plan when the labor law has come into force in the statement of comprehensive income for the nine-month period ended September 30, 2019.


31

18. SHARE CAPITAL AND SHARE PREMIUM ON ORDINARY SHARES At the extraordinary shareholders’ meeting of the Company held on September 18, 2018, the shareholders resolved the following: a) the change in its par value from Baht 10 per share to be Baht 1 per share resulting in the increase in ordinary shares from

14,062,500 shares to 140,625,000 shares. b) the increase in authorized share capital from Baht 140,625,000 (divided into 140,625,000 ordinary shares at Baht 1 par value)

to Baht 300,000,000 (divided into 300,000,000 ordinary shares at Baht 1 par value) allocated as follows:

- issuing newly ordinary shares of Baht 84,375,000 (divided into 84,375,000 ordinary shares at Baht 1 par value) to the existing shareholders in proportion to their shareholding (Rights Offering) at the ratio 1 existing ordinary share to 0.6 new ordinary shares at offering price of Baht 1 per share.

- issuing newly ordinary shares of Baht 75,000,000 (divided into 75,000,000 ordinary shares at Baht 1 par value) for initial public offering when the Company registers with the Stock Exchange of Thailand.

The Company registered the change in par value and the increase in authorized share capital with the Ministry of Commerce on September 21, 2018. The Company already received the proceeds from increase in share capital from existing shareholders of Baht 84,375,000 and registered the paid-up capital with the Ministry of Commerce on September 26, 2018. During February 7 to 11, 2019, the Company offered 75 million ordinary shares with Baht 13 each to the public for subscription shares. As a result, the Company registered the increase of its issued and paid-up share capital of Baht 225 million (divided into 225 million ordinary shares at Baht 1 par value) to Baht 300 million (divided into 300 million ordinary shares at Baht 1 par value) with the Ministry of Commerce on February 13, 2019. The Stock Exchange of Thailand approved the Company’s 300 million ordinary shares as listed securities to be traded on the Stock Exchange of Thailand, effective from February 20, 2019. The Company incurred expenses relating to the share offering totalling Baht 22.9 million which were presented as a deduction from the share premium on ordinary shares. 19. LEGAL RESERVE Under the provisions of the Public Company Limited Act B.E. 2535, the Company is required to appropriate at least 5% of its annual net profit (after deduction of the deficit brought forward, if any) as reserve fund until the reserve fund reaches 10% of the authorized share capital. The legal reserve is not available for dividend distribution. As at September 30, 2019 and December 31, 2018, legal reserve is equal to 10% of the authorized share capital. 20. DIVIDEND PAYMENTS At the ordinary shareholders’ meeting of the Company held on April 24, 2018, the shareholders approved the dividend declaration at Baht 2.14 per share for 14,062,500 ordinary shares, totalling Baht 30.09 million, to the shareholders whose names are recorded in the

book of shareholders’ registration as at April 30, 2018. The dividend was paid to the shareholders on May 14 , 2018. At the Board of Directors’ meeting of the Company held on September 3, 2018, the Board approved the appropriation of interim dividend of the Company at Baht 6.70 per share for ordinary shares of 14,062,500 shares, totalling Baht 94,218,750. Such dividend was paid to the Company’s shareholders on September 18 and 19, 2018. At the Board of Directors’ meeting of the Company held on January 21, 2019, the Board of Directors approved the appropriation of interim dividend of the Company at Baht 0.45 per share for ordinary shares of 225,000,000 shares, totalling Baht 101.25 million to the shareholders whose names are recorded in the book of shareholders’ registration as at January 29, 2019. The interim dividend was paid to the Company’s shareholders in January and February 2019. Such resolution of the appropriation of interim dividend has been acknowledged by the 2019 Annual General Meeting of shareholders

on April 29, 2019.


32

21. BASIC EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO OWNERS OF THE PARENT Basic earnings (loss) per share attributable to owners of the parent are determined by dividing the profit (loss) for each of the periods attributable to owners of the partner by the weighted average number of shares outstanding during the periods.

Weighted average number of shares (basic) for each of the three-month periods ended September 30, 2019 and 2018 are as follows:

In Million Shares 2019 2018

Number of shares outstanding as at July 1 300.0 14.1 Effect of shares from the change of par value - 126.5 Effect of shares issued during the period - 4.6 Weighted average number of shares (basic) 300.0 145.2 Weighted average number of shares (basic) for each of the nine-month periods ended September 30, 2019 and 2018 are as follows:

In Million Shares 2019 2018

Number of shares outstanding as at January 1 225.0 14.1 Effect of shares from the change of par value - 126.5 Effect of shares issued during the period 63.5 1.6 Weighted average number of shares (basic) 288.5 142.2 22. LONG-TERM LEASE AGREEMENTS As at September 30, 2019 and December 31, 2018, the Group had various operating lease agreements covering its office premises, restaurant area and equipment. Under the term of agreements, the Group has paid deposits totalling Baht 193.2 million and Baht 162.1 million, which were presented as a part of “Refundable deposits” in the consolidated statements of financial position as at September 30, 2019 and December 31, 2018, respectively, and in the separate statements of financial position totalling Baht 6.4 million and Baht 1.3 million, respectively. The totals of future minimum lease payments under non-cancellable operating leases are as follows:

In Thousand Baht

Consolidated Financial Statements Separate Financial Statements September 30,

2019 December 31,

2018 September 30,

2019 December 31,

2018

Not later than 1 year 378,809 331,619 23,167 597 Later than 1 year and not later than 5 years 380,510 349,060 103,204 402 Later than 5 years 125,261 10,779 113,779 - Total 884,580 691,458 240,150 999


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23. OPERATING SEGMENTS Business segment Management considers that the Group operates in a single line of business, namely restaurant business and has, therefore only one major business segment.

Geographical segment The segment financial information of the Group in the consolidated financial statements for each of the three-month periods ended September 30, 2019 and 2018 were as follows: 2019 (In Million Baht) Revenues Revenues from from Thailand Overseas Total Revenues from sales and services 757.9 1.6 759.5 Costs of foods and beverages (279.1) (1.2) (280.3) Others (331.0) - (331.0) Gross margin 147.8 0.4 148.2 Other income 33.7 Distribution costs (28.6) Administrative expenses (126.8) Tax expense (4.4) Profit for the period 22.1 2018 (In Million Baht) Revenues Revenues from from Thailand Overseas Total Revenues from sales and services 734.1 1.9 736.0 Costs of foods and beverages (264.9) (1.5) (266.4) Others (301.1) - (301.1) Gross margin 168.1 0.4 168.5 Other income 21.0 Distribution costs (22.7) Administrative expenses (114.5) Finance costs (6.1) Tax expense (8.5) Profit for the period 37.7


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The segment financial information of the Group in the consolidated financial statements for each of the nine-month periods ended September 30, 2019 and 2018 were as follows: 2019 (In Million Baht) Revenues Revenues from from Thailand Overseas Total Revenues from sales and services 2,203.6 5.4 2,209.0 Costs of foods and beverages (816.8) (4.2) (821.0) Others (931.7) - (931.7) Gross margin 455.1 1.2 456.3 Other income 79.9 Distribution costs (73.3) Administrative expenses (359.4) Finance costs (3.7) Tax expense (12.4) Profit for the period 87.4 2018 (In Million Baht) Revenues Revenues from from Thailand Overseas Total Revenues from sales and services 2,137.4 4.6 2,142.0 Costs of foods and beverages (769.1) (3.0) (772.1) Others (887.8) - (887.8) Gross margin 480.5 1.6 482.1 Other income 84.3 Distribution costs (81.4) Administrative expenses (332.4) Finance costs (18.8) Tax expense (25.1) Profit for the period 108.7


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24. COMMITMENTS AND CONTINGENT LIABILITIES As at September 30, 2019,

a) the Company and the Group had commitments under the agreements to purchase assets, inventory and services totalling Baht

55.7 million and Baht 159.0 million, respectively (As at December 31, 2018: Baht 52.2 million and Baht 120.8 million, respectively).

b) the Group was contingently liable for letters of guarantee issued by a local bank to various private companies totallling Baht 0.4

million (As at December 31, 2018: Baht 0.4 million). c) a subsidiary was a guarantor for short-term credit facilities of the Company of Baht 200.0 million (As at December 31, 2018:

guarantor for borrowing of Baht 780.0 million). d) the Company has a business cooperation agreement with a local company for promotion and distribution the Group’s products

for the period from September 26, 2018 to June 30, 2019. In consideration thereof, the Company is committed with the revenue sharing and has to comply with certain conditions as indicated in the agreement. Subsequently on June 26, 2019, the Company entered into the first amendment agreement to extend such cooperation agreement to be December 31, 2019.

e) the Group has the Marketing Support Agreement with 2 local companies for promoting and distributing of certain products of

such companies in the Group’s and franchisees’ restaurants for the period from July 1, 2019 to December 31, 2024. In consideration thereof, the Group is committed to perform promotion activities and comply with certain conditions as indicated in the agreement.

25. APPROVAL OF INTERIM FINANCIAL STATEMENTS The Company’s directors have authorized these interim financial statements for issue on November 11, 2019.

ZEN CORPORATION GROUP PUBLIC COMPANY LIMITED AND …Company Limited and its subsidiaries, and of Zen...

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