Financial Assets and Financial Liabilities

12 Months Ended

Dec. 31, 2021

Disclosure Of Financial Instruments [Abstract]

Financial Assets and Financial Liabilities

11. FINANCIAL ASSETS AND FINANCIAL LIABILITIES

11(a)Other financial assets and liabilities

	As of December 31,
	2021		2020
	US$’000		US$’000
Financial assets at fair value through other comprehensive income
Equity instrument (Note 11(d))		2,929		2,271
		2,929		2,271
Financial assets at fair value through profit or loss
Foreign exchange forward contracts (Note 11(c))		249		—
		249		—

(i) Financial assets and liabilities at fair value through profit or loss

Financial assets and liabilities at fair value through profit or loss reflect the changes in fair value of those foreign exchange forward contracts that are not designated in hedge relationships, but are intended to reduce the level of foreign currency risk for expected sales and purchase transactions.  

(ii) Financial assets at fair value through other comprehensive income - unquoted equity instrument

On January 1, 2018, the date of initial application of IFRS 9, our Company elected to reclassify its unquoted equity instrument in Thai Metal Processing Co., Ltd (“TMP”), which is engaged in the fabrication of copper rods, from financial assets – available-for-sale to financial assets at fair value through other comprehensive income due to the investment being hold as a long-term strategic investment and not expected to be sold in the short to medium term. During the years ended December 31, 2021, 2020, and 2019, our Company received dividends of $106, $108, and $109 from TMP, respectively, which were recorded in other income (Note 7(e)) in the consolidated income statements.

11. FINANCIAL ASSETS AND FINANCIAL LIABILITIES (continued)

11(b)Interest-bearing loans and borrowings

Under the line of credit arrangements for short-term debt with our Company’s banks, our Company may borrow up to approximately $270,094 and $264,162 as of December 31, 2021 and 2020, respectively, on such terms as our Company and the banks may mutually agree upon. These arrangements do not have termination dates but are reviewed annually for renewal. As of December 31, 2021 and 2020, the unused portion of the credit lines was approximately $153,250 and $200,340, respectively, which included unused letters of credit amounting to $66,820 and $95,034, respectively.

Letters of credit are issued by our Company in the ordinary course of business through major financial institutions as required by certain vendor contracts. As of December 31, 2021 and 2020, our Company had open letters of credit amounting to $50,633 and $18,077, respectively. Liabilities relating to the opened letters of credit are included in current liabilities.

Interest bearing loans and borrowings are including current portion $62,083 and $10,131 as of December 31, 2021 and 2020, respectively.

	As of December 31,
	2021						2020
	Interest rate		Maturity	Local currency			Interest rate	Maturity	Local currency
	%			‘000	US$’000		%		‘000	US$’000
Interest-bearing loans and borrowings
Bank loans (including bank overdrafts US$1,995 in 2021)		3.07	Mar. 2044	AUD$7,458		5,410	3.07	Mar. 2045	AUD$4,883		3,764
Bank loans	3.85~4.53		Jul . 2022	RMB$41,751		6,552	4.50 ~ 4.90	Jun. 2021	RMB$17,800		2,736
Trust receipt	0.7~3.3		Jun. 2022	THB$1,648,835		49,729	0.9 ~ 1.0	Mar. 2021	THB$74,176		2,488
Bank loan (Trust receipt in 2020)		1.98	Dec. 2022	SGD$5,000		3,696	2.32	Apr. 2021	SGD$6,332		4,793
Total						65,387					13,781

11. FINANCIAL ASSETS AND FINANCIAL LIABILITIES (continued)

11(c)Hedging activities and derivatives

(i)    Commodity price risk

Our Company purchases copper on an ongoing basis as its operating activities require a continuous supply of copper for manufacturing products. To reduce the exposures to copper shortage, our Company enters into purchase contracts with commitment of monthly minimum purchase at market prices for selected operating units. The majority of these transactions take the form of contracts that are entered into and continue to be held for the purpose of receipt or delivery of the copper based on our Company’s expected purchase, sale or usage requirements. Such purchase commitment contracts are not deemed financial instruments or derivatives. To date, these contract positions have not had a material effect on our Company’s financial position, results of operations, and cash flow.

(ii) Foreign currency risk

Our Company enters into foreign exchange forward contracts with the intention to reduce the foreign exchange risk of expected sales and purchase transactions. These contracts are entered into the periods consistent with foreign currency exposure of the underlying transaction, generally from one to 12 months. These contracts are not designated in hedge relationships, and are measured at fair value through profit or loss.

As of December 31, 2021 and 2020, our Company had outstanding forward contracts with notional amounts of $(42.1) million and $0 million, respectively. The outstanding forward contracts at December 31, 2021 mature between Jan. 27 and June 22, 2022, respectively. Our Company recognized gain (loss) on forward contracts as other income (expenses) – refer to Note 7(e) and Note 7(f).

The forward contract balance varies with the expected foreign currency transactions and changes in foreign exchange rate.

	2021				2020
	Assets		Liabilities		Assets		Liabilities
	US$’000		US$’000		US$’000		US$’000
Foreign currency forward contracts
Fair value		249		—		—		—

11. FINANCIAL ASSETS AND FINANCIAL LIABILITIES (continued)

11(d)Fair values

Set out below is a comparison of the carrying amounts and fair value of our Company’s financial instruments that are carried in the financial statements:

	Carrying amount				Fair value
	As of December 31,				As of December 31,
	2021		2020		2021		2020
	US$’000		US$’000		US$’000		US$’000
Financial assets-current
Financial assets at amortized cost
Cash and cash equivalents		44,507		52,237		44,507		52,237
Financial assets at fair value at fair value through profit		249		—		249		—
Trade receivables		103,564		82,071		103,564		82,071
Other receivables		2,648		6,192		2,648		6,192
Due from related parties		13,965		10,982		13,965		10,982
Financial assets-non-current
Financial assets at fair value through other comprehensive income		2,929		2,271		2,929		2,271
Financial assets at amortized cost
Long-term bank deposits*		1,725		1,879		1,725		1,879
Total		169,587		155,632		169,587		155,632
Financial liabilities-current
Liabilities at amortized cost
Interest-bearing loans and borrowings		62,083		10,131		62,083		10,131
Trade and other payables		44,784		27,370		44,784		27,370
Due to related parties		11,865		10,620		11,865		10,620
Accruals		23,374		21,361		23,374		21,361
Lease liabilities		571		551		571		551
Financial liabilities-non-current
Liabilities at amortized cost
Interest-bearing loans and borrowings		3,304		3,650		3,304		3,650
Lease liabilities		1,916		1,783		1,916		1,783
Total		147,897		75,466		147,897		75,466
* included in other non-current assets

(i) Methods and assumptions used to estimate fair value

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values:

► Cash and cash equivalents, trade receivables, other receivables, due from related parties, trade and other payables, due to related parties, and financial lease liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

► Fixed-rate and variable-rate receivables are evaluated by our Company based on parameters such as interest rates, specific country risk factors, individual creditworthiness of the customer and the risk characteristics of the financed project. Based on this evaluation, allowances were provided to account for the expected losses of these receivables. As of December 31, 2021 and 2020, the carrying amounts of such receivables, net of allowances, were not materially different from their calculated fair values.

11. FINANCIAL ASSETS AND FINANCIAL LIABILITIES (continued)

         11(d)   Fair values(continued)

(i) Methods and assumptions used to estimate fair value (continued)

► Fixed rate long-term bank deposits and fixed rate and variable-rate borrowings are evaluated using discounted cash flows and the market rates or current rates for deposits of similar remaining maturities.

► Fair value of financial liabilities at fair value through profit or loss - derivatives is derived from inputs other than quoted prices that are observable for the asset or liability.

► Fair value of interest-bearing borrowings and loans are determined by using discounted cash flow method with discount rate that reflects the issuer’s borrowing rate as of the end of the reporting period. The non-performance risk as of December 31, 2021 was assessed to be insignificant.

(ii) Description of significant unobservable inputs to valuation

	Valuation technique	Significant unobservable inputs	Liquidity discount (2021 and 2020)	Sensitivity of the input to fair value
				2021	2020
Financial asset
Unquoted equity instrument	Market Approach Method	Liquidity Discount	30%	5%  decrease in the discount would increase in fair value by $209	5%  decrease in the discount would increase in fair value by $162

Our Company estimates the fair value of investment in equity instrument by using the market approach (market comparatives approach). The key in this method is the selection of quoted comparable companies and accommodate adjustments to bring the accounts of different companies into a broadly consistent framework for analysis. Then, select appropriate Indicators of Value. The followings should be taken into account:

► Enterprise Value (EV) versus Market Capitalization;

► Earnings-based: EBITDA +/or EBIT versus Net Earnings +/or Net Cash Flow

► Balance Sheet based: Net Total Assets versus Shareholders Funds

Discount for the lack of liquidity to reflect the lesser liquidity of this equity instrument compared with those of its comparable public company peers. Our Company assessed the discount for the lack of liquidity to be 30 percent on the basis of relevant studies applicable in the region and industry as well as on the specific facts and circumstances of the equity instrument. The equity instrument’s finance performance is characterized by stable, consistent growth and profitability. Our Company believes the liquidity discount of 30% would be appropriate.

11.     FINANCIAL ASSETS AND FINANCIAL LIABILITIES (continued)

         11(d)   Fair values (continued)

        (ii)     Description of significant unobservable inputs to valuation (continued)

Our Company carries the equity instrument as financial assets at fair value through other comprehensive income classified as level 3 within the fair value hierarchy.  A reconciliation of the beginning and closing balances is summarized below:

	2021			2020
	US$’000			US$’000
At January 1		2,271			4,062
Re-measurement financial assets to fair value, recognized in other comprehensive income/(loss)		734			(1,789	)
Exchange difference on translation		(76	)		(2	)
At December 31		2,929			2,271