News Detail

Date/Time
25 Apr 2019 17:03:00
Headline
Clarification of news or information requested by SET
Symbol
AQ
Source
AQ
Full Detailed News
Download Full Detailed News
                SET requests to clarify news or information


Subject                                  : Clarification of news or information 
requested by SET
Description                              :
-Translation-

SET.011/2019
                                   25 April 2019

Subject:  Clarification information of letter No. Bor.Jor.120/2019 dated 4 April
 2019
To:         Directors and the Manager
             The Stock Exchange of Thailand
Refer to: The letter No. Bor.Jor.120/2562 dated 4 April 2019
                 The Stock Exchange of Thailand had the letter No. 120/2019 
dated 4 April 2019 requesting the company to clarify information about the
annual audited financial statement 2018 from certified public accountant to the
Stock Exchange of Thailand with qualified opinion especially the adequacy issues
of allowance for doubtful account investment in bills of exchange (B/E) and
loans of 1,067 and 447 million baht including fair value assessment of leasehold
rights for Koh Larn, Chonburi as well as the important items are other
long-term investments 900 million baht The inquiry details of the stock exchange
 are as follows.
1.    Adequacy of allowance for doubtful account investment in bills of exchange 
(B/E) and loans
The company increased its capital to private placement of 3,632 million baht, 
which is intended to be used to repay debts according to the judgment of Supreme
Court's Criminal Division for Persons Holding Political Positions to Krung Thai
Bank However, such damage payment is still in the process of land auction. The
company use some money approximately 1,600 million baht to invest in B/E of
Planet Energy Holding Pte. Ltd. (Planet) and provide short-term loans to Krung
Thai Development Company Limited (Krung Thai Land). The Board of Directors has
provided the policy to prevent risks, including monitoring operational
performance that invest and provide short-term loans closely as well as to find
ways of negotiating collateral and/or additional guarantees. The details are
according to referred letter No. 2 and outstanding summary of value as follows.
Description    Start Transaction Date    Outstanding Value (Million Baht)    Due Date
        As of 31December 2018    As of 28 February2019    
Investment in B/E of Planet    30 November 2017    1,067    1,067    30 June 2019
Short-term loans to Krung Thai Land    17 July 2017 1/    447    4122/    30 April 2019
Total        1,514    1,479    
1/ Start investing in type of B/E, change to loan on 30 June 2018 2/ Received 
debt payment of 35 million baht
    However, the report of auditors indicates that such transaction continues to 
change due dates The company had not yet received the financial report in 2017
and 2018 of Planet For Krung Thai Bank, the company received financial
statements in 2017 with shareholders' equity of 218 million baht but show the
information that Krung Thai Land has temporarily stopped construction due to
adjusted construction drawing and such construction assets are pledged as loan
guarantees.
    The Stock Exchange of Thailand would like to clarify additional information as 
follows:
1.1.    In the opinion of Board of Directors on the adequacy appropriateness of not
reserve allowance for such doubtful accounts. The company has no current
financial position of Planet and temporary stop of construction for Krung Thai
Land.
Answer    The Board of Directors considers the following information
1.1.1.    Planet has evaluated the property of authorized control person and 
ultimate shareholder for PEH consists of the valued ordinary shares of Meta
Corporation Plc. (META), value of Green Earth Power (Thailand) (GEP) ordinary
shares and cash received from GEP sale of common shares such as ECF Power and
Scan Inter Plc (SCN)
In the valuation of META ordinary shares, the analysis is based on the market 
capitalization as of 18 February 2019 and the holding proportion of PEH at 6.72%
of all shares sold of META. Therefore, the value of META ordinary share which
the authorized control person and ultimate shareholder hold at 6,72% of all
shares sold will be the value of 175.36 million baht.
In the valuation of GEP ordinary shares, the analysis is based on the fair value
evaluation report of GEP and prepared by approved financial advisor from office
of SEC. as of February 2019 which is evaluated with caution according to
reasonable assumptions and using net present value method of cash flow that the
analytical department considers appropriate. Thus, the value of GEP ordinary
shares of authorized control person and ultimate shareholder holding at 38% of
all shares sold will be valued at 1,308.99 million baht.
In addition, the authorized control person and ultimate shareholder of PEH has 
received from sales GEP ordinary shares to ECF-Power and SCN equal to 608.71
million baht which returned to invest in the development of GEP solar power
plant project. Therefore, the authorized control person and ultimate shareholder
of PEH has the total asset value of 2,093.06 million baht and concluded that
the asset value of authorized control person and ultimate shareholder of PEH
holdings are worth more than sufficient to repay short-term debt securities or
bills of exchange (BE) issued by PEH with equals 1,067  million baht1 and
accounted for approximately 1.96 times the value of short-term debt securities
or bills of exchange (BE). As a result of PEH has often changed the company
structure, the analysis department therefore considers that investors in such
short-term debt securities may be gradually partial repayment.
1.1.2.    Krung Thai Land
The total assets value in accounting of company current situation is 1,265.59 
million baht which adjusted book value, according to the property valuation
report prepared by Siam City Appraisal Company Limited as at 2 November 2017 and
conducted land and improvement assessment of "Portrait Condominium Rama 4
Project", which is the company project. The total of company assets after
accounting adjustment are 1,434.84 million baht when deducted from the company
total liabilities, totalling 1,047.74 million baht. The value of shareholders'
equity after the accounting adjustment is 387.11 million baht.
Nevertheless, the group of 4 Krung Thai Land shareholders are famous person in 
the political and real estate development business. Such group of company
shareholders are holding ordinary shares in various proportion of 4 other
companies such as:
1)    Triple P Assets Company Limited
2)    Chao Phaya Insurance Public Company Limited
3)    Krung Thai Tractor Company Limited
4)    Reuziti (Thailand) Company Limited
When considering such proportionate shareholding in above 4 companies, the group
of Krung Thai Land shareholders holding assets in other companies valued at
1,481.01 million baht and paid-up authorized capital of 517.14 million baht.
However, the value of Krung Thai Land shareholders' equity is equal to 387.11 
million baht, including reputation and assets value in 4 other companies that
group of Krung Thai Land shareholders is holding in the amount of 1,481.01
million baht and show such group of Krung Thai Land shareholders has potential
to repay the loan agreement worth 412 million baht  by selling company assets
both Krung Thai Land and other companies more than the value of loan agreements
if demand and to repay to the company (Attachment 2).
1.2.    Progress to obtain the information on current financial position of Planet,
full reserve allowance consideration for doubtful accounts with explanations of
 potential impacts on the financial position and operating results of company.
Answer For the analysis information of management department regarding Planet 
Company and Krung Thai Land, the Board of Directors is also confidence that both
companies will be able to repay debts as recalled by company according to
analysis document (Attachment1), as for the Krung Thai Company to repay both
principal and interest within April 2019. In the event of impact on financial
position and operating results of company if Planet and Krung Thai Land is
unable to pay. the following impacts will be as follows.
Shareholderes equity as at 31 December 2018        3,668     million baht
Reserve allowance for doubtful accounts            1,479    million baht
Balance of shareholderes equity                2,189    million baht
1.3.    Specify the person responsible in charge of risk prevention according to 
the Board of Directors stated above including identify the operational result
that according to the policy or not.
Answer     Risk Management Committees consist of:
1)    Mr. Somchai Meesen
2)    Mr. Vuttiphong Issaramalal
3)    Dr. Saranya Sanghiran
The company policy to invest in bills of exchange and loans made by the 
management to follow up the performance in each company closely and analyse of
invested company status and always to report the Board of Directors. The
management is able to get some money back when company wants to use money. Both
companies have the potential to be returned money by the company needs and no
default in the interest.
2.    Fair valuation of leasehold rights to Koh Larn, Chonburi
In 2013, the subsidiary company has the right to lease land 81 rai on Koh Larn, 
Chonburi and the remaining lease period of 27 years. The project development
plan was interrupted in 2017 Therefore, the company hired the independent
appraiser to evaluate leasehold by appraised value of 79 million baht (net book
value of 71 million baht in 2019). For the consideration method of income from
renting leasehold rights at the market price and discounted to the present value
under an unusual assumption, the auditor was unable to use other audit methods
to be satisfied in evaluating fair value of such leasehold rights.
The Stock Exchange of Thailand would like to clarify additional information as 
follows:
2.1.    Policy on fair valuation of land leasehold rights for testing impairment 
and company reason of unable to evaluate fair value of such leasehold rights
Answer The company provides fair valuation every year. In this year, the company
changed the appraisal company from Knight Frank Chartered (Thailand) Company
Limited to SL Standard Appraisal Company Limited, which commissioned in March
2018 and assessment completed on 30 April 2018 by using two assessment methods:
1)    Price appraised by Market Approach, evaluated price of 82 million baht.
2)    Priced apprised by Discounted Cash Flow Approach-DFC, evaluated price of 91 
million baht.
2.2.    Opinion of the Board of Directors regarding the fair value consideration 
and such impairment of leasehold rights.
Answer The Board of Directors always seek the appraisal company in the list of 
approved names by the Stock Exchange of Thailand
3.    Other Long-term investments
In accordance with the notes to the financial statements No.14 regarding other 
long-term investments stated that on 3 September 2018, the company recorded the
preliminary agreement to purchase an ordinary share of company not less than 1.5
million shares, 600 baht par value, totalling 900 million baht from unrelated
individuals. The company paid up shares of 730 million baht, the remaining
unpaid amount to 96 million baht and received the share transfer on 3 December
2018.
The Stock Exchange of Thailand would like to clarify additional information as 
follows:
3.1.    The date on which the Board of Directors has resolved to invest and make 
the investment decisions., including any information of Board of Directors to
consider investing, coordinator or recommend investment, pricing criteria,
investment sources used to purchase investments. In case of using funds from the
capital increase, requesting to consider whether is in accordance with the
purpose of capital increase or not and the benefited company will receive from
investing in such company.

Answer The Board of Directors passed a resolution to invest in such ordinary 
shares on 3 October 2018. The Company entered into sale and purchase agreement
on 5 October 2018. However, the Board of Directors considered the investment
decision from the following information.
1)    The company has received the most information for due diligence of business 
status (Not verify the information on an official document). For such
information, the present value return of received company are 979.73 million
baht or accounted for 7.3% of return on investment which is an attractive return
 in investing.
2)    Entering into the agreement with condition if the due diligence of business 
status is completed and the value of return is not company satisfactory, the
sale contract will be considered to be terminated. The seller must return the
deposit with interest rate at 3% per year from the date that the seller receives
 payment from company's deposit.
3)    The company is in the process of resolving Krung Thai Bank case, thus 
delaying investment in real estate. The company has the option to invest in new
business in order to receive good returns. The seller contacted the company to
offer the energy company shares. New business management department was brought
to the Board of Directors to consider alternative investments. Therefore, the
Board of Directors passed the resolution for Khun Prapat Yokhan (Director) to
coordinate such investments as alternative investments due to the company wants
to diversify risks from the real estate business as the main company business
and the company used the proceeds from business of investment acquisition.
3.2.    Summary details of the invested company such as company name, nature 
business, shareholder structure, the Board of Directors, financial position and
operating results in 2016 - 2018.
Answer The company invests in ordinary shares of Wind Energy Holding Company 
Limited (Wind Energy) which is the company with main income from holding shares
in other companies. At present, Wind Energy has investment in 8 subsidiaries.
The company operates manufacturing business and electricity sale from wind
power, with the shareholding structure as follows.
 
The Board of Directors of Wind Energy Limited
1)    Mr. Nop Narongdej
2)    Mr. Natthawut Phowborom
3)    Mr. Than Riensuwan
4)    Mr. Apichat Nathasilp
5)    Mr. Wichai Thongtang
6)    Mr. Vichate Tantiwanich
7)    Mrs. Emma Lewis Collins
8)    Mr. Kamthorn Kittiisaranon
9)    Miss Nanthida Kittiisaranon
10)    Miss Anicha Ahsirano
11)    Mr. Akararat Na Ranong
Financial position and operating results of Wind Energy and subsidiaries in 
2016-2018.
        Unit:  Million Baht
Description    2016    2017    2018
Total Assets    19,905.04    49,106.73    27,812.31
Total Liabilities    12,163.17    40,770.77    19,965.20
Shareholder's Equity    7,741.87    8,335.96    7,847.11
Total Revenues    2,686.93    4,275.00    3,268.61
Total Expenses    1,914.60    2,707.14    2,295.77
Net Profit    772.33    1,567.86    972.84

3.3.    Summary details of seller such as name. In the case of the juristic person,
specify name of the directors and ultimate shareholders, Business relationship
and shareholding with the Group of Board of Directors and Management.
Answer The seller is natural person named Khun Jariya Buasup which is no 
business relationship and shareholding with the Group of Board of Directors and
Management.
3.4.    Such transaction is within the scope of asset acquisition transaction or 
connected transaction and the company has complied with the requirements
referred to No. 3-4 or not and how.
Answer The purchase-sale transactions of such ordinary shares are the derived 
revenues from assets   under the Notification of Capital Market Supervisory
Board No. TorChor. 20/2008 Re: Rules on Entering into Material Transactions
Deemed as Acquisition or Disposal of Assets (Including the amendments) and the
Notification of Board of Governors of Stock Exchange of Thailand Re:  Disclosure
of Information and Other Acts of Listed Companies Concerning the Acquisition
and Disposition of Assets, 2004 (Including the amendments)  ("Announcement of
Acquisition or Disposition of Assets"). However, when calculating the
transaction size compared to the total assets referring to the consolidated
financial statements of company ended 30 June 2018, which measured the size of
all 4 cases have been found the maximum transaction size at 12.98 % according to
the criteria of return value. Therefore, the company has no duty to disclose
any information in accordance with the announcement of acquisition or
disposition transaction due to lower than 15%.

Please be aware and please spread further.
Yours Sincerely,
(Mr. Suthad Chankingthong)       (Ms. Ranchana Rajatanavin)    
                   Director                                        Director


                         Signature ___________________________
                                    ( Mr.Suthad Chankingthong  Ms.Ranchana 
Rajatanavin )
                                    Director          Director
                         Authorized to sign on behalf of the company

______________________________________________________________________
This announcement was prepared and disseminated by listed company or issuer 
through the electronic system which is provided for the purpose of dissemination
of the information and related documents of listed company or issuer to the
Stock Exchange of Thailand only.  The Stock Exchange of Thailand has   no
responsibility for the correctness and completeness of any statements, figures,
reports or opinions contained in this announcement, and has no liability for any
losses and damages in any cases.  In case you have any inquiries or
clarification regarding this announcement, please directly contact listed
company or issuer who made this announcement.