News Detail

Date/Time
22 Oct 2020 17:15:00
Headline
Clarification of news or information requested by SET
Symbol
AQ
Source
AQ
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                SET requests to clarify news or information


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

SET. 033/2020
                    
22 October 2020
Subject:        Clarification information by letter No. BorJor.192/2020 dated 8 
October 2020
To:           Directors and the Manager
                       The Stock Exchange of Thailand
Reference:     Letter No. BorJor.192/2020 dated 8 October 2020

In reference to the Stock Exchange of Thailand's letter No. BorJor.192/2020 
dated 8 October 2020 requesting company for the 2020 second quarter financial
statements clarification which had been reviewed by the Certified Public
Accountant, the auditor had a qualified opinion on investments in bill of
exchange (B/E) and short-term loans of 412 million baht which the company
continues to change the due date. The latest due date was on 30 September 2020
and remarks about company prosecutions, including the key items in those
financial statements.
The investors have also been informed of important information for decision 
investment making in the company securities of stock market. It is therefore
requested that the Company provide additional information and clarification to
propagate through the system for the Stock Exchange of Thailand as follows.
1.    Investments in bill of exchange and short-term loans, totaling 1,484 million 
baht.
With reference to notes 6, 8 to the financial statements, the company statement 
indicated that a Bill of Exchange investment of Planet Energy Holding Pte., Ltd.
(Planet) amounted to 1,072 million baht in 2017. (Ultimate shareholders are
Khun Supasit Pokinjarurat and Khun Aung Thiha) and short-term loan to Krungthai
Land Development Company Limited (Krungthai Land) in the amount of 412 million
baht (Ultimate shareholder group is Laohapongchana). The Board of Directors have
resolved the company to renew the Bill of Exchange period and short-term loan
agreement for 9-10 times and the Board of Directors resolved the renewal of Bill
of Exchange period latest date on 24 September 2020. In this regard, the
company has informed the Stock Exchange of Thailand that the company does not
have a need to use such funds. The Board of Director has provided additional
risk policies protection such as monitoring the operating situation of invested
company, short-term loans closely, negotiated collateral and/or additional
guarantees and investments in other companies, as detailed in the letter that
refer to 2.
However, the auditor's report for the annual year 2020 second quarter provided a
qualified opinion on the adequacy of an allowance for doubtful accounts of
investments in the bill of exchange and short-term loans, totaling 1,484 million
baht from the 2018 financial statements to the current period. For reasons that
are not supported by evidence and how to determine the other, the auditor's
report stated the latest Planet's Financial Statements received by the company
(Financial statements had not been audited by the auditor for the year 2018)
that assets of Planet Company amounted to USD 170.43 million and shareholders'
equity of USD 113.59 million. The Company believes that the property of
authorized persons and ultimate shareholder of such companies totaled 1,810.76
billion baht, according to an analysis of debt securities on 5 May 2020. As for
Krungthai Land, the 2020 annual financial statements audited by the auditor,
which was shareholders' equity of 100.53 million baht and a temporary
construction freeze. In both cases, the Company's management believes that it
can be fully charged. Therefore, the allowance for doubtful accounts was not
considered.
The Stock Exchange of Thailand requests the company to clarify the following 
information.
1.1    Opinion of the Board of Directors on extending the term of bill of exchange,
loan agreement and such company's ability to repay the loan by providing
information and explaining the criteria used to consider as well.
Answer:
-    The Board of Director meeting was held by the company on 24 September 2020, 
which resolved to extend the term of bill of exchange and loan agreement to the
date of 31 December 2020 by considering their ability to repay debts and the
debtor's assets proposed enough value to cover debts. The Company uses the asset
 value criteria in consideration.
-    The debtor was contacted for an extended period of time to make a repayment 
plan in September 2020. Management has requested a resolution of the Board of
Directors due to the debtor has made many plans as an option for the company
while the company has been constantly monitoring the quality of debtor's assets
and hired financial advisers to consider the plan.
1.2    Explanation of risk prevention policies of the Board of Directors as 
described in such Company's letter referred to 2 such as monitoring the
operating situation of invested company, short-term loans closely, negotiated
collateral and/or additional guarantees and investments in other companies
including the implementation such company policy of determined Board.
Answer:
-    At present, the company has not been received any collaterals or guarantees 
from debtors. At this time, the debtor has proposed a repayment plan to the
company and the company has hired a financial advisor to analyze the payment
plan, which the company expects to be completed by the end of 2020.
1.3    Guidelines for conducting a search in up-to-date evidence about the 
financial position and the operating results of Planet and Krungthai Land so
that the auditors can express opinions on the Company's financial statements.
Answer: The company has hired an appraisal company to analyze the Planet
Energy Holdings Company Limited and analyzed in accordance with the Attachment 1
Re: Debt Securities Analysis. The Company only has analyzed the debt securities
due to the Planet Energy Holdings Company Limited is a fund in Singapore that
does not have to prepare the financial statements. The Board of Director has an
opinion if the repayment plan analysis is completed then the auditor will be
able to express an opinion on the company financial statements, which is
expected to be completed by the end of 2020.
1.    Investments in shares of The Tarna Align Resort Company Limited (The Tarna) 
125 million baht.
On 29 August 2019, the Board of Directors had approved an offer for all ordinary
shares of the Tarna Company, which operated hotels and resorts in Koh Tao,
Phangan District, Suratthani total 1,387,500 shares to 125 million baht with an
opinion that is a reasonable purchase price because of  lower price  than book
value (For details please refer to the Company's letter 3) and the notes to the
financial statements 10.3 and 25.2.4 states that the Tarna Company received a
subpoena for payment not exceeding 45 million baht as well as the company is
considering an impairment of the Tarna's investments. Summarize the sequence of
important events as follows:

Date    Situation
2 September 2019    The Company entered into an agreement to purchase shares in the
Tarna with Ms.Sunisa Sethapanit by  gradual deposit payment of 63 million baht
for the shares completed on 11 July 2019 and the remaining 62 million baht. The
Company issued promissory notes (P/N) to the seller, aged 6 months without
interest. The company gradually payment based on P/N completion date of 9 April
2020.
25 June 2020    -    The Tarna Company received a subpoena to pay 37 million baht and 
interest not exceeding 8 million baht, totaling no more than 45 million baht
(The court ruled on 8 April 2020). As a result of being lawsuit filed since 5
July 2019 but the company did not know because in the process of preparing sale
and purchase agreement.
-    The Tarna Company recorded as an administrative expense in full amount. The 
Company is currently appealing a court order.
30 June 2020    The Company tests goodwill for impairment of investments in the 
Tarna Company and recognized a loss on impairment of 8 million baht.

The Stock Exchange has requested that the Company provide additional information
 as follows.
2.1    Information and criteria used by the Board of Directors in conducting a due 
diligence audit and considerations for investing in the Tarna Company,
coordinator name or introducing companies to invest as well as sale and purchase
agreement defines the terms on liability for damages resulting from the
lawsuit.
Answer:
-    The Board of Director had a methodology for business process auditing by the 
law office conducting to investigate the case of the Tarna Company on 25 April
2019 and no lawsuit. The company had hired a company appraisal and evaluation
assets were worth more than the purchase price. In this regard, the responsible
agency reviewed the information on debt obligations, assets and receivables
completely as shown in the financial statements for the year 2019 ended 31
January 2019 on August 31, 2019. The management team traveled and inspected such
 place of business operation.
-    The lawsuit was filed at the Tarna Company after the due diligence completed. 
The company had a lawsuit before entering into the purchase and sale agreement
on 5 July 2019.
-    On 2 September 2019, the Company received notice of the judgment dated 30 
April 2020. The Company made an appeal and notified the seller regarding this
lawsuit to prevent damage in the case. In case of the company is damaged,
compensation will be made from the seller under the purchase and sale agreement
stating that the parties did not breach the agreement right is entitled to
compensation based on actual damage.
-    Coordinator name or recommended as a broker to sell a business.
2.2    Reasons for the impairment of investment in the Tarna Company
Answer:
-    As a result of the Tarna Company was filed a civil suit, the Court of First 
Instance ordered the Tarna Company to repay a debt of 45.32 million baht by
dividing the principal amount of 37.34 million baht and interest of 7.98 million
baht. Since the Court of First Instance had already sentenced, the auditor had
considered the damage provision form litigation in the financial statements of
the Tarna Company. Thus, AQ Public Company Limited considered the impairment of
investment in the Tarna Company as shareholders 99.82%.
3    Sale of land sublease rights and building of the Bangkok Free Trade Zone 
project at a price of 100 million baht.
 According to notes 13 to the financial statements stating that on 29 May 2020, 
Free Zone Company Asset Limited (the company holds 100% shares) made an
agreement with a company not related to sell land sublease rights and 14
buildings of Bangkok Free Trade Zone was a net price of 100 million baht when
such sublease rights were equal to 146 and 144 million baht according to the
accounts as of 31 March 2020 and 30 June 2020. For the purpose that memorandum
of such agreement was scheduled to sign a purchase agreement by 15 September
2020.
    The stock exchange would like to acknowledge the opinion of the Board of 
Directors in determining the appropriateness and reasonableness for sale price
of land sublease rights that the Company has set a value lower than the book
value.
Answer: The Board of Director considered a form of the old warehouse and in a 
neighborhood with modern warehouses for rent including facilities to transport
goods from the containers. In the warehouse for rent of the company's
subsidiaries must be renovated and dismantled for new construction. The company
must make a large amount of investment for the renovation and demolition which
compared to the remaining lease term will cost the company to invest in a rental
warehouse cheap and repair costs and expenses to be responsible by tenants. The
company expects to make cash flows to be received from rental future project
which are less than the current project sales. The Board of Directors therefore
approved the sale of leasehold rights and warehouses at a price of 100 million
baht.
The current extension of time from the date of memorandum signed an agreement on
 15 September 2020 was extended to 16 November 2020.

4    Progress on the revocation of the property management agreement and benefit 
sharing.
On 16 October 2015, the Company entered into a property management and benefit 
sharing (agreement) with the Golden Technology Industrial Co., Ltd. (Golden
Company) and Progress Property Management Co., Ltd. (Progress Company). The
company agreed to comprehensive power of compound a debt including sale
management of land as collateral for debts repayment to Krung Thai Bank. Both
parties have agreed not to claim the debt and exercise of recourse against each
other as collateral under the agreement and operational flexibility. The
Progress Company has transferred its shares of Golden Company 5.44 million
shares, representing 68% of the company.
        The company reported that progress had been filed with the Civil Court to 
revoke the contract, which the company has fought not a breach of contract. The
court verdict was on 18 March 2019 by a judge to dismiss the plaintiff and the
case is being considered by the Court of Appeal (For details please refer to the
Company's letter 4) However, the notes to the financial statements 1.1 states
that the Court of Appeal verdict was read on 4 June 2020. The judge returned the
company to transfer its shares of the Golden company 5.44 million shares to
plaintiff. Subsequently, the Company filed a petition for extension period in
the Supreme Court, which the court granted an extension of time until 3
September, 2020.
Progress lawsuit: The Company is currently awaiting the court of appeal in order
to transfer the shares back to the Progress Property Company Limited. In this
case, the company transferred the shares back to the Progress Property Company
Limited, it will not affect the auction of land collateral.
        
    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

______________________________________________________________________
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