REPORT OF THE INDEPENDENT CERTIFIED PUBLIC …
Transcript of REPORT OF THE INDEPENDENT CERTIFIED PUBLIC …
REPORT OF THE INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
TO THE PLANNERS
NOK AIRLINES PUBLIC COMPANY LIMITED
Disclaimer of Opinion
We were engaged to audit the consolidated financial statements of Nok Airlines Public
Company Limited and its subsidiaries (“the Group”) and the separate financial statements
of Nok Airlines Public Company Limited (“the Company”), which comprise the consolidated
and separate statements of financial position as at December 31, 2020, and the related
consolidated and separate statements of profit or loss and other comprehensive income, changes
in shareholders’ equity and cash flows for the year then ended, and notes to the consolidated and
separate financial statements, including a summary of significant accounting policies.
We do not express an opinion on the accompanying consolidated and separate financial
statements. Because of the significance of the matters described in the Basis for Disclaimer
of Opinion section of our report, we have not been able to obtain sufficient appropriate
audit evidence to provide a basis for an audit opinion on these consolidated and separate
financial statements.
Basis for Disclaimer of Opinion
As we considered the conditions of uncertainty that had impact to the future outcomes of
the Group’s and the Company’s operations as follows:
1. Lack of financial liquidity and debt default
As disclosed in Note 1.2.1 to the financial statements regarding the financial position of
the Group and the Company as at December 31, 2020, the Group had significant current
liabilities in excess of current assets by Baht 16,194.30 million and had capital deficiency
of Baht 8,002.15 million in the consolidated financial statements and the Company had
current liabilities in excess of current assets by Baht 16,193.29 million and had capital
deficiency of Baht 7,972.81 million in the separate financial statements.
In the third quarter of year 2020, the Company was under the Automatic Stay status
according to the Order to accept the rehabilitation petition of the Central Bankruptcy Court
on July 30, 2020. As a result, the Company has triggered the event of default of outstanding
liabilities and inability to pay liabilities when due, which consisted of trade account payables,
short-term borrowings and lease liabilities. The ability to repay outstanding liabilities
due within one year is depended on the creditors’ approval of the rehabilitation plan
and the successful implementation of the rehabilitation plan.
Deloitte Touche Tohmatsu Jaiyos Audit
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2. Effect of Coronavirus Disease 2019 Pandemic to the operations of the Group
As disclosed in Note 1.2.1 to the financial statements, the Coronavirus disease 2019
(“COVID-19”) pandemic is continuing to evolve, resulting in an economic slowdown
and adversely impacting most businesses and industries, especially aviation industry.
This affect to the Company and the subsidiary to close overseas routes since March 2020
onwards. For domestic routes, the Company normally operates with adjustments on
frequency of flights has been reduced as appropriate under the Emergency Situation Act.
This situation may have a significant impact on the flight plan, the financial position, the
ability to generate revenues and the current and future cash flows of the Group.
3. Entering into the rehabilitation process
As disclosed in Note 4 to the financial statements, on July 30, 2020, the Company
submitted a petition to enter into a business rehabilitation process and propose the
rehabilitation planners to the Central Bankruptcy Court under the Bankruptcy Act B.E. 2483.
The Central Bankruptcy Court issued an order to accept the rehabilitation petition of the
Company on the same day. On November 4, 2020, the Central Bankruptcy Court granted
the Company’s business rehabilitation petition and appointed the Planners as nominated
by the Company. Currently, the Company is under rehabilitation plan and the Planners
is in process of submitting the rehabilitation plan for requesting approval from the
creditors. The Company’s business plan, including flight plan and the ability to continue
as a going concern depends on several internal and external factors, economic condition
and aviation industry, including the creditors’ approval of the rehabilitation plan as well
as the successful implementation of the rehabilitation plan and the Company’s ability to
continue to operate the business.
The aforementioned situations in No. 1 to No. 3 have impact on and are inter-related
reflecting the material uncertainty to the ability to continue as going concern of the
Company which may affect valuation of significant assets and liabilities to the consolidated
and separate financial statements for the year ended December 31, 2020.
Emphasis of Matter
We draw attention to the following notes to the financial statements as follows:
1. Note 1.2.3 and 2.3 to the financial statements that on July 14, 2020, the Annual General
Meeting of Shareholders for the year 2020 of NokScoot Airlines Company Limited (the
“subsidiary”) approved the dissolution of the subsidiary. The subsidiary registered the
dissolution with the Department of Business Development on July 29, 2020. Currently,
the subsidiary is undergoing the liquidation process. The subsidiary appointed a liquidator
to manage the liquidation process and the determination of operating policy is subject to
direction by the liquidator. As a result, the Company lost control of such subsidiary. The Company derecognized the assets and liabilities of the subsidiary at their carrying
amounts, and non-controlling interests in the former subsidiary at their carrying amount
and recognized resulting difference as a gain on dissolution of the subsidiary in the
consolidated financial statements of the Group.
Deloitte Touche Tohmatsu Jaiyos Audit
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2. Note 2.6 to the financial statements that the Group has adopted the Group of Financial
Instruments Standards and Thai Financial Reporting Standard No. 16 “Leases” which
become effective for fiscal years beginning on or after January 1, 2020 The Group elected
to recognize the cumulative effect of initially applying such Standards as an adjustment
to the beginning balances of retained earnings of the reporting period. In addition, the
Group elected to adopt the Accounting Treatment Guidance on the temporary relief
measures for additional accounting alternatives to alleviate the impact of the COVID-19
outbreak issued by the Federation of Accounting Professions.
However, such matters did not affect our disclaimer of opinion.
Responsibilities of Management and Those Charged with Governance for the
Consolidated and Separate Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated and
separate financial statements in accordance with Thai Financial Reporting Standards
(“TFRSs”), and for such internal control as management determines is necessary to enable
the preparation of consolidated and separate financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the consolidated and separate financial statements, management is responsible
for assessing the Group’s and the Company’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern
basis of accounting unless management either intends to liquidate the Group and the
Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Group’s financial
reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated and Separate Financial
Statements
Our responsibility is to conduct an audit of the consolidated and separate financial
statements in accordance with Thai Standards on Auditing and to issue an auditor's report.
However, because of the matters described in the Basis for Disclaimer of Opinion section
of our report, we were not able to obtain sufficient appropriate audit evidence to provide a
basis for an audit opinion on these financial statements.
Deloitte Touche Tohmatsu Jaiyos Audit
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We are independent of the Group in accordance with the Federation of Accounting Professions’
Code of Ethics for Professional Accountants together with the ethical requirements that are
relevant to the audit of the consolidated and separate financial statements, and we have
fulfilled our other ethical responsibilities in accordance with these requirements.
Dr. Suphamit Techamontrikul
Certified Public Accountant (Thailand)
BANGKOK Registration No. 3356
August 31, 2021 DELOITTE TOUCHE TOHMATSU JAIYOS AUDIT CO., LTD.
Notes
2020 2019 2020 2019
ASSETS
CURRENT ASSETS
Cash and cash equivalents 5.1 1,405,561,027 1,233,787,384 1,404,419,500 362,394,166
Current investments 6 - 42,878,939 - 42,261,195
Current investments in financial assets 6 541,235,949 - 541,235,949 -
Trade and other current receivables 7.1 255,160,170 2,493,338,355 256,943,929 1,036,373,329
Short-term loans to a related party 8 - - - 200,000,000
Inventories 9 98,840,588 80,984,963 98,840,588 80,984,963
Short-term aircraft deposits and prepayments 10 106,322,765 272,557,947 106,322,765 272,557,947
Other current assets 175,456,342 123,046,016 175,362,853 62,844,945
Total Current Assets 2,582,576,841 4,246,593,604 2,583,125,584 2,057,416,545
NON-CURRENT ASSETS
Deposits at bank pledged as collateral 33.4 110,246,299 1,153,058,005 110,246,299 960,659,498
Other non-current financial assets 11 45,619,100 - 45,619,100 -
Investments in subsidiaries 12 - - 99,990 4,999,990
Investment in joint venture 14 - 8,119,200 28,420,554 28,420,554
Other long-term investments 11 - 46,175,400 - 45,814,200
Long-term loans to a related party 15 - - - 1,460,000,000
Maintenance reserve 22.1 6,292,715,783 8,342,408,284 6,292,715,783 5,650,730,869
Leasehold improvements and equipment 16 66,442,758 148,697,514 66,442,758 115,762,339
Right-of-use assets 17 8,038,733,906 - 8,038,733,906 -
Intangible assets 18 27,432,477 48,916,514 27,244,357 36,269,947
Deferred tax assets 19 13,321,915 13,321,915 13,321,915 13,321,915
Long-term aircraft deposits and prepayments 10 627,941,410 1,054,093,391 627,941,410 1,006,025,752
Other non-current assets 89,894,181 109,571,430 89,894,181 158,875,441
Total Non-current Assets 15,312,347,829 10,924,361,653 15,340,680,253 9,480,880,505
TOTAL ASSETS 17,894,924,670 15,170,955,257 17,923,805,837 11,538,297,050
Notes to the financial statements form an integral part of these statements
...........................................................
Mr. Tai Chong Yih (Director) Mr. Wutthiphum Jurangkool (Director)
FINANCIAL STATEMENTS FINANCIAL STATEMENTS
...........................................................
NOK AIRLINES PUBLIC COMPANY LIMITED AND SUBSIDIARIES
STATEMENTS OF FINANCIAL POSITION
AS AT DECEMBER 31, 2020
UNIT : BAHT
CONSOLIDATED SEPARATE
Notes
2020 2019 2020 2019
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Short-term borrowings 20 2,720,000,000 3,620,000,000 2,720,000,000 2,520,000,000
Trade and other current payables 21 4,381,079,559 5,688,405,325 4,380,677,249 2,771,058,072
Deferred income from customer loyalty programmes 47,128,488 36,951,459 47,128,488 36,951,459
Provisions for aircraft return condition and short-term aircraft maintenance 22.3 80,859,868 72,407,580 80,859,868 62,210,730
Current portion of lease liabilities 24 11,459,390,865 - 11,459,390,865 -
Other current liabilities 88,417,383 71,469,287 88,358,595 70,397,378
Total Current Liabilities 18,776,876,163 9,489,233,651 18,776,415,065 5,460,617,639
NON-CURRENT LIABILITIES
Provisions for aircraft maintenance as plan 22.2 6,668,666,179 8,793,346,169 6,668,666,179 5,572,635,402
Provisions for aircraft return condition and long-term aircraft maintenance 22.3 88,279,486 125,101,448 88,279,486 101,473,991
Long-term provisions for employee benefit 23 107,134,565 188,664,824 107,134,565 176,680,141
Lease liabilities - net of current portion 24 234,889,872 - 234,889,872 -
Other non-current liabilities 21,234,105 42,822,602 21,234,105 42,530,668
Total Non-current Liabilities 7,120,204,207 9,149,935,043 7,120,204,207 5,893,320,202
TOTAL LIABILITIES 25,897,080,370 18,639,168,694 25,896,619,272 11,353,937,841
SHAREHOLDERS’ EQUITY
SHARE CAPITAL
Authorized share capital 26
4,197,166,631 ordinary shares of Baht 1 each 4,197,166,631 4,197,166,631
3,408,049,800 ordinary shares of Baht 1 each 3,408,049,800 3,408,049,800
Issued and paid-up share capital 26
3,729,186,806 ordinary shares of Baht 1 each, 3,729,186,806 3,729,186,806
3,108,515,756 ordinary shares of Baht 1 each, 3,108,515,756 3,108,515,756
Share premium on ordinary shares 26 6,720,795,354 5,789,788,722 6,720,795,354 5,789,788,722
RETAINED EARNINGS (DEFICIT)
Appropriated
Legal reserve 27 62,500,000 62,500,000 62,500,000 62,500,000
Unappropriated (deficit) (17,513,001,778) (10,050,337,573) (18,485,295,595) (8,776,445,269)
Deficit arising from change in ownership interest in subsidiaries - (5,940,185) - -
Total shareholders’ equity attributable to owners of the Company (7,000,519,618) (1,095,473,280) (7,972,813,435) 184,359,209
Non-controlling interests (1,001,636,082) (2,372,740,157) - -
TOTAL SHAREHOLDERS’ EQUITY (CAPITAL DEFICIENCY) (8,002,155,700) (3,468,213,437) (7,972,813,435) 184,359,209
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 17,894,924,670 15,170,955,257 17,923,805,837 11,538,297,050
Notes to the financial statements form an integral part of these statements
...........................................................
Mr. Tai Chong Yih (Director) Mr. Wutthiphum Jurangkool (Director)
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FINANCIAL STATEMENTS FINANCIAL STATEMENTS
NOK AIRLINES PUBLIC COMPANY LIMITED AND SUBSIDIARIES
STATEMENTS OF FINANCIAL POSITION (CONTINUED)
AS AT DECEMBER 31, 2020
UNIT : BAHT
CONSOLIDATED SEPARATE
Notes
2020 2019 2020 2019
CONTINUING OPERATIONS
REVENUES
Passenger revenues 5,784,220,942 11,163,363,866 5,784,220,942 11,227,896,366
Service revenues 777,090,636 1,248,906,861 777,090,636 1,291,538,531
Other income
Interest income 30,510,904 15,138,428 84,781,679 57,312,124
Others 28 143,568,747 131,895,107 143,568,747 131,887,924
Total Revenues 6,735,391,229 12,559,304,262 6,789,662,004 12,708,634,945
EXPENSES
Costs of passenger and services 7,439,347,381 13,468,472,422 7,439,347,381 13,566,220,821
Selling expenses 37,039,055 102,983,739 37,039,055 102,978,998
Administrative expenses 1,236,435,402 648,624,796 1,236,036,685 670,766,323
Finance costs 910,014,166 81,033,562 910,014,166 82,841,780
Impairment loss on right-of-use assets 17 3,446,296,290 - 3,446,296,290 -
Expected credit losses 3,104,616,061 - 3,257,921,624 -
Total Expenses 16,173,748,355 14,301,114,519 16,326,655,201 14,422,807,922
SHARE OF LOSS FROM INVESTMENT IN A JOINT VENTURE - (1,409,685) - -
LOSS BEFORE INCOME TAX EXPENSES (9,438,357,126) (1,743,219,942) (9,536,993,197) (1,714,172,977)
INCOME TAX EXPENSES 19 - - - -
LOSS FOR THE PERIODS FROM CONTINUING OPERATIONS (9,438,357,126) (1,743,219,942) (9,536,993,197) (1,714,172,977)
DISCONTINUED OPERATION
Profit (loss) from discontinued operation - net of tax 13 2,046,733,662 (1,352,180,694) - -
TOTAL LOSS FOR THE YEARS (7,391,623,464) (3,095,400,636) (9,536,993,197) (1,714,172,977)
OTHER COMPREHENSIVE INCOME
Item that will not be reclassified subsequently to profit or loss
Actuarial gain on defined employee benefit plans 95,758,709 123,056,465 95,758,709 123,056,465
OTHER COMPREHENSIVE INCOME FOR THE YEARS 95,758,709 123,056,465 95,758,709 123,056,465
TOTAL COMPREHENSIVE LOSS FOR THE YEARS (7,295,864,755) (2,972,344,171) (9,441,234,488) (1,591,116,512)
...........................................................
Mr. Tai Chong Yih (Director) Mr. Wutthiphum Jurangkool (Director)
FINANCIAL STATEMENTS FINANCIAL STATEMENTS
NOK AIRLINES PUBLIC COMPANY LIMITED AND SUBSIDIARIES
STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME (CONTINUED)
...........................................................
CONSOLIDATED SEPARATE
NOK AIRLINES PUBLIC COMPANY LIMITED AND SUBSIDIARIES
STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED DECEMBER 31, 2020
UNIT : BAHT
Notes
2020 2019 2020 2019
Profit (loss) for the year attributable to:
Equity holders of the Company
From continuing operations (8,489,178,814) (1,722,435,965) (9,536,993,197) (1,714,172,977)
From discontinued operation 497,929,639 (328,958,700)
(7,991,249,175) (2,051,394,665)
Non-controlling interests of the subsidiaries
From continuing operations (949,178,312) (20,783,977)
From discontinued operation 1,548,804,023 (1,023,221,994)
599,625,711 (1,044,005,971)
(7,391,623,464) (3,095,400,636)
Total comprehensive income (loss) for the year attributable to:
Equity holders of the Company
From continuing operations (8,393,420,105) (1,599,379,500) (9,441,234,488) (1,591,116,512)
From discontinued operation 497,929,639 (328,958,700)
(7,895,490,466) (1,928,338,200)
Non-controlling interests of the subsidiaries
From continuing operations (949,178,312) (20,783,977)
From discontinued operation 1,548,804,023 (1,023,221,994)
599,625,711 (1,044,005,971)
(7,295,864,755) (2,972,344,171)
EARNINGS (LOSSES) PER SHARE 29
Basic earnings (losses) per share (Baht)
From continuing operations (2.33) (0.57)
From discontinued operation 13 0.14 (0.11)
Basic losses per share for the years (2.19) (0.68) (2.62) (0.57)
Notes to the financial statements form an integral part of these statements
........................................................... ...........................................................
Mr. Tai Chong Yih (Director) Mr. Wutthiphum Jurangkool (Director)
UNIT : BAHT
CONSOLIDATED SEPARATE
FINANCIAL STATEMENTS FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2020
Notes
Non-controlling Total
Issued and Share premium Deficit arising Total attributions interests shareholders’
paid-up on ordinary Appropriated Unappropriated from change in to owners of equity
share capital shares Legal reserve (deficit) ownership interest the Company (Capital Deficiency)
in subsidiaries
Changes in shareholders’ equity for the year ended December 31, 2019
Balances as at January 1, 2019 2,271,999,796 4,325,885,792 62,500,000 (8,121,999,373) (5,940,185) (1,467,553,970) (1,564,075,346) (3,031,629,316)
Increase in ordinary shares 26 836,515,960 1,463,902,930 - - - 2,300,418,890 - 2,300,418,890
Non-controlling interests from investment in subsidiaries during the year - - - - - - 235,341,160 235,341,160
Total comprehensive loss for the year - - - (1,928,338,200) - (1,928,338,200) (1,044,005,971) (2,972,344,171)
Balances as at December 31, 2019 3,108,515,756 5,789,788,722 62,500,000 (10,050,337,573) (5,940,185) (1,095,473,280) (2,372,740,157) (3,468,213,437)
Changes in shareholders’ equity for the year ended December 31, 2020
Balances as at January 1, 2020 - as previously reported 3,108,515,756 5,789,788,722 62,500,000 (10,050,337,573) (5,940,185) (1,095,473,280) (2,372,740,157) (3,468,213,437)
Effect from adoption of Thai Financial Reporting Standard No. 9 2.6 - - - (257,892,459) - (257,892,459) - (257,892,459)
Balance as at January 1, 2020 - after adjusted 3,108,515,756 5,789,788,722 62,500,000 (10,308,230,032) (5,940,185) (1,353,365,739) (2,372,740,157) (3,726,105,896)
Increase in ordinary shares 26 620,671,050 931,006,632 - - - 1,551,677,682 - 1,551,677,682
Total comprehensive loss for the year - - - (7,895,490,466) - (7,895,490,466) 599,625,711 (7,295,864,755)
3,729,186,806 6,720,795,354 62,500,000 (18,203,720,498) (5,940,185) (7,697,178,523) (1,773,114,446) (9,470,292,969)
Change in shareholder’s equity
Change in non-controlling interest from write-off of investment in a subsidiary - - - 690,718,720 5,940,185 696,658,905 771,478,364 1,468,137,269
Total change in shareholder’s equity - - - 690,718,720 5,940,185 696,658,905 771,478,364 1,468,137,269
Balances as at December 31, 2020 3,729,186,806 6,720,795,354 62,500,000 (17,513,001,778) - (7,000,519,618) (1,001,636,082) (8,002,155,700)
Notes to the financial statements form an integral part of these statements
Mr. Wutthiphum Jurangkool (Director)Mr. Tai Chong Yih (Director)
NOK AIRLINES PUBLIC COMPANY LIMITED AND SUBSIDIARIES
STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
FOR THE YEAR ENDED DECEMBER 31, 2020
UNIT : BAHT
CONSOLIDATED FINANCIAL STATEMENTS
Total attributions to owners of the Company
Retained earnings (deficit)
........................................................... ...........................................................
Notes
Issued and Share premium Total
paid-up on ordinary Appropriated Unappropriated shareholders’
share capital shares Legal reserve (deficit) equity
(Capital Deficiency)
Changes in shareholders’ equity for the year ended December 31, 2019
Balances as at January 1, 2019 2,271,999,796 4,325,885,792 62,500,000 (7,185,328,757) (524,943,169)
Increase in ordinary shares 26 836,515,960 1,463,902,930 - - 2,300,418,890
Total comprehensive loss for the year - - - (1,591,116,512) (1,591,116,512)
Balances as at December 31, 2019 3,108,515,756 5,789,788,722 62,500,000 (8,776,445,269) 184,359,209
Changes in shareholders’ equity for the year ended December 31, 2020
Balances as at January 1, 2020 - as previously reported 3,108,515,756 5,789,788,722 62,500,000 (8,776,445,269) 184,359,209
Effect from adoption of Thai Financial Reporting Standard No. 9 2.6 - - - (267,615,838) (267,615,838)
Balance as at January 1, 2020 - after adjusted 3,108,515,756 5,789,788,722 62,500,000 (9,044,061,107) (83,256,629)
Increase in ordinary shares 26 620,671,050 931,006,632 - - 1,551,677,682
Total comprehensive loss for the year - - - (9,441,234,488) (9,441,234,488)
Balances as at December 31, 2020 3,729,186,806 6,720,795,354 62,500,000 (18,485,295,595) (7,972,813,435)
Notes to the financial statements form an integral part of these statements
...........................................................
Mr. Tai Chong Yih (Director) Mr. Wutthiphum Jurangkool (Director)
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SEPARATE FINANCIAL STATEMENTS
Retained earnings (deficit)
NOK AIRLINES PUBLIC COMPANY LIMITED AND SUBSIDIARIES
STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 2020
UNIT : BAHT
Notes
2020 2019 2020 2019
CASH FLOWS FROM OPERATING ACTIVITIES
Loss before income tax expenses (7,391,623,464) (3,095,400,636) (9,536,993,197) (1,714,172,977)
Adjustments for
Depreciation 2,440,729,212 95,529,835 2,038,821,061 82,806,763
Amortization 11,419,989 16,917,860 9,825,946 13,385,438
Loss on disposals and write-off of assets 25,104,227 186,525 2,105,634 186,525
Gain from termination of leases (20,737,417) - (20,737,417) -
Unrealized loss on exchange rate (32,457,212) 23,224,370 (25,552,620) 116,766,555
Impairment loss on right-of-use assets 17 3,446,296,290 - 3,446,296,290 -
Expected credit losses 3,104,616,061 - 3,257,921,624 -
Allowance for doubtful accounts - 24,859,170 - 30,072,413
Maintenance reserve reversal 22.1 55,366,649 895,456,338 55,366,649 895,456,338
Provision for aircraft maintenance recognized as expenses 968,204,684 1,699,417,847 1,231,003,868 869,045,390
Deferred income from customer loyalty programmes record during the year 10,177,029 18,621,746 10,177,029 18,621,746
Employee benefit expenses 55,938,837 80,375,833 53,306,149 75,266,760
Interest income (32,556,775) (22,803,479) (84,781,679) (57,312,124)
Interest expense 5.3 275,536,781 125,091,357 231,146,301 82,841,780
Share of loss from investment in a joint venture - 1,409,685 - -
Gain on liquidation of the subsidiary (514,037,462) - - -
Operating gain (loss) before changes in operating assets and liabilities 2,401,977,429 (137,113,549) 667,905,638 412,964,607
Operating assets (increase) decrease
Trade and other current receivables 718,407,074 (555,586,265) (352,545,415) (219,925,230)
Inventories (17,855,625) (30,786,124) (17,855,625) (30,786,124)
Short-term aircraft deposits and prepayments (87,066,074) 98,466,096 (87,066,074) 83,560,071
Other current assets (56,889,755) (14,659,547) (117,072,354) 2,302,869
Maintenance reserve (1,062,409,236) (1,849,845,135) (761,993,979) (1,296,868,568)
Deposit at bank pledged as collateral 1,042,811,706 (30,195,517) 850,413,199 32,626,110
Other non-current financial assets 556,300 - 195,100 -
Long-term aircraft deposits and prepayments 121,647,237 (322,178,525) 124,922,355 (307,272,500)
Other non-current assets 19,677,249 (45,755,829) (75,128,293) (68,276,031)
Operating liabilities increase (decrease)
Trade and other current payables (3,446,881,892) (210,033,648) (73,403,573) (532,166,986)
Aircraft maintenance paid (64,405,064) (673,701,575) (64,405,064) (670,882,377)
Other current liabilities 16,948,096 56,197,109 17,961,217 56,066,436
Employee benefit paid (41,710,387) (42,522,721) (27,093,016) (42,522,721)
Other non-current liabilities (21,333,913) (52,415,678) (21,296,563) (51,593,613)
Cash received (paid) from operations (476,526,855) (3,810,130,908) 63,537,553 (2,632,774,057)
Tax refund 526,953,784 - 174,529,732 -
Income tax paid (3,732,371) (6,530,995) (3,657,354) (4,922,234)
Net cash flows provided by (used in) operating activities 46,694,558 (3,816,661,903) 234,409,931 (2,637,696,291)
FINANCIAL STATEMENTS FINANCIAL STATEMENTS
...........................................................
NOK AIRLINES PUBLIC COMPANY LIMITED AND SUBSIDIARIES
Mr. Tai Chong Yih (Director) Mr. Wutthiphum Jurangkool (Director)
...........................................................
NOK AIRLINES PUBLIC COMPANY LIMITED AND SUBSIDIARIES
STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2020
UNIT : BAHT
CONSOLIDATED SEPARATE
STATEMENTS OF CASH FLOWS (CONTINUED)
Notes
2020 2019 2020 2019
CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid for temporary investments - (33,652,822) - (34,782,685)
Cash paid for current investments in financial assets (498,974,754) - (498,974,754) -
Cash received from other long-term investment - 504,200 - 504,200
Cash paid for other long-term investments - (17,400) - -
Cash paid for investment in subsidiaries - - - (50,990)
Cash paid for short-term loan to a related party (200,000,000) - (200,000,000) (200,000,000)
Cash paid for long-term loan to a related party - - - (245,000,000)
Cash paid for investment in joint venture - (8,119,200) - -
Cash paid for acquisition of equipment and intangible assets 5.2 (13,099,305) (66,542,430) (8,745,135) (36,720,536)
Proceeds from sales of equipment and intangible assets 10,981 123,357 10,981 123,357
Cash received from interest income 24,408,184 22,306,969 23,280,313 14,602,123
Proceeds from the shares in the subsidiary to non-controlling interests - 235,341,160 - -
Net cash flows provided by (used in) investing activities (687,654,894) 149,943,834 (684,428,595) (501,324,531)
CASH FLOWS FROM FINANCING ACTIVITIES
Cash paid for interest expense 5.3 (174,498,425) (118,159,987) (130,107,945) (75,910,410)
Cash received from short-term borrowings 5.3 200,000,000 3,420,000,000 200,000,000 2,820,000,000
Cash paid for lease liabilites (147,216,723) - (147,216,723) -
Cash paid for short-term borrowing 5.3 (700,000,000) (2,200,000,000) - (2,000,000,000)
Proceeds from share capital increase 26 1,551,677,682 2,300,418,890 1,551,677,682 2,300,418,890
Net cash flows provided by financing activities 729,962,534 3,402,258,903 1,474,353,014 3,044,508,480
Effect of exchange rate changes on cash and cash equivalents 82,771,445 78,354,344 17,690,984 9,782,542
Net increase (decrease) in cash and cash equivalents 171,773,643 (186,104,822) 1,042,025,334 (84,729,800)
Cash and cash equivalents as at January 1, 1,233,787,384 1,419,892,206 362,394,166 447,123,966
Cash and cash equivalents as at December 31, 5.1 1,405,561,027 1,233,787,384 1,404,419,500 362,394,166
- -
Notes to the financial statements form an integral part of these statements
........................................................... ...........................................................
Mr. Tai Chong Yih (Director) Mr. Wutthiphum Jurangkool (Director)
FOR THE YEAR ENDED DECEMBER 31, 2020
UNIT : BAHT
CONSOLIDATED SEPARATE
FINANCIAL STATEMENTS FINANCIAL STATEMENTS
NOK AIRLINES PUBLIC COMPANY LIMITED AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2020
1. GENERAL INFORMATION AND OPERATIONS OF THE COMPANY AND SUBSIDIARIES
1.1 General information of the Company and subsidiaries (the “Group”)
1.1.1 Nok Airlines Public Company Limited (the “Company”) was incorporated as
a limited company under Thai laws on February 27, 2004. The registered
office is located at 3 Rajanakarn Building, 17th Floor, South Sathorn Road,
Yannawa, Sathorn, Bangkok, and its principal activity is to provide air
transport services for passengers. On January 18, 2013, the Company registered
to convert the Company from a limited company to a public limited company
and registered the change of the Company’s name from Nok Airlines Company
Limited to Nok Airlines Public Company Limited with the Ministry of
Commerce. On June 20, 2013, the Company had been approved by the Stock
Exchange of Thailand to be a listed company in the Stock Exchange of Thailand.
On January 1, 2021, the Company registered the change of address of new head
office to 222 Don Mueang International Airport, Central Building, Room No. 4235,
4th Floor, Vibhavadi Rangsit Road, Sanambin Sub-district, Don Mueang District, Bangkok.
As at December 31, 2020, the Company’s major shareholders were Mrs. Hatairatn
Jurangkool, Mr. Nattapol Jurangkool, Mr. Taveechat Jurangkool and Thai
Airways International Public Company Limited, which are Thai shareholders,
holding 26.38%, 26.07%, 22.51% and 13.28%, respectively, of the Company’s
issued and paid-up share capital.
As at December 31, 2019, the Company’s major shareholders were Mrs.
Hatairatn Jurangkool, Mr. Nattapol Jurangkool, Mr. Taveechat Jurangkool and
Thai Airways International Public Company Limited which are Thai shareholders,
holding 24.37%, 24.32%, 20.98% and 15.94%, respectively, of the Company’s
issued and paid-up share capital.
1.1.2 Nok Holidays Company Limited was incorporated as a limited company
under Thai laws on April 4, 2014. The registered office is located at 3 Rajanakarn
Building, 17th Floor, South Sathorn Road, Yannawa, Sathorn, Bangkok and its
principal activity is to provide tourism and other relevant business.
On January 1, 2021, the Company registered the change of address of new office
to 222 Don Mueang International Airport, Central Building, Room No. 4235,
4th Floor, Vibhavadi Rangsit Road, Sanambin Sub-district, Don Mueang
District, Bangkok.
- 2 -
1.1.3 Nok Mangkang Company Limited was incorporated as a limited company
under Thai laws on June 13, 2014. The registered office is located at 3 Rajanakarn
Building, 17th Fl., South Sathorn Road, Yannawa, Sathorn, Bangkok, and its
principal activity is to provide air transport service for passengers, parcel and
parcel post.
On January 28, 2021, the Company registered the change of address of new
office to 222 Don Mueang International Airport, Central Building, Room No.4235,
4th Floor, Vibhavadi Rangsit Road, Sanambin Sub-district, Don Mueang District, Bangkok.
1.1.4 NokScoot Airlines Company Limited was incorporated as a limited company
under Thai laws on October 30, 2013. The current registered office is located at
999/9 The Offices at Central World Building, 26th Floor, Rama 1 Road,
Pathumwan Sub-district, Pathumwan District, Bangkok, and its principal activity
is to provide air transport service for passengers, parcel and parcel post.
On July 29, 2020, NokScoot Airlines Co., Ltd. registered the dissolution
with the Department of Business Development (see Note 1.2.3).
1.2 Operations of the Company and subsidiaries
1.2.1 Operations of the Company and subsidiaries
For the year ended December 31, 2020, the consolidated and separate financial
statements of the Company shown net loss of Baht 7,391.62 million and
Baht 9,536.99 million, respectively. As at December 31, 2020, the consolidated
and separate financial statements shown total current liabilities exceeded total current
assets of Baht 16,194.30 million and Baht 16,193.29 million and shown capital
deficiency of Baht 8,002.15 million and Baht 7,972.81 million, respectively.
Impact from Coronavirus Disease 2019 Pandemic to Nok Airlines Public
Company Limited (the “Company”) and NokScoot Airlines Company Limited
(the “subsidiary”).
The Coronavirus disease 2019 pandemic is continuing to evolve, resulting in
an economic slowdown and adversely impacting most businesses and
industries especially aviation industry. This affect to the Company and the
subsidiary to close oversea routes since March 2020 onwards. For domestic
routes, the Company normally operates with adjustments on frequency of
flights has been reduced as appropriate under the Emergency Situation Act.
On July 1, 2020, the Company continued their operation in accordance with
the Civil Aviation Authority of Thailand hereby issued the notification on
the conditions for permitting aircrafts to fly over, fly into or out of, and take
off or land in the Kingdom, dated June 29, 2020.
- 3 -
1.2.2 Management plan of Nok Airlines Public Company Limited (the “Company”)
On January 14, 2020, the Extraordinary General Meeting of Shareholders No.
1/2020 has resolved to approve the increase of registered capital of 888.15 million
shares at an offering price of Baht 2.50 per share. The Company determined the
allocation ratio as 3.50 existing shares to 1 newly-issued ordinary share. On
February 11, 2020, the Company received subscriptions in the amount of Baht
1,551.68 million from issued and paid-up share capital totaling 620.67 million shares
at an offering price of Baht 2.50 per share with a par value of Baht 1 per share.
On June 30, 2020, the Board of Director Meeting on special No. 6/2020 has
resolved to approve to renew the term of a connected transaction with a
connected person in relation to a receipt of financial assistance of the credit
limit of Baht 3,000 million, which extended the term from 1 year to 3 years
under the existing credit limit and conditions from October 1, 2020 to May 14,
2023 and grant the rights for the lender to terminate the agreement and/or
immediately cancel the outstanding credit limit. This connected transaction was
approved by the Annual General Meeting of Shareholders of 2020 on August 6,
2020.
On July 30, 2020, the Company submitted a petition to enter into a business
rehabilitation process and proposed the rehabilitation planners (the
“Planners”) to the Central Bankruptcy Court. The Central Bankruptcy Court
accepted the business rehabilitation petition for further consideration on the
same day (see Note 4). As a result, the Company is under the automatic stay
provisions under the Bankruptcy Act B.E. 2483. Such situation may affect to
the recorded assets and liabilities as at December 31, 2020. However, the
Company’s management considered that the preparation of financial statements
on a going concern basis is still appropriate because the Company prepared
and submitted the rehabilitation plan to request for approved from creditors
and the Central Bankruptcy Court during the year 2021. During this period,
the Company is able to continue its necessary activities for operation as
usual in order to enable the Company to continue as a going concern for at
least 12 months from the date in the statement of financial position.
However, the Company’s ability to continue as going concern depends on
the creditors’ approval of the rehabilitation plan as well as the successful
implementation of the rehabilitation plan.
1.2.3 Operations of NokScoot Airlines Company Limited (the “subsidiary”)
NokScoot Airlines Co., Ltd. has been experiencing continuous financial
losses and has worsened by the Coronavirus Disease 2019 (“COVID-19”)
Pandemic because routes are oversea routes, such as China, Taiwan, Japan,
which have been affected by COVID-19 severely. Therefore, this affected
significantly to NokScoot Airlines Co., Ltd. in order that they cannot operate
on a going concern.
- 4 -
On June 26, 2020, the Board of Directors’ meeting on special No. 5/2020 of
Nok Airlines Public Company Limited (the “Company”) acknowledged the
business termination and liquidation of NokScoot Airlines Co., Ltd. of which
Nok Mangkang Co., Ltd., a subsidiary of the Company, holds 49.65% of its
registered shares. On July 14, 2020, Annual General Meeting of Shareholders
of 2020 approved the dissolution and liquidation along with appointing the
liquidator of NokScoot Airlines Co., Ltd. Subsequently, the subsidiary
registered the dissolution with the Department of Business Development on
July 29, 2020.
The NokScoot Airlines Co., Ltd. (the “subsidiary”)’s financial information as
at July 29, 2020 and for the period from January 1, 2020 to July 29, 2020
(date of dissolution registration) shown net loss of Baht 5,712.96 million,
and total current liabilities exceeded total current assets of Baht 7,759.69
million and shown capital deficiency of Baht 10,720.47 million.
2. BASIS FOR PREPARATION AND PRESENTATION OF THE FINANCIAL STATEMENTS
2.1 The Company and subsidiaries maintain its accounting records in Thai Baht and
prepares its statutory financial statements in the Thai language in conformity with
Thai Financial Reporting Standards and accounting practices generally accepted in
Thailand.
The financial statements in Thai language are the official statutory financial
statements of the Company. The financial statements in English language have been
translated from the Thai language financial statements. In the event of any conflict
or different interpretation in the two languages, the Thai version of the financial
statements, in accordance with Thai laws will prevail.
2.2 The Company and subsidiaries’ financial statements have been prepared in accordance
with the Thai Accounting Standard (TAS) No. 1 “Presentation of Financial Statements”,
which was effective for financial periods beginning on or after January 1, 2020 onward,
and the Regulation of The Stock Exchange of Thailand (SET) dated October 2, 2017,
regarding “The preparation and submission of financial statements and reports for the
financial position and results of operations of the listed companies B.E. 2560” and the
Notification of the Department of Business Development regarding “The Brief Particulars
in the Financial Statement (No.3) B.E. 2562” dated December 26, 2019.
2.3 The financial information of NokScoot Airlines Co., Ltd. (the “subsidiary”) as at July 29,
2020 and for the period from January 1, 2020 to July 29, 2020 (date of dissolution
registration) has been prepared on the basis of measuring asset items at the lower of
carrying amount or net realizable values and measuring liability items at values or
other considerations to be paid, and classified all asset and liability items as current items
in accordance with the clarification regarding the preparation of the financial statements
in accordance with the basis other than going concern basis issued by the Federation
of Accounting Professions on October 11, 2018. This is because the subsidiary
registered the dissolution with the Department of Business Development on July 29,
2020. The Clarification is effective for the financial statements for the period ending
on or after January 1, 2019 onwards, applying the prospective method.
- 5 -
The subsidiary appointed a liquidator to manage the liquidation process and the
determination of operating policy is subject to direction by the liquidator. As a result,
the Company lost control of such subsidiary. The Company derecognized the assets and
liabilities of the subsidiary at their carrying amounts, and non-controlling interests in the
former subsidiary at their carrying amount and recognized resulting difference as a gain
on dissolution of the subsidiary in the consolidated financial statements of the Group.
2.4 The consolidated financial statements included the accounting records of the Company and
its subsidiaries by eliminating of the intercompany significant transactions and balances.
As at December 31, 2020, and 2019, the Company has shareholding portion in the
subsidiaries as follows:
Subsidiaries Type of business Country of Registration Shareholdings
registration date (%)
As at As at
December 31, December 31,
2020 2019
Direct subsidiaries
Nok Holidays Co., Ltd. Tourism and other relevant Thailand April 4, 2014 99.99 99.99
businesses
Nok Mangkang Co., Ltd. Air transport service for Thailand June 13, 2014 49 49
passengers, parcel and
parcel post
Indirect subsidiary
NokScoot Airlines Air transport service for Thailand October 30, 2013 24.33 24.33
Co., Ltd.(1), (2) passengers, parcel and
parcel post
(1) A subsidiary of Nok Mangkang Co., Ltd. (2) On June 26, 2020, the Board of Directors’ meeting on special No. 5/2020 of Nok Airlines Public Company
Limited acknowledged the business termination and liquidation of NokScoot Airlines Co., Ltd. and NokScoot
Airlines Co., Ltd. registered the dissolution with the Department of Business Development on July 29, 2020 (see
Note 1.2.3).
2.5 The financial statements have been prepared under the historical cost convention
except as disclosed in the significant accounting policies (see Note 3).
2.6 Thai Financial Reporting Standards affecting the presentation and disclosure in the
current period financial statements
During the year, the Group has adopted the revised and new financial reporting
standards and guidelines on accounting issued by the Federation of Accounting
Professions which become effective for fiscal years beginning on or after January 1, 2020.
These financial reporting standards were aimed at alignment with the corresponding
International Financial Reporting Standards, with most of the changes directed towards
revision of wording and terminology, and provision of interpretations and accounting
guidance to users of standards. The adoption of these financial reporting standards does
not have any significant impact on the Group’s financial statements, except the following
financial reporting standards:
- 6 -
Group of Financial Instruments Standards
Thai Accounting Standards (“TAS”) TAS 32 Financial Instruments: Presentation Thai Financial Reporting Standards (“TFRS”) TFRS 7 Financial Instruments: Disclosures TFRS 9 Financial Instruments Thai Financial Reporting Standard Interpretations (“TFRIC”) TFRIC 16 Hedges of a Net Investment in a Foreign Operation TFRIC 19 Extinguishing Financial Liabilities with Equity Instruments
These group of Standards make stipulations relating to the classification of financial
instruments and their measurement at fair value or amortized cost; taking into account the
type of instrument, the characteristics of the contractual cash flows and the Company’s
business model, the calculation of impairment using the expected credit loss method, and
the concept of hedge accounting. These include stipulations regarding the presentation
and disclosure of financial instruments.
Thai Financial Reporting Standard No. 16 “Leases” (“TFRS 16”)
TFRS 16 “Leases” provides a comprehensive model for the identification of lease
arrangements and their treatment in the financial statements of both lessees and lessors.
This TFRS superseded the following lease Standards and Interpretations upon its effective
date, which are Thai Accounting Standard No.17 “Leases”, Thai Accounting Standard
Interpretation No.15 “Operating Lease - Incentives”, Thai Accounting Standard
Interpretation No.27 “Evaluating the Substance of Transactions involving the Legal Form
of a Lease” and Thai Financial Reporting Standard Interpretation No.4 “Determining
whether on Arrangement contains a Lease”.
For lessee accounting, there are significant changes to lease accounting in this TFRS by
removing the distinction between operating and finance leases under TAS 17 and
requiring a lessee to recognize a right-of-use asset and a lease liability at commencement
for all leases, except for short-term leases and leases of low value assets. However, the
lessor accounting treatment continues to require a lessor to classify a lease either as an
operating lease or a finance lease, using the same concept as TAS 17.
The Group adopted the Group of Financial Instruments Standards and Thai Financial
Reporting Standards No.16 has been applied, recognizing the cumulative effect of the
initial application of these Thai Financial Reporting Standards which is adjusted to
retained earnings on January 1, 2020 and don’t restate the previous year’s financial
statements that presented for comparison.
- 7 -
The impacts on the beginning balance of the year of 2020 due to the adoption of
these standards are presented as follows:
UNIT : BAHT
Consolidated financial statements
Effect from Thai Financial Reporting Standards
As at Group of TFRS 16 As at
December 31, financial January 1,
2019 instruments 2020
Statements of financial position
Assets
Current assets
Current investments 42,878,939 (42,878,939) - -
Trade and other current receivables 2,493,338,355 (257,892,459) - 2,235,445,896
Other current financial assets - 42,878,939 - 42,878,939
Non-current assets
Other long-term investment 46,175,400 (46,175,400) - -
Right-of-use assets - - 15,974,940,964 15,974,940,964
Deposits at bank pledged as collateral 1,153,058,005 (1,153,058,005) - -
Other non-current financial assets - 1,199,233,405 - 1,199,233,405
Liabilities
Current liabilities
Current portion of lease liabilities - - 2,683,865,349 2,683,865,349
Non-current liabilities
Lease liabilities - - 13,291,075,615 13,291,075,615
Shareholders’ equity
Retained deficit - unappropriated 10,050,337,573 257,892,459 - 10,308,230,032
UNIT : BAHT
Separate financial statements
Effect from Thai Financial Reporting Standards
As at Group of TFRS 16 As at
December 31, financial January 1,
2019 instruments 2020
Statements of financial position
Assets
Current assets
Current investments 42,261,195 (42,261,195) - -
Trade and other current receivables 1,036,373,329 (267,615,838) - 768,757,491
Other current financial assets - 42,261,195 - 42,261,195
Non-current assets
Other long-term investment 45,814,200 (45,814,200) - -
Right-of-use assets - - 13,522,274,385 13,522,274,385
Deposits at bank pledged as collateral 960,659,498 (960,659,498) - -
Other non-current financial assets - 1,006,473,698 - 1,006,473,698
Liabilities
Current liabilities
Current portion of lease liabilities - - 1,860,528,351 1,860,528,351
Non-current liabilities
Lease liabilities - - 11,661,746,034 11,661,746,034
Shareholders’ equity
Retained deficit - unappropriated 8,776,445,269 267,615,838 - 9,044,061,107
- 8 -
Financial impact of the initial application of Group of Financial Instruments Standards
Because the Group has elected to recognize the cumulative effect as an adjustment of
retained earnings at the date of initial application, for the purpose of assessing whether
there has been a significant increase in credit risk since initial recognition of financial
instruments that remain recognized on the date of initial application of financial reporting
standard related to Group of Financial Instruments Standard.
As at January 1, 2020, the consolidated and separate financial statements shown the effect
from allowance for expected credit losses increased in amounting to Baht 257.89 million
and Baht 267.62 million, respectively, for trade and other receivables.
Financial impact of the initial application of Thai Financial Reporting Standards
No.16
The Group recognized lease liabilities in relation to leases, which had previously
been classified as operating leases under the principles of Thai Accounting Standard
No. 17 (“TAS 17”). The right-of-use assets were measured at amount equal to the
lease liability, adjusted by the amount of any prepaid or accrued lease payments
relating to that lease recognized in the statement of financial position immediately
before the date of initial application. These liabilities were measured at the present
value of the remaining lease payments, discounted using the Group’s incremental
borrowing rates.
The following table shows the operating lease commitments disclosed applying Thai
Accounting Standard No. 17 as at December 31, 2019, discounted using incremental
borrowing rate at the date of initial application and the lease liabilities recognized in
the statement of financial position at the date of initial application.
UNIT : BAHT Consolidated Separate
financial financial
statements statements
Operating lease commitments at December 31, 2019 19,141,953,796 16,527,274,555
Short-term leases and leases of low-value assets (269,257,083) (265,820,643)
Contracts reassessed as service agreements (154,254,834) (153,019,877)
Effect of discounting the above amounts (2,743,500,915) (2,586,159,650)
Lease liabilities recognized at January 1, 2020 15,974,940,964 13,522,274,385
The Group has recognized right-of-use assets and lease liabilities for Baht 15,974.94
million upon the transition to Thai Financial Reporting Standard No.16.
- 9 -
Accounting Treatment Guidance on “The temporary relief measures for additional
accounting alternatives to alleviate the impacts from COVID-19 outbreak”
This accounting treatment guidance is the option for all entities applying Financial
Reporting Standards for Publicly Accountable Entities. Since the preparation of
financial statements during the period, which COVID-19 situation still be highly
uncertainty as at the end of reporting period may cause the entities’ management to
use the critical judgment in the estimation or the measurement and recognition of
accounting transactions. Objective of this accounting treatment guidance is to
alleviate some of the impact of applying certain financial reporting standards, and to
provide clarification about accounting treatments during the period of uncertainty
relating to this situation. The entities can apply this accounting treatment guidance
for the preparation of financial statements with the reporting period ending within
the period from January 1, 2020 to December 31, 2020.
The Group has elected to apply the Accounting Treatment Guidance on “The temporary
relief measures for additional accounting alternatives to alleviate the impacts from
COVID-19 outbreak” as following;
- Not to take into account forward-looking information when determining expected
credit losses, in cases where the Group uses a simplified approach to determine
expected credit losses.
- The Group has elected to not to account for any reduction in lease payments by
lessors due to the COVID-19 situation, as a lease modification, with the lease
liabilities that come due in each period reduced in proportion to the reduction
and depreciation of right-of-use assets and interest on lease liabilities recognized
in each period reversed in proportion to the reduction, with any differences then
recognized in profit or loss.
2.7 Amendment of Thai Financial Reporting Standard No.16 “Leases”
TFRS 16 has been amended for the Rent Concessions related to COVID-19, which
is effective from June 1, 2020 with earlier application permitted. The amendment
permits lessees, as a practical expedient, not to assess whether rent concessions that
occur as a direct consequence of the COVID-19 pandemic and meet specified
conditions are lease modifications and, instead, to account for those rent concessions
as if they were not lease modifications. In addition, the revised TFRS 16 also added
the requirements for the temporary exception arising from interest rate benchmark
reform, which an entity shall apply these amendments for annual reporting periods
beginning on or after January 1, 2022 with earlier application permitted. This
revised TFRS 16 has been announced in the Royal Gazette on January 27, 2021.
- 10 -
In addition, the 2021 amendment to TFRS 16 - Phase 2 has been announced in the
Royal Gazette on May 13, 2021, which permits a lessee to apply the practical
expedient regarding COVID-19-related rent concessions to rent concessions for
which any reduction in lease payments affects only payments originally due on or
before June 30, 2022. lessee shall apply this amendment for annual reporting
periods beginning on or after April 1, 2021 with earlier application is permitted.
The Group’s management will adopt such TFRSs in the preparation of the company’s
financial statements when it becomes effective. Also, the Group’s management is in the
process to assess the impact of these TFRSs on the financial statements of the Group in
the period of initial application.
2.8 Thai Financial Reporting Standards announced in the Royal Gazette but not yet effective
The Federation of Accounting Professions has issued the Notification regarding Thai
Accounting Standards, Thai Financial Reporting Standards, Thai Accounting Standards
Interpretation and Thai Financial Reporting Standard Interpretation, which have been
announced in the Royal Gazette and will be effective for the financial statements for the
period beginning on or after January 1, 2021 onwards. These financial reporting standards
were aimed at alignment with the corresponding International Financial Reporting
Standards, with most of the changes directed towards revisions to references to the
Conceptual Framework in TFRSs, the amendment for definition and accounting
requirements as follows:
Conceptual Framework for Financial Reporting
The revised Conceptual Framework for Financial Reporting consisted of the revised
definitions and recognition criteria of asset and liability as well as new guidance on
measurement, derecognition of asset and liability, presentation and disclosure. In addition,
this Conceptual Framework for Financial Reporting clearly clarifies management’s
stewardship of the entity’s economic resources, prudence, and measurement uncertainty
of financial information.
Definition of Business
The revised Thai Financial Reporting Standard No.3 “Business Combinations”
clearly clarifies the definition of business and introduce an optional concentration
test. Under the optional concentration test, the acquired set of activities and assets is
not a business if substantially all of the fair value of the gross assets acquired is
concentrated in a single identifiable asset or group of similar assets. This revised
financial reporting standard requires prospective method for such amendment.
Earlier application is permitted.
- 11 -
Definition of Materiality
The revised definition of materiality resulted in the amendment of Thai Accounting
Standards No.1 “Presentation of Financial Statements” and Thai Accounting
Standards No.8 “Accounting Policies, Changes in Accounting Estimates and
Errors”, including other financial reporting standards which refer to materiality. This
amendment is intended to make the definition of material to comply with the
Conceptual Framework which requires prospective method for such amendment.
Earlier application is permitted.
The Interest Rate Reform
Due to the interest rate reform, there are the amendments of specific hedge
accounting requirements in Thai Financial Reporting Standard No.9 “Financial
Instruments” and Thai Financial Reporting Standard No.7 “Financial Instruments:
Disclosures”.
In addition, the Federation of Accounting Professions has issued the Notification
regarding Thai Financial Reporting Standards (“TFRSs”) that are relevant to Interest
Rate Benchmark Reform Phase 2 amendments (“Phase 2 amendments”) and amends
Thai Financial Reporting Standards No. 4 “Insurance Contracts”, Thai Financial
Reporting Standards No. 7 “Financial Instruments: Disclosures” and Thai Financial
Reporting Standards No. 9 “Financial Instruments”. The Phase 2 amendments
address issues that might affect financial reporting during the reform of an interest
rate benchmark, including the effects of changes to contractual cash flows or
hedging relationships arising from the replacement of an interest rate benchmark
with an alternative benchmark rate. Such TFRSs have been announced in the Royal
Gazette on June 28, 2021 and will be effective for the financial statements for the
periods beginning on or after January 1, 2022 onwards with earlier application
permitted.
The Group’s management will adopt such TFRSs in the preparation of the company’s
financial statements when it becomes effective. Also, the Group’s management is in the
process to assess the impact of these TFRSs on the financial statements of the Group
in the period of initial application.
3. SIGNIFICANT ACCOUNTING POLICIES
3.1 Basis of preparation of the consolidation financial statements
The Consolidated financial statements comprise the Company and its subsidiaries’
financial statements and the Group’s interest in associates and joint ventures.
Transactions eliminated on consolidation financial statements
Significant intra-group balances and transactions have been eliminated in the preparation
of the consolidated financial statements. The consolidated financial statements for the
years ended December 31, 2020 and 2019 were prepared by using the financial statements
of its subsidiaries, associates and joint ventures as of the same date.
- 12 -
3.2 Foreign currencies
Transactions in foreign currencies incurred during the year are converted to Baht at
the exchange rate of the transaction date. Monetary assets and liabilities
denominated in foreign currencies at the reporting date are converted into Baht at
the reference exchange rates established by the Bank of Thailand at that date.
Gain or loss from settlements and conversion are recognized in the statement of
profit or loss and other comprehensive income.
3.3 Cash and cash equivalents
Cash and cash equivalents consist of cash on hand and all types of deposit at
financial institution and certificate of deposits with maturity date within 3 months,
excluding deposits at financial institution used as collateral.
3.4 Trade and other current receivables
a) Policies applicable prior to January 1, 2020
Trade receivables and other receivables are stated at their invoice value less allowance
for doubtful accounts.
The Group are accounted allowance for doubtful debts is provided for the estimated
collection losses that may incur in collection of receivables. The allowance for
doubtful accounts is based on collection experience and current status of receivables
outstanding at the statement of financial position date.
b) Policies applicable from January 1, 2020
Trade receivables and other receivables are stated at their invoice value less
allowance for expected credit losses.
The allowance for expected credit losses has disclosed in Note 3.7.
3.5 Inventories
Inventories are stated at the lower of cost or net realizable value.
Cost is determined by weighted average method. Net realizable value is the estimate of
the selling price in the ordinary course of business less the estimated costs necessary
to make sale.
3.6 Current investments and other long-term investments
a) Policies applicable prior to January 1, 2020
Current investment
Current investment consisting of deposit at banks having a maturity exceeding
3 months but less than 12 months is presented at cost and is not used as collateral.
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Other long-term investments
Other long-term investments are non-marketable equity securities which are
stated at cost less any impairment losses (if any).
Disposal of investments
On disposal of an investment, the difference between net disposal proceeds and
the carrying amount is recognized as profit or loss in the statement of profit or loss
and other comprehensive income.
If the Group disposes of a partial of its holding investment, the deemed cost of
the sold investment and holding investment is determined using the weighted-
average method applied to the carrying value of the total holding of the
investment.
b) Policies applicable from January 1, 2020, has disclosed in Note 3.7.
3.7 Financial instruments
Policies applicable from January 1, 2020
Financial assets and financial liabilities are initially measured at fair value. Transaction
costs that are directly attributable to the acquisition or issuance of financial assets and
financial liabilities (other than financial assets and financial liabilities at fair value
through profit or loss) are added to or deducted from the fair value of the financial assets
or financial liabilities, as appropriate, on initial recognition. Transaction costs directly
attributable to the acquisition of financial assets or financial liabilities at fair value
through profit or loss are recognized immediately in profit or loss.
Financial assets
All recognized financial assets are measured subsequently in their entirely at either
amortized cost or fair value, depending on the classification of the financial assets.
Classification of financial assets
Debt instruments that meet the following conditions are measured subsequently at
amortized cost;
• The financial asset is held within a business model whose objective is to hold
financial assets in order to collect contractual cash flows; and
• The contractual terms of the financial asset give rise on specified dates to cash flows
that are solely payments of principal and interest on the principal amount
outstanding.
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By default, all other financial assets are measured subsequently at fair value through
profit or loss (FVTPL).
Impairment of financial assets
The Group recognizes a loss allowance for expected credit losses on investments in debt
instruments that are measured at amortized cost or at FVTOCI, lease receivables, trade
receivables and contract assets. The amount of expect credit losses is updated at each
reporting period date to reflect changes in credit risk since initial recognition of the
respective financial instrument.
The Group always recognizes allowance for lifetime ECL for trade receivables, contract
assets and lease receivables. The expected credit losses on these financial assets are
estimated using a provision matrix based on the Group’s historical credit loss
experience, adjusted for factors that are specific to the debtors, general economic
conditions and an assessment of both the current as well as the forecast direction of
conditions at the reporting date, including time value of money where appropriate.
For all other financial instruments, the Group recognizes allowance for lifetime ECL
when there has been a significant increase in credit risk since initial recognition.
However, if the credit risk on the financial instrument has not increased significantly
since initial recognition, the Group measures the loss allowance for that financial
instrument at an amount equal to 12-month ECL.
Lifetime ECL represents the expected credit losses that will result from all possible
default events over the expected life of a financial instrument. In contrast, 12-month
ECL represents the portion of lifetime ECL that is expected to result from default events
on a financial instrument that are possible within 12 months after the reporting date.
(i) Write-off policy
The Group writes off a financial asset when there is information indicating that the
debtor is in severe financial difficulty and there is no realistic prospect of
recovery. Financial assets written off may still be subject to enforcement activities
under the Group’s recovery procedures, taking into account legal advice where
appropriate. Any recoveries made are recognized in profit or loss.
(ii) Measurement and recognition of expected credit losses
The measurement of expected credit losses is a function of the probability of default,
loss given default (i.e. the magnitude of the loss if there is a default) and the
exposure at default. The assessment of the probability of default and loss given
default is based on historical data adjusted by forward-looking information. As for
the exposure at default, for financial assets, this is represented by the asset’s gross
carrying amount at the reporting date, the Group’s understanding of the specific
future financing needs of the debtors, and other relevant forward-looking
information.
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For financial assets, the expected credit loss is estimated as the difference between all
contractual cash flows that are due to the Group in accordance with the contract and all
the cash flows that the Group expects to receive, discounted at the original effective
interest rate. For a lease receivable, the cash flows used for determining the expected
credit losses is consistent with the cash flows used in measuring the lease receivable in
accordance with TFRS 16 “Leases”.
The Group recognizes an impairment gain or loss in profit or loss for all financial
instruments with a corresponding adjustment to their carrying amount through a loss
allowance account, except for investments in debt instruments that are measured at
FVTOCI, for which the loss allowance is recognized in other comprehensive income
and accumulated in the investment revaluation reserve, and does not reduce the carrying
amount of the financial asset in the statement of financial position.
Derecognition of financial assets
The Group derecognizes a financial asset only when the contractual rights to the cash
flows from the asset expire, or when it transfers the financial asset and substantially all
the risks and rewards of ownership of the asset to another entity. If the Group neither
transfers nor retains substantially all the risks and rewards of ownership and continues to
control the transferred asset, the Group recognizes its retained interest in the asset and an
associated liability for amounts it may have to pay. If the Group retains substantially all
the risks and rewards of ownership of a transferred financial asset, the Group continues
to recognize the financial asset and also recognizes a collateralized borrowing for the
proceeds received.
On derecognition of a financial asset measured at amortized cost, the difference between
the asset’s carrying amount and the sum of the consideration received and receivable is
recognized in profit or loss. In addition, on derecognition of an investment in a debt
instrument classified as at FVTOCI, the cumulative gain or loss previously accumulated
in the investments revaluation reserve is reclassified to profit or loss. In contrast, on
derecognition of an investment in equity instrument which the Group has elected on
initial recognition to measure at FVTOCI, the cumulative gain or loss previously
accumulated in the investments revaluation reserve is not reclassified to profit or loss,
but is transferred to retained earnings.
Financial liabilities
All financial liabilities are measured subsequently at amortized cost using the effective
interest method or at FVTPL.
However, financial liabilities that arise when a transfer of a financial asset does not
qualify for derecognition or when the continuing involvement approach applies.
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Financial liabilities are measured subsequently at amortized cost
Financial liabilities that are not; (i) contingent consideration of an acquirer in a business
combination (ii) held for trading or (iii) it is designated as at FVTPL or measured
subsequently at amortized cost using the effective interest method.
The effective interest method is a method of calculating the amortized cost of a financial
liability and of allocating interest expense over the relevant period. The effective interest
rate is the rate that exactly discounts estimated future cash payments (including all fees
and points paid or received that form an integral part of the effective interest rate,
transaction costs and other premiums or discounts) through the expected life of the
financial liability, or (where appropriate) a shorter period, to the amortized cost of a
financial liability.
Derecognition of financial liabilities
The Group derecognizes financial liabilities when, and only when, the Group’s
obligations are discharged, cancelled or have expired. The difference between the
carrying amount of the financial liability derecognized and the consideration paid and
payable is recognized in profit or loss.
When the Group exchanges with the existing lender one debt instrument into another
one with the substantially different terms, such exchange is accounted for as an
extinguishment of the original financial liability and the recognition of a new financial
liability. Similarly, the Group accounts for substantial modification of terms of an
existing liability or part of it as an extinguishment of the original financial liability and
the recognition of a new liability. It is assumed that the terms are substantially different
if the discounted present value of the cash flows under the new terms, including any fees
paid net of any fees received and discounted using the original effective rate is at least
10 percent different from the discounted present value of the remaining cash flows of
the original financial liability. If the modification is not substantial, the difference
between; (1) the carrying amount of the liability before the modification; and (2) the
present value of cash flows after modification should be recognized in profit or loss as
the modification gain or loss within other gains and losses.
3.8 Investments in subsidiaries, associates and joint ventures
Investments in subsidiaries, associates and joint ventures in the separate financial
statements of the Company are accounted for using the cost, less impairment losses
(if any). Investments in associates and joint ventures in the consolidated financial
statements are accounted for using the equity method.
An associate is an entity which the Group has significant influence. Significant
influence is the power to participate in the financial and operating policy decisions of
the investee but is not control or joint control over those policies.
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A joint venture is a joint arrangement whereby the parties that have joint control of the
arrangement have rights to the net assets of the joint arrangement. Joint control is the
contractually agreed sharing of control of an arrangement, which exists only when
decisions about the relevant activities require unanimous consent of the parties sharing
control.
Under the equity method, an investment in an associate or a joint venture is initially
recognized in the consolidated statement of financial position at cost and adjusted
thereafter to recognize the Group’s share of the profit or loss and other comprehensive
income of the associate or joint venture. When the Group’s share of losses of an
associate or a joint venture equals or exceeds the Group’s interest in that associate or
joint venture (which includes any long-term interests that, in substance, form part of the
Group’s net investment in the associate or joint venture), the Group discontinues
recognizing its share of further losses. Additional losses are recognized only to the
extent that the Group has incurred legal or constructive obligations or made payments
on behalf of the associate or joint venture.
An investment in an associate or a joint venture is accounted for using the equity
method from the date on which the investee becomes an associate or a joint venture. On
acquisition of the investment in an associate or a joint venture, any excess of the cost of
the investment over the Group’s share of the net fair value of the identifiable assets and
liabilities of the investee is recognized as goodwill, which is included within the
carrying amount of the investment. Any excess of the Group’s share of the net fair value
of the identifiable assets and liabilities over the cost of the investment is recognized
immediately as profit or loss in the statement of profit or loss and other comprehensive
income in the period in which the investment is acquired.
The Group discontinues the use of the equity method from the date when the investment
ceases to be an associate or a joint venture, or when the investment is classified as held-
for-sale.
When the Group reduces its ownership interest in an associate or a joint venture but the
Group continues to use the equity method, the Group reclassifies to profit or loss for the
proportion of the gain or loss that had previously been recognized in other
comprehensive income relating to that reduction in ownership interest in the statement
of profit or loss and other comprehensive income if that gain or loss would be
reclassified to profit or loss upon the disposal of the related assets or liabilities.
When a group entity transacts with an associate or a joint venture, profits and losses
resulting from such transactions are recognized in the Group’s consolidated financial
statements only to the extent of interests in the associate or joint venture that are not
related to the Group.
Disposal of investments
On disposal of an investment, the difference between net disposal proceeds and the
carrying amount is recognized as profit or loss in the statement of profit or loss and
other comprehensive income.
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If the Group disposes of a partial of its holding investment, the deemed cost of the sold
investment and holding investment is determined using the weighted-average method
applied to the carrying value of the total holding of the investment.
3.9 Maintenance reserve
Maintenance reserve is prepayments which the Group pay to the lessor at the rate
specified in the agreement. It can be reimbursed when sending the aircraft to the
overhaul maintenance in accordance with overhaul plan with the conditions
specified in the agreements.
3.10 Leasehold improvements and equipment
Leasehold improvements and equipment are measured at cost less accumulated
depreciation and allowance for impairment losses (if any).
Cost includes expenditure that is directly attributable to the acquisition of the asset.
The cost of self-constructed assets includes the cost of materials and direct labor, any
other costs directly attributable to bringing the assets to a working condition for their
intended use. The cost also includes the costs of dismantling and removing the items
and restoring the site on which they are located and capitalized borrowing costs.
Purchased software that is integral to the functionality of the related equipment is
capitalized as part of that equipment.
When parts of an item of leasehold improvements and equipment have different
useful lives, they are accounted for separately by major components.
Gains and losses on disposal of leasehold improvements and equipment are determined by
comparing the proceeds from disposal with the carrying amount of leasehold improvements
and equipment, and are recognized net as profit or loss in the statement of profit or loss and
other comprehensive income.
Subsequent costs
The cost of replacing a part of an item of leasehold improvements and equipment are
recognized in the carrying amount of the item if it is probable that the future
economic benefits embodied within the part will flow to the Group, and its cost can
be measured reliably. The carrying amount of the replaced part is derecognized. The
costs of the day-to-day servicing of leasehold improvements and equipment are
recognized as an expense in statement of profit or loss and other comprehensive
income as incurred.
Depreciation
Depreciation is calculated based on the depreciable amount of leasehold improvements
and equipment, which is the cost of an asset, or other amount substituted for cost, less its
residual value.
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Depreciation is charged as an expense to the statement of profit or loss and other
comprehensive income on a straight-line basis over the estimated useful lives of each
component of an item of leasehold improvements and equipment. The estimated useful
lives of assets are as follows:
Leasehold improvements 5 years or duration of lease period
Aircraft rental improvements 5 years or duration of lease period
Equipment, office equipment,
communication equipment and tools 5 years
Computer equipment 3 and 5 years
Vehicles 5 years
No depreciation is provided on land and construction in progress.
Depreciation methods, useful lives and residual values are reviewed at each financial
year-end and adjusted if appropriate.
3.11 Intangible asset
Intangible asset is computer software program which is stated at cost net of accumulated
amortization and allowance for impairment losses (if any).
Amortization
Amortization is calculated over the cost of the asset less its residual value.
Amortization is recognized as an expense in the statement of profit or loss and other
comprehensive income on a straight-line basis over the estimated useful lives of
intangible asset from the date that they are available for use. The estimated useful life of
asset is as follows:
Computer software 3 - 5 years
Amortization methods, useful lives and residual values are reviewed at each
financial year-end and adjusted if appropriate.
3.12 Impairment of non-financial assets
The carrying amounts of the Group’s assets are reviewed at each reporting date to
determine whether there is any indication of impairment. If any such indication
exists, the asset’s recoverable amounts are estimated.
An impairment loss is recognized if the carrying amount of an asset or its cash-
generating unit exceeds its recoverable amount. The impairment loss is recognized
as an expense in the statement of profit or loss and other comprehensive income.
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Calculation of recoverable amount
The recoverable amount of a non-financial asset is the higher of the asset’s value in use or
fair value less costs to sell. In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset. For an asset that
does not generate cash inflows largely independent from other assets, the recoverable
amount is determined for the cash-generating unit to which the asset belongs.
Reversals of impairment
Impairment losses recognized in prior periods in respect of other non-financial assets are
assessed at each reporting date for any indications of impairment the loss has decreased or
no longer exists. An impairment loss is reversed if there has been a change in the
estimates used to determine the recoverable amount. An impairment loss is reversed only
to the extent that the asset’s carrying amount does not exceed the carrying amount that
would have been determined, net of depreciation or amortization, as if no impairment loss
had been recognized.
3.13 Provisions for aircraft maintenance
3.13.1 Provisions for aircraft maintenance as plan
Provisions for aircraft maintenance as plan is recorded over the entire period of
aircraft lease agreement by using best estimation based on historical experience
and other factors, including expectations of future events that are believed to be
reasonable under the circumstances. The provisions are calculated based on the
expenses expected to be incurred and allocate to be expenses in cost of passenger
and services and provisions for aircraft maintenance until the shop visit plan using
period and flight usage.
3.13.2 Provisions for aircraft return condition and aircraft maintenance
Provisions for aircraft return condition
The Company records provision for aircraft return condition when return the
aircraft to lessor at the expiration date of lease agreement over the entire period of
aircraft lease agreement. The Company use best estimation based on historical
experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances. The provisions are calculated
based on the expenses expected to be incurred and the delivery costs and allocate
to be expense in cost of passenger and services and provisions for aircraft
maintenance until the redelivery date using the periods in the contract.
- 21 -
Provisions for aircraft maintenance
The Company records provisions for aircraft maintenance according to the
maintenance plan. The provisions are calculated based on the expenses
expected to be incurred and allocate to be expense in cost of passenger and
services and provisions for aircraft maintenance until the maintenance date
using the flight hour.
3.14 Employee benefits
3.14.1 Provident fund
Under Provident Fund Act. (B.E.2530), the Company has established the
provident fund for its employee. Each employee contributes 2-15% of the
gross salary and the Company contributes the same amount not exceeding
5%. The Company records contributory provident fund as expenses when
incurred.
3.14.2 Post-employment benefits
The Group operate post-employment benefits plans under the Thai Labor
Protection Act. Such benefits are calculated by an independent actuary at the
end of reporting period using the Projected Unit Credit Method, which is
estimated based on the present value of expected cash flows of benefits to be
paid in the future taken into account the actuarial assumptions including
employee salaries, turnover rate, mortality rate, years of service and other
factors. Discount rate used in the calculation of provision is referenced to the yield
curve of Thai government bond.
The Company recognized the actuarial gains or losses arising from defined
benefit plan in other comprehensive income in the period incurred.
3.14.3 Pilot saving fund
The Company has provided other benefits to pilots on the retirement date or
upon resignation or loosen license cause. This accumulated saving fund is
calculated on the basis of actual number of flights per month and years of
service of its employees as per the Company’s policy.
3.15 Revenue recognition
3.15.1 Passenger revenue
The Group recognize the revenue from airfare after the services have been
rendered to the passengers as per flight schedule indicated in the air ticket.
Proceeds from sales of the air tickets that have not been recognized as
revenue are presented as unearned income in current liabilities of the
statement of financial position.
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3.15.2 Customer loyalty programmes
The Company operates a loyalty programmes which allows customers to
accumulate points when they flown through the Company. The points can then be
redeemed for air ticket.
Passenger revenue and service revenue are allocated to the accumulated points
which are calculated based on proportion of exercised points to total points and
presented as deferred income from customer royalty programmes. The Company
recognizes revenue when the customer redeems the points and receive flight
service.
3.15.3 Revenues from services
Revenues from services which is short-term service are recognized when the
services are rendered.
3.15.4 Interest income and other income
Interest income and other income are recognized on an accrual basis.
3.16 Expense recognition
Expenses are recognized on an accrued basis.
3.17 Finance costs
Finance costs comprise interest expense on borrowings and contingent consideration.
Borrowing costs that are not directly attributable to the acquisition, construction or
production of a qualifying asset are recognized in the statement of profit or loss and
other comprehensive income using the effective interest method.
3.18 Lease
The Group has applied TFRS 16 using the cumulative catch-up approach and therefore
comparative information has not been restated and is presented under TAS 17. The
details of accounting policies under both TAS 17 and TFRS 16 are as follows:
a) Policies applicable from January 1, 2020
The Group as lessee
The Group assesses whether a contract is or contains a lease, at inception of the
contract. The Group recognizes a right-of-use asset and corresponding lease liability
with respect to all lease arrangements in which it is the lease, except for short-term
leases (defined as leases with a lease term of 12 months or less) and leases of low-
value assets. For these leases, the Group recognizes the lease payments as an
operating expense on a straight-line basis over the term of the lease.
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The lease liability is initially measured at the present value of the lease payments
that are not paid at the commencement date, discounted by using the rate implicit in
the lease. If this rate cannot be readily determined, the Group uses its incremental
borrowing rate.
Lease payments included in the measurement of the lease liability comprise:
• Fixed lease payments (including in-substance fixed payments), less any lease
incentives receivable;
• Variable lease payments that depend on an index or rate, initially measured
using the index or rate at the commencement date;
• The amount expected to be payable by the lease under residual value gurantees;
• The exercise price of purchase options, if the lease is reasonably certain to
exercise the options; and
• Payments of penalties for terminating the lease, if the lease term reflects the
exercise of an option to terminate the lease.
The lease liability is subsequently measured by increasing the carrying amount to
reflect interest on the lease liability (using the effective interest method) and by
reducing the carrying amount to reflect the lease payments made.
The Group remeasures the lease liability (and makes a corresponding adjustment to
the related right-of-use asset) whenever:
• The lease term has changed or there is a significant event or change in
circumstances resulting in a change in the assessment of exercise of a purchase
option, in which case the lease liability is remeasured by discounting the revised
lease payments using a revised discount rate.
• The lease payments change due to changes in an index or rate or a change in
expected payment under a guaranteed residual value, in which cases the lease
liability is remeasured by discounting the revised lease payments using an
unchanged discount rate (unless the lease payments change is due to a change in a
yield interest rate, in which case a revised discount rate is used).
• A lease contract is modified and the lease modification is not accounted for as a
separate lease, in which case the lease liability is remeasured based on the lease
term of the modified lease by discounting the revised lease payments using a
revised discount rate at the effective date of the modification.
Right-of-use assets comprise the initial measurement of the corresponding lease
liability, lease payments made at or before the commencement date, less any lease
incentives received and any initial direct costs. They are subsequently measured at
cost less accumulated depreciation and impairment losses.
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Right-of-use assets are depreciated over the shorter period of lease term and useful
life of the underlying asset. If a lease transfers ownership of the underlying asset or
the cost of the right-of-use asset reflects that the Group expects to exercise a
purchase option, the related right-of-use is depreciated over the useful life of the
underlying asset. The depreciation starts at the commencement date of the lease.
The Group applies TAS 36 to determine whether a right-of-use asset is impaired
and accounts for any identified impairment loss.
Variable rents that do not depend on an index or rate are not included in the
measurement the lease liability and the right-of-use asset. The related payments are
recognized as an expense in the period in which the event or condition that triggers
those payments occurs in profit or loss.
The Group as lessor
Leases for which the Group is a lessor are classified as finance or operating leases.
Whenever the terms of the lease transfer substantially all the risks and rewards of
ownership to the lessee, the contract is classified as a finance lease. All other leases
are classified as operating leases.
When the Group is an intermediate lessor, it accounts for the head lease and the sub-
lease as two separate contracts. The sub-lease is classified as a finance lease or
operating lease by reference to the right-of-use asset arising from the head lease.
Rental income from operating leases is recognized on a straight-line basis over the
term of the relevant lease. Initial direct costs incurred in negotiating and arranging
an operating lease are added to the carrying amount of the leased asset and
recognized on a straight-line basis over the lease term.
Amounts due from lessees under finance leases are recognized as receivables at the
amount of the Group’s net investment in the leases. Finance lease income is
allocated to accounting periods so as to reflect a constant periodic rate of return on
the Group’s net investment outstanding in respect of the leases.
b) Policies applicable prior to January 1, 2020
Leases in which substantially all the risks and rewards of ownership of assets
remain with the lessor are accounted for as operating lease. Rentals applicable to
such operating leases are charged as an expense to the statement of profit or loss
and other comprehensive income on the straight-line basis over lease term.
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Sale and leaseback transaction results in an operating lease
If the sale price is clear that the transaction is established at fair value, any profit or
loss shall be recognized immediately in the statement of profit or loss and other
comprehensive income.
If the sale price is below fair value, any profit or loss shall be recognized
immediately in statement of profit or loss and other comprehensive income. Except
for the loss is compensated for by future lease payments at below market price, it
shall be deferred and amortized in proportion to the lease payments over the period
for which the lease asset is expected to be used.
If the sale price is above fair value, the excess over fair value shall be deferred and
amortized over the period for which the lease asset is expected to be used.
3.19 Income tax
Income tax expense for the year comprises current and deferred tax. Current and
deferred tax are recognized as income or expenses in the statement of profit or loss
except to the extent that they relate to a business combination, or items recognized
directly in equity or other comprehensive income.
Current tax is the expected tax payable or receivable derived from a computation of
profit using tax rates enacted at the end of reporting period and any adjustment to tax
payable in respect of previous years.
Deferred tax is recognised in respect of temporary differences between the carrying
amounts and taxable value of assets and liabilities, using tax rates enacted or
substantively enacted to the temporary differences when they reverse.
Deferred tax is not recognised for the following temporary differences:
- the initial recognition of goodwill and related transactions
- the initial recognition of assets or liabilities in a transaction that is not a business
combination and that affects neither accounting profit or loss nor taxable profit
or loss
- differences relating to investments in subsidiaries, associates and joint ventures to
the extent that it is probable that they will not reverse in the foreseeable future.
In determining the amount of current and deferred tax, the Group takes into account
the impact of uncertain tax positions and whether additional taxes and interest may
be due. The Group believes that its accruals for tax liabilities are adequate for all
open tax years based on its assessment of many factors, including interpretations of
tax law and prior experience. This assessment relies on estimates and assumptions
and may involve a series of judgments about future events. New information may
become available that causes the Group to change its judgment regarding the
adequacy of existing tax liabilities; such changes to tax liabilities will impact tax
expense in the period when such a determination is made.
- 26 -
Deferred tax assets and liabilities are offset when they relate to income tax levied by
the same taxation authority and the Group intend to settle its current tax assets and
liabilities on a net basis.
A deferred tax asset is recognized to the extent that it is probable that future taxable
profits will be available against which the temporary differences can be utilized.
Deferred tax assets are reviewed at each reporting date and reduced to the extent that
it is no longer probable that the related tax benefit will be realized. The Company
recognizes deferred tax liabilities for all taxable temporary differences in the
consolidated and separate financial statements.
3.20 Basic earnings (loss) per share and diluted earnings (loss) per share
Basic earnings (loss) per share is determined by dividing profit (loss) for the year by
weighted average number of ordinary shares during the year.
Diluted earnings (loss) per share is determined by the profit (loss) for the period
attributable to ordinary shareholders of the Company and the weighted average number
of ordinary shares outstanding during the year after adjusting for the effects of all
dilutive potential ordinary shares.
3.21 Fair value measurements
Fair value is the price that would be received from selling an asset or paid to transfer a
liability in an ordinary transaction between market participants at the measurement date,
regardless of whether that price is directly observable or estimated using valuation
technique. In estimating the fair value of an asset or a liability, the Group takes into
account the characteristics of the asset or liability as market participants would take those
characteristics into account when pricing the asset or liability at the measurement date.
Fair value for measurement and/or disclosure purposes in these consolidated and separated
financial statements is determined on such a basis.
In addition, fair value measurements are categorized into Level 1, 2 or 3 based on the
degree to which the inputs to the fair value measurements are observable and the
significance of the inputs to the fair value measurement, which are described as follows:
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or
liabilities that the entity can access at the measurement date.
Level 2 inputs are inputs, other than quoted prices included within Level 1, which
are observable for the asset or liability, either directly or indirectly.
Level 3 inputs are unobservable inputs for the asset or liability.
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3.22 Use of management’s judgements, accounting estimate and key sources of
estimation uncertainty
The preparation of financial statements in conformity with Thai Financial Reporting
Standards (TFRSs) requires the Group’s management to exercise various judgments in
order to determine the accounting policies, estimates and assumptions that affect the
reported amounts of assets and liabilities, the disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of revenues
and expenses during the year. Although these estimates are based on management’s
reasonable consideration of current events, actual results may differ from these
estimates.
Critical judgments in applying the Group’s accounting policies are as follows:
3.22.1 Impairment of right-of-use asset
At the end of each reporting period, the Group’s right-of-use asset are tested
for impairment when there is an indicator that the asset may be impaired.
The Group recognize impairment loss when recoverable amount of asset is
lower than carrying amount whereas, recoverable amount is the higher of fair
value less cost to sale of asset or value in use.
The fair value less cost to sale is assessed from information of right-of-use
assets, maintenance record and market condition, including other factors
such as the aircraft usage period and the significant tools element.
The value in use of asset is calculated from expected future cash inflow
using weighted average cost of capital as discount rate to present value.
The source of assumption using in the calculation consists of flight plan,
estimated cost and related expenses. Such estimates are based on
management’s reasonable consideration of current events, which require
management to exercise their judgement to reflect the best estimate at that
time to forecast the future result. Accordingly, actual results may differ from
this estimate.
3.22.2 Deferred tax assets
The Group recognizes deferred tax assets for deductible temporary differences
and unused tax losses when it is probable that the Group have sufficient future
taxable profits to utilize the temporary differences and unused tax losses. For
this purpose, the management is required to estimate the deferred tax assets that
the Group should recognize, by considering the expected future taxable profits
in each period.
The source of expected future taxable profit is an estimated future cash
inflow which is calculated from flight plan, expected cost and operating
expense. Such estimates are based on management’s reasonable consideration of
current events, the actual result may differ from this estimate.
- 28 -
3.22.3 Provisions for aircraft maintenance
The management of the Group need to exercise judgments in order to
estimate the reasonableness of assumptions used to estimate aircraft maintenance
in each period of maintenance schedule and expense for retaining the aircraft
when returning aircraft according to lease agreement based on reviewing
maintenance condition with lease agreement and maintenance schedule obtained
from maintenance company, actual information in the past and management’s
experience. Additional information is disclosed in Note 3.13.
3.22.4 Sale and leaseback transaction results in an operating lease
To determine sale and leaseback transaction resulting in an operating lease,
the Company’s management has to exercise significant judgments to determine
the appropriateness of lease agreement according to operating lease, aircraft
fair value and returned rental fee. If it is clear that the selling transaction is
established at fair value, any profit or loss shall be recognized immediately
in the statement of profit or loss and other comprehensive income. Additional
information is disclosed in Note 3.18.
4. REHABITATION PLAN
The situation of Coronavirus Disease 2019 (“COVID-19”) Pandemic, which globally
severely affects business, caused the Group’s disruption and obstruction of the operation.
Furthermore, the Company has to decrease the frequency of the number of flight and
temporarily reschedule some flight routes, which affect revenue of the Company significantly.
On July 30, 2020, the Board of Directors’ Meeting on special No. 8/2020 passed a
resolution to the Company to submit a petition to enter into a business rehabilitation
process and propose the rehabilitation planners (“the Planners”) to the Central Bankruptcy
Court under the Bankruptcy Act B.E. 2483. The Company submitted a petition to enter
into a business rehabilitation and proposed the rehabilitation planners to the Central
Bankruptcy Court on the same day that the Board of Directors passed the resolution. The
Central Bankruptcy Court issued an order to accept the business rehabilitation petition on
the same day.
On October 27, 2020, the Central Bankruptcy Court examined the brief of rehabilitation
petition of the Company, and ordered that no further hearing was required under the
Bankruptcy Act B.E. 2483, section 90/10 because no one raised any objection against the
petition. The summarized details of the actions relating to the filing for rehabilitation of
the Company are as follows:
- The Company, as a debtor, has filed for rehabilitation with the Central Bankruptcy
Court because the Company considered that the rehabilitation is the most suitable and
the best course of action for the temporary liquidity financial issues of the Company
under the supervision of the Central Bankruptcy Court in order that the Company can
operate normally.
- 29 -
- The Company has no intention to terminate, liquidate or go bankrupt the business. The
Company has certain intention to continue its operations. The current problem of the
Company was not from the fundamental factors of the business but from several
factors including the Coronavirus Disease 2019 (“COVID-19”) Pandemic, which
severely affects to business globally. If there is a restructuring under an appropriate
rehabilitation process, the Company expected that it could enable the business growth.
- The rehabilitation process will facilitate the Company to achieve the objective of
business rehabilitation effectively from the procedures that are under the legal
framework and give the rights to all related parties fairly. It will also allow the
Company to continue its usual operations, whether the providing passenger
transportation services, air cargo and air parcel post operations throughout the
rehabilitation process.
- The initial rehabilitation plan is debt restructuring to resolve the existing liquidity
issue by taking into account the interest of all related parties fairly and consistent with
the ability to repay the debt of the Company including the business management. It is
to achieve and be able to pay the debt according to the rehabilitation plan effectively.
- The Company nominated Grant Thornton Specialist Advisory Services Co., Ltd
together with Mr. Prinya Waiwatana, Mr. Tai Chong Yih, Mr. Kasemsant Weerakun,
Mr. Wutthiphum Jurangkool and Mr. Chavalit Uttasart, directors of the Company, to
act as the planners.
On November 4, 2020, the Central Bankruptcy Court granted the Company’s business
rehabilitation petition and appointed the Planners as nominated by the Company. Subsequently,
the Official Receiver has announced the Court Order of the Company’s business rehabilitation
petition and appointed the Planners in the Royal Gazette on December 15, 2020. The Planners
will prepare the rehabilitation plan for submission to the Official Receiver within March 15,
2021. Subsequently, the Planners made a request to the Bankruptcy Court for extension to
submit the rehabilitation plan pursuant to section 90/43 paragraph 2 of the Bankruptcy Act
B.E. 2483 (A.D. 1940) (as amended) and extension the twice time, one-month each from the
previous deadline. The Central Bankruptcy Court considered and issued an approval of the
extension of the plan submission for which the deadline for the last extension is May 15, 2021.
However, May 15, 2021, was the public holiday on the weekend. Therefore, the Planners
submitted the rehabilitation plan to the Official Receiver on May 17, 2021. Subsequently,
the Planners submitted a plan amendment petition to the Official Receiver on July 30, 2021.
The Official Receiver scheduled the meeting with the creditors to consider the rehabilitation
plan on August 4, 2021. The creditors’ meeting passed a resolution in accordance with the
Section 90/46 of the Bankruptcy Act B.E. 2483 (A.D. 1940) (as amended), accepted the
rehabilitation plan dated May 17, 2021 and the plan as amended per a plan amendment
petition, which were proposed by the Planners and creditor, as well as nominated four plan
administrators, i.e. Mr. Wutthiphum Jurangkool, Mr. Tai Chong Yih, Mr. Prinya Waiwatana,
and Mr. Chavalit Uttasart. Subsequently, the Central Bankruptcy Court held the hearing to
consider the rehabilitation plan on August 26, 2021 and there were 7 objection petitions
filed against the rehabilitation plan and these petitions were accepted for consideration by
the Court. The Court allowed the Planner and creditors to further negotiate to resolve the
objections and scheduled for the Court hearing on reading the order on the rehabilitation plan
on September 6, 2021. The Company expects to manage the operations in according to the
objectives of the rehabilitation plan within the fourth quarter of the year of 2021.
- 30 -
5. SUPPLEMENTARY DISCLOSURES OF CASH FLOW INFORMATION
5.1 Cash and cash equivalents as at December 31 consist of: UNIT : BAHT
Consolidated Separate
financial statements financial statements
2020 2019 2020 2019
Cash on hand 7,589,155 21,186,297 7,589,155 10,103,639
Deposits at banks - current accounts 242,962,002 394,000,487 242,962,002 73,867,804
Deposits at banks - savings accounts 1,155,009,870 817,455,643 1,153,868,343 278,422,723
Certificates of deposit (interest at the rates of
0.45 % - 1.00% p.a. with maturities within 3 months) - 1,144,957 - -
Total 1,405,561,027 1,233,787,384 1,404,419,500 362,394,166
5.2 Non-cash items from purchases and increase in equipment and intangible assets for
the year ended December 31, consist of: UNIT : BAHT
Consolidated Separate
financial statements financial statements
2020 2019 2020 2019
Payables for purchases of equipment and
intangible assets brought forward 445,048 9,129,593 445,048 9,129,593 Add Purchases during the year 12,696,698 57,857,885 8,342,528 28,035,991 Less Cash payments during the year (13,099,305) (66,542,430) (8,745,135) (36,720,536) Payables for purchases of equipment and
intangible assets carried forward 42,441 445,048 42,441 445,048
5.3 Cash and non-cash items from changes in liabilities of financing activities for the
year ended December 31, consist of:
UNIT : BAHT
Consolidated financial statements
Change in cash items
As at December 31, 2020 Balance Interest Cash Cash Adjustment Balance
as at recognized received paid on dissolution as at
January 1, during of indirect December 31,
2020 the year subsidiary 2020
Short-term borrowings from
financial institutions 500,000,000 - - (500,000,000) - -
Short-term borrowings from
shareholder 2,920,000,000 - 200,000,000 - (400,000,000) 2,720,000,000
Short-term borrowings from other 200,000,000 - - (200,000,000) - -
Accrued interest expenses 15,410,959 275,536,781 - (174,498,425) - 116,449,315
Total 3,635,410,959 275,536,781 200,000,000 (874,498,425) (400,000,000) 2,836,449,315
- 31 -
UNIT : BAHT
Consolidated financial statements
Change in cash items
As at December 31, 2019 Balance Interest Cash Cash Balance
as at recognized Received paid as at
January 1, during December 31,
2019 the year 2019
Short-term borrowings from
financial institutions 1,600,000,000 - 300,000,000 (1,400,000,000) 500,000,000
Short-term borrowings from
shareholder 800,000,000 - 2,920,000,000 (800,000,000) 2,920,000,000
Short-term borrowings from other - - 200,000,000 - 200,000,000
Accrued interest expenses 8,479,589 125,091,357 - (118,159,987) 15,410,959
Total 2,408,479,589 125,091,357 3,420,000,000 (2,318,159,987) 3,635,410,959
UNIT : BAHT
Separate financial statements
Change in cash items
As at December 31, 2020 Balance Interest Cash Cash Balance
as at recognized Received paid as at
January 1, during December 31,
2020 the year 2020
Short-term borrowings from
shareholder 2,520,000,000 - 200,000,000 - 2,720,000,000
Accrued interest expenses 15,410,959 231,146,301 - (130,107,945) 116,449,315
Total 2,535,410,959 231,146,301 200,000,000 (130,107,945) 2,836,449,315
UNIT : BAHT
Separate financial statements
Change in cash items
As at December 31, 2019 Balance Interest Cash Cash Balance
as at recognized received paid as at
January 1, during December 31,
2019 the year 2019
Short-term borrowings from
financial institutions 900,000,000 - 300,000,000 (1,200,000,000) -
Short-term borrowings from
shareholder 800,000,000 - 2,520,000,000 (800,000,000) 2,520,000,000
Accrued interest expenses 8,479,589 82,841,780 - (75,910,410) 15,410,959
Total 1,708,479,589 82,841,780 2,820,000,000 (2,075,910,410) 2,535,410,959
6. TEMPORARY INVESTMENTS AND CURRENT INVESTMENTS IN FINANCIAL ASSETS
Temporary investments and current investments in financial assets as at December 31
consist of:
UNIT : BAHT Consolidated Separate financial statements financial statements 2020 2019 2020 2019
Temporary investments
Time deposits with maturity of
more than 3 months but not
more than 1 year (interest rate of
0.375% to 1.15%per annum) - 42,878,939 - 42,261,195
Total - 42,878,939 - 42,261,195
- 32 -
UNIT : BAHT Consolidated Separate
financial statements financial statements
2020 2019 2020 2019
Current investments in financial assets
Time deposits with maturity of
more than 3 months but not
more than 1 year (interest rate of
0.55% to 0.70%per annum) 541,235,949 - 541,235,949 -
Total 541,235,949 - 541,235,949 -
7. TRADE AND OTHER CURRENT RECEIVABLES
7.1 Trade and other current receivables
Trade and other current receivables as at December 31, consist of:
UNIT : BAHT
Consolidated Separate
financial statements financial statements
2020 2019 2020 2019
Trade receivables - related parties (see Note 32.1) 62,694,040 3,799,088 63,052,252 60,259,229 Trade receivables - other parties 815,561,043 1,098,013,557 815,501,049 515,578,811
Total 878,255,083 1,101,812,645 878,553,301 575,838,040 Less Allowance for doubtful accounts - (36,115,941) - (40,745,755) Less Allowance for expected credit losses (773,475,586) - (773,773,804) -
Total trade receivables 104,779,497 1,065,696,704 104,779,497 535,092,285 Other receivables
Advance aircraft rental - 92,674,449 - 88,022,742 Other prepaid expenses 79,205,627 122,446,690 79,205,627 100,987,910 Accrued income - related parties (see Note 32.1) - 9,716,958 - 13,018,869 Accrued income - other parties 57,356,204 151,747,079 57,356,204 72,117,363 Accrued interest income - related parties
(see Note 32.1) 14,656,438 - 28,952,459 1,726,027 Accrued interest income - other parties 370,866 6,941,971 370,866 6,356,044 Advance payments - related parties (see Note 32.1) - 380,022 1,792,294 1,366,660 Advance payments - other parties 3,540,545 27,026,679 3,540,545 18,169,032 Advance payments for aircraft maintenance
and engine maintenance 11,616,198 29,343,657 11,616,198 12,016,043 Advance fuel for aircraft 15,001,197 356,422,646 15,001,197 48,717,422 Refundable value-added tax 8,535 591,879,968 - 130,543,265 Other receivables - related parties (see Note 32.1) 243,818,991 - 243,818,991 - Others 28,585,235 56,484,210 28,585,235 25,662,345
Total 454,159,836 1,445,064,329 470,239,616 518,703,722 Less Allowance for doubtful accounts - (17,422,678) - (17,422,678) Less Allowance for expected credit loss (303,779,163) - (318,075,184) -
Total other receivables 150,380,673 1,427,641,651 152,164,432 501,281,044 Total 255,160,170 2,493,338,355 256,943,929 1,036,373,329
- 33 -
As at December 31, 2020, the Company recognized allowance for expected credit
losses of trade and other current receivables in total amount of Baht 773.77 million
and Baht 318.08 million, respectively, in separate financial statement due to
allowance for expected credit losses according to TFRS9 mainly are allowance for
expected credit losses of NokScoot Airlines Co., Ltd. which is subsidiary of the
Company in total amount of Baht 298.84 million and other receivable in total
amount of Baht 793.01 million.
7.2 Trade receivables as at December 31, classified by aging are as follows:
UNIT : BAHT
Consolidated Separate
financial statements financial statements
2020 2019 2020 2019
Within credit terms 19,043,244 172,482,531 19,043,244 60,751,958
Overdue - Less than 1 month 22,368,374 200,456,049 22,368,374 97,096,855
- 1 month to 2 months 18,388,141 75,241,211 18,388,141 37,737,857
- 2 months to 4 months 58,903,255 304,583,272 58,903,255 109,828,757
- 4 months to 1 year 335,293,146 282,139,583 335,293,146 229,676,858
- over 1 year 424,258,923 66,909,999 424,557,141 40,745,755
878,255,083 1,101,812,645 878,553,301 575,838,040
Less Allowance for doubtful accounts - (36,115,941) - (40,745,755)
Less Allowance for expected credit losses (773,475,586) - (773,773,804) -
Total 104,779,497 1,065,696,704 104,779,497 535,092,285
The Group has recognized the loss allowance for trade receivables at an amount
equal to lifetime ECL. The expected credit losses on trade receivables are estimated
using a provision matrix by reference to credit losses from past experience of the
debtor and an analysis of the debtor’s current financial position. The Group has
recognized a loss allowance of 100% against all receivables historical experience
has indicated that these receivables are generally not recoverable.
The following table shows the reconciliation in allowance for lifetime ECL that has
been recognized for trade receivables in accordance with the simplified approach
set out in TFRS 9 for the year ended December 31, 2020:
UNIT : BAHT Consolidated Separate
financial statement financial statement
Balance as at January 1, 2020 36,115,941 40,745,755
Net remeasurement of loss allowance 737,943,073 733,028,049
Amounts recovered - -
Derecognition of beginning allowance for expected
credit loss due to liquidation of subsidiary (583,428) -
Balance as at December 31, 2020 773,475,586 773,773,804
- 34 -
8. SHORT-TERM LOANS TO A RELATED PARTY
On November 12, 2019, the Company entered into the loan agreement for lending to Nok
Mangkang Co., Ltd. in the amount of Baht 200 million, which are promissory notes and carry
interest rate at 6.30% per annum. Subsequently, on May 12, 2020, the Company renewed
such unsecured promissory notes until August 11, 2020, which were repayable with interest
as specified in the agreement within 3 months from the date of the promissory notes. The
principal is due for repayment within 12 months from the loan agreement date.
On March 12, 2020, the Company entered into the loan agreement with Nok Mangkang Co., Ltd.
for lending the loan in the amount of Baht 200 million, which are promissory notes and carry
interest rate at 6.20% per annum. Subsequently, on June 12, 2020, the Company renewed such
unsecured promissory notes until July 13, 2020, which were repayable with interest as specified in
the agreement within 1 month from the date of the promissory notes. The principal is due for
repayment of all promissory notes issued within December 12, 2020.
On August 11, 2020 and July 13, 2020, Nok Mangkang Co., Ltd. failed to repay interest and
did not renew the promissory notes on maturity date. The Company calculated default interest
rate at 15% per annum from the date of default payment or the date of default in loan
agreement in the amount of Baht 25.82 million.
As at December 31, 2020 and 2019, short-term loans to a related party were Baht 400
million and Baht 200 million, respectively and accrued interest from a related party were
Baht 28.95 million (include default interest) and Baht 1.72 million, respectively.
As at December 31, 2020, the Company recorded allowance for expected credit loss for
short-term loans to a related party in full amount of Baht 400 million and accrued interest
including accrued default interest in full amount of Baht 28.95 million in the separate
financial statements (see Note 32.1).
9. INVENTORIES
Inventories as at December 31, consist of:
UNIT : BAHT
Consolidated and separate
financial statements
2020 2019
Goods for sales 5,429,770 8,136,046
Food and beverage 169,505 2,542,775
Spare parts and other supplies 93,241,313 70,306,142
Total 98,840,588 80,984,963
- 35 -
Costs of inventories recognized as expenses in the consolidated and separate statements of
profit or loss and other comprehensive income for the years ended December 31, are as
follows:
UNIT : MILLION BAHT
Consolidated Separate
financial statements financial statements
2020 2019 2020 2019
For the years ended December 31, 15.76 69.55 4.05 9.87
10. AIRCRAFT DEPOSITS AND PREPAYMENTS
Aircraft deposits and prepayments as at December 31, consist of:
UNIT : BAHT
Consolidated Separate
financial statements financial statements
2020 2019 2020 2019
Short-term
Deposits - aircraft and machine lease 356,204,398 272,557,947 356,204,398 272,557,947
Less : Allowance for deposits (249,881,633) - (249,881,633) -
Total 106,322,765 272,557,947 106,322,765 272,557,947
Long-term
Deposits - aircraft lease 359,750,377 531,576,911 359,750,377 483,509,272
Prepayments - aircraft acquisition 501,156,753 522,516,480 501,156,753 522,516,480
Less : Allowance for deposits
and prepayments (232,965,720) - (232,965,720) -
Total 627,941,410 1,054,093,391 627,941,410 1,006,025,752
Deposits for aircraft and machine lease are security deposit for aircraft lease and deposit
for engine lease. The Engine lease is a short-term lease of engine for existing engine is
off-wing for maintenance. It shall be returned to lessee at the time of lease expiry.
Prepayment for aircraft acquisition is a pre-delivery payment (PDP) for those aircraft
which the Company purchases directly from aircraft manufacturers but not yet delivered.
PDP term and amount was set up in Aircraft Purchase Agreement with aircraft
manufacturers.
The Company entered into sale and lease back agreements under lease for certain of the
purchased aircraft which the sale and lease back will be effective when the aircraft are
delivered, the lease terms are not exceed 12 years. However, as at the date of entering into
sale and lease back agreements, the buyer has responsibility to pay the said PDP instead of
the Company.
- 36 -
11. OTHER NON-CURRENT FINANCIAL ASSETS AND OTHER LONG-TERM INVESTMENTS
Other non-current financial assets as at December 31, 2020 consist of:
Companies Consolidated and separate financial statements
Shareholding Cost method
(%) Baht
Investment in Aeronautical Radio of Thailand Limited 0.75 4,969,100
Investment in Flight Training (Thailand) Co., Ltd. 15.00 40,650,000
Total 45,619,100
Other long-term investments as at December 31, 2019 consist of:
Companies Consolidated financial
statements
Separate financial
statements
Shareholding Cost Shareholding Cost
method method
(%) Baht (%) Baht
Aeronautical Radio of Thailand Limited 0.84 5,525,400 0.78 5,164,200
Flight Training (Thailand) Co., Ltd. 15.00 40,650,000 15.00 40,650,000
Total 46,175,400 45,814,200
11.1 Investment in Aeronautical Radio of Thailand Limited
The Company and its subsidiary applied for a membership of Aeronautical Radio
of Thailand Limited in 2004 and 2015, respectively, and acquired the Aeronautical
Radio of Thailand Limited’s shares according to its regulation.
The authorized share capitals of Aeronautical Radio of Thailand Limited of
6,600,000 ordinary shares, at par value of Baht 100 each, are classified into 2 classes
as to the qualification of the shareholders as follows:
1. Ordinary share class A, 6,000,000 shares specifically held by Thai government
and persons who get consents from the Government.
2. Ordinary share class B, 600,000 shares specifically held by airlines, which
regularly operate their flights to and/or in Thailand according to their
announced flight schedules.
As the regulation of Aeronautical Radio of Thailand Limited does not allow the
dividend payment, shareholders will receive discount on air navigation facility
charge instead. The proportion of shareholding will be increased or decreased
depending on the allotment by Aeronautical Radio of Thailand Limited based on
the number of flights during the year of the members. The amount paid for the
shares is refundable upon the termination of its membership.
- 37 -
During the year ended December 31, 2020, the Company reduced shares of 1,951
shares and the Company received this portion in the amount of Baht 195,100 as a result
the percent holding in such company decreased from 0.78% to 0.75%.
As at December 31, 2020, the Company has investment in Aeronautical Radio of
Thailand Limited’s share capital totaling 49,691 shares, amounting of Baht 4,969,100.
11.2 Investment in Flight Training (Thailand) Co., Ltd.
On September 12, 2014, the Company agreed with a juristic person in foreign
country and a juristic person in Thailand in order to establish Flight Training (Thailand)
Co., Ltd. (Formerly Pan Am International Flight Training Center (Thailand) Co., Ltd.),
a crew training center, in the amount of USD 1.25 million which is 15% of the share
capital of such joint venture.
12. INVESTMENTS IN SUBSIDIARIES
Investments in subsidiaries as at December 31, consist of:
Companies Type of business Country of Shareholding Paid-up share capital Separate
registration financial statements
Cost method
(%) (Baht) (Baht)
2020 2019 2020 2019 2020 2019
Direct subsidiaries
Nok Holidays Co., Ltd.** Tourism guiding and other
relevant business Thailand 99.99 99.99 100,000 100,000 99,990 99,990
Nok Mangkang Co., Ltd. Air transport service for
passengers, parcel
and parcel post Thailand 49 49 10,000,000 10,000,000 4,900,000 4,900,000
Indirect subsidiary
NokScoot Airlines Co., Ltd.* Air transport service for
passengers, parcel
and parcel post Thailand 24.33 24.33 2,960,784,300 2,960,784,300 - -
4,999,990 4,999,990
Less : Allowance for diminution in value of investment in
a subsidiary*
(4,900,000) -
Total 99,990 4,999,990
* A subsidiary of Nok Mangkang Co., Ltd.
Nok Mangkang Co., Ltd. held 49% of total shares in NokScoot Airlines Co., Ltd, which Nok Mangkang Co., Ltd. borrowed loan from the Company (see Note 15) to
invest in NokScoot Airlines Co., Ltd. Therefore, the Company has indirect control over NokScoot Airlines Co., Ltd. through Nok Mangkang Co., Ltd.
On June 26, 2020, the Board of Directors’ Meeting on special No. 5/2020 of Nok Airlines Public Company acknowledged the business termination and
liquidation of NokScoot Airlines Co., Ltd. and Nok Scoot Airlines Co., Ltd. registered the dissolution with the Department of Business Development
on July 29, 2020 (see Note 1.2.3).
As at December 31, 2020, the Company recorded allowance for diminution in value of investment in Nok Mangkang Co., Ltd. (direct subsidiary) in
full amount of Baht 4.90 million because direct subsidiary has been experiencing continuous financial losses.
** On March 25, 2019, the Meeting of Board of Directors of the Company has passed a resolution to proceed registration of liquidation Nok Holidays Co., Ltd.
Subsequently, on July 25, 2019, the Meeting of Executive committee of the Company has considered and passed a resolution to continue business operation of Nok
Holidays Co., Ltd.
- 38 -
13. DISCONTINUED OPERATION
On July 14, 2020, the Annual General Meeting of Shareholders of 2020 of NokScoot
Airlines Co., Ltd., which is an indirect subsidiary of the Company as mentioned in Note
12, passed a resolution to approve the dissolution and liquidation. The Group classified
net loss of NokScoot Airlines Co., Ltd. as net loss from discontinued operation in the
consolidated financial statements.
On July 29, 2020, NokScoot Airlines Co., Ltd. (the “subsidiary”) registered the
dissolution with the Department of Business Development and appointed a liquidator to
manage the liquidation process and the determination of operating policy is subject to
direction by the liquidator. As a result, the Company lost control of such subsidiary.
The Company derecognized the assets and liabilities of the subsidiary at their carrying amounts,
and non-controlling interests in the former subsidiary at their carrying amount and recognized
resulting difference as a gain on dissolution of the subsidiary in the consolidated financial
statements of the Group.
The subsidiary’s financial information as at July 29, 2020 and for the period from January 1, 2020 to
July 29, 2020 (date of dissolution registration) shown total assets of Baht 3,793.31 million and total
liabilities of Baht 11,553.00 million, and loss from operations of Baht 5,712.96 million.
The Company recognized gain on dissolution of the subsidiary of Baht 7,759.69 million in the
consolidated financial statements of the Group.
The consolidated statements of profit or loss and other comprehensive income for the
year ended December 31, 2020 and 2019 for discontinued operations are as follows:
UNIT : BAHT
Consolidated
financial statements
For the year ended December 31, Note 2020 2019
Discontinued operation
Revenues 1,416,508,412 7,409,819,010
Expenses (7,129,463,962) (8,761,999,704)
Loss from discontinued operation (5,712,955,550) (1,352,180,694)
Gain on dissolution of the subsidiary 7,759,689,212 -
Profit (loss) before income tax expense 2,046,733,662 (1,352,180,694)
Income tax expense - -
Profit (loss) for the year from discontinued operation
- net of income tax 2,046,733,662 (1,352,180,694)
Earnings (losses) per share*
Basic earnings (losses) per share (Baht) 29 0.14 (0.11)
* Earnings (losses) per share from discontinued operation for equity holders of the Company
- 39 -
14. INVESTMENT IN JOINT VENTURE
The Company invest in Air Black Box Asia Pacific Pte Ltd., which is a company
incorporated in Singapore and operates in platform for airline reservation systems, in the
amount of SGD 1.15 million or equivalent to Baht 28.42 million which has shareholding
portion at 13.04% of its registered and paid-up share capital.
As at December 31, 2020 and 2019, investment in joint venture in the separate financial
statements has detail as follows:
UNIT : BAHT
Separate financial statements
2020 2019
At January 1, 28,420,554 28,420,554
Disposals - -
At December 31, 28,420,554 28,420,554
As at December 31, 2020 and 2019, investment in joint venture which is recorded by the
equity method in the consolidated financial statements and at cost value in the separate
financial statement has detail as follows:
Unit As at As at
December 31, December 31,
2020 2019
Nature of business: Operates in platform for airline
reservation systems
Country of incorporation: Singapore
Shareholding by the Company Percentage 13.04 13.04
Carrying amount based on equity method Baht - -
Carrying amount based on cost method Baht 28,420,554 28,420,554
Share of loss from investment in joint venture Baht - 1,409,685
Paid-up share capital Singapore dollars 9,264,219 9,264,219
Total assets Singapore dollars 3,151,470 3,563,189
Total liabilities Singapore dollars 2,913,969 2,035,756
On March 29, 2019, the Board of Directors’ meeting of NokScoot Airlines Company
Limited (the “subsidiary”) approved to invest in Line Maintenance Partnership (Thailand)
Co., Ltd., which is a company incorporated in Thailand and operates in platform for line
maintenance service with the registered capital of Baht 63.68 million. The subsidiary
invested in the portion of 50.9998% of its registered capital or equivalent to Baht 32.48
million. On the same date, the Subsidiary entered into Joint Venture Agreement and
related agreement of Line Maintenance Partnership (Thailand) Co., Ltd. with SIA
Engineering Co., Ltd. and a management of Nok Airlines Public Company Limited. The
proportion of investment for the subsidiary, SIA Engineering Co., Ltd. and a management
of Nok Airlines Public Company Limited are by 50.9998%, 49% and 0.0002%,
respectively.
- 40 -
Subsequently in August 2019, the subsidiary paid the first payment in Line Maintenance
Partnership (Thailand) Co., Ltd., by Baht 8.12 million which the investment paid has
portion at 25% from the proportion of investment of 50.9998% as stipulated in the
agreement.
On July 14, 2020, the Annual General Meeting of Shareholders for the year 2020 of
NokScoot Airlines Company Limited passed a resolution to dissolve and liquidate Line
Maintenance Partnership (Thailand) Co., Ltd. Subsequently, Line Maintenance
Partnership (Thailand) Co., Ltd. registered the dissolution with the Department of
Business Development on September 18, 2020 and appointed a liquidator to manage the
liquidation process, and the determination of operating policy is subject to direction by
the liquidator. As a result, NokScoot Airlines Company Limited lost control of Line
Maintenance Partnership (Thailand) Co., Ltd. Therefore, the Company derecognized the
investment in the joint venture in the consolidated financial statements of the Group.
15. LONG-TERM LOANS TO A RELATED PARTY
On July 8, 2014, the Company entered into the loan agreement for lending to Nok Mangkang
Co., Ltd. (the “subsidiary”) in the amount of Baht 970 million, carrying interest rate at the
average fixed deposits rate for 1 year of two commercial banks plus 0.50% p.a. payable on
annual basis with no collateral and due for repayment within 10 years. On November 22, 2018,
and April 15, 2019, the Company entered into the addendum to loan agreement No. 1 and No. 2,
respectively, for addition lending to subsidiary in the amount of Baht 490 million, carrying interest
rate 6.50% p.a. and due for repayment within 10 years from the date of receiving the loan. Other
conditions are specified in the agreement.
As at December 31, 2020 and 2019, long-term loans to a related party were Baht 1,460 million
and Baht 1,460 million, respectively, and accrued interest income were Baht 144.11 million and
Baht 103.85 million, respectively.
On December 30, 2020 and 2019 the Company has issued a letter to accept the request
from a subsidiary to extend the accrued interest income for 12 months from December 31, 2020
and December 31, 2019, respectively. As at December 31, 2020, the Company presented the
accrued interest income as a part of non-current assets (see Note 32.1).
As at December 31, 2020, the Company recorded allowance for expected credit loss for long-term
loans to a related party and accrued interest income in full amount in the separate financial statements,
totaling of Baht 1,460 million and Baht 144.11 million, respectively (see Note 32.1).
- 41 -
16. LEASEHOLD IMPROVEMENTS AND EQUIPMENT
Leasehold improvements and equipment as at December 31, consist of:
As at December 31, 2020 UNIT : BAHT
Consolidated financial statements
Balance Increase Decrease Transfer in Adjustment Balance
as at (out) as at
January 1, December 31, 2020
2020
Cost
Leasehold improvements 103,369,421 - (23,021,128) 5,949,000 - 86,297,293
Aircraft improvements 108,400,805 - (35,047,041) - - 73,353,764
Office tools 18,652,583 6,839 (146,338) - - 18,513,084
Office equipment 29,799,418 146,359 (1,091,158) - - 28,854,619
Computer equipment 157,214,136 760,992 (8,446,249) - - 149,528,879
Communication equipment 5,216,004 - (177,240) - - 5,038,764
Tools 274,884,050 699,982 (324,883) - 8,211,800 283,470,949
Vehicles 5,628,046 - - - - 5,628,046
Leasehold improvements
in progress and asset under
installation 6,821,687 5,949,000 (150,000) (5,949,000) - 6,671,687
Total cost 709,986,150 7,563,172 (68,404,037) - 8,211,800 657,357,085
Accumulated depreciation
Leasehold improvements (91,680,734) (5,663,469) 21,128,497 - - (76,215,706)
Aircraft improvements (60,268,344) (16,727,866) 13,193,310 - - (63,802,900)
Office tools (17,065,880) (1,211,406) 143,769 - - (18,133,517)
Office equipment (25,628,586) (2,310,497) 1,031,788 - - (26,907,295)
Computer equipment (143,288,351) (8,538,006) 7,539,849 - - (144,286,508)
Communication equipment (4,676,867) (360,284) 175,844 - - (4,861,307)
Tools (215,453,272) (34,236,447) 140,194 - - (249,549,525)
Vehicles (3,226,602) (667,067) - - - (3,893,669)
Total accumulated
depreciation (561,288,636) (69,715,042) 43,353,251 - - (587,650,427)
Derecognition of asset due to
liquidation of the indirect
subsidiary - (3,263,900)
Leasehold improvements
and equipment 148,697,514 66,442,758
- 42 -
As at December 31, 2019 UNIT : BAHT
Consolidated financial statements
Balance Increase Decrease Transfer in Balance
as at (out) as at
January 1, December 31, 2019
2019
Cost
Leasehold improvements 104,225,092 588,263 (2,898,996) 1,455,062 103,369,421
Aircraft improvements 81,995,616 26,405,189 - - 108,400,805
Office tools 19,097,530 24,920 (469,867) - 18,652,583
Office equipment 29,874,067 437,903 (698,303) 185,750 29,799,417
Computer equipment 156,891,632 2,169,257 (1,888,468) 41,715 157,214,136
Communication equipment 5,341,352 - (125,348) - 5,216,004
Tools 270,003,979 6,589,273 (1,709,202) - 274,884,050
Vehicles 5,628,047 - - - 5,628,047
Leasehold improvements
in progress and asset
under installation 6,971,687 1,532,527 - (1,682,527) 6,821,687
Total cost 680,029,002 37,747,332 (7,790,184) - 709,986,150
Accumulated depreciation
Leasehold improvements (83,784,378) (10,655,740) 2,759,384 - (91,680,734)
Aircraft improvements (39,799,608) (20,468,736) - - (60,268,344)
Office tools (15,750,927) (1,768,536) 453,583 - (17,065,880)
Office equipment (22,554,181) (3,698,320) 623,915 - (25,628,586)
Computer equipment (132,739,771) (12,379,778) 1,831,198 - (143,288,351)
Communication equipment (4,372,787) (429,409) 125,329 - (4,676,867)
Tools (171,676,093) (45,464,072) 1,686,893 - (215,453,272)
Vehicles (2,561,358) (665,244) - - (3,226,602)
Total accumulated
depreciation (473,239,103) (95,529,835) 7,480,302 - (561,288,636)
Leasehold improvements
and equipment 206,789,899 148,697,514
Depreciation for the years ended December 31,
2020 Baht 69,715,042
2019 Baht 95,529,835
As at December 31, 2020 and 2019, cost value of equipment which are fully depreciated but
still in use of the Company and its subsidiaries are Baht 364.16 million and Baht 297.52
million, respectively.
- 43 -
As at December 31, 2020 UNIT : BAHT
Separate financial statements
Balance Increase Decrease Transfer in Adjustment Balance
as at (out) as at
January 1, December 31,
2020 2020
Cost
Leasehold improvements 93,796,328 - (23,021,128) 5,949,000 - 76,724,200
Aircraft improvements 73,353,764 - - - - 73,353,764
Office tools 18,652,583 6,839 (146,338) - - 18,513,084
Office equipment 24,984,345 125,359 (1,091,158) - - 24,018,546
Computer equipment 149,962,948 760,992 (1,205,158) - - 149,518,782
Communication equipment 5,216,004 - (177,240) - - 5,038,764
Tools 267,039,693 699,982 (20,000) - 8,211,800 275,931,475
Vehicles 5,628,046 - - - - 5,628,046
Leasehold improvements
in progress and asset
under installation 6,821,687 5,949,000 (150,000) (5,949,000) - 6,671,687
Total cost 645,455,398 7,542,172 (25,811,022) - 8,211,800 635,398,348
Accumulated depreciation
Leasehold improvements (83,074,998) (5,271,589) 21,128,497 - - (67,218,090)
Aircraft improvements (51,658,448) (12,144,451) - - - (63,802,899)
Office tools (17,065,881) (1,211,406) 143,769 - - (18,133,518)
Office equipment (21,196,020) (2,186,105) 1,031,788 - - (22,350,337)
Computer equipment (137,687,935) (7,782,987) 1,194,510 - - (144,276,412)
Communication equipment (4,676,867) (360,284) 175,844 - - (4,861,307)
Tools (211,106,307) (33,333,049) 19,999 - - (244,419,357)
Vehicles (3,226,603) (667,067) - - - (3,893,670)
Total accumulated
depreciation (529,693,059) (62,956,938) 23,694,407 - - (568,955,590)
Leasehold improvements and
equipment 115,762,339 66,442,758
- 44 -
As at December 31, 2019
UNIT : BAHT
Separate financial statements
Balance Increase Decrease Transfer in Balance
as at (out) as at
January 1, December 31,
2019 2019
Cost
Leasehold improvements 94,805,950 434,311 (2,898,995) 1,455,062 93,796,328
Aircraft improvements 73,353,764 - - - 73,353,764
Office tools 19,097,530 24,921 (469,868) - 18,652,583
Office equipment 25,131,184 365,714 (698,303) 185,750 24,984,345
Computer equipment 149,804,196 2,037,720 (1,888,468) 9,500 149,962,948
Communication equipment 5,341,353 - (125,349) - 5,216,004
Tools 262,178,650 6,570,244 (1,709,201) - 267,039,693
Vehicles 5,628,046 - - - 5,628,046
Leasehold improvements
in progress and asset
under installation 6,971,687 1,500,312 - (1,650,312) 6,821,687
Total cost 642,312,360 10,933,222 (7,790,184) - 645,455,398
Accumulated depreciation
Leasehold improvements (76,524,565) (9,309,817) 2,759,384 - (83,074,998)
Aircraft improvements (38,776,989) (12,881,459) - - (51,658,448)
Office tools (15,750,927) (1,768,536) 453,582 - (17,065,881)
Office equipment (18,880,157) (2,939,777) 623,914 - (21,196,020)
Computer equipment (128,603,309) (10,915,825) 1,831,199 - (137,687,935)
Communication equipment (4,372,788) (429,409) 125,330 - (4,676,867)
Tools (168,896,503) (43,896,696) 1,686,892 - (211,106,307)
Vehicles (2,561,359) (665,244) - - (3,226,603)
Total accumulated
depreciation (454,366,597) (82,806,763) 7,480,301 - (529,693,059)
Leasehold improvements and
equipment 187,945,763 115,762,339
Depreciation for the years ended December 31,
2020 Baht 62,956,938
2019 Baht 82,806,763
As at December 31, 2020 and 2019, cost value of equipment which are fully depreciated
but still in use of the Company are Baht 364.16 million and Baht 297.52 million,
respectively.
- 45 -
17. RIGHT-OF-USE ASSETS
Right-of-use assets as at December 31, 2020, consist of:
UNIT : BAHT
Consolidated financial statements
As at December 31, 2020 Balance Consequence Increase Decrease Balance
as at from initial as at
January 1, apply to TFRS 16 December 31,
2020 (see Note 2.6) 2020
Cost
Aircraft - 15,892,770,286 234,858,525 (440,935,027) 15,686,693,784
Office and station - 82,170,678 9,024,355 (8,681,873) 82,513,160
Vehicle - - 3,412,512 - 3,412,512
Total cost - 15,974,940,964 247,295,392 (449,616,900) 15,772,619,456
Accumulated depreciation
Aircraft - - (2,331,176,061) 140,402,252 (2,190,773,809)
Office and station - - (39,316,460) 2,051,913 (37,264,547)
Vehicle - - (521,646) - (521,646)
Total accumulated
depreciation - - (2,371,014,167) 142,454,165 (2,228,560,002)
Less : Allowance for impairment - - (3,446,296,290)
Less : Derecognition of asset due to
liquidation of the indirect
subsidiary - - (2,059,029,258)
Right-of-use assets - 15,974,940,964 8,038,733,906
Depreciation for the year ended December 31,
2020 Baht 2,356,248,189
- 46 -
UNIT : BAHT
Separate financial statements
As at December 31, 2020 Balance Consequence Increase Decrease Balance
as at from initial as at
January 1, apply to TFRS 16 December 31,
2020 (see Note 2.6) 2020
Cost
Aircraft - 13,443,934,131 234,858,525 (440,935,027) 13,237,857,629
Office and station - 78,340,254 7,511,632 (8,681,873) 77,170,013
Vehicle - - 3,412,512 - 3,412,512
Total cost - 13,522,274,385 245,782,669 (449,616,900) 13,318,440,154
Accumulated depreciation
Aircraft - - (1,939,039,540) 140,402,252 (1,798,637,288)
Office and station - - (36,302,937) 2,051,913 (34,251,024)
Vehicle - - (521,646) - (521,646)
Total accumulated
depreciation - - (1,975,864,123) 142,454,165 (1,833,409,958)
Less : Allowance for impairment - - (3,446,296,290)
Right-of-use assets - 13,522,274,385 8,038,733,906
Depreciation for the year ended December 31,
2020 Baht 1,961,098,144
During the year ended December 31, 2020, the Company recognized impairment loss on
right-of-use assets in the amount of Baht 3,446.30 million.
The maturity analysis of lease liabilities is presented in Note 24.
Revenues and expenses related to lease agreements for the year ended December 31,
2020, are as follows:
UNIT : BAHT
Consolidated Separate
financial statements financial statements
2020 2020
Amounts recognized in profit or loss
Interest expense relating to lease liabilities 607,539,875 607,539,875
Expense relating to short-term leases 225,002,922 225,002,922
Expense relating to leases of low-value assets 116,276,921 116,276,921
Expense relating to variable lease payments not
included in the measurement of the lease liability 3,336,234 3,336,234
Income from sub-leasing right-of-use assets 214,150,956 214,150,956
For the year ended December 31, 2020, total cash out flow for lease agreements is equaled to
Baht 164.84 million.
Lease agreements of the Group are fixed lease payment in the amount of Baht 42.62 million
and USD 75.01 million.
- 47 -
On July 30, 2020, the Company received termination notices for Aircraft Lease Agreement of 2
aircrafts from a lessor. The Company derecognized the right-of-use assets and lease liabilities
(see Note 24) in the consolidated and separate financial statements. In addition, the Company
early terminated the aircraft sublease agreements because the Company provided sublease for
these 2 aircrafts (see Note 33.5).
18. INTANGIBLE ASSETS
Intangible assets as at December 31, consist of:
As at December 31, 2020 UNIT : BAHT
Consolidated financial statements
Balance Increase Decrease Transfer in Balance
as at (out) as at
January 1, December 31,
2020
2020
Cost
Computer software 200,951,021 643,170 (746,843) - 200,847,348
Software under development 15,601,165 4,490,356 - - 20,091,521
Total cost 216,552,186 5,133,526 (746,843) - 220,938,869
Accumulated amortization
Computer software (167,635,672) (11,419,988) 682,421 - (178,373,239)
Total accumulated
amortization (167,635,672) (11,419,988) 682,421 - (178,373,239)
Derecognition of asset due to
liquidation of the indirect
subsidiary
-
(15,133,153)
Intangible assets 48,916,514 27,432,477
As at December 31, 2019 UNIT : BAHT
Consolidated financial statements
Balance Increase Decrease Transfer in Balance
as at (out) as at
January 1, December 31,
2019
2019
Cost
Computer software 203,704,902 16,187,729 (23,528,394) 4,586,784 200,951,021
Software under development 16,265,125 3,922,824 - (4,586,784) 15,601,165
Total cost 219,970,027 20,110,553 (23,528,394) - 216,552,186
Accumulated amortization
Computer software (174,246,206) (16,917,860) 23,528,394 - (167,635,672)
Total accumulated
amortization (174,246,206) (16,917,860) 23,528,394 - (167,635,672)
Intangible assets 45,723,821 48,916,514
Amortization for the years ended December 31,
2020 Baht 11,419,988
2019 Baht 16,917,860
- 48 -
As at December 31, 2020 and 2019, cost value of intangible assets which are fully
amortized but still in use of the Company and its subsidiaries are Baht 140.33 million and
Baht 131.08 million, respectively.
As at December 31, 2020 UNIT : BAHT
Separate financial statements
Balance Increase Decrease Transfer in Balance
as at (out) as at
January 1,
December 31, 2020
2020
Cost
Computer software 183,312,653 570,000 - - 183,882,653
Software under development 11,444,364 230,356 - - 11,674,720
Total cost 194,757,017 800,356 - - 195,557,373
Accumulated amortization
Computer software (158,487,070) (9,825,946) - - (168,313,016)
Total accumulated
amortization (158,487,070) (9,825,946) - - (168,313,016)
Intangible assets 36,269,947 27,244,357
As at December 31, 2019 UNIT : BAHT
Separate financial statements
Balance Increase Decrease Transfer in Balance
as at (out) as at
January 1,
December 31, 2019
2019
Cost
Computer software 190,853,317 15,987,730 (23,528,394) - 183,312,653
Software under development 10,329,325 1,115,039 - - 11,444,364
Total cost 201,182,642 17,102,769 (23,528,394) - 194,757,017
Accumulated amortization
Computer software (168,630,026) (13,385,438) 23,528,394 - (158,487,070)
Total accumulated
amortization (168,630,026) (13,385,438) 23,528,394 - (158,487,070)
Intangible assets 32,552,616 36,269,947
Amortization for the years ended December 31,
2020 Baht 9,825,946
2019 Baht 13,385,438
As at December 31, 2020 and 2019, cost value of intangible assets which are fully
amortized but still in use of the Company are Baht 140.33 million and Baht 131.08
million, respectively.
- 49 -
19. DEFERRED TAX ASSETS
Deferred tax assets as at December 31 consist of:
UNIT : BAHT
Consolidated and separate
financial statements
2020 2019
Deferred tax assets 13,321,915 13,321,915
The movements of deferred tax assets during the years are as follows:
UNIT : BAHT
Consolidated and separate financial statements
Balances Items Items Balances
As at recognized in recognized As at
January 1, profit or loss in other December 31,
2020 comprehensive 2020
income
Deferred tax assets
Allowance for expected credit losses 386,525 - - 386,525
Employee benefit obligations 12,935,390 - - 12,935,390
Total 13,321,915 - - 13,321,915
UNIT : BAHT
Consolidated and separate financial statements
Balances Items Items Balances
As at recognized in recognized As at
January 1, profit or loss in other December 31,
2019 comprehensive 2019
income
Deferred tax assets
Allowance for doubtful accounts 386,525 - - 386,525
Employee benefit obligations 12,935,390 - - 12,935,390
Total 13,321,915 - - 13,321,915
Income tax expense for the years ended December 31, consist of:
UNIT : BAHT
Consolidated and separate
financial statements
2020 2019
Current tax for the year - -
Deferred income tax - -
Income tax expense - -
- 50 -
Reconciliation between income tax expense and the amount of tax derived from accounting
profit (loss) multiplied by the applicable tax rate for the years ended December 31, are as
follows:
UNIT : BAHT
Consolidated Separate
financial statements financial statements
2020 2019 2020 2019
Accounting profit for non-promoted business (4,654,867,537) (415,050,265) (4,753,503,608) (386,003,300)
Accounting loss for promoted business (4,783,489,589) (1,328,169,677) (4,783,489,589) (1,328,169,677)
Accounting loss before income tax expense (9,438,357,126) (1,743,219,942) (9,536,993,197) (1,714,172,977)
Income tax calculated based on tax rate at 20% (930,973,507) (83,010,053) (950,700,722) (77,200,660)
Effect of tax losses not recognized as deferred
tax assets - - - -
Effect of loss for promoted business used as
tax deduction 930,973,507 83,010,053 950,700,722 77,200,660
Tax effect of temporary differences - - - -
Corporate income tax expenses
as presented in the statements of profit or loss
and other comprehensive income - - - -
As at December 31, 2020, the Company and its subsidiaries did not record deferred tax assets
related to loss carried forward because the Company and its subsidiaries’ management assess
that the estimated future taxable income will not be sufficient to allow for the realization in
full amount of deferred tax assets resulting from loss carried forward of Baht 11,223.51
million and Baht 11,058.07 million for the consolidated financial statements and separate
financial statements, respectively.
20. SHORT-TERM BORROWINGS
Short-term borrowings as at December 31, are as follows:
UNIT : BAHT
Consolidated Separate
financial statements financial statements
2020 2019 2020 2019
Short-term borrowings from financial
institutions - 500,000,000 - -
Short-term borrowings from a shareholder
(see Note 32.1) 2,720,000,000 2,920,000,000 2,720,000,000 2,520,000,000
Short-term borrowings from other - 200,000,000 - -
Total 2,720,000,000 3,620,000,000 2,720,000,000 2,520,000,000
- 51 -
Short-term borrowings from financial institutions
NokScoot Airlines Company Limited (the “subsidiary”) had short-term borrowings from two
financial institutions in the form of promissory notes of Baht 350 million per each financial
institution totaling of Baht 700 million which were guaranteed by the Company and a major
shareholder company of the subsidiary. Such loans carry the interest rate at Money Market Rate
(MMR) per annum and BIBOR per annum of each financial institution. In November 2019,
the subsidiary has paid short-term borrowings in the amount of Baht 200 million and renewed
the promissory notes of Baht 500 million from due date on February 10, 2017 for every 0.5 to
3 months each to be until July 13, 2020 (see Note 1.2.2). On June 30, 2020, the financial
institutions received repayment in the amount of Baht 7.19 million from the subsidiary.
Subsequently on July 14, 2020, the subsidiary passed a resolution for liquidation (see Note 1.2.3)
and still has liability with the financial institutions, the Company, as the guarantor, has a contingent
liability from the guarantee. On July 20, 2020 and July 31, 2020, the Company paid such
borrowings from the financial institutions including interest totaling Baht 243.82 million and had the
subsidiary as a debtor. According to uncertainty of receiving the repayment from the subsidiary,
the Company recorded the allowance for expected credit losses in full amount (see Note 32.1).
Short-term borrowings from a shareholder
On April 25, 2019, the Annual General Meeting of Shareholders 2019 has resolved to
approve the entering into a connected transaction with a connected person in relation to a
receipt of financial assistance under the credit limit of Baht 3,000 million to use for working
capital and general operation purpose of the Company, separately draw down as needed by
issuing one or more promissory notes, which each of the notes has the term of no longer than
180 days, interest rate no more than average of Minimum Loan Rate (MLR) plus 1.00% per
annum.
Subsequently, on June 30, 2020, the Extraordinary Board of Director’s Meeting No. 6/2020 has
resolved to approve to renew the term of a connected transaction with a connected person to
renew the term from 1 year to 3 years under the same credit limit and conditions. The connected
transaction was approved by the Annual General Meeting of Shareholders of 2020 on August 6,
2020 (see Note 1.2.2).
As at December 31, 2020 and 2019, the Company has short-term loan from a shareholder
amounting of Baht 2,720 million and Baht 2,520 million, respectively which is unsecured
promissory note and carries interest rate at 5.75% - 6.00% p.a. and 6.00% p.a., respectively,
and is repayable within 3 months from the date of the promissory note (see Note 32.1).
On November 4, 2020, the Central Bankruptcy Court ordered the company to rehabilitate its
business which causing the Company to default on interest payments and didn’t renew the
promissory note upon maturity. According to the loan agreement stating that in the event that the
borrower defaults to debt payment agreement or breach of this contract, whether any of the above
the borrower agrees that the lender can charge interest at the rate at 15% p.a. from the date of
default or breach of this contract.
- 52 -
As at December 31, 2020 and 2019, the Company has short-term loans from a shareholder
amounting of Baht 2,720 million and Baht 2,520 million, respectively, and accrued interest
amounting of Baht 116.45 million and Baht 15.41 million, respectively.
Short-term borrowings from other
As at December 31, 2019, a subsidiary has a short-term loan from other who is a major
shareholder of the Company amounting of Baht 200 million, which is unsecured promissory
note and carries interest rate at 6.30% p.a. In March 2020, a subsidiary made a repayment of
such loan in the amount of Baht 200 million.
21. TRADE AND OTHER CURRENT PAYABLES
Trade and other current payables as at December 31, consist of:
UNIT : BAHT
Consolidated Separate
financial statements financial statements
2020 2019 2020 2019
Trade payables - related parties (see Note 32.1) 85,371,514 194,867,467 85,371,514 78,091,964
Trade payables - other parties 2,709,175,608 2,036,381,663 2,709,175,608 1,238,736,059
Other payables - related parties (see Note 32.1) 1,802,589 5,612,887 1,802,589 5,878,212
Other payables - other parties 163,189,694 17,745,901 163,109,395 3,151,475
Unearned passenger revenues 186,020,151 1,622,748,629 186,020,151 621,403,038
Other advances received 90,672,755 524,717,966 90,672,755 252,406,785
Accrued interest expense - related parties
(see Note 32.1) 116,449,315 15,410,959 116,449,315 15,410,959
Accrued expenses 1,023,448,315 1,248,623,282 1,023,126,454 534,948,669
Withholding tax payable 4,949,618 22,296,571 4,949,468 21,030,911
Total 4,381,079,559 5,688,405,325 4,380,677,249 2,771,058,072
22. MAINTENANCE RESERVE AND PROVISIONS FOR AIRCRAFT MAINTENANCE
22.1 Maintenance Reserve
Maintenance reserve is prepayments which the Company and its subsidiaries pay to
the lessor at the rate specified in the agreement. It can be reimbursed when sending
the aircraft to the overhaul maintenance in accordance with overhaul plan with the
conditions specified in the agreements.
- 53 -
Maintenance reserve consist of:
UNIT : BAHT
Consolidated Separate
financial statements financial statements
For the year For the year For the year For the year
ended ended ended ended
December 31, December 31, December 31, December 31,
2020 2019 2020 2019
Maintenance reserve at beginning of the year 8,342,408,284 7,788,296,566 5,650,730,869 5,649,595,719
Add Additional payment during the year 1,058,096,402 1,782,449,032 757,681,145 1,229,472,464
Less Reversal during the year (55,366,649) (895,456,338) (55,366,649) (895,456,338)
Less Reimburse from lessor during the year (60,329,582) (332,880,976) (60,329,582) (332,880,976)
Derecognition of assets due to liquidation of the
indirect subsidiary (2,992,092,672) - - -
Long-term maintenance reserve at ending
of the year 6,292,715,783 8,342,408,284 6,292,715,783 5,650,730,869
22.2 Provisions for aircraft maintenance as plan
Provisions for aircraft maintenance as plan consist of:
UNIT : BAHT
Consolidated Separate
financial statements financial statements
For the year For the year For the year For the year
ended ended ended ended
December 31, December 31, December 31, December 31,
2020 2019 2020 2019
Provisions for aircraft maintenance as plan
at beginning of the year 8,793,346,169 8,177,323,409 5,572,635,402 5,774,825,434
Add Increase during the year - recognized
as expenses for the year 1,489,044,598 1,951,162,506 1,188,629,342 1,132,949,714
Less Reversal during the year (55,906,989) (760,216,695) (55,906,989) (760,216,695)
Less Aircraft maintenance cost paid during the year (36,691,576) (574,923,051) (36,691,576) (574,923,051)
Derecognition of liabilities due to liquidation of
the indirect subsidiary (3,521,126,023) - - -
Long-term provisions for aircraft maintenance
as plan at ending of the year 6,668,666,179 8,793,346,169 6,668,666,179 5,572,635,402
- 54 -
22.3 Provisions for aircraft return condition and aircraft maintenance
Provisions for aircraft return condition and aircraft maintenance consist of:
UNIT : BAHT
Consolidated Separate
financial statements financial statements
For the year For the year For the year For the year
ended ended ended ended
December 31, December 31, December 31, December 31,
2020 2019 2020 2019
Provisions for aircraft return condition and
aircraft maintenance at beginning of the year 197,509,028 219,746,024 163,684,721 194,145,344
Add Increase during the year - recognized
as expenses for the year 77,749,722 108,959,484 69,121,378 97,916,659
Less Reversal during the year (35,953,257) (32,417,956) (35,953,257) (32,417,956)
Less Aircraft maintenance cost paid
during the year (27,713,488) (98,778,524) (27,713,488) (95,959,326)
Derecognition of liabilities due to liquidation of
the indirect subsidiary (42,452,651) - - -
Provisions for aircraft return condition and
aircraft maintenance at ending of the year 169,139,354 197,509,028 169,139,354 163,684,721
Less Short-term provisions for aircraft return
condition and aircraft maintenance
at ending of the year (80,859,868) (72,407,580) (80,859,868) (62,210,730)
Long-term provisions for aircraft return condition
and aircraft maintenance at ending of the year 88,279,486 125,101,448 88,279,486 101,473,991
23. PROVISIONS FOR EMPLOYEE BENEFIT
Provisions for employee benefit as at December 31 consist of:
UNIT : BAHT
Consolidated Separate
financial statements financial statements
2020 2019 2020 2019
Retirement benefits 98,464,813 180,388,278 98,464,813 168,403,595
Other long term benefit - pilot saving fund 8,669,752 8,276,546 8,669,752 8,276,546
Total 107,134,565 188,664,824 107,134,565 176,680,141
- 55 -
23.1 Retirement benefits
Movements in the retirement benefits obligations are as follows:
UNIT : BAHT
Consolidated Separate
financial statements financial statements
For the year
ended
For the year
ended
For the year
ended
For the year
ended
December 31, December 31, December 31, December 31,
2020 2019 2020 2019
Retirement benefits obligations
at the beginning of the year 180,388,278 266,077,346 168,403,595 259,201,736
Employee benefits paid (41,448,288) (42,419,861) (26,830,917) (42,419,861)
Current service costs and interest cost 55,283,532 79,787,258 52,650,844 74,678,185
Actuarial gain from assumption change (95,758,709) (123,056,465) (95,758,709) (123,056,465)
Retirement benefits obligations
at the end of the year 98,464,813 180,388,278 98,464,813 168,403,595
Retirement benefits recognized in the statements of profit or loss for the years ended
December 31, are as follows:
UNIT : BAHT
Consolidated Separate
financial statements financial statements
2020 2019 2020 2019
Current service costs 51,639,009 63,101,241 49,162,741 58,587,917
Interest cost 3,644,523 3,507,956 3,488,103 3,317,864
Past service cost - 13,178,061 - 12,772,404
Total 55,283,532 79,787,258 52,650,844 74,678,185
The Labor Protection Act (No. 7) B.E. 2562 has been announced in the Royal Gazette
on April 5, 2019, which was effective after 30 days from the date announced in Royal
Gazette. This Labor Protection Act stipulated additional legal severance pay rates for
employees who had worked for an uninterrupted period of twenty years or more. Such
employees were entitled to receive compensation of not less than 400 days at the
employees’ latest wage rate. This change was considered an amendment to post-
employment benefits plan. The Group reflected the effect of such change by
recognizing past service cost as an expense in the income statement of the period in
which the law was effective.
- 56 -
The principal actuarial assumptions as at December 31, 2020 and 2019 are as follows;
Consolidated financial statements
2020 2019
Percentage (% p.a.) Percentage (% p.a.)
Discount rate 1.14 2.29 - 2.61
Salary increase rate 1.50 3.00 - 4.00
Employee turnover 0 - 15.00 0 - 16.00
(depend on employee age) (depend on employee age)
Mortality rate TMO2017 TMO2017
(Thai Mortality Ordinary Table (Thai Mortality Ordinary Table
2017) 2017)
Separate financial statements
2020 2019
Percentage (% p.a.) Percentage (% p.a.)
Discount rate 1.14 2.29
Salary increase rate 1.50 3.00
Employee turnover 0 - 15.00 0 - 16.00
(depend on employee age) (depend on employee age)
Mortality rate TMO2017 TMO2017
(Thai Mortality Ordinary Table (Thai Mortality Ordinary Table
2017) 2017)
Significant actuarial assumptions for the determination of the employee benefit
obligations are discount rate, expected salary increase rate, turnover rate and mortality
rate.
The sensitivity analyses below have been determined based on reasonably possible
changes of the respective assumption occurring at the end of the reporting period, while
holding all other assumptions are constant.
The impact on the employee benefit obligations increased/(decreased) as at December 31,
were as follows:
UNIT : BAHT
Impact on employee benefit obligations
increases (decreases)
Consolidated financial Separate financial
statements statements
2020 2019 2020 2019
Discount rate - increase by 1% (7,703,292) (14,356,220) (7,703,292) (13,325,162)
Discount rate - decrease by 1% 9,151,967 17,069,278 9,151,967 15,852,129
Salary increase rate - increase by 1% 7,500,894 14,349,790 7,500,894 13,036,088
Salary increase rate - decrease by 1% (6,403,561) (12,244,676) (6,403,561) (11,111,875)
Turnover rate - increase by 1% (8,348,949) (14,931,268) (8,348,949) (14,554,249)
Turnover rate - decrease by 1% 6,575,013 11,591,527 6,575,013 11,304,421
Life expectancy - increase by 1 year 496,282 1,040,007 496,282 965,005
Life expectancy - decrease by 1 year (491,240) (1,029,462) (491,240) (955,065)
- 57 -
The sensitivity analysis presented above may not be representative of the actual change
in the employee benefit obligations as it is unlikely that the change in assumptions
would occur in isolation of one another as some of the assumptions may be correlated.
Furthermore, in presenting the above sensitivity analysis, the present value of the
employee benefit obligations have been calculated using the Projected Unit Credit
Method at the end of the report period, which is the same as that applied in calculating
the post-employment benefit obligations liability recognized in the statement of
financial position.
23.2 Other long-term employee benefit - Pilot saving fund
Movements in other long-term employee benefit - Pilot saving fund are as follows:
UNIT : BAHT
Consolidated and separate
financial statements
For the year ended For the year ended
December 31, December 31,
2020 2019
Other long-term employee benefit
- Pilot saving fund at the beginning of the year 8,276,546 7,790,831
Add Increase during the year - recognized as expenses for the year 844,981 779,747
Less Pilot saving paid (262,099) (102,860)
Less Reversal during the year (189,676) (191,172)
Other long-term benefit
- Pilot saving fund at the end of the year 8,669,752 8,276,546
On January 1, 2013, the Company provided other benefits to Pilot upon the
retirement age or upon resignation or loosen license cause. This accumulated saving
fund to pilots is calculated on the basis of actual number of flights per month and
years of service of pilots as per the Company’s policy. However, as at December 31,
2016 the Company terminated the said benefits to Pilot and the benefit will be paid
back to pilot in accordance with the Company’s policy. Pilot who joins the Company
after December 31, 2016 will not receive such benefits.
- 58 -
24. LEASE LIABILITIES
Lease liabilities as at December 31, were as follows:
UNIT : BAHT
Consolidated and
separate financial statements
2020
Maturity analysis:
Year 1 13,478,491,926
Year 2 – 5 229,455,967
After the fifth year -
13,707,947,893
Less deferred interest (2,013,667,156)
Total 11,694,280,737
Classification as:
Non-current 234,889,871
Current 11,459,390,866
Total 11,694,280,737
On July 30, 2020, the Company submitted a petition to enter into a business rehabilitation
and proposed the rehabilitation planners to the Central Bankruptcy Court. The Central
Bankruptcy Court issued an order to accept the business rehabilitation petition on the
same day (see Note 4) that resulted the Company entered into rehabilitation process. As a
result, the Company has default on payment of outstanding lease liabilities and lease
liabilities that gradually due, as reason of the conditions of default on long-term lease
liabilities which is cause the lessors under the lease to have rights to claim all lease
liabilities immediately. Therefore, such lease liabilities which were previously due after
one year are classified as current liabilities in accordance with the terms in the lease
agreements in amount of Baht 11,291.13 million in the consolidated and separate
financial statements as at December 31, 2020.
25. CAPITAL MANAGEMENT
The Company and its subsidiaries’ objective in managing capital is to safeguard the Company and
its subsidiaries’ ability to continue as a going concern in order to provide returns for shareholders
and benefits for other stakeholders.
In addition, the Company monitors its capital in accordance with the covenant on financial ratios
under the credit facility of bank guarantee agreement with a financial institution (see Note 33.4).
- 59 -
26. SHARE CAPITAL
Consolidated and separate financial statements
Par value For the year ended For the year ended
per share December 31, 2020 December 31, 2019
(Baht) Number Amount Number Amount
of shares (Baht) of shares (Baht)
Authorized
As at January 1
Ordinary shares 1 3,408,049,800 3,408,049,800 2,499,249,882 2,499,249,882
Capital increase on February 13, 2019 1 - - 908,799,918 908,799,918
Capital decrease on January 21, 2020 1 (99,030,527) (99,030,527) - -
Capital increase on February 18, 2020 1 888,147,358 888,147,358 - -
Ordinary shares
as at December 31 1 4,197,166,631 4,197,166,631 3,408,049,800 3,408,049,800
Issued and paid-up share capital
As at January 1
Ordinary shares 1 3,108,515,756 3,108,515,756 2,271,999,796 2,271,999,796
Increase of new shares on February 8, 2019 1 - - 836,515,960 836,515,960
Increase of new shares on February 11, 2020 1 620,670,967 620,670,967 - -
Increase of new shares on June 9, 2020 1 83 83 - -
Ordinary shares
as at December 31 1 3,729,186,806 3,729,186,806 3,108,515,756 3,108,515,756
On January 22, 2019, the Extraordinary General Meeting of the Shareholders No. 1/2019
has resolved to approve the increase of registered capital to the existing shareholders
proportionated to their respective shareholdings (Rights Offering) of Baht 908.80 million
from the existing registered capital of Baht 2,499.25 million to the new registered capital
of Baht 3,408.05 million by means of issuance 908.80 million newly-issued ordinary
shares with the par value of Baht 1 each, and also approved the amendment to Clause 4 of
Memorandum of Association of the Company to be in line with the capital increase.
The Company determined the allocation ratio as 2.50 existing share to 1 newly-issued
ordinary share at an offering price of Baht 2.75 per share.
On February 8, 2019, the Company received subscription in the amount of Baht 2,300.42
million for the issued and paid-up share capital totaling 836.52 million shares at an offering
price of Baht 2.75 per share with a par value of Baht 1 per share. This resulted in share
premium of Baht 1,463.90 million. The Company registered the paid-up share capital in the
amount of Baht 3,108.52 million with the Ministry of Commerce on February 13, 2019.
On January 14, 2020, the Extraordinary General Meeting of the Shareholders No. 1/2020
has resolved to approve the followings:
• Approved the reduction of registered capital of the Company in the total amount of
Baht 99.03 million from the existing registered capital of Baht 3,408.05 million to the
new registered capital of Baht 3,309.02 million.
- 60 -
• Approved the increase of registered capital to the existing shareholders proportionated to
their respective shareholdings (Rights Offering) of Baht 888.15 million from the existing
registered capital of Baht 3,309.02 million to the new registered capital of Baht 4,197.17
million by means of issuance 888.15 million newly-issued ordinary shares with the par
value of Baht 1 each, and also approved the amendment to Clause 4 of Memorandum of
Association of the Company to be in line with the capital increase. The Company
determined the allocation ratio as 3.50 existing share to 1 newly-issued ordinary share at an
offering price of Baht 2.50 per share.
On February 11, 2020, the Company received subscription in the amount of Baht 1,551.68
million for the issued and paid-up share capital totaling 620.67 million shares at an offering
price of Baht 2.50 per share with a par value of Baht 1 per share. This resulted in share premium
of Baht 931.01 million. The Company registered the paid-up share capital in the amount of Baht
3,729.19 million with the Ministry of Commerce on February 18, 2020.
On June 9, 2020, the Company received cash from exercise of warrant NOK-W1 (final round)
in the amount of Baht 264.42 for the issued and paid-up share capital totaling 83 shares at the
exercise price of Baht 3.18574 per share with a par value of Baht 1 per share. This resulted in
share premium of Baht 181.42. The Company registered the paid-up share capital in the amount
of Baht 83 with the Ministry of Commerce on June 9, 2020.
Share premium
Section 51 of the Public Companies Act B.E. 2535(1992) requires companies to set aside
share subscription money received in excess of the par value of the shares issued to a reserve
account (“share premium”). Share premium is not available for dividend distribution.
As at December 31, 2020 and 2019, the Company has share premium in the amount of
Baht 6,720.79 million and Baht 5,789.79 million, respectively.
27. LEGAL RESERVE
Section 116 of the Public Limited Companies Act B.E. 2535 requires that a company shall
allocate not less than 5% of its annual net profit less the accumulated losses brought
forward, if any, to a reserve account (“legal reserve”), until this account reaches an
amount not less than 10% of the registered capital. The legal reserve is not available for
dividend distribution.
- 61 -
28. OTHER INCOME - OTHERS
Other income - others consist of:
UNIT : BAHT
For the years ended December 31,
Consolidated Separate
financial statements financial statements
2020 2019 2020 2019
Revenue from insurance claim 1,359,965 540,552 1,359,965 540,552
Gain on exchange rate 67,609,780 157,977,738 67,609,780 7,387,760
Refund for aircraft maintenance 2,056,736 11,174,168 2,056,736 11,174,168
Other fee income 35,949,644 87,162,444 35,949,644 84,279,909
Revenue from internet service under
Type I license - - - -
Incentive income from airports - - - -
Others 36,592,622 83,184,370 36,592,622 28,505,535
Less : Other income from discontinued operation - (208,144,165) - -
Total 143,568,747 131,895,107 143,568,747 131,887,924
29. BASIC EARNINGS (LOSS) PER SHARE
The calculations of basic earnings (loss) per share were based on the profit (loss) for the
year attributable to ordinary shareholders of the Company and the weighted average
number of ordinary shares outstanding during the year.
The weighted average number of issues of ordinary shares outstanding for the year ended
December 31, are as follows:
Consolidated and separate
financial statements
For the year ended December 31,
2020 2019
Number of ordinary shares outstanding at January 1 3,108,515,756 2,271,999,796
Effect of shares exercised at February 13, 2019 - 737,967,504
Effect of shares exercised at February 18, 2020 537,575,674 -
Effect of exercised warrant to purchase ordinary shares 46 -
Weighted average number of ordinary shares (basic) 3,646,091,476 3,009,967,300
- 62 -
The calculations of basic earnings (loss) per share for the year ended December 31, are
as follows:
Consolidated financial statements
For the year ended December 31,
Continuing operations Discontinued operation Total
2020 2019 2020 2019 2020 2019
Net profit (loss) (Baht) (8,489,178,814) (1,722,435,965) 497,929,639 (328,958,700) (7,991,249,175) (2,051,394,665)
Number of share capital (shares) 3,646,091,476 3,009,967,300 3,646,091,476 3,009,967,300 3,646,091,476 3,009,967,300
Basic earnings (loss) per share
(Baht per share) (2.33) (0.57) 0.14 (0.11) (2.19) (0.68)
Separate financial statements
For the year ended December 31,
2020 2019
Net loss (Baht) (9,536,993,196) (1,714,172,977)
Number of share capital (shares) 3,646,091,476 3,009,967,300
Basic losses per share (Baht per share) (2.62) (0.57)
30. PROVIDENT FUND
The Company has set up a Provident Fund which is contributory by employees and the Company.
The fund is registered as the provident fund in accordance with the Provident Fund Act B.E. 2530.
On April 2020, the Company changed the rate of contributions to the provident fund.
Previously, the Company paid contributions at a rate of 5% to a rate of 2%, later in May -
December 2020, the Company changed the rate of contribution from the previous rate 2%
to the Company stopped contributing to the provident fund for the Company.
The Company contributed to the provident fund and recorded as expenses in the statements of
profit or loss and other comprehensive income as follows: UNIT : MILLION BAHT
Consolidated Separate
financial statements financial statements
2020 2019 2020 2019
For the years ended December 31, 6.52 44.73 3.64 37.01
- 63 -
31. EXPENSES BY NATURE
The significant expenses classified by nature for the years ended December 31, are as follows:
UNIT : BAHT
Consolidated Separate
financial statements financial statements
2020 2019 2020 2019
Fuel expenses 2,080,118,053 7,226,033,250 1,547,972,061 4,102,664,897
Employee benefit expenses 1,293,659,962 1,928,461,844 806,011,924 1,455,108,678
Ground service expenses and navigation fee 949,357,553 2,663,793,496 661,200,996 1,527,494,712
Expenses related to pilots and cabin crews 301,589,543 774,835,235 221,049,092 433,220,746
Aircraft maintenance expenses 1,969,630,362 4,105,941,353 1,549,932,805 2,439,634,169
Depreciation and amortization expenses 2,410,869,352 112,447,695 2,033,881,031 96,192,201
Aircraft lease and spare part 337,409,846 4,003,232,860 337,409,846 3,016,003,383
Merchandise and supplies used 31,312,729 198,797,397 26,946,815 124,641,069
Promotion and advertising expenses 136,650,928 311,966,830 123,257,602 202,219,551
Insurance expense 98,179,182 115,929,757 84,880,338 67,646,295
Credit card fee 25,397,926 47,560,491 25,397,926 47,560,491
Call center customers expense 45,515,422 67,315,368 45,515,422 67,315,368
Passenger transportation expense 20,326,387 387,330,424 20,326,387 44,909,020
Penalty for termination of agreements and
loss from dispute 851,401,352 - 851,401,352 -
- 64 -
32. RELATED PARTY TRANSACTIONS
The Company has transactions with its related parties which have the same group of
shareholders and directors. Those transactions occurred in the normal course of business
based on the basis determined by the Company and related persons parties.
Significant related persons and related parties as at December 31, 2020 and 2019, consist of:
Company Name Type of Businesses Relationship
NokScoot Airlines Co., Ltd.*** Air transport services for passengers,
parcel and parcel post
Indirect subsidiary
Nok Mangkang Co., Ltd. Air transport services for passengers, parcel
and parcel post
Subsidiary
Nok Holidays Co., Ltd. Tourism and other relevant businesses Subsidiary
Flight Training (Thailand) Co., Ltd. Cockpit training services Held by the Company
Air Black Box Asia Pacific Pte Ltd. Platform for airline reservation systems Joint venture
Thai Airways International PLC. Services transportation and logistics Common shareholders and director
Thai Smile Airways Co., Ltd. Services transportation and logistics Same group of shareholders
Donmuang International Airport Hotel Co., Ltd. Hotel Same group of shareholders
Thai Flight Training Co., Ltd. Cockpit training Same group of shareholders
Haad Thip PLC. Manufacturing and distribution of soft
drinks
Spouse of common director
Thailand Post Co., Ltd.* Postal service Common director
CAT Telecom PLC.* Telecommunications business Common director
Advanced Medical Center Co., Ltd.**** Hospital Common director
Siam Makro PLC.** Wholesale business Common director
AIRA Securities PLC. Equities and Derivatives Service Common shareholders and director
AIRA Advisory Company Limited Business consultancy services Common shareholders and director
Siam City Law Offices DR Co., Ltd. General business law services Common director
Siam City Law Offices GP Co., Ltd. General business law services Common director
Muang Thai Insurance PLC.**** Non-life insurance Common director
Millcon Steel PLC. Manufacturer and a distributor of a
complete range of steel products
Common director
Jmax Corporation Co., Ltd. Property management and rental business Common director
SE-EDUCATION PLC. Operate bookstores Common director
Summit Auto Body Industry Co., Ltd. Manufacture of other parts and
accessories for motor vehicles
Common director
Grant Thornton Corporate Services Co., Ltd. Financial consultancy services Common director
* This entity had been considered as a related party until May 1, 2019, which was the date when there was no more common
director.
** This entity had been considered as a related party until August 9, 2019, which was the date when there was no more
common director.
*** This entity had been considered as indirect subsidiary until July 29, 2020, which was the date when there was no control
over the indirect subsidiary.
**** This entity had been considered as a related party until November 11, 2020, which was the date when there was no more
common director.
- 65 -
32.1 Balances with related parties are as follows:
UNIT : BAHT
Consolidated Separate
financial statements financial statements
As at As at As at As at
December 31, December 31, December 31, December 31,
2020 2019 2020 2019
Trade receivables - related parties (see Note 7.1)
Thai Smile Airways Co., Ltd. 70,950 126,271 70,950 126,271
NokScoot Airlines Co., Ltd. 62,468,531 - 62,468,531 56,101,928
Haad Thip PLC. 146,610 176,576 146,610 176,576
Nok Holidays Co., Ltd. - - 358,212 358,212
Muang Thai Insurance PLC. - 3,361,421 - 3,361,422
Jmax Corporation Co., Ltd. - 134,820 - 134,820
SE-EDUCATION PLC. 7,949 - 7,949 -
Total 62,694,040 3,799,088 63,052,252 60,259,229
Less Allowance for expected credit losses (62,545,672) - (62,903,884) -
Total 148,368 3,799,088 148,368 60,259,229
Accrued income - related parties (see Note 7.1)
NokScoot Airlines Co., Ltd. - - - 3,301,911
Muang Thai Insurance PLC. - 9,716,958 - 9,716,958
Total - 9,716,958 - 13,018,869
Accrued interest income - a related party (see Note 7.1)
Nok Mangkang Co., Ltd. - - 28,952,459 1,726,027
NokScoot Airlines Co., Ltd. 14,656,438 - - -
Less Allowance for expected credit losses (14,656,438) - (28,952,459) -
Total - - - 1,726,027
Advance payments - related parties (see Note 7.1)
Nok Mangkang Co., Ltd. - - 1,314,062 1,131,104
Nok Holidays Co., Ltd. - - 478,232 235,556
Thai Airways International PLC. - 380,022 - -
Total - 380,022 1,792,294 1,366,660
Other receivables - related parties (see Note 7.1)
NokScoot Airlines Co., Ltd. 243,818,991 - 243,818,991 -
Less Allowance for expected credit losses (243,818,991) - (243,818,991) -
Total - - - -
Short-term loans to a related party (see Note 8)
Nok Mangkang Co., Ltd. - - 400,000,000 200,000,000
Less Allowance for expected credit losses - - (400,000,000) -
Total - - - 200,000,000
Long-term loans to a related party (see Note 15)
Nok Mangkang Co., Ltd. - - 1,460,000,000 1,460,000,000
Less Allowance for expected credit losses - - (1,460,000,000) -
Total - - - 1,460,000,000
- 66 -
UNIT : BAHT
Consolidated Separate
financial statements financial statements
As at As at As at As at
December 31, December 31, December 31, December 31,
2020 2019 2020 2019
Other non-current assets - Accrued interest
income - a related party (see Note 15)
Nok Mangkang Co., Ltd. - - 144,109,553 103,849,441
Less Allowance for expected credit losses - - (144,109,553) -
Total - - - 103,849,441
Short-term borrowings from
a shareholder (see Note 20)
Major shareholder 2,720,000,000 2,920,000,000 2,720,000,000 2,520,000,000
Trade payables - related parties (see Note 21)
Thai Airways International PLC. 76,740,592 191,895,956 76,740,592 73,095,629
Thai Smile Airways Co., Ltd. 240,848 93,084 240,848 93,084
Donmuang International Airport Hotel Co., Ltd. 144,000 85,400 144,000 85,400
Thai Flight Training Co., Ltd. - 64,596 - 64,596
NokScoot Airlines Co., Ltd. 2,024,824 - 2,024,824 2,024,824
Flight Training (Thailand) Co., Ltd. 1,248,373 2,728,431 1,248,373 2,728,431
Air Black Box Asia Pacific Pte Ltd. 4,972,877 - 4,972,877 -
Total 85,371,514 194,867,467 85,371,514 78,091,964
Other payables - related parties (see Note 21)
NokScoot Airlines Co., Ltd. 447,427 - 447,427 265,325
AIRA Advisory Company Co., Ltd. 695,500 1,605,000 695,500 1,605,000
Siam City Law Offices GP Co., Ltd. 591,988 - 591,988 -
Siam City Law Offices DR Co., Ltd. 10,384 - 10,384 -
Muang Thai Insurance PLC. - 4,007,887 - 4,007,887
Summit Auto Body Industry Co., Ltd. 4,020 - 4,020 -
Grant Thornton Corporate Services Co., Ltd. 53,270 - 53,270 -
Total 1,802,589 5,612,887 1,802,589 5,878,212
Accrued interest expense - related parties
(see Note 21)
Major shareholder 116,449,315 15,410,959 116,449,315 15,410,959
- 67 -
32.2 Transactions with related parties for the years ended December 31, are summarized as
follows:
UNIT : BAHT
Consolidated Separate
financial statements financial statements
2020 2019 2020 2019
Passenger revenues
Thai Airways International PLC. - 597,505 - 597,505
NokScoot Airlines Co., Ltd. - - 1,083,297 52,041,488
Thai Smile Airways Co., Ltd. 3,904,177 2,629,347 3,904,177 2,629,347
Haad Thip PLC. 934,164 1,293,185 934,164 1,293,185
Siam Makro PLC. - 515,738 - 515,738
Millcon Steel PLC. 34,756 269,145 34,756 269,145
Total 4,873,097 5,304,920 5,956,394 57,346,408
Service revenues
Thai Smile Airways Co., Ltd. 39,308 - 39,308 -
NokScoot Airlines Co., Ltd. - - 6,387,267 42,300,162
Flight Training (Thailand) Co., Ltd. 30,800 20,000 30,800 20,000
Total 70,108 20,000 6,457,375 42,320,162
Other service fee income
Muang Thai Insurance PLC. 19,464,138 53,401,263 19,464,138 53,401,263
Jmax Corporation Co., Ltd. 28,100 133,100 28,100 133,100
Total 19,492,238 53,534,363 19,492,238 53,534,363
Others income - interest income
Nok Mangkang Co., Ltd. - - 77,947,914 42,176,742
Passenger revenues and service revenues are determined based on cost plus margin as
stipulated in the agreements. Other service fee income and interest income are determined
based on rate as stipulated in the agreements.
- 68 -
UNIT : BAHT
Consolidated Separate
financial statements financial statements
2020 2019 2020 2019
Costs of passengers and services
Thai Airways International PLC. 60,282,722 158,317,825 60,282,722 29,016,889
Thai Smile Airways Co., Ltd. 152,392 303,656 152,392 303,656
Donmuang International Airport Hotel Co., Ltd. 998,412 1,480,373 998,412 1,480,373
Thai Flight Training Co., Ltd. 2,279,600 2,415,692 2,279,600 2,415,692
Flight Training (Thailand) Co., Ltd. 13,119,320 18,537,944 13,119,320 18,537,944
NokScoot Airlines Co., Ltd. - - 114,953 64,881,269
Haad Thip PLC. - 2,617 - 2,617
Air Black Box Asia Pacific Pte Ltd. 4,687,729 - 4,687,729 -
Total 81,520,175 181,058,107 81,635,128 116,638,440
Administrative expenses
Thailand Post Co., Ltd. - 153,573 - 153,573
CAT Telecom PLC. - 1,658 - 1,658
AIRA Securities PLC. 750,000 1,175,000 750,000 1,175,000
Advanced Medical Center Co., Ltd. - 595,705 - 595,705
AIRA Advisory Company Limited 3,250,000 5,900,000 3,250,000 5,900,000
Summit Auto Body Industry Co., Ltd. 23,100 - 23,100 -
Grant Thornton Corporate Services Co., Ltd. 7,588,766 - 7,588,766 -
Total 11,611,866 7,825,936 11,611,866 7,825,936
Legal fee
Siam City Law Offices DR Co., Ltd. 7,761,128 648,250 7,761,128 648,250
Siam City Law Offices GP Co., Ltd. 837,040 1,563,677 837,040 1,563,677
Total 8,598,168 2,211,927 8,598,168 2,211,927
Finance cost
Major shareholder 231,146,301 76,739,178 231,146,301 76,739,178
Costs of passenger and services are determined on normal price charged to general clients.
Directors and managements’ benefits for the year ended December 31, are as follows:
UNIT : BAHT
Consolidated Separate
financial statements financial statements
2020 2019 2020 2019
Short-term employee benefits 11,437,429 24,302,463 11,437,429 23,417,351
Post-employment benefits 760,470 2,371,665 760,470 1,730,566
Total 12,197,899 26,674,128 12,197,899 25,147,917
- 69 -
33. SIGNIFICANT AGREEMENTS, COMMITMENTS AND CONTINGENT LIABILITIES
33.1 Acquisition of aircrafts
As at December 31, 2020 and 2019, the Company has commitments for acquisition of
aircrafts to be paid in the future of USD 135.76 million.
33.2 Aircraft lease agreement
As at December 31, 2020 and 2019, the Company and subsidiaries have commitments
under the long-term operating lease agreements for aircrafts for the period of 5 to 12
years with aircraft lease expenses to be paid in the future as follows:
UNIT : USD
Consolidated Separate
financial statements financial statements
2020 2019 2020 2019
Within one year - 113,837,075 - 84,875,575
Over one year but not over five years - 400,943,095 - 343,983,095
Over five years - 108,749,843 - 108,749,843
Total - 623,530,013 - 537,608,513
Aircraft lease expenses recognized as expenses in the statements of profit or loss
and other comprehensive income are as follows:
UNIT : MILLION BAHT
Consolidated Separate
financial statements financial statements
2020 2019 2020 2019
For the year ended December 31, 228.73 3,743.00 228.73 2,755.77
On February 1, 2019, the Company terminated 1 aircraft and had to comply with all
conditions as specified in the aircraft termination agreement. As a result, there is no
additional charge from such aircraft termination agreement.
On February 27, 2019, the Company signed Reassignment and Termination agreements
to early terminate of 2 ATRs. The Company found a new lessee; therefore, the Company
was released from, pursuant to the lessor agreement, the penalty payment for the early
termination of such ATRs as specified in the agreement.
On March 27, 2020, the Company early terminated 2 aircrafts and had to comply
with all conditions as specified in the aircraft termination agreement. As a result,
there is no additional charge from such aircraft termination agreement.
On October 7, 2020, the aircraft lease agreements of 2 aircrafts were early terminated
because the Company could not comply with the conditions as specified in the
aircraft lease agreements resulting that lessors terminated the lease agreements. The
Company had expense for termination of aircraft lease agreements in amount of USD
18.19 million or equivalent to Baht 578.90 million.
- 70 -
33.3 Other lease and service agreements
The minimum rental fee and service fee under the agreements to be paid in the future
are as follows:
Consolidated financial statements
As at December 31, 2020
Agreements Currency Periods Total
Within one Over Over
year one year but five years
not over
five years
Lease and Rental Agreements
Office rental and service THB 2,700,096 174,000 - 2,874,096 Vehicle rental THB 1,975,093 - - 1,975,093 Equipment rental THB 1,312,800 204,693 - 1,517,493
Service Agreements
Call center service THB 11,835,225 - - 11,835,225
Ticket reservation system USD 1,686,169 - - 1,686,169
As at December 31, 2019
Agreements Currency Periods Total
Within one Over Over
year one year but five years
not over
five years
Lease and Rental Agreements
Office rental and service THB 46,912,969 49,014,923 - 95,927,892
Office rental and service CNY 68,753 - - 68,753
Office rental and service USD 64,800 13,800 - 78,600
Office rental and service SGD 15,000 17,500 - 32,500
Vehicle rental THB 1,891,400 1,276,094 - 3,167,494
Equipment rental THB 2,283,372 2,091,200 - 4,374,572
Service Agreements
Aircraft maintenance USD 27,223,695 50,338,847 - 77,562,542
Aircraft maintenance SGD 1,361,724 3,744,741 - 5,106,465
Ticket reservation system USD 2,201,587 2,280,408 - 4,481,995
Ticket reservation system EUR 17,123 - - 17,123
Call center service THB 21,094,500 - - 21,094,500
Collection agent USD 6,300 - - 6,300
Flight information service EUR 28,500 - - 28,500
Flight information service USD 7,913 - - 7,913
Service advisor JPY 1,633,333 - - 1,633,333
- 71 -
Separate financial statements
As at December 31, 2020
Agreements Currency Periods Total
Within one Over Over
year one year but five years
not over
five years
Lease and Rental Agreements
Office rental and service THB 2,700,096 174,000 - 2,874,096 Vehicle rental THB 1,975,093 - - 1,975,093 Equipment rental THB 1,312,800 204,693 - 1,517,493
Service Agreements
Call center service THB 11,835,225 - - 11,835,225
Ticket reservation system USD 1,686,169 - - 1,686,169
As at December 31, 2019
Agreements Currency Periods Total
Within one Over Over
year one year but five years
not over
five years
Lease and Rental Agreements
Office rental and service THB 44,862,991 49,014,923 - 93,877,914
Vehicle rental THB 1,857,600 1,276,094 - 3,133,694
Equipment rental THB 2,172,972 1,963,200 - 4,136,172
Service Agreements
Call center service THB 14,830,500 - - 14,830,500
Ticket reservation system USD 2,081,414 2,248,225 - 4,329,639
Rental fee and service fee per lease agreements recognized as expenses in the statements
of profit or loss and other comprehensive income are as follows:
UNIT : MILLION BAHT
Consolidated Separate
financial statements financial statements
2020 2019 2020 2019
For the year ended December 31, 129.38 128.15 129.38 67.46
- 72 -
33.4 Credit facilities from financial institutions
The Group have credit facilities from financial institutions as follows:
Currency Consolidated financial statements
As at December 31, 2020 As at December 31, 2019
Total Utilized Remaining Total Utilized Remaining
General guarantee THB 61,500,000 28,697,288 32,808,712 89,500,000 56,408,232 33,091,768
General guarantee JPY - - - 78,008,380 78,008,380 -
Guaranteed by Standby Letter of Credit USD 5,000,000 2,750,923 2,249,077 16,637,534 10,408,852 6,228,682
Guaranteed by Standby Letter of Credit THB 1,200,000,000 78,871,526 1,121,128,474 1,200,000,000 706,640,401 493,359,599
Overdraft THB 54,000,000 - 54,000,000 54,000,000 - 54,000,000
Currency Separate financial statements
As at December 31, 2020 As at December 31, 2019
Total Utilized Remaining Total Utilized Remaining
General guarantee THB 61,500,000 28,697,288 32,808,712 61,500,000 32,840,572 28,659,428
Guaranteed by Standby Letter of Credit USD 5,000,000 2,750,923 2,249,077 5,000,000 4,848,432 151,568
Guaranteed by Standby Letter of Credit THB 1,200,000,000 78,871,526 1,121,128,474 1,200,000,000 706,640,401 493,359,599
Overdraft THB 54,000,000 - 54,000,000 54,000,000 - 54,000,000
As at December 31, 2020, the Company entered into credit limit agreement for standby
letter of credit and letter of guarantee with local banks and a branch of foreign bank in
the credit limit of Baht 1,261.50 million and USD 5 million. Certain Credit limit is
secured by deposit accounts of Baht 23.13 million and USD 3.83 million. In
addition, the Company has to maintain the significant financial ratio as specified by
such bank.
As at December 31, 2019, the Company entered into credit limit agreement for standby
letter of credit and letter of guarantee with local banks and a branch of foreign bank in
the credit limit of Baht 1,261.50 million and USD 5 million. Certain Credit limit is
secured by deposit accounts of Baht 727.70 million and USD 4.85 million. In addition,
the Company has to maintain the significant financial ratio as specified by such bank.
As at December 31, 2020 and 2019, the Company could not maintain some financial
ratios under the credit facility of bank guarantee agreement with a financial institution.
However, the Company received a letter from the financial institution to extend the
maintaining of financial ratios to December 31, 2020.
- 73 -
33.5 Aircraft Intermediate Lease Agreement
As at December 31, 2020 and 2019, the Company had revenue from entered into
Aircraft Intermediate Lease Agreement with companies to sublease of three Boeing
737-800. The term of these agreements is forty-eight months from delivery date and
the Company received rental income as specified in the agreements.
On July 30, 2020, the Company received termination notices for Aircraft Lease
Agreement from a lessor due to noncompliance with the conditions as specified in
the Aircraft Lease Agreements. Hence, the Company submitted termination notices
for Aircraft Sublease Agreement of 2 aircrafts to subtenant.
The minimum lease receivables under the agreements to be received in the future
are as follows:
UNIT : USD
Consolidated and separate
financial statements
As at As at
December 31, December 31,
2020 2019
Not later than one year - 7,938,443
Over one year but not over five years - 158,585
- 8,097,028
Aircraft rental income recognized as income in the statements of profit or loss and
other comprehensive income are as follows:
UNIT : MILLION BAHT
Consolidated and separate
financial statements
2020 2019
For the year ended December 31, 214.15 256.88
- 74 -
34. OPERATING SEGMENTS
The operating segment results are prepared based on the Management of the company.
The operating results by business segment provided to Chief Operating Decision Maker to
make decisions about allocating resources to, and assessing the performance of, operating
segments is measured in accordance with Financial Reporting Standard. The Company has
two reportable segments, which represent separately by geographical areas which consists of
domestic air services and international air services.
The segment information of the Company and its subsidiaries were presented by domestic and
foreign business segments as follows: UNIT : BAHT
Consolidated financial statements
Domestic air services
International air services
Total
Statement of profit or loss and other comprehensive income for the year ended December 31, 2020
Revenues Passenger revenues 5,583,101,810 201,119,132 5,784,220,942
Service revenues 524,308,432 - 524,308,432
Other income
Others 105,466,986 1,509,139 106,976,125
Unallocated amount - - 319,885,730
Total Revenues 6,212,877,228 202,628,271 6,735,391,229
Expenses Costs of passenger and services 6,816,540,789 430,614,195 7,247,154,984
Selling expenses 36,745,081 293,974 37,039,055
Administrative expenses 1,022,978,407 44,198,958 1,067,177,365
Impairment loss on right-of-use assets - - 3,446,296,290
Expected credit losses - - 3,104,616,061
Unallocated amount - - 1,271,464,600
Total Expenses 7,876,264,277 475,107,127 16,173,748,355
Loss before income tax expenses (1,663,387,049) (272,478,856) (9,438,357,126)
Income tax expenses - - -
Loss for the periods from continuing operations (1,663,387,049) (272,478,856) (9,438,357,126)
Discontinued operation (see Note 13)
Profit for the period from discontinued
operation - net of tax income - - 2,046,733,662
Total loss for the year (1,663,387,049) (272,478,856) (7,391,623,464)
Other comprehensive income for the year - - 95,758,709
Total comprehensive loss for the year (1,663,387,049) (272,478,856) (7,295,864,755) Timing of revenue recognition
At a point in time Passenger revenues 5,784,220,942
Service revenues 727,435,171
Other income 174,079,651
Overtime
Service revenues 49,655,465
Total 6,735,391,229
Statement of financial position as at December 31, 2020 Segment assets 17,049,822,834 845,101,836 17,894,924,670
Segment liabilities 25,192,819,277 704,261,093 25,897,080,370
- 75 -
UNIT : BAHT
Consolidated financial statements
Domestic air
services
International
air services
Total
Statement of profit or loss and other comprehensive
income for year
ended December 31, 2019
Revenues
Passenger revenues 9,128,156,049 2,035,207,817 11,163,363,866
Service revenues 771,193,759 126,071,635 897,265,394
Other income
Others 98,830,957 4,551,432 103,382,389
Unallocated amount - - 395,292,613
Total Revenues 9,998,180,765 2,165,830,884 12,559,304,262
Expenses
Costs of passenger and services 10,014,633,015 3,000,695,751 13,015,328,766
Selling expenses 101,739,130 1,244,608 102,983,738
Administrative expenses 526,066,960 112,391,901 638,458,861
Unallocated amount - - 545,752,839
Total Expenses 10,642,439,105 3,114,332,260 14,302,524,204
Loss before income tax expenses (644,258,340) (948,501,376) (1,743,219,942)
Income tax expenses - - -
Loss for the periods from continuing operations (644,258,340) (948,501,376) (1,743,219,942)
Discontinued operation (see Note 13)
Loss for the period from discontinued
operation - net of tax income - - (1,352,180,694)
Total loss for the year (644,258,340) (948,501,376) (3,095,400,636)
Other comprehensive income for the year - - 123,056,465
Total comprehensive loss for the year (644,258,340) (948,501,376) (2,972,344,171)
Timing of revenue recognition
At a point in time
Passenger revenues 11,163,363,866
Service revenues 1,185,827,765
Other income 147,033,536
Overtime
Service revenues 63,079,095
Total 12,559,304,262
Statement of financial position
as at December 31, 2019
Segment assets 8,395,474,967 6,775,480,290 15,170,955,257
Segment liabilities 9,964,333,866 8,674,834,828 18,639,168,694
- 76 -
35. INVESTMENT PROMOTION RIGHTS AND PRIVILEGES
The Company and its subsidiary have been granted certain rights and privileges as a
promoted business under the Investment Promotion Act which they will be exempted
from corporate income tax on promotional operations in service airlines for the
aggregated amount not exceeding 100% of their investment, excluding cost of land and
working capital for a period of 8 years from the commencement of promoted revenue.
The Company and its subsidiary shall follow the conditions laid out in the investment
promotion certificates.
As at December 31, 2020 and 2019, the Company’s investment promotion certificates are
as follows:
Date of certificate Certificate number Revenue commenced date Expiry date
December 23, 2011 2512(2)/2554 November 24, 2011 November 23, 2019***
December 23, 2011 2513(2)/2554 December 2, 2011 December 1, 2019***
January 25, 2012 1087(2)/2555 December 28, 2011 December 27, 2019***
April 20, 2012 1475(2)/2555 June 9, 2012 June 8, 2020****
July 11, 2012 1893(2)/2555 September 18, 2012 September 17, 2020**
October 10, 2012 2447(2)/2555 December 1, 2012 November 30, 2020
October 18, 2012 2549(2)/2555 March 12, 2013 March 11, 2021**
November 30, 2012 2771(2)/2555 December 31, 2012 December 30, 2020*
November 30, 2012 2772(2)/2555 December 29, 2012 December 28, 2020****
November 30, 2012 2773(2)/2555 February 19, 2013 February 18, 2021
February 8, 2013 1207(2)/2556 February 22, 2013 February 21, 2021****
April 5, 2013 1518(2)/2556 May 17, 2013 May 16, 2021*
April 24, 2013 1558(2)/2556 May 21, 2013 May 20, 2021*
July 2, 2013 1916(2)/2556 October 28, 2013 October 27, 2021
January 6, 2015 1010(2)/2558 November 25, 2014 November 24, 2022
September 30, 2015 58-2263-0-00-1-0 November 5, 2015 November 4, 2023
As at December 31, 2020 and 2019, the subsidiary’s investment promotion certificates are
as follows: Date of certificate Certificate number Revenue commenced date Expiry date
April 24, 2015 1553(2)/2558 April 20, 2015 April 19, 2023**
April 24, 2015 1534(2)/2558 April 20, 2015 April 19, 2023**
December 26, 2016 60-0197-1-00-1-0 June 2, 2018 September 30, 2024**
February 16, 2017 60-0198-1-00-1-0 September 12, 2019 September 11, 2024**
Shareholders of the Company and its subsidiary will be exempted from tax on dividends
from promoted business during the period in which they are granted the exemption from
corporate income tax.
- 77 -
The Company and its subsidiary thus have to comply with certain conditions contained in
the promotion certificates.
* The certificates are in the process of the certificates cancellation before expiry date
because the Company subleased aircraft Boeing 737-800 (see Note 33.5).
** The certificates are in the process of the certificates cancellation before expiry date
because the Company returned the aircrafts to lessors.
*** The certificates are in the process of the certificates cancellation since expiry date
and the Company returned the aircrafts to lessors.
**** The certificates were cancelled on May 7, 2020 and the Company returned the
aircrafts to lessors.
Total reported revenues between promoted and non-promoted businesses for the years
ended December 31, are as follows:
UNIT : BAHT
Consolidated financial statements
2020
Promoted Non-promoted Total
business business
Passenger revenues and service revenues 5,768,692,193 792,619,385 6,561,311,578
Other income 62,095,204 111,984,447 174,079,651
Total 5,830,787,397 904,603,832 6,735,391,229
UNIT : BAHT
Consolidated financial statements
2019
Promoted Non-promoted Total
business business
Passenger revenues and service revenues 16,245,182,003 3,361,098,518 19,606,280,521
Other income 47,767,074 315,075,677 362,842,751
16,292,949,077 3,676,174,195 19,969,123,272
Less : Revenue from discontinued operation (6,014,128,980) (1,395,690,030) (7,409,819,010)
Total 10,278,820,097 2,280,484,165 12,559,304,262
UNIT : BAHT
Separate financial statements
2020
Promoted Non-promoted
Business business Total
Passenger revenues and service revenues 5,768,692,193 792,619,385 6,561,311,578
Other income 62,095,204 166,255,222 228,350,426
Total 5,830,787,397 958,874,607 6,789,662,004
- 78 -
UNIT : BAHT
Separate financial statements
2019
Promoted Non-promoted
Business business Total
Passenger revenues and service revenues 10,276,678,899 2,242,755,998 12,519,434,897
Other income 2,141,198 187,058,850 189,200,048
Total 10,278,820,097 2,429,814,848 12,708,634,945
36. DISCLOSURE OF INFORMATION ON FINANCIAL INSTRUMENTS
36.1 Credit risk
Credit risk refers to the risk that accounts receivable will default on its contractual
obligations resulting in a financial loss to the Group. The Group may have concentration
of risks from its receivables. However, the Company and subsidiaries do not have
significant damage incurred from non-compliance with its contractual obligations of
the accounts receivable and expects that there is no significant credit risk.
In the case of recognized financial assets in the statement of financial position, the
carrying amount of the assets recorded in the statement of financial position represents
the maximum exposure to credit risk.
36.2 Liquidity and interest rate risk
Ultimate responsibility for liquidity risk management rests with the Planners, which
has established an appropriate liquidity risk management framework for management of
the Group’s short, medium and long-term funding including financial liabilities which are
not derivatives. The framework of risk management is within the business rehabilitation
plan, which is in progress to present to Official Receiver, as described in Note 4.
36.3 Exchange rate risk
Exchange rate risk arises from a change in exchange rate effect on the Company and
subsidiaries in the current reporting period and in future years.
The Group use derivative financial instruments which consist of forward contracts to
reduce exposure to fluctuations in foreign currency exchange.
Forward contract protects from movements in exchange rate by establishing the rate
at which a foreign currency asset and liability will be settled. Any increase or
decrease in the amount required to settle the asset or liability is offset by a corresponding
movement in the forward foreign exchange contract.
- 79 -
The carrying amounts of the Group’s foreign currency assets and liabilities as at
December 31, 2020 are as follows:
UNIT : MILLION BAHT
Consolidated and separate
financial statements
Assets Liabilities
US Dollar currency 806.33 3,034.92
Euro currency - 221.39
Chinese Yuan currency 164.19 56.15
Vietnamese Dong currency 55.73 0.18
Other currencies 19.19 17.17
The notional contract amount and the fair value of forward foreign exchange contracts
are summarized as follows:
Consolidated and separate financial statements
Contract amounts Deliverable amount Fair value (Baht)
Currency As at
December 31,
2020
As at
December 31,
2019
Currency As at
December 31,
2020
As at
December 31,
2019
As at
December 31,
2020
As at
December 31,
2019
USD - 8,000,000 THB - 240,151,550 - 241,806,003
As at December 31, 2019, forward foreign exchange contracts have maturity date
within 4 - 6 months, after the date of the statement of financial position (As at
December 31, 2020 : Nil).
Foreign currency sensitivity analysis
The following table details the Group’s sensitivity to appreciation and depreciation
in THB currency against USD currency. The sensitivity analysis includes only
outstanding foreign currency denominated monetary items and foreign exchange
forward contracts applied cash flow hedges accounting for USD currency at the
reporting date and using an increase or decrease rate by considering the reasonably
possible change in foreign exchange rates.
UNIT : MILLION BAHT
Consolidated and separate
financial statements
Appreciation Depreciation
As at December 31, 2020
Exchange rate change by 10%
Gain (loss) on foreign exchange rate
Asset (104.54) 104.54
Liability 332.98 (332.98)
- 80 -
36.4 Fuel price risk
Aircraft fuel is a major cost of the Company’s operation and the Company has an
exposure from the fluctuation of aircraft fuel’s price. Therefore, the Company has policy
entered into fuel fixed-price contracts with fuel suppliers for 30% - 50% of volume of
monthly consumption for not exceeding 24 months.
As at December 31, 2020 and 2019, the Company did not have obligations under fuel fixed-
price contracts.
36.5 Fair value of financial instruments.
For the fair value disclosures, considerable judgment is necessarily required in
estimation of fair value. Accordingly, the estimates presented herein are not
necessarily indicative of the amount that could be realized in a current market
exchange. The use of different market assumptions and/or estimation methodologies
may have a material effect on the estimated fair value. The following methods and
assumptions were used by the Company and subsidiaries in estimating fair value of
financial instruments.
Financial assets and liabilities measured at fair value
Certain financial assets and financial liabilities of the Company and subsidiaries are
measured at fair value in the statements of financial position at the end of reporting
period. The following table gives information about how the fair values of these
financial liabilities are determined.
Financial liabilities CONSOLIDATED AND
SEPARATE FINANCIAL
STATEMENTS
Fair
value hierarchy
Valuation technique and key input
Fair value (Thousand Baht)
As at December 31,
2020
As at December 31,
2019
Deferred income from customer loyalty programs
47,128 36,951 Level 3 Obligation from granting the points is
recognized and measured at the fair
value of the consideration receivable
which is derived from outstanding points
expected future redemption multiplied
by estimated fair value per points.
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Financial assets and liabilities not measured at fair value
Carrying amount of cash and cash equivalents, current investments, current
investments in financial assets trade and other current receivables, deposits and
prepayment for aircraft and other current assets which measured at amortized cost
are approximate of fair value due to the short maturity period.
Carrying amount of deposits at bank pledged as collateral, long-term loans to a related
company, short-term borrowings, trade and other current payables, provisions for
aircraft maintenance as plan, provisions for aircraft return condition and aircraft
maintenance and other current liabilities which measured at amortized cost has
estimated fair value equal to the book value.
37. SIGNIFICANT COMMERCIAL DISPUTE
In the first quarter of the year 2018, the Company filed a statement of claims to the Singapore
International Arbitration Center (collectively called “SIAC”) to consider the dispute with a
company (“litigant”) by requesting such company to pay damages to the Company arising from
its breach of the contracts. On August 31, 2019, the Tribunal rendered the award determining
that the litigant was not in breach of the contracts and the Company is ordered to make a
compensation in the amount of EUR 5.39 million, SGD 0.38 million and KRW 0.27 million
with interest at the rate of 5.33% per annum from the date of the Final Award until the payment
date. On December 2, 2019, the Company filed petition against the award of tribunal to the
Supreme Court of Singapore. Later, the Company was granted to withdraw the petition on
March 26, 2020 and the Company submitted a notice of discontinuance accordingly on April 1,
2020.
On February 24, 2020, the litigant filed a petition of enforcement according to the Final Award
of the SIAC to the Central Intellectual Property and International Trade Court of Thailand.
Currently, such dispute is being considered.
Subsequently on August 27, 2020, the Company requested the court to temporarily suspend such dispute because the Company filed a petition to enter into a business rehabilitation process
(see Note 4). The court ruled to temporarily suspend such dispute until further notice under the
Bankruptcy Act 1940, Section 90/12(4).
As at December 31, 2020, the Company recorded the provisions relating to such dispute with
interest calculated until the end of reporting period date as administrative expense and finance
costs in the amount of Baht 219.19 million in the consolidated and separate financial statements.
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38. RECLASSIFICATIONS
The Company has reclassified transactions in statements of profit or loss for the year ended
December 31, 2019 to consistent with discontinued operations for the year ended December 31,
2020.
UNIT : BAHT
Consolidated
For the year ended December 31, 2019
Before reclassification
Reclassified for
discontinued operation
After reclassification
Passenger revenues 16,758,564,116 5,595,200,250 11,163,363,866
Service revenues 2,847,716,405 1,598,809,544 1,248,906,861
Other income
Interest income 22,803,479 7,665,051 15,138,428
Others 340,039,272 208,144,165 131,895,107
Total Revenues 19,969,123,272 7,409,819,010 12,559,304,262
Costs of passenger and services 21,770,891,808 8,302,419,386 13,468,472,422
Selling expenses 210,459,011 107,475,272 102,983,739
Administrative expenses 956,672,047 308,047,251 648,624,796
Finance costs 125,091,357 44,057,795 81,033,562
Total Expenses 23,063,114,223 8,761,999,704 14,301,114,519
Share of loss from investment in a joint venture (1,409,685) - (1,409,685)
Loss before income tax expenses (3,095,400,636) (1,352,180,694) (1,743,219,942)
Income tax expenses - - -
Loss for the year (3,095,400,636) (1,352,180,694) (1,743,219,942)
39. APPROVAL OF THE FINANCIAL STATEMENTS
The financial statements have been approved for issuing by the Planners of the Company
on August 31, 2021.
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