SET requests to clarify news or information Subject : Clarification of information in financial statements for the year 2021 Clarification of news or information requested by SET Description : SET requests to clarify news or information Subject : Clarification of information in financial statements for the year 2021 ALL/CS_011/2022 22 April 2022 RE: To Clarify the information in the financial statements for the year 2021 To: Director and Managing Director Stock Exchange of Thailand CC : Secretary of the Securities and Exchange Commission References : 1. The Company's financial statements for the year 2021 2. Letter of the Stock Exchange of Thailand No. Bor Jor. 163/2565 dated April 8, 2022 3. Regulations of the Stock Exchange of Thailand, rules and procedures relating to information disclosure and any operations of the listed company 2017 As the Stock Exchange of Thailand has sent a letter to All Inspired Development Public Company Limited that the Company has submitted the financial statements for the year 2021, which have been audited by the auditor. The auditor has observations about recording losses from the termination of the contract to buy and sell land. It also appears that the issuance of debentures and borrowings is a significant amount and the consolidated capital lawsuit 239 million baht (12% of shareholders' equity. Therefore, SET requested All Inspired Development Company Limited (Public) to clarify additional information i.e., 1) entering into a compromise agreement to agree to cancel the contract to buy and sell land; 2) borrowing money and issuing of debt instruments that are significant to financial position and operating results; and 3) value lawsuits. Total lawsuit 239 million baht To provide investors with complete information for making investment decisions in the Company's securities The SET therefore requests the Company to clarify additional information through the SET's information dissemination system within April 21, 2022, as follows: 1) Making a compromise agreement to agree to cancel the contract to buy and sell land According to Auditor's note 11 of the financial statements, on December 29, 2021, the Company has entered into a compromise agreement to agree to cancel the land purchase contract whereby the company recorded the deposit as Loss on cancellation of the contract in 2021. Thus, the company had a net loss of 347 million baht. The company would like to clarify as follows: 1.1 Summary of Land purchase contract such as objective, contract value, deposit, and other conditions. 1.2 Information and criteria which the Company considering the purchase of land, Land value, land inspection process to be consistent with purpose of utilization. Reasons for canceling the land purchase contract and making compromise agreement to cancel such contract. 1.3 The approver of the purchase of land and the deposit of money, the cost of land, the cancellation of the land purchase contract, the compromise agreement Is it according to the approval or not? 1.4 Opinion of the Board of Directors About the land purchase contract, the placement of deposit and the reason of making a compromise agreement that it has taken cautious actions in the best interests of the shareholders. The Actions to remedy the damage incurred to the Company, including guidelines and measures relating to the consideration and approval of the contract to prevent such damage that may occur in the future. The company would like to clarify the following issues: 1.1 In 2018, the Company has a business plan approved by the Board of Directors. must procure and purchase land on Srinakarin-La Salle Road near the MRT Yellow Line, Lasalle Station, for the purpose of developing a condominium project. On May 30, 2018, the Company has made Agreement to buy and sell land in the amount of 1 plot of land, Mr. Chitti Ratchaiboon, the seller, has the area specified as title deed 7-3-78 rai, located at Bua, around Soi Lasalle 83 It is about 250 meters from the Lasalle BTS station to be developed into a condominium project. According to the business plan laid out at the purchase and sale price of the land 125,000 baht per square wah, totaling 397,250,000 baht. according to the actual area obtained from the survey. The price is divided into 3 installments, the first installment is paid in the amount of 20,000,000 baht on the date of the purchase and sale agreement of the land, the second installment is paid in the amount of 20,000,000 baht within 30 September 2018, the third installment, the remaining amount is paid in the amount of 357,250,000 baht on the date of registration of the transfer of ownership of the land. The transfer of ownership is scheduled within May 30, 2019. All expenses such as stamp duty and transfer of ownership fees are payable half per party, withholding tax part Withholding income tax, the seller of the land is responsible. The seller agrees to transfer of ownership in the land to the purchaser without prejudice to any rights or obligations under the law. If there is such a burden, the seller agrees to postpone the registration of the transfer of ownership and postpone the payment of the land until the seller has completed the process. While the land ownership has not been transferred the seller has to permit the purchasing company to submit various matters to government agencies For the Installation of temporary fences, publicity signs set up a temporary sales office, surveying the area for project development the seller is allowed to operate immediately so that the buyer can develop the project. and apply for loans to financial institutions rapidly. But if the purchaser company does not accept the transfer of ownership of the land under the contract The purchaser company agrees to the seller to forfeit the money already paid and remove any buildings or additions and adjusted the land to its original condition and/or allow the seller to sue to force the buyer to comply with the contract or pay the remaining amount and receive the transfer of land ownership immediately. If the seller breaches any of the contracts or does not Transfer of ownership of the land according to the contract The seller agrees to return the full amount of the paid deposit, including a fine of 40,000,000 baht or allow the purchaser company to sue, forcing the seller to comply with the contract to transfer the ownership of the land immediately. After having entered into a contract to buy and sell the land There have been two memorandums attached to the contract to buy and sell land, the first time was made on May 30, 2018, and the second time was made on May 29, 2019. The making of the memorandum of agreement attached to the contract no. 2 arises from the request of the purchaser's company who is not yet ready to accept the transfer of land ownership from the seller according to the original schedule as agreed in the contract due to the lack of financial liquidity of the purchasing company. The buying company and the seller therefore agreed to postpone the transfer of land ownership from the original date within May 30, 2019 to within February 28, 2020, and the buying company agreed to pay for the additional land to the buyer the additional land for the seller in 2 more installments, the first installment paid in the amount of 30,000,000 baht on the date of signing the amendment of the land purchased contract, the second time paid the amount 30,000,000 baht within July 30, 2019 and agree to second amended the contract, reduce the amount of land area according to the results of the district survey from 7-3-78 rai to 7-3-37 rai and reduce the land price from 397,250,000 baht to 392,125,000 baht. According to the area obtained from the survey of the completed district and the purchasing company agree to pay all expenses in the registration of the transfer of land ownership both fees Stamp duty and withholding tax paid by the seller. The other agreements remain in accordance with the original contract in all respects to extend the period of transfer of land ownership and to pay the rest of the price. 1.2 While the Company has made the land purchase agreement including the two amendment of the land purchased agreement, the Company has criteria and information for considering the purchase of land and depositing money, land value, and the process of land inspection to be consistent with the purpose of utilization according to the company's business plan in 2018 and 2019 by studying and analyzing the of the project (Due Diligence) both in terms of returns business and legal If there is an assessment and risk management, the Executive Committee (EXCOM) will consider and approve beforehand. The reason for canceling the land purchase Agreement due to the company has been the plaintiff filed a lawsuit against Mr. Chitti Ratchaiboon seller in the Civil Court case of No. 340/2563 of the Phra Khanong Civil Court to ask the court for a judgment of 1) to make the defendant to register the transfer of land ownership to the Company free from any deprivation of rights and encumbrances in the land. The purchase company will make payment for the remaining amount 292,125,000 baht on the transfer date. (2) If the defendant does not proceed with the transfer of land ownership to the Company without the deprivation of rights and encumbrances anything in the land. And to ask the defendant to pay back the money that has already been paid in the amount of 100,000,000 baht, pay the fine Amount 40,000,000 baht, Loss of benefit amount 12,666,666.60 baht and another 20,000,000 baht per month until the company transfers the ownership of the land to the company. The damages of the lack of benefits in the use of the land according to the plan and delayed construction of condominium projects Land appraisal fee, EIA preparation fee, EIA project design fee and sales office Sales office construction cost of land development preparation, Consultant fee for solving land problems Total damages amounted to 30,196,000 baht, plus interest at 7.5% per annum of the principal, totaling 191,014,036.46 baht as of the filing date. But the defendant has filed an appeal to defend the case, requesting the court to dismiss the lawsuit and counterclaim, requesting the Company to pay damages amounting to 7,553,005,.82 baht and loss of benefit 784,250 baht per month until the company moves its assets and attendants out of the land. and deliver the land back to the plaintiff. During the trial, the Company submitted a request for temporary protection before adjudicating the court to order the attachment of the disputed land and prohibit the defendant from selling or selling the disputed land. The defendant objected to the request for temporary protection before adjudicating the request to be dismissed. but if the court orders temporary protection before adjudicating upon the request of the company, then asked the court to order the company to place a bail for damages in the amount of 292,125,000 baht. The court had already conducted an inquiry of the request for temporary protection before the judgment was completed and has an appointment to hear the order on January 20, 2022 and if the court orders temporary protection before adjudicating as requested by the company the court may require the company to deposit damage insurance against the defendant in the amount of 292 ,125,000 000 baht or reduce it as the court deems appropriate. If the company provide money in the amount of 292 ,125,000 baht or may be less to place bail to court order It will affect the financial liquidity of the company. And the company would probably not be able to provide this amount to bail with the court. In addition, when considering the content of this case, the company has two parts of the request for enforcement of the lawsuit: (1) requesting the court to issue a judgment for the defendant to transfer ownership of the land to the company according to the contract, (2) but if the defendant Failure to transfer ownership, ask the defendant to pay deposits and damages to the company. Which from a request for enforcement in this manner If the company wins the lawsuit The court will have a judgment requiring the defendant to transfer the land to the company. And the company must pay for the remaining land in the amount of 292,125,000 baht and has to pay fees, taxes and duties for the transfer of land ownership, about 30,000,000 baht as well. And from the land inspection There is no deprivation of rights. or the encumbrance of the land in the meaning of the law. The company may not be possible to refuse to accept the transfer of the land because the land still has rights and other encumbrances. In addition , the defendant himself would agree to transfer the ownership of the land to the company according to the judgment. The defendant will receive the remaining money for the land under the contract, which is already satisfied by the defendant better than agreeing to pay the deposit back with damages to the company for sure. The opportunity for the company to receive a refund of the deposit plus damages and interest from the defendant in accordance with the second order enforcement request according to the lawsuit would be difficult to occur. Otherwise, if the court issues a temporary protection order before the judgment, it will prevent the defendant from selling this plot of land to another person until the case is final. The defendant may retaliate by giving a statement to the court agreeing to transfer the land to the company under the contract before the court decides. and from the company's financial liquidity The company would not be able to provide money to receive the transfer of land from the defendant in time, regardless of whether the defendant agrees to transfer the land before the judgment or after the court has sentenced the defendant to transfer the land to the company, the company will eventually be forfeited by the defendant. because the company is not ready to pay the rest of the land price. But if the result of this case, the Company is the loser of the case by the court's judgment Dismissal. In addition to the company will be forfeited all the money already paid. will also have to pay damages according to the counterclaim to the defendant as well Must pay damages according to the counterclaim to the defendant as well. It is expected that in this case, the court will have a judgment within 2022. In addition, in the next 1-2 years, the condominium market may not recover as before. Even if the company has acquired this plot of land, the company can borrow money to receive the land transfer. But the company will have to bear the interest from borrowing money to accept the transfer of this plot of land. The company has not yet implemented a project in this plot of land. Therefore, the company should devote the budget to complete the construction of The Excel Lasalle 17 project in a nearby location to deliver and transfer the ownership to the customer and get the money back to the company. Therefore, when considering the case If the prosecution continues the company doesn't get any benefit. from this prosecution and also have to pay the cost of hiring a lawyer to continue as well. The Board of Executive Directors (EXCOM) resolved in the meeting No. 14/21 on December 13, 2021, to settle this case by agreeing to compromise with the defendant in court before the date of the hearing of the Temporary Protection Order before the Judgment on January 20, 2022 by allowing the defendant to forfeit all deposits Including the sales office and various buildings that the company paints on the land becomes the ownership of the defendant. The defendant must not be claiming any damages or taking any legal action against the company any longer so that the company does not have to procure money in the amount of 292 ,125,000 baht the company will not have to procure money in the amount of 292 ,125,000 baht to deposit the court bail. or receive the transfer of ownership. The Company will have no cost to demolish the sales office and adjusting the condition of the land to be the same to deliver it back as well as not having to pay the cost of hiring a lawyer to continue litigation The company should be priority dedicated to completing the Excel Lasalle 17 project to deliver and transfer ownership to customers. and received a refund back to the company. 1.3 In making a contract to buy and sell land including making a memorandum of agreement attached to the land purchase and sale agreement No. 1 and No. 2, and deposit payment for land. The approver is the resolution of the Executive Board meeting. which is in accordance with the approval authority According to the Manual on Authority No. 3 at the 12th Executive Committee Meeting (EXCOM) held on June 13, 2018. As for the termination of the land purchase and sale agreement and the compromise agreement, the approver is the resolution of the Executive Board meeting. which is in accordance with the approval authority In the Executive Committee Meeting (EXCOM). 1.4 Opinions of the Board of Directors on entering into a land purchase contract in accordance with and appropriate to the economic conditions as of 2018, before the outbreak of the Coronavirus Disease 2019 (COVID COVID-19), with a resolution to purchase the said plot of land According to the minutes of the Executive Board Meeting ( EXCOM) No. 12 held on June 13, 2018, which is an opinion based on caution and for the best interests of shareholders. Remedy for the damage that occurred the company will expedite the construction of other projects which is in the process of completion of construction and ready to be transferred to the customer as stipulated in the contract and adjust the sales strategy to be able to compete in the market under the current situation to accelerate the sales of transfers for the completed projects. The company will not buy new plots of land in 2022-2023 but will sell other plots of land that the company has contracted to but the ownership transfer has not yet been reached to those who are interested in purchasing or negotiate with the seller to extend the transfer of ownership without paying additional money or sell the land that the company has received the ownership transfer but has not yet implemented the project in order to get money and profits to return as soon as possible In addition, the Company has guidelines and measures for considering and approving contracts to purchase and sell land by planning the purchase of land and placing a deposit in accordance with the company's financial liquidity and the domestic real estate market Including the need to keep up with the economic crisis situation in the country and the world and to take into consideration and approve the contract to buy and sell land to be more cautious and concise to prevent damage in this manner that may occur in the future as well 2. Loan and issuance of debentures in significant amounts that affect financial position and performance According to the notes to financial statement no. 22, 23, 24, 26, 40.2 and 40.3, as of December 31, 2021, the Company has issued debentures of 2,397 million Baht, loans from financial institutions of 1,097 million Baht and loans from third parties of 1,000 million Baht. The issuance of debentures and loans are totaling up to 4,495 million baht, representing 57% of assets, 76% of liabilities, and 224% of shareholders' equity accordingly. In addition, on January 13, 2021, the Company also submitted a filing for issuance of new debentures and from January - February 2022, the Company also entered into various loan agreements with third parties in the amount 79 million Baht. In order to comply with the regulations of the SET as referred to in No. 2, the Company has a duty to disclose the information immediately in the event that the Company has issue significant amounts of new loans and debentures which affects the financial position and performance. Therefore, the Company has disclosed details regarding the loans and issuance of debentures through the SET portal, consisting of contract parties, relationship with the Company, directors, management, or major shareholders, loan type, loan purpose, loan amount, interest rate, start and maturity date, repayment terms, collateral, conditions for default and other important conditions. Moreover, the Company must strictly comply with the regulations of the SET in the future as well. The Company shall clarify the following issues - As of December 31, 2021, the Company has loans with financial institutions in the amount of 1,096.63 million Baht, details are as follows (Details are in the table in the attachment.) - As of December 31, 2021, the Company has debenture in the amount of 2,432.20 million Baht. These are holder-bearing, unsubordinated, secured and unsecured with details as follows (Details are in the table in the attachment.) - As of December 31, 2021, the Company has loans from third parties in the amount of 966.48 million Baht with details as follows Counterparties: 119 Third Parties Relationship with the Company or executive directors or major shareholders: Not related to the Company or executive directors or major shareholders Type of loans: Short term and long term loans Purpose of loans: Working capital Loan Amount: 966.48 million Baht Interest Rate: 8.50% - 15.00% Start - Maturity Date: 3 months to 18 months Collateral: collateral and no collateral Conditions of Default: Borrower is unable to repay either principal or interest at due date specified in the loan agreement with third parties Moreover, during the period of January 2022 - February 2022, the Company has entered into loan agreement with third parties in the amount of 78.80 million Baht with details as follows Counterparties: 17 Third Parties Relationship with the Company or executive directors or major shareholders: Not related to the Company or executive directors or major shareholders Type of loans: Short term and long term loans Purpose of loans: Working capital Loan Amount: 78.80 million Baht Interest Rate: 8.00% - 15.00% Start - Maturity Date: 3 months to 18 months Collateral: No collateral Conditions of Default: Borrower is unable to repay either principal or interest at due date specified in the loan agreement with third parties 3. Litigations Claim of 239 million Baht According to the note to the financial statement no. 38 as of December 31, 2021, the Company has been sued for a breach of agreement and prosecution claims totaling 239.40 million Baht or 12% of the shareholders' equity. The Group's management has assessed the results of the litigations and believed that the actual damages will not exceed the related provisions recorded in the financial statement. Issues that the SET asked the company to clarify 3.1 Summary of the lawsuit progress and the expected effects 3.2 Provisions for liabilities recorded in the financial statements including information for consideration which convinces the management that the actual damage will not exceed the related provisions as recorded in the financial statements. According to the regulations of the Stock Exchange of Thailand Referring to No. 2, the company has a duty to disclose information immediately in case of important disputes affecting the operation of the listed company, therefore, the company is requested to comply with the regulations of the Stock Exchange of Thailand. referred to strictly in the future as well The Company would like to clarify the following issues: 3.1 Summary of the progress of the company's lawsuits that have been litigated in various lawsuits The details are as follows. 1) Civil cases are related to breach of contract of Both old projects and new projects of the company. The plaintiff is a trade creditor of the company. The issue of litigation is a breach of contract, requesting payment of contract wages and requesting a refund of the security deposit at the expiration of the warranty period under the contract. As for the guidelines for proceeding to defend each case, when the company has been sued the legal department examines the facts from the relevant departments of each party and summarizes the facts in each case. For example, in the case of a claim for unpaid construction fees under the contract, the legal department will consider whether the plaintiff or the contractor has worked completely under the contract or not. Was the delivered work completed in accordance with the contract? Including any further amendments required or not and come to fix the defective work according to the guarantee of the work or not, etc. and prepare legal opinions along with guidelines for proceeding to the case and present to the executives for further approval. It was found that the main reason causing the company to be sued because throughout the past period, the company itself has been affected by the epidemic of Covid-19 epidemic, lack of working capital, causing the construction to be halted. In addition to the orders of government agencies to temporarily suspend the construction of projects, the construction of various projects as a result, the Company is unable to pay according to the construction plan. In case of litigation claiming, the guarantee of the work under the contract It is a claim for insurance for the performance of the contract in the old project of the company that has been completed. in which the return of the work guarantees The company must first verify that In the past, the work that the contractor or the plaintiff did Is there any defect in the contract or not? which from a preliminary examination There are some works under the litigation contract that are disputed about defects and responsibilities. In addition, in the withdrawal of the insurance money back, the contractor must make a document for reimbursement of the deposit in accordance with the terms specified in the contract, that is, the document must be signed by the company that the work has no defects. Most of which the contractor or the plaintiff will not send complete documents to withdraw according to the regulations in any way. Therefore, the company is unable to make such payments. As for the progress in the civil case, most of the cases are pending court proceedings. The company has a policy to negotiate and mediate to negotiate to reduce the debt balance and does not charge interest. The best way for the company to get the most benefit in litigation in which part of the case has completed the trial the company has agreed to enter into a compromise agreement with the plaintiff to request the payment of debt according to the judgment according to the compromise agreement. 2) Consumer cases, in essence, the Company's consumer cases the issues of the dispute can be summarized as follows: 2.1 Dispute cases related to breach of contract to buy and sell condominium units of the project, requesting a refund due to the delay in construction of the project Expiration of the period of transfer of ownership of the condominium. The company has been affected by the epidemic of the Covid-19 epidemic, as well as the government agency has ordered the labor of the construction site. causing the construction to be halted and causing the construction to be delayed. In addition, the spread of the Covid-19 epidemic has also affected the overall economy of the world. causing some customers to decide not to accept the transfer of ownership of the condominium. And in the part of foreign customers, most of them are Chinese customers. With the outbreak of the Covid-19 Pandemic, they are unable to transfer money and travel outside their own country. That's why the customer decides to cancel the contract and request a refund. 2.2 Dispute cases related to breach of contract to buy and sell condominium units of the project In the event that the bank does not approve the loan causing the customer to be unable to pay the remaining amount of the condominium unit to the Company. The customer therefore becomes the party in breach of the contract. The customer has exercised the right to the court to request a refund. The company will consider a partial refund. For the progress in the consumer case, the case is in the process of trial at the mediation court. The Company has given importance to negotiation and mediation with customers in order to save the cost of lawyer's fee. There is a guideline for negotiating mediation by requesting a partial refund or refund the principal in the amount received from the customer and requesting installment payments without interest. The company has agreed to enter into a compromise agreement with the customer to installment payments and in most cases, the court has made a verdict under the compromise agreement and the case has completed the court's trial. from the aforementioned lawsuit may affect the company causing the company to have to reserve money to pay the debt according to the judgment 3.2. The Company has not recorded the provisions of the lawsuit due to the information from the past to the present Legal department of the company can mediate litigants to pay only the commercial debt (which was recorded as the Company's trade accounts payable in the financial statements). The management therefore believes that the possibility of paying the fine in litigation is not material to the Company's financial statements. Please be informed accordingly. All Inspire Development PLC. BY: ????????????? Director (Mr.Thanakorn Thanawarith) Signature ___________________________ ( Mr.Thanakorn Thanawarith ) Director Authorized to sign on behalf of the company ______________________________________________________________________ This announcement was prepared and disseminated by listed company or issuer through the electronic system which is provided for the purpose of dissemination of the information and related documents of listed company or issuer to the Stock Exchange of Thailand only. The Stock Exchange of Thailand has no responsibility for the correctness and completeness of any statements, figures, reports or opinions contained in this announcement, and has no liability for any losses and damages in any cases. In case you have any inquiries or clarification regarding this announcement, please directly contact listed company or issuer who made this announcement.
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All Inspire Development pcl published this content on 22 April 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 22 April 2022 10:57:02 UTC.