All Inspire Development Public : Clarification of information in financial statements for the year 2021 Clarification of news or information requested by SET

Date/Time

22 Apr 2022 17:27:25

Headline

Clarification of information in financial statements for the year 2021 Clarification of news or information requested by SET

Symbol

ALL

Source

ALL

Full Detailed News

                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

______________________________________________________________________
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