Group Lease Public : Clarification on 2020 Financial Statement

บริษัท กรุ๊ปลีส จ)มหำชนำกัด(

GROUP LEASE PUBLIC COMPANY LIMITED

Ref: GL 13/2022

	9 August 2022
Subject:	Clarification on 2020 Financial Statement
Attention:	The President
	The Stock Exchange of Thailand

KPMG issued a disclaimer of conclusion for the Company for the 2020 financial statement. There were a number of items that led KPMG to their disclaimer of conclusion, however these items can be grouped into three categories: legal uncertainty, KPMG being unable to obtain satisfactory explanation and evidence, and going concern.

First, for legal uncertainty, there are several legal cases actioned by the substantial convertible debenture holder of the Company and its related companies. The Company's subsidiary in Singapore, Group Lease Holdings Pte. Ltd. ("GLH"), is one of the defendants in a legal case brought by the substantial convertible debenture holder of the Company seeking more than $124 million in damages. In Thailand, the substantial convertible debenture holder filed a case against the Company seeking more than THB 8 billion compensation for damages. Due to these two cases plus others, the uncertainly from litigation against the Company has increased in our auditor's view and now represents a material uncertainty which could result in financial consequences that are significantly different to those recorded in the financial information at 31 December 2020. The Company will try to obtain the best litigation outcome against JTA which is stated in Auditor's review report and will obtain more legal evidence and reasoning in support of the Company. The main civil case in Thailand has yet to go to trial and the Company is well prepared to defend itself in the Thai courts.

Second, KPMG was unable to obtain satisfactory explanation and evidence for several items. KPMG questioned transactions the Company's subsidiary had with a related-party in Cambodia. The auditor stated that they have not received satisfactory explanations and evidence for some of these transactions. As a consequence, any resulting consideration and treatment of required provisions or other adjustments may not be fully or properly reflected in the interim financial information. Also, the Company discovered that approximately USD 73 million held in an account of GLH with an overseas Bank has a charge over it and thus the Company classified this as a non-current asset instead of as cash. KPMG stated that the Company has not provided them with a satisfactory explanation of the nature or status of this charge, or whether there is any current or likely loss arising which would require adjustment or disclosure in the interim financial information. The Company did provide many and all documents to KPMG which had been in hand already and took action to try to obtain the additional information and evidence which KPMG requested, however some of these information and evidences were out of the hands of the Company. The Company will continue to seek all the information and evidences which KPMG requests and if needed will take action in all meanings including legal actions to make sure the Company is able to provide all information to the Auditors to satisfy them in the future.

Third, other issues such as Expected Credit Loss ("ECL"), investments in other countries such as Sri Lanka, Myanmar, and Laos, and delayed audit by our subsidiary GLH. As for ECL, we continue to work on it and will certainly resolve it shortly. For the investment in those three countries, we did invest there with the expectation of growing our business but unfortunately each of those countries face an uncertain future politically and economically and that is out of our control. The audit of GLH was delayed due to the complexity of our group legal situation just as our audit in Thailand was delayed and like Thailand, we are making significant progress in our GLH audit.

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The Company continues to work on the issues raised by KPMG. The Company will continue to try its best in court. While it is unfortunate that KPMG was unable to be satisfied with some information about the Company, we will continue to try to provide satisfactory evidence.

Yours sincerely,

( Mr. Riki Ishigami )

Chief Executive Officer

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