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

ดีลอยท ์ทูช้ โธมทัสุ ไชยยศ สอบบญัชี

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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.



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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.



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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


...........................................................


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STATEMENTS OF FINANCIAL POSITION (CONTINUED)

AS AT DECEMBER 31, 2020

UNIT : BAHT


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)

...........................................................




STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME (CONTINUED)

...........................................................



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)


........................................................... ...........................................................


UNIT : BAHT




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)


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)


Mr. Wutthiphum Jurangkool (Director)Mr. Tai Chong Yih (Director)


STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY


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)


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


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)


...........................................................


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SEPARATE FINANCIAL STATEMENTS

Retained earnings (deficit)


STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (CONTINUED)


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)


...........................................................



...........................................................


STATEMENTS OF CASH FLOWS


UNIT : BAHT


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

- -


........................................................... ...........................................................



UNIT : BAHT




NOTES TO THE FINANCIAL STATEMENTS


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.

- 13 -

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.

- 14 -

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.

- 15 -

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.

- 16 -

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.

- 17 -

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.

- 18 -

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.

- 19 -

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.

- 20 -

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.

- 22 -

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.

- 23 -

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.

- 24 -

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.

- 25 -

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.

- 27 -

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



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


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) - -


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



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


financial institutions 1,600,000,000 - 300,000,000 (1,400,000,000) 500,000,000


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




as at recognized Received paid as at


2020 the year 2020


shareholder 2,520,000,000 - 200,000,000 - 2,720,000,000


Total 2,535,410,959 231,146,301 200,000,000 (130,107,945) 2,836,449,315

UNIT : BAHT




as at recognized received paid as at


2019 the year 2019


financial institutions 900,000,000 - 300,000,000 (1,200,000,000) -


shareholder 800,000,000 - 2,520,000,000 (800,000,000) 2,520,000,000


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 -



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



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



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:


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



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



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


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


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


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


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)


and equipment 148,697,514 66,442,758

- 42 -



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


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


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)


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 -



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



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


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



as at (out) as at


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



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


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


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


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


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


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


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



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 (out) as at


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


subsidiary

-

(15,133,153)

Intangible assets 48,916,514 27,432,477




as at (out) as at


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


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)


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 (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


Computer software (158,487,070) (9,825,946) - - (168,313,016)

Total accumulated

amortization (158,487,070) (9,825,946) - - (168,313,016)





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


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)


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



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


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



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



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



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



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



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






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 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






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 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



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



For the year

ended

For the year

ended

For the year

ended

For the year

ended


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



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;


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)


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



For the year ended For the year ended


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


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,



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:



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:



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)



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



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



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



As at As at As at As at


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


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


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 - - -


Total - - - 1,726,027

Advance payments - related parties (see Note 7.1)


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 -


Total - - - -

Short-term loans to a related party (see Note 8)


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



As at As at As at As at


2020 2019 2020 2019

Other non-current assets - Accrued interest

income - a related party (see Note 15)


Less Allowance for expected credit losses - - (144,109,553) -

Total - - - 103,849,441


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


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 -


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



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


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



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


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



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



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



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:



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





not over

five years


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


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 -






not over

five years


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


Ticket reservation system USD 1,686,169 - - 1,686,169





not over

five years


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


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



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



As at As at


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



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


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


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


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


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


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)


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


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


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


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


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


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



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:


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



Appreciation Depreciation


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.

- 81 -

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.

- 82 -

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)


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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