Bangkok--Nov 23--KGI
Following news reports that some listed companies, including KGI, eliminated their retained losses whilst still having a share discount, and that this was not in accordance with standard accounting practice, Mr.William Fang, Chief Operating Officer of KGI (Thailand) Public Company limited, would like to clarify as follows. KGI eliminated its retained losses in April 2003. Before doing so, the Company consulted with the Ministry of Commerce, the SEC, the Company’s external auditors and other relevant parties. KGI followed all of the recommendations and advice from these parties.
Consequently, the Company transferred share premium to offset its retained losses whilst leaving the share discount unchanged. Subsequently, in August 2003, the MOC released a new regulation; Por.Nor.0803/3221 re: The offset of the share discount of public companies with other items. In November 2005 the Federation of Accounting Professions gave an opinion on that rule, saying that companies should eliminate all share discount before removing retained losses.
The Company would like to clarify that KGI did not use the wrong accounting standard, and that the new MOC regulation and the clarification by the Federation of Accounting Professions were made only after the Company had already eliminated its retained losses. The Company has agreed with the SEC to follow the new interpretation of the rules and to amend its financial statements at the end of 2005. If the new presentation had been used for the Company’s most recent financial statements, dated 30 September 2005, the Company’s balance sheet would have shown a retained loss of Bt36m. However, there would have been no impact on the Company’s income statement. Under Thai law, the Company will only be able to pay a dividend after all retained loss has been eliminated.
For more information please contact
Soraya Pongprayoon
Tel. 02-663-3226 ext. 666 or 01-697-9100 End.