MCOT Public Company Limited and its Subsidiaries Report and Financial Statements
December 31, 2021
The independent auditor’s report
To the Shareholders of MCOT Public Company Limited
I have audited the accompanying consolidated financial statements of MCOT Public Company Limited and its subsidiaries (the Group), which comprise the consolidated statement of financial position as at 31 December 2021, and the consolidated statements of comprehensive income, changes equity and cash flows for the year then ended and the notes to the consolidated financial statements, including a summary of significant accounting policies, and have also audited the separate financial statements of MCOT Public Company Limited for the same period.
In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of MCOT Public Company Limited and its subsidiaries and of MCOT Public Company Limited as at 31 December 2021, their financial performance and their cash flows. cash for the year then ended in accordance with Thai Financial Reporting Standards.
Basis of opinion
I conducted my audit in accordance with State Auditing Standards and Thai Auditing Standards. My responsibilities under these standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements part of my report. I am independent of the Group in accordance with the State Auditing Standards as issued by the State Audit Commission and the Code of Ethics for Professional Accountants issued by the Federation of Accounting Professions with respect to my audit financial statements, and I have fulfilled my other ethical responsibilities in accordance with the State Auditing Standards and the Code. I believe that the evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.
Focus on issues
I draw attention to the following points.
- The restatement of the financial statements for the year ended December 31, 2020, presented here for comparative information, due to the change in the fair value of investment properties, the Company also presenting the statement of financial position at January 1, 2020 for comparative information, as indicated in note 4 of the consolidated financial statements.
- Contingent assets and liabilities arising from the recall of the 2500 – 2690 megahertz spectrum by the National Radio-television and Telecommunications Commission and the uncertainty related to the lawsuit brought against the Company by its contractual partner in connection with this recall of the spectrum, as indicated in note 27.4 to the consolidated financial statements.
My opinion is not changed with respect to these matters.
Main audit questions
Key audit matters are matters that, in my professional judgment, were of most significance in my audit of the current period financial statements. These matters were addressed in the context of my audit of the financial statements as a whole and the formation of my opinion thereon, and I express no separate opinion on these matters.
I have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of my report, including on these issues. Accordingly, my audit included performing procedures to address my assessment of the risks of material misstatement of the financial statements. The results of my audit procedures, including the procedures performed to address the matters below, form the basis of my audit opinion on the accompanying financial statements as a whole.
The main audit questions and how the audit procedures respond to each question are described below.
The Group’s turnover is significant in the financial statements and directly affects its operating results, to which users of the financial statements are attentive. The Group has many types of income and these come from various channels, under agreements with a large number of customers which contain various conditions, relating to matters such as sales promotions and discounts. Additionally, changes in consumer behavior and industry trends have directly affected the competitive environment in the media and entertainment industry. There are therefore risks as to the amount and timing of revenue recognition.
I have examined the accounting of the Group’s turnover by
- Assess and test the Group’s IT system and its internal controls with respect to the revenue cycle by interviewing responsible executives, gaining an understanding of the controls and selecting representative samples to test the operation of the designed controls.
- Apply a sampling method to select sales and service contracts to assess whether revenue recognition was in accordance with the terms of the relevant contract and whether it was in accordance with Group policy.
- On a sampling basis, review supporting documentation for sales and service transactions made during the year, with particular attention to expanding the scope of supporting documentation review.
- Review of credit ratings issued by the Group after the end of period, paying particular attention to expanding the scope of documentation sampling.
- Perform analytical procedures on disaggregated data to detect possible irregularities in sales transactions throughout the period, especially for accounting entries made through journal vouchers.
Contingent liabilities arising from litigation
As noted in the emphasis paragraph on contingent assets and liabilities arising from the recall of 2,500 – 2,690 megahertz spectrum by the National Radio-television and Telecommunications Commission and the uncertainty regarding the lawsuit filed against the Company by its contractual partner in relation to this spectrum recall, the matter is currently being examined by the Central Administrative Court. The outcome of the case cannot yet be concluded and depends on the results of future legal and judicial proceedings. In addition, the timing and magnitude of any impact are uncertain. Therefore, in order to assess the outcome of the litigation to determine the corresponding liabilities, management must exercise significant judgment and consider related laws and regulations. Due to the inherent uncertainty and complexity of the file, this is a key audit matter.
I inquired with management about procedures relating to the collection, monitoring and evaluation of significant pending court cases and appreciated the judgment exercised by management in evaluating the case. The audit procedures included, among others, the following:
- I inquired with management and obtained relevant information from them on important court cases.
- I inquired about the key details and progress of the case with in-house legal counsel and management and the methods used by management to assess and estimate liabilities arising from the case. I have also reviewed the defense documents submitted to the Central Administrative Court by the Company’s legal representative.
- I have reviewed the Opinion Report on Significant Legal Matters prepared by management and the in-house legal office.
- I appreciated the communication of information relating to significant legal cases in the notes to the consolidated financial statements.
State auditing standards as described in the Basis of opinion section and the Auditor’s Responsibilities for the Audit of the Financial StatementsThis section relates only to the audit of the financial statements, which are prepared by management in accordance with Thai financial reporting standards.
The consolidated statement of financial position of MCOT Public Company Limited and its subsidiaries, as well as the separate statement of financial position of MCOT Public Company Limited as at 31 December 2020 (before restatement), presented as comparative information, have been audited by another auditor who expressed an unqualified opinion on these statements, in his report dated February 23, 2021. However, the auditor has drawn attention with emphasis on the adoption of standards of financial reporting relating to financial instruments and TFRS 16 Leases, change in accounting method for measuring investment properties from the cost method to the fair value method and the uncertainty of lawsuits brought by the Company by its partner contract arising from the recall of the 2500 – 2690 megahertz spectrum by the National Commission for Radio-television and Telecommunications.
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