Page 218 - BTSGroup ONE REPORT 2021/22_EN

216 l Introduction l Nature of Business l Organisation and Shareholding Structure l Business Review l Corporate Governance l Financial Statements l Other Information l
6.4 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2022
1. General information
1.1 Corporate information
BTS Group Holdings Public Company Limited (“the Company”) is a public
company incorporated and domiciled in Thailand. Its major shareholder
is the group of Keeree Kanjanapas. The Group is principally engaged in
the provision of transportation (Move), the provision of comprehensive
marketing (Mix) and the capture opportunities and create synergies by
sharing system platform (Match).
The registered office of the Company is at 21 Soi Choei Phuang,
Viphavadi-Rangsit Road, Jompol, Jatujak, Bangkok.
1.2 Mass transit business
The mass transit business is detailed as follows:
1.2.1 Mass transit project - Green Line
a) The operation of an elevated mass transit system in prime business
areas in Bangkok over two routes (“the Core BTS Sky Train
System”), which covers a distance of 23.5 km, comprising the 17 km
of the Sukhumvit line from Mo-Chit to On-Nut stations, and
the 6.5 km of the Silom line from National Stadium to Taksin Bridge
stations, under the concession agreement dated 9 April 1992 and
the amendment to the concession agreement between the Bangkok
Metropolitan Administration (“BMA”) and Bangkok Mass
Transit System Public Company Limited (“BTSC”/“Subsidiary”),
for 30 years after commissioning under the concession granted
by BMA. The commercial operations commenced on 5 December 1999.
The concession stipulates that the civil works are to be structured
on a build-transfer-operate basis whereby the subsidiary will transfer
legal title of the assets to BMA as they are brought into service.
The electrical and mechanical works are to be transferred to BMA
on a build-operate-transfer basis at the expiry of the concession.
On 17 April 2013, BTSC and BTS Rail Mass Transit Growth
Infrastructure Fund (“BTSGIF”) entered into the Net Revenue Purchase
and Transfer Agreement in relation to the Bangkok Mass Transit System
Concession Agreement, covering the remainder of the concession.
From an accounting perspective, BTSC carefully and thoroughly
considered these transactions and concluded that the sale of the rights
to collect future fare box revenues was a true sale of an intangible
asset (project cost). As a result, BTSC derecognised project cost
and the related accounts from its books and recognised a gain on
sale of future net fare box revenues in the financial statements for
the year ended 31 March 2014. The agreement stipulates that the
BTSC continues to be the operator of the train services, overseen
by BTSGIF, while decision-making authority as the owner belongs
to BTSGIF. BTSC submits cash receipts of net fare box revenues to
BTSGIF, as a middleman responsible only for the collection of fare
box revenue. BTSC receives fees as the operator under the conditions
as stipulated in the agreement.
However, from a tax perspective, the sale of future net fare box
revenues was treated as borrowing from BTSGIF. BTSC remains the
owner of the intangible asset (project cost) and fare box revenues and
expenses still belong to the subsidiary. BTSC calculates corporate
income tax based on taxable revenues and expenses determined
in accordance with tax legislation.