28-06-2015, 11:24 PM
In 2014, TTA and PM Group, both controlled by Mr Prayudh Mahagitsiri, took 9% and 4% stakes in Sino Grandness respectively. TTA, which is listed in the Bangkok Stock Exchange, has recently released its 2014 annual report.
The following extracts from the annual report are interesting:
Page 166 Extract : "On 30 December 2014, Soleado [wholly owned by TTA] subscribed ......shares......of Sino Grandness Food Industry Group Limited (“SGFI”).......... According to the subscription agreement, Soleado shall have active representative on the board of directors of SGFI and the dividend policy has been specified, any changes in term and conditions shall be agreed by Soleado. As a meaningful representation on the governing body of an entity generally indicates significant influence, then the Company classified SGFI as an associate."
To qualify as an associate, the normal shareholding threshold is 20%. TTA's stake in Sino Grandness is 9% only.
But as TTA has declared that it has significant influence over Sino Grandness (and hence classifying Sino as an associate company), it cannot be a passive shareholder. TTA should have a fair idea of how Sino Grandness is being run.
If Sino Grandness becomes unprofitable later on, TTA will have to book 9% of losses.
Page 38 Extract: "Diversification strategy underway : 2014 saw TTA make a strategic investment in Sino Grandness as part of the Group’s overarching diversification strategy. The investment will provide exposure to the China market, and to a new industry sector (food and beverages). TTA also sees potential for Sino Grandness to leverage TTA’s global infrastructure and experience to extend its business to other markets beyond China."
On separate occasions, Sino CEO has indicated that Sino's branded products will go beyond China, with Hong Kong as the first station, to be followed by Thailand, and other Southeast Asian countries. TTA, working with PM group, will have the distribution rights in Southeast Asia which has a combined population of 1 billion people.
The following extracts from the annual report are interesting:
Page 166 Extract : "On 30 December 2014, Soleado [wholly owned by TTA] subscribed ......shares......of Sino Grandness Food Industry Group Limited (“SGFI”).......... According to the subscription agreement, Soleado shall have active representative on the board of directors of SGFI and the dividend policy has been specified, any changes in term and conditions shall be agreed by Soleado. As a meaningful representation on the governing body of an entity generally indicates significant influence, then the Company classified SGFI as an associate."
To qualify as an associate, the normal shareholding threshold is 20%. TTA's stake in Sino Grandness is 9% only.
But as TTA has declared that it has significant influence over Sino Grandness (and hence classifying Sino as an associate company), it cannot be a passive shareholder. TTA should have a fair idea of how Sino Grandness is being run.
If Sino Grandness becomes unprofitable later on, TTA will have to book 9% of losses.
Page 38 Extract: "Diversification strategy underway : 2014 saw TTA make a strategic investment in Sino Grandness as part of the Group’s overarching diversification strategy. The investment will provide exposure to the China market, and to a new industry sector (food and beverages). TTA also sees potential for Sino Grandness to leverage TTA’s global infrastructure and experience to extend its business to other markets beyond China."
On separate occasions, Sino CEO has indicated that Sino's branded products will go beyond China, with Hong Kong as the first station, to be followed by Thailand, and other Southeast Asian countries. TTA, working with PM group, will have the distribution rights in Southeast Asia which has a combined population of 1 billion people.
