GPSC FN_ENG

3 G L O B A L P O W E R S Y N E R G Y P U B L I C C O M P A N Y L I M I T E D Independent Auditor’s Report Recoverability of loan to and interest receivable from and investment in 24M Technologies, Inc . Refer to Note 3 4 and 7 to the consolidated and separate financial statements The key audit matter How the matter was addressed in the audit At 31 December 2017, the Group has loan to and interest receivable totalling to Baht 171.1 million and investment of Baht 715.6 million, representing 18% share in the capital of 24M Technologies, Inc. in the form of an unquoted equity instrument which is carried at cost. The recoverability of loan to and interest receivable and investment is an area of my focus because the Company is still in the development stage and therefore not yet profitable. The Group need to involves significant judgement to estimate the recoverable amount. My audit procedures in this area included, among others : • evaluating the Group’s process for identifying indicators of impairment; • evaluating the appropriateness of the recoverable amount and the key assumptions, including sales volume and prices, operating costs and long-term growth rates, which included comparing these inputs with externally derived data as well as my knowledge of the client and the industry; • consulting KPMG valuation specialists to assist in evaluating the appropriateness of the discount rates applied comparing with market average; • performing sensitivity analysis, which included assessing the effect of reasonably possible reductions in growth rates and forecast cash flows to evaluate the impact on the cash- generating unit; • evaluating the adequacy of financial statement disclosures according to Thai Financial Reporting Standards.