Rama IX Art Museum
Audited Financial Statements
Auditor Kornthong Luangvilai CPA No.7210
Deloitte Touche Tohmatsu Jaiyos Audit Co., Ltd.
 
Audited Financial Statements

Qualified Opinion

We have audited the financial statements of Rama IX Art Museum Foundation (the "Foundation"), which comprise the statements of financial position as at December 31, 2017, and the related statements of income and expenditure and changes in funds' equity for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, except for the effects of the matter described in the Basis for Qualified Opinion paragraph, the accompanying financial statements present fairly, in all material respects, the financial position of Rama IX Art Museum Foundation as at December 31, 2017, and its financial performance for the year then ended in accordance with Thai Financial Reporting Standards for Non-Publicly Accountable Entities.

Basis for Qualified Opinion

As disclosed in Note 11 to the financial statements, the Foundation's art collections are carried in the statement of financial position as at December 31, 2016 in the amount of Baht 49.95 million. The Foundation's certain art collections have carried at a revalued amount, which were higher than costs of art of collections, which constitutes a departure from Thai Financial Reporting Standard for Non-Publicly Accountable Entities. As at December 31, 2016, the Foundation recorded certain art collections and surplus on assets revaluation increased in the amount of Baht 28.88 millon. Therefore, the financial statements for the year ended December 31, 2016 were audited by another auditor of the same firm who expressed a qualified opinion on those financial statements on March 2, 2017. However, the Foundation's art collections as at December 31, 2017 amount of Baht 55.45 million is still over-presented amount of Baht 28.93 million. As the Foundation's certain art collections havr carried at a revalued amount, which were higher than costs of art of collections, which constitutes a departure from Thai Financial Reporting Standard for Non-Publicly Accountable Entities. The Foundation's records indicate that had the Foundation carried the art collections at costs of art of collections, the Foundation would have to record the reduction in value of art collection of Baht 28.93 million. Accordingly, art collections and surplus on assets revaluation would have been decreased in the same of Baht 28.93 million.

We conducted our audit in accordance with Thai Standards on Auditing ("TSAs"). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Foundation in accordance with the Federation of Accounting Professions' Code of Ethics for Professional Accountants together with the ethical requirements that are relevant to our audit of the financial statements, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.

Responsibilities of Management for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with Thai Financial Reporting Standards for Non-Publicly Accountable Entities, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Foundation's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Foundation or to cease operations, or has no realistic alternative but to do so.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with TSAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with TSAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Foundation's internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Foundation's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Foundation to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with management regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.


BANGKOK

December 12, 2018

Kornthong Luangvilai
Certified Public Accountant (Thailand)
Registration No. 7210
DELOITTE TOUCHE TOHMATSU JAIYOS AUDIT CO., LTD.

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Rama IX Art Museum Foundation
Statement of Financial Position
As at December 31, 2017
Baht
  Notes 2017 2016
ASSETS  
CURRENT ASSETS  
Cash and cash equivalents 5 894,317 189,969
Temporary investments 6 69,175,936 71,874,244
Supplies 7 570,484 775,388
Other current assets 8 213,437 175,232
 Total Current Assets   70,854,174 73,014,833
   
NON-CURRENT ASSETS  
Leasehold improvement and equipment 9 2,285,448 2,387,178
Intangible asset 10 1,263 3,133
Art collection 11 55,449,415 49,954,455
 Total Non-Current Assets   57,736,126 52,344,766
TOTAL ASSETS   128,590,300 125,359,599
LIABILITIES AND FUND'S EQUITY  
CURRENT LIABILITIES  
Accrued expenses
  85,439 78,767
Foundation income tax payable
  - 100,692
 Total Current Liabilities   85,439 179,459
TOTAL LIABILITIES   85,439 179,459
   
FUND'S EQUITY  
Initial capital fund from donation   200,000 200,000
Additional funds from donation   1,027,600 1,027,600
Accumulated excess of income over expenditure   98,351,059 95,071,338
OTHER COMPONENT OF FUND'S EQUITY  
Surplus on assets revaluation 11 28,926,202 28,881,202
 Total Fund's Equity   128,504,861 125,180,140
TOTAL LIABILITIES AND FUND'S EQUITY   128,590,300 125,359,599
Notes to the financial statements form an integral part of these statements
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Rama IX Art Museum Foundation
Statements of Income and Expenditure
For the Years ended
December 31, 2017
Baht
  Notes 2017 2016
INCOME  
Donation income 11 3,817,680 12,866,327
Donated artworks   4,880,000 500,000
Interest income   4,173 13,210
Unrealized gain from the revaluation of investment 6 485,801 993,714
Other income 14 120,000 120,000
 Total Income   9,307,654 14,493,251
EXPENDITURE  
Personnel expenses   3,437,447 3,729,544
Rental fee   - 566,905
Professional fees   194,261 180,128
Depreciation and amortization   654,195 237,482
Loss on diminution in value of assets 11 - 1,298,000
Error of prior year 11 45,000 -
Book printing expenses 204,905 593,222
Art collection written off 11 - 80,000
Artist sponsorship program expenses   600,000 800,000
70th anniversary Bangkok Bank project expenses   1,108 7,859
The Most Illustrious Artist project expense 12 8,877 654,515
Other office expenses   833,084 859,695
Income tax expense 13 49,056 100,692
 Total Expenditure   6,027,933 9,108,042
INCOME OVER EXPENDITURE FOR THE YEARS   3,279,721 5,385,209
Notes to the financial statements form an integral part of these statements
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Rama IX Art Museum Foundation
Statements of Changes in Funds' Equity
For the Years ended
December 31, 2017
Baht
  Note Capital Fund
From Donation

Accumulated
Excess of Income over Expenditure
Other component
of fund's equity
Surplus on
assets revaluation
Total Fund's
Equity
Initial Capital
Fund
Additional
Fund
  For the year ended December 31, 2016
Beginning balance as at January 1, 2016
200,000 1,027,600 89,686,129 - 90,913,729
Surplus on assets revaluation 11 - - - 28,881,202 28,881,202
Income over expenditure - - 5,385,209 - 5,385,209
Ending balance as at December 31, 2016 200,000 1,027,600 95,071,338 28,881,202 125,180,140
  For the year ended December 31, 2017
Beginning balance as at January 1, 2017
200,000 1,027,600 95,071,338 28,881,202 125,180,140
Surplus on assets revaluation 11 - - - 45,000 45,000
Income over expenditure - - 3,279,721 - 3,279,721
Ending balance as at December 31, 2017 200,000 1,027,600 98,351,059 28,926,202 128,504,861
Notes to the financial statements form an integral part of these statements
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Rama IX Art Museum Foundation
Notes to The Financial Statements
For the Years Ended
December 31, 2017


1. 1. OBJECTIVES AND GENERAL INFORMATION OF THE FOUNDATION


Office of the National Culture Commission approved the setup of the Rama IX Art Museum Foundation (the "Foundation") on August 15, 1996. The registration for the setup of the Foundation was completed on October 4, 1996, with the following objectives:

1.1 To manage the Project of Art Exhibition in the honor of His Majesty King Bhumibol Adulyadej, the Supreme Artist, in Art and Culture, commemoration of the 50th anniversary of His Majesty The King's accession to the throne.

1.2 To be responsible to fund raising in order to build up and manage a modern art museum to be named in the honor of His Majesty The King.

1.3 To support and develop knowledge of art and to collect and promote Thai artworks in the country and throughout the other countries around the world.

1.4 To promote and support the attitude to preserve the Thai contemporary art.

1.5 To organize a quality art publishing house concentrating in conventional publications and electronic educational aids for further understanding of Thai contemporary arts and to support and develop artistical knowledge.

1.6 To organize with other non-profit organization, education institution, art activities and others which have its same objectives in order to stimulate more grants and funding for public and young artists.

1.7 To encourage government organization, private organization, partnership, local and international company and international cultural collaborations in order to support objectives of the foundation.

The Foundation's office is located at Hua Seng Heng 2, 7th floor, 255-257 Yaowarat Road, Samphantawong, Bangkok Subsequently, in January 2017, the Foundation has changed the address to I Tower Building, 18th floor, No. 888 Vibhavadi Rangsit Road, Chatuchak, Bangkok.

2. FUNDING POLICIES

The Foundation was established with the initial funds of Baht 200,000. The Foundation may raise additional funds as follows:

2.1 Funds provided by governmental organizations or state enterprises, or others in the country.

2.2 Funds or properties donated by charitable persons or organizations in the country or abroad.

2.3 Fund or properties bequeathed under a will or other juristic acts, provided that there are no conditions obligating the Foundation to any liabilities or whatsoever.

2.4 Interest and dividends arising from funds and the property which constitute the assets of the Foundation.

2.5 Contributions from the usage of the property or facilities of the Foundation, or services provided by the Foundation with free of charge.

2.6 Other income from the Foundation's activities that is approved by the Foundation's Board of Directors.

3. BASIS OF PREPARATION AND PRESENTATION OF THE FINANCIAL STATEMENTS

The Foundation maintains its accounting records in Thai Baht and prepares its statutory financial statements in Thai language in conformity with Thai Financial Reporting Standard for Non-Publicly Accountable Entities (“TFRS for NPAEs”) issued by the Federation of Accounting Professions and accounting practices generally accepted in Thailand, except the accounting policy for art collection as disclosed in Note 4.6.

The Foundation's financial statements have been prepared in accordance with Notification of the Department of Business Development dated September 28, 2011 regarding "The Brief Particulars in the Financial Statement B.E. 2554".

The financial statements have been prepared on an accrual basis under the measurement basis of historical cost except as disclosed in the significant accounting policies.

4. SIGNIFICANT ACCOUNTING POLICIES

4.1 Cash and cash equivalents

Cash and cash equivalents are cash on hand and all types of deposits at financial institutions with maturity of three months or less and excluding deposits at financial institutions used as collateral (if any).

4.2 Temporary investments

Temporary investments are investments in trading securities which are stated at fair value. Changes in fair value of securities will be charge to the statement of income and expenditure.

4.3 Supplies

Supplies are stated at cost which is calculated on an average basis.

4.4 Leasehold improvement and equipment

Leasehold improvement and equipment are stated at cost less accumulated depreciation.

Depreciation is calculated by the straight-line method, based on the estimated useful lives of the assets as follows:

Leasehold improvement 3 years
Office equipment 5 years

For office equipment, which was transferred from the Golden Jubilee Art Celebration, depreciation is calculated by the straight-line method, based on its remaining useful life.

4.5 Intangible asset

Intangible asset which is computer program is stated at cost less accumulated amortization.

Amortization is calculated by the straight-line method, based on the estimated useful lives over the period of 5 years.

4.6 Art collection

The artworks transferred from the Golden Jubilee Art Celebration as well as donated by artists is accounted at cost at price given by the individual Artists.

During the year 2016, the Foundation reappraised the art collection by the collective vote of a panel of art experts based on their knowledge of the art market; some with upward revaluation, some no change, and some with downward revaluation. The increase in revaluation is recognized as the surplus in other component of fund's equity under "surplus on assets revaluation'', while the decrease in revaluation is charged directly against any prior appraisal increase for the particular asset. The residual appraisal decrease is recognized as an expense in the statement of income and expenditure.

4.7 Income and expenditure recognition

Income and expenditure are recognized on an accrual basis, except for income from donation.

Donation income

Donation income is recognized when the donation is received.

Donated artwork

Donated artwork is recognized when the artwork is received which accounted at cost at price given by the individual Artist.

4.8 Income tax expense

The Foundation records income tax expense to be paid as expense of the year and records related tax liability using the accrual basis.

4.9 Use of managements' judgment

The preparation of financial statements in conformity with TERS for NPAEs and generally accepted accounting principles also requires the Foundation's management to exercise judgments in order to determine the accounting policies, estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the last date of the reporting period and the reported amounts of income and expenditure during the reporting period. Although, these estimates are based on management’s reasonable consideration of current events, actual results may differ from these estimates.

5. CASH AND CASH EQUIVALENTS

Cash and cash equivalents as at December 31, were as follows:


  2017 2016
Baht
Cash on hand 27,000 27,000
Cash at banks - savings account 867,317 162,969
  894,317 189,969

6. TEMPORARY INVESTMENTS

Temporary investment as at December 31, were as follows:

  2017 2016
  Cost Unrealized
Gain
Fair
Value
Cost Unrealized
Gain
Fair
Value
Baht
Fixed income fund and opened-end fund 68,690,135 485,801 69,175,936 70,880,530 993,714 71,874,244
Total 68,690,135 485,801 69,175,936 70,880,530 993,714 71,874,244

7. SUPPLIES

Supplies as at December 31, were as follows:

2017 2016
Baht
Art in the Reign of Rama IX Books and art catalogues 425,933 449,699
Supreme Artist Book 143,957 325,056
CD Project 6 Decade 594 633
  570,484 775,388

Supplies will be given to donors who donate to the Foundation.

8. OTHER CURRENT ASSETS

Other current assets as at December 31, were as follows:

2017 2016
Baht
Deposit 12,600 149,682
Refundable withholding tax 135,158 -
Others 65,679 25,550
  213,437 175,232

9. LEASEHOLD IMPROVEMENT AND EQUIPMENT

Leasehold improvement and equipment as at December 31, were as follows:

As at December 31, 2017
Balance as at
January 1, 2017
Additions Disposals Balance as at
December 31, 2017
Baht
COST:
Leasehold improvement 1,904,188 136,774 - 2,040,962
Office equipment 1,636,173 452,054 (49,839) 2,038,388
   Total cost 3,540,361
588,828 (49,839) 4,079,350
ACCUMULATED DEPRECIATION:
Leasehold improvement (1,041) (406,019) - (407,060)
Office equipment (1,152,142) (246,306) 11,606 (1,386,842)
   Total accumulated depreciation (1,153,183)
(652,325) 11,606 (1,793,902)
Leasehold improvement and equipment 2,387,178
- - 2,285,448
As at December 31, 2016
Balance as at
January 1, 2016
Additions Disposals Balance as at
December 31, 2016
Baht
COST:
Leasehold improvement 130,594 1,904,188 (130,594) 1,904,188
Office equipment 1,710,820 41,290 (115,937) 1,636,173
   Total cost 1,841,414
1,945,478 (246,531) 3,540,361
ACCUMULATED DEPRECIATION:
Leasehold improvement (130,592) (1,041) 130,592 (1,041)
Office equipment (1,031,191) (234,571) 113,620 (1,152,142)
   Total accumulated depreciation (1,161,783)
(235,612) 244,212 (1,153,183)
Leasehold improvement and equipment 679,631
- - 2,387,178
DEPRECIATION FOR THE YEARS ENDED DECEMBER 31,
2017 Baht 652,325
2016 Baht 235,612

10. INTANGIBLE ASSET

Intangible asset as at December 31, were as follows:

As at December 31, 2017
Balance as at
January 1, 2017
Additions Disposals Balance as at
December 31, 2017
Baht
Computer program 68,420
- - 68,420
Less Accumulated amortization (65,287)
(1,870) - (67,157)
Intangible asset 3,133
- - 1,263
As at December 31, 2016
Balance as at
January 1, 2016
Additions Disposals Balance as at
December 31, 2016
Baht
Computer program 68,420
- - 68,420
Less Accumulated amortization (63,417)
(1,870) - (65,287)
Intangible asset 5,003
- - 3,133
AMORTIZATION FOR THE YEARS ENDED DECEMBER 31,
2017 Baht 1,870
2016 Baht 1,870

11. ART COLLECTION

Art collection as at December 31, were as follows:

  2017 2016
Baht
Art collection balances as at January 1, 51,252,455 21,951,253
Increase arising from revaluation of assets - 28,881,202
Additions from donates 4,880,000 500,000
Additions from purchases 614,960 -
Error of prior year 45,000 -
Decrease from disposal - (80,000)
  56,792,415 51,252,455
Less Allowance for diminution in value of assets (1,343,000) (1,298,0002)
Art collection balances as at December 31, 55,449,415 49,954,455

As at December 31, 2016, the Foundation has surplus on assets revaluation of Baht 28,881,202 and allowance for diminution in value of assets of Baht 1,298,000 which arising from the reappraisal of art collection by the Foundation in 2016 (see Note 4.6).

Subsequently, during 2017, the Foundation has additional adjustments of the surplus on asset revaluation and allowance for diminution in value of assets of 2016 in the same amount of Baht 45,000. As a reult, as at December 31, 2017, the Foundation has surplus on assets revaluation of Baht 28,926,202 and allowance for diminution in value of assets of Baht 1,343,000.

12. THE MOST ILLUSTRIOUS ARTIST PROJECT

The Foundation has arranged the the most illustrious artist project which the project expense for the years ended december 31, 2017 and 2016 were Baht 8,877 and Baht 654,515, respectively.

In this regards, the Foundation also received the donation income for the years ended December 31, 2016 of Baht 11,500,000 (2017: None).


13. INCOME TAX EXPENSE

Income tax expense for the years ended December 31, 2017 and 2016 were calculated from income before expenditure, for income that is not exempt from taxation according to the Revenue Code.

14. LAWSUIT

During the year 2011, the Foundation has filed a police complaint against a resigned Foundation's employee who was found to have made fraudulent transactions between the years 2007 to 2010 with the total damage value of Baht 693,380. Consequently, on July 17, 2012, a court hearing was held at The Pathumwan Municipal Court and the defendant accepted to pay in full amount of Baht 693,380 by paying not less than Baht 10,000 per month and to be complete within 3 years.

For the year ended December 31, 2016, the defendant has already paid for Baht 120,000, therefore, the outstanding amount is Baht 163,380. The Foundation recognized as other income when the amount of the damage was received.

For the year ended December 31, 2017, the defendant has already paid for Baht 120,000, therefore, the outstanding amount is Baht 43,380. The Foundation recognized as other income when the amount of the damage was received.

Subsequently, on May 7, 2018, the Pathumwan Municipal court made a judgment that the defendant made full payment to the Foundation and the Foundation requested to withdraw petition. Therefore, the court released the case from the court.


15. APPROVAL OF THE FINANCIAL STATEMENTS

These financial statements have been approved for issuing by the authorized director of the Foundation on December 12, 2018.
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