Page 228 - E-BOOK

I have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the Financial
Statements section of my report, including in relation to these matters. Accordingly, my audit included the performance
of procedures designed to respond to 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, provide the
basis for my audit opinion on the accompanying financial statements as a whole.

Key audit matters and how audit procedures respond to each matter are described below.

Recognition of interest income from loans purchased of receivables
The Company’s policy on recognition of interest income from loans purchased of receivables is discussed in
Note 4.1 to the financial statements. The Company recognised interest income from loans purchased of receivables
of Baht 9,722 million in 2020, representing 78 percent of the total income, and thus it is considered the Company’s
main source of income. I addressed the recognition of interest income from loans purchased of receivables as a key
audit matter because the calculation of the credit-adjusted effective interest rate used in interest recognition is require
management to exercise judgement in determining the assumptions to be used in cashflow estimates and the expected
life of each debtor, as well as the development of the model for each group of debtors with similar characteristics. In addition,
the recognition of interest income from loans purchased of receivables is substantially dependent on data processing
Annual Report 2020 by information technology systems.

I obtained an understanding of, assessed and tested on a sampling basis the effectiveness of the internal controls

relevant to the recognition of interest income, collection processes, the internal controls over the information technology
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systems that relevant, by inquiring of management to gain on understanding, assessing the methods applied by management
in recognition of interest income from loans purchased of receivables, evaluated the appropriateness of basis and
gained an understanding of the process by which cash inflow were estimated and the credit-adjusted effective interest
rate. I tested, on a sampling basis, the effectiveness of the calculation of the credit-adjusted effective interest rate, as
well as reviewing whether the calculation of the cash inflow estimates and the expected life of each debtor were consistent
with the model. In addition, I tested the accuracy of the data used in the model on a sampling basis, as well as performing
an evaluation of the appropriateness of other factors that affect the cashflow estimates and a review of the
accounting records, and including the cut-off income whether interest income is recognised in proper period. Moreover,
I performed analytical procedures on interest income and tested, on a sampling basis, significant adjustments made
through journal vouchers.

Expected credit losses of loans purchased of receivables
As discussed in Note 12.1 to the financial statements, the Company has loans purchased of receivables and
accrued interest receivables amounting to Baht 90,969 million and allowance for expected credit losses amounting to
Baht 13,243 million (representing 59 percent of total assets). These are considered to be significant amounts. The
recording of an allowance for expected credit losses is a result of the Company’s adoption of financial reporting
standards related to financial instruments that became effective from 1 January 2020. This set of financial reporting standards
provides guidance on the calculation of impairment on financial instruments using the expected credit losses method