Page 71 - BAM ONE REPORT 2564 (ENGLISH VERSION)

Form 56-1 One Report 2021
Bangkok Commercial Asset Management Public Co., Ltd. 69

The tool for managing the asset quality risk
The Company determines the purchasing prices of NPLs and NPAs using related factors of those NPLs and NPAs,
for example, debtors’ history, debt obligation, the quality of collaterals, the quality of the NPAs, as well as the external
environment, such as the competition and the economy, etc; in order to determine the expected revenue from debt
collection and sale of properties.

The Company manages its debtors under the debt restructuring agreement, whereas the Company reviews
debtors’ repayment ability through the Aging system. The system notifies debtors to pay their debt in advance, in order
to prevent the default on payment. Debtors who fail to make the repayment will be managed with legal proceedings,
in order to reduce the risk from debtors that are unable to follow the debt restructuring agreement.

3. Market risk refers to risk of potential damage to the Company arising from changes in value of assets and
liabilities driven by movement of interest rates, exchange rates and prices. The Company’s business is mainly prone
to risk of changes in market prices of collateral and NPAs, or risk of changes in assets’ value according to market condition
which will lead to an increase or decrease in revenues.

The tool for managing the market risk
The Company reviews the appraisal prices, by applying the BOT Regulation’s for financial institutions, whereas
the Company will review the appraisal price of collaterals of NPLs at every 3 years; and review the appraisal prices of
NPAs at every 1 year, or at any other interval if the situation has significantly changed. The Company also sets aside
the sufficient reserves and the allowance for impairment of assets, in order to cover the potential damages from the
depreciation and the impairment of collaterals of NPLs and NPAs.

(D) Compliance Risk
Compliance risk refers to risk arising from the Company’s non-compliance with or failure to fully or correctly
comply with the laws, rules, regulations, standards, provisions, orders, and guidelines that are enforceable over its
business transactions. The compliance risk may lead to financial losses or damages to the Company’s reputation and
image. The framework and guidelines on compliance risk management have been formulated.

The tool for managing the compliance risk
The Company specifies the operational methods and procedures for managing the compliance risk, based on
the standards specified by supervising organizations, professional standards, and the laws. The Company also seeks the
opinions from BOT on its annual operation inspection, in order to stimulate constant improvement of its operation.