Page 76 - BAM ONE REPORT 2564 (ENGLISH VERSION)

74 Part 1
Business Operation and Performance

sector policies that are applicable to the Company and (b) policy, financial position and business operation plan of
each financial institution with respect to their credit, NPL and NPA management. Due to the complexity and correlation
of such factors, most of which are beyond the Company’s control, the Company may be unable to procure NPLs and
NPAs in a sufficient amount and at reasonable prices, which will have a significant adverse impact on its growth,
competitiveness, financial position, and performance.

Failure by the Company to collect payments from debtors and generate revenue and cash flow from NPL
management as targeted, whereas its performance depends mainly on its ability in collection of payments from
debtors and effective NPL management and also on debtors’ ability to pay their debts, whether in whole or in
part
The generation of revenue and cash flow from NPLs depends on numerous factors, including the Company’s
ability to effectively manage NPLs within an appropriate period of time and other factors, which mostly are beyond
the Company’s control, such as debtors’ ability to pay their debts, whether partly or wholly. This is because customers
that are NPLs of the Company often have an insecure financial standing and poor operating performance with
a tremendous need for financial assistance or have negative net assets, while some debtors are in the bankruptcy or
debt restructuring process. If it is unable to restructure such debts and enforce the debt repayment, the Company may
have to resort to other methods to generate revenue from its NPLs such as litigation, transfer and disposal of assets
through sale and enforcement of collateral. These methods are time-consuming, costly and less effective or may require
compliance with the laws, regulations or public sector policies then in force, whereas the outcome thereof might not
be as expected by the Company. In some cases, moreover, the Company may not have a first-ranking right of enforcement
over the collateral, while other creditors may have a higher-ranking preferential right over such collateral.

In addition, the Company may be unable to collect a sufficient amount from the enforcement of collateral to
cover its investment cost or may even fail to collect any payment at all. In the business reorganization process by a
court order under the bankruptcy law, if the court issues an order approving the business reorganization plan, which
is approved by a majority of the creditors who have the rights of claims against the debtors, the Company may have
to agree to such plan that may not be beneficial to it. Furthermore, the court may rule that the collateral be void or
reject the petition for collateral enforcement whereby the Company may receive a limited amount of return or suffer
a loss from such process and may be unable to collect the debts from its debtors and to recognize revenue from those
NPLs as projected, which may have a significant adverse impact on its financial position and performance.

Fluctuations in Thai real estate market that could affect the Company’s ability to generate revenue and
cash flow from collateral underlying NPLs and NPAs
The Company is prone to risk involved with Thai real estate market condition, considering that all of the collateral
underlying its NPLs and NPAs is located in Thailand. Its ability to generate revenue and cash flow from those assets
hinges on the liquidity and condition of Thai real estate market. Given that such market condition does not turn out
as predicted by the Company, sales and prices of its properties may decrease accordingly and it may take a long time
for those assets to fully generate revenue. As such, the Company may have to sell them out under the terms and
conditions of the sale and purchase agreements that will cause the Company to obtain lower benefits or to sell the
assets at less-than-expected prices. Besides, a slowdown in Thai real estate business may make it more difficult for the