Page 78 - BAM ONE REPORT 2564 (ENGLISH VERSION)

76 Part 1
Business Operation and Performance

The Company’s staff who have duty to make a due diligence review determine the asset prices using their own
discretion, assumptions, experience and personal view, which may neither ensure the accuracy nor reflect the true
value of the assets. In general, the Company conducts the due diligence review, based on information received from
financial institutions that sell NPLs and NPAs, in order to appraise the assets and set prices. In this respect, the projection
on debt collection and asset selling is used as a basis for determination of purchase prices, which is a step that enables
the due diligence process to be complete. If the information on such debt collection and asset selling projection is
inaccurate or incomplete or leads to a misunderstanding, any decision made based on the said information may cause
a risk of failing to purchase NPLs and NPAs as targeted. Moreover, making each due diligence review on a large volume
of assets may result in greater errors in the appraisal or failure to complete the appraisal due to time constraints.
Although these are trivial errors, a combination of such errors may impact the Company’s overall profitability. Besides,
the Company may decide to buy NPLs and NPAs at a price higher than a commercially reasonable price of those assets,
which could adversely affect its financial position and performance.

Risk from the Company’s asset appraisal being made based on various assumptions, which may cause the
appraised value of collateral underlying NPLs and NPAs to fail to reflect the true value of those assets that the
Company will recognize after selling such assets
The appraisal of collateral underlying NPLs and NPAs, which are presented in the Company’s financial statements,
is conducted by applying the regulations set forth by the BOT for financial institutions to adhere to. The Company
arranges for the appraisal to be carried out by the SEC-approved independent appraisers and also by its internal appraisal
team. Each appraiser may need to use his/her own judgment about some factors such as historical reference prices
and may establish a set of assumptions that are subject to change and may be inaccurate or incomplete or not mirror
the true value. In addition, the appraised value of collateral underlying NPLs and NPAs of the Company neither is
a determinant of the sale and purchase price of those assets nor guarantees that the Company will be able to sell the
assets at such price, whether at present or in the future. Besides, the price at which the Company can sell the assets
may be lower than the appraised value of such assets. As a result, the inaccuracy of the appraisal conducted either
by the independent appraisers or by the Company’s internal appraisal team or the pricing method used by the Company
may have an impact on the Company’s decision-making on determination of the targeted return on investment from
NPLs, debt restructuring, and determination of selling prices of NPAs, which could adversely affect the Company’s
business, financial position, and performance.

Risk associated with the Company’s operation of NPL and NPA management business and possession of
a massive amount of assets that are under strict supervision of the concerned authorities and changes in
the applicable laws and regulations that may adversely affect the Company’s business, financial position, and
performance

The Company’s NPL and NPA management business is subject to strict supervision whereby the Company must
comply with all requirements under the related regulations, practice guidelines and policies with respect to debt
restructuring, appraisal and sale of underlying collateral and NPAs, rules and procedures for NPA management, debt
collection from debtors, debt write-off, tax-related regulations, and accounting standards. Moreover, as the owner of
a large number of properties, the Company must abide by all requirements under the related regulations, practice
guidelines and policies such as the land and building tax law, the environmental law, the town planning law, and other
rules and regulations.