Page 80 - BAM ONE REPORT 2564 (ENGLISH VERSION)

78 Part 1
Business Operation and Performance

agrees to reschedule the debt repayment for the principal debtor without consent to such debt rescheduling from the
guarantor or mortgagor who is not the principal debtor, this will result in the guarantor or mortgagor who is not the
principal debtor being discharged from the liability. Therefore, in the restructuring of any debt that has a guarantor or
mortgagor who is not the principal debtor, the Company may have to receive consent from that guarantor or mortgagor
in order that the guarantee provided by such guarantor or the collateral of such mortgagor will remain enforceable
after the debt restructuring. This process will limit the flexibility in debt restructuring by the Company. Given that the
Company does not receive the consent from the guarantor or mortgagor who is not the principal debtor, the Company
may have fewer alternatives for debt restructuring or debt compromise and may thus have to resort to mortgage
enforcement, which usually is costly and time-consuming.

Besides, the liability of the mortgagor who is not the principal debtor is limited to value of the mortgaged property
only, whereby any agreement requiring the mortgagor to be liable for any amount exceeding value of the mortgaged
property shall become void. Nonetheless, in the case where the debtor, who is a juristic person and person having
power to manage or control the operation of a juristic person, has mortgaged his own property as collateral for debt
of such juristic person, that person may then execute a guarantee agreement for debt of the same juristic person and
may assume the liability in the amount higher than value of the mortgaged property.

Despite the formulation of measures to ensure compliance with the laws so as to lessen the impacts of any
amendments to those laws, the Company believes that the changes to such laws will have material impacts on the
Company, particularly on its rights under the guarantee agreements or mortgage agreements for its NPLs in the case
where such agreements are not made in conformity with the provisions of the aforementioned laws. In addition, although
the Company’s procedures for debt enforcement against the debtor and mortgage enforcement against the collateral
that belongs to the debtor may not be significantly affected, the debt enforcement against the guarantor and mortgagor
who is not the principal debtor will be more difficult and lengthier since the Company will have to follow the additional
processes required by laws, which may adversely affect its financial position and performance.

Risk of the Company possibly being held liable due to legal disputes and other disputes in which the Company
is occasionally involved

In the operation of its usual course of business, the Company has to be involved in legal disputes and other
disputes. Generally, those disputes arise when (a) the Company seeks to collect outstanding debts from debtors, seize
or sell the underlying collateral or enforce guarantees, pledges or mortgages, or (b) the Company and the counterparties
in the purchase or sale of collateral underlying NPLs or NPAs of the Company request the court to issue an order
certifying the legal right of each party. Also, the Company may face a lawsuit or be involved in other disputes from its
normal course of business operation. For instance, the debtors that fail to pay the debt may resist having their properties
seized by the Company and accordingly bring the disputes to the court. Moreover, in the case where the Company
already took a legal action against a debtor and the said debtor made a counterclaim, if the Company anticipates that
it may face damages from the lawsuit, whether already filed or prepared to be filed, or damages from any other disputes
against the Company, the Company will record provisions for litigation in accordance with the related accounting policy
or the Company’s internal policy, which conforms to the Thai Financial Reporting Standards (TFRS) and the Thai