Year 2007

6.2 Interest Rate Risk
As at December 31, 2007, the Company has invested in financial instruments that yield a return in the form of
interest such as deposits at commercial banks to the amount of Baht 536.7 million. Promissory notes amounted to Baht 478.2
million, bonds amounted to Baht 272.7 million, which has a fair value of Baht 269.9 million, and debentures amounted to Baht 31.3
million, with a fair value of Baht 21.2 million. If there is a change in the interest rate, there will be a risk for reinvestment and
instrument price volatility.
To minimize the risks, the Company has closely followed up and reviewed an alteration of the money market, and
determined the average period of investment in debt instruments in keeping with the direction of change in interest rates.
Meanwhile, the Company will occupy debt instruments until they are due so as to avoid a loss incurred by the fluctuation of debt
instruments price owing to, in turn, a change in interest rates.
6.3 Risk Associated with Providing Loans
As at December 31, 2007, the Company had residential loans of Baht 129.8 million to lend to outsiders, and
another Baht 2,277.1 million for loans for commercial purposes and real estate project development. Thus, both types of loans for
outsiders totaled Baht 2,406.9 million. Borrowers had to take a mortgaged loan to ensure repayment. Nevertheless, risks might
occur when there are violations of loan contracts on the part of debtors. This may be due to debtors’ financial crisis, making them
unable to repay their debts. Or they may violate the contract on purpose. Both cases inevitably cause damage to the Company as
a creditor. Another risk stems from a fluctuation of the property market affecting the Company’s collateral security.
To minimize such a risk, the Company has defined the scope of responsibility, loan regulations and a legal
procedure, apart from encouraging good morals and ethics in dealing with loan affairs. This aims to have the people concerned
strictly comply with the defined measures.
With regard to personal customers taking residential loans, the Company has an analytical procedure for all
debtors based on a sound standard of loan provision. For instance, it examines the completeness, accuracy and conformity of
each debtor’s income and credit data, based on the Company’s data sources or evidence presented by the customers, including
their credit data derived from the National Credit Bureau. Of course, this is carried out through a compact and efficient procedure,
which can respond to the customers’ demand in a short time.
For debtors with various projects, the analytical procedure begins with the analysis of the project feasibility,
previous record and performance of the project manager, and the company’s financial status. In addition, the Company has also
determined debt payment conditions and interest rates corresponding with each customer’s cash flow and risk. It also consistently
follows up and audits debtors’ status, for example, an annual financial review and the analysis of data on debt period
arrangement. For the property used as debtors’ collateral security, the Company rigorously requires that of good quality and
sufficient for debt payment.
Finally, the Company has developed the loan management system to enhance efficiency in the management of
debtors. The system not only provides swift services and fits well with customers, but also efficiently supports the Company’s
performance concerning credit services.
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