56-1 One Report / Annual Report 2021 Thanachart Capital Publ ic Company Limited 129 Assets For the Year 2021 2020 Total Assets (Million Baht) 49,223 48,518 Hire Purchase Receivables - net (Million Baht) 47,371 46,058 Financial Lease Receivable - net (Million Baht) 540 690 Hire Purchase-to-Total Asset Ratio (Percent) 96.24 94.93 Property Foreclosed (Million Baht) 98 67 Financial Position For the year 2021, total assets of THANI and its subsidiary amounted to 49,223 million baht, representing an increase of 1.45 percent compared to the year 2020. In this connection, hire purchase receivables (net of allowance for doubtful accounts) accounted for 96.24 percent of their total assets, up from the prior year. Under the situation when the country went through the second year of the COVID-19 pandemic which had adverse impacts on the country’s economic and social structures, THANI continued to focus on careful management of risks. Importantly, it continued assessing the quality of the loans which received assistance. The purpose was to deal with the uncertainties arising from the impacts of the COVID-19 pandemic situation whereby new virus variants continued to emerge. However, THANI continued to focus on giving hire purchase service which was its key business. Emphasis was also placed on looking after and retaining customer base. The objectives were to maintain its market share and to enable it to stay competitive in the industry in the long run. Quality of Receivables and Loan Loss Provision As of 31 December 2021, expected credit losses (ECL) of THANI which might arise from hire purchase receivables and financial lease receivables amounted to 1,485 million baht, an increase of 257 million baht or 20.93 percent when compared to that of the end of 2020. On the other hand, in comparison with 2020, the provision based on the expected credit losses increased by 248 million baht, mainly due to the credit risk which increased as a result the economic slowdown caused by COVID-19 pandemic. The economic sector was hard hit by the disruption of economic activities and the declining household income as well as the slowdown of the private sector’s spending and investment. The additional provision in 2021 reflected the ECL model which predicted future developments. The objective was to accommodate the risk which might arise from the uncertainties caused by the virus transmission. This was in compliance with the Thai Financial Reporting Standards No. 9 (TFRS 9). THANI adopted a policy for bad debt write-off. In this connection, THANI would dispose of the loans once the court ruled that the debtor and the guarantor make repayments to THANI. When THANI was unable to repossess the assets or enforce the debt judgements or collect debts from debtors, it would write off bad debts by disposing of the bad debts. The objective was to reduce the loan loss provision. On the other hand, any gain received from the disposal of the bad debts would be recorded as other income. As regards the years 2021 and 2020, THANI wrote off bad debts worth amounted to 264 million baht and 438 million baht respectively. Most of hire purchase receivables and financial lease receivables (less unearned interest income) for the years 2021 and 2020 were normal receivables with no more than 3 installments overdue. They amounted to 47,533 million baht and 46,476 million baht respectively, which accounted for 96.23 percent and 96.87 percent of the total hire purchase receivables and financial lease receivables respectively. The information showed that most of THANI’s receivables remained normal.
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