130 Total Liabilities 31 December 2021 31 December 2020 Total Liabilities 37,657 37,699 Short-term Loans and Overdrafts 17,796 10,991 Long-term Loans 2,045 7,590 Long-term Debentures 16,794 18,099 Total Other Liabilities 1,022 1,019 Total Liabilities (Unit: Million Baht) Adequacy of Loan Loss Provision THANI calculates the expected credit loss from financial assets by applying the general approach. In this connection, THANI uses the three stage approach to determine the allowance for impairment resulting from credit loss. As part of the three stage approach, THANI will take into consideration the change to the credit quality since the date when the revenue is first recognized. As for debts under the hire purchase agreements with the related legal cases in which the courts of law rule in favor of THANI, such debts are shown under other non-current assets in the Statement of Financial Position. As well, allowance for the credit loss is set aside in full amount for such debts with deducting the collateral value. The expected credit loss is estimated based on the probability of the weighted credit loss throughout the anticipated lifetime of the financial instrument by referring to the present value of cash which is expected not to be received. In this connection, reference is made to the experience of loss in the past, taking into account THANI’s asset groups which carry common characteristics of credit risk, such as type of collateral, contract period, and other related factors. This will be adjusted by the information obtained through current observations as well as the supporting forecasts which are rational, if proven that they are statistically correlated. In addition, discretion must be properly used in estimating the expected credit loss based on macroeconomic data. As well, assessment on the current situation must be conducted and economic conditions must be forecast in advance, taking into consideration weighted probabilities under different scenarios, including base-case scenario, best-case scenario and worst-case scenario, in the calculation of the expected credit loss. The use of future forecasts increases the degree of discretion being applied to the assessment of the impacts which the related macroeconomic changes will have on the expected credit loss. However, THANI will arrange for a regular review and revision of the methodologies and assumptions which are used in forecasting future economic conditions. Furthermore, the expected credit loss also includes management overlays whereby management inputs for model override may be necessary. In addition, THANI has been cautious not only in considering additional allowance from the management overlays, for the debts which probably could not be collected, but also in enhancing efficiency in debt collection in line with expansion of the loan portfolio size. In this connection, non-performing loans of THANI in 2021 and 2020 amounted to 1,863 million baht and 1,500 million baht respectively. As well, allowance for the expected credit loss in 2021 and 2020 amounted to 1,485 million baht and 1,228 million baht respectively. Allowance for expected credit loss to non-performing loans ratio of THANI in the year 2021 and 2020 amounted to 79.71 percent and 81.87 percent respectively. Taking into consideration its prudent lending and strict debt collection standards, THANI believed that the loan loss provision remained appropriate, adequate and efficient in the ordinary course of THANI’s normal operations. Note: Short-term Loans and Overdrafts included the loans which were due to be repaid within one year.
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