140 Sources of Capital As of 31 December 2021, the sources of TNS’s capital included shareholders’ equity, borrowings from financial institutions and shareholders as well as debt instruments issued for the purpose of financing the growth of TNS’s various transactions. Liabilities TNS’s debt structure included borrowings from financial institutions, securities business payables and derivatives business payables, payables to clearing house and broker dealers as well as other debts issued and borrowings. As at 2021 year end, total liabilities of TNS amounted to 5,045 million baht, representing an increase of 1,936 million baht or 62.27 percent compared to 2020 year end. Most of the liabilities were borrowings from financial institutions and other debts issued and borrowings, which amounted to 3,147 miiilion baht or accounted for 62.38 percent of the total liabilities, representing an increase of 2,537 million baht when compared to the end of 2020. The proceeds were used for supporting the growth of the transactions related to securities borrowing and lending as well as block trades. Shareholders’ Equity As of 31 December 2021, shareholders’ equity of TNS amounted to 3,634 million baht, representing a decrease of 109 million baht or 2.91 percent compared to 2020 year end. In this connection, net operating profit amounted to 661 million baht while return on equity (ROE) amounted to 17.92 percent. During the year 2021, TNS paid dividend for 2020 performance in the amount of 450 million baht and paid interim dividend for the first half of 2021 performance in the amount of 330 million baht. Moreover, TNS set aside 22 million baht from 2021 net profit as statutory reserve. In this connection, as of 31 December 2021, TNS already fully set aside the statutory reserve. As at 31 December 2021, debt to equity ratio of TNS was 1.39 times, representing an increase from 0.83 times compared to 31 December 2020. In case securities business payables and derivatives business payables as well as payables to clearing house were excluded, TNS’s debt to equity ratio as at 31 December 2021 and 2020 would be 1.04 times and 0.27 times respectively. Liquidity In the conduct of TNS’s business affairs, the activities which affected the liquidity most were operating activities. In this connection, cash flows from or used in operating activities arose from changes in revolving funds related to securities business receivables or payables, as well as receivables or payables to clearing house. In 2021, TNS’s net cash flow increased by 44 million baht. In this connection, cash flows from operating activities amounted to 1,669 million baht. On the other hand, cash flows used in investing activities amounted to 72 million baht while cash flows used in financing activities amounted to 1,785 million baht. Net capital ratio (NCR) of TNS was 61.97 percent, which was well above the minimum requirement of 7 percent of general liabilities and assets pledged as collateral imposed by the SEC. Factors or Events that Might Significantly Affect Future Financial Position or Operations Economic and political conditions and various domestic and international situations might have an impact on TNS’s financial position and performance. Trend of changing interest rates, political uncertainties, COVID-19 transmission, the BOT’s monetary policy, Thailand’s
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