The Company’s Risk Management Structure Chart As at 31 December 2021 • The conduct of business affairs is under a system of check and balance with Middle Office comprising of the Risk Control Unit and Back Office, being separated from the Front Office. • The Company puts in writing of all the established policies and guidelines regarding the risk management that specifies responsibilities of related unit as the operational guidelines for the employees. Moreover, the Company has established a four-step guideline for risk management. The guideline includes 1) the identification of the characteristics of risk as well as risk factors, 2) the development of appropriate tools and models for risk measurement, 3) the control of risks within acceptable limits, and 4) the close monitoring of risk status in order to properly manage any possible risks in a timely manner. • The differences in size and risk ratios determined for each exposure measured by tools and models allowed the Company to be able to perceive the degree of severity from the possible risks. These risk variables could also be used as a ceiling or the acceptable risk level as well as to provide warning signals before severe losses occur. • The risk management report is presented to the board of directors of each subsidiary company and the overview report is presented to the Company’s Board of Directors in a periodic and timely manner. The aforementioned risk management systems are developed based on prudent principles and will be reviewed regularly to suit prevailing situations. The systems are designed to be transparent, explicit, and examinable, and to take into consideration the interests of shareholders, customers, and staff. Risk Factors Affecting the Company’s Business Operations The risks to business operations of the Company and its subsidiaries are as follows: 1. Credit Risk Credit risk arises from a situation in which the debtors or counterparties fail to repay or fulfill their agreed obligations. This might be contributed by the fact that the debtor’s financial position is under distress due to volatilities of economic conditions that pose adverse impact on businesses or the debtors’ mismanagement, which as a result, may adversely affect the Company and its subsidiaries’ earnings and capital. The credit risk may arise from ordinary financial Board of Directors Thanachart Capital Public Company Limited Executive Committee Chief Executive Officer Business Division Financial Division Accounting Department Risk Management Finance & Investment Management Section Special Project Risk Oversight Committee Audit Committee 66
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