Page 46 - PSTC - One Report 2023 (EN)

Annual Report 2023 (Form 56-1 ONE REPORT)
45
5) Fluctuations in Exchange Rates
The Company bears the cost of ordering goods that need to be imported from abroad, which is paid in foreign currency. The Company manages this risk by entering into forward contracts with domestic commercial banks in order to reduce the impact of exchange rate fluctuations potentially affecting the Company’s operating results.
Risk on Securities
1.Credit Risk:
Bondholders face the risk of not receiving interest or principal payments if the issuer’s business and operations fail to meet expectations, or if the issuer’s assets are insufficient to cover the debt repayment. The issuer may fail to fulfill interest payments or repay the principal of these debt securities, leading to default, as outlined in Clause 11.1 (ง) of the debt securities’ terms and conditions. The issuer does not evaluate credit risk. Therefore, investors should assess the financial status and debt repayment capability of the issuer based on information provided in the debt securities offering memorandum and prospectus. Continuous monitoring of the issuer’s news is advisable, as the issuer is listed on the Stock Exchange of Thailand. Investors can track issuer news on the Stock Exchange of Thailand website and the Securities and Exchange Commission (SEC) office. For additional information on the issuer’s debt securities, investors can request details from the Thai Bond Market Association.
2. Price Risk:
The market price of debt securities may fluctuate due to factors such as changes in interest rates, Bank of Thailand policies, overall economic conditions, inflation rates, maturity of debt securities, supply and demand dynamics, and the issuer’s financial condition. Consequently, there is a risk of price volatility of debt securities when investors wish to buy or sell them before the maturity date.
3. Liquidity Risk:
Bondholders planning to sell debt securities in the secondary market before maturity may face challenges. Immediate sale at the desired price might not be feasible due to limited trading of securities in the secondary market. However, shareholders can buy or sell debt securities at commercial banks, securities firms, or other licensed entities. Typically, shareholders are restricted from selling debt securities to individuals and are limited to transactions within institutional investor and large investor groups, as defined by SEC regulations.
4. Early Redemption Risk:
The companies retain the right to redeem debt securities before the maturity date (Call Option) in whole or in part, as stipulated in the debt securities’ terms and conditions. This prerogative lies exclusively with the company. Investors face the risk of early repayment, contingent on the prevailing circumstances and various factors. Early redemption may lead to investors not receiving anticipated returns and encountering risks related to market interest rate fluctuations, impacting reinvestment of principal and interest from the early redemption.