Risk Factors Business Risk Factors • Risks from interest rates The Company and subsidiaries have short-term liabilities, excessive withdrawals from accounts, short-term loans from financial institutions, and loans for revolving funds. The Company and subsidiaries have tried to reduce the financial funds and long-term loans for lower interest rates. Higher interest rates in the future may affect the company’s performance and cash flow. However, the Company has risk management plans to reduce the impacts from interest rates fluctuation using fixed interest rate loans and floating interest rate loans when it deems appropriate. • Risks from uncertainty of online lottery project Loxley GTECH Technology Company Limited, an associate of Loxley Public Company Limited signed an agreement with the Government Lottery Off ice (GLO) of Thailand to provide equipment and service for online lottery project on 29 July 2005. According to the agreement, online lottery ticket vending machines shall be ready for operation within seven months after the contract signing date. However, for the past five years, LGT has been repeatedly informed by the GLO to postpone the operation. Despite the facts that LGT has tried to negotiate a way out with the GLO and that recently the government seemed to have a resolution to go ahead with operation of the vending machines in selling 6-digit lotteries instead of 3-digit and 2-digit lotteries, uncertainty remains. The Company has acknowledged this loss from impairment of investment and closely followed up on the project in order to adjust business plans in due time. The problem is considered an uncontrollable uncertainty. The Company has finally set up reserve funds for all of the impairment of investment.
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Loxley Public Company Limited
• External risks External risks that have affected the company’s business operation and incomes include the political unrest in Bangkok. So far, the unrest has had more or less impacts on the company’s revenues and operations of many departments. Because the unrest was unpredictable and it is likely to reoccur in the future, the Company has planned to cope with such incidents with flexible working system, document protection measure, and security systems to safeguard all the company’s buildings, assets and employees. Administrative Risk Factors • Personnel Risks The Company has put a focus on human resource development and management, incessantly upgrading employees’ skills and expertise. However, retirements of high ranked executives and key persons are considered one of the Company’s major risks. To solve the problem, the Company has planned for development of substitutes for positions in each working field. The Company will not cling to one specific person’s capability or decision but will distribute responsibilities and decisions under the management of the Board of Directors.