Capital Nomura Securities Public Company Limited Review report and interim financial statements 30 September 2013

Transcription

1 Capital Nomura Securities Public Company Limited Review report and interim financial statements 30 September 2013

2 Independent Auditor s Report on Review of Interim Financial Information To the Shareholders of Capital Nomura Securities Public Company Limited I have reviewed the accompanying statement of financial position of Capital Nomura Securities Public Company Limited as at 30 September 2013, the related statements of comprehensive income for the three-month and nine-month periods ended 30 September 2013, the statements of changes in equity and cash flows for the nine-month period then ended, as well as the condensed notes to the financial statements. Management is responsible for the preparation and presentation of this interim financial information in accordance with Thai Accounting Standard 34 Interim Financial Reporting. My responsibility is to express a conclusion on this interim financial information based on my review. Scope of review I conducted my review in accordance with Thai Standard on Review Engagements 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Thai Standards on Auditing and consequently does not enable me to obtain assurance that I would become aware of all significant matters that might be identified in an audit. Accordingly, I do not express an audit opinion. Conclusion Based on my review, nothing has come to my attention that causes me to believe that the accompanying interim financial information is not prepared, in all material respects, in accordance with Thai Accounting Standard 34 Interim Financial Reporting. Somjai Khunapasut Certified Public Accountant (Thailand) No Ernst & Young Office Limited Bangkok: 12 November 2013

3 Capital Nomura Securities Public Company Limited Statement of financial position As at 30 September 2013 Note 30 September December 2012 (Unaudited but (Audited) reviewed) Assets Cash and cash equivalents 2 827, ,271 Deposits at financial institutions Receivables from Clearing House ,606 Securities and derivatives business receivables - net 5 8,064,136 7,969,481 Derivative assets 6 47,990 - Investments - net 7 1,297,559 15,597 Premises and equipment - net 8 106, ,680 Intangible assets - net 15,490 11,836 Deferred tax assets 9 40,901 44,894 Other assets - net , ,747 Total assets 10,600,528 9,250,112 The accompanying notes are an integral part of the financial statements.

4 Capital Nomura Securities Public Company Limited Statement of financial position (Continued) As at 30 September 2013 Note 30 September December 2012 (Unaudited but (Audited) reviewed) Liabilities and equity Liabilities Borrowings from financial institutions ,000 2,200,000 Payables to Clearing House , ,616 Securities and derivatives business payables 13 1,923,648 2,570,198 Borrowings 14 1,576,650 - Provisions for long-term employee benefits 52,008 49,826 Deferred tax liabilities Other liabilities , ,098 Total liabilities 5,251,734 5,579,867 Equity Share capital Registered, issued and paid-up 2,150,469,000 ordinary shares of Baht 1 each (31 December 2012: 71,682,300 ordinary shares of Baht 10 each) 16 2,150, ,823 Premium on share capital 2,131,834 2,131,834 Premium on treasury stock 1,487 1,487 Other components of equity - revaluation surplus (deficit) on investments 7.2 3,177 (60) Retained earnings Appropriated - statutory reserve 72,000 72,000 - general reserve 215, ,000 Unappropriated 774, ,161 Total equity 5,348,794 3,670,245 Total liabilities and equity 10,600,528 9,250, The accompanying notes are an integral part of the financial statements. Directors

5 Capital Nomura Securities Public Company Limited Statement of comprehensive income For the three-month and nine-month periods ended 30 September 2013 (Unit: Thousand Baht except earnings per share express in Baht) For the three-month periods For the nine-month periods ended 30 September ended 30 September Note Profit or loss: Revenue Brokerage fees , , , ,467 Fees and service income 18 27,996 25,044 86,690 64,535 Gain on securities 7.3 4,782 3,910 5,600 2,842 Loss on derivatives/exchange rate (198) (12) (14,252) (19) Interest and dividend 22,521 15,794 65,134 48,962 Interest on margin loans 75,520 54, , ,481 Other income ,569 2,825 Total revenue 359, ,884 1,288, ,093 Expenses Financial costs 34,749 18, ,744 46,329 Fees and services expenses 22,591 18,130 77,679 51,880 Operating expenses Personnel expenses 138, , , ,943 Premises and equipment expenses 42,665 38, , ,761 Directors' remuneration ,345 1,946 Other expenses 20,331 17,879 62,393 59,797 Total operating expenses 202, , , ,447 Total expenses 259, , , ,656 Profit before income tax 99,450 74, , ,437 Income tax 9 (20,124) (17,644) (89,661) (41,945) Profit for the period 79,326 56, , ,492 Other comprehensive income: Gain (loss) on re-measuring available-for-sale investments 4,641 (1,102) 4,046 (1,866) Income tax relating to gain (loss) on re-measuring available-for-sale investments (928) 220 (809) 427 Other comprehensive income (loss) 3,713 (882) 3,237 (1,439) Total comprehensive income for the period 83,039 56, , ,053 Earnings per share 20 Basic earning per share (Baht per share) Weighted average number of ordinary shares (shares) 2,150,469, ,951,000 1,252,470, ,951,000 The accompanying notes are an integral part of the financial statements.

6 Capital Nomura Securities Public Company Limited Statement of changes in equity For the nine-month period ended 30 September 2013 Other components of equity - Retained earnings Issued and revaluation surplus Appropriated paid-up Premium on Premium on (deficit) Statutory General Treasury Treasury share capital share capital treasury stock on investments reserve reserve stock reserve Unappropriated stock Total Balance - as at 1 January ,823 2,131,834-1,377 72, ,000 96, ,366 (96,993) 3,419,400 Dividend paid (Note 21) (34,189) - (34,189) Total comprehensive income (loss) for the period (1,439) , ,053 Balance - as at 30 september ,823 2,131,834 - (62) 72, ,000 96, ,669 (96,993) 3,513,264 Balance - as at 1 January ,823 2,131,834 1,487 (60) 72, , ,161-3,670,245 Increase share capital (Note 16) 1,433, ,433,646 Dividend paid (Note 21) (114,665) - (114,665) Total comprehensive income for the period , , ,568 Balance - as at 30 September ,150,469 2,131,834 1,487 3,177 72, , ,827-5,348,794 The accompanying notes are an integral part of the financial statements.

7 Capital Nomura Securities Public Company Limited Statement of cash flows For the nine-month period ended 30 September Cash flows from operating activities Profit before income tax 445, ,437 Adjustments to reconcile profit before income tax to net cash provided by (paid from) operating activities Depreciation and amortisation 42,160 40,046 Loss (gain) on disposal of investments (9,917) 775 Reversal of loss on impairment of investments - (6,637) Gain on disposal of equipment (110) - Loss on derivatives/exchange rate 14,235 - Interest and dividend income (65,134) (48,962) Interest income from margin loans (241,194) (148,481) Other interest income (1,393) (1,361) Financial costs 114,744 46,329 Cash received from interest 26,743 32,949 Cash received from interest on margin loans 240, ,980 Cash received from other interest 1,398 1,378 Cash paid for interest expenses (included other financial costs) (91,595) (50,595) Cash paid for income tax (120,170) (67,330) Income from operating activities before changes in operating assets and liabilities 356, ,528 Operating assets (increase) decrease Receivables from Clearing House 490,209 (531,823) Securities and derivatives business receivables (93,238) (2,594,422) Other assets (24,807) (5,578) Operating liabilities increase (decrease) Borrowings from financial institutions (1,300,000) 1,250,000 Payables to Clearing House 83,327 (113,468) Securities and derivatives business payables (647,158) 1,879,667 Borrowings 1,484,500 - Provisions for long-term employee benefits 2,182 3,603 Other liabilities (12,003) (2,126) Net cash from (used in) operating activities 339,184 (1,619) The accompanying notes are an integral part of the financial statements.

8 Capital Nomura Securities Public Company Limited Statement of cash flows (Continued) For the nine-month period ended 30 September Cash flows from investing activities Cash paid for purchase of available-for-sale securities (15,023,578) - Cash received from disposal of available-for-sale securities 13,752, ,238 Net cash received (paid) for held-to maturity debt securities 927 (3,384) Cash received from disposal of other investments - 5 Cash received from interest and dividend 36,242 14,683 Cash paid for acquisition of equipment (30,850) (14,592) Cash received from sales of equipment Cash paid for acquisition of intangible assets (6,188) (3,415) Net cash from (used in) investing activities (1,270,451) 303,535 Cash flows from financing activities Proceed from increase in share capital 1,433,646 - Cash paid for dividend (114,665) (34,189) Net cash from (used in) financing activities 1,318,981 (34,189) Net increase in cash and cash equivalents 387, ,727 Cash and cash equivalents at the beginning of the period 440, ,885 Cash and cash equivalents at the end of the period 827, ,612 - Supplemental cash flows information Non-cash transactions Accounts payable for purchase of fixed assets and intangible assets 1, The accompanying notes are an integral part of the financial statements.

9 Capital Nomura Securities Public Company Limited Notes to interim financial statements For the three-month and nine-month periods ended 30 September General information 1.1 The Company s information Capital Nomura Securities Public Company Limited ("the Company") is a public company incorporated and domiciled in Thailand. The Company is principally engaged in the securities with business of securities brokerage, securities dealing, securities borrowing and lending services, investment advisory, securities underwriting, financial advisory services and the derivatives broking. The registered office of the Company is at 25 Bangkok Insurance Building, 15th - 17th Floor, South Sathorn Road, Tungmahamak, Sathorn, Bangkok. As at 30 September 2013, the Company has 24 branches in Bangkok and up country (31 December 2012: 23 branches). 1.2 Basis of the preparation of the interim financial statements These interim financial statements are prepared in accordance with Thai Accounting Standard No. 34 (revised 2009) "Interim Financial Reporting", with the Company choosing to present condensed interim financial statements. However, the Company has presented the statements of financial position, comprehensive income, changes in equity, and cash flows in the same format as that used for the annual financial statements, and the presentation of the financial statements has been made in compliance with requirement of the notification of the Office of the Securities and Exchange Commission relating to the format of the financial statements of securities companies No. Sor. Thor. Kor. Nor. 53/2553 dated 15 December The interim financial statements are intended to provide information additional to that included in the latest annual financial statements. Accordingly, they focus on new activities, events and circumstances so as not to duplicate information previously reported. These interim financial statements should therefore be read in conjunction with the latest annual financial statements. The interim financial statements in Thai language are the official statutory financial statements of the Company. The interim financial statements in English language have been translated from the Thai language interim financial statements. 1

10 1.3 New accounting standards Below is a summary of accounting standards that become effective in the current accounting period and those that will become effective in the future. a. Accounting standards that become effective in the current accounting period Accounting standards: TAS 12 Income Taxes TAS 20 (revised 2009) Accounting for Government Grants and Disclosure of Government Assistance TAS 21 (revised 2009) The Effects of Changes in Foreign Exchange Rates Financial Reporting Standard: TFRS 8 Operating Segments Accounting Standard Interpretations: TSIC 10 Government Assistance - No Specific Relation to Operating Activities TSIC 21 Income Taxes - Recovery of Revalued Non-Depreciable Assets TSIC 25 Income Taxes - Changes in the Tax Status of an Entity or its Shareholders Accounting Treatment Guidance for Transfers of Financial Assets These accounting standards, financial reporting standard, accounting standard interpretations and accounting treatment guidance do not relevant to the business of the Company. For TAS 12 regarding Income Taxes, this standard does not have any impact to the Company s financial statement since the Company had early adopted before the effective date. b. Accounting standards that will become effective in the future Effective date Accounting Standard: TAS 12 (revised 2012) Income taxes 1 January 2014 Financial Reporting Standard: TFRS 4 Insurance Contracts 1 January 2016 Accounting Standard Interpretation: TSIC 15 Operating Leases - Incentives 1 January 2014 TSIC 27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease 1 January

11 Effective date TSIC 29 Service Concession Arrangements: 1 January 2014 Disclosures TSIC 32 Intangible Assets - Web Site Costs 1 January 2014 Financial Reporting Standard Interpretations: TFRIC 1 Changes in Existing 1 January 2014 Decommissioning, Restoration and Similar Liabilities TFRIC 4 Determining whether an Arrangement 1 January 2014 contains a Lease TFRIC 5 Rights to Interests arising from 1 January 2014 Decommissioning, Restoration and Environmental Rehabilitation Funds TFRIC 7 Applying the Restatement Approach 1 January 2014 under TAS 29 Financial Reporting in Hyperinflationary Economies TFRIC 10 Interim Financial Reporting and 1 January 2014 Impairment TFRIC 12 Service Concession Arrangements 1 January 2014 TFRIC 13 Customer Loyalty Programmes 1 January 2014 TFRIC 17 Distributions of Non-cash Assets to 1 January 2014 Owners TFRIC 18 Transfers of Assets from Customers 1 January 2014 The management of the Company has assessed the effect of the above accounting standard, financial reporting standard, accounting standard interpretations and financial reporting standard interpretations and believes that they are not relevant to the business of the Company, except TFRIC 13 for which the management is still evaluating the first-year impact to the financial statements and has yet to reach a conclusion, and TAS 12 (revised 2012) which is not impact to the Company s financial statements. 1.4 Significant accounting policies The interim financial statements are prepared using the same accounting policies and methods of computation as were used for the financial statements for the year ended 31 December 2012, except the accounting policy for derivatives which applied in this current period. 3

12 Derivatives - Forward exchange contracts Receivables and payables arising from forward exchange contracts are translated into Baht at the rates of exchange ruling at the end of reporting period. Unrecognised gains and losses from the translation are included in determining income. Premiums or discounts on forward exchange contracts are amortised on a straight-line basis over the contract periods. 2. Cash and cash equivalents 30 September December 2012 Cash Current deposits and saving deposits 571, ,355 Time deposits with maturity date not more than 3 months from acquisition date 300, ,000 Promissory notes at call 769, ,000 Total cash and cash equivalents 1,640, ,432 Less: Deposits for the customers accounts (812,898) (531,161) Cash and cash equivalents 827, , Deposits at financial institutions 30 September December 2012 Time deposits with maturity date more than 3 months from acquisition date 345, ,000 Less: Deposits for the customers accounts (345,000) (100,000) Deposits at financial institutions Receivables from Clearing House 30 September December 2012 Receivables from Clearing House Equity and debt securities - 453,653 Derivatives 34,478 32,631 Receivables from foreign companies - 35,249 Total receivables from Clearing House 34, ,533 Less: Receivables from Clearing House for customers accounts (34,081) (30,927) Receivables from Clearing House ,606 4

13 5. Securities and derivatives business receivables 30 September December 2012 Securities business receivables Cash accounts 949,873 1,501,672 Credit balances receivables 5,865,402 5,264,562 Guaranteed deposit receivables 650, ,898 Receivables under securities borrowing and lending business 570, ,658 Other receivables 6,312 6,392 Total securities business receivables 8,042,631 7,952,182 Add: Accrued interest receivables 24,875 23,458 Less: Allowance for doubtful accounts (6,335) (6,335) Net securities business receivables 8,061,171 7,969,305 Derivative business receivables Derivative business receivables 2, Total derivatives business receivables 2, Net securities and derivatives business receivables 8,064,136 7,969, As at 30 September 2013, the Company has securities business receivables of approximately Baht 6.4 million on which the recognition of income on an accrual basis has been suspended (31 December 2012: Baht 6.4 million). 5.2 As at 30 September 2013 and 31 December 2012, the Company has classified its securities business receivables including related interest receivable as follows, in accordance with the relevant guidelines issued by the Office of the Securities and Exchange Commission governing accounting for the doubtful debts of securities companies. 30 September 2013 Debt balance Allowance for doubtful accounts Debt balance net of allowance for doubtful accounts Normal 8,064,136-8,064,136 Doubtful 6,335 6,335 - Total 8,070,471 6,335 8,064,136 5

14 31 December 2012 Debt balance Allowance for doubtful accounts Debt balance net of allowance for doubtful accounts Normal 7,969,481-7,969,481 Doubtful 6,335 6,335 - Total 7,975,816 6,335 7,969, As at 30 September 2013, guaranteed deposit receivables of approximately Baht million represent cash paid to secure the borrowing of securities for securities borrowing and lending transactions, and the fair value of the securities borrowed is approximately Baht million (31 December 2012: Baht million and Baht million, respectively). 6. Derivatives assets 30 September 2013 Fair value Notional amount Forward exchange contract 47,990 1,514,425 Total derivatives assets 47,990 1,514, Investments 7.1 Investments classified by type 30 September December 2012 Cost/ Cost/ Amortised cost Fair value Amortised cost Fair value Available-for-sale securities Debt securities 78,431 78, Listed equity securities Unit trusts 1,202,810 1,206, Total 1,281,271 1,285, Add (less): Allowance for revaluation 3,971 (75) Less: Allowance for impairment (30) (30) Net available-for-sale securities 1,285, Held-to-maturity debt securities Treasury bill 1,740,262 1,313,374 Less: Investments for the customer s accounts (1,734,387) (1,304,805) Held-to-maturity debt securities 5,875 8,569 Other investments Non-marketable equity securities 15,665 15,665 Less: Allowance for impairment (9,193) (9,193) Net other investments 6,472 6,472 Net investments 1,297,559 15,597 6

15 7.2 Other components of equity - revaluation surplus (deficit) on investments For the nine-month period ended 30 September 2013 For the year ended 31 December 2012 Balance - beginning of the period (60) 1,377 Changes during the period from Revaluation 13,963 (2,632) Disposal (9,917) 769 Deferred income tax (809) 426 Balance - end of the period 3,177 (60) 7.3 Gain on securities For the three-month periods ended 30 September For the nine-month periods ended 30 September Unrealised loss on revaluation in trading securities - (84) - (84) Realised gain (loss) on trading in securities Trading securities (1,414) (1,088) (4,317) (2,936) Available-for-sale securities 6,196 (1,545) 9,917 (770) Other investments (5) Reversal of loss on impairment - 6,627-6,637 Total gain on securities 4,782 3,910 5,600 2, Premises and equipment Movements of premises and equipment during the nine-month period ended 30 September 2013 are summarised below. Cost 1 January ,791 Additions 31,523 Disposals (3,195) 30 September ,119 Accumulated depreciation 1 January ,111 Depreciation for the period 38,533 Depreciation on disposals (3,194) 30 September ,450 Net book value 30 September ,669 7

16 9. Deferred tax assets/liabilities and income tax Income tax for the three-month and nine-month periods ended 30 September 2013 was calculated at the rate of 20 percent on profit before income tax, after adjusting income and expenses that are disallowable for tax computation purposes, and adjusted with deferred tax expenses (2012: 23 percent). Income tax expenses for the three-month and nine-month periods ended 30 September 2013 and 2012 are made up as follows: For the three-month periods ended 30 September For the nine-month periods ended 30 September Current income tax: Current income tax charge for the period 12,480 17,042 85,711 43,614 Deferred tax: Relating to origination and reversal of temporary differences 7, ,064 (3,118) Effects of changes in the applicable tax rates/prior period s adjustment - (90) (114) 1,449 Income tax expenses reported in the statements of comprehensive income 20,124 17,644 89,661 41,945 Reconciliation between income tax expenses and the product of accounting profit multiplied by the applicable tax rates for the three-month and nine-month periods ended 30 September 2013 and 2012 are as follows: For the three-month periods ended 30 September For the nine-month periods ended 30 September Accounting profit before tax 99,450 74, , ,437 Applicable tax rate 20 percent 23 percent 20 percent 23 percent Accounting profit before tax multiplied by applicable tax rate 19,890 17,162 89,198 39,431 Effects of changes in the applicable tax rates/prior period s adjustment - (90) (114) 1,449 Tax effect on non-tax deductible expenses/non-taxable income ,065 Income tax expenses reported in the statements of comprehensive income 20,124 17,644 89,661 41,945 8

17 As of 30 September 2013 and 31 December 2012, the components of deferred tax assets and deferred tax liabilities are as follows: 30 September December 2012 Deferred tax assets Allowance for impairment of investments 1,845 1,845 Allowance for impairment on property foreclosed 5,570 5,570 Allowance for doubtful accounts/allowance for other receivables 1,282 1,282 Provisions for long-term retirement benefits 10,402 9,965 Accrued employee expenses 17,541 21,870 Revaluation deficit on investments - 15 Others 4,261 4,347 Total deferred tax assets 40,901 44,894 Deferred tax liabilities Revaluation surplus on investments (794) - Others (50) (129) Total deferred tax liabilities (844) (129) Net deferred tax assets 40,057 44, Other assets 30 September December 2012 Loans to employees 69,556 66,685 Contribution for Securities Clearing Fund 39,876 35,737 Prepaid expenses 20,165 11,088 Deposits 16,848 16,749 Property foreclosed (net of allowance for impairment of Baht 28 million) 15,000 15,000 Receivables from disposal of securities 12,650 - Deferred premium on forward contract 8,403 - Deposit for derivative business 5,000 5,000 Accrued interest receivables 4,828 1,554 Fees and service income receivables 353 4,809 Others 6,722 7,125 Total other assets 199, ,747 9

18 11. Borrowings from financial institutions As at 30 September 2013 and 31 December 2012, borrowings from financial institutions comprising only domestic borrowings and are classified as follows: 30 September 2013 Interest rate Remaining period to maturity per annum (percent) At call Less than 1 year 1-5 years Total Borrowings , , ,000 Total borrowings from financial institutions - 250, , , December 2012 Interest rate Remaining period to maturity per annum (percent) At call Less than 1 year 1-5 years Total Promissory notes , ,000-1,300,000 Borrowings , ,000 Total borrowings from financial institutions 900, , ,000 2,200,000 As at 30 September 2013 and 31 December 2012, the above borrowings of Baht 900 million are borrowings from the branch of an overseas bank, with maturities of next 2-3 years. The interest is carried at fixed rates per annum, payable monthly. The loan agreements contain conditions whereby the Company is obliged to pay unwinding fees or compensation for losses arising as a result of the Company terminating the agreements or prepaying the borrowings before the maturity date, which is calculated based on the conditions as specified in the loan agreements. Moreover, the Company has to comply with certain terms and conditions such as the maintenance of an interest bearing debt to equity ratio of not exceeding 1.5:1 and dividend payout ratio. 12. Payables to Clearing House 30 September December 2012 Payables to Clearing House Equity and debt securities 631, ,398 Derivatives 2, Payables to foreign companies Total payables to Clearing House 634, ,616 10

19 13. Securities and derivatives business payables 30 September December 2012 Securities business payables Cash accounts 715,809 1,487,045 Guaranteed deposit payables 633, ,520 Payable under securities borrowing and lending business 570, ,658 Total securities business payables 1,919,384 2,565,223 Add: Interest payables 4,125 3,517 Total securities business payables 1,923,509 2,568,740 Derivatives business payables Derivatives business payables 139 1,458 Total derivatives business payables 139 1,458 Total securities and derivatives business payables 1,923,648 2,570, Borrowings As at 30 September 2013, borrowings of Baht 1,577 million are US dollar borrowing from a related party, maturing in January 2014, and carrying interest at LIBOR+1.05 percent per annum, payable quarterly. However, the Company has purchased forward exchange contract to mitigate the related foreign exchange risk. 15. Other liabilities 30 September December 2012 Accrued employee expenses 89, ,937 Accrued expenses 28,064 20,811 Accrued interest expenses 5,956 4,938 Corporate income tax payable 11,101 45,509 Others 28,823 24,903 Total other liabilities 163, ,098 11

20 16. Share capital On 26 April 2013, the Annual General Meeting of the Company s shareholders No.1/2556 passed the following resolutions. a. Approved a share split changing the par value of the Company s ordinary shares from Baht 10 per share (71,682,300 shares) to Baht 1 per share (716,823,000 shares). b. Approved an increase of Baht 1,433,646,000 in the Company s registered share capital, from Baht 716,823,000 to Baht 2,150,469,000, through the issuance of 1,433,646,000 new ordinary shares with a par value of Baht 1 each. All new ordinary shares are to be allotted to the existing shareholders in proportion to their existing shareholding (Rights Offering) at a rate of 2 new shares for each existing share, and an offer price of Baht 1 per share. The Company registered the increase in its registered share capital with the Ministry of Commerce on 24 June 2013 and share capital has been fully paid up. 17. Brokerage fee income For the three-month periods ended 30 September For the nine-month periods ended 30 September Brokerage fee from securities business 212, , , ,985 Brokerage fee from derivatives business 15,030 15,322 54,504 46,482 Total brokerage fees income 227, , , , Fees and service income For the three-month periods ended 30 September For the nine-month periods ended 30 September Underwriting fee 11,702 2,749 34,623 16,689 Financial advisory 3,206 1,550 6,692 4,430 Securities borrowing and lending 5,390 5,584 18,156 13,045 Business support 6,822 13,921 21,856 24,578 Others 876 1,240 5,363 5,793 Total fees and service income 27,996 25,044 86,690 64,535 12

21 19. Directors remuneration Directors remuneration represents the benefits paid to directors of the Company in accordance with Section 90 of the Public Limited Companies Act., exclusive of salaries, bonuses and related benefits paid to directors who hold executive positions. 20. Earnings per share Basic earnings per share is calculated by dividing profit for the period (excluding other comprehensive income) by the weighted average number of ordinary shares outstanding during the period, net of treasury stock held by the Company. The number of ordinary shares has been adjusted to reflect the proportionate change in the number of ordinary shares as a result of the share split from Baht 10 per share to Baht 1 per share mentioned in Note 16 to financial statements, with the calculation assuming that the share split took place at the beginning of the reporting period. For the three-month periods ended 30 September For the nine-month periods ended 30 September Profit for the period (Thousand Baht) 79,326 56, , ,492 Weighted average number of ordinary shares (shares) 2,150,469, ,951,000 1,252,470, ,951,000 Earnings per share (Baht/share) Dividends During the periods, the Company declared the following dividends for payment to shareholders: Dividend Approved by Total dividend declaration declaration per share Dividends from the operating results for the year ended 31 December 2012 The annual ordinary meeting of the Company s shareholders No. 1/2556 on 26 April 2013 (Million Baht) (Baht) (from 71,682,300 ordinary shares at par value of Baht 10 each) Dividends from the operating results for the period as from 1 September 2011 to 31 December 2011 The annual ordinary meeting of the Company s shareholders No. 1/2555 on 27 June (from 68,395,100 ordinary shares at par value of Baht 10 each) 13

22 22. Related party transactions During the periods, the Company had significant business transactions with the following related parties. Related parties Nomura Singapore Limited Nomura Securities Co., Ltd. Nomura International (Hong Kong) Limited Nomura International Plc. Nomura Investments (Singapore) Private Limited Nomura Mauritius Limited Instinet Pacific Limited United Information Highway Co., Ltd. Relationship Having common major shareholders Having common major shareholders Having common major shareholders Having common major shareholders Having common major shareholders Having common major shareholders Having common major shareholders Having common director Such transactions with its related companies were concluded on the commercial terms and based agree upon by the Company and those companies in the ordinary course of business. The significant transactions are summarised below: For the three-month For the nine-month periods ended 30 September periods ended 30 September Pricing policies (for period 2013) Transactions occurred during the period Brokerage fees income - Nomura Singapore Limited 181 4,370 4,536 13,945 At normal rate charged to other clients and Exclusive Partner, in accordance with the SET s and SEC s notification - Nomura International Plc , At normal rate charged to other clients and Exclusive Partner, in accordance with the SET s and SEC s notification - Instinet Pacific Limited 9,423-25,108 - At normal rate charged to other clients and Exclusive Partner, in accordance with the SET s and SEC s notification Fees income from business support services - Nomura Singapore Limited 2,700 2,687 8,100 7,888 At actual costs plus a margin of 10 percent Fees income from research services - Nomura Securities Co., Ltd ,550 4,550 At actual costs plus a margin of 10 percent 14

23 For the three-month periods ended 30 September For the nine-month periods ended 30 September Pricing policies (for period 2013) Transactions occurred during the period (continued) Fees income from introducing broker - Nomura Singapore Limited ,088 Based on actual executed transactions of our referred customers and at the rate as indicated in the agreement referred to similar business Fees income from underwriting - Nomura International Plc ,437 Fees income from securities borrowing and lending - Nomura International Plc ,935 - At normal rate charged to other clients - Instinet Pacific Limited At normal rate charged to other clients Fees income from other services - Nomura Securities Co., Ltd. 4,122 11,234 13,756 16,690 At the rate determined by extend and amount of work assigned Fee expenses from Hi-speed circuit service - United Information Highway Co., Ltd ,065 At the same rate charged to other clients without dependent interest Brokerage fees expense from foreign securities trading - Nomura Singapore Limited Calculated base on trade volume and at the referential rate charged to other clients without dependent interest Fee expenses from referral - Nomura Securities Co., Ltd Interest on borrowings - Nomura Mauritius Limited 5,356-14,255 - At the rate per annum Interest income from loans to employees - Director At the same rate charged to other Company s staffs Legal advisory fees - Director

24 As at 30 September 2013 and 31 December 2012, the outstanding balances of the related party transactions have been shown in the statements of financial position as follows: 30 September December 2012 Securities business receivables - Nomura Singapore Limited 3,960 9,321 - Nomura International Plc ,600 - Instinet Pacific Limited 126,265 - Other assets - accrued income receivables - Nomura Singapore Limited 272 1,172 - Nomura Securities Co., Ltd. - 3,511 Other assets - loan to employees - Director 1,397 1,604 Other assets - others - Nomura Investments (Singapore) Private Limited 1,923 1,387 - Nomura International (Hong Kong) Limited Nomura Singapore Limited Nomura Securities Co., Ltd Securities business payables - Nomura Singapore Limited - 106,284 - Nomura International Plc ,972 - Instinet Pacific Limited 165,168 - Borrowings - Nomura Mauritius Limited 1,576,650 - Other liabilities - Nomura International (Hong Kong) Limited Nomura Mauritius Limited 4, United Information Highway Co., Ltd The movements of the balance of borrowings between the Company and those related companies for the nine-month period ended 30 September 2013 are as follows: For the nine-month period ended 30 September 2013 Balance as at Increase during Balance as at Borrowings 31 December 2012 the period 30 September 2013 Nomura Mauritius Limited - 1,576,650 1,576,650 16

25 Management s remuneration Benefits paid to directors and management of the Company both monetary and non-monetary were as follows: For the three-month periods ended 30 September For the nine-month periods ended 30 September Short-term employee benefits 27,082 20,458 79,237 60,720 Post-employment benefits ,459 1,364 27,577 20,920 80,696 62, Operating information by segment Operating segment information is reported in a manner consistent with the internal reports that are regularly reviewed by the chief operating decision maker (the Board of Executive Directors) in order to make decisions about the allocation of resources to the segment and assess its performance. For management purposes, the Company is organised into business units based on its products and services and have four reportable segments as follows: Securities business segment, which provide service according to brokering, derivative brokering and securities borrowing and lending. Investment banking segment, which provide service according to underwriting, investment advisory and financial advisory. Fixed Income segment, which provide service according to trading debt securities. Other segments, which provide other services. The chief operating decision maker monitors the operating results of the business units separately for the purpose of making decisions about resource allocation and assessing performance. Segment performance is measured based on operating profit or loss and on a basis consistent with that used to measure operating profit or loss in the financial statements. 17

26 Below is the financial information as at 30 September 2013 and 31 December 2012, and for the three-month and nine-month periods ended 30 September 2013 and 2012 of the Company by segment. (Unit: Million Baht) For the three-month periods ended 30 September Securities business segment Investments banking segment Fixed income segment Other segments Total Total revenue Segment operating income (1) Unallocated income (expenses) Gain (loss) on investments/ derivatives/exchange rate 2 4 Interest and dividend income Interest on margin loans Other income 1 1 Financial costs (35) (19) Operating expenses (68) (64) Income tax (20) (18) Profit for the period For the nine-month periods ended 30 September (Unit: Million Baht) Securities business segment Investments banking segment Fixed income segment Other segments Total Total revenue Segment operating income Unallocated income (expenses) Gain (loss) on investments/ derivatives/exchange rate (13) 3 Interest and dividend income Interest on margin loans Other income 4 3 Financial costs (115) (46) Operating expenses (221) (206) Income tax (90) (42) Profit for the period

27 (Unit: Million Baht) Securities business segment Investments banking segment As at Fixed income segment Other segments Total September December September December September December September December September December Premises and equipment - net Unallocated assets 10,494 9,136 Total assets 10,601 9, Commitments and contingent liabilities As at 30 September 2013 and 31 December 2012, the Company has the following outstanding commitments and contingent liabilities The Company has the outstanding commitments under the lease agreements for its office building and motor vehicles, under which the Company is to pay rental and service fees in the future, counting from the period end date, as follows. (Unit: Million Baht) 30 September December 2012 Within 1 year In 1-2 years Over 2 years The Company has commitments to pay the fees related to its securities business to the Stock Exchange of Thailand and Thailand Securities Depository Company Limited. These comprise a monthly fixed amount, a percentage of trading volume each month and/or a percentage of net settlements each month The Company has commitment to pay the fees related to its derivatives business to Thailand Futures Exchange Public Company Limited and Thailand Clearing House Company Limited. These comprise a monthly fixed amount and/or at the fixed payment for each purchase or sale of a futures contract transacted. 19

28 24.4 The Company has commitment to pay a fee to the Office of the Securities and Exchange Commission in relation to securities business licenses for securities brokerage at the rate of percent of its trading volume. For commission received from securities trading, underwriting and others which the Company has licenses, the Company also has commitment to pay a fee at the rate of 1 percent per annum of income from the aforesaid activities. The minimum total fee is Baht 500,000 per annum Employee Joint Investment Program The Company has the Employee Joint Investment Program ( the EJIP ), one of the Company s staff welfare benefits, which support the Company s staff who voluntary apply to be the EJIP members to build their wealth by possessing the Company s shares. The EJIP member must contribute a certain amount or a certain portion but not less than Baht 500 and not greater than 10 percent of their salary and average incentive on a monthly basis. The Company shall contribute to the EJIP members at 10 percent of their contributions. During the periods, the amount contributed to the EJIP members by the Company as mentioned portion was presented under the caption of Personnel expenses. 25. Approval of interim financial statements These interim financial statements were authorised for issue by the Company s board of directors on 12 November