BNP PARIBAS BANGKOK BRANCH STATUTORY FINANCIAL STATEMENTS 31 DECEMBER 2011

Transcription

1 BNP PARIBAS BANGKOK BRANCH STATUTORY FINANCIAL STATEMENTS 31 DECEMBER 2011

2 AUDITOR S REPORT To the Board of Directors of BNP Paribas I have audited the accompanying statement of financial positions as at 31 December 2011and 2010, and the related statements of income, changes in Head Office s equity and balances with other branches under the same entity and cash flows for the years then ended of BNP Paribas - Bangkok Branch. The Bank s management is responsible for the correctness and completeness of information in these financial statements. My responsibility is to express an opinion on these financial statements based on my audits. I conducted my audits in accordance with generally accepted auditing standards. Those standards require that I plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audits provide a reasonable basis for my opinion. In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position as at 31 December 2011 and 2010, and the results of its operations and cash flows for the years then ended of BNP Paribas - Bangkok Branch in accordance with generally accepted accounting principles. Anothai Leekitwattana Certified Public Accountant (Thailand) No PricewaterhouseCoopers ABAS Ltd. Bangkok 25 April 2012

3 1 General information BNP Paribas was incorporated in France. The address of BNP Paribas registration in Thailand, as a branch, is as follows: 29 th Floor Abdulrahim Place, 990 Rama IV Road, Bangkok BNP Paribas operates a Bangkok Branch. The Bank was granted a banking license by the Bank of Thailand on the 6 th November These financial statements have been approved by the management on 25 April Summary of significant accounting policies The principal accounting policies adopted in the preparation of the Bank s financial statements of the Bank are set out below: 2.1 Basis of preparation Bangkok Branch is a segment of BNP Paribas which is incorporated in France ( the Head office ) and is not separately incorporated legal entity. The financial statements have been prepared from the records of the Thailand operations and only reflect transactions recorded locally. The financial statements have been prepared in accordance with procedures, the generally accepted accounting principles in Thailand under the Accounting Act B.E. 2543, being those Financial Reporting Standards under the Accounting Profession Act B.E The primary financial statements (i.e. statement of financial position, statement of comprehensive income, statement of changes in Head Office s equity and other branches under the same entity and statement of cash flows) are prepared in the format as required by the Notification of the Bank of Thailand ( BOT ), No. SorNorSor 11/2553, The Preparation and Format of the Financial Statements of Commercial Bank and Holding Parent Company of Financial Group dated on 3 December The financial statements have been prepared under the historical cost convention except for some investments and derivative financial instruments as disclosed in the accounting policies below. The preparation of financial statements in conformity with Thai generally accepted accounting principles requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Bank s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in note 4. An English version of the financial statements has been prepared from the statutory financial statements that are in the Thai language. In the event of a conflict or a difference of interpretation between the two languages, the Thai language statutory financial statements shall prevail. Refer to Note 36, the major comparative figures have been reclassified as necessary to conform with the presentation according to the Notification of the BOT No. SorNorSor 11/2553, The Presentation and Format of the Financial Statements of Commercial Bank and Holding Parent Company of Financial Group dated 3 December 2010 which is mandatory for the accounting periods beginning on or after 1 January 2011.

4 2 Summary of significant accounting policies (Cont d) 2.2 New accounting standards, new financial reporting standards, new interpretation, amendments to accounting standards, accounting framework a) New accounting standards, new financial reporting standards, new interpretation and amendments to accounting standards effective for the periods beginning on or after 1 January 2011 and adopt by the Bank: TAS 1 (Revised 2009) TAS 2 (Revised 2009) TAS 7 (Revised 2009) TAS 8 (Revised 2009) TAS 10 (Revised 2009) TAS11 (Revised 2009) TAS 16 (Revised 2009) TAS 17 (Revised 2009) TAS 18 (Revised 2009) TAS 19 TAS 23 (Revised 2009) TAS 24 (Revised 2009) TAS 26 TAS 27 (Revised 2009) TAS 28 (Revised 2009) TAS 29 TAS 31 (Revised 2009) TAS 33 (Revised 2009) TAS 34 (Revised 2009) TAS 36 (Revised 2009) TAS 37 (Revised 2009) TAS 38 (Revised 2009) TAS 40 (Revised 2009) TFRS 2 TFRS 3 (Revised 2009) TFRS 5 (Revised 2009) TFRS 6 TFRIC 15 TSIC 31 Presentation of Financial Statements Inventories Statement of Cash Flows Accounting Policies, Changes in Accounting Estimates and Errors Events after the Reporting Period Construction Contracts Property, Plant and Equipment Leases Revenue Employee Benefits Borrowing Costs Related Party Disclosures Accounting and Reporting by Retirement Benefit Plans Consolidated and Separate Financial Statements Investments in Associates Financial Reporting in Hyperinflationary Economies Interests in Joint Ventures Earnings per Share Interim Financial Reporting Impairment of Assets Provisions, Contingent Liabilities and Contingent Assets Intangible Assets Investment Property Share-based Payment Business Combinations Non-current Assets Held for Sale and Discontinued Operations Exploration for and Evaluation of Mineral Resources Agreements for the Construction of Real Estate Revenue - Barter Transactions Involving Advertising Services

5 2 Summary of significant accounting policies (Cont d) 2.2 New accounting standards, new financial reporting standards, new interpretation, amendments to accounting standards, accounting framework (Cont d) a) New accounting standards, new financial reporting standards, new interpretation and amendments to accounting standards effective for the periods beginning on or after 1 January 2011 and adopt by the Bank: (Cont d) The accounting policies used in the preparation of the financial statements are consistent with those used in the annual financial statements for the year ended 31 December 2010 except for followings: x TAS1 (Revised 2009) Presentation of Financial Statements x TAS 16 (Revised 2009) Property, Plant and Equipment x TAS 19 Employee Benefits x TFRS 2 Share-based Payment and TAS 19 Employee Benefits which are under the assessment of their impacts. The Bank s management has assessed and determined impact of the adoption of new accounting policies as follows; TAS 1 (Revised 2009): The revised standard will prohibit the presentation of items of income and expenses in the statement of changes in equity, requiring non-owner changes in equity to be presented separately from owner changes in equity. The Bank can choose whether to present one statement (the statement of comprehensive income) or two statements (the statement of income and statement of comprehensive income). Where the Bank restate or reclassify comparative information, they will be required to present a restated statement of financial position as at the beginning of the comparative period in addition to the current requirement to present statement of financial position at the end of the current period and comparative period. However, for the financial statements whose period begins on or after 1 January 2011, and which period is the first to apply this standard, the Bank can choose to present statement of financial position only two statements without the statement of financial position as at the beginning comparative period. The Bank has adopted TAS 1 (Revised 2009) with effect from 1 January The Bank chooses to present a single statement of comprehensive income. As at 31 December 2010, the Bank presented losses on re-measuring available-for-sale-investments in statement of comprehensive income amounting to Baht 3.78 million. TAS 16 (Revised 2009): The revised standard requires the Bank to include in cost of PPE an initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located, when the Bank has the obligation to do so. For an item of PPE with a cost that is significant in relation to the total cost of the item, the Bank is required to depreciated the item separately. The revised standard also requires the Bank to review useful life, residual value and depreciation method at least at each financial year-end. The effect from such standard will not significantly impact the financial statements being presented. TAS 19: This deals with accounting for employee benefits. The standard classifies employee benefits into four categories: (a) short-term employee benefits; (b) postemployment benefits (including defined contribution plan and defined benefit plan); (c) other long-term employee benefits; and (d) termination benefits. The standard requires the Bank to measure the defined benefit plan and other long-term employee benefits by using the Projected Unit Credit method (PUC). The Bank can choose to recognise any actuarial gain or loss for a defined benefit plan either in other comprehensive income or profit and loss. Actuarial gain or loss for other long-term employee benefits shall be recognised in profit and loss. The Bank has adopted this standard from 1 January 2011.

6 2 Summary of significant accounting policies (Cont d) 2.2 New accounting standards, new financial reporting standards, new interpretation, amendments to accounting standards, accounting framework (Cont d) a) New accounting standards, new financial reporting standards, new interpretation and amendments to accounting standards effective for the periods beginning on or after 1 January 2011 and adopt by the Bank: (Cont d) TFRS 2: This deals with accounting for transactions in which an entity receives goods or services as consideration for either: x Cash or other assets, the amount of which is based on the price or value of the entity s share (cash-settled) that is recognised as liability. The measurement of the transaction is based on the fair value of the goods or service received. The cash-settled transactions are required to be re-measured at the dateof each statement of financial position and at the date of settlement, with change in fair value recognised in profit or loss. The Bank has adopted this standard with effect from 1 January The impact of the adoption of accounting policy is as follows: Baht 000 Statement of financial position as at 31 December 2011 Provision for share-based payment 15,025 Statement of comprehensive income for the year ended 31 December 2011 Personnel expenses 15,025 b) Amendments to accounting standards and new interpretations to accounting standard that are not yet effective and have not been early adopted by the Bank: Effective for the periods beginning on or after 1 January 2013 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 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 The Bank s management has determined that the amendments to accounting standards and new interpretations to accounting standard will not significantly impact the financial statements being presented. 2.3 Recognition of interest income Interest income is recognised on accrual basis. Such income recognition is discontinued when reasonable doubt exists as to the timely collection or if payment of principal or interest is contractually over three months past due. Then the interest income is recognised when payment is received. When income recognition is discontinued, the Bank reverses outstanding accrued interest income to the statement of income.

7 2 Summary of significant accounting policies (Cont d) 2.4 Recognition of interest expenses Interest on borrowings and deposits are recognised as an expense on accrual basis. 2.5 Investment in securities Investments are initially recognizes and eliminates on the trade date. Basis of investment classification The Bank classifies its investments into the following categories: trading, available-for-sale, heldto-maturity and general investment. Investments that are acquired principally for the purpose of generating a profit from short-term fluctuations in price are classified as trading investments. Investments intended to be held for an indefinite period of time, which may be sold in response to needs for liquidity or changes in interest rates, are classified as available-for-sale. Investments with fixed maturity that the management has the intent and ability to hold to maturity are classified as held-to-maturity. Investment in non-marketable equity securities are classified as general investment. Management determines the appropriate classification of its investments at the time of the purchase and re-evaluates such designation on a regular basis. Carrying value of investments Trading securities are carried at fair value, with differences between the carrying values and fair values being presented as unrealised gains or losses in the statement of income. Available-for-sale securities are carried at fair values, less allowance for impairment in value (if any). Differences between carrying values and fair values are presented as unrealised gains or losses in the Head Office s equity section. Held-to-maturity debt securities are carried at amortised cost, less allowance for impairment in value (if any). Investments in non-marketable equity securities are classified as general securities and carried at cost less allowance for impairment in value (if any). Fair values of debt securities, which are classified as trading and available-for-sale securities are calculated with reference to the last quoted bid prices at the close of business on the statement of financial position date. Fair values of marketable equity securities are calculated with reference to the quoted bid prices of the Stock Exchange of Thailand at the close of business on the statement of financial position date. A test for impairment is carried out when there is a factor indicating that such investment might be impaired. If the carrying value of the investment is higher than its recoverable amount, the impairment loss is charged to the statement of comprehensive income. On disposal of an investment, the difference between the net disposal proceeds and the carrying amount is charged or credited to the statement of comprehensive income. When disposing of part of a particular investment in debt or equity securities, the carrying amount of the disposed part is based on the First-In, First-Out carrying amount of the total holding of the investment.

8 2 Summary of significant accounting policies (Cont d) 2.6 Loans and allowance for doubtful accounts Loans are generally stated at the principal amounts outstanding. The allowance for doubtful accounts is provided for risks of losses incurred on loans. The allowance is increased by provisions charged to expense and decreased by write-offs, net off recoveries.the estimated losses are based on collection experience and management s evaluation of the adequacy of the allowance for doubtful accounts, which evaluation encompasses consideration of the current status of individual debtors as well as debtors in general. 2.7 Troubled debt restructurings The Bank records assets or equities received in settlement of debts at the lower of the fair value of the assets or equities, less estimated selling expenses (if any), or the amount of investment in receivables (including accrued interest income). When the troubled debt restructuring involves modification of terms of receivables, the fair value of the investment in receivables after restructuring is based on the net present value of the expected future cash flows, discounted by the Minimum Lending Rates (MLR) prevailing at the restructuring date. Losses arising from restructuring, less recorded allowance for doubtful accounts, are recognised in the statement of income when incurred. Legal fees and other direct costs incurred because of the restructuring are expensed when incurred. 2.8 Equipment and depreciation Equipment is stated at historical cost less accumulated depreciationand impairment loss. Subsequent costs are included in the asset s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Bank and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred. Depreciation is calculated on the straight-line method to write off the cost of each asset less its residual value over the estimated useful life as follows: Leasehold improvements Furniture and office Motor vehicles 5 years 3-5 years 5 years The assets residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. The asset s carrying amount is written-down immediately to its recoverable amount if the asset s carrying amount is greater than its estimated recoverable amount. Gains or losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised within Other (losses)/gains net in profit or loss. 2.9 Computer software Purchased computer software licenses are capitalised on the basis of the costs incurred to acquire and bring to use the specific software. These costs are amortised over their estimated useful lives 5-10 years. Software maintenance costs are expenses as incurred.

9 2 Summary of significant accounting policies (Cont d) 2.10 Financial instruments A financial instrument is any contract that gives rise to both a financial asset of one entity and a financial liability or an equity instrument of another entity. The Bank s financial assets and liabilities comprise of cash, interbank and money market items (assets and liabilities), investment in securities, loans, deposits, borrowings and certain balances of other assets and liabilities Derivatives financial instruments Derivatives financial instruments for trading purpose are recognised at fair valuesand net amount reported in the statement of financial position as assets or liabilities by the same counterparty and when the contracts have the same maturity date. Changes in fair values are posted to the statement of income. Derivatives financial instruments for hedging are used for the purpose to manage the Bank s exposures to market price movement using of derivatives. Gain or loss resulting from the change in fair values of contracts is recognised in accordance with the accounting treatment on hedge items. If hedged items are carried on an accrual basis, then hedging instruments carry the accrual consistently. Hybrid Instrument includes a non-derivative host contract and an embedded derivative. The Bank records the host contract applied accounting standards as the classification of the host contract. An embedded derivative is separated from the host contract and measured at fair value, if and only if: 1. The economic characteristics and risks of the host contract and the embedded derivative are non-closely related. 2. A separate instrument with the same terms as the embedded derivative would meet the definition of a derivative. 3. The hybrid instrument is not measured at fair value through the statement of income. If an embedded derivative is not separated or in case there is no reliable fair value of embedded derivative, the Bank will record the hybrid instrument, applying accounting standards as the classification of the host contract. Starting from 1 January 2010 onwards, the Bank has applied fair value option method for deposits and borrowings with embedded derivatives. The fair value changes are recognised in the statement of income Leases - where the Bank is the lessee Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease Cash and cash equivalents For the purposes of cash flow statement, cash and cash equivalents include cash on hand, interbank and money market items and net balance of inter-office accounts with Head Office and other branches under the same entity with initial maturity of three months or less.

10 2 Summary of significant accounting policies (Cont d) 2.14 Foreign currency translation Foreign currency assets and liabilities are translated into Baht using the reference exchange rates established by the BOT ruling at the reporting date for the translation of foreign monetary items, and the average rates of exchange of the BOT ruling at the transaction date for the transactions in the statements of comprehensive income. Gains and losses resulting from translation are included in the statements of comprehensive income Provisions Provisions for are recognised when: the Bank has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated. Provisions are not recognised for future operating losses. Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognised as interest expense Employee benefits Provident fund The Bank has a define contribution plan in a provident fund for employee. The assets of which are held in a separate fund which is managed by the external fund manager. The provident fund is funded by payments from employees and by the Bank. Contributions to the provident fund are charged to the statement of income in the year to which they relate. Long-term employee benefits The Bank set provision for long-term employee benefits which consisted of legal severance under the labor law applicable in Thailand and long-serviced award. The liability in respect of employee s benefits is measured, using the projected unit credit method which is calculated by an independent actuary in accordance with the actuarial technique. The present value of the defined benefit obligation is determined by discounting estimated future cash flows using yield on the government bonds which have terms to maturity approximating the terms of related liability. The estimated future cash flows shall reflect employee salaries, turnover rate, mortality, length of service and others. Actuarial gains or losses will be recognised in the statement of comprehensive incomes in the period to which they are related. In determining the appropriate discount rate, the Group considers the interest rates in which the benefits will be paid to the staff.

11 2 Summary of significant accounting policies (Cont d) 2.17 Share-based payment Share-based payment transactions are payments based the value of BNP Paribas shares (Head Office). The Bank grants employees the deferred share-based or share price-linked cash settled compensation plans. The expense related to these plans is recognised in the year during which the employee rendered the corresponding services. If the payment is explicitly subject to the employee's continued presence at the vesting date, the service are presumed to have been rendered during the vesting period and the corresponding compensation expense is recognised on a pro rata basis over that period. 3 Financial risk management 3.1 Financial risk factors Risk management is key in the business of banking. At BNP Paribas, operating methods and procedures throughout the organization are geared towards effectively addressing this matter. The entire process is supervised primarily by the Group Risk Management Department (GRM), which is responsible for measuring and controlling risks at Group level. GRM is independent from the core businesses, business lines and territories and reports directly to Group Executive Management. The risk categories reported by the Bank evolve in line with methodological developments and regulatory requirements Credit risk Credit risk is the risk of incurring an economic loss on loans and receivables (existing or potential due to prior commitments) resulting from a change in the credit quality of the Bank s debtors, which can ultimately result in default. The probability of default and the expected recovery on the loan or receivable in the event of default are key components of the credit quality assessment. Counterparty risk is the demonstration of credit risk in market, investment and/or payment transactions that potentially expose the Bank to the default risk of the counterparty. It is a bilateral risk on a counterparty with whom a transaction is entered into and of which the amount may vary over time, in line with market parameters that impact the value of the relevant market instrument. BNP Paribas, Bangkok Branch adopts a Global Credit Risk Policy & Procedures ( Credit Risk Policy ) that is detailed in accordance with the Bank of Thailand s Regulation. The credit risk policy provides guidance on credit risk management and also defines the responsibilities of each of the parties involved in credit risk management.

12 3 Financial risk management (Cont d) 3.1 Financial risk factors (Cont d) Market risk Market risk is the risk of incurring an economic loss as a result of adverse changes in market parameters, whether directly observable or not. Observable market parameters include, but are not limited to, foreign exchange rates, interest rate, price of security and commodity, price of derivatives, and other parameters that can be directly inferred from them, such as credit spreads, implied volatility or implied correlation. Non-observable market parameters are those based on working assumptions such as parameters contained in models or based on statistical analysis. Market risk primarily arises in trading portfolios, but may also exist in other portfolios containing assets held in connection with the banking business, such as Equity holdings. Liquidity is an important component of market risk. In situations of limited or no liquidity, goods or instruments may not be tradable at their estimated value. This may arise, for example, due to low transaction volumes, legal restrictions, or a one-way market. The GRM s responsibility in terms of market risk management is to define measure and analyze sensitivities and risk factors, and to measure and control Value at Risk (VaR) to ensure that all business activity complies with the approved limit. The interest rate risk and the foreign exchange rate risk are the key market risks of the Bank a b Interest Rate Risk arises from a change in interest rates to have an adverse effect on the value of the Bank s financial instrument or may cause volatility on net interest earnings or cost of the Bank in the current reporting period and future years. Foreign exchange rate risk is the risk that occurs from changes in exchange rates which may affect the value of the Bank s financial instruments or may cause volatility in the Bank s earnings or cost of funds Liquidity risk Liquidity risk is the risk of the Bank being unable to fulfill current or future foreseen or unforeseen cash or collateral requirements without affecting routine transactions or its financial position. The Bank manages its liquidity position through a global liquidity policy approved by Group Executive Management and also complies with the Bank of Thailand s liquidity reserve regulations. The objective of the Group s liquidity management is to secure a balanced financing mix to support the Bank s development strategy, ensure that the Bank is always in a position to discharge its obligations to its customer, ensure that it does not trigger a systemic crisis solely by its own action, to comply with the standards set by the local banking supervisor, to keep the cost of refinancing as low as possible; and to cope with any liquidity crises. Group ALM Committee authorizes implementation of the liquidity risk management policy. Responsibility for implementing the policy at both central and individual entity level has been delegated to ALM-Treasury Committee. In addition, Group Risk Management (GRM) contributes to defining liquidity policy principles. It also provides second-line control on risk indicators including regularly monitor the liquidity stress test.

13 3 Financial risk management (Cont d) 3.2 Fair value estimation The fair value represents the amount for which an asset could be exchanged or a liability settled in an arm s length transaction between knowledgeable and willing parties. The financial instruments are measured using quoted market prices. Where quoted market prices are not available, fair values are based on the generally accepted models. The input parameter to the model used in taken form observable markets for similar instruments or underlyings, and includes consideration of maturity, interest rate, correlation and volatility, etc. 4 Additional information 4.1 Critical accounting estimates, assumptions and judgments Estimates assumptions and judgments are reviewed on an ongoing basis and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Fair value of financial derivative instruments In determining the fair value of financial derivative instruments, the management has made judgment by using a variety of valuation techniques. The input parameters to the models used are taken from observable markets, and includes consideration of maturity, interest rate correlation and volatility, etc. Impairment of loans and commitment and contingent liabilities The Bank maintains an allowance for doubtful accounts and provision for contingent liabilities to reflect impairment of loans and off-statement of financial position items. They relate to estimated losses resulting from the inability of customers to make required payments. The allowance for doubtful accounts and provision for contingent liabilities are significantly impacted by the Bank s assessment of collaterals and/or future cash inflows. Such assessment being based on consideration of historical collection experience, financial position and performance, known identified instances of default and consideration of economics. Provision for long-term employee benefits The Bank has commitment on provision for long-term employee benefits to employee on reaching retirement age. The present value of employee benefit liabilities recognised in the statement of financial position is determined on the present value of estimated future cash outflows for staff that is nearly reach retirement age. The assumptions used in determining the net year cost for employee benefits includes the salary and years of services of respective employees which are payable in the future and discount rate. Any changes in these assumptions will impact the net year cost recorded for employee benefits. 4.2 Capital risk management The Bank s objectives when managing capital are to ensure that the Bank will be able to continue as a going concern while maximizing the returns to the Bank, the benefits of other stakeholders and complying with the Bank of Thailand rules of the capital fund.

14 Capital funds Capital fund and assets maintained in Thailand under section 32 of the Financial Institution Act B.E2551 as at 31 December 2011 and 2010 comprise of the following Total Asset maintained under Section 32 6,329,323 5,957,034 Total fund for maintenance of assets under Section 32 and net balance of inter-office accounts Capital for maintenance of assets under Section 32 5,472,323 5,433,825 Net balance of inter-office accounts which the branch is the debtor to the head office and other branches located in other countries, the parent company and subsidiaries of the head office 3,270,954 12,080,595 Total 8,743,277 17,514,420 Total regulatory Capital funds 5,472,323 5,433,825 Total capital funds to risk assets ratio (%) The Bank will disclose capital maintenance information as at 31 December 2011 in accordance with the Notification of the Bank of Thailand Re: Public Disclosure of Capital Maintenance Information for Commercial Banks on its web site at in April Interbank and money market items, net - assets 2011 On demand Term Total Baht 000 Domestic items The Bank of Thailand 104,757 2,920,000 3,024,757 Commercial banks 8,317-8,317 Total 113,074 2,920,000 3,033,074 Add Accrued interest receivables Total domestic items 113,074 2,920,440 3,033,514 Foreign items Singapore Dollars 16,706-16,706 Swedish Kroners 20,333-20,333 Danish Kroners Australian Dollars 2,543-2,543 Euro - 136, ,272 Total 39, , ,120 Add Accrued interest receivables Less Allowance for doubtful - (1,362) (1,362) Total foreign items 39, , ,200 Total domestic and foreign items 152,922 3,055,792 3,208,714

15 Interbank and money market items, net - assets (Cont d) 2010 On demand Term Total Baht 000 Domestic items The Bank of Thailand 56,805 9,350,000 9,406,805 Commercial banks 1,006-1,006 Total 57,811 9,350,000 9,407,811 Add Accrued interest receivables Total domestic items 57,811 9,350,768 9,408,579 Foreign items Singapore Dollars 44,235-44,235 Swedish Kroners 21,059-21,059 Danish Kroners Australian Dollars 6,270-6,270 Total foreign items 71,950-71,950 Total domestic and foreign items 129,761 9,350,768 9,480,529 7 Derivatives 7.1 Derivatives held for trading As at 31 December 2011 and 2010, fair value and notional amount classified by type of risks are as follows: 2011 Type of Risk Fair Value Assets Liabilitiess Notional amount Baht 000 Exchange rate risk 14,874,809 12,241, ,398,661 Interest rate risk 14,500,097 14,716,867 1,371,298,507 Credit risk 1,779 24, ,622 Total 29,376,685 26,982,387 1,784,261,790 Type of Risk 2010 Fair Value Assets Liabilities Notional amount Baht 000 Exchange rate risk 18,421,203 19,389, ,040,114 Interest rate risk 10,899,936 11,110,107 1,012,730,927 Credit risk 3,217 3, ,622 Total 29,324,356 30,503,445 1,550,335,663

16 7 Derivatives (Cont d) 7.1 Derivatives held for trading (Cont d) As at 31 December 2011 and 2010, proportion of the notional of derivative transactions classified by counter parties are as follows: Counterparty Proportion (%) Proportion (%) Financial institution Group companies 9 11 Corporate 5 4 Total Investment in securities, net Investments in securities as at 31 December 2011 and 2010 comprised of the following: Fair value Fair value Trading securities Government securities and securities guaranteed by the Ministry of Finance 2,124,056 6,478,696 Total trading securities, net 2,124,056 6,478,696 Available-for-sale securities Government securities and securities 8,743,108 8,670,337 guaranteed by the Ministry of Finance Total available-for-sale securities 8,743,108 8,670,337 Cost/ Cost/ Amortised cost Amortised cost Held to maturity debt securities Government securities and securities guaranteed by the Ministry of Finance - 249,002 Total held to maturity debt securities - 249,002 Cost Cost General investments Non-marketable equity securities Less Allowance for impairment (37) (35) Total general investments, net - 5 Total investments in securities, net 10,867,164 15,398,040

17 9 Loans and accrued interest receivables, net a) Grouped by type of contracts Overdrafts - 4 Loans 2,277,508 1,914,115 Staff loans 15,677 16,614 Total loans 2,293,185 1,930,733 Add Accrued interest receivables 19,127 10,099 Total loans and interest receivables 2,312,312 1,940,832 Less Allowance for doubtful accounts BOT requirement (Individual approach) (162,711) (363,777) Surplus reserve (7,117) (85,044) Loans and accrued interest receivables, net 2,142,484 1,492,011 b) Grouped by currency and resident Domestic Foreign Total Domestic Foreign Total Thai baht 1,760,593-1,760,593 1,089,765-1,089,765 US Dollar 373,748 15, , ,254 46, ,968 Other 143, , Total 2,278,078 15,107 2,293,185 1,884,019 46,714 1,930,733 c) Grouped by business sector 2011 Special Sub- Normal Mention Standard Doubtful Loss Total Manufacturing and commerce 885, ,191 1,026,659 Real estate and construction 761, ,994 Utilities and services 468, ,748 Housing loans 10, ,864 Others 24, ,920 Total 2,151, ,191 2,293, Special Sub- Normal Mention Standard Doubtful Loss Total Manufacturing and commerce 562, , ,999 1,151,471 Real estate and construction 51, ,000 Utilities and services 659, ,934 Housing loans 8, ,889 Others 59, ,439 Total 1,341, , ,999 1,930,733

18 9 Loans and accrued interest receivables (Cont d) d) Grouped by classifications: " amount % Used for Allowance for used for set the Set the Doubtful! allowance allowance accounts #%$ Baht 000 (%) Baht 000 Minimum allowance Followed BoT Regulations Normal 2,171,121 2,151, ,520 Special mention Substandard Doubtful loss Loss 141, , ,191 Total 2,312,312 2,293, ,711 Additional allowance 7, ,828 " 2010 amount % Used for Allowance for used for set the Set the Doubtful! allowance allowance accounts #%$ Baht 000 (%) Baht 000 Minimum allowance Followed BoT Regulations Normal 1,351,456 1,341, ,414 Special mention 398, ,378 2/40 159,365 Substandard Doubtful loss Loss 190, , ,998 Total 1,940,832 1,930, ,777 Additional allowance 85, , Allowance for doubtful accounts 2011 Special Sub- Normal mention standard Doubtful Loss Total Balance at beginning of year 98, , , ,821 Add Additional (reversal) allowance during year (69,821) (159,365) - - (49,807) (278,993) Balance at end of year 28, , , Special Sub- Normal mention standard Doubtful Loss Total Balance at beginning of year 87,658-59, , , ,514 Add Additional (reversal) allowance during year 10, ,961 (59,200) (343,619) 52,348 (178,710) Translation adjustment - (1,596) - - (387) (1,983) Balance at end of year 98, , , ,821

19 11 Provisioning policy on allowance for doubtful accounts The Bank has credit exposures in Thailand, which have been experiencing economic problems in recent years. By letter dated 22 December 1998, the Head Office put in place a framework risk guarantee agreement for high risk countries. Under this agreement, it is stipulated that all cross-border credit transaction in a high risk country which exceeds local powers are guaranteed by BNP Paribas Head Office. This agreement applied to all outstanding credit exposures in place as of 1 April 1998, with effect as of the date thereof. By this agreement BNP Paribas Head Office guaranties to BNP Paribas Bangkok Branch the risks as such were defined above, for a maximum of up to 80% of all amounts expected to be owed to BNP Paribas Bangkok by the borrowers at the triggering date of the guarantee. 12 Troubled debt restructurings As at 31 December 2011 and 2010, the Bank has outstanding receivables which have been restructured as follows: Outstanding Outstanding balance balance Number after TDR Number after TDR of loans Million Baht of loans Million Baht At beginning of year Restructured during the year Repaid and closed during the year (2) (448) (1) (247) At end of year There is no customer whose debt has been restructured during the year ended 31 December 2011 and For the year ended 31 December 2011 and 2010, the Bank incurred no losses from revaluation allowance for debt restructuring and recognised income received from restructured customers of Baht 1.55 million. (2010: Baht million)

20 3 Equipment, net 2011 Cost Accumulated Depreciation Net book value Beginning balances Increase Decrease Write-off Transfer in (out) Ending balances Beginning balances Increase Decrease Write-off Transfer in (out) Ending balances Beginning Balance Ending Balance Leasehold improvement 6,864 4, ,096 12,895 (4,787) (1,943) - - (545) (7,275) 2,077 5,620 Furniture and office equipment 42,684 5,096 - (959) (1,096) 45,725 (30,730) (4,566) (33,889) 11,954 11,836 Motor vehicles 4, ,761 (4,100) (611) (4,711) Total 54,309 10,031 - (959) - 63,381 (39,617) (7,120) (45,875) 14,692 17, Cost Accumulated Depreciation Net book value Beginning balances Increase Decrease Write-off Transfer in (out) Ending balances Beginning balances Increase Decrease Write-off Transfer in (out) Ending balances Beginning Balance Ending Balance Leasehold improvement 16, (10,130) - 6,864 (14,217) (619) - 10,049 - (4,787) 2,941 2,077 Furniture and office equipment 57,855 6,310 (526) (20,955) - 42,684 (47,768) (4,331) ,955 - (30,730) 10,088 11,954 Motor vehicles 4, ,761 (3,297) (803) (4,100) 2, Total

21 & & BNP Paribas - Bangkok Branch 14 Intangible assets, net Beginning Balance Baht 000 Increase Baht Cost Accumulated Depreciation Book value Ending Beginning Ending Beginning Ending Decrease Write-off Balance Balance Increase Decrease Write-off Balances Balance Balance Computer software 3, ,978 (1,9 3) (553) - - (2,546) 1,985 1,432 Total 3, ,978 (1,9 3) (553) - - (2,546) 1,985 1,432 Beginning Balance Baht 000 Increase Baht Cost Accumulated Depreciation Book value Ending Beginning Ending Beginning Ending Decrease Write-off Balance Balance Increase Decrease Write-off Balances Balance Balance Computer software 22,917 1,661 - (20,600) 3,978 (22,081) (512) - 20,600 (1,993) 836 1,985 Total 22,917 1,661 - (20,600) 3,978 (22,081) (512) - 20,600 (1,993) 836 1,985

22 15 2WKHUDVVHWV Accrued interest income 74,135 83,355 Deposits 6,020 5,622 Others 7,327 24,460 87, , Deposits 16.1 Grouped by types On demand 139, ,515 Savings 2,574, ,890 Term 514,207 3,064,155 Total deposits 3,228,265 3,817, Grouped by currency US Dollar 374,939 62,062 Thai Baht 2,847,888 3,753,962 Other currencies 5,438 1,536 Total deposits 3,228,265 3,817, Interbank and money market items - liabilities 2011 On demand Term Total Baht 000 Domestic Commercial bank 40,624-40,624 Special institution Other financial institution - 1,664,501 1,664,501 Total 40,624 1,664,501 1,705, On demand Term Total Baht 000 Domestic Commercial bank 31,436-31,436 Special institution 603, ,026 Other financial institution 600,000 1,597,560 2,197,560 Total 1,234,462 1,597,560 2,832,022 As of 31 December 2011 and 2010, the Bank has issued the Bills of exchange with embedded derivative that are not designated at fair value to the interbank amount of Baht 758 million and Baht 746 million, respectively.

23 18 Financial liabilities under fair value option Bills of exchange with embedded derivatives designated at fair value option as of 31 December 2011 and 2010 are as followings. Bills of exchange with embedded derivatives 2,083,440 1,661,326 Total 2,083,440 1,661,326 The bills of exchange carry fixed interest rates and /or the floating rate which refer to the fluctuation of the swap curve or other index. The Bank also has the right to early redeem the bill of exchange following to conditions specified in the agreements. Proportion of contractual balance by counterparty as at 31 December are as followings: Percentage (%) Percentage (%) Financial institution Fund 2 - Total Borrowings Domestic Domestic Thai Baht - Bills of exchange 301, ,397 Total 301, ,397 The Bills of exchange carry fixed rates of interest which vary from 3.00% % p.a. and are unsecured. The maturity dates are within 30 days. 20 Provisions The Bank set provisions as of 31 December 2011 and 2010 as followings: Domestic Domestic Post employment benefit 11,769 9,879 Long-serviced award benefit 2,384 1,444 Total Provisions 14,153 11,323

24 21 Employee benefits Long-term employee benefits The Bank has assessed liabilities for long-term employee benefit by using Projected Unit Credit method as follows: Beginning balance 11,323 11,486 Current service costs 1,916 2,531 Interest costs Actuarial gain (loss) in statement of comprehensive income 786 (3,174) Less Benefits paid (210) (63) Ending balance 14,153 11,323 Expenses for employee benefit were recognised in the statements of comprehensive income as follows: Current service cost 1,916 2,531 Interest costs Amortization of unrecognized gain (loss) 786 (3,174) Total 3,040 (100) Significant assumptions used in the actuarial calculation are summarised as follows: Discount rate 4% 3% Future salary increase rate 5% 5% Pre-retirement mortality rate 75% of Thai Mortality Ordinary 75% of Thai Mortality Ordinary Table 2008 Table1997 Disability rate 10% of mortality rate 10% of mortality rate Pre-retirement withdrawal rate From Thai Withdrawal Table From Thai Withdrawal Table Retirement age 60 years old 60 years old 22 Other liabilities Income tax payable 75,210 9,554 Accrued expenses 151, ,877 Other liabilities 53, ,778 Total other liabilities 279, ,209

25 23 Commitments and contingent liabilities As at 31 December 2011 and 2010, the Bank has the following commitments and contingent liabilities which were incurred in the normal course of business: Foreign Foreign Thai currency Total Thai currency Total Letters of credit 2, , ,500 12,155 3,118,834 3,130,989 Guarantees on loans - 256, , , ,250 Liabilities under unmatured bills , ,507 Other commitments 8,061,710 8,354,720 16,416,430 4,957,654 7,275,931 12,233,585 Spot exchange contracts - bought 1,613,511 3,411,172 5,024,683 10,734,767 8,494,902 19,229,669 Spot exchange contracts - sold 3,379,408 1,633,086 5,012,494 8,494,701 10,734,869 19,229,570 Forward exchange contracts - bought 13,323,493 32,791,120 46,114,613 5,808,476 23,979,415 29,787,891 Forward exchange contracts - sold 28,455,994 17,123,670 45,579,664 19,625,543 10,017,240 29,642,783 Currency swap contracts - bought 71,637,256 85,611, ,248, ,632, ,423, ,055,745 Currency swap contracts - sold 77,131,484 79,574, ,705, ,747, ,758, ,505,931 Interest rate swap contracts 1,202,605, ,213,262 1,374,818, ,893, ,202, ,096,128 Cross currency interest rate swap contracts - bought 101,028, ,681, ,710, ,390, ,608, ,998,477 Cross currency interest rate swap contracts - sold 74,578, ,041, ,620,270 90,393, ,841, ,234,748 Forward rate agreement - bought ,934,799 6,934,799 Currency option instruments bought 1,569,045 1,745,503 3,314,548 1,864,934 3,264,017 5,128,951 Currency option instruments sold 54, , , , , ,421 Interest option instruments bought 11,350,000-11,350,000 2,600,000-2,600,000 Interest option instruments sold 15,300,000-15,300,000 10,100,000-10,100,000 Credit Default Swap 300, , , , , ,763 Forward exchange option - bought 1,569,045 1,744,703 3,313,748 3,328,759 1,831,308 5,160,067 Forward exchange option - sold - 166, , ,009 1,771,005 2,267,014 Unused overdrafts - 950, , , ,539 Total 1,611,960, ,496,557 2,247,456,870 1,370,837, ,491,285 2,102,328,827 The management anticipates no material losses as a result of these transactions.

26 24 Related party transactions Enterprises and individuals that directly, or indirectly through one or more intermediaries, control, or are controlled by, or are under common control, the Bank, including holding companies, subsidiaries and fellow subsidiaries are related parties. Associates and individuals owning, directly or indirectly, an interest in the voting rights of the Bank that gives them significant influence over the enterprise, key management personnel, including directors and officers of the Bank and close members of the family of these individuals and companies associated with these individuals also constitute related parties. In considering each possible related party relationship, attention is directed to the substance of the relationship, and not only the legal form. The significant related party transactions made with fellow branches, subsidiaries, associates and the Head Office of BNP Paribas are as follows: Statement of financial positions Borrowings, deposits and accrued interest payable 3,184,047 11,329,421 Contingencies 364,320, ,682,655 Account receivables for investments - 499,665 Statement of comprehensive income Interest income 71,070 (555) Interest expenses 145, ,708 Loss on trading activities and foreign exchange (470,095) (42,017) Non-interest income - Cost sharing from financial instruments, net 106, ,444 - Head Offices allocation expenses 42,549 32,502 - Technical assistant fee 26,521 35,876 Management remuneration - Short-term employee benefits 67,149 62,153 - Long-term employee benefits Transactions between the Bank and related parties are priced at and contained similar conditions as with the Bank s general customers and conformed to normal banking practice. The (profit) cost sharing includes the sharing of revenues and expenses between related parties, which may be cross-border, of the capital market activities. All these related parties will have a number of functions which can be categorized as trading, sales and marketing, management and support functions, involved in these capital market activities. The sharing principles of these agreements are based on Organisation for Economic Co-operation and Development (OECD) guidelines and applied arm s length remunerations of all parties. The Bank has not extended extraordinary monetary and/or non-monetary benefits to the Banks executives at the level of Managing Director and higher, except for ordinary benefits to the executives such as salary, benefits, bonus (if any) and employee benefits. The Bank has not sold, given or leased any properties to the Managing Director and higher and their related parties and has not purchased or leased any assets from those persons included contingency benefits from employment agreements compensation and other benefit from those persons.