2005 - Asianbanks.net

(Unit : Million Baht)
The Bank Only
31 December 2005 31 December 2004
Less than Over Less than Over
1 year 1 year Total 1 year 1 year Total
Forward and spot contracts
- Bought 5,794 66 5,860 8,575 - 8,575
- Sold 28,342 368 28,710 21,314 - 21,314
Cross currency and interest rate swap contracts
- Bought 1,446 - 1,446 - - -
- Sold 1,456 1,602 3,058 - 1,197 1,197
Interest rate swap contracts
- Fixed rate payer - 5,728 5,728 - - -
- Floating rate payee - 5,728 5,728 - - -
- Floating rate payer - 5,728 5,728 - - -
- Fixed rate payee - 5,728 5,728 - - -
The Bank sets up policies and relevant risk limits by which it requires risk reporting and control procedures for the various types
of risk, as a control over financial derivative activities. The Bank realizes that financial derivatives involve credit risk and manages it by
setting credit limits for its customers in general. The same credit approval process used when granting loans to a customer is adopted for
financial derivative customers, so that the Bank is able to maintain risk at acceptable levels. However, financial derivatives may cause the
Bank to incur gains or losses as they are sensitive to foreign exchange rates and interest rates, which can fluctuate materially as the
market situation changes.
32. ADJUSTMENT AGAINST RETAINED EARNINGS
During the current year, the Bank made adjustments totaling Baht 209 million against 2004 brought forward retained earnings as a result of
differences noted for loan and receivable accounts, which related to the prior years before 2004. In addition, the Bank adjusted gains of Baht 9 million
on disposal of treasury stocks in 2004 to share premium on treasury stocks in the financial statements.
33. SUBSEQUENT EVENT
On 22 February 2006, the Bank’s Board of Directors passed a resolution approving the following appropriation of the 2005 net earnings, which
are to be recorded in the second quarter of 2006 :-
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