Untitled - Baiduri Bank

Transcription

Annual Report
2007
Vision & Mission
Statement
VISION
To be the leading banking and
financial group in Brunei
Darussalam
MISSION
As a truly local entity in
Brunei Darussalam, the Group
is committed to provide
innovative and comprehensive
financial products and
services to the Bruneian
community
Contents
Vision and Mission Statement
Chairperson’s Statement
Corporate Information
2007 Key Financial Figures
2007 Corporate Highlights
- Business Highlights
- Operations Management
- Human Resource Development
- Corporate Social Responsibility
Financial Statements
- Report of the Directors
- Independent Auditors’ Report
- Balance Sheets
- Profit and Loss Statements
- Statements of Changes in Equity
- Cash Flow Statements
- Notes to Financial Statements
Offices, Branches and ATM Network
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The Opening of the Wealth Management Centre
in Kiulap was an important step in the expansion of
our activities in this business segment. During the
year, we introduced our first Certificate of Deposit
and several new investment products. In addition,
we organized the first Baiduri Expo in August 2007
where free financial health checks and consultation
were provided to customers.
The new Baiduri Prestige programme was launched
in June 2007 with enhanced features and benefits.
In card services, we launched the RBA American
Express card, the first and only airline co-brand
card in Brunei.
We continued to develop our specialized and
structured financial services to medium and large
corporate bodies in support of the country’s
economic diversification objectives. In addition to
its participation in the financing schemes offered
by the Ministry of Industry and Primary Resources
to SMEs, Banduri Bank has in place its own SME
Programme to assist the growth of local small
businesses.
On behalf of the Board of Directors, I am pleased
to present the Annual Report and Accounts of
Baiduri Bank Berhad for the financial year ended
31st December 2007.
We benefited from the latest technology to enhance
our services. Under e-channels, we introduced the
first and only multi-currency ATM in the Sultanate,
located at Brunei International Airport. New
features like cash and cheque deposit functions
were added to our ATMs and the number of
locations increased to twenty-seven. We launched
FAST, the next generation suite of services via the
mobile phone, which allows subscribers to pay bills
and perform banking and other services using IVR
technology.
FINANCIAL PERFORMANCE
The Baiduri Bank Group delivered excellent financial
results in 2007, with profits before tax amounting
to B$44.8 million, an increase of 66.6% over the
previous year. Total assets at the end of the year
stood at B$2.5 billion, ranking the Group among
the top financial institutions in Brunei Darussalam.
Both Baiduri Bank and Baiduri Finance, its wholly
owned subsidiary, contributed to this achievement.
Baiduri Bank’s core businesses (retail banking
and corporate banking) grew significantly and
performed well.
Baiduri Finance consolidated its position as the
market leader in car financing.
DEVELOPMENTS IN 2007
In 2007, our focus was on expanding and diversifying
our range of products and services.
2
OPERATIONAL
FORWARD
EFFICIENCY
AS
THE
WAY
Our Credit Administration Department was
certified to ISO 9001: 2000 in November 2007. This
represents an important step towards providing
more efficient services to customers.
CUSTOMER ACCESSIBILITY
For better customer accessibility and convenience,
a new branch at Muara Town was opened in
September 2007. The Sengkurong and Kiulap
branches were relocated and refurbished to project
our Group’s modern professional image.
UPGRADING HUMAN RESOURCES
We invested heavily in our human resource
development.
2007 saw fourteen employees
graduated with the Certificate in Financial Planning,
bringing to thirty-seven the total number of financial
planners serving our customers.
Baiduri Bank Annual Report 2007
CORPORATE SOCIAL RESPONSIBILITY
Baiduri Bank has been an active and regular
supporter of local charities.
Beneficiaries of
our CSR programme include Pusat Ehsan, Child
Development Centre, SMARTER, World Blood
Donor Day and Universal Children’s Day. The
Baiduri Bank Charity Golf tournament organized
annually to raise funds for charity is the biggest
golfing event organized in Brunei. We also offered
education grants to deserving children from less
privileged families and supported the advancement
of local musical talent through our sponsorship of
the Pelangi Awards 2007.
AWARDS AND RECOGNITION
For the fifth time in six years, Baiduri Bank was
adjudged the Bank of the Year for Brunei by The
Banker magazine, UK in 2007. In addition, FAST,
our revolutionary mobile suite of services launched
in October 2007 won a Special Citation for Mobile
Payments at the 3rd Financial Insights Innovation
Awards in February 2008.
Winning international recognition shows, once
again, that Baiduri Bank is continually improving
its products and services in line with the highest
international standards.
processing of retail loans for speedier approval and
has a helpdesk to provide an even higher level of
service to customers.
We shall continue to improve the skills of our staff,
focusing on professional studies and customer
services.
Overall, Baiduri Bank Group will continue to meet
the needs of the people of Brunei in offering
innovative products and banking services of the
highest possible quality.
APPRECIATION
On behalf of the Board of Directors, I would like to
express our appreciation to the Government of His
Majesty the Sultan and Yang Di-Pertuan.
I also wish to thank our shareholders and our valued
clients for their continued support and confidence
in us. Without our customers, we would not have
become the award-winning local bank we are
today.
In conclusion, I wish to record the Bank’s appreciation
to the management and staff for their hard work and
much-valued contributions to a highly successful
year.
ECONOMIC OUTLOOK
The Banking Order 2006 and the Finance Act provide
for a sound future for the financial sector, bringing
it in line with the best regulated neighbouring
countries.
YTM Pengiran Anak Isteri
Pengiran Anak Hajah Zariah
Chairperson
Together with the recently released “Wawasan
Brunei 2035”, Brunei Darussalam’s Long-Term
Development Plan and the Government’s move to
lower corporate income tax, a promising economic
outlook for Brunei can be envisaged. We look
forward to developing our services to individuals and
businesses to support the country’s diversification
and economic growth.
OUR PLANS FOR 2008
As a result of the progress made, Baiduri Bank
will be focusing even more on organizational and
product development with emphasis on investment
products.
We will be setting up a Business Services Centre in
Kiarong.
We will upgrade our IT operations and relocate
them to a new state-of-the-art Data Centre.
Our new Loan Centre in Kiarong, which started
operations in February 2008, is providing centralized
3
SHAREHOLDERS
Baiduri Holdings Bhd
Royal Brunei Airlines Sdn Bhd
Royal Brunei Technical Services Sdn Bhd
BNP Paribas
BOARD OF DIRECTORS
YTM Pg Anak Isteri Pg Anak Hajah Zariah Binti
Almarhum Pg Pemancha Pg Anak Haji Mohamed Alam
(Chairperson)
YAM Pengiran
Muda Abdul Qawi
Francis Caze
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Pg Dato Paduka
Abu Bakar Bin Pg Seri
Indera Pg Hj Ismail
Hj Amir Hamzah
Hj Hanafi
Dato Paduka
Timothy Ong
Teck Mong
Claude De Kemoularia
Victor Chua
Beng Khoon
MANAGEMENT COMMITTEE
(L to R) Seated: Yvonne Chan, Pierre Imhof, Raymond Bariou, Veronica Chong
(L to R) Standing: Pg Azaleen Bin Pg Mustapha, Ti Eng Hui, Hj Haliluddin Bin Dato Hj Talib, Andrew Young
Pierre Imhof
Raymond Bariou
Ti Eng Hui
Andrew Young Chee Ann
Hj Haliluddin Bin Dato Hj Talib
Yvonne Chan Eng Pheng
Pg Azaleen Bin Pg Mustapha
Veronica Chong Nyet Hwa
General Manager
Senior Deputy General Manager
Deputy General Manager, Retail Banking & Branch Network
Deputy General Manager, Operations
General Manager, Baiduri Finance
Senior Manager, Corporate Banking
Senior Manager, Treasury
Senior Manager, Personnel & Finance
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AWARDS AND ACCOLADES
Baiduri Bank won the Bank of the Year Brunei award from The Banker magazine, UK, in 2002, 2003, 2004, 2006
and 2007. The Bank also won in the Marketing, PR or Brand Management Project category of the Asian Banking
Awards consecutively in 2004 and 2005. In February 2008, Baiduri Bank received a Special Citation for FAST, the
revolutionary mobile suite of services at the Financial Insights Innovation Awards.
The award ceremony for Bank of the Year 2007 took place at the
Dorchester Hotel, London on 28th November 2007. Mr Ti Eng Hui,
Deputy General Manager, Retail Banking and Branch Network of
Baiduri Bank, received the award on behalf of the Bank
Baiduri Bank’s wholly-owned subsidiary, Baiduri Finance obtained the internationally recognized ISO9001:2000
quality certification in 2003. In November 2007, the Bank’s Credit Administration Department became the first
department within the Bank to have achieved this prestigious recognition. These two units remain the only two
bodies within the banking and finance sector in Brunei certififed to ISO 9001.
AUDITORS
Deloitte and Touche
CORPORATE SECRETARY
Precision Consultancy Sdn Bhd
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OPERATING RESULTS
Year Ended December 31
2007
2006
(B$ in thousands, except per share information)
For the Year
Revenue (1)
Net income
Return on assets
Return on shareholders’ equity
Shares issued and paid (in millions)
109,710
82,052
1.28%
23.89%
60,000
99,937
64,274
0.91%
16.21%
60,000
1,973
721
1,526
106
1,554
627
1,205
88
At Year End
Total Assets
Total Loans and advances (net)
Total deposits
Total shareholders’ equity
Contents
Includes interest and non interest income excludes interest expenses
(1)
TOTAL REVENUE (GROUP - 2007)
($'000)
Hire Purchase
& Leasing
Consumer &
Commercial
Banking
Others
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Group Assets
Group Customer Deposits
2500
3000
2500
2000
B$’M
B$’M
2000
1500
1500
1000
1000
500
500
0
0
2004
2005
2006
2004
2007
2005
2006
2007
Years
Years
Group Customer Loans (net)
Group Shareholders’ Funds
1400
140
1200
120
1000
100
B$’M
B$’M
119.3
800
80
600
60
400
40
200
20
0
95.06
83
78.37
0
2004
2005
2006
2007
2004
2005
Years
31.34
13.00
30
12.00
25
11.00
18.763
10.00
%
B$’M
35
9.00
15
10.227
10
8.00
7.082
7.00
5
6.00
5.00
0
2004
2005
2006
2004
2007
2005
2006
2007
Years
Years
Total Capital
Group Return On Total Assets
22630
120000
1.30
1.20
14819
100000
1.10
B$’000
1.00
%
Tier 1
Group Total Income
1.40
0.90
0.80
0.70
80000
0.50
12609
13952
60000
40000
0.60
58442
64719
77697
89910
2004
2005
2006
2007
20000
0.40
0.30
2004
2005
2006
0
2007
Years
Years
2004
8
2007
Capital Adequacy Ratios (Bank)
Group Net Profit After Tax
20
2006
Years
2005
2006
2007
Net Interest Income
Non-Interest Income
2007
Corporate Highlights
Business Highlights
CONSUMER FINANCING – BAIDURI FINANCE
Living up to its name as the market leader in automobile financing, Baiduri Finance implemented an on-line
Enhanced Hire Purchase Delivery System, which reduced drastically the processing time for hire purchase approvals
as well as payment s to motor dealers, creating a win-win-win for Baiduri Finance, automobile buyers and dealers.
This has resulted in yet another year of excellent financial per formance, recording an increase of 38% net income
before administrative expenses and pre-tax profit increase of 80% over 2006.
CORPORATE BANKING
Since 2001, under the Enterprise Facilitation
Scheme and the Micro-Credit Scheme, both in
collaboration with the Ministry of Industry and
Primary Resources, we have assisted many local
entrepreneurs in alleviating financial difficulties
faced by them in starting businesses.
2008 is the fifth year that Baiduri Bank is in
par tnership in a Brunei SME’s Par tnership
Programme with Brunei Shell Petroleum, Brunei
Economic Development Board and Asia Inc Forum.
This programme is aimed to continuously nurture
Brunei SMEs by helping groom them and their
businesses through business awards, networking
gatherings and business forums and workshops.
RETAIL LENDING
In 2007, with a complete range of products and service offerings, the Bank focused on direct sales activities working
closely with third-party referral intermediaries and strong merchant base. The Bank also capitalized on its strong
customer base to offer customized mortgage loan schemes to staff of selected companies.
Various sales channels were used in achieving the excellent results, mainly with the recruitment of a direct sales
team who reached out to cater to specific various needs and requirements of an individual and then tailoring or
customizing the loan to suit the needs.
In addition, Baiduri Bank has adopted the practice of offering financial planning health checks before embarking
to decisions of a loan.
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Business Highlights
WEALTH MANAGEMENT
Baiduri Bank set up a dedicated Wealth
Management Unit in March 2006 to spearhead
this business. Being an independent party,
the Bank adopts a relatively neutral approach
in selecting products that match the needs,
preferences and risk profiles of the Bruneian
investors.
In addition, adopting best practices from leading
banks and insurance companies, Baiduri Bank
rolled out financial health checks and risk profiling
for its customers across all branches. At the same
time, a large group of frontline staff members
were selected to undergo financial planning
certification offered by the Singapore College
of Insurance. By end 2007, Baiduri Bank has 37
trained financial planners, the largest number among banks in Brunei Darussalam.
During 2007, new funds and certificates of deposit were launched with increased sales activities. These included
the Singapore Dividend Growth, the Golden China Fund and Global Luxury and Lifestyle Fund under SGAM.
A full-fledged Wealth Management Centre was set up on the second floor of the newly relocated Kiulap Branch
offering free consultation services by the bank’s personal financial planners.
CARD SERVICES
Baiduri Card Centre delivered excellent financial performance in 2007. Through the acquisition of the American
Express franchise in Brunei, Baiduri Bank has significantly increased its merchant sales volume and grown its credit
card base, thus further strengthening its leadership position in the card business. Baiduri Bank is the first and
only bank in Brunei to hold franchises for all three leading payment card brands, namely Visa, MasterCard and
American Express, for both card issuing and merchant acquiring businesses.
Baiduri Card Centre is the first in the country to launch EMV card acceptance service allowing merchants to accept
EMV chip cards for payment without risk of fraud. It is also the first to issue the EMV-compliant Visa Platinum Card,
based on Dynamic Data Authentication (DDA).
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Business Highlights
BAIDURI PRESTIGE
Established in June 1999, Baiduri Prestige
offers exclusive banking privileges to affluent
individuals and high flyers that deserve special
recognitions and rewards.
In 2007, the Bank undertook to improve the
overall service offerings as well as the key
aspec t s of customer relationship management.
The new Baiduri Prestige programme launched
in June 2007 was well accepted by existing
and new customers with record breaking new
sign-ups.
REMITTANCE BUSINESS
Baiduri Bank is the first and only bank in Brunei to launch a
partnership agreement with a global remittance company. The
Bank selected Western Union Financial Services Inc, to offer
worldwide person-to-person remittance service through its branch
network in Brunei in November 2005. A big bang approach was
adopted for the roll-out within a span of two months. Express
counters and specially designed Western Union booths were
installed in branches with heavy traffic. This was coupled with
intensive marketing efforts to heighten awareness and encourage
usage. Western Union is the preferred remittance service in Brunei
mainly because of its reputation for speed and security.
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Operations Management
MOBILE BANKING SERVICES
In October 2007, in keeping pace with technological
advancement and to provide value added service
to customers, Baiduri Bank introduced FAST, an
advanced mobile payment service which offers users
the convenience of making bill payments through a
simple, user-friendly IVR (Interactive Voice Response)
system, the first of its kind in Brunei Darussalam.
Available to the general public, FAST users are able
to access the service 24 hours a day from anywhere
with a phone signal. This mobile banking service
won a Special Citation for Innovation from Financial
Insights, a financial service research and advisory firm
in early 2008.
ISO9001:2000 CERTIFICATION FOR CREDIT ADMINISTRATION DEPARTMENT
Baiduri Bank’s Credit Administration Department (CAD)
was certified ISO 9001:2000 in November 2007 by Moody
International Certification Malaysia. It bears testimony
that the Department has met internationally accepted
standards for management systems as defined by the
International Organization for Standardization (ISO).
Being the first department within the Bank and the second
within the Bank Group to have achieved this certification,
CAD joins Baiduri Finance, as the only two organizations
within the banking and finance sector in Brunei certified
to ISO 9001 so far.
PLANS FOR 2008
In 2008, we shall continue to focus on our organizational development in order to stay ever more relevant in today’s
competitive financial services industry. This includes the setting up of a Business Services Centre in Kiarong with
the consolidation of three departments into one, the relocation and upgrading of our IT operations to a new
state of the art Data Centre, the implementation of a new IT structure and the expansion and implementation of
a quality management system covering the entire Operations Division.
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Human Resource Development
In line with the Group’s vision to continually increase the skills and competencies of the whole workforce, the
Human Resources Division of the Group seek to build a quality team with the right skills and talents to meet our
current and future needs.
CONTINUOUSLY BUILDING OF THE SERVICE QUALITY CULTURE
It is the Group policy of providing training and
development of our employees to meet and exceed
customers’ expec tations with the continuous
improvement of the competencies of our staff.
Emphasis was on the delivery of excellent service
and customer care to our clients in line with the
Group’s Service Standards. In 2007, a series of
training workshops were developed in-house for our
frontline and back office staff covering all aspects of
customer service in order to deliver the highest level
of customer care to our customers.
The total number of training workshops conducted increased by 50% in 2007 with over 80% of staff participation
from the Group.
ENHANCEMENT OF COMPETENCY BASED SKILLS
Another batch of 14 staff were trained in 2007 as
financial planners and were certified with the Certificate
in Financial Planning with the Singapore College of
Insurance, bringing the total number of staff employed
who are specialized in this field to 37 personnel to
provide professional service to our esteemed clients.
All front line staff are also now fully equipped with
full knowledge of the Bank Group’s products and
services with product briefings and updates conducting
continuously throughout the year.
In addition to looking after our customers’ needs, as part of staff welfare, all staff have attended the basic fire, safety
and health awareness courses with more than 10 staff achieving the highest award of the CPR Instructor course.
In order to support the many training initiatives, the training budget has been increased by another 10% in the
coming year.
COMPENSATION AND BENEFITS STRATEGY
In order to improve the Employee Value Proposition and in line with the organization’s performance driven culture,
the Group is constantly reviewing the employee’s compensation and benefits strategy. As a result, a number of
financial and other incentives have been introduced during the year to linking achievement of financial targets.
Sales incentives were further enhanced and in addition, the five top achievers under the Wealth Management
Unit were awarded an incentive trip to attend the 30th IFPAS (Insurance and Financial Practitioners Association of
Singapore) National Congress held in Singapore in March 2008.
14
Corporate Social Responsibility
CARING FOR THE LESS FORTUNATE
Baiduri Bank has been an active and regular
supporter of local charities since its inception.
The Bank has a policy of donating in kind, usually
in response to a specific need that has been
identified. Past donations and sponsorships
have included educational books, personal
computers, medical equipment, special furniture,
wheelchairs, major buggies, construction of
purpose built facilities and even Special Olympic
sports day.
The Bank’s mission is to continue to raise public
awareness about the needs of the special people
and to promote activities and assistance that
would contribute toward special people gaining
acceptance in the wider society. Baiduri Bank
works very closely with Pusat Ehsan, SMARTER and Child Development Centre amongst others. From time to
time, the Bank also considers expenses for those who cannot afford medical treatment.
The annual charity golf event, renamed as The Baiduri Masters: Your Charity Golf Event from 2008, is the main
activity which public participation is invited to help charity. The golf tournament, started in 1996, is the most
prestigious and widely attended in Brunei. In 2007, more than 600 golfers participated. From the proceeds of the
event, a total of BND 66,000 was donated to several charities and welfare bodies.
SAVING LIVES THROUGH BLOOD DONATIONS
In June 2007, Baiduri Bank joined hands with
the Ministry of Health as the main sponsor
of the World Blood Donor Day. The event,
held at the RIPAS Hospital, was aimed to
create wider awareness of the importance of
voluntary blood donation and encourage more
people to become regular blood donors. It is
also designed to celebrate and thank those
individuals who voluntarily donate their blood
without any reward, except the knowledge
that they have helped save lives. 14th June
has been selected as World Blood Donor Day
by the International Federation of Red Cross
and Red Crescent Societies, the International
Federation of Blood Donor Organizations and
the International Society of Blood Transfusion, and is endorsed by the World Health Organization. In support
of this cause, employees of Baiduri Bank also participated in a blood donation event held at the Bank’s training
center on 19th June 2008.
15
Corporate Social Responsibility
NURTURING BRUNEIAN ENTREPRENEURS
Baiduri Bank continued it’s SME Partnership Programme
with Asia Inc Forum, aimed to continuously nurture
Brunei SMEs. Among the key programme carried out
during the year were the SME Dinner and Business
Awards, “Meet the Entrepreneur” Networking Series,
“Women in Business” Forum and a Workshop on
“Franchising”. Now in its 5th year, the programme
aims to continuously nurture Brunei SMEs by helping
them inject a sense of entrepreneurship, grow their
business and build relationships in an atmosphere of
quality learning and interacting with other business
colleagues.
TOWARDS A BETTER FUTURE FOR OUR CHILDREN
On 20 th November 2007, Baiduri Bank became the main
sponsor the Universal Children’s Day, organized by the
Ministry of Culture Youth and Sports. The day is observed
worldwide as a day of fraternity and understanding
between children. On this day, activities devoted to
promoting the ideals and objectives of the United
Nations Resolution 836(IX) 1954 on the welfare of the
children of the world. 20th November also marks the day
on which the UN Assembly adopted the declaration of
the Rights of the Child 1959 and the Convention of the
Rights of the Child in 1989.
HELPING LESS PRIVILEGED CHILDREN ACHIEVE THEIR EDUCATION GOALS
Each year, Baiduri Bank offers education grants to deserving children from less privileged homes to assist in meeting
the cost of their school fees. In 2007, a total of 10 children from throughout the country received such grants.
PROMOTING LOCAL TALENTS
In December, in suppor t of the advancement of local music talent s, Baiduri Bank sponsored the Pelangi Awards.
Thousands of people thronged the Jerudong Park & Country Club Amphitheatre to watch the awards presentation,
themed “Modern Traditional Fusion”, reflecting the wide-ranging cultures of the Sultanate as well as the evolution
of the local music scene. Five awards were presented.
16
Financial Statements
For the year ended 31st December 2007
Report of the Directors
The directors have pleasure in presenting their annual report and audited financial statements of the Company
and of the Group for the financial year ended December 31, 2007.
PRINCIPAL ACTIVITIES
The principal activities of the Company and the Group are to carry on the business of banking and related financial
services including dealing in investment securities, stock broking and e-financial services. There have been no
significant changes in the nature of these activities during the financial year.
One of the Company’s subsidiaries, Baiduri Securities Sdn Bhd, had remained dormant throughout the financial
year ended December 31, 2007.
RESULTS
Balance at December 31, 2006
Total profits for the financial year
Transferred from retained profits to statutory reserve
Dividends paid
The Group
B$’000
The Company
B$’000
9,436
31,340
(16,050)
(7,100)
4,257
25,267
(12,634)
(7,100)
17,626
9,790
RESERVES AND PROVISIONS
There were no other material transfers to or from reserves and provisions during the financial year other than those
disclosed in the financial statements.
SHARE CAPITAL
On February 25, 2008, the issued share capital was increased to B$100,000,000 by the issue of 40,000,000 ordinary
shares of B$1 each.
The newly issued shares rank pari passu in all respect with the existing shares of the Company.
FINANCIAL STATEMENTS
The state of affairs of the Company as at December 31, 2007 is set out in the balance sheet. These financial
statements were approved by the Board of Directors on March 6, 2008.
DIVIDENDS
Dividends paid in respect of the financial year ended December 31, 2006
B$
7,100,000
At the forthcoming Annual General Meeting, a total dividend of B$8,400,000 in respect of the current financial
year ended December 31, 2007 will be proposed for shareholders’ approval. Such dividend, if approved by the
shareholders, will be accounted for as an appropriation of retained profits of the shareholders’ equity in the next
financial year ending December 31, 2008.
18
Report of the Directors
DIRECTORS
The directors in office during the financial year and at the date of this report are:
YTM Pengiran Anak Isteri Pengiran Anak Hajah Zariah
YAM Pengiran Muda Abdul Qawi
Pg Dato Paduka Haji Abdul Hamid bin Pengiran Haji Mohd Yassin
Dato Paduka Timothy Ong Teck Mong
Claude De Kemoularia
Francis Caze
Datin Paduka Hajah Intan bte Mohd Kassim
Victor Chua Beng Khoon
Haji Mohd Kamaruddin bin Dato Paduka Haji Abd Wahab
Pengiran Dato Paduka Haji Abu Bakar bin Pengiran Seri Indera
Pengiran Haji Ismail
Haji Amir Hamzah Haji Hanafi
(resigned on August 22, 2007)
(appointed on March 7, 2007 and
resigned on July 30, 2007)
(appointed on March 7, 2007)
(resigned on February 16, 2007)
(appointed on August 22, 2007)
(appointed on July 30, 2007)
AUDITORS
The auditors, Deloitte & Touche, have indicated their willingness to accept re-appointment.
On behalf of the board
________________________________________
Director
________________________________________
Director
________________________________________
Director
Brunei Darussalam
Date: March 6, 2008
19
Independent Auditors’ Report
to the members of Baiduri Bank Berhad
and subsidiaries
We have audited the accompanying financial statements of Baiduri Bank Berhad (the Company) and its subsidiaries
(the Group) which comprise the balance sheets of the Company and the Group as at December 31, 2007, the profit
and loss statements, statements of changes in equity and cash flows statements of the Company and the Group
for the year then ended, and summary of significant accounting policies and other explanary notes, as set out on
pages 67 to 81.
Directors’ Responsibility
The Company’s directors are responsible for the preparation and fair presentation of these financial statements in
accordance with the provisions of Brunei Darussalam Companies Act, Cap. 39 (the “Act”), the Brunei Darussalam
Banking Order 2006 (the “Order”), and generally accepted accounting principles in Brunei Darussalam. This
responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and
fair presentation of financial statements that are free from material misstatement, whether due to fraud or error;
selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable
in the circumstances.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our
audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk
assessments, the auditor consider internal control relevant to the entity’s preparation and fair presentation of
the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for
the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made
by directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion,
a)
the financial statements of the Company and consolidated financial statements of the Group are properly
drawn up in accordance with the provisions of the Act, the Order and generally accepted accounting principles in
Brunei Darussalam so as to give a true and fair view of the state of affairs of the Company and the Group as
at December 31, 2007 and of the results, changes in equity and cash flows of the Company and the Group
for the year ended on that date;
b)
the accounting and other records required by the Act to be kept by the Company and its subsidiaries have
been properly kept in accordance with the provisions of the Act; and
c)
we have obtained all the information and explanations that we required.
________________________________________
DELOITTE & TOUCHE
Certified Public Accountants
___________________________________
NG HUI HUA
Brunei Darussalam Authorised Auditor
Brunei Darussalam
Date: March 6, 2008
20
Balance Sheets
December 31, 2007
Note
ASSETS
Cash, deposits and balances with banks
Cash deposits and reserve
Loans and advances (net)
Due from related parties
Other assets
Investment in subsidiaries
Other investments
Goodwill on consolidation
Property, plant and equipment
The Group
2007
2006
B$’000
B$’000
The Company
2007
2006
B$’000
B$’000
832,921
97,790
1,259,366
94,114
34,297
174,767
124
17,983
550,281
86,168
1,065,284
39,493
44,436
216,130
149
17,199
831,535
66,662
730,003
94,114
33,852
25,249
174,767
16,986
549,328
59,125
627,375
39,493
43,908
2,249
216,130
16,196
2,511,362
2,019,140
1,973,168
1,553,804
50,815
2,166,661
127,601
31,923
13,557
302
1,203
39,874
1,742,856
104,799
27,450
8,030
318
753
124,305
50,614
1,525,747
127,601
29,066
8,649
240
1,203
85,772
39,673
1,205,461
104,799
24,235
5,295
240
753
2,392,062
1,924,080
1,867,425
1,466,228
60,000
41,888
17,626
60,000
25,838
9,436
60,000
35,953
9,790
60,000
23,319
4,257
Equity attributable to
equity holders of the parent
Minority interest
119,514
(214)
95,274
(214)
105,743
-
87,576
-
TOTAL EQUITY
119,300
95,060
105,743
87,576
2,511,362
2,019,140
1,973,168
1,553,804
181,267
167,426
181,267
167,426
4
5
6
7
8
9
10
11
TOTAL ASSETS
LIABILITIES AND EQUITY
Amount due to subsidiaries (net)
Amount due to related parties
Current, fixed, savings and other deposits
Deposits and balances with banks
Other liabilities and provisions
Income tax payable
Deferred tax liabilities
Provision for retirement benefits
12
13
14
15
16
16
17
TOTAL LIABILITIES
CAPTIAL, RESERVES AND
MINORITY INTEREST
Share capital
Statutory reserve
Retained profits
18
19
TOTAL LIABILITIES AND EQUITY
COMMITMENTS AND CONTINGENCIES
20
_____________________________________
Director
_____________________________________
Director
_____________________________________
Director
_____________________________________
General Manager
See accompanying notes to financial statements.
21
Profit And Loss Statements
Year Ended December 31, 2007
Note
Interest income
Less: Interest expense
21
21
Fees, commission and service charges
Foreign exchange profit and other income
Gain from investments
NET INCOME
Other administrative expenses
Allowances on loans and advances
22
23
OPERATING INCOME
Goodwill amortisation
The Group
2007
2006
B$’000
B$’000
The Company
2007
2006
B$’000
B$’000
132,587
(42,677)
125,284
(47,605)
81,711
(27,658)
83,412
(35,663)
89,910
6,336
14,736
1,558
77,679
4,680
9,435
703
54,053
6,336
20,105
1,558
47,749
4,680
11,141
703
112,540
(47,462)
(20,268)
92,497
(40,855)
(24,753)
82,052
(32,354)
(15,868)
64,273
(27,036)
(17,676)
44,810
(25)
26,889
(25)
33,830
-
19,561
-
PROFIT BEFORE TAX
Income tax
16
44,785
(13,445)
26,864
(8,101)
33,830
(8,563)
19,561
(5,365)
PROFIT AFTER TAXATION
Transfer to statutory reserve
19
31,340
(16,050)
18,763
(8,099)
25,267
(12,634)
14,196
(7,097)
15,290
10,664
12,633
7,099
PROFIT FOR THE YEAR AFTER
TRANSFER TO STATUTORY RESERVE
22
Statements of Changes in Equity
The Group
Note
Balance at January 1, 2006
Transferred from retained profits
to statutory reserve
Dividends paid
Attributable to equity holders of the parent
Statutory
Retained
Minority
Reserves
Profits
Total
Interest
B$’000
B$’000
B$’000
B$’000
17,739
-
5,472
18,763
83,211
18,763
-
8,099
-
(8,099)
(6,700)
(6,700)
-
(6,700)
60,000
-
25,838
-
9,436
31,340
95,274
31,340
(214)
-
95,060
31,340
-
16,050
-
(16,050)
(7,100)
(7,100)
-
(7,100)
60,000
41,888
17,626
119,514
(214)
119,300
Issued Statutory
Capital Reserve
B$’000
B$’000
Retained
Profits
B$’000
Total
Equity
B$’000
19
24
(214)
-
Total
Equity
B$’000
60,000
19
24
Transferred from retained profits
to statutory reserve
Dividends paid
Issued
Capital
B$’000
82,997
18,763
The Company
Note
Balance at January 1, 2006
Net profits for the year
Transferred from retained profits to
statutory reserve
Dividends paid
Net profits for the year
Transferred from retained profits to
statutory reserve
Dividends paid
19
24
19
24
60,000
-
16,222
-
3,858
14,196
80,080
14,196
-
7,097
-
(7,097)
(6,700)
(6,700)
60,000
-
23,319
-
4,257
25,267
87,576
25,267
-
12,634
-
(12,634)
(7,100)
(7,100)
60,000
35,953
9,790
105,743
23
Cash Flow Statements
Note
CASH FLOWS FROM OPERATING ACTIVITIES:
Profit before income tax
Adjustments for: Amortisation of goodwill on consolidation
Depreciation
Gain on disposal property, plant
and equipment (net)
The Group
2007
2006
B$’000
B$’000
The Company
2007
2006
B$’000
B$’000
44,785
26,864
33,830
19,561
25
3,710
25
3,630
3,412
3,374
(38)
(1,558)
(22)
(703)
(38)
(1,558)
(22)
(703)
46,924
(194,082)
(54,621)
10,139
10,941
423,805
4,923
29,794
(99,637)
(17,871)
(30,262)
(6,695)
477,755
(976)
35,646
(102,628)
(54,621)
10,056
38,533
10,941
320,286
5,281
22,210
(5,200)
(17,871)
(29,951)
(41,443)
(6,683)
426,274
(2,361)
Cash generated from operations
Income tax paid
248,029
(7,934)
352,108
(4,714)
263,494
(5,209)
344,975
(3,689)
Net cash from operating activities
240,095
347,394
258,285
341,286
Operating cash flows before
movements in working capital
Loans and advances (net)
Due from related parties
Other assets
Due to subsidiaries
Due to related parties
Current, fixed, savings and other deposits
Other liabilities and provisions
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment
Proceeds from sale of property,
plant and equipment
Investment in subsidiaries
Net (additions) disposal of investments
(4,757)
(4,300)
(4,465)
(4,040)
301
1,558
41,363
170
703
(13,737)
301
1,558
(23,000)
41,363
169
703
(13,737)
Net cash from (used in) investing activities
38,465
(17,164)
15,757
(16,905)
CASH FLOWS FROM FINANCING ACTIVITY:
Dividends paid
(7,100)
(6,700)
(7,100)
(6,700)
NET INCREASE IN CASH AND
CASH EQUIVALENTS
271,460
323,530
266,942
317,681
CASH AND CASH EQUIVALENTS AT THE
BEGINNING OF THE YEAR
531,650
208,120
503,654
185,973
803,110
531,650
770,596
503,654
CASH AND CASH EQUIVALENTS AT THE
END OF THE YEAR
25
24
Notes to Financial Statements
December 31, 2007
1
OPERATIONS
The principal activities of the Company and the Group are to carry on the business of banking and related
financial services including dealing in investment securities, stock broking and e-financial services. There
have been no significant changes in the nature of these activities during the financial year.
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The financial statements have been prepared in accordance with the historical cost convention modified
by the revaluation of certain treasury instruments to market value and are expressed in Brunei Darussalam
dollars.
Group Financial Statements
The consolidated financial statements include the financial statements of the Company and its subsidiaries
for the financial year December 31, 2007. The subsidiaries consolidated are entities in which the Group has
an equity interest of more than 50% in the issued share capital at the balance sheet date or has power to
exercise control over the operations.
Subsidiaries are consolidated from the date on which effective control is acquired by the Group. Inter company
transactions are eliminated on consolidation and the consolidated financial statements reflect external
transactions only. Where necessary, accounting policies for subsidiary companies have been changed to
ensure consistency with policies adopted by the Group.
Goodwill
Goodwill arising on consolidation represents the excess of cost of acquisition over the fair values of the net
identifiable assets acquired. Goodwill is stated at cost less accumulated amortisation.
Goodwill is amortised through the Group income statement over 10 years.
Interest Income and Expense
(i)
Interest income and expenses are recognized in the profit and loss statements on an accrual basis.
When an account becomes non-performing, interest is suspended until it is realised on a cash basis.
(ii)
For the finance subsidiary, interest earned on hire purchase and leasing transactions are spread over
the period of the agreements, using the commonly accepted method known as the “Rule-of-78” so as
to produce a constant periodic rate of interest. The income arising therefrom each year comprises
interest in respect of those installments which have become due for payment during the financial year.
The remainder is carried forward as a provision for unearned income.
Loans and Allowance for Bad and Doubtful Receivables
All loans and financing are recognised when cash is advanced to borrowers. Legal fees incurred in securing
a loan and financing are treated as part of the cost of the transaction.
Loans and financing are stated after deduction of allowance for possible losses. These allowances comprise
specific allowances against non-performing receivables and financing and the related interest-in-suspense.
Specific allowance and suspension of interest are made for doubtful receivables and financing which have
been individually reviewed and specifically identified as a bad or doubtful. Known bad receivables are written
off.
An uncollectible loan and financing or portion of a loan and financing classified as bad or doubtful is either
written off or provided for after taking into consideration the realizable value of collateral, if any, when in the
judgement of the management there is no prospect of recovery.
25
December 31, 2007
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Depreciation
Depreciation is calculated to write off the cost of the property, plant and equipment over their estimated
useful lives by the straight line method. The estimated useful lives are as follows:Freehold lands and buildings
Leasehold lands and buildings
Leasehold improvements
Computers
Office equipment
Office furniture and fittings
Household furniture and equipment
Motor vehicles
50 years
Over period of the lease
5 years
5 – 8 years
5 years
5 – 10 years
5 – 10 years
5 years
Gains and losses on disposal of property, plant and equipment are determined by reference to their
net book value and are taken into account in determining operating profit.
Repairs and maintenance are charged to the profit and loss statements when the expenditure is
incurred.
Fully depreciated property, plant and equipment are retained in the financial statements until they are
no longer in use.
Investments
(i)
Investments in subsidiaries
Investments in subsidiaries in the Company’s financial statements are stated at cost less amounts
written off in recognition of any permanent fall in value.
Dividend income is recorded in the profit and loss statements in the financial year in which a
dividend has been approved by the shareholders in the investee company.
(ii)
Other investments
Quoted and unquoted investments intended to be held for long term are stated at cost less
impairment in value that is other than temporary, determined on an individual investment basis.
Interest earned on other investment is reported as interest income.
Treasury Related Off-Balance Sheet Financing Instruments
Transactions in treasury related off-balance sheet financial instruments including foreign exchange
contracts are valued at market prices if they are for trading purposes and the resultant profits and
losses are taken to the profit and loss statements. Transaction entered into for hedging purposes are
accounted for in a manner consistent with the accounting treatment of the item being hedged.
26
December 31, 2007
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Acceptances
Acceptances comprise undertakings by the Company to pay bills of exchange drawn on customers. The
Company expec t s the acceptance to be set tled simultaneously with the reimbursement from the customers.
Acceptances are disclosed liabilities with corresponding contra-assets.
Foreign Currency Transactions
Transactions in foreign currencies are recorded in Brunei Darussalam dollars at the rates ruling at the dates of
the transactions. At each balance sheet date, recorded monetary balances that are denominated in foreign
currencies are reported at the rates ruling at the balance sheet date. All realised and unrealised exchange
adjustment gains and losses are dealt with in the profit and loss statements.
Income Tax
Tax expense is determined on the basis of tax effect accounting, using the liability method and it is applied
to all significant timing differences except that a debit balance or a debit to the deferred tax balance is not
carried forward unless there is a reasonable expectation of its realisation.
Employee Benefits
The Company and the Group contribute to the Tabung Amanah Pekerja (“TAP”), a defined contribution plan
regulated and managed by the Government of Brunei Darussalam, which applies to all local employees. The
contributions to TAP are charged to the income statements in the period to which the contribution relate.
The Company also operates a defined retirement fund scheme for its employees, which requires provisions
to be made periodically based on the entitlements of the employees. The provisions are calculated on the
basis of the number of years service of the employees and are charged to the income statements in the
period in which the entitlements arise.
3
RELATED PARTIES TRANSACTIONS
Related parties in these financial statements refer to members of the holding company’s group of
companies.
Some of the Company’s transactions and arrangements are with related parties and subsidiary companies
and the effect of these on the basis determined between the parties are reflected in these financial
statements.
Significant related companies’ transactions are as follows: The Company
2007
2006
B$’000
B$’000
Interest income
Interest expenses
Net interest expense paid to subsidiary
3,008
767
2,284
1,576
1,033
2,714
27
December 31, 2007
4
CASH DEPOSITS AND RESERVE
The reserve is maintained in accordance with Section 45 of the Brunei Darussalam Banking Order 2006 and a
directive issued by the Brunei Government Ministry of Finance in accordance with Section 13A of the Finance
Companies Act, Cap. 89. The reserve is not available for use in the Company and its subsidiaries’ day to day
operations.
5
LOANS AND ADVANCES (NET)
The Group
2007
2006
B$’000
B$’000
a)
Loans and Advances
The Company
2007
2006
B$’000
B$’000
877,115
800,177
877,115
800,177
(56,560)
(90,552)
(81,373)
(91,429)
(56,560)
(90,552)
(81,373)
(91,429)
730,003
627,375
730,003
627,375
Hire purchase receivables
Finance leases of equipment
530,226
580
440,620
88
-
-
Less: Allowance for doubtful receivables
Less: Allowance for interest in suspense
530,806
(924)
(519)
440,708
(2,176)
(623)
-
-
529,363
437,909
-
-
1,259,366
1,065,284
730,003
627,375
Less: Allowance for bad and
doubtful receivables
Allowance for interest in suspense
Balance at end of year
The Group and the Company classify loans in accordance with its own internal loans grading policies.
The Group and the Company make specific allowances for non-performing loans and financing in accordance
with its policy set out in Note 2. Interest income is suspended when the account is classified as non-performing
until it is realised on a cash basis.
28
December 31, 2007
5
LOANS AND ADVANCES (NET) (continued)
Movements in allowance for bad and doubtful receivables on loans are as follows: The Group
2007
2006
B$’000
B$’000
b)
Balance at the beginning of the year
Addition
Written back
Written off
Balance at the end of the year
The Company
2007
2006
B$’000
B$’000
81,373
7,670
(429)
(32,054)
112,182
17,676
(110)
(48,375)
81,373
7,670
(429)
(32,054)
112,182
17,676
(110)
(48,375)
56,560
81,373
56,560
81,373
Movements in allowance for interest in suspense on loans are as follows: The Group
2007
2006
B$’000
B$’000
c)
Addition
Written back
Written off
The Company
2007
2006
B$’000
B$’000
91,429
18,764
(383)
(19,258)
124,148
28,974
(1,618)
(60,075)
91,429
18,764
(383)
(19,258)
124,148
28,974
(1,618)
(60,075)
90,552
91,429
90,552
91,429
Movements in allowance for bad and doubtful receivables on hire purchase are as follows: The Group
2007
2006
B$’000
B$’000
d)
Addition
Written off
The Company
2007
2006
B$’000
B$’000
2,176
6,935
(8,187)
4,546
8,341
(10,711)
-
-
924
2,176
-
-
Movements in allowance for interest in suspense on hire purchase are as follows: The Group
2007
2006
B$’000
B$’000
e)
Addition
Written off
The Company
2007
2006
B$’000
B$’000
623
52
(156)
946
409
(732)
-
-
519
623
-
-
29
December 31, 2007
6
DUE FROM RELATED PARTIES
The Group/The Company
2007
2006
B$’000
B$’000
Overdrafts
Commercial term loans & others
7
23,052
16,441
94,114
39,493
OTHER ASSETS
The Group
2007
2006
B$’000
B$’000
Prepayments
Interest receivable
Deposits
Others
8
12,699
81,415
The Company
2007
2006
B$’000
B$’000
1,066
13,152
388
19,691
1,004
13,597
327
29,508
640
13,152
354
19,706
565
13,579
288
29,476
34,297
44,436
33,852
43,908
SUBSIDIARY COMPANIES
The Company
2007
2006
B$’000
B$’000
a)
Unquoted shares, at cost
b)
The following are the subsidiaries of the Company:
25,249
Name of Company
and Place of Incorporation
Principal Activities
Baiduri Finance Berhad
(Brunei Darussalam)
Finance company
Baiduri Securities Sdn Bhd
(Brunei Darussalam)
Share brokers and dealers in securities
and investments of all kinds
2,249
Percentage of Paid
Up Capital Held
2007
2006
%
%
100
100
51
51
Baiduri Securities Sdn Bhd ceased operations after January 31, 2002 and has been dormant since then.
Full provision has been made for the cost of this investment.
30
December 31, 2007
9
OTHER INVESTMENTS
The investments consist of: The Group/The Company
2007
2006
B$’000
B$’000
Quoted investments, at cost
Unquoted investments, at cost
174,767
-
216,130
-
174,767
216,130
As at December 31, 2007, the quoted investments with cost amounting $134,340,000 (2006:$59,369,000), coupon
rate ranging 2.187% to 4.91% (2006: 3.375% to 4.91%) per annum and maturity dates ranging from January 24,
2008 to December 20, 2012 (2006: February 17, 2007 to December 30, 2010) are held to maturity.
There was a provision for diminution in value amounting $9 million (prior year: $NIL) for held to maturity
investments.
The unquoted investments consist of the following: -
10
Name of Company
and Place of Incorporation
Principal Activities
SBI Garment Industries Sdn Bhd
(Brunei Darussalam)
Garment manufacturer
Percentage of Paid
Up Capital Held
2007
2006
%
%
100
100
GOODWILL ON CONSOLIDATION
The Group
2007
2006
B$’000
B$’000
At cost
249
249
Accumulated amortisation
Amortisation charge for the year
100
25
75
25
125
100
124
149
Net book value at the end of the year
31
December 31, 2007
11
PROPERTY, PLANT AND EQUIPMENT
The Group
Freehold
Lands &
Buildings
B$’000
Leasehold
Lands &
Buildings
B$’000
Leasehold
Improvements
B$’000
Computers
B$’000
Office
Equipment
B$’000
Cost
At the beginning of the year
Additions
Disposal/written off
2,925
500
(250)
4,368
-
5,416
1,267
(869)
21,746
2,364
(873)
3,247
508
(247)
At the end of the year
3,175
4,368
5,814
23,237
3,508
Accumulated depreciation
Depreciation for the year
143
60
-
861
251
-
4,466
466
(868)
13,151
2,467
(869)
2,549
285
(244)
203
1,112
4,064
14,749
2,590
54
249
428
2,474
251
Net book value:
2,782
3,507
950
8,595
698
2,972
3,256
1,750
8,488
918
Office
Furniture
and Fittings
B$’000
Household
Furniture &
Equipment
B$’000
Motor
Vehicles
B$’000
Total
B$’000
Cost
Additions
659
84
(62)
80
7
-
765
27
-
39,206
4,757
(2,301)
681
87
792
41,662
487
40
(57)
19
14
-
331
127
-
22,007
3,710
(2,038)
470
33
458
23,679
36
12
126
3,630
Net book value:
172
61
434
17,199
211
54
334
17,983
Depreciation for prior year
32
December 31, 2007
11
PROPERTY, PLANT AND EQUIPMENT (continued)
The Company
Freehold
Lands &
Buildings
B$’000
Leasehold
Lands &
Buildings
B$’000
Leasehold
Improvements
B$’000
Computers
B$’000
Office
Equipment
B$’000
Cost
Additions
2,925
500
(250)
4,368
-
4,849
1,261
(869)
20,380
2,103
(873)
2,991
492
(245)
3,175
4,368
5,241
21,610
3,238
143
60
-
861
251
-
4,031
429
(868)
12,444
2,263
(869)
2,400
253
(242)
203
1,112
3,592
13,838
2,411
54
249
402
2,294
229
Net book value:
2,782
3,507
818
7,936
591
2,972
3,256
1,649
7,772
827
Office
Furniture
and Fittings
B$’000
Household
Furniture &
Equipment
B$’000
Motor
Vehicles
B$’000
Total
B$’000
Cost
Additions
567
75
(62)
80
7
-
669
27
-
36,829
4,465
(2,299)
580
87
696
38,995
432
33
(57)
19
14
-
303
109
-
20,633
3,412
(2,036)
408
33
412
22,009
27
12
107
3,374
Net book value:
135
61
366
16,196
172
54
284
16,986
33
December 31, 2007
12
AMOUNT DUE TO SUBSIDIARIES
The Company
2007
2006
B$’000
B$’000
Amount due to subsidiaries (net)
13
124,305
AMOUNT DUE TO RELATED PARTIES
The Group
2007
2006
B$’000
B$’000
Current accounts
Savings accounts
Term deposits
Others
14
7,274
1,496
30,903
201
7,763
10,758
32,093
-
7,274
1,496
30,903
-
50,815
39,874
50,614
39,673
CURRENT, FIXED, SAVINGS AND OTHER DEPOSITS
Current accounts
Saving accounts
Term deposits
The Company
2007
2006
B$’000
B$’000
173,297
659,094
1,334,270
125,522
530,595
1,086,739
173,297
134,020
1,218,430
125,522
125,752
954,187
2,166,661
1,742,856
1,525,747
1,205,461
OTHER LIABILITIES AND PROVISIONS
The Group
2007
2006
B$’000
B$’000
Interest payable
Accruals
Provisions
Advance receipts
Others
34
The Company
2007
2006
B$’000
B$’000
7,763
10,758
32,093
201
The Group
2007
2006
B$’000
B$’000
15
85,772
The Company
2007
2006
B$’000
B$’000
8,832
3,047
8,972
3,616
7,456
7,572
2,652
7,578
3,895
5,753
9,023
2,436
7,449
3,522
6,636
7,305
1,931
6,104
3,819
5,076
31,923
27,450
29,066
24,235
December 31, 2007
16
INCOME TAX
The Group
2007
2006
B$’000
B$’000
(a)
Tax expense
Income tax expense attributable to
profit is made up of:
Current income tax provision - Brunei
Deferred taxation
13,461
(16)
8,091
10
8,563
-
5,365
-
Balance at end of the year
13,445
8,101
8,563
5,365
The Group
2007
2006
B$’000
B$’000
(b)
Movement in provision for tax
Balance at the beginning of the financial year
Income tax paid
Current financial year’s tax expense on profit
17
The Company
2007
2006
B$’000
B$’000
8,030
(7,934)
13,461
4,654
(4,715)
8,091
5,295
(5,209)
8,563
3,619
(3,689)
5,365
13,557
8,030
8,649
5,295
The Group
2007
2006
B$’000
B$’000
(c)
The Company
2007
2006
B$’000
B$’000
The Company
2007
2006
B$’000
B$’000
Deferred taxation
Transfer (from)/ to current income tax
318
(16)
308
10
240
-
240
-
302
318
240
240
PROVISION FOR RETIREMENT BENEFITS
2007
2006
B$’000
B$’000
Charge for the year
Utilised
753
450
-
400
400
(47)
1,203
753
35
December 31, 2007
18
SHARE CAPITAL
Authorised:
Number of ordinary shares of $1 each
Issued and fully paid:
2007
2006
’000
’000
2007
2006
’000
’000
120,000
120,000
120,000
120,000
60,000
60,000
60,000
60,000
On February 25, 2008, the issued share capital was increased to B$100,000,000 by the issue of 40,000,000
ordinary shares of B$1 each.
The newly issued shares rank pari passu in all respect with the existing shares of the Company.
19
STATUTORY RESERVE
The Group
2007
2006
B$’000
B$’000
The Company
2007
2006
B$’000
B$’000
Charge for the year
25,838
16,050
17,739
8,099
23,319
12,634
16,222
7,097
41,888
25,838
35,953
23,319
The transfer from profit and loss statements is to comply with Section 24 of the Brunei Darussalam Banking
Order 2006 and Section 13 of the Finance Companies Act, Cap. 89.
20
COMMITMENTS AND CONTINGENCIES
In the normal course of business, the Company and the Group make various commitments and incur certain
contingent liabilities with legal recourse to its customers. No material losses are anticipated as a result of
these transactions. The commitments and contingencies constitute the following: The Group/The Company
2007
2006
B$’000
B$’000
Letter of credit and bills for collection
Guarantees
Acceptances and other obligations
Foreign exchange contracts
36
55,402
120,401
790
4,674
39,633
105,572
893
21,328
181,267
167,426
December 31, 2007
21
INTEREST INCOME
The Group
2007
2006
B$’000
B$’000
Interest income
Less: Interest in suspense
151,020
(18,433)
152,701
(27,417)
100,092
(18,381)
110,420
(27,008)
132,587
125,284
81,711
83,412
The Group
2007
2006
B$’000
B$’000
Interest expense
Interest expense comprises interest incurred or
deposits and other interest bearing liabilities.
Interest expenses paid/payable to:
Banks and customers
22
42,677
47,605
The Company
2007
2006
B$’000
B$’000
27,658
35,663
OTHER ADMINISTRATIVE EXPENSES
The Group
2007
2006
B$’000
B$’000
Directors’ fees
Depreciation of property, plant and equipment
Rental
Salaries, allowances and bonuses
Others
23
The Company
2007
2006
B$’000
B$’000
The Company
2007
2006
B$’000
B$’000
1,419
3,710
1,391
17,001
22,935
709
3,630
1,291
14,072
21,153
1,419
3,412
1,176
14,059
12,288
709
3,374
1,095
11,802
10,056
47,462
40,855
32,354
27,036
ALLOWANCES ON LOANS AND ADVANCES / OTHERS
The Group
2007
2006
B$’000
B$’000
Loans and advances to customers/others
20,268
24,753
The Company
2007
2006
B$’000
B$’000
15,868
17,676
37
December 31, 2007
24
DIVIDENDS
2007
2006
B$’000
B$’000
Dividend paid during the financial year
7,100
6,700
Dividend for
the year 2006
Dividend for
the year 2005
At the forthcoming Annual General Meeting, a total dividend of B$8,400,000 in respect of the current financial
year ended December 31, 2007 will be proposed for shareholders’ approval. Such dividend, if approved by
the shareholders, will be accounted for as an appropriation of retained profits of the shareholders’ equity in
the next financial year ending December 31, 2008.
25
CASH AND CASH EQUIVALENTS
The Group
2007
2006
B$’000
B$’000
Cash, deposits and balance with banks
Cash reserve
Deposits and balances with banks
26
The Company
2007
2006
B$’000
B$’000
832,921
97,790
(127,601)
550,281
86,168
(104,799)
831,535
66,662
(127,601)
549,328
59,125
(104,799)
803,110
531,650
770,596
503,654
RISK MANAGEMENT OBJECTIVES AND POLICIES
Accepting and managing risk is central to the business of the Group and is an important source of competitive
advantage.
The Board of Directors are accountable for establishing and maintaining an environment that manages risk in
an effective and efficient manner. This includes a robust system of limits, controls and reporting processes.
Management and senior executives track key performance indicators, investigates and reports on effectiveness
of risk management systems to the Board of Directors. The Group’s internal audit department also provide
an independent assessment of this process.
The following discussion on risk management concentrates on the Group’s main areas of risk:
(i)
Credit Risk
Credit risk is the risk of financial loss that results from customers failing to meet their obligations. Credit
risk arises primarily from lending-related activities and represents Group’s major risk type.
The Board of Directors approves major prudential policies and limits that govern large customer
exposures and industry concentration. The Board of Directors also appoints independent credit officers
in each business areas. These credit officers would work with the line managers to ensure that approved
policies are applied appropriately and achieve optimal returns on the Group’s risk exposure.
In respect of its lending-related activities, management regularly review the amount of risk accepted in
related to one borrower or groups of borrowers, industry segments, level of non-performing loans and
adequacy of provisioning requirements.
Exposure to credit risk is also managed in part by obtaining collateral. Some of the assets typically
included as collateral are property, assignment of rental income, salary and deposit placement.
38
December 31, 2007
26
RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
(ii)
Liquidity Risk
Liquidity risk is the risk that the Group is unable to meet its cashflow obligations as and when they fall
due.
To manage the risk, the Group monitors and maintains sufficient liquid assets to ensure that the liquidity
risk exposure is managed and minimised.
Additionally, the Group has to comply with the regulations and guidelines of Ministry of Finance in
maintaining minimum cash balances with the Ministry of Finance.
(iii)
Interest/Financing Rate Risk
Interest/financing rate risk is the risk of earnings and value of financial instruments caused by fluctuations
in interest/financing rates.
Sensitivity to interest/financing rates arises from the differences in the maturities and re-pricing dates of
assets and liabilities. These differences are monitored and managed by management to ensure that the
risk exposure is minimised. This includes actively reviewing its interest/financing rate to ensure that the
Group receives an optimal and yet competitive interest/financing spread.
27
COMPARATIVES
Certain comparative figures have been reclassified to conform with the current year presentation.
39
Offices, Branches and
ATM Network
BAIDURI BANK GROUP
Postal Address
Bandar Seri Begawan
P.O. Box 2220, BSB BS8674,
Negara Brunei Darussalam
Kuala Belait
P.O. Box 1368, KB KA1189,
Seria
P.O. Box 25, Seria KB1133,
Website Address:
www.baiduri.com
E-mail Address:
bank@baiduri.com
BAIDURI BANK BERHAD - List of Offices/Branches
Head Office
Block A, Units 1-4, Kiarong Complex,
Lebuhraya Sultan Hassanal Bolkiah, BE1318
Tel No: (673) 226 8300
Fax No: (673) 245 5599
Card Centre
Block A, Unit 8, Kiarong Complex,
Manager: Lee Ai Cheng
Tel No: (673) 226 8300
Fax No: (673) 245 4184
Customer Helpdesk: (673) 245 4187
Loan Centre
Block A, Unit 6, Kiarong Complex,
Manager: Hjh Maripaz Abdullah
Tel No: (673) 226 8300
Fax No: (673) 245 4183
Wealth Management Centre
Unit 10, Level 2, Seri Kiulap Complex,
Kg Kiulap, Bandar Seri Begawan
Head: Peng Eng Soon
Tel No: (673) 223 2153/54
Fax No: (673) 223 2155
Business Services Centre
Block B, Unit 1-5, Kiarong Complex,
Manager: Chin Ing Kiaw
Tel No: (673) 226 8300
Fax No: (673) 245 5599
e-Banking Centre
Block B, Unit 1-5, Kiarong Complex,
Head: Shirlene Shim
Tel No: (673) 226 8300
Fax No: (673) 245 5599
Customer Helpdesk: (673) 242 5644
40
Prestige Centres
G.02, Ground Floor, Block A,
Yayasan Sultan Haji Hassanal Bolkiah Complex
Bandar Seri Begawan BS8711
Tel No: (673) 223 3111, 220 8206
Fax No: (673) 222 1891
Unit 10, Grond & 1st Floor
Seri Kiulap Complex Bandar Seri Begawan BE1518
Tel No: (673) 223 6905 / 6 / 10
Fax No: (673) 223 6904
Prestige Programme Manager: Alvina Chung
Yayasan Branch
G.02, Ground floor, Block A,
Yayasan Sultan Haji Hassanal Bolkiah Complex, BS8711
Manager: Alvina Chung
Tel No: (673) 223 3233
Fax No: (673) 222 1891
Kiarong Branch
Ground Floor, Block A, Unit 1, Kiarong Complex,
Manager: Cheng Eng Khen
Tel No: (673) 226 8300
Fax No: (673) 245 2888
Kuala Belait Branch
Units 2 & 3, Tang Ching Ying Bldg,
Jalan Sungai, Kuala Belait KA2331
Manager: Ramlah Don
Tel No: (673) 333 0650 / 51
Fax No: (673) 334 2297
Sengkurong Branch
Units 1 & 2, Ground Floor, Sengkurong Complex,
Kg Sengkurong A BG1121
Manager: Hjh Mimie Hawa Hj Ariffin
Tel No: (673) 266 3960
Fax No: (673) 266 3959
The Mall Branch
Unit G-30, Ground Floor, The Mall,
Abdul Razak Complex Gadong, BE3519
Manager: Evan Wong Han Boon
Tel No: (673) 242 1498, 2421398
Fax No: (673) 242 1415
Supa Save Gadong Branch
Units 7 & 8, Supa Save Gadong
Kg. Mata-Mata, BE1718
Manager: Vivi Rudynanissmah Mamud
Tel No: (673) 242 0627 / 29
Fax No: (673) 242 0909
Seria Branch
Unit 13, Jalan Sultan Omar Ali, Seria KB2733
Manager: Helen Hwong Su Chow
Tel No: (673) 322 2438
Fax No: (673) 322 2433
Kiulap Branch
Unit 10, Ground & 1st Floor,
Seri Kiulap Complex,Kg Kiulap BE1518
Manager: Davern Lim
Tel No: (673) 223 6905 / 6 / 10
Fax No: (673) 223 6904
Offices, Branches and
ATM Network
Serusop Branch
Unit 1, Block A, Komplex Delima Jaya,
Simpang 62, Jalan Muara,
Kg. Delima Satu BB4713
Manager: Ramlah Ahad
Tel No: (673) 234 3288
Fax No: (673) 234 3285
Tutong Branch
Unit 1, Ground & 1st Floor,
Tutong Central Mall,
Kg. Petani, Pekan Tutong TA 1141
Manager: Hjh Mimie Hawa Hj Ariffin
Tel No: (673) 426 0707
Fax No: (673) 426 0714
Muara Branch
Ground 1, Bgn Tiga Tingkat,
Pekan Muara BT1128,
Manager: Ramlah Ahad
Tel No: (673) 277 1700/1
Fax No: (673) 277 1702
BAIDURI FINANCE BERHAD
(a wholly owned subsidiary of Baiduri Bank)
General Manager: Hj Haliluddin bin Dato Hj Talib
Head Office
Block A, Units 2 & 3, Ground Floor, Kiarong Komplex,
Lebuhraya Sultan Hassanal Bolkiah, BE1318.
Tel No: (673) 226 8300
Fax No: (673) 245 0877
Kuala Belait
Unit G20, Ground Floor, Komplex Harapan
Jalan Setia DiRaja, Kuala Belait KA3131
Tel No: (673) 333 0569/70
Fax No: (673) 333 0572
Website Address:
www.baidurifinance.com
Email Address:
finance@baiduri.com
24-Hour Off-site ATM Locations
Supa Save Mabohai
Centrepoint, Gadong
Mail Processing Centre, Old Airport Road
Bunut Post Office
Grand City Hotel, Batu Bersurat
Soon Lee Megamart, Kuala Belait
Hua Ho Mall, Manggis
Soon Lee Megamart, Lambak Kanan
Brunei International Airport (multi-currency)
Supa Save, Panaga
Soon Lee Megamart, Sungai Liang
Hua Ho Mall, Tanjong Bunut
RIPAS Hospital
Seri Q-lap Mall, Kiulap
Petani Mall, Tutong
Giant Mall, Rimba
41

Untitled - Baiduri Bank

Transcription

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