Annual Report Laporan Tahunan - Baiduri Bank
Annual Report Laporan Tahunan - Baiduri Bank
Annual Report Laporan Tahunan - Baiduri Bank
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<strong>Annual</strong> <strong>Report</strong> <strong>Laporan</strong> <strong>Tahunan</strong>
<strong>Annual</strong> <strong>Report</strong><br />
2008
Vision & Mission<br />
Statement<br />
VISION<br />
To be the leading banking and<br />
financial group in Brunei<br />
Darussalam<br />
MISSION<br />
As a truly local entity in<br />
Brunei Darussalam, the Group<br />
is committed to provide<br />
innovative and comprehensive<br />
financial products and<br />
services to the Bruneian<br />
community<br />
Contents<br />
Vision and Mission Statement 3<br />
Chairperson’s Statement 4<br />
Corporate Information 6<br />
2008 Key Financial Figures 9<br />
2008 Corporate Highlights 11<br />
- Business Highlights 12<br />
- Operations Management 15<br />
- Human Resource Development 16<br />
- Corporate Social Responsibility 17<br />
Financial Statements 21<br />
- <strong>Report</strong> of the Directors 22<br />
- Independent Auditors’ <strong>Report</strong> 24<br />
- Balance Sheets 25<br />
- Profit and Loss Statements 26<br />
- Statements of Changes in Equity 27<br />
- Cash Flow Statements 28<br />
- Notes to Financial Statements 29<br />
Offices, Branches and ATM Network 43
Chairperson’s Statement<br />
Compared to 2007, <strong>Baiduri</strong> Finance increased<br />
its net income by 19.44% to BND 43 million. Net<br />
profit after tax reached BND 16 million, an increase<br />
of 45.45% over the previous year. <strong>Baiduri</strong> Finance<br />
maintained its position as the market leader in<br />
automobile financing.<br />
DEVELOPMENTS IN 2008<br />
In 2008, we focused on organizational development<br />
and product enhancement with emphasis on<br />
investment products.<br />
Upgrading Facilities<br />
On behalf of the Board of Directors, I am pleased to<br />
present the <strong>Annual</strong> <strong>Report</strong> and Accounts of <strong>Baiduri</strong><br />
<strong>Bank</strong> Berhad for the financial year ending 31st<br />
December 2008.<br />
GLOBAL FINANCIAL CRISIS<br />
The Year 2008 has been a difficult year for the global<br />
economy. What started as a sub-prime crisis in the<br />
U.S.A. eventually deepened into a global economic<br />
recession of unprecedented dimensions. This<br />
recession is expected to continue through 2009.<br />
Fortunately, in spite of a sharp decline in oil and<br />
gas prices, Brunei’s domestic economy has been<br />
relatively unaffected.<br />
SATISFACTORY FINANCIAL RESULTS<br />
In an unfavourable international environment,<br />
however, the <strong>Baiduri</strong> <strong>Bank</strong> Group was still able to<br />
expand its business and achieve satisfactory financial<br />
results. Both <strong>Baiduri</strong> <strong>Bank</strong> and <strong>Baiduri</strong> Finance, its<br />
wholly-owned subsidiary, contributed to this.<br />
In 2008, <strong>Baiduri</strong> <strong>Bank</strong> recorded a net income of<br />
BND 110 million against BND 82 million in 2007,<br />
an increase of 34%. Profit after tax amounted to<br />
BND 28 million, an increase of 10.67% over the<br />
previous year.<br />
We continued to upgrade our facilities in order<br />
to serve our customers better. In February 2008,<br />
we opened the Loan Centre in Kiarong, providing<br />
centralized processing of retail loans for speedier<br />
approval. During the second half of the year, we<br />
set up the Business Services Centre in Kiarong,<br />
consolidating three departments in one, thus<br />
providing centralized operational support for<br />
all departments within <strong>Baiduri</strong> <strong>Bank</strong> Group. In<br />
December 2008, we moved our subsidiary <strong>Baiduri</strong><br />
Finance to new premises in Beribi, bringing it closer<br />
to the automobile district. We opened an adjacent<br />
branch of <strong>Baiduri</strong> <strong>Bank</strong> for the convenience of our<br />
corporate customers.<br />
Technological Development<br />
We continued developing technology. We<br />
upgraded our IT operations; we consolidated the<br />
Data Centre and Information System teams and<br />
relocated them under one roof to a new state-ofthe-art<br />
Data Centre in Kiarong.<br />
Enhancing Products and Customer Experience<br />
Under Wealth Management, we introduced<br />
Structured Deposits and other investment products<br />
to diversify what we were offering to customers.<br />
The second <strong>Baiduri</strong> Expo with the theme “Saving for a<br />
Brighter Future” was held in June at the International<br />
Convention Centre, showcasing products and services<br />
of the <strong>Baiduri</strong> <strong>Bank</strong> Group with an emphasis on<br />
savings and investment. Free financial health checks<br />
and consultations were provided to customers.<br />
The <strong>Baiduri</strong> Prestige programme held several<br />
lifestyle activities for its members in 2008.<br />
We continued to develop our specialized and<br />
structured lending services to small, medium<br />
4 <strong>Baiduri</strong> <strong>Bank</strong> <strong>Annual</strong> <strong>Report</strong> 2008
Chairperson’s Statement<br />
and large corporate customers in support of the<br />
country’s economic diversification objectives.<br />
<strong>Baiduri</strong> <strong>Bank</strong> continued to make special efforts to<br />
assist the growth of local small businesses under<br />
its various SME programmes with private and<br />
government bodies as partners.<br />
HUMAN RESOURCES<br />
Over the years, we have stressed the importance<br />
of staff development. In 2008, the first batch of<br />
13 employees underwent studies leading to the<br />
Diploma in Financial Planning. Regular training<br />
and seminars were organized in order to improve<br />
service quality and operating processes.<br />
CORPORATE SOCIAL RESPONSIBILITY<br />
<strong>Baiduri</strong> <strong>Bank</strong> has been an active and regular<br />
supporter of local charities, such as Pusat Ehsan,<br />
Child Development Centre and SMARTER. The<br />
<strong>Baiduri</strong> Masters, our annual golf event organized to<br />
raise funds for charity, remains the biggest golfing<br />
event in Brunei. We also offer education grants to<br />
deserving children from less-privileged families to<br />
help them achieve their educational goals.<br />
In support of community education, <strong>Baiduri</strong> <strong>Bank</strong><br />
has sponsored the World Blood Donor Day and<br />
Universal Children’s Day annually.<br />
AWARDS<br />
For the sixth time in seven years, <strong>Baiduri</strong><br />
<strong>Bank</strong> won the <strong>Bank</strong> of the Year Award for Brunei from<br />
The <strong>Bank</strong>er magazine, UK in November 2008.<br />
people of Brunei, we plan the following in 2009:<br />
• The upgrading of premises and facilities as part<br />
of our ongoing large-scale improvement<br />
project;<br />
• The provision of new techniques to assist our<br />
customers in line with the most up-to-date<br />
standards of information technology;<br />
• The widening of our range of products especially<br />
in Retail <strong>Bank</strong>ing, to make them better adapted<br />
to the needs and expectations of our<br />
customers;<br />
• The continued enhancement of our staff’s<br />
performance, especially in providing customer<br />
services by undertaking professional studies in<br />
financial planning.<br />
APPRECIATION<br />
On behalf of the Board of Directors, I would like to<br />
express our appreciation to the Government of His<br />
Majesty the Sultan and Yang Di-Pertuan.<br />
I also wish to thank our shareholders and our valued<br />
clients for their continued support and confidence.<br />
Without our customers, we would not have become<br />
the award-winning local bank we are today.<br />
In conclusion, I wish to record <strong>Baiduri</strong> <strong>Bank</strong>’s<br />
appreciation to the management and staff for their<br />
hard work and much-valued contributions to a highly<br />
successful year.<br />
ECONOMIC OUTLOOK<br />
A large part of the Brunei economy has traditionally<br />
been driven by public spending and development<br />
projects. Major projects currently underway in the<br />
Sungai Liang Industrial Park, increased activities<br />
in the oil and gas industries, housing resettlement<br />
and other projects will generate activities which<br />
will contribute to fuelling the economic growth<br />
in Brunei. We are confident that Brunei will not<br />
be adversely affected by the uncertain global<br />
economic situation in 2009.<br />
YTM Pengiran Anak Isteri<br />
Pengiran Anak Hajah Zariah<br />
Chairperson<br />
OUR PLAN FOR 2009<br />
In line with our global strategy to develop innovative<br />
products for our Bruneian customers, and to focus<br />
on customer service and efficiency with the aim<br />
of bringing the highest of quality services to the<br />
<strong>Baiduri</strong> <strong>Bank</strong> <strong>Annual</strong> <strong>Report</strong> 2008 5
Corporate Information<br />
Corporate Information<br />
SHAREHOLDERS<br />
<strong>Baiduri</strong> Holdings Bhd<br />
Royal Brunei Airlines Sdn Bhd<br />
Royal Brunei Technical Services Sdn Bhd<br />
BNP Paribas<br />
BOARD OF DIRECTORS<br />
YTM Pg Anak Isteri Pg Anak Hajah Zariah Binti<br />
Almarhum Pg Pemancha Pg Anak Haji Mohamed Alam<br />
(Chairperson)<br />
YAM Pengiran<br />
Muda Abdul Qawi<br />
YB Pehin Orang Kaya Pekerma<br />
Dewa Dato Seri Setia<br />
Awang Lim Jock Seng<br />
YM Dato Paduka<br />
Timothy Ong<br />
Teck Mong<br />
Claude De Kemoularia<br />
Francis Caze<br />
Hj Amir Hamzah<br />
Hj Hanafi<br />
Bertie Cheng Shao Shiong<br />
6 <strong>Baiduri</strong> <strong>Bank</strong> <strong>Annual</strong> <strong>Report</strong> 2008<br />
46 <strong>Baiduri</strong> <strong>Bank</strong> <strong>Annual</strong> <strong>Report</strong> 2007
Corporate Information<br />
MANAGEMENT COMMITTEE<br />
(L to R) Seated: Yvonne Chan, Pierre Imhof, Raymond Bariou, Veronica Chong<br />
(L to R) Standing: Pg Azaleen Bin Pg Mustapha, Ti Eng Hui, Hj Haliluddin Bin Dato Hj Talib, Andrew Young<br />
Pierre Imhof<br />
Raymond Bariou<br />
Ti Eng Hui<br />
Andrew Young Chee Ann<br />
Hj Haliluddin Bin Dato Hj Talib<br />
Yvonne Chan Eng Pheng<br />
Pg Azaleen Bin Pg Mustapha<br />
Veronica Chong Nyet Hwa<br />
General Manager<br />
Senior Deputy General Manager<br />
Deputy General Manager, Retail <strong>Bank</strong>ing & Branch Network<br />
Deputy General Manager, Operations<br />
General Manager, <strong>Baiduri</strong> Finance<br />
Senior Manager, Corporate <strong>Bank</strong>ing<br />
Senior Manager, Treasury<br />
Senior Manager, Personnel & Finance<br />
<strong>Baiduri</strong> <strong>Bank</strong> <strong>Annual</strong> <strong>Report</strong> 2008 7
Corporate Information<br />
AWARDS AND ACCOLADES<br />
<strong>Baiduri</strong> <strong>Bank</strong> won the <strong>Bank</strong> of the Year Brunei award from The <strong>Bank</strong>er magazine, UK, in 2002, 2003, 2004, 2006<br />
2007 and 2008. The <strong>Bank</strong> also won in the Marketing, PR or Brand Management Project category of the Asian <strong>Bank</strong>ing<br />
Awards consecutively in 2004 and 2005. In February 2008, <strong>Baiduri</strong> <strong>Bank</strong> received a Special Citation for FAST, the<br />
revolutionary mobile suite of services at the Financial Insights Innovation Awards.<br />
The award ceremony for <strong>Bank</strong> of the Year 2008 took place at the<br />
Dorchester Hotel, London on 26th November 2008. Mr Pierre Imhof<br />
(2 nd left), General Manager and Mr Ti Eng Hui, Deputy General Manager,<br />
Retail <strong>Bank</strong>ing and Branch Network (2 nd right) received the award on<br />
behalf of the <strong>Bank</strong><br />
<strong>Baiduri</strong> <strong>Bank</strong>’s FAST won a Special Citation for Innovation at the Financial<br />
Insights Innovation Awards held in Singapore on 29th February 2008.<br />
Mr Sim Kiem Lee, Cheif Technology Officer, <strong>Baiduri</strong> <strong>Bank</strong> (centre)<br />
receiving the plaque from Mr Cort Isemhagen, Vice President of the IDG<br />
Group (right)<br />
<strong>Baiduri</strong> <strong>Bank</strong>’s wholly-owned subsidiary, <strong>Baiduri</strong> Finance obtained the internationally recognized ISO9001:2000<br />
quality certification in 2003. In 2007, the <strong>Bank</strong>’s Credit Administration Department became the first department<br />
within the <strong>Bank</strong> to have achieved this prestigious recognition. These two units remain the only two bodies within<br />
the banking and finance sector in Brunei certififed to ISO 9001.<br />
AUDITORS<br />
Deloitte and Touche<br />
CORPORATE SECRETARIAL SERVICE PROVIDER<br />
Deloitte & Touche Management Services Pte Ltd<br />
848 <strong>Baiduri</strong> <strong>Bank</strong> <strong>Annual</strong> <strong>Report</strong> 2008<br />
<strong>Baiduri</strong> <strong>Bank</strong> <strong>Annual</strong> <strong>Report</strong> 2007
2008 Key Financial Figures<br />
OPERATING RESULTS<br />
(B$ in thousands, except per share information)<br />
Year Ended December 31<br />
2008 2007<br />
For the Year<br />
Revenue (1) 135,054 109,710<br />
Net Income 110,415 82,052<br />
Return on assets 1.42% 1.28%<br />
Return on shareholders’ equity 22.20% 23.89%<br />
Shares issued and paid (in millions) 100,000 60,000<br />
At Year End<br />
Total Assets 1,961 1,973<br />
Total Loans and advances (net) 738 7.30<br />
Total deposits 1,623 1,526<br />
Total shareholders’ equity 125 106<br />
Contents<br />
(1)<br />
Includes interest and non-interest income, excludes interest expenses<br />
TOTAL REVENUE (GROUP - 2008)<br />
($'000)<br />
Hire Purchase<br />
& Leasing<br />
B$58,177<br />
Consumer &<br />
Commercial<br />
<strong>Bank</strong>ing<br />
B$98,572<br />
Others<br />
B$21,695<br />
<strong>Baiduri</strong> <strong>Bank</strong> <strong>Annual</strong> <strong>Report</strong> 2008 9
2008 Key Financial Figures<br />
Group Assets<br />
Group Customer Deposits<br />
3000<br />
2500<br />
2500<br />
2000<br />
B$Mil<br />
2000<br />
1500<br />
1000<br />
B$Mil<br />
1500<br />
1000<br />
500<br />
500<br />
0<br />
2005 2006 2007 2008<br />
0<br />
2005 2006 2007 2008<br />
Years<br />
Years<br />
Group Customer Loans (net)<br />
Group Shareholders’ Funds<br />
B$Mil<br />
1600<br />
1400<br />
1200<br />
1000<br />
800<br />
600<br />
400<br />
200<br />
0<br />
2005 2006 2007 2008<br />
Years<br />
B$Mil<br />
160<br />
140<br />
120<br />
100<br />
80<br />
60<br />
40<br />
20<br />
0<br />
136.71<br />
119.3<br />
95.06<br />
83<br />
2005 2006 2007 2008<br />
Years<br />
B$Mil<br />
35<br />
30<br />
25<br />
20<br />
15<br />
10<br />
5<br />
0<br />
Group Net Profit After Tax<br />
31.34<br />
25.806<br />
18.763<br />
10.227<br />
2005 2006 2007 2008<br />
Years<br />
%<br />
15.00<br />
14.00<br />
13.00<br />
12.00<br />
11.00<br />
10.00<br />
9.00<br />
8.00<br />
7.00<br />
6.00<br />
5.00<br />
Capital Adequacy Ratios (<strong>Bank</strong>)<br />
2005 2006 2007 2008<br />
Years<br />
Total Capital Tier 1<br />
%<br />
1.40<br />
1.30<br />
1.20<br />
1.10<br />
1.00<br />
0.90<br />
0.80<br />
0.70<br />
0.60<br />
0.50<br />
0.40<br />
0.30<br />
Group Return On Total Assets<br />
2005 2006 2007 2008<br />
Years<br />
B$'Mil<br />
140<br />
120<br />
100<br />
80<br />
60<br />
40<br />
20<br />
0<br />
Group Total Income<br />
24.5<br />
22.6<br />
14.8<br />
14.0<br />
64.7<br />
77.7<br />
90.0<br />
110.4<br />
2005 2006 2007 2008<br />
Years<br />
Net Interest Income<br />
Non-Interest Income<br />
10 <strong>Baiduri</strong> <strong>Bank</strong> <strong>Annual</strong> <strong>Report</strong> 2008
2008<br />
Corporate Highlights<br />
<strong>Baiduri</strong> <strong>Bank</strong> <strong>Annual</strong> <strong>Report</strong> 2008
Business Highlights<br />
Corporate <strong>Bank</strong>ing Division<br />
In 2008, the Corporate <strong>Bank</strong>ing Division participated in pioneering and innovative corporate financing<br />
schemes for a number of leading companies in the oil and gas, aviation and telecommunications industries.<br />
This included a syndicated finance scheme with other leading international banks to finance a tanker and a<br />
major national housing project.<br />
For the fifth year in 2008, <strong>Baiduri</strong> <strong>Bank</strong> continued to work hand-in-hand with Brunei Shell Petroleum, Brunei<br />
Economic Development Board and Asia Inc Forum on an SME partnership programme aimed to continuously<br />
nurture and groom Brunei SME’s through business awards, networking gathering, business forums and<br />
workshops.<br />
Under the Enterprise Facilitation Scheme and the Micro-Credit Scheme, both in collaboration with the<br />
Ministry of Industry and Primary Resources, <strong>Baiduri</strong> <strong>Bank</strong> has since 2001, been providing assistance to local<br />
entrepreneurs to give them a head start in their business.<br />
Retail <strong>Bank</strong>ing Division<br />
The setting up of a new Loan Centre in Kiarong in February 2008 provided centralized processing of retail<br />
loans, thus helping achieve a much improved turnaround time for loan applications. Through active marketing<br />
and cross-selling, Mortgage Loans and SME financing also saw a major increase despite stiff competition<br />
from other banks.<br />
With a comprehensive range of investment products, Wealth Management sales increased across the product<br />
range. The first series of Structured Deposits was launched in April 2008, and was fully subscribed before the<br />
end of the offer period. This is a strong achievement despite a volatile global outlook for investors. Investor<br />
education, customer risk profiling, ethical consultative selling, professional staff training and details to sales<br />
process were key ingredients for success.<br />
The second <strong>Baiduri</strong> Expo themed “Saving for a Brighter Future” held at the International Convention Centre<br />
in June emphasized savings and investment and showcased products and services of the <strong>Baiduri</strong> <strong>Bank</strong> Group.<br />
Free financial health checks and consultation were provided to customers.<br />
Thanks to excellent credit and operation control combined with substantial increase in operating profits,<br />
<strong>Baiduri</strong> Card Centre continued to deliver excellent financial performance in 2008. Leveraging on the latest<br />
technology, <strong>Baiduri</strong> <strong>Bank</strong>’s card merchants were the first in Brunei to be provided with VeriFone wireless card<br />
terminals. Using GPRS technology, and incorporating the latest protections against fraud and tampering with<br />
in-built verification and authentication features, the VeriFone is battery-powered with a sleek compact design<br />
which makes it extremely portable and safe, allowing transactions to be processed just about anywhere and<br />
at any time of the day, providing extreme versatility to business operators such as car-hiring companies and<br />
food delivery service.<br />
Established in 2005, <strong>Baiduri</strong> <strong>Bank</strong>’s partnership with<br />
Western Union Financial Services continued to be<br />
the preferred remittance service in Brunei because<br />
of its reputation for speed and security. Offering<br />
worldwide person-to-person remittance service<br />
through the bank’s branch network, it is especially<br />
popular with immigrant workers from other Asian<br />
countries. <strong>Baiduri</strong> <strong>Bank</strong> remains the first and only<br />
bank in Brunei to launch a partnership agreement<br />
with a global remittance company.<br />
12 <strong>Baiduri</strong> <strong>Bank</strong> <strong>Annual</strong> <strong>Report</strong> 2008
Business Highlights<br />
Established in June 1999 and enhanced in 2007,<br />
<strong>Baiduri</strong> Prestige offers exclusive banking privileges<br />
to the mass affluent customer segment and high net<br />
worth individuals.<br />
In 2008, <strong>Baiduri</strong> Prestige organized several lifestyle<br />
events exclusively for their members. These included<br />
a health and beauty seminar and exhibition held at<br />
the Rizqun International Hotel in April; an exclusive<br />
preview of the d’Banyan Residency @ Sutra luxury<br />
designer homes held at the Empire Hotel and Country<br />
Club in May; Barbara Harris Water Jewels preview<br />
held at the Empire Hotel and Country Club in August.<br />
The Prestige event of the year was the screening of<br />
the movie “Butterfly Lovers” at the Mall Cineplex,<br />
Gadong exclusively for <strong>Baiduri</strong> Prestige members.<br />
The movie starred Brunei’s home-grown superstar<br />
Wu Chun alongside Hong Kong’s Charlene Choi.<br />
The evening exclusive included a “Meet the Stars”<br />
session where guests were given the opportunity to<br />
meet the stars in person.<br />
DISTRIBUTION CHANNELS<br />
To broaden its distribution footprints as well as enrich channels<br />
to improve customer experience, <strong>Baiduri</strong> <strong>Bank</strong> invested<br />
substantially in self-service banking channels, including the<br />
ATM network, internet banking and mobile phone banking.<br />
Enhancements to the website and cash deposit machines were<br />
carried out in 2008.<br />
Through a series of campaigns to encourage e-channels usage,<br />
increases in the usage of electronic channels were seen over the<br />
12 month period till end 2008. ATM usage as a percentage of<br />
all transactions increased by 12.66% from 2007; transactions via<br />
internet banking saw an impressive 207% increase from January<br />
to December 2008. FAST mobile payment services, which was<br />
first launched in October 2007 saw increasing take-up through<br />
the months, and recorded a 94.5% increase in December 2008<br />
compared to twelve months earlier.<br />
In addition to developing the electronic channels, <strong>Baiduri</strong> <strong>Bank</strong><br />
Group also embarked on a plan to renovate all its premises and branches with the aim of enhancing the total<br />
customer experience and to create a more conducive sales environment. The project started in 2007 and is<br />
expected to be finished by 2010. In 2008, a new branch at Beribi was added, bringing to 12 the total number<br />
of branches in the network.<br />
<strong>Baiduri</strong> <strong>Bank</strong> <strong>Annual</strong> <strong>Report</strong> 2008 13
Business Highlights<br />
<strong>Baiduri</strong> Finance<br />
Leveraging on <strong>Baiduri</strong> <strong>Bank</strong>’s multi-channel delivery systems, <strong>Baiduri</strong> <strong>Bank</strong>’s wholly-owned subsidiary, <strong>Baiduri</strong><br />
Finance continued to grow its business volume and increase its hire-purchase portfolio in 2008.<br />
Besides automobile finance, <strong>Baiduri</strong> Finance also offers attractive savings schemes. To encourage savings and to<br />
reward its customers, <strong>Baiduri</strong> Finance successfully held a 3-month promotion on the popular Multi-Tier Savings<br />
Account from April to June 2008 where depositors stood the chance to win lucky draw cash prizes of $50,000,<br />
$30,000 and $20,000 in addition to monthly cash and novelty prizes.<br />
<strong>Baiduri</strong> Finance moved its head office to new<br />
premises at Sumbangsih Bahagia in December<br />
2008, reflecting <strong>Baiduri</strong> Finance’s growth and<br />
success over the years. Located in the heart of<br />
the automobile district in Beribi, it was a strategic<br />
move to meet the demands of a burgeoning local<br />
population, to serve customers better and be<br />
closer to clients and partners in Beribi.<br />
The new premises are equipped with ultra-modern<br />
facilities such as dedicated counters for hire<br />
purchase, insurance renewal, blue card collection<br />
and other services. It also has a Prestige Centre to cater for its high net worth customers. The new office was<br />
officially opened on 17th December by Yang Berhormat Pehin Orang Kaya Laila Setia Dato Seri Awang Haji Abd<br />
Rahman bin Haji Ibrahim, Minister of Finance II.<br />
14 <strong>Baiduri</strong> <strong>Bank</strong> <strong>Annual</strong> <strong>Report</strong> 2008
Operations Management<br />
The role of the Operations Management Division (OMD) is to provide support to the business units, leveraging<br />
on information technology to achieve optimum operational efficiency. The Division utilizes an integrated<br />
management system and engages employees in continuous improvement programs with the ultimate aim to<br />
achieve total customer satisfaction.<br />
In 2008, a Quality Control Circle (QCC) initiative was launched seeking to set new standards through quality<br />
improvements with the aim to achieve ISO9001 by year 2010 for Operations Management Division and ISO<br />
27001 certification for IT Department by 2011.<br />
Under the current large-scale premises improvement project, the Property Department undertook three major<br />
premises improvement projects. This involved refurbishing premises to reflect a modern professional image<br />
and to provide comfortable working environment to the growing number of staff.<br />
A new Loan Centre was set up at Kiarong Complex<br />
in February providing centralized processing of retail<br />
loans. In December, <strong>Baiduri</strong> Finance’s head office<br />
was relocated to bigger and more modern premises<br />
in Beribi and a new branch of <strong>Baiduri</strong> <strong>Bank</strong> was set up<br />
adjacent to <strong>Baiduri</strong> Finance.<br />
In addition, a Business Services Centre was set up with<br />
the aim to streamline workflow to improve turnaround<br />
time and provide a one-stop centre for customers.<br />
The centre began operations during the third quarter<br />
of 2008 and was officially opened in early 2009. It<br />
involved the merger of three distinct departments<br />
into one and provides operating support for all departments under the <strong>Bank</strong> and <strong>Baiduri</strong> Finance.<br />
Work on relocating the Seria Branch began in late 2008 and was completed in early 2009. The new premises<br />
included a new Prestige Centre to serve members in the Belait District. Refurbishment work on the Head<br />
Office at Kiarong has already started and is expected to be completed by the beginning of 2010.<br />
In 2008, the <strong>Bank</strong>’s IT operations was upgraded and<br />
relocated to a new state-of-the-art Data Centre in<br />
Kiarong and a new IT structure was implemented.<br />
This close integration of various functions also<br />
allowed for multi-skilling of staff.<br />
Under the e-<strong>Bank</strong>ing Department, improvements<br />
were made to ATM network with several new ATMs<br />
and CDMs added to meet the growing needs of<br />
customers and to serve the growing customer base.<br />
Plans are underway for new and improved services<br />
to be introduced via electronic channels in 2009, and<br />
include the launch of an enhanced personal internet<br />
banking service.<br />
Mr Pierre Imhof (right) <strong>Baiduri</strong> <strong>Bank</strong>’s GM and Mr Song Kin Koi,<br />
Managing Director of TelBru signing a Value Added Service<br />
Agreement (VASA) on provision of a comprehensive range of bill<br />
payment services to TelBru customers via electronic channels as well<br />
as over the counter. The ceremony was held at TelBru Headquarters<br />
on 11 th June 2008<br />
<strong>Baiduri</strong> <strong>Bank</strong> <strong>Annual</strong> <strong>Report</strong> 2008 15
Human Resource Development<br />
In line with the Group’s vision to continually increase<br />
the skills and competencies of the whole workforce,<br />
the Human Resources Department of the Group<br />
seeks to build a quality team with the right skills and<br />
talents to meet our current and future needs.<br />
Continuously Building the Service Quality<br />
Culture<br />
With emphasis on the delivery of excellent customer<br />
service to our clients in line with the Group’s Service<br />
Standards, a total of 112 training workshops were<br />
developed and conducted in-house which covered<br />
all aspects of customer service, products and<br />
services, generating an average of 2.5 training days<br />
per staff member during the year.<br />
Enhancing Competency Based Skills<br />
In 2008, 13 holders of the Certificate in Financial<br />
Planning (CertFP) underwent studies leading to the<br />
Diploma in Financial Planning and received their<br />
diplomas from the Singapore College of Insurance<br />
in early 2009. This brings to 37 the total number<br />
of personnel professionally trained in financial<br />
planning, out of which, 4 hold the Chartered<br />
Financial Consultant (ChFC) qualifications; 13 with<br />
the Diploma in Financial Planning (DipFP) and<br />
the rest with the Certificate in Financial Planning<br />
(Cert FP).<br />
The Diploma in Financial Planning (DipFP) is part<br />
of the route to the Chartered Financial Consultant<br />
(ChFC), the premier designation in financial<br />
consulting and is offered to CertFP holders wishing<br />
to acquire in-depth knowledge of the principles<br />
and tools involved in the various aspects of financial<br />
planning process.<br />
To equip all front line personnel with full knowledge<br />
of the <strong>Bank</strong> Group’s products and services, product<br />
briefings and updates were continuously conducted<br />
throughout the year.<br />
As part of staff welfare, basic fire, safety and health awareness courses were also offered with more than 10<br />
personnel having received the highest award of the CPR Instructor course to date.<br />
Compensation and Benefits Strategy<br />
In order to improve Employee Value Proposition and in line with the organization’s performance driven culture,<br />
the Group is constantly reviewing the employees’ compensation and benefits strategy. As a result, a number of<br />
financial and other incentives have been introduced during the year linking achievement of financial targets.<br />
Sales incentives were further enhanced and in addition, eight top achievers in Wealth Management business<br />
for 2008 were rewarded with an incentive trip to attend the 31st IFPAS (Insurance and Financial Practitioners<br />
Association of Singapore) National Congress held in Singapore in March 2009.<br />
16 <strong>Baiduri</strong> <strong>Bank</strong> <strong>Annual</strong> <strong>Report</strong> 2008
Corporate Social Responsibility<br />
<strong>Baiduri</strong> <strong>Bank</strong> Group has benefited from the support of the community and wants to give back to society<br />
wherever possible. Some of the community programmes supported by the Group in 2008 were:<br />
Caring for the Less Fortunate<br />
<strong>Baiduri</strong> <strong>Bank</strong> has been an active and regular supporter of local charities<br />
since its inception. The <strong>Bank</strong> has a policy of donating in kind, usually<br />
in response to a specific need that has been identified. The <strong>Bank</strong><br />
aims to raise public awareness about the needs of special people and<br />
to promote activities that would contribute towards special people<br />
gaining acceptance in the wider society.<br />
Among the contributions made by <strong>Baiduri</strong> <strong>Bank</strong> Group in 2008 to this<br />
group were:<br />
• Donation of 10 units of specially designed personal<br />
computers for visually impaired students presented to<br />
the Special Education Section of the Ministry of Education.<br />
• Donation of BND8,000 towards the purchase of a van for<br />
SMARTER.<br />
• The cost of salaries for two teachers in Pusat Ehsan Al-<br />
Ameerah for a year.<br />
• Donation of a specially designed wheelchair to an 18-year<br />
old man suffering from Spastic Quadriplegic Cerebral Palsy<br />
and Epilepsy.<br />
• Donation to the Ministry of Culture Youth and Sports<br />
to help meet the cost of hosting the Special Olympics<br />
Asia Pacific Bocce Competition held in Brunei from 18th to<br />
24th August 2008.<br />
Participants at the popular annual charity golf<br />
event, the <strong>Baiduri</strong> Masters<br />
The annual charity golf event, The <strong>Baiduri</strong> Masters is the main activity in which public participation is invited<br />
to help raise funds for charity. The golf tournament, which started in 1996, is the most prestigious and widely<br />
attended in Brunei. In 2008, more than 720 players participated, the highest in its history. It also recorded<br />
another first, with a player striking a hole-in-one, winning himself a brand new BMW 730Li. All surplus from<br />
this event were donated to charities and welfare bodies.<br />
Helping Less-Privileged Children Achieve<br />
Their Education Goals<br />
<strong>Baiduri</strong> <strong>Bank</strong> offers education grants to deserving<br />
children from less privileged homes to assist them<br />
in meeting the cost of their school fees. In 2008,<br />
several children from throughout the country<br />
received such grants.<br />
Mr Pierre Imhof presenting an education grant to a school principal<br />
during the Chinese New Year Dinner in Kuala Belait.<br />
<strong>Baiduri</strong> <strong>Bank</strong> <strong>Annual</strong> <strong>Report</strong> 2008 17
Corporate Social Responsibility<br />
Promoting Conservation<br />
As part of <strong>Baiduri</strong> <strong>Bank</strong>’s commitment to promoting sustainable development, <strong>Baiduri</strong> <strong>Bank</strong> Group carried out<br />
several conservation initiatives in 2008<br />
• In June 2008, <strong>Baiduri</strong> <strong>Bank</strong>, in partnership with the Energy Division of the Prime Minister’s Department<br />
launched an initiative to promote energy efficiency and conservation among the bank staff and<br />
customers. It involved distribution of stickers and booklets on the theme.<br />
• The <strong>Baiduri</strong> Expo 2008, which was held<br />
from 26th to 29th June, showcased<br />
measures that can be taken by the public<br />
to conserve energy in line with the theme<br />
“Saving for a Brighter Future”.<br />
• At the Hari Raya Aidilfitri Gala Dinner for<br />
customers and business associates held<br />
at the Jerudong Park Amphitheatre in<br />
October 2008, <strong>Baiduri</strong> <strong>Bank</strong> Group made<br />
a pledge in support conservation of<br />
initiatives for Kampong Ayer which<br />
aimed to maintain its cleanliness to<br />
preserve the village’s unique qualities as<br />
a national heritage.<br />
<strong>Baiduri</strong> <strong>Bank</strong>’s Chairperson, YTM Pengiran Anak Isteri Pengiran Anak<br />
Hajah Zariah presenting <strong>Baiduri</strong> <strong>Bank</strong> Group’s pledge of support on<br />
Kampong Ayer conservation initiatives to a representative of a student<br />
group.<br />
Making a Difference at RIPAS Hospital<br />
On 25th September 2008, in keeping with the spirit<br />
of Ramadhan, a group of senior management<br />
personnel from <strong>Baiduri</strong> <strong>Bank</strong> led by the General<br />
Manager, Mr Pierre Imhof, took time off their busy<br />
schedule to pay a pre-Hari Raya visit to patients at<br />
RIPAS Hospital. Together with the Acting Minister<br />
of Health, YDM Pehin Orang Kaya Pekerma Laila<br />
Diraja Dato Paduka Awang Haji Hazair bin Haji<br />
Abdullah, Mr Imhof presented food hampers to<br />
more than 80 patients who due to their illnesses,<br />
would have to be away from their loved ones<br />
during the Hari Raya season.<br />
18 <strong>Baiduri</strong> <strong>Bank</strong> <strong>Annual</strong> <strong>Report</strong> 2008
Corporate Social Responsibility<br />
Promoting Arts, Culture and Local Talent<br />
<strong>Baiduri</strong> <strong>Bank</strong> Group is committed to promoting cultural exchange and expanding the local talent pool in the<br />
fields of arts and culture.<br />
In June 2008, in promoting cultural exchange, the Group sponsored the French SOAP collective artists, which<br />
specializes in spray painting using environmentally friendly spray paint. Spray painters Migwel, Deser and<br />
Keflione drew huge interest and participation in their workshops and conference on their unique line of street<br />
art. Organized by Alliance Francaise, the project aimed at providing cultural and educational exchange for<br />
free to the people of Brunei and foster closer relations among the different ethnic groups.<br />
Under the same cause, <strong>Baiduri</strong> <strong>Bank</strong> Group made a donation to the Bandar Seri Begawan Indian Association at<br />
the Deepavali Dinner held in November 2008 in honour of the <strong>Bank</strong>’s Indian customers and business associates.<br />
In support of the advancement of local musical and singing talent, <strong>Baiduri</strong> <strong>Bank</strong> Group sponsored the<br />
production of a music CD featuring finalists of Season 2 of the most anticipated reality show in Brunei, Passport<br />
to Fame (P2F) which took place from June to December 2008. Beginning with over 250 contestants, those who<br />
did not meet the grades were eliminated during each round, bringing to just 22 the number of finalists in the<br />
various categories. The final round was a grand finale held at the Jerudong Park Amphitheatre in December<br />
where winners were picked through SMS voting, in similar fashion as Malaysia’s “Akademi Fantasia”.<br />
In collaboration with leading radio station Pelangi FM, the <strong>Bank</strong> also sponsored the production of “Rentak<br />
914”, Volume 3, a music CD featuring 18 songs by up and coming local singers which included names like<br />
Maria, winner of Pelangi Awards for two years running.<br />
Supporting Community Development<br />
In 2008, <strong>Baiduri</strong> <strong>Bank</strong> Group together with its employees carried out several projects in support of community<br />
development:<br />
• World Blood Donor Day – On 14 th June 2008, <strong>Baiduri</strong><br />
<strong>Bank</strong> again became the main sponsor for the World<br />
Blood Donor Day. The event, held at the Yayasan Sultan<br />
Hassanal Bolkiah Complex, was aimed to create wider<br />
awareness of the importance of voluntary blood donation<br />
and encourage more people to become regular blood<br />
donors. It was also designed to thank individuals who<br />
voluntarily donated their blood without any reward to<br />
help save lives. This was the second year that <strong>Baiduri</strong><br />
<strong>Bank</strong> had sponsored the event.<br />
• Blood Donation Drive – On 19 th June 2008, in collaboration<br />
with RIPAS Blood Donation Centre, <strong>Baiduri</strong> <strong>Bank</strong> Group<br />
held a blood donation drive at the Group’s Training<br />
Centre with the purpose to replenish stock of the stock<br />
of the blood bank. A total of 58 employees from various<br />
departments of <strong>Baiduri</strong> <strong>Bank</strong> and <strong>Baiduri</strong> Finance<br />
participated.<br />
Mr Raymond Bariou with a participant of a blood<br />
donation drive held on 19 th June 2008 at the Training<br />
Centre.<br />
<strong>Baiduri</strong> <strong>Bank</strong> <strong>Annual</strong> <strong>Report</strong> 2008 19
Corporate Social Responsibility<br />
• Pusat Ehsan Charity Bazaar - On 3 rd August 2008, in support of efforts to raise funds for Pusat Ehsan,<br />
staff of <strong>Baiduri</strong> <strong>Bank</strong> participated in the annual Charity Bazaar held at the Centre’s premises in<br />
Kampong Bengkurong. They sold food and drinks and organized fun activities such as water gun<br />
shooting, face painting, tattooing and lucky dips with the aim to raise as much funds as possible<br />
within the day at the Centre. Proceeds from the activities were donated to Pusat Ehsan.<br />
• Universal Children’s Day – On 25 th November 2008,<br />
<strong>Baiduri</strong> <strong>Bank</strong> was the main sponsor of this annual<br />
event organized by the Ministry of Culture Youth<br />
and Sports. Held at the Mumong Sports<br />
Complex in the Belait District, the event saw<br />
more than 600 primary school children from<br />
various schools in the district enjoy a carnival<br />
morning packed with fun and games in line<br />
with the theme “The Right to Play” set by<br />
UNICEF. Senior officials and staff of <strong>Baiduri</strong><br />
<strong>Bank</strong> joined officials from the Ministry to share<br />
their morning with the children.<br />
Nurturing Bruneian Entrepreneurs<br />
<strong>Baiduri</strong> <strong>Bank</strong> continued its SME Partnership<br />
Programme with Asia Inc Forum, aimed to<br />
continuously nurture Brunei SMEs. The key programs<br />
carried out during the year included a “Women in<br />
Business” Forum and a workshop on franchising.<br />
Senior Deputy General Manager, Mr Raymond Bariou speaking at<br />
the Launching Ceremony of the 2008 SME Programme<br />
20 <strong>Baiduri</strong> <strong>Bank</strong> <strong>Annual</strong> <strong>Report</strong> 2008
Financial Statements<br />
For the year ended 31 st December 2008<br />
<strong>Baiduri</strong> <strong>Bank</strong> <strong>Annual</strong> <strong>Report</strong> 2008
<strong>Report</strong> of the Directors<br />
The directors have pleasure in presenting their annual report and audited financial statements of the Company<br />
and of the Group for the financial year ended December 31, 2008.<br />
PRINCIPAL ACTIVITIES<br />
The principal activities of the Company and the Group are to carry on the business of banking and related<br />
financial services including dealing in investment securities, stock broking and e-financial services. There have<br />
been no significant changes in the nature of these activities during the financial year.<br />
One of the Company’s subsidiaries, <strong>Baiduri</strong> Securities Sdn Bhd, had remained dormant throughout the<br />
financial year ended December 31, 2008.<br />
Results<br />
The Group<br />
B$’000<br />
The Company<br />
B$’000<br />
Balance at December 31, 2007 17,626 9,790<br />
Total profits for the financial year 25,806 27,770<br />
Transferred from retained profits to:<br />
- Share capital (5,000) (5,000)<br />
- Statutory reserve (18,689) (13,885)<br />
Dividends paid (8,400) (8,400)<br />
Balance at December 31, 2008 11,343 10,275<br />
RESERVES AND PROVISIONS<br />
There were no other material transfers to or from reserves and provisions during the financial year other than<br />
those disclosed in the financial statements.<br />
SHARE CAPITAL<br />
On February 25, 2008, the issued share capital was increased to B$100,000,000 by the issue of 40,000,000<br />
ordinary shares of B$1 each.<br />
The newly issued shares rank pari passu in all respect with the existing shares of the Company.<br />
FINANCIAL STATEMENTS<br />
The state of affairs of the Company as at December 31, 2008 is set out in the balance sheet. These financial<br />
statements were approved by the Board of Directors on March 5, 2009.<br />
DIVIDENDS<br />
B$<br />
Dividends paid in respect of the financial year ended December 31, 2007 8,400,000<br />
At the forthcoming <strong>Annual</strong> General Meeting, a total dividend of B$8,900,000 in respect of the current financial<br />
year ended December 31, 2008 will be proposed for shareholders’ approval. Such dividend, if approved by<br />
the shareholders, will be accounted for as an appropriation of retained profits of the shareholders’ equity in<br />
the next financial year ending December 31, 2009.<br />
22 <strong>Baiduri</strong> <strong>Bank</strong> <strong>Annual</strong> <strong>Report</strong> 2008
<strong>Report</strong> of the Directors<br />
Directors<br />
The directors in office during the financial year and at the date of this report are:<br />
YTM Pengiran Anak Isteri Pengiran Anak Hajah Zariah<br />
YAM Pengiran Muda Abdul Qawi<br />
YB Pehin Orang Kaya Pekerma Dewa Dato Seri Setia Lim Jock Seng (appointed on November 13, 2008)<br />
YM Dato Paduka Timothy Ong Teck Mong<br />
Claude De Kemoularia<br />
Francis Caze<br />
Haji Amir Hamzah Haji Hanafi<br />
Bertie Cheng Shao Shiong (appointed on August 22, 2008)<br />
Pengiran Dato Paduka Haji Abu Bakar bin Pengiran Seri<br />
Indera Pengiran Haji Ismail (resigned on November 13, 2008)<br />
Victor Chua Beng Khoon (resigned on July 8, 2008)<br />
Auditors<br />
The auditors, Deloitte & Touche, have indicated their willingness to accept re-appointment.<br />
On behalf of the board<br />
________________________________________<br />
Director<br />
________________________________________<br />
Director<br />
________________________________________<br />
Director<br />
Brunei Darussalam<br />
Date: 5th March 2009<br />
<strong>Baiduri</strong> <strong>Bank</strong> <strong>Annual</strong> <strong>Report</strong> 2008 23
Independent Auditors’ <strong>Report</strong><br />
to the members of <strong>Baiduri</strong> <strong>Bank</strong> Berhad<br />
and subsidiaries<br />
We have audited the accompanying financial statements of <strong>Baiduri</strong> <strong>Bank</strong> Berhad (the Company) and its subsidiaries<br />
(the Group) which comprise the balance sheets of the Company and the Group as at December 31, 2008, the<br />
profit and loss statements, statements of changes in equity and cash flows statements of the Company and the<br />
Group for the year then ended, and a summary of significant accounting policies and other explanatory notes, as<br />
set out on page 65 to 78.<br />
Directors’ Responsibility<br />
The Company’s directors are responsible for the preparation and fair presentation of these financial statements in<br />
accordance with the provisions of the Brunei Darussalam Companies Act, Cap. 39 (the “Act”), the Brunei Darussalam<br />
<strong>Bank</strong>ing Order 2006 (the “Order”), and generally accepted accounting principles in Brunei Darussalam. This<br />
responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and<br />
fair presentation of financial statements that are free from material misstatement, whether due to fraud or error;<br />
selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable<br />
in the circumstances.<br />
Auditors’ Responsibility<br />
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our<br />
audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical<br />
requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements<br />
are free from material misstatement.<br />
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the<br />
financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of<br />
the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk<br />
assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of<br />
the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for<br />
the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes<br />
evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made<br />
by directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit<br />
evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.<br />
Opinion<br />
In our opinion,<br />
a) the financial statements of the Company and consolidated financial statements of the Group are<br />
properly drawn up in accordance with the provisions of the Act, the Order and generally accepted<br />
accounting principles in Brunei Darussalam so as to give a true and fair view of the state of affairs of the<br />
Company and the Group as at December 31, 2008 and of the results, changes in equity and cash flows<br />
of the Company and the Group for the year ended on that date;<br />
b) the accounting and other records required by the Act to be kept by the Company and its subsidiaries<br />
have been properly kept in accordance with the provisions of the Act; and<br />
c) we have obtained all the information and explanations that we required.<br />
_____________________________________<br />
DELOITTE & TOUCHE<br />
Certified Public Accountants<br />
_____________________________________<br />
NG HUI HUA<br />
Brunei Darussalam Authorised Auditor<br />
Brunei Darussalam<br />
Date: 5 th March 2009<br />
24 <strong>Baiduri</strong> <strong>Bank</strong> <strong>Annual</strong> <strong>Report</strong> 2008
Balance Sheets<br />
December 31, 2008<br />
The Group<br />
The Company<br />
2008 2007 2008 2007<br />
Note B$’000 B$’000 B$’000 B$’000<br />
Assets<br />
Cash, deposits and balances with banks 792,117 832,921 790,046 831,535<br />
Cash deposits and reserve 4 118,069 97,790 82,617 66,662<br />
Loans and advances (net) 5 1,339,201 1,259,366 737,648 730,003<br />
Due from related parties 6 116,759 94,114 116,795 94,114<br />
Other assets 7 53,967 34,297 53,503 33,852<br />
Investment in subsidiaries 8 - - 25,249 25,249<br />
Other investments 9 136,478 174,767 136,478 174,767<br />
Goodwill on consolidation 10 100 124 - -<br />
Property, plant and equipment 11 20,828 17,983 18,920 16,986<br />
Total assets 2,577,555 2,511,362 1,961,256 1,973,168<br />
LIABILITIES AND EQUITY<br />
Amount due to subsidiaries (net) 12 - - 81,432 124,305<br />
Amount due to related parties 13 37,700 50,815 37,499 50,614<br />
Current, fixed, savings and other deposits 14 2,299,523 2,166,661 1,623,222 1,525,747<br />
Deposits and balances with banks 53,397 127,601 53,397 127,601<br />
Other liabilities and provisions 15 35,743 31,923 31,638 29,066<br />
Income tax payable 16 9,221 13,557 3,727 8,649<br />
Deferred tax liabilities 16 3,557 302 3,540 240<br />
Provision for retirement benefits 17 1,688 1,203 1,688 1,203<br />
Total liabilities 2,440,849 2,392,062 1,836,143 1,867,425<br />
CAPITAL, RESERVES AND<br />
MINORITY INTEREST<br />
Share capital 18 100,000 60,000 100,000 60,000<br />
Statutory reserve 19 25,577 41,888 14,838 35,953<br />
Retained profits 11,343 17,626 10,275 9,790<br />
Equity attributable to<br />
equity holders of the parent 136,920 119,514 105,743 105,743<br />
Minority interest (214) (214) - -<br />
Total equity 136,706 119,300 125,113 105,743<br />
Total liabilities and equity 2,577,555 2,511,362 1,961,256 1,937,168<br />
Commitments and contingencies 20 193,734 181,267 193,734 181,267<br />
_____________________________________<br />
Director<br />
_____________________________________<br />
Director<br />
_____________________________________<br />
Director<br />
_____________________________________<br />
General Manager<br />
See accompanying notes to financial statements.<br />
<strong>Baiduri</strong> <strong>Bank</strong> <strong>Annual</strong> <strong>Report</strong> 2008 25
Profit And Loss Statements<br />
Year Ended December 31, 2008<br />
The Group<br />
The Company<br />
2008 2007 2008 2007<br />
Note B$’000 B$’000 B$’000 B$’000<br />
Interest income 21 150,419 132,587 92.205 81,711<br />
Less: Interest expense (40,040) (42,677) (24,639) (27,658)<br />
110,379 89,910 67,566 54,053<br />
Fees, commission and service charges 7,002 6,336 7,002 6,336<br />
Foreign exchange profit and other income 15,726 14,736 34,027 20,105<br />
Gain from investments 1,820 1,558 1,820 1,558<br />
Net income 134,927 112,540 110,415 82,052<br />
Other administrative expenses 22 (52,804) (47,462) (36,180) (32,354)<br />
Allowances on loans, advances<br />
and investment (47,619) (20,268) (42,823) (15,868)<br />
Operating income 34,504 44,810 31,412 33,830<br />
Goodwill amortisation (24) (25) - -<br />
Profit before tax 34,480 44,785 31,412 33,830<br />
Income tax 16 (8,674) (13,445) (3,642) (8,563)<br />
Profit after taxation 25,806 31,340 27,770 25,267<br />
Transfer to statutory reserve 19 (18,689) (16,050) (13,885) (12,634)<br />
Profit for the year after<br />
transfer to statutory reserve 7,117 15,290 13,885 12,633<br />
See accompanying notes to financial statements.<br />
26 <strong>Baiduri</strong> <strong>Bank</strong> <strong>Annual</strong> <strong>Report</strong> 2008
Statements of Changes in Equity<br />
Year Ended December 31, 2008<br />
The Group<br />
Attributable to equity holders of the parent<br />
Issued Statutory Retained Minority Total<br />
Note Capital Reserves Profits Total Interest Equity<br />
B$’000 B$’000 B$’000 B$’000 B$’000 B$’000<br />
Balance at January 1, 2007 60,000 25,838 9,436 95,274 (214) 95,060<br />
Total profits for the financial year - - 31,340 31,340 - 31,340<br />
Transferred from retained profits<br />
to statutory reserve 19 - 16,050 (16,050) - - -<br />
Dividends paid 23 - - (7,100) (7,100) - (7,100)<br />
Balance at December 31, 2007 60,000 41,888 17,626 119,514 (214) 119,300<br />
Total profits for the financial year - - 25,806 25,806 - 25,806<br />
Transferred to issued capital 40,000 (35,000) (5,000) - - -<br />
Transferred from retained profits<br />
to statutory reserve 19 - 18,689 (18,689) - - -<br />
Dividends paid 23 - - (8,400) (8,400) - (8,400)<br />
Balance at December 31, 2008 100,000 25,577 11,343 136,920 (214) 136,706<br />
The Company<br />
Issued Statutory Retained Total<br />
Note Capital Reserve Profits Equity<br />
B$’000 B$’000 B$’000 B$’000<br />
Balance at January 1, 2007 60,000 23,319 4,257 87,576<br />
Net profits for the year - - 24,267 25,267<br />
Transferred from retained profits to<br />
statutory reserve 19 - 12,634 (12,634) -<br />
Dividends paid 23 - - (7,100) (7,100)<br />
Balance at December 31, 2007 60,000 35,953 9,790 105,743<br />
Net profits for the year - - 27,770 27,770<br />
Transferred to issued capital 40,000 (35,000) (5,000) -<br />
Transferred from retained profits to<br />
statutory reserve 19 - 13,885 (13,885) -<br />
Dividends paid 23 - - (8,400) (8,400)<br />
Balance at December 31, 2008 100,000 14,838 10,275 125,113<br />
See accompanying notes to financial statements.<br />
<strong>Baiduri</strong> <strong>Bank</strong> <strong>Annual</strong> <strong>Report</strong> 2008 27
Cash Flow Statements<br />
Year Ended December 31, 2008<br />
The Group<br />
The Company<br />
2008 2007 2008 2007<br />
Note B$’000 B$’000 B$’000 B$’000<br />
Cash flows from operating activities:<br />
Profit before income tax 34,480 44,785 31,412 33,830<br />
Adjustments for: -<br />
Amortisation of goodwill on consolidation 24 25 - -<br />
Depreciation 4,320 3,710 3,934 3,412<br />
Gain on disposal property, plant<br />
and equipment (net) (14) (38) (12) (38)<br />
Gain from investments (1,820) (1,558) (1,820) (1,558)<br />
Operating cash flows before<br />
movements in working capital 36,990 46,924 33,514 35,646<br />
Loans and advances (net) (79,835) (194,082) (7,645) (102,628)<br />
Due from related parties (22,681) (54,621) (22,681) (54,621)<br />
Other assets (19,670) 10,139 (19,651) 10,056<br />
Due to subsidiaries - - (42,873) 38,533<br />
Due to related parties (13,115) 10,941 (13,115) 10,941<br />
Current, fixed, savings and other deposits 132,862 423,805 97,475 302,286<br />
Other liabilities and provisions 4,305 4,923 3,057 5,281<br />
Cash generated from operations 38,856 248,029 28,081 263,494<br />
Income tax paid (9,735) (7,934) (5,264) (5,209)<br />
Net cash from operating activities 29,121 240,095 22,817 258,285<br />
Cash flows from investing activities:<br />
Purchases of property, plant and equipment (7,230) (4,757) (5,933) (4,465)<br />
Proceeds from sale of property,<br />
plant and equipment 79 301 77 301<br />
Gain from investments 1,820 1,558 1,820 1,558<br />
Investment in subsidiaries - - - (23,000)<br />
Net (additions) / disposal of investments 38,289 41,363 38,289 41,363<br />
Net cash from investing activities 32,958 38,465 34,253 15,757<br />
Cash flows from financing activity:<br />
Dividends paid (8,400) (7,100) (8,400) (7,100)<br />
Net increase in cash and<br />
cash equivalents 53,679 271,460 48,670 266,942<br />
Cash and cash equivalents at the<br />
beginning of the year 803,110 531,650 770,596 503,654<br />
Cash and cash equivalents at the<br />
end of the year 24 856,789 803,110 819,266 770,596<br />
See accompanying notes to financial statements.<br />
28 <strong>Baiduri</strong> <strong>Bank</strong> <strong>Annual</strong> <strong>Report</strong> 2008
Notes to Financial Statements<br />
December 31, 2008<br />
1 OPERATIONS<br />
The principal activities of the Company and the Group are to carry on the business of banking and<br />
related financial services including dealing in investment securities, stock broking and e-financial services.<br />
There have been no significant changes in the nature of these activities during the financial year.<br />
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES<br />
Basis of Accounting<br />
The financial statements have been prepared in accordance with the historical cost convention, with the<br />
provisions of the Brunei Darussalam Companies Act, Cap. 39, the Brunei Darussalam <strong>Bank</strong>ing Order 2006<br />
and generally accepted accounting principles in Brunei Darussalam, and are expressed in Brunei<br />
Darussalam dollars.<br />
Basis of Consolidation<br />
The consolidated financial statements include the financial statements of the Company and its subsidiaries<br />
for the financial year December 31, 2008. The subsidiaries consolidated are entities in which the Group<br />
has an equity interest of more than 50% in the issued share capital at the balance sheet date or has power<br />
to exercise control over the operations.<br />
Subsidiaries are consolidated from the date on which effective control is acquired by the Group. Intra<br />
group transactions, balances, income and expenses are eliminated on consolidation. Where necessary,<br />
adjustments are made to the financial statements of subsidiaries to bring their accounting policies into<br />
line with those used by other members of the Group.<br />
Minority interests in the net assets of consolidated subsidiaries are identified separately from the<br />
Group’s equity therein. Minority interests consist of the amount of those interest at the date of the origin<br />
business combination and the minority’s share of changes in equity since the date of combination.<br />
Goodwill<br />
Goodwill arising on consolidation represents the excess of cost of acquisition over the fair values of the<br />
net identifiable assets acquired. Goodwill is stated at cost less accumulated amortization.<br />
Goodwill is amortised through the Group income statement over 10 years.<br />
Interest Income and Expense<br />
(i)<br />
(ii)<br />
Interest income and expenses are recognized in the profit and loss statements on an accrual basis.<br />
When an account becomes non-performing, interest is suspended until it is realised on a cash<br />
basis.<br />
For the finance subsidiary, interest earned on hire purchase and leasing transactions are spread<br />
over the period of the agreements, using the commonly accepted method known as the “Rule-of-<br />
78” so as to produce a constant periodic rate of interest. The income arising therefrom each year<br />
comprises interest in respect of those installments which have become due for payment during the<br />
financial year. The remainder is carried forward as a provision for unearned income.<br />
<strong>Baiduri</strong> <strong>Bank</strong> <strong>Annual</strong> <strong>Report</strong> 2008 29
Notes to Financial Statements<br />
December 31, 2008<br />
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)<br />
Loans and Allowance for Bad and Doubtful Receivables<br />
All loans and financing are recognised when cash is advanced to borrowers. Legal fees incurred in securing<br />
a loan and financing are treated as part of the cost of the transaction.<br />
Loans and financing are stated after deduction of allowance for possible losses. These allowances<br />
comprise specific allowances against non-performing receivables and financing and the related interestin-suspense.<br />
Specific allowance and suspension of interest are made for doubtful receivables and financing<br />
which have been individually reviewed and specifically identified as bad or doubtful. Known bad receivables<br />
are written off.<br />
An uncollectible loan and financing or portion of a loan and financing classified as bad or doubtful is<br />
either written off or provided for after taking into consideration the realizable value of collateral, if any,<br />
when in the judgement of the management there is no prospect of recovery.<br />
Depreciation<br />
Depreciation is calculated to write off the cost of the property, plant and equipment over their estimated<br />
useful lives by the straight line method. The estimated useful lives are as follows:-<br />
Freehold lands and buildings<br />
Leasehold lands and buildings<br />
Leasehold improvements<br />
Computers<br />
Office equipment<br />
Office furniture and fittings<br />
Household furniture and equipment<br />
Motor vehicles<br />
50 years<br />
Over period of the lease<br />
5 years<br />
5 – 8 years<br />
5 years<br />
5 – 10 years<br />
5 – 10 years<br />
5 years<br />
Gains and losses on disposal of property, plant and equipment are determined by reference to their net<br />
book value and are taken into account in determining operating profit.<br />
Repairs and maintenance are charged to the profit and loss statements when the expenditure is<br />
incurred.<br />
Fully depreciated property, plant and equipment are retained in the financial statements until they are<br />
no longer in use.<br />
Investments<br />
(i)<br />
Investments in subsidiaries<br />
Investments in subsidiaries in the Company’s financial statement are stated at cost less amounts<br />
written off in recognition of any permanent fall in value.<br />
Dividend income is recorded in the profit and loss statements when received in the financial year<br />
or in which a dividend has been approved by the shareholders in the investee company.<br />
(ii)<br />
Other investments<br />
30 <strong>Baiduri</strong> <strong>Bank</strong> <strong>Annual</strong> <strong>Report</strong> 2008<br />
Quoted and unquoted investments intended to be held for long term are stated at<br />
cost less impairment in value that is other than temporary, determined on an individual investment<br />
basis, except for situation in which the Company is able to realize a profit in these investments,<br />
the realized profits are taken to the profit and loss statements.<br />
Interest earned on other investment is reported as interest income.
Notes to Financial Statements<br />
December 31, 2008<br />
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)<br />
Treasury Related Off-Balance Sheet Financing Instruments<br />
Transactions in treasury related off-balance sheet financial instruments including foreign exchange<br />
contracts are valued at market prices if they are for trading purposes and the resultant profits and losses<br />
are taken to the profit and loss statements. Transaction entered into for hedging purposes are<br />
accounted for in a manner consistent with the accounting treatment of the item being hedged.<br />
Acceptances<br />
Acceptances comprise undertakings by the Company to pay bills of exchange drawn on customers.<br />
The Company expects the acceptance to be settled simultaneously with the reimbursement from<br />
the customers. Acceptances are disclosed liabilities with corresponding contra-assets.<br />
Foreign Currency Transactions<br />
Transactions in foreign currencies are recorded in Brunei Darussalam dollars at the rates ruling at the<br />
dates of the transactions. At each balance sheet date, recorded monetary balances that are denominated<br />
in foreign currencies are reported at the rates ruling at the balance sheet date. All realised and unrealised<br />
exchange adjustment gains and losses are dealt with in the profit and loss statements.<br />
Income Tax<br />
Tax expense is determined on the basis of tax effect accounting, using the liability method and it is<br />
applied to all significant timing differences except that a debit balance or a debit to the deferred tax<br />
balance is not carried forward unless there is a reasonable expectation of its realisation.<br />
Employee Benefits<br />
The Company and the Group contribute to the Tabung Amanah Pekerja (“TAP”), a defined contribution<br />
plan regulated and managed by the Government of Brunei Darussalam, which applies to all local employees.<br />
The contributions to TAP are charged to the income statements in the period to which the contribution relate.<br />
The Company also operates a defined retirement fund scheme for its employees, which requires<br />
provisions to be made periodically based on the entitlements of the employees. The provisions are<br />
calculated on the basis of the number of years service of the employees and are charged to the income<br />
statements in the period in which the entitlements arise.<br />
3 Related Parties transactions<br />
Related parties in these financial statements refer to members of the holding company’s group of companies.<br />
Some of the Company’s transactions and arrangements are with related parties and subsidiary<br />
companies and the effect of these on the basis determined between the parties are reflected in these<br />
financial statements.<br />
Significant related companies’ transactions are as follows: -<br />
The Company<br />
2008 2007<br />
B$’000 B$’000<br />
Interest income 5,280 3,008<br />
Interest expenses 577 767<br />
Net interest expense paid to subsidiary 482 2,284<br />
<strong>Baiduri</strong> <strong>Bank</strong> <strong>Annual</strong> <strong>Report</strong> 2008 31
Notes to Financial Statements<br />
December 31, 2008<br />
4 CASH DEPOSITS AND RESERVE<br />
The reserve is maintained in accordance with Section 45 of the Brunei Darussalam <strong>Bank</strong>ing Order 2006 and a<br />
directive issued by the Brunei Government Ministry of Finance in accordance with Section 25(2) of the Finance<br />
Companies Act, Cap. 89. The reserve is not available for use in the Company and its subsidiaries’ day to day<br />
operations.<br />
5 LOANS AND ADVANCES (NET)<br />
The Group<br />
The Company<br />
2008 2007 2008 2007<br />
B$’000 B$’000 B$’000 B$’000<br />
a) Loan to individuals 447,287 439,608 447,287 439,608<br />
Loan to corporate entities 443,903 437,507 443,903 437,507<br />
891,190 877,115 891,190 877,115<br />
Less: Allowance for bad and<br />
doubtful receivables (60,341) (56,560) (60,341) (56,560)<br />
Allowance for interest in suspense (93,201) (90,552) (93,201) (90,552)<br />
737,648 730,003 737,648 730,003<br />
Hire purchase receivables 603,065 530,226 - -<br />
Finance leases of equipment 457 580 - -<br />
603,522 530,806 - -<br />
Less: Allowance for doubtful receivables (1,441) (924) - -<br />
Less: Allowance for interest in suspense (528) (519) - -<br />
601,553 529,363 - -<br />
Balance at end of year 1,339,201 1,259,366 737,648 730,003<br />
The Group and the Company classify loans in accordance with its own internal loans grading policies.<br />
The Group and the Company make specific allowances for non-performing loans and financing in accordance<br />
with its policy set out in Note 2. Interest income is suspended when the account is classified as non-performing<br />
until it is realised on a cash basis.<br />
32 <strong>Baiduri</strong> <strong>Bank</strong> <strong>Annual</strong> <strong>Report</strong> 2008
Notes to Financial Statements<br />
December 31, 2008<br />
5 Loans and advances (NET) (continued)<br />
Movements in allowance for bad and doubtful receivables on loans are as follows: -<br />
The Group<br />
The Company<br />
2008 2007 2008 2007<br />
B$’000 B$’000 B$’000 B$’000<br />
b) Balance at the beginning of the year 56,560 81,373 56,560 81,373<br />
Addition 10,448 7,670 10,448 7,670<br />
Written back (2,819) (429) (2,819) (429)<br />
Written off (3,848) (32,054) (3,848) (32,054)<br />
Balance at the end of the year 60,341 56,560 60,341 56,560<br />
Movements in allowance for interest in suspense on loans are as follows: -<br />
The Group<br />
The Company<br />
2008 2007 2008 2007<br />
B$’000 B$’000 B$’000 B$’000<br />
c) Balance at the beginning of the year 90,552 91,429 90,552 91,429<br />
Addition 13,075 18,764 13,075 18,764<br />
Written back (5,082) (383) (5,082) (383)<br />
Written off (5,344) (19,258) (5,344) (19,258)<br />
Balance at the end of the year 93,201 90,552 93,201 90,552<br />
Movements in allowance for bad and doubtful receivables on hire purchase are as follows: -<br />
The Group<br />
The Company<br />
2008 2007 2008 2007<br />
B$’000 B$’000 B$’000 B$’000<br />
d) Balance at the beginning of the year 924 2,176 - -<br />
Addition 7,155 6,935 - -<br />
Written off (4,276) (8,187) - -<br />
Recoveed (2,359) - - -<br />
Balance at the end of the year 1,441 924 - -<br />
Movements in allowance for interest in suspense on hire purchase are as follows: -<br />
The Group<br />
The Company<br />
2008 2007 2008 2007<br />
B$’000 B$’000 B$’000 B$’000<br />
e) Balance at the beginning of the year 519 623 - -<br />
Addition 23 52 - -<br />
Written back (14) (156) - -<br />
Balance at the end of the year 528 519 - -<br />
<strong>Baiduri</strong> <strong>Bank</strong> <strong>Annual</strong> <strong>Report</strong> 2008 33
Notes to Financial Statements<br />
December 31, 2008<br />
6 Due from related parties<br />
The Group/The Company<br />
2008 2007<br />
B$’000 B$’000<br />
Overdrafts 11,937 12,699<br />
Commercial term loans and others 104,858 81,415<br />
116,795 94,114<br />
7 OTHER ASSETS<br />
The Group<br />
The Company<br />
2008 2007 2008 2007<br />
B$’000 B$’000 B$’000 B$’000<br />
Prepayments 1,170 1,066 740 640<br />
Interest receivable 14,406 13,152 14,406 13,152<br />
Refundable deposits 32,380 16,041 32,347 16,007<br />
Others 6,011 4,038 6,010 4,053<br />
53,967 34,297 53,503 33,852<br />
8 SUBSIDIARY COMPANIES The Company<br />
2008 2007<br />
B$’000 B$’000<br />
a) Unquoted shares, at cost 25,249 25,249<br />
b) The following are the subsidiaries of the Company:<br />
Name of Company Principal Activities Percentage of Paid<br />
and Place of Incorporation<br />
Up Capital Held<br />
2008 2007<br />
<strong>Baiduri</strong> Finance Berhad Finance Company 100% 100%<br />
(Brunei Darussalam)<br />
<strong>Baiduri</strong> Securities Sdn Bhd Share brokers and dealers in securities 51% 51%<br />
(Brunei Darussalam)<br />
and investments of all kinds<br />
<strong>Baiduri</strong> Securities Sdn Bhd ceased operations after January 31, 2002 and has been dormant since then.<br />
Full provision has been made for the cost of this investment.<br />
34 <strong>Baiduri</strong> <strong>Bank</strong> <strong>Annual</strong> <strong>Report</strong> 2008
Notes to Financial Statements<br />
December 31, 2008<br />
9 OTHER INVESTMENTS<br />
The investments consist of: -<br />
The Group/The Company<br />
2008 2007<br />
B$’000 B$’000<br />
Quoted investments, at cost 181,478 183,767<br />
Unquoted investments, at cost - -<br />
Less: Allowance for impairment 181,478 183,767<br />
(45,000) (9,000)<br />
136,478 174,767<br />
The quoted investments with cost amounting $170,474,130 (2007:$134,340,000), coupon rate ranging 1.25%<br />
to 4.91% (2007: 2.187% to 4.91%) per annum and maturity dates ranging from August 15, 2010 to October 10,<br />
2011 (2007: January 24, 2008 to December 20, 2012) are held to maturity.<br />
The unquoted investments consist of the following: -<br />
Name of Company Principal Activities Percentage of Paid<br />
and Place of Incorporation<br />
Up Capital Held<br />
2008 2007<br />
SBI Garment Industries Sdn Bhd Garment manufacturer 100% 100%<br />
(Brunei Darussalam)<br />
10 GOODWILL ON CONSOLIDATION<br />
The Group<br />
2008 2007<br />
B$’000 B$’000<br />
At cost 249 249<br />
Accumulated amortisation<br />
Balance at the beginning of the year 125 100<br />
Amortisation charge for the year 24 25<br />
Balance at the end of the year 149 125<br />
Net book value at the end of the year 100 124<br />
<strong>Baiduri</strong> <strong>Bank</strong> <strong>Annual</strong> <strong>Report</strong> 2008 35
Notes to Financial Statements<br />
December 31, 2008<br />
11 Property, plant and equipment<br />
The Group Freehold Leasehold<br />
Lands & Lands & Leasehold Office<br />
Buildings Buildings Improvements Computers Equipment<br />
B$’000 B$’000 B$’000 B$’000 B$’000<br />
Cost<br />
At the beginning of the year 3,175 4,368 5,814 23,237 3,508<br />
Additions 1,614 43 2,662 2,144 488<br />
Reclassification - 19 (19) - -<br />
Disposal/written off - - (59) (9) (104)<br />
At the end of the year 4,789 4,430 8,398 25,372 3,892<br />
Accumulated depreciation<br />
At the beginning of the year 203 1,112 4,064 14,749 2,590<br />
Depreciation for the year 73 257 760 2,670 367<br />
Disposal/written off - - - (8) (100)<br />
At the end of the year 276 1,369 4,824 17,411 2,857<br />
Depreciation for prior year 60 251 466 2,467 285<br />
Net book value:<br />
At the beginning of the year 2,972 3,256 1,750 8,488 918<br />
At the end of the year 4,513 3,061 3,574 7,961 1,035<br />
Office Household<br />
Furniture Furniture & Motor<br />
and Fittings Equipment Vehicles Total<br />
B$’000 B$’000 B$’000 B$’000<br />
Cost<br />
At the beginning of the year 681 87 792 41,662<br />
Additions 206 14 59 7,230<br />
Reclassification - - - -<br />
Disposal/written off (1) - (60) (233)<br />
At the end of the year 886 101 791 48,659<br />
Accumulated depreciation<br />
At the beginning of the year 470 33 458 23,679<br />
Depreciation for the year 40 15 138 4,320<br />
Disposal/written off - - (60) (168)<br />
At the end of the year 510 48 536 27,831<br />
Depreciation for prior year 40 14 127 3,710<br />
Net book value:<br />
At the beginning of the year 211 54 334 17,983<br />
At the end of the year 376 53 255 20,828<br />
The period of lease of the leasehold lands and buildings ranging from 15 to 82 years, expire ranging from<br />
April 2016 to March 2088.<br />
36 <strong>Baiduri</strong> <strong>Bank</strong> <strong>Annual</strong> <strong>Report</strong> 2008
Notes to Financial Statements<br />
December 31, 2008<br />
11 Property, plant and equipment (continued)<br />
The Company Freehold Leasehold<br />
Lands & Lands & Leasehold Office<br />
Buildings Buildings Improvements Computers Equipment<br />
B$’000 B$’000 B$’000 B$’000 B$’000<br />
Cost<br />
At the beginning of the year 3,175 4,368 5,241 21,610 3,238<br />
Additions 1,614 43 1,748 1,958 362<br />
Reclassification - 19 (19) - -<br />
Disposal/written off - - (59) (9) (99)<br />
At the end of the year 4,789 4,430 6,911 23,559 3,501<br />
Accumulated depreciation<br />
At the beginning of the year 203 1,112 3,592 13,838 2,411<br />
Depreciation for the year 73 257 675 2,426 332<br />
Disposal/written off - - - (8) (95)<br />
At the end of the year 276 1,369 4,267 16,256 2,648<br />
Depreciation for prior year 60 251 429 2,263 253<br />
Net book value:<br />
At the beginning of the year 2,972 3,256 1,649 7,772 827<br />
At the end of the year 4,513 3,061 2,644 7,303 853<br />
Office Household<br />
Furniture Furniture & Motor<br />
and Fittings Equipment Vehicles Total<br />
B$’000 B$’000 B$’000 B$’000<br />
Cost<br />
At the beginning of the year 580 87 696 38,995<br />
Additions 135 14 59 5,933<br />
Reclassification - - - -<br />
Disposal/written off (1) - (60) (228)<br />
At the end of the year 714 101 695 44,700<br />
Accumulated depreciation<br />
At the beginning of the year 408 33 412 22,009<br />
Depreciation for the year 37 15 119 3,934<br />
Disposal/written off - - (60) (163)<br />
At the end of the year 445 48 471 25,780<br />
Depreciation for prior year 33 14 109 3,412<br />
Net book value:<br />
At the beginning of the year 172 54 284 16,986<br />
At the end of the year 269 53 224 18,920<br />
The period of lease of the leasehold lands and buildings ranging from 15 to 50 years.<br />
<strong>Baiduri</strong> <strong>Bank</strong> <strong>Annual</strong> <strong>Report</strong> 2008 37
Notes to Financial Statements<br />
December 31, 2008<br />
12 AMOUNT DUE TO SUBSIDIARIES<br />
The Company<br />
2008 2007<br />
B$’000 B$’000<br />
Amount due to subsidiaries (net) 81,432 124,305<br />
13 AMOUNT DUE TO RELATED PARTIES<br />
The Group<br />
The Company<br />
2008 2007 2008 2007<br />
B$’000 B$’000 B$’000 B$’000<br />
Current accounts 5,899 7,763 5,899 7,763<br />
Savings accounts 2,083 10,758 2,083 10,758<br />
Term deposits 29,517 32,093 29,517 32,093<br />
Others 201 201 - -<br />
37,700 50,815 37,499 50,614<br />
14 CURRENT, FIXED, SAVINGS AND OTHER DEPOSITS<br />
The Group<br />
The Company<br />
2008 2007 2008 2007<br />
B$’000 B$’000 B$’000 B$’000<br />
Current accounts 216,554 173,297 216,554 173,297<br />
Saving accounts 700,986 659,094 145,216 134,020<br />
Term deposits 1,381,983 1,334,270 1,261,452 1,218,430<br />
2,299,523 2,166,661 1,623,222 1,525,474<br />
15 OTHER LIABILITIES AND PROVISIONS<br />
The Group<br />
The Company<br />
2008 2007 2008 2007<br />
B$’000 B$’000 B$’000 B$’000<br />
Interest payable 9,114 8,832 8,800 9,023<br />
Accruals 2,683 3,047 1,996 2,436<br />
Provisions and sundry creditors 19,420 16,428 16,316 14,085<br />
Advance receipts 4,526 3,616 4,526 3,522<br />
35,743 31,923 31,638 29,066<br />
38 <strong>Baiduri</strong> <strong>Bank</strong> <strong>Annual</strong> <strong>Report</strong> 2008
Notes to Financial Statements<br />
December 31, 2008<br />
16 INCOME TAX<br />
The Group<br />
The Company<br />
2008 2007 2008 2007<br />
B$’000 B$’000 B$’000 B$’000<br />
(a)<br />
Tax expense<br />
Income tax expense attributable to<br />
profit is made up of:<br />
Current income tax provision - Brunei 8,699 13,461 3,642 8,563<br />
Deferred taxation (25) (16) - -<br />
Net 8,674 13,445 3,642 8,563<br />
The Group<br />
The Company<br />
2008 2007 2008 2007<br />
B$’000 B$’000 B$’000 B$’000<br />
(b)<br />
Movement in provision for tax<br />
Balance at the beginning of the financial year 13,557 8,030 8,649 5,295<br />
Income tax paid (9,735) (7,934) (5,264) (5,209)<br />
Current financial year’s tax expense on profit 8,699 13,461 3,642 8,563<br />
Transfer to deferred taxation (3,300) - (3,300) -<br />
9,221 13,557 3,727 8,649<br />
The Group<br />
The Company<br />
2008 2007 2008 2007<br />
B$’000 B$’000 B$’000 B$’000<br />
(c)<br />
Deferred taxation<br />
Balance at the beginning of the year 302 318 240 240<br />
Transfer from/ (to) current income tax 3,275 (16) 3,300 -<br />
Balance at the end of the year 3,577 302 3,540 240<br />
17 PROVISION FOR RETIREMENT BENEFITS<br />
The Group/The Company<br />
2008 2007<br />
B$’000 B$’000<br />
Balance at the beginning of the year 1,203 753<br />
Charge for the year 500 450<br />
Utilised (15) -<br />
Balance at the end of the year 1,688 1,203<br />
<strong>Baiduri</strong> <strong>Bank</strong> <strong>Annual</strong> <strong>Report</strong> 2008 39
Notes to Financial Statements<br />
December 31, 2008<br />
18 SHARE CAPITAL<br />
The Group/The Company The Group/The Company<br />
2008 2007 2008 2007<br />
’000 ’000 B$’000 B$’000<br />
(Number of ordinary shares of B$1 each)<br />
Authorised: 120,000 120,000 120,000 120,000<br />
Issued and fully paid: 100,000 60,000 100,000 60,000<br />
On February 25, 2008, the issued share capital was increased to B$100,000,000 by the transfer of $35,000,000<br />
from statutory reserve and $5,000,000 from retained profits.<br />
The newly issued shares rank pari passu in all respect with the existing shares of the Company.<br />
19 STATUTORY RESERVE<br />
The Group<br />
The Company<br />
2008 2007 2008 2007<br />
B$’000 B$’000 B$’000 B$’000<br />
Balance at the beginning of the year 41,888 25,838 35,953 23,319<br />
Transferred to capital (35,000) - (35,000) -<br />
Transferred from profit and loss statements 18,689 16,050 13,885 12,634<br />
Balance at the end of the year 25,577 41,888 14,838 35,953<br />
The transfer from profit and loss statements is to comply with Section 24 of the Brunei Darussalam <strong>Bank</strong>ing<br />
Order 2006 and Section 13 of the Finance Companies Act, Cap. 89.<br />
20 COMMITMENTS AND CONTINGENCIES<br />
In the normal course of business, the Company and the Group make various commitments and incur certain<br />
contingent liabilities with legal recourse to its customers. No material losses are anticipated as a result of<br />
these transactions. The commitments and contingencies constitute the following: -<br />
The Group/The Company<br />
2008 2007<br />
B$’000 B$’000<br />
Letter of credit and bills for collection 61,424 55,402<br />
Guarantees 120,247 120,401<br />
Acceptances and other obligations 877 790<br />
Foreign exchange contracts 11,186 4,674<br />
193,734 181,267<br />
40 <strong>Baiduri</strong> <strong>Bank</strong> <strong>Annual</strong> <strong>Report</strong> 2008
Notes to Financial Statements<br />
December 31, 2008<br />
21 INTEREST INCOME<br />
The Group<br />
The Company<br />
2008 2007 2008 2007<br />
B$’000 B$’000 B$’000 B$’000<br />
Interest income from various types of<br />
lending and instrument activities 158,291 151,020 100,053 100,092<br />
Less: Interest in suspense (7,872) (18,433) (7,848) (18,381)<br />
150,419 132,587 92,205 81,711<br />
22 OTHER ADMINISTRATIVE EXPENSES<br />
The Group<br />
The Company<br />
2008 2007 2008 2007<br />
B$’000 B$’000 B$’000 B$’000<br />
Directors’ fees 1,920 1,419 1,920 1,419<br />
Depreciation of property, plant and equipment 4,320 3,710 3,934 3,412<br />
Rental 1,497 1,391 1,282 1,176<br />
Salaries, allowances and bonuses 18,729 17,007 15,518 14,059<br />
23 DIVIDENDS<br />
The Group/The Company<br />
2008 2007<br />
B$’000 B$’000<br />
Dividend paid during the financial year 8,400 7,100<br />
Dividend for Dividend for<br />
the year 2007 the year 2006<br />
At the forthcoming <strong>Annual</strong> General Meeting, a total dividend of B$8,900,000 in respect of the current financial<br />
year ended December 31, 2008 will be proposed for shareholders’ approval. Such dividend, if approved by<br />
the shareholders, will be accounted for as an appropriation of retained profits of the shareholders’ equity in<br />
the next financial year ending December 31, 2009.<br />
24 CASH AND CASH EQUIVALENTS<br />
The Group<br />
The Company<br />
2008 2007 2008 2007<br />
B$’000 B$’000 B$’000 B$’000<br />
Cash, deposits and balance with <strong>Bank</strong>s 792,117 832,921 790,146 831,535<br />
Cash reserve 118,069 97,790 82,617 66,662<br />
Deposits and balances with banks (53,397) (127,601) (53,397) (127,601)<br />
856,789 803,110 819,266 770,596<br />
<strong>Baiduri</strong> <strong>Bank</strong> <strong>Annual</strong> <strong>Report</strong> 2008 41
Notes to Financial Statements<br />
December 31, 2008<br />
25 RISK MANAGEMENT OBJECTIVES AND POLICIES<br />
Accepting and managing risk is central to the business of the Group and is an important source of<br />
competitive advantage.<br />
The Board of Directors are accountable for establishing and maintaining an environment that manages risk<br />
in an effective and efficient manner. This includes a robust system of limits, controls and reporting<br />
processes. Management and senior executives track key performance indicators, investigates and reports<br />
on effectiveness of risk management systems to the Board of Directors. The Group’s internal audit department<br />
also provide an independent assessment of this process.<br />
The following discussion on risk management concentrates on the Group’s main areas of risk:<br />
(i)<br />
Credit risk<br />
Credit risk is the risk of financial loss that results from customers failing to meet their obligations.<br />
Credit risk arises primarily from lending-related activities and represents Group’s major risk type.<br />
The Board of Directors approves major prudential policies and limits that govern large customer<br />
exposures and industry concentration. The Board of Directors also appoints independent credit<br />
officers in each business areas. These credit officers would work with the line managers to ensure that<br />
approved policies are applied appropriately and achieve optimal returns on the Group’s risk<br />
exposure.<br />
In respect of its lending-related activities, management regularly review the amount of risk accepted<br />
in related to one borrower or groups of borrowers, industry segments, level of non-performing loans<br />
and adequacy of provisioning requirements.<br />
Exposure to credit risk is also managed in part by obtaining collateral. Some of the assets typically<br />
included as collateral are property, assignment of rental income, salary and deposit placement.<br />
(ii)<br />
Liquidity risk<br />
Liquidity risk is the risk that the Group is unable to meet its cashflow obligations as and when they fall<br />
due.<br />
To manage the risk, the Group monitors and maintains sufficient liquid assets to ensure that the liquidity<br />
risk exposure is managed and minimised.<br />
Additionally, the Group has to comply with the regulations and guidelines of Ministry of Finance in<br />
maintaining minimum cash balances with the Ministry of Finance.<br />
(iii)<br />
Interest/Financing rate risk<br />
Interest/financing rate risk is the risk of earnings and value of financial instruments caused by<br />
fluctuations in interest/financing rates.<br />
Sensitivity to interest/financing rates arises from the differences in the maturities and re-pricing dates<br />
of assets and liabilities. These differences are monitored and managed by management to ensure that<br />
the risk exposure is minimised. These includes actively reviewing its interest/financing rate to ensure<br />
that the Group receives an optimal and yet competitive interest/financing spread.<br />
42 <strong>Baiduri</strong> <strong>Bank</strong> <strong>Annual</strong> <strong>Report</strong> 2008
Offices, Branches and<br />
ATM Network<br />
BAIDURI BANK GROUP<br />
Postal Address<br />
Bandar Seri Begawan<br />
P. O. Box 2220, BSB BS8674,<br />
Negara Brunei Darussalam<br />
Kuala Belait<br />
P. O. Box 1368, Kuala Belait KA1131,<br />
Negara Brunei Darussalam<br />
Seria<br />
P. O. Box 25, Seria KB1133,<br />
Negara Brunei Darussalam<br />
Website Address<br />
www.baiduri.com<br />
E-mail Address<br />
bank@baiduri.com<br />
BAIDURI BANK BERHAD - List of Offices/Branches<br />
Head Office<br />
Block A, Units 1-4, Kiarong Complex<br />
Lebuhraya Sultan Hassanal Bolkiah BE1318<br />
Tel No: (673) 226 8300<br />
Fax No: (673) 245 5599<br />
Corporate Communications & Marketing Department<br />
Block A, Units 1-4, Kiarong Complex<br />
Lebuhraya Sultan Hassanal Bolkiah BE1318<br />
Tel No: (673) 226 8300<br />
Fax No: (673) 245 5572<br />
Card Centre<br />
Block A, Unit 8, Kiarong Complex<br />
Lebuhraya Sultan Hassanal Bolkiah BE1318<br />
Tel No: (673) 226 8300<br />
Fax No: (673) 245 4184<br />
Customer Helpdesk: (673) 245 4187<br />
Loan Centre<br />
Block A, Unit 6, Kiarong Complex<br />
Lebuhraya Sultan Hassanal Bolkiah BE1318<br />
Tel No: (673) 226 8433<br />
Fax No: (673) 245 4183<br />
Wealth Management Centre<br />
Unit 10, Level 2, Seri Kiulap Complex,<br />
Kg Kiulap, Bandar Seri Begawan<br />
Tel No: (673) 223 2153 / 54<br />
Fax No: (673) 223 2155<br />
Business Services Centre<br />
Block B, Units 1-5, Kiarong Complex<br />
Lebuhraya Sultan Hassanal Bolkiah BE1318<br />
Tel No: (673) 226 8300<br />
Fax No: (673) 245 5599<br />
E-<strong>Bank</strong>ing Centre<br />
Block B, Units 1-5, Kiarong Complex<br />
Lebuhraya Sultan Hassanal Bolkiah BE1318<br />
Tel No: (673) 226 8386<br />
Fax No: (673) 242 5741<br />
Customer Helpdesk: (673) 242 5644<br />
Email: ebanking@baiduri.com<br />
Prestige Centres<br />
Yayasan<br />
G.02, Ground Floor, Block A<br />
Yayasan Sultan Haji Hassanal Bolkiah Complex<br />
Bandar Seri Begawan BS8711<br />
Tel No: (673) 223 3111, 220 8206<br />
Fax No: (673) 222 1891<br />
Kiulap<br />
Unit 10, 1 st Floor<br />
Seri Kiulap Complex Bandar Seri Begawan BE1518<br />
Tel No: (673) 223 6905 / 6 / 10<br />
Fax No: (673) 223 6940<br />
Beribi<br />
Unit 1, Ground Floor, Sumbangsih Bahagia<br />
Kompleks Perindustrian Beribi<br />
Bandar Seri Begawan BE1118<br />
Tel No: (673) 242 6800<br />
Fax No: (673) 245 0877<br />
Seria<br />
Unit 10, 1 st Floor, Jalan Sultan Omar Ali, Seria KB2733<br />
Tel: (673) 322 2450, Ext 213 / 215<br />
Fax: (673) 322 1070<br />
Beribi Branch<br />
Unit 1, Ground Floor, Sumbangsih Bahagia<br />
Kompleks Perindustrian Beribi<br />
Bandar Seri Begawan BE1118<br />
Tel No: (673) 242 6827<br />
Fax No: (673) 242 6829<br />
Kiarong Branch<br />
Ground Floor, Block A, Unit 1, Kiarong Complex<br />
Lebuhraya Sultan Hassanal Bolkiah BE1318<br />
Tel No: (673) 226 8300<br />
Fax No: (673) 245 2888<br />
Kiulap Branch<br />
Unit 10, Ground & 1st Floor, Seri Kiulap Complex<br />
Kg Kiulap BE1518<br />
Tel No: (673) 223 6905 / 6 / 10<br />
Fax No: (673): 223 6904<br />
Kuala Belait Branch<br />
Units 2 & 3, Tang Ching Ying Bldg<br />
Jalan Sungai, Kuala Belait KA2331<br />
Tel No: (673) 333 0650<br />
Fax No: (673) 334 2297<br />
Muara Town Branch<br />
Ground Floor, Bangunan Tiga Tingkat<br />
Pekan Muara BT1128<br />
Negara Brunei Darussalam<br />
Tel No: (673) 277 1700 / 1<br />
Fax No: (673) 277 1702<br />
Sengkurong Branch<br />
Units 1 & 2, Ground Floor, Sengkurong Complex<br />
Kg Sengkurong A BG1121<br />
Tel No: (673) 266 3960<br />
Fax No: (673) 266 3959<br />
Seria Branch<br />
Unit 10, Jalan Sultan Omar Ali, Seria<br />
Tel No: (673) 322 2450 / 438 / 960 / 963<br />
Fax No: (673) 322 2433<br />
<strong>Baiduri</strong> <strong>Bank</strong> <strong>Annual</strong> <strong>Report</strong> 2008 43
Offices, Branches and<br />
ATM Network<br />
Serusop Branch<br />
Unit 1, Block A, Komplex Delima Jaya,<br />
Simpang 62 Jalan Muara,<br />
Kg Delima Satu BB4713<br />
Tel No: (673) 234 3288<br />
Fax No: (673) 234 3285<br />
SupaSave Gadong Branch<br />
Units 7 & 8, SupaSave Gadong<br />
Kg Mata-Mata BE1718<br />
Tel No: (673) 242 0627 / 29<br />
Fax No: ((673) 242 0909<br />
The Mall Branch<br />
Unit G-30, Ground Floor, The Mall<br />
Abdul Razak Complex, Gadong BE3519<br />
Tel No: (673) 242 1498, 242 1398/96<br />
Fax No: (673) 242 1415<br />
Tutong Branch<br />
Unit 1, Ground & 1st Floor<br />
Tutong Central Mall,<br />
Kg Petani, Pekan Tutong TA1141<br />
Tel No: (673) 426 0707<br />
Fax No: (673) 426 0714<br />
BAIDURI FINANCE BERHAD<br />
(a wholly-owned subsidiary of <strong>Baiduri</strong> <strong>Bank</strong>)<br />
Head Office<br />
Sumbangsih Bahagia, Units 1-3<br />
Ground and 1 st Floor, Kompleks Perindustrian Beribi<br />
Highway End, Gadong BE1118<br />
Tel No: (673) 242 6800<br />
Fax No: (673) 245 0877<br />
Kuala Belait<br />
Unit G20, Ground Floor<br />
Kompleks Harapan<br />
Jalan Setia Diraja, Kuala Belait KA3131<br />
Tel No: (673) 333 0570<br />
Fax No: (673) 333 0572<br />
Website Address<br />
www.baidurifinance.com<br />
E-mail Address<br />
baifin@brunet.bn<br />
Yayasan Branch<br />
G.02, Ground Floor, Block A<br />
Yayasan Sultan Haji Hassanal Bolkiah Complex BS8711<br />
Tel No: (673) 223 3233<br />
Fax No: (673) 222 1891<br />
<strong>Baiduri</strong> <strong>Bank</strong> Off-site ATM Locations<br />
Brunei International Airport<br />
Bunut Post Office<br />
Centrepoint, Gadong<br />
Giant Hypermarket, Tasik Rimba<br />
Grand City Hotel, Batu Bersurat<br />
Hua Ho Manggis Mall<br />
Hua Ho Mall, Tanjong Bunut<br />
Mail Processing Centre, Old Airport Berakas<br />
RIPAS Hospital<br />
Seri Q-lap Mall, Kiulap<br />
Soon Lee Megamart, Kuala Belait<br />
Soon Lee, Lambak Kanan<br />
Soon Lee, Sungai Liang<br />
SupaSave, Mabohai<br />
SupaSave, Panaga<br />
Petani Mall, Tutong<br />
44 <strong>Baiduri</strong> <strong>Bank</strong> <strong>Annual</strong> <strong>Report</strong> 2008
Head Office:<br />
Block A, Units 1-4, Kiarong Complex<br />
Lebuhraya Sultan Hassanal Bolkiah BE1318 Brunei Darussalam<br />
Tel: (673) 226 8300 Fax: (673) 245 5599<br />
Email: bank@baiduri.com<br />
www.baiduri.com