Annual Report Laporan Tahunan - Baiduri Bank

Notes to Financial Statements
December 31, 2008
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Treasury Related Off-Balance Sheet Financing Instruments
Transactions in treasury related off-balance sheet financial instruments including foreign exchange
contracts are valued at market prices if they are for trading purposes and the resultant profits and losses
are taken to the profit and loss statements. Transaction entered into for hedging purposes are
accounted for in a manner consistent with the accounting treatment of the item being hedged.
Acceptances
Acceptances comprise undertakings by the Company to pay bills of exchange drawn on customers.
The Company expects the acceptance to be settled simultaneously with the reimbursement from
the customers. Acceptances are disclosed liabilities with corresponding contra-assets.
Foreign Currency Transactions
Transactions in foreign currencies are recorded in Brunei Darussalam dollars at the rates ruling at the
dates of the transactions. At each balance sheet date, recorded monetary balances that are denominated
in foreign currencies are reported at the rates ruling at the balance sheet date. All realised and unrealised
exchange adjustment gains and losses are dealt with in the profit and loss statements.
Income Tax
Tax expense is determined on the basis of tax effect accounting, using the liability method and it is
applied to all significant timing differences except that a debit balance or a debit to the deferred tax
balance is not carried forward unless there is a reasonable expectation of its realisation.
Employee Benefits
The Company and the Group contribute to the Tabung Amanah Pekerja (“TAP”), a defined contribution
plan regulated and managed by the Government of Brunei Darussalam, which applies to all local employees.
The contributions to TAP are charged to the income statements in the period to which the contribution relate.
The Company also operates a defined retirement fund scheme for its employees, which requires
provisions to be made periodically based on the entitlements of the employees. The provisions are
calculated on the basis of the number of years service of the employees and are charged to the income
statements in the period in which the entitlements arise.
3 Related Parties transactions
Related parties in these financial statements refer to members of the holding company’s group of companies.
Some of the Company’s transactions and arrangements are with related parties and subsidiary
companies and the effect of these on the basis determined between the parties are reflected in these
financial statements.
Significant related companies’ transactions are as follows: -
The Company
2008 2007
B$’000 B$’000
Interest income 5,280 3,008
Interest expenses 577 767
Net interest expense paid to subsidiary 482 2,284
Baiduri Bank Annual Report 2008 31