Annual Report Laporan Tahunan - Baiduri Bank

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Notes to Financial Statements December 31, 2008 21 INTEREST INCOME The Group The Company 2008 2007 2008 2007 B$’000 B$’000 B$’000 B$’000 Interest income from various types of lending and instrument activities 158,291 151,020 100,053 100,092 Less: Interest in suspense (7,872) (18,433) (7,848) (18,381) 150,419 132,587 92,205 81,711 22 OTHER ADMINISTRATIVE EXPENSES The Group The Company 2008 2007 2008 2007 B$’000 B$’000 B$’000 B$’000 Directors’ fees 1,920 1,419 1,920 1,419 Depreciation of property, plant and equipment 4,320 3,710 3,934 3,412 Rental 1,497 1,391 1,282 1,176 Salaries, allowances and bonuses 18,729 17,007 15,518 14,059 23 DIVIDENDS The Group/The Company 2008 2007 B$’000 B$’000 Dividend paid during the financial year 8,400 7,100 Dividend for Dividend for the year 2007 the year 2006 At the forthcoming Annual General Meeting, a total dividend of B$8,900,000 in respect of the current financial year ended December 31, 2008 will be proposed for shareholders’ approval. Such dividend, if approved by the shareholders, will be accounted for as an appropriation of retained profits of the shareholders’ equity in the next financial year ending December 31, 2009. 24 CASH AND CASH EQUIVALENTS The Group The Company 2008 2007 2008 2007 B$’000 B$’000 B$’000 B$’000 Cash, deposits and balance with Banks 792,117 832,921 790,146 831,535 Cash reserve 118,069 97,790 82,617 66,662 Deposits and balances with banks (53,397) (127,601) (53,397) (127,601) 856,789 803,110 819,266 770,596 Baiduri Bank Annual Report 2008 41
Notes to Financial Statements December 31, 2008 25 RISK MANAGEMENT OBJECTIVES AND POLICIES Accepting and managing risk is central to the business of the Group and is an important source of competitive advantage. The Board of Directors are accountable for establishing and maintaining an environment that manages risk in an effective and efficient manner. This includes a robust system of limits, controls and reporting processes. Management and senior executives track key performance indicators, investigates and reports on effectiveness of risk management systems to the Board of Directors. The Group’s internal audit department also provide an independent assessment of this process. The following discussion on risk management concentrates on the Group’s main areas of risk: (i) Credit risk Credit risk is the risk of financial loss that results from customers failing to meet their obligations. Credit risk arises primarily from lending-related activities and represents Group’s major risk type. The Board of Directors approves major prudential policies and limits that govern large customer exposures and industry concentration. The Board of Directors also appoints independent credit officers in each business areas. These credit officers would work with the line managers to ensure that approved policies are applied appropriately and achieve optimal returns on the Group’s risk exposure. In respect of its lending-related activities, management regularly review the amount of risk accepted in related to one borrower or groups of borrowers, industry segments, level of non-performing loans and adequacy of provisioning requirements. Exposure to credit risk is also managed in part by obtaining collateral. Some of the assets typically included as collateral are property, assignment of rental income, salary and deposit placement. (ii) Liquidity risk Liquidity risk is the risk that the Group is unable to meet its cashflow obligations as and when they fall due. To manage the risk, the Group monitors and maintains sufficient liquid assets to ensure that the liquidity risk exposure is managed and minimised. Additionally, the Group has to comply with the regulations and guidelines of Ministry of Finance in maintaining minimum cash balances with the Ministry of Finance. (iii) Interest/Financing rate risk Interest/financing rate risk is the risk of earnings and value of financial instruments caused by fluctuations in interest/financing rates. Sensitivity to interest/financing rates arises from the differences in the maturities and re-pricing dates of assets and liabilities. These differences are monitored and managed by management to ensure that the risk exposure is minimised. These includes actively reviewing its interest/financing rate to ensure that the Group receives an optimal and yet competitive interest/financing spread. 42 Baiduri Bank Annual Report 2008
Page 1 and 2: Annual Report Laporan Tahunan
Page 4 and 5: Vision & Mission Statement VISION T
Page 6 and 7: Chairperson’s Statement and large
Page 8 and 9: Corporate Information MANAGEMENT CO
Page 10 and 11: 2008 Key Financial Figures OPERATIN
Page 12 and 13: 2008 Corporate Highlights Baiduri B
Page 14 and 15: Business Highlights Established in
Page 16 and 17: Operations Management The role of t
Page 18 and 19: Corporate Social Responsibility Bai
Page 20 and 21: Corporate Social Responsibility Pro
Page 22 and 23: Financial Statements For the year e
Page 24 and 25: Report of the Directors Directors T
Page 26 and 27: Balance Sheets December 31, 2008 Th
Page 28 and 29: Statements of Changes in Equity Yea
Page 30 and 31: Notes to Financial Statements Decem
Page 44 and 45: Offices, Branches and ATM Network B
Page 46: Head Office: Block A, Units 1-4, Ki

Annual Report Laporan Tahunan - Baiduri Bank

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