Annual Report Laporan Tahunan - Baiduri Bank

Annual Report Laporan Tahunan

Annual Report 

2008

Vision & Mission 

Statement 

VISION 

To be the leading banking and 

financial group in Brunei 

Darussalam 

MISSION 

As a truly local entity in 

Brunei Darussalam, the Group 

is committed to provide 

innovative and comprehensive 

financial products and 

services to the Bruneian 

community 

Contents 

Vision and Mission Statement 3 

Chairperson’s Statement 4 

Corporate Information 6 

2008 Key Financial Figures 9 

2008 Corporate Highlights 11 

- Business Highlights 12 

- Operations Management 15 

- Human Resource Development 16 

- Corporate Social Responsibility 17 

Financial Statements 21 

- Report of the Directors 22 

- Independent Auditors’ Report 24 

- Balance Sheets 25 

- Profit and Loss Statements 26 

- Statements of Changes in Equity 27 

- Cash Flow Statements 28 

- Notes to Financial Statements 29 

Offices, Branches and ATM Network 43

Chairperson’s Statement 

Compared to 2007, Baiduri Finance increased 

its net income by 19.44% to BND 43 million. Net 

profit after tax reached BND 16 million, an increase 

of 45.45% over the previous year. Baiduri Finance 

maintained its position as the market leader in 

automobile financing. 

DEVELOPMENTS IN 2008 

In 2008, we focused on organizational development 

and product enhancement with emphasis on 

investment products. 

Upgrading Facilities 

On behalf of the Board of Directors, I am pleased to 

present the Annual Report and Accounts of Baiduri 

Bank Berhad for the financial year ending 31st 

December 2008. 

GLOBAL FINANCIAL CRISIS 

The Year 2008 has been a difficult year for the global 

economy. What started as a sub-prime crisis in the 

U.S.A. eventually deepened into a global economic 

recession of unprecedented dimensions. This 

recession is expected to continue through 2009. 

Fortunately, in spite of a sharp decline in oil and 

gas prices, Brunei’s domestic economy has been 

relatively unaffected. 

SATISFACTORY FINANCIAL RESULTS 

In an unfavourable international environment, 

however, the Baiduri Bank Group was still able to 

expand its business and achieve satisfactory financial 

results. Both Baiduri Bank and Baiduri Finance, its 

wholly-owned subsidiary, contributed to this. 

In 2008, Baiduri Bank recorded a net income of 

BND 110 million against BND 82 million in 2007, 

an increase of 34%. Profit after tax amounted to 

BND 28 million, an increase of 10.67% over the 

previous year. 

We continued to upgrade our facilities in order 

to serve our customers better. In February 2008, 

we opened the Loan Centre in Kiarong, providing 

centralized processing of retail loans for speedier 

approval. During the second half of the year, we 

set up the Business Services Centre in Kiarong, 

consolidating three departments in one, thus 

providing centralized operational support for 

all departments within Baiduri Bank Group. In 

December 2008, we moved our subsidiary Baiduri 

Finance to new premises in Beribi, bringing it closer 

to the automobile district. We opened an adjacent 

branch of Baiduri Bank for the convenience of our 

corporate customers. 

Technological Development 

We continued developing technology. We 

upgraded our IT operations; we consolidated the 

Data Centre and Information System teams and 

relocated them under one roof to a new state-ofthe-art 

Data Centre in Kiarong. 

Enhancing Products and Customer Experience 

Under Wealth Management, we introduced 

Structured Deposits and other investment products 

to diversify what we were offering to customers. 

The second Baiduri Expo with the theme “Saving for a 

Brighter Future” was held in June at the International 

Convention Centre, showcasing products and services 

of the Baiduri Bank Group with an emphasis on 

savings and investment. Free financial health checks 

and consultations were provided to customers. 

The Baiduri Prestige programme held several 

lifestyle activities for its members in 2008. 

We continued to develop our specialized and 

structured lending services to small, medium 

4 Baiduri Bank Annual Report 2008

Chairperson’s Statement 

and large corporate customers in support of the 

country’s economic diversification objectives. 

Baiduri Bank continued to make special efforts to 

assist the growth of local small businesses under 

its various SME programmes with private and 

government bodies as partners. 

HUMAN RESOURCES 

Over the years, we have stressed the importance 

of staff development. In 2008, the first batch of 

13 employees underwent studies leading to the 

Diploma in Financial Planning. Regular training 

and seminars were organized in order to improve 

service quality and operating processes. 

CORPORATE SOCIAL RESPONSIBILITY 

Baiduri Bank has been an active and regular 

supporter of local charities, such as Pusat Ehsan, 

Child Development Centre and SMARTER. The 

Baiduri Masters, our annual golf event organized to 

raise funds for charity, remains the biggest golfing 

event in Brunei. We also offer education grants to 

deserving children from less-privileged families to 

help them achieve their educational goals. 

In support of community education, Baiduri Bank 

has sponsored the World Blood Donor Day and 

Universal Children’s Day annually. 

AWARDS 

For the sixth time in seven years, Baiduri 

Bank won the Bank of the Year Award for Brunei from 

The Banker magazine, UK in November 2008. 

people of Brunei, we plan the following in 2009: 

• The upgrading of premises and facilities as part 

of our ongoing large-scale improvement 

project; 

• The provision of new techniques to assist our 

customers in line with the most up-to-date 

standards of information technology; 

• The widening of our range of products especially 

in Retail Banking, to make them better adapted 

to the needs and expectations of our 

customers; 

• The continued enhancement of our staff’s 

performance, especially in providing customer 

services by undertaking professional studies in 

financial planning. 

APPRECIATION 

On behalf of the Board of Directors, I would like to 

express our appreciation to the Government of His 

Majesty the Sultan and Yang Di-Pertuan. 

I also wish to thank our shareholders and our valued 

clients for their continued support and confidence. 

Without our customers, we would not have become 

the award-winning local bank we are today. 

In conclusion, I wish to record Baiduri Bank’s 

appreciation to the management and staff for their 

hard work and much-valued contributions to a highly 

successful year. 

ECONOMIC OUTLOOK 

A large part of the Brunei economy has traditionally 

been driven by public spending and development 

projects. Major projects currently underway in the 

Sungai Liang Industrial Park, increased activities 

in the oil and gas industries, housing resettlement 

and other projects will generate activities which 

will contribute to fuelling the economic growth 

in Brunei. We are confident that Brunei will not 

be adversely affected by the uncertain global 

economic situation in 2009. 

YTM Pengiran Anak Isteri 

Pengiran Anak Hajah Zariah 

Chairperson 

OUR PLAN FOR 2009 

In line with our global strategy to develop innovative 

products for our Bruneian customers, and to focus 

on customer service and efficiency with the aim 

of bringing the highest of quality services to the 

Baiduri Bank Annual Report 2008 5

Corporate Information 


SHAREHOLDERS 

Baiduri Holdings Bhd 

Royal Brunei Airlines Sdn Bhd 

Royal Brunei Technical Services Sdn Bhd 

BNP Paribas 

BOARD OF DIRECTORS 

YTM Pg Anak Isteri Pg Anak Hajah Zariah Binti 

Almarhum Pg Pemancha Pg Anak Haji Mohamed Alam 

(Chairperson) 

YAM Pengiran 

Muda Abdul Qawi 

YB Pehin Orang Kaya Pekerma 

Dewa Dato Seri Setia 

Awang Lim Jock Seng 

YM Dato Paduka 

Timothy Ong 

Teck Mong 

Claude De Kemoularia 

Francis Caze 

Hj Amir Hamzah 

Hj Hanafi 

Bertie Cheng Shao Shiong 

6 Baiduri Bank Annual Report 2008 



MANAGEMENT COMMITTEE 

(L to R) Seated: Yvonne Chan, Pierre Imhof, Raymond Bariou, Veronica Chong 

(L to R) Standing: Pg Azaleen Bin Pg Mustapha, Ti Eng Hui, Hj Haliluddin Bin Dato Hj Talib, Andrew Young 

Pierre Imhof 

Raymond Bariou 

Ti Eng Hui 

Andrew Young Chee Ann 

Hj Haliluddin Bin Dato Hj Talib 

Yvonne Chan Eng Pheng 

Pg Azaleen Bin Pg Mustapha 

Veronica Chong Nyet Hwa 

General Manager 

Senior Deputy General Manager 

Deputy General Manager, Retail Banking & Branch Network 

Deputy General Manager, Operations 

General Manager, Baiduri Finance 

Senior Manager, Corporate Banking 

Senior Manager, Treasury 

Senior Manager, Personnel & Finance 



AWARDS AND ACCOLADES 

Baiduri Bank won the Bank of the Year Brunei award from The Banker magazine, UK, in 2002, 2003, 2004, 2006 

2007 and 2008. The Bank also won in the Marketing, PR or Brand Management Project category of the Asian Banking 

Awards consecutively in 2004 and 2005. In February 2008, Baiduri Bank received a Special Citation for FAST, the 

revolutionary mobile suite of services at the Financial Insights Innovation Awards. 

The award ceremony for Bank of the Year 2008 took place at the 

Dorchester Hotel, London on 26th November 2008. Mr Pierre Imhof 

(2 nd left), General Manager and Mr Ti Eng Hui, Deputy General Manager, 

Retail Banking and Branch Network (2 nd right) received the award on 

behalf of the Bank 

Baiduri Bank’s FAST won a Special Citation for Innovation at the Financial 

Insights Innovation Awards held in Singapore on 29th February 2008. 

Mr Sim Kiem Lee, Cheif Technology Officer, Baiduri Bank (centre) 

receiving the plaque from Mr Cort Isemhagen, Vice President of the IDG 

Group (right) 

Baiduri Bank’s wholly-owned subsidiary, Baiduri Finance obtained the internationally recognized ISO9001:2000 

quality certification in 2003. In 2007, the Bank’s Credit Administration Department became the first department 

within the Bank to have achieved this prestigious recognition. These two units remain the only two bodies within 

the banking and finance sector in Brunei certififed to ISO 9001. 

AUDITORS 

Deloitte and Touche 

CORPORATE SECRETARIAL SERVICE PROVIDER 

Deloitte & Touche Management Services Pte Ltd 


Baiduri Bank Annual Report 2007

2008 Key Financial Figures 

OPERATING RESULTS 

(B$ in thousands, except per share information) 

Year Ended December 31 

2008 2007 

For the Year 

Revenue (1) 135,054 109,710 

Net Income 110,415 82,052 

Return on assets 1.42% 1.28% 

Return on shareholders’ equity 22.20% 23.89% 

Shares issued and paid (in millions) 100,000 60,000 

At Year End 

Total Assets 1,961 1,973 

Total Loans and advances (net) 738 7.30 

Total deposits 1,623 1,526 

Total shareholders’ equity 125 106 

Contents 

(1) 

Includes interest and non-interest income, excludes interest expenses 

TOTAL REVENUE (GROUP - 2008) 

($'000) 

Hire Purchase 

& Leasing 

B$58,177 

Consumer & 

Commercial 

Banking 

B$98,572 

Others 

B$21,695 


2008 Key Financial Figures 

Group Assets 

Group Customer Deposits 

3000 

2500 

2500 

2000 

B$Mil 

2000 

1500 

1000 

B$Mil 

1500 

1000 

500 

500 

0 

2005 2006 2007 2008 

0 

2005 2006 2007 2008 

Years 

Years 

Group Customer Loans (net) 

Group Shareholders’ Funds 

B$Mil 

1600 

1400 

1200 

1000 

800 

600 

400 

200 

0 

2005 2006 2007 2008 

Years 

B$Mil 

160 

140 

120 

100 

80 

60 

40 

20 

0 

136.71 

119.3 

95.06 

83 

2005 2006 2007 2008 

Years 

B$Mil 

35 

30 

25 

20 

15 

10 

5 

0 

Group Net Profit After Tax 

31.34 

25.806 

18.763 

10.227 

2005 2006 2007 2008 

Years 

% 

15.00 

14.00 

13.00 

12.00 

11.00 

10.00 

9.00 

8.00 

7.00 

6.00 

5.00 

Capital Adequacy Ratios (Bank) 

2005 2006 2007 2008 

Years 

Total Capital Tier 1 

% 

1.40 

1.30 

1.20 

1.10 

1.00 

0.90 

0.80 

0.70 

0.60 

0.50 

0.40 

0.30 

Group Return On Total Assets 

2005 2006 2007 2008 

Years 

B$'Mil 

140 

120 

100 

80 

60 

40 

20 

0 

Group Total Income 

24.5 

22.6 

14.8 

14.0 

64.7 

77.7 

90.0 

110.4 

2005 2006 2007 2008 

Years 

Net Interest Income 

Non-Interest Income 


2008 

Corporate Highlights 


Business Highlights 

Corporate Banking Division 

In 2008, the Corporate Banking Division participated in pioneering and innovative corporate financing 

schemes for a number of leading companies in the oil and gas, aviation and telecommunications industries. 

This included a syndicated finance scheme with other leading international banks to finance a tanker and a 

major national housing project. 

For the fifth year in 2008, Baiduri Bank continued to work hand-in-hand with Brunei Shell Petroleum, Brunei 

Economic Development Board and Asia Inc Forum on an SME partnership programme aimed to continuously 

nurture and groom Brunei SME’s through business awards, networking gathering, business forums and 

workshops. 

Under the Enterprise Facilitation Scheme and the Micro-Credit Scheme, both in collaboration with the 

Ministry of Industry and Primary Resources, Baiduri Bank has since 2001, been providing assistance to local 

entrepreneurs to give them a head start in their business. 

Retail Banking Division 

The setting up of a new Loan Centre in Kiarong in February 2008 provided centralized processing of retail 

loans, thus helping achieve a much improved turnaround time for loan applications. Through active marketing 

and cross-selling, Mortgage Loans and SME financing also saw a major increase despite stiff competition 

from other banks. 

With a comprehensive range of investment products, Wealth Management sales increased across the product 

range. The first series of Structured Deposits was launched in April 2008, and was fully subscribed before the 

end of the offer period. This is a strong achievement despite a volatile global outlook for investors. Investor 

education, customer risk profiling, ethical consultative selling, professional staff training and details to sales 

process were key ingredients for success. 

The second Baiduri Expo themed “Saving for a Brighter Future” held at the International Convention Centre 

in June emphasized savings and investment and showcased products and services of the Baiduri Bank Group. 

Free financial health checks and consultation were provided to customers. 

Thanks to excellent credit and operation control combined with substantial increase in operating profits, 

Baiduri Card Centre continued to deliver excellent financial performance in 2008. Leveraging on the latest 

technology, Baiduri Bank’s card merchants were the first in Brunei to be provided with VeriFone wireless card 

terminals. Using GPRS technology, and incorporating the latest protections against fraud and tampering with 

in-built verification and authentication features, the VeriFone is battery-powered with a sleek compact design 

which makes it extremely portable and safe, allowing transactions to be processed just about anywhere and 

at any time of the day, providing extreme versatility to business operators such as car-hiring companies and 

food delivery service. 

Established in 2005, Baiduri Bank’s partnership with 

Western Union Financial Services continued to be 

the preferred remittance service in Brunei because 

of its reputation for speed and security. Offering 

worldwide person-to-person remittance service 

through the bank’s branch network, it is especially 

popular with immigrant workers from other Asian 

countries. Baiduri Bank remains the first and only 

bank in Brunei to launch a partnership agreement 

with a global remittance company. 



Established in June 1999 and enhanced in 2007, 

Baiduri Prestige offers exclusive banking privileges 

to the mass affluent customer segment and high net 

worth individuals. 

In 2008, Baiduri Prestige organized several lifestyle 

events exclusively for their members. These included 

a health and beauty seminar and exhibition held at 

the Rizqun International Hotel in April; an exclusive 

preview of the d’Banyan Residency @ Sutra luxury 

designer homes held at the Empire Hotel and Country 

Club in May; Barbara Harris Water Jewels preview 

held at the Empire Hotel and Country Club in August. 

The Prestige event of the year was the screening of 

the movie “Butterfly Lovers” at the Mall Cineplex, 

Gadong exclusively for Baiduri Prestige members. 

The movie starred Brunei’s home-grown superstar 

Wu Chun alongside Hong Kong’s Charlene Choi. 

The evening exclusive included a “Meet the Stars” 

session where guests were given the opportunity to 

meet the stars in person. 

DISTRIBUTION CHANNELS 

To broaden its distribution footprints as well as enrich channels 

to improve customer experience, Baiduri Bank invested 

substantially in self-service banking channels, including the 

ATM network, internet banking and mobile phone banking. 

Enhancements to the website and cash deposit machines were 

carried out in 2008. 

Through a series of campaigns to encourage e-channels usage, 

increases in the usage of electronic channels were seen over the 

12 month period till end 2008. ATM usage as a percentage of 

all transactions increased by 12.66% from 2007; transactions via 

internet banking saw an impressive 207% increase from January 

to December 2008. FAST mobile payment services, which was 

first launched in October 2007 saw increasing take-up through 

the months, and recorded a 94.5% increase in December 2008 

compared to twelve months earlier. 

In addition to developing the electronic channels, Baiduri Bank 

Group also embarked on a plan to renovate all its premises and branches with the aim of enhancing the total 

customer experience and to create a more conducive sales environment. The project started in 2007 and is 

expected to be finished by 2010. In 2008, a new branch at Beribi was added, bringing to 12 the total number 

of branches in the network. 



Baiduri Finance 

Leveraging on Baiduri Bank’s multi-channel delivery systems, Baiduri Bank’s wholly-owned subsidiary, Baiduri 

Finance continued to grow its business volume and increase its hire-purchase portfolio in 2008. 

Besides automobile finance, Baiduri Finance also offers attractive savings schemes. To encourage savings and to 

reward its customers, Baiduri Finance successfully held a 3-month promotion on the popular Multi-Tier Savings 

Account from April to June 2008 where depositors stood the chance to win lucky draw cash prizes of $50,000, 

$30,000 and $20,000 in addition to monthly cash and novelty prizes. 

Baiduri Finance moved its head office to new 

premises at Sumbangsih Bahagia in December 

2008, reflecting Baiduri Finance’s growth and 

success over the years. Located in the heart of 

the automobile district in Beribi, it was a strategic 

move to meet the demands of a burgeoning local 

population, to serve customers better and be 

closer to clients and partners in Beribi. 

The new premises are equipped with ultra-modern 

facilities such as dedicated counters for hire 

purchase, insurance renewal, blue card collection 

and other services. It also has a Prestige Centre to cater for its high net worth customers. The new office was 

officially opened on 17th December by Yang Berhormat Pehin Orang Kaya Laila Setia Dato Seri Awang Haji Abd 

Rahman bin Haji Ibrahim, Minister of Finance II. 


Operations Management 

The role of the Operations Management Division (OMD) is to provide support to the business units, leveraging 

on information technology to achieve optimum operational efficiency. The Division utilizes an integrated 

management system and engages employees in continuous improvement programs with the ultimate aim to 

achieve total customer satisfaction. 

In 2008, a Quality Control Circle (QCC) initiative was launched seeking to set new standards through quality 

improvements with the aim to achieve ISO9001 by year 2010 for Operations Management Division and ISO 

27001 certification for IT Department by 2011. 

Under the current large-scale premises improvement project, the Property Department undertook three major 

premises improvement projects. This involved refurbishing premises to reflect a modern professional image 

and to provide comfortable working environment to the growing number of staff. 

A new Loan Centre was set up at Kiarong Complex 

in February providing centralized processing of retail 

loans. In December, Baiduri Finance’s head office 

was relocated to bigger and more modern premises 

in Beribi and a new branch of Baiduri Bank was set up 

adjacent to Baiduri Finance. 

In addition, a Business Services Centre was set up with 

the aim to streamline workflow to improve turnaround 

time and provide a one-stop centre for customers. 

The centre began operations during the third quarter 

of 2008 and was officially opened in early 2009. It 

involved the merger of three distinct departments 

into one and provides operating support for all departments under the Bank and Baiduri Finance. 

Work on relocating the Seria Branch began in late 2008 and was completed in early 2009. The new premises 

included a new Prestige Centre to serve members in the Belait District. Refurbishment work on the Head 

Office at Kiarong has already started and is expected to be completed by the beginning of 2010. 

In 2008, the Bank’s IT operations was upgraded and 

relocated to a new state-of-the-art Data Centre in 

Kiarong and a new IT structure was implemented. 

This close integration of various functions also 

allowed for multi-skilling of staff. 

Under the e-Banking Department, improvements 

were made to ATM network with several new ATMs 

and CDMs added to meet the growing needs of 

customers and to serve the growing customer base. 

Plans are underway for new and improved services 

to be introduced via electronic channels in 2009, and 

include the launch of an enhanced personal internet 

banking service. 

Mr Pierre Imhof (right) Baiduri Bank’s GM and Mr Song Kin Koi, 

Managing Director of TelBru signing a Value Added Service 

Agreement (VASA) on provision of a comprehensive range of bill 

payment services to TelBru customers via electronic channels as well 

as over the counter. The ceremony was held at TelBru Headquarters 

on 11 th June 2008 


Human Resource Development 

In line with the Group’s vision to continually increase 

the skills and competencies of the whole workforce, 

the Human Resources Department of the Group 

seeks to build a quality team with the right skills and 

talents to meet our current and future needs. 

Continuously Building the Service Quality 

Culture 

With emphasis on the delivery of excellent customer 

service to our clients in line with the Group’s Service 

Standards, a total of 112 training workshops were 

developed and conducted in-house which covered 

all aspects of customer service, products and 

services, generating an average of 2.5 training days 

per staff member during the year. 

Enhancing Competency Based Skills 

In 2008, 13 holders of the Certificate in Financial 

Planning (CertFP) underwent studies leading to the 

Diploma in Financial Planning and received their 

diplomas from the Singapore College of Insurance 

in early 2009. This brings to 37 the total number 

of personnel professionally trained in financial 

planning, out of which, 4 hold the Chartered 

Financial Consultant (ChFC) qualifications; 13 with 

the Diploma in Financial Planning (DipFP) and 

the rest with the Certificate in Financial Planning 

(Cert FP). 

The Diploma in Financial Planning (DipFP) is part 

of the route to the Chartered Financial Consultant 

(ChFC), the premier designation in financial 

consulting and is offered to CertFP holders wishing 

to acquire in-depth knowledge of the principles 

and tools involved in the various aspects of financial 

planning process. 

To equip all front line personnel with full knowledge 

of the Bank Group’s products and services, product 

briefings and updates were continuously conducted 

throughout the year. 

As part of staff welfare, basic fire, safety and health awareness courses were also offered with more than 10 

personnel having received the highest award of the CPR Instructor course to date. 

Compensation and Benefits Strategy 

In order to improve Employee Value Proposition and in line with the organization’s performance driven culture, 

the Group is constantly reviewing the employees’ compensation and benefits strategy. As a result, a number of 

financial and other incentives have been introduced during the year linking achievement of financial targets. 

Sales incentives were further enhanced and in addition, eight top achievers in Wealth Management business 

for 2008 were rewarded with an incentive trip to attend the 31st IFPAS (Insurance and Financial Practitioners 

Association of Singapore) National Congress held in Singapore in March 2009. 


Corporate Social Responsibility 

Baiduri Bank Group has benefited from the support of the community and wants to give back to society 

wherever possible. Some of the community programmes supported by the Group in 2008 were: 

Caring for the Less Fortunate 

Baiduri Bank has been an active and regular supporter of local charities 

since its inception. The Bank has a policy of donating in kind, usually 

in response to a specific need that has been identified. The Bank 

aims to raise public awareness about the needs of special people and 

to promote activities that would contribute towards special people 

gaining acceptance in the wider society. 

Among the contributions made by Baiduri Bank Group in 2008 to this 

group were: 

• Donation of 10 units of specially designed personal 

computers for visually impaired students presented to 

the Special Education Section of the Ministry of Education. 

• Donation of BND8,000 towards the purchase of a van for 

SMARTER. 

• The cost of salaries for two teachers in Pusat Ehsan Al- 

Ameerah for a year. 

• Donation of a specially designed wheelchair to an 18-year 

old man suffering from Spastic Quadriplegic Cerebral Palsy 

and Epilepsy. 

• Donation to the Ministry of Culture Youth and Sports 

to help meet the cost of hosting the Special Olympics 

Asia Pacific Bocce Competition held in Brunei from 18th to 

24th August 2008. 

Participants at the popular annual charity golf 

event, the Baiduri Masters 

The annual charity golf event, The Baiduri Masters is the main activity in which public participation is invited 

to help raise funds for charity. The golf tournament, which started in 1996, is the most prestigious and widely 

attended in Brunei. In 2008, more than 720 players participated, the highest in its history. It also recorded 

another first, with a player striking a hole-in-one, winning himself a brand new BMW 730Li. All surplus from 

this event were donated to charities and welfare bodies. 

Helping Less-Privileged Children Achieve 

Their Education Goals 

Baiduri Bank offers education grants to deserving 

children from less privileged homes to assist them 

in meeting the cost of their school fees. In 2008, 

several children from throughout the country 

received such grants. 

Mr Pierre Imhof presenting an education grant to a school principal 

during the Chinese New Year Dinner in Kuala Belait. 



Promoting Conservation 

As part of Baiduri Bank’s commitment to promoting sustainable development, Baiduri Bank Group carried out 

several conservation initiatives in 2008 

• In June 2008, Baiduri Bank, in partnership with the Energy Division of the Prime Minister’s Department 

launched an initiative to promote energy efficiency and conservation among the bank staff and 

customers. It involved distribution of stickers and booklets on the theme. 

• The Baiduri Expo 2008, which was held 

from 26th to 29th June, showcased 

measures that can be taken by the public 

to conserve energy in line with the theme 

“Saving for a Brighter Future”. 

• At the Hari Raya Aidilfitri Gala Dinner for 

customers and business associates held 

at the Jerudong Park Amphitheatre in 

October 2008, Baiduri Bank Group made 

a pledge in support conservation of 

initiatives for Kampong Ayer which 

aimed to maintain its cleanliness to 

preserve the village’s unique qualities as 

a national heritage. 

Baiduri Bank’s Chairperson, YTM Pengiran Anak Isteri Pengiran Anak 

Hajah Zariah presenting Baiduri Bank Group’s pledge of support on 

Kampong Ayer conservation initiatives to a representative of a student 

group. 

Making a Difference at RIPAS Hospital 

On 25th September 2008, in keeping with the spirit 

of Ramadhan, a group of senior management 

personnel from Baiduri Bank led by the General 

Manager, Mr Pierre Imhof, took time off their busy 

schedule to pay a pre-Hari Raya visit to patients at 

RIPAS Hospital. Together with the Acting Minister 

of Health, YDM Pehin Orang Kaya Pekerma Laila 

Diraja Dato Paduka Awang Haji Hazair bin Haji 

Abdullah, Mr Imhof presented food hampers to 

more than 80 patients who due to their illnesses, 

would have to be away from their loved ones 

during the Hari Raya season. 



Promoting Arts, Culture and Local Talent 

Baiduri Bank Group is committed to promoting cultural exchange and expanding the local talent pool in the 

fields of arts and culture. 

In June 2008, in promoting cultural exchange, the Group sponsored the French SOAP collective artists, which 

specializes in spray painting using environmentally friendly spray paint. Spray painters Migwel, Deser and 

Keflione drew huge interest and participation in their workshops and conference on their unique line of street 

art. Organized by Alliance Francaise, the project aimed at providing cultural and educational exchange for 

free to the people of Brunei and foster closer relations among the different ethnic groups. 

Under the same cause, Baiduri Bank Group made a donation to the Bandar Seri Begawan Indian Association at 

the Deepavali Dinner held in November 2008 in honour of the Bank’s Indian customers and business associates. 

In support of the advancement of local musical and singing talent, Baiduri Bank Group sponsored the 

production of a music CD featuring finalists of Season 2 of the most anticipated reality show in Brunei, Passport 

to Fame (P2F) which took place from June to December 2008. Beginning with over 250 contestants, those who 

did not meet the grades were eliminated during each round, bringing to just 22 the number of finalists in the 

various categories. The final round was a grand finale held at the Jerudong Park Amphitheatre in December 

where winners were picked through SMS voting, in similar fashion as Malaysia’s “Akademi Fantasia”. 

In collaboration with leading radio station Pelangi FM, the Bank also sponsored the production of “Rentak 

914”, Volume 3, a music CD featuring 18 songs by up and coming local singers which included names like 

Maria, winner of Pelangi Awards for two years running. 

Supporting Community Development 

In 2008, Baiduri Bank Group together with its employees carried out several projects in support of community 

development: 

• World Blood Donor Day – On 14 th June 2008, Baiduri 

Bank again became the main sponsor for the World 

Blood Donor Day. The event, held at the Yayasan Sultan 

Hassanal Bolkiah Complex, was aimed to create wider 

awareness of the importance of voluntary blood donation 

and encourage more people to become regular blood 

donors. It was also designed to thank individuals who 

voluntarily donated their blood without any reward to 

help save lives. This was the second year that Baiduri 

Bank had sponsored the event. 

• Blood Donation Drive – On 19 th June 2008, in collaboration 

with RIPAS Blood Donation Centre, Baiduri Bank Group 

held a blood donation drive at the Group’s Training 

Centre with the purpose to replenish stock of the stock 

of the blood bank. A total of 58 employees from various 

departments of Baiduri Bank and Baiduri Finance 

participated. 

Mr Raymond Bariou with a participant of a blood 

donation drive held on 19 th June 2008 at the Training 

Centre. 



• Pusat Ehsan Charity Bazaar - On 3 rd August 2008, in support of efforts to raise funds for Pusat Ehsan, 

staff of Baiduri Bank participated in the annual Charity Bazaar held at the Centre’s premises in 

Kampong Bengkurong. They sold food and drinks and organized fun activities such as water gun 

shooting, face painting, tattooing and lucky dips with the aim to raise as much funds as possible 

within the day at the Centre. Proceeds from the activities were donated to Pusat Ehsan. 

• Universal Children’s Day – On 25 th November 2008, 

Baiduri Bank was the main sponsor of this annual 

event organized by the Ministry of Culture Youth 

and Sports. Held at the Mumong Sports 

Complex in the Belait District, the event saw 

more than 600 primary school children from 

various schools in the district enjoy a carnival 

morning packed with fun and games in line 

with the theme “The Right to Play” set by 

UNICEF. Senior officials and staff of Baiduri 

Bank joined officials from the Ministry to share 

their morning with the children. 

Nurturing Bruneian Entrepreneurs 

Baiduri Bank continued its SME Partnership 

Programme with Asia Inc Forum, aimed to 

continuously nurture Brunei SMEs. The key programs 

carried out during the year included a “Women in 

Business” Forum and a workshop on franchising. 

Senior Deputy General Manager, Mr Raymond Bariou speaking at 

the Launching Ceremony of the 2008 SME Programme 


Financial Statements 

For the year ended 31 st December 2008 


Report of the Directors 

The directors have pleasure in presenting their annual report and audited financial statements of the Company 

and of the Group for the financial year ended December 31, 2008. 

PRINCIPAL ACTIVITIES 

The principal activities of the Company and the Group are to carry on the business of banking and related 

financial services including dealing in investment securities, stock broking and e-financial services. There have 

been no significant changes in the nature of these activities during the financial year. 

One of the Company’s subsidiaries, Baiduri Securities Sdn Bhd, had remained dormant throughout the 

financial year ended December 31, 2008. 

Results 

The Group 

B$’000 

The Company 

B$’000 

Balance at December 31, 2007 17,626 9,790 

Total profits for the financial year 25,806 27,770 

Transferred from retained profits to: 

- Share capital (5,000) (5,000) 

- Statutory reserve (18,689) (13,885) 

Dividends paid (8,400) (8,400) 

Balance at December 31, 2008 11,343 10,275 

RESERVES AND PROVISIONS 

There were no other material transfers to or from reserves and provisions during the financial year other than 

those disclosed in the financial statements. 

SHARE CAPITAL 

On February 25, 2008, the issued share capital was increased to B$100,000,000 by the issue of 40,000,000 

ordinary shares of B$1 each. 

The newly issued shares rank pari passu in all respect with the existing shares of the Company. 

FINANCIAL STATEMENTS 

The state of affairs of the Company as at December 31, 2008 is set out in the balance sheet. These financial 

statements were approved by the Board of Directors on March 5, 2009. 

DIVIDENDS 

B$ 

Dividends paid in respect of the financial year ended December 31, 2007 8,400,000 

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. 


Report of the Directors 

Directors 

The directors in office during the financial year and at the date of this report are: 

YTM Pengiran Anak Isteri Pengiran Anak Hajah Zariah 

YAM Pengiran Muda Abdul Qawi 

YB Pehin Orang Kaya Pekerma Dewa Dato Seri Setia Lim Jock Seng (appointed on November 13, 2008) 

YM Dato Paduka Timothy Ong Teck Mong 

Claude De Kemoularia 

Francis Caze 

Haji Amir Hamzah Haji Hanafi 

Bertie Cheng Shao Shiong (appointed on August 22, 2008) 

Pengiran Dato Paduka Haji Abu Bakar bin Pengiran Seri 

Indera Pengiran Haji Ismail (resigned on November 13, 2008) 

Victor Chua Beng Khoon (resigned on July 8, 2008) 

Auditors 

The auditors, Deloitte & Touche, have indicated their willingness to accept re-appointment. 

On behalf of the board 

________________________________________ 

Director 

________________________________________ 

Director 

________________________________________ 

Director 

Brunei Darussalam 

Date: 5th March 2009 


Independent Auditors’ Report 

to the members of Baiduri Bank Berhad 

and subsidiaries 

We have audited the accompanying financial statements of Baiduri Bank Berhad (the Company) and its subsidiaries 

(the Group) which comprise the balance sheets of the Company and the Group as at December 31, 2008, the 

profit and loss statements, statements of changes in equity and cash flows statements of the Company and the 

Group for the year then ended, and a summary of significant accounting policies and other explanatory notes, as 

set out on page 65 to 78. 

Directors’ Responsibility 

The Company’s directors are responsible for the preparation and fair presentation of these financial statements in 

accordance with the provisions of the Brunei Darussalam Companies Act, Cap. 39 (the “Act”), the Brunei Darussalam 

Banking Order 2006 (the “Order”), and generally accepted accounting principles in Brunei Darussalam. This 

responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and 

fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; 

selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable 

in the circumstances. 

Auditors’ Responsibility 

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our 

audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical 

requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements 

are free from material misstatement. 

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the 

financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of 

the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk 

assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of 

the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for 

the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes 

evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made 

by directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit 

evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. 

Opinion 

In our opinion, 

a) the financial statements of the Company and consolidated financial statements of the Group are 

properly drawn up in accordance with the provisions of the Act, the Order and generally accepted 

accounting principles in Brunei Darussalam so as to give a true and fair view of the state of affairs of the 

Company and the Group as at December 31, 2008 and of the results, changes in equity and cash flows 

of the Company and the Group for the year ended on that date; 

b) the accounting and other records required by the Act to be kept by the Company and its subsidiaries 

have been properly kept in accordance with the provisions of the Act; and 

c) we have obtained all the information and explanations that we required. 

_____________________________________ 

DELOITTE & TOUCHE 

Certified Public Accountants 

_____________________________________ 

NG HUI HUA 

Brunei Darussalam Authorised Auditor 

Brunei Darussalam 

Date: 5 th March 2009 


Balance Sheets 

December 31, 2008 

The Group 

The Company 

2008 2007 2008 2007 

Note B$’000 B$’000 B$’000 B$’000 

Assets 

Cash, deposits and balances with banks 792,117 832,921 790,046 831,535 

Cash deposits and reserve 4 118,069 97,790 82,617 66,662 

Loans and advances (net) 5 1,339,201 1,259,366 737,648 730,003 

Due from related parties 6 116,759 94,114 116,795 94,114 

Other assets 7 53,967 34,297 53,503 33,852 

Investment in subsidiaries 8 - - 25,249 25,249 

Other investments 9 136,478 174,767 136,478 174,767 

Goodwill on consolidation 10 100 124 - - 

Property, plant and equipment 11 20,828 17,983 18,920 16,986 

Total assets 2,577,555 2,511,362 1,961,256 1,973,168 

LIABILITIES AND EQUITY 

Amount due to subsidiaries (net) 12 - - 81,432 124,305 

Amount due to related parties 13 37,700 50,815 37,499 50,614 

Current, fixed, savings and other deposits 14 2,299,523 2,166,661 1,623,222 1,525,747 

Deposits and balances with banks 53,397 127,601 53,397 127,601 

Other liabilities and provisions 15 35,743 31,923 31,638 29,066 

Income tax payable 16 9,221 13,557 3,727 8,649 

Deferred tax liabilities 16 3,557 302 3,540 240 

Provision for retirement benefits 17 1,688 1,203 1,688 1,203 

Total liabilities 2,440,849 2,392,062 1,836,143 1,867,425 

CAPITAL, RESERVES AND 

MINORITY INTEREST 

Share capital 18 100,000 60,000 100,000 60,000 

Statutory reserve 19 25,577 41,888 14,838 35,953 

Retained profits 11,343 17,626 10,275 9,790 

Equity attributable to 

equity holders of the parent 136,920 119,514 105,743 105,743 

Minority interest (214) (214) - - 

Total equity 136,706 119,300 125,113 105,743 

Total liabilities and equity 2,577,555 2,511,362 1,961,256 1,937,168 

Commitments and contingencies 20 193,734 181,267 193,734 181,267 

_____________________________________ 

Director 

_____________________________________ 

Director 

_____________________________________ 

Director 

_____________________________________ 

General Manager 

See accompanying notes to financial statements. 


Profit And Loss Statements 

Year Ended December 31, 2008 

The Group 

The Company 

2008 2007 2008 2007 

Note B$’000 B$’000 B$’000 B$’000 

Interest income 21 150,419 132,587 92.205 81,711 

Less: Interest expense (40,040) (42,677) (24,639) (27,658) 

110,379 89,910 67,566 54,053 

Fees, commission and service charges 7,002 6,336 7,002 6,336 

Foreign exchange profit and other income 15,726 14,736 34,027 20,105 

Gain from investments 1,820 1,558 1,820 1,558 

Net income 134,927 112,540 110,415 82,052 

Other administrative expenses 22 (52,804) (47,462) (36,180) (32,354) 

Allowances on loans, advances 

and investment (47,619) (20,268) (42,823) (15,868) 

Operating income 34,504 44,810 31,412 33,830 

Goodwill amortisation (24) (25) - - 

Profit before tax 34,480 44,785 31,412 33,830 

Income tax 16 (8,674) (13,445) (3,642) (8,563) 

Profit after taxation 25,806 31,340 27,770 25,267 

Transfer to statutory reserve 19 (18,689) (16,050) (13,885) (12,634) 

Profit for the year after 

transfer to statutory reserve 7,117 15,290 13,885 12,633 



Statements of Changes in Equity 


The Group 

Attributable to equity holders of the parent 

Issued Statutory Retained Minority Total 

Note Capital Reserves Profits Total Interest Equity 

B$’000 B$’000 B$’000 B$’000 B$’000 B$’000 

Balance at January 1, 2007 60,000 25,838 9,436 95,274 (214) 95,060 

Total profits for the financial year - - 31,340 31,340 - 31,340 

Transferred from retained profits 

to statutory reserve 19 - 16,050 (16,050) - - - 

Dividends paid 23 - - (7,100) (7,100) - (7,100) 

Balance at December 31, 2007 60,000 41,888 17,626 119,514 (214) 119,300 

Total profits for the financial year - - 25,806 25,806 - 25,806 

Transferred to issued capital 40,000 (35,000) (5,000) - - - 

Transferred from retained profits 

to statutory reserve 19 - 18,689 (18,689) - - - 

Dividends paid 23 - - (8,400) (8,400) - (8,400) 

Balance at December 31, 2008 100,000 25,577 11,343 136,920 (214) 136,706 

The Company 

Issued Statutory Retained Total 

Note Capital Reserve Profits Equity 

B$’000 B$’000 B$’000 B$’000 

Balance at January 1, 2007 60,000 23,319 4,257 87,576 

Net profits for the year - - 24,267 25,267 

Transferred from retained profits to 

statutory reserve 19 - 12,634 (12,634) - 

Dividends paid 23 - - (7,100) (7,100) 

Balance at December 31, 2007 60,000 35,953 9,790 105,743 

Net profits for the year - - 27,770 27,770 

Transferred to issued capital 40,000 (35,000) (5,000) - 

Transferred from retained profits to 

statutory reserve 19 - 13,885 (13,885) - 

Dividends paid 23 - - (8,400) (8,400) 

Balance at December 31, 2008 100,000 14,838 10,275 125,113 



Cash Flow Statements 


The Group 

The Company 

2008 2007 2008 2007 

Note B$’000 B$’000 B$’000 B$’000 

Cash flows from operating activities: 

Profit before income tax 34,480 44,785 31,412 33,830 

Adjustments for: - 

Amortisation of goodwill on consolidation 24 25 - - 

Depreciation 4,320 3,710 3,934 3,412 

Gain on disposal property, plant 

and equipment (net) (14) (38) (12) (38) 

Gain from investments (1,820) (1,558) (1,820) (1,558) 

Operating cash flows before 

movements in working capital 36,990 46,924 33,514 35,646 

Loans and advances (net) (79,835) (194,082) (7,645) (102,628) 

Due from related parties (22,681) (54,621) (22,681) (54,621) 

Other assets (19,670) 10,139 (19,651) 10,056 

Due to subsidiaries - - (42,873) 38,533 

Due to related parties (13,115) 10,941 (13,115) 10,941 

Current, fixed, savings and other deposits 132,862 423,805 97,475 302,286 

Other liabilities and provisions 4,305 4,923 3,057 5,281 

Cash generated from operations 38,856 248,029 28,081 263,494 

Income tax paid (9,735) (7,934) (5,264) (5,209) 

Net cash from operating activities 29,121 240,095 22,817 258,285 

Cash flows from investing activities: 

Purchases of property, plant and equipment (7,230) (4,757) (5,933) (4,465) 

Proceeds from sale of property, 

plant and equipment 79 301 77 301 

Gain from investments 1,820 1,558 1,820 1,558 

Investment in subsidiaries - - - (23,000) 

Net (additions) / disposal of investments 38,289 41,363 38,289 41,363 

Net cash from investing activities 32,958 38,465 34,253 15,757 

Cash flows from financing activity: 

Dividends paid (8,400) (7,100) (8,400) (7,100) 

Net increase in cash and 

cash equivalents 53,679 271,460 48,670 266,942 

Cash and cash equivalents at the 

beginning of the year 803,110 531,650 770,596 503,654 

Cash and cash equivalents at the 

end of the year 24 856,789 803,110 819,266 770,596 



Notes to Financial Statements 


1 OPERATIONS 

The principal activities of the Company and the Group are to carry on the business of banking and 

related financial services including dealing in investment securities, stock broking and e-financial services. 

There have been no significant changes in the nature of these activities during the financial year. 

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 

Basis of Accounting 

The financial statements have been prepared in accordance with the historical cost convention, with the 

provisions of the Brunei Darussalam Companies Act, Cap. 39, the Brunei Darussalam Banking Order 2006 

and generally accepted accounting principles in Brunei Darussalam, and are expressed in Brunei 

Darussalam dollars. 

Basis of Consolidation 

The consolidated financial statements include the financial statements of the Company and its subsidiaries 

for the financial year December 31, 2008. The subsidiaries consolidated are entities in which the Group 

has an equity interest of more than 50% in the issued share capital at the balance sheet date or has power 

to exercise control over the operations. 

Subsidiaries are consolidated from the date on which effective control is acquired by the Group. Intra 

group transactions, balances, income and expenses are eliminated on consolidation. Where necessary, 

adjustments are made to the financial statements of subsidiaries to bring their accounting policies into 

line with those used by other members of the Group. 

Minority interests in the net assets of consolidated subsidiaries are identified separately from the 

Group’s equity therein. Minority interests consist of the amount of those interest at the date of the origin 

business combination and the minority’s share of changes in equity since the date of combination. 

Goodwill 

Goodwill arising on consolidation represents the excess of cost of acquisition over the fair values of the 

net identifiable assets acquired. Goodwill is stated at cost less accumulated amortization. 

Goodwill is amortised through the Group income statement over 10 years. 

Interest Income and Expense 

(i) 

(ii) 

Interest income and expenses are recognized in the profit and loss statements on an accrual basis. 

When an account becomes non-performing, interest is suspended until it is realised on a cash 

basis. 

For the finance subsidiary, interest earned on hire purchase and leasing transactions are spread 

over the period of the agreements, using the commonly accepted method known as the “Rule-of- 

78” so as to produce a constant periodic rate of interest. The income arising therefrom each year 

comprises interest in respect of those installments which have become due for payment during the 

financial year. The remainder is carried forward as a provision for unearned income. 




2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 

Loans and Allowance for Bad and Doubtful Receivables 

All loans and financing are recognised when cash is advanced to borrowers. Legal fees incurred in securing 

a loan and financing are treated as part of the cost of the transaction. 

Loans and financing are stated after deduction of allowance for possible losses. These allowances 

comprise specific allowances against non-performing receivables and financing and the related interestin-suspense. 

Specific allowance and suspension of interest are made for doubtful receivables and financing 

which have been individually reviewed and specifically identified as bad or doubtful. Known bad receivables 

are written off. 

An uncollectible loan and financing or portion of a loan and financing classified as bad or doubtful is 

either written off or provided for after taking into consideration the realizable value of collateral, if any, 

when in the judgement of the management there is no prospect of recovery. 

Depreciation 

Depreciation is calculated to write off the cost of the property, plant and equipment over their estimated 

useful lives by the straight line method. The estimated useful lives are as follows:- 

Freehold lands and buildings 

Leasehold lands and buildings 

Leasehold improvements 

Computers 

Office equipment 

Office furniture and fittings 

Household furniture and equipment 

Motor vehicles 

50 years 

Over period of the lease 

5 years 

5 – 8 years 

5 years 

5 – 10 years 

5 – 10 years 

5 years 

Gains and losses on disposal of property, plant and equipment are determined by reference to their net 

book value and are taken into account in determining operating profit. 

Repairs and maintenance are charged to the profit and loss statements when the expenditure is 

incurred. 

Fully depreciated property, plant and equipment are retained in the financial statements until they are 

no longer in use. 

Investments 

(i) 

Investments in subsidiaries 

Investments in subsidiaries in the Company’s financial statement are stated at cost less amounts 

written off in recognition of any permanent fall in value. 

Dividend income is recorded in the profit and loss statements when received in the financial year 

or in which a dividend has been approved by the shareholders in the investee company. 

(ii) 

Other investments 


Quoted and unquoted investments intended to be held for long term are stated at 

cost less impairment in value that is other than temporary, determined on an individual investment 

basis, except for situation in which the Company is able to realize a profit in these investments, 

the realized profits are taken to the profit and loss statements. 

Interest earned on other investment is reported as interest income.



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 




4 CASH DEPOSITS AND RESERVE 

The reserve is maintained in accordance with Section 45 of the Brunei Darussalam Banking Order 2006 and a 

directive issued by the Brunei Government Ministry of Finance in accordance with Section 25(2) of the Finance 

Companies Act, Cap. 89. The reserve is not available for use in the Company and its subsidiaries’ day to day 

operations. 

5 LOANS AND ADVANCES (NET) 

The Group 

The Company 

2008 2007 2008 2007 

B$’000 B$’000 B$’000 B$’000 

a) Loan to individuals 447,287 439,608 447,287 439,608 

Loan to corporate entities 443,903 437,507 443,903 437,507 

891,190 877,115 891,190 877,115 

Less: Allowance for bad and 

doubtful receivables (60,341) (56,560) (60,341) (56,560) 

Allowance for interest in suspense (93,201) (90,552) (93,201) (90,552) 

737,648 730,003 737,648 730,003 

Hire purchase receivables 603,065 530,226 - - 

Finance leases of equipment 457 580 - - 

603,522 530,806 - - 

Less: Allowance for doubtful receivables (1,441) (924) - - 

Less: Allowance for interest in suspense (528) (519) - - 

601,553 529,363 - - 

Balance at end of year 1,339,201 1,259,366 737,648 730,003 

The Group and the Company classify loans in accordance with its own internal loans grading policies. 

The Group and the Company make specific allowances for non-performing loans and financing in accordance 

with its policy set out in Note 2. Interest income is suspended when the account is classified as non-performing 

until it is realised on a cash basis. 




5 Loans and advances (NET) (continued) 

Movements in allowance for bad and doubtful receivables on loans are as follows: - 

The Group 

The Company 

2008 2007 2008 2007 

B$’000 B$’000 B$’000 B$’000 

b) Balance at the beginning of the year 56,560 81,373 56,560 81,373 

Addition 10,448 7,670 10,448 7,670 

Written back (2,819) (429) (2,819) (429) 

Written off (3,848) (32,054) (3,848) (32,054) 

Balance at the end of the year 60,341 56,560 60,341 56,560 

Movements in allowance for interest in suspense on loans are as follows: - 

The Group 

The Company 

2008 2007 2008 2007 

B$’000 B$’000 B$’000 B$’000 

c) Balance at the beginning of the year 90,552 91,429 90,552 91,429 

Addition 13,075 18,764 13,075 18,764 

Written back (5,082) (383) (5,082) (383) 

Written off (5,344) (19,258) (5,344) (19,258) 


Movements in allowance for bad and doubtful receivables on hire purchase are as follows: - 

The Group 

The Company 

2008 2007 2008 2007 

B$’000 B$’000 B$’000 B$’000 

d) Balance at the beginning of the year 924 2,176 - - 

Addition 7,155 6,935 - - 

Written off (4,276) (8,187) - - 

Recoveed (2,359) - - - 

Balance at the end of the year 1,441 924 - - 

Movements in allowance for interest in suspense on hire purchase are as follows: - 

The Group 

The Company 

2008 2007 2008 2007 

B$’000 B$’000 B$’000 B$’000 

e) Balance at the beginning of the year 519 623 - - 

Addition 23 52 - - 

Written back (14) (156) - - 

Balance at the end of the year 528 519 - - 




6 Due from related parties 

The Group/The Company 

2008 2007 

B$’000 B$’000 

Overdrafts 11,937 12,699 

Commercial term loans and others 104,858 81,415 

116,795 94,114 

7 OTHER ASSETS 

The Group 

The Company 

2008 2007 2008 2007 

B$’000 B$’000 B$’000 B$’000 

Prepayments 1,170 1,066 740 640 

Interest receivable 14,406 13,152 14,406 13,152 

Refundable deposits 32,380 16,041 32,347 16,007 

Others 6,011 4,038 6,010 4,053 

53,967 34,297 53,503 33,852 

8 SUBSIDIARY COMPANIES The Company 

2008 2007 

B$’000 B$’000 

a) Unquoted shares, at cost 25,249 25,249 

b) The following are the subsidiaries of the Company: 

Name of Company Principal Activities Percentage of Paid 

and Place of Incorporation 

Up Capital Held 

2008 2007 

Baiduri Finance Berhad Finance Company 100% 100% 

(Brunei Darussalam) 

Baiduri Securities Sdn Bhd Share brokers and dealers in securities 51% 51% 


and investments of all kinds 

Baiduri Securities Sdn Bhd ceased operations after January 31, 2002 and has been dormant since then. 

Full provision has been made for the cost of this investment. 




9 OTHER INVESTMENTS 

The investments consist of: - 


2008 2007 

B$’000 B$’000 

Quoted investments, at cost 181,478 183,767 

Unquoted investments, at cost - - 

Less: Allowance for impairment 181,478 183,767 

(45,000) (9,000) 

136,478 174,767 

The quoted investments with cost amounting $170,474,130 (2007:$134,340,000), coupon rate ranging 1.25% 

to 4.91% (2007: 2.187% to 4.91%) per annum and maturity dates ranging from August 15, 2010 to October 10, 

2011 (2007: January 24, 2008 to December 20, 2012) are held to maturity. 

The unquoted investments consist of the following: - 

Name of Company Principal Activities Percentage of Paid 

and Place of Incorporation 

Up Capital Held 

2008 2007 

SBI Garment Industries Sdn Bhd Garment manufacturer 100% 100% 


10 GOODWILL ON CONSOLIDATION 

The Group 

2008 2007 

B$’000 B$’000 

At cost 249 249 

Accumulated amortisation 

Balance at the beginning of the year 125 100 

Amortisation charge for the year 24 25 

Balance at the end of the year 149 125 

Net book value at the end of the year 100 124 




11 Property, plant and equipment 

The Group Freehold Leasehold 

Lands & Lands & Leasehold Office 

Buildings Buildings Improvements Computers Equipment 

B$’000 B$’000 B$’000 B$’000 B$’000 

Cost 

At the beginning of the year 3,175 4,368 5,814 23,237 3,508 

Additions 1,614 43 2,662 2,144 488 

Reclassification - 19 (19) - - 

Disposal/written off - - (59) (9) (104) 

At the end of the year 4,789 4,430 8,398 25,372 3,892 

Accumulated depreciation 

At the beginning of the year 203 1,112 4,064 14,749 2,590 

Depreciation for the year 73 257 760 2,670 367 

Disposal/written off - - - (8) (100) 

At the end of the year 276 1,369 4,824 17,411 2,857 

Depreciation for prior year 60 251 466 2,467 285 

Net book value: 

At the beginning of the year 2,972 3,256 1,750 8,488 918 


Office Household 

Furniture Furniture & Motor 

and Fittings Equipment Vehicles Total 

B$’000 B$’000 B$’000 B$’000 

Cost 

At the beginning of the year 681 87 792 41,662 

Additions 206 14 59 7,230 

Reclassification - - - - 

Disposal/written off (1) - (60) (233) 

At the end of the year 886 101 791 48,659 



Depreciation for the year 40 15 138 4,320 

Disposal/written off - - (60) (168) 


Depreciation for prior year 40 14 127 3,710 




The period of lease of the leasehold lands and buildings ranging from 15 to 82 years, expire ranging from 

April 2016 to March 2088. 




11 Property, plant and equipment (continued) 

The Company Freehold Leasehold 

Lands & Lands & Leasehold Office 

Buildings Buildings Improvements Computers Equipment 

B$’000 B$’000 B$’000 B$’000 B$’000 

Cost 

At the beginning of the year 3,175 4,368 5,241 21,610 3,238 

Additions 1,614 43 1,748 1,958 362 

Reclassification - 19 (19) - - 

Disposal/written off - - (59) (9) (99) 



At the beginning of the year 203 1,112 3,592 13,838 2,411 

Depreciation for the year 73 257 675 2,426 332 

Disposal/written off - - - (8) (95) 

At the end of the year 276 1,369 4,267 16,256 2,648 

Depreciation for prior year 60 251 429 2,263 253 


At the beginning of the year 2,972 3,256 1,649 7,772 827 

At the end of the year 4,513 3,061 2,644 7,303 853 

Office Household 

Furniture Furniture & Motor 

and Fittings Equipment Vehicles Total 

B$’000 B$’000 B$’000 B$’000 

Cost 


Additions 135 14 59 5,933 

Reclassification - - - - 

Disposal/written off (1) - (60) (228) 




Depreciation for the year 37 15 119 3,934 

Disposal/written off - - (60) (163) 


Depreciation for prior year 33 14 109 3,412 




The period of lease of the leasehold lands and buildings ranging from 15 to 50 years. 




12 AMOUNT DUE TO SUBSIDIARIES 

The Company 

2008 2007 

B$’000 B$’000 

Amount due to subsidiaries (net) 81,432 124,305 

13 AMOUNT DUE TO RELATED PARTIES 

The Group 

The Company 

2008 2007 2008 2007 

B$’000 B$’000 B$’000 B$’000 

Current accounts 5,899 7,763 5,899 7,763 

Savings accounts 2,083 10,758 2,083 10,758 

Term deposits 29,517 32,093 29,517 32,093 

Others 201 201 - - 

37,700 50,815 37,499 50,614 

14 CURRENT, FIXED, SAVINGS AND OTHER DEPOSITS 

The Group 

The Company 

2008 2007 2008 2007 

B$’000 B$’000 B$’000 B$’000 

Current accounts 216,554 173,297 216,554 173,297 

Saving accounts 700,986 659,094 145,216 134,020 

Term deposits 1,381,983 1,334,270 1,261,452 1,218,430 

2,299,523 2,166,661 1,623,222 1,525,474 

15 OTHER LIABILITIES AND PROVISIONS 

The Group 

The Company 

2008 2007 2008 2007 

B$’000 B$’000 B$’000 B$’000 

Interest payable 9,114 8,832 8,800 9,023 

Accruals 2,683 3,047 1,996 2,436 

Provisions and sundry creditors 19,420 16,428 16,316 14,085 

Advance receipts 4,526 3,616 4,526 3,522 

35,743 31,923 31,638 29,066 




16 INCOME TAX 

The Group 

The Company 

2008 2007 2008 2007 

B$’000 B$’000 B$’000 B$’000 

(a) 

Tax expense 

Income tax expense attributable to 

profit is made up of: 

Current income tax provision - Brunei 8,699 13,461 3,642 8,563 

Deferred taxation (25) (16) - - 

Net 8,674 13,445 3,642 8,563 

The Group 

The Company 

2008 2007 2008 2007 

B$’000 B$’000 B$’000 B$’000 

(b) 

Movement in provision for tax 

Balance at the beginning of the financial year 13,557 8,030 8,649 5,295 

Income tax paid (9,735) (7,934) (5,264) (5,209) 

Current financial year’s tax expense on profit 8,699 13,461 3,642 8,563 

Transfer to deferred taxation (3,300) - (3,300) - 

9,221 13,557 3,727 8,649 

The Group 

The Company 

2008 2007 2008 2007 

B$’000 B$’000 B$’000 B$’000 

(c) 

Deferred taxation 

Balance at the beginning of the year 302 318 240 240 

Transfer from/ (to) current income tax 3,275 (16) 3,300 - 

Balance at the end of the year 3,577 302 3,540 240 

17 PROVISION FOR RETIREMENT BENEFITS 


2008 2007 

B$’000 B$’000 

Balance at the beginning of the year 1,203 753 

Charge for the year 500 450 

Utilised (15) - 

Balance at the end of the year 1,688 1,203 




18 SHARE CAPITAL 

The Group/The Company The Group/The Company 

2008 2007 2008 2007 

’000 ’000 B$’000 B$’000 

(Number of ordinary shares of B$1 each) 

Authorised: 120,000 120,000 120,000 120,000 

Issued and fully paid: 100,000 60,000 100,000 60,000 

On February 25, 2008, the issued share capital was increased to B$100,000,000 by the transfer of $35,000,000 

from statutory reserve and $5,000,000 from retained profits. 

The newly issued shares rank pari passu in all respect with the existing shares of the Company. 

19 STATUTORY RESERVE 

The Group 

The Company 

2008 2007 2008 2007 

B$’000 B$’000 B$’000 B$’000 

Balance at the beginning of the year 41,888 25,838 35,953 23,319 

Transferred to capital (35,000) - (35,000) - 

Transferred from profit and loss statements 18,689 16,050 13,885 12,634 


The transfer from profit and loss statements is to comply with Section 24 of the Brunei Darussalam Banking 

Order 2006 and Section 13 of the Finance Companies Act, Cap. 89. 

20 COMMITMENTS AND CONTINGENCIES 

In the normal course of business, the Company and the Group make various commitments and incur certain 

contingent liabilities with legal recourse to its customers. No material losses are anticipated as a result of 

these transactions. The commitments and contingencies constitute the following: - 


2008 2007 

B$’000 B$’000 

Letter of credit and bills for collection 61,424 55,402 

Guarantees 120,247 120,401 

Acceptances and other obligations 877 790 

Foreign exchange contracts 11,186 4,674 

193,734 181,267 




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 


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 




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. 


Offices, Branches and 

ATM Network 

BAIDURI BANK GROUP 

Postal Address 

Bandar Seri Begawan 

P. O. Box 2220, BSB BS8674, 

Negara Brunei Darussalam 

Kuala Belait 

P. O. Box 1368, Kuala Belait KA1131, 


Seria 

P. O. Box 25, Seria KB1133, 


Website Address 

www.baiduri.com 

E-mail Address 

bank@baiduri.com 

BAIDURI BANK BERHAD - List of Offices/Branches 

Head Office 

Block A, Units 1-4, Kiarong Complex 

Lebuhraya Sultan Hassanal Bolkiah BE1318 

Tel No: (673) 226 8300 

Fax No: (673) 245 5599 

Corporate Communications & Marketing Department 



Tel No: (673) 226 8300 

Fax No: (673) 245 5572 

Card Centre 

Block A, Unit 8, Kiarong Complex 


Tel No: (673) 226 8300 

Fax No: (673) 245 4184 

Customer Helpdesk: (673) 245 4187 

Loan Centre 

Block A, Unit 6, Kiarong Complex 


Tel No: (673) 226 8433 

Fax No: (673) 245 4183 

Wealth Management Centre 

Unit 10, Level 2, Seri Kiulap Complex, 

Kg Kiulap, Bandar Seri Begawan 

Tel No: (673) 223 2153 / 54 

Fax No: (673) 223 2155 

Business Services Centre 

Block B, Units 1-5, Kiarong Complex 


Tel No: (673) 226 8300 

Fax No: (673) 245 5599 

E-Banking Centre 

Block B, Units 1-5, Kiarong Complex 


Tel No: (673) 226 8386 

Fax No: (673) 242 5741 

Customer Helpdesk: (673) 242 5644 

Email: ebanking@baiduri.com 

Prestige Centres 

Yayasan 

G.02, Ground Floor, Block A 

Yayasan Sultan Haji Hassanal Bolkiah Complex 

Bandar Seri Begawan BS8711 

Tel No: (673) 223 3111, 220 8206 

Fax No: (673) 222 1891 

Kiulap 

Unit 10, 1 st Floor 

Seri Kiulap Complex Bandar Seri Begawan BE1518 

Tel No: (673) 223 6905 / 6 / 10 

Fax No: (673) 223 6940 

Beribi 

Unit 1, Ground Floor, Sumbangsih Bahagia 

Kompleks Perindustrian Beribi 

Bandar Seri Begawan BE1118 

Tel No: (673) 242 6800 

Fax No: (673) 245 0877 

Seria 

Unit 10, 1 st Floor, Jalan Sultan Omar Ali, Seria KB2733 

Tel: (673) 322 2450, Ext 213 / 215 

Fax: (673) 322 1070 

Beribi Branch 

Unit 1, Ground Floor, Sumbangsih Bahagia 

Kompleks Perindustrian Beribi 

Bandar Seri Begawan BE1118 

Tel No: (673) 242 6827 

Fax No: (673) 242 6829 

Kiarong Branch 

Ground Floor, Block A, Unit 1, Kiarong Complex 


Tel No: (673) 226 8300 

Fax No: (673) 245 2888 

Kiulap Branch 

Unit 10, Ground & 1st Floor, Seri Kiulap Complex 

Kg Kiulap BE1518 

Tel No: (673) 223 6905 / 6 / 10 

Fax No: (673): 223 6904 

Kuala Belait Branch 

Units 2 & 3, Tang Ching Ying Bldg 

Jalan Sungai, Kuala Belait KA2331 

Tel No: (673) 333 0650 

Fax No: (673) 334 2297 

Muara Town Branch 

Ground Floor, Bangunan Tiga Tingkat 

Pekan Muara BT1128 


Tel No: (673) 277 1700 / 1 

Fax No: (673) 277 1702 

Sengkurong Branch 

Units 1 & 2, Ground Floor, Sengkurong Complex 

Kg Sengkurong A BG1121 

Tel No: (673) 266 3960 

Fax No: (673) 266 3959 

Seria Branch 

Unit 10, Jalan Sultan Omar Ali, Seria 

Tel No: (673) 322 2450 / 438 / 960 / 963 

Fax No: (673) 322 2433 


Offices, Branches and 

ATM Network 

Serusop Branch 

Unit 1, Block A, Komplex Delima Jaya, 

Simpang 62 Jalan Muara, 

Kg Delima Satu BB4713 

Tel No: (673) 234 3288 

Fax No: (673) 234 3285 

SupaSave Gadong Branch 

Units 7 & 8, SupaSave Gadong 

Kg Mata-Mata BE1718 

Tel No: (673) 242 0627 / 29 

Fax No: ((673) 242 0909 

The Mall Branch 

Unit G-30, Ground Floor, The Mall 

Abdul Razak Complex, Gadong BE3519 

Tel No: (673) 242 1498, 242 1398/96 

Fax No: (673) 242 1415 

Tutong Branch 

Unit 1, Ground & 1st Floor 

Tutong Central Mall, 

Kg Petani, Pekan Tutong TA1141 

Tel No: (673) 426 0707 

Fax No: (673) 426 0714 

BAIDURI FINANCE BERHAD 

(a wholly-owned subsidiary of Baiduri Bank) 

Head Office 

Sumbangsih Bahagia, Units 1-3 

Ground and 1 st Floor, Kompleks Perindustrian Beribi 

Highway End, Gadong BE1118 

Tel No: (673) 242 6800 

Fax No: (673) 245 0877 

Kuala Belait 

Unit G20, Ground Floor 

Kompleks Harapan 

Jalan Setia Diraja, Kuala Belait KA3131 

Tel No: (673) 333 0570 

Fax No: (673) 333 0572 

Website Address 

www.baidurifinance.com 

E-mail Address 

baifin@brunet.bn 

Yayasan Branch 

G.02, Ground Floor, Block A 

Yayasan Sultan Haji Hassanal Bolkiah Complex BS8711 

Tel No: (673) 223 3233 

Fax No: (673) 222 1891 

Baiduri Bank Off-site ATM Locations 

Brunei International Airport 

Bunut Post Office 

Centrepoint, Gadong 

Giant Hypermarket, Tasik Rimba 

Grand City Hotel, Batu Bersurat 

Hua Ho Manggis Mall 

Hua Ho Mall, Tanjong Bunut 

Mail Processing Centre, Old Airport Berakas 

RIPAS Hospital 

Seri Q-lap Mall, Kiulap 

Soon Lee Megamart, Kuala Belait 

Soon Lee, Lambak Kanan 

Soon Lee, Sungai Liang 

SupaSave, Mabohai 

SupaSave, Panaga 

Petani Mall, Tutong 


Head Office: 


Lebuhraya Sultan Hassanal Bolkiah BE1318 Brunei Darussalam 

Tel: (673) 226 8300 Fax: (673) 245 5599 

Email: bank@baiduri.com 

www.baiduri.com

Annual Report Laporan Tahunan - Baiduri Bank

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