Annual Report Laporan Tahunan - Baiduri Bank

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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
Notes to Financial Statements December 31, 2008 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. 32 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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