notes to the consolidated financial statements - Sacombank

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REPoRt oF tHE BoARD oF SUPERVISoRS Taking the responsibilities for monitoring compliance with the laws and regulations set by the State Bank of Vietnam (SBV) across Sacombank’s system to ensure its stable growth, achievement of business objectives and adherence to the laws and banking regulations, based on macro-economic forecasts and the Bank’s performance review, the Board of Supervisors in 2011 performed the following specific action plans: Hold periodic meetings between the Board of Supervisors and the Internal Auditors and the Risk Management team; attend the meetings of the Board of Directors; provide comments on the development and implementation of business plans; perform comprehensive monitoring of the Bank’s operations in various aspects with emphasis on the monitoring and cooperation with the Board of Directors and the Board of Management to achieve the set objectives. In 2011, as a tool of the Board of Supervisors, the Internal Audit system (consisting of the Internal Auditors at the Head Office and the Regional Inspection and Supervision Team) performed audits of 408 transaction offices (100% of the total number of transaction offices), 11 divisions/departments at the Head Office and 3 Subsidiaries (SBA, SBL, SBJ). Periodic and extraordinary cash counts were performed at all transaction offices across the Bank’s system. The controls and internal audit systems of the Bank proved their efficiency in the monitoring process to achieve the goal of prevention and warning of any probable risks. In addition, the Internal Auditors have performed distant supervision of all business units across the Bank’s system, gave timely warnings and identified any violations of the regulations for immediate response and remediation as well as provided guidelines on business operations for different business units. Assessment of the Board of Supervisors on the Bank’s business activities: n Management: The Board of Directors performed their management role well, providing timely support and instructions to the Board of Management in relation to managerial tasks. The Board of Directors also closely coordinated with the Board of Supervisors through inspection and control of the operating activities of the Bank and its subsidiaries. n Operations: The Board of Management made outstanding efforts in 2011, having consistently grasped market developments in a timely manner and strictly implemented the directives of the Board of Directors as well as adhering to the plans of the Board of Directors. These actions resulted in a number of praiseworthy successes in the year in terms of profit before tax, total assets, and business network expansion. The Board of Management also coordinated closely with the Board of Supervisors in monitoring and supervising operating activities, and providing relevant information and data to support the Board of Supervisors’ actions. n Internal controls: The Bank has built and has always been interested in the improvement of a system of internal controls to meet the development needs of the Bank. There was an emphasis on self-checks and self-correction, and appointing Itinerant Directors and Transaction Managers to conduct checks as well. The control system comprises of risk management policies, 35 ANNUAL REPORT 2011 processes and regulations, decentralisation of power, levels of authorisation and IT applications. The tasks of inspection and supervision were improved to attain better results. n Risk management and treatment in Sacombank’s control system. Market risks (i) Foreign exchange risk According to economists, one of the biggest successes of the monetary policy of 2011 lies in the foreign exchange rate policy. With VND deposit rates being maintained high while the applicable ceiling rate for USD deposits being kept low, the foreign exchange rate between USD and VND has been kept reasonably stable after it had been sharply depreciated by 9% at the beginning of the year. However, the foreign exchange rate climbed at certain points in time during the year which was principally due to gold speculation. With the foreign exchange rate being quite stable in 2011 and efficient management of the foreign exchange risks, Sacombank has not been affected severely by the foreign exchange risks. (ii) Interest rate risk In 2011, given the scarcity of raised funds, banks’ race to increase interest rates was intensified vigorously. However, thanks to its policy on floating loan interest rates, Sacombank successfully managed interest rate risks.
Liquidity risk (i) High inflation of the local economy; (ii) The monetary tightening policy; (iii) Interest rate competition among banks Some banks fell into intensified liquidity problem. Liquidity risk represented a significant risk faced by many banks. Sacombank’s internal financial indicators related to liquidity remained under control but at high limits, and needed attention and handling. Some of the indicators were the VND-denominated lending to fund-raising ratio, the quick ratio in VND by day or week. Credit risk As at October 2011, according to the data of the SBV, bad debts of the banking sector rose by 35.6% from 2010 and hit 3.4% of the total lending balance. Sacombank’s bad debt ratio as at 31 December 2011 was 0.56%, which was quite low compared with the average ratio of the banking sector. The low ratio was attributed to the Bank’s credit grant procedures being stringent. The Bad Debt Prevention and Handling Board fulfilled well its advisory and forecasting role and set out solutions for handling bad debts. However, bad debts are forecast to increase highly in early 2012, and require further closer control to be in place. The Internal Audit, as a tool of the Board of Supervisors Results of evaluation of financial statements The Board of Supervisors evaluated the quarterly, semiannual and annual Financial Statements of the Bank in the fiscal year 2011 and agreed to confirm the following results: The financial statements of the Bank for 2011 were prepared in the forms issued along with Decision No. 16/2007/QD- NHNN dated 18 April 2007 of the State Bank of Vietnam on “Financial Reporting Regulations for Credit Institutions” and in accordance with Circular No. 09/2010/TT-BTC dated 15 January 2010 of the Ministry of Finance on “Guidance for disclosure of information on the stock market,” Vietnamese Accounting Standards and prevailing regulations. The data reflected in the financial statements for 2011 are sufficient, timely, clear, accurate, truthful and reasonable. They have been approved by the Audit Committee of Sacombank and independently audited by PricewaterhouseCoopers (Vietnam) Limited. Sacombank’s financial position and indicators are within the limits permitted for banks. THE BOARD OF SUPERVISORS ANNUAL REPORT 2011 36
Page 2: Explanation about the meaning of fi
Page 5 and 6: MAJOR FINANCIAL INDICATORS (in VND
Page 7 and 8: ANNUAL REPORT 2011 4
Page 9 and 10: 9 REGION BRANCH 8 7 3 2 5 1 4 6 TRA
Page 11 and 12: shortcomings of intensive concentra
Page 13: From the left, Mr Dang Van Thanh -
Page 16 and 17: InCoRPoRAtIon AnD DEVELoPMEnt SACOM
Page 18 and 19: HIStoRICAL MILEStonES 21 December 1
Page 20 and 21: 2011 EVEnt HIGHLIGHtS 1. 22 Februar
Page 22 and 23: 5. 7 April 2011 - Ho Chi Minh City
Page 24 and 25: oRGAnIzAtIon CHARt Management and S
Page 26 and 27: IntRoDUCtIon to tHE BoARD oF DIRECt
Page 28 and 29: ACtIVItIES oF tHE BoARD oF DIRECtoR
Page 30 and 31: IntRoDUCtIon to tHE BoARD oF SUPERV
Page 32 and 33: IntRoDUCtIon to tHE BoARD oF MAnAGE
Page 35 and 36: For 20 years, Sacombank has been de
Page 37: In addition, to ensure the highest
Page 41 and 42: and foreign exchange rates were con
Page 43 and 44: Day and Sacombank Plus in associati
Page 45 and 46: Frequent training was provided thro
Page 47 and 48: BÁO CÁO KẾT QUẢ KINH DOANH AN
Page 49 and 50: Criteria Rating Meanings Issue cred
Page 51 and 52: Development orientation of the bank
Page 53 and 54: lending portfolio in accordance wit
Page 55 and 56: on job position/title, and proper a
Page 57 and 58: CORPORATE GOVERNANCE With the aim o
Page 59 and 60: the proper implementation of these
Page 61 and 62: Data Center Launch the virtualisati
Page 63 and 64: OBJECTIVES AND MANAGERIAL RESOLUTIO
Page 65 and 66: asset portfolio with risks with the
Page 67 and 68: n Third: building the business netw
Page 69 and 70: Results for some operational safety
Page 71 and 72: NUMBER OF STB SHARES BY YEAR 208,94
Page 73 and 74: SHAREHOLDING STRUCTURE AT 31 DECEMB
Page 75 and 76: As a large and responsible listed o
Page 77 and 78: Of these, Sacombank focuses special
Page 79 and 80: FOR A BETTER LIFE n Continuing to p
Page 81 and 82: FINANCIAL STATEMENTS Bringing added
Page 83 and 84: CORPORATE INFORMATION Banking Licen
Page 85 and 86: AuDITOR’S REPORT INDEPENDENT AUDI
Page 87 and 88: BALANCE SHEET (continued) B LIABILI
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CASH FLOW STATEMENT (Direct method)
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CONSOLIDATED FINANCIAL STATEMENTS F
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STATEMENT BY MANAGEMENT STATEMENT O
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Opinion In our opinion, the consoli
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CONSOLIDATED INCOME STATEMENT (Cont
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CONSOLIDATED INCOME STATEMENT (Dire
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NOTES TO THE CONSOLIDATED FINANCIAL
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Inter-company balances, transaction
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n Second-time rescheduled debts whi
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Gains or losses from disposal of tr
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2.13 Cash and cash equivalents For
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4 BALANCES WITH THE STATE BANK 31.1
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6 TRADING SECURITIES 31.12.2011 31.
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8 LOANS, ADVANCES AND FINANCE LEASE
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8.7 Analysis by type of business en
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(ii) Included in debt securities is
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Accumulated depreciation At 1 Janua
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15 OTHER ASSETS 31.12.2011 Million
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Denominated in VND 31 December 2010
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The facility financed for a subsidi
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21.1 Payables to customers Included
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Number of shares Ordinary shares Sh
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In accordance with Decree No. 146/2
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28 FEES AND COMMISSION INCOME 2011
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34 GENERAL AND ADMINISTRATIVE EXPEN
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The deferred income tax assets aris
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41 COMMITMENTS UNDER OPERATING LEAS
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44.1.1 Credit risk measurement and
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44.1.4 Collaterals As a common prac
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44.1.5 Credit quality (continued) T
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44.1.6 Concentration of risks of fi
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44.1.6 Concentration of risks of fi
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44.2 Market risk The Group takes on
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44.2.1 Foreign exchange risk (conti
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44.2.2 Interest rate risk (continue
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44.2.3 Price risk The Group is expo
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44.3.1 On-balance sheet items CURRE
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45 FAIR VALUE MEASUREMENT The conso
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4. Dong Anh Transaction Office 55 G
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4. Thua Thien Hue Branch 126 Nguyen
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2. Phan Ri Cua Transaction Office 2
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3. Ong Ta Transaction Office 785-78
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5. Le Trong Tan Transaction Office
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1. My Xuyen Transaction Office 1 Av
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ANNUAL REPORT 2011 174
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SAIGON THUONG TIN COMMERCIAL JOINT
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