Assets 2007 - Bank Pembangunan Malaysia Berhad

Transcription

Spurring The Nation’s Growth
Memacu Pembangunan Negara
L a pora n
Ta h u n a n
2007
A n nual
report
www.bpmb.com.my
Bank Pembangunan Malaysia Berhad (16562-K)
Menara Bank Pembangunan
Bandar Wawasan, 1016, Jalan Sultan Ismail
Peti Surat 10788, 50724 Kuala Lumpur
Tel 603 2611 3888
Laporan Tahunan 2007 Annual Report
Rasional Muka Hadapan
Cover Rationale
Sebagai sebuah institusi pembangunan
kewangan yang sedang berkembang,
Bank Pembangunan telah mengambil
pelbagai peluang untuk menjadi sebahagian
daripada pembangunan negara. Dengan
kemahiran dalam bidang Maritim,
Infrastruktur dan Teknologi Tinggi, imej
perkasanya kini menggambarkan komitmen
untuk meningkatkan piawaiannya bagi
memenuhi jangkaan di tahap antarabangsa.
A thriving development financial institution,
Bank Pembangunan has seized many
opportunities in being part of the country’s
development. Having honed its skills in the
areas of Maritime, Infrastructure and High
Technology, its bold image now reflects the
commitment in raising its standard to meet
international expectations.
Rangka Kerja Korporat
Corporate Framework
3
PROFIL KORPORAT
CORPORATE PROFILE
6
MAKLUMAT KORPORAT
CORPORATE INFORMATION
7
STRUKTUR KORPORAT
CORPORATE STRUCTURE
Ulasan Prestasi
Performance Review
8
MAKLUMAT PENTING KEWANGAN
FINANCIAL HIGHLIGHTS
9
RINGKASAN 5 TAHUN
KEWANGAN KUMPULAN
5-YEAR GROUP
FINANCIAL SUMMARY
10
PERTUMBUHAN 5 TAHUN KUMPULAN
5-YEAR GROUP GROWTH
12
KUNCI KIRA-KIRA DIPERMUDAHKAN
SIMPLIFIED GROUP BALANCE SHEETS
14
PRESTASI KEWANGAN
FINANCIAL PERFORMANCE
Kepimpinan
Leadership
16
AHLI-AHLI LEMBAGA PENGARAH
BOARD OF DIRECTORS
18
PROFIL LEMBAGA PENGARAH
PROFILE OF DIRECTORS
26
JAWATANKUASA PENGURUSAN KANAN
SENIOR MANAGEMENT COMMITTEE
Kebertanggungjawaban
Accountability
28
PENYATA TADBIR URUS KORPORAT
STATEMENT OF CORPORATE GOVERNANCE
34
PENYATA KAWALAN DALAMAN
STATEMENT ON INTERNAL CONTROL
36
PENGURUSAN RISIKO
RISK MANAGEMENT
Perspektif
46
PENYATA PRESIDEN/
PENGARAH URUSAN KUMPULAN
Kandungan
Contents
Laporan
Reports
60
STUDY ON MALAYSIAN PORTS
78
STUDY ON OFFSHORE SUPPORT
VESSEL (OSV) IN MALAYSIA
88
STUDY ON ADVANCED
ELECTRONICS INDUSTRY
97
PERISTIWA BERGAMBAR 2007
2007 IN PICTURES
Penyata Kewangan Beraudit
Audited Financial Statements
106
PENYATA KEWANGAN BERAUDIT
AUDITED FINANCIAL STATEMENTS
Perspectives
PRESIDENT/ GROUP MANAGING
DIRECTOR’S STATEMENT
Bank Pembangunan
2
Laporan Tahunan 2007
Profil Korporat
Bank Pembangunan Malaysia Berhad (BPMB)
is wholly owned by Malaysian Government
through the Minister of Finance Inc.
Bank Pembangunan has been mandated
as a development financial institution to
provided medium to long term financing
to the following sectors:
MARITIM
TEKNOLOGI TINGGI
INFRASTRUKTUR
MARITIME
HIGH TECHNOLOGY
INFRASTRUCTURE
3
Bank Pembangunan
Bank Pembangunan Malaysia Berhad
(BPMB) dimiliki sepenuhnya oleh Kerajaan
Malaysia melalui Kementerian Kewangan
DiPerbadankan. Bank Pembangunan di
beri mandat untuk berfungsi sebagai
institusi kewangan pembangunan yang
menyediakan pembiayaan jangka
sederhana dan panjang kepada sektorsektor berikut:
Corporate Profile
Corporate Profile
SHIPPING
SHIPYARD
MARINE RELATED INDUSTRIES
Maritim
Maritime
Profil Korporat
PERKAPALAN
LIMBUNGAN
INDUSTRI BERKAITAN MARIN
Bank Pembangunan
4
AEROANGKASA
BIOTEKNOLOGI
ALAM SEKITAR/ TENAGA BOLEH GUNA SEMULA
ELEKTRIK & ELEKTRONIK
PERKHIDMATAN BERKAITAN PEMBUATAN
PEMBUATAN DAN BAHAN TERMAJU
AEROSPACE
BIOTECHNOLOGY
ENVIRONMENT/ RENEWABLE ENERGY
ELECTRIC & ELECTRONIC
MANUFACTURING RELATED SERVICES
ADVANCED MANUFACTURING & MATERIAL
Teknologi Tinggi
High Technology
–
–
–
–
PELABUHAN
LEBUHRAYA
JALAN RAYA
REL
UTILITI
– TENAGA
– AIR
PEMBANGUNAN KAWASAN
–
–
–
–
PROJEK SOSIAL
PENDIDIKAN
ICT
TENAGA BOLEH GUNA SEMULA
DAN KECEKAPAN TENAGA
– PENGURUSAN SISA
– PEMBENTUNGAN
– PENEBATAN BANJIR
PELANCONGAN
– PELANCONGAN KESIHATAN
– TAMAN TEMA
TRANSPORTATION
–
–
–
–
PORTS
HIGHWAYS
ROADS
RAILS
UTILITIES
– ENERGY
– WATER
AREA DEVELOPMENT
–
–
–
–
SOCIAL PROJECT
EDUCATION
ICT
RENEWABLE ENERGY &
ENERGY EFFICIENCY
– WASTE MANAGEMENT
– SEWERAGE
– FLOOD MITIGATION
TOURISM
– HEALTH TOURISM
– THEME PARKS
Infrastruktur
Infrastructure
PENGANGKUTAN
Bank Pembangunan
5
Sebagai syarikat induk, Bank Pembangunan
memainkan peranan utama dalam
menerajui pembangunan sektor-sektor
strategik ekonomi Malaysia. Fokus utama
adalah kepada menjamin projek-projek
pengembangan pasaran yang kritikal
kepada pembangunan ekonomi negara.
Dengan aset terkumpul berjumlah lebih
RM27 bilion, Kumpulan Bank Pembangunan
berupaya untuk menguruskan pembiayaan
dan keperluan pembangunan perniagaan
usahawan Malaysia daripada permulaan
kepada pengkomersilan dan agihan
antarabangsa.
As the holding company, Bank Pembangunan
plays a key role in spearheading the
growth of Malaysia’s strategic economic
sectors. Its focus is on sustenance of
market expansion projects critical growth
of the national economy. With a combine
asset value of more than RM27 billion,
Bank Pembangunan Group is well
positioned to manage the financing and
business development needs of Malaysian
entrepreneurs from start-up to
commercialization and international
distribution.
Maklumat Korporat
Corporate Information
Pengerusi
Chairman
Tan Sri Dato’ Seri Dr. Hj. Zainul Ariff Hj. Hussain
(Bersara pada 1 Disember 2007/
Retired on 1st December 2007)
Bank Pembangunan
6
Ahli-ahli Lembaga Pengarah
Jawatankuasa Syariah
Board Members
Dato’ Abdul Rahim Mohd. Zin
Syariah Committee
Dato’ Seri Hj. Harussani Hj. Zakaria
Prof. Dr. Abdul Jalil Borhan
Dr. Ridzwan Ahmad
Dr. Miszairi Sitiris
(Bersara pada 31 Ogos 2007/
Retired on 31st August 2007)
Dato’ Tajuddin Atan
(Dilantik pada 1 Disember 2007/
Appointed on 1st December 2007)
Dato’ Abdul Rahim Abu Bakar
Dato’ Othman Jusoh
Dato’ Ab. Halim Mohyiddin
Pn. Haini Hassan
Dr. Mohmad Isa Husain
Datuk Zakiah Hashim
En. Fazlur Rahman Ibrahim
(Bersara pada 31 Disember 2007/
Retired on 31st December 2007)
Tn. Hj. Mohd. Zariff Mohd. Zaman
Setiausaha Syarikat Kumpulan
Group Company Secretary
Pn. Hasmah Razali
Juruaudit
Auditor
KPMG Desa Megat & Co.
Pejabat Berdaftar
Registered Office
Aras 28, Menara Bank Pembangunan
Bandar Wawasan
1016, Jalan Sultan Ismail
Peti Surat 10788
50724 Kuala Lumpur, Malaysia
Laman Web
Website
www.bpmb.com.my
Struktur Korporat
Corporate Structure
Bank Pembangunan
7
Maklumat Penting Kewangan
Financial Highlights
GROUP
BANK
2007
2006
2007
2006
Interest income
1,432
1,256
1,210
1,053
Total income
2,055
1,917
1,344
1,422
Operating profit
825
810
498
666
Profit before taxation
832
441
380
553
Profit after taxation and minority interests
860
361
409
496
28,064
26,780
23,311
22,505
3,230
3,855
1,158
1,848
KEY BALANCE SHEET DATA (RM Million)
Total assets
Total deposits and placements
2,486
1,916
2,284
1,856
Loans, advances and financing
20,154
18,074
17,440
16,148
8
Total liabilities
21,616
21,026
17,788
17,363
Bank Pembangunan
PROFITABILITY (RM Million)
Investment securities
Deposits from customers
5,185
4,839
5,170
4,839
Commitments and contingencies
10,921
11,025
8,265
9,338
Paid-up capital
3,079
3,079
3,079
3,079
Shareholders’ funds
6,257
5,559
5,523
5,142
Infrastructure support fund
606
535
606
535
Government funds
365
378
0
0
96
119
96
119
23.94
10.23
13.27
16.11
2.60
2.60
Return on Equity
14.55
7.27
7.66
11.17
Return on Assets
3.03
1.77
1.66
2.68
Risk Weighted Capital Ratio
22.49
17.66
Core capital
21.76
20.28
3.85
3.80
Deferred income
SHARE INFORMATION per share (sen)
Earnings per share
Gross dividend
FINANCIAL RATIOS
Profitability Ratios (%)
Capital Adequacy Ratio (%)
Liquidity Ratios (times)
Long Term Debt over Equity
4.80
4.78
Ringkasan 5 Tahun Kewangan Kumpulan
5-Year Group Financial Summary
2007
2006
2005
2004
2003
Interest income
1,432
1,256
1,121
1,102
852
Total income
PROFITABILITY (RM Million)
2,055
1,917
1,245
1,148
926
Operating profit
825
810
490
474
446
832
441
243
381
320
Profit after taxation and minority interests
860
361
246
360
261
28,064
26,780
23,014
17,250
14,110
3,230
3,855
2,626
3,343
2,639
2,488
1,916
1,542
1,264
915
20,154
18,074
16,058
12,083
9,865
Total liabilities
21,616
21,026
17,452
13,614
10,889
9
5,185
4,839
4,166
4,270
3,753
Bank Pembangunan
KEY BALANCE SHEET DATA (RM Million)
Total assets
Total deposits and placements
Deposits and customers
10,921
11,025
6,657
8,358
7,709
Paid-up capital
3,079
3,079
2,129
1,600
1,600
Shareholders’ funds
6,257
5,559
4,375
2,934
2,575
606
535
464
127
266
Government funds
365
378
372
379
378
96
119
109
194
1
23.94
10.23
10.77
22.51
16.32
2.60
2.60
3.76
0.00
5.00
Return on Equity
14.55
7.27
6.74
13.07
11.48
Return on Assets
3.03
1.77
1.21
2.43
2.42
4.86
4.78
5.68
5.57
4.14
Deferred income
SHARE INFORMATION per share (sen)
Earnings per share
Gross dividend
FINANCIAL RATIOS
Profitability Ratios (%)
Debt Ratios (times)
Long Term Debt over Equity
Pertumbuhan 5 Tahun Kumpulan
5-Year Group Growth
RM (Million)
2007
2006
2005
2004
2003
926
1,148
320
243
381
441
832
1,245
1,917
2,055
Profit Before Taxation
14,110
17,250
23,014
26,780
Total Income
Bank Pembangunan
10
28,064
Total Assets Employed
2003
2,934
2,575
2004
4,375
2005
6,257
5,559
Shareholders’ Funds
2006
2007
Bank Pembangunan
20,154
18,074
16,058
5,185
4,839
4,166
4,270
3,753
12,083
9,865
Deposits From Customers
11
2007
2006
6.8%
5.0%
8.9%
71.8%
1.8%
1.9%
3.7%
0.1%
10.7%
3.9%
7.2%
67.5%
4.4%
1.7%
4.4%
0.2%
ASSETS
Cash and short term deposits
Deposit and placement with financial institutions
Other assets
Investments in associates
Property, plant and equipment
Deferred tax assets
Kunci Kira-Kira Dipermudahkan
Simplified Group Balance Sheets
Bank Pembangunan
12
Assets 2006
Assets 2007
CASH AND SHORT TERM DEPOSITS
DEPOSIT AND PLACEMENT WITH FINANCIAL INSTITUTIONS
INVESTMENT SECURITIES
LOANS, ADVANCES AND FINANCING
OTHER ASSETS
INVESTMENTS IN ASSOCIATES
PROPERTY, PLANT AND EQUIPMENT
DEFERRED TAX ASSETS
18.5%
1.4%
7.2%
46.1%
11.0%
11.3%
0.7%
3.5%
0.3%
18.1%
1.6%
7.6%
47.3%
11.5%
9.3%
0.7%
3.4%
0.5%
2006
13
Bank Pembangunan
LIABILITIES & EQUITY
Fixed deposits and acceptances
Other liabilities
Redeemable guaranteed notes
Long terms loans
Share capital
Reserves
Minority interests
Infrastructure support & Government funds
Deferred income
2007
Prestasi Kewangan
Financial Performance
The financial statements of the Group for the financial
year (FY) ending 31 December 2007 had taken into
consideration the decision to dispose the entire holding
in Bank Perusahaan Kecil & Sederhana Malaysia Berhad
(“SME Bank”) by 31 March 2008. As at 31 December 2007,
the assets and liabilities of the SME Bank was classified
in the Balance Sheets as “Assets of disposal group/
investment in a subsidiary classified as held for sale”
and its financial performance is presented separately
on the Income Statements as “Discontinued Operation”.
Analysis of Significant
Balance Sheet Movements
14
TOTAL ASSETS
Bank Pembangunan
For the purpose of comparison, the financial performance
and position of the SME Bank have been included in the
Group’s position for the FY 2007.
The Group’s total assets for the FY ending 31 December 2007
stood at RM28.06 billion, an increase of 4.80% or
RM1.28 billion over the previous financial year. The asset
growth for the Group was mainly driven by the increase
in loans, advances and financing and the increase in
the securities portfolio which increased by 11.51% or
RM2.08 billion and 29.73% or RM0.57 billion respectively.
DEPOSITS AND PLACEMENTS WITH FINANCIAL
INSTITUTIONS
The Group’s total deposits and placements for the FY
ending 31 December 2007 decreased by 16.21% or
RM0.62 billion. This was primarily due to the shift in the
investment of the excess short-term funds to
longer-term securities, particularly in high-rated
corporate bonds and private debt securities.
INVESTMENT IN SECURITIES
The investment in securities for the FY ending
31 December 2007 grew by 29.73% to RM2.49 billion
from RM1.92 billion in the previous year. During the
year, the Group’s portfolio in Private Debt securities
increased by 29.21% or RM495.42 million. The Group
had also increased its investments in Cagamas Bonds by
more than two folds from RM47.58 million in FY 2006
to RM96.83 million for the FY ending 31 December 2007.
Investments in quoted and unquoted shares for the
FY ending 31 December 2007 had a growth of 19.74%
or RM24.44 million over that of FY 2006.
The Group’s total loans, advances and financing
grew by 11.51% or RM2.08 billion for the FY ending
31 December 2007. The Group’s lending direction
continued to be focused on its main principal activity
and during the year, a total of RM6.15 billion of loans
were disbursed from the two banks within the Group,
namely, Bank Pembangunan and SME Bank.
For the FY ending 31 December 2007, Bank Pembangunan,
the holding company and the major contributor to
the performance of the Group, had recorded a growth
of 6.95% or a total loan disbursement of up to
RM4.29 billion as compared to RM4.01 billion for
FY 2006. This was contributed by disbursement of
loans to the Maritime and High-Technology sectors,
which recorded a substantial growth of 507.85% and
290.14% or by an amount of RM1.13 billion and
RM0.30 billion respectively, however, disbursements
for Infrastructure project financing during the year
declined by 31.32%.
FIXED DEPOSITS AND ACCEPTANCES
The Group’s fixed deposits and acceptances grew by
7.14% for the FY ending 31 December 2007 to
RM5.18 billion. The growth was part of the strategy
adopted to provide the necessary liquidity for loan
disbursements pending draw-down from other sources
of long-term funding and the issuance of notes under
the existing MTN Programme.
LONG-TERM LOANS
NON-INTEREST INCOME
Long-term loans increased marginally by 2.08% or
RM0.26 billion for the Group for the FY ending
31 December 2007. The domestic funding increased as
a result of the draw-down from the New Ship Financing
Facility, the Special Tourism Fund (“Tabung Khas
Pelancongan”), Fund for the 9th Malaysian Plan projects
and the “Tabung Pembangunan Pengangkutan Awam”,
all of which are supported or funded by the Government.
Non-interest income for the Group had decreased
by 5.66% or RM37.36 million for the FY ending
31 December 2007 as compared to FY 2006. (In 2006,
Bank Pembangunan received a compensation sum of
RM243.16 million from the Government due to loan
written off exercise by the SME Bank). This was
achievable due to the increases in the income from
charter hire, demurrage and freight arising from the
operations of Global Maritime Ventures Berhad (‘GMVB’).
The income from these activities was RM165.55 million,
contributing up to 26.57% to the total non-interest
income of the Group for the FY ending 31 December 2007.
The Long-term funding from foreign sources for the
FY ending 31 December 2007 had decreased by 14.14%
or RM538.33 million due to loan repayments to the
Japan Bank for International Cooperation (JBIC) and
the Export Credit Agency (ECA).
The increase in net profit by 138.06% to RM859.76 million
for the FY ending 31 December 2007 had contributed
to the increase in the reserves for the Group by 28.15%
to RM3.18 billion. This had a direct impact on the
Shareholders’ Fund for the Group, which improved by
12.56% from RM5.56 billion to RM6.26 billion for the
FY ending 31 December 2007.
The overhead expenses for the Group rose by 6.40% or
RM24.18 million for the FY ending 31 December 2007.
Personnel cost for the Group increased by 16.49% or
RM20.22 million due to the annual salary increment
and higher number of staff, particularly from SME Bank,
in their effort to improve its delivery system to the
public. The general administration, marketing and
other establishment cost for the year under review for
the Group also increased at a moderate rate of 1.55%
or RM3.96 million.
COMMITMENTS AND CONTINGENCIES
The contingent liabilities, arising mainly from secured
guarantee given to third parties on behalf of borrowers
and from other commitments, had decreased by 0.94% or
The commitments for future disbursement of loans for
the Group for the FY ending 31 December 2007 also
decreased, by 5.79% or RM0.59 billion. This was
mainly contributed by the loan disbursed during the
year and several withdrawals of commitments that
were approved earlier.
LOAN AND FINANCING LOSS AND ALLOWANCE
For the year under review, the Group’s total loans and
financing loss and provision decreased by 79.01%
from RM471.86 million in FY 2006 to RM99.05 million.
The reduction was mainly due to minimal loan loss
provisioning made by SME Bank in FY 2007 after the
major write off exercise made in FY 2006.
TAX EXPENSES AND ZAKAT
INTEREST INCOME
The tax expense for the FY ending 31 December 2007
for the Group had decreased by 138.99% or RM111.19
million. The main reason for this decline was the
overprovision for taxation of up to RM63.82 million
for Bank Pembangunan in prior years.
Interest income for the Group grew by 14.01% or
The Group’s core activity in loan financing was the main
contributor to this income, providing RM1.22 billion
or 85.27% of the total interest income for the year.
In addition to this, Bank Pembangunan had obtained
approval for tax exemption on the net income arising
from its infrastructure government projects
commencing from the year of assessment 2000 to
year of assessment 2009.
Analysis of the Income Statement
Interest income earned from treasury operations and
investment in securities for the FY ending 31 December 2007
had contributed RM101.67 million and RM109.29 million,
respectively. These operations together contributed
14.73% to the total interest income for the Group.
15
Bank Pembangunan
SHAREHOLDERS’ FUND
OVERHEAD EXPENSES
Ahli-ahli Lembaga Pengarah
Board of Directors
Bank Pembangunan
16
(Dari kiri/From left)
Dr. Mohmad Isa Hussain
Pengarah Bukan Bebas Bukan Eksekutif
Non-Independent/Non-Executive Director
Pengarah Bebas Bukan Eksekutif
Independent/Non-Executive Director
Datuk Zakiah Hashim
Presiden/Pengarah Urusan Kumpulan
President/Group Managing Director
Pn. Haini Hassan
Tn. Hj. Mohd. Zarif Mohd. Zaman
17
Bank Pembangunan
(Dari kiri/From left)
Profil Lembaga Pengarah
Profile of Directors
Dato’ Tajuddin Atan was appointed to the Board on December 1, 2007. He graduated with a Bachelor of Science (Agribusiness)
from Universiti Putra Malaysia and later obtained Master in Business Administration, Ohio University and awarded the
Beta Gamma Sigma (MBA) in recognition of high scholastic achievement. He was attached to Bumiputra Commerce Bank
Berhad for 16 years in various positions including a stint as the Treasurer/ Assistant General Manager managing the BCB
New York branch. His last designation in BCB was Senior Vice President, Treasury Division. Dato’ Tajuddin commenced his
career in the corporate management sector in year 2000 and was attached to a few public listed companies, most
notably as the Managing Director of Chase Perdana Berhad and Advisor to Sitt Tatt Berhad for three years until
September 2004. He was formerly the General Manager/Chief Executive Officer of Bank Simpanan Nasional from 2004
to 2007. Currently he is the Chairman Global Maritime Ventures Berhad, Global Carriers Berhad and Pembangunan Ekuiti
Sdn. Bhd. He is also the Chairman of the Association for Development Finance Institution of Malaysia (ADFIM) and is a
member of the Board of Amanah Ikhtiar Malaysia, a private trust organization that was established with the objective
of reducing poverty in Malaysia. On July 14, 2008, he was also appointed as a member of the Board of Bursa Malaysia.
Dato’ Tajuddin Atan dilantik
menjadi Lembaga Pengarah
pada 1 Disember 2007.
Beliau berkelulusan Ijazah
Sarjana Muda Sains
(Perniagaan Tani) dari
Universiti Putra Malaysia
dan Sarjana Pentadbiran
Perniagaan dari Ohio
University dan telah
dianugerahkan Beta Gamma
Sigma sebagai mengiktiraf
kecemerlangan pencapaian
akademik beliau. Beliau pernah
berkhidmat di Bank Bumiputra
Commerce Berhad
selama 16 tahun
dalam pelbagai
kapasiti
jawatan
Bank Pembangunan
18
termasuk Bendahari/Penolong Pengurus
Besar bagi menguruskan cawangan BCB
di New York. Jawatan terakhir beliau di
BCB ada Timbalan Presiden Kanan,
Perbendaharaan. Dato’ Tajuddin telah
berkecimpung dalam sektor pengurusan
korporat dalam tahun 2000 dan telah
berkhidmat di beberapa syarikat senaraian
awam seperti Pengarah Urusan Chase
Perdana Berhad dan Penasihat kepada Sitt
Tatt Berhad selama tiga tahun sehingga
September 2004. Beliau telah dilantik
sebagai Pengurus Besar/ Ketua Pegawai
Eksekutif di Bank Simpanan Nasional dari
2004 hingga 2007. Kini beliau juga adalah
Pengerusi di Global Maritime Venture
Berhad, Global Carriers Berhad dan
Pembangunan Ekuiti Sdn. Bhd. Beliau
juga Pengerusi Persatuan Institusiinstitusi Kewangan Pembangunan
Malaysia (ADFIM) dan Ahli Lembaga
Pengarah Amanah Ikhtiar Malaysia,
sebuah organisasi amanah swasta yang
ditubuhkan bertujuan untuk
mengurangkan kadar kemiskinan di
Malaysia. Beliau juga dilantik menjadi
Ahli Lembaga Pengarah Bursa
Malaysia pada 14 Julai 2008.
He was appointed to the Board on February 6, 2004. He holds a
Bachelor of Economics (Hons) from University of Malaya and MBA
(Finance) from University of Oregon, USA. He currently serves as the
Chairman at TH Technologies Sdn. Bhd. He was previously Chief
Executive Officer at Perbadanan Tabung Pendidikan Tinggi Nasional
(PTPTN) from 2004 to 2006. He has served the Ministry of Finance in
various capacities from 1972 until his retirement in June 2004. He was
formerly the Group Chief Executive of Malaysian Kuwaiti Investment
Co. Sdn. Bhd. from 1995 to 1998 and also served as Executive Director
of Asian Development Bank from August 2000 to July 2003. He has also
acted as a leader to the Malaysian Delegation in numerous finance
meetings from 1986 to 1999 and in loan negotiations with
domestic and international financial institutions and
investment bankers from 1996 to 2005.
bersara pada bulan Jun 2004. Beliau
juga pernah menyandang jawatan Ketua
Eksekutif Kumpulan, Malaysian Kuwaiti
Investment Co. Sdn. Bhd. dari tahun
1995 hingga 1998 dan juga sebagai
Pengarah Eksekutif, Bank Pembangunan
Asia dari Ogos 2000 hingga Julai 2003.
Beliau juga pernah menjadi ketua
delegasi Malaysia dalam pelbagai
mesyuarat kewangan dari tahun 1986
hingga 1999 serta rundingan pinjaman
dalam negeri dan institut kewangan
antarabangsa dan pegawai-pegawai
bank pelaburan dari 1996 hingga 2005.
19
Bank Pembangunan
Beliau dilantik sebagai Ahli Lembaga
Pengarah pada 6 Februari 2004.
Berkelulusan Ijazah Sarjana Muda
Ekonomi (Kepujian) dari Universiti
Malaya dan Sarjana Pengurusan
Perniagaan (Kewangan) dari University
of Oregon, USA. Kini beliau berkhidmat
sebagai Pengerusi TH Technologies
Sdn. Bhd. Sebelum ini beliau adalah
Ketua Pegawai Eksekutif di Perbadanan
Tabung Pendidikan Tinggi Nasional
(PTPTN) dari tahun 2004 hingga 2006.
Beliau pernah berkhidmat dengan
Kementerian Kewangan dalam pelbagai
kapasiti dari tahun 1972 hingga beliau
Pengarah Urusan di MMC Engineering
Group Bhd. dari tahun 1991 hingga
1995. Beliau pernah menjawat pelbagai
jawatan penting di Malaysia Mining
Corporation Berhad dari tahun 1983
hingga 1991 seperti Pengurus Besar
Pembangunan Perniagaan dan Ketua
Jurutera Elektrikal. Sebelum itu, beliau
pernah berkhidmat dalam pelbagai
kapasiti di Lembaga Letrik Negara dari
tahun 1969 hingga 1979 dan juga
sebagai Jurutera Elektrik Kanan Kawasan
di Pernas Charter Management
Sdn. Bhd. dari tahun 1979 hingga 1982.
Dato’ Abdul Rahim Abu Bakar was appointed to the Board on December 1, 2003. He
holds a Bachelor of Science (Hons) in Electrical Engineering from Brighton College of
Technology, UK (1969). He is a member of the Institute of Engineers Malaysia,
Professional Engineer Malaysia and holds the Electrical Engineer Certificate of
Competency Grade 1. He was formerly the Vice President of PETRONAS,
heading the Petrochemical Business from 1999 to 2002; Managing Director of
PETRONAS Gas Bhd. from 1995 to 1999; Managing Director of MMC
Engineering Group Berhad from 1991 to 1995 and had held several other key
positions in Malaysian Mining Corporation Berhad from 1983 to 1991 which
includes the General Manager, Business Development and Chief Electrical
Engineer. Prior to that, he has served in various capacities in the National
Electricity Board from 1969 to 1979 and also as a Senior Area Electrical
Engineer at Pernas Charter Management Sdn. Bhd. from 1979 to 1982.
Dato’ Abdul Rahim Bakar telah dilantik
menjadi Ahli Lembaga Pengarah pada
1 Disember 2003. Beliau memiliki Ijazah
Sarjana Muda Sains (Kepujian)
Kejuruteraan Elektrik dari Brighton
College of Technology, UK (1969). Beliau
merupakan ahli Institut Jurutera
Malaysia, Jurutera Profesional Malaysia
dan memiliki Sijil Kemahiran
Kejuruteraan Elektrik Gred 1. Beliau
sebelum ini merupakan Naib Presiden di
PETRONAS menerajui Perniagaan
Petrokimia dari tahun 1999 hingga
2002; Pengarah Urusan di PETRONAS
Gas Bhd. dari tahun 1995 hingga 1999;
Bank Pembangunan
20
Jawatankuasa Pendidikan di Pertubuhan
Akauntan Antarabangsa (IFAC) dari
tahun 2001 hingga 2005. Selain itu,
beliau juga merupakan Ahli Lembaga
Pengarah di beberapa buah organisasi
seperti Digi.Com Berhad, HeiTech
Padu Berhad, Arab-Malaysian
Corporation Berhad, Utusan
Malaysia (Melayu) Berhad,
MCM Technologies Berhad,
Kumpulan Perangsang
Selangor Berhad, Idris
Hydraulic (Malaysia) Bhd,
Amway (Malaysia)
Holdings Berhad, Idaman
Unggul Berhad dan KNM
Group Berhad.
21
Bank Pembangunan
Dato’ Ab. Halim Mohyiddin mula
dilantik sebagai Ahli Lembaga Pengarah
pada 29 Julai 2004. Beliau memiliki
Ijazah Sarjana Muda Ekonomi
(Perakaunan) dari Universiti Malaya dan
Ijazah Sarjana Pengurusan Perniagaan
dari University of Alberta, Kanada.
Pernah bertugas sebagai Pensyarah di
Universiti Kebangsaan Malaysia dari
tahun 1973 hingga 1978. Beliau
menyertai Messrs Peat Marwick Mitchell
(sekarang dikenali sebagai KPMG) pada
tahun 1977 dan menjadi rakan kongsi
pada tahun 1985. Sebelum bersara pada
1 Oktober 2001, beliau merupakan
rakan kongsi yang bertanggungjawab
menguruskan Bahagian Perkhidmatan
Penasihat Kewangan dan Insurans. Kini
beliau merupakan Presiden Institut
Akauntan Awam Berdaftar Malaysia
(MICPA) dan Pengerusi Jawatankuasa
Pendidikan dan Latihan di institut
tersebut. Beliau juga merupakan ahli
majlis Institut Akauntan Malaysia (MIA)
dan Felo di Institut Percukaian Malaysia.
Beliau turut berkhidmat sebagai Ahli
Dato’ Ab. Halim Mohyiddin was appointed to the Board on July 29, 2004. He holds a Bachelor of Economics in
(Accounting) from University of Malaya and Masters in Business Administration from University of Alberta, Canada.
He was a Lecturer at Universiti Kebangsaan Malaysia from 1973 to 1978. He joined Messrs Peat Marwick Mitchell (now
known as KPMG) in 1977 and was admitted as a Partner in 1985. Prior to his retirement on October 1, 2001, he was
the Partner in charge of the Assurance and Financial Advisory Services Division. He is currently the President of the
Malaysian Institute of Certified Public Accountants (MICPA) and the Chairman of the Education and Training
Committee of the institute. He is also a council member of the Malaysian Institute of Accountants (MIA) and a Fellow
of the Malaysian Institute of Taxation. He served as a member of Education Committee of the International Federation
of Accountants (IFAC) from 2001 to 2005. He also sits on the boards of Digi.Com Berhad; HeiTech Padu Berhad; ArabMalaysian Corporation Berhad; Utusan Melayu (Malaysia) Berhad; MCM Technologies Berhad; Kumpulan Perangsang
Selangor Berhad; Idris Hydraulic (Malaysia) Bhd.; Amway (Malaysia) Holdings Berhad; Idaman Unggul Berhad and KNM
Group Berhad.
Datuk Zakiah Hashim telah dilantik
1 Oktober 2005. Beliau adalah graduan
dari Universiti Malaya pada tahun 1971
dan memiliki Ijazah Sarjana Muda
Sastera (Kepujian). Mula berkhidmat
dalam Perkhidmatan Awam
Malaysia pada 1971 dan telah
berkhidmat dalam pelbagai
kapasiti termasuk Timbalan Ketua
Setiausaha, Kementerian
Pembangunan Usahawan (kini
dikenali sebagai Kementerian
Pembangunan Usahawan dan
Koperasi) dari tahun 1996 hingga
2000, Pendaftar Pertubuhan,
Kementerian Hal Ehwal Dalam
Negeri dari tahun 1982
hingga 1996; Ketua
Penolong Setiausaha
(Penerbitan dan
Penapisan Filem),
Kementerian Hal
Datuk Zakiah Hashim, was appointed to the Board on October 1, 2005. She graduated from University of Malaya with
a Bachelor of Arts (Hons) in 1971. She joined the Malaysian Civil Service in 1971 and has served in various capacities
including Deputy Secretary General, Ministry of Entrepreneur Development (now known as Ministry of Entrepreneur
and Co-operative Development) from 1996 to 2000; Registrar of Societies, Ministry of Home Affairs from 1982 to
1996; Principal Assistant Secretary (Publications and Film Censorship), Ministry of Home Affairs from 1975 to 1982
and Assistant Secretary at the Ministry of Health from 1971 to 1975. She was promoted to the post of Secretary
General, Ministry of Entrepreneur and Co-operative Development (MECD) in December 2000 and retired from the
Malaysian civil service on November 8, 2004. She is also a Board Member of UDA Holdings Sdn. Bhd,; UNIKL Sdn. Bhd.
and a Council Member of UNIKL. She was appointed as Advisor (a non-remunerative position) to GALERIA MECD
(a display, promotion and marketing centre for SME products) in October 2005 by the Minister of Entrepreneur and
Co-operative Development. In April 2006, she was appointed as the Chairman of the Board of Trustees, Bangunan
Puspanitapuri, PUSPANITA.
Bank Pembangunan
22
Datuk Zakiah Hashim
Ehwal Dalam Negeri dari tahun 1975
hingga 1982, dan Penolong Setiausaha
di Kementerian Kesihatan dari tahun
1971 hingga 1975. Beliau kemudian
telah dinaikkan pangkat menjadi Ketua
Setiausaha, Kementerian Pembangunan
Usahawan dan Koperasi (MECD) pada
bulan Disember 2000 dan bersara dari
perkhidmatan awam pada 8 November
2004. Beliau adalah Ahli Lembaga
Pengarah UDA Holdings Sdn. Bhd.;
UNIKL Sdn. Bhd dan Ahli Majlis
Universiti Kuala Lumpur (UNIKL). Beliau
turut dilantik sebagai Penasihat kepada
Galeria MECD (pusat pameran, promosi
dan pasaran produk PKS) pada Oktober
2005 oleh Menteri Pembangunan
Usahawan dan Koperasi. Pada April
2006, beliau telah dilantik sebagai
Pengerusi Lembaga Pemegang Amanah,
Bangunan Puspanitapuri, PUSPANITA.
Penolong Pendaftar Kanan, Mahkamah
Tinggi Malaya dari 1988 hingga 1990;
Penolong Pegawai Insolvensi, Jabatan
Insolvensi 1992 hingga 1994; Hakim
Mahkamah Sesyen Kuala Lumpur dari
1997 hingga 1999; Timbalan Pengerusi
Tribunal Tuntutan Pembeli Rumah dari
2003 – 2006. Kini beliau adalah
Timbalan Peguam Cara Perbendaharaan,
Kementerian Kewangan yang disandang
sejak Ogos 2006.
Puan Haini Hassan, was appointed to the Board on March 13, 2007 as a
Non-Independent Non-Executive Director. She holds LL-B (Malaya) 1984 and LL-B
(London) 1991. Prior to joining Bank Pembangunan’s Board, she was a Magistrate in
Muar, Johor from 1984 to 1987; Assistant Director, Legal Aid Bureau (Johore) from
1987 to 1988; Senior Assistant Registrar, High Court Malaya from 1988 to 1990;
Deputy Official Assignee, Official Assignee Department from 1992 to 1994; Deputy
Registrar, Federal Court Malaysia from 1994 to 1997; Session Court Judge, Kuala
Lumpur from 1997 to 1999; Legal Adviser, Ministry of Defence from 2000 to 2003;
Deputy Chairman Homebuyers Tribunal from 2003 to 2006 and now the Deputy
Treasury Solicitor, Minitsry of Finance, a position she held since August 2006.
Puan Haini Hassan dilantik sebagai
Lembaga Pengarah pada 13 Mac 2007
sebagai Pengarah Bukan Bebas Bukan
Eksekutif. Beliau berkelulusan LLB(Malaya) 1984 dan LLB-M (London)
1991. Sebelum menyertai Lembaga
Pengarah Bank Pembangunan, beliau
merupakan Magistret di Muar, Johor
dari 1984 hingga 1987; Penolong
Pengarah Biro Bantuan Undang-undang
(Johor) dari 1987 hingga 1988;
Bank Pembangunan
23
Puan Haini Hassan
Dr. Mohmad Isa Husain dilantik menjadi
Ahli Lembaga Pengarah pada 1 Oktober
2005. Beliau berkelulusan Sarjana Muda
Ekonomi (Kepujian) Statistik Gunaan
dari Universiti Malaya. Kini beliau
adalah Timbalan Setiausaha, Bahagian
Pelaburan dan Penswastaan,
Kementerian Kewangan Malaysia
(Diperbadankan). Beliau memegang
Ijazah Kedoktoran dalam bidang
Kewangan dari Universiti Putra
Malaysia; Ijazah Sarjana Pengurusan
Perniagaan (Kewangan) dari Universiti
Kebangsaan Malaysia dan Diploma
Lepasan Ijazah Pengurusan Awam dari
Institut Tadbiran Awam Negara (INTAN),
Kuala Lumpur. Beliau pernah
berkhidmat dalam pelbagai kapasiti
jawatan semasa menjawat jawatan
lantikan kerajaan seperti Penolong
Pengarah Kanan Bahagian Belanjawan,
Kementerian Kewangan Malaysia dari
April 1995 hingga Mei 2000; Penolong
Setiausaha, Bahagian Pengurusan
Perolehan, Kementerian Kewangan
Malaysia dari Mei 1990 hingga April
1995; Penolong Pengarah, Unit
Perancangan Ekonomi Negeri Pahang
(SEPU) dari Mac 1985 hingga Jun 1998;
Penolong Pengarah, Unit Penyelarasan
Perlaksanaan Jabatan Perdana Menteri
dari Januari 1983 hingga Mac 1985.
Beliau juga adalah Ahli Lembaga Pengarah
di Professional Services Corporation
Sdn. Bhd., PSDC International Sdn. Bhd.,
Perbadanan Kemajuan Ekonomi Negeri
Kedah, Prokhas Sdn. Bhd. dan Pelaburan
Hartanah Bumiputera Bhd. Beliau telah
dilantik menjadi Ahli Lembaga Pengarah
EXIM Bank pada 2 Mei 2008.
Dr. Mohmad Isa Hussain, was appointed to the Board on October 1, 2005. A
graduate form University of Malaya in Bachelor of Economics (Hons) majoring
in Applied Statistics. Currently, he is the Deputy Secretary, Investment and
Privatization Division, Ministry of Finance (Inc.). He holds a PhD in Finance
from Universiti Putra Malaysia; a Master of Business Administration in
Finance from Universiti Kebangsaan Malaysia and a postgraduate Diploma in
Public Management from National Public Administration Institute (INTAN),
Kuala Lumpur. He has also served in various capacities on government
appointed positions in the Ministry of Finance (Inc.) including as Senior
Assistant Director of Budget Division from April 1995 to May 2000; Assistant
Secretary, Procurement Management Division from May 1990 to April 1995;
Assistant Director, Pahang State Economics Planning Unit (SEPU) from
March 1985 to June 1988; Assistant Director, Implementation
Coordination Unit (ICU), Prime Minister’s Department
from January 1983 to March 1985. He also sits on the
board of Professional Service Corporation Sdn. Bhd.;
Kedah State Economics Development Corporation;
PSDC International Sdn. Bhd.; Prokhas Sdn. Bhd. and
Pelaburan Hartanah Bumiputera Bhd. He was
appointed as member of the Board of EXIM Bank
on May 2, 2008.
Bank Pembangunan
24
Dr. Mohmad Isa Hussain
Tn. Hj. Zarif Mohd. Zaman
kerajaan kepada Persatuan Negaranegara Pengeluar Bijih Timah sebagai
Pakar Ekonomi dari Ogos 1999 hinga
Mac 2001; Pengarah, Seksyen Industri
dan Perkhidmatan, Unit Perancang
Ekonomi dari April 2001 hingga Ogos
2004; Pengarah Kanan Seksyen
Penswastaan, Unit Perancang
Ekonomi dari Ogos 2004
hingga Jun 2006; dan
jawatan terakhir beliau
dalam kerajaan adalah
Timbalan Ketua Pengarah
(Sektoral), Unit Perancang
Ekonomi, Jabatan Perdana
Menteri yang disandang
dari Jun 2006 hingga
Disember 2006.
25
Bank Pembangunan
Beliau berkelulusan Ijazah Sarjana Muda
Sains Kemasyarakatan (Ekonomi) dari
Universiti Sains Malaysia. Beliau bersara
dari perkhidmatan kerajaan pada
24 Disember 2006 dan telah dilantik
13 Mac 2007. Sebelum menyertai Bank
Pembangunan, beliau pernah
memegang berbagai jawatan dalam
perkhidmatan kerajaan sebagai
Penolong Setiausaha, Bahagian
Petroleum, Kementerian Perusahaan
Utama dari Mac 1974 hingga November
1974; Penolong Setiausaha, Unit
Pembangunan Petroleum, Jabatan
Perdana Menteri dari Disember 1974
hingga April 1977; Ketua Penolong
Setiausaha Bahagian Pembangunan
Galian, Kementerian Perusahaan Utama
dari April 1977 hingga Disember 1994.
Pernah dipinjamkan dari perkhidmatan
He is a Bachelor of Social Science (Economics) Degree Holder from Universiti Sains Malaysia. He retired from the
Government service on December 24, 2006 and appointed to the board on March 13, 2007. Prior to joining Bank
Pembangunan, he held various position in the Government service as Assistant Secretary, Petroleum Division, Ministry
of Primary Industries from March 1974 to November 1974; Assistant Secretary, Petroleum Development Unit, Prime
Ministers Department from December 1974 to April 1977; Principal Assistant Secretary, Minerals Development
Division, Ministry of Primary Industries from April 1977 to December 1994; seconded from Government service as
Economist at Association of Tin Producing Countries from January 1995 to July 1999; Director, Energy Section,
Economic Planning Unit from August 1999 to March 2001; Senior Director, Industries and Services Section, Economic
Planning Unit from April 2001 to August 2004; Senior Director, Privatization Section, Economic Planning Unit from
August 2004 to June 2006 and his last position in the Government service was Deputy Director General (Sectoral),
Economic Planning Unit, Prime Minister’s Department, a position he held from June 2006 till December 2006.
Jawatankuasa
Pengurusan Kanan
Senior Management Committee
Bank Pembangunan
26
Jamaluddin Nor Mohamad
Ketua Pegawai Operasi
Chief Operating Officer
(Dari kanan/From right)
Kebertanggungjawaban
Accountability
Penyata Tadbir Urus Korporat
Statement of Corporate Governance
The Board of Directors of Bank Pembangunan Malaysia Berhad recognises the importance of the principles of Corporate
Governance and subscribes to Bank Negara Malaysia’s Guidelines on Corporate Governance Standards on Directorship
for Development Financial Institutions i.e. BNM/DFI/GP4 (“GP4”) in achieving an optimal governance framework and
maximising the shareholder value of the Bank.
A.
BOARD OF DIRECTORS
The Board is responsible to ensure the effectiveness of the Bank’s operations. This includes the responsibility for
determining the Bank’s overall strategic direction, approval of performance targets, monitoring of management
achievements, providing overall policy guidance and ensuring that policies and procedures for internal control
system and succession planning are in place.
Bank Pembangunan
28
The Board consists of 8 Directors – 1 Executive Director who is the Bank’s President/Group Managing Director, 2
Non-Independent Non-Executive Directors and 5 Independent Non-Executive Directors. All Non-Executive
Directors are persons of calibre and credibility to exercise independent judgement to the Board. Their role is to
ensure that any decision of the Board is deliberated fully and objectively with regard to the long-term objectives
of the Bank.
The diversity of the Directors’ background from the fields of management, banking, finance, legal, accounting,
economics and their experience accumulated while serving both in private and government sectors, brings to
the Board the necessary range of expertise and experience required by the Board to effectively perform its
functions.
The appointment of the Chairman and all the Directors are in accordance to GP4 and the Bank’s Articles of Association.
The Board of Directors meets at least once a month to discuss and monitor amongst others, the overall conduct
and performance of the Bank’s business, including matters relating to financial, policies, strategies, performance
and resources. For the year 2007, the Board met 15 times. The record of attendance by Directors at the Board
Meetings for 2007 is as follows:
NAME OF DIRECTOR
Tan Sri Dato’ Seri Dr. Haji Zainul Ariff bin Haji Hussain (Chairman)
NO. OF MEETINGS ATTENDED
14/14*
(Resigned on 1 December 2007)
Datuk Abdul Rahim bin Mohd Zin (President/Group Managing Director)
10/10*
(Resigned on 31 August 2007)
Dato’ Abdul Rahim bin Abu Bakar
13/15
Dato’ Othman bin Jusoh
12/15
Dato’ Ab. Halim bin Mohyiddin
14/15
Datuk Zakiah binti Hashim
15/15
Dr. Mohmad Isa bin Hussain
13/15
Puan Haini Hassan
11/12*
(Appointed on 13 March 2007)
Tuan Haji Mohd Zarif bin Mohd Zaman
10/12*
(Appointed on 13 March 2007)
Encik Fazlur Rahman Ebrahim
9/9*
(Appointed on 27 June 2007 and resigned on 31 December 2007)
Dato’ Tajuddin bin Atan (President/Group Managing Director)
(Appointed on 1 December 2007)
* Reflects the number of meetings attended during the time the Director held office.
1/1*
B.
SUPPLY OF INFORMATION
Directors are provided with notices and Board papers prior to Board Meetings to give Directors time to deliberate
on issues raised at meetings.
All Directors have direct access to the services of the Company Secretary and to the Senior Management.
Independent professional advice is also made available to Directors in furtherance of their duties in the event
such services are required.
C.
TRAINING OF DIRECTORS
It is the Bank’s practice that each new Director is given materials and briefing on the Bank’s history, operations
and financial performance to enable them to have first hand understanding of the Bank’s operations.
The members of the Board keep abreast with developments in the banking industry by attending conferences
and seminars held in Malaysia and abroad.
The Bank also encourages Directors to attend talks, training programmes and seminars to update themselves on
new developments in the business environment.
COMMITTEES
There are four Board Committees established to assist the Board in discharging of its duties and responsibilities,
namely the Audit and Examination Committee, Nominating Committee, Remuneration Committee and Risk
Management Committee.
Audit and Examination Committee
1.
Objective
The objective of the Audit and Examination Committee (AEC) is to review the financial condition of the Bank
and its subsidiaries, its internal controls, performance and findings of the Internal Auditors, and to recommend
appropriate remedial action regularly.
2.
Functions and Responsibilities
The functions and responsibilities of the AEC are as follows:
•
Recommend to the Board on the appointment of External Auditors, the fee and other matters pertaining
to the resignation or termination or change of External Auditors.
•
Review with External Auditors:
•
(a)
Their audit plan.
(b)
Their evaluation of the system of internal control.
(c)
Their audit report.
(d)
Their management letter and management’s response.
(e)
The assistance given by the management and staff to the External Auditors.
Carry out the following with regards to the internal audit function:
(a)
Review the adequacy of scope, functions and resources of the internal audit function and that it has
the necessary authority to carry out its work.
(b)
Review and approve internal audit plan, programme and processes.
(c)
Review audit reports and consider adequacy of Management’s actions taken on audit findings or
recommendations.
(d)
Recommend to the Nominating Committee of the Board on the appointment and termination of the
Head of Internal Audit.
(e)
Recommend to the Remuneration Committee of the Board on the remuneration of the Head of
Internal Audit.
29
Bank Pembangunan
D.
In addition, all Directors of the Bank have attended the Corporate Directors Training Programme as proposed by
the Companies Commission of Malaysia.
(f)
•
Receive and consider reports relating to the perpetration and prevention of fraud.
•
Review the Bank’s compliance with the related Government’s regulations.
•
Review the first six months result and the year-end financial statement prior to its submission to the Board
for approval.
•
The review of the year-end financial statement, whereby the presentation to the AEC will be conducted by
the External Auditors, focuses particularly on:
•
3.
(a)
Any major changes in the accounting policy or its implementation.
(b)
Adequacy of provisions against contingencies, bad and doubtful debts.
(c)
Significant and unusual events.
(d) Compliance with accounting standards and other legal requirements.
Ensure the prompt publication of annual accounts.
•
Discuss any problem and reservations that may arise from the interim and final audits, as well as any
matter which the External Auditors may wish to discuss (in the absence of management where necessary).
•
Review any related party transactions and conflict of interest situation that may arise in the Bank or within
the Banking group including any transaction, procedure or conduct that raises questions of management integrity.
•
Preparation of an AEC report at the end of each financial year, which will be published in the Bank‘s Annual Report.
•
Review and endorse the status and progress of Management‘s responses and corrective measures on issues
raised in the BNM Examination Report, before it is tabled to the Board for approval.
•
The AEC shall also report on the following to the Board to enable the Board in preparing an AEC Report
for the Bank’s Annual Report:
Bank Pembangunan
30
Review any appraisal or assessment of members of the internal audit function as well as decide on
their remuneration package, excluding the Head of Internal Audit.
(a)
The composition of the AEC, including name, designation and directorship of the members and
whether the Director is independent or otherwise.
(b)
The terms of reference of AEC.
(c)
The number of AEC meetings held in the financial year and details of attendance of each member.
(d)
A summary of the activities of the AEC in the discharge of its functions and duties for the financial year.
(e)
A summary of the activities of the Internal Audit Department.
•
The AEC shall update the Board on the issues and concerns discussed during their meetings including those
raised by External Auditors and where appropriate, make the necessary recommendation to the Board.
•
The AEC shall review the Policies on Significant/Sensitive Payments and Executive Expenditures and where
appropriate, make the necessary recommendations to the Board.
Committee Meeting and Attendance
During the financial of 2007, the AEC held 9 meetings. The members of the Committee and their record of
attendance are as follows:
MEMBERS
Dato’ Ab. Halim bin Mohyiddin (Chairman)
9/9
8/9
7/9
Tuan Haji Mohd Zarif bin Mohd Zaman
4/4*
(Appointed on 29 June 2007)
Nominating Committee
1.
Objective
The primary objective of the Nominating Committee (NC) is to establish a documented, formal and transparent
procedure for the appointment of Directors, President/Group Managing Director and key Senior Executives (Vice
President who is also a Head of Function and above) and to assess the effectiveness of individual Directors, the
Board as a whole and the various committees of the Board, President/Group Managing Director and key Senior
Executives (Vice President who is also a Head of Function and above).
2.
Establishing minimum requirements for the Board and the President/Group Managing Director to perform
their responsibilities effectively. It is also responsible for overseeing the overall composition of the Board
in terms of the appropriate size and skills, the balance between Executive Directors, Non-Executive and
Independent Directors, and mix of skills and other core competencies required through annual reviews.
•
Recommending and assessing the nominees for directorship, the Directors to fill board committees, as well
as nominees for the President/Group Managing Director position. This includes assessing Directors and the
President/Group Managing Director proposed for reappointment, before an application for verification is
submitted to Bank Negara Malaysia.
•
Establishing a mechanism for formal assessment and assessing the effectiveness of the Board as a whole,
the contribution by each Director to the effectiveness of the Board, the contribution of the Board’s various
committees and the performance of the President/Group Managing Director.
•
Recommending to the Board on removal of a President/Group Managing Director if he is ineffective, errant
or negligent in discharging his responsibilities.
•
Ensuring that all Directors undergo appropriate induction programmes and received continuous training.
•
Overseeing appointment and management succession planning of key senior executives (Vice President
who is also a Head of Function and above), and performance evaluation of Senior Vice President, Chief
Operating Officer and President/Group Managing Director and recommending to the Board the removal of
key Senior Executives (Vice President who is also a Head of Function and above) if they are ineffective,
errant and negligent in discharging their responsibilities. The President/Group Managing Director be given
the authority to assess and evaluate candidates for new appointments, negotiate and determine the salary,
benefits and terms and conditions of service for the positions of Vice President who is also a Head of
Function and above and thereafter it would be tabled to the Nominating Committee for approval and
thereafter to the Board Directors for notation.
That the performance evaluation of Vice President (Head of Function) is delegated to the President/Group
Managing Director.
•
3.
Propose the appointment of Board members to the Board of Directors of subsidiary companies.
Committee Meetings and Attendance
During the financial year of 2007, the NC held 10 meetings. The members of the Committee and their record of
MEMBERS
Dato’ Othman Jusoh (Chairman)
9/10
10/10
Dato' Ab. Halim bin Mohyiddin
10/10
10/10
10/10
31
Bank Pembangunan
•
The functions and responsibilities of the NC are as follows:
Remuneration Committee
Objective
The primary objective of the Remuneration Committee (RC) is to provide a formal and transparent procedure for
developing a remuneration policy for Directors, Managing Director and key Senior Executives (Vice President
who is also a Head of Function and above) and ensuring that compensation is competitive and consistent with
the Bank’s culture, objectives and strategy.
2.
The functions and responsibilities of the RC are as follows:
•
1.
32
Bank Pembangunan
•
•
3.
Recommending a framework of remuneration for Directors, President/Group Managing Director and key Senior
Executives (Vice President who is also a Head of Function and above). The remuneration policy should:
(a)
Be documented and approved by the full Board and any changes thereto should be subjected to the
endorsement of the full Board;
(b)
Reflect the experience and level of responsibility borne by individual Directors, the President/Group
Managing Director and key Senior Executives (Vice President who is also a Head of Function and
above);
(c)
Be sufficient to attract and retain Directors, President/Group Managing Director and key Senior
Executives (Vice President who is also a Head of Function and above) of calibre needed to manage
the Bank successfully; and
(d)
Be balanced against the need to ensure that the funds of the Bank are not used to subsidise excessive
remuneration packages.
Recommending specific remuneration packages for Directors, President/Group Managing Director and key
Senior Executives (Vice President who is also a Head of Function and above). The remuneration packages
should:
(a)
Be based on an objective consideration and approved by the full Board;
(b)
Take due consideration of the assessments of the Nominating Committee of the effectiveness and
contribution of the Director, President/Group Managing Director or key Senior Executives (Vice
President who is also a Head of Function and above) concerned;
(c)
Not be decided by the exercise of sole discretion of any one individual or restricted group of
individuals; and
(d)
Be competitive and is consistent with the Bank’s culture, objective and strategy.
Endorsing any changes deemed necessary to the schemes, terms of services and new terms for executives
and staff of BPMB before submission to the Board of Directors for final approval.
During the financial year of 2007, the RC held 8 meetings. The members of the Committee and their record of
MEMBERS
Datuk Zakiah binti Hashim (Chairman)
8/8
8/8
8/8
Puan Haini binti Hassan
4/5*
(Appointed on 29 June 2007)
Risk Management Committee
1.
Objective
The primary objective of the Risk Management Committee (RMC) is to oversee:
2.
•
the overall management of all risks covering market risk management, credit risk management and
operational risk management.
•
review and recommend the risk management policies and risk tolerance limits.
•
ensures infrastructure, resources and systems are in place for risk management.
The RMC is primarily responsible for the effective and optimum functioning of the risk management function
within the Bank and its responsibilities include:
(a)
Risk Management Strategies and Policies
i.
Review and recommend risk management strategies and policies for Board’s approval.
ii.
Review and propose the setting of the risk appetite/tolerance of the Bank at enterprise and at
strategic business unit levels to the Board.
i.
Oversee the overall management of all risks covering market, credit and operational.
ii.
Ensure that there are clear and independent reporting lines and responsibilities for the overall
business activities and risk management functions.
iii.
Inculcate risk management culture within the Bank.
iv.
(c)
Institute independent review of the Bank’s risk management infrastructure, capabilities, environment and
processes.
Risk Management Methodologies and Tools
i.
Approve risk methodologies for measuring and managing risks arising from the Bank’s business and
operational activities.
ii.
Endorse the engagement of external and independent reviewers for the validation of risk measurement
methodologies and outputs.
iii.
(d)
3.
Review the allocation of risk-adjusted capital and broad-based limits across the Bank covering
market, credit and operational risk.
Risk Management Infrastructure – Systems and Processes
i.
Review the risk management processes, systems and internal controls throughout the Bank.
ii.
Review on periodic basis, risk exposures of the Bank in line with the risk management strategy.
iii.
Review the adequacy of tools, systems and resources for the successful execution of risk functions within
the Bank.
iv.
v.
Empower members of Management/Committee the authority to approve deviations from limits.
Review contingency plans for dealing with various extreme internal/external events and disasters.
During the financial year of 2007, the RMC held 7 meetings. The members of the Committee and their record of
MEMBERS
Dato' Abdul Rahim bin Abu Bakar (Chairman)
7/7
Dato' Othman bin Jusoh
6/7
7/7
6/7
33
Bank Pembangunan
(b)
Review new products and services to be submitted for Board’s approval and highlighting the risk
aspects to the Board.
Risk Management Governance and Organization Structure
iii.
Penyata Kawalan Dalaman
Statement on Internal Control
RESPONSIBILITY
The Board of Directors (“Board”) recognises the importance of sound internal controls and risk management practices
to good corporate governance. However, such system of internal control is designed to manage the Group’s risks
within an acceptable risk profile, rather than eliminate the risk of failure to achieve the policies and business
objectives of the Group. Accordingly, it can only provide reasonable assurance against misstatement of management
and financial information and records. To this end, the Board has established an organization structure which clearly
defined lines of accountability and delegated authority.
The Board has delegated specific responsibilities to four subcommittees (Audit and Examination, Risk Management,
Nomination and Remuneration). These committees have the authority to examine particular issues and report back to
the Board with their recommendation. These committees are chaired by Independent Non-Executive Directors.
Bank Pembangunan
34
The management assists the Board in the implementation of the Board’s policies and procedures on risk and control
by identifying and assessing the risks faced, and in the design, operation and monitoring of suitable internal controls
to mitigate and control these risks.
KEY INTERNAL CONTROL PROCESSES
The key processes that have been established in reviewing the adequacy and integrity of the system of internal controls
include the following:
•
•
•
The respective subcommittees of the Board are established by the Board to assist the Board in ensuring the
effectiveness of the Bank’s operations and that the Bank’s operations are in accordance with the corporate
objectives, strategies and the annual budget as well as the policies and business environment and internal
operating conditions.
The Group Audit & Examination of the Bank monitors compliance with policies and procedures and the
effectiveness of the internal control systems and highlights significant findings in respect of any
non-compliance. Audits are carried out on all units or branches, the frequency of which is determined by the
level of risk assessed, to provide an independent and objective report on operational and management activities
of these units or branches. The annual audit plan is reviewed and approved by the respective Audit &
Examination Committee of the subsidiaries.
The Audit & Examination Committee review internal control issues identified by the Group Audit & Examination,
the external auditors, regulatory authorities and management, and evaluates the adequacy of internal control
system. The minutes of the Audit Committee meetings are tabled to the Board of the Bank on a monthly or
periodic basis.
•
The Risk Management Committee was established by the Board to assist the Board to oversee the overall
management of principal areas of risk in order to ensure structures and procedures of risk management are in
place and they are reflective of the Bank’s risk tolerance.
•
The Remuneration Committee was established to provide a formal and transparent procedure for developing a
remuneration policy for Directors and its Senior Management, ensuring that compensation is competitive and
consistent with the Bank’s culture, objectives and strategy.
Further details of the activities undertaken by the Audit & Examination Committee, Risk Management Committee,
Nomination Committee and Remuneration Committee are set out in the corporate governance disclosure.
•
Operational committees have been established with appropriate empowerment to ensure effective management
and supervision of the Group’s core areas of business operations. These committees include the Loan and
Investment Committee, Senior Management Committee and the Information Technology Steering Committee.
•
Annual budgets are approved by the respective Boards and the business units and operating subsidiaries’
performance are assessed against the approved budgets and explanations are provided for significant variances
on a monthly basis to the respective Boards.
•
There are proper guidelines within the Group for hiring and termination of staff, formal training programmes
for staff, annual performance appraisals and other relevant procedures in place to ensure that staff are
competent and adequately trained in carrying out their responsibilities.
•
The Board of the Bank and the respective Boards of subsidiaries in the Group receive and review reports from
management on a regular basis on business operations at their monthly meetings.
•
There are policy guidelines and authority limits imposed on Executive Directors and management within the
Group in respect of the day-to-day banking and financing operations, extension of credits, investments,
acquisitions and disposals of assets.
•
Policies and procedures to ensure compliance with internal controls and the relevant laws and regulations are
set out in operations manuals, guidelines and directives issued by the Bank and subsidiaries in the Group which
are updated from time to time.
•
The Nomination Committee was formed to establish a documented, formal and transparent procedure for the
appointment of directors, Group Managing Director, Managing Director and key senior officers and to assess the
effectiveness of individual directors, the Board as a whole and the various committees of the Board, Group
Managing Director, Managing Director and key senior officers.
35
Bank Pembangunan
•
Pengurusan Risiko
Risk Management
OVERVIEW
Bank Pembangunan Malaysia Berhad (the Bank) being a development financial institution, is entrusted with a
developmental role of providing medium to long term financing to projects in infrastructure, maritime and high
technology sectors.
To enable the Bank to fulfill its financing intermediary role effectively, the Bank has established a comprehensive risk
management system to identify, measure, monitor and control risks that will promote and maintain high asset quality
and minimize reliance on collateral lending in its endeavor to achieve the mandate set by the Government.
Bank Pembangunan
36
As a banking institution, where lending is the core business, the Bank is faced with credit risk, liquidity risk, operational
risk, market risk, interest rate risk and product risk in carrying out its activities. In managing its business risk effectively
and efficiently, the Bank has been guided by its Risk Management Policy, which outlines a sound basis for integrated
risk management effort and internal control as components of good corporate governance. Specific policies and
procedures have been established for each risk management function within the Group Risk Management as well as
within the operational functions of the Bank. Towards this end, risk management in the Bank shall provide a
framework to identify, objectively assess and actively manage all relevant potential risks and opportunities.
RISK MANAGEMENT INFRASTRUCTURE
The Board of Directors, is ultimately responsible for the management of risk of the Bank. The Board ensures effective
implementation of the risk management policies and determines the risk level, consistent with the risk appetite of the
Bank. Given the size and complexity of its operations, the Board has established dedicated committees to assist in
overseeing and managing total risks and specific risks faced by the Bank. This has provided the necessary infrastructure
for managing risk within the Bank and for implementing various risk management policies and procedures.
The key committees involved in risk management are as follows:
•
Risk Management Committee (RMC)
The RMC, a board level committee, is responsible for the overall risk management of the Bank, including credit risk,
operational risk, liquidity risk, and market risk and asset liability management within the Bank.
•
Credit Approval Committee of the Board (CACB)
The CACB, also a board level committee, is mainly responsible to assist the Board in managing credit risk
particularly in the area of loan financing sanctioning. The Committee has been vested with authority to approve
loan/financing application of up to RM250 million. CACB would also evaluate, discussed and recommend to the
Board of Directors on loan/financing application exceeding RM250 million.
•
Loan & Investment Committee (LICOM)
LICOM is the Management-level committee that decides on loan proposals and investments of up to its approving
limit, i.e. RM40 million. Loans of higher limit will also be evaluated and discussed at this Committee and would
be recommended higher approving authorities.
•
Asset Liability Management Committee (ALCO)
ALCO’s primary role is to manage the interest rate risk, forex risk, liquidity risk and capital adequacy of the Bank.
ALCO is mandated to derive with the most appropriate strategy for the Bank in terms of the mix of assets and
liabilities to generate optimum levels of quality earnings and to guard against the potential consequences of
market volatility, interest rate movement, liquidity constraints, foreign exchanges exposure and capital adequacy
requirement in order to enhance or optimize risk-return. At this Committee, all Market Risk Indicator Limits
approved by the Board are being monitored as well as ensuring the implementation of the various strategies
related to the assets and liabilities management.
•
Infrastructure Credit Risk Committee (ICRC)
The approving authority decides on financing application for Infrastructure financing after the ICRC reviews it.
As a prudent step, infrastructure loan proposals for the proposed financing will be deliberated first at the ICRC
to identify the risk issues underlying the loan proposals, before being considered by the approving authority. This
Committee reviews the said proposal paper and gives views objectively and independently.
•
Financing Supervision Committee (FSC)
The main focus of FSC (formerly known as Loan Supervision Committee) is to discuss and provide solutions to
loan accounts, which had become problematic and fall into the Non-Performing Loan category.
KEY FUNCTIONAL STRUCTURE WITHIN GROUP RISK MANAGEMENT
Credit Risk
The main objective of Credit Risk is to assist the Bank in managing its credit risk. In achieving this key objective,
Credit Risk screens all financing proposals for any lapse in credit risk, identifies risk issues associated with the
financing proposals and rates the underlying client, business or transaction in accordance with the Bank’s credit
risk guidelines and procedures. In addition, Credit Risk is also responsible to analyze the loan portfolio and to
provide advice on the Bank’s risk exposure by industry rating and returns. The Function is also responsible to
monitor the exposure against its established limits and ultimately lead to maintaining quality loan portfolio.
•
Operational Risk
The primary role is to assess, identify and manage the operational risk inherent in all material products, activities,
processes and systems. The function is to develop operational risk management strategies, policies and
framework as well as to communicate and report the best practices in order to effectively manage the
operational risks in the Bank. Included in the Operational Risk function is Business Continuity Management
Coordination, whose main objective is to plan, coordinate, develop, implement and maintain the Business
Continuity Plan (BCP) programme for the Bank.
•
Market Risk
The main objective of Market Risk is to monitor interest rate, forex risk, liquidity risk and capital adequacy of
the Bank. In addition, the Function also acts as the middle office for monitoring the investment risk such as in
bonds and equities. In line with the industry best practice, the Function is also responsible to assist the Bank in
optimizing the risk reward through managing Assets & Liabilities that will enhance the maintenance of healthy
and stable financial position of the Bank.
•
Technical
The main objective of Technical is to assist operational functions in solving technical issues related to the
projects financed by the Bank and to monitor the status of assets financed by the Bank through periodic
inspections. Technical also takes up an active role in protecting the Bank’s interest through the provision of
technical advisory in ensuring technical viability of the projects being financed and the ability to be implemented
and operated as planned, as well as ensure that the projects are financed adequately and the approved loans are
disbursed especially for payment claims that are based on project implementation progress.
37
Bank Pembangunan
•
The main management function primarily involved in the management of risk in the Bank is Group Risk Management,
which provides the main support to the Risk Management Committee and is responsible for the development and
maintenance of sound risk management policies and procedures for the Bank and its main subsidiaries. In order to
maintain its independence, Group Risk Management reports directly to the RMC and is made up of five (5) functions
as follows:
•
Compliance
Compliance function, which is now under Group Legal, is responsible to check and vet through all Letters of
Offer and pertinent documents for the disbursement before submitting to the Bank’s Approving Authority for
signing and approval.
Risk Management
Pengurusan Risiko
The major areas of risks to which the Bank is exposed to can be summarised as follows:
Credit Risk
The potential loss of revenue and principal in the form of specific provision
arising from the failure of a counterparties or the borrowers to honour debts or
settlement through its lending.
Market Risk
Risk of loss due to adverse movement in the mark-to-market value of the
company’s assets and liabilities.
Liquidity Risk
The risk relates to the ability to maintain sufficient liquid assets to meet
financial commitments and obligations at a reasonable cost and time.
Operational Risk
The risk that deficiencies in information system or internal controls will result
in unexpected loss. The risk is associated with human error, system failure and
inadequate controls and procedures.
Interest Rate Risk
Exposure to loss arising from unfavorable movement in interest rate, resulting
in mismatch between income and expenses between interest bearing asset and
liabilities especially involve the gap in long term against short term financing.
Product Risk
Possibility of product incurring financial or opportunity loss attributed to poor
reception by customer, competitiveness of products terms and conditions,
competencies of promoting and/or timing of entrance of the products.
Forex Risk
Probability of loss occurring from an adverse movement in foreign exchange rates.
Strategic Risk
The current and prospective impact on earnings or capital arising from adverse
business decisions, improper implementation of decisions or lack of responsiveness
to industry changes. This risk is a function of the compatibility of an organisation’s
strategic goals, the business strategies developed to achieve those goals, the
resources deployed against these goals, and the quality of implementation.
Bank Pembangunan
38
RISK MANAGEMENT PROCESS
Lending activities are subject to constant risk. The Bank realizes that the key success lies in how the risk is managed,
by putting in place clear risk management process that describe the steps taken to mitigate risk as it occurs, to meet
the Bank’s objective.
The management of risk at the Bank is undertaken by the respective operational functions within the Bank and
monitored by the Group Risk Management. This risk management process involves four major processes as follows:
Risk Identification
Identify and analyse risks surrounding the activities and understand how to
respond to these risks.
Risk Assessment and Measurement Quantify and assess risk impact.
Risk Control
Putting systems in place and recommend measures to control and mitigate risk.
Risk Monitoring
Monitor the effectiveness of risk management controls, and report on progress
and compliance.
CREDIT RISK MANAGEMENT
As lending is the main activity of the Bank, the main focus of the Bank’s risk management system has been on the
credit risk faced by the Bank in providing loans to its clients. The Bank believes that a sound credit risk management
system, which encompasses a check-and-balance structure, is necessary to minimize poor loan quality due to
imprudent lending, risk concentrations in the loan portfolio and other judgmental errors that could seriously impact
the overall financial soundness of the Bank.
An effective credit risk management system begins with enhancing the origination of quality loan assets and
continues with the preservation of quality loan assets through the establishment of the necessary internal controls
within the credit process. Management of credit risk is not only vital in protecting the Bank’s loan assets but also to
sustain profits by promoting and maintaining loan asset quality within an environment of loan asset growth. The
process of credit risk management would be as follows:
•
Risk Identification & Assessment
•
Identifying of credit risk issues on loan proposals by Group Risk Management.
(b)
Implementation of credit rating system to assess/measure the quality and level of credit risk of borrowers.
(c)
Identification of non-compliance of the terms of letter of offer/facility agreement and other requirement
prior to loan drawdown.
(d)
Annual loan review and re-rating conducted on all loans to identify credit risk migration of loan portfolio.
(e)
Stress testing on loan portfolio under various scenarios.
(f)
Credit risk assessment on of the Bank’s new financing products.
(g)
Post-mortem review of Non-Performing loans (NPLs) to identify lapses in credit process, system, people as
well as serve as feedback to relevant functions for upgrading credit skills with the objective that past
mistakes will not be repeated.
Risk Control & Monitoring
The following controls and monitoring measures are maintained within the credit process at the Bank for an
effective credit risk management:
(a)
Maintaining qualified credit personnel for credit processing and review.
(b)
Establishment of Credit policies that document credit risk management in credit evaluation process.
(c)
Management of vulnerable credit and tracking of loans in arrears.
(d)
Benchmarking of assets quality against established limits.
(e)
Loan portfolio analysis on quality of loans and exposure as well as risk distribution.
(f)
Internal Audit findings on non-compliance.
39
Bank Pembangunan
(a)
The Bank has instituted the following activities within the credit process that serve to identify and assess credit
risks to enable the Bank to institute the necessary controls for credit risk mitigation:
The activities involved in the identification and assessment of credit risk and the required controls are instituted at
the following credit process. While the operational functions within the credit process at the Bank have clear
accountabilities and responsibilities for undertaking and implementing the mentioned process, Group Risk Management
plays its roles in monitoring such activities for an effective credit risk management:
The loan origination is the first line of defense against poor risk assessment. Credit judgment of the executives
of the Business Development & Advisory (BDA) and the Credit Analysts of Credit who initiate and process the
loan applications respectively are critical to the quality of the loans. The selection and training of the BDA
Executives and the Credit Analysts are the key factors in ensuring the origination of quality loans based on good
lending judgement.
•
Bank Pembangunan
40
At Credit Origination
There is clear segregation between loan initiation/loan sourcing and loan processing as loan is originated by
Business Development & Advisory (BDA) and processed by Credit. Both BDA and Credit are accountable for the
prudent credit business. BDA ensures that the loans are of good quality and carries out preliminary assessment of
the loan proposals to determine the viability of the project and to decide whether the project is worth pursuing
for further evaluation.
Risk Management
Pengurusan Risiko
•
At Credit Assessment
The Bank maintains an independent credit evaluation function, which is separated from loan originator to
maintain check and balance. Prudent credit assessment is practiced by Credit to mitigate credit risk issues, with
the involvement of Credit Risk function in providing independent credit risk assessment and credit rating. Being
an independent party not involved in sourcing of the clients, Credit Risk function provides an essential
check-and-balance system against imprudent lending decisions.
During credit risk assessment by Credit Risk function, all credit proposals are rated using a rating system known
as Credit Rating System (CRS) and Project Risk Scoring (PRS) System that process the scores for the key risk
factors and generate the final rating that grade the quality of all credit proposals. The internal credit risk rating
system is developed to better measure the credit worthiness of each customer with the primary objectives to
provide a consistent approach in risk grading of the borrowers and to measure the borrowers’ risk of default
objectively. Risk owners will mitigate all credit risk issues before the approving authorities consider the credit
proposals. The Group Risk Management also reviews credit proposals for completeness of information, quality of
analysis as well as compliance with the credit policies.
Credit Risk management is further enforced with the involvement of Infrastructure Credit Risk Committee (ICRC)
that discusses the credit risk issues and provides independent views on financing proposals for infrastructure
projects before being considered by the approving authorities.
The Bank has instituted clear internal controls to govern the lending activities and assessment of credit proposals
for prudent lending activities through the establishment of Credit Lending Policies & Guidelines, operational
manuals and directives issued and updated from time to time, which would enable the Bank to achieve its
corporate objectives within an acceptable risk profile and risk appetite. The Bank Negara Malaysia (BNM)
guidelines as prescribed under the Development Financial Institutions Act 2002 (DFIA) are also being adhered to.
To ensure highest standard of credit assessment, all BDA executives and Credit analysts must undergo relevant
training programmes to ensure understanding of credit evaluation. In the effort to continuously promote
professionalism and expertise in their work, the Bank encourages all executives in credit-related functions to
secure the Certified Credit Professional (CCP).
The Bank acknowledges that training must be continuous to enhance professionalism and competencies of the
staff and the training programmes must be related to the business sectors that the Bank supports.
•
At Credit Approval
The loan approval process, which consists of different levels of approving authority according to loan limits,
reflects the management of credit risk and the Bank’s desire for quality loans. The approval hierarchy, which links
the authority limit to the amount of the loan, will ensure that credit sanctioning remain a critical part of the
risk evaluation system.
•
At Credit Disbursement
Loan disbursement requisition is independently checked by Compliance, as a “final gatekeeper” to ensure the
adherence to loan disbursement conditions prior to loan disbursement. Credit Compliance also verifies terms and
conditions imposed in the Letter of Offer as approved by the approving authority.
After the loan is disbursed, the Bank employs a system to monitor the quality of the loan throughout the loan
period. Any deterioration in the quality of the loan will be detected, and corrective measures may be undertaken
to protect the interest of the Bank. Supervision function monitors the borrowers’ conduct of the loan and is
responsible for the loan review to assess current credit risk of the borrower as well as to monitor the progress
of the projects being financed. Loan review is conducted at least once a year and more frequent reviews are
performed on high-risk loans under the watch list. Annual loan review will be re-rated by Credit Risk to identify
credit risk migration for effective monitoring.
Overall credit risk profiles of loan portfolio are reviewed and monitored by Credit Risk by performing stress test
on loan portfolio based on selected scenarios, which include possible downgrading of the accounts and thereon
to compute the Economic Capital Allocation required for the lending exposure.
Credit Risk continuously monitors all limits pertaining to financing portfolio and any breaches or critical level
of exposure is reported to the Senior Management and relevant committees.
The Bank diversifies its loan portfolio and avoids any undue concentration of credit risk in its loan portfolio by
setting credit limit to single customer to manage lending to any specific groups of related borrowers. Credit Risk
reports on the exposure of each customer and percentage of large loan on monthly basis to the relevant
committees and functions of the Bank.
To avoid being over-exposed to any particular economic sector, the Bank diversifies its credit risk by spreading
its loan portfolio across different economic activities. The limit by business sector is guided by the Bank’s Budget
and is reviewed where necessary. Credit Risk advises on the risk exposure by providing reports on loan exposure,
loan by function, size, industry and rating on a monthly basis to the relevant committees and functions of the Bank.
In order to preserve the quality of the loan assets, various controls have been instituted including the
establishment of the Financing Supervision Committee that undertakes to monitor, manage and recommend
recovery strategies for all delinquent accounts, with the objective of preventing them from turning
non-performing. The Committee, which meets once a month, also identifies and monitors accounts for early
signs of loan deterioration.
To better understand how problem loans and losses develop and identify weaknesses in credit and monitoring
process and systems, Operational Risk conducted in-depth post mortem reviews on NPLs and potentials.
Observations and findings in relation to NPLs are communicated as feedback to assist in upgrading credit skills
with the objective that past mistakes will not be repeated. Lessons are learned from root-cause analysis and
generate actions to improve credit risk management process.
An independent assessment of “loan compliance” is undertaken by the Group Audit & Examination of the Bank.
The findings on the non-compliance of policies and procedures are incorporated in the audit findings for the
Audit Committee as well as are communicated to the respective functions as feedback and follow-up.
At Credit Monitoring
41
Bank Pembangunan
•
OPERATIONAL RISK MANAGEMENT
Risk Management
To safeguard the Bank’s bottom line arising from the operational risk, the Operational Risk function of the Bank has
put in place various controls to limit the possible losses from operational risk as well as to ensure that operational risk
are adequately considered at all stages in the decision making process, as follows:
•
The following key methods and enablers are in place to assist Operational Risk function to identify and assess
weaknesses in internal processes and systems, product and services, and staff inadequacies:
•
(a)
Use of Key Risk Indicator (KRI) to identify pressure points in internal processes.
(b)
Performing Gap Analysis on critical processes to spot potential risk points in the activities.
(c)
Collecting Loss Event Data.
(d)
Implementing Control Risk Self Assessment (CRSA) to acquire information about business process risks,
while empowering the process owners to take responsibility for identifying and mitigating those risks.
The following key methods and activities are maintained at the Bank to serve as internal controls for an effective
operational risk management:
42
(a)
Promoting awareness within the Bank on the need to manage operational risk.
Bank Pembangunan
Pengurusan Risiko
Operational risk occurs through ineffective (those that fail to achieve their objectives) or inefficient process (those that
achieve their objectives but consume excessive costs), system risk (including system availability, data integrity, system
capacity, unauthorized access and use, and business recovery from various contingencies), people risk (that typically
results from staff constraints, incompetence, dishonesty, or a corporate culture that does not cultivate risk awareness).
(b)
Tracking of operational risk data, risk exposure and loss event by business/service line.
(c)
Measuring the severity of the impact of possible loss to the Bank by assessing the frequency of losses and
their sizes in relation to the value at risk.
(d)
Examining the adequacy of the existing/new operating procedures and internal control systems with
regard to operational risk avoidance.
(e)
Establishment of operational risk management and control process documents, which include policies and
procedures and strategies for mitigating operational risk, as well as procedures for regular reporting on
operational risk management with relevant data and results.
Functional Structure
Operational risk covers the following main areas; organizational structure, product and services, process and systems,
regulatory and statutory, information technology, external factors that impact the operational aspects of the Bank
and negligence of staff that results in possible financial loss to the Bank. The Operational Risk function of the Bank
is responsible for assessing and monitoring these operational risk issues, while the business units and the respective
operational functions within the Bank are responsible for operating within the operational risk management framework
in their functional areas.
The Operational Risk function of the Bank has set in place various systems to assist in identifying possible risk issues,
including the use of Key Risk Indicator (KRI) to identify the pressure points of weaknesses. By monitoring these
pressure points, an early warning of a lapse/weakness/lack of control, such as error rates, high staff turnover rate and
penalties/fines, can be received in order that timely action could be taken.
The method of risk assessment that has been applied at the Bank is Gap Analysis that assists in developing solutions
and serves as preventive measures for curbing the risk issues from turning into major problems. Self-assessment by
the respective business units and operational functions of the Bank on risk issues associated with their activities has
also helped in better risk profiling. The Bank has also developed the Loss Event Data Collection for Operational Risk,
which is part of the Operational Risk framework requirements. Any occurrence specified in 7 Loss categories, which
happens either accidentally or by design that resulted in loss and/or potential loss to the Bank, are captured in the
system. From this exercise, the Bank would be able to increase the level of accuracy and sensitivity of expected/unexpected
issues, hence would ensure that the same incident would not be repeated in the future by improving internal controls.
The Bank has also undertaken various activities of sound principles of Operational Risk Management, including to
develop IT Risk Management Framework, in its effort to monitor the risk more prudently and dynamically especially
in the IT process. In addition, the Bank has undertaken to promote and implement the Operational Risk Management
policy by enhancing the level of awareness within the Bank and Group. A number of in-house risk management
seminars have been organized to all levels of staff within the Bank to inculcate risk awareness culture.
As part of the Bank’s strategy to mitigate risks and manage the impact of loss events, the Bank has embarked on the
implementation of the Business Continuity Plan (BCP) programme for the Bank, which is handled by Business Continuity
Management, a designated unit under Operational Risk function of the Bank.
LIQUIDITY RISK MANAGEMENT
The key methods involve in the identification and assessment of liquidity risk is as follows:
•
(a)
Use of risk indicators.
(b)
Assessment of current liquidity position based on all cash inflows and outflows projection.
(c)
Liquidity Gap Analysis.
Risk Control and monitoring
The following measures serve to monitor and control liquidity risk:
(a)
Establishment of appropriate limit.
(b)
Regular review of the risk indicator.
(c)
Monitoring of funding requirements based on budget and strategic plans.
The management of liquidity risk is an important part of the Asset-Liability Management (ALM) process in the Bank
to ensure that the Bank can honour all its financial obligations as they fall due and at the same time is able to fund
its business commitments as well as its future growth. While Market Risk function is responsible for the overall yearly
liquidity management analysis and reporting on a macro-level for the Bank, day-to-day liquidity management will be
the responsibility of Group Treasury, who will monitor and measure liquidity gaps and liquidity requirements for the
Bank and its subsidiaries. The liquidity gap is a profile of the timing of all the cash flows of the Bank to identify the
mismatches in the cash inflow (assets) and cash outflow (liabilities). The cash flows are summed into time buckets and
the difference between the inflow and outflow is the gap for the respective time bucket.
Liquidity Risk is also assessed and managed through the application of risk indicators such as capital adequacy,
liquidity ratios, diversification of funding and counter party limit, which will be reviewed annually or when
necessary. Short-term (up to 3 months) liquidity crunch shall be met by money market borrowings and disposals of
marketable securities.
To effectively manage liquidity, various factors are analysed such as anticipated funding requirement, sources of funds,
Bank’s fund-raising capacity, present and anticipated asset quality, present and future earnings capacity and present
and planned capital position. ALCO shall be advised on the structuring and modification of the operating unit loans
in terms of sources of funding, pricing, tenor and repayment structure, which would have significant impact on the
Bank’s liquidity.
43
Bank Pembangunan
•
Liquidity risk relates to the Bank’s ability to maintain sufficient liquid assets at a reasonable cost to meet its financial
obligations when they fall due. These liquid assets refer to all-cash or ‘near’ cash resource (for example; deposits with
counter party financial institutions and short-term financial instruments) available to the Bank to accommodate
decreases in liabilities and to fund increases in assets. Liquidity risk usually arises from the mismatching of maturities
of assets and liabilities, significant and sustained losses owing to non-performing loans or from an inadequate
capital base.
MARKET RISK MANAGEMENT
Market risk is the risk of loss arising from adverse movement in the level of market prices or rates. The key methods
used for identifying and assessing market risk are as follows:
Risk Management
Pengurusan Risiko
•
•
Bank Pembangunan
44
(a)
Mark-to-market of the Bank’s exposure and comparison against predetermined market risk limits.
(b)
Perform assessment on existing bond and equity and the proposed bond and equity to be acquired for
trading purpose.
(c)
Perform assessment on any borrowings, which are subject to forex risk.
(d)
Review of trends of market movements.
(a)
Establishment of daily counterparty limits for placement of PDS.
(b)
Perform simulations to determine the impact of changes in risk profile within current market condition.
(c)
Regular reporting of risk profile to relevant committees.
Group Treasury undertakes the implementation of control measures with the involvement of Money Market & Bond
Dealing function of the Bank.
In identifying and assessing market risk, Group ALM Support (effective March 3, 2008, Group ALM Support is known
as Market Risk) involves in preparing, analyzing, monitoring and forecasting by way of simulations, which would
reflect the impact of various possible changes of each risk profile within current market conditions and also Balance
Sheet and Income Statement of the Bank and Group. Market Risk function proposes and recommends the needed
mitigations and alternative actions to adhere to internal limits of the Bank and Group. Presently, the focus is on Daily
Counterparty Limits.
Market Risk reports the risk profile of the Bank and Group via Monthly ALM and Market Risk Report to the Board of
Directors, Risk Management Committee (RMC) and other relevant committees of the Bank and Group.
The Bank continues the initiatives to enhance market risk management and to identify new needs in market risk
management to be in line with the need to monitor the risk more prudently and dynamically.
INTEREST RATE RISK MANAGEMENT
All interest rate related assets and liabilities in the Bank are potentially exposed to interest rate risks. The degree of
interest rate risk exposure depends upon the extent to which the Bank is running mismatches. Not withstanding this,
the increase and/or decrease in interest rate requires proper control in order to maintain good margin and spreads,
profitability and long-term viability. The main areas of activities in the Bank which generate potential interest rate
risk management, include rate sensitive liabilities such as ‘set funds’ and ‘non-set’ deposits, including US dollar funds,
fixed deposits placed with third party financial instruments, investments in financial institutions, rate sensitive lending
to customers and other products, business and hedging activities with interest rate contents.
•
The key methods in the assessment of interest rate risk include:
Analysing changes in the interest rate and market behaviour or any abnormal event by way of preparing
forecasts and simulations under different interest rate environments.
(b)
Conducting review on the Group’s overall interest rate risk position and related source of risk and develop
an action plan.
Market Risk function shall be empowered to perform the following activities in monitoring interest rate risk:
(a)
Establishment of risk tolerance limit to maintain IRR exposure within self-imposed parameters over a range
of possible changes in interest rates.
(b)
Close monitoring on compliance by Operations and Treasury on the relevant risk indicator limits.
(c)
Close monitoring on compliance to the established minimum spread and net interest margin.
(d)
Recommendation of appropriate corrective measures on any breach of the risk indicator limits.
(e)
Formulating and reviewing strategies to ensure the risk indicator limits are not breached.
Market Risk is responsible in monitoring and managing the impact from the interest rate movement of the Bank and
Group by establishing a structured and comprehensive framework for an effective risk management by adopting
quality and comprehensive ALM practice. In relation to this, Interest Rate Risk Management Guidelines have been
established that contain a set of rules and guidelines to identify, quantify and control interest rate risk, and at the
same time to focus on the net interest margin and income for profit. The overall purpose is therefore to maintain
safety, soundness and profitability of the Group for both the short and long-term.
For the measurement of interest rate risk, Group Treasury institutes an appropriate system for interest rate risk
management which include analysing and conveying any changes in the interest rate and market behaviour or any
abnormal event by way of preparing forecasts and simulations reflecting the impact of various possible changes in
interest rate and market conditions on the balance sheet and income statement.
To control and monitor the interest rate risk, the Bank has in place an interest rate risk management process, which
regularly reviews the interest rate outlook, including the setting of risk tolerance limit. An important goal of interest
rate risk management is to maintain the interest rate risk exposure within self-imposed parameters over a range of
possible changes in interest rates. To do this, ALCO will establish a system of interest rate risk limits and risk taking
guidelines over time. Such risk limits will require approval from the Board and will be reviewed periodically in line with
market developments and the Bank’s risk appetite. For the Bank, where the current level of banking activities are not
extensive and with limited holdings of financial instruments and derivatives, relatively simple guidelines and limits
may be set which will be determined by ALCO.
45
Bank Pembangunan
•
(a)
Ekonomi Malaysia dalam tahun
2007 sekali lagi melepasi kadar
pertumbuhan yang dijangkakan
apabila KDNK telah meningkat
kepada 6.3% berbanding 6%
seperti yang dijangkakan.
Bank Pembangunan
46
Penyata Presiden/
Pengarah Urusan Kumpulan
Dengan nama Allah yang Maha Pemurah, lagi Maha Mengasihani.
Ekonomi Malaysia dalam tahun 2007 sekali lagi melepasi
kadar pertumbuhan yang dijangkakan apabila KDNK
telah meningkat kepada 6.3% berbanding 6% seperti
yang dijangkakan. Ekonomi negara menunjukkan
perkembangan yang kukuh pada suku tahun keempat,
berpunca dari permintaan dalam negeri yang baik dan
peningkatan perbelanjaan dalam sektor awam.
Kesemua sektor ekonomi telah mencatatkan
pertumbuhan yang positif pada tahun 2007. Sektor
Pertanian telah berkembang sebanyak 2.2%
terutamanya pada suku keempat berikutan
pertambahan pengeluaran minyak sawit mentah dan
peningkatan pengeluaran ternakan. Sektor
perlombongan mencatatkan pertumbuhan sebanyak
3.2% berpunca daripada peningkatan pengeluaran
minyak mentah melalui telaga minyak laut dalam
Kikeh. Sektor perkilangan pula meningkat sebanyak
3.1%, hasil daripada perkembangan kukuh dalam
industri berorientasikan dalam negeri. Peningkatan
dalam industri berorientasikan dalam negeri telah
disokong oleh prestasi memberangsangkan di dalam
sektor peralatan pengangkutan, makanan dan
minuman serta industri berkaitan pembinaan. Industri
berorientasikan eksport juga menunjukkan prestasi
yang lebih baik dengan penambahbaikan dalam sektor
elektrik dan elektronik.
Sektor perkhidmatan terus kekal sebagai pendorong
utama kepada pertumbuhan ekonomi dengan
mencatatkan pertumbuhan sebanyak 9.7% pada
tahun tersebut. Pertumbuhan dalam sektor ini
berpunca daripada prestasi kukuh oleh sub-sektor
seperti perniagaan borong dan perniagaan runcit,
penginapan dan restoran, kewangan, insuran, harta
tanah dan perkhidmatan perniagaan. Bagi sektor
pembinaan pula, pertumbuhan kekal pada tahap 4.6%.
Negara mencatatkan lebihan dagangan untuk sepuluh
tahun berturut-turut dalam tahun 2007. Lebihan
dagangan meningkat sebanyak 3.7% kepada RM1.1097
trilion. Eksport mencatatkan peningkatan sebanyak 2.7%,
manakala import pula bertambah sebanyak 4.9%.
Pasaran eksport yang pelbagai adalah faktor utama
pertumbuhan terjamin dalam eksport. Pasaran Asia
adalah pasaran utama kepada eksport Malaysia. Eksport
ke Asia telah meningkat 6.2% pada tahun tersebut,
mewakili sebanyak 63% daripada jumlah eksport
berbanding 55% sahaja sedekad yang lalu. Manakala,
pelaburan yang kukuh dalam sektor perkilangan dan
perkhidmatan dikenalpasti sebagai faktor utama
peningkatan dalam eksport. Pertambahan dalam
perbelanjaan pelaburan telah menyebabkan kenaikan ke
atas import barang perantaraan dan barang modal, yang
mana mewakili lebih 70% daripada jumlah import
pada tahun tersebut. Kargo penghantaran rentas
(trans-shipment cargo) di wilayah Asia Tenggara telah
meningkat di antara 10% hingga 15% setahun.
Berdasarkan fakta ini, lebih banyak syarikat perkapalan
dijangka menukar hub mereka ke Malaysia dalam jangka
masa lima hingga sepuluh tahun berikutnya bagi
memperoleh manfaat daripada harga yang menarik yang
ditawarkan oleh pelabuhan-pelabuhan di Malaysia dan
keupayaan mengendalikan jumlah kargo yang besar. Ini
adalah petunjuk yang baik kepada Bank Pembangunan di
mana salah satu daripada sektor utamanya adalah untuk
menyediakan pembiayaan kepada sektor maritim
khususnya kepada sektor-sektor yang memberi sokongan
kepada aktiviti-aktiviti perdagangan antara kawasan.
Penambahbaikan dalam infrastruktur adalah antara
agenda utama pada tahun 2007. Pelancaran pelan induk
pembangunan kawasan seperti Iskandar Malaysia,
Koridor Ekonomi Wilayah Utara, Koridor Ekonomi
Wilayah Timur, Koridor Pembangunan Sabah dan
Koridor Tenaga Diperbaharui Sarawak (SCORE), telah
menggariskan beberapa projek-projek infrastruktur yang
mempunyai kesan yang ketara bagi memastikan
kejayaan pelan-pelan induk pembangunan ekonomi ini.
47
Bank Pembangunan
Tinjauan Ekonomi Malaysia
Bagi pihak Lembaga Pengarah Bank Pembangunan Malaysia Berhad
(Bank Pembangunan), saya dengan sukacitanya membentangkan Laporan
Tahunan Ke-34 dan Penyata Kewangan Beraudit Bank Pembangunan bagi
tahun kewangan berakhir 31 Disember 2007.
President/Group Managing Director’s Statement
Penyata Presiden/Pengarah Urusan Kumpulan
Bank Pembangunan
48
Sejumlah 949 projek perkilangan telah diluluskan pada
tahun 2007. Kelulusan pelaburan dalam negara telah
meningkat sebanyak 2.9% kepada RM26.5 bilion.
Analisa yang dibuat ke atas projek-projek yang
diluluskan menunjukkan arah aliran pelaburan menuju
ke arah intensif modal, nilai tambah yang tinggi dan
projek-projek teknologi tinggi. Sebagai insitusi
pembiayaan pembangunan yang diberi mandat untuk
menyediakan pembiayaan terutamanya kepada sektorsektor teknologi tinggi yang berintensifkan modal, Bank
Pembangunan secara tidak langsung telah mendapat
manfaat daripada pelaburan-pelaburan yang dibuat.
Disokong oleh permodalan dan keberuntungan yang
kukuh, sektor perbankan telah menunjukkan tahap
prestasi memberangsangkan dan kekal berdaya tahan.
Aktiviti pembiayaan sistem perbankan mencatatkan
pertumbuhan kukuh sebanyak 8.6% berbanding
pertumbuhan tahun sebelumnya sebanyak 6.3%.
Permodalan sistem perbankan adalah kukuh dengan
nisbah modal berwajaran risiko terus kekal di atas 13%
setakat akhir tahun. Pinjaman-pinjaman tidak berbayar
(NPL) untuk klasifikasi enam bulan bertambah baik dan
menurun kepada 2.4% daripada jumlah bersih pinjaman
berbanding 3.7% pada tahun sebelumnya, dibantu oleh
pemulihan yang tinggi dan pengurusan kunci kira-kira
yang aktif melalui jualan aset NPL dan proses hapus
kira hutang lapuk dan ragu pada hujung tahun.
Tinjauan Prestasi Institusi-Institusi Kewangan
Pembangunan (IKP)
LATARBELAKANG
IKP telah diwujudkan bagi membangun dan
menggalakkan sektor-sektor strategik ekonomi
disamping mencapai objektif yang khusus serta
matlamat sosial bagi pihak Kerajaan melalui
mandat-mandat yang diberikan kepada IKP tertentu.
Kerajaan telah menggariskan teras pembangunan bagi
IKP di bawah Garis Panduan Ketiga Pelan Perspektif
atau 3rd Outline Perspective Plan, Pelan Induk
Kewangan, Rancangan Malaysia Kesembilan dan Pelan
Induk Industri Ketiga. Perkara utama dalam teras
pembangunan tersebut adalah:
•
Menyediakan peluang pembiayaan untuk
membantu membangunkan sektor-sektor yang
digalakkan oleh kerajaan.
•
Menyediakan peluang pembiayaan untuk
menyokong kapasiti keusahawanan dan
keusahawanan tekno terutamanya di kalangan
komuniti Industri Kecil & Sederhana.
•
Menunjukkan penggunaan yang efektif terhadap
dana-dana Kerajaan dan memperkenalkan
rangka kerja sistematik bagi mendapatkan dana
ke arah pendanaan kendiri
•
Memupuk disiplin pengendalian termasuk
meningkatkan ketelusan keinstitusian dan tahap
tataurus korporat serta meningkatkan aktiviti
pengurusan risiko.
Daripada keseluruhan 13 IKP, enam (6) daripadanya
dikawal di bawah Akta Institusi Kewangan
Pembangunan 2002 atau DFIA, iaitu Bank
Pembangunan Malaysia Berhad, Bank Perusahaan Kecil
dan Sederhana Malaysia Berhad (SME Bank),
Export-Import Bank Malaysia (EXIM Bank), Bank
Kerjasama Rakyat Malaysia (Bank Rakyat), Bank
Simpanan Nasional (BSN) dan Bank Pertanian Malaysia
(Agro Bank). Institusi-institusi kewangan pembangunan
ini dijangka akan terus maju dan memainkan peranan
penting dan menumpukan perhatian kepada
pembangunan sektor-sektor strategik dengan
menyediakan pembiayaan bagi sektor industri, sektor
perkhidmatan dan memodenkan sektor pertanian.
Dalam aspek ini, Bank Pembangunan akan tetap fokus
kepada mandat yang diberi iaitu menyediakan
kemudahan kredit jangka sederhana dan jangka
panjang kepada projek-projek infrastruktur, maritim,
teknologi tinggi dan industri berintensifkan modal
dalam perkilangan dan sektor-sektor lain yang di kenal
pasti seiring dengan polisi pembangunan negara.
Bagi memastikan IKP ini terus fokus terhadap mandat
yang diberikan dan aktiviti-aktiviti mereka
dilaksanakan dengan bijak, cekap dan berkesan, Bank
Negara Malaysia (BNM) secara berterusan
mengeluarkan berbagai pekeliling/garis panduan bagi
mengukuhkan kapasiti dan meningkatkan rangka kerja
IKP yang terbabit bagi melengkapkan usaha
pengawasan tahunan mereka.
Perkembangan dalam tahun 2007
Dalam tahun 2007, BNM telah mengeluarkan dua (2)
garis panduan dan satu (1) pekeliling kepada IKP,
seperti dibawah.
•
GARIS PANDUAN DANA LATIHAN STAF
Garis panduan asal telah diperkenalkan pada
28 November 1985 dan semakan telah dibuat
untuk digunapakai oleh IKP, berkuatkuasa mulai
6 April 2007.
Objektif garis panduan ini adalah untuk
menggalakkan institusi-institusi kewangan
untuk melatih kakitangan mereka dan bukannya
‘memancing’ staf daripada institusi kewangan
lain. Ini bagi memastikan tiada penawaran gaji
yang melampau oleh mana-mana institusi
kewangan yang melebihi tahap produktiviti
sebenar dalam usaha memenuhi keperluan
modal insan.
Garis panduan ini yang berkuatkuasa mulai
28 September 2007 menggariskan prosidurprosidur kawalan yang boleh digunapakai oleh
institusi-institusi kewangan dalam menawarkan
produk-produk kewangan atau perkhidmatan yang
baru dan jangkaan BNM terhadap amalan pengurusan
dan pengawalan risiko berhubung dengan
pembangunan, tawaran dan pemasaran produkproduk tersebut oleh institusi-institusi kewangan.
Ia juga mengemukakan tanggungjawab institusiinstitusi kewangan terhadap pengguna-pengguna
bagi memastikan produk-produk yang ditawar
atau disyorkan adalah bersesuaian dan pengguna
diberitahu dengan jelas akan sifat dan risiko
berkaitan sesuatu produk tersebut.
•
AMALAN KUTIPAN HUTANG WAJAR
Pekeliling ini menetapkan amalan kutipan
hutang wajar yang perlu diikuti oleh setiap IKP
bagi menerapkan tahap profesionalisme yang
tinggi dalam kutipan hutang daripada peminjam
yang dibuat sama ada oleh pengutip hutang
dalaman atau agensi pengutip hutang luar yang
dilantik oleh IKP. Dalam keadaan sekiranya
agensi luar dilantik, pihak IKP perlu
mengeluarkan dokumen kebenaran kepada
agensi dilantik yang membenarkan mereka
mengutip hutang bagi pihak IKP. IKP juga harus
memastikan pengutip hutang dalaman dan
agensi pengutip hutang luar yang dilantik,
mematuhi peruntukan-peruntukan kerahsiaan di
bawah undang-undang berkaitan dan juga
amalan-amalan kutipan hutang seperti
pengeluaran notis kepada peminjam, kutipan
bayaran dan tatalaku pengutip-pengutip hutang.
Prestasi Kewangan Enam(6) IKP di bawah DFIA
Jumlah baki pinjaman telah berkembang sebanyak
18.6% daripada RM50.9 bilion pada 2006 kepada
RM60.4 bilion pada tahun 2007, mewakili 92.6%
daripada jumlah baki pinjaman keseluruhan IKP pada
akhir tahun 2007. Pertumbuhan kukuh ini didorong
oleh peningkatan dalam pembiayaan untuk
penggunaan kredit oleh Bank Rakyat dan BSN dan
pinjaman-pinjaman yang diberikan oleh Bank
Pembangunan kepada sektor maritim dan teknologi
tinggi. Pinjaman-pinjaman yang diberi kepada sektorsektor strategik ekonomi seperti pembinaan, elektrik,
gas dan bekalan air, sektor perkilangan dan pertanian,
kekal menggalakkan dan meningkat sebanyak 15%,
mewakili 31% daripada jumlah pinjaman. Hasil
daripada pertumbuhan kukuh di dalam baki pinjaman,
nisbah kasar NPL menurun daripada 10.0% kepada
8.8% meskipun peningkatan ke atas jumlah pinjaman
kasar NPL daripada RM4.9 bilion dalam tahun 2006
kepada RM5.1 bilion dalam tahun 2007.
Prestasi Kewangan Bank Pembangunan dan
Anak-Anak Syarikat
Dalam tahun semasa, jumlah pendapatan faedah Bank
Pembangunan telah meningkat sebanyak 15.24%
kepada RM1.21 bilion daripada RM1.05 bilion.
Pertumbuhan hasil faedah antara lain disumbangkan
oleh peningkatan ketara di dalam pendapatan faedah
daripada aktiviti pemberian pinjaman sebanyak
15.30%. Walaubagaimanapun, pendapatan bukan
faedah susut sebanyak RM234.58 juta daripada
RM369.03 juta pada tahun 2006 kepada RM134.45
juta pada tahun 2007 berikutan pengurangan
pampasan yang diterima daripada Kerajaan
berbanding pada tahun 2006.
Bank Pembangunan mencatatkan keuntungan bersih
RM408.53 juta, menurun sebanyak 17.62% jika
dibandingkan keuntungan bersih pada tahun
sebelumnya iaitu RM495.96 juta. Pendapatan bukan
faedah yang lebih rendah dan peruntukan khas yang
lebih tinggi menyumbang kepada keuntungan bersih
yang rendah.
Berbanding tahun 2006, jumlah aset 2007 telah
meningkat sebanyak 3.58% atau RM806.37 juta
kepada RM23.31 bilion disamping pertumbuhan
pinjaman yang kukuh iaitu 8.0%. Pertumbuhan
tersebut disumbangkan oleh permintaan pembiayaan
yang memberangsangkan dari sektor teknologi tinggi
berikutan peningkatan bagi permintaan ke atas
sumber bioteknologi dan tenaga alternatif.
Setakat 31 Disember 2007, jumlah dana pemegang
saham Bank Pembangunan menunjukkan peningkatan
sebanyak 7.39% iaitu daripada RM5.14 bilion tahun
lalu kepada RM5.52 bilion dalam tahun 2007.
Berdasarkan keputusan tahun kewangan 2007, Nisbah
Modal Berwajaran Risiko Bank kekal pada 22.49%,
berbanding tahun sebelumnya yang mana melepasi
keperluan minima yang ditentukan oleh Bank Negara
Malaysia.
•
BANK PERUSAHAAN KECIL & SEDERHANA
MALAYSIA BERHAD (SME BANK)
Bagi tahun kewangan berakhir 31 Disember 2007,
pendapatan SME Bank meningkat 4.81% atau
RM12.44 juta daripada RM258.45 juta daripada
tahun sebelumnya kepada RM270.89 juta. Ini
berpunca daripada peningkatan pendapatan
faedah dan pendapatan berasaskan fi.
GARIS PANDUAN PENGENALAN PRODUK BARU
49
Bank Pembangunan
•
Keuntungan sebelum cukai pula meningkat kepada
RM53.43 juta, berbanding dengan kerugian sebelum
cukai sebanyak RM306.94 juta yang dicatatkan
pada tahun sebelumnya, yang mana kebanyakannya
disebabkan oleh peruntukan yang tinggi, dan
hapus kira hutang ragu dan hutang lapuk. Bagi
prestasi operasi, sejumlah 1,622 projek dengan
nilai pinjaman sebanyak RM3.05 bilion telah
diluluskan, yang mana nilai pinjaman ini meningkat
sebanyak 42.52% daripada RM2.14 bilion pada
tahun sebelumnya. Walaupun usaha yang
bersungguh-sungguh telah dilakukan bagi
mengembangkan pasaran, pengawalan yang betul
dan mekanisme pengawasan telah dilaksanakan
bagi memastikan kualiti pinjaman tidak
diabaikan. Ini dibuktikan dengan kadar rendah
pinjaman tidak berbayar kasar sebanyak 6.40%.
•
Prestasi Pemberian Pinjaman
Bank Pembangunan memainkan peranan penting
dalam mempelopori pertumbuhan ekonomi sektor
strategik negara dalam menyediakan pembiayaan
jangka sederhana dan panjang khususnya kepada
sektor-sektor yang telah diberikan mandat. Dalam
tahun 2007, 67 pinjaman dengan jumlah RM4.69
bilion telah diluluskan bagi membiayai berbagai projek
infrastruktur, maritim dan teknologi tinggi.
•
Bank Pembangunan telah memulakan
pembiayaan projek-projek infrastruktur seawal
tahun 1999. Pada awalnya pembiayaan lebih
mengutamakan projek-projek infrastruktur yang
dikenalpasti oleh Kerajaan. Namun begitu, pada
hari ini, pembiayaan telah diperluaskan kepada
projek-projek infrastruktur komersial seperti
infrastruktur pelancongan.
GLOBAL MARITIME VENTURES BERHAD (GMVB)
GMVB terus mendapat manfaat daripada
peningkatan kadar sewa pengangkutan untuk
kapal pukal kering dan kapal tangki. Pendapatan
operasi bagi kumpulan GMVB meningkat sebanyak
18.17% pada 2007 kepada RM337.22 juta
berbanding RM285.36 juta pada tahun 2006.
Keadaan pasaran yang meyakinkan telah turut
menyumbang kepada pulangan yang
memberangsangkan daripada penjualan salah
sebuah kapal. Hasilnya, keuntungan sebelum
cukai bertambah daripada RM141.23 juta dalam
tahun 2006 kepada RM341.25 juta pada 2007.
Dana pemegang saham GMVB kekal kukuh pada
tahun 2007 di mana ia meningkat hingga mencapai
aras RM998.63 juta, selepas kejatuhan pada tahun
2006 berikutan pelaksanaan pengurangan modal.
Bank Pembangunan
50
•
PEMBANGUNAN LEASING CORPORATION SDN BHD
Bagi tahun kewangan berakhir 31 Disember 2007,
Pembangunan Leasing Corporation Bhd. (PLC) dan
anak-anak syarikatnya, mencatatkan prestasi
kewangan yang dinamik. PLC mencapai jumlah
pendapatan RM42.28 juta dengan rekod
keuntungan sebelum cukai sebanyak RM55.36
juta. Peningkatan yang ketara dari tahun 2006
dipacu oleh peningkatan dalam operasi pembiayaan
Jual Beli dan Ijarah disamping pemulihan
terhadap pinjaman-pinjaman tidak berbayar.
•
PEMBANGUNAN EKUITI SDN BHD
Pembangunan Ekuiti Sdn. Bhd. (PEkuiti), sebuah
syarikat usaha sama antara Bank Pembangunan
dan Intrasys Sdn. Bhd., yang mana telah diberi
mandat untuk menguruskan dana pelaburan
sebanyak RM1.0 bilion di bawah SME Growth
Acceleration Fund telah mencatatkan
keuntungan sebelum cukai sebanyak
RM0.53 juta pada akhir tahun 31 Disember 2007,
peningkatan sebanyak RM0.28 juta berbanding
RM0.25 juta pada tahun 2006.
INFRASTRUKTUR
Pada tahun 2007, 17 pinjaman bernilai
RM2.78 bilion telah diluluskan bagi membiayai
projek-projek infrastruktur dalam pelbagai
sektor. Industri pembinaan merupakan penerima
utama yang mencatatkan 86.0% daripada
jumlah pinjaman diluluskan, diikuti oleh
pelancongan, telekomunikasi dan pelabuhan.
Jumlah aset pinjaman infrastruktur setakat akhir
2007 adalah berjumlah RM15.36 bilion berbanding
RM15.33 bilion pada tahun 2006, yang
mencatatkan peningkatan sebanyak 0.20%.
Sektor air, pembinaan dan pengangkutan terus
menjadi penyumbang utama kepada portfolio
pinjaman infrastruktur.
•
MARITIM
Setakat 31 Disember 2007, jumlah keseluruhan
aset pinjaman maritim adalah RM1.72 bilion,
satu peningkatan mengagumkan sebanyak
115.6% berbanding RM799.0 juta pada tahun
kewangan sebelumnya. Ini telah membuktikan
yang Bank Pembangunan telah meningkatkan
usaha untuk terus memperhebatkan bantuan
kepada industri perkapalan dan limbungan
sejajar dengan mandat kami untuk membantu
kerajaan membangunkan dan menukar negara
ini ke arah Negara Maritim.
Dalam tahun 2007, 18 pinjaman bernilai
RM676.70 juta telah diluluskan. Keseluruhannya
disumbangkan oleh permintaan yang besar
daripada industri perkapalan, terutamanya
daripada kapal luar pesisir. Jumlah pengeluaran
pinjaman Bank pada tahun 2007 adalah RM1.45
bilion, peningkatan yang membanggakan
sebanyak 502.90% jika dibandingkan dengan
•
TEKNOLOGI TINGGI
Dalam tahun 2006, Kerajaan telah memberi
kepercayaan kepada Bank Pembangunan untuk
mengurus Dana Biodisel bernilai RM500 juta.
Dengan sambutan yang begitu menggalakkan
daripada pelabur-pelabur tempatan, Bank
Pembangunan telah memperkenalkan Skim
Pembiayaan Biofuel bernilai RM2.0 bilion pada
tahun 2007, sebagai kesinambungan daripada
Dana Biodisel dan sebagai sokongan kepada
Polisi Biofuel Negara. Dibawah skim ini, Bank
Pembangunan telah meluluskan sejumlah
RM300.50 juta pinjaman pada tahun 2007.
Selain daripada itu, sejumlah RM2.0 bilion dana
juga telah diperuntukkan untuk industri tenaga
boleh diperbaharui dan kecekapan tenaga yang
dikenali sebagai Renewable Energy and Energy
Efficiency (Skim RE&EE). Skim RE&EE II adalah
kesinambungan daripada Skim RE&EE I yang
telah digunakan sepenuhnya. Bank Pembangunan
telah meluluskan lima projek bernilai
Keseluruhannya, sektor teknologi tinggi
menyumbang 5.42% atau RM978.90 juta
daripada jumlah keseluruhan aset pinjaman
dalam tahun 2007, yang mana ia adalah
peningkatan yang menggalakkan sebanyak
RM435.90 juta atau 80.28% berbanding tahun
sebelumnya iaitu sebanyak RM543.0 juta.
Salah satu prinsip operasi strategik di bawah plan
strategik lima tahun adalah memperkenalkan
program-program penambahbaikan yang
komprehensif terhadap rantaian penyampaian
perkhidmatan bagi pelanggan luaran dan dalaman
dan mengambil pendekatan perniagaan dalam setiap
aktiviti. Sehubungan itu, pada Disember 2007, Bank
Pembangunan telah dianugerahkan MS ISO 9001:2000
bagi proses permohonan pinjaman sehingga
pengeluaran surat tawaran. Untuk meneruskan
penambahbaikan ini, Bank Pembangunan telah
memulakan proses bagi mengembangkan perakuan ini
sehingga ke proses pengeluaran wang.
Pada bulan Ogos 2007, Bank Pembangunan telah
bekerjasama dengan Asian Strategic & Leadership
Institute (ASLI) bagi menganjurkan “4th National
Utility Summit”, dengan tema, “Blazing New Trails:
Development, Strategies & Opportunities for
a Profitable Future”. Persidangan yang menarik itu
telah mendapat sambutan menggalakkan daripada
syarikat-syarikat utama dan besar daripada
sektor-sektor utiliti; Air, Telekomunikasi dan ICT,
Tenaga dan Elektrik, yang telah berbincang tentang
perkembangan terkini, senario kes dan cabarancabaran seperti ketidakstabilan harga, kemajuan
teknologi, kehendak pelanggan dan peraturanperaturan persekitaran yang kerap berubah.
Tahun 2007 juga menyaksikan Bank Pembangunan
menerima anugerah daripada Association of
Development Financing Institution in Asia and the
Pacific (ADFIAP) bagi kategori Pembangunan
Infrastruktur untuk projek pengurusan banjir iaitu
Stormwater Management and Road Tunnel ataupun
SMART untuk mengurangkan masalah banjir di
bandaraya Kuala Lumpur.
Penambahbaikan Berterusan
51
Bank Pembangunan
Dana Baru Pembiayaan Perkapalan (NSFF)
bernilai RM1.0 bilion yang diperkenalkan pada
tahun 2001 terus mendapat permintaan yang
menggalakkan. Keseluruhannnya, setakat
31 Disember 2007, NSFF telah diberi pinjam
kepada 48 syarikat dengan jumlah kelulusan
sebanyak RM973.70 juta.
Buat pertama kalinya dalam sejarah gemilang Bank
Pembangunan dan sempena sambutan Jubli Emas
Kemerdekaan Malaysia, Bank Pembangunan sebagai
warganegara korporat yang patriotik, telah
menyambut ulangtahun ke-50 kemerdekaan dengan
menggantung kain rentang gergasi dan menerbitkan
iklan televisyen yang disiarkan di TV3 di sepanjang
Perayaan Bulan Kemerdekaan. Usaha ini tidak sia-sia
apabila kain rentang gergasi Bank Pembangunan telah
mendapat tempat ketiga kain rentang hiasan terbaik
sempena Perayaan Kemerdekaan ke-50 anjuran
Kementerian Kebudayaan, Kesenian dan Warisan.
Sementara iklan televisyen pula dianugerahkan
Pengarah Terbaik untuk iklan di Anugerah Oskar
6 anjuran Persatuan Pekerja Filem Malaysia.
Tanggungjawab Sosial Korporat
Bank Pembangunan
52
Program Tanggungjawab Sosial Korporat (CSR) telah
diperkenalkan bertujuan memupuk amalan-amalan
tangggungjawab sosial dalam organisasi dalam usaha
menyediakan bantuan kepada kanak-kanak kurang
bernasib baik, anak yatim, orang kurang upaya dan
ibu tunggal. Sebagai sebuah institusi kewangan
pembangunan yang unggul, dengan hubungan yang
begitu baik dengan masyarakat Malaysia, kami
percaya yang kami bertanggungjawab untuk
menyumbang kepada kehidupan yang lebih baik
kepada masyarakat.
Sebagai rakyat prihatin, Bank Pembangunan tidak
pernah lupa untuk mengeluarkan zakat perniagaan
kepada pusat pungutan zakat di seluruh negara.
Penyampaian zakat perniagaan bagi tahun berakhir
31 Disember 2006 adalah sebanyak RM2.3 juta dan
telah dikeluarkan pada tahun 2007.
Bank Pembangunan dengan kerjasama Institut
Pediatrik, Hospital Kuala Lumpur telah menganjurkan
Majlis Sumbangan Aidil Fitri di hospital tesebut.
Sumbangan berbentuk wang dan barangan itu, telah
diberikan kepada 200 pesakit padiatrik di institut
tersebut. Bank Pembangunan juga telah
memperuntukkan sumbangan tunai kepada staf
kurang upaya, ibu-ibu tunggal dan ahli keluarga staf
yang telah meninggal dunia.
CSR ini bukan bertujuan kedermawanan sahaja,
bahkan juga usaha untuk mencetuskan kesedaran
akan kesan kewujudan Bank Pembangunan terhadap
masyarakat, keadaan sekeliling dan alam sekitar.
Dalam tahun 2007, Bank Pembangunan meneruskan
inisiatif CSR ini terhadap pemuliharaan alam sekitar
dengan menaja lapan ekor Ring-tailed Lemur di Zoo
Melaka. Bank Pembangunan telah sekian lama
menyokong padu terhadap memulihara spesis-spesis
hidupan liar yang terancam sejak 1990 lagi, sebagai
menandakan komitmen jangka panjang Bank
Pembangunan ke arah memulihara, mengurus dan
menjaga sumber alam semula jadi dan budaya.
Modal Insan Dan Pembangunan Organisasi
Bank Pembangunan melihat pembangunan modal
insan adalah kritikal bagi memastikan matlamat jangka
pendek atau jangka panjangnya tercapai. Dalam
persekitaran yang bergerak pantas dan berasaskan
pengetahuan, kekuatan modal insan adalah penting
untuk Bank Pembangunan terus bersaing.
Strategi-strategi yang telah dikenalpasti bukan sahaja
untuk membangunkan dan menambah baik bakat sedia
ada, bahkan juga mengambil bakat baru dengan
pengalaman yang berharga yang kemudiannya akan
membantu mencipta budaya kerja yang harmoni dan
berdaya maju. Sehubungan itu, Program Pelatih
Pengurusan, yang telah diperkenalkan pada tahun 2006,
disambung semula pada tahun 2007 dengan mengambil
16 orang siswazah baru untuk digilap dan dibangunkan
sebagai pemimpin masa depan yang mempunyai
wawasan dan kepimpinan berkualiti yang akan
mengetuai Bank Pembangunan di masa akan datang.
Tahun 2007 juga melihat perlantikan dua Ahli
Lembaga Pengarah yang baru iaitu Puan Haini Hassan
dan Tuan Haji Mohd. Zarif Mohd. Zaman. Di peringkat
pengurusan pula, menyaksikan perlantikan Encik
Mohd. Fauzi Rahmat sebagai Ketua Pegawai Operasi
dan Encik Mohd. Ghazali Abbas, Timbalan
Presiden/Ketua, Audit dan Pemeriksaan Kumpulan.
Bank juga telah melantik Encik Jamaludin Nor
Mohamad yang mula menyertai pengurusan Bank
Pembangunan pada awal 2008 sebagai Timbalan
Presiden Kanan, Operasi.
Bank Pembangunan juga mengucapkan selamat tinggal
kepada bekas Presiden/Pengarah Urusan Kumpulan,
Datuk Abdul Rahim Mohd. Zin yang bersara pada
30 Ogos 2007 selepas hampir empat tahun menerajui
Bank Pembangunan dan syarikat-syarikat kumpulannya
dengan penuh dedikasi. Kemudian pada 1 Disember
2007, Bank Pembangunan juga menyaksikan persaraan
Tan Sri Dato’ Seri Dr. Hj. Zainul Ariff Haji Hussain
sebagai Pengerusi Lembaga Pengarah.
Bank Pembangunan terus mengiktiraf tradisi memberi
anugerah khidmat setia kepada staf. Dalam tahun
2007, 15 orang staf telah menerima Anugerah
Khidmat Setia 10 Tahun, 15 orang menerima
Anugerah Khidmat Setia 15 Tahun, 12 orang
menerima Anugerah Khidmat Setia 25 Tahun, dan
2 lagi menerima Anugerah Khidmat Setia 30 Tahun.
Prospek Perniagaan
Dengan Ekonomi Malaysia pada tahun 2008 dijangka
akan terus kukuh, berbagai usaha telah diambil oleh
Kerajaan dalam menyediakan asas yang kuat untuk
membangunkan negara. Projek-projek mega yang
digariskan di bawah Rancangan Malaysia ke-9 (9MP)
seperti pembangunan koridor-koridor ekonomi seperti
Iskandar Malaysia, Koridor Ekonomi Wilayah Utara,
Koridor Ekonomi Pantai Timur, Koridor Pembangunan
Kini kami sedang melaksanakan penstrukturan semula,
yang mana akan menyaksikan pengasingan SME Bank
daripada Kumpulan Bank Pembangunan seperti yang
diumumkan pada suku keempat tahun 2007. SME
Bank akan menjadi entiti yang berasingan di bawah
Kementerian Kewangan Diperbadankan menjelang
1 April 2008. Proses pengasingan ini bertujuan
menguatkan dan mempertingkatkan kapasiti,
kecekapan dan keberkesanan kedua-dua Bank dalam
menyediakan khidmat kewangan khusus kepada
sektor-sektor sasaran.
Dalam menyiapkan diri ke arah prestasi yang lebih
baik dalam tahun 2008 dan tahun-tahun mendatang,
kami akan meneruskan usaha menukar dan mengatur
strategi dalam setiap aspek perniagaan kami untuk
memberikan khidmat lebih baik kepada pelanggan,
menjadi lebih efektif dan efisien dalam urus tadbir
korporat dan kawalan dalaman yang mana akan
meliputi pengukuhan seluruh proses kredit dan
pengurusan risiko dan infrastruktur IT. Dalam
menyiapkan diri untuk tujuan itu, kami telah
mengambil beberapa inisiatif yang perlu untuk
mengatur tenaga kerja, struktur, sistem dan
proses-proses kearah pelaksanaan yang lebih tinggi.
Pelaburan dalam modal insan akan terus menjadi
keutamaan kami kerana mereka adalah aset
terpenting Bank Pembangunan dalam menukar Bank
Pembangunan menjadi entiti perniagaan yang efektif.
Barisan hadapan akan didedahkan kepada kemahiran
Penghargaan
Bagi pihak Bank, saya ingin mengucapkan terima
kasih saya kepada pelanggan kami, Kementerian
Kewangan Diperbadankan, Kementerian Pembangunan
Usahawan dan Koperasi, Bank Negara Malaysia, juga
agensi-agensi kerajaan yang lain di atas sokongan dan
keyakinan yang berterusan. Bagi pihak Pengurusan,
secara ikhlas saya juga ingin mengucapkan ribuan
terima kasih kepada Ahli Lembaga Pengarah, yang
telah menyokong kami tanpa ada rasa jemu.
Sokongan dan keyakinan, diharapkan akan menjadi
petanda baik pada tahun-tahun mendatang bagi
memastikan Bank Pembangunan akan terus relevan
dalam memacu pembangunan negara.
Presiden/ Pengarah Urusan Kumpulan
Seperti diumumkan di Belanjawan Negara 2008, Bank
Pembangunan telah sekali lagi diberi kepercayaan
untuk menguruskan Tabung Infrastruktur Pelancongan
(TIF) bernilai RM200 juta, bagi mempromosi aktiviti
pelancongan di Sabah dan Sarawak. TIF mula
dilancarkan pada Oktober 2002 oleh Kerajaan
bertujuan menyediakan pembiayaan kepada
projek-projek berkaitan pelancongan seperti pusat
pelancongan bersepadu, taman tema, taman rekreasi,
kawasan dermaga, marina dan safari serta hotel dan
resort dan lain-lain. RM200 juta ini akan menjadi
sebahagian daripada peruntukan diberikan kepada
Bank Pembangunan bernilai RM1.2 bilion untuk
tabung TIF. Peruntukan khas untuk mempromosi
industri pelancongan di Sabah dan Sarawak ini,
menandakan kepercayaan dan keyakinan kerajaan
terhadap kemampuan Bank Pembangunan.
yang lebih baik bukan sahaja untuk memberi khidmat
pelanggan dan menyediakan khidmat nasihat, tetapi
juga untuk mengubah keseluruhan rantaian nilai
kredit (credit value chain) untuk lebih kepada
penganalisaan risiko (risk analytical), yang antara lain
memerlukan mereka untuk meningkatkan kebolehan
di dalam model risiko kewangan (financial risk
modeling). Ini sejajar dengan keperluan baru yang
mana menuntut lebih penekanan kepada metodologi
dalaman Bank Pembangunan, semakan penyeliaan
(supervisory review) dan disiplin pasaran daripada
memfokus kepada menyukat risiko tunggal (single risk
measure) sahaja. Kami akan meneruskan langkah untuk
mendapatkan keyakinan pasaran kerana kami mahu
dikenali sebagai institusi kewangan pembangunan
yang berkesan dalam merealisasikan kehendak
pelanggan dan pemegang saham. Kami akan terus
membina daya tahan yang tinggi dan meletakkan di
kedudukan yang baik agar dapat mengambil
kesempatan terhadap apa jua peluang, yang bakal
muncul di masa hadapan. Dengan meletakkan strategi
di tempat yang betul, kami akan terus mara
kehadapan sebagai institusi kewangan pembangunan
utama, ke arah memenuhi aspirasi Kerajaan. Kami
akan sentiasa berusaha untuk membina pertumbuhan
yang mampan yang dapat melalui kitaran ekonomi
dan perubahan-perubahan risiko pasaran. Sebagai
penjaga kepada dana Kerajaan, kami akan lebih
berhati-hati dalam mengatur strategi kami.
53
Bank Pembangunan
Sabah dan SCORE, termasuk pelaksanaan beberapa
projek-projek infrastruktur berimpak tinggi, tentunya
memberi peluang yang lebih luas untuk Bank
Pembangunan meluaskan bukan sahaja
perniagaannya, bahkan juga ruang yang lebih untuk
menyumbang kepada pembangunan negara.
President/Group Managing
Director’s Statement
In the name of Allah, the most Beneficent, the most Merciful.
On behalf of the Board of Directors of Bank Pembangunan Malaysia Berhad (Bank Pembangunan), it is
my pleasure to present the Thirty Fourth Annual Report and the Audited Financial Statements of Bank
Pembangunan for the financial year ended December 31, 2007.
Malaysian Economic Review
Malaysia’s economy in 2007 once again surpassed the estimated growth for the year under review whereby GDP grew at
6.3% as compared to the 6% forecasted. The economy registered a strong growth in the fourth quarter of the year,
attributed by the robust domestic demand and increase in public sector spending.
Bank Pembangunan
54
Positive growth was recorded in all economic sectors during the year. Agriculture sector expanded by 2.2% in which the
growth was particularly high in the fourth quarter due to the expansion in crude palm oil output and higher output of
livestock. Mining sector recorded a growth of 3.2% attributed by the increase in crude oil output that was supported by the
Kikeh deepwater fields. Manufacturing sector grew by 3.1%, a reflection of the strong expansion in the domestic-oriented
industries. Expansion in domestic-oriented industries was underpinned by the encouraging performance in transport
equipment, food and beverages as well as construction related industries. Export oriented industries also showed a better
performance with an improvement in the electrical & electronic sector.
Services sector remained as the main impetus to economic growth with 9.7% growth for the year. Growth in the sector was
mainly attributed by the strong performance of sub sectors like wholesale and retail trade, accommodation and restaurant,
finance, insurance, real-estate and business services. Growth for the construction sector was sustainable at 4.6%.
The country recorded its tenth consecutive year of trade surplus in 2007. Trade surplus increased by 3.7% to RM1.1097
trillion. Exports recorded an increase of 2.7%, while imports grew by 4.9%. The diversified export markets were the main
factor for the sustained growth in exports. As a matter of fact, Asia markets have become more predominant for Malaysia’s
exports. Export to Asia grew 6.2% during the year, representing 63% of total exports as compared to only 55% share a
decade ago. Meanwhile, strong investment in the manufacturing and services sectors were regarded as the main factors to
the increase in imports. The expansion in investment spending gave rise to the imports of intermediate and capital goods,
which accounted for more than 70% of the total imports for the year. The trans-shipment cargo in the Southeast Asian
region was growing between 10% and 15% a year. Based on this, more shipping lines are expected to switch hubs to
Malaysia within the next five to ten years to benefit from Malaysian ports’ attractive pricing and capability in handling cargo
volumes. This augurs well for Bank Pembangunan in which one of its three main mandated roles is to provide financing to
the maritime sector particularly those that supports the intra-regional trade activities.
Improvement in infrastructure was among the major agenda during the year under review. The launching of regional
development master plans namely Iskandar Malaysia, Northern Corridor Economic Region, East Coast Economic Region,
Sabah Development Corridor and Sarawak Corridor of Renewable Energy have outlined various high impact infrastructure
projects to ensure the success of these economic development master plans.
A total of 949 manufacturing projects were approved in 2007. Domestic investment approvals rose 2.9% to RM26.5 billion.
An analysis done on the approved projects shows that the investment trend is moving towards more capital intensive, high valueadded and high technology projects. Being the development financial institution mandated to provide financing particularly to
the capital-intensive high technology sectors, Bank Pembangunan has to a certain extent benefited from the investments made.
Supported by strong capitalization and profitability, the banking sector demonstrated a high level performance and
remained resilient. The banking system financing activity recorded a strong growth of 8.6% compared to a growth of 6.3%
in the previous year. The capitalization of the banking system was strong with a risk weighted capital ratio (RWCR) of 13%
as at end of the year. The non-performing loan (NPL) for six-month classification improved further to account for 2.4% of
net total loans as compared to 3.7% in the previous year, underpinned by strong recoveries and active balance sheet
management via NPL sales and year-end write-offs.
Performance Review of Development Financial Institutions (DFIs)
OVERVIEW
Provide financing opportunities to support the development of sectors promoted by the Government;
•
Provide financing opportunities to support the country’s entrepreneurial and technopreneurial capacity especially in
the SME community;
•
Demonstrate effective use of the Government funding and introduce a systematic framework for sourcing funds
towards self-sufficiency funding;
•
Instill operational discipline including increased institutional transparency and corporate governance standards and
enhanced risk management activities.
Out of thirteen (13) DFIs, six (6) are regulated under the Development Financial Institutions Act (DFIA) 2002, namely Bank
Pembangunan Malaysia Berhad, Bank Perusahaan Kecil dan Sederhana Berhad (SME Bank), Export-Import Bank of Malaysia
Berhad (EXIM Bank), Bank Kerjasama Rakyat Malaysia Berhad (Bank Rakyat), Bank Simpanan Nasional (BSN) and Bank
Pertanian Malaysia Berhad. It is envisaged that these regulated DFIs would continue to progress and assume a significant
role in addressing the development of strategic sectors by providing financing to promote the industrial sector, the services
sector and the modernization of the agriculture sector. In this aspect, Bank Pembangunan would remain focused on our
mandated role which is to provide medium to long term credit facilities to finance infrastructure projects, maritime,
high-technology and capital intensive industries in manufacturing as well as other identified sectors in line with the
country’s development policy.
In ensuring those regulated DFIs remain focused on their mandated roles and that their activities are carried out in a
prudent, effective and efficient manner, BNM continuously has issued various guidelines/circulars to strengthen the capacity
and enhancing the prudential framework, to complement their yearly surveillance exercise.
Development in 2007
In 2007, BNM issued two (2) guidelines and one (1) circular to the DFIs, as given below.
•
GUIDELINES ON STAFF TRAINING FUND
The original guideline was introduced on 28 Nov 1985 and revision was made to include DFIs and made effective to
them from 6 April 2007.
The objective of this guideline is to encourage financial institutions to train their own personnel and not to resort to
‘pinching’ of staff from other financial institutions. This is to ensure that there is no excessive bidding up of salaries
by any financial institutions that are far in excess of the actual level of productivity in order to meet human capital
requirements.
•
GUIDELINES ON INTRODUCTION TO NEW PRODUCTS
The guideline, which is effective from 28 September 2007 sets out the applicable regulatory procedures on the offering
of new financial products and services by financial institutions and BNM’s expectations regarding the management
and control of risk associated with the development, offering and marketing of those products by financial
institutions.
It also addresses the responsibilities of financial institutions towards consumers in ensuring that products sold or
recommended are suitable, and that customers are clearly and fully informed of the nature and risks associated with
these products.
55
Bank Pembangunan
•
DFIs are established to develop and promote strategic sectors of the economy as well as achieve social goals, whereby certain
DFIs are mandated to promote and achieve the Government’s specific social and economic objectives. The Government has
outlined the development thrusts for DFIs under the Third Outline Perspective Plan (OPP3), Financial Master Plan, Ninth
Malaysia Plan and Third Industrial Master Plan. The key imperatives under those development thrusts are:
Penyata Presiden/ Pengarah Urusan Kumpulan
•
Bank Pembangunan
56
FAIR DEBT COLLECTION PRACTICES
This circular sets out fair debt collection practices that every DFI is required to observe in order to promote high
standards of professionalism in collecting debts from borrowers which is made either by in-house debt collectors or
external debt collection agency engaged by the DFIs. In the event an external agency is appointed, the DFI is required
to issue an authorization document to the particular external agency to authorize them to collect debts on its behalf.
The DFIs must ensure that the in-house and appointed external debt collectors comply with the secrecy provisions
under the relevant legislation as well as debt collection practices in dealing with issuance of notice to borrowers,
collection of payments and conduct of debt collectors.
Financial Performance of Six (6) DFIs under DFIA
Total loans outstanding expanded by 18.6% from RM50.9 billion in 2006 to RM60.4 billion in 2007 to account for 92.6% of
the total loan outstanding of 13 DFIs as at end 2007. The strong growth was driven largely by the increase in financing for
consumption credit by both Bank Rakyat and BSN and loans extended by Bank Pembangunan to maritime and
high-technology sectors. Loans extended to strategic sectors of the economy i.e construction, electricity, gas and water
supply, manufacturing and agriculture sectors remained favourable and increased by 15%, representing 31% of the total
loans. As a result of stronger growth in loans outstanding, the gross NPL ratio improved from 10.0% to 8.8%, despite a hike
in total gross NPL from RM4.9 billion in 2006 to RM5.1 billion in 2007.
Financial Performance Of Bank Pembangunan and It’s Subsidiaries
During the year under review, Bank Pembangunan’s total interest income rose 15.24% to RM1.21 billion from RM1.05 billion.
The growth in interest revenue was inter-alia attributed to the significant increase in interest income from the lending
activities by 15.30%. The non-interest income however reduced by RM234.58 million from RM369.03 million in 2006 to
RM134.45 million in 2007 due to lower compensation received from the Government as compared to 2006.
Bank Pembangunan recorded a Net Profit of RM408.53 million, a decrease of 17.62% as compared to the preceding financial
year’s Net Profit of RM495.96 million. The lower non-interest income and higher specific provision contributed to the lower
Net Profit.
As compared to the 2006 figure, total assets for 2007 were up by 3.58% or RM806.37 million to RM23.31 billion amidst a
backdrop of strong loans growth of 8.0%. The growth was mainly attributed to strong loans demand by the high technology
sector, as demands for biotechnology and alternative energy resources are accelerating.
Bank Pembangunan’s total shareholders’ funds stood at RM5.52 billion as at 31 December 2007, from RM5.14 billion a year
ago, which represents an increase of 7.39%.
Based on the 2007 financial year results, Bank Pembangunan’s Risk Weighted Capital Ratio (RWCR) was maintained at 22.49%,
in comparable to RWCR in the previous year, which surpassed the minimum requirement set by Bank Negara Malaysia.
•
BANK PERUSAHAAN KECIL & SEDERHANA MALAYSIA BERHAD (SME BANK)
For the financial year ended 31 December 2007, SME Bank’s revenue rose by 4.81% or RM12.44 million from RM258.45
million in the preceding year to RM270.89 million. This was attributable to the increase in interest income and
fee-based income.
The profit before tax increased to RM53.43 million, as compared to a loss before tax of RM306.94 million recorded in
the preceding year, which was mainly due to high provision and bad and doubtful debts write-off. On the part of
operational performance, a total of RM3.05 billion worth of loans were approved favouring 1,622 projects, the value
of which increased by 42.52% from RM2.14 billion in the preceding year. Although greater efforts were made to
expand SME Bank’s outreach to the market and consumers, proper control and monitoring mechanisms have also been
put in place to ensure the quality of loans is not compromised. This was evidenced by the low rate of gross
non-performing loans at 6.40%.
GMVB continued to benefit from the increase in freight rate for dry bulk carriers and tankers. Its operating income,
on a group basis, increased by 18.17% in 2007 to RM337.22 million as compared to RM285.36 million in 2006. The
favourable market conditions had also contributed good returns from the disposal of one vessel. As a result, the profit
before tax surged from RM141.23 million in 2006 to RM341.25 million in 2007. GMVB shareholders’ fund further
strengthened in 2007 as it picked up to achieve RM998.63 million, after a drop in 2006 resulting from a capital
reduction exercise.
•
PEMBANGUNAN LEASING CORPORATION SDN BHD
For the financial year ended 31 December 2007, Pembangunan Leasing Corporation Sdn. Bhd. (PLC) and its subsidiaries
recorded a dynamic financial performance. PLC achieved a total income of RM42.28 million with a record profit before
tax of RM55.36 million. The substantial increase from 2006 was derived from the increase in Hire Purchase and Ijarah
operations as well as recovery of the non-performing loans.
•
PEMBANGUNAN EKUITI SDN BHD
Pembangunan Ekuiti Sdn Bhd (PEkuiti), a joint venture company between Bank Pembangunan and Intrasys Sdn. Bhd.,
which was mandated to manage the RM1.0 billion SME Growth Acceleration Fund recorded a profit before tax of
RM0.53 million for the year ended 31 December 2007, an increase of RM0.28 million as compared to RM0.25 million
in 2006.
Lending Performance
Bank Pembangunan plays a vital role in spearheading the growth of the country’s strategic economic sectors in providing
medium to long term financing mainly to its mandated sectors. In 2007, 67 loans worth RM4.69 billion had been approved
to finance various projects in the infrastructure, maritime and high technology sectors.
•
INFRASTRUCTURE
Bank Pembangunan commenced the financing of infrastructure projects in 1999. Initially, financing was for the
prioritized infrastructure projects identified by the Government. Today, however, Bank Pembangunan’s financing
schemes have expanded to also cover the commercial infrastructure projects such as tourism infrastructure.
During the year under review, 17 loans valued at RM2.78 billion had been approved to finance infrastructure projects
in various sectors. The construction industry was the major recipient that accounted for 86.0% of the total loans
approved, followed by tourism infrastructure projects, telecommunications and ports.
The total outstanding infrastructure loan portfolio as at the end of 2007 was RM15.36 billion as opposed to RM15.33
billion in 2006, which recorded only a marginal increase of 0.20%. Water, construction and transportation sectors
continued to be the main contributors to the infrastructure loan portfolio.
GLOBAL MARITIME VENTURES BERHAD (GMVB)
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Bank Pembangunan
•
MARITIME
As at 31 December 2007, the total maritime loan outstanding amount was RM1.72 billion, an astounding increase of
115.27% as compared to RM799.0 million in the preceding financial year. This proves that Bank Pembangunan had
stepped up its efforts to further intensify the assistance provided to the shipyard and shipping industry in consonance
with our mandate to assist the government in developing and transforming the country into a ‘Maritime Nation’.
•
In 2007, 18 loans valued at RM676.70 million were approved. It was largely a result of overwhelming demands from
the shipping industry particularly those from the offshore support activities. Bank Pembangunan’s total disbursement
in 2007 was RM1.45 billion, an impressive 502.90% increase as compared to 2006’s RM240.10 million.
The RM1.0 billion New Shipping Finance Fund (NSFF), which was introduced in 2001 continued to receive
overwhelming demand. Cumulatively, as at 31 December 2007, the NSFF had benefited 48 companies with a total
approval amount of RM973.70 million.
•
HIGH TECHNOLOGY
The Government, in 2006, entrusted Bank Pembangunan to manage the Biodiesel Fund worth RM500 million. With the
overwhelming response from the domestic investors, Bank Pembangunan introduced Biofuel Financing Scheme worth
RM2.0 billion in 2007 as a continuation of the Biodiesel Fund and in support of the Government’s National Biofuel
Policy. Under this scheme, Bank Pembangunan had approved a total of RM300.50 million worth of loans in 2007.
Bank Pembangunan
58
Additionally, another RM2.0 billion worth of fund had been allocated for the renewable energy & efficient energy
(RE&EE) industry. The RE&EE Scheme II is a continuation from Bank Pembangunan’s fully utilized RE&EE Scheme I.
Bank Pembangunan had approved five projects worth RM102.71 million in 2007.
Overall, high technology sector contributed 5.42% or RM978.90 million of the total loan outstanding as at end of
2007, which was an encouraging increase of RM435.90 million or 80.28% as compared to RM543.0 million in the
preceding year.
Continuous Improvement
One of the strategic operating principles in Bank Pembangunan’s five-year strategic plan is to institute comprehensive
improvement programmes across the service delivery chain to both the internal and external customers and to adopt a
business approach to its activities. In line with that, in December 2007, Bank Pembangunan was awarded the MS ISO
9001:2000 certification for processing of loan application until issuance of letter of offer. To further improve its
enhancement program, Bank Pembangunan has embarked on the process to expand the certification to the disbursement
process.
In August 2007, Bank Pembangunan teamed up as a strategic partner with the Asian Strategy & Leadership Institute (ASLI)
to organize the 4th National Utilities Summit. With the theme "Blazing New Trails: Development, Strategies & Opportunities
for a Profitable Future", the high profile event received good response from the key players and prominent companies from
the utilities sectors. Key individuals from the Water, Telecommunication & ICT, Energy & Electricity sectors utilized the forum
to discuss the latest developments, case-scenarios and insights into the challenges such as price volatility, technological
advancements, consumer demands and the rapidly changing environmental regulations.
The year 2007 also saw Bank Pembangunan being accorded an award by the prestigious Association of Development
Financing Institution in Asia and the Pacific (ADFIAP) in the category of ‘Infrastructure Development’ for its Stormwater
Management and Road Tunnel (SMART) project to alleviate the flooding problem in the city centre of Kuala Lumpur.
For the first time in Bank Pembangunan's glorious history and in conjunction with the Golden Jubilee Celebration of
Malaysia's Independence, Bank Pembangunan as a patriotic corporate citizen celebrated the 50th anniversary of
Independence by displaying a giant bunting and producing a television commercial, which was aired on TV3 throughout the
Merdeka Month Celebration. The effort did not go unnoticed as the giant bunting was accorded the third placing in the best
decorated bunting competition held in conjunction with the 50th Merdeka Celebration organized by Kementerian
Kebudayaan, Kesenian dan Warisan. At the same time, the television commercial was accorded the Best Director award for
an advertisement in the “Anugerah Oskar ke 6” organized by Persatuan Pekerja Filem Malaysia.
Corporate Social Responsibility
The Bank Pembangunan Corporate Social Responsibility (CSR) Programme was initiated with the intention of cultivating
socially responsible practices within the organizations of Bank Pembangunan in order to provide aid to orphans,
underprivileged children, the handicapped and single mothers. Being one of the leading development financial institutions
with a long-standing relationship with the Malaysian community, we believe that we have a responsibility to contribute
towards the well being of our community.
As a responsible corporate citizen, Bank Pembangunan routinely distributes its ‘zakat perniagaan’ to zakat collection centres
nationwide. The business tithes payments for the year ended 31 December 2006 was RM2.3 million, which was distributed
to the deserving parties in 2007.
Working in collaboration with Pediatrics Institute, Kuala Lumpur Hospital, Bank Pembangunan had organized an Aidil Fitri
Contribution Ceremony at the hospital. The contribution, both monetary and in-kind were made to 200 pediatrics patients
at the institute. Bank Pembangunan had also allocated cash donations to its disabled staffs, single mothers and family
members of deceased staff in a bid to bring cheer to their Aidil Fitri celebration.
Bank Pembangunan views human capital development as critical in ensuring the achievement of its goals, short or long term;
especially in this fast moving, knowledge-based arena where human capital gives Bank Pembangunan a crucial competitive edge.
The strategies that have been put in place are targeted at not only developing and upgrading existing talent, but to also
recruit new talent with valuable experience that will subsequently help create a viable working culture in a harmonious
manner. Thus, the Management Trainee Program, which was introduced in 2006, was continued in 2007 by recruiting
16 fresh graduates to be groomed and developed from within into future leaders who have the mindset and leadership
qualities to lead Bank Pembangunan in the coming years.
The year 2007 also saw the appointment of Puan Haini Hassan and Tuan Haji Mohd Zarif Mohd Zaman onboard the Bank’s
Board of Directors. At the management level, Bank Pembangunan witnessed the appointment of Encik Mohd. Fauzi Rahmat
and Encik Mohd. Ghazali Abbas as the Chief Operating Officer and Vice President/Head, Group Audit & Examination
respectively. In addition to that, Bank Pembangunan in early 2008 also welcomed Encik Jamaluddin Nor Mohamad as Senior
Vice President, Operations.
Bank Pembangunan bid farewell to the former President/Group Managing Director, Datuk Abdul Rahim Mohd Zin who retired
on 30 August 2007 after almost 4 years helming Bank Pembangunan and its Group of companies. On 1 December 2007,
Bank Pembangunan also witnessed the retirement of Tan Sri Dato’ Seri Dr. Hj Zainul Ariff Hj Hussain as Chairman of the Board.
Bank Pembangunan also continued to acknowledge the tradition of providing staff awards. In 2007, 15 staff received the
10-Year Long Service Award, 15 the 15-Year Long Service Award, 12 the 25-Year Long Service Award and 2 staff received
the 30-Year Long Service Award.
Business Prospect
With the Malaysian economy in 2008 expected to strengthen further, various efforts are being undertaken by the Government
in providing a strong base for the development of the country. Mega projects outlined under the Ninth Malaysian Plan (9MP)
such as the development of economic corridors namely Iskandar Malaysia, North Corridor Economic Region, East Coast
Economic Region, Sabah Development Corridor and Sarawak Corridor of Renewable Energy; including the implementation of
several high impact infrastructure projects, certainly offer wider opportunities for Bank Pembangunan to expand not only its
business but also to provide greater contribution in spurring the national development agenda.
As announced in the National Budget 2008, Bank Pembangunan had once again been entrusted to manage the Tourism
Infrastructure Fund (TIF) of RM200 million to promote tourism activities in Sabah and Sarawak. TIF was initially launched in
October 2002 by the Government to help provide financing for tourism related projects like integrated tourism centers, theme
parks, recreational parks, waterfront, marinas and safaris and hotels & resorts and many more. This RM200.0 million will be
part of the allocation provided to the Bank amounting to RM1.2 billion for its TIF. The specific allocation for the promotion
of tourism industry in Sabah and Sarawak marked the trust and confidence of the Government in Bank Pembangunan.
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Bank Pembangunan
Human Capital And Organizational Development
The CSR initiatives are not only about philanthropy but also represents an effort to create more awareness of Bank
Pembangunan’s impact on society, its surrounding and environment. In 2007, Bank Pembangunan continued its CSR
initiatives in environmental conservation by sponsoring the upkeep of eight Ring-tailed Lemurs at the Melaka Zoo. Bank
Pembangunan has been heartily supporting the care of endangered wildlife species since the 1990s to signify Bank
Pembangunan’s long-term commitment towards the preservation, management, and care of natural and cultural resources.
Gearing towards better performance in 2008 and years to come, we will continue our journey in transforming and strategizing
every part of businesses to better serve the customers, be more effective and efficient in corporate governance and internal
controls which would cover the strengthening of the overall credit process, risk management and IT infrastructure. Moving
towards that, we have embarked on the necessary initiatives to align our people, structure, systems and processes towards
superior execution. The investment in human capital would remain as our top priority as they form the essential asset of the
Bank in transforming the Bank as an effective business entity. The front liners will be empowered with the improved skills set
not only to serve the customers and better provide the necessary advice but also to transform the entire credit value chain to
be more risk analytical, which amongst others require them to upgrade their capabilities with financial risk modeling. This is to
be in line with new requirements which demands greater emphasis on the Bank’s own internal methodologies, supervisory
review and market discipline rather than focusing on a single risk measure. We will pursue our journey to build market
confidence as we want to be recognized as an effective development financial institution in meeting customer and stakeholder
needs. We will persevere to build greater resilience and to be well placed to capitalize on any opportunity, which may arise in
the future. With the right strategies in place, we will forge ahead in our voyage as a leading development financial institution,
towards fulfilling the Government’s aspirations. We will always strive to build a sustainable growth that will withstand
economic cycles and market risk changes. As a custodian of the Government’s fund, we will remain prudent in our strategies.
Appreciation
On behalf of Bank Pembangunan, I would like to express my gratitude to our customers, the Ministry of Finance, the Ministry
of Entrepreneur and Cooperative Development, Bank Negara Malaysia as well as other Government agencies and authorities
for their continued support and confidence. On behalf of the Management team, I would also like to express our sincere
gratitude to the Board of Directors, whom has supported us tirelessly. The support and confidence, hopefully, will augur well
in the years to come to ensure Bank Pembangunan will remain relevant in spurring the nation’s growth.
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We are currently undergoing a major re-structuring exercise, an exercise that will witness the departure of SME Bank from
the Bank Pembangunan Group as announced in the fourth quarter of 2007. SME Bank will be a separate entity under
Minister of Finance Incorporated come 1st April 2008. The separation exercise is aimed at further strengthening and
enhancing the Bank’s capacity, efficiency and effectiveness in providing specialized financial services to its targeted sectors.
Laporan
Reports
Study On Malaysian Ports
Introduction
1.1
OBJECTIVE
The objective of the study is as follows:
1.2
•
To provide a general overview of the port industry;
•
To determine the present status of Malaysian ports; and
•
To identify the business opportunities for BPMB.
METHODOLOGY
The study is prepared based on primary and secondary research whereby the following methods were used:
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•
Questionnaire surveys, visitations, discussion and observations with targeted industry players;
•
Discussion with related government agencies; and
•
Information derived from shipping publications, intelligent reports and industry web pages.
Visitations and discussions have been conducted with the following ports:
i.
Port Tanjung Pelepas
ii.
Johor Port
iii.
Kuantan Port
iv.
Bintulu Port
v.
Kuching Port
vi.
Miri Port
vii.
Kota Kinabalu Port
viii. Sepangar Bay Container Port
ix.
Westport
x.
North Port
xi.
Penang Port
General Overview of Port Industry
Economic globalization in some way has forced the ports around the world to evolve from a mere land and sea
interfaces to becoming a provider of complete logistics network.
Globalization of manufacturing and outsourcing;
•
Global trends of logistics network restructuring and reposition of regional and/or local distribution center;
•
Rapid growth in volume of world seaborne freight, especially container;
•
Emerging hub and spoke system in global shipping service;
•
Increase of transshipment cargo and competition among ports and terminal operators;
•
Introduction of the super mega size containership;
•
Increasing competition towards hub ports;
•
Emerging global terminal operators and their growing market share;
•
One stop shopping concept and intermodal transport linking strategically between ocean, railway, road and
inland waterway;
•
Increasing role of ports in global supply chain management and logistics network structures;
•
Increase of productivity and efficiency in ports; and
•
High cost and constraints for developing port facilities.
Due to the above challenges, competitive ports around the world have been trying to develop physical
infrastructures, especially container terminals and related facilities, and to expand their port hinterland by
introducing free trade zones with a hope to develop hub ports and international logistics centers. Additionally,
in order to cope with the above challenges, some ports have been carrying out port reforms such as port
governance restructuring and deregulations as well as private and public partnership.
2.1
EMERGING ISSUES IN PORT DEVELOPMENT
2.1.1 Development in Container Trade
During the 1990s and early 2000s, the growth of world container trade was accelerated to an average
growth rate of 9.1% per year. The rapid growth of container trade was attributed by the following factors:
•
Liberalization of international trade and globalization has substantially help accelerating the growth
of international trade. The world trade volume has continued to grow with the gradual removal of
barriers under the World Trade Organization and also through the regional trade agreements;
•
Increasing importance in transshipment movements (the transfer of cargo from one ship to another);
•
More ports have developed the infrastructure and acquired the handling equipment needed to cater
container vessels. Due to this development, goods that had previously been shipped as loose cargoes
gradually converted to containers;
•
Containerization, combined with developments in information, food and other technologies, has
expanded the range of trading possibilities. The most obvious example, owing to the development in
technologies, the carriage of highly perishable goods has been made possible;
•
China has emerged as a major new container market. The trade volume to and from China has grown
enormously over the decade.
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•
The challenges in port industry are mainly coming from the unpredictable environmental changes as well as trends in
the shipping, port and logistics industries. The following are some of the challenges in port industry, which ports in
the world should give serious attention in order to become competitive:
2.1.2 Hub And Spoke Network in Liner Service
•
In hub and spoke network system, containers to a region are delivered to a primary hub port and
then transported to its final destination via sea, rail, road or inland waterways.
•
Similarly, exports from a particular region are collected at the primary hub, which are then
transported to final destination.
•
The primary hubs must be equipped to allow for a quick turnaround time of vessels, have to be on
the geographical central of the region and be able to accommodate large vessels.
•
The emergence of the system allows the establishment of load centers along the East-West
shipping lanes.
•
Also, the systems allow shipping lines to provide a global network of east/west, north/south and
regional services.
2.1.3 Port Reforms, Privatization and New Roles
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•
Public - Private partnerships to finance port investments and manage port facilities have been
common for many years.
•
Many governments have accelerated deregulation of economic activities and decentralization of
decision making to reduce demands on the public sector budget, increase financial viability and
improve productivity and efficiency in the port industry.
2.1.4 Emergence of Global Container Terminal Operators
•
The privatization of port activities around the world has increased the participation of global
terminal operators, particularly in container port operations.
•
Global terminal operators are aggressively penetrating the global container stevedoring market in
order to increase their competitiveness by establishing global networks.
•
Penetration of global terminal operators is through horizontal integration that is either by mergers
and acquisitions or by investing in container terminal development in other countries. Investment in
container terminal development could be done through a joint venture with local companies or other
global operators or shipping lines. Examples are Hutchison Port’s acquisitions of concessions at ports
in China, Indonesia, The Republic of Korea, Thailand and Myanmar.
•
The leading terminal operators will develop strategies toward the control of larger parts of the supply
chain and establish a totally integrated system.
•
This includes creating a landbridge between ports and inlands, for example, by operating rail
terminals, setting-up road haulage companies or running own feeder services. This expansion
includes downstream diversification of shipping lines into terminal management like AP Moller
(Maersk Sealand) at the Port of Tanjung Pelepas.
2.1.5 Hub Ports
•
Competition among hub ports is growing as less developed ports are developing their ports
infrastructures to compete with the existing hub ports.
•
As competition increases, shipping alliances and major shipping lines have been taking advantage of
their growing power in negotiating concessions for dedicated terminals or deciding ports of call.
•
Also, shipping lines demand ports to provide deep water, quality services, productivity, efficiencies as
well as infrastructures such as rails and roads.
•
Ports are losing their bargaining power and have been forced to actively enhance productivity and
invest a great amount of money in order to stay competitive.
•
Another major trend in port industry is the development of logistics related zones like free trade
zones or international logistics zones to accommodate value-added logistics activities.
•
The main objective in developing such logistics center is to attract foreign investment and create new
employment.
•
A successful logistic zone will be able to secure freight volume for the port and would open the
potential to develop the port into a hub port.
•
Apparently, the trend to establish logistics centers by ports will further increase the competition in
port industry.
2.1.6 Logistics Centers
2.2
WORLD’S TOP PORTS
According to the American Association of Port Authorities (AAPA), Shanghai Port of China, Singapore Port,
Rotterdam Port of Netherlands, Ningbo Port of China and Tianjin Port of China are the world’s top five ports in
2005 based on the total cargo volume.
Meanwhile, Singapore Port, Hong Kong Port, Shanghai Port of China, Shenzen Port of China and Busan Port of
South Korea are the world’s top five ports measured based on the container traffic volume.
It is expected that by 2010, Shanghai Port container throughput to surpass the performance of Hong Kong Port and
by 2020 Shanghai Port is expected to be overtaken by Shenzen Port to become the world’s largest container port.
Shanghai and Shenzen ports are expected to be moving 56.2 million and 57.9 million TEU, respectively, by 2020.
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General Overview of Malaysian Ports
3.1
BACKGROUND
About 95% of Malaysia’s trade is by sea through the country’s seven international ports, namely Penang Port,
Port Klang, Johor Port, Port of Tanjung Pelepas, Kuantan Port, Kemaman Port and Bintulu Port.
Malaysia plays the role of a regional transshipment hub, while its ports serve as regional hinterland ports. Being
a transshipment hub, the country functions as the transfer point for different shipping lines where cargo is
off-loaded from one ship to other ships and forwarded to different port destinations.
According to AAPA’s world port ranking 2005, based on the total cargo volume, Port Klang was ranked the 26th
top port in the world with total cargo volume of 109.7 tonnes. Nevertheless, Port Klang was ranked 14th and
Port of Tanjung Pelepas was ranked 19th in the world port ranking based on the container traffic in which each
port recorded 5.5 million and 4.2 million TEU respectively.
In comparison with the country’s nearest neighbour, Singapore Port was ranked 2nd based on its total cargo
volume of 423.3 tonnes and regarded as the world’s top port for its container traffic of 23.2 million TEU.
3.2
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PERFORMANCE OF CONTAINER TRAFFIC BY MALAYSIAN PORTS FOR THE FIRST HALF OF 2007
In general the volume of containers handled at principal container ports of Malaysia for the period of January
to June 2007 increased by 14.76% to 7.4 million TEUs. The ports recorded a combined volume of 6.5 million TEUs
for the same period in 2006. The growth was mainly attributed to the handling of more transshipment traffic.
Port Klang, Malaysia’s leading container port, handled 3.38 million TEUs container traffic during the first half of
the year as compared to 3.0 million TEUs handled in the same period last year. Port Klang comprises two port
terminals, namely Northport and Westports, accounted for 46% of the total container traffic handled by ports
in Peninsular Malaysia.
Port of Tanjung Pelepas recorded container traffic of 2.72 million TEUs, while Johor Port registered 453,000 TEUs,
bringing a combined container traffic volume of 3.18 million TEUs.
Penang port’s container traffic volume grew by 11.53% to 444,242 TEUs for the first half of 2007. The port
believed that with the delivery of its two quay cranes in July this year, the container traffic volume would reach
900,000 TEUs by end of the year.
Kuantan Port, meanwhile, handled 65,117 TEUs during the period, marking a moderate rise of 9.12% from the
same period last year. During the period in 2006, Kuantan port handled less than 60,000 TEUs.
Sarawak’s four principal container ports namely Bintulu Port, Kuching Port, Miri Port and Rajang Port handled
a total of 230,000 TEUs. During the period, Bintulu Port remained as the lead container port in Sarawak with
total container handling of 110,420 TEUs, registering a dramatic increase of 34% as compared to 84,500 TEUs of
container handling in the same period last year. The remarkable increase was due to the significant improvement
in shipping services provided by Swee Joo Bhd and Harbour Link Line.
Sabah container ports, namely Tawau Port, Kota Kinabalu Port and Sandakan Port also recorded positive growth
in the container handling for the period. The three ports handled a total of 126,800 TEUs of container volume
for the first half of the year.
Table 1 : Container Traffic for Malaysia Ports (January – June 2007)
PORTS
CONTAINER VOLUME (TEUs)
1. Port Klang
3.38 million
2. Port of Tanjung Pelepas
2.72 million
3. Johor Port
453,000
4. Penang Port
444,242
5. Kuantan Port
65,117
6. Bintulu Port
110,420
7. Kuching Port
78,000
8. Rajang Port
31,700
9. Miri Port
10. Ports of Tawau, Kota Kinabalu and Sandakan
Source: portsworld.com
9,129
126,800
3.3
PROFILE OF MALAYSIAN PORTS
Malaysian ports are either established as Federal ports or State ports. There are also ports and jetties that are
under the purview of the Marine Department, fishing ports and jetties under the purview of Fisheries
Development Authority as well as special ports run by major oil companies.
3.3.1 Federal Ports
The federal ports were established as Federal Statutory Bodies. For examples Penang Port was established
under the Penang Port Commission Act 1955, Bintulu Port was established under the Bintulu Port Authority
Act 1981, while the rest of the federal ports were established under the Port Authorities Act 1963.
Nevertheless, under the Port Privatization Act 1990, the operations of federal ports were either
corporatized or privatized to private operators. After the privatization of federal ports, the port authorities
assumed new roles as the regulatory bodies. For illustration, Penang Port is now operated by a private
operator, Penang Port Sdn Bhd (PPSB). Penang Port Commission, meanwhile, acts as the regulatory body
for PPSB and other private operators under its jurisdiction.
3.3.2 State Ports
3.3.3 Minor Ports and Jetties
Minor ports and jetties are classified under three categories:
•
Ports and jetties under the jurisdiction of the Marine Department Malaysia and governed by the
Merchant Shipping Act 1952. Examples are Barter Trade Jetty in Labuan, Bandar Hilir, Melaka Jetty,
Muar Jetty and Kuala Terengganu Jetty.
•
Fishing Ports and jetties under the jurisdiction of the Fishing Development Authority. Examples are
fishing ports at Tanjung Dawai, Kedah; Sungai Udang, Melaka; Batu Maung, Pulau Pinang; Tok Bali,
Kelantan and Mukah, Sarawak.
•
Terminals, which are privately owned by oil majors, beach resorts and fishermen. Examples are Kertih
Port owned by Petronas, Labuan Port oil terminals and Tanjung Manis Port oil terminal that are
owned by Shell, Pulau Indah oil terminal owned by Caltex and Port Dickson oil terminals owned
by Esso.
Figure 1 shows the location of major Malaysian Ports, while Table 2 is the profile for federal ports and state ports.
Figure 1 : Location of Malaysian Major Ports
Kudat
Dermaga Tanjung
Lembung
Sapangar Bay
Oil Terminal
Kuala Perlis
Teluk Ewa Jetty
Sandakan
Kota Kinabalu Port
Kota Bahru
Tumpat
Labuan Port
Kertih Port
Penang Port
Lahat Datu
Kemaman Port
Miri Port
Lumut Port
Kuantan Port
Telok Intan
Bintulu Port
Port Klang
Rajang Port
Port Dikcson
Sungai Udang Port
Malacca Port
Mersing
Kuching Port
Muar
Tanjung Pelepas
Source: Portsworld
Johor Port
Semporna
Kunak
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Ports in Sarawak were established under the Sarawak Port Authorities Ordinance 1961. In Sarawak, the port
authorities, namely Kuching Port Authority, Rajang Port Authority and Miri Port Authority own and
operate the ports.
Ports in Sabah and Sarawak are state ports that came under State Statutory Bodies. Ports in Sabah were
established under the Sabah Port Authority Enactment 1967. Sabah ports have been privatized and operated
by only one private operator that is Sabah Ports Sdn Bhd. Sabah Port Authority acts as the regulator.
Table 2: Malaysian Federal and State Ports
FEDERAL PORTS
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1. Port Klang
Regulator:
Port Operator:
Port Klang Authority
Northport (Malaysia) Berhad
Westports Malaysia Sdn Bhd
2. Penang Port
Regulator:
Port Operator:
Penang Port Commission
Penang Port Sdn Bhd
Teluk Ewa Jetty
3. Johor Port
Regulator:
Port Operator:
Johor Port Authority
Johor Port Bhd
Port of Tanjung Pelepas
4. Kuantan Port
Regulator:
Port Operator:
Kuantan Port Authority
Kuantan Port Consortium Sdn Bhd
5. Kemaman Port
Regulator:
Port Operator:
Kuantan Port Authority
Kuantan Port Consortium Sdn Bhd
(East Wharf)
6. Bintulu Port
Regulator:
Port Operator:
Bintulu Port Authority
Bintulu Port Sdn Bhd
1. Lumut Port, Perak
Regulator:
Port Operator:
Lumut Port
Lumut Maritime Terminal Sdn Bhd
2. Dermaga Tanjung Lembung
Regulator:
Port Operator:
Marine Department
Langkawi Port Sdn Bhd
3. Sabah Ports
Regulator:
Port Operator:
Sabah Port Authority
Sabah Ports Sdn Bhd
a. Kota Kinabalu Port
b. Tawau Port
c. Lahad Datu Port
d. Sandakan Port
e. Sepangar Bay Oil Terminal
f. Kunak Port
g. Kudat Port
4. Ports in Sarawak
Regulator /
Port Operator:
Kuching Port Authority
Rajang Port Authority
Miri Port Authority
STATE PORTS
Source: MIMA
Primary Research Findings
PORT TANJUNG PELEPAS
4.1.1 Background
Port of Tanjung Pelepas (PTP) commenced operations in the first quarter of 2000. In a short span of 8 years,
PTP has grown into one of the world’s major container port. During the period, PTP throughput volumes
have grown by ten fold. Located at the south western tip of Johor, that is the confluence of major shipping
routes, PTP is fast carving its reputation as the region's premier transshipment hub. PTP’s excellent port
facilities, world-class state-of-the art port infrastructure, advanced integrated information technology
system, and highly trained staffs ensure world class efficiency and productivity to its customer.
As at end of 2006, total turnover for the company was valued at RM560.04 million, reflecting the growth
of 15% compared with the previous year’s figure of RM484.98 million. The net profit after tax was
RM115.06 million in 2006, an improvement of 50% from 2005, which was recorded at RM76.5 million. The
increase in revenue was due mainly from the income of terminal, tenants and marine charges.
The port recorded a throughput of 2.7 million TEUs between January and June 2007. In 2006, PTP coped
with 4.8 million TEUs, accounting for 46% of the 13.6 million TEUs handled by all the ports in Malaysia.
PTP is at the tail end of completing the construction of its two additional berths. The additional berths will
increase its annual handling capacity from 6 million TEUs to 8 million TEUs.
4.1.3 SWOT Analysis
PTP is in intense, direct competition with Port of Singapore. Its feeder network can be further developed
with the development of new ports in neighbouring countries. The threats, could be reversed as an
opportunistic strategy in forging collaborations and forming strategic alliance to enhance PTP’s
competitiveness. In its defense, PTP is not just in competition with the Port of Singapore, but is up against
the might of the Singapore government who would go out of its way to ensure its port does not loose out.
Singapore’s greatest advantage is its long history and undisputed standing as a port of choice.
Figure 2: SWOT Analysis of Port Tanjung Pelepas
STRENGTHS
WEAKNESSES
_Offers over 1000 acres of commercial and
industrial free zone.
_Excellent connectivity via road, air and sea that
offers various business and logistics facilitations
that can attract big companies.
_Ideal hub location in SE Asia.
_Value-added services including bunkers, container
repair, reefer repair and ship repair/supplies.
_Highly efficient and reliable port management
system, which features user online access.
_Lack of skilled manpower.
_Lack of cranes to support port’s operation. Over
utilized crane’s capacity. (200%).
_Lack of hinterland has resulted in over-reliance
on transshipment, which is a volatile business.
Pasir Gudang continues to be served by Johor
Port due to it closer proximity to hinterland.
OPPORTUNITIES
THREATS
_Free zone can attract MNCs, IPCs, RDC from
Singapore as it offers cost savings. This can
increase PTP’s local cargo base.
_Greenfield site offers tremendous growth
potential with capacity to expand in line with
demand by shipping lines.
_The maturing of new container markets
following the admission of Vietnam, Cambodia,
Myanmar and Laos would open up vast
opportunities for new ports like PTP.
_Having difficulties when dealing with local
authorities (Lembaga Pelabuhan Johor) which
involves many layers of red tapes and
procedures.
_Development of China ports.
_Neighbouring ports are offering lines discounts
and incentives on long-term contracts.
4.1.2 Cargo Throughput Statistic For Port Tanjung Pelepas
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4.1
4.2
JOHOR PORT
4.2.1 Background
Johor port also known as Pasir Gudang port is located in the midst of the largest concentration of palm
oil refineries in Malaysia, making it the biggest palm oil handling port in the country. Nestled within the
busy transport hub at the tip of Peninsular Malaysia, Johor Port Berhad operates in an exciting, progressive
environment for businesses. In 1984, Johor Port became the first port in Malaysia to be gazetted as a Free
Trade Zone, giving it a distinct business advantage. This status has effectively promoted the development
of the port as an entreport centre and introduced a new dimension to Johor Port in international trading.
Johor Port’s success is evidence with its stable financial performance. The port’s revenue for the year 2005
was RM435.4 million, 24% more than the previous year, which recorded RM352.6 million. Net profit after
tax increased by 9.94% from RM124.8 million to RM137.2 million in 2005. This is supported by an increase
in the amount of containership, break bulk and dry bulk cargo and a higher contribution from its whollyowned subsidiary, JP Logistics Sdn Bhd.
The challenge for this matured port is to continuously deliver sustainable growth, while having limited
space for expansion. Therefore, the port is aggressively pursuing new businesses, such as the ship-to-ship,
salvage and warehouse management to generate new revenue streams.
4.2.2 Cargo Throughput Statistic For Johor Port
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Container throughput for the first six months of 2007 hit a total of 453,000 TEUs. In 2006, container
throughput recorded a 5% increase from 880,611 TEUs to 836,754 TEUs in 2005. However, the handling
cargo throughput declined to 26.9 million tonnes in 2006 as compared to 28.1 million tonnes in 2005.
4.2.3 SWOT Analysis
Due to the limited land available for expansion, alternative locations at Tg. Langsat and Tg. Pelepas have
been discovered to support Pasir Gudang port - a development that poses a serious threat to the port. The
problem of ageing equipment, which is seen as a weakness, should be quickly addressed as it may affect
the efficiency of the port’s operations.
Figure 3: SWOT Analysis of Johor Port
STRENGTHS
WEAKNESSES
_Located at the industrial area.
_Free Trade zone.
_Strategically located at the busiest international
trades lines.
_Multipurpose port.
_Ageing equipments.
_Lack of skilled manpower.
_Port tariff has not been changed since the last
30 years.
OPPORTUNITIES
THREATS
_Business expansion in subsidiary company.
_Development of synergistic business
collaboration with shipping community
(internationally & locally).
_Iskandar Development Region (IDR) is a major
stimulus for the development of southern Johor.
IDR is expected to be the catalyst for foreign
direct investments in the region and will
provide opportunities for new revenue streams.
_Neighbouring ports are offering competitive
prices.
_Utilization of land area is almost maximum.
Higher cost for land acquisition or land
reclamation.
KUANTAN PORT
4.3.1 Background
Kuantan Port Consortium Sdn Bhd (KPC) is wholly owned by Road Builder [M] Holdings Berhad. Kuantan
Port is a multipurpose deep sea port facing the South China Sea. It plays a key role in catalysing the
development of the East Coast Corridor, which is featured as the heartland of the petrochemical industries.
Strategically located in the state of Pahang on the eastern seaboard of Peninsular Malaysia, Kuantan Port
is developing into a major international port in tandem with the rapid expansion of the industrial and
manufacturing activities of the East Coast Corridor. Supported with excellent port facilities and services, a
vast market outreach and a strong network of global shipping connections have strengthen the position
of Kuantan Port as a petrochemical hub port and a major container terminal of the East Coast region.
In 2005, Kuantan Port recorded total revenue of RM92.23 million as compared to RM 91.06 million in 2004.
The port’s revenue increased by 16% to RM108.0 million in 2006, surpassing the RM100 million level for
the first time. However, net profit after tax was drop from RM37.22 million in 2005 to RM25.36 million in
2006 due to a decrease in operating income. Kuantan Port was expected to post a 10 % growth in revenue
to RM120 million for 2007.
Total cargo throughput at Kuantan Port in 2006 exceeded the 10 million tonnes level for the first time in
its 32-year history. The 10.67 million tonnes of cargo throughput represented an increase of 11% over the
9.41 million tonnes achieved in 2005. Kuantan Port recorded 26% jump in its container throughput to
124,834 TEUs in 2006 as compared to 119,167 TEUs in 2005.
4.3.3 SWOT Analysis
Kuantan Port’s vital strength is the availability of space for future expansion. Opportunity-wise, Kuantan
Port has the infrastructure and attractions to potentially pull more shipping lines as well as to increase its
throughput. However, the over- dependence on niche cargo i.e. chemical and petrochemical is a worrying
threat, which it should seriously address by diversifying its services to other sectors.
Figure 4: SWOT Analysis of Kuantan Port
STRENGTHS
WEAKNESSES
_Strategic location especially for Far East trade.
_Linked by rail network (Kerteh-GebengKuantan).
_Ample facilities for chemical/petro-chemical
industries.
_Ample space for development of additional
berth.
_Industries located nearby not consumer-item
based.
_Lack of professional and skilled manpower.
_No direct calls to Europe/USA market.
OPPORTUNITIES
THREATS
_Development of Eastern Corridor Economic
Region (ECER) may attract more main line
operators (MLOs) for Far East market.
_Setting-up a distribution centre for dry bulk
cargo, which can carter the bigger vessel.
_Capturing other markets with the establishment
of free zone (industrial plus commercial) may
increase throughput.
_New East Coast Highway might cause cargo to
move straight to other ports.
_Facing competition from China, Thailand and
Cambodia that offer better freight rates.
4.3.2 Cargo Throughput Statistic For Kuantan Port
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4.3
4.4
BINTULU PORT
4.4.1 Background
Bintulu Port is one of the top ports in South-East Asia. The port is strategically located along the busy
sealanes between the BIMP-EAGA Far East and Europe on the north-east coast of Sarawak. The port covers
an area of 320 hectares and serves the economic development region under the Bintulu Development
Authority as well as the outlaying regions in Sarawak and neighbouring states. It is the only export gateway
for Liquefied Natural Gas (LNG) produced from the Central Luconia field, off the Bintulu coast. In addition
it handles a growing volume of a variety of general cargoes, liquid and dry bulk and containerised cargoes.
For the financial year ended 2006, Bintulu Port has recorded turnover of RM385.54 million, registering an
increase of RM2.65 million as compared to RM382.89 million in 2005. The net profit after tax was
RM148.63 million as compared to RM47.37 million in 2005. This increase in revenue was attributed by the
increase in the handlings of container, general cargoes and petroleum products.
4.4.2 Cargo Throughput Statistic For Bintulu Port
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In 2006, Bintulu Port recorded a cargo throughput of 36.51 million tonnes, up from 36.44 million tonnes
in 2005. Although Liquefied Natural Gas (LNG) is the principal traffic, there has been considerable change
in the cargo mix. This is in accordance to the structural transformation of the economic and industrial
development of its hinterland. The port now handles large quantities of bulk cargo consisting of crude oil,
petroleum products, palm oil and general cargo. The total container throughput for Bintulu port has grown
by 35% from 147,800 TEUs in 2005 to 199,704 TEUs in 2006.
Transshipment of container cargo consists 55% of the port’s total container throughput, and container
volumes are anticipated to increase about 16% this year against 2006 figures. The composition of cargo
at the port is expected to undergo further changes in view of the increasing attraction of the port as an
important sea outlet to the vast expanding hinterland of Bintulu, supported by massive energy and petrochemical projects.
4.4.3 SWOT Analysis
Being labeled as the hub for East Malaysia, it is already gaining competitive edge than the other ports
surrounding it. It should focus on its niche market that is LNG and leverage on its core competencies and
inherent advantages.
Figure 5: SWOT Analysis of Bintulu Port
STRENGTHS
WEAKNESSES
_Strategic location as load centre/hub for East
Malaysia.
_Long-term customer focus due to nature of
cargo (LPG, LNG, crude oil).
_Strong financial reserve for internal funding for
expansion.
_Credibility and reputation of port.
_State of Sarawak certified the port as deep water
port to service the growing traffic in the state.
_Lack of feedering network.
_Heavily rely on LNG.
_No attractive trade infrastructure.
OPPORTUNITIES
THREATS
_Development of refinery/gas/energy sector in
Bintulu.
_Demand from international enterprise that
looking for a regional base of aluminium plant.
_Promote one stop maritime centre
(bunkering/slop reception/marine services).
_Competition with regional ports like Muara port
(Brunei) and South Philippines.
_Having difficulties in dealing with local
authorities red tapes.
_Port tariff has not been changed since the last
30 years.
SARAWAK STATE PORTS (KUCHING, MIRI & RAJANG PORTS)
4.5.1 Background
In Sarawak three separate port authorities have been set up to administer the Kuching, Miri and Rajang
ports. Ports in Sarawak are established under the Sarawak Port Authorities Ordinance 1961.
Kuching Port Authority (KPA), was the first organized port in the state of Sarawak. Situated just outside
Kuching, the port has grown to become a premier port of the state. Miri Port is located along the north
west coast of Sarawak, Miri Port is an important feeder port that links Sarawak’s northen region to the rest
of the world. The port is not only a key player in the development of trade for Sarawak's economy but also
for the Malaysia’s economy as a whole. Rajang port is a riverine port situated at the heart of Rajang River.
Operating through 4 centres of operations, Sibu Port is the principal port and convergence centre for
agglomeration of goods for the central region of Sarawak.
4.5.2 Financial Performance
Miri Port recorded a satisfactory financial performance for the financial year ended 2005. The total
revenue increased from RM6.60 million in 2004 to RM7.63 million in 2005. Loss after taxation decreased
by 4% from RM10.78 million to RM10.38 million during the same period. The relocation of Miri Port to its
new site at Kuala Baram industrial estate was another milestone in the rapid development of the economic
growth for Miri.
4.5.3 Cargo Throughput Statistic
In 2005 Kuching Port’s cargo throughput reached its highest level over the past 10 years. The total
throughput registered during the year was 7.48 million tonnes. The growth was mainly due to strong
performance in its container and liquid bulk cargo businesses. Container traffic grew by 1.3% to 143,096
TEUs in 2005 as compared to 141,227 TEUs in 2004. Miri Port’s total container throughput recorded an
increase of 3% from 14,402 TEUs in 2004 to 14,823 in 2005. However, the total throughput registered a
decrease of 5% from 5.33 million tonnes in 2004 to 5.05 million tonnes in 2005. This is mainly due to the
decrease in the export of petroleum products.
4.5.4 SWOT Analysis
In order to remain competitive in the global maritime trading, Sarawak State Ports are focusing to become
a “One-Stop Centre” for maritime activities in Sarawak.
Figure 6: Swot Analysis Of Sarawak State Ports
STRENGTHS
WEAKNESSES
_All terminals are in close proximity to the
industrial estates to facilitate cargo movement.
_Recognized as the main key players in the
development of trade for not only Sarawak's
economy but Malaysia as a whole.
_Ports are linked by an efficient network of
transportation.
_Unfavorable location of the port (river ports).
_Major ports have to deal more on red tape
procedures (bureaucracy).
_Increasing competition in the regional port
industry.
OPPORTUNITIES
THREATS
_Anticipate growth in the northern region
(surrounded by the oil and gas industry).
_Using IT development as a part of enabling tools
in order to meet the increasing demand of
market place.
_The Sama Jaya Free Industrial Zone (SjFIZ) project
located nearby the Kuching port has given
another positive and proactive step towards the
continuos growth and support of the industries
by the government and private sectors.
_Lack of export activities in Sarawak State.
KPA’s turnover decreased from RM61.65 million in 2005 to RM60.93 million in 2006. KPA recorded a net
loss after tax of RM0.2 million in 2006 as compared to a net profit after tax of RM1.3 million in 2005.
KPA's revenue for 2006 continued its gradual decline since 2004 as a result of slower increase in cargo
volume especially for break bulk, liquid bulk and dry bulk cargo.
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4.5
4.6
SABAH PORTS
4.6.1 Background
Sabah has seven main seaports, namely port of Kota Kinabalu, Sepangar Bay, Sandakan, Tawau, Lahad
Datu, Kudat and Kunak. The port of Labuan enjoys free port status. With the exception of Labuan, all the
ports are under the jurisdiction and control of the Sabah Ports Authority. The Sabah Ports Authority (SPA)
was formed in 1968 under the Sabah Ports Authority Enactment 1967. This was amended in 1981 to
authorise SPA to take control of all ports within the state.
In terms of their financial performance, the ports have shown an encouraging performance in 2006. The
total revenue increased to RM157.95 million in 2006 from RM147.09 million in 2005. The ports’ net profit
after tax in 2006 grew 11.5% from RM41.53 million in the previous year.
The seven ports in Sabah will continue to benefit from the expanding palm oil industry in line with the
State Government’s efforts to develop palm oil related downstream industries. The new Sepangar Bay
Container Port with more than double the current capacities and equipped with modern
infrastructures/equipment will augur well for the port.
4.6.2 Cargo Throughput Statistic For Sabah Port
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Overall, the total cargo volume handled at all ports rose to 28.1 million tonnes in 2006 compared to 26.2
million tonnes in 2005. The total volume of containers handled by Sabah Ports in 2006 was 226,721 TEUs
compared to 208,500 TEUs in 2005, representing growth of about 8.7%. Liquid bulk cargo mainly palm oil
contributes to about 39% of Sabah Port’s revenue while containers and dry cargo contribute about 23%
and 26% respectively whereas the balances are from petroleum and chemicals.
The seven ports handled a total of 14.2 million tonnes of cargo for the first six months in 2007 compared
to 13 million tonnes for the same period last year. Container throughput for the first half of this year hit 129,000
TEUs, a 20.56% jump from the same period last year. The increase in cargo throughput was supported by
strong growth in the palm oil industry in Sabah. Sabah is the largest palm oil producing state in Malaysia.
4.6.3 SWOT Analysis
After the privatisation of Sabah Ports, the company has continuously embarked on various efforts to
improve the port performance and productivity, which include port infrastructure development and
purchase of port facilities equipments. The newly-developed 500-meter Sepangar Bay Container Port
(SBCP) is said to be Malaysia’s new gateway in the BIMP-EAGA region as it is strategically located along
the busy shipping lane between the Far East and Europe.
Figure 7: SWOT Analysis of Sabah Ports
STRENGTHS
WEAKNESSES
_Manage and operate all ports in Sabah.
_The newly-developed SBCP is strategically
located along the busy shipping lane between
Far East and Europe.
_SBCP functions as the regional feeder to China.
_Holds monopolistic position as a sole port
operator in Sabah only for the first 5 years
after its privatisation.
_Posses relatively short post-privatisation track
record as the company is only in its third year
of privatised operation.
_Tax exemption privilege will expire soon (tax
exemption for 5 years after privatisation).
OPPORTUNITIES
THREATS
_Development of Lahad Datu Palm Oil Industries
Cluster to benefit Lahad Datu Port.
_Palm oil, petroleum and timber are Sabah’s main
exports, which are primarily transported by sea.
_The SBCP would be able to attract bigger
container vessels not only for Sabah and East
Malaysia but also transshipment containers to
and from North Asia as well as Indo-China and
the Indian Sub-Continent.
_Indirect competition from private jetties and
mid-stream operators, who mainly cater to
break-bulk cargo and small vessels.
_After the privatisation, Sabah Ports is subject to
comply to various government rules and
regulations e.g. rules and regulations pertaining
to licensing.
WESTPORT
4.7.1 Background
Westport is an integrated port situated on 587 hectares of waterfront land equipped with terminal
handling facilities for containers, dry bulk, liquid bulk and other conventional cargo. Strategically
positioned in the Straits of Malacca, Westport with its deepwater facilities at the doorstep of Malaysia’s
largest and most concentrated industrial region is set to become a major load centre in southeast Asia.
Looking into the port’s financial performance, revenue for Westport has grown steadily for the past three
years. Westport's revenue grew by 16% from RM520.95 million in 2004 to RM604.45 million in 2005.
During 2006, Westport achieved revenue of RM741.56 million, an increase of 23% compared to the
previous year. A significant amount or about RM571 million of the revenue came from its container
operations. As at June 2007, Westport commanded 63% share of the container cargo market in Port Klang.
Westport's debt-to-equity ratio has fallen to 0.90 this year from 1.98 in 2006, due to an increase in paidup capital.
In 2007, Westport is expected to see further growth from local and transshipment boxes. Local boxes are
expected to grow by 15% and transshipment growth is expected to grow by 10% as more cargo from
Indonesia and South Asia make direct calls or use Westport to transship. Westport now is looking forward
to expand their facilities in anticipation of the growth forecast.
In 2006, Westport achieved 3.6 million TEUs, which was 26% above 2005 figure. Local boxes are expected
to grow by 15% or two-and-a-half times GDP of 6%. Transshipment traffic is expected to grow by 10%
as more cargo ships from Indonesia and South Asia make direct calls or use Westports to transship. The
main factor that contributes to robust growth of Westports’ quality services is its productivity being
among the top five in the world. What is also pleasing about Westports’ achievement is that it is a 100%
local enterprise serving almost 90% of international clientele. In other words, they can be called as a truly
‘global’ port.
4.7.3 SWOT Analysis
Westports has plenty of strengths, which can be exploited further to attract more MLOs to enter its port.
From a potential opportunity perspective, the limitation of its neighbour Northport can yield advantage
to Westports to capture a bigger slice of the market. However, Westports must be diligent in addressing its
weakness and mitigate the threats to enhance its competitiveness.
Figure 8: SWOT Analysis of Westport
STRENGTHS
WEAKNESSES
_A world class sea-port.
_Well-trained staff is highly in demand.
_Situated in a strategic location that is ideal for
users to capitalize on both the international
and domestic markets.
_Excellent existing infrastructure is readily
available (rail, road or air)
_Only one road access.
_24 hours operation x 365 days resulting in high
turnover of staff.
_Insufficient cranes.
OPPORTUNITIES
THREATS
_Located at Pulau Indah - Free trade zone area
offers huge business opportunities.
_Transshipment business mainly from China,
Vietnam, Europe and Bangkok.
_Being strategically located next to Selangor
Halal Hub (SHH), given credit to the port to
become halal hub centre.
_Regional competition.
_Conventional cargo moving to container.
_High interest rate from financial institution for
expansion.
4.7.2 Cargo Throughput Statistic For Westport
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4.7
4.8
NORTHPORT
4.8.1 Background
Northport is Malaysia's largest operator of multi-purpose port, handling 60% of the nation's trade. It is
also Malaysia's pioneer port bringing along with it 103 years of experience in port dynamics.
Northport is a major hub port and an integral component of the transportation pipeline in the region. With
increased connectivity to ports in China and the East Asia and increase in the spread of services linking US
ports, the Mediterranean and Europe, Northport offers more links to worldwide ports than any other port
in Malaysia and has emerged as one of the most important hub ports in the region.
Northport Holdings Bhd (NCB) showed improved performance during the financial year ended
December 31, 2006. The port operating company, Northport (Malaysia) Bhd and haulage company, Kontena
Nasional Berhad posted a combined turnover of RM834.0 million in 2006, compared with RM806.6 million
recorded in the previous year. The net profit after tax was recorded at RM79.8 million, an increased of
16.5% from RM68.5 million in 2005. The total revenue posted by Northport was RM634.1 million while the
haulage subsidiary recorded a total revenue of RM199.9 million.
4.8.2 Cargo Throughput Statistic For Northport
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Northport continued to maintain a strong market reach, registering a throughput volume of 2,661,094
TEUs, or an increase of 1.1% compared with 2,632,257 TEUs recorded in year 2005.
4.8.3 SWOT Analysis
As an established port in Malaysia, Northport has a good reputation and extensive experience in the port
business. Besides, it has a strong global network, with the potential of attracting more shipping lines
through the provision of a wide range of services. The prospect of future growth in the Malaysian and
regional economies would give plenty of opportunities to Northport to capture a bigger market and
increase its throughput. However, Northport should be wary of its inherent weaknesses and monitor the
threats in order to retain it competitiveness in the market.
Figure 9: SWOT Analysis of Northport
STRENGTHS
WEAKNESSES
_Extensive/strong network of global services.
_The largest multi-purpose port facility in
Malaysia providing a comprehensive range of
port services.
_Experience and stable management team.
_Land limitation for long-term expansion.
_Rigid commercial practice that needs to be
promoted in order to attract more shipping
lines beyond its traditional captive market.
OPPORTUNITIES
THREATS
_Government certified Northport as a leading
gateway port of making Malaysia the Global
Halal Hub.
_Emergence of Port Klang as regional hub.
_Growth in Supply Change Management
worldwide.
_Regional competition.
_Relocation of shipping lines.
_Changes in regulatory policy.
PENANG PORT
4.9.1 Background
Located along the Northwest coast of Peninsula Malaysia, Penang Port serves one of the busiest trade
routes in the region and links Malaysia to more than 200 ports worldwide. Being a deepwater port and
overlooking major shipping lanes in the Straits of Malacca, it is a choice port of call for traders within the
Indonesia-Malaysia-Thailand Growth Triangle and the Asia-Pacific region. The North-South Highway,
spanning the west coast of Peninsular Malaysia from the Malaysia-Thailand border to the MalaysiaSingapore border, places Penang Port within easy reach of all major economic regions in the country.
Penang Port is also linked directly with the east coast of Peninsular Malaysia via the East-West Highway.
Penang Port also serves very well as a sea-air modal choice for cargo transportation as it takes only 30
minutes to arrive at the Bayan Lepas International Airport from the port.
The port has the facilities to handle containers, liquid bulk, dry bulk and breakbulk cargoes. Penang Port
has embarked on an expansion programme, which aspires to become the main container terminal in the
Indonesia-Malaysia-Thailand Growth Triangle (IMG-TG).
4.9.2 Cargo Throughput Statistic For Penang Port
In 2005, the cargo throughput posted a 1.0% growth to 23.6 million tonnes from 23.4 million tonnes in
2004. However, in 2006, it decreased to 19.4 million tonnes. The container throughput for 2006, on the
other hand, rose 6.8% to 849,730 TEUs over 2005 figure.
As of June 2007, the container throughput has achieved 445,138 TEUs. This container growth was driven
primarily by the increase in external demand for the country’s electrical and manufactured products.
4.9.3 SWOT Analysis
Penang Port has promising potential to grow and capture a bigger market share due to its history, strategic
location and good connectivity. Plenty of opportunities are in store for the port to expand its reach and
enhance its competitiveness.
Figure 10: SWOT Analysis of Penang Port
STRENGTHS
WEAKNESSES
_Fairly large hinterland including Southern
Thailand.
_Good physical connectivity (road, sea, air).
_Surrounded by areas of major economic
growths.
_Frequent breakdown of ageing equipment.
_The wharf is not deep enough to cater to the
mother vessels of shipping liners.
_Lack of land transportation connectivity and
inadequate support infrastructure.
OPPORTUNITIES
THREATS
_Business expansion in subsidiary company.
_Development of NCER will promote Penang port
as the leading of the Indonesia, Malaysia,
Thailand Growth Triangle (IMT-GT) as a regional
transshipment centre.
_Completion of second access bridge at the
North Butterworth Container Terminal (NBCT)
will benefits the port in providing logistic
services efficiently.
_Well known among foreigners as holiday
destination thus could attract more cruise traffic.
_Development and emerging new ports within
its captive and extended hinterland (Southern
Thailand port and Belawan).
_Intra-port competition (PTP and Westport).
_Development of rail services to other ports.
The year 2006 was a challenging year for the port as the slower economic growth had a significant impact
on the throughput of the port. The revenue and net profit after tax was recorded at RM225.07 million and
RM12.76 million respectively.
77
Bank Pembangunan
4.9
Financing Opportunities For BPMB
Bank Pembangunan could support the further development of the ports by providing financial assistance, especially
in the area of port’s facilities and infrastructure. The following financing opportunities have been identified:
PORT TANJUNG PELEPAS
•
For its Phase 5 development in the next ten years, PTP is planning to build 30 more berths.
BINTULU PORT
•
Refurbishment of the Multipurpose Terminal in 2007 – 2009.
•
Expansion of the Palm Oil Terminal (3rd Berth) in 2007 – 2008.
•
Expansion of the Container Terminal in 2008 – 2010.
•
Redevelopment of General Cargo Wharf to Container Berths in 2008 – 2010.
KOTA KINABALU PORT
•
Relocation of the Conventional Port to Sepangar Bay in the next five years.
SEPANGAR BAY
•
The extension of Sepangar Bay Jetty for RM30 million in the next five years.
•
Land reclamation at Sepangar for RM25 million in the next five years.
Bank Pembangunan
78
WESTPORT
Expansion plan of RM800 million in 2007 – 2010:
•
Expansion of the current berth for RM460 million.
•
Purchase four Super Post-Panamax quay cranes for RM77 million.
•
Expansion of container yard operations for RM70 million.
•
Purchase 33 rubber tyred gantry (RTG) cranes for RM106 million.
•
Purchase 23 prime movers and trailers for RM7 million.
NORTHPORT
•
Upgrading of wharf to become multipurpose for RM300 million in 2009.
•
New development at Sungai Puloh for RM800 million in 2009.
PENANG PORT
Third Phase of the Northern Butterworth Container Terminal (NBCT) for RM1 billion in 2007 – 2012:
•
Construction of additional wharf extension to the existing container wharves.
•
Construction of a new stacking area for export containers.
•
Construction of a new barging centre.
•
Procurement of seven Super Post-Panamax quay cranes and other handling equipment.
•
Dredging of the North Channel.
Conclusion
Cargoes handled by ports in Malaysia have increased in line with the rapid expansion of the economy. Aside from the
increase in volume, there has also been a transformation in the composition of the cargoes handled leading to a wider
variety of cargoes being handled by the ports in the country.
It has been reported often that shippers tend to choose Singapore because they benefit from faster transit times, less
congestion and greater range and frequency of services, even though it is more expensive. Hence, the underlying fact is
that Singapore, besides the port infrastructure, is able to provide reliable and quality services to meet shippers’ demand.
In this sense, despite the fact that both the Port of Tanjung Pelepas and Port Klang have made tremendous
investments in terms of upgrading port capacity and equipment, what is lacking now is quality supporting services.
There remain a number of obstacles to be overcome before Malaysia can succeed in becoming a regional
transshipment centre. An overall integrated approach is needed to address the issues of transport inefficiency. The
weaker links are between the ports and other transportation systems (road and rail) and the supporting services.
•
Lack of technical expertise and skilled workers to handle specific port operations;
•
Lack of container handling equipment and existing equipment is under performing;
•
Lack of computerization for port operations;
•
Competition with private jetties; and
•
Constraint in fund to implement upgrading and new expansion project as high capital investment is needed.
In general, amongst the problems faced by the port operators are as follows:
The input gathered from the study includes proposals from port operators as to how various institutions can assist
the industry:
•
Provide an integrated approach between the ports and other transportation system (road and rail);
•
Provide soft loans for capital and development investment;
•
Provide loans with lower interest rate; and
•
Provide expertise and assist ports in carrying out viability studies on any proposed investment project on port
facilities before implementation as the cost is usually huge and payback period is slow.
Bank Pembangunan
79
Study On Offshore Support Vessel (OSV)
In Malaysia
1.
BACKGROUND
Offshore support vessels (OSV) are best described as a group of different types of vessels offering services either
in the offshore operations as well as services between shore base and offshore.
The OSV sector provides transportation services to offshore drilling rigs, fixed platforms, and floating platforms.
The main services provided are:
(1)
Delivering drilling supplies, fuel, water, and food.
(2)
Moving personnel to, from, and between offshore installations.
(3)
Towing rigs from one location to the next and placing or retrieving its anchors.
(4)
Providing safety and emergency response services and,
(5)
Supporting offshore construction projects.
Vessel owners charge a daily fee for the use of a vessel. The rate depends upon a multitude of factors. Those
factors include the type of vessel, the length of the contract, the supply/demand balance at the time of the
contract, and where the vessel is located.
Vessels can be traded on the spot market, meaning contracts are short in duration and only last as long as the task
at hand or they can be on long-term contract, ranging in length from a few months to a few years. Crew vessels
typically charge the least, followed by supply vessels and then anchor handlers. Rates can range from as little as
US$2000/day for a crew vessel during lean times to US$40,000/day for an anchor handler during peak times.
Bank Pembangunan
80
In most areas of the world, a supply vessel can move from one country to another without much difficulty. That
gives companies with sizeable fleets a lot of flexibility to move their vessels from areas with low activity to areas
with high activity relatively easily.
2.
OFFSHORE BASINS OF THE WORLD
The Gulf of Mexico (GOM)
The Gulf of Mexico has long been one of the busiest supply vessel markets in the world. That is a direct result
of the historical level of oilfield activity that has taken place as over 44,000 wells have been drilled in the Gulf
since the 1940s. The market is highly competitive and it is estimated that there are over 150 different vessel
owners operating over 850 vessels in the GOM. Foreign competition is not allowed in the GOM.
The North Sea
The North Sea is a very mature and developed market. It is a basin that requires vessels with advanced capabilities.
This is due to the harsh working environment of the North Sea as well as the demanding requirements of deep
water drilling.
The North Sea market also requires the use of standby/rescue vessels, which are legally required by the U.K.
government. These boats must be used to standby around rigs and platforms in case of emergencies.
West Africa
West Africa is a market that is dominated by only a handful of international players. Historically, vessel
requirements were not terribly demanding and many less capable vessels could work there. That market still
exists today. However, the rapid advance of deep-water exploration and development drilling over the past few
years has dramatically increased the demand for deep-water capable vessels. West Africa is a basin that should
provide good organic growth opportunities for everyone involved in the oilfield.
Asia Pacific
The Asia Pacific region cannot really be easily characterized. There are a wide variety of vessels to match a wide
variety of working requirements. Some areas only require minimal support from vessels owners while other areas,
such as the deep-water areas offshore Malaysia demand the newest, most capable vessels. However, the trend
over the past few years is that more and more new generation vessels are winning the jobs.
The Middle East
The Middle East is probably the least demanding basin as far as vessel requirements is concerned. It is typically
all shallow water and drilling depths are not considered that deep. Small, local players dominate the market.
Brazil
The Brazilian market is demanding. As one of the pioneers of deep water drilling, the requirements on vessel
owners have always been high.
Other Latin America
DEEPWATER EXPLORATION
The next impetus for growth in the oil and gas industry would be in the deepwater and ultra-deepwater
explorations. With oil and gas resources being finite, oil and gas companies are going further to recover
hydrocarbons from remote locations. Deepwater refers to water depth of between 200 meters and 1000 meters
while ultra-deepwater refers to water depth beyond that.
Deepwater exploration is the ultimate frontier of the petroleum industry, with the maturing of existing
petroleum fields. Oil and gas companies are expected to continue increasing their capital spending to offset
declining production volumes and to increase their reserves to meet the anticipated demand for crude oil.
Deepwater exploration activities are primarily found in Brazil, Gulf of Mexico, Norway, Angola and Nigeria.
Malaysia has announced several major deepwater crude oil finds in East Malaysia, with an estimated 1.540
million boe (barrels of oil equivalent).
Table 1: Malaysian Deepwater Fields
FIELD
DISCOVERED
ESTIMATED RESERVES
ONSTREAM
OPERATOR
(MILLION BOE)
Kamunsu East
1999
120
2009
Sabah Shell
Kamunsu East North
2000
185
2008
Sabah Shell
Kikeh
2002
560
2007
Murphy Oil
Kikeh Kecil
2003
100
2009
Murphy Oil
Gumusut
2004
300
2008
Sabah Shell
Kakap
2004
75
2010
Murphy Oil
Senangin
2004
100
2010
Murphy Oil
Malikai
2004
100
2009
Sabah Shell
Source: Infocredit D & B
81
Bank Pembangunan
3.
The rest of Latin America is characterized by much less demanding vessel requirements than that of Brazil. Very
old vessels have typically characterized the Mexican and Venezuelan markets, which constitute the majority of
non-Brazilian Latin America. Pricing has typically been the over-riding consideration in these markets as there
was little need to differentiate on capabilities.
Study On Offshore Support Vessel (OSV) In Malaysia
4.
TYPE OF OSV VESSELS
There are many different types of boats that provide services to the oil and gas industry. Some are designed to
transport crews to, from, and between oil rigs and platforms, while others are used to deliver supplies to rigs or
tow a rig from one location to another. The line between different asset classes can become blurred as many
boats are built with functionality that crosses over into another vessel’s domain. Below are the main types of
vessels used in the oil industry.
Anchor Handling Towing Supply (AHTS)
Anchor Handling Towing Supply vessels, or AHTS vessels, tow rigs from one location to another and are equipped
with powerful winches which are used to lift and position the rig’s anchors. In addition, many can carry
moderate amounts of supplies such as drilling fluid or drill pipe and also support offshore construction projects.
AHTS vessels are usually specified in terms of base horsepower (BHP) and towing capacity.
New generation, deep-water capable vessels typically have much greater horsepower (at least 8000 BHP) and
winch strength (at least 250 tons). Winch strength determines the size of an anchor and the maximum depth to
which it can be placed. In addition, their winches also have longer spooling lengths, which are needed to place
anchors in deeper waters.
Most have dynamic positioning capability although it is not an absolute requirement. Dynamic positioned vessels
use global positioning systems and computer controlled propulsion systems that allow the vessel to maintain an
exact position, regardless of wave and wind forces. In addition, a vessel that is typically built today can carry
more supplies than its 25 year old peers.
Bank Pembangunan
82
TYPE OF OSV VESSELS
PURPOSE
Anchor Handling
Tug (AHT)
A special purpose vessel
equipped with towing
machinery used to tow
offshore rigs and equipment
from one location to another
and to set anchors for drilling
rigs. Usually in small size to
maximize its towing power.
TYPE OF OSV VESSELS
PURPOSE
Anchor Handling Tug Special purpose vessel
Supply (AHTS)
similar to AHT, equipped
with towing winches to tow
and deploy offshore rigs and
moorings. In addition, AHTS,
which are characterized by
longer after decks, could be
used in limited supply roles.
Supply Vessels
Offshore Supply Vessels deliver drilling supplies such as liquid mud, dry bulk cement, fuel, drinking water, drill
pipe, casing and a variety of other supplies to drilling rigs and platform. The vessels are also referred to as
Platform Supply Vessels (PSVs). They are the same thing, although some industry participants like to think of a
PSV as the larger version of an Offshore Supply Vessel. Offshore Supply Vessels are usually specified in terms of
cargo carrying capacity, measured in dead weight tons (dwt).
Crew Boats
Crew boats transport personnel to, from, and between offshore rigs and platforms. These boats are much smaller
than their AHTS or OSV cousins, and can range in size from 75ft to 190ft (23m – 58m). Crew boats are generally
specified by cruising speed. The smallest boats (75ft) are typically used to transport crews between offshore
installations and not to and from shore.
Newer generation crew boats, called Fast Supply Vessels (FSV) can also carry very limited amounts of supplies
and as such are often used for emergency or time sensitive deliveries of supplies in addition to transporting crews
To transport personnel to,
from and between offshore
rigs and platforms.
Other Types of Vessels
There are a variety of other types of vessels used by the oil & gas industry, which include:
•
Standby/Rescue Vessels, which are required to remain in the vicinity of offshore rigs and platforms in order
to provide emergency response services, such as personnel rescue, fire fighting, and first aid.
•
Utility/Workboats, which perform a lot of work in support of offshore construction projects.
•
Survey vessels, which collect geophysical data.
•
Well stimulation vessels, which perform fracturing and acidizing of producing wells.
•
Multi-Purpose Supply Vessels (MPSV) which can provide a combination of remote subsea intervention
services, remote operated vehicle (ROV) operations, deep-water lifting & installation, delivery of supplies,
fire fighting, and oil spill recovery.
•
Tug boat, which is powerful small size boat with high level of maneuverability providing towing services
for vessels and barge.
•
Laybarge/Crane, which is specialised barge with crane facilities used for pipe installation and pipe laying.
Also equipped with welding stations and mooring system.
•
In addition, there are other boats that carry out maintenance work, pollution control, and diving support.
TYPE OF OSV VESSELS
Tug Boat
PURPOSE
Powerful small size boat
with high level of
maneuverability providing
towing services for vessels
and barge.
Crew Boat
PURPOSE
83
Bank Pembangunan
TYPE OF OSV VESSELS
5.
MALAYSIAN OSV INDUSTRY
The analysis on Malaysian OSV is made based on statistics provided by Ministry of Transport. For this analysis,
OSV is consists of Anchor Handling Vessel, Standby Vessel, Supply Vessel, Barge, Landing Craft and Tug Boat.
Fleet Size
In 2005, there were 136 OSVs registered in Malaysia with 127,464 GRT. In 2006, the number of OSVs registered
increased to 157 (154,429 GRT) mainly due to favourable market.
The Malaysian newly registered OSVs peaked in 1997 and since then registered a declining pattern until 1999.
However, a positive trend was recorded from 1999 to 2006 as shown in Chart below. There was high demand for
OSVs for the past 7 years driven by high charter rates.
Chart 1: Malaysian New Registered Offshore Support Vessel 1996-2006
280
No.
GRT
260
180,000
160,000
240
220
140,000
200
120,000
180
160
84
40
100,000
140
80,000
120
100
60,000
80
40,000
60
20,000
Bank Pembangunan
20
0
0
Year 1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
No.
GRT
Source: Ministry of Transport Statistics
As at 31 December 2006, OSVs comprised 60% and 17% of the total Malaysian registered vessels, in terms of
the number of vessels and GRT, respectively. These were mainly small vessels with 2,360 vessels or 96% are below
5,000 GRT.
Fleet Age
The majority of Malaysian registered tankers were above 20 years old i.e. 30% in terms of number of vessels and
29% in terms of GRT. Admittedly, the young vessels have higher GRT per vessel whereas the older vessels have
lower GRT.
Table on the next page shows the breakdown.
Chart 2: Age of Malaysian OSVs (as at 31 December 2006)
800
No.
GRT
500,000
450,000
700
400,000
600
350,000
500
300,000
400
250,000
300
200,000
150,000
200
100,000
100
50,000
0
0
Age <5 years
5-9 years
10-14 years 15-19 years
>20 years
No.
GRT
AGE (YEAR)
NO.
%
GRT
%
AVERAGE GRT PER VESSEL
Below 5
321
13
310,290
21
967
5 to 9
256
11
157,248
10
614
10 to 14
659
27
385,622
25
585
15 to 19
475
19
225,739
15
475
Above 20
738
30
439,483
29
596
2,449
100
1,518,382
100
620
Total
Source: Ministry of Transport Statistics
Malaysian OSV Players
Generally, the offshore support vessels and services industry perceived to be a competitive industry. Competing
players in this industry are wide and include companies in various sizes ranging from large MNCs to local
companies, both large and small. To remain resilient against adverse market conditions and stay ahead of
competition, the competitive factors behold are price and quality of vessels and services.
Presently, there are 22 major players in Malaysia that are engaged in the provision of offshore support vessels
and services. These players in aggregate owned 278 vessels, which consist of various types of offshore support
vessels, as illustrated in Table 3. It is noteworthy that the number of offshore support vessels is constantly
changing, as the demand is dependent on the level of exploration, development and production activities in the
oil and gas industry.
Among the major players of OSVs are Bumi Armada, Borcos Shipping, Ajang Shipping and Scomi.
85
Bank Pembangunan
Table 2: Age of Malaysian Registered OSVs (as at 31 December 2006)
Table 3: Vessels that service the Oil and Gas Industry in Malaysia
Bank Pembangunan
86
COMPANY
FAST
CREW
BOAT
LANDING
SAFETY
CRAFT STANDBY/
GP
UTILITY/
MINI
SUPPLY
AHT/ STRAIGHT
TOWING
SUPPLY
VESSEL
ANCHOR BARGES
HANDLING
TUG/SUPPLY
WORKBOATS SURVEY
VESSEL
OTHERS
TOTAL
Ajang
2
4
12
-
-
2
3
2
3
1
1
30
Borcos
15
–
11
2
-
1
2
-
-
-
4
35
Bumi Armada
-
-
4
6
-
-
11
1
5
1
12
40
Alam Maritim
-
-
-
-
-
5
7
-
1
2
-
15
Jasa Merin
-
-
-
2
-
5
3
-
-
1
-
11
Sealink
1
4
-
6
10
-
3
-
-
-
-
24
Jaya Coastal
-
4
2
-
-
-
-
-
-
-
-
6
Tanjung Offshore
-
-
-
1
-
4
2
-
-
-
-
7
Sarku
-
-
-
-
-
-
-
3
5
-
-
8
Intra Oil Services
4
-
-
1
-
1
9
5
2
1
-
23
Wise Innovations
-
-
-
-
-
-
1
-
-
-
-
1
Amsbacj Marine
-
-
-
1
-
-
-
-
-
-
-
1
JCB Oil & Services
1
-
-
-
-
-
-
-
-
-
-
1
Gagasan
4
-
-
-
-
-
-
2
-
-
-
6
Bahtera Wira
-
-
-
-
-
-
2
-
-
-
-
2
Chalvoyage
-
-
-
-
-
-
-
-
-
-
2
2
Oilserve Marine
-
-
-
-
-
-
2
-
-
-
-
2
Dayang Entreprise
-
-
1
-
-
-
-
-
2
-
-
3
Sribima (M)
Shipping
-
2
2
-
-
-
-
-
-
-
-
4
Tidewater Offshore
1
-
-
-
-
7
-
-
-
-
1
9
Intan Offshore
2
-
-
-
-
2
8
-
1
1
-
14
Scomi/Chuan Hup
-
-
-
11
-
-
23
-
-
-
-
34
30
14
32
30
10
27
76
13
19
7
20
278
Total
Source: Study by Sribima and GMVB, 2006
Despite having numbers of local operators in the market, most of the OSVs are still dominated by foreign players
as highlighted in Table 4.
MALAYSIAN
REGISTERED
FOREIGN
REGISTERED
TOTAL
% OF MALAYSIAN
REGISTERED
2001
80
244
324
25%
2002
75
550
625
12%
2003
-
847
847
0%
2004
12
110
122
10%
2005
35
273
308
11%
Total
202
2,024
2,226
9%
Source: Domestic Shipping Licensing Board, Ministry of Transport
Note:
1.
2.
Total number of licence issued need not be the same as the total number of ships as a ship may have been licensed a few times.
The data is limited to OSVs involved in Exploration Work Equipment.
Malaysian registered OSV licenses only consist of 9% out of 2,226 total licenses recorded during 5 years period
from 2001 to 2005. The very low percentage indicates that the local players unable to meet the high demand
for OSVs.
Petronas undertakes the exploration and production of the oil and gas in Malaysia whilst other oil companies
operate as a contractor to Petronas under Production Sharing Contracts (PSC). One of the requirements under
the PSC is priority is to be given to Malaysian registered vessels. However, the oil companies have no choice but
to charter foreign OSVs to fulfill their requirements as currently, the number of local OSVs are very limited.
87
Bank Pembangunan
YEAR
Table 4: OSV Licenses Issued, 2001 - 2005
6.
Bank Pembangunan
88
ISSUES IN OSV INDUSTRY
Shortage of Skilled Technical Staff
There is a shortage of skilled technical personnel in the oil and gas support services industry. A skilled staff takes
a few years to train and there is no guarantee that another company in the industry might not poach him or
her after the training is completed. The relatively small pool of seafarers, technicians, divers and engineers is due
to the fact that the offshore support services industry is highly specialized in nature. As the oil and gas industry
is seeing steady growth in activities, there is knock-on demand for extra human resources to fuel the additional
work levels. Added to this is the use of multi-functional teams needed to operate in different geographic
locations and environments.
Consolidation and Rationalisation in the Oil and Gas industry
Consolidation and rationalisation have been the key word in the oil and gas industry over the last decade. In
tandem with the widespread mergers and acquisitions taking place in the business world, many petroleum
companies are also merging so as to achieve economies of scale and higher crude oil reserves. The trend is also
driven by globalisation forces as most of the oil and gas players are global in nature. The markets, prices and
profitability are all tightly inter-linked between regions by extensive trade and competition. The net effect is
that there are fewer petroleum companies in the scene while the number of supporting services companies
remain fairly constant. By virtue of this, service providers supporting the oil and gas industry must be able to
demonstrate quality services and meeting customer demand for vessels equipped with greater technological
capabilities and larger in size as well as reliability in order to remain competitive.
Project-Based Business
One of the industry challenges faced by companies providing OSV services is to maintain a stable source of
income due to having a majority of income derived from project-based businesses. Once the term of the project
is completed, the support services companies would have to source for new projects to derive a new source of
revenue. The exception is that the contracts are renewed for another fixed period of time, when the oil and gas
companies are satisfied with their work. Hence, fluctuations in revenue are quite normal in project-based
businesses. On a positive note, some service providers view this as an advantage where they could explore the
best possible deal from time to time. Although long term contract is perceived to be providing as secured
revenue stream, there could be risk involved in entering into unfavourable arrangement rate due to unforeseen
circumstances throughout the long contract period.
Greater Investment in Deepwater Environment
In deepwater environment, the field architecture, technology and concept options are more complex and diverse
and hence present greater risks. The need for a myriad of floater designs and sub-sea systems require extensive
engineering expertise to manage a multitude of equipment and systems interface. The high risks present in
deepwater development demands greater diligent risk mitigation, with huge investment of expertise. The further of
the offshore platform is located from land, the greater is the risk and the smaller the permissible margin of error.
Volatility in Oil Prices
The fluctuation in crude oil and natural gas prices are significantly effected by the demand and supply of the
global crude oil market. The level of volatility then affect the level of capital spending by companies operating
in the O&G industry. Any major sustained decline in the price of oil price and gas could result in a lower
investment in the E&P activities and tend to decline the investment in offshore support services. Although the
industry specialists foresee the price will not drop below USD45 per barrel in the near future, no assurance can
be given that the offshore support vessels activities will not be affected in the event of depression in oil prices.
Increased Competition
The offshore support vessels and service industry is a huge competitive environment to both local and
international market, either from the local licensed service provider or foreign vessel suppliers which have jointventure arrangement with local licensed vessel suppliers that supply various maritime vessels and services to
oilfield operators. Competitive factors include price, quality of services and quality and availability of vessels.
Licenses, Registration and Certification Requirements
The O&G industry in general is a highly regulated industry. Operators or service providers are required to possess
the relevant licenses issued by Petronas in order to provide service to Petronas or other operators. In addition,
the MOF also regulates the industry through the issuance of relevant license. The players are taking the risk, as
there is no assurance that these licenses, registration and certification will be renewed when they expire.
Furthermore, offshore support service provider must adhere and conform to the local legislations and
international standards for safety management, operation as well as pollution controls.
OPPORTUNITIES FOR OSV INDUSTRY
The advent of deepwater exploration and production is expected to increase the demand for offshore support
services as these petroleum fields lie at a greater distance from the shore. This new development will create
greater demand for new series of OSVs, which have the capability in operating at deepwater oil fields for
operational support and maintenance services.
The successful ventures into other countries by Petronas have managed to establish good business relationships
with host countries, which, in turn provide opportunities to the OSV operators to leverage on Petronas presence
in search for new business.
There is a strong need for Bank Pembangunan to support the local OSV players so that they could reduce the
high number of foreign OSV operators in the lucrative local offshore market, thus prevent outflow of revenue
from the country.
Bank Pembangunan should expect an increase in demand for new OSVs due to the current booming market.
There is also an urgent need for the local OSV operators to replace their aging fleet, which majority of them is
above 20 years old.
The demand for offshore support services is correlated to the performance of the oil and gas industry.
Specifically in Malaysia, the oil and gas industry is projected to expand further as the country is one of the major
beneficiaries of increased crude oil prices, as it is a net exporter of crude oil. This translates into increased
offshore support services including OSVs.
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7.
Study On Advanced Electronics Industry
Introduction
1.1
1.2
GENERAL OVERVIEW ON ELECTRICAL AND ELECTRONICS INDUSTRY IN MALAYSIA
The electrical and electronics (E&E) industry is a leading contributor to Malaysia’s industrial development, in
terms of output, foreign exchange earnings and support activities. During the period of Second Industrial Master
Plan (IMP 2), 1996-2005, the industry registered double-digit growth in exports, thus maintaining Malaysia’s
position as a net exporter of E&E products. Malaysia’s production and export of semiconductors ranked among
the top five in the world for the period 2000 – 2004. Electronic integrated circuits, which constituted 28.2% of
total exports of E&E products, increased by 4.6% or RM1.0 billion to RM23.1 billion during the same period.
Malaysia is now looking to produce more high-end electronics products that have the potential to enhance the
growth of E&E sector in the future.
INDUSTRY CHARACTERISTICS AND SEGMENTATION
Today, Malaysia's E&E industry has developed significant capacities and skills in the manufacture of a wide range
of semiconductor devices, high-end consumer electronic goods and information and communication technology
(ICT) products.
The electronics industry in Malaysia can be classified into three sub-sectors:
a)
Consumer Electronics;
b)
Electronic Components; and
c)
Industrial Electronics.
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Chart 1: Exports of Electronics Products by Sub-Sector, 2002-2006
160
RM (Billion)
136.8
140
120
115.4
100
99.8
94.8
87.7
102.5
103.2
100.4
84.3
82.7
80
60
40
21.1
22.7
22.2
19.7
20
19.1
0
Year
2002
CONSUMER ELECTRONICS
ELECTRONIC COMPONENTS
INDUSTRIAL ELECTRONICS
Source: Department of Statistics
2003
2004
2005
2006
a)
b)
Consumer Electronics
Chart 1 shows the trend of exports E&E industry from 2002 to 2006. During the five years period, exports
of consumer electronics was hovering around RM19 million to RM22 million. This sub-sector includes the
manufacture of colour television receivers, audiovisual products such as CD/VCD/DVD players, home
theaters, portable digital music players, camcorders and digital cameras. The industry is moving towards
the utilisation of flat panel display technology and production of multifunction digital audio/video products.
The capital investment in this sub-sector for the period 2000 till 2006 amounted to RM3.8 billion.
Electronic Components
The trend shows export of electronic components increased from year 2002 to 2006. The products under
this sub-sector include semiconductor devices (fabricated wafers, integrated circuits and integrated circuit
design), passive components (capacitors, inductors, resistors) and other components (such as storage
media, disk drive parts, printed circuit boards and metal and plastic parts/components for E&E application).
Capital investment for the year 2006 amounted to RM7.6 billion. Within this sub-sector, the
semiconductor industry is dominant in terms of production, employment creation and export contribution.
Industrial Electronics
This sub-sector covers ICT products such as computer and computer peripherals, telecommunications,
optics, and other industrial electronic products such as office equipment (copier machines, fax machines,
typewriters, automatic data processing machines) and industrial controllers. The industrial electronics
export registered an upward trend from the year 2004 to 2006. Companies in this sub-sector have moved
into the production and development of higher-end industrial electronic products such as computer
networking equipment, new generation audio-visual digital equipment and data storage devices (magnetic
resonance magnetic heads, compact disc media and hard disc drives). The capital investment under this
sub-sector amounted to RM1.1 billion for 2006.
c)
1.3
ADVANCED ELECTRONICS INDUSTRY
Advance Electronics industry in Malaysia is focusing more on higher-end electronics industry with emphasis on
the sub-sectors of optoelectronics, photonics and laser technology, microelectronics and micro-electromechanical
systems (MEMS). Other advanced electronics activities that currently being promoted by MIDA (Malaysian
Industrial Development Authority) are:
•
Design, development and manufacture of:
-
computer or peripherals
microprocessor application
•
Development and production of communication equipment
•
Design and production of integrated circuits (ICs)
•
Development and production of cathode ray tubes and advance displays
•
Design, development and manufacturer of printer heads, head gimbals/head carriages, headstacks,
magnetic heads, voice coil motors and actuators
•
Development and production of advanced connectors
•
Development and manufacturing of high density interconnect printed circuit boards (PCB) excluding rigid
single-sided PCB
•
Design, development and manufacture of printer mechanism
•
Development and production of surface mount components
•
Design, development and manufacture of Electro-Magnetic Interference (EMI) shielding products
•
Design, development and manufacture of contra rotator washing machines
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Photonics
INTRODUCTION
Photonics is the technology of generating and harnessing light and other forms of radiant energy, whose
fundamental element is the photon. Photonics involves cutting-edge uses of lasers, optics, fiber-optics, and
electro-optical devices in numerous and diverse fields of technology such as manufacturing, health care,
telecommunication, environmental monitoring, homeland security, aerospace, and many others.
2.2
APPLICATION OF PHOTONICS
Photonic devices have the potential to increase the capacity of existing optical fibre cable networks by 500 times
for a relatively small cost. The same fibre link using optical amplifiers instead of electronic repeaters only needs
9 amplifiers and has a total capacity in excess of 75,000 Megabytes. Photonic technology has many applications
in the following areas:
2.1
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2.3
•
Consumer Equipment: Barcode scanner, printer, CD/DVD/Blu-ray devices, remote control devices
•
Telecommunications: Optical fiber communications
•
Medicine: Correction of poor eyesight, laser surgery, surgical endoscopy,
•
Industrial Manufacturing: The use of lasers for welding, drilling, cutting, and various kinds of surface
modification
•
Construction: Laser levelling, laser rangefinding, smart structures
•
Entertainment: Laser shows, beam effects, holographic art
•
Metrology: Time and frequency measurements, rangefinding
•
Photonic Computing: Clock distribution and communication between computers, circuit boards or within
optoelectronic integrated circuits
KEY PLAYERS
Finisar Malaysia
American parent company Finisar Corporation has chosen Malaysia for its first manufacturing site outside the
USA. Commencing operations in May 2001, Finisar Malaysia currently exports products worth more than
RM35 million a month, mainly to the USA, Europe and Asia.
The plant in Ipoh, Perak, with a 1,100-strong workforce, manufactures optical transceivers, assembles passive
optics components, and fabricates and packages filters. The Ipoh plant had initiated Research & Development
(R&D) activities and played an active role in defining the manufacturing processes for the next generation of
devices for Finisar. Taking advantage of Malaysia’s easy accessibility, Ipoh is Finisar’s global production supply
chain centre and manages the company’s subcontractors in the region.
Photronix Malaysia
Founded in 1997 as an R&D company by a Malaysian entrepreneur, Photronix currently manufactures
erbium-doped fibre amplifiers (EDFAs), fibre fused tap, fibre Bragg gratings and wavelength division
multiplexing (WDM) couplers for original equipment manufacturers in the USA and Europe. MSC-status
company with operations in Malaysia’s Multimedia Super Corridor (MSC), Photronix continues to be active in
R&D and is conducting government-funded telecommunications-related research with local universities.
2.4
CURRENT STATUS OF PHOTONICS INDUSTRY
The Third Outline Perspective Plan (2001 – 2010) has designated photonics as a priority area for R&D and
industrial development. Photonics is a new field in this country. A concrete initiative has therefore to be put in
place prior to any large scale mobilisation from the government.
As such, manufacturers are invited to take advantage of the country’s capabilities by outsourcing their manufacturing
activities to Malaysian companies or by setting up their operations in Malaysia, either in wholly-owned subsidiaries
or in joint-venture with Malaysians. Industries which use photonics are growing in Malaysia. The production of
photonic parts and components is expected to be worth US$28 billion by 2007.
The most promising, but challenging field of photonics is the development of optoelectronics integrated circuits.
Fabrication problems and incompatibility of materials have impeded progress in this area. Malaysian manufacturers
will need to acquire the capability to develop photonics components and equipment and manufacture them
efficiently in large volumes, to be able to reduce product costs and compete in the international market for
photonics.
Optoelectronics
INTRODUCTION
Optoelectronics is a field of technology that combines the physics of light with electricity. Optoelectronics
encompasses the study, design and manufacture of hardware devices that convert electrical signals into photon
signals and vice versa. Any device that operates as an electrical-to-optical or optical-to-electrical transducer is
considered an optoelectronic device. Optoelectronic technologies include fiber optic communications, laser
systems, electric eyes, remote sensing systems, medical diagnostic systems and optical information systems.
3.1
3.2
KEY PLAYERS – OPTOELECTRONIC COMPANIES
Agilent Technologies
Agilent Malaysia currently sources between 30% to 40% of its components locally, and this figure is set to
increase. Agilent Malaysia currently makes a wide range of products for the global market including optical
encoders, light emitting diodes, optical mouse, test and measurement instruments, camera modules and radio
frequency semiconductors. R&D will play an increasingly important role, with spending a total of RM1 billion
over the next five years.
OSRAM Opto Semiconductors (OSRAM)
One of OSRAM largest and most well equipped manufacturing operations for its opto semiconductor business
segment is situated in Penang. Operating in Penang since 1972, the company manufactures surface mounted
light emitting diodes (LEDs), radial LEDs, intelligent displays and sensors, and recently began the production of
organic LEDs, based on a new and highly sophisticated technology.
OSRAM sees Malaysia as an ideal base to supply the growing markets in Asia for photonics and optical devices.
PWB Technologies (PWB)
In 1999, Germany’s PWB commenced operations in Johor Bahru, Johor. PWB’s base in Johor Bahru is the
company’s only manufacturing site outside German, where it currently produces optical encoders for clients in
Europe and the USA, including Swiss engineering conglomerate Buhler. Photonics is a new business for PWB and
one in which the company is planning for expansion.
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3.3
CURRENT STATUS OF OPTOELECTRONICS INDUSTRY
Chart 2: Global optoelectronics industry
in three major application areas
28%
OPTICAL
COMMUNICATIONS
38%
COMPUTING
TOTAL (2006) US$19 billion
Source: www.photonics.com
In 2006, the optoelectronics market achieved new highs with
optoelectronics enabled and components reaching US$565 billion,
a 14.5% increase over 2005 (US$494 billion). Presently, almost
75% of optoelectronics components are produced in Japan. It is
estimated that by 2010, 22% of the global optoelectronics market
value will come from new product technology. However, other
parts of Southeast Asia such as Malaysia and Thailand continue to
show growth in optoelectronics.
Over the last decade, many U.S. and European companies have
been steadily moving manufacturing to Asia. While this trend
is far advanced in the semiconductor market, the pace of this
move has slowed considerably in the optical-component
because the telecommunications market continues to remain
severely depressed.
From an applications standpoint, computing is the largest segment of the
US$19 billion global optoelectronics market. The computing market is
mainly composed of image sensors, non-diode lasers and LEDs. The
consumer and entertainment applications sector follows closely in size, but
has experienced the most growth, 15 percent, over 2004.
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Laser Technology
4.1
INTRODUCTION
In 2006, the worldwide sale for laser materials and components was valued at US$5.98 billion. Demand for laser
materials and components are expected to be driven by the expansion of the manufacturing capacity in Asia
Pacific. Laser technology is used in various fields:
•
In the manufacturing sector, the application of laser welding in serial manufacturing is expected to
expand. While laser cutting and welding of conventional blank sheets and laser cracking of motor parts
are widely applied, the technology is also presently used in processing innovative materials (for example,
foamed metals) and the manufacture of automobiles, where laser welding robots are used for cutting
covering plastics. Automotive suppliers are also increasingly using laser welding for plastic housings (for
example, electronic components). Laser soldering and laser welding for micro-applications (for example,
sensors) are being tested for applicability.
•
In consumer electronics, telecommunications and data communication, lasers are used as transmitters in
optical communication over optical fibres and free space. They are used to store and retrieve data from
compact discs and digital video discs, as well as magneto-optical discs. Laser lighting displays accompany
many musical concerts.
•
In medicine, laser scalpel is used for laser vision correction and other surgical techniques. Lasers are also
used for dermatological procedures.
•
In surveying and constructions, laser line levels are used.
•
In aerospace, lasers are used in aircraft guiding system.
•
In military, lasers are used as target designators for weapons.
For all these advanced applications, process and quality control are important. New kinds of laser sources will be
explored to enable further applications. However, the primary challenge of adopting laser technology is cost,
where the initial outlay for advanced laser cutting equipment may be prohibitive to most SMEs in Malaysia.
4.2
KEY PLAYERS
Excel Technology Asia
Excel Technology Asia was established in April 1999 as a subsidiary of Excel Technology, Inc. Its primary objective
is to market, sell, service, and support products of select manufacturing subsidiaries of Excel Technology, Inc. In
addition it offers a state-of-the-art laser applications laboratory for our customers to conduct feasibility studies
and manufacturing simulation. Excel today is comprised of nine manufacturing subsidiaries. The four Excel
manufacturing companies that either design and build laser systems or integrate laser systems into laser-based
material processing systems are represented by Excel Technology Asia. Among the most significant industrial
laser market segments served are the aerospace, automotive, consumer product, medical device, jewelry, and
diamond industries. Typical laser materials processing applications include marking, engraving, scribing, cutting,
drilling, deep engraving and micromachining of virtually any material.
Established in 1996, Han's Laser Technology Co. Ltd is now a world-class enterprise, the largest laser machining
equipment manufacturer in Asia. Main product portfolio covers more than 80 models of industrial laser
equipments including laser marker series, laser welder series, laser cutter series, laser display series, laser subsurface engraver series, PCB laser driller series and computer to plate system etc. They have been widely adopted
in the production of electronic appliances, integrated chips, PCB, computers, telecommunication equipments,
instruments and meters, automotive, precision machineries, construction materials, fashion and clothing, urban
illumination, wearing accessories, packaging and many other products.
Chart 3: Global sales of laser industry (2005-2007)
CURRENT STATUS OF LASER INDUSTRY
Sales of world laser industry showed a great growth in 2005
reaching to US$5.58 billion. In 2006, the number was
US$5.98 billion and is expected to increase up to US$6.2
billion in 2007. Industrialized nations have been vigorously
engaged in R&D of laser technology as to take the most
advanced information technology to the world of
competition.
Today lasers are used in industries, like medicine, research,
art and entertainment, education, and military applications.
Some of the main areas of laser use are in Table 1.
64
95
63
62
62
61
59.8
60
59
58
57
55.8
56
55
54
53
52
Source:
http://www.acunion.net
/en/ma/Laser.htm
51
50
Year
2005
2006
2007
Unit: 100 million
Table 1: Laser Applications
COMMERCE
INDUSTRY
MEDICINE
MILITARY
RESEARCH
_
_
_
_
_
_
_
_
_
_
_
_
_
_
_
_
_
_
_
_
_
_
_
_
_
_
_
_
_
_
Copiers
Displays
Fiber Optics
Holography
Printing
Reading/Scanning
Communications
Compact and
Video-Discs
Alignment
Annealing
Cutting/Drilling
Dynamic Balancing
Metrology
Non-destructive
Testing
_ Sealing
Soldering/Welding
Lithography
Source: http://www.rli.com/resources/laseapps.asp
Cell Research
Dentistry
Surgery
Diagnostics
Opthalmology
Oncology
Navigation
Ranging
Simulation
Weapons
Guidance
Interferometry
Plasma Diagnostics
Scanning Microscope
Photochemistry
Velocimetry
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4.3
Han’s Laser
Robotics
5.1
INTRODUCTION
An industrial robot is an automatically controlled, programmable, multipurpose, manipulative machine, with
three or more reprogrammable axes. About 750,000 robots are in operation daily around the world, with more
than 40% of them in Japan. Presently, the use of robots depends on established actuation techniques, such as
pneumatic, hydraulic and electric. New approaches to robot actuation involve ultrasonic motors and artificial
muscles. For artificial muscles, several materials are being studied, which include shape memory alloys,
contractile polymers, micro-fabricated electrostatic devices and piezoelectric and magnetostrictive materials.
5.2
KEY PLAYERS
KUKA Robot Automation Malaysia
KUKA Malaysia, located in Selangor, is the South East Asia Regional Office and the Technical Support Centre for
KUKA Robot Group in Asia. KUKA Malaysia was incorporated in 1994. The business scope covers design,
fabrication, assembly, delivery, installation, testing, commissioning, training and production standby of robotic
systems. KUKA is able to provide complete system solutions in all areas of robotic applications, including welding,
handling, cutting, gluing, bending, and palletizing.
ASIAN AUTOTEC (ATEC)
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ATEC is a member of Robotics Automation Association of Malaysia and Malay Chamber of Commerce, Malaysia.
Over the past years, ATEC has successfully undertaken numerous projects and amongst them, were state-of-theart projects solely developed in-house and in close collaboration with the worldwide principals, business partners
and suppliers in advanced technological and robotics field.
5.3
CURRENT STATUS OF ROBOTICS INDUSTRY
In the world market, robotics has doubled its size from
US$5.7 billion in 2000 to US$11 billion in 2005. As shown in
chart 4, robotic market is expected to grow by a factor of six
by the year 2025. Currently, the EU holds a 35% share of the
world's robotics market.
In 2006, more than 61,700 robots were supplied to Asian
countries (including Australia and New Zealand), about 19%
fewer than in 2005. The E&E industry in Asia, which invested
very heavily in 2005, cut robot purchases by half. Supplies to
the automotive industry also decreased slightly.
In Japan, supplies fell by 26% to about 37,400 units. After the
substantial investments within the automotive and E&E
industry in 2005, purchases in both sectors were down in 2006.
The sharp fall was compensated by increased sales to the machinery
and metal industry as well as to the chemical industry.
In 2006, about 10,800 industrial robots were ordered for
destinations in the Republic of Korea, down 17% from 2005.
In 2005, the supply was about 13,000 units, which was
largely the result of strong demand from the electronic
components industry.
Chart 4: Worldwide Robotic Market Growth
Market Size ($ billion)
70
$66.4 B
60
50
$24.9 B
40
30
$11 B
20
$5.7 B
10
$5.6 B
0
1995
2000
2005
2010
2025 Year
Source: Japan Robotic Association
China was the third largest robot market in Asia, with 5,800 newly installed robots, about 29% more than in
2005. The automotive industry is still the predominant user of industrial robots.
In 2006, the number of industrial robots supplied in India almost doubled, to about 850 robots. Total supplies in
all other Asian markets, including Indonesia, Malaysia, the Philippines, Singapore, Taiwan, Thailand and Vietnam,
decreased by 7%.
An emerging area for the application of robots is the service industry. Personal robots are emerging, especially
for household applications, for example, robots floor cleaning. Military applications will also drive the
development of many mobile robots. In Malaysia the use of industrial robots is limited to a few industries, such
as automotive assembly, semiconductors and chemicals.
Micro-Electromechanical System(MEMS)
6.1
INTRODUCTION
Micro-electromechanical Systems (MEMS) is the integration of mechanical elements, sensors, actuators and
electronics on a common silicon substrate through the utilization of microfabrication technology. MEMS
technology allows smaller components to be integrated to produce smaller electrical and mechanical equipment.
It capitalises upon the computational ability of microelectronics. Industries will be able to produce equipment
in much smaller dimensions while expanding the space of possible designs and applications. Such equipment can
be further enhanced by embedding chips which can be programmed with smart features. The technology will
allow for high levels of functionality, reliability and sophistication at a relatively low cost.
6.2
KEY PLAYERS
MEMS Technology
MEMS Technology is the Malaysian holding company of SensFab Pte Ltd and SenzPak Pte Ltd, which are based
in Singapore. The company designs and manufactures MEMS based products including pressure sensors,
accelerometers, thermopiles, binary lenses, thermopile arrays and microphones. It is one of the fastest growing
MEMS companies in the world. With its upcoming state of the art MEMS design centre, MEMS Technology will
perhaps be the only independent MEMS company in the world that will be capable of offering services from
design concepts to supplying fully tested products.
6.3
CURRENT STATUS OF MEMS INDUSTRY
Chart 5 shows the global market for MEMS industry reached
almost US$6 billion in 2005 and grows with a compound
annual growth rate of 14%. It is expected to grow to
US$25.3 billion in 2008. The average annual growth rate of
the world market for the MEMS for the period 2000-2010 is
estimated at 33.2%.
In Malaysia, the pace of adoption of the MEMS is growing.
In August 2007, MEMS Technology group received a
RM9.6 million Strategic Thrust Areas Research (STAR) grant
from Multimedia Development Corporation to subsidise the
innovation centre. MEMS Technology is injecting another
RM16 milllion to finance the R&D activities and operations
of the innovation centre. The consumption of MEMS
components for mobile handsets reached US$157 million in
2005, and by 2010, it is expected to surpass US$1 billion.
There were also emerging opportunities for MEMS Technology
to be used in products such as inertial sensors used in the
automobile industry and radio frequency components.
Chart 5: Global market for MEMS, 2004-2010
(US$ millions)
$ (millions)
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
Year
2004
2005
2010
97
Bank Pembangunan
Quantum Matrix is a fully owned Malaysian company actively engaged in research, design, development and
manufacturing of MEMS products such as packaging, module assembly and system integration. Quantum Matrix
has been working with Universiti Malaysia Perlis (formerly known as Kolej Universiti Kejuruteraan Utara
Malaysia), a fully funded government engineering institution specializing in Microelectronic. Quantum Matrix
endeavors to be the foremost company in Malaysia in providing solutions not only for the automotive industry
but also for telecommunication, consumer electronics, medical and industrial applications using MEMS
technology.
Quantum Matrix
Challenges
Towards sustaining the competitiveness of Malaysian industries in global market, several challenges in the application
of advanced electronics need to be addressed, including:
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a)
Shortage of skilled workforce and talents
Greater utilisation of technologies require high skilled workforce, which is apparently represents a significant
cost component of investment in high technology sector. While there are programmes on re-skilling, as well as
industrial skill development training for unemployed graduates, the supply of a skilled workforce is still
inadequate and often mismatched, due to rapid changes in technology developments. Industries face difficulties
in coping with the supply shortage, due to the increase competition in the recruitment of workforce that has
given a rise to job hopping by skilled workers to high staff turnover among companies.
b)
Limited utilisation of technologies and lack of effective linkages and support in R&D
There is a need for greater utilisation of technology by Malaysian companies, especially SMEs. The lack of
resources and limited involvement in R&D among Malaysian companies post a constraint in their ability to
innovate or develop new products and services in order to enhance their integration into the global supply
chains. To keep pace with rapid technological developments, Malaysian companies need to continuously upgrade
their products and processes and involve in R&D for product innovation. To remain competitive, companies need
to take advantage of the recent trends in technology convergence, as this will lead to opportunities in new
applications and creation of new products and services.
c)
Limited access to financial support
Costs which companies have to bear to acquire technologies include:
•
Capital equipment;
•
Upgrading and maintenance;
•
Remuneration for both local and foreign experts and skilled personal.
High technology acquisition through foreign suppliers can be costly, partly due to the premium placed on the quality
and reliability of the equipment and services. This compels most local industries to borrow heavily from financial
institutions, in order to invest in new technologies required for the operations. There is also a need for flexibility
in the provision of financial and technical support for R&D. It is necessary to ensure that there is a continuity in
providing financial and technical support to enable research projects to be completed and produce expected benefits.
Opportunities For BPMB
Recognizing the sectors potential, the Malaysian government has identified photonics and optoelectronics as the country’s
priority sectors for development. In line with this policy, the government is actively fostering photonics-related R&D
at universities and research institutions. The government is also aggressively upgrading the skills of Malaysia’s workforce.
Furthermore, the State Government of Penang is now vigorously campaigning to bring the photonics industry to Penang.
The future development of the advanced electronics industry in Malaysia focuses on sustaining this high growth sector
which is in the process of transforming into competitive, full-fledged skills-based electronics and ICT clusters, capable
of supplying most kinds of electronic and ICT goods for the global market. There are vast business opportunities for
electronic companies seeking a competitive base for manufacturing and other skill-intensive activities such as R&D,
product design and development.
Conclusion
Over the years, Malaysia has proven itself not only as a major producer and exporter of electronic products but also
as an attractive location to foreign investors. In developing the industry further, the government is prepared to
consider granting tax incentives, including pioneer status and investment tax allowance, to a selected range of
electronics products and high technology industries. A pioneer status scheme for small-scale industries is also available
to eligible investors.
The advanced electronics industry in Malaysia continues to enjoy high growth rates. It is envisaged that the industry will
receive good response from investors as the government pursues more capital-intensive and high-technology investments
to raise the value-added generated by the industry. In this context, the government has outlined a set of strategic
directions and strategies which will be undertaken in the medium-term. To maximise value-added activities in the
advanced electronics industry, there is, however, a need to develop capabilities in core, strategic and emerging technologies
such as R&D, product development, marketing and distribution, as well as in upgrading human resource skills.
Peristiwa Bergambar 2007
2007 In Pictures
Januari
7 Januari
January
January
Golf Persahabatan dengan
Bank Negara Malaysia
Friendly Golf with Bank Negara
Malaysia
Majlis Perhimpunan Semangat
Semangat Gathering
12 Januari
January
Februari
February
11 Februari
February
Golf Persahabatan dengan
Kementerian Kewangan
Friendly Golf with
Ministry of Finance
Mac
March
March
1 Mac
Majlis Menandatangani
Perjanjian SME Growth
Acceleration Fund Sdn. Bhd.
Signing Ceremony SME Growth
Acceleration Fund Sdn. Bhd.
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2007 In Pictures
6-7 Mac
March
Mac
March
Seminar Pelaburan
Tempatan MIDA
MIDA Domestic
Investment Seminar
April
April
16 April
April
17 April
April
Majlis Pelancaran
Program ISO 9000:2001
ISO 9000:2001
Launching Ceremony
Majlis Pelancaran
Portal Maklumat SAF-i
SAF-i Information Portal
Launching Ceremony
Bank Pembangunan
100
25 April
April
Sesi Dialog Bersama FEM
Dialog Session with FEM
Mei
May
May
5 Mei
Perhimpunan Hari Pekerja
Labour Day Assembly
8-10 Mac
March
21 Mac
March
Persidangan Maritim
Kebangsaan
National Maritime Conference
Sesi Networking dengan
PERDASAMA
Networking Session with
PERDASAMA
23-24 April
April
Seminar Pelaburan
Tempatan MIDA
MIDA Domestic Investment
Seminar
Bank Pembangunan
101
9-13 Mei
May
Pameran MIHAS
MIHAS Exhibition
2007 In Pictures
Jun
29 Mei
May - 1 June
Jun
June
Persidangan Antarabangsa
Bahan-bahan Termaju dan
Teknologi Nano
International Conference on
Advancement of Materials and
Nanotechnology
16 Jun
June
Pelancaran Lagu Korporat
Launching of Corporate Song
Majlis Makan Malam Tahunan
Annual Dinner
Bank Pembangunan
102
Julai
12 Julai
July
July
Sesi Networking
dengan AMIM
Networking Session
with AMIM
Ogos
August
August
4 Ogos
August
21 Ogos
Kejohanan Golf
Jemputan Jubli Emas
Invitational Golden
Jubilee Golf
Tournament
Sesi Networking
dengan CIDB
Networking
Session
with CIDB
9 Jun
June
Bowling dengan Media
Bowling with Media
5th Asean Ports and Shipping
5th Asean Ports and Shipping
12-13 Jun
June
26 Julai
July
Sesi Networking dengan
DPMM
Networking Session with
DPMM
August
28-29 Ogos
Persidangan Utiliti Kebangsaan ke-4
The 4th National Utilities Summit
Bank Pembangunan
103
2007 In Pictures
September
September
29 September
September
Sumbangan Ramadhan di
Institut Pediatrik, Hospital
Kuala Lumpur
Ramadhan Contribution to the
Paediatric Institute, Hospital
Kuala Lumpur
Oktober
October
21 Oktober
October
Majlis Hari Raya Korporat
Corporate Hari Raya
Bank Pembangunan
104
November
November
13 November
November
Forum Kewangan untuk
Pedagang dan Pengusaha
Bumiputera
Financial Forum for
Bumiputera Traders and
Entrepreneurs
Disember
December
4-8 Disember
December
Pameran Maritim dan
Aeroangkasa Antarabangsa
Langkawi (LIMA)
Langkawi International
Maritime & Aerospace (LIMA)
Exhibition
Pameran Kewangan Malaysia (MYFEX)
Malaysian Financial Exhibition (MYFEX)
November
30 Oktober
October - 4 November
22-24 November
November
Expo Jubli Emas
Golden Jubilee Expo
17-28 Disember
December
Majlis Penyerahan Zakat Perniagaan
Business Tithes Handover Ceremony
Bank Pembangunan
105
Penyata Kewangan Beraudit
Audited Financial Statements
Directors’ Report
The Directors have pleasure in submitting their report and the audited financial statements of the Group and of the Bank for the
financial year ended 31 December 2007.
PRINCIPAL ACTIVITIES
The Bank is principally engaged to undertake infrastructure project financing and to carry out the functions of a development bank
focusing on maritime, advanced manufacturing industries, high technology and export oriented industries. The principal activities of
the subsidiary companies are as disclosed in Note 38 to the financial statements.
There have been no significant changes in the nature of these activities during the financial year.
Annual Report 2007
RESULTS
Bank Pembangunan
108
Group
RM’000
Bank
RM’000
Profit after tax from continuing operations
Profit after tax from discontinued operations
796,874
62,891
408,525
–
Net profit for the year
859,765
408,525
Attributable to:
Equity holders of the Bank
Minority interests
737,128
122,637
408,525
–
859,765
408,525
There were no material transfers to or from reserves and provisions during the year under review except as disclosed in the financial
statements.
In the opinion of the Directors, the results of the operations of the Group and of the Bank during the financial year were not
substantially affected by any item, transaction or event of a material and unusual nature.
DIVIDENDS
Final tax exempt dividend on 3,078,724,000 ordinary shares, amounting to RM80,000,000 (2.6 sen net per ordinary share), in respect
of the financial year ended 31 December 2006 was declared on 22 May 2007 and approved for payment on 29 June 2007.
The dividend has been accrued and accounted for in equity as an appropriation of retained profit during the financial year.
At the forthcoming Annual General Meeting, a final tax exempt dividend in respect of the financial year ended 31 December 2007, of
2.6% on 3,078,724,000 ordinary shares, amounting to a dividend payable of RM80,000,000 (2.6 sen net per ordinary share) will be
proposed for the shareholders' approval. The financial statements for the current financial year do not reflect this proposed dividend.
Such dividend, if approved by the shareholder, will be accounted for in equity as an appropriation of retained profits in the financial
year ending 31 December 2008.
DIRECTORS
The names of the Directors of the Bank in office since the date of the last report and at the date of this report are:
Dato’ Tajuddin bin Atan
Dr Mohmad Isa bin Hussain
Haini binti Hassan
Mohd Zarif Mohd Zaman
Datuk Abdul Rahim bin Mohd Zin
Tan Sri Dato’ Seri Dr. Hj. Zainul Ariff bin Hj. Hussain
Fazlur Rahman bin KMM Ebrahim
(appointed on 1 December 2007)
(term ended on 31 August 2007)
(term ended on 1 December 2007)
(appointed on 27 June 2007, term ended on 31 December 2007)
(term ended on 6 February 2008)
DIRECTORS’ BENEFITS
Neither at the end of the financial year, nor at any time during that year, did there subsist any arrangement to which the Bank was a
party, whereby the Directors might acquire benefits by means of the acquisition of shares in or debentures of the Bank or any other
body corporate.
Since the end of the previous financial year, no Director has received or become entitled to receive a benefit (other than benefits
included in the aggregate amount of emoluments received or due and receivable by the Directors as shown in Note 29 or the fixed
salary of a full time employee of the Bank) by reason of a contract made by the Bank or a related corporation with any Director or
with a firm of which the Director is a member, or with a company in which the Director has a substantial financial interest.
DIRECTORS' INTEREST
None of the Directors holding office at 31 December 2007 had any interest in the ordinary shares of the Bank and of its related
corporations during the financial year.
RATING BY EXTERNAL RATING AGENCIES
Date
Rating Classification
Rating Received
RAM Rating
19 December 2007
Issue rating on RM7 billion Conventional
Medium-Term Notes Programme and
Islamic Murabahah Medium-Term
Notes Programme
AA1
BUSINESS OUTLOOK
Bank Pembangunan Group would continue to remain prudent, maintain strong corporate governance, practice sound risk management
and propagate high performance culture despite its relentless pursuit for growth.
In line with the Malaysian economic growth forecast of between 5% to 6% coupled with the prospect of growth from the recently
launched economic regions, Bank Pembangunan Group in general and the Bank in particular would be strategically positioned to
capitalize the potential opportunities. Hence, the Group and the Bank could look forward to achieving equally favourable
performances in 2008.
OTHER STATUTORY INFORMATION
(a)
(b)
Before the income statements and balance sheets of the Group and of the Bank were made out, the Directors took reasonable
steps:
(i)
to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of provision for
doubtful debts and satisfied themselves that all known bad debts had been written off and that adequate provision had
been made for doubtful debts; and
(ii)
to ensure that any current assets which were unlikely to realise their values as shown in the accounting records in the
ordinary course of business had been written down to an amount which they might be expected so to realise.
At the date of this report, the Directors are not aware of any circumstances:
(i)
which would render the amount written off for bad debts or the amount of the provision for doubtful debts in the financial
statements of the Group and of the Bank inadequate to any substantial extent and the values attributed to current assets
in the financial statements of the Group and of the Bank misleading;
(ii)
which have arisen which would render adherence to the existing method of valuation of assets or liabilities of the Group
and of the Bank misleading or inappropriate; and
(iii) not otherwise dealt with in this report or financial statements of the Group and of the Bank which would render any
amount stated in the financial statements misleading.
109
Bank Pembangunan
Rating Agency
Annual Report 2007
Details of the Bank’s ratings are as follows:
Directors’ Report (cont’d)
OTHER STATUTORY INFORMATION
(c)
(d)
(cont’d)
As at the date of this report, there does not exist:
(i)
any charge on the assets of the Group or of the Bank which has arisen since the end of the financial year which secures
the liabilities of any other person; or
(ii)
any contingent liability of the Group or of the Bank which has arisen since the end of the financial year.
In the opinion of the Directors:
(i)
no contingent liability or other liability has become enforceable or is likely to become enforceable within the period of
twelve months after the end of the financial year which will or may affect the ability of the Group or of the Bank to meet
its obligations when they fall due; and
(ii)
no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial
year and the date of this report which is likely to affect substantially the results of the operations of the Group or of the
Bank for the financial year which this report is made.
SUBSEQUENT EVENTS
Annual Report 2007
Subsequent events are disclosed in Note 39 to the financial statements.
AUDITORS
The auditors, Ernst & Young have expressed their willingness to continue in office.
Signed on behalf of the Board in accordance with a resolution of the Directors dated 27 March 2008.
Bank Pembangunan
110
Kuala Lumpur, Malaysia
Dato' Tajuddin bin Atan
Statement By Directors
Pursuant to Section 169(15) of the Companies Act, 1965
We, Dr Mohmad Isa bin Hussain and Dato' Tajuddin bin Atan, being two of the Directors of Bank Pembangunan Malaysia Berhad,
do hereby state that, in the opinion of the Directors, the accompanying financial statements set out on pages 114 to 186 are drawn
up in accordance with the provisions of the Companies Act, 1965 and applicable Financial Reporting Standards in Malaysia as modified
by Bank Negara Malaysia/Development Financial Institutions Guidelines so as to give a true and fair view of the financial position of
the Group and of the Bank as at 31 December 2007 and of the results and the cash flows of the Group and of the Bank for the year
then ended.
Signed on behalf of the Board in accordance with a resolution of the Directors dated 27 March 2008.
Annual Report 2007
Bank Pembangunan
111
Statutory Declaration
Pursuant to Section 169(16) of the Companies Act, 1965 and
Section 73(1)(E) of the Development Financial Institutions Act, 2002
We, Dato’ Ab. Halim bin Mohyiddin and Dato' Tajuddin bin Atan, the Director and Managing Director, respectively, of the Bank who
are primarily responsible for the financial management of Bank Pembangunan Malaysia Berhad, do solemnly and sincerely declare that
the financial statements set out on pages 114 to 186 are, to the best of our knowledge and belief, correct and we make this solemn
declaration conscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declarations Act, 1960.
Subscribed and solemnly declared by
the abovenamed at Kuala Lumpur in
the Federal Territory on 27 March 2008
Annual Report 2007
Bank Pembangunan
112
Before me,
Report of the Auditors to the Members of
(incorporated In Malaysia)
We have audited the financial statements set out on pages 114 to 186. These financial statements are the responsibility of the Bank’s
Directors.
It is our responsibility to form an independent opinion, based on our audit, on the financial statements and to report our opinion to
you, as a body, in accordance with Section 174 of the Companies Act, 1965 and for no other purpose. We do not assume responsibility
to any other person for the content of this report.
We conducted our audit in accordance with Approved Standards on Auditing in Malaysia. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the Directors, as well as evaluating the overall presentation
of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
In our opinion:
(i)
the financial position of the Group and of the Bank as at 31 December 2007 and of the results and the cash flows of the
Group and of the Bank for the year then ended; and
(ii)
the matters required by Section 169 of the Companies Act, 1965 to be dealt with in the financial statements; and
the accounting and other records and the registers required by the Act to be kept by the Bank and by its subsidiaries have been
properly kept in accordance with the provisions of the Act.
We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Bank’s financial statements are
in form and content appropriate and proper for the purposes of the preparation of the consolidated financial statements and we have
received satisfactory information and explanations required by us for those purposes.
The audit reports on the financial statements of the subsidiaries were not subject to any qualification and did not include any comment
made under sub-section (3) of Section 174 of the Act.
Ernst & Young
AF: 0039
Chartered Accountants
27 March 2008
Abdul Rauf bin Rashid
No. 2305/05/08(J)
Partner
Annual Report 2007
(b)
the financial statements have been properly drawn up in accordance with the provisions of the Companies Act, 1965 and
applicable Financial Reporting Standards in Malaysia as modified by Bank Negara Malaysia/Development Financial Institutions
Guidelines so as to give a true and fair view of:
113
Bank Pembangunan
(a)
Balance Sheets
as at 31 December 2007
Group
Bank
Note
2007
RM'000
2006
RM'000
(restated)
2007
RM'000
2006
RM'000
(restated)
3
1,039,548
2,881,310
989,612
1,225,466
4
5
6
7
8
9
10
11
12
13
847,710
2,293,266
17,526,562
389,552
–
463,092
847,783
4,133
19,171
42,698
1,051,246
1,916,388
18,073,664
1,181,802
–
453,339
1,123,739
33,951
14,933
49,536
172,443
2,284,327
17,439,835
426,298
861,726
124,301
26,853
4,133
40,615
32,594
626,092
1,855,829
16,148,017
637,490
1,754,353
145,496
31,168
4,242
31,853
44,632
23,473,515
26,779,908
22,402,737
22,504,638
4,590,744
–
908,274
–
28,064,259
26,779,908
23,311,011
22,504,638
14
5,169,630
4,839,111
5,169,630
4,839,111
15
16
17
18
19
20
21
5,000
304,289
2,018,630
10,164,937
606,291
–
96,334
–
429,266
2,047,664
12,676,531
535,289
378,402
119,260
5,000
194,767
1,988,400
9,727,489
606,291
–
96,334
–
289,999
1,987,438
9,591,631
535,289
–
119,260
18,365,111
21,025,523
17,787,911
17,362,728
3,251,119
–
–
–
21,616,230
21,025,523
17,787,911
17,362,728
3,078,724
3,178,312
3,078,724
2,480,157
3,078,724
2,444,376
3,078,724
2,063,186
6,257,036
5,558,881
5,523,100
5,141,910
190,993
195,504
–
–
6,448,029
5,754,385
5,523,100
5,141,910
28,064,259
26,779,908
23,311,011
22,504,638
ASSETS
Annual Report 2007
Deposits and placements with
financial institutions
Securities portfolio
Other assets
Investments in subsidiaries
Interest in associates
Prepaid land leases
Investment properties
Deferred tax assets
Bank Pembangunan
114
Assets of disposal group/investment in a
subsidiary classified as held for sale
39
TOTAL ASSETS
LIABILITIES
Deposits and placements of banks and
other financial institutions
Other liabilities
Long term loans
Government funds
Deferred income
Liabilities directly associated with assets
of disposal group
39
TOTAL LIABILITIES
Equity attributable to equity
holders of the Bank
Share capital
Reserves
Minority interests
Total equity
TOTAL EQUITY AND LIABILITIES
22
23
The accompanying notes form an integral part of the financial statements.
Income Statements
for the year ended 31 December 2007
Note
Bank
2006
RM'000
(restated)
2007
RM'000
2006
RM'000
(restated)
Interest income
Interest expense
25
26
1,236,432
(768,355)
1,256,227
(728,582)
1,209,648
(766,827)
1,053,059
(666,990)
Net interest income
Non-interest income
27
468,077
550,425
527,645
660,359
442,821
134,453
386,069
369,035
Net income
Overhead expenses
28
1,018,502
(278,532)
1,188,004
(377,810)
577,274
(79,194)
755,104
(89,490)
Operating profit
Loans and financing loss and allowance
31
739,970
(69,952)
810,194
(471,857)
498,080
(117,702)
665,614
(112,632)
670,018
97,416
338,337
102,815
380,378
–
552,982
–
767,434
29,440
441,152
(80,000)
380,378
28,147
552,982
(57,020)
796,874
361,152
408,525
495,962
62,891
–
–
–
859,765
361,152
408,525
495,962
Share of results of associates
32
Profit for the year
Discontinued Operation
Profit for the year from discontinued operations
39
Profit for the year
115
Attributable to:
Shareholders of the Bank
Minority interests
737,128
122,637
314,898
46,254
408,525
–
495,962
–
Profit for the year
859,765
361,152
408,525
495,962
23.94
10.23
Earnings per share - basic (sen)
34
Bank Pembangunan
Tax expense
Annual Report 2007
Group
2007
RM'000
At 31 December 2006
1,000
–
–
3,078,724
–
–
–
–
–
–
–
–
–
950,000
–
–
–
–
Net losses not recognised in the
income statement
Total recognised income and
expense for the year
Issue of shares
Transfer to statutory reserve
Dividends paid
Arising from capital repayment
of subsidiary
–
–
Currency translation differences
Share of reserves of associate
–
–
1,000
1,000
2,128,724
2,128,724
33
Note
At 1 January 2006, as restated
At 1 January 2006,
as previously stated
Prior year adjustments
- Effects of Note 43(a)
Group
116
Annual Report 2007
10,114
–
–
–
–
–
–
–
–
–
10,114
–
10,114
462,220
–
–
–
247,981
–
–
–
–
–
214,239
18,336
195,903
-
–
–
–
–
–
–
–
–
–
–
–
–
(28,508)
–
(37,350)
–
–
–
(37,350)
–
(21,434)
(15,916)
8,842
–
8,842
2,035,331
–
314,898
–
(247,981)
(80,000)
–
314,898
–
-
2,048,414
18,335
2,030,079
5,558,881
–
277,548
950,000
–
(80,000)
(37,350)
314,898
(21,434)
(15,916)
4,411,333
36,671
4,374,662
<------------------------------------------Attributable to equity holders of the Bank ------------------------------------------>
<--------------------------------------- Non-Distributable --------------------------------------->
Unrealised
Exchange Distributable
Share
Capital General Statutory
Holding Translation
Retained
capital
reserve
reserve
reserve
reserve
reserve
profits
Total
RM'000
RM'000 RM'000
RM'000
RM'000
RM'000
RM'000
RM'000
Bank Pembangunan
195,504
(43,585)
33,665
–
–
(36,537)
(12,589)
46,254
(12,589)
–
241,961
–
241,961
Minority
Interests
RM'000
5,754,385
(43,585)
311,213
950,000
–
(116,537)
(49,939)
361,152
(34,023)
(15,916)
4,653,294
36,671
4,616,623
Total
Equity
RM'000
Consolidated Statement of Changes in Equity
1,000
3,078,724
–
–
–
–
Net losses not recognised
in the income statement
Dividends paid
At 31 December 2007
–
–
–
–
–
–
–
–
Currency translation differences
Unrealised net losses on
revaluation of securities
available-for-sale
–
–
–
–
1,000
1,000
3,078,724
3,078,724
33
Note
At 1 January 2007, as restated
At 1 January 2007,
- Effects of Note 43(b)
Group
666,483
–
–
204,263
–
–
–
462,220
52,237
–
409,983
Bank Pembangunan
10,114
–
–
–
–
–
–
10,114
–
–
10,114
–
–
(28,508)
(19,255)
–
(19,255)
–
–
–
(47,763)
–
65,947
65,947
–
(24,237)
(24,237)
–
–
–
41,710
Annual Report 2007
(28,508)
–
104,473
84,519
(43,492)
737,128
–
(80,000)
(24,237)
(19,255)
2,506,768 6,257,036
–
737,128
(204,263)
(80,000)
–
–
2,053,903 5,643,400
52,236
18,572
1,983,095 5,454,408
<------------------------------------------Attributable to equity holders of the Bank ------------------------------------------>
<--------------------------------------- Non-Distributable --------------------------------------->
Unrealised
Exchange Distributable
Share
Capital General Statutory
Holding Translation
Retained
capital
reserve
reserve
reserve
reserve
reserve
profits
Total
RM'000
RM'000 RM'000
RM'000
RM'000
RM'000
RM'000
RM'000
117
190,993
(11,056)
122,637
–
(116,092)
–
(11,056)
195,504
–
–
195,504
Minority
Interests
RM'000
6,448,029
(54,548)
859,765
–
(196,092)
(24,237)
(30,311)
5,838,904
104,473
84,519
5,649,912
Total
Equity
RM'000
Statement Of Changes In Equity
Bank
Note
At 1 January 2006,
At 1 January 2006,
as restated
Issue of shares
Dividends paid
33
Annual Report 2007
At 31 December 2006
Bank Pembangunan
118
At 1 January 2007,
- Effects of Note 43(b)
At 1 January 2007,
as restated
<-------------- Non Distributable -------------->
Unrealised
Holding
Share
Statutory
Reserve/
capital
reserve
(Deficit)
RM'000
RM'000
RM'000
Distributable
Retained
profits
RM'000
Total
RM'000
2,128,724
195,903
–
1,414,650
3,739,277
–
18,336
–
18,335
36,671
2,128,724
–
950,000
–
–
214,239
–
–
247,981
–
–
–
–
–
–
1,432,985
495,962
–
(247,981)
(80,000)
3,775,948
495,962
950,000
–
(80,000)
3,078,724
462,220
–
1,600,966
5,141,910
3,078,724
409,983
–
1,548,730
5,037,437
–
–
52,237
–
–
51,142
52,236
18,572
104,473
69,714
51,142
1,619,538
5,211,624
3,078,724
462,220
Unrealised net losses
on revaluation of securities
available-for-sale
–
–
(17,049)
–
(17,049)
Net losses not recognised
in the income statement
–
–
–
–
(17,049)
–
–
408,525
(17,049)
408,525
Total recognised income and
expense for the year
Dividends paid
–
–
–
–
204,263
–
(17,049)
–
–
408,525
(204,263)
(80,000)
391,476
–
(80,000)
3,078,724
666,483
34,093
At 31 December 2007
33
1,743,800
5,523,100
Cash Flow Statements
Group
Bank
2007
RM'000
2006
RM'000
2007
RM'000
2006
RM'000
767,434
64,642
441,152
–
380,378
–
552,982
–
(97,416)
–
80,831
896
–
(102,815)
(53)
94,567
–
7,258
–
–
5,522
154
–
–
(53)
16,424
–
–
(149,706)
(5,623)
(24,240)
–
–
–
(1,146)
(827)
(1,533)
–
(6,622)
–
–
–
(13)
(5,656)
(38,547)
–
(21,730)
(50,320)
(1,113)
(459)
(711)
–
(25,212)
–
–
–
(2,948)
(243)
(2,948)
(243)
(6,764)
–
–
288
32,676
375,918
(21,686)
354
–
–
35,310
228,855
(6,764)
(751)
(16,461)
288
25,387
345,390
(11,282)
1,093
(9,603)
–
26,676
131,452
(305,722)
–
–
25,694
(106,355)
3,752
(79,205)
298,528
2,896
–
–
–
(227,444)
–
–
25,694
(106,355)
3,752
(50,132)
–
–
–
–
–
652,211
895,936
308,463
630,932
Operating profit before working capital changes
(Increase)/decrease in operating capital changes:
Deposits and placements with
Other assets
Other liabilities
(339,813)
(2,150,375)
195,495
345,519
(161,114)
161,781
(2,472,264)
(195,474)
673,482
(98,380)
453,649
(1,409,764)
(144,544)
335,519
(112,040)
(403,968)
(2,275,961)
(193,063)
1,005,275
(416,835)
Cash used in operations
Income taxes paid
Retirement benefits paid
(1,458,077)
(38,478)
–
(1,034,919)
(11,520)
(6,831)
(568,717)
(41,787)
–
(1,653,620)
(13,073)
(6,831)
Net cash used in operating activities
(1,496,555)
(1,053,270)
(610,504)
(1,673,524)
119
Bank Pembangunan
Profit before taxation from:
Continuing operations
Discontinued operations
Adjustments for:
Share of profits in associates
Provision for retirement benefits
Depreciation
Amortisation of prepaid lease rental
Amortisation of dry-docking expenses
Net gain on disposal of property, plant
and equipment
Gain on sale of securities portfolio
Gain on disposal of associates
Dividend income:
- subsidiaries
- associates
- investment securities
Amortisation of premium less accretion
of discount of securities portfolio
(Write back)/allowance for diminution in value:
- securities portfolio
- investment in associates
- investment in subsidiaries
Securities available-for-sale written off
Unrealised loss on foreign exchange
Allowance for doubtful debts and financing
Allowance for doubtful debt and financing
written back
Bad debts and financing written off
Sundry debtors written off
Infrastructure Support Fund written back
Deferred income recognised
Unrealised loss on derivative instruments
Annual Report 2007
CASH FLOWS FROM OPERATING ACTIVITIES
Cash Flow Statements (cont’d)
Group
Bank
2007
RM'000
2006
RM'000
2007
RM'000
2006
RM'000
–
–
–
–
–
50,320
–
(4,385)
–
4,849
–
–
814
–
–
1,113
21,730
50,320
–
–
(351,470)
1,332
1,397
–
11,631
(458,678)
(13,658)
(3,370)
–
–
96,063
–
(431,855)
(8,458)
–
–
(246)
48,479
Annual Report 2007
CASH FLOWS FROM INVESTING ACTIVITIES
Bank Pembangunan
120
Proceeds from disposal of interest in subsidiary
Acquisition of associates
Additional investment in subsidiaries
Dividends from securities portfolio
Dividends from subsidiaries
Dividends from associates
Dividend received arising from pre-acquisition
profit of associates
Purchase of securities portfolio
Purchase of property, plant and equipment
Purchase of investment properties
Additions for prepaid land leases
Repayment to hire purchase creditors
Proceeds from disposal of securities portfolio
Proceeds from disposal of property, plant
and equipment
Proceeds from disposal of investment properties
Proceeds from capital reduction of subsidiary
Amount paid to minority interest arising
from capital repayment
Proceeds from disposal of interests in associates
Proceeds from redemption of preference shares
in investment securities
Proceeds from sale of investment securities/
(net of purchase)
Cash and cash equivalent for disposal group
Proceeds from redemption of preference
shares in associates
Net cash used in investing activities
11,631
(591,747)
(68,068)
–
(2,465)
–
96,546
–
(431,855)
(56,001)
–
–
(246)
58,479
228,041
666
–
1,294
–
–
10,882
–
–
681
–
36,000
–
45,308
(4,000)
–
–
45,308
–
–
–
685
–
–
20,767
–
–
–
4,633
–
3,229
731
727
–
(875,559)
731
(1,104,596)
(407,184)
(237,114)
(698,780)
Net proceeds from long-term loans
Settlement of redeemable guaranteed notes
Proceeds from government compensation
Proceeds from government grants
Proceeds from issuance of bond
Dividends paid
Proceeds from issuance of shares
Repayment of hire purchase creditors
300,561
(29,996)
488,934
–
–
–
–
(110)
876,650
(59,774)
79,261
10,300
1,000,000
(80,000)
950,000
–
110,471
–
501,403
–
–
–
–
(110)
535,030
–
79,261
–
1,000,000
(80,000)
950,000
–
Net cash generated from financing activities
759,389
2,776,437
611,764
2,484,291
(1,841,762)
1,315,983
(235,854)
2,881,310
1,565,327
1,225,466
1,113,479
CASH AND CASH EQUIVALENTS AT END OF YEAR
1,039,548
2,881,310
989,612
1,225,466
Cash and cash equivalents comprise:
1,039,548
2,881,310
989,612
1,225,466
CASH FLOWS FROM FINANCING ACTIVITIES
NET (DECREASE)/INCREASE IN CASH AND
CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS AT
BEGINNING OF YEAR
111,987
Notes To The Financial Statements
31 December 2007
1.
CORPORATE INFORMATION
Bank Pembangunan Malaysia Berhad ("the Bank") is a public limited liability company, incorporated and domiciled in Malaysia.
The registered office of the Bank is located at Level 16, Menara Bank Pembangunan, Bandar Wawasan, No. 1016, Jalan Sultan
Ismail, 50250 Kuala Lumpur.
The Bank is principally engaged to undertake infrastructure projects financing and to carry out the functions of a development
bank focusing on maritime, advanced manufacturing industries, high technology and export oriented industries while the other
entities within the Group are primarily involved in provision of financial services as a development bank, venture capital
investment and ship owning activities.
There have been no significant changes in the nature of the principal activities during the financial year.
The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the Directors on
27 March 2008.
SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Group and of the Bank have been prepared in accordance with the provisions of the
Companies Act, 1965 and applicable Financial Reporting Standards (“FRSs”) in Malaysia as modified by Bank Negara
Malaysia/Development Financial Institutions ("BNM/DFIs") Guidelines.
The financial statements incorporate those activities relating to Islamic Banking, which have been undertaken by the Group.
Islamic Banking refers generally to the granting of financing under Syariah principles.
The financial statements of the Group and of the Bank have been prepared under the historical cost convention unless
otherwise indicated in the accounting policies below.
2.2 Summary of Significant Accounting Policies
(a)
Subsidiaries and Basis of Consolidation
(i)
Subsidiaries
Subsidiaries are entities over which the Group has the ability to control the financial and operating policies so
as to obtain benefits from their activities. The existence and effect of potential voting rights that are currently
exercisable or convertible are considered when assessing whether the Group has such power over another entity.
In the Bank’s separate financial statements, investments in subsidiaries are stated at cost less impairment losses.
On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is
included in profit or loss.
(ii)
Basis of Consolidation
The consolidated financial statements comprise the financial statements of the Bank and its subsidiaries as at
the balance sheet date. The financial statements of the subsidiaries are prepared for the same reporting date as
the Bank.
Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control,
and continue to be consolidated until the date that such control ceases. In preparing the consolidated financial
statements, intragroup balances, transactions and unrealised gains or losses are eliminated in full. Uniform
accounting policies are adopted in the consolidated financial statements for like transactions and events in
similar circumstances.
Acquisitions of subsidiaries are accounted for using the purchase method. The purchase method of accounting
involves allocating the cost of the acquisition to the fair value of the assets acquired and liabilities and
contingent liabilities assumed at the date of acquisition. The cost of an acquisition is measured as the aggregate
of the fair values, at the date of exchange, of the assets given, liabilities incurred or assumed, and equity
instruments issued, plus any costs directly attributable to the acquisition.
(b)
Associates
Associates are entities in which the Group has significant influence and that is neither a subsidiary nor an interest in
a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the
investee but not in control or joint control over those policies.
Annual Report 2007
2.1 Statement of Compliance and Basis of Preparation
121
Bank Pembangunan
2.
Notes To The Financial Statements (cont’d)
31 December 2007
2.
(cont’d)
(b)
Associates
(cont’d)
(cont’d)
Investments in associates are accounted for in the consolidated financial statements using the equity method of
accounting. Under the equity method, the investment in associate is carried in the consolidated balance sheet at cost
adjusted for post-acquisition changes in the Group’s share of net assets of the associate. The Group’s share of the net
profit or loss of the associate is recognised in the consolidated profit or loss. Where there has been a change
recognised directly in the equity of the associate, the Group recognises its share of such changes.
In applying the equity method, unrealised gains and losses on transactions between the Group and the associate are
eliminated to the extent of the Group’s interest in the associate. After application of the equity method, the Group
determines whether it is necessary to recognise any additional impairment loss with respect to the Group’s net
investment in the associate. The associate is equity accounted for from the date the Group obtains significant
influence until the date the Group ceases to have significant influence over the associate.
Annual Report 2007
Goodwill relating to an associate is included in the carrying amount of the investment and is not amortised. Any
excess of the Group’s share of the net fair value of the associate’s identifiable assets, liabilities and contingent
liabilities over the cost of the investment is excluded from the carrying amount of the investment and is instead
included as income in the determination of the Group’s share of the associate’s profit or loss in the period in which
the investment is acquired.
When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any longterm interests that, in substance, form part of the Group’s net investment in the associates, the Group does not
recognise further losses, unless it has incurred obligations or made payments on behalf of the associate.
122
Bank Pembangunan
The most recent available audited financial statements of the associates are used by the Group in applying the equity
method. Where the dates of the audited financial statements used are not coterminous with those of the Group, the
share of results is arrived at from the last audited financial statements available and management financial
statements to the end of the accounting period. Uniform accounting policies are adopted for like transactions and
events in similar circumstances.
In the Bank’s separate financial statements, investments in associates are stated at cost less impairment losses. On
disposal of such investments, the difference between net disposal proceeds and their carrying amounts is included in
profit or loss.
(c)
Transactions Eliminated on Consolidation
Intra-group balances, and any unrealised income and expenses arising from intra-group transactions, are eliminated
in preparing the consolidated financial statements.
Unrealised gains arising from transactions with equity accounted investees are eliminated against the investment to
the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains,
but only to the extent that there is no evidence of impairment.
(d)
Foreign Currency Transactions
Transactions in foreign currencies are translated to the respective functional currencies of the Group's entities at
exchange rates at the dates of the transaction.
Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are retranslated to the
functional currency at the exchange rate at that date except where the foreign exchange risk is borne by third parties
(Guarantors). Foreign currency differences arising on retranslation are recognised in the income statement.
(e)
Property, Plant and Equipment
All items of property, plant and equipment are initially recorded at cost. Subsequent costs are included in the asset’s
carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic
benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The
carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the income
statement during the financial period in which they are incurred.
(cont’d)
(e)
Property, Plant and Equipment
(cont’d)
(cont’d)
Subsequent to recognition, property, plant and equipment are stated at cost less accumulated depreciation and any
accumulated impairment losses. The policy for the recognition an measurement of impairment losses is disclosed in
Note 2.2(h).
Freehold land has an unlimited useful life and therefore is not depreciated. Building-in-progress are also not
depreciated as these assets are not available for use. Depreciation of other property, plant and equipment is provided
for on a straight-line basis to write off the cost of each asset to its residual value over the estimated useful life, at
the following annual rates:
50 years
25 years
3 - 10 years
3 - 20 years
5 - 8 years
2.5 - 3 years
The residual values, useful life and depreciation method are reviewed at each financial year-end to ensure that the
amount, method and period of depreciation are consistent with previous estimates and the expected pattern of
consumption of the future economic benefits embodied in the items of property, plant and equipment.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are
expected from its use or disposal. The difference between the net disposal proceeds, if any and the net carrying
amount is recognised in profit or loss.
(f)
Investment Properties
Investment properties principally comprise properties held for long-term rental yields or capital appreciation or both
and which are not occupied by the Group. Investment property is carried at cost less accumulated depreciation and
any impairment losses.
The policy for the recognition and measurement of impairment losses is disclosed in Note 2.2(h).
Freehold land is not depreciated. Freehold building is depreciated at an annual rate of 2%, calculated on a straight
line basis to write off the cost of each building over the estimated useful life.
Investment properties are measured initially at cost, including transaction costs. The carrying amount includes the cost
of replacing part of an existing investment property at the time that cost is incurred if the recognition criteria is met
and excludes the cost of day-to-day servicing of that property.
Investment properties are derecognised when either they have been disposed of or when the investment property is
permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gains or losses on
the retirement or disposal of an investment property are recognised in profit and loss in the year in which they arise.
(g)
Leases
(i)
Classification
A lease is recognised as a finance lease if it transfers substantially to the Group all the risks and rewards
incidental to ownership. Leases of land and building are classified as operating or finance leases in the same way
as leases of other assets and the land and buildings elements of a lease of land and buildings are considered
separately for the purposes of lease classification. All leases that do not transfer substantially all the risks and
rewards are classified as operating leases, with the following exceptions:
– Property held under operating leases that would otherwise meet the definition of an investment property is
classified as an investment property on a property-by-property basis and, if classified as investment property,
is accounted for as if held under a finance lease (Note 2.2(f)); and
– Land held for own use under an operating lease, the fair value of which cannot be measured separately from
the fair value of a building situated thereon at the inception of the lease, is accounted for as being held under
a finance lease, unless the building is also clearly held under an operating lease.
Annual Report 2007
Building
Vessels
Furniture and equipment
Partitioning, installation and renovations
Motor vehicles
Dry-docking expenses
123
Bank Pembangunan
2.
31 December 2007
2.
(cont’d)
(h)
(cont’d)
Impairment of Assets
The carrying amount of the assets, except for inventories, deferred tax assets, non-current asset (or disposal group)
held for sales and financial assets (other than investments in subsidiaries and associates), are reviewed at each
reporting date to determine whether there is any indication of impairment. If any such indication exists, then the
asset’s recoverable amount is estimated. Recoverable amount for goodwill is estimated at each reporting date.
An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable
amount. A cash-generating unit is the smallest identifiable asset group that generates cash flows that largely are
independent from other assets and groups. Impairment losses are recognised in the income statement. Impairment
losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill
allocated to the units and then to reduce the carrying amount of the other assets in the unit (groups of units) on a
pro rata basis.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and fair value less costs
to sell. In assessing value in use, estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
Annual Report 2007
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in
prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An
impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An
impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount
that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
Reversals of impairment losses are credited to the income statement in the year in which the reversals are recognised.
Bank Pembangunan
124
(i)
Goodwill
Goodwill acquired in a business combination is initially measured at cost being the excess of the cost of business
combination over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities.
Following the initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is not
amortised but instead, it is reviewed for impairment, annually or more frequently if events or changes in circumstances
indicate that the carrying value may be impaired. Gains and losses on the disposal of an entity include the carrying
amount of goodwill relating to the entity sold.
In respect of equity accounted investees, the carrying amount of goodwill is included in the carrying amount of
the investment. The entire carrying amount of the investment is tested for impairment when there is objective evidence
of impairment.
(j)
Financial Instruments
Financial instruments are recognised in the balance sheet when the Group has become a party to the contractual
provisions of the instrument.
Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual
arrangement. Interest, dividends, gains and losses relating to a financial instrument classified as a liability, are reported
as expense or income. Distributions to holders of financial instruments classified as equity are charged directly to equity.
Financial instruments are offset when the Group has a legally enforceable right to offset and intends to settle either
on a net basis or to realise the asset and settle the liability simultaneously.
(i)
Cash and Cash Equivalents
For the purposes of the cash flow statements, cash and cash equivalents include cash on hand and at bank and
deposits at call which have an insignificant risk of changes in value, net of outstanding bank overdrafts, if any.
(ii)
Loan Receivables
Receivables are carried at anticipated realisable values. Bad debts are written off when identified. An estimate is
made for doubtful debt based on a review of all outstanding amounts as at the balance sheet date.
(iii) Payables
Payables are stated at cost which is the fair value of the consideration to be paid in the future for goods and
services received.
(cont’d)
Financial Instruments (cont’d)
(iv) Interest Bearing Loans and Borrowings
All loans and borrowings are recorded at the amount of proceeds received, net of directly attributable transaction
costs. All borrowing costs are recognised as an expense in the income statement in the period in which they are
incurred.
(v)
Equity Instruments
Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the period in
which they are declared.
The transaction costs of an equity transaction are accounted for as a deduction from equity, net of tax. Equity
transaction costs comprise only those incremental external costs directly attributable to the equity transaction
which would otherwise have been avoided.
(vi) Foreign Exchange Contracts, Interest Rate Swaps, Floater Annuity Swaps and Futures Contracts
With the adoption of the revised BNM/GP8 as stated in Note 2.3(c) from 1 January 2007, all derivative financial
instruments are measured at fair value and are carried as assets when the fair value is positive and as liabilities
when the fair value is negative. Any gain or loss arising from a change in the fair value of the derivatives is
recognised in the income statement.
(vii) Securities Portfolio
The adoption of the revised BNM/GP8 as stated in Note 2.3(c) has resulted in a change of accounting policy for
securities portfolio. With effect from 1 January 2007, the holdings of the securities portfolio of the Group and
the Bank are recognised based on the following categories and valuation methods:
(i)
Securities Held-For-Trading
Securities are classified as held-for-trading if they are acquired principally for the purpose of benefitting
from actual or expected short-term price movement or to lock in arbitrage profits. The securities held-fortrading will be stated at fair value and any gain or loss arising from a change in their values and
derecognition of these securities are recognised in the income statements.
(ii)
Securities Held-To-Maturity
Securities held-to-maturity are financial assets with fixed or determinable payments and fixed maturity that
the Group and Bank have the positive intent and ability to hold to maturity.
Unquoted shares in organisations set up for socio-economic purposes and equity instruments received as a
result of loan restructuring or loan conversion which do not have a quoted market price in an active market
and whose fair value cannot be reliably measured are also classified as securities held-to-maturity.
Securities held-to-maturity are measured at accreted/amortised cost based on the effective yield method.
Amortisation of premium, accretion of discount and impairment as well as gain or loss arising from
derecognition of securities held-to-maturity are recognised in the income statement.
(iii) Securities Available-For-Sale
Securities available-for-sale are financial assets that are not classified as held for-trading or held-tomaturity. The securities available-for-sale are measured at fair value, or at cost (less impairment losses) if
the fair value cannot be reliably measured. The return and cost of the securities available-for-sale are
credited and charged to the income statement using accreted/amortised cost based on the effective yield
method. Any gain or loss arising from a change in fair value after applying the accreted/amortised cost
method are recognised directly in equity through the statement of changes in equity, until the financial
asset is sold, collected, disposed of or impaired, at which time the cumulative gain or loss previously
recognised in equity will be transferred to the income statement.
Annual Report 2007
(j)
(cont’d)
125
Bank Pembangunan
2.
31 December 2007
2.
(cont’d)
(j)
(cont’d)
Financial Instruments (cont’d)
(vii) Securities Portfolio (cont’d)
(iii) Securities Available-For-Sale (cont’d)
Prior to the adoption of the new accounting policies described in Note 2.3(c), investments in securities are
classified as investment securities. The accounting policies for investments securities were as follows:
Investment Securities
Investments in debt and equity securities are recognised initially at fair value plus attributable transaction costs.
Subsequent to initial recognition:
– Investments in equity securities other than investments in subsidiaries and associates are stated at the lower of
cost or market value, determined on an aggregate portfolio basis by category of investment after taking into
consideration allowance for diminution in value,
Annual Report 2007
– Investments in debt securities are stated at amortised cost using the effective interest method less allowance
for diminution in value.
Where in the opinion of the Directors, there is a decline other than temporary in the value of equity securities
and debt securities other than investment in subsidiaries and associates, the allowance for diminution in value is
recognised as an expense in the financial year in which the decline is identified.
On disposal of an investment, the difference between net disposal proceeds and its carrying amount is recognised
in the income statement.
Bank Pembangunan
126
All investments in debt and equity securities are accounted for using settlement date accounting. Settlement date
accounting refers to:
(a) the recognition of an asset on the day it is received by the entity, and
(b) the derecognition on an asset and recognition of any gain or loss on disposal on the date it is delivered.
(k)
Inventories
Inventories consist of lubricants on board for own consumption and are stated at cost in US Dollars and converted to
Ringgit Malaysia at a rate that approximates the rate of exchange at balance sheet date. The cost of lubricants is based
on the weighted average cost and includes expenditure incurred in acquiring the inventories and bringing them to their
existing location and condition.
(l)
Employee Benefits
Short term employee benefit obligations in respect of salaries, annual bonuses, paid annual leave and sick leave are
measured on an undiscounted basis and are expensed as the related service is provided.
A provision is recognised for the amount expected to be paid under short term cash bonus if the Group has a present
legal or constructive obligation to pay this amount as a result of past service provided by the employee and the
obligation can be estimated reliably.
The Group’s contribution to the Employees Provident Fund is charged to the income statements in the year to which
they relate. Once the contributions have been paid, the Group has no further payment obligations.
(m) Liabilities
Deposits from customers, banks and financial institutions are stated at placement values and adjusted for accrued
interest.
Payables are measured initially and subsequently at cost. Payables are recognised when there is a contractual obligation
to deliver cash or another financial asset to another entity.
(cont’d)
(n)
(cont’d)
Government Grants
Government grants are recognised at their fair value in the balance sheet where there is a reasonable assurance that
the grants will be received and all attaching conditions will be complied with. The Government grants are presented
in the balance sheet as “Infrastructure Support Fund” and “Deferred Income”.
Deferred income comprises claims received in relation to interest rate differentials on financing of Government
Infrastructure projects. Other claims received are recorded in the “Infrastructure Support Fund”.
Grants that compensate the Group for expenses incurred are recognised as income over the period necessary to match
the grants on a systematic basis to the costs that it is intended to compensate.
(o)
Government Funds
(p)
(i)
To finance the purchase of property, plant and equipment. The funds received are initially recognised at their
fair values in the balance sheet as deferred income where there is reasonable assurance that the funds will be
received and all attaching conditions will be complied with. Government funds that compensate the Group for
expenses incurred are recognised as income over the periods necessary to match the grant on a systematic basis
to the costs that it is intended to compensate. Government funds that compensate the Group for the cost of an
asset are recognised as income on a systematic basis over the useful life of the asset.
(ii)
To finance loans for specific projects and utilise against credit losses and charges arising from the financing of
these projects. The Government funds are recognised at the fair value of the consideration received in the
balance sheet. The interest income earned on the loans financed by the Government funds is recognised as
revenue of the Bank. Any credit losses or charges as a result of the loans defaulted are utilised against the funds.
Provisions
Provisions are recognised when the Group has a present obligation as a result of a past event and it is probable that
an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate
of the amount can be made. Provisions are reviewed at each balance sheet date and adjusted to reflect the current
best estimate. Where the effect of the time value of money is material, provisions are discounted using a current pretax rate that reflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase in
the provision due to the passage of time is recognised as finance cost.
(q)
Contingent Liabilities
Contingent liabilities consist of secured guarantees given to third parties on behalf of borrowers. Contingent liabilities
are disclosed in the notes to the accounts, unless the possibility of an outflow of resources embodying economic
benefits is remote.
Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated
reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow of economic benefits is
remote. Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence of one or more
future events are also disclosed as contingent liabilities unless the probability of outflow of economic benefits is remote.
(r)
Disposal Groups Held for Sale and Discontinued Operation
Non financial assets (or disposal groups) are classified as held for sale if their carrying amount will be recovered
principally through a sale transaction rather than through continuing use. This condition is regarded as met only when
the sale is highly probable and the asset (or disposal group) is available for immediate sale in its present condition
subject only to terms that are usual and customary.
Immediately before classification as held for sale, the measurement of the non-current assets (or all the assets and
liabilities in a disposal group) is brought up-to-date in accordance with applicable FRSs. Then, on initial classification
as held for sale, non-financial assets or disposal groups (other than investment properties, deferred tax assets,
employee benefits assets and financial assets) are measured in accordance with FRS 5 that is at the lower of carrying
amount and fair value less costs to sell. Any differences are included in profit or loss.
Annual Report 2007
Government funds comprise the following:
127
Bank Pembangunan
2.
31 December 2007
2.
(cont’d)
(r)
(cont’d)
Disposal Groups Held for Sale and Discontinued Operation
(cont’d)
A component of the Group is classified as a discontinued operation when the criteria to be classified as held for sale
have been met or it has been disposed and such a component represents a separate major line of business or
geographical area of operations, is part of a single co-ordinated major line of business or geographical area of
operations or is a subsidiary acquired exclusively with a view to resale.
(s)
Revenue
Operating income for the Group consists of interest on loans and fixed deposits, income from leases, hire purchase
financing, confirming and factoring, income from Islamic financing, charter hire, demurrage and freight income,
income from acting as investment manager, income from investments and provision of advisory, consultancy and
related services pertaining to investments and income from sale of food products and general merchandise and
promotion of goods manufactured by Bumiputera entrepreneurs and rental of plant hire. Operating income for the
Company consists of interest on loans and fixed deposits, income from Islamic financing and income from investments.
Income recognition is as follows:
Annual Report 2007
(i)
Interest and Financing Income Recognition
Interest income is recognised in the income statement as it accrues, using the effective interest method. Income
from Islamic banking financing is recognised on an accrual basis in accordance with the principles of Syariah.
When an account is classified as impaired (arrears for more than six or twelve months (as further elaborated in
Note(t)(i)) or where doubt as to the recoverability of an advance exists) recognition of interest income is
suspended until it is realised on a cash basis. The policy on suspension of interest is in conformity with Bank
Negara Malaysia/Development Financial Institutions Guidelines ("BNM/DFI/GP3") on classification of impaired
loans/financing and provisioning for bad and doubtful debts, BNM/DFI/GP3 except for loans to finance
Government Infrastructure projects and commercial infrastructure projects with long term supply agreements.
Bank Pembangunan
128
(ii)
Income Recognition for Leasing, Hire Purchase Financing, Confirming and Factoring
Income earned on leasing and hire purchase financing is recognised based on the “Rule of 78” method and
confirming and factoring on the accrual basis. Interest income from confirming activities is calculated on the
straight line method over the period of confirming arrangement whilst interest income on factoring facilities are
calculated daily based on the balance outstanding.
(iii) Dividend Income
Dividend income is recognised when the Group's right to receive payment is established.
(iv) Charter Hire, Demurrage and Freight Income
Revenue and expenses up to the balance sheet date are recognised for voyage which remain uncompleted as at
the balance sheet date, the income receivable for the voyage are pro-rated up to the balance sheet date and all
relevant costs are accrued.
(t)
Income Tax
Tax expense comprises current and deferred tax. Tax expense is recognised in the income statement except to the extent
that it relates to items recognised directly in equity, in which case it is recognised in equity.
Current tax is the expected amount of income taxes payable in respect of the taxable profit for the year using tax rates
enacted at the balance sheet date.
Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying
amounts of assets and liabilities for reporting purposes and the amounts used for taxation purposes. Deferred tax is not
recognised for the following temporary differences: the initial recognition of goodwill, the initial recognition of assets
or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit
(tax loss). Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when
they reverse, based on the laws that have been enacted or substantially enacted at the balance sheet date.
(cont’d)
(t)
Income Tax
(cont’d)
(cont’d)
Deferred tax liability is recognised for all taxable temporary differences.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against
which the temporary difference can be utilised. Deferred tax assets are reviewed at each reporting date and are
reduced to the extent that it is no longer probable that the related tax benefit will be realised.
Additional taxes that arise from the distribution of dividends are recognised at the same time as the liability to pay
the related dividend is recognised.
(u)
Basis of Valuation of Loans, Advances and Financing
Loans, advances and financing are carried at their outstanding principal and interest balances less interest in suspense
and allowance for bad and doubtful debts and financing.
Basis of Valuation of Loans, Advances and Financing
Loans, advances and financing are carried at their outstanding principal and interest balances less interest in
suspense and allowance for bad and doubtful debts and financing.
Based on management’s evaluation of the portfolio of loan, lease, hire purchase, block discount and factoring
receivables, specific allowances for doubtful debts are made when the collectibles of receivables becomes
uncertain. In evaluating collectibility, management considers several factors such as the borrower’s financial
position, cash flow projections, management, quality of collateral or guarantee supporting the receivables, as
well as prevailing and anticipated economic conditions.
A general allowance based on a set percentage of the total outstanding loans, net of interest in suspense and
specific allowance for doubtful debts is also maintained to cover possible losses which are not specifically
identified. This percentage is reviewed annually in the light of past experience and prevailing circumstances and
an adjustment is made to the overall general allowance, if necessary.
An uncollectible loan or portion of a loan classified as bad is written off after taking into consideration the
realisable value of the collateral, if any, when it is deemed that there is no prospect of recovery.
In respect of the classification of impaired loans and provisioning for bad and doubtful debts, the policy of the
Company states that a Government infrastructure loan and commercial loans with long term supply agreement
with the Government are classified as impaired when the principal or interest is overdue more than twelve
(12) months.
For policy on portfolio other than the above, the loans, advances and financing are classified as impaired when
the principal or interest is overdue more than six (6) months.
(ii)
Non-Banking Operations
Debts considered to be uncollectible are written off while allowances are made for debts based on estimates of
possible losses that may arise from non-collection of receivables.
(v)
Recognition of Interest and Financing Expenses
Interest expense and attributable profit (on activities relating to Islamic banking business) on deposits and borrowings
of the Group and the Bank are recognised in the income statement using the effective interest method, in the period
in which they are incurred.
(w) Foreclosed Properties
Foreclosed properties are those acquired in full or partial satisfaction of debts and are stated at the lower of cost and
fair value.
Annual Report 2007
(i)
129
Bank Pembangunan
2.
31 December 2007
2.
(cont’d)
2.3 Changes in Accounting Policies and Effects Arising from Adoption of New and Revised FRSs and BNM's Circulars
(a)
Adoption of New and Revised FRSs
On 1 January 2007, the Group and the Bank adopted the following FRSs mandatory for financial periods beginning
on or after 1 October 2006:
FRS 117 Leases
FRS 124 Related Party Disclosures
(i)
FRS 117: Leases
Annual Report 2007
Prior to 1 January 2006, leasehold land held for own use was classified as property, plant and equipment and
was stated at cost less accumulated depreciation and impairment losses. The adoption of the revised FRS 117 has
resulted in a change in the accounting policy relating to the classification of leases of land and buildings. Leases
of land and buildings are classified as operating or finance leases in the same way as leases of other assets and
the land and building elements of a lease of land and building are considered separately for the purposes of lease
classification. Leasehold land held for own use is now classified as operating lease and where necessary, the
minimum lease payments or the up-front payments made are allocated between the land and the buildings
elements in proportion to the relative fair values for leasehold interests in the land element and building element
of the lease at the inception of the lease. The up-front payment represents prepaid lease payments and are
amortised on a straight-line basis over the lease term.
The Group and the Bank have applied the change in accounting policy in respect of leasehold land in accordance
with the transitional provisions of FRS 117. At 1 January 2006, the unamortised amount of leasehold land is
retained as the surrogate carrying amount of prepaid lease payments as allowed by the transitional provisions.
The reclassification of leasehold land as prepaid lease payments has been accounted for retrospectively and as
disclosed below, certain comparatives have been restated. The effects on the balance sheets as at 31 December
2006 are set out in Note 11.
Bank Pembangunan
130
(ii)
FRS 124: Related Party Disclosures
The adoption of FRS 124 did not result in significant changes in accounting policies of the Group and the Bank
and did not have a significant impact on the Group and the Bank, other than the disclosure of the compensation
to key management personnel as shown in Note 30.
The following new and revised FRSs which are mandatory for companies with financial periods beginning on or after
1 January 2007 are not relevant to the Group and the Bank:
FRSs
FRS 6: Exploration for and Evaluation of Mineral Resources
Amendment to FRS 1192004: Employees Benefit Actuarial Gain and Losses, Group Plans and Disclosures
(b)
Effective for
financial periods
beginning on/after
1 January 2007
1 January 2007
Standards and Interpretations Issued but Not Yet Effective
The Group and the Bank have not adopted the following new and revised FRSs which have been issued but not yet
effective.
FRSs, Amendments to FRSs and Interpretations
FRS 107: Cash Flow Statements
FRS 111: Construction Contracts
FRS 112: Income Taxes
FRS 118: Revenue
FRS 120: Accounting for Government Grants and Disclosure of Government Assistance
FRS 126: Accounting and Reporting by Retirement Benefit Plans
FRS 129: Financial Reporting in Hyperinflationary Economies
Effective for
financial periods
beginning on/after
1 July 2007
1 July 2007
1 July 2007
1 July 2007
1 July 2007
1 July 2007
1 July 2007
(cont’d)
2.3 Changes in Accounting Policies and Effects Arising from Adoption of New and Revised FRSs and BNM's Circulars (cont’d)
Standards and Interpretations Issued but Not Yet Effective
(cont’d)
FRSs, Amendments to FRSs and Interpretations
FRS 134: Interim Financial Reporting
FRS 137: Provisions, Contingent Liabilities and Contingent Assets
Amendment to FRS 121: The Effects of Changes in Foreign Exchange Rates Net Investment in Foreign Operations
IC Interpretation 1: Changes in Existing, Decommissioning, Restoration and Similar Liabilities
IC Interpretation 2: Members' Shares in Co-operative Entities and Similar Instruments
IC Interpretation 5: Rights to Interests arising from Decommissioning, Restoration and
Environmental Rehabilitation Funds
IC Interpretation 6: Liabilities arising from Participating in a Specific Market Waste Electrical and Electronic Equipment
IC Interpretation 7: Applying the Restatement Approach under FRS 1292004
Financial Reporting in Hyperinflationary Economies
IC Interpretation 8: Scope of FRS 2
FRS 139: Financial Instruments: Recognition and Measurement
Effective for
financial periods
beginning on/after
1 July 2007
1 July 2007
1 July 2007
1 July 2007
1 July 2007
1 July 2007
1 July 2007
1 July 2007
1 July 2007
Deferred
The impact of applying the above FRSs, Amendments to FRSs and Interpretations on these financial statements upon
first adoption of these standards as required by paragraph 30(b) of FRS 108 Accounting Policies, Changes in
Accounting Estimates and Errors are not disclosed as FRS 107, 112, 118, 120, 126, 129, 134 and 137, Amendment to
FRS 121 and IC Interpretation 1 do not have any significant financial impact on the financial statements, and FRS 111
and IC Interpretations 2, 5, 6, 7 and 8 are not applicable to the Group and the Bank.
In the previous financial year, the MASB had also issued FRS 139 Financial Instruments: Recognition and Measurement for
which the MASB has yet to announce the effective date. The impact of applying FRS 139 on the financial statements upon
first adoption of this standard as required by paragraph 30(b) of FRS 108 Accounting Policies, Changes in Accounting
Estimates and Errors is not required to be disclosed by virtue of exemptions provided under paragraph 103AB of FRS 139.
(c)
Voluntary Adoption of BNM's Revised Guidelines on Financial Reporting for Licensed Institutions ("BNM/GP8")
With effect from 1 January 2007, the Group and the Bank voluntarily adopted partially the revised guidelines on
Financial Reporting for Licensed Institutions (“BNM/GP8”) issued by Bank Negara Malaysia on 5 October 2004, and
became effective to licensed institutions from period beginning 1 January 2005, which resulted in the following new
accounting policies, all of which have been adopted prospectively:
(i)
The recognition and measurement of the investment and dealing securities portfolio of the Group and the Bank
as securities held-for-trading, securities held-to-maturity and securities available-for sale.
(ii)
The recognition and measurement of derivative financial instruments and the adoption of hedge accounting.
The revised BNM/GP8 requires the prior year comparative figures to be restated to reflect the changes in accounting
policies arising from the adoption of the revised BNM/GP8. However, the Group and the Bank have not restated the
comparative figures due to thefollowing:
–
It was considered not meaningful since the classification of securities in line with BNM/GP8 only commenced
towards the end of the previous financial year. Accordingly, restatement of the securities would entail an
arbitrary allocation of prior year’s dealing and investment securities into current year’s classification; and
–
The non-restatement of comparative figures is in line with the transitional provisions of Financial Reporting Standard
139 Financial Instruments: Recognition and Measurement (“FRS 139”). Although FRS 139 is not yet effective, it
disallows retrospective application and requires non-reversal of accounting policies followed in the prior year.
In light of the above, the comparative figures of the Group and the Bank are not restated and any adjustments for
the previous carrying amounts shall be recognised as an adjustment of the balance of retained earnings or reserves
at the beginning of the current financial year. The details of adjustments made to the opening retained earnings,
reserves and results for the current year are disclosed in Note 43 to the financial statements.
The revised BNM/GP8 has also resulted in certain new disclosures as disclosed in Note 5.
Annual Report 2007
(b)
131
Bank Pembangunan
2.
31 December 2007
2.
(cont’d)
2.4 Functional and Presentation Currency
These financial statements are presented in Ringgit Malaysia (RM), which is the Bank’s functional currency. Some of the
Group’s subsidiaries have identified United States Dollar (USD) as their functional currency and have measured its results
and financial position for the current year in USD. The results and financial position of these companies were subsequently
translated into RM in accordance with the requirement of FRS 121. All financial information presented in RM has been
rounded to the nearest thousand (RM'000) unless otherwise stated.
2.5 Significant Accounting Judgements and Estimates
The preparation of financial statements requires management to make judgements, estimates and assumptions that affect
the application of policies and reported amounts of assets, liabilities, income and expenses. Although these estimates are
based on management's best knowledge of current events and actions, actual results may differ from these estimates.
Critical accounting estimates and assumptions used that are significant to the financial statements and areas involving
higher degree of judgement and complexity are as follows:
Annual Report 2007
(i)
Bank Pembangunan
132
Fair Value Estimation of Securities Held-To-Maturity and Securities Available-For-Sale (Note 5)
The fair value of securities that are not traded in an active market are determined using valuation techniques based
on assumptions of market conditions existing at the balance sheet date, including reference to quoted market prices
and independent dealer quotes for similar securities and discounted cash flow method.
(ii)
Deferred Tax (Note 13) and Income Taxes (Note 32)
The Group and the Bank are subject to income taxes in many jurisdictions and significant judgment is required in
estimating the provision for income taxes. There are many transactions and interpretations of tax law for which the
final outcome will not be established until some time later. Liabilities for taxation are recognised based on estimates
of whether additional taxes will be payable. The estimation process includes seeking expert advice where appropriate.
Where the final liability for taxation is different from the amounts that were initially recorded, the differences will
affect the income tax and deferred tax provisions in the period in which the estimate is revised or the final liability
is established.
(iii) Allowances for Bad and Doubtful Debts (Note 6)
The Group and the Bank review the doubtful loans, advances and financing at each reporting date to assess whether
allowances should be recorded in the financial statements. In particular, judgement is required in the identification of
doubtful loans, and the estimation of realisation amount from the doubtful loans when determining the level of
allowance required.
The Group and the Bank have adopted certain criteria in the identification of doubtful loans, which include classifying
loans as non-performing when repayments are in arrears for more than six (6) months. Specific allowances for
doubtful loans are provided after taking into consideration of the values assigned to collateral.
The values assigned to collateral are estimated based on market value and/or forced sales value, as appropriate and
conforms with BNM/DFIs guidelines. In addition to the specific allowances made, the Group and the Bank also make
general allowance against exposure not specifically identified based on a certain percentage of total outstanding loan
net of interest in suspense and specific provision for credit risk. Such estimates are based on assumptions about a
number of factors and actual results may differ, resulting in future changes to the allowance.
(iv) Classification between Investment Properties and Property, Plant and Equipment
The Group has developed certain criteria based on FRS 140 in making judgement whether a property qualifies as an
investment property. Investment property is a property held to earn rentals or for capital appreciation or both.
Some properties comprise a portion that is held to earn rentals or for capital appreciation and another portion that
is held for use in the production or supply of goods or services or for administrative purposes. If these portions could
be sold separately (or leased out separately under a finance lease), the Group would account for the portions
separately. If the portions could not be sold separately, the property is an investment property only if an insignificant
portion is held for use in the production or supply of goods or services or for administrative purposes. Judgement is
made on an individual property basis to determine whether ancillary services are so significant that a property does
not qualify as investment property.
CASH AND SHORT TERM FUNDS
Group
Cash and balances with other
Money at call and deposit placements
maturing within one month
2006
RM'000
2007
RM'000
2006
RM'000
18,117
77,441
3,710
3,857
1,021,431
2,803,869
985,902
1,221,609
1,039,548
2,881,310
989,612
1,225,466
2007
RM'000
2006
RM'000
2007
RM'000
2006
RM'000
785,302
–
62,408
554,134
11,527
485,585
110,035
–
62,408
157,221
–
468,871
847,710
1,051,246
172,443
626,092
DEPOSITS AND PLACEMENTS WITH FINANCIAL INSTITUTIONS
Group
Licensed banks
Licensed finance companies
Other financial institutions
5.
Bank
SECURITIES PORTFOLIO
Group
Securities available-for-sale
Securities held-to-maturity
Bank
Note
2007
RM'000
2006
RM'000
2007
RM'000
2006
RM'000
(i)
(ii)
(iii)
1,670,624
622,642
–
–
–
1,916,388
1,666,426
617,901
–
–
–
1,855,829
2,293,266
1,916,388
2,284,327
1,855,829
During the year, the Company wrote off investment in unquoted shares against allowance for diminution in value amounting to
RM287,940 (2006 - RM35,343,000).
(i)
Securities available-for-sale
At fair value
2007
Group
RM'000
Bank
RM'000
Money market instruments:
Malaysian Government Securities
39,827
39,827
Quoted securities: (In Malaysia)
Shares
Others
29,083
2,220
27,105
–
31,303
27,105
521
1,598,973
521
1,598,973
1,599,494
1,599,494
1,670,624
1,666,426
Unquoted securities: (In Malaysia)
Shares
Private debt securities
Total securities available-for-sale
Annual Report 2007
4.
Bank
2007
RM'000
133
Bank Pembangunan
3.
31 December 2007
5.
(ii)
(cont’d)
Securities Held-To-Maturity
At amortised cost
2007
Cagamas
Unquoted securities: (In Malaysia)
Others
Annual Report 2007
Less: Allowance for diminution in value
Bank Pembangunan
134
Total securities held-to-maturity
Group
RM'000
Bank
RM'000
5,008
98,483
5,008
98,483
103,491
103,491
514,410
10,509
514,410
–
524,919
514,410
(5,768)
–
622,642
617,901
Indicative market value of the securities held-to-maturity are as follows:
2007
Cagamas
Unquoted private debt securities
Group
RM'000
Bank
RM'000
5,131
96,829
485,723
5,131
96,829
485,723
(iii) Investment securities
2006
Cagamas
Quoted securities:
Shares
Unit trust stocks
Unquoted securities:
Shares
Others
Amortisation of premium less accretion of discounts
Less: Allowance for diminution in value
- Malaysian Government Securities
- Cagamas
- other securities
Group
RM'000
Bank
RM'000
50,381
48,252
45,381
48,252
98,633
93,633
89,722
892
54,743
–
90,614
54,743
36,805
1,740,986
1,899
9,025
1,730,526
–
1,779,690
1,739,551
(2,828)
(2,828)
(1,250)
(674)
(47,797)
(1,250)
(674)
(27,346)
(52,549)
(32,098)
1,916,388
1,855,829
5.
(iii) Investment securities
(cont’d)
(cont’d)
2006
(a)
(b)
Market value of quoted securities:
Shares and trust units stocks quoted in Malaysia
Indicative value of unquoted securities:
Cagamas
Group
RM'000
Bank
RM'000
85,110
35,185
50,409
48,872
1,817,220
45,152
48,872
1,806,760
(vi) Other disclosures
6.
5,005
18,000
120,313
5,108
7,928
83,673
5,005
18,000
120,313
5,108
2,928
83,673
143,318
96,709
143,318
91,709
Group
Loans and financing to industries
Allowance for doubtful debts:
- specific
- general
Interest in suspense
Staff loan
Loan to subsidiaries
Lease receivable
Block discounting and factoring receivables
Hire purchase receivables
Ijarah receivables
135
Bank
2007
RM'000
2006
RM'000
2007
RM'000
2006
RM'000
18,645,223
19,343,180
18,180,138
16,746,411
(625,477)
(346,103)
(609,046)
(473,267)
(477,290)
(344,130)
(305,746)
(433,903)
(971,580)
(440,553)
(1,082,313)
(486,327)
(821,420)
(229,660)
(739,649)
(158,537)
(1,412,133)
(1,568,640)
(1,051,080)
(898,186)
17,233,090
17,774,540
17,129,058
15,848,225
29,646
–
96,680
95,095
49,434
67,129
56,710
–
103,792
81,388
48,936
45,205
29,646
281,131
–
–
–
–
28,774
271,018
–
–
–
–
337,984
336,031
310,777
299,792
Allowance for doubtful debts:
- specific
- general
(35,835)
(5,487)
(27,256)
(4,950)
–
–
–
–
Interest in suspense
(41,322)
(3,190)
(32,206)
(4,701)
–
–
–
–
(44,512)
(36,907)
–
–
18,073,664
17,439,835
16,148,017
Net loans, advances and financing
17,526,562
Bank Pembangunan
One year to two years
Three years to five years
Over five years
Annual Report 2007
The maturity structure of money market instruments available-for-sale and held-to-maturity (2006 - investment securities)
are as follows:
Group
Bank
2007
2006
2007
2006
RM'000
RM'000
RM'000
RM'000
31 December 2007
6.
(cont’d)
The maturity structure of the gross loans to industries is as follows:
Group
Maturity within one year
One year to three years
Three years to five years
Over five years
Bank
2007
RM'000
2006
RM'000
2007
RM'000
2006
RM'000
3,816,952
4,923,360
2,180,717
7,724,194
3,784,021
5,860,264
2,744,024
6,954,871
3,351,867
4,923,360
2,180,717
7,724,194
2,708,079
5,427,507
2,495,930
6,114,895
18,645,223
19,343,180
18,180,138
16,746,411
The loans and advances to subsidiaries are repayable over a period of three to seven years commencing from the date of
drawdown and are at interest rates ranging from 3.5% to 4.0% (2006 - 3.5% to 4.0%) per annum. Included in these advances is
a revolving facility amounting to RM60,000,000 at an interest rate equivalent to the Company’s average return on deposits.
Annual Report 2007
Included in loans, advances and financing is gross loans, advances and financing of the Group as at 31 December 2006, was
RM40,946,000 financed by the Government funds, of which the treatment of the income earned and credit losses incurred are
as disclosed in Note 2.2(o).
Bank Pembangunan
136
7.
OTHER ASSETS
Group
Sundry receivables, deposits and prepayment
Less: Allowance for doubtful debts
Trade receivables
Less: Allowance for doubtful debts
Amount receivable from Government
in respect of compensation for:
- Foreign exchange differences
- Infrastructure projects
- Compensation for loan written
Accrued interest receivable
Associates
Subsidiaries
Tax recoverable
Pool working fund
Foreclosed properties
Inventories
Bank
2007
RM'000
2006
RM'000
2007
RM'000
2006
RM'000
198,903
(802)
465,697
(1,105)
70,033
(802)
35,110
(1,105)
198,101
464,592
69,231
34,005
17,332
(385)
18,762
(394)
–
–
–
–
16,947
18,368
–
–
35,323
85,361
–
30,904
–
–
3,771
3,808
13,000
2,337
207,933
135,213
243,164
47,966
28,381
–
14,651
4,056
14,840
2,638
35,324
85,361
–
30,880
–
203,770
1,732
–
–
–
114,974
135,213
243,164
37,201
–
72,933
–
–
–
–
389,552
1,181,802
426,298
637,490
Pool working fund represents advances from subsidiaries to the pool operators for operating funds of the vessels in the pool.
These advances are interest free, unsecured and are refundable only upon termination of the pool agreement signed between the
subsidiaries with the pool operators.
Group
Included in the sundry receivables, deposits and prepayments of the Group are the following:
(a)
An amount due from related parties of Global Maritime Ventures Berhad amounting to RM29,443,417 (2006 RM28,381,000) bears a weighted average interest rate of 7% (2006 - 7%). The remaining amounts are unsecured, interest
free and have no fixed terms of repayment.
7.
OTHER ASSETS
(cont’d)
Included in the sundry receivables, deposits and prepayments of the Group are the following: (cont’d)
(b)
Included in prior year was an amount due from Export-Import Bank of Malaysia Berhad amounting to RM107,688,877. The
amount due is unsecured and its terms and conditions are in accordance with the terms and conditions as stipulated in the
loan agreement with Japan Bank of International Cooperation (“JBIC”) as disclosed in Note 18(vi) to the financial statements.
Amount due from associates are unsecured, subject to interest at 7% (2006 - 7%) per annum and repayable on monthly basis.
Bank
Included in amount due from subsidiaries is RM200,000,000 (2006 - RM50,000,000), which bears interest of 5.0% per annum and
repayable over a period of 20 years, commencing on 22 November 2006. The remaining amounts are unsecured, interest free and
have no fixed terms of repayment.
8.
INVESTMENTS IN SUBSIDIARIES
(i)
862,700
(974)
1,771,789
(17,436)
861,726
1,754,353
Disposal of Bank Perusahaan Kecil & Sederhana Malaysia Berhad ("SME Bank")
Information relating to the disposal of SME Bank is set out in Note 39.
(ii)
Disposal of interest in Pembangunan Ekuiti Sdn Bhd ("PESB")
During the financial year, the Group disposed approximately 41% of its equity interest in PESB for cash consideration of
RM813,600.
(iii) Details of the subsidiaries are disclosed in Note 38.
9.
INTEREST IN ASSOCIATES
Group
Bank
2007
RM'000
2006
RM'000
2007
RM'000
2006
RM'000
At cost:
Quoted ordinary shares, in Malaysia
Unquoted ordinary shares
247,151
18,615
358,935
27,420
125,609
15
144,000
15
Group’s share of retained post acquisition reserve
265,766
155,706
386,355
69,782
125,624
–
144,015
–
Unquoted redeemable preference shares
421,472
6,127
456,137
6,859
125,624
6,127
144,015
6,859
Long term loans to associates
Less: Accumulated impairment losses
427,599
42,954
(7,461)
462,996
–
(9,657)
131,751
(7,450)
150,874
–
(5,378)
463,092
453,339
124,301
145,496
820,398
431,478
820,398
396,998
Market value of quoted shares
Loans to associates amounting to RM38,981,417 bear an interest rate of 7% per annum, payable quarterly and will be maturing
in 2018. The remaining amounts are unsecured, interest free and have no fixed terms of repayment.
Details of the associates are as follows:
Name of Associates
(incorporated in Malaysia)
Held by the Bank:
Ekuiti Teroka (Malaysia) Sdn Bhd 1
Malaysian Bulk Carriers Berhad 2
Proportion of
Ownership Interest
2007
2006
%
%
44.00
18.39
44.00
19.38
Principal Activities
Venture capital company
Ship management and operates a container depot
137
Bank Pembangunan
Unquoted shares at cost
Less: Impairment losses
2006
RM'000
Annual Report 2007
Bank
2007
RM'000
31 December 2007
9.
INTEREST IN ASSOCIATES
(cont’d)
Details of the associates are as follows: (cont’d)
Name of Associates
(incorporated in Malaysia)
Proportion of
Ownership Interest
2007
2006
%
%
Principal Activities
Held through a subsidiary:
Wawasan Bulk Services Sdn Bhd
30.00
30.00
Ship management
Alam Eksplorasi Sdn Bhd
40.00
40.00
Ship-owning, ship operating, ship agency, chartering
and other related to shipping industry
Alam Synergy I (L) Inc
40.00
40.00
Ship-owning, ship operator and charter hire of vessel
Alam Synergy II (L) Inc
40.00
40.00
Alam Synergy III (L) Inc
40.00
40.00
40.00
40.00
Ship management
Baycorp Ship Management Sdn Bhd
Annual Report 2007
Gagasan Sembilan Sdn Bhd
Bank Pembangunan
138
5
40.00
–
Formasi Cekal Sdn Bhd
40.00
40.00
Orkim Leader Sdn Bhd 4
40.00
–
Ship-owning and freighting
4
40.00
–
Ship-owning and freighting
Orkim Power Sdn Bhd
Ship-owning
Ship-owning, ship operator and to undertake all
kind of contract to carry merchant goods
Held through subsidiary classified as assets held for sale:
Celcure Chemicals Sdn Bhd
36.20
36.20
Manufacture of wood preservatives
Metrod Malaysia Bhd
20.60
20.60
Manufacturing electrical conductor of grade copper
wire rodes
30.00
30.00
Manufacture of ceramic capasitor
31.50
31.50
Under liquidation
Capatronics Malaysia Sdn Bhd
BI Walden Management Sdn
Bhd3
BI Walden Management Kedua Sdn
Bhd3
30.00
30.00
Under liquidation
BI Walden Management Ketiga Sdn Bhd
30.00
30.00
Fund management
BI Walden Ventures Ketiga Sdn Bhd
34.09
34.09
Venture capital
39.67
39.67
Under liquidation
BI Walden Ventures Keempat Sdn
Bhd3
1
During the financial year, the Bank disposed of its investment in preference shares in Ekuiti Teroka (Malaysia) Sdn Bhd ("ETSB")
for cash consideration of RM732,532.
2
During the financial year, the Group disposed approximately 1% of its equity interest in Malaysian Bulk Carriers Berhad
("MBCB") for cash consideration of RM45,307,000. Although the Group holds less than 20% of voting powers in MBCB, the
Group exercises significant influence by virtue of a director representation to the Board of this associates.
3
In members' voluntary liquidation.
4
During the financial year, a subsidiary, GMV-Orkim Sdn Bhd (formerly known as Megakey Ventures Sdn Bhd) entered into a joint
venture agreement with Orkim Sdn Bhd to acquire 40% interest in Orkim Leader Sdn Bhd and Orkim Power Sdn Bhd for a cash
consideration of RM4,800,000 each.
5
Another subsidiary, GMV-Gagasan Sdn Bhd (formerly known as Prestige Polar Sdn Bhd) also entered into a joint venture agreement
with Gagasan Carriers Sdn Bhd to acquire 40% interest in Gagasan Sembilan Sdn Bhd for a cash consideration of RM1,918,000.
The summarised financial statements of the associates are as follows:
Assets and liabilities
Total assets
Total liabilities
Results:
Revenue
Profit for the year
2007
RM'000
2006
RM'000
2,519,239
673,148
2,234,058
607,453
636,060
589,079
457,552
313,786
40,819
At 31 December 2007
–
–
–
–
–
–
–
–
40,819
1 January 2007, (restated)
Charge for the year
Disposals/write-off
Fully amortised
Transfer to investment properties
Transfer to assets held for sale
Effect of movements in exchange rates
At 31 December 2007
Net Carrying Amount
Accumulated Depreciation
44,407
–
–
–
–
–
(3,588)
–
Freehold
land
RM'000
January 2007, (restated)
Additions
Disposal/write-off
Fully amortised
Reclassification
Transfer to assets held for sale
Cost
2007
Group
10. PROPERTY, PLANT AND EQUIPMENT
15,647
(11,473)
31,344
5,811
(506)
–
–
(48,122)
–
4,174
50,786
6,028
(1,136)
–
–
–
(51,504)
–
Bank Pembangunan
62,057
34,518
56,865
4,404
–
–
(281)
(26,470)
–
96,575
232,616
–
–
–
2,945
(6,708)
(132,278)
–
Buildings
RM'000
Furniture
and
equipment
RM'000
139
6,002
1,036
(574)
–
–
–
(3,181)
–
3,283
4,217
746
(562)
–
–
(1,897)
–
2,504
779
72,039
4,579
(755)
–
–
–
(35,173)
–
40,690
67,918
3,840
(223)
–
–
(31,768)
–
39,767
923
Annual Report 2007
Motor
vehicles
RM'000
Partitioning,
installation
and
renovations
RM'000
700,035
417,438
432,813
46,560
(38,721)
–
–
–
(23,214)
1,117,473
1,285,989
13,888
(110,584)
–
–
–
–
(71,820)
Vessels
RM'000
11,697
–
–
–
–
–
–
–
–
11,697
15,507
24,854
(220)
–
(2,945)
–
(25,499)
–
Capital
work-in
progress
RM'000
Total
RM'000
15,826
12,953
9,471
17,941
(3,824)
(2,810)
–
–
(7,825)
28,779
847,783
495,707
602,628
79,302
(43,836)
(2,810)
(281)
(108,257)
(31,039)
1,343,490
19,021 1,726,367
17,683
68,068
(5,419) (118,688)
(2,810)
(2,810)
–
–
–
(6,708)
–
(251,223)
304
(71,516)
Drydocking
expenses
RM'000
–
–
–
–
–
–
–
–
44,407
Charge for the year
Disposals/write-off
Fully amortised
Reclassification
Adjustments
At 31 December 2006
Net Carrying Amount
44,407
At 31 December 2006
Freehold
land
RM'000
42,796
466
–
–
–
–
–
1,145
–
(cont’d)
175,751
56,865
48,330
8,786
–
–
216
(467)
–
232,616
204,264
11,579
–
–
–
–
16,182
591
–
Buildings
RM'000
19,442
31,344
27,345
4,216
(226)
–
–
9
–
50,786
40,652
7,953
(329)
–
–
–
2,215
295
–
Furniture
and
equipment
RM'000
140
Additions
Disposal/write-off
Transfer from Government funds
Fully amortised
Over capitalised in prior year
Reclassification
Adjustments
Cost
2006
Group
Bank Pembangunan
4,121
67,918
34,952
33,002
(165)
–
–
129
–
72,039
57,092
1,547
(382)
–
–
–
13,951
(169)
–
Partitioning,
installation
and
renovations
RM'000
Annual Report 2007
1,785
4,217
6,034
852
(2,531)
–
–
(138)
–
6,002
8,151
672
(2,678)
–
–
–
–
(143)
–
Motor
vehicles
RM'000
853,176
432,813
410,541
49,798
–
–
–
–
(27,526)
1,285,989
1,371,083
7,243
–
–
–
(158)
–
–
(92,179)
Vessels
RM'000
15,507
–
–
–
–
–
–
–
–
15,507
22,778
13,029
–
11,427
–
–
(35,040)
3,313
–
Capital
work-in
progress
RM'000
9,550
9,471
31,507
7,258
–
(30,092)
–
–
798
19,021
42,088
7,091
–
–
(30,092)
(28)
–
–
(38)
Drydocking
expenses
RM'000
1,123,739
602,628
558,709
103,912
(2,922)
(30,092)
216
(467)
(26,728)
1,726,367
1,788,904
49,580
(3,389)
11,427
(30,092)
(186)
(2,692)
5,032
(92,217)
Total
RM'000
31 December 2007
Bank
2007
Freehold
land
RM'000
(cont’d)
Buildings
RM'000
Furniture
and
equipment
RM'000
Partitioning
and
installation
RM'000
Motor
vehicles
RM'000
Capital
work-in
progress
RM'000
Total
RM'000
Cost
At 1 January 2007, (restated)
Additions
Disposals/write off
Transfer to subsidiary
Adjustment during the year
1,826
–
–
–
–
–
13,051
–
(6,838)
–
(900)
–
32,971
7,295
–
(2,295)
–
(2,650)
4,043
178
–
(366)
–
(375)
3,270
–
–
–
(716)
–
1,089
6,185
–
(1,113)
–
490
56,250
13,658
(6,838)
(3,774)
(1,616)
(2,535)
At 31 December 2007
1,826
5,313
35,321
3,480
2,554
6,651
55,145
–
–
–
–
–
–
2,386
89
(1,177)
–
–
593
17,682
3,991
–
(311)
(124)
124
2,665
463
–
(355)
–
146
2,350
380
–
–
(1,314)
704
–
–
–
–
–
–
25,083
4,923
(1,177)
(666)
(1,438)
1,567
At 31 December 2007
–
1,891
21,362
2,919
2,120
–
28,292
Net Carrying Amount
1,826
3,422
13,959
561
434
6,651
26,853
At 1 January 2006, (restated)
Additions
Disposals/write off
Reclassification
Transferred to subsidiary
8,280
–
(6,454)
–
–
–
–
57,490
–
(47,057)
–
5,461
(2,843)
–
26,215
6,618
–
(167)
2,215
(1,632)
(278)
2,407
1,151
–
(300)
13,532
(12,966)
219
4,572
132
–
(1,434)
–
–
–
18,021
557
–
–
(20,326)
(253)
3,090
116,985
8,458
(53,511)
(1,901)
882
(17,694)
3,031
At 31 December 2006
1,826
13,051
32,971
4,043
3,270
1,089
56,250
Charge for the year
Disposals/write off
Reclassification
–
–
–
–
–
–
–
23,340
443
(22,383)
–
216
1,019
(250)
14,548
3,417
–
(99)
–
(187)
3
2,192
7,586
–
(146)
–
(7,097)
130
3,277
507
–
(1,434)
–
–
–
–
–
–
–
–
–
–
43,357
11,953
(22,383)
(1,679)
216
(6,265)
(117)
At 31 December 2006
–
2,385
17,682
2,665
2,350
–
25,082
Net Carrying Amount
1,826
10,666
15,289
1,378
920
1,089
31,168
2006
Cost
141
Bank Pembangunan
Charge for the year
Disposals/write off
Transfer to subsidiary
Annual Report 2007
31 December 2007
11. PREPAID LAND LEASE
Group
2007
RM'000
Cost
At 1 January
Addition during the year
Reclassification as held for sale
At 31 December
Annual Report 2007
Depreciation
At 1 January
Charge for the year
Reclassification as held for sale
2007
RM'000
2006
RM'000
40,764
2,465
(37,708)
–
34,679
6,421
–
(336)
5,521
–
–
–
5,593
–
(882)
810
5,521
40,764
5,521
5,521
6,813
896
(6,276)
–
(45)
6,072
925
–
–
(184)
1,279
154
–
–
(45)
1,334
94
(216)
67
–
At 31 December
1,388
6,813
1,388
1,279
Carrying amount
4,133
33,951
4,133
4,242
2006
RM'000
2007
RM'000
2006
RM'000
12. INVESTMENT PROPERTIES
Group
2007
RM'000
142
Bank Pembangunan
Bank
2006
RM'000
Bank
Cost
At 1 January
Addition during the year
Transfer from property, plant and equipment
Disposal
18,037
–
6,708
(901)
18,037
–
–
–
59,135
3,370
6,838
–
5,624
–
53,511
–
At 31 December
23,844
18,037
69,343
59,135
Depreciation and impairment loss
At 1 January
Disposal
Transfer from property, plant and equipment
Charge for the year
3,104
(235)
281
1,529
(6)
2,870
–
–
248
(14)
27,282
–
1,177
599
(330)
522
–
22,383
4,377
–
At 31 December
4,673
3,104
28,728
27,282
Carrying amount
19,171
14,933
40,615
31,853
Included in the above are:
Freehold land
Buildings
1,683
17,488
1,683
13,250
8,137
32,478
8,137
23,716
19,171
14,933
40,615
31,853
The Directors of the Group and the Company estimated the fair values of the investment properties of the Group and the
Company are RM153,765,000 (2006 - RM18,116,000) and RM153,765,000 (2006 - RM121,000,000) respectively based on
comparison with indicative market value stated in the Property Market Report 2006.
13. DEFERRED TAX
Group
Bank
2007
RM'000
2006
RM'000
2007
RM'000
2006
RM'000
49,536
6,087
68,241
(18,705)
44,632
887
40,883
3,749
At 1 January
Recognised in income statement
Recognised in equity
- prior year adjustment
- current year adjustment
(18,916)
5,991
At 31 December
42,698
49,536
32,594
44,632
64,932
(22,234)
65,510
(15,974)
54,801
(22,207)
55,468
(10,836)
42,698
49,536
32,594
44,632
Presented after appropriate offsetting as follows:
Deferred tax assets
Deferred tax liabilities
–
–
(18,916)
5,991
–
–
Deferred tax assets of the Group:
Loan Loss
and
Allowances
RM’000
Impairment
Loss on
Securities
RM’000
Property,
Plant and
Equipment
RM’000
Other
Temporary
Differences
RM’000
Total
RM’000
At 1 January 2007
54,543
(1,948)
709
(25)
7,585
(3,675)
2,673
5,070
65,510
(578)
At 31 December 2007
52,595
684
3,910
7,743
64,932
At 1 January 2006
50,494
4,049
683
26
91,057
(83,472)
2,154
519
144,388
(78,878)
At 31 December 2006
54,543
709
7,585
2,673
65,510
Unrealised
Holding
Reserve
RM’000
Property,
Plant and
Equipment
RM’000
Other
Temporary
Differences
RM’000
Total
RM’000
Deferred tax liabilities of the Group:
At 1 January 2007
- effect of prior year adjustment
- current year
18,916
(5,991)
At 31 December 2007
12,925
At 1 January 2006
At 31 December 2006
–
–
10,950
(9,238)
5,024
2,573
15,974
(6,665)
–
–
–
–
18,916
(5,991)
1,712
7,597
22,234
Property,
Plant and
Equipment
RM’000
Other
Temporary
Differences
RM’000
Total
RM’000
76,147
(65,197)
–
5,024
76,147
(60,173)
10,950
5,024
15,974
143
Bank Pembangunan
The components and movements of deferred tax assets and liabilities during the financial year prior to offsetting are as follows:
Annual Report 2007
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set-off current tax assets against current
tax liabilities and when the deferred income taxes relates to the same fiscal authority.
31 December 2007
13. DEFERRED TAX
(cont’d)
Deferred tax assets of the Bank:
Loan Loss
and
Allowances
RM’000
Unrealised
Holding
Reserve
RM’000
709
(709)
Unabsorbed
Capital
Allowances
RM’000
Other
Temporary
Differences
RM’000
1,314
216
676
55,468
(667)
Total
RM’000
At 1 January 2007
54,543
(1,948)
At 31 December 2007
52,595
–
1,314
892
54,801
At 1 January 2006
50,494
4,049
683
26
–
–
2,152
(1,936)
53,329
2,139
At 31 December 2006
54,543
709
–
216
55,468
Unrealised
Holding
Reserve
RM’000
Property,
Plant and
Equipment
RM’000
Total
RM’000
Annual Report 2007
Deferred tax liabilities of the Bank:
Bank Pembangunan
144
At 1 January 2007
- effects of prior year adjustment
- current year
–
–
10,836
(1,554)
18,916
(5,991)
At 31 December 2007
12,925
–
–
10,836
(1,554)
18,916
(5,991)
9,282
22,207
Property,
Plant and
Equipment
RM’000
Total
RM’000
At 1 January 2006
12,446
(1,610)
12,446
(1,610)
At 31 December 2006
10,836
10,836
Deferred tax assets have not been recognised in respect of the following items:
Group
Deductible temporary differences
Unutilised tax losses
Unabsorbed capital allowances
2007
RM'000
2006
RM'000
–
20,911
–
31,004
297,926
191,767
20,911
520,697
The unutilised tax losses and unabsorbed capital allowances of the Bank are available for offsetting against future taxable profits
subject to no substantial change in shareholdings under the Income Tax Act, 1967 and guidelines issued by the tax authority.
14. DEPOSITS FROM CUSTOMERS
Group
Fixed deposits and negotiable instruments
of deposits
- One year or less
- More than one year
Bank
2007
RM'000
2006
RM'000
2007
RM'000
2006
RM'000
4,469,630
700,000
4,200,411
638,700
4,469,630
700,000
4,200,411
638,700
5,169,630
4,839,111
5,169,630
4,839,111
2007
RM'000
2006
RM'000
2007
RM'000
2006
RM'000
2,360,035
2,819,595
2,387,938
2,451,173
2,360,035
2,809,595
2,387,938
2,451,173
5,179,630
4,839,111
5,169,630
4,839,111
The deposits are sourced from the following types of customers:
Business enterprises
Government and statutory bodies
Bank
15. DEPOSITS AND PLACEMENTS OF BANKS AND OTHER FINANCIAL INSTITUTIONS
Group
Licensed banks
Bank
2007
RM'000
2006
RM'000
2007
RM'000
2006
RM'000
5,000
–
5,000
–
Annual Report 2007
Group
Group
Amount due to related companies
Amount due to subsidiary
Provision for taxation
Provision for zakat
Accrued interest payable
Trade creditors
Sundry creditors and accruals
Hire purchase
Dividend payable
Minority shareholders’ advance to subsidiaries
Bank
2007
RM'000
2006
RM'000
2007
RM'000
2006
RM'000
40,764
–
860
6
67,845
3,598
85,712
38
80,000
25,466
–
–
67,835
55
107,604
1,621
215,864
148
–
36,139
–
–
–
5
67,845
3,188
43,691
38
80,000
–
–
97,428
67,599
5
57,638
1,958
65,223
148
–
–
304,289
429,266
194,767
289,999
Minority shareholder’s advances to subsidiaries are unsecured, interest free and have no fixed terms of repayment.
17. REDEEMABLE GUARANTEED NOTES
Group
Bank
2007
RM'000
2006
RM'000
2007
RM'000
2006
RM'000
Guaranteed notes*
Medium term notes**
30,230
1,000,000
60,226
1,000,000
–
1,000,000
–
1,000,000
Infrastructure notes - nominal value***
Less: Unamortised discount
1,000,000
(11,600)
1,000,000
(12,562)
1,000,000
(11,600)
1,000,000
(12,562)
988,400
987,438
988,400
987,438
2,018,630
2,047,664
1,988,400
1,987,438
Bank Pembangunan
145
16. OTHER LIABILITIES
31 December 2007
17. REDEEMABLE GUARANTEED NOTES
(cont’d)
Group
2007
RM'000
Bank
2006
RM'000
2007
RM'000
2006
RM'000
Discount upon issuance
Amortisation to date
18,500
(6,900)
18,500
(5,938)
18,500
(6,900)
18,500
(5,938)
Unamortised discount
11,600
12,562
11,600
12,562
* These notes are guaranteed by the Bank. These notes carry coupon rates ranging between 3.2% and 5.85% (2006 - 3.2% and
5.85%) per annum and are for tenures of 1 year and 3 years.
** These notes carry coupon rates ranging between 5.00% to 6.30% (2006 - 5.00% to 6.30%) per annum and are for tenures of
5 years to 15 years.
*** These notes are guaranteed by the Government of Malaysia. These notes carry coupon rates of 7.00% to 7.5% (2006 - 7.00%
to 7.50%) per annum and are for tenures of 15 years to 25 years.
18. LONG TERM LOANS
Annual Report 2007
2007
Bank Pembangunan
146
Group
Loans from Government of Malaysia
- Unsecured:
Principal
Interest
Loans from Employees Provident Fund
- Unsecured:
Principal
Interest
Other loans - Unsecured:
Principal
Unrealised foreign exchange loss
Interest
Other loans - Secured:
Principal
Interest
Bai’ Al-Inah financing from Government
Principal and profits
Due after
twelve
months
RM'000
Due within
twelve
months
RM'000
Due after
twelve
months
RM'000
2006
Due within
twelve
months
RM'000
673,719
–
10,452
6,047
1,049,658
–
65,971
5,127
673,719
16,499
1,049,658
71,098
5,997,000
–
–
63,190
5,847,000
–
–
62,273
5,997,000
63,190
5,847,000
62,273
2,464,810
26,545
–
462,924
–
22,803
4,385,593
–
–
595,186
26,676
22,489
2,491,355
485,727
4,385,593
644,351
390,757
–
46,690
–
515,270
–
54,929
–
390,757
46,690
515,270
54,929
–
-
37,088
9,271
9,552,831
612,106
11,834,609
841,922
(cont’d)
2007
Bank
Loan from Government of Malaysia
- Unsecured:
Principal
Interest
- Unsecured:
Principal
Interest
Other loans - Unsecured:
Principal
Unrealised foreign exchange loss
Interest
Due after
twelve
months
RM'000
Due within
twelve
months
RM'000
Due after
twelve
months
RM'000
2006
Due within
twelve
months
RM'000
673,719
–
10,452
6,047
393,571
–
60,893
5,127
673,719
16,499
393,571
66,020
5,997,000
–
–
63,190
5,847,000
–
–
62,273
5,997,000
63,190
5,847,000
62,273
2,464,809
26,545
–
462,924
–
22,803
2,823,028
–
–
350,574
26,676
22,489
2,491,354
485,727
2,823,028
399,739
9,162,073
565,416
9,063,599
528,032
Annual Report 2007
18. LONG TERM LOANS
Loans from Government of Malaysia
The loans from the Government of Malaysia due after twelve months are repayable as follows:
Year
Principal
amount due
2007
2006
RM'000
RM'000
2009
2010
Due after 2010
10,452
10,661
652,606
25,084
25,440
1,562,580
673,719
1,613,104
Interest on the loan is charged at rates of 1.0% to 3.75% (2006 - 1.0% to 3.75%) per annum.
Other than the long term loans described for the Bank, the following are other loans of the Group:
Included in other loans of the Group are:
(i)
Loans for the dry-bulkers are secured by a first priority Malaysian Ship mortgage and general assignment of earnings and
insurance in respect of the vessels concerned and guarantee from the Bank and holding company of a corporate shareholder
of the respective subsidiaries amounting to RM10,263,000 (2006: RM76,419,040).
(ii)
Loans for tankers are secured by a first preferred cross-collaterised mortgage of the vessel, an assignment of earnings
derived from the pool and insurance of the vessels concerned amounting to RM427,184,000 (2006: RM487,431,400).
The interest rate of the term loans during the year ranged from 5.42% to 6.09% (2006: 4.67% to 6.07%) per annum.
Included in other loans of disposal group in Note 39 (2006 - group) are:
Loans from the Japan Bank of International Corporation (“JBIC”)
(i)
Loan of ¥5,716,228,574 (approximately RM205,041,118) principal repayable over a period of 19 years commencing 20
December 1995, after a grace period of 6 years. As at 31 December 2007, the principal balance of the loan stood at
RM40,349,863 (2006: RM43,646,238). The loan will mature on 20 December 2013.
Bank Pembangunan
147
Group
31 December 2007
18. LONG TERM LOANS
(cont’d)
Included in other loans of disposal group in Note 39 (2006 - group) are: (cont’d)
Loans from the Japan Bank of International Corporation (“JBIC”) (cont’d)
(ii)
Loan of ¥4,660,000,000 (approximately RM167,154,200) principal repayable over a period of 18 years commencing 20 May
2002, after a grace period of 7 years. As at 31 December 2007, the principal balance of the loan stood at RM60,920,294
(2006: RM67,401,768). The loan will mature on 20 May 2017.
(iii) Loan of ¥6,273,000,000 (approximately RM225,012,510) principal repayable over a period of 14 years commencing 19
December 1995 after a grace period of 6 years. As at 31 December 2007, the principal balance of the loan stood at
RM10,777,973 (2006: RM20,911,788). The loan will mature on 19 December 2008.
(iv) Loan of ¥10,344,000,000 (approximately RM371,039,280) principal repayable over a period of 8 years commencing on 26
July 2003 after a grace period of 2 years. As at 31 December 2007, the principal balance of the loan stood at RM73,472,381
(2006: RM122,454,233). The loan will mature on 26 January 2009.
Annual Report 2007
(v)
Bank Pembangunan
148
Loan of USD150,000,000 (approximately RM570,000,000) principal payable over a period of 7 years commencing on 26 July
2003 after a grace period of 3 years. As at 31 December 2007, the principal balance of the loan stood at RM62,042,600
(2006: RM103,409,400). The loan will mature on 26 January 2009.
(vi) Loan of ¥8,400,000,000 (approximately RM301,308,000) principal repayable over a period of 7 years commencing on 26
October 2002 after a grace period of 3 years. The loan was obtained on 3 May 1999 and is guaranteed by the Government
of Malaysia. As at 31 December 2007, the principal balance of the loan stood at RM64,613,600 (2006: RM107,688,877). The
loan will mature on 26 April 2009.
(vii) Loans from the Japan Bank of International Cooperation for Asean-Japan Development Fund (AJDF) and Small and Medium
Industry Promotion Program (SMIPP) amounting to RM63,019,836 and RM57,267,900 respectively (2006: RM77,518,000 and
RM63,296,100 respectively) which are repayable in semi annual instalments of Ringgit Malaysia equivalent of ¥281,921,000
and Ringgit Malaysia equivalent of ¥125,945,000 each commencing from December 1995 and May 1999 respectively.
(viii) Loan from Japan Bank of International Cooperation amounting to RM158,829,607 principle payable over a period of 30
years commencing on 30 September 2009 after a grace period of 10 years. As at 31 December 2007, the principal balance
of the loan stood at RM139,208,673 (2006: RM158,829,607). The loan will mature on 30 September 2039.
(ix) Loan of ¥16,296,000,000 (approximately RM584,537,520) principal payable over a period of 40 years inclusive 10 years grace
period commencing on 20 March 2009. The loan was obtained on 24 June 1999 and is unsecured. As at 31 December 2007,
the principal balance of the loan stood at RM96,805,929 (2006: RM118,883,379). The loan will mature on 30 September 2039.
The Bank’s loans are guaranteed by the Government of Malaysia.
The interest rates on long term loans ranges from 2% to 4.5% (2006: 2% to 4.5%) per annum during the year.
Loans from other institutions:
Included in the loans from other institutions are mainly from Bank Negara Malaysia (“BNM”) and Affin Bank Berhad amounting
to RM975,257,009 and RM4,888,889 respectively (2006: RM845,892,962 and RM34,222,222).
Interest on the loan is charged at rates of 1.0 % to 4.0 % (2006: 1.0% to 4.0%) per annum.
Bank
Loan from Government of Malaysia
The loans from the Government of Malaysia due after twelve months are repayable as follows:
Year
Principal
amount due
2007
2006
RM'000
RM'000
2008
2009
2010
Due after 2010
–
10,661
10,661
652,397
10,452
10,661
10,661
361,797
673,719
393,571
Directors’ Report
18. LONG TERM LOANS
(cont’d)
Loan of RM997,000,000 (2006 - RM997,000,000) is repayable in a bullet repayment in 2009 at 8%. Loan of RM2,000,000,000 (2006
- RM2,000,000,000) (EPF 1st Tranche) is repayable in 5 equal instalments over a period of 5 years, commencing from 2019. The
interest rate on the loan is fixed at 5% per annum. In the previous years and during the year, the Company had withdrawn
additional RM2,850,000,000 and RM150,000,000 respectively, out of total loan facility of RM3,100,000,000 (EPF 2nd Tranche). The
repayment schedule is not fixed until the loan is fully drawdown. All the above loans are guaranteed by Government of Malaysia.
Loan from the Japan Bank of International Cooperation for Untied Loan amounting to RM503,899,993 (¥15,392,079,300)
[2006 - RM688,563,919 (¥21,032,805,300)] which is repayable in semi-annual instalments of Ringgit Malaysia equivalent of
¥2,820,363,000 commencing from November 2002. Realised foreign exchange gain/loss on interest payment, if any, from the
long term Yen loan is accounted for in the income statements. The loan will mature in November 2010.
(ii)
Loan from Export Credit Agency (ECA) lenders amounting to RM585,872,997 ( 120,174,146) [2006 - RM730,550,308
( 156,962,108)]. This loan is repayable in semi-annual instalments of Ringgit Malaysia equivalent of 18,393,981
commencing from June 2005 and will mature in June 2012.
(iii) Loan from IT7 - Japan Bank of International Cooperation for Untied Loan amounting to RM1,102,420,000 (¥35,000,000,000)
[2006 - RM962,775,000 (¥30,000,000,000)] out of total loan facility of RM1,747,580,000 (¥59,000,000,000). The loan will
mature in March 2017. Interest is repayable in semi-annual instalments and the final repayment schedule is not fixed until
the loan is fully drawdown. Realised foreign exchange gain/loss on interest payment, if any, from the long term Yen loan is
accounted for in the income statements.
(iv) Loan from Pension Trust Fund Council amounting to RM300,000,000 (2006 - RM300,000,000) which is repayable in 2008.
Loan from Pension Trust Fund amounting to RM500,000,000 (2006 - RM500,000,000) which is repayable in 12 instalments
over a period of 6 years, commencing from 2015. This loan will mature in 2020.
(v)
Loans from other institutions, namely from Bank Negara Malaysia (“BNM”) and Pusat Tenaga Malaysia amounting to
RM8,032,168 and RM9,124,970 respectively (2006 - RM8,921,800 and RM9,124,970).
The Bank’s loans are guaranteed by Government of Malaysia. The interest rates on long term loans for the Bank ranges from 0%
to 8% (2006 - 0% to 8%) per annum during the year.
19. INFRASTRUCTURE SUPPORT FUND
Group and Bank
2007
2006
RM'000
RM'000
At 1 January
Net receivable during the year
Transferred from general provision
Utilised during the year
535,289
45,308
88,497
(62,803)
463,768
102,911
–
(31,390)
At 31 December
606,291
535,289
The Government provides funds to the Bank in relation to its mandate to provide financing for Government infrastructure
projects. The amounts received are non-repayable and are accounted for during the year as follows:
(i)
amounts to compensate against related costs are recognised in the income statement in relation to infrastructure financing.
(ii)
amounts utilised for purpose of payments on financing costs relating to the funding for an infrastructure loan are
transferred to Infrastructure Support Fund.
In the previous year, the Infrastructure Support Fund was also utilised to account for compensation for infrastructure projects
financed by Employee Provident Fund (“EPF”). In the current year, compensation received for projects financed by EPF and
Pension Trust Fund Council is recorded directly to deferred income.
149
Bank Pembangunan
(i)
Annual Report 2007
Included in other loans are:
31 December 2007
19. INFRASTRUCTURE SUPPORT FUND
(cont’d)
The amount was accounted for as follows in the financial year 2007:
Amount received/receivable from Government during the year
Amount matched against costs and recognised as income
Transferred to Infrastructure Support Fund
2007
RM'000
2006
RM'000
87,621
(42,313)
(45,308)
168,048
(65,137)
(102,911)
–
–
For the year ended 31 December 2007, RM42,313 million was recognised as income and also utilised to offset the various cost
incurred. The balance carried forward is to be utilised against future related costs incurred by the Bank in relation to
infrastructure financing.
20. GOVERNMENT FUNDS
Group
(a)
2006
RM'000
100,718
815
101,772
(847)
101,533
100,925
–
(207)
101,533
100,718
To finance the purchase and construction of property, plant and equipment:
(i)
Annual Report 2007
2007
RM'000
Nursery Factory Scheme
At 1 January
Less: Funds utilised during the year
Utilised to offset depreciation charged on property, plant and equipment
150
Bank Pembangunan
At 31 December
(ii)
Nursery Factory Scheme (RMK8)
At 1 January
Utilised to offset depreciation
Utilised to offset expenses
Reclassification
27,512
(3,569)
(7,677)
983
22,199
(3,053)
(3,061)
11,427
At 31 December
17,249
27,512
(iii) Nursery Factory Scheme (RMK9)
At 1 January
Funds received during the year
Utilised to offset expenses
At 31 December
(b)
5,900
5,000
(243)
–
5,900
–
10,657
5,900
41,257
37,909
To finance loans:
(i)
(ii)
Soft Loan Scheme
At 1 January
Less: (Provision)/writeback
- specific
- general
5
(3)
3,333
15
At 31 December
41,259
41,257
Soft Loan Scheme (SMA)
At 1 January
Less: Writeback - specific
Loans written off
44,319
–
–
44,293
115
(89)
At 31 December
44,319
44,319
To finance loans:
(cont’d)
Group
(iii) Tabung Usahawan Pahang
At 1 January
Loan written off
Reclassification
454
–
–
(75)
426
103
(75)
–
379
454
82,553
90,474
(2,444)
(146)
(4,243)
(549)
(7,080)
11,608
(265)
(19,076)
(188)
–
68,091
82,553
Tabung Inkubator Pertanian Kelantan
At 1 January
Loan written off
Reclassification
2,976
–
–
14
2,553
442
(19)
–
At 31 December
2,990
2,976
38,172
–
34,507
4,400
At 31 December
(iv) Skim Pembangunan Ekonomi Desa-Islamic
At 1 January
- specific
- general
Loan written off
Hibah
Reclassification
At 31 December
(v)
2006
RM'000
(vi) Tabung Usahawan Siswazah (TUS)
At 1 January
Funds received during the year
- specific
- general
Loan written off
Reclassification
At 31 December
(vii) Dana Usahawan Negeri Terengganu
At 1 January
- specific
- general
Hibah
Loan written off
Reclassification
At 31 December
(viii) SPEDI
At 1 January
- specific
- general
At 31 December
50
39
(27)
2,955
(34)
(3,656)
–
38,234
38,172
12,401
16,111
(12)
68
(450)
(71)
7,168
795
72
(1,481)
(3,096)
–
19,104
12,401
999
997
(25)
2
976
2
–
999
Annual Report 2007
2007
RM'000
151
Bank Pembangunan
(b)
(cont’d)
31 December 2007
(b)
To finance loans:
(cont’d)
(cont’d)
Group
2007
RM'000
2006
RM'000
5,000
5,000
5,000
5,000
4,902
(516)
4,902
–
At 31 December
4,386
4,902
(xii) SASWE
At 1 January
Less: Loans written off
6,239
517
6,239
–
At 31 December
6,756
6,239
365,933
378,402
(ix) Program Dan Skim Usahawan Kraf
At 1 January/31 December
(x)
Program Dan Skim Usahawan Batik
At 1 January/31 December
Annual Report 2007
(xi) Small and Medium Industries Development Corporation (SMIDEC)
At 1 January
Less: Loans written off
Total
Less:
Liabilities directly associated with assets of subsidiary held for sale
(365,933)
–
152
Bank Pembangunan
–
378,402
21. DEFERRED INCOME
Group and Bank
2007
2006
RM'000
RM'000
At 1 January
Received from Government during the year
Utilised during the year
At 31 December
119,260
83,429
(106,355)
108,848
94,388
(83,976)
96,334
119,260
The Government provide funds to the Bank in relation to its mandate to provide financing for Government infrastructure projects
financed by Employee Provident Fund and Pension Trust Fund Council. The amounts received are non-repayable and are utilised
to compensate the cost of fund differential and loss of profit margin.
22. SHARE CAPITAL
Number of Ordinary
Shares of RM1 Each
2007
2006
RM'000
RM'000
Authorised:
At 31 December
Amount
2007
RM'000
2006
RM'000
10,000,000
10,000,000
10,000,000
10,000,000
Issued and fully paid:
At 1 January
Issued during the year
3,078,724
–
2,128,724
950,000
3,078,724
–
2,128,724
950,000
At 31 December
3,078,724
3,078,724
3,078,724
3,078,724
23. RESERVES
Group
Non-distributable:
Capital reserve
General reserve
Statutory reserve
Unrealised holding reserve
Exchange translation reserve
Distributable:
Retained profits (Note 24)
Bank
2007
RM'000
2006
RM'000
2007
RM'000
2006
RM'000
1,000
10,114
666,483
41,710
(47,763)
671,544
1,000
10,114
462,220
–
(28,508)
444,826
–
–
666,483
34,093
–
700,576
–
–
462,220
–
–
462,220
2,506,768
2,035,331
1,743,800
1,600,966
3,178,312
2,480,157
2,444,376
2,063,186
The capital reserve of the Group arose from the capitalisation of bonus issue in certain subsidiaries in previous years.
The Income Tax Act 1967 was amended recently to introduce the single tier corporate tax system with effect from the year of
assessment 2008. Under the new single tier corporate tax system, dividend distribution to shareholders will be exempted from tax.
Under the single tier system, the Bank shall not be entitled to deduct tax on dividend paid, credited or distributed to its shareholders,
and such dividends paid, credited or distributed by the Bank will be exempted from tax in the hands of the shareholders.
However, there will be a transitional period of six years, expiring on 31 December 2013, to allow companies to pay franked
dividends to their shareholders under limited circumstances. Companies also have an irrevocable option to disregard the Section
108 balance and opt to pay dividends under the single tier system. This proposed change in the tax law also provides for the
Section 108 balance to be locked in as at 31 December 2007.
The Bank did not elect for the irrevocable option to disregard the Section 108 balance. Accordingly, during the transitional period,
the Bank can utilise the balance in the Section 108 account as at 31 December 2007 to distribute cash dividend payments to
ordinary shareholdings as defined under the Finance Bill, 2007.
As at 31 December 2007, the Bank has tax exempt profits available for distribution of approximately RM1,500,823,000 (2006 RM1,247,708,000), subject to the agreement of the Inland Revenue Board.
The Company has sufficient tax credit under Section 108 and the balance in the tax exempt income account to frank the payment
of dividends out of its entire retained earnings as at 31 December 2007.
25. INTEREST INCOME
Group
- Interest income other than recoveries from NPL
- Recoveries from NPL
Deferred income recognised
Money at call and deposit placement with
- securities available-for-sale
Others
Amortisation of premium less accretion of discount
Bank
2007
RM'000
2006
RM'000
2007
RM'000
2006
RM'000
949,296
19,210
106,355
964,180
1,487
83,976
926,501
16,872
106,355
816,720
1,487
83,976
54,293
103,285
52,642
56,557
–
104,330
–
93,653
–
8,441
–
104,330
–
93,114
–
–
1,233,484
2,948
1,255,022
1,205
1,206,700
2,948
1,051,854
1,205
1,236,432
1,256,227
1,209,648
1,053,059
Included in the interest income from loans, advances and financing of the Bank is interest income from subsidiary amounting to
RM9,281,682 (2006 - RM5,219,440).
153
Bank Pembangunan
24. RETAINED EARNINGS
Annual Report 2007
The statutory reserves are maintained in compliance with the requirements of Section 39 of Development Financial Institution
Act 2002 ("the Act") and are not distributable as cash dividends. Under the Act, the Bank is required to transfer at least 50% of
its profit after tax, up to 50% of its paid-up capital.
31 December 2007
26. INTEREST EXPENSE
Group
Deposits and acceptances
Long term loans
Subsidiary
Others
Bank
2007
RM'000
2006
RM'000
2007
RM'000
2006
RM'000
187,692
443,957
132,452
–
4,254
142,137
463,995
117,524
–
4,926
187,692
443,026
130,500
2,647
2,962
137,878
408,111
112,223
7,786
992
768,355
728,582
766,827
666,990
2007
RM'000
2006
RM'000
2007
RM'000
2006
RM'000
333,295
4,395
18,842
285,772
763
13,986
–
–
–
–
–
–
356,532
300,521
–
–
5,623
–
24,240
–
1,533
–
5,656
–
38,547
–
711
–
1,146
–
–
–
4,847
109
–
–
1,113
–
50,320
21,730
1,672
–
–
23,540
4,840
1,924
–
–
–
(288)
–
–
–
21,682
–
–
–
354
4,840
1,924
–
16,461
751
(288)
–
–
–
11,282
9,603
–
–
(1,093)
27. NON-INTEREST INCOME
Group
Annual Report 2007
(a)
(b)
Bank Pembangunan
154
(c)
Other operating income:
Charter hire, demurrage and freight income
Fee income
Other operating income
Investment income:
Gain on sale of:
Gain on disposal of associates
Gross dividends from:
- quoted
- unquoted
- associates
- subsidiaries
Write back/(allowance) for diminution in value of:
- securities held-to-maturity
- investment in subsidiaries
- investment in associates
Investment securities written off
Others
Other income:
Fee income
Rental income:
- subsidiaries
- others
Gain on disposal of property, plant and equipment
(Loss)/gain on foreign exchange:
- realised
- unrealised
Compensation from the Government:
- utilisation of Infrastructure Support Fund
for specific provision
- write back of Infrastructure Support Fund
for general provision written back
- on foreign exchange
- on loans written off
Bank
37,485
28,525
141,054
45,715
20,559
25,458
20,517
22,936
–
1,310
149,706
–
8,710
827
7,703
893
(13)
5,280
1,490
459
(27)
(32,676)
(11,911)
(35,310)
–
(25,387)
235
(26,676)
62,804
31,390
62,803
31,390
(88,497)
10,516
–
–
30,412
243,164
(88,497)
10,516
–
–
30,412
243,164
27. NON-INTEREST INCOME
(cont’d)
Group
2007
RM'000
(c)
Other income: (cont’d)
Realised income/(loss) from:
- Interest rate swap
- Floater annuity swap
- Contract forward
Unrealised (loss)/income from:
- Interest rate swap
- Floater annuity swap
- Contract forward
Others
Total non-interest income
Bank
2006
RM'000
2007
RM'000
2006
RM'000
8,451
(2,106)
2,190
14,815
(1,487)
78
8,451
(2,106)
2,190
14,815
(1,487)
78
(6,676)
2,476
448
27,930
–
–
–
25,167
(6,676)
2,476
448
81
–
–
–
1,224
156,408
331,313
(6,601)
323,320
550,425
660,359
134,453
369,035
Bank
2007
RM'000
2006
RM'000
2007
RM'000
2006
RM'000
(i)
(ii)
(iii)
(iv)
79,448
110,236
7,481
81,367
122,625
135,257
4,106
115,822
40,208
16,620
7,233
15,133
34,543
30,942
2,547
21,458
278,532
377,810
79,194
89,490
61,140
283
5,810
12,215
101,060
564
9,524
11,477
32,186
235
4,867
2,920
28,357
195
4,152
1,839
79,448
122,625
40,208
34,543
79,302
1,529
896
–
103,912
248
925
5,894
4,923
599
154
4,229
11,953
4,377
94
6,086
24,553
3,956
18,244
6,034
2,723
3,992
2,459
5,973
110,236
135,257
16,620
30,942
(iii) Promotion and marketing expenses
Advertisement and publicity
7,481
4,106
7,233
2,547
(iv) General administrative expenses
General administrative expenses
Auditors’ remuneration
Retirement benefit
Amortisation of dry-docking expenses
Hire purchase interest
Rental of - equipment
62,879
497
–
–
17,941
9
–
41
102,208
547
2,896
(53)
7,258
32
2,896
38
14,968
156
–
–
–
9
–
–
21,369
110
–
(53)
–
32
–
–
81,367
115,822
15,133
21,458
Personnel costs
Establishment related expenses
Promotion and marketing expenses
General administrative expenses
(i)
(ii)
Personnel costs
Salaries, allowances and bonuses
Social security cost
Pension costs - Defined contribution plan
Other staff related expenses
Establishment related expenses
Depreciation:
- Property, plant and equipment
- Investment properties
Amortisation of prepaid lease rental
Rental of leasehold land and premises
Repairs and maintenance of property,
plant and equipment
Information technology expenses
155
Bank Pembangunan
Group
Note
Annual Report 2007
28. OVERHEAD EXPENSES
31 December 2007
29. DIRECTORS' FEES AND REMUNERATION
Group
Bank
2007
RM'000
2006
RM'000
2007
RM'000
2006
RM'000
661
200
103
7
539
160
105
41
661
200
103
7
539
160
105
41
971
845
971
845
157
8
224
131
9
110
157
8
224
131
9
110
389
250
389
250
–
–
–
600
100
117
–
–
–
–
–
–
–
817
–
–
264
135
231
122
–
–
–
–
399
353
–
–
Total
1,759
2,265
1,360
1,095
Total (excluding benefits-in-kind)
1,744
2,215
1,345
1,045
Directors of the Bank:
Executive directors/Managing directors:
Salary and other remuneration,
including meeting allowances
Bonuses
Pension cost - Defined contribution plan
Benefits-in-kind
Non-executive directors:
Annual Report 2007
Fees
Benefits-in-kind
Other remuneration
Bank Pembangunan
156
Directors of the Subsidiaries:
Executive directors:
Salary and other remuneration,
including meeting allowance
Bonuses
Pension cost - defined contribution plan
Non-executive directors:
Fees
Other remuneration
Group
2007
2006
Number of executive directors:
RM850,001 to RM900,000
RM800,001 to RM850,000
RM55,001 to RM60,000
1
–
1
–
1
–
Number of non-executive directors:
RM50,001 to RM100,000
RM0 to RM50,000
1
8
4
3
11
8
Number of directors of the Bank whose
remuneration falls into the following bands:
30. COMPENSATION TO KEY MANAGEMENT PERSONNEL
Key management personnel are defined as persons having authority and responsibility for planning, directing and controlling the
activities of the Group and the Bank directly or indirectly, including any director of the Group and the Bank. The remuneration
and compensation of Directors and other members of key management during the year was as follows:
Group
Bank
2007
RM'000
2006
RM'000
2007
RM'000
2006
RM'000
1,539
2,030
964
804
2007
RM'000
2006
RM'000
2007
RM'000
2006
RM'000
971
845
971
845
2007
RM'000
2006
RM'000
2007
RM'000
2006
RM'000
27,964
(88,497)
46,972
–
22,766
(88,497)
45,017
–
347,954
(217,225)
213,273
(79,205)
322,624
(138,947)
117,825
(50,132)
–
(244)
298,528
(7,711)
–
(244)
–
(78)
Short term employees benefits
Included in the total key management personnel are:
Group
Executive Directors' remuneration (Note 29)
Bank
31. LOANS AND FINANCING LOSS AND ALLOWANCES
69,952
471,857
117,702
112,632
2007
RM'000
2006
RM'000
2007
RM'000
40,551
(63,904)
76,239
(14,944)
36,563
(63,823)
75,680
(14,911)
(23,353)
61,295
(27,260)
60,769
(7,681)
1,594
16,871
1,834
(2,481)
1,594
(5,402)
1,653
(6,087)
18,705
(887)
(3,749)
(29,440)
80,000
(28,147)
57,020
32. TAX EXPENSE
Group
Income tax expense:
Current income tax
Overprovision in prior years
Deferred tax expense:
Origination and reversal of temporary differences
Effect of changes in tax rate*
Bank
2006
RM'000
* In the Malaysian Budget 2007, it was announced that the corporate income tax rate will be reduced to 27% in 2007 and to
26% in 2008. Consequently, deferred tax assets and liabilities are measured using these tax rates.
Annual Report 2007
Allowance for bad and doubtful debts and financing:
General allowance
- made during the year
- written back
Specific allowance
- made during the year
- written back
Bad debts and financing
- written off
- recovered
Bank
157
Bank Pembangunan
Group
31 December 2007
32. TAX EXPENSE
(cont’d)
A reconciliation of income tax expense applicable to profit before taxation at the statutory income tax rate to income tax
expense at the effective income tax rate of the Group and of the Bank are as follows:
Reconciliation of effective tax expense
Group
2006
RM'000
2007
RM'000
2006
RM'000
767,434
441,152
380,378
552,982
207,207
2,146
16,883
(156,094)
123,523
(7,041)
72,439
(121,589)
102,702
1,594
1,662
(70,282)
154,835
(1,653)
2,181
(87,329)
–
(2,482)
(27,827)
(5,369)
(463)
23,000
(5,121)
10,196
Over provision in prior years
34,464
(63,904)
94,944
(14,944)
35,676
(63,823)
71,931
(14,911)
Tax expense
(29,440)
80,000
(28,147)
57,020
Profit before tax
Annual Report 2007
Tax using Malaysian tax rate of 27% (2006 - 28%)
Effect of changes in tax rate
Non-deductible expenses
Income not subject to tax
Current year losses for which no deferred
tax asset was recognised
Reversal of deferred tax previously recognised
Effect of tax benefit previously not recognised
Other items
Bank Pembangunan
158
Bank
2007
RM'000
–
–
–
–
–
–
–
3,897
33. DIVIDENDS
Dividends recognised in the current year by the Bank are:
Sen
per share
Total
amount
RM'000
2.60
80,000
2.60
80,000
2007
Final 2006 ordinary
2006
Final 2005 ordinary paid on 19 December 2006
Final tax exempt dividend on 3,078,724,000 ordinary shares, amounting to RM80,000,000 (2.6 sen net per ordinary share), in
respect of the financial year ended 31 December 2006 was declared on 22 May 2007 and approved for payment on 29 June 2007.
At the forthcoming Annual General Meeting, a final tax exempt dividend in respect of the financial year ended 31 December
2007, of 2.6% on 3,078,724,000 ordinary shares, amounting to a dividend payable of RM80,000,000 (2.6 sen net per ordinary
share) will be proposed for the shareholders' approval. The financial statements for the current financial year do not reflect this
proposed dividend. Such dividend, if approved by the shareholder, will be accounted for in equity as an appropriation of retained
profits in the financial year ending 31 December 2008.
34. EARNINGS PER SHARE
The basic earnings per share ("EPS") of the Group and the Bank are calculated by dividing the net profit for the year by the
weighted average number of ordinary shares in issue during the financial year.
Group
Net profit for the year (RM’000)
Number of ordinary shares in issue (’000)
Basic EPS (sen)
Bank
2007
2006
2007
2006
737,128
314,898
408,525
495,962
3,078,724
3,078,724
3,078,724
3,078,724
23.94
10.23
13.27
16.11
35. CAPITAL AND OTHER COMMITMENTS
Commitments of the Group and the Bank not included in these financial statements are as follows:
Group
Disbursement of loans to industries
Foreign exchange related contract
- Forward contracts
Interest rate related contracts
- Swaps
Capital expenditure
Bank
2007
RM'000
2006
RM'000
2007
RM'000
2006
RM'000
7,580,750
10,188,618
7,580,750
8,721,818
11,846
8,043
11,846
5,126
2,888
3,224
2,888
3,224
2,571
7,485
2,571
7,485
2007
RM'000
2006
RM'000
2007
RM'000
2006
RM'000
646,454
797,851
646,454
599,894
36. CONTINGENCIES
At 31 December 2007 there are contingent liabilities in respect of:
The Directors are of the opinion that provisions are not required in respect of these matters, as it is not probable that a future
sacrifice of economic benefits will be required or the amount is not capable of reliable measurement.
Group
2007
RM'000
2006
RM'000
A subsidiary is defending an action brought up by a client on negligence issue which
has resulted in collateral being forfeited by the Government. Based on legal advice,
the subsidiary has a fair chance in this case.
13,848
13,848
Litigation case against a subsidiary by a property developer who accuse that a property
charged to one of the subsidiary’s client was void. The same property has been used
by the subsidiary’s client as a collateral charged to the subsidiary. Therefore, the third
party is claiming for the collateral from the subsidiary. Based on legal advice, there is
sufficient evidence to prove that the collateral charged was valid.
2,000
2,000
A subsidiary had conducted a foreclosure proceeding against a client. However, the
client brought action to halt the legal case. The case was settled during the year in
the subsidiary's favour.
–
4,000
Contingent liabilities not considered remote Litigation (unsecured)
Bank
The Bank is defending an action brought up by a client on misrepresentation issue
which has resulted in collateral being disposed without informing the client. Based
on legal advice, the Bank has fair chance in this case.
2007
RM'000
2006
RM'000
20,000
20,000
Annual Report 2007
Secured guarantees given to third
parties on behalf of borrowers
Bank
159
Bank Pembangunan
Group
31 December 2007
37. RELATED PARTY TRANSACTIONS
The Banks’s major transactions with its related companies consist mainly of extending credit facilities and giving of loans and
advances. The Directors of the Bank are of the opinion that these transactions have been entered into in the normal course of
business and have been established under negotiated basis. In addition to the transaction detailed elsewhere in the financial
statements, the Group and the Bank has the following transactions with related parties during the financial year:
Bank
2007
RM'000
2006
RM'000
6,086
6,431
–
3,506
2,723
–
–
–
6,086
5,280
7,969
788
1,850
254,463
2,257
(13,102)
Annual Report 2007
Subsidiaries:
Rental of premises charged by a subsidiary
Rental income from a subsidiary
Deterioration of loan portfolio charged by a subsidiary
Service level agreement
Building maintenance
Long term loan transferred from a subsidiary
Property, plant and equipment transferred from a subsidiary
Property, plant and equipment transferred to a subsidiary
38. COMPANIES IN THE GROUP
(a)
The subsidiaries, all incorporated in Malaysia, are as follows:
Name of Company
160
Bank Pembangunan
Pembangunan Leasing
Corporation Sdn Bhd
Effective interest
held by the Bank
2007
2006
%
%
100.00
100.00
Principal activities
Lease, hire purchase financing, factoring,
block discounting and investment holding
Maju Nominees (Tempatan) Sdn Bhd
100.00
100.00
Nominee and factoring
BPF Properties Sdn Bhd*
100.00
100.00
Property investment
BPMB Urus Harta Sdn Bhd
100.00
100.00
Property investment
54.80
95.48
Bank Perusahaan Kecil &
Sederhana Malaysia Berhad***
100.00
100.00
Global Maritime Venture Berhad
90.00
90.00
Pembangunan Ekuiti Sdn Bhd
(formerly known as ("f.k.a.")
BPMB-NIF Modal Teroka Sdn Bhd)**
Investment manager and provision of advisory,
consultancy and related services pertaining
to investments
Development Banking
Venture capital investment
* In members' voluntary liquidation
** Refer to Note 8(ii).
*** Classified as discontinued operation during the current financial year as disclosed in Note 39.
(b)
Detail of subsidiary companies of Bank Perusahaan Kecil & Sederhana Malaysia Berhad classified as assets held for sale, all
of which are incorporated in Malaysia, are as follows:
Name of Associates
Golden Prominent Sdn Bhd
Effective interest
held by the Bank
2007
2006
%
%
100.00
100.00
92.70
92.70
Dormant
BI Technology & Engineering Centre
Sdn Bhd*
100.00
100.00
Dormant
Metro Prominent Sdn Bhd
100.00
100.00
Dormant
Guardmont Industries Sdn Bhd
100.00
100.00
Dormant
BI Technical Consultancy
Services Sdn Bhd*
Owning, chartering and operating of vessel
Detail of subsidiary companies of Bank Perusahaan Kecil & Sederhana Malaysia Berhad classified as assets held for sale, all
of which are incorporated in Malaysia, are as follows: (cont’d)
Metro Maple Sdn Bhd
100.00
100.00
Dormant
BI Nelayan Malaysia Berhad
100.00
100.00
Ceased operation
BI Nominees (Tempatan) Sdn Bhd
100.00
100.00
Nominee services
Malaysian Technology
Investments (L) Bhd
100.00
100.00
Dormant
SME Growth Acceleration
Fund Sdn Bhd
100.00
100.00
Venture capital company
BI Walden Ventures ke
Lima Sdn Bhd
100.00
100.00
Dormant
* In members' voluntary liquidation.
(c)
Details of subsidiary companies of Global Maritime Ventures Berhad, all of which are incorporated in Malaysia, are as follows:
Name of Company
Effective interest
held by the Group
2007
2006
%
%
Mutiara Navigation Sdn Bhd
70.00
70.00
Ship-owning
Intan Navigation Sdn Bhd
70.00
70.00
Ship-owning
Nilam Navigation Sdn Bhd
70.00
70.00
Ship-owning
Kasa Navigation Sdn Bhd
70.00
70.00
Ship-owning
Mayang Navigation Sdn Bhd
70.00
70.00
Ship-owning
Sari Navigation Sdn Bhd
70.00
70.00
Ship-owning
Tiara Navigation Sdn Bhd
70.00
70.00
Dormant
Glory Incentive Sdn Bhd
100.00
100.00
Investment holding
GMV-ALAM Sdn Bhd
(f.k.a. Synergy Sparkle Sdn Bhd)
100.00
100.00
Investment holding
GMV-Gagasan Sdn Bhd
(f.k.a. Prestige Polar Sdn Bhd)
100.00
100.00
Investment holding
Tegas Senja Sdn Bhd
100.00
100.00
Investment holding
GMV-Bahtera Sdn Bhd
(f.k.a. Nilam Inisiatif Sdn Bhd)
100.00
100.00
Investment holding
GMV-Orion Sdn Bhd
(f.k.a. Global Satria Sdn Bhd)
100.00
100.00
Investment holding
GMV-Regional Sdn Bhd
(f.k.a. Modular Majoriti Sdn Bhd)
100.00
100.00
Investment holding
GMV-Orkim Sdn Bhd
(f.k.a. Megakey Ventures Sdn Bhd)*
100.00
–
Investment holding
GMV-Offshore Sdn Bhd
(f.k.a. Megan Metropolis Sdn Bhd)*
100.00
–
Investment holding
GMV-Global Sdn Bhd*
100.00
–
Investment holding
GMV-Jasa Sdn Bhd*
100.00
–
Investment holding
* Incorporated during the year with paid up capital of RM2 each.
Annual Report 2007
Name of Company
Effective interest
held by the Bank
2007
2006
%
%
161
Bank Pembangunan
(b)
(cont’d)
31 December 2007
(d)
(cont’d)
Details of subsidiary companies of Glory Incentive Sdn Bhd, all of which are incorporated in Malaysia, are as follows:
Name of Company
(e)
Annual Report 2007
Permata Navigation Sdn Bhd
70.00
70.00
Ship-owning
Gemala Navigation Sdn Bhd
70.00
70.00
Ship-owning
Ratna Navigation Sdn Bhd
70.00
70.00
Ship-owning
Kencana Navigation Sdn Bhd
70.00
70.00
Ship-owning
Ayu Navigation Sdn Bhd
70.00
70.00
Ship-owning
Details of subsidiaries of Pembangunan Leasing Corporation Sdn Bhd, which are incorporated in Malaysia, are as follows:
Name of Company
(f)
Effective interest
held by the Group
2007
2006
%
%
Effective interest
held by the Group
2007
2006
%
%
PLC Credit & Factoring Sdn Bhd
100.00
100.00
Insurance agency property management, hire
purchase financing and factoring
BI Credit & Leasing Berhad
100.00
100.00
Credit and leasing
Details of a subsidiary company of BI Credit & Leasing Berhad, which is incorporated in Malaysia, are as follows:
Bank Pembangunan
162
Name of Company
KIB Nominee (Tempatan) Sdn Bhd
Effective interest
held by the Group
2007
2006
%
%
100.00
100.00
Nominee services
39. DISCONTINUED OPERATIONS AND DISPOSAL GROUP CLASSIFIED AS HELD FOR SALE
On 25 January 2008, the Bank announced its decision to dispose of its entire holdings in Bank Perusahaan Kecil & Sederhana
Malaysia Berhad ("SME Bank") to its ultimate shareholder, the Minister of Finance Incorporated as part of its rationalisation
exercise. SME Bank is principally engaged in acting as a development bank focusing on small and medium size enterprises. The
disposal is consistent with the Group’s long-term strategy to maximise growth and profitability by focusing on infrastructure
projects financing and to carry out the functions of a development bank focusing on maritime, advanced manufacturing
industries, high technology and export oriented industries.
The disposal of the subsidiary is due to be completed on 31 March 2008 and as at 31 December 2007, final negotiations for the
sale are in progress. As at 31 December 2007, the assets and liabilities of SME Bank have been presented on the consolidated
balance sheet as a disposal group held for sale and results from this subsidiary is presented separately on the consolidated income
statement as discontinued operation.
(cont’d)
An analysis of the result of discontinued operation and the result recognised on the assets of disposal group is as follows:
Group
2006
RM'000
(Restated)
Interest income
Interest expense/finance cost
195,829
(59,578)
193,319
(64,086)
Net interest income
Net non-interest income
136,251
72,574
129,233
70,339
Net income
Administration and operating expenses
208,825
(123,456)
199,572
(128,242)
Operating profit
Loan and financing loss and provision
85,369
(29,097)
71,330
(386,581)
Loss on disposal of subsidiaries
Share of results of associated companies
56,272
–
8,370
(315,251)
(20,231)
42,579
Profit/(loss) before taxation
Tax expense
64,642
(1,751)
(292,903)
(25,183)
Profit/(loss) after taxation
62,891
(318,086)
Annual Report 2007
2007
RM'000
Group
Directors' remuneration:
- fees
- other emoluments
Auditors' remuneration:
- statutory audit
Rental of premises
Depreciation of property, plant and equipment
Gain on disposal of property, plant and equipment
2007
RM'000
2006
RM'000
877
–
810
47
243
4,628
9,762
90
217
6,086
27,723
185
The cash flows attributed to the discontinued operations are as follows:
Group
2007
RM'000
2006
RM'000
Operating cash flows
Investing cash flows
Financing cash flows
(934,352)
(133,028)
364,042
632,960
(18,872)
541,101
Total cash flows
(703,338)
1,155,189
Bank Pembangunan
163
The following amounts have been included in arriving at loss before tax of discontinued operation:
31 December 2007
(cont’d)
The major classes of assets and liabilities of SME Bank classified as held for sale on the consolidated balance sheet as at
31 December 2007 are as follows:
Carrying
amounts
as at
31.12.2007
RM'000
Annual Report 2007
ASSETS
Bank Pembangunan
164
Deposits and placements with financial institutions
Other assets
Interest in associates
Prepaid land leases
875,559
543,349
192,936
2,627,281
117,866
59,355
142,966
31,432
Assets of disposal group classified as held for sale
4,590,744
LIABILITIES
Other liabilities
Long term loans
Government funds
10,000
99,992
2,775,194
365,933
Liabilities directly associated with assets classified as held for sale
3,251,119
The cost of investments in SME Bank on the Bank’s balance sheet as at 31 December 2007 is RM908,274,500.
40. FINANCIAL INSTRUMENTS
Financial risk management objectives and policies
The Group’s financial risk management policies seek to enhance shareholder value. The Group focuses on the enterprise wide risk
exposure, which include credit, market, liquidity and operation risk and seeks to minimise potential adverse effects on the
financial performance of the Group.
As part of the Group’s strategy to integrate the management and control of risks across the various risk segments, a dedicated
function known as the Group Risk Management was established.
Financial risks management is carried out through risk assessment and reviews, internal control systems and adhered to Group
financial risk management policies, which are reported to and approved by the Board of Directors. The Board also approves the
treasury policies, which cover the management of these risks.
The main areas of financial risks faced by the Group are set out as follows:
Credit risk
Credit risk is the potential loss arising from customers or counterparties failing to meet their financial contractual obligations.
Management of credit risk is principally through lending directions and policies, which are instituted based on prevailing business
and economic conditions. Credit processes are also structured to ensure adherence of credit policies and to establish impartiality
in loan origination, approval, documentation, disbursement and settlement.
The Group Risk Management, is primarily involved in managing, enhancing asset quality, reviews concentration limits, according
to various categories such as customer, economic segment and product types and monitors credit portfolio risk. Industry risk is
also evaluated and monitored as dynamic changes in the economic environment has a direct impact on the Bank’s assets quality.
40. FINANCIAL INSTRUMENTS
Credit risk
(cont’d)
(cont’d)
The internal credit risk rating system is enhanced to better measure the credit worthiness of each customer. The primary
objectives are to provide a consistent approach in risk grading of the Group’s borrowers and to measure the risk of default by
borrowers objectively.
Internal single customer limit are regularly monitored to minimise the risk of over-concentration. The overall credit risk
management is subjected to an ongoing process for reviewing and enhancement.
Credit reviews on loan applications before being approved by the approving authorities are conducted. Various Credit Committee
have been established to review all loans to be submitted for the approval of the respective Board of Directors of the Bank and
subsidiaries. The respective credit committees themselves have approving authority up to a specified limit.
Foreign Currency Risk
The Group is exposed to foreign currency risk as a result of its borrowings made in currencies other than Ringgit Malaysia. The
Group’s policy in managing its exposure to foreign currency risks is by hedging through forward contract deals.
The Group manages its liquidity requirement on a day-to-day basis to ensure that funds are readily available for its operational
needs, withdrawals of deposits and repayments to fund providers. The Group may raise funds locally and globally either through
government-to-government arrangements or direct negotiations. Other sources of funding through the capital market are being
explored on an on-going basis to ensure a diversity of funding source.
Operational Risk
Operational risk, which inherent in all business activities, is the risk of loss resulting from inadequate or failed internal processes,
people and systems, or from external events.
Operational Risk Management (ORM) takes place in a day-to-day basis at each business unit level. The Bank mitigates its
operational risk by having comprehensive internal controls, system and procedures, which are reviewed regularly and subjected
to periodical audits by Internal Auditors.
To further enhance the overall risk management, the Bank had started the Business Continuity Plan (BCP) project in 2007. The
BCP program is expected to complete in 2008. Meanwhile, an interim BCP measures are in place.
Interest Rate Risks
The Group may be exposed to a loss in earnings due to the interest rates structure of the balance sheet arising from interest rates
and yield curves changes. The sensitivity to interest rates arises from the mismatches in the reprising rates, cash flows and other
characteristic of the assets and their corresponding liability funding. The Group manages its interest rate risk exposure through
the use of fixed/floating rate debts and financial instruments.
165
Bank Pembangunan
Liquidity risk is the risk that an enterprise will encounter difficulty in raising funds to meet its current and future payment
obligations associated with financial obligations when they fall due. The liquidity and cash flow risks are managed by maintaining
a diversity of funding sources and spreading debt repayments over a range of maturities.
Annual Report 2007
Liquidity Risk
166
Annual Report 2007
2,519,549
Total Assets
Deposits and placements of banks and other
Other liabilities
Liabilities and shareholder's funds
50,037
2,853
562,078
–
–
–
–
–
–
–
–
–
1,521,690
–
–
–
–
–
–
–
1,265,644
–
–
1,790,327
5,000
–
1,309,928
23,544
671,416
997,859
–
–
60,718
2,113,659
1,960,430
30,171
118,523
1,635,414
–
–
–
–
–
–
–
28
176,294
–
114,066
–
7,639,184
902,085
173,557
6,563,542
–
–
–
–
–
–
–
–
–
–
–
–
8,228,054
656,507
327,709
7,243,838
–
–
–
–
–
–
–
–
–
–
129,505
–
6,407,114
31,824
–
–
389,552
463,092
847,783
4,133
19,171
42,698
4,590,744
18,117
–
<--------------------------------- Non-trading book --------------------------------->
Up to 1
>1 - 3
>3 - 12
>1 - 5
Over 5 Non-interest
month
months
months
years
years
sensitive
RM’000
RM’000
RM’000
RM’000
RM’000
RM’000
Available-for-sale
Held-to-maturity
Other assets
Investment in associates
Prepaid land lease
Deferred tax assets
Assets
2007
Group
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Trading
books
RM’000
5,000
304,289
5,169,630
28,064,259
1,670,624
622,642
17,526,562
389,552
463,092
847,783
4,133
19,171
42,698
4,590,744
1,039,548
847,710
Total
RM'00
3.63
–
3.63
–
5.57
1.90
6.98
–
–
–
–
–
–
–
3.62
3.58
Effective
interest
rate
%
The table below summarises the Group’s and Bank’s exposure to interest rate risk. The table indicates effective average interest rates at the balance sheet date and the periods in
which the financial instruments reprice or mature, whichever is earlier.
41. INTEREST RATE RISKS
Bank Pembangunan
31 December 2007
(cont’d)
(cont’d)
(cont’d)
1,887,367
632,182
–
632,182
On-balance sheet interest sensitivity gap
Off-balance sheet interest sensitivity gap*
Total interest sensitivity gap
–
–
3,423,982
–
–
3,423,982
–
30,230
1,219,375
–
–
Bank Pembangunan
53,149 (1,457,683)
44,284 (1,463,552)
8,865
5,869
1,265,644
–
–
1,265,644
–
–
1,887,367
–
–
–
–
–
92,040
–
–
(4,124,164)
–
(4,124,164)
9,278,996
–
–
9,278,996
1,676,992
–
–
1,676,992
5,962,192 (1,050,942)
(14,734)
–
5,947,458 (1,050,942)
Annual Report 2007
10,531,278
–
–
6,257,036
190,993
4,083,249
3,251,119
1,788,400
7,490,596
–
–
200,000
1,362,926
–
–
–
–
606,291
96,334
<--------------------------------- Non-trading book --------------------------------->
Up to 1
>1 - 3
>3 - 12
>1 - 5
Over 5 Non-interest
month
months
months
years
years
sensitive
RM’000
RM’000
RM’000
RM’000
RM’000
RM’000
Total Liabilities and Shareholders’ Equity
Shareholders’ equity
Minority interests
Total liabilities
Long term loans
Deferred income
Liabilities directly associated with assets
classified as held for sale
2007
Group
167
–
–
–
–
–
–
–
–
–
–
–
–
Trading
books
RM’000
–
–
–
28,064,259
6,257,036
190,993
21,616,230
3,251,119
2,018,630
10,164,937
606,291
96,334
Total
RM'00
–
–
–
–
–
–
–
–
6.71
5.05
–
–
Effective
interest
rate
%
Other liabilities
Total Assets
Available-for-sale
Held-to-maturity
Other assets
Investment in subsidiaries
Prepaid land lease
Deferred tax assets
Assets
2006
(cont’d)
Annual Report 2007
1,900,837
–
–
–
1,105,413
–
–
–
1,744,633
153,296
–
565,644
–
–
–
–
–
–
–
–
–
743,450
–
–
–
–
–
–
–
2,915,760
631,559
394,134
2,172,310
–
–
60,609
30,230
1,832,861
2,246,159
43
–
1,849,278
–
–
–
–
–
–
–
–
396,838
–
204,976
200,000
–
8,817,508
671,496
409,323
7,476,415
–
–
–
–
–
–
–
–
260,274
–
–
1,817,434
–
8,084,685
610,954
34,854
7,438,877
–
–
–
–
–
–
–
–
–
163,681
–
–
2,971,163
36,422
–
–
1,181,802
–
453,339
1,123,739
33,951
14,933
49,536
77,441
–
<--------------------------------- Non-trading book --------------------------------->
Up to 1
>1 - 3
>3 - 12
>1 - 5
Over 5 Non-interest
month
months
months
years
years
sensitive
RM’000
RM’000
RM’000
RM’000
RM’000
RM’000
168
Group
Bank Pembangunan
–
–
–
–
-
–
–
–
–
–
–
–
–
–
–
–
–
Trading
books
RM’000
–
429,266
2,047,664
4,839,111
26,779,908
1,472,211
444,177
18,073,664
1,181,802
–
453,339
1,123,739
33,951
14,933
49,536
2,881,310
1,051,246
Total
RM'00
–
–
–
–
–
4.01
4.59
6.04
–
–
–
–
–
–
–
3.45
3.38
Effective
interest
rate
%
31 December 2007
(cont’d)
(cont’d)
1,670,688
–
1,670,688
–
–
1,245,072
139,659
–
–
–
1,245,072
(cont’d)
(1,036,971)
(1,040,195)
3,224
3,286,354
–
–
3,286,354
1,362,654
–
–
–
Bank Pembangunan
(158,648)
(158,648)
–
1,903,281
–
–
1,903,281
2,444
–
–
–
10,418,056
–
–
10,418,056
(2,333,371)
–
(2,333,371)
2,976,128
–
–
2,976,128
5,841,380
(3,224)
5,838,156
Annual Report 2007
8,600,622
–
–
–
2,571,152
–
–
–
(3,979,854)
(3,979,854)
–
6,951,017
5,558,881
195,504
1,196,632
–
535,289
378,402
119,260
<--------------------------------- Non-trading book --------------------------------->
Up to 1
>1 - 3
>3 - 12
>1 - 5
Over 5 Non-interest
month
months
months
years
years
sensitive
RM’000
RM’000
RM’000
RM’000
RM’000
RM’000
Minority interests
Total liabilities
Long term loans
Government fund
Deferred income
2006
Group
169
–
–
–
–
–
–
–
–
–
–
–
Trading
books
RM’000
–
–
–
26,779,908
5,558,881
195,504
21,025,523
12,676,531
535,289
378,402
119,260
Total
RM'00
–
–
–
–
–
–
–
4.28
–
–
–
Effective
interest
rate
%
50,037
5,329
562,044
–
–
–
–
–
–
–
–
–
–
1,478,622
–
–
–
–
–
–
–
–
2,440,980
Total Assets
Other liabilities
1,265,644
–
–
–
1,780,327
5,000
–
–
640,954
23,544
–
962,358
–
Annual Report 2007
–
–
–
2,123,659
1,749,112
30,171
118,523
1,427,975
–
–
–
–
–
–
–
–
–
172,443
–
–
200,000
–
7,594,356
1,003,679
166,340
6,424,337
–
–
–
–
–
–
–
–
–
–
–
1,788,400
–
8,429,479
554,913
327,709
7,546,857
–
–
–
–
–
–
–
–
–
–
–
194,767
–
–
2,456,130
27,626
–
–
426,298
861,726
124,301
26,853
4,133
40,615
32,594
908,274
3,710
–
<--------------------------------- Non-trading book --------------------------------->
Up to 1
>1 - 3
>3 - 12
>1 - 5
Over 5 Non-interest
month
months
months
years
years
sensitive
RM’000
RM’000
RM’000
RM’000
RM’000
RM’000
Available-for-sale
Held-to-maturity
Other assets
Prepaid land lease
Deferred tax assets
Assets
2007
(cont’d)
170
Bank
Bank Pembangunan
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Trading
books
RM’000
5,000
194,767
1,988,400
5,169,630
23,311,011
1,666,426
617,901
17,439,835
426,298
861,726
124,301
26,853
4,133
40,615
32,594
908,274
989,612
172,443
Total
RM'00
3.63
–
6.53
3.63
–
5.57
1.90
6.95
–
–
–
–
–
–
–
–
3.63
3.63
Effective
interest
rate
%
31 December 2007
(cont’d)
(cont’d)
563,613
–
563,613
–
–
1,877,367
92,040
–
–
1,877,367
(cont’d)
3,343,034
–
–
3,343,034
1,219,375
–
–
Bank Pembangunan
(624,690) (1,585,057)
(624,690) (1,593,922)
–
8,865
1,265,644
–
–
1,265,644
–
–
–
8,888,238
–
–
8,888,238
(458,759)
(14,734)
(473,493)
1,516,236
–
–
1,516,236
6,078,120
5,869
6,083,989
Annual Report 2007
7,099,838
–
–
1,316,236
–
(3,964,362)
(3,964,362)
–
6,420,492
5,523,100
–
897,392
–
606,291
96,334
<--------------------------------- Non-trading book --------------------------------->
Up to 1
>1 - 3
>3 - 12
>1 - 5
Over 5 Non-interest
month
months
months
years
years
sensitive
RM’000
RM’000
RM’000
RM’000
RM’000
RM’000
Minority interests
Total liabilities
Long term loans
Deferred income
2007
Bank
171
–
–
–
–
–
–
–
–
–
–
Trading
books
RM’000
–
–
–
23,311,011
5,523,100
–
17,787,911
9,727,489
606,291
96,334
Total
RM'00
–
–
–
–
–
–
–
5.37
–
–
Effective
interest
rate
%
1,912,328
Total Assets
Other liabilities
1,105,413
–
–
1,221,609
–
–
690,719
–
–
–
–
–
–
–
Annual Report 2007
1,900,837
–
–
659,028
–
–
153,296
505,732
–
–
–
–
–
–
–
1,832,861
–
–
2,027,937
–
365,818
40,043
1,622,076
–
–
–
–
–
–
–
–
–
200,000
7,285,264
–
260,274
980,260
6,044,730
–
–
–
–
–
–
–
–
–
1,787,438
7,930,568
–
–
645,808
7,284,760
–
–
–
–
–
–
–
–
289,999
–
2,689,513
3,857
–
36,422
–
637,490
1,754,353
145,496
31,168
4,242
31,853
44,632
<--------------------------------- Non-trading book --------------------------------->
Up to 1
>1 - 3
>3 - 12
>1 - 5
Over 5 Non-interest
month
months
months
years
years
sensitive
RM’000
RM’000
RM’000
RM’000
RM’000
RM’000
Other assets
Prepaid land lease
Deferred tax assets
Assets
2006
(cont’d)
172
Bank
Bank Pembangunan
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Trading
books
RM’000
4,839,111
289,999
1,987,438
22,504,638
1,225,466
626,092
1,855,829
16,148,017
637,490
1,754,353
145,496
31,168
4,242
31,853
44,632
Total
RM'00
3.75
–
5.56
–
3.61
4.00
5.81
6.04
–
–
–
–
–
–
–
Effective
interest
rate
%
31 December 2007
(cont’d)
(cont’d)
717,026
(1,241,809)
(1,241,809)
–
1,900,837
–
–
1,900,837
–
–
–
(239,844)
(243,068)
3,224
2,271,005
–
–
2,271,005
438,144
–
–
5,638,419
–
–
7,425,857
–
–
7,425,857
504,711
–
504,711
3,425,179
–
–
3,625,179
–
–
3,625,179
3,660,085
(3,224)
3,656,861
(3,396,945)
(3,396,945)
–
6,086,458
5,141,910
–
944,548
–
535,289
119,260
–
–
–
–
–
–
–
–
–
–
Trading
books
RM’000
–
–
–
22,504,638
5,141,910
–
17,362,728
9,591,631
535,289
119,260
Total
RM'00
–
–
–
–
–
–
–
4.77
–
–
Effective
interest
rate
%
Bank Pembangunan
Annual Report 2007
* The Bank entered into interest rate swaps with various commercial banks on RM800 million of RM997 million borrowings from Employees Provident Fund which carries fixed rate
of 8% per annum. The interest rate swaps is over the tenure of the loans and entails a change in the interest rate profile from fixed rate to floating rate.
717,026
–
–
–
1,195,302
89,889
–
–
1,195,302
(cont’d)
<--------------------------------- Non-trading book --------------------------------->
Up to 1
>1 - 3
>3 - 12
>1 - 5
Over 5 Non-interest
month
months
months
years
years
sensitive
RM’000
RM’000
RM’000
RM’000
RM’000
RM’000
Minority interests
Total liabilities
Long term loans
Deferred income
2006
Bank
173
31 December 2007
42. FAIR VALUES
Financial instruments comprise financial assets, financial liabilities and also off-balance sheet derivatives. The fair value of a
financial instrument is the amount at which the instrument could be exchanged or settled between knowledgeable and willing
parties in an arm’s length transaction, other than in a forced or liquidation sale. The information presented herein represents best
estimates of fair values of financial instruments at the balance sheet date.
Loans, advances and financing to customers, where such market prices are not available, various methodologies have been used
to estimate the approximate fair values of such instruments. These methodologies are significantly affected by the assumptions
used and judgements made regarding risk characteristics of various financial instruments, discount rates, estimates of future cash
flows, future expected loss experience and other factors. Changes in the assumptions could significantly affect these estimates
and the resulting fair value estimates. Therefore, for a significant portion of the Group's and the Bank’s financial instruments,
including loans, advances and financing to customers, their respective fair value estimates do not purport to represent, nor
should they be construed to represent, the amounts that the Group and the Bank could realise in a sale transaction at the balance
sheet date. The fair value information presented herein should also in no way be construed as representative of the underlying
value of the Group and the Bank as a going concern.
Annual Report 2007
The on-balance sheet financial assets and financial liabilities of the Group and the Bank whose fair values are required to be
disclosed in accordance with FRS132 comprise all its assets and liabilities with the exception of investments in subsidiaries,
investments in associated companies, property, plant and equipment and provision for current and deferred taxation.
Bank Pembangunan
174
The estimated fair values of those on-balance sheet financial assets and financial liabilities as at the balance sheet date
approximate their carrying amounts as shown in the balance sheets, except for the following financial assets and liabilities:
2007
2006
Carrying
Value
RM'000
Carrying
Fair Value
RM'000
Carrying
Value
RM'000
Carrying
Fair Value
RM'000
Financial Assets
Securities Portfolio:
–
17,526,562
–
17,322,890
1,900,560
18,073,664
2,001,611
18,050,019
Financial liabilities
Long term loans*
5,174,630
2,018,630
10,164,937
5,174,630
1,783,907
9,049,681
4,839,111
2,047,664
12,676,531
4,839,111
1,751,472
11,124,135
Carrying
Value
RM'000
Carrying
Fair Value
RM'000
Carrying
Value
RM'000
Carrying
Fair Value
RM'000
Financial Assets
Securities Portfolio:
- securities held-to-maturity
617,901
17,439,835
587,683
17,262,569
–
1,854,659
16,037,569
–
1,935,972
15,985,778
Financial liabilities
Long term loans*
5,174,630
1,988,400
9,727,489
5,174,630
1,783,907
8,612,234
4,839,111
1,987,438
9,591,631
4,839,111
1,693,332
8,586,541
Group
2007
Bank
2006
* As at 31 December 2006, the fair values of unrecognised financial instruments comprising of interest rate swaps used to hedge
the long term loans are included in the fair values of longterm loans.
42. FAIR VALUES
(cont’d)
The methods and assumptions used in estimating the fair values of other financial instruments are as follows:
(a)
Cash and Short-term Funds
The carrying amount approximates fair value due to the relatively short maturity of the financial instruments.
(b)
Deposits and Placements with Financial Institutions
The fair values of those financial instruments with remaining maturities of less than one year approximate their carrying
values due to their relatively short maturities. For those financial instruments with maturities of more than one year, the
fair values are estimated based on discounted cash flows using applicable prevailing market rates of similar remaining
maturities at the balance sheet date.
(c)
Securities
Fair values of securities that are actively traded is determined by quoted bid prices. For non-actively traded securities,
independent broker quotations are obtained. Fair values of equity securities are estimated using a number of methods,
including net tangible assets.
The fair values of variable and fixed rate loans with remaining maturity of less than one year are estimated to approximate
their carrying values. For fixed rate loans, variable rate loans and Islamic financing with maturities of more than one year,
the fair values are estimated based on expected future cash flows of contractual instalment payments and discounted at
prevailing rates at balance sheet date offered for similar loans to new borrowers with similar credit profiles, where
applicable. In respect of Government infrastructure loans, the fair values are estimated after taking into account the
Government compensation received on these loans. For non-performing loans, the fair values are deemed to approximate
the carrying values, net of interest in suspense and specific allowance for bad and doubtful debts and financing.
(e)
Deposits from Customers, Deposits and Placements of Banks and Other Financial Institutions
The fair values of deposits payable on demand and deposits and placements with maturities of less than one year
approximate their carrying values due to the relatively short maturity of these instruments. The fair values of fixed deposits
and placements with remaining maturities of more than one year are estimated based on discounted cash flows using
applicable rates currently offered for deposits and placements with similar remaining maturities. The fair value of Islamic
deposits are estimated to approximate their carrying values as the profit rates are determined at the end of their holding
periods based on the actual profits generated from the assets invested.
(f)
Redeemable Guaranteed Notes
The fair values are estimated based on expected future cash flows of coupon and face value payments and discounted at
their quoted bid prices at balance sheet date or prevailing rates at balance sheet date obtained for similar notes with similar
maturities, where applicable.
(g)
Long Term Loans
The fair values are estimated based on expected future cash flows of contractual instalment payments and discounted at
prevailing rates at balance sheet date obtained for similar loans with similar maturities, where applicable.
(h)
Derivative Financial Instruments
Fair values of derivative instruments are normally zero or negligible at inception and the subsequent change in value is
favourable (assets) or unfavourable (liabilities) as a result of fluctuations in market interest rates or foreign exchange rates
relative to their terms.
The fair values of the Group's and the Bank's derivative instruments are estimated by reference to quoted market prices.
Internal models are used where no market price is available.
Annual Report 2007
Loans, Advances and Financing
175
Bank Pembangunan
(d)
31 December 2007
43. PRIOR YEAR ADJUSTMENTS AND EFFECTS OF CHANGES IN ACCOUNTING POLICIES
(a)
Recognition of interest on multi-tiered loans
The Group and the Bank restated the opening balances of retained profits of the prior and current years to recognise the
effect of recognising interest income and profit on multitiered loans, advances and financing based on the effective interest
method. The effects on retained profits, statutory reserve and current year's net profit are disclosed in Note (e) below.
(b)
Partial adoption of guidelines on Financing Reporting for Licensed Institutions ("BNM/GP8")
During the financial year, the Group and the Bank voluntarily adopted BNM/GP8 which became effective from period
beginning 1 January 2005. The adoption of the revised BNM/GP8 has resulted in changes in accounting policies as disclosed
in Note 2.3(c) and Note 2.2(j)(vi) to the financial statements.
(i)
The holdings of the securities portfolio of the Group and the Bank are segregated based on the categories and
valuation as disclosed in Note 2.2(j)(vii) to the financial statements.
Annual Report 2007
The changes in accounting policies have been accounted for prospectively and the effects of the changes are as follows:
Group
2007
RM'000
Bank
2007
RM'000
At 1 January, as previously stated
Effect of change in accounting policies on securities portfolio Note 43(b)(i)
–
65,947
–
51,142
At 1 January, as restated
65,947
51,142
Effects on net unrealised reserves on available-for-sale securities
176
Bank Pembangunan
(ii)
Derivatives
Derivatives are now valued at fair value and are carried as assets when the fair value is positive and as liabilities when
the fair value is negative. Any gain or loss arising from a change in the fair value of the derivatives is recognised in
the income statement.
The changes in accounting policies have been accounted for prospectively and the effects of the changes are disclosed
in Note (e) below.
(c)
The Group and the Bank reclassified leasehold land from property, plant and equipment to prepaid land lease following the
adoption of FRS 117.
(d)
The Group and the Bank reclassified certain captions in the income statement to properly reflect income and expenses on grant.
(e)
The effects of recognising interest income and profit on multi-tiered loans, advances and financing based on the effective
interest method and partial adoption of BNM/GP8 on derivatives are as follows:
Group
Effects on retained profits:
Note 43(a)
Note 43(b)(ii)
Effects on statutory reserve:
Note 43(a)
Bank
2007
RM'000
2006
RM'000
2007
RM'000
2006
RM'000
1,983,095
2,030,079
1,548,730
1,414,650
52,236
18,572
18,335
–
52,236
18,572
18,335
–
2,053,903
2,048,414
1,619,538
1,432,985
409,983
195,903
409,983
195,903
52,237
18,336
52,237
18,336
462,220
214,239
462,220
214,239
43. PRIOR YEAR ADJUSTMENTS AND EFFECTS OF CHANGES IN ACCOUNTING POLICIES
Effects on net profit for the year:
Net profit before adjustments
Effects of:
Note 43 (a)
Note 43(b)(ii)
Group
2007
RM'000
Bank
2007
RM'000
856,627
405,387
6,890
(3,752)
859,765
6,890
(3,752)
408,525
Group/Bank
Balance Sheets:
Other liabilities
Reserves
Income Statements:
Interest income
Non-interest income
Tax expense
Note 43(a)
RM'000
Note 43(c)
RM'000
Note 43(d)
RM'000
Total
RM'000
110,448
5,975
104,473
–
–
–
–
–
–
110,448
5,975
104,473
72,095
–
–
4,293
–
–
–
31,390
31,390
–
72,095
31,390
31,390
4,293
–
–
(33,951)
33,951
–
–
(33,951)
33,951
–
–
–
–
Group
Balance Sheet:
Prepaid lease rental
Bank
Balance Sheet:
(4,242)
4,242
(4,242)
4,242
Annual Report 2007
The following table provides the summarised estimates of the extent to which each of the line items in the balance sheet
and income statements for the year ended 31 December 2006 is higher or lower that it would have been without the effect
of Note 43(a), 43(c) and 43(d):
Increase/(decrease)
177
Bank Pembangunan
(f)
(cont’d)
31 December 2007
44. COMPARATIVES
(i)
Restatement of comparatives:
Increase/(decrease)
Group
Balance Sheets:
Deposits and placement with
Other liabilities
Reserves
Previously
stated
RM'000
Note
43(a)
RM'000
Note
43(c)
RM'000
Note
43(d)
RM'000
Others*
RM'000
Restated
RM'000
2,875,258
–
–
–
6,052
2,881,310
1,060,303
17,963,216
1,157,690
–
426,296
2,375,684
–
110,448
–
–
5,975
104,473
–
–
(33,951)
33,951
–
–
–
–
–
–
–
–
(9,057)
–
–
–
(3,005)
–
1,051,246
18,073,664
1,123,739
33,951
429,266
2,480,157
1,184,132
628,969
440,467
105,339
78,231
72,095
–
–
–
4,293
–
–
–
–
–
–
31,390
31,390
–
–
–
–
–
(2,524)
(2,524)
1,256,227
660,359
471,857
102,815
80,000
1,216,409
–
–
–
9,057
1,225,466
635,149
16,037,569
587,490
35,410
–
234,024
1,958,713
–
110,448
–
–
–
5,975
104,473
–
–
–
(4,242)
4,242
–
–
–
–
–
–
–
–
–
(9,057)
–
50,000
–
–
50,000
–
626,092
16,148,017
637,490
31,168
4,242
289,999
2,063,186
980,964
337,645
81,242
52,727
72,095
–
–
4,293
–
–
–
–
–
31,390
31,390
–
–
–
–
–
1,053,059
369,035
112,632
57,020
Income Statements:
Annual Report 2007
Interest income
Non-interest income
Share of results of associates
Tax expense
Bank
178
Bank Pembangunan
Balance Sheets:
Deposits and placement with
Other assets
Other liabilities
Reserves
Income Statements:
Interest income
Non-interest income
Tax expense
* Reclassified to conform with current year's presentation.
(ii)
The comparatives have been audited by a firm of auditors other than Ernst & Young.
45. ISLAMIC BANKING BUSINESS
The state of affairs as at 31 December 2007 and results for the financial year ended on this date under the Islamic Banking
business of the Group included in the Group financial statements are summarised as follows:
Balance sheets as at 31 December
2006
RM'000
restated
2007
RM'000
2006
RM'000
restated
(a)
221,473
850,521
216,416
458,694
(b)
(c)
(d)
(e)
(k)
336
–
1,734,768
4,109
1,446,265
142,842
404,594
655,557
265,097
–
336
–
1,715,664
4,108
–
1,680
404,594
86,442
255,593
-
3,406,951
2,318,611
1,936,524
1,207,003
Other liabilities
(f)
Long term advances
Government fund
Islamic general fund
Liabilities directly associated with disposal group (k)
518,063
402,000
–
400,000
1,152,383
934,505
257,649
580,653
190,560
400,000
889,749
–
491,456
402,000
–
400,000
643,068
–
247,540
150,000
–
400,000
409,463
–
Total liabilities and Islamic banking funds
3,406,951
2,318,611
1,936,524
1,207,003
2,791,568
3,182,470
2,791,568
3,092,512
Assets
Cash and short-term funds
Deposits and placements with financial
institutions
Advances and financing
Other assets
Assets of disposal group
Total assets
Liabilities
(l)
Income statements for the financial year ended 31 December
Income from Islamic banking business
Profit expenses
(g)
95,051
(22,800)
95,334
(9,396)
91,244
(22,651)
18,998
(9,396)
Net income
Overhead expenses
(h)
72,251
(2,283)
85,938
(26,795)
68,593
(2,557)
9,602
(199)
Operating profit
Advances and financing loss and allowances
(i)
69,968
(16,786)
59,143
(76,583)
66,036
(30,418)
9,403
3,982
Profit/(loss) before taxation and Zakat
Taxation and Zakat
(j)
53,182
(2,013)
(17,440)
(1,372)
35,618
(2,013)
13,385
(1,322)
51,169
(18,812)
33,605
12,063
11,341
(63,240)
–
(44,428)
–
12,063
–
–
(730)
(63,240)
45,668
12,063
Profit/(loss) after taxation and Zakat
Discontinued Operation
Profit for the year from discontinued operations (k)
Accumulated losses brought forward
Accumulated losses carried forward
Annual Report 2007
Bank
2007
RM'000
179
Bank Pembangunan
Group
Note
31 December 2007
(cont’d)
Statement of changes for the financial year ended 31 December (cont’d)
Capital
funds
RM'000
Retained
profits
RM'000
Total
RM'000
Group
As at 1 January 2006
Net loss for the year
Allocation of fund from equity
555,564
–
397,400
(44,428)
(18,812)
–
511,136
(18,812)
397,400
As at 31 December 2006/1 January 2007, as restated
952,964
200,000
–
(63,240)
–
62,659
889,724
200,000
62,659
1,152,964
(581)
1,152,383
Bank
As at 1 January 2006
–
–
397,400
–
12,063
–
–
12,063
397,400
As at 31 December 2006/1 January 2007, as restated
397,400
–
200,000
12,063
33,605
–
409,463
33,605
200,000
As at 31 December 2007
597,400
45,668
643,068
2007
RM'000
2006
RM'000
restated
2007
RM'000
2006
RM'000
restated
53,182
11,341
(17,440)
–
35,618
–
13,385
–
30,416
21,269
30,269
(3,892)
–
736
–
(1,832)
59,573
332
–
–
–
–
–
–
Annual Report 2007
As at 31 December 2007
Bank Pembangunan
180
Cash flow statements for the financial year ended 31 December
Group
Bank
Cash flows from operating activities
Profit/(loss) before tax from:
Continuing operation
Discontinued operation
Adjustments for:
Allowance for doubtful debts
Allowance for doubtful debts no
longer required
Bad debts written off
Amortisation of premium less accretion of
discount of investment securities
(406)
406
(406)
406
Operating profit before working
capital changes
Changes in working capital:
Other assets
Other liabilities
Deposits & Placement with financial institutions
Cash and short term deposits of disposal group
247,442
340,747
(18,361)
(263,711)
(1,953,276)
(249,302)
231,966
223,722
–
(267,718)
251,658
245,871
1,345
–
(1,659,618)
(255,590)
247,585
(1,680)
–
(82,573)
Cash generated from operations
Zakat paid
(1,551,890)
(2,013)
976
(1,322)
(1,095,263)
(2,013)
(82,359)
(1,322)
Net cash used in from operating activities
(1,553,903)
(346)
(1,097,276)
(83,681)
95,269
62,308
65,481
9,899
(cont’d)
Cash flow statements for the financial year ended 31 December (cont’d)
Group
Bank
2007
RM'000
2006
RM'000
restated
2007
RM'000
2006
RM'000
restated
Proceed from government grants
Purchase of property, plant and equipment
Purchase on bond
Proceeds from sale of bonds and matured bonds
Net proceeds from long-term advances
301,556
(165,104)
–
405,000
–
183,403
200,000
–
(25)
(405,000)
–
400,000
306,201
397,400
–
(2)
–
405,000
–
250,000
200,000
–
(25)
(405,000)
–
400,000
150,000
397,400
Net cash generated from financing activity
924,855
698,576
854,998
542,375
2007
RM'000
2006
RM'000
restated
2007
RM'000
2006
RM'000
restated
(629,048)
850,521
698,230
152,291
(242,278)
458,694
458,694
–
221,473
850,521
216,416
458,694
Cash flows from financing activities
Bank
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
(A) Cash and Cash Equivalents
Cash and cash equivalents included in the cash flow statements comprise the following balance sheet amounts:
Group
Cash and short term funds
Bank
2007
RM'000
2006
RM'000
2007
RM'000
2006
RM'000
221,473
850,521
216,416
458,694
Notes to the financial statements for the financial year ended 31 December 2007
(a)
Cash and short-term funds
Group
Cash and bank balances with
Money at call and deposit placements
maturing within one months
(b)
Bank
2007
RM'000
2006
RM'000
restated
2007
RM'000
2006
RM'000
restated
5,435
32,060
378
1,477
216,038
818,461
216,038
457,217
221,473
850,521
216,416
458,694
2007
RM'000
2006
RM'000
restated
2007
RM'000
2006
RM'000
restated
336
142,842
336
1,680
Group
Licensed banks
181
Bank Pembangunan
Cash and cash equivalents (Note A)
Annual Report 2007
Group
Bank
31 December 2007
(c)
(cont’d)
Group
(d)
Bank
2007
RM'000
2006
RM'000
restated
2007
RM'000
2006
RM'000
restated
Unquoted securities:
-
405,000
-
405,000
Amortisation of premium less accretion
of discounts
-
(406)
-
(406)
-
404,594
-
404,594
2007
RM'000
2006
RM'000
restated
2007
RM'000
2006
RM'000
restated
877,350
58,079
40,300
–
–
1,268,220
–
–
–
–
245,144
53,689
(654,962)
49
488,459
–
99,542
3,974
29,703
130,663
175,641
53,063
15,205
1,476
–
66,294
(222,566)
559
814,947
58,079
40,300
–
–
1,268,220
–
–
–
–
245,144
53,689
(653,421)
49
99,179
–
43,440
–
–
46,914
–
–
–
–
–
50,188
(87,173)
49
1,887,869
–
842,013
–
1,827,007
–
152,597
–
Annual Report 2007
Group
Bank Pembangunan
182
Al-Bai Bithaman Ajil
Bai' Inah - BIN
Al-Ijarah
Bai’Murabahah
Bai’Dayn
Bai’Istisna
Ijarah Thummalbai’
Murabahah Dayn
Mali
Maluk
Ijarah Muntahia Bitamalik - IJM
Staff Loan
Unearned income
Late payment charges
AITAB
Allowance for bad and doubtful
Advances and financing:
- specific
- general
- income-in-suspense
Net advance and financing
(80,206)
(35,075)
(37,820)
Bank
(130,174)
(12,725)
(43,557)
1,734,768
(55,052)
(34,689)
(21,602)
(54,415)
(1,094)
(10,646)
655,557
1,715,664
86,442
2007
RM'000
2006
RM'000
restated
2007
RM'000
2006
RM'000
restated
1,371,272
363,496
453,471
202,086
1,352,228
363,436
86,442
–
The maturity structure of the advances and financing are as follows:
Group
Receivable after 12 months
Receivable within 12 months
Bank
Other assets
Group
Other receivables
2006
RM'000
restated
2007
RM'000
2006
RM'000
restated
4,109
265,097
4,108
255,593
2007
RM'000
2006
RM'000
restated
2007
RM'000
2006
RM'000
restated
893
4,117
513,053
1,403
40,135
216,111
5
4,117
487,334
1,327
4,117
242,096
518,063
257,649
491,456
247,540
2007
RM'000
2006
RM'000
restated
2007
RM'000
2006
RM'000
restated
16,640
2,660
332
–
–
47,087
–
8,579
–
–
–
1,020
11,479
6,511
25,097
–
2,760
63
897
2,222
7,239
–
2,121
297
159
366
5,718
11,348
13,576
2,660
332
–
–
47,087
–
8,579
–
–
–
1,020
11,479
6,511
67
–
1,201
–
–
298
–
–
–
–
–
366
5,718
11,348
94,308
58,287
91,244
18,998
–
11,840
–
–
743
25,207
–
–
95,051
95,334
91,244
18,998
Other liabilities
Group
Other payables
Accrued profit payable
Inter divisions
(g)
Bank
Income from Islamic Banking business
Group
Income from financing:
- Al-Bai Bithaman Ajil
- Bai' Inah - BIN
- Al-Ijarah
- Bai’Murabahah
- Bai’Dayn
- Bai’Istisna
- Ijarah Thummalbai’
- Ijarah Muntahia Bitamalik - IJM
- Murabahah Dayn
- Mali
- Maluk
Staff loan
Deposit placement with financial institution
Income from placements
with financial institutions:
- Mudharabah
Fee income:
- Other income
Bank
Annual Report 2007
(f)
Bank
2007
RM'000
183
Bank Pembangunan
(e)
(cont’d)
31 December 2007
(h)
(cont’d)
Overhead Expenses
Group
Staff costs
Administration and general expenses
Commitment fees
Bank
2007
RM'000
2006
RM'000
restated
2007
RM'000
2006
RM'000
restated
232
51
2,000
12,928
9,777
4,090
506
51
2,000
186
13
–
2,283
26,795
2,557
199
4,090
332
48,500
–
–
56,000
–
–
48,500
2006
RM'000
restated
2007
RM'000
2006
RM'000
restated
736
(2,329)
(12,186)
784
29,781
59,573
(505)
(1,832)
(3,589)
22,936
–
–
–
637
29,781
–
–
–
(4,192)
210
16,786
76,583
30,418
(3,982)
2007
RM'000
2006
RM'000
restated
2007
RM'000
2006
RM'000
restated
2,013
1,372
2,013
1,322
The above has been determined after charging amongst other items the following:
Finance cost
Shariah Committee's remuneration
(i)
–
–
56,000
Advances and financing loss and allowance
Annual Report 2007
Group
2007
RM'000
Bad debts and financing written off
Bad debts recovered
Allowance for doubtful debts no longer required
Specific allowance
General allowance
Bank Pembangunan
184
(j)
Bank
Taxation and zakat
Group
Zakat
(k)
Bank
Discontinued operations and disposal group classified as held for sale
An analysis of the result of discontinued operation and the result recognised on the assets of disposal group is as follows:
Group
2007
RM'000
2006
RM'000
(Restated)
Net income
Administration and operating expenses
62,814
(39,191)
73,161
(26,517)
Operating profit
Loan and financing loss and provision
23,623
(12,282)
46,644
(80,452)
Taxation and zakat
11,341
–
(33,808)
(50)
Profit after taxation
11,341
(33,858)
Discontinued operations and disposal group classified as held for sale (cont’d)
The following amounts have been included in arriving at loss before tax of discontinued operation:
Group
Finance cost
Depreciation of property, plant and equipment
Gain on disposal of a subsidiary
2007
RM'000
2006
RM'000
66
2,656
–
–
4,090
4
(24,757)
321
The cash flows attributed to the discontinued operations are as follows:
2006
RM'000
Operating cash flows
Investing cash flows
Financing cash flows
(190,953)
(167,739)
232,959
85,338
(2,747)
154,562
Total cash flows
(125,733)
237,153
The major classes of assets and liabilities of disposal group classified as held for sale as on consolidated balance sheet as at
31 December 2007 are as follows:
Carrying
amounts
as at
31.12.2007
RM'000
ASSETS
Other assets
Prepaid land leases
263,711
160,867
–
842,764
13,819
165,104
–
–
1,446,265
LIABILITIES
Other liabilities
Long term loans
Government funds
80,333
552,616
301,556
Liabilities directly associated with assets classified as held for sale
934,505
Annual Report 2007
Group
2007
RM'000
185
Bank Pembangunan
(k)
(cont’d)
31 December 2007
(l)
(cont’d)
Commitment and contingencies
Group
Disbursement of loans to industries
Commitment
Financing guarantee
Bank
RM'000
RM'000
restated
RM'000
RM'000
restated
2,791,568
–
–
3,092,512
67,927
22,031
2,791,568
–
–
3,092,512
–
–
2,791,568
3,182,470
2,791,568
3,092,512
(m) Comparatives
During the year, the Group and the Bank has presented the Bank's Islamic banking business for information purposes. The
comparative figures for the Group and the Bank have been restated to conform with current year's presentation.
Annual Report 2007
The summarised effects on balance sheet of the Group as at 31 December 2006 is as shown below:
Bank Pembangunan
186
Previously
stated
RM'000
Adjustment
RM'000
Restated
RM'000
Assets:
Cash and short-term fund
Other assets
391,827
200,509
–
569,115
9,458
458,694
(57,667)
404,594
86,442
255,639
850,521
142,842
404,594
655,557
265,097
Liabilities:
Other liabilities
Long term advances
Islamic general fund
75,554
430,653
–
474,163
182,095
150,000
400,000
415,586
257,649
580,653
400,000
889,749
Group
The summarised effects on income statement of the Group as at 31 December 2006 is shown below:
As
Previously
stated
RM'000
Adjustment
RM'000
As
restated
RM'000
49,863
45,471
95,334
Group
Income from Islamic banking business
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Assets 2007 - Bank Pembangunan Malaysia Berhad

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