malaysian plantations berhad - Alliance Financial Group Berhad

Transcription

MALAYSIAN PLANTATIONS BERHAD (6627-X)
annual report 2007 laporan tahunan
s o a r i n g
h i g h e r
s u r g i n g
f u r t h e r
MALAYSIAN PLANTATIONS BERHAD
(6627-X)
A n n u a l R e p o r t 2007 L a p o r a n T a h u n a n
Corporate Profile
Malaysian Plantations Berhad (“MPlant” or “the
Company”) was incorporated in Malaysia on 7 April
1966 with the name of Malayan Plantations Limited.
The Company changed its name to Malayan
Plantations Sdn. Berhad on 15 April 1966 and
subsequently to Malaysian Plantations Sendirian
Berhad on 24 April 1979. On 8 May 1979, the
Company converted its status to a public company
limited by shares and assumed its present name.
MPlant was listed on the Main Board of Bursa
Malaysia Securities Berhad (“Bursa Securities”) on 6
July 1979.
Today, the MPlant Group is principally involved in
the provision of financial services through its
principal subsidiary, Alliance Bank Malaysia Berhad
(“Alliance Bank”).
Alliance Bank, which was accorded anchor bank
status under the domestic banking consolidation
programme initiated by Bank Negara Malaysia in
year 2000, together with its subsidiaries, Alliance
Investment Bank Berhad (formerly known as Alliance
Merchant Bank Berhad) (“Alliance Investment
Bank”), Alliance Investment Management Berhad
(formerly known as Alliance Unit Trust Management
Berhad) (“Alliance Investment Management”)
provide a wide range of financial products and
services
in
commercial
banking,
financing,
investment banking, stockbroking, unit trust
management, investment advisory and other related
financial services.
A N N U A L
R E P O R T
2 0 0 7
CONTENTS
Corporate Information
2
Group Corporate Structure
3
Group Financial Highlights
4
Board of Directors
5
Group Management
11
Chairman’s Statement (Penyata Pengerusi)
15
Corporate Governance Statement
25
Additional Information
32
Statement on Internal Control
34
Audit Committee Report
36
Statement of Board of Directors’ Responsibilities
40
Financial Statements
41
List of Properties
153
Group Directory
156
Analysis of Shareholdings
161
Substantial Shareholders
163
Directors’ Shareholdings
164
Notice of Annual General Meeting
165
Statement Accompanying Notice of Annual General Meeting
166
Form of Proxy
A N N U A L
R E P O R T
2 0 0 7
corporate information
DIRECTORS
Datuk Oh Chong Peng
Chairman, Independent Non-Executive Director
Dato’ Thomas Mun Lung Lee
Tee Kim Chan
Independent Non-Executive Director
Stephen Geh Sim Whye
Tan Yuen Fah
Phoon Siew Heng
Non-Independent Non-Executive Director
Megat Dziauddin bin Megat Mahmud
Kung Beng Hong
Datuk Bridget Anne Chin Hung Yee
GROUP COMPANY SECRETARY
REGISTRAR
PRINCIPAL BANKER
Lee Wei Yen (MAICSA 7001798)
Shareworks Sdn Bhd
No. 23, Jalan Sri Hartamas 7
Sri Hartamas
50480 Kuala Lumpur, Malaysia
Alliance Bank Malaysia Berhad
REGISTERED OFFICE AND
PRINCIPAL PLACE OF BUSINESS
3rd Floor, Menara Multi-Purpose
Capital Square
No. 8 Jalan Munshi Abdullah
Tel : 03–6201 1120
Fax : 03–6201 3121
Tel
Fax
Website
E-mail
Ernst & Young
Chartered Accountants
Level 23A, Menara Milenium
Jalan Damanlela
Pusat Bandar Damansara
:
:
:
:
03–2694 4888
03–2694 6200
www.mplant.com.my
[email protected]
AUDITORS
2
M A L A Y S I A N
P L A N T A T I O N S
B E R H A D
( 6 6 2 7 - X )
BURSA MALAYSIA STOCK NAME/CODE
MPLANT/2488
INTERNATIONAL SECURITIES
IDENTIFICATION NUMBER (ISIN)
MPLANT
MYL2488OO004
group corporate structure
as at 30 June 2007
MALAYSIAN PLANTATIONS BERHAD
100%
ALLIANCE BANK
MALAYSIA BERHAD
100%
100%
ALLIANCE INVESTMENT
BANK BERHAD
Syabas Sutra
Sdn Bhd*
(formerly known as
Alliance Merchant Bank Berhad)
100%
Alliance Islamic Bank
Berhad
100%
100%
Alliance Research
Sdn Bhd (formerly known as
ABG Capital
Management Sdn Bhd
KLCity Research Sdn Bhd)
100%
Alliance Direct
Marketing Sdn Bhd
100%
Alliance Merchant
Nominees (Tempatan) Sdn Bhd*
100%
AllianceGroup Nominees
(Tempatan) Sdn Bhd
100%
Alliance Merchant
Nominees (Asing) Sdn Bhd*
100%
AllianceGroup Nominees
(Asing) Sdn Bhd
100%
Rothputra Nominees
(Tempatan) Sdn Bhd*
100%
AllianceGroup
Properties Sdn Bhd
100%
Rothputra Nominees
(Asing) Sdn Bhd*
100%
Alliance International
Berhad
100%
Alliance Investment
Futures Sdn Bhd
100%
Kota Indrapura
Development
Corporation Berhad
100%
Pridunia Sdn Bhd
100%
Setiu Sea Resort
Sdn Bhd
100%
Matrix Core Options
& Futures Sdn Bhd
100%
Hijauan Setiu
Sdn Bhd
100%
Setiu Integrated
Resort Sdn Bhd
100%
Alliance Trustee
Berhad #
(formerly known as KLCS Futures Sdn Bhd)
100%
Nominees (Tempatan)
Sdn Bhd
100%
KLCity Ventures Sdn Bhd
100%
Nominees (Asing) Sdn Bhd
100%
Alliance Asset
Management (L) Limited
100%
AFB Nominees
(Tempatan) Sdn Bhd
100%
KLCS Sdn Bhd
70%
Alliance Investment
Management Berhad
100%
KLCS Asset Management
Sdn Bhd
100%
AIBB Nominees (Tempatan) Sdn Bhd
100%
AIBB Nominees (Asing) Sdn Bhd
94.94%
KLCity Unit Trust Berhad
70%
Alliance Capital Asset
Management Sdn Bhd*
(formerly known as Kuala Lumpur
City Securities Sdn Bhd)
(formerly known as Alliance Unit Trust
Management Berhad)
*
(formerly known as Kuala Lumpur City
Nominees (Tempatan) Sdn Bhd)
(formerly known as Kuala Lumpur City
Nominees (Asing) Sdn Bhd)
Under members’ voluntary liquidation
# The shares are held through Malaysian Plantations Berhad (20%), Alliance Bank
Malaysia Berhad (20%), Alliance Investment Bank Berhad (20%), Hijauan Setiu Sdn Bhd
(20%) and Setiu Integrated Resort Sdn Bhd (20%)
3
A N N U A L
R E P O R T
2 0 0 7
group financial highlights
2007
2006
2005
2004
2003
Profit/(loss) before tax
RM’000
150,812
(283,119)
297,418
277,038
209,531
Profit/(loss) for the year
RM’000
107,363
(201,424)
213,971
202,467
170,345
Total assets
RM’000
26,399,289
23,581,197
23,659,816
23,312,763
20,197,136
Gross loans and advances
RM’000
14,360,311
14,581,170
15,240,945
15,740,344
14,538,476
Deposits from customers
RM’000
19,111,063
17,666,221
16,916,930
17,059,290
15,217,115
Shareholders’ equity
RM’000
1,942,722
1,742,305
1,954,747
1,764,947
1,575,010
Share capital - issued and fully paid
RM’000
1,217,670
1,167,978
1,162,592
1,162,591
1,162,589
Sen
9.13
(17.32)
18.36
17.39
16.66
%
5.82
(10.92)
11.48
12.11
13.95
Gross dividend per share
Sen
–
–
3
2
2
Net assets per share
RM
1.60
1.49
1.68
1.52
1.35
Earnings/(loss) per share
Return on equity
P R O F I T B E F O R E TA X RM’Million
S H A R E H O L D E R S ’ E Q U I T Y RM’Million
210
‘03
277
‘04
297
‘05
(283)
‘06
151
N E T A S S E T S P E R S H A R E RM
‘03
‘04
‘07
1.35
B E R H A D
1,765
1,955
‘05
1,742
1,943
‘07
‘03
1.52
1.68
1.49
1.60
4
1,575
T O TA L A S S E T S RM’Million
‘05
‘06
‘04
‘06
‘07
M A L A Y S I A N
‘03
( 6 6 2 7 - X )
‘04
20,197
23,313
‘05
23,660
‘06
23,581
‘07
26,399
board of directors
DATUK OH CHONG PENG
(Chairman, Independent Non-Executive Director)
Chairman of Nomination Committee and Remuneration Committee
Aged 62, a Malaysian, was appointed Chairman to the Board on 21 April 2006. He
had undertaken his accountancy training in London from 1964 and qualified as a
Chartered Accountant in 1969. He is a Fellow of the Institute of Chartered
Accountants in England and Wales as well as a member of the Malaysian Institute of
Certified Public Accountants (MICPA) and the Malaysian Institute of Accountants.
Datuk Oh joined Coopers & Lybrand (now called PricewaterhouseCoopers) in
London in 1969 and in Malaysia in 1971. He was a Partner of Coopers & Lybrand
Malaysia from 1974. He had serviced clients of Coopers & Lybrand throughout
Malaysia and ASEAN, which covered a broad range of industries including financial
services, construction, real estate, manufacturing, hospitality and services. He retired
as a Senior Partner of Coopers & Lybrand in 1997 and then joined the Rashid Hussain
Berhad Group of Companies in 1998 until 2003.
Datuk Oh is a Government appointed member of the Labuan Offshore Financial
Services Authority and the Malaysian Accounting Standards Board. He is also a
trustee of the Huaren Education Foundation and the UTAR Education Foundation,
and a council member of University Tunku Abdul Rahman.
His past appointments included being a Government appointed Member of the Kuala
Lumpur Stock Exchange (1990-1996), a Council member (1981-2001) and a past
President (1994-1996) of the MICPA.
Datuk Oh is currently the Non-Executive Chairman of Land & General Berhad and
sits on the Boards of British American Tobacco (Malaysia) Berhad, IJM Corporation
Berhad, IJM Plantations Berhad, Star Publications (Malaysia) Berhad, Rohas Euco
Industries Berhad and several other private companies.
DATO' THOMAS MUN LUNG LEE
(Independent Non-Executive Director)
Member of Nomination Committee and Remuneration Committee
Aged 69, a Malaysian, was appointed to the Board on 26 September 2005. He is a
barrister at law (England) who holds a Master of Arts (MA) and a Master of Law
(LLM) degrees from Cambridge University, England and has been in legal practice as
an advocate and solicitor for over 40 years. He is a member of the Appeals
Committee of Bursa Malaysia Berhad. He is also an arbitrator with the Court of
Arbitration for Sport, Lausanne, Switzerland.
Dato’ Thomas Lee is currently the Senior Partner of Lee Hishammuddin Allen &
Gledhill. He is the Chairman of Alliance Bank and Alliance Investment Bank. He also
holds directorships in UMW Holdings Berhad, Saujana Consolidated Berhad, Saujana
Resort (M) Berhad and several private companies.
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A N N U A L
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2 0 0 7
board of directors
TEE KIM CHAN
Member of Audit Committee, Nomination Committee and
Remuneration Committee
Aged 53, a Malaysian, was appointed to the Board on 15 January 2004. He was
admitted to the Honourable Society of Lincoln’s Inn, London in 1978 and enrolled as
an advocate and solicitor of the High Court in Malaya in 1979. He is a practising
advocate and solicitor.
He is the Chairman of the Negeri Sembilan Bar Committee and a member of the Bar
Council. He has practical experience in several areas of legal work, in particular civil
litigation, conveyancing, corporate matters including rescues and insolvency, estate
matters and trust.
He currently sits on the Boards of Alliance Trustee Berhad, Kota Indrapura
Development Corporation Berhad and several other private companies.
STEPHEN GEH SIM WHYE
Member of Audit Committee
Aged 51, a Malaysian, was appointed to the Board on 5 May 2004. He is an
accountant by profession. He was admitted as a member of the Malaysian Institute
of Certified Public Accountants in 1985.
In 1987, Mr Stephen Geh was admitted into the Malaysian Institute of Accountants
as a Chartered Accountant and became a member of Malaysian Institute of Taxation
in 1992. Since 1984, he has been a practising accountant and consultant to several
companies. He has wide experience in the financial management of companies
involved in tin mining, oil palm and rubber plantations, manufacturing, property
development and construction.
He was also involved in the financial management of a number of Malaysian
companies with overseas investments which were involved in manufacturing and
trading of their products and also acted as tax adviser to these companies.
He is currently the Managing Director of GSW Consultants Sdn Bhd and sits on the
Boards of several other private companies.
6
M A L A Y S I A N
B E R H A D
( 6 6 2 7 - X )
board of directors
TAN YUEN FAH
Chairman of Audit Committee
Aged 62, a Singaporean, was appointed to the Board on 1 July 2005. He holds a
Bachelor of Accountancy from the University of Singapore and a Bachelor of Laws
from the University of Wolverhampton, United Kingdom (“UK”). He also holds a
post-graduate diploma in Business Administration from the Manchester Business
School, UK. He is a Fellow of the Institute of Certified Public Accountants of
Singapore, CPA (Australia), the Association of Chartered Certified Accountants, UK
and an Associate of the Chartered Institute of Management Accountants, UK.
Mr Tan was in the commerce and industry sector for 11 years prior to joining the
banking and finance sector. He joined Overseas Union Bank Ltd, Singapore in 1979,
holding various senior positions and retired in 2002 as Executive Vice President.
He is currently a Director of Chartered Semiconductor Manufacturing Ltd, Singapore
Food Industries Limited, Guthrie GTS Limited, Overseas Union Insurance Ltd and
Fullerton Fund Management Company Ltd in Singapore.
PHOON SIEW HENG
(Non-Independent Non-Executive Director)
Member of Nomination Committee and Remuneration Committee
Aged 43, a Singaporean, was appointed to the Board on 12 July 2005. Mr Phoon is
the Senior Managing Director, Chief Investment Officer at Temasek Holdings
(Private) Limited. Prior to joining Temasek, Mr Phoon was with Standard Chartered
Merchant Bank Asia Limited. He was a Deputy Director in the Ministry of Finance,
Singapore, from 1988 to 1992.
Mr Phoon holds a Bachelor of Economics (Honours) degree from Monash University,
Australia. He sits on the Boards of Alliance Bank, Alliance Investment Bank and
Fullerton Financial Holdings Pte Ltd (formerly known as Asia Financial Holdings Pte
Ltd).
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board of directors
MEGAT DZIAUDDIN BIN MEGAT MAHMUD
Member of Audit Committee, Nomination Committee and
Aged 61, a Malaysian, was appointed to the Board on 26 September 2005. He holds
a Bachelor of Science (Econs) (Hons) degree from the Queen’s University of Belfast,
Northern Ireland and is a Fellow of the Institute of Chartered Accountants in Ireland
as well as a Chartered Accountant with the Malaysian Institute of Accountants.
With more than 30 years of experience in senior managerial capacities, Tuan Haji
Megat had served with Golden Hope Plantations Berhad as Group Director-Finance,
Arab-Malaysian Merchant Bank Berhad first as General Manager-Operations and
later as General Manager-Investment, Bank Simpanan Nasional as Finance Manager
and the Accountant-General’s Department as Treasury Accountant.
He currently sits on the Boards of Alliance Bank, Alliance Investment Bank, Alliance
Investment Management Berhad, MNRB Holdings Berhad, Pernec Corporation
Berhad and four subsidiaries of Felda Holdings Berhad.
KUNG BENG HONG
Member of Audit Committee
Aged 62, a Malaysian, was appointed to the Board on 21 April 2006. He holds a
Bachelor of Arts (Honours) degree in Economics from the University of Malaya. He is
a Fellow of the Institute of Bankers Malaysia.
Mr Kung has 37 years working experience in the banking industry and has held
numerous senior management positions, mainly in Malaysia, including
CEO/Directorship positions in 4 banks. His experience includes positions held in
Citibank N.A. in USA and Singapore. He is presently the Advisor of Fullerton Financial
Holdings Pte Ltd (formerly known as Asia Financial Holdings Pte Ltd).
8
M A L A Y S I A N
B E R H A D
( 6 6 2 7 - X )
board of directors
DATUK BRIDGET ANNE CHIN HUNG YEE
(also known as Datuk Bridget Lai)
Aged 52, a Malaysian, was appointed to the Board on 20 June 2007. She holds a
Master of Business Administration degree (with Distinction) from the University of
Hull, United Kingdom and is a Certified Financial Planner. She is also a member of the
Malaysian Association of Company Secretaries.
She joined Alliance Bank and Alliance Investment Bank as a Director on 19 July 2005
and was appointed Group Chief Executive Officer of Alliance Banking Group with
effect from 1 September 2005.
Prior to her appointment at Alliance Banking Group, Datuk Bridget Lai was attached
to a leading multinational Bank for a considerable period and has extensive
experience in most aspects of commercial banking. She was the Country Head of
Consumer and SME Banking Malaysia prior to an international posting with the same
bank as the Global Head of Distribution. Her key responsibilities include Branch
Channel and alternative channels of Sales and Service distribution & International
Banking.
She also sits on the Boards of Alliance Investment Management, Alliance Research
and several other private companies.
LEE WEI YEN
(Group Company Secretary)
Mr Lee joined the MPlant Group on 1 April 2004. He brings with him extensive
experience and exposure in corporate matters and has been actively involved in
corporate restructuring, mergers, takeovers, initial public offerings and other
corporate exercises. His area of exposure covers companies in banking, insurance,
stockbroking, asset management, unit trust management, property development,
trading and manufacturing.
Mr Lee holds a Master of Business Administration degree major in Finance from
Universiti Putra Malaysia and is an Associate member of the Malaysian Institute of
Chartered Secretaries & Administrators.
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A N N U A L
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board of directors
O T H E R I N F O R M AT I O N O F D I R E C T O R S
i
Family Relationship
None of the Directors has any family relationship with each other and/or major shareholders of the Company.
ii
Conflict of Interest
None of the Directors has any conflict of interest with the Company.
iii List of Convictions for Offences
None of the Directors has been convicted for any offences (other than traffic offences, if any) within the past ten (10)
years.
iv Attendance of Directors at Board Meetings
There were ten (10) Board Meetings held during the financial year ended 31 March 2007. Details of attendance of the
Directors at Board Meetings are as follows:
Name of Director
v
Attendance
1.
Datuk Oh Chong Peng (Appointed on 21.4.2006)
2.
10/10
3.
Tee Kim Chan
10/10
4.
10/10
5.
Tan Yuen Fah
9/10
6.
Phoon Siew Heng
10/10
7.
9/10
8.
Kung Beng Hong (Appointed on 21.4.2006)
9/9
9.
Datuk Bridget Anne Chin Hung Yee (Appointed on 20.6.2007)
Securities Holdings in the Company and its Subsidiaries
The Directors' shareholdings are disclosed on Page 164 of this Annual Report.
10
M A L A Y S I A N
B E R H A D
( 6 6 2 7 - X )
9/9
Not Applicable
group management
DATUK BRIDGET ANNE CHIN HUNG YEE
of Alliance Banking Group
(also known as Datuk Bridget Lai)
Group Chief Executive Officer
Datuk Bridget Lai joined as a Director of Alliance Bank and Alliance Investment Bank on 19 July 2005.
She was appointed Group Chief Executive Officer of the Alliance Banking Group with effect from
1 September 2005.
Prior to her appointment at Alliance Banking Group, Datuk Bridget Lai was attached to a leading
multinational Bank for a considerable period and has extensive experience in most aspects of
commercial banking. She was the Country Head of Consumer and SME Banking Malaysia prior to an
international posting with the same bank as the Global Head of Distribution. Her key responsibilities
include Branch Channel and alternative channels of Sales and Service distribution & International
Banking.
She holds a Master of Business Administration degree (with Distinction) from the University of Hull,
United Kingdom and is a Certified Financial Planner. She is also a member of the Malaysian Association
of Company Secretaries. She also sits on the Board of MPlant.
SHIM KON TECK
Group Chief Operating Officer
Mr Shim joined Alliance Bank on 9 September 2005 as Group Chief Operating Officer, bringing with
him over 25 years of banking experience and has a strong operations background in sales
management, branch operations and human capital management. He provides strategic direction on
overall operational needs which includes aligning operational processes to respective business needs so
as to improve business processes to achieve cost efficiencies and productivity. He also oversees Human
Resources, Legal and Compliance, Information Systems and Property Services for the Group.
He holds a Master of Business Administration degree from the University of Hull, United Kingdom and
is a Certified Financial Planner. Prior to joining Alliance Bank, he was with an international bank and
was instrumental in doubling the growth of the Mortgage business in 5 years and making it one of the
most profitable businesses for the Bank. Mr Shim is an Associate member of the Chartered Institute of
Bankers (UK).
PHILIP GOH TECK SIANG
Group Chief Financial Officer
With Alliance Bank since 2001, Mr Goh was appointed Group Chief Financial Officer on 1 October
2005 and is responsible for Group Finance and Capital Management.
Mr Goh qualified as an accountant with the Malaysian Institute of Certified Public Accountants and is
a member of the Malaysian Institute of Accountants. He is an honorary member of the Finance &
General Purposes Committee of Kolej Tuanku Ja’afar and was a Director and Chairman of the Audit
Committee of Diperdana Holdings Berhad. His other appointments included positions in Malaysian
Tobacco Company Berhad, Arab-Malaysian Insurance Berhad, and an Indonesian conglomerate.
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group management
LIEW SWEE LIN
Group Head, Consumer Banking
Appointed as the Group Head of Consumer Banking on 20 September 2005, Ms Liew is responsible
for setting the strategic direction, strategy development and implementation of retail banking business
plans as well as delivery on performance targets. Her retail banking portfolio includes Mortgages, Hire
Purchase, Credit Cards and Personal Loans, Share Margin Financing and other Secured Loans, Direct
Sales, Wealth Management as well as Branch Banking. She also oversees the Group Decision Science
and Group Corporate Branding portfolios, drawing on her expertise and previous experience to lead
the creation of a core business enabler for the group.
Ms Liew brings with her over 17 years management experience in financial services, consulting and
manufacturing industries with multinational companies spanning across Hong Kong, Malaysia and
Singapore. She is able to draw on her strengths in business franchise building, change management
as well as her management experience in business turnaround to lead implementation of optimal
business models and improvement efforts in product management, portfolio, channel, risk and
operational capabilities.
Ms Liew is qualified by a Masters in Science in International Marketing (UK) and is an accredited
Certified Financial Planner (CFP, USA).
FUNG KAI JIN
Group Head, Commercial Banking
Mr Fung joined the Bank on 16 September 2005 as Group Head of Commercial Banking charged with
building up the Commercial Banking and SME Banking business. Prior to joining the Bank, he served
in various senior management positions with a foreign bank, gaining a wide range of experience
ranging from corporate banking, commercial and SME banking, trade and cash management and credit
process improvement.
He graduated with a Degree in Bachelor of Construction Economics from Royal Melbourne Institute of
Technology, Melbourne in 1986 followed with a Master of Business Administration from Curtin
University, Western Australia, in 1988.
YAHYA IBRAHIM
Group Head, Islamic Banking
Encik Yahya possesses a well rounded knowledge of Alliance Bank’s operations having served in its
finance and merchant banking divisions since 1994. He is also well versed with the Malaysian property
scene from experience and knowledge gained from previous organizations prior to joining the Bank.
As the Group Head of Islamic Banking, Encik Yahya is responsible for growing the Islamic Banking
business to capture a wider customer base. His extensive experience in banking will hold him in good
stead to meet the challenge. Encik Yahya holds a Diploma in Marketing, a degree and an MBA.
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M A L A Y S I A N
B E R H A D
( 6 6 2 7 - X )
group management
LOW CHOON SEONG
Group Head, Special Asset Management
Mr Low joined the Bank on 1 December 2005 as Group Head of Special Asset Management where he
is responsible for the recoveries function of Alliance Banking Group. He has 30 years banking
experience in both foreign and local banks, primarily in corporate lending, recovery and credit risk
management.
He holds a Diploma in Banking from the Chartered Institute of Bankers, London and is a Senior
Associate of the Institute of Bankers, Malaysia.
CHOO YEE KWAN
Group Chief Risk Officer
Mr Choo joined the Bank as Group Chief Risk Officer on 17 July 2006, bringing with him more than
25 years of experience in international and local banking, particularly in credit control, group risk
management and remedial management. Prior to joining Alliance Bank, Mr. Choo served a major
international bank in London and was the Chief Risk Officer of a large local bank in Malaysia. At
Alliance Bank, he will oversee the Group’s entire risk management framework and infrastructure in line
with Basel II standards.
Mr Choo holds honours degrees in economics and law from Universiti Malaya and University of
London. He is a Barrister-at-Law from Lincoln’s Inn and was called to the Bar of England and Wales in
1984. He is an Associate Fellow of the Institute of Bankers, Malaysia, and had served as a member of
the Corporate Debt Restructuring Committee (CDRC) under the auspices of Bank Negara Malaysia. He
currently serves on the Education Committee of the Institute of Bankers, Malaysia.
KAY CHUAN SENG
Group Head, Internal Audit
Mr Kay joined Alliance Bank in 1985 and has more than 29 years of banking experience. Mr Kay heads
the Group Internal Audit for the Alliance Banking Group and reports to the Group Audit Committee of
Alliance Bank Malaysia Berhad and Alliance Investment Bank Berhad. He also reports to the Audit
Committee of Malaysian Plantations Berhad.
Mr Kay is a Senior Associate member of the Institute of Bankers, Malaysia.
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group management
TAN CHIN AUN
Head, Corporate Banking
Mr Tan Chin Aun joined Alliance Bank on 2 July 2007 as the Group Head of Corporate Banking. Prior
to joining Alliance Bank, Mr Tan served in various senior management positions with a foreign bank
where he gained a wide range of experience spanning corporate banking, investment banking, credit
risk management, cash management and global relationship banking. Mr Tan graduated with a
Bachelor of Business Administration from the University of Winsconsin, Eau Claire.
SACHI RATNAJOOTHY
Head, Financial Markets
Sachi joined Alliance Bank in 2006 as the Head of Treasury. Currently, Sachi heads the Financial
Markets division for the Group where she manages Treasury and Debt Capital Markets.
She has extensive experience in the Malaysian Private Debt Securities Market and has held senior
management positions as Country Debt Head ABN AMRO Bank Berhad, Head of Fixed Income ArabMalaysian Merchant Bank Berhad and Head of Mortgage Operations & Research Cagamas Berhad.
Sachi is a fellow member of the Chartered Institute of Management Accountants CIMA, UK and was
a Board Member of the Bond Dealer Institute Malaysia.
NIK AZHAR BIN ABDULLAH
Executive Director/Head, Alliance Investment Management
Encik Nik Azhar bin Abdullah, joined Alliance Banking Group in February 2007 as Executive
Director/Head of Alliance Investment Management. In his present role, he is responsible for the
business growth and operations of Alliance Investment Management.
With a CIMA qualification and an honours degree in Accountancy from the University of Portsmouth,
United Kingdom, Encik Nik brings with him in-depth experience in investment management in local
and international markets.
Encik Nik build his reputation as a shrewd and astute fund manager and chief investment officer from
his attachments with a Merchant Bank, Asset Management Company and Investment Bank. Besides
fund management, his wealth of experience in portfolio management, client servicing, business
development and research, will stand him in good stead to scale up Alliance Investment Management.
Under his leadership, he has managed funds over RM5 billion and has bagged several prestigious EdgeLipper and Standard and Poor’s awards.
14
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B E R H A D
( 6 6 2 7 - X )
c h a i r m a n ’s s t a t e m e n t
penyata pengerusi
DEAR SHAREHOLDERS
It is my pleasure to present
the Annual Report and
Financial Statements of
Malaysian Plantations
Berhad for the financial
year ended 31 March 2007.
PARA PEMEGANG SAHAM
YANG DIHORMATI
Saya dengan sukacitanya
membentangkan Laporan
Tahunan dan Penyata
Kewangan Malaysian
Plantations Berhad bagi tahun
kewangan yang berakhir pada
31 Mac 2007.
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penyata pengerusi
P E R S E K I TA R A N P E R N I A G A A N
K E S E L U R U H A N N YA
PA D A
Tahun 2006 merupakan tahun yang menarik dan
mencabar bagi industri perbankan memandangkan
penyatuan yang lanjut pada ketika meningkatnya
liberalisasi dan persaingan disebabkan oleh suasana
yang berubah dan kemasukan peserta-peserta
baru.
OVERALL BUSINESS ENVIRONMENT
2006 was an exciting and challenging year for the
banking industry with further consolidation amidst
increased liberalisation and competition as a result
of the changing landscape and entry of new
players.
Positive macroeconomic fundamentals, renewed
foreign investor interests, improved corporate
earnings and robust demand for crude palm oil
throughout the year were among the supporting
reasons for the strong equity markets.
2006 is also an important year for the Malaysian
financial sector with the merger of merchant banks,
stockbroking firms and discount houses to form
investment banks under the Framework of
Investment Banks. This has changed the financial
landscape and paved the way for greater dynamism
in investment banking towards more effective
intermediation of the capital market.
In another positive development, Bank Negara
Malaysia (“BNM”), as part of its efforts to further
liberalize the capital market, has relaxed the rules
on investment abroad by allowing unit trust
companies, fund management companies, and
insurance funds to invest up to 50% of assets under
management overseas.
The gradual transition to a more flexible exchange
rate regime is yet another tremendous boost to
corporate Malaysia in general and the local banking
16
M A L A Y S I A N
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( 6 6 2 7 - X )
Asas makroekonomi yang positif, minat pelabur
asing yang bersemarak semula, perolehan korporat
yang semakin baik dan permintaan minyak sawit
mentah yang semakin meningkat sepanjang tahun
adalah antara sebab-sebab yang menyokong
kekuatan pasaran ekuiti.
Tahun 2006 juga penting bagi sektor kewangan
Malaysia dengan penggabungan beberapa bank
saudagar, firma pembrokeran saham dan gedung
diskaun untuk membentuk bank pelaburan di
bawah Rangka Kerja Bank-Bank Pelaburan. Ini telah
mengubah medan kewangan dan menapak laluan
yang lebih dinamik dalam perbankan pelaburan ke
arah pengantaraan pasaran modal yang lebih
berkesan.
Dalam suatu lagi perkembangan yang positif, Bank
Negara Malaysia (“BNM”), sebagai salah satu
langkah untuk meliberalkan lagi pasaran modal,
telah melonggarkan peraturan-peraturan bagi
pelaburan luar negeri dengan membenarkan danadana syarikat-syarikat amanah saham, pengurusan
dana, dan insurans dilaburkan sehingga 50%
daripada aset-aset dibawah pengurusan luar negeri.
Peralihan secara beransur-ansur kepada rejim kadar
pertukaran yang lebih fleksibel adalah antara
penggalak yang amat kuat kepada korporat
Malaysia secara umum dan khususnya, industri
perbankan tempatan. Langkah ini melengkapkan
dan
memudahkan
pelaksanaan
inisiatif
penyerantauan dan minat yang semakin meningkat
terhadap urus niaga lintas sempadan dalam suasana
yang semakin global.
Inisiatif Rancangan Malaysia Kesembilan, seperti
Wilayah Pembangunan Iskandar, Lorong Ketiga
Lebuh Raya Utara Selatan di antara Rawang
dengan Tanjung Malim, Jambatan Pulau Pinang
industry in particular. It complements and facilitates
regionalization initiatives and the growing appetite
for cross-borders transactions in an increasingly
globalised environment.
Ninth Malaysia Plan initiatives, such as the Iskandar
Development Region, Third lane of the North South
Expressway between Rawang-Tanjung Malim,
Second Penang Bridge and West Coast Expressway,
coupled with the abolishment of real property gains
tax, have seen the revitalisation of the construction
and property sector, which in turn will strengthen
and spur the growth of the services sector.
PERFORMANCE REVIEW
The Group
The Group recorded a profit before tax of RM150.8
million for the financial year ended 31 March 2007
as compared to a loss of RM283.1 million in the
previous financial year. The achievement of a profit
before tax was primarily due to higher income,
lower loan loss provisions and impairment loss as a
result of better recoveries. During the financial year,
the issued capital of the Company increased from
RM1.17 billion to RM1.22 billion from the exercise
of 49.7 million 2002/2007 warrants. Consequently,
the Group shareholders’ funds have increased from
RM1.74 billion to RM1.94 billion and net assets per
share rose to RM1.60 from RM1.49.
Alliance Bank and its subsidiaries (“Alliance
Banking Group”)
Being the principal contributor to the performance
of the Group, the Alliance Banking Group has made
significant strategic progress in the financial year
under review. Its businesses have achieved good
organic growth even as its experienced and trained
staff continued to cultivate deep relationships with
customers. The intensive re-engineering of its
businesses has strengthened further its ability to
innovate, integrate and execute. Tremendous
inroads have been made in enhancing its branch,
sales and risk management infrastructure, and
realigning its loan portfolio mix to better capture
industry revenue pools. It is now on a stronger
footing to move on to the next level as it makes
itself ready to face the challenges of an increasingly
complex and competitive business environment.
penyata pengerusi
Kedua dan Lebuh Raya Pantai Timur, digandingkan
dengan pemansuhan cukai keuntungan harta
tanah, telah menyaksikan pembangkitan semula
sektor pembinaan dan harta tanah, yang seterusnya
akan mengukuhkan dan mendorong pertumbuhan
sektor perkhidmatan.
T I N J A U A N P R E S TA S I
Kumpulan
Kumpulan mencatatkan keuntungan sebelum cukai
sebanyak RM150.8 juta bagi tahun kewangan yang
berakhir pada 31 Mac 2007, berbanding kerugian
sebanyak RM283.1 juta pada tahun kewangan
sebelumnya. Pencapaian keuntungan sebelum
cukai ini khususnya berpunca daripada pendapatan
yang lebih tinggi, peruntukan kerugian pinjaman
dan kerugian pelemahan yang lebih rendah yang
dihasilkan daripada kutipan balik yang lebih baik.
Pada tahun kewangan ini, modal Syarikat yang
diterbitkan bertambah daripada RM1.17 bilion
kepada RM1.22 bilion melalui pelaksanaan 49.7
juta waran 2002/2007. Dengan itu, dana
pemegang saham Kumpulan telah meningkat
daripada RM1.74 bilion kepada RM1.94 bilion dan
aset bersih sesaham naik kepada RM1.60 daripada
RM1.49.
Alliance Bank dan anak-anak syarikatnya
(“Kumpulan Perbankan Alliance”)
Sebagai penyumbang utama kepada prestasi
Kumpulan, Kumpulan Perbankan Alliance telah
mencapai kemajuan strategik yang besar pada
tahun kewangan yang ditinjau. Perniagaannya
telah mencapai pertumbuhan organik yang
cemerlang sementara kakitangannya yang
berpengalaman dan terlatih terus mengeratkan
hubungan
dengan
pelanggan-pelanggan.
Pengolahan
intensif
perniagaannya
telah
mengukuhkan lagi kebolehannya untuk membuat
pembaharuan, penyepaduan dan pelaksanaan.
Pelbagai usaha telah dilaksanakan untuk
menaiktarafkan
cawangan-cawangannya,
meningkatkan infrastruktur jualan dan pengurusan
risikonya, dan menjajarkan semula campuran
portfolio
pinjamannya
untuk
menangguk
himpunan hasil industri dengan lebih baik.
17
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penyata pengerusi
Kini kedudukannya lebih mantap untuk maju ke
peringkat yang seterusnya sementara Kumpulan ini
mempersiapkan dirinya untuk menghadapi cabaran
daripada suasana perniagaan yang semakin
kompleks dan bersaingan.
Strong sales growth, which is attributed to
aggressive sales and distribution strategies have
caused an uptrend in the acquisition of new loans.
During the financial year, the Alliance Banking
Group saw increased momentum in loans growth in
targeted segments with Consumer loans growing
15% year-on-year and Commercial loans growing
7%. Consumer loans growth was buoyed by a
good take up of personal loans as well as an
increase in credit card loans of 57% and mortgage
loans of 18% compared to the corresponding
period last year.
Consequently the loan portfolio in Consumer and
Commercial Banking was realigned to reflect
market growth and opportunities, resulting in an
increase portfolio mix in these segments from 42%
and 29% to 49% and 32% respectively, with a
corresponding decrease in the portfolio mix of
corporate loans.
Asset quality has improved with both net Non
Performing Loans (“NPL”) and gross NPL ratios
improving from 9.5% and 14.6% in the previous
financial year to 5.6% and 10.9% respectively as at
31 March 2007. Loan loss coverage also improved
from 48.5% in the previous financial year to 67.3%
as at 31 March 2007. This aligns Alliance Banking
Group’s loan impairment standards with best
practices and to close the gap with the provisioning
recommendations of Financial Reporting Standard
(“FRS”) 139 – Financial Instruments: Recognition
and Measurement requirement. The Group’s riskweighted capital ratio remained strong at 16.6%.
18
M A L A Y S I A N
B E R H A D
( 6 6 2 7 - X )
Pertumbuhan jualan yang kukuh, hasil daripada
strategi penjualan dan pengedaran yang agresif,
telah meningkatkan perolehan pinjaman baru. Pada
tahun kewangan ini, Kumpulan Perbankan Alliance
telah mencapai peningkatan momentum dari segi
pertumbuhan pinjaman dalam segmen-segmen
sasaran dengan pertumbuhan pinjaman Pengguna
sebanyak 15% tahun atas tahun dan pertumbuhan
pinjaman
Perdagangan
sebanyak
7%.
Pertumbuhan pinjaman Pengguna telah disokong
oleh sambutan baik terhadap pinjaman peribadi di
samping peningkatan pinjaman kad kredit
sebanyak 57% dan pinjaman gadai janji sebanyak
18% berbanding dengan tempoh yang sepadan
dengannya pada tahun lepas.
Oleh itu, portfolio pinjaman dalam Perbankan
Pengguna dan Perdagangan telah dijajarkan semula
untuk mencerminkan pertumbuhan dan peluang
pasaran
yang
sejurusnya
menghasilkan
peningkatan campuran portfolio dalam segmensegmen ini masing-masing dari 42% dan 29%
kepada 49% dan 32%, dengan penurunan
campuran portfolio pinjaman korporat yang
sepadan dengannya.
Mutu aset telah meningkat dengan nisbah
Pinjaman Tidak Berbayar (“PTB”) bersih dan nisbah
PTB kasar masing-masing bertambah baik daripada
9.5% dan 14.6% pada tahun kewangan yang lepas
kepada 5.6% dan 10.9% setakat 31 Mac 2007.
Perlindungan kerugian pinjaman juga bertambah
baik daripada 48.5% pada tahun kewangan yang
lepas kepada 67.3% setakat 31 Mac 2007. Ini
menyelaraskan piawaian pelemahan pinjaman
Kumpulan Perbankan Alliance dengan amalan
terbaik dan merapatkan jurang dengan saranan
peruntukan Piawaian Pelaporan Kewangan 139 Instrumen
Kewangan:
Pengiktirafan
dan
Pengukuran. Nisbah modal berwajaran risiko
Kumpulan ini kekal teguh pada 16.6%.
Consumer Banking is beginning to reap the benefits
of a Group-wide transformation and re-engineering
process which saw the unit undertaking cost
containment and operations centralization exercises
to further improve efficiencies and services. The
initiatives in place saw Consumer Banking
contributing 40% to the total revenue of Alliance
Bank. Core contributory products were Mortgage,
Consumer Loans, Credit Cards and Wealth
Management instruments.
Commercial Banking has put in place key initiatives
to consolidate its position as the preferred bank
among Small and Medium Enterprises (“SMEs”). It
has met its key deliverables via its investment of
tremendous resources to re-engineer processes,
innovate and expand product offerings, reshape
portfolio quality and attract the right talents and
develop them to drive higher growth in the SME
business.
A new business model was successfully developed
and implemented during the financial year under
review, to deliver and support Commercial
Banking’s customer promise, and to develop longterm partnerships and provide one-stop financial
solutions to target customer segments. The coming
on-stream of the new business model has brought
a three-fold increase in sales volume amidst
continued improvement in portfolio quality.
During the financial year, the Corporate Banking
portfolio was reshaped for a balanced asset quality.
penyata pengerusi
Perbankan Pengguna sudah mula meraut manfaat
proses transformasi dan perombakan seluruh
Kumpulan yang melibatkan unit ini melaksanakan
usaha pengawalan kos dan pemusatan operasi
untuk meningkatkan lagi kecekapan dan
perkhidmatan. Inisiatif yang dilaksanakan terbukti
berhasil
apabila
Perbankan
Pengguna
menyumbang sebanyak 40% kepada jumlah hasil
Alliance Bank. Antara produk teras yang menjadi
penyumbang adalah Gadai Janji, Pinjaman
Pengguna, Kad Kredit dan instrumen Pengurusan
Kekayaan.
Perbankan Komersial telah memulakan beberapa
inisiatif penting untuk mengukuhkan lagi
kedudukannya sebagai bank pilihan utama di
kalangan Perusahaan Kecil dan Sederhana (“PKS”).
Kumpulan ini telah mencapai hasilnya yang penting
melalui pelaburan sumber yang banyak untuk
mengolah proses, mencipta produk baru,
meluaskan penawaran produk, membentuk semula
mutu portfolio dan menarik bakat yang bersesuaian
dan kemudian mengasah kemahiran mereka
sehingga dapat menggiatkan lagi pertumbuhan
dalam perniagaan PKS.
Model perniagaan yang baru berjaya dihasilkan dan
dilaksanakan pada tahun kewangan yang ditinjau,
untuk menunaikan dan menyokong janji Perbankan
Perdagangan kepada pelanggan, dengan tujuan
menjalin perkongsian jangka panjang dan
menyediakan penyelesaian kewangan sehenti
kepada segmen pelanggan yang disasarkan.
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penyata pengerusi
Pelaksanaan model perniagaan yang baru telah
menggandakan jumlah jualan sebanyak tiga kali
sementara mutu portfolio terus bertambah baik.
Pada tahun kewangan ini, portfolio Perbankan
Korporat
telah
disusun
semula
untuk
menyeimbangkan
mutu
asetnya.
Suatu
pembaharuan rangka kerja pengurusan risiko
seluruh perusahaan telah memperkenalkan budaya
pengurusan risiko yang lebih berkesan dalam
Perbankan Korporat dan melahirkan unit Sokongan
Pentadbiran Kredit untuk menjaga aspek risiko
perniagaan ini dengan mengasingkan tugas
pengasalan daripada fungsi pentadbiran kredit.
An enterprise-wide revamp of the risk management
framework has introduced a more robust risk
management culture in Corporate Banking and the
setting up of the Credit Administration Support unit
to look after the risk aspect of this business by
segregating origination from credit administration
function.
Islamic Banking turned in a strong performance
with Islamic financing packages constituting 15%
of total financing assets of the Alliance Banking
Group. During the financial year under review,
revenue from Islamic Banking constituted 14% of
total revenues of Alliance Bank with Consumer
Banking making up of 55% of the revenue,
followed by Corporate and Commercial 23% and
Treasury 22%.
C O R P O R AT E D E V E L O P M E N T
On 26 May 2006, Alliance Bank issued RM600
million of Tier 2 Subordinated Bonds, which have a
10 year maturity with a call from the 5th
anniversary of the issue date. The Subordinate
Bonds carry an interest coupon of 6.09% per
annum, subject to revision of rate in year six at
7.59% per annum. The proceeds from the
Subordinate Bonds were used as general working
capital, including the redemption of its existing
RM535 million 7.75% subordinated bonds on 20
June 2006.
20
M A L A Y S I A N
B E R H A D
( 6 6 2 7 - X )
Perbankan Islam menunjukkan prestasi yang kukuh
dengan pakej pembiayaan Islam mencakupi 15%
daripada jumlah aset pembiayaan Kumpulan
Perbankan Alliance. Pada tahun kewangan yang
ditinjau, hasil daripada Perbankan Islam
merangkumi 14% daripada jumlah hasil Alliance
Bank dengan Perbankan Pengguna menyumbang
55% daripada hasil, diikuti Korporat dan
Perdagangan 23% dan Perbendaharaan 22%.
P E R K E M B A N G A N K O R P O R AT
Pada 26 Mei 2006, Alliance Bank menerbitkan
RM600 juta Bon Subordinat Tingkat 2, yang
mempunyai tempoh matang 10 tahun dengan
opsyen beli pada ulang tahunnya yang ke-5 dari
tarikh terbitan. Bon Subordinat tersebut membawa
kupon faedah sebanyak 6.09% setahun, tertakluk
kepada semakan kadar pada tahun ke-6 pada kadar
7.59% setahun. Hasil perolehan daripada Bon
Subordinat digunakan sebagai modal kerja am,
termasuklah penebusan bon subordinat 7.75%
bernilai RM535 juta yang sedia ada pada 20 Jun
2006.
Pada 21 Jun 2006, Syarikat mengumumkan
cadangannya untuk menerbitkan Program Kertas
Perdagangan (“KP”)/Nota Jangka Sederhana
(“NJS”) bernilai RM300 juta untuk membiayai
semula pinjaman Syarikat yang sedia ada dan untuk
memenuhi keperluan modal kerja dan/atau
pendanaan Kumpulan. Terbitan Pertama Khas KP
bernilai nominal RM200 juta untuk tempoh matang
satu (1) tahun diterbitkan pada 18 September 2006
untuk membiayai semula pinjaman bertempoh
yang sedia ada sebanyak RM200 juta.
On 21 June 2006, the Company announced the
proposal to undertake an issuance of Commercial
Papers (“CP”)/Medium Term Notes (“MTN”)
Programme of RM300 million for the purpose of
refinancing existing borrowing of the Company and
to meet working capital and/or
funding
requirements of the Group. A Special First Issuance
of CP of RM200 million nominal value for a tenor
of one (1) year was issued on 18 September 2006
to re-finance an existing term loan of RM200
million.
On 9 October 2006, Alliance Bank was made a
direct wholly-owned subsidiary of the Company as
a result of the members’ voluntary winding-up of
Syabas Sutra Sdn Bhd, a wholly-owned subsidiary
of the Company which was previously the
immediate holding company of Alliance Bank.
On 30 December 2006, Alliance Investment Bank’s
merger with Kuala Lumpur City Securities Sdn Bhd
resulted in its complete transformation into an
investment bank, in accordance with Guidelines on
Investment Banks issued by Bank Negara Malaysia
and Securities Commission.
To further strengthen the Group’s asset and fund
management capabilities, Alliance Unit Trust
Management Berhad and Alliance Capital Asset
Management Sdn Bhd were merged on 2 April
2007 to form Alliance Investment Management
Berhad, which is among the top ten fund managers
in the country with assets under management of
RM2.4 billion as at 31 March 2007.
The 2002/2007 Warrants of the Company, which
were issued in September 2002 pursuant to a
Rights Issue, expired on 8 June 2007. With the
conversion of almost all the warrants, the issued
and paid up share capital of the Company increased
to RM1,548,105,929 comprising 1,548,105,929
ordinary shares of RM1.00 each fully paid. There
were 2,013,228 warrants not exercised by the
expiry date and these have accordingly lapsed.
penyata pengerusi
Pada 9 Oktober 2006, Alliance Bank telah dijadikan
anak syarikat langsung milik penuh Syarikat melalui
pembubaran sukarela ahli Syabas Sutra Sdn Bhd,
anak syarikat milik penuh Syarikat yang sebelum ini
merupakan syarikat induk langsung Alliance Bank.
Pada 30 Disember 2006, penggabungan Alliance
Investment Bank dengan Kuala Lumpur City
Securities
Sdn
Bhd
menyempurnakan
transformasinya kepada bank pelaburan, selaras
dengan Garis Panduan bagi Bank Pelaburan yang
dikeluarkan oleh Bank Negara Malaysia dan
Suruhanjaya Sekuriti.
Untuk mengukuhkan lagi kemampuan pengurusan
aset dan dana Kumpulan, Alliance Unit Trust
Management Berhad dan Alliance Capital Asset
Management Sdn Bhd telah digabungkan pada 2
April 2007 untuk membentuk Alliance Investment
Management Berhad yang meletakkannya di
kalangan sepuluh pengurus dana teratas di negara
ini dengan aset yang diuruskannya berjumlah
RM2.4 bilion setakat 31 Mac 2007.
Waran 2002/2007 Syarikat, yang diterbitkan pada
bulan September 2002 selaras dengan suatu
Terbitan Hak telah luput pada 8 Jun 2007. Dengan
penukaran hampir semua waran, modal saham
Syarikat yang diterbitkan dan berbayar bertambah
kepada RM1,548,105,929 yang terdiri daripada
1,548,105,929 saham biasa bernilai RM1.00 setiap
satu dan berbayar sepenuhnya. 2,013,228 waran
belum lagi dilaksanakan pada tarikh luputnya dan
dengan itu waran tersebut telah luput.
TA N G G U N G J AWA B S O S I A L K O R P O R AT
Kumpulan percaya dengan sesungguhnya bahawa
Tanggungjawab Sosial Korporat (“TSK”) dilahirkan
melalui cara kami bertingkah laku semasa
berurusan. Kami percaya bahawa TSK tidaklah
bererti membelanjakan wang tetapi sebaliknya
tercermin melalui cara kami memperoleh wang
dengan bertanggungjawab, dengan memastikan
kami sentiasa memelihara alam sekitar dan menjaga
kebajikan golongan yang kurang mampu.
21
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penyata pengerusi
Falsafah perniagaan kami menghendaki supaya
kami sentiasa bertindak adil semasa berurusan
dengan semua pelanggan dan pembekal kami.
Dalam berbuat demikian, kami menunaikan
tanggungjawab kami kepada komuniti di tempat
kami beroperasi dengan menyokong usaha yang
dibaktikan kepada pendidikan dan kemajuan
golongan yang muda dan yang kurang mampu.
DIVIDEN
C O R P O R AT E S O C I A L R E S P O N S I B I L I T Y
The Group believes very strongly that Corporate
Social Responsibility (“CSR”) is expressed in the
way we conduct ourselves when doing business.
We believe CSR is not about spending money but in
how we make our money in a responsible way;
ensuring that we look after the environment and
those in need. Our business philosophy is to be fair
in all our dealings with all our customers and
suppliers. At the same time we fulfil our
responsibilities to the communities in which we
operate by supporting causes devoted to education
and personal development of the young and needy.
Meskipun dengan tahap keuntungan Kumpulan,
Lembaga Pengarah tidak dapat menyarankan
sebarang pembayaran dividen bagi tahun
kewangan yang berakhir pada 31 Mac 2007 kerana
Kumpulan Perbankan Alliance tidak sempat
membayar dividen kepada Syarikat sebelum
penghujung tahun kewangan. Lembaga Pengarah
akan mengisytiharkan dividen kepada pemegang
saham selepas dividen diterima daripada anak-anak
syarikat kami dan selepas kelulusan yang wajib
telah diterima kelak.
Selain itu, Lembaga Pengarah telah mencadangkan
pengimbangan kerugian terkumpul Syarikat
dengan akaun premium saham untuk memudahkan
pengisytiharan dividen pada masa depan.
Cadangan ini akan dikemukakan untuk kelulusan
pemegang saham semasa Mesyuarat Agung Luar
Biasa yang akan datang.
PA N D A N G A N E K O N O M I
DIVIDENDS
Despite the profitability at Group level, the Board of
Directors is not able to recommend any payment of
dividends for the financial year ended 31 March
2007 as the Alliance Banking Group was not able to
pay a dividend to the Company before the close of
the financial year due to timing constraints. The
Board would be declaring a dividend to
shareholders after dividends are received from our
subsidiaries and after the necessary approvals have
been received.
In addition, the Board has proposed for
shareholders’ approval at the forthcoming
Extraordinary General Meeting to set-off the
accumulated losses of the Company against the
share premium account to facilitate the declaration
of dividends in future.
22
M A L A Y S I A N
B E R H A D
( 6 6 2 7 - X )
Menurut Laporan Tahunan 2006 BNM,
pertumbuhan global pada tahun 2007 akan
dikekalkan pada kadar yang melebihi 4% bagi
tahun
kelima
berturut-turut.
Walaupun
pertumbuhan yang sederhana telah diramalkan
bagi Amerika Syarikat, pemulihan di Eropah dan
Jepun
pula
dijangka
dapat
dikekalkan.
Pertumbuhan di rantau Asia akan disokong oleh
permintaan dalam negeri. Walau bagaimanapun,
aliran modal yang kukuh ke rantau ini akan terus
menjadi cabaran dari segi pengurusan kewangan.
Ekonomi Malaysia dijangka akan mencatatkan
pertumbuhan yang teguh pada tahun 2007,
disokong oleh pertumbuhan global yang
berlanjutan dan permintaan dalam negeri yang
berdaya tahan, dengan Keluaran Dalam Negeri
ECONOMIC OUTLOOK
According to BNM’s 2006 Annual Report, global
growth in 2007 is to be sustained at above 4% for
the fifth consecutive year. While a moderation in
growth is forecast for the US, the recovery in
Europe and Japan is expected to be sustained.
Growth in the Asian region will be supported by
domestic demand. However, strong capital flows to
the region would continue to pose a challenge to
monetary management.
The Malaysian economy is expected to register solid
growth in 2007, supported by sustained global
growth and resilient domestic demand, with real
Gross Domestic Product expanding by 6%.
Inflation is expected to remain benign during the
year. After having increased in 2006 following the
partial reduction of fuel and other subsidies,
inflation is expected to trend downwards during the
year. BNM’s expected average inflation rate for
2007 is in the range of 2-2.5%.
G O I N G F O RWA R D
The year ahead is expected to be a good year for
the Group as it reaps the benefits of the
transformation and capabilities that have been put
in place. The Group looks forward to stronger loans
portfolio growth in the targeted segments and
improved return on equity for shareholders.
We intend to become a key player in the targeted
business segments of Commercial Banking and
Consumer Banking. The Group will be very focused
on industry wide spaces, using state of the art
information systems, business analytics and
innovative business models to exploit these spaces
in the industry and to ensure effective and
sustainable growth.
The Group will also continue to leverage on the
regional presence and expertise of its major
shareholder to enhance our network and product
proposition as well as to capitalize on the strength
of our SME and consumer market segments and
that of our human resource pool.
penyata pengerusi
Kasar berkembang sebanyak 6%. Inflasi dijangka
akan kekal rendah pada tahun ini. Selepas
meningkat pada tahun 2006 ekoran pengurangan
separa bahan api dan subsidi yang lain, inflasi
dijangka akan menurun pada tahun ini. Jangkaan
BNM terhadap kadar purata inflasi pada tahun
2007 ialah antara 2-2.5%.
M A J U K E D E PA N
Tahun yang akan datang dijangka akan menjadi
tahun yang baik untuk Kumpulan kerana inilah
masanya Kumpulan ini akan menikmati manfaat
daripada transformasi dan kemampuan yang telah
diperoleh.
Kumpulan
ini
mengharapkan
pertumbuhan portfolio pinjamannya yang lebih
kukuh dalam segmen yang disasarkan dan
pulangan ekuiti yang lebih baik untuk pemegang
saham.
Kami berhasrat untuk menjadi peserta yang penting
dalam
segmen-segmen
perniagaan
yang
disasarkan, iaitu Perbankan Komersial dan
Perbankan Pengguna. Kumpulan ini akan
memberikan tumpuan yang khusus terhadap
ruang-ruang yang merentasi seluruh industri,
dengan menggunakan sistem maklumat yang
canggih, analisis perniagaan dan model perniagaan
yang inovatif untuk mengeksploitasi ruang-ruang
ini dan untuk menjamin pertumbuhan yang
berkesan dan berlanjutan.
Kumpulan juga akan terus mengumpil kehadiran
serantau dan kepakaran pemegang sahamnya yang
utama untuk mengukuhkan rangkaian dan usul
produk kami di samping memanfaatkan kekuatan
segmen PKS dan segmen pasaran pengguna kami,
dan juga kekuatan sumber manusia kami.
Visi kami adalah untuk menjadi penyedia
penyelesaian kewangan bersepadu yang terunggul
dengan capaian ke seluruh rantau dan kami akan
berusaha untuk memberikan pengalaman yang
terbaik kepada pelanggan-pelanggan dan
mewujudkan nilai jangka panjang untuk para
pemegang saham. Ini akan dicapai melalui
penyampaian pengalaman pelanggan yang
cemerlang; melalui perikatan strategik dan sinergi
Kumpulan yang dipertingkatkan; dan melalui
penggunaan teknologi dan modal manusia yang
terbaik.
A N N U A L
R E P O R T
23
2 0 0 7
Our vision is to be a leading integrated financial
solutions provider with regional reach, and we will
strive to deliver the best experience for customers
and to create long term value for shareholders.
These will be achieved through the delivery of
excellent customer experience; through strategic
alliances and enhanced Group synergies; and the
engagement of best-in-class technology and
human capital.
We will work towards being recognized as a
financial group that employs best practices in every
aspect of its businesses, as a Malaysian bank of
great integrity and excellent corporate governance.
To better reflect the existing business and scope of
activities of the Group, the Company has obtained
the necessary regulatory approvals for the proposed
change of name to ‘Alliance Financial Group
Berhad’, subject to the shareholders’ approval at
the forthcoming Extraordinary General Meeting.
BOARD OF DIRECTORS
Datuk Bridget Lai, the Group Chief Executive
Officer of Alliance Bank, who joined the Board on
20 June 2007 is a very welcomed addition that will
help strengthen the capabilities of the oversight role
of the Board.
ACKNOWLEDGEMENT
On behalf of the Board of Directors, I would like to
extend our gratitude to the management and staff
of the Group for their continued commitment and
dedication. I would also like to extend our
appreciation to Bank Negara Malaysia, the
Securities Commission, Bursa Securities, business
partners, advisers and customers. Finally, we would
like to thank our shareholders for their continued
support.
penyata pengerusi
Kami akan berusaha sehingga diiktiraf sebagai
kumpulan kewangan yang menggunakan amalan
terbaik dalam setiap aspek perniagaannya, sebagai
sebuah bank Malaysia yang memiliki keutuhan
yang tinggi dan tadbir urus korporat yang
cemerlang.
Untuk mencerminkan dengan lebih jelas lagi
perniagaan dan jenis-jenis kegiatan yang dijalankan
oleh Kumpulan pada masa ini, Syarikat telah
mendapatkan kelulusan berperaturan yang perlu
bagi cadangan untuk menukar namanya kepada
‘Alliance Financial Group Berhad’, tertakluk kepada
persetujuan para pemegang saham syarikat pada
Mesyuarat Agung Luar Biasa yang akan datang.
LEMBAGA PENGARAH
Datuk Bridget Lai, Ketua Pegawai Eksekutif
Kumpulan Alliance Bank yang menganggotai
Lembaga Pengarah ini pada 20 Jun 2007,
merupakan ahli baru yang tersangat dialu-alukan
kerana beliau akan menolong mengukuhkan
kemampuan Lembaga Pengarah dari segi peranan
Lembaga Pengarah sebagai pengawal selia.
PENGHARGAAN
Bagi pihak Lembaga Pengarah, saya ingin
mengucapkan setinggi-tinggi terima kasih kepada
pihak pengurusan dan semua kakitangan
Kumpulan atas komitmen dan dedikasi anda yang
berterusan. Saya juga ingin melahirkan
penghargaan kami kepada Bank Negara Malaysia,
Suruhanjaya Sekuriti, Bursa Securities, rakan-rakan
niaga, para penasihat dan semua pelangganpelanggan kami.
Akhir sekali, kami ingin
mengucapkan terima kasih kepada para pemegang
saham kami atas sokongan anda yang berterusan.
DATUK OH CHONG PENG
Pengerusi
DATUK OH CHONG PENG
Chairman
24
M A L A Y S I A N
B E R H A D
( 6 6 2 7 - X )
corporate governance statement
The Board of Directors of Malaysian Plantations Berhad have adopted the highest standards of corporate governance in all
areas of its activities with the objective of achieving business prosperity and corporate accountability. The ultimate objective
is to safeguard the interests of all stakeholders and to enhance shareholders’ value. The Board is committed to ensure that
the Company is in compliance with the guidelines on Best Practices in Corporate Governance set out in the Malaysian Code
on Corporate Governance.
1.
THE BOARD OF DIRECTORS
1.1 Composition
The Board comprises nine (9) members, who are all Non-Executive Directors, of whom six (6) are Independent
Directors. The Board is constituted of individuals of high calibre and diverse experience and collectively have the
necessary skills and qualification to effectively manage the Company and to discharge the responsibilities of the
Board. The current board members are all very experienced in the management of businesses and in terms of
academic background have skills in the areas of law, banking, accounting, economics and business management.
The presence of a majority of Independent Non-Executive Directors also provides the necessary checks and balances
to ensure that the interests of all shareholders and the general public are given due consideration in the decisionmaking process.
A brief profile of each Director is presented on pages 5 to 9 of this Annual Report.
1.2 Duties and Responsibilities
The Board is led by the Chairman, Datuk Oh Chong Peng, who is an Independent Non-Executive Director.
The Chairman receives strong and positive support from the Company Secretary in discharging his duties and
responsibilities to ensure the effective functioning of the Board.
There are matters specifically reserved for the Board’s decision to ensure that the direction and control of the Group
are firmly in hand. The day-to-day conduct of the Group’s business is delegated to the full-time employees of the
Group subject to the authority limit given. The Board is ultimately responsible for the overall performance of the
Company and of the Group.
The principal duties and responsibilities of the Board are:
• formulating the business direction and objectives of the Group;
• reviewing, adopting and approving the Group’s annual budgets, strategic plans, key operational initiatives, major
investments and funding decisions;
• overseeing the conduct of business of the Group;
• reviewing the risk management process within the Group;
• assuming its responsibility in succession planning within the Group; and
• reviewing the adequacy and integrity of internal control systems and management information systems to ensure
compliance with relevant laws, rules, regulations, directives and guidelines.
The Board also assumes various functions and responsibilities that are required of them by regulatory authorities,
as specified in guidelines and directives issued from time to time.
1.3 Board Meetings
The Board meets on a regular basis to review business performance, strategies, business plans and significant
policies as well as to consider business and other proposals which require the Board’s approval. Ad-hoc Board
meetings are held to deliberate on corporate proposals or urgent issues which require the Board’s consideration
between scheduled meetings.
25
A N N U A L
R E P O R T
2 0 0 7
The Board met ten (10) times during the financial year ended 31 March 2007. Details of each Director’s attendance
for the financial year ended 31 March 2007 are as follows:
Name of Director
Attendance
1.
Datuk Oh Chong Peng (Chairman)(Appointed on 21.4.2006)
9/9
2.
Dato' Thomas Mun Lung Lee
10/10
3.
Tee Kim Chan
10/10
4.
10/10
5.
Tan Yuen Fah
9/10
6.
Phoon Siew Heng
10/10
7.
9/10
8.
9/9
9.
Bridget Anne Chin Hung Yee (Appointed on 20.6.2007)
Not Applicable
1.4 Access to Information
Board members are provided with relevant proposal papers and supporting documents well in advance of Board
meetings to enable them to discharge their duties effectively. Senior management and advisers are invited to attend
Board meetings, where necessary, to provide additional information and insights on the relevant agenda items
tabled at Board meetings.
The Directors have full access to the services of the Company Secretary, whose role includes ensuring that Board
procedures, applicable rules and regulations are complied with.
Every Director has the right to resources, whenever necessary and reasonable, for the performance of his duties at
the cost of the Company.
Directors may seek external independent professional advice at the expense of the Company, to assist them in
making well-informed decisions whether as a full Board or in their individual capacity.
1.5 Appointment and Re-election of Directors
Pursuant to the guidelines issued by Bank Negara Malaysia (“BNM”), the appointment of new Directors and the
re-appointment of Directors upon the expiry of their respective tenure of office as approved by BNM, are subject
to the prior approval of BNM.
Any proposed appointment of new Board members and proposed re-appointment will be assessed by the
Nomination Committee. The Nomination Committee will, upon its assessment, submit its recommendation to the
Board for approval subject to Bank Negara Malaysia’s consent.
Upon appointment, new Directors are advised of their legal and statutory responsibilities. All Directors are also
regularly being updated on new requirements affecting their responsibility and are constantly reminded of their
obligations.
26
M A L A Y S I A N
In accordance with the Articles of Association of the Company, newly appointed Directors shall hold office only
until the next AGM, and shall then be eligible for re-election. Additionally, one-third (1/3) of the remaining existing
Directors shall retire from office at each annual general meeting (“AGM”) and be eligible to offer themselves for
re-election provided always that all Directors shall retire from office at least once every three (3) years.
B E R H A D
( 6 6 2 7 - X )
Details of the Directors seeking re-election at the forthcoming AGM of the Company are disclosed in the Statement
Accompanying Notice of AGM on page 166 of this Annual Report.
1.6 Directors’ Training
The Board places the responsibility for training of directors on the Nomination Committee which on a continuous
basis, evaluates and determines the training needs of directors.
All the Directors have completed the Mandatory Accreditation Programme and attended various training
programmes under the Continuing Education Programmes pursuant to the requirements of Bursa Securities.
The Company has in place a Directors’ Orientation Programme for newly appointed Directors to familiarise
themselves with the Group’s business operations. The Directors are provided with the opportunity for relevant
training programmes on an ongoing basis on areas relating to the banking and financial industry to keep abreast
with the latest developments in the marketplace. During the financial year, the Directors attended seminars, courses
and briefings conducted by professional bodies and regulatory authorities.
Seminars, courses and briefings attended by Directors during the financial year ended 31 March 2007 include the
following:•
•
•
•
•
•
•
•
•
Workshop for Directors and Senior Management on Leaders & Leadership
Directors' Programme : Basel II Directives - An appreciation from a Practical Standpoint
Applications and Implications of Selected Revised/New Financial Reporting Standards (FRS)
IBBM Risk Management Conference 2006 : Managing Structured Products and Derivatives
Program on Improving Board of Directors' Performance, Leadership and Governance
US GAAP Seminar
Briefing on the Anti-Money Laundering Act 2001
Marketing Partner of Global Leadership Forum
Directors' Duties and Liabilities: Challenges and Obligations in Maintaining Corporate Governance
1.7 Board Committees
The Board has established various Board Committees to assist and complement the Board in the execution of its
responsibilities. Each Board Committee operates within its terms of reference, which clearly define its functions and
authority. The Board Committees of MPlant are as follows:
a)
Audit Committee
The composition of the Audit Committee and its Terms of Reference together with the Report of Audit
Committee are presented on pages 36 to 39 of this Annual Report.
b)
Nomination Committee
The Nomination Committee reviews the existing mix of skills, experience, size, effectiveness of the Board and
contribution of each individual Director. It also considers and recommends to the Board, the candidates for
directorships.
The salient Terms of Reference of the Nomination Committee are as follows:• To establish minimum requirements for the board i.e. required mix of skills, experience, qualification and
other core competencies required of a director. The Committee is also responsible for establishing minimum
requirements for the Chief Executive Officer (“CEO”). The requirements and criteria should be approved
by the full board.
27
A N N U A L
R E P O R T
2 0 0 7
• To recommend and assess the nominees for directorship, board committee members as well as nominees
for the CEO. This includes assessing directors for reappointment, before an application for approval is
submitted to Bank Negara Malaysia. The actual decision as to who shall be nominated should be the
responsibility of the full board.
• To oversee the overall composition of the board, in terms of the appropriate size and skills, and the balance
between executive directors, non-executive directors and independent directors through annual review.
• To recommend to the board the removal of a director/CEO from the board/management if the
director/CEO is ineffective, errant and negligent in discharging his responsibilities.
• To establish a mechanism for the formal assessment on the effectiveness of the board as a whole and the
contribution of each director to the effectiveness of the board, the contribution of the board’s various
committees and the performance of the CEO and other key senior management officers. Annual
assessment should be conducted based on an objective performance criterion. Such performance criteria
should be approved by the full board.
• To ensure that all directors receive an appropriate continuous training program in order to keep abreast with
the latest development in the industry.
• To oversee the appointment, management succession planning and performance evaluation of key senior
management officers.
• To recommend to the board the removal of key senior management officers if they are ineffective, errant
and negligent in discharging their responsibilities.
• To assess, on an annual basis, to ensure that the directors and key senior management officers are not
disqualified under Section 56 of the Banking and Financial Institutions Act, 1989.
The Nomination Committee currently comprises entirely of non-executive directors with the majority being
independent. For the financial year ended 31 March 2007, a total of four (4) meetings were held by the
Nomination Committee. The members of the Nomination Committee and the details of attendance during the
financial year ended 31 March 2007 are as follows:
Name of Committee Member
c)
Datuk Oh Chong Peng (Chairman)
4/4
Tee Kim Chan
4/4
4/4
Phoon Siew Heng
3/4
4/4
The Remuneration Committee reviews and make recommendations to the Board on the remuneration package
of Non-Executive Directors. The reviews cover all aspects of remuneration, including but not limited to
Directors’ fees, allowances and benefits-in-kind based on the level of responsibilities undertaken by the
particular Director concerned.
28
M A L A Y S I A N
Attendance
B E R H A D
( 6 6 2 7 - X )
The salient Terms of Reference of the Remuneration Committee are as follows:
• To recommend a framework of remuneration for directors, CEO and key senior management officers for
the full board’s approval. The remuneration framework should support the Company’s culture, objectives
and strategy and should reflect the responsibility and commitment, which goes with the board membership
and responsibilities of the CEO and senior management officers. There should be a balance in determining
the remuneration package, which should be sufficient to attract and retain the directors of calibre, and yet
not excessive to the extent of the Company’s funds are used to subsidise the excessive remuneration. This
framework should cover all aspects of remuneration including director’s fees, salaries, allowances, bonuses,
options and benefits-in-kind.
• To recommend specific remuneration packages for executive directors and the CEO. The remuneration
package should be structured such that it is competitive and consistent with the Company’s culture,
objectives and strategy. Salary scales drawn up should be within the scope of the general business policy
and not be dependant on short-term performance to avoid incentives for excessive risk-taking. As for nonexecutive directors and independent directors, the level of remuneration should be linked to their level of
responsibilities undertaken and contribution to the effective functioning of the board. In addition, the
remuneration of each board member may differ based on their level of expertise, knowledge and
experience.
• To review annually the Group Policy on remuneration of non-executive directors of the subsidiaries and to
recommend the remuneration of the non-executive directors for the board’s approval.
The Remuneration Committee currently comprises of entirely non-executive directors with the majority being
independent. For the financial year ended 31 March 2007, four (4) meetings were held by the Remuneration
Committee. The members of the Remuneration Committee and the details of attendance during the financial
year ended 31 March 2007 are as follows:
Attendance
Datuk Oh Chong Peng (Chairman)
3/3
Tee Kim Chan
4/4
4/4
Phoon Siew Heng
3/4
4/4
The minutes of all the above Board Committees are tabled to the Board for notation at the next available Board
meeting.
1.8 Directors' Remuneration
The objective of the Company’s policy on Directors’ remuneration is to attract and retain Directors needed to steer
the Company towards achieving its goal effectively. The determination of the Non-Executive Directors’
remuneration is a matter for the Board as a whole.
The level of remuneration of Non-Executive Directors is linked to their level of responsibilities undertaken.
Non-Executive Directors are paid annual Directors’ fees and sitting allowances for attendance to Board/Committee
meetings. The members of Board Committees are also paid annual fees for additional responsibilities undertaken.
29
A N N U A L
R E P O R T
2 0 0 7
The aggregate remuneration of the Directors of the Company categorised into the appropriate components and
analysed into bands of RM50,000 for the financial year ended 31 March 2007 is set out below.
Fees
(RM’000)
Other Allowances and
Benefits-in-kind (RM’000)
Total
(RM’000)
-
-
-
Non-Executive Directors
424
218
642
Amount of Remuneration
Executive Directors
RM50,000 to RM100,000
-
7
RM100,001 to RM150,000
-
1
Executive Directors
2.
A C C O U N TA B I L I T Y A N D A U D I T
2.1 Financial Reporting
The annual financial statements and quarterly results are reviewed by the Audit Committee and approved by the
Board of Directors for BNM’s clearance prior to public release. A statement by the Directors explaining the Board’s
responsibility for preparing the annual financial statements is set out on page 40 of this Annual Report.
2.2 Risk Management Framework and Internal Control
A Statement on Internal Control, which provides an overview of the state of internal control within the Group, is
disclosed on page 34 of this Annual Report.
2.3 Relationship with the Auditors
Through the Audit Committee, the Company has established a formal and transparent relationship with the
auditors, both internal and external. The external auditors are invited to discuss the annual financial statements,
their audit plan, audit findings and other special matters that require the Board’s attention. The Audit Committee
meets with the external auditors at least once a year, without the presence of the Management.
2.4 Related Party Transactions
All related party transactions are reviewed by the Group Internal Auditors and reports on the review are forwarded
to the Audit Committee every quarter for endorsement.
3.
I N V E S T O R S R E L AT I O N A N D
S H A R E H O L D E R S C O M M U N I C AT I O N
The Company acknowledges the importance of regular communication with shareholders and investors. The Company
endeavours to maintain constant and effective communication with shareholders through timely and comprehensive
announcements. The Board regards the Annual General Meeting (“AGM”) and Extraordinary General Meetings as an
opportunity to communicate directly with shareholders and encourages attendance and participation in dialogue. The
notice of AGM is despatched to shareholders, together with explanatory notes or circulars on items of special business,
at least twenty-one (21) days prior to the meeting date.
30
M A L A Y S I A N
B E R H A D
( 6 6 2 7 - X )
Analysts briefings are conducted every quarterly in conjunction with the release of the quarterly financial results to
provide consistent dialogues between the Group’s Senior Management and the investment community. During the last
12 months, the Group has participated in roadshows, conferences and forums in Singapore and Hong Kong and have
dialogues with foreign fund managers and investment community. The analysts briefings and roadshows keep the
investment community informed on the progress and development of the business activities of the Group and provide
an avenue for the Group to receive feedback from potential investors.
Shareholders, potential investors and members of the public can access the Company’s website at www.mplant.com.my
for information of the Group. They can also convey their concerns and queries to the Senior Independent Non-Executive
Director of the Company, Mr Tee Kim Chan at fax no. 03-2694 6200 or by e-mail to [email protected], or by
mail to the registered office of the Company at 3rd Floor, Menara Multi-Purpose, Capital Square, No. 8 Jalan Munshi
Abdullah, 50100 Kuala Lumpur, Malaysia.
4.
C O R P O R AT E D I S C L O S U R E
The Corporate Disclosure Policies and Procedures for MPlant Group (“CDPP”) provides timely, consistent and fair
disclosure of corporate information to enable informed decisions by investors.
The objectives of the CDPP are:
a)
raising awareness of directors, management and employees on, disclosure requirements and practices;
b)
providing guidance in disseminating corporate information to, and in dealing with investors, analysts, media
representatives and the public; and
c)
ensuring compliance with the disclosure obligations under the Listing Requirements of Bursa Securities and other
applicable laws.
The Group Company Secretary being the Corporate Disclosure Manager (“CDM”), serves as the primary contact person
for matters referenced in the CDPP. He oversees and co-ordinates disclosure of material information to Bursa Securities,
analysts, institutional investors, the media and the investing public. CDM also ensures compliance with the CDPP and
undertakes reviews of any violations, including assessment and implementation of appropriate consequences and
remedial action.
Certain designated senior Management staff of the Group are authorised to communicate Group information to the
investing public. The authorised spokespersons are regularly reminded of their responsibility to exercise due diligence in
making sure that the information to be disseminated to the investing public is accurate, clear, timely and complete, and
that due care is observed when responding to analysts, the media and the investing public.
To take advantage of current information technology to disseminate relevant information to the investing public, all
announcements released by the Company are made accessible via the Company’s website, www.mplant.com.my.
5.
DEALINGS IN SECURITIES
The Group has in place an internal procedure governing dealings in securities by the Directors and employees to prevent
contravention of applicable rules and requirements, including the provisions of the Listing Requirements of Bursa
Securities and insider trading laws.
“Watch List” and “Restricted List” are circulated regularly to the relevant directors and employees reminding them to
refrain from dealing with relevant securities. Directors and principal officers of the Group are also reminded on a quarterly
basis in relation to restriction in dealings in securities of the Company during Closed Periods.
This Corporate Governance Statement is made in accordance with the resolution of the Board of Directors.
31
A N N U A L
R E P O R T
2 0 0 7
additional information
The following additional information is provided in accordance with Paragraph 9.25 of the Bursa Securities Listing
Requirements:
1.
Utilisation of Proceeds
There were no proceeds raised from any corporate proposal during the financial year ended 31 March 2007.
2.
Non-Audit Fees
Non-audit fees paid/payable to the external auditors, Messrs Ernst & Young by the Group for the financial year ended
31 March 2007 amounted to RM150,670.
3.
Variations In Results
There were no variances of 10% or more between the audited results for the financial year ended 31 March 2007 and
the unaudited results previously announced.
4.
Material Contracts
Save as disclosed below, there were no material contracts (not being contracts entered into in the ordinary course of
business) entered into by the Group involving Directors’ and major shareholders’ interests, either still subsisting at the end
of the financial year or, if not then subsisting, entered into since the end of the previous financial year:
Proposed Issuance of Commercial Papers/Medium Term Notes Programme of RM300 Million
On 21 June 2006, the Company announced its proposal to undertake an issuance of Commercial Papers (“CP”)/Medium
Term Notes (“MTN”) Programme of RM300 Million (“the Proposed Programme”). Alliance Investment Bank Berhad and
Hwang-DBS Securities Berhad have been appointed as Joint Lead Arrangers and Joint Principal Advisers to arrange for
the Proposed Programme.
The Proposed Programme will have a tenure of seven (7) years from the date of the first issuance of the CP/MTN. The
Company may issue CP with maturities of one (1), two (2), three (3), six (6), nine (9) or twelve (12) months and/or MTN
with maturities of more than one (1) year and up to seven (7) years.
The Proposed Programme will be unsecured except for the following:
(i)
Special First Issuance of CP/MTN of nominal value of RM200 million where the said CP/MTN will be secured against
a Standby Letter of Credit / Bank Guarantee to be issued by DBS Bank Ltd, Labuan Branch;
(ii) CP up to the nominal value of RM100 million where the said CP will be secured against a Standby Letter of
Credit/Bank Guarantee to be issued by DBS Bank Ltd, Labuan Branch.
The Proposed Programme is subject to the approval of Securities Commission (“SC”) and this was obtained on 19 July
2006. The proceeds to be raised will be utilised to refinance existing borrowing of the Company and to meet working
capital and/or funding requirements of the Company and its subsidiaries.
On 18 September 2006, the Company issued RM200 million Commercial Papers out of its RM300 million Commercial
Papers/Medium Term Notes Programme. The proceeds from the issuance was used to repay the existing term loan of
RM200 million.
32
M A L A Y S I A N
B E R H A D
( 6 6 2 7 - X )
additional information
5.
Profit Guarantee
There was no profit guarantee given by the Company in respect of the financial year ended 31 March 2007.
6.
Revaluation of Landed Properties
The Group does not adopt a policy of regular revaluation of its landed properties.
7.
Amount of Options, Warrants or Convertible Securities Exercised During the Financial Year
During the financial year ended 31 March 2007, 49,691,793 new ordinary shares of RM1.00 each in the Company were
issued pursuant to the exercise of 49,691,793 2002/2007 Warrants at an exercise price of RM1.21 per ordinary share.
8.
Share Buy-Back
The Company did not buy back any of its shares during the financial year ended 31 March 2007.
9.
American Depository Receipt (“ADR”) or Global Depository Receipt (“GDR”)
The Company did not sponsor any ADR or GDR programme during the financial year ended 31 March 2007.
10. Sanctions and/or Penalties
There were no public sanctions and/or penalties imposed on the Company and its subsidiaries, Directors or Management
by the relevant regulatory bodies during the financial year ended 31 March 2007.
33
A N N U A L
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statement on internal control
RESPONSIBILITY
The Board acknowledges its overall responsibility for the Group’s system of internal control and for reviewing its adequacy
and integrity. The 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. It can therefore only provide
reasonable and not absolute assurance of effectiveness against material misstatement of management and financial
information or against financial losses and fraud.
The Board regularly receives and reviews reports on internal control and is of the view that the system of internal control that
has been instituted throughout the Group is sound and adequate to safeguard the shareholders’ investments and the Group’s
assets.
The Group has an on-going process for identifying, evaluating and managing the significant risks faced by the Group and this
process includes updating the system of internal control when there are changes to business environment or regulatory
guidelines. The process is regularly reviewed by the Board and accords with the ‘Statement on Internal Control: Guidance for
Directors of Public Listed Companies’ issued by the Task Force on Internal Control.
The role of Management is to implement the Board’s policies, procedures and guidelines on risk and control by identifying
and evaluating the risks faced and design, operate and monitor a suitable system of internal control to manage these risks.
The Board has extended the responsibilities of the Audit Committee to include the role of monitoring all internal controls on
behalf of the Board, including identifying risk areas and communicates to the Board critical risk areas faced by the Group. The
Audit Committee is supported by an internal audit function which is independent of the activities they audit. The internal
auditors have performed their duties with impartiality, proficiency and due professional care.
RISK MANAGEMENT FRAMEWORK
The Board ensures that the Group manages risk within clearly defined guidelines and will provide an independent oversight
to ensure that risk management policies are complied with, through a framework of established control and reporting process.
The Assets and Liabilities Management Committee, Credit Risk Management Committee and Operational Risk Management
Committee assume the responsibility of overseeing specific areas of risks identifiable to the Group’s business activities and
implement various risk management policies and procedures. An integrated Risk Management Committee is set up to oversee
and coordinate the activities of the above mentioned committees.
The major identifiable area of risks common to the activities and industries of the Group are credit risk, liquidity risk, market
risk and operational risk. For more information on the risks and relevant guidelines and policies please refer Note 41 to the
Financial Statements.
SYSTEM OF INTERNAL CONTROL
To ensure that a sound system of control is in place, the Board has established primary processes in reviewing the adequacy
and integrity of the system of internal control. The primary processes include:• Regular and comprehensive management reports are made available to the Board on a monthly basis, covering financial
performance and key business indicators, which allow for effective monitoring of significant variances between actual
performance against budgets and plans.
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statement on internal control
• Clearly defined delegation of responsibilities to committees of the Board and to Management including organisation
structures and appropriate authority levels.
• A code of conduct, human resource policies and performance reward system to support business objectives, risk
management and the system of internal control.
• A proper procedure to control applications and the environment of computer information systems.
• Regular update of internal policies and procedures, to reflect changing risks or resolve operational deficiencies.
• Regular review of the business processes by the Group’s internal audit, to assess the effectiveness of the control
environment and highlight significant risks impacting the Group.
R E V I E W O F T H E S TAT E M E N T B Y E X T E R N A L A U D I T O R S
As required by paragraph 15.24 of the Listing Requirements of Bursa Malaysia Securities Berhad, the external auditors have
reviewed this Statement on Internal Control for the inclusion in the annual report for the financial year ended 31 March 2007.
Their review was performed in accordance with Recommended Practice Guide 5: Guidance for Auditors on the Review of
Directors’ Statement on Internal Control issued by the Malaysian Institute of Accountants. Based on their review, the external
auditors have reported to the Board that nothing have come to their attention that causes them to believe that this Statement
is inconsistent with their understanding of the process the Board has adopted in the review of the adequacy and integrity of
internal control of the Group.
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audit committee report
AUDIT COMMITTEE
The Audit Committee comprises the following Directors:Tan Yuen Fah
Chairman, Independent Non-Executive Director
Tee Kim Chan
Kung Beng Hong
TERMS OF REFERENCE
1.
Policy
It is the policy of the Company to establish an Audit Committee to ensure that internal and external audit functions are
properly conducted and that audit recommendations are being carried out effectively.
2.
Objectives
The objectives of this policy are:
3.
a)
to relieve the full Board of Directors from detailed involvement in the review of the results of internal and external
audit activities, and yet ensure that audit findings are brought up to the highest level for consideration; and
b)
to comply with Paragraph 15.10 of the Bursa Malaysia Securities Berhad (“Bursa Securities”) Listing Requirements.
Composition of the Audit Committee
The Audit Committee shall be appointed by the Directors which shall fulfil the following requirements:
a) the Audit Committee must be composed of no fewer than three members;
b) a majority of the Audit Committee must be Independent Directors;
c) the members of the Audit Committee shall elect a Chairman from among themselves who shall be an Independent
Director; and
d) at least one member of the Audit Committee:
i) must be a member of the Malaysian Institute of Accountants; or
ii) if he is not a member of the Malaysian Institute of Accountants, he must have at least three years’ working
experience and:
aa) he must have passed the examinations specified in Part I of the 1st Schedule of the Accountants Act 1967;
or
bb) he must be a member of one of the associations of accountants specified in Part II of the 1st Schedule of
the Accountants Act 1967; or
iii) fulfils such other requirements as prescribed by the Bursa Securities.
No alternate Director shall be appointed as a member of the Audit Committee.
4.
Secretary to the Audit Committee
The Company Secretary shall be the Secretary to the Committee.
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5.
Quorum
The majority of members present must be Independent Directors to form a quorum.
6.
Attendance at Meetings
• The Head of Finance and Head of Internal Audit Department are invited to attend all meetings of the Audit
Committee.
• The External Auditors are normally invited to attend meetings as and when necessary.
• Other Board members may attend meetings upon the invitation of Audit Committee.
• The Secretary of the Audit Committee shall provide the necessary administrative and secretarial services for the
effective functioning of the Committee. The minutes of meetings are circulated to the Committee Members and to
all other members of the Board.
7.
Frequency of Meetings
The Committee shall meet at least four times a year. However, the frequency of meetings would increase depending on
the scope of the audit activities and the number of audit reports produced.
8.
Functions of the Audit Committee
The functions of the Audit Committee are as follows:
a)
To consider the appointment of the External Auditors, the audit fee and any questions of resignation or dismissal and
whether there is reason (supported by grounds) to believe that External Auditors are not suitable for re-appointment;
b)
To discuss with the External Auditors before the audit commences, the nature and scope of the audit, and ensure coordination where more than one audit firm is involved;
c)
To recommend the nomination of a person or persons as External Auditors;
d)
To
•
•
•
•
•
•
e)
To review the quarterly and year-end financial statements of the Company, prior to the approval of the Board of
Directors, focusing particularly on:
• any changes in accounting policies and practices;
• significant adjustments arising from the audit;
• any other significant and unusual events;
• the going concern assumption; and
• compliance with accounting standards and other legal requirements;
f)
To discuss problems and reservations arising from the interim and final audits, and any matter the Auditors may wish
to discuss (in the absence of Management where necessary);
review:
with the External Auditors, the audit plan;
with the External Auditors, their evaluation of the system of internal controls;
with the External Auditors, their audit report;
the assistance given by the Company’s officers to the External Auditors;
the consolidated financial statements of the Company; and
any related party transactions that may arise within the Group;
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9.
g)
To review the External Auditors’ Management letter and Management’s response;
h)
To propose best practices on disclosure in financial results and annual reports of the Company in line with the
principles set out in the Malaysian Code of Corporate Governance, other applicable laws, rules, directives and
guidelines;
i)
To propose that the Management has in place an adequate system of risk management to safeguard the Company’s
assets;
j)
To do the following where an internal audit function exists:
• review the adequacy of the scope, functions and resources of the internal audit function, and that it has the
necessary authority to carry out its work;
• review the internal audit programme and results of the internal audit process and where necessary ensure that
appropriate action is taken on the recommendations of the internal audit function;
• review any appraisal or assessment of the performance of members of the internal audit function;
• to consider the major findings of internal investigations and Management’s responses;
k)
To consider and examine any other matters as defined by the Board.
Authority
The Committee is authorised by the Board to:
a)
b)
c)
d)
e)
f)
g)
investigate any matter within the scope of the Committee’s duties;
have full and unrestricted access to any information in the Company;
obtain independent professional advice or other advice, whenever deemed necessary;
make recommendations for improvements of operating performance and management control arising from internal
and external audit recommendations;
have the resources which are required to perform its duties;
have direct communication channels with the External Auditors and person(s) carrying out the internal audit function
or activity, if any; and
be able to convene meetings with the External Auditors, excluding the attendance of the executive members of the
Committee, whenever deemed necessary.
AUDIT COMMITTEE MEETINGS HELD FOR THE FINANCIAL YEAR ENDED 31 MARCH 2007
During the financial year ended 31 March 2007, a total of six (6) Audit Committee meetings were held. The details of
attendance of the Committee members are as follows:
Attendance
Tan Yuen Fah
6/6
6/6
Tee Kim Chan
6/6
5/6
4/4
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S U M M A RY O F A C T I V I T I E S
The Audit Committee has during the financial year ended 31 March 2007 discharged the following duties:
a)
b)
c)
d)
e)
f)
g)
h)
i)
j)
k)
l)
Reviewed the quarterly results and made recommendations to the Board for approval;
Reviewed with the External Auditors, the draft Audited Financial Statements of the Company and the Group for the
financial year ended 31 March 2006;
Reviewed with the External Auditors, the audit findings for the financial year ended 31 March 2006;
Reviewed with the External Auditors, their audit plan for the financial year ended 31 March 2007;
Considered the re-appointment of External Auditors and their audit fee for the financial year ended 31 March 2007;
Reviewed the internal audit reports;
Reviewed the Statement on Internal Control for the financial year ended 31 March 2006 and the Audit Committee Report
for inclusion in the 2006 Annual Report;
Reviewed with the Internal Auditors, the internal audit plan and budget for the financial year ending 31 March 2008;
Reviewed Bank Negara Malaysia’s examination reports on subsidiaries;
Reviewed recurrent related party transactions entered into by the Company and its subsidiaries;
Reviewed and approved the engagement of Messrs Ernst & Young as reporting accountants for the proposed Commercial
Papers/Medium Term Notes Programme of RM300 million; and
Reviewed the Corporate Disclosure Policies and Procedures.
Subsequent to the financial year ended 31 March 2007, the Audit Committee discharged the following duties:
a)
b)
c)
Reviewed the 2007 Report to the Audit Committee from the External Auditors;
Reviewed the External Auditors’ Management Letter in respect of the audit for the Group for the financial year ended 31
March 2007; and
Reviewed with the External Auditors, the draft Audited Financial Statements of the Company and the Group for the
financial year ended 31 March 2007.
INTERNAL AUDIT FUNCTION
The Head of Internal Audit Department reports directly to the Audit Committee.
The Internal Audit Department is responsible for the provision of independent audit reports to the Audit Committee on the
Group’s system of internal control and its authority is provided in the Audit Charter, which formally documents the roles,
duties and responsibilities of the Internal Auditors.
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statement of board of directors'
r e s p o n s i b i l i t i e s for preparing the Annual Audited Financial Statements
The Companies Act, 1965 requires Directors to prepare financial statements for each financial year, which give a true and fair
view of the state of affairs of the Group and the Company for the financial year.
In preparing the financial statements, the Directors are responsible for the adoption of suitable accounting policies that comply
with the provisions of the Companies Act, 1965, applicable Financial Reporting Standards in Malaysia as modified by Bank
Negara Malaysia Guidelines. The Directors are also responsible to ensure their consistent use in the financial statements,
supported where necessary by reasonable and prudent judgements.
The Directors hereby confirm that suitable accounting policies have been consistently applied in the preparation of the
financial statements. The Directors also confirm that the Company maintains adequate accounting records and an effective
system of internal control to safeguard the assets of the Group and the Company and prevent and detect fraud or any other
irregularities.
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financial statements
Directors’ Report
42
Statement by Directors
50
Statutory Declaration
50
Report of the Auditors
51
Balance Sheets
52
Income Statements
54
Consolidated Statement of Changes in Equity
55
Statement of Changes in Equity
56
Consolidated Cash Flow Statement
57
Cash Flow Statement
60
Notes to the Financial Statements
61
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directors’ report
DIRECTORS' REPORT
The Directors have pleasure in presenting their report together with the audited financial statements of the Group and of the
Company for the financial year ended 31 March 2007.
PRINCIPAL ACTIVITIES
The principal activities of the Company are investment holding and provision of management services to the subsidiaries.
The principal activities of the subsidiaries are commercial banking and financing, investment banking, Islamic banking,
provision of stockbroking services, unit trusts and fund management, and the provision of related financial services.
There have been no significant changes in the nature of the principal activities during the financial year.
RESULTS
Group
RM'000
Profit/(loss) before taxation
Taxation and zakat
Company
RM'000
150,812
(1,495)
(43,449)
(2,050)
–––––––––––––––––––––––––
107,363
(3,545)
==============================
Attributable to:
Equity holders of the Company
Minority interests
107,258
(3,545)
105
–
–––––––––––––––––––––––––
107,363
(3,545)
==============================
There were no material transfers to or from reserves or provisions during the financial year other than as disclosed in the
statements of changes in equity.
DIVIDENDS
No dividend has been declared by the Company since the end of the previous financial year. The Directors do not recommend
any payment of dividend for the current financial year.
BUSINESS REVIEW FOR 2006/7
FY 2006/7 was a year of continuing liberalization as the financial service industry operated in a more challenging business and
economic environment. Competition continued to intensify with the expansion of branches among foreign banks, the merger
and acquisition of certain domestic banks as well as the recapitalization of domestic banks through regional players. Of
significance, the entry of new players in Islamic Banking, the newly formed investment banks and the liberalization of foreign
exchange administration policies are expected to generate increased activity with new innovative products and services to
attract a wider range of customers, including foreign clients.
Against this backdrop, the Alliance Banking Group went through a comprehensive restructuring exercise, both operationally
and structurally. Over the past 18 months, the Group embarked on a positive transformation journey to turnaround the
banking entity into a high performing banking group.
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directors’ report
BUSINESS REVIEW FOR 2006/7 (cont’d)
The Group expanded its reach by repositioning its branches into sales and service outlets, implemented multi-distribution
channels through Alliance Direct Marketing Sdn. Bhd., exclusive third party sales agencies, tie ups, telesales and forging
regional strategic alliances vide our parentage. These strategic partnerships and alliances serve us and our customers well
giving us greater access to the domestic and regional markets without high capital investment needed.
We remodeled our businesses into four main lines ranging from Consumer Banking, Commercial Banking, Islamic Banking,
Wholesale and Investment Banking and built robust and integrated risk management capability and infrastructure. The entities
of the Group leveraged on synergies across businesses and improve efficiency through the shared services model and
integration of complementary business. In this way, we were able to expand and strengthen our footprint more cost
effectively through the sharing of resources.
We focused on organic growth and implemented new strategies and business models, re-engineered business processes and
systems to drive higher productivity and efficiency, strengthen the Group’s resilience in facing and overcoming challenges in
an increasingly intense competitive environment.
We innovated and expanded our product franchise and adopted new distribution trends in order to continue sharpening our
value proposition to the customers. During the financial year, Alliance Bank expanded its Consumer Banking franchise by
rebalancing its loans portfolio to increase profitability by promoting mortgage, personal financing, credit cards and wealth
management products and services. Lending activity focused on mass market consumer and Small and Medium Enterprises
(“SMEs”) financing while corporate loans and offering of capital market solutions to local corporations continued. We have
also successfully rolled out a new business model for the SMEs and Commercial Banking clients and we continue to promote
Islamic Banking.
In December 2006, our Investment Bank subsidiary legally merged with Kuala Lumpur City Securities Sdn. Bhd. (“KLCS”) and
is now a Participating Organisation under Bursa Malaysia Securities Berhad. This means Alliance Investment Bank Berhad
(”AIBB”) now directly offers stock broking services to its clients thereby enhancing its capability and position as a key player
in the domestic and regional equity markets. To further strengthen our asset and fund management expertise, we have
recently rationalised the business of Alliance Unit Trust Management Berhad and Alliance Capital Asset Management Sdn.
Bhd. to form Alliance Investment Management Berhad, which is ranked among the top 10 asset management companies in
the country.
In conjunction with the RAM League Awards 2007, AIBB was awarded with the Special League Achievement Award and Blue
Print Award. The Special League Award was awarded to AIBB in recognition for outstanding accomplishments in the RAM
League Table while the Blue Print Award recognises AIBB’s “Glomac Regal Sdn Bhd RM175 million Murabahah Underwritten
Notes and Issuance of Murabahah Medium Term Notes Facility” as the groundbreaking New Real Estate Benchmark Deal.
Alliance Unit Trust’s First Fund was also awarded the Best Performing Fund Award under the Mixed Asset Balanced 10 years
category by Lipper Asia Ltd and The Edge Communication Group.
The Group continued to improve its asset quality and also revised its provisioning methodologies for non-performing loans
to close the gap with the provisioning recommendations of Financial Reporting Standard 139 – Financial Instruments:
Recognition and Measurement.
The Group continues to invest in building the required infrastructure and in enhancing its human capital and talent pool to
support business growth and to better manage risks. The Group has embarked on an integrated enterprise-wide risk
management framework within the Basel II Accord, establishing a culture of best practices that will augur well while it focuses
on its growth agenda.
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directors’ report
ECONOMIC OUTLOOK AND PROSPECT FOR 2007/8
Despite the expected slower growth from Malaysia’s largest trading partner, the US and the softening demand for computers
and related parts from the US market, which is a major export destination for Malaysian Electronic & Electrical products,
Malaysia’s domestic demand is expected to remain robust and the service sector will upstage manufacturing sector as the key
driver of growth in 2007. Overall, the economy is expected to post a 6.0% growth for 2007, according to BNM’s 2006 Annual
Report .
The financial services sub-sector in particular will remain vibrant and a major driver of growth. The banking industry has
improved substantially over the past decade and will continue to shine this year with Mergers and Acquisitions and Islamic
products providing the impetus. Lower NPLs and other health barometers of the banking system will continue to show
enhanced asset quality.
An accommodative monetary policy will also be conducive for growth this year. The Overnight Policy Rate is forecasted to
remain unchanged in 2007 at 3.5%. According to BNM’s 2006 Annual Report, the Consumer Price Index will most likely
average between 2.0%-2.5% in 2007 from 2006’s 3.6% with fuel prices remaining relatively stable for the year.
Fiscal policy is still in expansionary mode, with the implementation of the 9MP projects due to make an impact this year.
According to BNM, this should turnaround the construction sector to positive growth of nearly 3% in 2007 after three years
of contraction. The trickle-down effect from infrastructure projects is expected to be beneficial to Small and Medium
Enterprises as the government focuses spending on smaller but greater number of contracts.
Private sector-led growth will however continue to be the main agenda. According to BNM, consumer spending is expected
to moderate slightly to 6.4% from 2006’s 7.0% due to lagging impact from last year’s interest rate hikes. Private investment
is expected to pick up with double-digit growth and Foreign Direct Investment is expected to improve.
As a result of expected capital inflows, the Ringgit is likely to continue appreciating against the US Dollar by end-2007,
although greater two-way movements of the Ringgit is expected with greater liberalization. According to BNM, Malaysia’s
sizeable foreign reserves, which stands at RM290 billion as of end-2006, sufficient to finance 7.9 months of retained imports
and is 5.9 times the short-term external debt, should readily withstand these freer flows.
The positive momentum is expected to augur well for the banking industry with resilient growth and further improvement in
asset quality.
BUSINESS OUTLOOK FOR 2007/8
The Group is on much stronger footing and we are in a good position to meet and overcome the challenges in FY 2007/8.
We are committed to the Group’s long-term strategy of improving asset quality, whilst growing quality loans, advances and
fee income for a sustainable profitable growth. To fulfill our aspiration in our future expansion plans, we will progressively
invest in technology and build human capital. In addition to profit growth, we also aim to reduce our NPL level and increase
our loan coverage ratio in line with the best in class in the market. We believe that size alone will not determine our
aspirations. Instead our ROE and NPL management will define our leadership.
Growth in the Alliance Banking Group is expected to continue to be driven by Consumer Banking, SME lending and Islamic
Banking. Corporate lending is expected to remain soft as corporations continue to access the capital market to raise funds and
Corporate Banking will work closely with AIBB to further exploit these opportunities. We will continue to pursue aggressive
marketing strategies to promote mortgage, unsecured lending including credit cards, hire purchase, wealth management
offering and SME lending.
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directors’ report
BUSINESS OUTLOOK FOR 2007/8 (cont’d)
We have built the right platform to strengthen our sales capability with an increase in our sales force from about 90 people
to over 1,400 people, strengthened our branch footprint and scaled up our business and operations. We have already seen
an upside in our revenue. Going forward, we will continue to explore synergies to harness our resources for better service
quality and profitability, to expand our market share for sustainable growth and further enhance our net worth.
Our vision is to grow and strengthen the Group to be an integrated financial services group with a regional reach, delivering
the best customer experience and long term shareholder value. We aim to do this by leveraging on technology, putting in
place best in class analytical tools and best in class human capital. With strong corporate governance and sound risk
management policies, we have started on our mission and barring unforeseen circumstances, the Group expects a good year
ahead as it reaps the benefits of its new business models and capabilities.
RATING BY EXTERNAL AGENCY
Alliance Bank is rated by Rating Agency Malaysia Berhad ("RAM"). Based on RAM’s rating in April 2006, Alliance Bank’s short
term and long term ratings are reaffirmed at P1 and A1 respectively. RAM has classified these rating categories as follows:P1 - Financial institutions in this category have superior capacities for timely payments of obligations.
A1 - Financial institutions rated in this category are adjudged to offer adequate safety for timely repayment of financial
obligations. This level of rating indicates a corporate entity with adequate credit profiles, but which possess one or more
problem areas, giving rise to the possibility of future riskiness. Entities rated in this category have generally performed
at industry average and are considered to be more vulnerable to changes in economic conditions than those rated in
the higher categories.
DIRECTORS
The names of the Directors of the Company in office since the date of the last report and at the date of this report are:
Datuk Oh Chong Peng
Tan Yuen Fah
Tee Kim Chan
Phoon Siew Heng
Megat Dziauddin Bin Megat Mahmud
Kung Beng Hong
DIRECTORS' BENEFITS
Neither at the end of the financial year, nor at any time during the year, did there subsist any arrangement to which the
Company was a party, whereby the Directors might acquire benefits by means of the acquisition of shares in, or debentures
of, the Company 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
33(b) to the financial statements) by reason of a contract made by the Company 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.
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directors’ report
DIRECTORS' INTERESTS
According to the Register of Directors' Shareholdings, the interests of Directors in office at the end of the financial year in
shares in the Company were as follows:
Number of Ordinary Shares of RM1.00 Each
1.4.2006
Acquired
Sold
31.3.2007
The Company
Megat Dziauddin Bin Megat Mahmud
- Direct
- Indirect
- Direct
- Indirect (held through spouse, Datin Teh Yew Kheng)
3,000
-
-
-
3,000
-
-
35,000
-
35,000
By virtue of their shareholdings in the Company, the above Directors are deemed to have beneficial interests in the shares of
the subsidiary companies of the Company. None of the other Directors in office at the end of the financial year had any
interest in shares in the Company or its related corporations during the financial year.
ISSUE OF SHARES
During the financial year, the Company increased its issued and paid-up ordinary share capital from RM1,167,978,154 to
RM1,217,669,947 by way of the issuance of 49,691,793 new ordinary shares of RM1.00 each pursuant to the exercise of
49,691,793 2002/2007 Warrants at an exercise price of RM1.21 per ordinary share.
The new ordinary shares issued during the financial year rank pari passu in all respects with the existing ordinary shares of the
Company.
WARRANTS
The 2002/2007 Warrants are constituted by a Deed Poll dated 17 June 2002 executed by the Company. The warrants were
listed on Bursa Malaysia Securities Berhad on 20 September 2002. The main features of the 2002/2007 Warrants are as
follows:
(a) Each warrant entitles the registered holder to subscribe for one new ordinary share of RM1.00 each in the Company at
an exercise price of RM1.21, subject to any adjustments under certain circumstances in accordance with the terms of the
Deed Poll.
(b) The Exercise Period is the period commencing on 9 September 2002 until 8 June 2007. Warrants not exercised during
the Exercise Period will thereafter lapse and cease to be valid.
(c) The new ordinary shares of RM1.00 each to be issued pursuant to the exercise of the warrants will rank pari passu in all
respect with the existing issued ordinary shares of the Company except that they shall not be entitled to any dividends,
rights, allotments and/or other distributions, the entitlement date of which precedes their date of allotment.
BAD AND DOUBTFUL DEBTS
Before the income statements and balance sheets of the Group and of the Company were made out, the Directors took
reasonable steps to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of
allowance for doubtful debts and satisfied themselves that all known bad debts had been written off and adequate allowance
had been made for doubtful debts.
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directors’ report
BAD AND DOUBTFUL DEBTS (cont’d)
At the date of this report, the Directors are not aware of any circumstances which would render the amount written off for
bad debts, or the amount of the allowance for doubtful debts, in the financial statements of the Group and of the Company
inadequate to any substantial extent.
CURRENT ASSETS
Before the income statements and balance sheets of the Group and of the Company were made out, the Directors took
reasonable steps to ascertain that any current assets, which were unlikely to be realised in the ordinary course of business,
have been written down to an amount which they might be expected to realise.
At the date of this report, the Directors are not aware of any circumstances which would render the values attributed to the
current assets in the financial statements of the Group and of the Company misleading.
VALUATION METHOD
At the date of this report, the Directors are not aware of any circumstances which have arisen which would render adherence
to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.
CONTINGENT AND OTHER LIABILITIES
At the date of this report, there does not exist:(i)
any charge on the assets of the Group or of the Company which has arisen since the end of the financial year which
secures the liabilities of any other person; or
(ii) any contingent liability in respect of the Group or of the Company that has arisen since the end of the financial year other
than in the ordinary course of banking business.
No contingent liability or other liability of the Group or of the Company has become enforceable, or is likely to become
enforceable within the period of twelve months after the end of the financial year which, in the opinion of the Directors, will
or may affect the ability of the Group and of the Company to meet their obligations as and when they fall due.
CHANGE OF CIRCUMSTANCES
At the date of this report, the Directors are not aware of any circumstances, not otherwise dealt with in this report or the
financial statements of the Group and of the Company, that would render any amount stated in the financial statements
misleading.
ITEMS OF AN UNUSUAL NATURE
In the opinion of the Directors:(i)
the results of the operations of the Group or of the Company during the financial year have not been substantially
affected by any item, transaction or event of a material and unusual nature other than the effect arising from the changes
in accounting policies as disclosed in Note 48 to the financial statements; and
(ii) there has not arisen in the interval between the end of the financial year and the date of this report any item, transaction
or event of a material and unusual nature which is likely to affect substantially the results of the operations of the Group
or of the Company for the financial year in which this report is made.
47
A N N U A L
R E P O R T
2 0 0 7
directors’ report
OTHER SIGNIFICANT EVENTS
(a) Proposed Issuance of Commercial Papers/Medium Term Notes Programme of RM300 Million
On 21 June 2006, the Company announced its proposal to undertake an issuance of Commercial Papers (“CP”)/Medium
Term Notes (“MTN”) Programme of RM300 Million.
The Programme has a tenure of seven (7) years from the date of the first issuance of the CP/MTN. The Company may
issue CPs with maturities of one (1), two (2), three (3), six (6), nine (9) or twelve (12) months and/or MTN with maturities
of more than one (1) year and up to seven (7) years.
The Programme will be unsecured except for the following:
(i)
Special First Issuance of CP/MTN of nominal value of RM200 million where the said CP/MTN will be secured against
a Standby Letter of Credit/Bank Guarantee to be issued by DBS Bank Ltd, Labuan Branch;
(ii) CPs up to the nominal value of RM100 million where the said CPs will be secured against a Standby Letter of
The proceeds to be raised will be utilised to refinance existing borrowing of the Company and to meet working capital
and/or funding requirements of the Company and its subsidiaries.
On 18 September 2006, the Company announced the issuance of RM200 million Commercial Papers out of the RM300
million Commercial Papers/Medium Term Notes Programme. The proceeds from the issuance was used to repay the
existing term loan of RM200 million.
(b) Completion of Establishment of Investment Bank Subsidiary
On 30 June 2006, AIBB, a wholly-owned subsidiary of Alliance Bank obtained a joint approval from Bank Negara
Malaysia and the Securities Commission for the proposed rationalisation of the merchant banking business and the
stockbroking business of Kuala Lumpur City Securities Sdn. Bhd. ("KLCS") to transform into an Investment Bank.
On 8 August 2006, AIBB changed its name from Alliance Merchant Bank Berhad to its present name.
On 28 December 2006, the High Court of Malaya at Kuala Lumpur granted a vesting order to vest the business, assets
and liabilities of KLCS to AIBB and on 30 December 2006, the business, assets and liabilities of KLCS were vested into
AIBB pursuant to the said order of the High Court of Malaya. With the completion of this integration exercise, AIBB had
completed its transformation into an Investment Bank in accordance with the Guidelines on Investment Banks issued
jointly by Bank Negara Malaysia and Securities Commissions dated 1 July 2005.
Subsequent to the vesting of stockbroking business to AIBB, KLCS has become a dormant company and changed its name
to KLCS Sdn. Bhd. with effect from 4 January 2007.
EVENTS SUBSEQUENT TO BALANCE SHEET DATE
Rationalisation of the unit trust management business of Alliance Unit Trust Management Berhad ("AUTM") and the asset
management business of Alliance Capital Asset Management Sdn. Bhd. ("ACAM") ("Rationalisation Exercise")
Pursuant to a Vesting Order granted by the High Court of Malaya at Kuala Lumpur on 28 March 2007, the asset management
business of ACAM, a 70% subsidiary of Alliance Investment Bank Berhad, was vested to AUTM, a 70% subsidiary of Alliance
Bank Malaysia Berhad, on 2 April 2007.
48
M A L A Y S I A N
B E R H A D
( 6 6 2 7 - X )
directors’ report
EVENTS SUBSEQUENT TO BALANCE SHEET DATE (cont’d)
On 4 April 2007, AUTM changed its name to Alliance Investment Management Berhad and on 7 June 2007, ACAM was
placed under Members' Voluntary Winding Up pursuant to Section 254 of the Companies Act, 1965.
Expiry of Warrants
The 2002/2007 Warrants of the Company had expired on 8 June 2007. The issued and paid up share capital of the Company
has increased to RM1,548,105,929 comprising 1,548,105,929 ordinary shares of RM1.00 each fully paid. There were
2,013,228 warrants not exercised by the expiry date and have accordingly lapsed.
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 12 June 2007.
Datuk Oh Chong Peng
Kuala Lumpur, Malaysia
12 June 2007
49
A N N U A L
R E P O R T
2 0 0 7
statement by directors
Pursuant to Section 169(15) of the Companies Act, 1965
We, Datuk Oh Chong Peng and Dato' Thomas Mun Lung Lee, being two of the Directors of Malaysian Plantations Berhad,
do hereby state that, in the opinion of the Directors, the accompanying financial statements set out on pages 52 to 152 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 Guidelines so as to give a true and fair view of the financial position of the
Group and of the Company as at 31 March 2007 and of the results and the cash flows of the Group and of the Company for
the year then ended.
Signed on behalf of the Board in accordance with a resolution of the Directors dated 12 June 2007.
Datuk Oh Chong Peng
12 June 2007
statutory declaration
Pursuant to Section 169(16) of the Companies Act, 1965
I, Poh Khang Mei, being the officer primarily responsible for the financial management of Malaysian Plantations Berhad, do
solemnly and sincerely declare that the accompanying financial statements set out on pages 52 to 152 are in my opinion
correct, and I 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 Poh Khang Mei
at Kuala Lumpur in the Federal
Territory on 12 June 2007
Before me,
T. Thandonee Rajagopal
Commissioner for Oaths
12 June 2007
50
M A L A Y S I A N
B E R H A D
( 6 6 2 7 - X )
report of the auditors
to the members of Malaysian Plantations Berhad (Incorporated in Malaysia)
We have audited the financial statements set out on pages 52 to 152. These financial statements are the responsibility of the
Company'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 applicable 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:
(a) 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 Guidelines so as to give a true
and fair view of:
(i)
the financial position of the Group and of the Company as at 31 March 2007 and of the results and the cash flows
of the Group and of the Company 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
(b) the accounting and other records and the registers required by the Act to be kept by the Company 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 financial statements of
the Company 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 auditors' reports on the financial statements of the subsidiaries were not subject to any qualification material to the
consolidated financial statements and did not include any comment required to be made under Section 174(3) of the Act.
Ernst & Young
AF: 0039
Chartered Accountants
Gloria Goh Ewe Gim
No.1685/04/09(J)
Partner
12 June 2007
51
A N N U A L
R E P O R T
2 0 0 7
balance sheets
as at 31 March 2007
Group
Note
2007
RM'000
2006
RM'000
Company
2007
2006
RM'000
RM'000
ASSETS
Cash and short-term funds
Deposits and placements with financial institutions
Securities held-for-trading
Securities available-for-sale
Securities held-to-maturity
Loans, advances and financing
Balances due from clients and brokers
Land held for property development
Other assets
Dividend receivable
Tax recoverable
Statutory deposits
Investment in subsidiaries
Property, plant and equipment
Intangible assets
Deferred tax assets
TOTAL ASSETS
52
M A L A Y S I A N
B E R H A D
( 6 6 2 7 - X )
3
4
5
6
7
8
9
10
11
12
13
14
15
16
4,144,057
2,597,459
4,762
248
2,435,257
1,134,284
66,400
28,350
14,978
299,333
–
–
2,052,983
1,046,795
–
–
2,430,081
3,149,350
–
–
13,310,628
13,549,622
–
–
521,067
251,596
–
–
28,922
28,922
–
–
250,309
169,269
46,395
1,538,550
–
–
7,300
–
38,380
62,750
1,713
961
581,955
749,895
–
–
–
–
1,529,142
49,283
139,529
114,562
657
310
330,840
309,366
–
–
120,303
117,994
–
–
–––––––––––––––––––––––––––––––––––––––––––––––––––––
26,399,289
23,581,197
1,656,369
1,617,702
=============================================================
balance sheets
as at 31 March 2007
Group
Company
2007
2006
RM'000
RM'000
2007
RM'000
2006
RM'000
17
19,111,063
17,666,221
–
–
18
482,358
771,006
–
–
Note
LIABILITIES AND EQUITY
Deposits and placements of banks and
other financial institutions
Obligations on securities sold under
repurchase agreements
Recourse obligations on loans sold to Cagamas
Bills and acceptances payable
Balances due to clients and brokers
Other liabilities
Subordinated bonds
Short/Long term borrowing
Provision for taxation
Deferred tax liabilities
19
20
21
22
23
24
16
TOTAL LIABILITIES
Share capital
Share premium
Statutory reserve
Capital reserves
Revaluation reserves
Accumulated losses
25
26
27
28
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS
Minority interests
TOTAL LIABILITIES AND EQUITY
COMMITMENTS AND CONTINGENCIES
40
2,010,098
1,157,226
–
–
313,578
444,115
–
–
481,271
200,608
–
–
378,440
169,854
–
–
865,939
680,782
2,425
20,434
600,000
535,000
–
–
200,000
200,000
200,000
200,000
1,191
1
1,191
–
7,818
9,053
186
1,283
–––––––––––––––––––––––––––––––––––––––––––––––––––––
24,451,756
21,833,866
203,802
221,717
=============================================================
1,217,670
1,167,978
1,217,670
1,167,978
491,238
480,803
491,238
480,803
268,125
238,107
–
–
7,013
16,138
–
–
12,905
12,959
–
–
(54,229)
(173,680)
(256,341)
(252,796)
–––––––––––––––––––––––––––––––––––––––––––––––––––––
1,942,722
1,742,305
1,452,567
1,395,985
4,811
5,026
–
–
–––––––––––––––––––––––––––––––––––––––––––––––––––––
26,399,289
23,581,197
1,656,369
1,617,702
=============================================================
7,973,462
7,509,093
–
–
=============================================================
The accompanying notes form an integral part of the financial statements.
53
A N N U A L
R E P O R T
2 0 0 7
income statements
for the year ended 31 March 2007
Group
Note
Operating revenue
29
Interest income
Interest expense
30
31
Net interest income/(expense)
Net income from Islamic banking business
51
Other operating income
32
Net income
Other operating expenses
33
Operating profit/(loss)
Allowance for losses on loans, advances
and financing
Impairment loss net of write-back
34
35
Taxation and zakat
36
Attributable to:
Equity holders of the Company
Minority interests
2007
RM'000
Earnings/(loss) per share (sen):
Basic
Diluted
37(a)
37(b)
Net dividends per ordinary share
in respect of the year (sen):
1,461,094
1,283,254
11,293
11,067
=============================================================
1,122,096
1,015,793
1,293
1,047
(549,538)
(525,713)
(9,880)
(3,397)
–––––––––––––––––––––––––––––––––––––––––––––––––––––
572,558
490,080
(8,587)
(2,350)
135,035
76,757
–
–
–––––––––––––––––––––––––––––––––––––––––––––––––––––
707,593
566,837
(8,587)
(2,350)
216,123
201,576
10,314
10,012
–––––––––––––––––––––––––––––––––––––––––––––––––––––
923,716
768,413
1,727
7,662
(493,488)
(437,077)
(3,222)
(2,288)
–––––––––––––––––––––––––––––––––––––––––––––––––––––
430,228
331,336
(1,495)
5,374
(289,619)
(598,077)
–
–
10,203
(16,378)
–
–
–––––––––––––––––––––––––––––––––––––––––––––––––––––
150,812
(283,119)
(1,495)
5,374
(43,449)
81,695
(2,050)
(2,383)
–––––––––––––––––––––––––––––––––––––––––––––––––––––
107,363
(201,424)
(3,545)
2,991
=============================================================
38
9.1
(17.3)
7.9
(17.3)
====
=============================
–
0.72
–
0.72
=============================================================
54
B E R H A D
Company
2007
2006
RM'000
RM'000
107,258
(201,810)
(3,545)
2,991
105
386
–
–
–––––––––––––––––––––––––––––––––––––––––––––––––––––
107,363
(201,424)
(3,545)
2,991
=============================================================
M A L A Y S I A N
2006
RM'000
( 6 6 2 7 - X )
consolidated statement
o f c h a n g e s i n e q u i t y for the year ended 31 March 2007
Attributable to Equity Holders of the Company
Non-Distributable
GROUP
Note
At 1 April 2005
Net loss for the year
Issue of shares
Exercise of
warrants
25
Unrealised net
loss on revaluation
of securities
available-for-sale
Dividend paid
38
At 31 March 2006
At 1 April 2006
- as previously stated
- effects of
adopting FRS 3
At 1 April 2006,
as restated
Net profit for
the year
Exercise of
warrants
25
Unrealised net
loss on revaluation
of securities
available-for-sale
Transfer to
statutory reserve
Dividend paid
38
At 31 March 2007
Share
Capital
RM'000
Share
Premium
RM'000
Statutory
Reserve
RM'000
Capital
Reserves
RM'000
Revaluation
Reserves
RM'000
Accumulated
losses
RM'000
Total
Shareholders'
Equity
RM'000
1,162,592
–
–
479,672
–
–
238,107
–
–
16,138
–
–
21,705
–
–
36,533
(201,810)
–
1,954,747
(201,810)
–
5,386
1,131
–
–
–
–
6,517
Minority
Interests
RM'000
Total
Equity
RM'000
3,524 1,958,271
386 (201,424)
1,200
1,200
–
6,517
–
–
–
–
(8,746)
–
(8,746)
–
(8,746)
–
–
–
–
–
(8,403)
(8,403)
(84)
(8,487)
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
1,167,978
480,803
238,107
16,138
12,959
(173,680)
1,742,305
5,026 1,747,331
===================================================================================================================
1,167,978
480,803
238,107
16,138
12,959
(173,680)
1,742,305
5,026 1,747,331
–
–
–
(9,125)
–
42,211
33,086
–
33,086
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
1,167,978
480,803
238,107
7,013
12,959
(131,469)
1,775,391
5,026 1,780,417
–
–
–
–
–
107,258
107,258
105
107,363
49,692
10,435
–
–
–
–
60,127
–
60,127
–
–
–
–
(54)
–
(54)
–
(54)
–
–
30,018
–
–
(30,018)
–
–
–
–
–
–
–
–
–
–
(320)
(320)
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
1,217,670 491,238
268,125
7,013
12,905
(54,229)
1,942,722
4,811 1,947,533
===================================================================================================================
55
A N N U A L
R E P O R T
2 0 0 7
statement of changes in equity
COMPANY
Note
At 1 April 2005
Exercise of warrants
Net profit for the year
Dividend paid
25
38
At 31 March 2006
At 1 April 2006
25
At 31 March 2007
Share
Capital
RM'000
M A L A Y S I A N
B E R H A D
( 6 6 2 7 - X )
Accumulated
Losses
RM'000
Total
RM'000
1,162,592
479,672
(247,384)
1,394,880
5,386
1,131
–
6,517
–
–
2,991
2,991
–
–
(8,403)
(8,403)
–––––––––––––––––––––––––––––––––––––––––––––––––––––
1,167,978
480,803
(252,796)
1,395,985
=============================================================
1,167,978
480,803
(252,796)
1,395,985
49,692
10,435
–
60,127
–
–
(3,545)
(3,545)
–––––––––––––––––––––––––––––––––––––––––––––––––––––
1,217,670
491,238
(256,341)
1,452,567
=============================================================
56
NonDistributable
Share
Premium
RM'000
consolidated cash flow statement
2007
RM'000
2006
RM'000
150,812
(283,119)
CASH FLOWS FROM OPERATING ACTIVITIES
Adjustments for:
Accretion of discount less amortisation of premium of securities held-to-maturity
Depreciation of property, plant and equipment
Dividends from securities held-to-maturity
Dividends from securities available-for-sale
Gain from investment in Staple Bonds
Gain on disposal of property, plant and equipment
Gain on disposal of foreclosed properties
Net (gain)/loss from sale of securities held-to-maturity
Net gain from sale of securities held-for-trading
Net gain from sale of securities available-for-sale
Unrealised gain/(loss) on revaluation of securities held-for-trading
Interest expense on subordinated bonds
Interest expense on borrowing
Interest income from securities held-to-maturity
Interest income from securities available-for-sale
Allowance for bad and doubtful debts (net of recoveries)
Allowance for commitments and contingencies
Impairment loss net of write-back of securities available-for-sale
Impairment loss net of write-back of securities held-to-maturity
Amortisation of goodwill
Amortisation of subordinated bond issue expenses and discount
Amortisation of intangible assets
Profit Equalisation Reserve
Impairment loss on development property
Property, plant and equipment written off
Write off of intangible assets
Operating profit before working capital changes carried forward
(63,824)
(45,771)
18,029
22,173
(2,465)
(3,426)
(11)
(517)
(1,754)
(1,794)
(4,975)
(3,319)
(266)
(340)
(1,098)
868
(2,382)
(11,540)
(11,886)
(1,273)
1,575
(976)
40,235
41,462
9,880
3,397
(59,859)
(58,804)
(44,346)
(33,222)
451,195
616,508
2,149
767
(4,826)
(1,050)
(5,377)
17,428
–
17,515
–
24,566
14,309
14,016
(5,778)
11,188
–
384
6
12
–
3
––––––––––––––––––––––––
479,343
325,136
57
A N N U A L
R E P O R T
2 0 0 7
Operating profit before working capital changes brought forward
Changes in working capital:
Deposits and placements of banks and other financial institutions
Obligations on securities sold under repurchase agreements
Balance due from clients and brokers
Other liabilities
Provision for bad and doubtful debts
Other assets
Statutory deposits with Bank Negara Malaysia
Cash generated from operations
Taxes paid
Net cash generated from operating activities
2007
RM'000
2006
RM'000
479,343
325,136
1,444,842
749,291
(288,649)
8,738
852,872
(65,606)
280,663
(383,591)
(60,886)
69,954
188,763
(116,075)
1,211
–
285,162
352,248
(212,201)
478,100
(90,759)
19,594
167,940
(140,375)
(130,537)
(90,778)
––––––––––––––––––––––––
2,917,764
1,206,636
(11,867)
(24,730)
––––––––––––––––––––––––
2,905,897
1,181,906
––––––––––––––––––––––––
CASH FLOWS FROM INVESTING ACTIVITIES
Dividends received from securities held-to-maturity
Dividends received from securities available-for-sale
Interest received from securities held-to-maturity
Interest received from securities available-for-sale
Purchase of property, plant and equipment
Purchase of intangible assets
Proceeds from disposal of property, plant and equipment
Proceeds from disposal of intangible assets
Purchase of securities held-to-maturity, net of sale proceeds
Purchase of securities available-for-sale, net of sale proceeds
Net cash used in investing activities
58
M A L A Y S I A N
B E R H A D
( 6 6 2 7 - X )
2,205
2,831
11
517
59,859
58,804
44,346
33,222
(49,694)
(16,648)
(2,698)
(8,915)
11,689
15,000
1
545
796,148
(546,412)
(994,885)
116,347
––––––––––––––––––––––––
(133,018)
(344,709)
––––––––––––––––––––––––
2007
RM'000
2006
RM'000
CASH FLOWS FROM FINANCING ACTIVITIES
Drawdown of short/long term borrowing
Repayment of long term borrowing
Redemptions of subordinated bonds
Proceeds from issuance of subordinated bonds
Proceeds from exercise of warrants
Interest paid on subordinated bonds
Interest paid on long term borrowing
Dividends paid to shareholders of the Company
Dividends paid to minority interests
Additional shares subscribed by minority interests
Net cash generated from financing activities
NET INCREASE IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS AT END OF YEAR
200,000
200,000
(200,000)
–
(535,000)
–
600,000
–
60,127
6,517
(40,235)
(41,462)
(9,880)
(3,397)
–
(8,403)
(320)
(86)
–
1,200
––––––––––––––––––––––––
74,692
154,369
––––––––––––––––––––––––
2,847,571
991,566
3,731,743
2,740,177
––––––––––––––––––––––––
6,579,314
3,731,743
============================
Cash and cash equivalents comprise the following:
4,144,057
2,597,459
2,435,257
1,134,284
––––––––––––––––––––––––
6,579,314
3,731,743
============================
59
A N N U A L
R E P O R T
2 0 0 7
cash flow statement
2007
RM'000
2006
RM'000
(Loss)/profit before taxation
(1,495)
Adjustments for:
Interest income
Interest expense
Return on capital from investment in subsidiaries
(Writeback of)/impairment loss on investment in subsidiaries
Allowance for doubtful debts due from a subsidiary
Gross dividend
Operating loss before working capital changes
Changes in working capital:Receivables
Payables
Subsidiaries
Cash used in operations
Taxes (paid)/refunded
Net cash used in operating activities
5,374
112
108
2
13
(1,293)
(1,047)
9,880
3,397
(6)
–
(308)
8
12
–
(10,000)
(10,020)
––––––––––––––––––––––––
(3,096)
(2,167)
(4,389)
(93)
(5)
166
(1,022)
(199,774)
––––––––––––––––––––––––
(8,512)
(201,868)
(9)
329
––––––––––––––––––––––––
(8,521)
(201,539)
––––––––––––––––––––––––
Interest received
Return on capital from investment in subsidiaries
Net dividend received
Net cash generated from investing activities
(461)
(198)
1,293
1,047
6
–
–
7,214
––––––––––––––––––––––––
838
8,063
––––––––––––––––––––––––
CASH FLOWS FROM FINANCING ACTIVITIES
Drawdown of short/long term borrowing
Repayment of long term borrowing
Proceeds from exercise of warrants
Dividends paid
Interest paid
200,000
200,000
(200,000)
–
60,127
6,517
–
(8,403)
(9,880)
(3,397)
––––––––––––––––––––––––
50,247
194,717
––––––––––––––––––––––––
42,564
1,241
28,598
27,357
––––––––––––––––––––––––
71,162
28,598
============================
Cash and cash equivalents comprise the following:
60
M A L A Y S I A N
B E R H A D
( 6 6 2 7 - X )
4,762
248
66,400
28,350
––––––––––––––––––––––––
71,162
28,598
============================
notes to the financial statements
- 31 March 2007
1.
CORPORATE INFORMATION
The Company is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on the Main Board
of Bursa Malaysia Securities Berhad. The registered office of the Company is located at 3rd Floor, Menara Multi-Purpose,
Capital Square, No. 8, Jalan Munshi Abdullah, 50100 Kuala Lumpur, Malaysia.
The principal activities of the Company are investment holding and provision of management services to the subsidiaries.
The principal activities of the subsidiaries are commercial banking and financing, investment banking, Islamic banking,
provision of stockbroking services, unit trusts and fund management, and the provision of related financial services.
There have been no significant changes in the nature of the principal activities during the financial year.
The financial statements are expressed in Ringgit Malaysia.
The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the
Directors on 12 June 2007.
2.
SIGNIFICANT ACCOUNTING POLICIES
The accounting policies adopted by the Company and the Group are consistent with those adopted in the previous
financial year except for the adoption of the following:
On 1 April 2006, the Company and the Group adopted the following new and revised Financial Reporting Standards
("FRS") which are mandatory for financial periods beginning on or after 1 January 2006.
FRS
FRS
FRS
FRS
FRS
FRS
FRS
FRS
FRS
FRS
FRS
FRS
FRS
FRS
FRS
2
3
5
101
108
110
116
121
127
128
132
133
136
138
140
Share-based Payment
Business Combinations
Non-current Assets Held for Sale and Discontinued Operations
Presentation of Financial Statements
Accounting Policies, Changes in Accounting Estimates and Errors
Events after the Balance Sheet Date
Property, Plant and Equipment
The Effects of Changes in Foreign Exchange Rates
Consolidated and Separate Financial Statements
Investments in Associates
Financial Instruments: Disclosure and Presentation
Earnings Per Share
Impairment of Assets
Intangible Assets
Investment Property
FRS 102 Inventories and FRS 131 Interest in Joint Ventures are not applicable to the Company and the Group.
The MASB has also issued the following FRSs, amendments to FRSs and interpretations that are effective for financial
period beginning subsequent to 1 January 2006, and that have not been applied in preparing these financial statements:
61
A N N U A L
R E P O R T
2 0 0 7
- 31 March 2007
2.
SIGNIFICANT ACCOUNTING POLICIES (cont’d)
Standard/Interpretation
FRS 117 Leases
FRS 124 Related Party Disclosures
FRS 139 Financial Instruments: Recognition and Measurement
Amendment to FRS 119 2004 Employee Benefits - Actuarial Gains and Losses, Group Plans
and Disclosures
FRS 6 Exploration for and Evaluation of Mineral Resources
Amendment to FRS 121 The Effects of Changes in Foreign
Exchange Rates - Net Investment in a Foreign Operation
IC Interpretation 1 Changes in Existing Decommissioning, Restoration and Similar Liabilities
IC Interpretation 2 Members' Share 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 129 2004
Financial Reporting in Hyperinflationary Economies
IC Interpretation 8 Scope of FRS 2
Effective Date
1 October 2006
1 October 2006
To be announced
1 January 2007
1 January 2007
1 July 2007
1 July 2007
1 July 2007
1 July 2007
1 July 2007
1 July 2007
1 July 2007
The Company and the Group plan to apply FRS 117, Leases and FRS 124, Related Party Disclosures and the Amendment
to FRS 119 2004, Employee Benefits: Actuarial Gains and Losses, Group Plans and Disclosures for the financial period
beginning 1 April 2007 and to apply the rest of the above-mentioned FRSs (except for FRS 6 and FRS 139 as explained
below) and Interpretations for the financial period beginning 1 April 2008. The adoption of the revised FRS 117, FRS 124
and Amendment to FRS 119 2004 will not result in significant changes in accounting policies of the Company and the
Group except for the format and extent of disclosures presented in the financial statements.
The MASB has issued FRS 139, Financial Instruments: Recognition and Measurement but the MASB has yet to announce
the effective date of this standard. The Company and the Group has not adopted FRS 139 and by virtue of the exemption
in paragraph 103AB of FRS 139, the impact of applying FRS 139 on its 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 disclosed.
On 15 August 2006, the MASB issued FRS 6, Exploration for and Evaluation of Mineral Resources which will be effective
for annual periods beginning on or after 1 January 2007 and for which is not applicable to the Company and the Group.
Hence, no further disclosure is warranted.
The initial application of the other standards and interpretations are not expected to have any material impact on the
financial statements.
The adoption of FRS 2, 5, 108, 110, 121, 127, 128, 132, 133 and 140, other than FRS 3, 101, 116, 136 and 138, does
not have any significant financial impact on the Company and the Group. The principal effects of the changes in
accounting policies resulting from the adoption of FRS 3, 101, 116, 136 and 138 are disclosed in Note 48.
62
M A L A Y S I A N
B E R H A D
( 6 6 2 7 - X )
- 31 March 2007
2.
(a) Basis of Preparation
The financial statements of the Company and of the Group have also been prepared on a historical basis, except the
following assets which are stated at fair value: securities held-for-trading and securities available-for-sale.
The financial statements of the Company and of the Group comply with the provision of the Companies Act, 1965
and applicable Financial Reporting Standards in Malaysia as modified by Bank Negara Malaysia Guidelines.
The financial statements incorporate all activities relating to the Islamic banking business which have been
undertaken by the Group. Islamic banking business refers generally to the acceptance of deposits and granting of
financing under the Syariah principles.
The financial statements are presented in Ringgit Malaysia (RM) and all values are rounded to the nearest thousand
(RM'000), unless otherwise stated.
In the preparation of the financial statements, management has been required to make judgements, estimates and
assumptions that affect the application of accounting policies and the reported amount of assets, liabilities, income
and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on
an on going basis. Revisions to accounting estimates are recognised in the financial statements in the period in which
the estimate is revised and in any future periods affected.
In particular, information about significant areas of estimation uncertainty and critical judgements in applying
accounting policies that have the most significant effect on the amount recognised in the financial statements are
described in the following notes:
(i)
Annual testing for impairment of goodwill (Note 15) - the measurement of the recoverables amount of cashgenerating units are determined based on the value-in-use method, which requires the use of estimates for cash
flow projections approved by management covering a 5-year period, estimates growth rates for cash flows
beyond the fifth year extrapolated in perpetuity and discount rates applied to the cash flow projections.
(ii) Fair value estimation for securities held-for-trading (Note 5) and securities available-for-sale (Note 6) - the fair
value of securities that are not traded in active market are determined using valuation techniques based on
assumptions of market conditions existing at the balance date, including reference to quoted market prices and
independent dealer quotes for similar securities and discounted cash flows method.
(iii) Deferred tax assets (Note 16) - deferred tax assets are recognised for all unutilised tax losses to extent that it is
probable that taxable profit will be available against which the tax losses can be utilised. Significant management
judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the
likely timing and level of future taxable profits together with future tax planning strategies.
(b) 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 Company's separate financial statements, investments in subsidiaries are stated at cost less impairment
losses. The policy for recognition and measurement of impairment losses is in accordance with Note 2(k)(iv).
On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is
included in income statement.
A N N U A L
R E P O R T
63
2 0 0 7
- 31 March 2007
2.
(b) Subsidiaries and Basis of Consolidation (cont’d)
(ii) Basis of Consolidation
The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as
at the balance sheet date. The financial statements of the subsidiaries are prepared for the same reporting date
as the Company.
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.
Any excess of the cost of the acquisition over the Group's interest in the net fair value of the identifiable assets,
liabilities and contingent liabilities represent goodwill.
Any excess of the Group's interest in the net fair value of the identifiable assets, liabilities and contingent
liabilities over the cost of acquisition is recognised immediately in the income statement.
Minority interest represent the portion of profit or loss and net assets in subsidiaries not held by the Group. It is
measured at the minorities' share of the fair value of the subsidiaries' identifiable assets and liabilities at the
acquisition date and the minorities' share of changes in the subsidiaries' entity since then.
(c) 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.
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 income statement. 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.
64
M A L A Y S I A N
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.
B E R H A D
( 6 6 2 7 - X )
- 31 March 2007
2.
(c) Associates (cont’d)
When the Group's share of losses in an associate equals or exceeds its interest in the associate, including any long
term interests that, in substance, form part of the Group's net investment in the associate, the Group does not
recognise further losses, unless it has incurred obligations or made payments on behalf of the associate.
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.
On disposal of such investments, the difference between net disposal proceeds and their carrying amount is included
in the income statment.
(d) Intangible Assets
(i) Goodwill
Goodwill is measured at cost less accumulated impairment losses, if any. Goodwill is no longer amortised. Instead
it is allocated to cash-generating units which are expected to benefit from the synergies of the business
combination. Each cash-generating unit represents the lowest level at which the goodwill is amortised and is not
larger than a reportable business segment. The carrying amount of goodwill is tested annually for impairment,
or more frequently if events or changes in circumstances indicate that it might be impaired. Gains and losses on
the disposal of an entity include the carrying amount of goodwill relating to the entity sold. The policy for the
recognition and measurement of impairment losses is in accordance with Note 2(k)(iii).
Negative goodwill represents the excess of the Group’s interest in the net fair value of the identifiable assets,
liabilities and contingent liabilities acquired over the cost of the acquisition of the subsidiary company, is
recognised immediately in the income statement.
(ii) Computer Software
Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and bring to
use the specific software. The costs are amortised over their useful lives which is five years and are stated at cost
less accumulated amortisation and accumulated losses, if any. Computer software is assessed for impairment
whenever there is an indication that it may be impaired. The amortisation period and amortisation method are
reviewed at least at each balance sheet date.
The policy for the recognition and measurement of impairment losses is in accordance with 2(k)(iii).
Costs associated with developing or maintaining computer software programmes are recognised as an expenses
as incurred. Costs that are directly associated with production of identifiable and unique software products
controlled by the Group, and that will probably generate economic benefits exceeding costs beyond one year,
are recognised as intangible assets. Direct costs include software development employee costs and appropriate
portion of relevant overhead.
65
A N N U A L
R E P O R T
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- 31 March 2007
2.
(e) Allowance for Bad and Doubtful Debts and Financing
Loans, advances and financing are stated at cost less any allowance for bad and doubtful debts and financing.
Specific allowance for bad and doubtful debts and financing are made with regard to specific risks and relate to those
loans or trade receivables that have been individually reviewed and specifically identified as sub-standard, doubtful
or bad.
A general allowance based on a percentage of total outstanding loans (including unearned interest), net of specific
allowance for bad and doubtful debts, is maintained by the Group against risks which are not identified.
An uncollectible loan or portion of a loan classified as bad is written off after taking into consideration the realisable
value of collateral, if any, when in the judgement of the management, there is no prospect of recovery.
Values assigned to collateral held for non-performing loans secured by properties is determined based on the
realisable values of the properties, being the forced sale value provided by independent parties/valuers, on the
following basis:
(i)
assigning only fifty percent (50%) of the realisable value of the properties held as collateral for non-performing
loans which are in arrears for more than five (5) years but less than seven (7) years; and
(ii) no value assigned to the realisable value of the properties held as collateral for non-performing loans which are
in arrears for more than seven (7) years.
The allowance for bad and doubtful debts and financing are computed in conformity with BNM/GP3. Consistent
with previous years, the Group has adopted a more stringent classification policy on non-performing loans, whereby
loans are classified as non-performing and sub-standard when repayments are in arrears for more than three (3)
months from the first day of the default or after maturity date.
During the year, the Group adopted a more stringent basis for specific allowances on non-performing loans by
making a 100% specific allowance on non-performing loans which are more than 3 months-in-arrears. Previously,
specific allowance was only made at 20% when a non-performing loan was in arrears of 6 months, 50% for nonperforming loan in arrears of 9 months and 100% for non-performing loan in arrears of 12 months and above. The
change in the allowance estimate has resulted an additional specific allowance for bad and doubtful debts and
financing of RM93,500,000 in the current year.
(f) Provisions for Liabilities
Provisions for liabilities are recognised when the Company and the Group have 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, the
amount of a provision are discounted using a current pre-tax 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.
66
M A L A Y S I A N
Provisions for restructuring costs are recognised when the Company and the Group have a detailed formal plan for
the restructuring which has been notified to the affected parties.
B E R H A D
( 6 6 2 7 - X )
- 31 March 2007
2.
(g) Repurchase Agreements
Securities purchased under resale agreements are securities which the Group have purchased with a commitment to
resell at future dates. The commitment to resell the securities is reflected as an asset on the balance sheet.
Conversely, obligations on securities sold under repurchase agreements are securities which the Group have sold from
their portfolio, with a commitment to repurchase at future dates. Such financing transactions and the obligations to
repurchase the securities are reflected as a liability on the balance sheet.
(h) Securities
The holdings of securities portfolio of the Group are recognised based on the following categories and consequently
their valuation methods:
(i) Securities held-for-trading
Securities are classified as held-for-trading if they are acquired principally for the purpose of selling or
repurchasing in the near term. Securities held-for-trading are stated at fair value and any gain or loss arising from
a change in their fair values and the derecognition of securities held-for-trading are recognised in the income
statement.
(ii) Securities held-to-maturity
Securities held-to-maturity are financial assets with fixed or determinable payments and fixed maturity that the
Group have the positive intent and ability to hold to maturity. Unquoted shares in organisations set up for socioeconomic 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.
The 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.
Any sale or reclassification of a significant amount if securities held-to-maturity not close to their maturity would
result in the reclassification of all securities held-to-maturity to securities available-for-sale, and prevent the
Group from classifying the similar class of securities as securities held-to-maturity for the current and following
two (2) financial years.
(iii) Securities available-for-sale
Securities available-for-sale are financial assets that are not classified as held-for-trading or held-to-maturity. The
securities available-for-sale are measured at fair value or at amortised cost (less impairment losses) if the fair
value cannot be reliably measured. Any gain or loss arising from a change in fair value 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.
67
A N N U A L
R E P O R T
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- 31 March 2007
2.
(i) Investments in Subsidiaries and Associates
The Company’s investments in subsidiaries and associates are stated at cost less impairment losses. The policy for the
recognition and measurement of impairment losses is in accordance with Note 2(k)(iv).
On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is
recognised in the income statement.
(j) Property, Plant and Equipment and Depreciation
All items of property, plant and equipment are initially recorded at cost. Subsequently 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.
When significant parts of an item of property and equipment have different useful lives, they are accounted for as
separate items (major components) of property and equipment.
Subsequent to intial recognition, property, plant and equipment except for freehold land are stated at cost less
accumulated depreciation and any accumulated impairment losses, if any. The policy for the recognition and
measurement of impairment losses is in accordance with Note 2(k)(iv).
Freehold land has an unlimited useful life and therefore is not depreciated. Leasehold land is stated at cost and
amortised over the periods of the leases ranging from 50 to 99 years. 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 rate:
Long term leasehold land
Buildings on freehold and leasehold land
Renovations
Office equipment, furniture and fittings
Computer equipment and software
Motor vehicles
10%
10%
20%
10%
-
2%
2%
20%
20%
25%
20%
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 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 the income statement.
68
M A L A Y S I A N
B E R H A D
( 6 6 2 7 - X )
- 31 March 2007
2.
(k) Impairment of Assets
The carrying amount of the Group's assets, except for deferred tax assets and financial assets (other than securities
held-to-maturity and available-for-sale) are reviewed at each balance sheet date to determine whether there are any
indications of impairment. Of any such indications exist, the asset's recoverable amount is estimated to determine
the amount of impairment loss. The policy of the impairment of assets are summarised as follows:
(i) Securities Held-to-Maturity
For securities carried at amortised cost in which there are objective evidence of impairment, impairment loss is
measured as the difference between the securities' carrying amount and the present value of the estimated
future cash flows discounted at the securities' original effective interest rate. The amount of the impairment loss
is recognised in the income statement.
Subsequent reversals in the impairment loss is recognised when the decrease can be objectively related to an
event occurring after the impairment was recognised, to the extent that the securities' carrying amount does not
exceed its amortised cost if no impairment had been recognised. The reversal is recognised in the income
statement.
For securities carried at cost, impairment loss is measured as the difference between the securities' carrying
amount and the present value of estimated future cash flows discounted at the current market rate of return for
similar securities. The amount of impairment loss is recognised in the income statement and such impairment
losses are not reversed subsequent to its recognition.
(ii) Securities Available-for-Sale
For securities available-for-sale in which there are objective evidence of impairment, the cumulative impairment
loss that had been recognised directly in equity shall be transferred from equity to the income statement, even
though the securities have not been derecognised. The cumulative impairment loss is measured as the difference
between the acquisition cost (net of any principal repayment and amortisation) and the current fair value, less
any impairment loss previously recognised in the income statement.
Impairment losses on investment in equity instruments classified as available-for-sale recognised are not reversed
subsequent to its recognition. Reversals of impairment losses on debt instruments classified as available-for-sale
are recognised in the income statement if the increase in fair value can be objectively related to an event occuring
after the recognition of the impairment loss in the income statement.
(iii) Goodwill/Intangible Assets
Goodwill and intangible assets that have an indefinite useful life are tested annually for impairment, or more
frequently if events or changes in circumstances indicate that it might be impaired. For impairment testing,
goodwill from business combinations or the intangible assets is allocated to cash-generating units ("CGU")
which are expected to benefit from the synergies of the business combination or intangible asset.
The recoverable amount is determined for each CGU based on its value in use. In assessing value in use, the
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. An impairment loss is
recognised in the income statement when the carrying amount of the CGU, including the goodwill or intangible
asset, exceeds the recoverable amount of the CGU. The total impairment loss is allocated, first, to reduce the
carrying amount of goodwill or intangible assets allocated to the CGU and then to the other assets of the CGU
on a pro-rate basis.
69
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R E P O R T
2 0 0 7
- 31 March 2007
2.
(k) Impairment of Assets (cont’d)
(iii) Goodwill/Intangible Assets (cont’d)
An impairment loss on goodwill is not reversed in subsequent periods. An impairment loss for intangible assets
is reversed if and only if there has been a change in the estimates used to determine the intangible asset's
recoverable amount since the last impairment loss was recognised and such reversal is through the income
statement to the extent that the intangible asset's carrying amount does not exceed the carrying amount that
would have been determined, net of amortisation, if no impairment loss had been recognised.
(iv) Other Assets
Other assets such as property, plant and equipment, foreclosed properties and investment in subsidiary
companies and associate company are reviewed for objective indications of impairment at each balance sheet
date or whenever there is any indication that these assets may be impaired. When such indications exist,
impairment loss is determined as the excess of the asset's carrying value over its recoverable amount (greater of
value in use or fair value less costs to sell) and is recognised in the income statement. The carrying amount is
increased to its revised recoverable amount, provided that the amount does not exceed the carrying amount that
would have been determined (net of amortisation or depreciation) had no impairment loss been recognised for
the asset in prior years.
(l) Leases
A lease is recognised as a finance lease if it transfers substantially to the Group all the risks and rewards incident to
ownership. All other leases are classified as operating leases.
(i) Finance Leases
Assets acquired by way of hire purchase or finance leases are stated at an amount equal to the lower of their
fair values and the present value of the minimum lease payments at the inception of the leases, less accumulated
depreciation and impairment losses. The corresponding liability is included in the balance sheet as borrowings.
In calculating the present value of the minimum lease payments, the discount factor used is the interest rate
implicit in the lease, when it is practicable to determine; otherwise, the Company’s incremental borrowing rate
is used.
Lease payments are apportioned between the finance costs and the reduction of the outstanding liability. Finance
costs, which represent the difference between the total leasing commitments and the fair value of the assets
acquired, are recognised as an expense in the income statement over the term of the relevant lease so as to
produce a constant periodic rate of charge on the remaining balance of the obligations for each accounting period.
The depreciation policy for leased assets is in accordance with that for depreciable property, plant and equipment
as described in Note 2(j).
(ii) Operating Leases
Operating lease payments are recognised as an expense in the income statement on a straight-line basis over
the term of the relevant lease.
(m) Bills and Acceptances Payable
70
M A L A Y S I A N
Bills and acceptances payable represent the Group's own bills and acceptances rediscounted and outstanding in the
market.
B E R H A D
( 6 6 2 7 - X )
- 31 March 2007
2.
(n) Forward Exchange Contracts
Unmatured forward exchange contracts are valued at forward rates as at the balance sheet date, applicable to their
respective dates of maturity, and unrealised losses and gains are recognised in the income statement in the period in
which they arise.
(o) 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 and 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.
The accounting policies for financial instruments recognised on the balance sheet are disclosed in the individual policy
statements associated with each item.
(i) 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.
When issued shares of the Company are repurchased, the consideration paid, including any attributable
transaction costs is presented as a change in equity. Repurchased shares that have not been cancelled are
classified as treasury shares and presented as a deduction from equity. No gain or loss is recognised in the
income statement on the sale, re-issuance or cancellation of treasury shares. When treasury shares are reissued
by resale, the difference between the sales consideration and the carrying amount of the treasury shares is shown
as a movement in equity.
(ii) Subordinated Bonds
The interest-bearing subordinated bonds are recognised as liability and are recorded at face value. Interest
expenses are accrued based on the effective interest rate method.
(iii) Interest-bearing Borrowings
Interest-bearing bank borrowings are recorded at the amount of proceeds received. All the borrowing costs are
recognised as expenses in the income statement in the period in which they are incurred.
(iv) Twelve (12) months Commercial Papers
The twelve (12) months Commercial papers are recognised as current liability and recorded at face value. Interest
and issue expenses are amortised on a straight line over the tenure of the papers.
71
A N N U A L
R E P O R T
2 0 0 7
- 31 March 2007
2.
(o) Financial Instruments (cont’d)
(v) Other Assets
Other receivables are carried at anticipated realisable values. Bad debts are written-off when identified. An
estimate is made for doubtful debts based on a review of all outstanding amounts as at the balance sheet date.
(vi) Liabilities
Deposits from customers, deposits and placements of banks and other financial institutions are stated at
placement values. Other liabilities are stated at cost which is the fair value of the consideration to be paid in the
future for goods and services received.
(vii) Balances Due From Clients and Brokers
In accordance with the Rules of Bursa Malaysia Securities Berhad, clients' accounts for the Group are classified
as non-performing (doubtful or bad) under the following circumstances:
Criteria for classification as non-performing
Doubtful
Bad
Types
Contra losses
When account remains outstanding
for 16 to 30 calendar days from the
date of contra transaction.
When the account remains outstanding for
more than 30 calendar days from the date
of contra transaction.
Overdue purchase
contracts
When the account remains outstanding
from T+5 market days to 30 calendar days.
When the account remains outstanding for
more than 30 calendar days.
Margin accounts
–
When the closing market value of the
counter(s) so financed has fallen below
130% of the outstanding balance.
Bad debts are written off when identified. Specific allowances are made for balances due from clients and brokers
which are considered doubtful or which have been classified as non-performing, net of interest-in-suspense and
after taking into consideration collateral held by the Group and deposits of and amounts due to dealer's
representative in accordance with the Rules of Bursa Malaysia Securities Berhad. General allowance is made
based on a certain percentage of balances due from clients and brokers (excluding outstanding purchase
contracts which are not due for payment) net of interest-in-suspense and specific allowances already made.
(p) Revenue Recognition
Revenue is recognised when it is probable that the economic benefits associated with the transaction will flow to the
Company and the amount of the revenue can be measured reliably.
(i) Dividend Income
Dividend income from securities held-to-maturity, securities available-for-sale and investment in subsidiaries and
associates are recognised when the right to receive payment is established.
72
M A L A Y S I A N
B E R H A D
( 6 6 2 7 - X )
- 31 March 2007
2.
(p) Revenue Recognition (cont’d)
(ii) Interest Income
Interest income is recognised in the income statement for all interest bearing assets on an accrual basis. Interest
income includes the amortisation of premium or accretion of discount. Interest income on securities are
recognised on an effective yield basis.
Interest income on overdrafts, housing loans and term loans is accounted for on accrual basis by reference to
rest periods as stipulated in the loan agreements, which are either monthly or daily. Interest income on hire
purchase, block discounting and leasing business is recognised on the 'Rule of 78' method. Income from the
Islamic banking business is recognised on the accrual basis in accordance with the principles of Syariah.
Where an account is classified as non-performing, interest accrued and recognised as income prior to the date
the loan is classified as non-performing is reversed out of interest income and set-off against the accrued interest
receivable account in the balance sheet. Thereafter, interest on the non-performing loan shall be recognised as
income on a cash basis. Customers' accounts are deemed to be non-performing where repayments are in arrears
for more than three (3) months from the first day of default or after maturity date.
The policy on interest recognition on non-performing loans is in conformity with the revised BNM/GP8.
(iii) Brokerage Income
Brokerage is charged to the clients and is recognised on the day when the contracts are executed.
(iv) Fees and Other Income
Loan arrangement fees and commissions, management and participation fees and underwriting commissions are
recognised as income when all conditions precedent are fulfilled.
Commitment fees, guarantee fees, portfolio management fees and corporate advisory fees which are material
are recognised as income based on time apportionment.
Handling fee paid to hire purchase dealers for hire purchase loans are expensed off to income statement in the
year in which they are incurred, in compliance with Bank Negara Malaysia's Circular dated 8 August 2003.
(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 are recognised on an accrual basis.
(q) Interest Rate Swaps, Futures, Forward and Option Contracts
The Group acts as an intermediary with counterparties who wish to swap their interest obligations. The Group also
uses interest rate swaps, futures, forward, and option contracts in its trading account activities and its overall interest
rate risk management.
Interest income and interest expense associated with interest rate swaps that qualify as hedges are recognised over
the life of the swap agreement as a component of interest income or interest expense. Gains and losses on interest
rate futures, forward, and option contracts that qualify as hedges are generally deferred and amortised over the life
of the hedged assets or liabilities as adjustments to interest income or interest expense.
Gains and losses on interest rate swaps, futures, forward and option contracts that do not qualify as hedges are
recognised in the period in which they arise using the mark-to-market method, and are included in net results from
dealing securities.
A N N U A L
R E P O R T
73
2 0 0 7
- 31 March 2007
2.
(r) Foreign Currency Translations
Transactions in foreign currencies are initially recorded in Ringgit Malaysia at rates of exchange ruling at the date of
the transaction. At each balance sheet date, foreign currency monetary items are translated into Ringgit Malaysia at
exchange rates ruling at that date, unless hedged by forward foreign exchange contracts, in which case the rates
specified in such forward contracts are used.
All exchange rate differences are taken to the income statement.
The principal exchange rates used for each respective unit of foreign currency ruling at the balance sheet date are as
follows:
2007
2006
Foreign Currency
RM
RM
1
1
1
1
1
1
1
US Dollar
Euro
Sterling Pound
Japanese Yen
Australian Dollar
Singaporean Dollar
Hong Kong Dollar
3.456
4.603
6.759
0.029
2.789
2.278
0.442
3.683
4.469
6.414
0.031
2.642
2.276
0.475
(s) Income Tax
Income tax on the profit or loss for the year comprises current and deferred tax. Current tax is the expected amount
of income taxes payable in respect of the taxable profit for the year and is measured using the tax rates that have
been enacted at the balance sheet date.
Deferred tax is provided for, using the liability method, on temporary differences at the balance sheet date between
the tax bases of assets and liabilities and their carrying amounts in the financial statements. In principle, deferred tax
liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised for all deductible
temporary differences, unused tax losses and unused tax credits to the extent that it is probable that taxable profit
will be available against which the deductible temporary differences, unused tax losses and unused tax credits can
be utilised. Deferred tax is not recognised if the temporary difference arises from goodwill or negative goodwill or
from the initial recognition of an asset or liability in a transaction which is not a business combination and at the time
of the transaction, affects neither accounting profit nor taxable profit.
Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realised or the
liability is settled, based on tax rates that have been enacted or substantively enacted at the balance sheet date.
Deferred tax is recognised in the income statement, except when it arises from a transaction which is recognised
directly in equity, in which case the deferred tax is also charged or credited directly in equity, or when it arises from
a business combination that is an acquisition, in which case the deferred tax is included in the resulting goodwill or
negative goodwill.
(t) Foreclosed Properties
74
M A L A Y S I A N
Foreclosed properties are stated at cost less impairment losses, if any, of such properties. The policy for the
recognition and measurement of impairment losses is in accordance with Note 2(k)(iv).
B E R H A D
( 6 6 2 7 - X )
- 31 March 2007
2.
(u) Cash and Cash Equivalents
Cash and cash equivalents as stated in the cash flow statements comprise cash and short-term funds and deposits
and placements with financial institutions which have an insignificant risk of changes in value.
(v) Profit Equalisation Reserve ("PER")
PER refers to the amount appropriated out of the total Islamic banking gross income in order to maintain a certain
level of return to depositors in conformity with BNM's "The Framework of the Rate of Return". PER is deducted from
the total Islamic banking gross income in deriving the net distributable gross income. This amount appropriated is
shared by the depositors and the Alliance Banking group.
(w) Employee Benefits
(i) Short Term Benefits
Wages, salaries, bonuses and social security contributions are recognised as an expense in the year in which the
associated services are rendered by employees of the Group. Short term accumulating compensated absences
such as paid annual leave are recognised when services are rendered by employees that increase their
entitlement to future compensated absences, and short term non-accumulating compensated absences such as
sick leave are recognised when the absences occur.
(ii) Defined Contribution Plans
As required by law, companies in Malaysia make contributions to the Employees Provident Fund ("EPF"). Such
contributions are recognised as an expense in the income statements as incurred.
3.
CASH AND SHORT-TERM FUNDS
Group
Cash and balances with banks and other
financial institutions
Money at call and deposit placements maturing
within one month
2007
RM'000
2006
RM'000
452,579
414,348
Company
2007
2006
RM'000
RM'000
4,762
248
3,691,478
2,183,111
–
–
–––––––––––––––––––––––––––––––––––––––––––––––––––––
4,144,057
2,597,459
4,762
248
=============================================================
75
A N N U A L
R E P O R T
2 0 0 7
- 31 March 2007
4.
DEPOSITS AND PLACEMENTS WITH FINANCIAL INSTITUTIONS
Group
2007
RM'000
Licensed banks
Islamic banks
Bank Negara Malaysia
Other financial institutions
2006
RM'000
Company
2007
2006
RM'000
RM'000
75,981
1,272
59,300
26,650
5,000
–
–
–
2,322,867
1,108,743
–
–
31,409
24,269
7,100
1,700
–––––––––––––––––––––––––––––––––––––––––––––––––––––
2,435,257
1,134,284
66,400
28,350
=============================================================
The deposits of the Company amounting to RM59,300,000 (2006: RM26,650,000) are placed with the Alliance Banking
group.
5.
SECURITIES HELD-FOR-TRADING
Group
At fair value
Money Market Instruments:
Bankers acceptances
Quoted securities:
Shares in Malaysia
Debt securities
6.
2007
RM'000
2006
RM'000
–
282,774
5,744
5,373
9,234
11,186
––––––––––––––––––––––––
14,978
299,333
============================
SECURITIES AVAILABLE-FOR-SALE
Group
At fair value
Malaysian Government securities
Malaysian Government investment certificates
Malaysian Government treasury bills
Bank Negara Malaysia bills
Cagamas bonds
Negotiable instruments of deposits
Commercial paper
Bankers acceptances
Quoted securities:
Shares in Malaysia
Unquoted securities:
Shares
Debt securities
2006
RM'000
285,274
145,710
–
–
125,727
499,902
45,568
228,099
86,254
–
133,383
64,433
79,979
–
64,401
–
3,205
12,567
1,113
1,113
718,385
604,665
––––––––––––––––––––––––
2,052,983
1,046,795
============================
76
M A L A Y S I A N
2007
RM'000
B E R H A D
( 6 6 2 7 - X )
- 31 March 2007
7.
SECURITIES HELD-TO-MATURITY
Group
At amortised cost
Cagamas bonds
Khazanah bonds
Commercial papers
Bankers acceptances
Quoted securities:
Debt securities
Unquoted securities:
Shares
Debt securities
Accumulated impairment losses
(i)
2007
RM'000
2006
RM'000
165,370
188,989
49,747
174,928
440,000
269,034
–
705,050
324,416
169,255
24,775
592,228
155,000
288,978
19,681
1,052,406
25,587
36,445
21,496
21,067
521,941
604,789
––––––––––––––––––––––––
2,562,142
3,289,040
(132,061)
(139,690)
––––––––––––––––––––––––
2,430,081
3,149,350
============================
Market value of money market instruments and quoted securities:
Cagamas bonds
Khazanah bonds
Commercial paper
Bankers acceptances
Debt securities
165,060
323,922
189,564
169,254
49,751
24,775
175,743
592,535
440,636
155,000
268,870
288,628
–
19,685
700,467
1,052,410
25,054
23,048
============================
(ii) The maturity structure of money market instruments held are as follows:
Within one year
One year to three years
Three years to five years
Over five years
1,464,940
1,923,064
489,951
613,663
38,227
82,142
–
7,870
––––––––––––––––––––––––
1,993,118
2,626,739
============================
A N N U A L
R E P O R T
77
2 0 0 7
- 31 March 2007
8.
LOANS, ADVANCES AND FINANCING
Group
Overdrafts
Term loans/financing
- Housing loans/financing
- Syndicated term loan/financing
- Hire purchase receivables
- Lease receivables
- Other term loans/financing
Bills receivables
Trust receipts
Claims on customers under acceptance credits
Staff loans [include loan to Executive Director of RM498,000 (2006: nil)]
Credit/charge card receivables
Revolving credits
Other loans
Unearned interest and income
Gross loans, advances and financing
Allowance for bad and doubtful debts and financing:
- Specific
- General
Net loans, advances and financing
(i)
2007
RM'000
2006
RM'000
2,061,174
2,217,812
4,522,181
3,835,852
291,141
264,884
1,542,585
1,518,988
24,104
52,570
3,998,350
4,567,426
155,711
220,184
102,119
132,328
1,150,641
982,000
109,088
111,144
399,447
253,884
660,143
908,201
122,761
119,540
–––––––––––––––––––––––––
15,139,445 15,184,813
(779,134)
(603,643)
–––––––––––––––––––––––––
14,360,311 14,581,170
(805,434)
(825,160)
(244,249)
(206,388)
–––––––––––––––––––––––––
13,310,628 13,549,622
=============================
By maturity structure:
Within one year
Over five years
5,069,892
5,492,253
1,011,400
1,095,710
1,388,965
1,758,692
6,890,054
6,234,515
–––––––––––––––––––––––––
14,360,311 14,581,170
=============================
(ii) By type of customer:
Domestic non-bank financial institutions
- Stockbroking companies
- Others
Domestic business enterprises
- Small and medium enterprises
- Others
Government and statutory bodies
Individuals
Other domestic entities
Foreign entities
78
M A L A Y S I A N
B E R H A D
( 6 6 2 7 - X )
11,233
104,081
11,412
99,872
3,954,960
4,243,171
3,118,752
3,990,079
18,457
18,903
7,086,074
6,191,447
7,200
5,702
59,554
20,584
–––––––––––––––––––––––––
14,360,311 14,581,170
=============================
- 31 March 2007
8.
LOANS, ADVANCES AND FINANCING (cont’d)
Group
2007
RM'000
2006
RM'000
159,172
1,347,758
1,242,306
153,218
1,317,883
1,196,276
(iii) By interest/profit rate sensitivity:
Fixed rate
- Other fixed rate loans/financing
Variable rate
- Base lending rate plus
- Cost plus
- Other variable rates
9,235,174
9,364,534
2,270,889
2,415,178
105,012
134,081
–––––––––––––––––––––––––
14,360,311 14,581,170
=============================
(iv) By economic sectors:
Purchase of securities
Purchase of transport vehicles
Purchase of landed property
of which: - Residential
- Non-residential
Purchase of fixed assets excl. land & building
Personal use
Credit card
Purchase of durable goods
Construction
Working capital
Others
211,739
1,435,005
5,998,684
353,545
1,326,985
5,517,044
4,510,848
3,932,096
1,487,836
1,584,948
26,426
24,412
736,871
480,642
399,469
253,881
186
203
339,731
382,538
4,715,359
5,450,510
496,841
791,410
–––––––––––––––––––––––––
14,360,311 14,581,170
=============================
(v) Movements in non-performing loans, advances and financing ("NPL") are as follows:
At beginning of year
Non-performing during the year
Reclassified as performing during the year
Loans/financing converted to securities
Recoveries
Amount written off
At end of year
Specific allowance
Net non-performing loans, advances and financing
Net NPL as % of gross loans, advances and financing less specific allowance
2,126,228
2,039,363
1,527,519
1,273,054
(1,115,054)
(724,255)
(1,464)
–
(545,462)
(267,684)
(431,595)
(194,250)
–––––––––––––––––––––––––
1,560,172
2,126,228
(805,434)
(825,160)
–––––––––––––––––––––––––
754,738
1,301,068
=============================
5.6%
A N N U A L
9.5%
R E P O R T
79
2 0 0 7
- 31 March 2007
8.
LOANS, ADVANCES AND FINANCING (cont’d)
Group
2007
RM'000
2006
RM'000
(vi) Movements in the allowance for bad and doubtful debts and financing are as follows:
General Allowance
Allowance made during the year
Amount written back
At end of year
As % of gross loans, advances and financing less specific allowance
206,388
224,874
75,340
27,410
(37,479)
(45,896)
–––––––––––––––––––––––––
244,249
206,388
=============================
1.8%
1.5%
Specific Allowance
Amount written-back in respect of recoveries
Loan/financing converted to securities
Amount written off
At end of year
825,160
384,462
639,362
715,518
(226,029)
(80,524)
(1,464)
–
(431,595)
(194,296)
–––––––––––––––––––––––––
805,434
825,160
=============================
(vii) Non-performing loan, advances and financing analysed by economic sectors are as follows:
- Non-residential
Purchase of fixed assets excl. land & building
Personal use
Credit card
Purchase of durable goods
Construction
Working capital
Others
80
M A L A Y S I A N
B E R H A D
( 6 6 2 7 - X )
64,567
101,294
683,989
161,164
80,134
791,061
418,691
400,698
265,298
390,363
1,498
3,567
47,636
67,384
8,473
5,081
–
51
53,199
171,151
571,639
794,607
27,877
52,028
–––––––––––––––––––––––––
1,560,172
2,126,228
=============================
- 31 March 2007
9.
BALANCES DUE FROM CLIENTS AND BROKERS
Group
2007
RM'000
Due from clients
Due from brokers
Less:
Allowance for bad and doubtful debts
2006
RM'000
318,482
180,376
234,010
100,764
–––––––––––––––––––––––––
552,492
281,140
(31,425)
(29,544)
–––––––––––––––––––––––––
521,067
251,596
=============================
These represent amount receivable by Investment banking subsidiary from margin and non-margin clients and outstanding
contracts entered into on behalf of clients where settlements via the Central Depository System have yet to be made, and
amount receivable from provision of corporate financial services.
The Investment banking subsidiary's normal trade credit terms for non-margin is 3 market days in accordance with the Bursa
Malaysia Securities Berhad's Fixed Delivery and Settlement System ("FDSS") trading rules. The credit terms of other
receivables of the Investment banking subsidiary are assessed and approved on a case-by-case basis.
Included in the balances due from clients and brokers are non-performing accounts, as follows:
Group
2007
RM'000
Classified as doubtful
Classified as bad
2006
RM'000
1,269
221
48,056
32,739
–––––––––––––––––––––––––
49,325
32,960
=============================
The movements in allowance for bad and doubtful debts are as follows:
Reversal of allowance
At end of year
29,544
14,242
8,873
22,067
(6,992)
(6,765)
–––––––––––––––––––––––––
31,425
29,544
=============================
10. LAND HELD FOR PROPERTY DEVELOPMENT
Group
2007
RM'000
Freehold land, at cost
Development costs
Accumulated impairment losses:
At beginning/end of year
Less : Impairment loss for the year
Carrying amount at end of year
2006
RM'000
23,114
23,114
8,943
8,943
–––––––––––––––––––––––––
32,057
32,057
(3,135)
(2,751)
–
(384)
–––––––––––––––––––––––––
28,922
28,922
=============================
A N N U A L
R E P O R T
81
2 0 0 7
- 31 March 2007
11. OTHER ASSETS
Group
2007
RM'000
Trade receivables
Other receivables, deposits and prepayments [Note (a)]
Manager's stocks [Note (b)]
Foreclosed properties
Amount due from subsidiaries [Note (c)]
Allowance for bad and doubtful debts
2006
RM'000
Company
2007
2006
RM'000
RM'000
230
1,143
–
–
252,239
167,558
4,715
326
1,258
1,524
–
–
12,966
14,229
–
–
–
–
49,207
1,545,739
–––––––––––––––––––––––––––––––––––––––––––––––––––––
266,693
184,454
53,922
1,546,065
(16,384)
(15,185)
(7,527)
(7,515)
–––––––––––––––––––––––––––––––––––––––––––––––––––––
250,309
169,269
46,395
1,538,550
=============================================================
(a) Other receivables, deposits and prepayments
Interest receivable
Prepayments
Deposits
Other receivables
67,455
35,903
128
79
10,970
5,691
4,352
25
10,992
10,131
112
112
162,822
115,833
123
110
–––––––––––––––––––––––––––––––––––––––––––––––––––––
252,239
167,558
4,715
326
=============================================================
Included in other receivables is an amount of RM45,299,000 (2006: RM54,809,000) being the principal balance of
housing loans and hire purchase loans acquired by the banking subsidiary from a state owned entity and which have
been sold to Cagamas Berhad, with recourse obligations.
(b) Manager's stocks
The manager's stock represent units held by the Group in the trust funds it manages and are stated at the lower of
cost and market value. Cost is determined using the weighted average method of valuation. Market value of unit
trust stock is determined by the Group as manager of the trust funds based on the underlying value of the trust
funds.
Group
2007
2006
RM'000
RM'000
Manager's stock, at cost
1,258
1,524
=============================
1,382
1,569
=============================
Market value
The Group have no significant concentration of credit risk that may arise from the exposure to a single debtor or
group of debtors.
82
M A L A Y S I A N
B E R H A D
( 6 6 2 7 - X )
- 31 March 2007
11. OTHER ASSETS (cont’d)
(c)
Amount due from subsidiaries
Group
2007
RM'000
Interest bearing
Non-interest bearing
Allowance for doubtful debts
2006
RM'000
Company
2007
2006
RM'000
RM'000
–
–
8,135
7,383
–
–
41,072
1,538,356
–––––––––––––––––––––––––––––––––––––––––––––––––––––
–
–
49,207
1,545,739
–
–
(7,527)
(7,515)
–––––––––––––––––––––––––––––––––––––––––––––––––––––
–
–
41,680
1,538,224
=============================================================
12. STATUTORY DEPOSITS
Statutory deposits comprise the following:
(a) non-interest bearing statutory deposits of RM581,855,000 (2006: RM749,795,000) relating to the banking
subsidiaries, maintained with Bank Negara Malaysia in compliance with Section 37(1)(c) of the Central Bank of
Malaysia Act, 1958 (revised 1994), the amounts of which are determined as a set percentage of total eligible
liabilities.
(b) interest bearing statutory deposits of RM100,000 (2006: RM100,000) relating to a subsidiary, Alliance Trustee
Berhad which is maintained with the Accountant-General in compliance with Section 3(f) of the Trust Companies
Act, 1949.
13. INVESTMENT IN SUBSIDIARIES
Company
2007
2006
RM'000
RM'000
Unquoted shares, at cost
Less: Accumulated impairment losses
1,567,198
106,331
(38,056)
(57,048)
–––––––––––––––––––––––––
1,529,142
49,283
=============================
The amounts due from subsidiaries are unsecured and have no fixed terms of repayment. Interest is charged on the amount
due from a subsidiary at 2.75% (2006: 2.75%) per annum.
83
A N N U A L
R E P O R T
2 0 0 7
- 31 March 2007
13. INVESTMENT IN SUBSIDIARIES (cont’d)
Details of the subsidiaries, which are incorporated in Malaysia, are as follows:
Name
Principal Activities
Effective Equity
Interest Held (%)
2007
2006
Subsidiaries of the Company
Alliance Bank Malaysia Berhad
Banking business, including Islamic banking
business, finance company business and the
provision of related financial services
100
100
Syabas Sutra Sdn. Bhd.
(in member's voluntary winding up)
Dormant
100
100
Hijauan Setiu Sdn. Bhd.
Investment holding
100
100
Setiu Integrated Resort Sdn. Bhd.
Investment holding
100
100
Pridunia Sdn. Bhd.
Dormant
100
100
Matrix Core Options & Futures Sdn. Bhd.
Dormant
100
100
Setiu Green Development Sdn. Bhd
Liquidated
–
100
Setiu Sea Resort Sdn. Bhd.
Dormant
100
100
Cosmoplex Sdn. Bhd.
(in members' voluntary winding up)
Dormant
100
100
Alliance Trustee Berhad
Trustee services
100
100
Kota Indrapura Development
Corporation Berhad
Property holding
100
100
Dormant
100
100
–
100
Subsidiary of Syabas Sutra Sdn Bhd
ABG Capital Management Sdn. Bhd.
Subsidiary of Kota Indrapura Development Corporation Berhad
Pantai Lagenda Golf & Country Club Sdn. Bhd.
84
M A L A Y S I A N
B E R H A D
( 6 6 2 7 - X )
Liquidated
- 31 March 2007
Effective Equity
Interest Held (%)
2007
2006
Alliance Investment Bank Berhad
(formerly known as Alliance Merchant
Bank Berhad)
Investment banking
100
100
Alliance Direct Marketing Sdn. Bhd.
Dealing in sales and distribution of consumer
and commercial banking products
100
100
Alliance Group Nominees (Asing) Sdn. Bhd.
Nominee services
100
100
AllianceGroup Nominees (Tempatan) Sdn. Bhd.
Nominee services
100
100
AllianceGroup Properties Sdn. Bhd.
Real property investment
100
100
Alliance Investment Management Berhad
Management Berhad)
Management of unit trusts funds
70
70
Alliance Finance Berhad
Liquidated
–
100
Alliance International Berhad
Dormant
100
100
Alliance International Nominees
(Tempatan) Sdn. Bhd.
Dormant
100
100
Alliance International Nominees
(Asing) Sdn. Bhd.
Dormant
100
100
AFB Nominees (Tempatan) Sdn. Bhd.
Dormant
100
100
Alliance Merchant Nominees (Tempatan)
Dormant
Sdn. Bhd. (in members' voluntary winding up)
100
100
Alliance Merchant Nominees (Asing) Sdn. Bhd.
Dormant
100
100
Alliance Merchant Unit Trust Berhad
Liquidated
–
100
Alliance Merchant Securities Holdings Sdn. Bhd.
Liquidated
–
100
Alliance Capital Asset Management Sdn. Bhd.
Portfolio management business
70
70
–
100
–
100
Name
Subsidiaries of Alliance Bank Malaysia Berhad
Subsidiaries of Alliance Investment Bank Berhad
Asean Financial Services Sdn. Bhd.
Rothputra Venture Management Sdn. Bhd.
Liquidated
Liquidated
85
A N N U A L
R E P O R T
2 0 0 7
- 31 March 2007
Subsidiaries of Alliance Investment Bank Berhad (cont’d.)
Name
Rothputra Ventures Berhad
Liquidated
Rothputra Nominees (Tempatan) Sdn. Bhd.
Effective Equity
Interest Held (%)
2007
2006
–
100
Dormant
100
100
Rothputra Nominees (Asing) Sdn. Bhd.
Dormant
100
100
KLCS Sdn. Bhd. (formerly known as
Kuala Lumpur City Securities Sdn. Bhd.)
Dormant
100
100
Alliance Research Sdn. Bhd. (formerly known
as KLCity Research Sdn. Bhd.)
Investment advisory
100
100
KLCity Ventures Sdn. Bhd.
Dormant
100
100
Alliance Asset Management (L) Limited
Dormant
100
100
Alliance Investment Futures Sdn. Bhd.
(formerly known as KLCS Futures Sdn.Bhd.)
Dormant
100
100
KLCS Asset Management Sdn. Bhd.
Fund management
100
100
KLCity Unit Trust Bhd.
Investment funds management
94.94
94.94
AIBB Nominees (Tempatan) Sdn. Bhd.
City Nominees (Tempatan) Sdn. Bhd.)
Nominee services
100
100
AIBB Nominees (Asing) Sdn. Bhd.
City Nominees (Asing) Sdn. Bhd.)
Nominee services
100
100
86
M A L A Y S I A N
B E R H A D
( 6 6 2 7 - X )
- 31 March 2007
14. PROPERTY, PLANT AND EQUIPMENT
Group
Freehold
land
RM'000
Long term
leasehold
land
RM'000
Buildings
on freehold
and leasehold
land
RM'000
3,679
61,164
Renovations
RM'000
Office
equipment,
furniture
and fittings
RM'000
Computer
equipment
RM'000
Motor
vehicles
RM'000
Total
RM'000
102,265
83,323
193,144
20,246
468,031
2007
Cost
At beginning
of year
As previously
stated
Reclassification
to intangible
assets (Note 15)
As restated
Additions
Disposals
At 31 March
4,210
–
–
–
–
–
(98,197)
– (98,197)
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
4,210
3,679
61,164
102,265
83,323
94,947
20,246 369,834
10
–
–
16,153
3,126
29,388
1,017
49,694
(1,453)
–
(1,393)
(3,076)
(3,751)
(3,212) (10,505) (23,390)
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
2,767
3,679
59,771
115,342
82,698
121,123
10,758 396,138
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Accumulated Depreciation
At beginning
of year
As previously
stated
Reclassification
to intangible
assets (Note 15)
As restated
Charge for
the year
Disposals
At 31 March
–
365
13,522
87,856
55,649
141,536
16,238
315,166
–
–
–
–
–
(59,894)
– (59,894)
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
–
365
13,522
87,856
55,649
81,642
16,238 255,272
–
4
1,240
5,970
4,833
5,117
865
18,029
–
–
(620)
(1,861)
(3,590)
(987)
(9,634) (16,692)
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
–
369
14,142
91,965
56,892
85,772
7,469 256,609
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Net Carrying Amount
At 31 March 2007
2,767
3,310
45,629
23,377
25,806
35,351
3,289 139,529
=========================================================================================================
87
A N N U A L
R E P O R T
2 0 0 7
- 31 March 2007
14. PROPERTY, PLANT AND EQUIPMENT (cont’d)
Group
Freehold
land
RM'000
Long term
leasehold
land
RM'000
Buildings
on freehold
and leasehold
land
RM'000
Renovations
RM'000
Office
equipment,
furniture
and fittings
RM'000
Computer
equipment
RM'000
Motor
vehicles
RM'000
Total
RM'000
2006
Cost
As previously
stated
4,210
3,734
55,276
100,883
79,290
186,938
23,242 453,573
Reclassification
to intangible
assets (Note 15)
–
–
–
–
–
(89,828)
– (89,828)
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
As restated
4,210
3,734
55,276
100,883
79,290
97,110
23,242 363,745
Transfer from
foreclosed
properties
–
–
8,256
–
–
–
–
8,256
Additions
–
–
–
3,921
5,077
15,637
383
25,018
Disposals
–
(55)
(2,368)
(2,539)
(1,044)
(9,430)
(3,379) (18,815)
Reclassification
to intangible
assets (Note 15)
–
–
–
–
–
(8,370)
–
(8,370)
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
At 31 March
4,210
3,679
61,164
102,265
83,323
94,947
20,246 369,834
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
As previously
stated
–
354
13,278
82,085
51,745
124,273
14,363 286,098
Reclassification
to intangible
assets (Note 15)
–
–
–
–
–
(46,421)
– (46,421)
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
As restated
–
354
13,278
82,085
51,745
77,852
14,363 239,677
Charge for the year
–
25
1,081
6,018
4,851
19,822
4,393
36,190
Disposals
–
(14)
(837)
(247)
(947)
(2,558)
(2,518)
(7,121)
Reclassification
to intangible
assets (Note 15)
–
–
–
–
–
(13,474)
– (13,474)
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
At 31 March
–
365
13,522
87,856
55,649
81,642
16,238 255,272
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Net Carrying Amount
At 31 March 2006
88
M A L A Y S I A N
4,210
3,314
47,642
14,409
27,674
13,305
4,008 114,562
=========================================================================================================
B E R H A D
( 6 6 2 7 - X )
- 31 March 2007
14. PROPERTY, PLANT AND EQUIPMENT (cont’d)
Company
Computer
equipment and
software
RM'000
Office
equipment,
furniture and
fittings
RM'000
Motor
vehicles
RM'000
Renovations
RM'000
Total
RM'000
2007
Cost
At 1 April
Additions
Disposals
At 31 March
222
540
96
543
1,401
33
30
396
2
461
–
(10)
–
(5)
(15)
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
255
560
492
540
1,847
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
At 1 April
Charge for the year
Disposals
At 31 March
179
433
38
441
1,091
23
17
59
13
112
–
(8)
–
(5)
(13)
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
202
442
97
449
1,190
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Net Carrying Amount
At 31 March 2007
Company
53
118
395
91
657
==============================================================================
Computer
equipment and
software
RM'000
Office
equipment,
furniture and
fittings
RM'000
Motor
vehicles
RM'000
Renovations
RM'000
Total
RM'000
2006
Cost
At 1 April
Additions
Disposals
At 31 March
203
492
96
468
1,259
27
90
–
81
198
(8)
(42)
–
(6)
(56)
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
222
540
96
543
1,401
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
At 1 April
Charge for the year
Disposals
At 31 March
173
431
19
403
1,026
13
35
19
41
108
(7)
(33)
–
(3)
(43)
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
179
433
38
441
1,091
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Net Carrying Amount
At 31 March 2006
43
107
58
102
310
==============================================================================
A N N U A L
R E P O R T
89
2 0 0 7
- 31 March 2007
15. INTANGIBLE ASSETS
Group
Note
2007
RM'000
2006
RM'000
271,063
288,578
Goodwill
Effect of adopting FRS 3
- Negative goodwill recognised to retained profit
Accumulated amortisation
At end of year
(a)
(b)
33,086
2,191
–
(19,706)
–––––––––––––––––––––––––––––––––––––
304,149
271,063
=============================
Upon adoption of FRS 3: Business Combination on 1 April 2006:
(a) Negative goodwill is now recognised immediately to the income statement with corresponding increase in retained
earnings. The negative goodwill was derived from the following:(i)
the acquisition of Alliance Bank; and
(ii) the acquisition of ex-Multi-Purpose Finance and Alliance Merchant Unit Trust Berhad by Alliance Bank.
(b) Goodwill with indefinite life ceased to be amortised and the accumulated amortisation has been netted off against
the gross cost of goodwill.
Group
2007
2006
RM'000
RM'000
Computer software
At cost:
As previously stated
Reclassification from property, plant and equipment (Note 14)
As restated
Additions
Disposal
At end of year
Accumulated amortisation:
Reclassification from property, plant and equipment (Note 14)
As restated
Charge for the year
Disposal
At end of year
Net carrying amounts
Total carrying amounts of goodwill and computer software
90
M A L A Y S I A N
B E R H A D
( 6 6 2 7 - X )
–
–
98,197
89,828
–––––––––––––––––––––––––––––––––––––
98,197
89,828
2,698
8,915
(1)
(545)
–––––––––––––––––––––––––––––––––––––
100,894
98,198
–––––––––––––––––––––––––––––––––––––
–
–
(59,894)
(46,421)
–––––––––––––––––––––––––––––––––––––
(59,894)
(46,421)
(14,309)
(14,016)
–
542
–––––––––––––––––––––––––––––––––––––
(74,203)
(59,895)
–––––––––––––––––––––––––––––––––––––
26,691
38,303
=============================
330,840
309,366
=============================
- 31 March 2007
15. INTANGIBLE ASSETS (cont’d)
(a) Impairment Test on Goodwill
Goodwill is reviewed annually for impairment, or more frequently when there are indications that impairment may
have occurred. Goodwill have been allocated to the Group's cash-generating units ("CGU") that expected to benefit
from the synergies of the acquisitions, identified according to the business segment as follows:
Group
RM'000
Corporate banking
Commercial banking
Consumer banking
Treasury
Corporate finance & equity capital market
Stockbroking business
Debt capital market
Asset Managemnet
44,758
56,080
101,565
83,284
1,838
12,433
2,084
2,107
–––––––––
––––––––––
304,149
==============
For annual impairment testing purposes, the recoverable amount of the CGUs, which are reportable business
segments, are determined based on their value-in-use. The value-in-use calculations apply a discounted cash flow
model using cash flow projections based on financial budget and projections approved by management. The key
assumptions for the computation of value-in-use include the discount rates, cash flow projection and growth rates
applied are as follows:
(i)
Discount rate
The discount rate of 10.1% are based on the pre-tax weighted average cost of capital plus an appropriate risk
premium, that reflect specific risks relating to the Group. The pre-tax weighted average cost of capital is
generally derived from an appropriate capital asset pricing model, which itself depends on inputs reflecting a
number of financial and economic variables including the risk-free rate in the country concerned.
(ii) Cash flow projections and Growth rate
Cash flow projections are based on five year financial budget and projections approved by management. Cash
flows beyond the fifth year are extrapolated in perpetuity using a nominal long term growth rate of 6.5% based
on average annual Gross Domestic Product growth rate forecasted for the 10 years from year 2011 to 2020
reported in the Third Industrial Master Plan. Cash flows are extrapolated in perpetuity due to the long term
perspective of these businesses within the Group.
Impairment is recognised in the income statement when the carrying amount of a CGU exceeds its recoverable
amount. This annual impairment test review reveals that there was no evidence of impairment.
(b) Sensitivity to changes in assumptions
Any reasonable possible change in the key assumptions would not cause the carrying amount of the goodwill to
exceed the recoverable amount of the CGU, which would warrant any impairment loss to be recognised.
A N N U A L
R E P O R T
91
2 0 0 7
- 31 March 2007
16. DEFERRED TAX
Group
2007
RM'000
Recognised in equity
Recognised in the income statement (Note 36)
At end of year
2006
RM'000
Company
2007
2006
RM'000
RM'000
(108,941)
(30,392)
1,283
1,193
(528)
(3,401)
–
–
(3,016)
(75,148)
(1,097)
90
–––––––––––––––––––––––––––––––––––––––––––––––––––––
(112,485)
(108,941)
186
1,283
=============================================================
Presented after appropriate offsetting as follows:
Deferred tax assets
Deferred tax liabilities
(120,303)
(117,994)
–
(25)
7,818
9,053
186
1,308
–––––––––––––––––––––––––––––––––––––––––––––––––––––
(112,485)
(108,941)
186
1,283
=============================================================
The components and movements of deferred tax assets and liabilities during the financial year prior to offsetting are as
follows:
Unabsorbed
Tax Losses
Other
Allowance for
and Capital
Temporary
Loan Loss
Allowances
Differences
Total
Group
RM'000
RM'000
RM'000
RM'000
Deferred tax assets:
At 1 April 2006
Recognised in income statement
At 31 March 2007
At 1 April 2005
At 31 March 2006
92
M A L A Y S I A N
B E R H A D
( 6 6 2 7 - X )
(74,598)
(39,372)
(20,428)
(134,398)
(33,073)
34,490
(5,635)
(4,218)
–––––––––––––––––––––––––––––––––––––––––––––––––––––
(107,671)
(4,882)
(26,063)
(138,616)
=============================================================
(63,829)
–
(4,285)
(68,114)
(10,769)
(39,372)
(16,143)
(66,284)
–––––––––––––––––––––––––––––––––––––––––––––––––––––
(74,598)
(39,372)
(20,428)
(134,398)
=============================================================
- 31 March 2007
16. DEFERRED TAX (cont’d)
Receivables
RM'000
Fair Value
Adjustment
Arising from
Consolidation
RM'000
Property,
Plant and
Equipment
RM'000
Other
Temporary
Differences
RM'000
Total
RM'000
Deferred tax liabilities:
At 1 April 2006
At 31 March 2007
At 1 April 2005
At 31 March 2006
1,240
7,631
11,372
5,214
25,457
–
–
–
(528)
(528)
(1,054)
(1)
1,443
814
1,202
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
186
7,630
12,815
5,500
26,131
=============================================================================
1,240
12,154
15,599
8,729
37,722
–
–
–
(3,401)
(3,401)
–
(4,523)
(4,227)
(114)
(8,864)
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
1,240
7,631
11,372
5,214
25,457
=============================================================================
Other
Temporary
Differences
2007
2006
RM'000
RM'000
Company
Deferred tax assets:
At 1 April 2006
At 31 March 2007
(25)
(47)
25
22
–––––––––––––––––––––––––––––––––––––
–
(25)
=============================
Receivables
2007
2006
RM'000
RM'000
Deferred tax liabilities:
At 1 April 2006
At 31 March 2007
1,308
1,240
(1,122)
68
–––––––––––––––––––––––––––––––––––––
186
1,308
=============================
93
A N N U A L
R E P O R T
2 0 0 7
- 31 March 2007
17. DEPOSITS FROM CUSTOMERS
Group
2007
RM'000
Demand deposits
Savings deposits
Fixed/investment deposits
Others
(i)
2006
RM'000
4,736,729
3,936,179
1,520,915
1,471,345
12,835,219 12,258,480
18,200
–
–
217
–––––––––––––––––––––––––––––––––––––
19,111,063 17,666,221
=============================
The maturity structure of fixed/investment deposits and negotiable instruments
of deposits are as follows:
Due within six months
Six months to one year
8,439,258
8,677,555
3,644,654
2,968,771
691,587
364,131
77,920
248,023
–––––––––––––––––––––––––––––––––––––
12,853,419 12,258,480
=============================
(ii) The deposits are sourced from the following types of customers:
Business enterprises
Individuals
Others
978,380
1,034,344
6,839,180
5,863,501
10,630,492
9,744,249
663,011
1,024,127
–––––––––––––––––––––––––––––––––––––
19,111,063 17,666,221
=============================
18. DEPOSITS AND PLACEMENTS OF BANKS AND OTHER FINANCIAL INSTITUTIONS
Group
2007
RM'000
Licensed banks
Licensed merchant banks
Other financial institutions
2006
RM'000
222,982
494,110
–
30,000
259,376
239,994
–
6,902
–––––––––––––––––––––––––––––––––––––
482,358
771,006
=============================
19. RECOURSE OBLIGATIONS ON LOANS SOLD TO CAGAMAS
94
This relates to proceeds received from conventional housing loans and hire purchase loans sold directly to Cagamas
Berhad with recourse to the Group. Under the agreement, the Group undertakes to administer the loans on behalf of
Cagamas Berhad and to buy back any loans which are regarded as defective based on pre-determined and agreed upon
prudential criteria set by Cagamas Berhad.
M A L A Y S I A N
B E R H A D
( 6 6 2 7 - X )
- 31 March 2007
20. BILLS AND ACCEPTANCES PAYABLE
Bills and acceptances payable represents the Group's own bills and acceptances rediscounted and outstanding in the
market.
21. BALANCES DUE TO CLIENTS AND BROKERS
Group
2007
RM'000
Due to clients
Due to brokers
2006
RM'000
188,823
100,270
189,617
69,584
–––––––––––––––––––––––––––––––––––––
378,440
169,854
=============================
These mainly relate to amounts payable to margin and non-margin clients and outstanding contracts entered into on behalf
of clients where settlement via the Central Depository System has yet to be made.
The Group's normal trade credit terms for non-margin clients is 3 market days according to the Bursa's FDSS trading rules.
The credit terms of other payables are assessed and approved on a case-by-case basis.
22. OTHER LIABILITIES
Group
2007
RM'000
Other liabilities [Note (a)]
Remisier's accounts [Note (b)]
Interest/income payable
Due to subsidiaries [Note (c)]
2006
RM'000
Company
2007
2006
RM'000
RM'000
721,335
547,226
1,180
1,185
26,042
22,670
–
–
101,949
88,495
–
–
16,613
22,391
–
–
–
–
1,245
19,249
–––––––––––––––––––––––––––––––––––––––––––––––––––––
865,939
680,782
2,425
20,434
=============================================================
(a) Other liabilities:
Provisions
Accruals
Deferred income
Other payables
201,043
14,665
1,161
1,167
159,274
93,449
–
–
9
4,283
–
–
361,009
434,829
19
18
–––––––––––––––––––––––––––––––––––––––––––––––––––––
721,335
547,226
1,180
1,185
=============================================================
(b) Included in remisier's accounts are deposits of RM6,567,000 (2006: RM5,891,000) which bear weighted average
effective interest rate of 3.16% (2006: 2.82%) per annum.
(c) The amount due to subsidiaries are unsecured, interest-free and has no fixed terms of repayment.
95
A N N U A L
R E P O R T
2 0 0 7
- 31 March 2007
23. SUBORDINATED BONDS
Group
2007
RM'000
At face value
2006
RM'000
600,000
535,000
=============================
The following are the salient features of the said bonds:
•
•
•
•
•
•
•
Description:
Tenure:
Settlement date:
Anniversary date:
Maturity date:
Interest coupon:
Revision of interest:
•
Redemption option:
•
Final redemption:
10 year from the Issue Date on a non-callable 5 year basis
10 years
26 May 2016
26 May
26 May 2011
6.09% per annum, subject to revision of rate in year six
The bonds, unless redeemed at the end of 5 years from the settlement date, shall
bear interest of 7.59% per annum from the sixth year onwards until the final redemption
The issuer may redeem the bonds in part or in whole, at any anniversary date
after 5 years from the settlement date; namely on 26 May in year 2011 or thereafter
At par on maturity date.
24. SHORT/LONG TERM BORROWING
Group/Company
2007
2006
RM'000
RM'000
One-year Commercial Papers 2006/2007 - secured [Note (a)]
Bank term loan - unsecured [Note (b)]
200,000
–
–
200,000
–––––––––––––––––––––––––––––––––––––
200,000
200,000
=============================
(a) One-year Commercial Papers 2006/2007 with all in interest rate of 4.58% per annum maturing on 18 September 2007.
(i)
Special First Issuance of CP/MTN of nominal value of RM200 million where the said CP/MTN will be secured
against a Standby Letter of Credit/Bank Guarantee to be issued by DBS Bank Ltd, Labuan Branch;
(b) Interest on the term loan is charged at a rate of 5% per annum. The term loan was paid on 27 November 2006 by way
of a bullet payment at the end of the tenure.
96
M A L A Y S I A N
B E R H A D
( 6 6 2 7 - X )
- 31 March 2007
25. SHARE CAPITAL
Number of Ordinary Shares
of RM1 each (in '000)
2007
2006
Amount
2007
2006
RM'000
RM'000
Authorised
At beginning and end of the year
2,000,000
2,000,000
2,000,000
2,000,000
=============================================================
Issued and fully paid
At beginning of the year
At end of the year
1,167,978
1,162,592
1,167,978
1,162,592
49,692
5,386
49,692
5,386
–––––––––––––––––––––––––––––––––––––––––––––––––––––
1,217,670
1,167,978
1,217,670
1,167,978
=============================================================
During the financial year, the issued and paid-up share capital of the Company was increased from RM1,167,978,154
comprising 1,167,978,154 ordinary shares of RM1.00 each to RM1,217,669,947 comprising 1,217,669,947 ordinary
shares of RM1.00 each by the issuance of 49,691,793 new ordinary shares of RM1.00 each at an exercise price of
RM1.21 per RM1.00 ordinary share arising from the exercise of 49,691,793 2002/2007 Warrants.
The 2002/2007 Warrants are constituted by a Deed Poll dated 17 June 2002 executed by the Company. The warrants
were listed on Bursa Malaysia Securities Berhad on 20 September 2002. The movement of the warrants is as follows:
Number of Warrants
2007
2006
At beginning of the year
Exercised
At end of the year
382,141,003 387,527,703
(49,691,793) (5,386,700)
––––––––––––––––––––––––––––––––––––––––
332,449,210 382,141,003
===============================
The main features of the 2002/2007 Warrants are as follows:
(a) Each warrant entitles the registered holder to subscribe for one new ordinary share of RM1.00 each in the Company
at an exercise price of RM1.21, subject to any adjustments under certain circumstances in accordance with the terms
of the Deed Poll.
(b) The Exercise Period is the period commencing on 9 September 2002 until 8 June 2007. Warrants not exercised during
the Exercise Period will thereafter lapse and cease to be valid.
(c) The new ordinary shares of RM1.00 each to be issued pursuant to the exercise of the warrants will rank pari passu
in all respect with the existing issued ordinary shares of the Company except that they shall not be entitled to any
dividends, rights, allotments and/or other distributions, the entitlement date of which precedes their date of
allotment.
26. STATUTORY RESERVE
A statutory reserve is maintained by the Group, in compliance with Section 36 of the Banking and Financial Institutions
Act, 1989 and the amount of RM268,125,000 (2006: RM238,107,000) represents the group's share of the post
acquisition statutory reserve.
A N N U A L
R E P O R T
97
2 0 0 7
- 31 March 2007
27. CAPITAL RESERVES
These are in respect of retained profit capitalised for a bonus issue by a subsidiary company.
28. REVALUATION RESERVE
The revaluation reserve is in respect of unrealised fair value gains and losses on securities available-for-sale.
29. OPERATING REVENUE
Operating revenue of the Group comprises revenue derived from commercial banking, investment banking, financing,
stockbroking, Islamic banking, sales of trust units, trustee services and dividend income from investment, but excludes all
related company transactions.
Operating revenue of the Company comprises gross interest income, dividend income and interest income derived from
subsidiary companies.
30. INTEREST INCOME
Group
- Interest income other than recoveries from NPLs
- Recoveries from NPLs
Money at call and deposit placements with financial
institutions
Others
Accretion of discount less amortisation of premium
Net interest/income suspended
2007
RM'000
2006
RM'000
731,306
107,150
777,787
59,760
Company
2007
2006
RM'000
RM'000
–
–
–
–
152,799
87,285
–
–
56
246
–
–
44,346
33,222
–
–
59,859
58,804
–
–
2,808
1,120
1,293
1,047
–––––––––––––––––––––––––––––––––––––––––––––––––––––
1,098,324
1,018,224
1,293
1,047
63,824
45,771
–
–
(40,052)
(48,202)
–
–
–––––––––––––––––––––––––––––––––––––––––––––––––––––
1,122,096
1,015,793
1,293
1,047
=============================================================
31. INTEREST EXPENSE
Group
2007
RM'000
Deposits and placements of banks and other
Loans sold to Cagamas
Subordinated bonds
Others
98
M A L A Y S I A N
B E R H A D
( 6 6 2 7 - X )
2006
RM'000
Company
2007
2006
RM'000
RM'000
13,650
7,746
–
–
426,264
401,695
–
–
11,495
15,446
–
–
40,235
66,028
–
–
9,880
3,397
9,880
3,397
48,014
31,401
–
–
–––––––––––––––––––––––––––––––––––––––––––––––––––––
549,538
525,713
9,880
3,397
=============================================================
- 31 March 2007
32. OTHER OPERATING INCOME
Group
2007
RM'000
2006
RM'000
Company
2007
2006
RM'000
RM'000
(a) Fee income:
Commissions
Service charges and fees
Portfolio management
Corporate advisory fees
Underwriting commissions
Brokerage fees
Guarantee fees
Processing fees
Commitment fees
Other fee income
25,920
32,183
–
–
32,528
26,850
–
–
8,088
10,123
–
–
6,763
7,352
–
–
543
1,112
–
–
35,948
20,984
–
–
13,865
12,782
–
–
8,020
12,888
–
–
13,207
13,760
–
–
14,333
13,728
–
–
–––––––––––––––––––––––––––––––––––––––––––––––––––––
159,215
151,762
–
–
=============================================================
(b) Investment income:
Gain/(loss) arising from sale of securities:
Net gain from sale of securities held-for-trading
Net gain/(loss) from sale of securities held-to-maturity
Net gain from sale of securities available-for-sale
Unrealised (loss)/gain on revaluation of securities
held-for-trading
Gain from investment in Staple Bonds
Gross dividend income from:
Subsidiaries
2,382
1,098
11,886
11,540
(868)
1,273
–
–
–
–
–
–
(1,575)
1,754
976
1,794
–
–
–
–
2,465
3,426
–
–
11
517
–
–
–
–
10,000
10,020
–––––––––––––––––––––––––––––––––––––––––––––––––––––
18,021
18,658
10,000
10,020
=============================================================
(c) Other income/(expenses)
Foreign exchange profit/(loss)
- realised
- unrealised
Rental income
Gain on disposal of property, plant and equipment
Gain on disposal of foreclosed properties
Impairment loss on development property
Write back/(impairment loss)
on investment in subsidiaries
Return on capital
Others
Total other operating income
24,477
4,349
453
4,975
266
–
21,369
(149)
539
3,319
340
(384)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
308
(8)
8
–
6
–
4,359
6,122
–
–
–––––––––––––––––––––––––––––––––––––––––––––––––––––
38,887
31,156
314
(8)
–––––––––––––––––––––––––––––––––––––––––––––––––––––
216,123
201,576
10,314
10,012
=============================================================
A N N U A L
R E P O R T
99
2 0 0 7
- 31 March 2007
33. OTHER OPERATING EXPENSES
Group
2007
RM'000
Personnel costs
- Salaries, allowances and bonuses
- Pension costs
- Others
Establishment costs
- Depreciation
- Amortisation of intangible assets
- Rental
- Water & electricity
- Repairs & maintenance
- EDP expenses
- Others
Marketing expenses
- Promotion and advertisement
- Branding and publicity
- Others
Administration and general expenses
- Amortisation of goodwill
- Communication expenses
- Printing and stationeries
- Insurance
- Professional fees
- Others
Total other operating expenses
2006
RM'000
Company
2007
2006
RM'000
RM'000
239,799
189,450
786
514
35,348
28,532
159
99
32,098
32,376
850
427
–––––––––––––––––––––––––––––––––––––––––––––––––––––
307,245
250,358
1,795
1,040
18,029
22,174
112
108
14,309
14,016
–
–
25,039
24,190
238
277
5,537
5,375
7
9
8,788
8,782
49
32
23,890
27,532
–
–
9,033
8,280
–
–
–––––––––––––––––––––––––––––––––––––––––––––––––––––
104,625
110,349
406
426
17,962
8,079
–
–
10,649
1,577
–
–
7,319
5,687
–
–
–––––––––––––––––––––––––––––––––––––––––––––––––––––
35,930
15,343
–
–
–
17,515
–
–
11,516
10,956
17
19
4,960
5,182
1
11
3,253
2,999
40
40
10,417
9,970
20
156
15,542
14,405
943
596
–––––––––––––––––––––––––––––––––––––––––––––––––––––
45,688
61,027
1,021
822
–––––––––––––––––––––––––––––––––––––––––––––––––––––
493,488
437,077
3,222
2,288
=============================================================
Included in the above expenditure are the following:
Auditors' remuneration [Note (a)]
Directors' remuneration [Note (b)]
Lease rental
Hire of equipment
Rental of premises
Remisiers' commission
Allowance for doubtful debts due from a subsidiary
Amortisation of computer software
100
M A L A Y S I A N
B E R H A D
( 6 6 2 7 - X )
660
732
56
27
5,273
9,633
642
311
561
7,385
–
–
1,194
2,277
–
–
502
13
2
13
25,039
24,190
238
277
14,294
6,847
–
–
–
–
12
–
14,309
14,016
–
–
=============================================================
- 31 March 2007
33. OTHER OPERATING EXPENSES (cont’d)
Group
2007
RM'000
2006
RM'000
Company
2007
2006
RM'000
RM'000
(a) Auditors' remuneration
Statutory audit
- Current year
- Over provision in prior year
Non-audit/other services
Total
508
514
24
22
1
–
1
–
151
218
31
5
–––––––––––––––––––––––––––––––––––––––––––––––––––––
660
732
56
27
=============================================================
(b) Directors' remuneration
Directors of the Company
- Allowances
- Fees
- Benefits-in-kind
Directors of Subsidiaries
Executive Directors
- Salaries and allowances
- Bonuses
- Benefits-in-kind
- Allowances
- Fees
Total
329
213
191
72
920
414
424
239
46
–
27
–
–––––––––––––––––––––––––––––––––––––––––––––––––––––
1,295
627
642
311
–––––––––––––––––––––––––––––––––––––––––––––––––––––
2,328
5,689
–
–
328
1,525
–
–
69
141
–
–
–––––––––––––––––––––––––––––––––––––––––––––––––––––
2,725
7,355
–
–
–––––––––––––––––––––––––––––––––––––––––––––––––––––
446
713
–
–
807
938
–
–
–––––––––––––––––––––––––––––––––––––––––––––––––––––
1,253
1,651
–
–
–––––––––––––––––––––––––––––––––––––––––––––––––––––
5,273
9,633
642
311
=============================================================
101
A N N U A L
R E P O R T
2 0 0 7
- 31 March 2007
34. ALLOWANCE FOR LOSSES ON LOANS, ADVANCES AND FINANCING
Group
(a) Specific allowance
- Made during the year
- Written back during the year
(b) General allowance
- Net allowance made/(written back) during the year
Bad debts on loans and financing
- Recovered
- Written off
2007
RM'000
2006
RM'000
639,362
(226,029)
715,518
(80,524)
37,861
(18,486)
(180,439)
(40,340)
14,183
4,516
–––––––––––––––––––––––––––––––––––––
284,938
580,684
Allowance on commitments and contingencies
Allowance on other receivables
2,149
767
2,532
16,626
–––––––––––––––––––––––––––––––––––––
289,619
598,077
=============================
35. IMPAIRMENT LOSS NET OF WRITE-BACK
Group
2007
RM'000
2006
RM'000
(4,826)
(1,050)
(5,377)
17,428
–––––––––––––––––––––––––––––––––––––
(10,203)
16,378
=============================
36. TAXATION
Group
2007
RM'000
Malaysian income tax:
Current year
Under/(over) provided in prior years
Deferred tax:
Relating to origination and reversal of temporary
differences (Note 16)
Relating to change in tax rate (Note 16)
Under/(over) provided in prior year (Note 16)
Taxation
Zakat
102
M A L A Y S I A N
B E R H A D
( 6 6 2 7 - X )
45,049
1,386
2006
RM'000
(544)
(6,003)
Company
2007
2006
RM'000
RM'000
–
447
2,295
(2)
3,700
(70,637)
2,795
77
8,909
–
(3)
–
(15,625)
(4,511)
(1,189)
13
–––––––––––––––––––––––––––––––––––––––––––––––––––––
43,419
(81,695)
2,050
2,383
30
–
–
–
–––––––––––––––––––––––––––––––––––––––––––––––––––––
43,449
(81,695)
2,050
2,383
=============================================================
- 31 March 2007
36. TAXATION (cont’d)
Income tax is calculated at the Malaysian statutory tax rate of 27% (2006: 28%) of the estimated assessable profit for
the year.
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 Company is as follows:
Group
2007
RM'000
Taxation at Malaysian statutory
tax rate of 27% (2006: 28%)
Effect of income subject to tax rate of 20%
Effect of changes in tax rates on
opening balance of deferred tax
Effect of expenses not deductible for tax purposes
Effect of income not subject to tax
(Over)/under provision of tax in prior years
- deferred
- income tax expense
Utilisation of previously unrecognised tax losses and
unabsorbed capital allowances
Deferred tax not recognised
Tax expense for the year
Tax savings during the year arising from:
- utilisation of current year tax losses
- utilisation of previously unrecognised tax losses
- utilisation of tax losses brought forward from
previous year
2006
RM'000
Company
2007
2006
RM'000
RM'000
150,812
(283,119)
(1,495)
5,374
=============================================================
40,719
(1)
(79,273)
(48)
(404)
–
1,505
–
8,909
7,915
767
–
8,709
(750)
(3)
3,199
–
–
867
–
(15,625)
1,386
(4,511)
(6,003)
(1,189)
447
13
(2)
(1,106)
–
–
–
455
181
–
–
–––––––––––––––––––––––––––––––––––––––––––––––––––––
43,419
(81,695)
2,050
2,383
=============================================================
90
1,105
2,897
–
–
–
–
–
44,527
–
–
–
=============================================================
37. EARNINGS PER SHARE
(a) Basic
Basic earnings per share is calculated by dividing the net profit/(loss) for the year by the weighted average number
of ordinary shares in issue during the financial year.
Group
2007
2006
Net profit/(loss) for the year (RM'000)
Weighted average number of ordinary shares in issue ('000)
Basic earnings/(loss) per share (sen)
107,258
(201,810)
1,174,337
1,165,261
9.1
(17.3)
=============================
103
A N N U A L
R E P O R T
2 0 0 7
- 31 March 2007
37. EARNINGS PER SHARE (cont’d)
(b) Diluted
The calculation of the diluted earnings per share is based on the net profit/(loss) for the year attributable to the equity
holders of the Company for year ended 31 March 2007 divided by the weighted average number of ordinary shares
of RM1.00 each. The weighted average number of ordinary share has taken into account the assumed exercise of
the outstanding 2002/2007 Warrants for the year ended 31 March 2007.
Group
2007
2006
Net profit/(loss) for the year (RM'000)
Weighted average number of ordinary shares in issue ('000)
Effect of exercise of warrants ('000)
107,258
(201,810)
1,174,337
1,165,261
180,077
–
–––––––––––––––––––––––––––––––––––––
1,354,414
1,165,261
–––––––––––––––––––––––––––––––––––––
7.9
(17.3)
=============================
Diluted earnings/(loss) per share (sen)
For the financial year ended 31 March 2006, total outstanding 2002/2007 Warrants has been excluded in the
computation of diluted losses per RM1.00 ordinary share for the Group, as their exercise to ordinary shares would
not be dilutive. Accordingly, the diluted losses per share for the financial year ended 31 March 2006 is presented as
equal to basic losses per share.
38. DIVIDENDS
Amount
2007
RM'000
2006
RM'000
Net Dividends
per Ordinary Share
2007
2006
sen
sen
Final
1% less 28% taxation, on 1,167,134,654 ordinary shares
of RM1.00 each, declared in the financial year ended
31 March 2005 paid on 25 October 2005
–
8,403
–
0.72
=============================================================
39. CAPITAL COMMITMENTS
Group
2007
RM'000
Capital expenditure:
Authorised and contracted for
Authorised but not contracted for
104
M A L A Y S I A N
B E R H A D
( 6 6 2 7 - X )
2006
RM'000
74,820
3,865
15,217
11,384
–––––––––––––––––––––––––––––––––––––
90,037
15,249
=============================
- 31 March 2007
40. COMMITMENTS AND CONTINGENCIES
In the normal course of business, the Group makes various commitments and incur certain contingent liabilities with legal
recourse to their customers. No material losses are anticipated as a result of these transactions.
Risk weighted exposure of the Group as at end of the financial year are as follows:
Group
Direct credit substitutes
Transaction-related
contingent items
Short-term self-liquidating
trade-related contingencies
Irrevocable commitments
to extend credit:
- maturity exceeding one year
- maturity not exceeding
one year
Foreign exchange
related contracts:
- less than one year
Underwriting liabilities
Other commitments
and contingencies
Principal
Amount
RM'000
2007
Credit
Equivalent
Amount
RM'000
RiskWeighted
Amount
RM'000
Principal
Amount
RM'000
2006
Credit
Equivalent
Amount
RM'000
RiskWeighted
Amount
RM'000
346,911
346,911
302,322
366,235
366,235
325,954
732,621
366,311
345,469
917,406
458,703
351,381
137,397
27,479
27,469
334,976
66,995
66,192
396,208
198,104
198,104
219,222
109,611
109,611
5,536,659
–
–
4,583,423
–
–
585,023
27,000
18,458
13,500
4,363
13,500
765,338
18,000
17,127
9,000
4,513
9,000
211,643
–
–
304,493
–
–
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
7,973,462
970,763
891,227 7,509,093
1,027,671
866,651
====================================================================================
The credit equivalent amount is arrived at using the credit conversion factor as per BNM guidelines. The foreign exchange
related contracts are all forward contracts. Foreign exchange contracts are subject to market risk and credit risk.
Market Risk
Market risk is the potential change in value caused by movement in market rates or prices. The contractual amounts
stated above provide only a measure of involvement in these types of transactions and do not represent the amounts
subject to market risk. Exposure to market risk may be reduced through offsetting on and off-balance sheet positions.
As at the end of the financial year, the amount of market risk is as follows:
Group
2007
RM’000
Amount of contracts which were not hedged and hence, exposed to market risk
2006
RM’000
742
35,230
=============================
105
A N N U A L
R E P O R T
2 0 0 7
- 31 March 2007
40. COMMITMENTS AND CONTINGENCIES (cont’d)
Credit Risk
Credit risk arises from the possibility that a counterparty may be unable to meet the terms of a contract in which the
Group has a gain position. This potential loss may increase or decrease over the life of the contracts, mainly as a function
of maturity dates and market rates or prices.
As at the end of the financial year, the amounts of credit risk are as follows:
Group
2007
RM’000
Exposure to credit risk, measured in terms of cost to replace the profitable contracts
2006
RM’000
7,176
3,676
=============================
41. FINANCIAL RISK MANAGEMENT POLICIES
The Group manages risk within clearly defined guidelines that are approved by the Directors. In addition, the Board of
Directors of the Group provide an independent oversight to ensure that risk management policies are complied with,
through a framework of established controls and reporting process.
The guidelines and policies adopted by the Group to manage the main risks that arise in the conduct of its business
activities are as follows:
(a) Credit Risk
Credit Risk is the potential loss of revenue and/or principal arising from defaults by borrower or counterparties
through business activities in lending, trading, investing and hedging. Exposure to credit risk may be categorised as
primary or secondary.
Primary exposure to credit risk arises from loans and advances. The credit exposure amount is represented by the
carrying amount of loans and advances in the balance sheet. The lending activities in the Group are guided by the
Group’s Credit Policies and Guidelines, in line with Best Practices in the Management of Credit Risk issued by Bank
Negara Malaysia. These credit policies and guidelines also include an Internal Grading model adopted by the Group
to grade its loan accounts according to its risk profile.
On the other hand, secondary credit exposure may arise from financial transactions with counterparties (including
interbank market activities, derivative instruments used for hedging and debt instruments) of which the amount of
credit exposure in respect of these instruments is equal to the carrying amount of these assets in the balance sheet.
This exposure is monitored on an on-going basis against predetermined counterparty limits.
The credit exposure arising from off-balance sheet activities i.e. commitments and contingencies is set out in Note
40 to the financial statements.
Credit risk arising from Treasury activities are managed by appropriate policies and supported by an Internal Treasury
Risk Management Framework.
106
M A L A Y S I A N
B E R H A D
( 6 6 2 7 - X )
- 31 March 2007
41. FINANCIAL RISK MANAGEMENT POLICIES (cont’d)
(b) Liquidity Risk
Liquidity risk refers to the Group’s ability to maintain adequate liquid assets so as to punctually meet its financial
obligations and commitments upon maturity and at a reasonable cost.
Liquidity risk is managed through the New Liquidity Framework issued by Bank Negara Malaysia and other internal
policies and ALCO benchmarks. A contingency funding plan is also established by the Group as a forward-looking
measure to ensure that liquidity risk can be addressed according to the degrees of key risk indicators, and which
incorporates alternative funding strategies which are ready to be implemented on a timely basis to mitigate the
impact of unforeseen adverse changes in liquidity in the market place.
(c) Market Risk
Market risk is the potential loss arising from the movement in the market rates or prices; the main components being
the interest rate risk and foreign exchange risk.
The Group has developed an Internal Treasury Risk Management Framework which includes policies and guidelines
to manage market risk in general. Market risk arising from the trading activities is controlled by mark-to-market
trading positions against pre-determined risk limits.
The Group is also susceptible to exposure to market risk arising from changes in prices of the shares quoted on Bursa
Malaysia Securities Berhad, which will directly impact the Group's balances due from clients and brokers. This risk is
controlled by application of credit approvals, limits and monitoring procedures.
(i) Interest Rate Risk
As a subset of Market Risk, interest rate risk refers to the volatility in net interest income as a result of changes
in the levels of interest rate and shifts in the composition of the assets and liabilities. Interest rate risk is managed
through interest rate sensitivity gap analysis. The potential reduction in net interest income from an unfavourable
interest rate movement is monitored against the risk tolerance limits set.
The effects of changes in the levels of interest rates on the market value of securities are monitored closely and
mark-to-market valuations are regularly reported to Management.
(ii) Foreign Currency Exchange Risk
Foreign exchange risk refers to the adverse movement in the exchange rates on the foreign exchange positions
taken by the Group from time to time. Foreign exchange risk is managed using Value-at-Risk method. The
foreign currency exchange open positions are regularly monitored against stop-loss limits.
(d) Operational Risk
Operational risk is the risk of loss resulting from inadequate or failed internal processes, people and systems or
resulting from external events.
Operational risk management identifies the inherent and residual risks in the Group's processes and activities,
determines the causes of failure, assesses potential loss, and enhances controls to mitigate risk impacts.
107
A N N U A L
R E P O R T
2 0 0 7
- 31 March 2007
41. FINANCIAL RISK MANAGEMENT POLICIES (cont’d)
(d) Operational Risk (cont’d)
While it is the responsibility of the individual business and support departments to manage their day-to-day
operational risks, independent support, monitoring and reporting thereof is provided by the Operational Risk
Management ("ORM") Department.
Among the programs undertaken to manage operational risks are general scoping of bank-wide risks, developing key
risk indicators for the various business and support groups, operational risk awareness internal workshops and
seminars, reviews of documentation of the Groups' processes and procedures and addressing crisis via business
continuity plans.
To prepare for its Basel Capital Accord ("Basel II") year 2007 implementation of capital allocation for operational risk,
the Group is currently gathering loss event data and developing its internal measurement approach formula.
42. INTEREST RATE RISK
In macro terms, interest rate risk refers to the overall sensitivity of the Group’s earnings and/or economic values of the
Group’s portfolio to changes in interest rates. Interest rate risk is managed through various risk management techniques
including re-pricing gap, net interest income simulation and stress testing.
The Group is exposed to various risks associated with the effects of fluctuations in the prevailing levels of market interest
rates on its financial position and cash flows. The effect of changes in the levels of interest rates on the market value of
securities are monitored regularly and the outcome of mark-to-market valuations are escalated to Management regularly.
The table below summarises the effective interest rates at the balance sheet date and the periods in which the financial
instruments will reprice or mature, whichever is the earlier.
108
M A L A Y S I A N
B E R H A D
( 6 6 2 7 - X )
- 31 March 2007
42. INTEREST RATE RISK (cont’d)
Non Trading Book
Company
2007
Up to
1 month
RM'000
>1-3
months
RM'000
>3-6
months
RM'000
>6-12
months
RM'000
>1-5
years
RM'000
Over 5
years
RM'000
Non
interest
sensitive
RM'000
Total
RM'000
Effective
interest
rate
%
–
–
–
–
–
–
4,762
4,762
–
Assets
Deposits and placements
with financial institutions
Other assets
Total assets
30,400
36,000
–
–
–
–
–
66,400
–
–
–
–
–
– 1,585,207 1,585,207
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
30,400
36,000
–
–
–
– 1,589,969 1,656,369
======================================================================================
3.51
–
–
–
– 200,000
–
–
–
200,000
–
–
–
–
–
–
3,802
3,802
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
–
–
– 200,000
–
–
3,802
203,802
–
–
–
–
–
– 1,452,567 1,452,567
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
4.58
–
Liabilities
Short-term borrowing
Other liabilities
Total liabilities
Equity
Total liabilities and
equity
On-balance sheet interest
sensitivity gap
Off-balance sheet interest
sensitivity gap
Total interest sensitivity
gap
–
–
– 200,000
–
– 1,456,369 1,656,369
======================================================================================
30,400
36,000
– (200,000)
–
–
133,600
–
–
–
–
–
–
–
–
–
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
30,400
36,000
– (200,000)
–
– 133,600
–
======================================================================================
109
A N N U A L
R E P O R T
2 0 0 7
- 31 March 2007
Group
2007
Up to
1 month
RM'000
>1-3
months
RM'000
>3-6
months
RM'000
>6-12
months
RM'000
>1-5
years
RM'000
Over 5
years
RM'000
Non
interest
sensitive
RM'000
Trading
book
RM’000
Effective
interest
Total
rate
RM'000
%
4,015,961
–
–
–
–
–
128,096
–
4,144,057
3.56
900 2,433,957
–
400
–
–
–
–
2,435,257
3.45
Assets
Cash and shortterm funds
Deposits and
placements
with financial
institutions
Securities
held-for-trading
Securities available
-for-sale
Securities heldto-maturity
Loans, advances
and financing
Balances due
from clients and
brokers
Other non-interest
sensitive balances
Total assets
–
–
–
–
–
–
–
14,978
14,978
16,316
562,735
226,979
108,674
935,029
198,923
–
4,327
2,052,983
4.40
573,233
698,124
80,828
181,087
841,884
34,869
20,056
–
2,430,081
3.55
11,140,288
210,101
274,231
– 13,310,628
7.23
371,837
131,908
–
–
8.84
227,145 1,530,666
–
–
977,880 (1,049,683)*
–
17,322
521,067
–
–
–
–
–
– 1,490,238
– 1,490,238
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
16,118,535 4,036,825 582,038 517,306 3,307,579 1,211,672
606,029
19,305 26,399,289
=====================================================================================================
Liabilities
Deposits from
customers
11,202,055 1,545,867 1,948,138 3,645,496 769,507
–
–
– 19,111,063
Deposits and
placements of
banks and
other financial
institutions
189,343
36,891
2,888
10,585 117,651 125,000
–
–
482,358
Obligations on
securities sold
under repurchase
agreements
2,010,098
–
–
–
–
–
–
– 2,010,098
Bills and acceptances
payable
148,840
224,248 108,183
–
–
–
–
–
481,271
6.09% subordinated
bonds
–
–
–
– 600,000
–
–
–
600,000
Recourse obligations
on loans sold to
Cagamas
–
–
–
18,895 294,683
–
–
–
313,578
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Total liabilities
13,550,336 1,807,006 2,059,209 3,674,976 1,781,841 125,000
–
– 22,998,368
110
M A L A Y S I A N
B E R H A D
( 6 6 2 7 - X )
2.75
2.20
3.25
3.76
6.09
3.46
- 31 March 2007
Group
2007
Up to
1 month
RM'000
>1-3
months
RM'000
>3-6
months
RM'000
>6-12
months
RM'000
>1-5
years
RM'000
Over 5
years
RM'000
Non
interest
sensitive
RM'000
Trading
book
RM’000
Effective
interest
Total
rate
RM'000
%
Total liabilities
(cont’d)
13,550,336 1,807,006 2,059,209 3,674,976 1,781,841 125,000
–
– 22,998,368
Balances due to
clients and brokers
378,147
–
–
–
–
–
293
–
378,440
Short-term borrowing
–
–
– 200,000
–
–
–
–
200,000
Other non-interest
sensitive balances
–
–
–
–
–
–
874,948
–
874,948
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Total liabilities
13,928,483 1,807,006 2,059,209 3,874,976 1,781,841 125,000
875,241
– 24,451,756
Equity
–
–
–
–
–
– 1,942,722
– 1,942,722
Minority interest
–
–
–
–
–
–
4,811
–
4,811
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Total liabilities
and equity
13,928,483 1,807,006 2,059,209 3,874,976 1,781,841 125,000 2,822,774
–
– 26,399,289
=====================================================================================================
On-balance
sheet interest
sensitivity gap
2,190,052 2,229,819 (1,477,171) (3,357,670) 1,525,738 1,086,672 (2,216,745)
19,305
–
Off-balance
sheet interest
sensitivity gap
–
–
–
–
–
–
–
–
–
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Total interest
sensitivity gap
2,190,052 2,229,819 (1,477,171) (3,357,670) 1,525,738 1,086,672 (2,216,745)
19,305
–
=====================================================================================================
2.50
4.58
* Specific allowance and general allowance of the Group are classified under the non-interest sensitive column.
111
A N N U A L
R E P O R T
2 0 0 7
- 31 March 2007
Non Trading Book
Company
2006
Up to
1 month
RM'000
>1-3
months
RM'000
>3-6
months
RM'000
>6-12
months
RM'000
>1-5
years
RM'000
Over 5
years
RM'000
Non
interest
sensitive
RM'000
Total
RM'000
Effective
interest
rate
%
–
–
–
–
–
–
248
248
–
Assets
with financial institutions
Other assets
Total assets
1,700
26,650
–
–
–
–
–
28,350
–
–
–
–
–
– 1,589,104 1,589,104
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
1,700
26,650
–
–
–
– 1,589,352 1,617,702
==========================================================================================
3.17
–
–
–
–
–
200,000
–
–
200,000
–
–
–
–
–
–
21,717
21,717
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
–
–
–
–
200,000
–
21,717
221,717
–
–
–
–
–
– 1,395,985 1,395,985
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
5.00
–
Liabilities
Long term borrowing
Other liabilities
Total liabilities
Equity
equity
–
–
–
–
200,000
– 1,417,702 1,617,702
==========================================================================================
On-balance sheet interest
sensitivity gap
Off-balance sheet interest
sensitivity gap
Total interest sensitivity
gap
1,700
–
–
(200,000)
–
171,650
–
–
–
–
–
–
–
–
–
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
1,700
26,650
–
– (200,000)
–
171,650
–
==========================================================================================
112
M A L A Y S I A N
26,650
B E R H A D
( 6 6 2 7 - X )
–
- 31 March 2007
Group
2006
Up to
1 month
RM'000
>1-3
months
RM'000
>3-6
months
RM'000
>6-12
months
RM'000
>1-5
years
RM'000
Over 5
years
RM'000
Non
interest
sensitive
RM'000
Trading
book
RM’000
Effective
interest
Total
rate
RM'000
%
2,460,832
–
–
–
–
–
136,627
–
2,597,459
3.19
1,700 1,132,184
–
400
–
–
–
–
1,134,284
3.20
Assets
Cash and shortterm funds
Deposits and
placements
with financial
institutions
Securities
held-for-trading
Securities available
-for-sale
Securities heldto-maturity
Loans, advances
and financing
Balances due
from clients and
brokers
Other non-interest
sensitive balances
Total assets
–
–
–
–
–
–
–
299,333
299,333
3.11
–
119,306
126,816
69,732
689,343
27,918
–
13,680
1,046,795
4.98
456,113
821,221
360,995
373,523 1,035,449
80,982
21,067
–
3,149,350
3.56
11,015,191
137,242
435,157
364,486 1,457,748 1,171,346 (1,031,548)*
– 13,549,622
7.13
165,642
70,629
–
–
9.75
–
–
–
15,325
251,596
–
–
–
–
–
– 1,552,758
– 1,552,758
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
14,099,478 2,280,582 922,968 808,141 3,182,540 1,280,246
694,229 313,013 23,581,197
====================================================================================================
–
Liabilities
Deposits from
customers
10,255,142 2,003,906 1,825,808 2,969,211 612,154
–
–
– 17,666,221
Deposits and
placements of
banks and
other financial
institutions
356,715
173,470
10,580
14,473
78,960 136,808
–
–
771,006
Obligations on
securities sold
under repurchase
agreements
1,126,782
30,444
–
–
–
–
–
– 1,157,226
payable
15,708
147,561
37,339
–
–
–
–
–
200,608
7.75% subordinated
bonds
–
535,000
–
–
–
–
–
–
535,000
Recourse obligations
on loans sold to
Cagamas
–
22,356
22,187
91,692 307,880
–
–
–
444,115
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Total liabilities
11,754,347 2,912,737 1,895,914 3,075,376 998,994 136,808
–
– 20,774,176
2.60
2.95
3.19
3.50
7.75
3.66
113
A N N U A L
R E P O R T
2 0 0 7
- 31 March 2007
Group
2006
Up to
1 month
RM'000
>1-3
months
RM'000
>3-6
months
RM'000
>6-12
months
RM'000
>1-5
years
RM'000
Over 5
years
RM'000
Non
interest
sensitive
RM'000
Trading
book
RM’000
Effective
interest
Total
rate
RM'000
%
Total liabilities
(cont’d)
11,754,347 2,912,737 1,895,914 3,075,376 998,994 136,808
–
– 20,774,176
Balances due to
clients and
brokers
169,642
–
–
–
–
–
212
–
169,854
Long term borrowing
–
–
–
– 200,000
–
–
–
200,000
Other non-interest
sensitive balances
–
–
–
–
–
–
689,836
–
689,836
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Total liabilities
11,923,989 2,912,737 1,895,914 3,075,376 1,198,994 136,808
690,048
– 21,833,866
Equity
–
–
–
–
–
– 1,742,305
– 1,742,305
Minority interest
–
–
–
–
–
–
5,026
–
5,026
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Total liabilities
and equity
11,923,989 2,912,737 1,895,914 3,075,376 1,198,994 136,808 2,437,379
– 23,581,197
====================================================================================================
On-balance
sheet interest
sensitivity gap
2,175,489 (632,155) (972,946) (2,267,235) 1,983,546 1,143,438 (1,743,150) 313,013
–
Off-balance
sheet interest
sensitivity gap
–
–
–
–
–
–
–
–
–
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Total interest
sensitivity gap
2,175,489 (632,155) (972,946) (2,267,235) 1,983,546 1,143,438 (1,743,150) 313,013
–
====================================================================================================
* Specific allowance and general allowance of the Group are classified under the non-interest sensitive column.
114
M A L A Y S I A N
B E R H A D
( 6 6 2 7 - X )
2.00
5.00
–
–
–
- 31 March 2007
43. CAPITAL ADEQUACY
BNM guidelines on capital adequacy require the Alliance Banking group, to maintain an adequate level of capital to
withstand any losses which may result from credit and other risks associated with financing operations. The capital
adequacy ratio is computed based on the eligible capital in relation to the total risk-weighted assets as determined by
BNM.
The capital adequacy ratios of the Group are as follows:-
Capital Ratios
Core capital ratio
Risk-weighted capital ratio
2007
%
2006
%
10.89
16.62
10.23
15.08
2007
RM'000
2006
RM'000
Components of Tier-I and Tier-II capital of the Group are as follows:-
Tier-I capital
Paid-up share capital
Preference shares
Share premium
Retained profits
Statutory reserves
Other reserves
Minority interests
Less : Purchased goodwill/goodwill on consolidation
Deferred tax assets
Total Tier-I capital
596,517
596,517
2,000
2,000
399,517
399,517
504,137
421,593
511,450
481,432
10,035
10,035
4,810
5,026
–––––––––––––––––––––––––––––––––––––
2,028,466
1,916,120
(304,149)
(303,263)
(120,303)
(117,994)
–––––––––––––––––––––––––––––––––––––
1,604,014
1,494,863
=============================
Tier-II capital
Subordinated bonds
General allowance for bad and doubtful debts and financing
Total Tier-II capital
Total capital/capital base
600,000
502,499
244,249
206,388
–––––––––––––––––––––––––––––––––––––
844,249
708,887
=============================
2,448,263
2,203,750
=============================
115
A N N U A L
R E P O R T
2 0 0 7
- 31 March 2007
43. CAPITAL ADEQUACY (cont’d)
Analysis of the Group's risk weighted assets in the various categories of risk-weighted are as follows:2007
Notional
RM'000
0%
10%
20%
50%
100%
Risk-weighted assets for market risk
Risk-weighted assets for counterparty risk
Total Risk Weighted Assets
RiskWeighted
RM'000
2006
Notional
RM'000
RiskWeighted
RM'000
7,803,143
–
5,179,157
–
153,335
15,334
602,049
60,205
3,028,275
605,655
2,464,529
492,906
4,026,518
2,013,259
3,655,582
1,827,791
12,026,987
12,026,987
12,139,466 12,139,466
–
46,767
–
95,766
–
18,437
–
–
–––––––––––––––––––––––––––––––––––––––––––––––––––––
27,038,258
14,726,439
24,040,783 14,616,134
=============================================================
44. LEASE COMMITMENTS
The subsidiaries have lease commitments in respect of equipment on hire and premises, all of which are classified as
operating leases. A summary of the non-cancellable long term commitments is as follows:
Group
2007
RM’000
Within one year
Between one and five years
More than five years
2006
RM’000
25,200
25,301
36,020
34,170
–
8,345
=============================
The operating leases for the subsidiaries' other premises typically run for a initial period of three years with options for
renewal. These leases are cancellable but are usually renewed upon expiry or replaced by leases on other properties.
Future minimum lease commitments are anticipated to be not less than the rental expense for 2007.
116
M A L A Y S I A N
B E R H A D
( 6 6 2 7 - X )
- 31 March 2007
45. SIGNIFICANT RELATED PARTY TRANSACTIONS
In addition to related party transaction disclosed elsewhere in the financial statements, set out below are the Group's and
the Company's other significant related party transactions.
Group
Company
2007
2006
2007
2006
Transactions
RM'000
RM'000
RM'000
RM'000
Subsidiaries
Interest income
Affiliated companies
Facility agent fees
Treasury and Commercial fees
Purchase and maintenance of Automated Debt Collection
and Recovery System
Fund management fees
Purchase of unit trust
(i)
–
–
1,233
955
–
13
–
–
46
–
–
–
4,334
–
–
–
1,548
–
–
–
246
–
–
–
=============================================================
The above transactions have been entered into in the normal course of business based on negotiated and mutually
agreed terms, and have been established on terms and conditions that are not materially different from those
obtainable in transactions with unrelated parties.
(ii) The affiliated companies refer to the group of companies within a substantial corporate shareholder of the Company.
The transactions with affiliated companies are aggregated because these transactions are similar in nature and no
single transaction is significant enough to warrant separate disclosure.
46. FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES
The carrying amounts and the fair value of the financial assets and liabilities of the Group and of the Company are as
follows:
2007
2006
Carrying
Carrying
Amount
Fair Value
Amount
Fair Value
Group
RM'000
RM'000
RM'000
RM'000
Financial assets
Balances due from clients and brokers
4,144,057
4,144,057
2,597,459
2,597,459
2,435,257
2,435,257
1,134,284
1,134,284
14,978
14,978
299,333
299,333
2,052,983
2,052,983
1,046,795
1,046,795
2,430,081
2,511,674
3,149,350
3,211,174
13,310,628
13,560,191
13,549,622 13,737,861
521,067
521,067
251,596
251,596
=============================================================
117
A N N U A L
R E P O R T
2 0 0 7
- 31 March 2007
46. FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES (cont’d)
The carrying amounts and the fair value of the financial assets and liabilities of the Group and of the Company are as
follows: (cont’d)
2007
2006
Carrying
Carrying
Amount
Fair Value
Amount
Fair Value
Group
RM'000
RM'000
RM'000
RM'000
Financial liabilities
Deposits and placements of banks
and other financial institutions
Obligations on securities sold under
Balances due to clients and brokers
Subordinated Bonds
Short/long term borrowing
19,111,063
19,038,970
17,666,221
17,604,970
482,358
471,195
771,006
760,100
2,010,098
2,010,098
1,157,226
1,157,226
313,578
297,265
444,115
418,571
481,271
481,271
200,608
200,608
378,440
378,440
169,854
169,854
600,000
600,000
535,000
535,000
200,000
200,000
200,000
200,000
=============================================================
Company
Financial assets
4,762
4,762
248
248
66,400
66,400
28,350
28,350
=============================================================
Financial liability
200,000
200,000
200,000
200,000
=============================================================
Note : The fair value of the other assets and other liabilities, which are considered short term in nature, are estimated to
be approximately their carrying values.
The methods and assumptions used in estimating the fair values of financial instruments are as follows:(i) Cash and short-term funds
The carrying amounts approximate fair values due to the relatively short maturity of the financial instruments.
(ii) Deposits and placements with financial institutions
The fair values of these financial instruments with remaining maturity of less than one year approximate their carrying
amounts due to the relatively short maturity of the financial instruments. For those financial instruments with maturity
of more than one year, the fair values are estimated based on discounted cash flows using applicable prevailing market
rates for placements of similar credit risk and similar remaining maturity as at the balance sheet date.
(iii) Securities held-for-trading, Securities available-for-sale and Securities held-to-maturity
118
M A L A Y S I A N
The fair values are estimated based on quoted or observable market prices at the balance sheet date. Where such
quoted or observable market prices are not available, the fair values are estimated using pricing models or discounted
cash flow techniques. Where discounted cash flow technique is used, the expected future cash flows are discounted
using prevailing market rates for a similar instrument at the balance sheet date.
B E R H A D
( 6 6 2 7 - X )
- 31 March 2007
(iv) Loans, advances and financing
The fair values of fixed rate loans with remaining maturity of less than one year and variable rate loans are estimated
to approximate their carrying values. For fixed rate loans and Islamic financing with remaining maturity of more than
one year, the fair values are estimated based on expected future cash flows of contractual instalment payments and
discounted at applicable prevailing rates at balance sheet date offered to new borrowers with similar credit profiles.
In respect of non-performing loans, the fair values are deemed to approximate the carrying values, net of specific
allowance for bad and doubtful debts and financing.
(v)
The fair values of deposit liabilities payable on demand (demand and savings deposits), or deposits with maturity of
less than one year are estimated to approximate their carrying amounts. The fair values of fixed deposits with
remaining maturities of more than one year are estimated based on expected future cash flows discounted at
applicable prevailing rates offered for deposits of similar remaining maturities. The fair values of Islamic deposits are
deemed to approximate their carrying amounts as profit rates are determined at the end of their holding periods
based on the profit generated from the assets invested. For negotiable instruments of deposits, the fair values are
estimated based on quoted or observable market prices as at the balance sheet date. Where such quoted or
observable market prices are not available, the fair values of negotiable instruments of deposits are estimated using
the discounted cash flow technique.
(vi) Deposits and placements of banks and other financial institutions, Obligations on securities sold under repurchase
agreements and Bills and acceptances payable
The carrying values of these financial instruments with remaining maturity of less than one year approximate their
carrying amounts due to the relatively short maturity of the financial instruments.
(vii) Recourse obligations on loans sold to Cagamas
The fair values of recourse obligations on loans sold to Cagamas are determined based on the discounted cash flows
of future instalment payments at applicable prevailing Cagamas rates as at the balance sheet date.
(viii) Long-term borrowing
The fair value of long term borrowing which approximates that of the carrying value, is estimated by discounting
the expected future cash flows using the current interest rate.
(ix) Subordinated Bonds
The fair value of the Subordinated Bonds is estimated based on discounted cash flow techniques using a current
yield curve appropriate for the remaining term to maturity.
(x)
Foreign exchange related contracts
The carrying values of the foreign exchange related contracts being mark-to-market values, are reasonable estimates
of their fair value.
(xi) Lending-related commitments
The unfunded portion of commitments to extend credit as well as standby and other letters of credit are stated at
their carrying amounts, considering that estimating their fair value is not practicable within the constraints of
timeliness or cost to determine with sufficient reliability.
A N N U A L
R E P O R T
119
2 0 0 7
- 31 March 2007
(xii) Balances due from/due to clients and brokers
The carrying amounts are reasonable estimates of the fair values because of their short tenor.
47. SEGMENTAL REPORTING
31 March 2007
Commercial
Banking
RM'000
REVENUE
External revenue
Inter-segment revenue
Investment
Banking
RM'000
Inter-segment
eliminations/
Stockbroking consolidation
and others
adjustments Consolidated
RM'000
RM'000
RM'000
1,296,984
98,234
65,876
–
1,461,094
11,086
465
11,276
(22,827)
–
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
1,308,070
98,699
77,152
(22,827)
1,461,094
=============================================================================
Total revenue
RESULTS
Segment results
Unallocated corporate expenses
Profit from operations
Finance costs
Allowance for losses on loans,
advances and financing
Profit before taxation
Taxation
Zakat
Profit after taxation
Minority interests
120
M A L A Y S I A N
B E R H A D
( 6 6 2 7 - X )
452,367
24,344
49,226
(45,594)
480,343
–
–––––––––––
480,343
(50,115)
(289,619)
10,203
–––––––––––
150,812
(43,419)
(30)
–––––––––––
107,363
(105)
–––––––––––
107,258
=============
- 31 March 2007
47. SEGMENTAL REPORTING (cont’d)
31 March 2007
Commercial
Banking
RM'000
Investment
Banking
RM'000
Stockbroking
and others
RM'000
23,453,933
1,996,864
458,969
–
25,909,766
158,683
330,840
–––––––––––––
26,399,289
==============
22,269,386
1,543,744
629,617
–
24,442,747
9,009
–––––––––––––
24,451,756
==============
50,326
14,450
13,447
360,398
1,018
1,316
245
18,920
1,048
2,263
617
–
–
–
–
–
52,392
18,029
14,309
379,318
==============
Eliminations Consolidated
RM'000
RM'000
Assets
Segment assets
Unallocated corporate assets
Intangible assets
Liabilities
Segment liabilities
Unallocated corporate liabilities
Other information
Capital expenditure
Depreciation
Other non-cash expenses
121
A N N U A L
R E P O R T
2 0 0 7
- 31 March 2007
31 March 2006
Commercial
Banking
RM'000
REVENUE
External revenue
Inter-segment revenue
Investment
Banking
RM'000
Inter-segment
eliminations/
Stockbroking consolidation
and others
adjustments Consolidated
RM'000
RM'000
RM'000
1,144,552
97,981
48,156
(7,435)
1,283,254
–
–
20,997
(20,997)
–
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
1,144,552
97,981
69,153
(28,432)
1,283,254
=============================================================================
Total revenue
RESULTS
Segment results
Unallocated corporate expenses
Profit from operations
Finance costs
Allowance for losses on loans,
advances and financing
Loss before taxation
Taxation
Loss after taxation
Minority interests
122
M A L A Y S I A N
B E R H A D
( 6 6 2 7 - X )
383,145
23,410
22,384
(28,178)
400,761
–
–––––––––––
400,761
(69,425)
(598,077)
(16,378)
–––––––––––
(283,119)
81,695
–––––––––––
(201,424)
(386)
–––––––––––
(201,810)
=============
- 31 March 2007
31 March 2006
Commercial
Banking
RM'000
Investment
Banking
RM'000
Stockbroking
and others
RM'000
20,792,573
1,848,414
450,100
–
23,091,087
180,744
309,366
–––––––––––––
23,581,197
==============
19,749,758
1,667,286
407,768
–
21,824,812
9,054
–––––––––––––
21,833,866
==============
23,418
15,939
25,728
569,244
448
2,448
444
43,204
1,152
4,590
4,557
1,634
–
–
–
–
25,018
22,977
30,729
614,082
==============
Eliminations Consolidated
RM'000
RM'000
Assets
Segment assets
Unallocated corporate assets
Intangible assets
Liabilities
Segment liabilities
Unallocated corporate liabilities
Other information
Capital expenditure
Depreciation
Other non-cash expenses
48. CHANGES IN ACCOUNTING POLICIES AND PRIOR YEAR ADJUSTMENTS
The accounting policies set out in Note 2 have been applied in preparing the financial statements for the year ended 31
March 2007. As indicated in Note 2, other than FRS 3, 101, 116, 136 and 138, the adoption of FRS 2, 5, 108, 110, 121,
127, 128, 132, 133 and 140 does not have any significant financial impact on the Group.
The impact resulting from changes in accounting policies arising from the adoption of FRS 3, 101, 116, 136 and 138 are
summarised below:
(a) FRS 101 Presentation of Financial Statements
The adoption of the revised FRS 101 has affected the presentation of minority interest and other disclosures. Minority
interest is now presented within total equity in the consolidated balance sheet and as an allocation of the total profit
for the year in the consolidated income statement. The movement of minority interest is now presented in the
consolidated statement of changes in equity.
These changes in presentation have been applied retrospectively and have no financial impact on the Group's
financial statements.
123
A N N U A L
R E P O R T
2 0 0 7
- 31 March 2007
48. CHANGES IN ACCOUNTING POLICIES AND PRIOR YEAR ADJUSTMENTS (cont’d)
(b) FRS 3 Business Combinations, FRS 136 Impairment of Assets and FRS 138 Intangible Assets
The adoption of FRS 3 Business Combinations and the consequential changes to FRS 136 Impairment of Assets and
FRS 138 Intangible Assets, has resulted in a change in the accounting policy relating to purchased goodwill, negative
goodwill and computer software.
Prior to 1 April 2006, goodwill was amortised on a straight-line basis over its estimated useful life of 20 years and at
each balance sheet date, the Group assessed if there is any indication of impairment of the cash-generating unit in
which the goodwill is attached to. The adoption of these new FRSs has resulted in the Group ceasing annual
amortisation of goodwill. Instead, goodwill is allocated to cash-generating units and the carrying amount is tested
annually for impairment, or more frequently if events or changes in circumstances indicate that it might be impaired.
Goodwill impairment is determined by comparing its carrying amount against its recoverable amount in accordance
with FRS 136. Any impairment loss is recognised in the income statement and subsequent reversal is not allowed.
This change in accounting policies has been accounted for prospectively for business combinations where the
agreement date is on or after 1 April 2006. For business combinations entered into prior to that date, the transitional
provisions of FRS 3 requires the Group to eliminate the carrying accumulated amortisation as at 1 April 2006 of
RM69,922,000 against the carrying amount of goodwill. The resulting carrying amount of goodwill for the Group
as at 1 April 2006 of RM303,263,000 ceased to be amortised thereafter. With the adoption of FRS 3, this has the
effect of reducing the amortisation charge of the Group by RM19,706,000 for the financial year ended 31 March
2007. No impairment loss on goodwill has been recognised in the financial year ended 31 March 2007.
Negative goodwill represents the excess in fair value of the net identifiable assets acquired over the cost of the
acquisition, is now recognised immediately in the income statement. Prior to 1 April 2006, negative goodwill was
amortised over the weighted average useful life of the non-monetary assets acquired. As at 1 April 2006, the carrying
amount of negative goodwill for the Group totaling RM33,086,000 was adjusted to retained profit/(loss) brought
forward. This has the effect of reducing the write back of negative goodwill recognised in the Group income
statement by RM2,191,000 for the financial year ended 31 March 2007. Similarly, the reserve on consolidation of
RM9,125,000 from capital reserve was reclassified to retained profit/(loss) brought forward with the adoption of
FRS 3.
The adoption of FRS 138 has resulted in the change in accounting policy for intangible assets relating to computer
software restrospectively. In accordance with FRS 138, the Group had segregated and reclassified those computer
software that does not form an integral part of the related hardware as intangible assets. The segregation was made
in the cost and accumulated depreciation of the said computer software for current and previous financial year.
The change in accounting policy did not affect the recognition and measurement of the Group's computer software
but has resulted in reclassification of prior year comparatives as disclosed in Note 14 and Note 15.
(c) FRS 116 Property, Plant and Equipment
FRS 116 Property, Plant and Equipment requires the review of the residual value and remaining useful life of an item
of property, plant and equipment at least at each financial year end. The Group have now revised the motor vehicle's
estimated useful live and its residual value with effect from 1 April 2006, as follows:
(i)
The useful live is now revised from 5 years to the range of 6 to 8 years according to their model; and
(ii) The residual value is now estimated at the range of 15% to 50% of the original cost instead of zero value at the
end of useful lives, by referring to the automobile magazine published in Malaysia.
124
M A L A Y S I A N
B E R H A D
( 6 6 2 7 - X )
- 31 March 2007
48. CHANGES IN ACCOUNTING POLICIES AND PRIOR YEAR ADJUSTMENTS (cont’d)
(c) FRS 116 Property, Plant and Equipment (cont’d)
FRS 116 also requires the re-instatement cost to be recognised as part of the property, plant and equipment and
depreciated according to the estimated useful life. The useful life is estimated to be at 5 years and zero residual value
at the end of the useful life.
The above revisions were accounted for prospectively as a change in accounting estimates and as a result, the
depreciation charges of the Group for the financial year ended 31 March 2007 have been reduced by RM732,000.
The changes in accounting policies as described above were adjusted to the opening retained profit/(loss) and capital
reserves of the Group are as follows:
Group
2007
RM’000
Effects on retained profits:
At 1 April, as previously stated
(173,680)
Effects of adopting FRS 3
- Business Combinations
42,211
–––––––––––––
At 1 April, as restated
(131,469)
==============
Effects on capital reserves:
At 1 April, as previously stated
16,138
Effects of adopting FRS 3
- Business Combinations
(9,125)
–––––––––––––
At 1 April, as restated
7,013
==============
(d) Comparative Figures
The presentation and classifications of items in the current year's financial statements are consistent with the previous
financial year except for the following comparative figures which have been restated for the effects of adopting the
above change in accounting policies:
Group
As previously
As
reported
restated
RM’000
RM’000
Balance Sheet as at 31 March 2006
Other assets
Goodwill
Intangible assets
13,537,001 13,549,622
181,890
169,269
152,865
114,562
271,063
–
–
309,366
=============================
Income Statement for the year ended 31 March 2006
Operating revenue
Net income
1,300,815
1,283,254
196,707
201,576
763,044
768,413
(413,708)
(437,077)
=============================
A N N U A L
R E P O R T
125
2 0 0 7
- 31 March 2007
49. OTHER SIGNIFICANT EVENTS
(a) Proposed Issuance of Commercial Papers/Medium Term Notes Programme of RM300 Million
On 21 June 2006, the Company announced its proposal to undertake an issuance of Commercial Papers
(“CP”)/Medium Term Notes (“MTN”) Programme of RM300 Million.
The Programme has a tenure of seven (7) years from the date of the first issuance of the CP/MTN. The Company
may issue CPs with maturities of one (1), two (2), three (3), six (6), nine (9) or twelve (12) months and/or MTN with
maturities of more than one (1) year and up to seven (7) years.
(i)
Special First Issuance of CP/MTN of nominal value of RM200 million where the said CP/MTN will be secured
against a Standby Letter of Credit/Bank Guarantee to be issued by DBS Bank Ltd, Labuan Branch;
The proceeds to be raised will be utilised to refinance existing borrowing of the Company and to meet working
capital and/or funding requirements of the Company and its subsidiaries.
On 18 September 2006, the Company announced the issuance of RM200 million Commercial Papers out of the
RM300 million Commercial Papers/Medium Term Notes Programme. The proceeds from the issuance was used to
repay the existing term loan of RM200 million.
(b) Completion of Establishment of Investment Bank subsidiary
On 30 June 2006, AIBB, a wholly-owned subsidiary of Alliance Bank obtained a joint approval from Bank Negara
Malaysia and the Securities Commission for the proposed rationalisation of the merchant banking business and the
stockbroking business of Kuala Lumpur City Securities Sdn. Bhd. ("KLCS") to transform into an Investment Bank.
On 8 August 2006, AIBB changed its name from Alliance Merchant Bank Berhad to its present name.
On 28 December 2006, the High Court of Malaya at Kuala Lumpur granted a vesting order to vest the business,
assets and liabilities of KLCS to AIBB and on 30 December 2006, the business, assets and liabilities of KLCS were
vested into AIBB pursuant to the said order of the High Court of Malaya. With the completion of this integration
exercise, AIBB had completed its transformation into an Investment Bank in accordance with the Guidelines on
Investment Banks issued jointly by Bank Negara Malaysia and Securities Commissions dated 1 July 2005.
Subsequent to the vesting of stockbroking business to AIBB, KLCS has become a dormant company and changed its
name to KLCS Sdn. Bhd. with effect from 4 January 2007.
50. EVENTS SUBSEQUENT TO BALANCE SHEET DATE
Rationalisation of the unit trust management business of Alliance Unit Trust Management Berhad ("AUTM") and the
asset management business of Alliance Capital Asset Management Sdn. Bhd. ("ACAM") ("Rationalisation Exercise")
Pursuant to a Vesting Order granted by the High Court of Malaya at Kuala Lumpur on 28 March 2007, the asset
management business of ACAM, a 70% subsidiary of Alliance Investment Bank Berhad, was vested to AUTM, a 70%
subsidiary of Alliance Bank Malaysia Berhad, on 2 April 2007.
126
M A L A Y S I A N
B E R H A D
( 6 6 2 7 - X )
- 31 March 2007
50. EVENTS SUBSEQUENT TO BALANCE SHEET DATE (cont’d)
On 4 April 2007, AUTM changed its name to Alliance Investment Management Berhad and on 7 June 2007, ACAM was
placed under Members' Voluntary Winding Up pursuant to Section 254 of the Companies Act, 1965.
Expiry of Warrants
The 2002/2007 Warrants of the Company had expired on 8 June 2007. The issued and paid up share capital of the
Company has increased to RM1,548,105,929 comprising 1,548,105,929 ordinary shares of RM1.00 each fully paid.
There were 2,013,228 warrants not exercised by the expiry date and have accordingly lapsed.
51. ISLAMIC BANKING BUSINESS
BALANCE SHEET AS AT 31 MARCH 2007
Group
Note
2007
RM’000
2006
RM’000
ASSETS
Financing, advances and other loans
Other assets
Deferred tax assets
Intangible assets
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
TOTAL ASSETS
401,305
404,051
40,000
30,000
480,657
542,192
155,795
187,180
2,085,780
1,997,204
42,544
9,347
73,178
76,520
14,105
15,678
227
178
337
68
–––––––––––––––––––––––––––––––––––––
3,293,928
3,262,418
=============================
LIABILITIES AND ISLAMIC BANKING FUNDS
Other liabilities
Provision for taxation
(j)
(k)
(l)
TOTAL LIABILITIES
Islamic Banking Funds
Reserves
TOTAL LIABILITIES AND ISLAMIC BANKING FUNDS
COMMITMENTS AND CONTINGENCIES
(t)
1,941,744
1,854,759
161,505
317,035
88,722
14,417
71
–
92,038
153,203
58,907
35,514
–––––––––––––––––––––––––––––––––––––
2,342,987
2,374,928
–––––––––––––––––––––––––––––––––––––
792,100
792,100
158,841
95,390
–––––––––––––––––––––––––––––––––––––
3,293,928
3,262,418
=============================
335,568
536,850
=============================
127
A N N U A L
R E P O R T
2 0 0 7
- 31 March 2007
51. ISLAMIC BANKING BUSINESS (cont’d)
INCOME STATEMENT FOR THE YEAR ENDED 31 MARCH 2007
Group
Note
Income derived from investment of depositors' funds and
Allowance for losses on financing, advances, and other loans
Transfer from/(to) profit equalisation reserve
(m)
(n)
Total attributable income
Income attributable to the depositors and financial institutions
(o)
Income attributable to the reporting institutions
Income derived from investment of Islamic Banking funds
(p)
Total net income
Impairment loss
(q)
Profit before taxation and zakat
Tax expense and zakat
Profit after taxation and zakat
Net income from Islamic banking business stated in the consolidated
income statements is derived from :Income derived from investment of depositors' funds and financial institutions
Tranfer from/(to) profit equalisation reserve
Income attributable to depositors and financial institutions
Income derived from investment of Islamic Banking funds
128
M A L A Y S I A N
B E R H A D
( 6 6 2 7 - X )
(r)
2007
RM’000
2006
RM’000
139,444
96,018
(43,866)
(17,082)
5,778
(11,188)
–––––––––––––––––––––––––––––––––––––
101,356
67,748
(60,291)
(46,630)
–––––––––––––––––––––––––––––––––––––
41,065
21,118
50,104
38,557
–––––––––––––––––––––––––––––––––––––
91,169
59,675
(3,091)
(3,312)
–
(3,376)
–––––––––––––––––––––––––––––––––––––
88,078
52,987
(24,965)
(14,250)
–––––––––––––––––––––––––––––––––––––
63,113
38,737
=============================
139,444
96,018
5,778
(11,188)
(60,291)
(46,630)
50,104
38,557
–––––––––––––––––––––––––––––––––––––
135,035
76,757
=============================
- 31 March 2007
STATEMENT OF CHANGES IN ISLAMIC BANKING FUNDS FOR THE YEAR ENDED 31 MARCH 2007
Capital funds
RM'000
Revaluation
reserves
RM'000
Retained
profit
RM'000
Total
RM'000
56,295
–
38,737
127,154
721,100
38,737
GROUP
At 1 April 2005
Additional funds allocated from head office
Unrealised net gain on revaluation
of securities available-for-sale
At 31 March 2006
At 1 April 2006
Unrealised net gain on revaluation
of securities available-for-sale
At 31 March 2007
71,000
721,100
–
(141)
–
–
–
499
–
499
–––––––––––––––––––––––––––––––––––––––––––––––––––––
792,100
358
95,032
887,490
=============================================================
792,100
358
95,032
887,490
–
–
63,113
63,113
–
338
–
338
–––––––––––––––––––––––––––––––––––––––––––––––––––––
792,100
696
158,145
950,941
=============================================================
129
A N N U A L
R E P O R T
2 0 0 7
- 31 March 2007
CASH FLOW STATEMENTS FOR THE YEAR ENDED 31 MARCH 2007
Group
2007
RM’000
2006
RM’000
88,078
52,987
Adjustments for:Accretion of discount less amortisation of premium of securities held-to-maturity
Accretion of discount less amortisation of premium of securities available-for-sale
Amortisation of computer software
Income from securities held-to-maturity
Income from securities available-for-sale
Allowance for bad and doubtful debts (net of recoveries)
Operating profit before working capital changes
Changes in working capital:
Bills and acceptance payable
Other liabilities
Other assets
Cash used in operations
Tax paid
Net cash used in operating activities
130
M A L A Y S I A N
B E R H A D
( 6 6 2 7 - X )
(16,393)
(11,494)
–
(853)
–
3,376
90
86
42
21
(8,442)
(7,119)
(8,129)
(8,206)
(5,778)
11,188
43,774
17,082
–––––––––––––––––––––––––––––––––––––
93,242
57,068
86,987
727,437
(155,531)
(74,346)
74,305
14,417
71
–
(55,390)
54,779
(132,320)
(889,109)
3,343
(76,520)
(33,226)
(410)
–––––––––––––––––––––––––––––––––––––
(118,519)
(186,684)
(30)
(164)
–––––––––––––––––––––––––––––––––––––
(118,549)
(186,848)
–––––––––––––––––––––––––––––––––––––
- 31 March 2007
CASH FLOW STATEMENTS FOR THE YEAR ENDED 31 MARCH 2007 (cont’d)
Group
2007
RM’000
2006
RM’000
Income from securities held-to-maturity
Income from securities available-for-sale
Purchase of intangible asset
Purchase of securities held-to-maturity, net of sale proceeds
Purchase of securities available-for-sale, net of sale proceeds
Net cash generated from/(used in) investing activities
8,442
7,119
8,129
8,206
(138)
(12)
(312)
(3)
77,927
(120,953)
31,755
(44,247)
–––––––––––––––––––––––––––––––––––––
125,803
(149,890)
–––––––––––––––––––––––––––––––––––––
CASH FLOWS FROM FINANCING ACTIVITY
Funds allocated to Islamic banking
–
721,100
–––––––––––––––––––––––––––––––––––––
–
721,100
–––––––––––––––––––––––––––––––––––––
7,254
384,362
434,051
49,689
–––––––––––––––––––––––––––––––––––––
441,305
434,051
=============================
Cash and cash equivalents comprise the following:Cash and short-term funds
401,305
404,051
40,000
30,000
–––––––––––––––––––––––––––––––––––––
441,305
434,051
=============================
131
A N N U A L
R E P O R T
2 0 0 7
- 31 March 2007
(a) CASH AND SHORT-TERM FUNDS
Group
2007
RM’000
Cash and balances with banks and other financial institutions
Money at call and deposit placements maturing within one month
2006
RM’000
30,245
50,051
371,060
354,000
–––––––––––––––––––––––––––––––––––––
401,305
404,051
=============================
(b) DEPOSITS AND PLACEMENTS WITH FINANCIAL INSTITUTIONS
40,000
30,000
–––––––––––––––––––––––––––––––––––––
40,000
30,000
=============================
(c) SECURITIES HELD-TO-MATURITY
At amortised cost
Money Market Instruments:Malaysian Government investment certificates
Bankers acceptances
Commercial papers
Khazanah bonds
Quoted securities:Debt securities
Unquoted securities:Private debt securities
Accumulated impairment losses
(i) Market value of money market instruments and quoted securities:
Bankers acceptances
Commercial papers
Khazanah bonds
Quoted debt securities
(ii) The maturity structure of money market instruments held are as follows:
Within one year
Over five years
132
M A L A Y S I A N
B E R H A D
( 6 6 2 7 - X )
140,931
–
55,026
–
169,482
127,395
24,775
31,972
19,682
192,826
14,990
14,970
103,604
133,948
–––––––––––––––––––––––––––––––––––––
484,033
545,568
(3,376)
(3,376)
–––––––––––––––––––––––––––––––––––––
480,657
542,192
=============================
140,249
127,555
–
24,775
54,759
31,962
–
19,685
99,389
192,729
–
15,897
=============================
157,729
105,755
174,476
222,948
33,234
60,077
–
7,870
–––––––––––––––––––––––––––––––––––––
365,439
396,650
=============================
- 31 March 2007
(d) SECURITIES AVAILABLE-FOR-SALE
Group
At fair value
Money Market Instruments:Negotiable instruments of deposits
Malaysian Islamic Treasury Bills
General Investment Instruments
Unquoted debt securities:Debt securities
2007
RM’000
2006
RM’000
9,945
–
85,307
–
54,024
–
60,543
133,156
–––––––––––––––––––––––––––––––––––––
155,795
187,180
=============================
(e) FINANCING, ADVANCES AND OTHER LOANS
(i) By type:
Cash line financing
Term loans/financing
- Lease receivables
- Other term loans/financing
Bills receivable
Trust receipts
Claims on customers under acceptance credits
Staff loans
Revolving credits
Unearned income
Gross financing, advances and other loans
Allowance for bad and doubtful debts and financing
- Specific
- General
Total net financing, advances and other loans
32,468
20,029
417,879
205,124
824,321
809,960
24,000
51,946
1,214,414
1,178,433
4,362
9,607
6,317
94
116,210
95,799
32,242
18,329
196,090
179,341
–––––––––––––––––––––––––––––––––––––
2,868,303
2,568,662
(693,580)
(521,840)
–––––––––––––––––––––––––––––––––––––
2,174,723
2,046,822
(55,045)
(19,014)
(33,898)
(30,604)
–––––––––––––––––––––––––––––––––––––
2,085,780
1,997,204
=============================
(ii) By maturity structure:
Within one year
Over five years
415,429
373,528
350,355
297,001
501,555
436,777
907,384
939,516
–––––––––––––––––––––––––––––––––––––
2,174,723
2,046,822
=============================
133
A N N U A L
R E P O R T
2 0 0 7
- 31 March 2007
(e) FINANCING, ADVANCES AND OTHER LOANS (cont’d)
Group
2007
RM’000
2006
RM’000
(iii) By contract:
Bai Bithaman Ajil (deferred payment sale)
Ijarah Thamma Ai-Bai/AITAB (finance lease)
Murabahah (cost-plus)
Qard (benevolent loan)
Bai Al-Dayn (debt trading)
Al-Dai Inah
Others
961,566
1,020,409
742,303
741,158
288,555
259,392
1,237
1,543
29,080
24,320
147,631
–
4,351
–
–––––––––––––––––––––––––––––––––––––
2,174,723
2,046,822
=============================
(iv) By type of customer:
Domestic non-bank financial institutions
- Others
Domestic business enterprises
- Small and medium enterprises
- Others
Individuals
Other domestic entities
Foreign entities
149
1,990
738,968
731,905
548,018
680,118
2,343
2,250
880,808
628,277
638
–
3,799
2,282
–––––––––––––––––––––––––––––––––––––
2,174,723
2,046,822
=============================
(v) By profit rate sensitivity:
Fixed rate
- Other fixed rate loans/financing
Variable rate
- Base lending rate plus
- Cost plus
- Other variable rates
134
M A L A Y S I A N
B E R H A D
( 6 6 2 7 - X )
101,947
714,534
769,870
82,552
690,313
893,600
250,309
102,023
315,797
230,550
22,266
47,784
–––––––––––––––––––––––––––––––––––––
2,174,723
2,046,822
=============================
- 31 March 2007
Group
2007
RM’000
2006
RM’000
28,846
728,765
570,189
68,015
694,142
576,018
- Non-residential
171,004
399,185
102,375
473,643
(vi) By economic sectors:
Purchase fixed assets
Personal use
Construction
Working capital
Others
18,601
17,470
161,603
2,979
54,202
41,884
503,656
490,285
108,861
156,029
–––––––––––––––––––––––––––––––––––––
2,174,723
2,046,822
=============================
(vii) Movement in non-performing financing, advances and other
loans ("NPF") including income receivable are as follows:
Non-performing during the year
Reclassified as performing during the year
Recoveries
Amount written off
At end of year
Specific allowance
Net non-performing financing, advances and other loans
Net NPF as a % of gross financing, advances and other loans less specific allowance
59,775
42,102
192,347
59,303
(158,990)
(38,559)
(3,604)
(2,719)
(4,418)
(352)
–––––––––––––––––––––––––––––––––––––
85,110
59,775
(55,045)
(19,014)
–––––––––––––––––––––––––––––––––––––
30,065
40,761
=============================
1.4%
2.0%
=============================
135
A N N U A L
R E P O R T
2 0 0 7
- 31 March 2007
(viii) Movements in the allowance for bad and doubtful debts and
financing are as follows:
Group
2007
RM’000
General Allowance
Amount written back
At end of year
As % of total financing less specific allowance
Specific Allowance
Amount written back in respect of recoveries
Amount written off
At end of year
2006
RM’000
30,604
17,817
8,934
14,759
(5,640)
(1,972)
–––––––––––––––––––––––––––––––––––––
33,898
30,604
=============================
1.6%
1.5%
=============================
19,014
15,143
74,068
6,539
(33,619)
(2,316)
(4,418)
(352)
–––––––––––––––––––––––––––––––––––––
55,045
19,014
=============================
(ix) NPL/NPF By sector:
- Non-residential
Personal use
Construction
Working capital
Others
Gross non-performing financing, advances and other loans
43,391
12,485
25,294
12,398
8,986
3,499
8,402
3,996
841
104
208
1,127
16,685
20,852
11,500
–
–––––––––––––––––––––––––––––––––––––
85,110
59,775
=============================
(f) OTHER ASSETS
Group
2007
RM’000
Other debtors, deposits and prepayments
Income receivable
136
M A L A Y S I A N
B E R H A D
( 6 6 2 7 - X )
2006
RM’000
39,183
5,733
3,361
3,614
–––––––––––––––––––––––––––––––––––––
42,544
9,347
=============================
- 31 March 2007
(g) DEFERRED TAX ASSETS
Group
2007
RM’000
Recognised in income statement (Note 51(r))
2006
RM’000
15,678
7,550
(1,541)
8,322
(32)
(194)
–––––––––––––––––––––––––––––––––––––
14,105
15,678
=============================
At end of year
Deferred tax assets, net
Deferred tax liabilities, net
14,105
15,678
–
–
–––––––––––––––––––––––––––––––––––––
14,105
15,678
=============================
The components and movements of deferred tax assets and liabilities during the financial year prior to offsetting
are as follows:
Other
Allowance for
Temporary
Unabsorbed
Loan Loss
Differences
Tax losses
Total
RM'000
RM'000
RM'000
RM'000
Deferred tax assets of the Group
At 1 April 2005
4,597
2,996
–
7,593
3,972
4,338
–
8,310
–
(194)
–
(194)
–––––––––––––––––––––––––––––––––––––––––––––––––––––
At 31 March 2006
8,569
7,140
–
15,709
244
(2,018)
290
(1,484)
–––––––––––––––––––––––––––––––––––––––––––––––––––––
At 31 March 2007
8,813
5,122
290
14,225
=============================================================
Property, Plant
and Equipment
RM'000
Deferred tax liabilities of the Group
At 1 April 2005
At 31 March 2006
At 31 March 2007
Other
Temporary
Differences
RM'000
Total
RM'000
43
–
43
(12)
–
(12)
––––––––––––––––––––––––––––––––––––––––––
31
–
31
3
54
57
–
32
32
––––––––––––––––––––––––––––––––––––––––––
34
86
120
================================================
137
A N N U A L
R E P O R T
2 0 0 7
- 31 March 2007
(h) PROPERTY, PLANT AND EQUIPMENT
Group
Renovation
RM'000
Office
equipment
and furniture
RM'000
Computer
equipment
RM'000
Motor
vehicles
RM'000
Total
2007
RM'000
46
22
244
279
591
Cost
2007
Reclassification to intangible
assets (Note 51(i))
As restated
Additions
At end of year
–
–
(141)
–
(141)
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
46
22
103
279
450
57
2
79
–
138
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
103
24
182
279
588
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
assets (Note 51(i))
As restated
Charge for the year
At end of year
14
3
114
214
345
–
–
(74)
–
(74)
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
14
3
40
214
271
12
2
20
56
90
26
5
60
270
361
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Net Carrying Amount
At 31 March 2007
77
19
122
9
227
==========================================================================
138
M A L A Y S I A N
B E R H A D
( 6 6 2 7 - X )
- 31 March 2007
(h) PROPERTY, PLANT AND EQUIPMENT (cont’d)
Group
Renovation
RM'000
Office
equipment
and furniture
RM'000
Computer
equipment
RM'000
Motor
vehicles
RM'000
Total
2006
RM'000
46
35
213
279
573
Cost
2006
assets (Note 51(i))
As restated
Additions
Transfer
assets (Note 51(i))
At end of year
–
–
(139)
–
(139)
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
46
35
74
279
434
–
–
15
–
15
–
(13)
16
–
3
–
–
(3)
–
(3)
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
46
22
102
279
449
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
assets (Note 51(i))
As restated
Charge for the year
Transfer
assets (Note 51(i))
At end of year
4
11
72
158
245
–
–
(53)
–
(53)
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
4
11
19
158
192
9
2
40
56
107
1
(10)
2
–
(7)
–
–
(21)
–
(21)
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
14
3
40
214
271
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Net Carrying Amount
At 31 March 2006
32
19
62
65
178
==========================================================================
139
A N N U A L
R E P O R T
2 0 0 7
- 31 March 2007
(i) INTANGIBLE ASSETS
Group
2007
RM’000
2006
RM’000
Computer software
At cost:
Reclassification from property, plant and equipment (Note 51(h))
As restated
Additions
At end of year
–
–
141
139
–––––––––––––––––––––––––––––––––––––
141
139
312
3
–––––––––––––––––––––––––––––––––––––
453
142
–––––––––––––––––––––––––––––––––––––
Accumulated Amortisation:
Reclassification from property, plant and equipment (Note 51(h))
As restated
Charge for the year
At end of year
Net carrying amounts
(74)
(53)
–––––––––––––––––––––––––––––––––––––
(74)
(53)
(42)
(21)
–––––––––––––––––––––––––––––––––––––
(116)
(74)
–––––––––––––––––––––––––––––––––––––
337
68
=============================
(j) DEPOSITS FROM CUSTOMERS
Non-Mudharabah Fund
Demand deposits
Savings deposits
598,909
184,708
Mudharabah Fund
General investment deposits
(i)
1,158,127
1,293,110
–––––––––––––––––––––––––––––––––––––
1,941,744
1,854,759
=============================
The maturity structure of Mudharabah General Investment deposits are as follows:
Due within six months
Six months to one year
140
M A L A Y S I A N
434,964
126,685
B E R H A D
( 6 6 2 7 - X )
723,361
903,634
398,652
309,281
26,263
71,965
9,851
8,230
–––––––––––––––––––––––––––––––––––––
1,158,127
1,293,110
=============================
- 31 March 2007
(j) DEPOSITS FROM CUSTOMERS (cont’d)
Group
2007
RM’000
2006
RM’000
(ii) The deposits are sourced from the following customers:Government and statutory bodies
Business enterprises
Individuals
Others
272,035
212,780
1,221,777
1,182,654
306,360
219,092
141,572
240,233
–––––––––––––––––––––––––––––––––––––
1,941,744
1,854,759
=============================
(k) DEPOSITS AND PLACEMENTS OF BANKS AND OTHER FINANCIAL INSTITUTIONS
Mudharabah Fund
Licensed Islamic banks
Licensed banks
Licensed finance companies
Non-Mudharabah Fund
86,000
54,049
–
136,319
90,295
80,207
21,456
10,214
–––––––––––––––––––––––––––––––––––––
161,505
317,035
=============================
(l) OTHER LIABILITIES
Other liabilities
Income payable
63,901
123,485
11,524
7,327
16,613
22,391
–––––––––––––––––––––––––––––––––––––
92,038
153,203
=============================
The movements in Profit Equalisation Reserve are as follows:
Provision made during the year
Amount written back during the year
At end of year
22,391
11,203
20,773
13,510
(26,551)
(2,322)
–––––––––––––––––––––––––––––––––––––
16,613
22,391
=============================
141
A N N U A L
R E P O R T
2 0 0 7
- 31 March 2007
(m) INCOME DERIVED FROM INVESTMENT OF DEPOSITORS' FUNDS AND FINANCIAL INSTITUTIONS
Group
2007
RM’000
Income derived from investment of:
(i) General investment deposits
(ii) Other deposits
At end of year
(i)
2006
RM’000
71,981
60,836
67,463
35,182
–––––––––––––––––––––––––––––––––––––
139,444
96,018
=============================
Income derived from investment of general investment deposits:
Finance income and Hibah
Money at call and deposit with financial institutions
Amortisation of premium less accretion of discount
Total finance income and hibah
52,413
45,266
4,166
5,088
3,077
3,015
4,283
1,572
–––––––––––––––––––––––––––––––––––––
63,939
54,941
6,167
5,393
–––––––––––––––––––––––––––––––––––––
70,106
60,334
1,876
502
–––––––––––––––––––––––––––––––––––––
71,982
60,836
=============================
(ii) Income derived from investment of other deposits:
142
M A L A Y S I A N
B E R H A D
( 6 6 2 7 - X )
50,316
27,202
2,835
1,887
3,012
1,899
3,803
904
–––––––––––––––––––––––––––––––––––––
59,966
31,892
5,838
3,263
–––––––––––––––––––––––––––––––––––––
65,804
35,155
1,660
27
–––––––––––––––––––––––––––––––––––––
67,464
35,182
=============================
- 31 March 2007
(n) ALLOWANCE FOR LOSSES ON FINANCING, ADVANCES AND OTHER LOANS
Group
2007
RM’000
(a) Specific allowance
- Made during the year
- Written back during the year
(b) General allowance
(c) Bad debts on loans and financing
- Recovered
- Written off
(d) Allowance on amount receivable from other debts
74,068
(33,619)
3,294
2006
RM’000
6,539
(2,316)
12,787
(3)
–
95
–
31
72
–––––––––––––––––––––––––––––––––––––
43,866
17,082
=============================
(o) INCOME ATTRIBUTABLE TO DEPOSITORS AND FINANCIAL INSTITUTIONS
- Mudharabah Fund
- Non-Mudharabah Fund
- Mudharabah Fund
- Non-Mudharabah Fund
- Others
40,246
10,045
26,870
5,687
7,724
13,903
273
148
2,003
22
–––––––––––––––––––––––––––––––––––––
60,291
46,630
=============================
(p) INCOME DERIVED FROM INVESTMENT OF ISLAMIC BANKING FUNDS
Other operating income/(expenses)
38,457
30,625
1,128
1,231
2,353
2,205
2,631
985
–––––––––––––––––––––––––––––––––––––
44,569
35,046
4,388
3,691
–––––––––––––––––––––––––––––––––––––
48,957
38,737
1,147
(180)
–––––––––––––––––––––––––––––––––––––
50,104
38,557
=============================
143
A N N U A L
R E P O R T
2 0 0 7
- 31 March 2007
(q) OTHER OPERATING EXPENSES
Group
2007
RM’000
Personnel costs
- Salaries, allowances and bonuses
- Pension costs
- Others
Establishment costs
- Depreciation
- Amortisation of computer software
- Rental
- Water & electricity
- Repairs & maintenance
- EDP expenses
- Others
Marketing expenses
- Promotion and advertisement
- Branding and publicity
- Others
Administration and general expenses
- Communication expenses
- Printing and stationeries
- Insurance
- Professional fees
- Others
Total other operating expenses
2006
RM’000
2,008
1,850
311
272
103
149
–––––––––––––––––––––––––––––––––––––
2,422
2,271
90
86
42
21
97
119
4
2
38
44
33
88
4
1
–––––––––––––––––––––––––––––––––––––
308
361
30
179
40
49
51
60
–––––––––––––––––––––––––––––––––––––
121
288
25
9
120
148
22
35
34
145
39
55
–––––––––––––––––––––––––––––––––––––
240
392
–––––––––––––––––––––––––––––––––––––
3,091
3,312
=============================
Included in the Group's other operating expenses are the Syariah Committee's remuneration of RM67,160 (2006:
RM66,540).
144
M A L A Y S I A N
B E R H A D
( 6 6 2 7 - X )
- 31 March 2007
(r) TAX EXPENSE AND ZAKAT
Group
2007
RM’000
Income tax :
Current
Deferred tax (Note 51(g)):
Relating to origination and reversal of temporary differences
Relating to change in tax rate
Taxation
Zakat
2006
RM’000
23,394
22,572
1,541
(8,322)
427
(8,322)
1,114
–
24,935
14,250
30
–
–––––––––––––––––––––––––––––––––––––
24,965
14,250
=============================
Income tax is calculated at the Malaysian Statutory tax rate of 27% (2006 : 28%) of the estimated assessable profit
for the year.
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 is as follows:
Group
2007
2006
RM’000
RM’000
Taxation at Malaysian Statutory tax rate of 27% (2006: 28%)
Effect of income not subject to tax
Effect on opening deferred tax for reduction in income tax rate
Effect of expenses not deductible for tax purposes
Tax expense for the year
88,078
52,987
=============================
23,782
14,836
–
(588)
1,114
–
39
2
–––––––––––––––––––––––––––––––––––––
24,935
14,250
=============================
(s) CAPITAL ADEQUACY
The capital adequacy ratios under the Islamic banking business are as follows:
Group
2007
%
Capital Ratios
Core capital ratio
Risk-weighted capital ratio
2006
%
40.58
38.86
42.05
40.23
=============================
Group
2007
RM’000
Tier-I capital
Capital funds
Retained profits
Deferred tax assets
Total Tier-I capital
2006
RM’000
792,100
792,100
158,145
95,032
(14,105)
(15,678)
–––––––––––––––––––––––––––––––––––––
936,140
871,454
=============================
145
A N N U A L
2 0 0 7
R E P O R T
- 31 March 2007
(s) CAPITAL ADEQUACY (cont’d)
The capital adequacy ratios under the Islamic banking business are as follows: (cont’d)
Group
2007
RM’000
Tier-II capital
General allowance for bad and doubtful debts and financing
2006
RM’000
33,898
30,604
–––––––––––––––––––––––––––––––––––––
33,898
30,604
=============================
970,038
902,058
=============================
Total Tier-II capital
Total Capital Base
Breakdown of risk weighted assets in the various categories of risk-weights are as follows:2007
Notional
RM'000
Group
0%
20%
50%
100%
Total Risk Weighted Assets
RiskWeighted
RM'000
2006
Notional
RM'000
RiskWeighted
RM'000
917,418
–
1,030,050
–
163,140
32,628
109,300
21,860
138,709
69,355
80,313
40,157
2,204,373
2,204,373
2,180,360
2,180,360
–––––––––––––––––––––––––––––––––––––––––––––––––––––
3,423,640
2,306,356
3,400,023
2,242,377
=============================================================
(t) COMMITMENTS AND CONTINGENCIES
In the normal course of business, the Group make various commitments and incur certain contingent liabilities with
legal recourse to their customers. No material losses are anticipated as a result of these transactions.
146
M A L A Y S I A N
B E R H A D
( 6 6 2 7 - X )
- 31 March 2007
(t) COMMITMENTS AND CONTINGENCIES (cont’d)
Risk weighted exposure of the Group are as follows:
2007
Group
Direct credit substitutes
Transaction-related contingent items
Short-term self-liquidating
trade-related contingencies
Irrevocable commitments to
extend credit:
- maturity exceeding one year
- maturity not exceeding one year
Foreign exchange related contracts:- less than one year
Other commitments
and contingencies
*
Principal
Amount
RM'000
2006
Credit
Equivalent
Amount*
RM'000
Risk
Weighted
Amount
RM'000
8,987
20,927
13,810
60,656
13,810
30,328
13,810
30,328
5,282
5,282
196,892
39,378
39,378
105,231
104,226
52,616
–
52,616
–
116,780
59,336
58,390
–
58,390
–
38,598
986
493
82,385
2,314
1,157
Principal
Amount
RM'000
Credit
Equivalent
Amount*
RM'000
Risk
Weighted
Amount
RM'000
8,987
41,853
8,987
20,927
26,408
10,265
–
–
6,991
–
–
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
335,568
88,798
88,305
536,850
144,220
143,063
===============================================================================
The credit equivalent amount is arrived at using the credit conversion factor as per Bank Negara Malaysia's
guidelines. The foreign related contracts are all forward contracts. Foreign exchange contracts are subject to market
risk and credit risk.
(u) PROFIT RATE RISK
The following tables indicate the effective profit rates at the balance sheet date and the periods in which the financial
instruments reprice or mature, whichever is earlier.
147
A N N U A L
R E P O R T
2 0 0 7
- 31 March 2007
(u) PROFIT RATE RISK (cont’d)
Up to
1 month
RM'000
>1-3
months
RM'000
>3-6
months
RM'000
>6-12
months
RM'000
>1-5
years
RM'000
Over 5
years
RM'000
Non
profit
sensitive
RM'000
401,303
–
–
–
–
–
2
401,305
3.49
10,000
–
5,044
30,000
9,945
89,721
–
–
10,211
–
5,117
72,961
–
130,021
292,450
–
10,712
10,270
–
–
–
40,000
155,795
480,657
2.73
4.66
2.12
531,267
14,789
87,335
36,266
822,543
682,523
(88,943)* 2,085,780
6.93
–
–
–
–
–
–
130,391
130,391
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
947,614
144,455
97,546 114,344 1,245,014
703,505
41,450
3,293,928
===========
==================================================================================
–
GROUP
2007
Assets
with banks and other
Financing, advances and
other loans
Other non-profit
sensitive balances
Total assets
Liabilities
of banks and other
Obligations on securities
sold under repurchase
agreements
payable
Other non-profit
sensitive balances
Total liabilities
Islamic Banking funds
On-balance sheet profit
sensitivity gap
Off-balance sheet profit
sensitivity gap
Total profit
sensitivity gap
Effective
profit
Total
rate
RM'000
%
1,147,227
153,458
206,293
398,652
36,114
–
–
1,941,744
2.81
105,049
35,000
–
2,197
19,259
–
–
161,505
3.34
88,722
–
–
–
–
–
–
88,722
3.01
10
9
52
–
–
–
–
71
–
–
–
–
–
–
–
150,945
150,945
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
1,341,008
188,467
206,345 400,849
55,373
–
150,945
2,342,987
–
–
–
–
–
–
950,941
950,941
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
–
1,341,008
188,467
206,345 400,849
55,373
– 1,101,886
3,293,928
===========
==================================================================================
(393,394)
(44,012)
(108,799) (286,505) 1,189,641
703,505 (1,060,436)
–
–
–
–
–
–
–
–
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
(393,394)
(44,012) (108,799) (286,505) 1,189,641
703,505 (1,060,436)
–
===========
==================================================================================
* Specific allowance and general allowance of the Group are classified under the non-profit sensitive column.
148
M A L A Y S I A N
–
B E R H A D
( 6 6 2 7 - X )
- 31 March 2007
(u) PROFIT RATE RISK (cont’d)
GROUP
2006
Assets
with banks and other
Financing, advances and
other loans
Other non-profit sensitive
balances
Total assets
Liabilities
of banks and other
Obligations on securities
sold under repurchase
agreements
Other non-profit sensitive
balances
Total liabilities
On-balance sheet profit
sensitivity gap
Off-balance sheet profit
sensitivity gap
Total profit
sensitivity gap
Up to
1 month
RM'000
>1-3
months
RM'000
>3-6
months
RM'000
>6-12
months
RM'000
>1-5
years
RM'000
Over 5
years
RM'000
Non
profit
sensitive
RM'000
Total
RM'000
Effective
profit
rate
%
404,051
–
–
–
–
–
–
404,051
3.09
30,000
–
20,001
–
–
36,975
–
29,888
49,462
–
39,316
29,325
–
99,908
361,735
–
18,068
44,694
–
–
–
30,000
187,180
542,192
–
5.19
1.99
434,244
8,025
25,762
32,552
656,492
889,747
(49,618)* 1,997,204
6.42
–
–
–
–
–
–
101,791
101,791
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
888,296
45,000
105,112 101,193 1,118,135
952,509
52,173 3,262,418
===========
===================================================================================
–
1,080,707
251,060
133,515
309,282
80,195
–
–
1,854,759
2.64
186,377
120,463
–
713
7,482
2,000
–
317,035
3.21
13,417
1,000
–
–
–
–
–
14,417
3.10
–
–
–
–
–
–
188,717
188,717
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
1,280,501
372,523
133,515 309,995
87,677
2,000
188,717 2,374,928
–
–
–
–
–
–
887,490
887,490
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
–
–
1,280,501
372,523
133,515 309,995
87,677
2,000 1,076,207 3,262,418
===========
===================================================================================
(392,205)
(327,523)
(28,403) (208,802) 1,030,458
950,509 (1,024,034)
–
–
–
–
–
–
–
–
–
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
(392,205) (327,523)
(28,403) (208,802) 1,030,458
950,509 (1,024,034)
–
===========
===================================================================================
* Specific allowance and general allowance of the Group are classified under the non-profit sensitive column.
149
A N N U A L
R E P O R T
2 0 0 7
- 31 March 2007
(v) FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES
The carrying amounts and the fair value of the financial assets and liabilities of the Group are as follows:2007
Carrying
Amount
RM'000
2006
Carrying
Amount
RM'000
Fair Value
RM'000
Fair Value
RM'000
Group
Financial assets
Securities available-for sale
401,305
401,305
404,051
404,051
40,000
40,000
30,000
30,000
155,795
155,795
187,180
187,180
480,657
489,157
542,192
545,707
2,085,780
2,135,453
1,997,204
2,001,253
=============================================================
Financial liabilities
Deposits and placements of banks and other
Obligations on securities sold under repurchase
agreements
1,941,744
1,938,021
1,854,759
1,854,752
161,505
160,725
317,035
316,567
88,722
88,722
14,417
14,417
71
71
–
–
=============================================================
Note: The fair value of the other assets and other liabilities, which are considered short-term in nature, are estimated
to be approximately their carrying values.
The methods and assumptions used in estimating the fair values of financial instruments are as follows:(i)
The carrying amounts approximate fair values due to the relatively short maturity of the financial instruments.
(ii) Deposits and placements with financial institutions
The fair values of these financial instruments with remaining maturity of less than one year approximate their
carrying amounts due to the relatively short maturity of the financial instruments. For those financial instruments
with maturity of more than one year, the fair values are estimated based on discounted cash flows using
applicable prevailing market rates for placements of similar credit risk and similar remaining maturity as at the
balance sheet date.
(iii) Securities held-for-trading, Securities available-for-sale and Securities held-to-maturity
The fair values are estimated based on quoted or observable market prices at the balance sheet date. Where
such quoted or observable market prices are not available, the fair values are estimated using pricing models or
discounted cash flow techniques. Where discounted cash flow technique is used, the expected future cash flows
are discounted using prevailing market rates for a similar instrument at the balance sheet date.
150
M A L A Y S I A N
B E R H A D
( 6 6 2 7 - X )
- 31 March 2007
(v) FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES (cont’d)
(iv) Financing, advances and other loans
The fair values of fixed rate loans with remaining maturity of less than one year and variable rate loans are
estimated to approximate their carrying values. For fixed rate loans and Islamic financing with remaining
maturity of more than one year, the fair values are estimated based on expected future cash flows of contractual
instalment payments and discounted at applicable prevailing rates at balance sheet date offered to new
borrowers with similar credit profiles. In respect of non-performing loans, the fair values are deemed to
approximate the carrying values, net of specific allowance for bad and doubtful debts and financing.
(v) Deposits from customers
The fair values of deposit liabilities payable on demand (demand and savings deposits), or deposits with maturity
of less than one year are estimated to approximate their carrying amounts. The fair values of fixed deposits with
remaining maturities of more than one year are estimated based on expected future cash flows discounted at
applicable prevailing rates offered for deposits of similar remaining maturities. The fair values of Islamic deposits
are deemed to approximate their carrying amounts as profit rates are determined at the end of their holding
periods based on the profit generated from the assets invested. For negotiable instruments of deposits, the fair
values are estimated based on quoted or observable market prices as at the balance sheet date. Where such
quoted or observable market prices are not available, the fair values of negotiable instruments of deposits are
estimated using the discounted cash flow technique.
(vi) Deposits and placements of banks and other financial institutions and obligations on securities sold under
The carrying values of these financial instruments with remaining maturity of less than one year approximate
their carrying amounts due to the relatively short maturity of the financial instruments.
(w) CHANGE IN ACCOUNTING POLICIES AND PRIOR YEAR ADJUSTMENTS
The accounting policies set out in Note 2 have been applied in preparing the financial statements for the year ended
31 March 2007. As indicated in Note 2, other than FRS 116 and 138 there was no financial impact on adopting FRS
2, 3, 5, 101, 108, 110, 121, 127, 128, 132, 133, 136 and 140, does not have any significant financial impact on the
Group.
(a) FRS 138 Intangible Assets
The adoption of FRS 138 has resulted in the change in accounting policy for intangible assets relating to
computer software retrospectively. In accordance with FRS 138, the Group had segregated and reclassified those
computer software that does not form an integral part of the related hardware as intangible assets. The
segregation was made in the cost and accumulated depreciation of the said computer software for current and
previous financial year.
The change in accounting policy does not affect the recognition and measurement of the Group's computer
software but has resulted in reclassification of prior year comparatives as disclosed in Note 51(h) and Note 51(i).
151
A N N U A L
R E P O R T
2 0 0 7
- 31 March 2007
(w) CHANGE IN ACCOUNTING POLICIES AND PRIOR YEAR ADJUSTMENTS (cont’d)
(b) FRS 116 Property, Plant and Equipment
FRS 116 Property,Plant and Equipment requires the review of the residual value and remaining useful life of an
item of property, plant and equipment at least at each financial year end. The Group has now revised the motor
vehicle's estimated useful live and its residual value with effect from 1 April 2006, as follows:
(i)
The useful live is now revised from 5 years to the range of 6 to 8 years according to their model; and
(ii) the residual value is now estimated at the range of 15% to 50% of the original cost instead of zero value
at the end of useful lives, by referring to the automobile magazine published in Malaysia.
FRS 116 also requires the re-instatement cost to be recognised as part of the property, plant and equipment and
depreciated according to the estimated useful life. The useful life is estimated to be at 5 years and zero residual
value at the end of the useful life.
The above revisions are accounted for prospectively as a change in accounting estimates. The adoption of this
accounting policy has not resulted in any financial impact to the Islamic banking business.
(c) Comparative Figures
The presentation and classification of items in the current year's financial statements are consistent with the
previous financial year except for the following comparative figures which have been restated for the effects of
adopting the above change in accounting policies:
Group
Previously
stated
RM’000
As restated
RM’000
Balance Sheets as at 31 March 2006
Intangible assets
152
M A L A Y S I A N
B E R H A D
( 6 6 2 7 - X )
246
178
–
68
=============================
list of properties
as at 31 March 2007
Year of
Purchase
Tenure
Remaining
Lease Period
(Expiry Year)
Age of
Property
(years)
Built-Up Net Book
Area
Value
(sq ft)
RM'000
Location
Current Use
11A, Jalan Raja Chulan
50200 Kuala Lumpur
Alliance Bank's
Branch/Office premises
1982
Freehold
–
36
26,882
2,928
1, Jalan Tembaga SD5/2A
52100 Kepong
Kuala Lumpur
Alliance Bank's
1992
Freehold
–
13
9,694
749
150 - 152, Jalan Cerdas
Taman Connaught
56000 Kuala Lumpur
Alliance Bank's
1997
Leasehold
99 years
71 years
2078
28
12,012
2,632
43 & 45
Jalan Bunga Tanjung 6A
Taman Putra
68000 Ampang, Selangor
Alliance Bank's
1997
Leasehold
99 years
74 years
2081
25
4,060
1,305
1960 E & F
Jalan Stadium
05100 Alor Setar
Alliance Bank's
1995
Leasehold
99 years
71 years
2078
26
4,125
506
Ground & Mezzanine Floor Alliance Bank's
Wisma Malvest
20 & 20A Jln Tun Dr Awang
Sungai Nibong Kecil
11900 Bayan Lepas
Penang
1995
Freehold
-
12
5,667
1,510
Unit 5 & 6, Block B
Krystal Point
Jalan Sultan Azlan Shah
Sungai Nibong
11900 Penang
Vacant
1996
Freehold
-
9
2,098
396
B-400, Jalan Beserah
25300 Kuantan, Pahang
Alliance Bank's
1996
Freehold
-
16
6,735
509
LG/134/135/128/F89
Holiday Plaza
Jalan Dato Sulaiman
80250 Johor Baharu
Alliance Bank's
1984
Freehold
-
23
5,454
1,016
1-01 & 1A-01
Menara Sarawak Enterprise
Jalan Bukit Meldrum
80300 Johor Bahru
Alliance Bank's
1996
Freehold
-
9
13,742
10,483
Lot 1 & 3
Jalan Permas Jaya 10/2
Bandar Baru Permas Jaya
Pelentong
81750 Masai, Johor Bahru
Alliance Bank's
1996
Freehold
-
14
24,286
1,963
153
A N N U A L
R E P O R T
2 0 0 7
list of properties
as at 31 March 2007
Location
Current Use
3 & 5, Jalan Bentara 1
Tun Aminah
81308 Johor Bahru
Vacant
Tenure
Remaining
Lease Period
(Expiry Year)
Age of
Property
(years)
1996
Freehold
-
15
6,160
1,139
Year of
Purchase
Built-Up Net Book
Area
Value
(sq ft)
RM'000
Unit 01-G & 01-1
Seremban City
Jalan Tunku Munawir
70000 Seremban
Alliance Bank's
1997
Freehold
-
8
7,250
1,961
Lot 6 & 7, Block A
Taman Melaka Raya
75000 Melaka
Alliance Bank's
1996
Leasehold
99 years
87 years
2094
9
7,520
664
Lot 1 & 2, Block D
Nountun Industrial Estate
88450 Inanam
Kota Kinabalu
Alliance Bank's
1996
Leasehold
999 years
916 years
2923
13
7,500
993
Lot 4-6, Block K
Sinsuran Complex
W.D.T. 132
88999 Kota Kinabalu
Vacant
1980
Leasehold
99 years
64 years
2071
29
14,800
790
Lot 1086 Jalan Utara
W.D.T. 127
91000 Tawau, Sabah
Alliance Bank's
1981
Leasehold
99 years
53 years
2060
34
15,450
712
Lot 8, Block A
Beaufort Jaya Com Centre
89800 Beaufort, Sabah
Alliance Bank's
1984
Pending
Issuance
of Titles
-
21
4,500
258
Lot 84, Taman KDC
89108 Kota Marudu
Sabah
Alliance Bank's
1993
Leasehold
99 years
51 years
2058
13
884
69
Lot 1, Block D
Mile 4 1/2 Jalan Labuk
Bandar Kim Fung
90000 Sandakan
Alliance Bank's
1993
Leasehold
99 years
73 years
2080
22
4,800
476
1 & 2, Block A
Jalan Jungkat
Pangie Light Ind. Complex
89989 Tenom, Sabah
Alliance Bank's
1993
Leasehold
999 years
917 years
2924
13
8,400
353
Lot 8 & 9, Section 11
Jalan Kulas Satu
93400 Kuching
Alliance Bank's
1993
Freehold
-
13
9,080
1,160
17, 19 & 21
Jalan USJ 9/5
47620 Subang Jaya
Alliance Bank's
1996
Leasehold
999 years
989 years
2996
11
4,620
3,043
154
M A L A Y S I A N
B E R H A D
( 6 6 2 7 - X )
list of properties
as at 31 March 2007
Year of
Purchase
Tenure
Remaining
Lease Period
(Expiry Year)
Age of
Property
(years)
Built-Up Net Book
Area
Value
(sq ft)
RM'000
Location
Current Use
2 & 3 Block A, Phase III
Luyang Com Centre
Damai Plaza, Jalan Damai
88300 Kota Kinabalu
Alliance Bank's
1994
Pending
Issuance
of Title
-
12.5
10,000
1,152
59-60, Jalan Tiga
90702 Sandakan, Sabah
Alliance Bank's
1963
Leasehold
999 years
882 years
2889
49
7,575
766
Lot B1 & B2
6th Floor, Block 45
Church Road
Alliance Bank's store
1985
Leasehold
999 years
888 years
2895
35
1,500
59
MPWPL U 0072 & 0073
24-25 Jalan Merdeka
87007 Labuan
Alliance Bank's
1979
Leasehold
99 years
50, 56 years
2057, 2063
41
41
6,000
789
MDLD 0090, Block 39
Jalan Panji
91100 Lahad Datu
Alliance Bank's
1985
Leasehold
99 years
54 years
2061
27
4,600
555
Mt. Kinabalu Golf
Course Kundasang
Vacant land
1983
Pending
Issuance
of Title
-
-
1 acre
111
Lot 1, Block A
Sedco Complex, W.D.T 13
89159 Kota Belud, Sabah
Vacant
1982
Leasehold
99 years
71 years
2078
23
1,200
116
Lot 84 Jalan Gaya
88000 Kota Kinabalu
Sabah
Alliance Bank's
1987
Leasehold
999 years
875 years
2882
49
2,510
1,756
A1 & A2, Block 44
Jalan Lebuh Tiga
Vacant
1983
Leasehold
999 years
894 years
2901
47
1,700
827
21 Lot 2, Block E
Alliance Bank's
premises
Jalan Tuaran 89350, Inanam
Kota Kinabalu, Sabah
1996
Leasehold
999 years
916 years
2923
7
1,248
402
45, Jalan Sungai Besi Indah
1/21, 43300 Balakong
Selangor
Alliance Bank's
2001
Leasehold
99 years
84 years
2091
6
9,909
1,516
3, Jalan SS 15/2A
Wisma Projass
47500 Subang Jaya
Selangor
Alliance Bank's
2005
Freehold
-
21
34,820
8,042
Lot 2, 48, 515 & 877
Kuala Pahang
District of Pekan, Pahang
Vacant land
1992
Freehold
-
-
1,167
acres
27,748
155
A N N U A L
R E P O R T
2 0 0 7
group directory
as at 30 June 2007
ALLIANCE BANK MALAYSIA BERHAD
HEAD OFFICE
Capital Square
8, Jalan Munshi Abdullah
50100 Kuala Lumpur
Tel : 03-2694 8800
Fax : 03-2694 6200
Website : www.alliancebank.com.my
BRANCHES
KEDAH
Alor Setar
1960 E & F, Jalan Stadium
05100 Alor Setar, Kedah
Tel : 04-731 0744
Fax: 04-733 8055
Klang
Ground Floor
1, Lorong Kasawari 4B
Taman Eng Ann
41150 Klang, Selangor
Tel : 03-3345 3700
Fax: 03-3345 3733
Sitiawan
23 & 24, Jalan Raja Omar
Taman Selamat
32000 Sitiawan, Perak
Tel : 05-691 1212
Fax: 05-691 7975
SELANGOR
Balakong
45, Jalan Sungai Besi Indah
1/21 Taman Sungai Besi Indah
43300 Seri Kembangan, Selangor
Tel : 03-8948 6972
Fax: 03-8948 9530
PULAU PlNANG
Bukit Mertajam
Ground & 1st Floor
Wisma Ng Ah Yan
No. 42, Leboh Nangka 2
Taman Mutiara
14000 Bukit Mertajam
Pulau Pinang
Tel : 04-530 3130
Fax: 04-530 7433
CP Tower, Petaling Jaya
Unit 1-2, Right Wing
Level 1, CP Tower
11, Jalan 16/11, Off Jalan Damansara
46350 Petaling Jaya, Selangor
Tel : 03-7957 3366
Fax: 03-7957 3360
Butterworth
4105 - 4107, Jalan Bagan Luar
12000 Butterworth, Pulau Pinang
Tel : 04-331 4863/64
Fax: 04-331 3904
Damansara Uptown
Unit 102 & 103, Level 1, Uptown 2
2, Jalan SS21/37, Damansara Uptown
Tel : 03-7660 9798
Fax: 03-7660 9799
156
B E R H A D
Sungai Nibong Kecil
Ground & Mezzanine Floor
Wisma Malvest
20 & 20A, Jalan Tun Dr Awang
Sungai Nibong Kecil
11900 Bayan Lepas
Pulau Pinang
Tel : 04-642 5918
Fax: 04-642 5924
Ipoh
40 & 42, Persiaran Greenhill
30450 Ipoh, Perak
Tel : 05-241 2346/8
05-241 2342/3
Fax: 05-241 2355
Sejati Indah, Sungai Petani
Ground Floor, Wisma Uni-Green
18, Jalan Permatang Gedong
Taman Sejati Indah
08000 Sungai Petani, Kedah
Tel : 04-431 1673/81
04-431 2139
Fax: 04-431 1687
Kajang
Lot 4 & 5, Jalan Jeloh 3
Off Jalan Bukit
43000 Kajang, Selangor
Tel : 03-8733 5966
Fax: 03-8736 4004
PERAK
Lunas, Kulim
888 & 889, Jalan Aman
Taman Sejahtera, 09600 Lunas
Kulim, Kedah
Tel : 04-484 3275/76/78
Fax: 04-484 3277
M A L A Y S I A N
Beach Street
Ground Floor, Bangunan Barkath
21, Beach Street
10300 Georgetown, Pulau Pinang
Tel : 04-262 8100
Fax: 04-261 3300
( 6 6 2 7 - X )
Mutiara Damansara
G19, IKANO Power Centre
No. 2, Jalan PJU 7/2
Mutiara Damansara
Tel : 03-7727 1041
Fax: 03-7727 1478
Pandan Indah
No. 11 & 13,
Jalan Pandan Indah 4/34
Pandan Indah
55100 Kuala Lumpur
Tel : 03-4295 7300
Fax: 03-4296 4107
Puchong Jaya
11, Jalan Kenari 5
Bandar Puchong Jaya
47100 Puchong Jaya, Selangor
Tel : 03-8075 9185
Fax: 03-8075 9200
Section 13, Petaling Jaya
Ground Floor, No. 76A
Jalan Universiti, Section 13
Tel : 03-7957 7272
Fax: 03-7957 2552
Shah Alam
Ground & 1st Floor
No. 2, Jalan Murni 25/61
Taman Sri Muda, Seksyen 25
40400 Shah Alam, Selangor
Tel : 03-5121 9336
Fax: 03-5121 9373
group directory
as at 30 June 2007
Shah Alam
Alliance Rakan
71, Jalan Pelabur B23/B
Seksyen 23
40300 Shah Alam, Selangor
Tel : 03-5541 7878
Fax: 03-5541 7676
Sri Damansara
1, Jalan Tembaga SD 5/2A
Bandar Sri Damansara
52100 Kuala Lumpur
Tel : 03-6272 0834/8384
Fax: 03-6275 0457/6272 1732
SS2, Petaling Jaya
No. 53 & 55, Jalan SS2/55
Tel : 03-7875 8255
Fax: 03-7874 0973
Subang Jaya
3 Alliance
3, Jalan SS15/2A
47500 Subang Jaya, Selangor
Tel : 03-5634 2870/1
Fax: 03-5634 1128
Taman Putra
43-45, Jalan Bunga Tanjung 6A
Taman Putra
68000 Ampang, Selangor
Tel : 03-4291 7740
Fax: 03-4292 9836
USJ, Subang Jaya
Ground & 1st Floor
17, 19 & 21, Jalan USJ 9/5N
47620 UEP Subang Jaya, Selangor
Tel : 03-8024 1300
Fax: 03-8024 1090
Westport
Ground Floor
Westport Business Centre
Pulau Indah (Westport)
42920 Selangor
Te : 03-3101 1168
Fax: 03-3101 1171
KUALA LUMPUR
Bangsar
28, Lorong Ara Kiri 2
Lucky Garden, Bangsar
59100 Kuala Lumpur
Tel : 03-2095 3185
Fax: 03-2095 3184
Capital Square
Ground Floor
Menara Multi-Purpose
Capital Square
50100 Kuala Lumpur
Tel : 03-2694 8800
Fax: 03-2694 6867
Jalan Imbi
Ground Floor
3, Jalan Imbi
55100 Kuala Lumpur
Tel : 03-2148 5155
Fax: 03-2142 1531
03-2732 8511
Jalan Ipoh
41 & 43, Jalan Ipoh
51200 Kuala Lumpur
Tel : 03-4041 2288
Fax: 03-4041 7918
Jalan Ipoh
Alliance Rakan
729, Ground Floor
Batu 41/4, Jalan Ipoh
51200 Kuala Lumpur
Tel : 03-6250 2610
Fax: 03-6250 2710
Jalan Pudu
Ground Floor
Plaza Magnum
128, Jalan Pudu
55100 Kuala Lumpur
Tel : 03-2143 8800
Fax: 03-2148 9785
Jalan Sultan Ismail
Mezzanine Floor
Menara Prudential
10, Jalan Sultan Ismail
50250 Kuala Lumpur
Tel : 03-2070 4477
Fax: 03-2070 4900
Kepong
Ground Floor
52, Jalan Prima, Vista Magna
Metro Prima Kepong
52100 Kuala Lumpur
Tel : 03-6257 9997
Fax: 03-6257 9996
Kuchai Entrepreneurs Park
1, Jalan 1/116B
Kuchai Entrepreneurs Park
58200 Kuala Lumpur
Tel : 03-7984 8800
Fax: 03-7981 6486
Mid Valley
15-G & 15-1,
The Boulevard Offices
Mid Valley City
Lingkaran Syed Putra
59200 Kuala Lumpur
Tel : 03-2283 1849
Fax: 03-2287 8217
Mont'Kiara
Unit A-0G-02, Block A
Plaza Mont'Kiara
2, Jalan Kiara, Mont'Kiara
50480 Kuala Lumpur
Tel : 03-6203 1543
Fax: 03-6201 2607
Segambut
Ground & 1st Floor
22, Wisma Sin Hoh Huat
Persiaran Segambut Tengah
51200 Kuala Lumpur
Tel : 03-6257 2105
Fax: 03-6257 2680
Selayang
71 & 73, Jalan 2/3A
Pusat Bandar Utara Selayang
KM 12, Jalan Ipoh
68100 Batu Caves, Selangor
Tel : 03-6135 1800
Fax: 03-6135 1787
Setapak
86, Jalan 2/23A
Taman Danau Kota
Off Jalan Genting Kelang
Setapak, 53300 Kuala Lumpur
Tel : 03-4143 9643
Fax: 03-4143 9568
Taman Connaught
150-152, Jalan Cerdas
Taman Connaught
56000 Kuala Lumpur
Tel : 03-9102 3973
Fax: 03-9102 3740
157
A N N U A L
R E P O R T
2 0 0 7
group directory
as at 30 June 2007
KUALA LUMPUR
Taman Maluri
1, 3 & 5, Jalan Jejaka 4
Taman Maluri, Cheras
55100 Kuala Lumpur
Tel : 03-9285 4133
Fax: 03-9283 1397
Taman Tun Dr Ismail
24, Jalan Tun Mohd Fuad 1
Taman Tun Dr Ismail
60000 Kuala Lumpur
Tel : 03-7729 8239
Fax: 03-7729 8237
Wisma MCA
Ground Floor, Wisma MCA
163, Jalan Ampang
50450 Kuala Lumpur
Tel : 03-2164 8240
Fax: 03-2168 8390
JOHOR
Batu Pahat
Ground, 1st & 2nd Floor
2 & 4, Jalan Kundang 3
Taman Bukit Pasir
83000 Batu Pahat, Johor
Tel : 07–431 4088
Fax: 07–434 0033
Jalan Tebrau
396B & 396B-1, Jalan Tebrau
Taman Majidee
80250 Johor Bahru, Johor
Tel : 07-332 2331
Fax: 07-331 1310
Tun Aminah
3 & 5, Jalan Bentara 1
Taman Ungku Tun Aminah
81300 Skudai, Johor
Tel : 07-554 0031
Fax: 07-554 0173
Johor Jaya
50 & 52, Jalan Dedap 13
Taman Johor Jaya
Tel : 07-353 5388
Fax: 07-355 7377
Ulu Tiram
Ground Floor, Lots 34 & 36
Jalan Johar 3, Desa Cemerlang
81800 Ulu Tiram, Johor
Tel : 07-861 5143
Fax: 07-861 5157
Menara Sarawak
Level 1, Menara Sarawak Enterprise
5, Jalan Bukit Meldrum
Tel : 07-223 0588
Fax: 07-224 8477
MELAKA
Kelapa Sawit, Kulai
16 & 17, Jalan Susur Satu
26th Mile, Jalan Air Hitam
Kelapa Sawit
81030 Kulai, Johor
Tel : 07-652 3704/5/7
Fax: 07-652 3706
Permas Jaya
1 & 3, Jalan Permas Jaya 10/2
Bandar Baru Permas Jaya
Tel : 07-386 2480
Fax: 07-386 2482
Bukit Bakri, Muar
88, Jalan Tepi Pasar
Bukit Bakri
84200 Muar, Johor
Tel : 06-986 7633
Fax: 06-986 6721
Sri Gading, Batu Pahat
1 & 2, Jalan Ria 1
Taman Ria Jaya, Sri Gading
83000 Batu Pahat, Johor
Tel : 07-455 9406
Fax: 07-455 9411
Segamat
No. 115, Jalan Genuang
85000 Segamat, Johor
Tel : 07-931 1170
Fax: 07-931 2727
Holiday Plaza, Johor Bahru
Unit G128, Holiday Plaza
Jalan Dato Suleiman
Century Garden
Tel : 07-331 1200
Fax: 07-331 1207
Taman Pelangi
Ground Floor, Shoplot Nos. 1 & 3
Jalan Perang, Taman Pelangi
P.O. Box 61, Taman Sri Tebrau
Tel : 07-333 2064/2177
07-332 7016
Fax: 07-333 7411
158
M A L A Y S I A N
B E R H A D
( 6 6 2 7 - X )
Melaka
101 & 103, Jalan Melaka Raya 24
Taman Melaka Raya
75000 Melaka
Tel : 06-284 9249
Fax: 06-284 9248
NEGERI SEMBILAN
Seremban
1G & 1-1
Arab Malaysian Business Centre
Jalan Tuanku Munawir
70000 Seremban, Negeri Sembilan
Tel : 06-762 5610/21
Fax: 06-762 5612
PAHANG
Kuantan
B400, Jalan Beserah
Tel : 09-567 2508
Fax: 09-567 3307
TERENGGANU
Kuala Terengganu
Wisma Kam Choon
101, Jalan Kampong Tiong
20100 Kuala Terengganu
Terengganu
Tel : 09-623 5244
Fax: 09-623 6379
group directory
as at 30 June 2007
SABAH
Bandar Kim Fung, Sandakan
Lot 1, Block C, Bandar Kim Fung
Mile 4 1/2, Jalan Utara P.O. Box 163
Post Office, Mile 1 1/2, Jalan Utara
Tel : 089-275 020/21/22
Fax: 089-275 027
Beaufort
Lot B, Block A, Beaufort Jaya
Commercial Centre, P.O. Box 220
89808 Beaufort, Sabah
Tel : 087-211 721
Fax: 087-212 392
Donggongon
Wisma PPS
Donggongon New Township
W.D.T. No. 56
80509 Penampang, Sabah
Tel : 088-713 411/2
088-718 980
Fax: 088-718 634
Inanam, Kota Kinabalu
Ground, 1st & 2nd Floor
Lot 7 & 9 Block D
89350 Inanam, Kota Kinabalu, Sabah
Tel : 088-435 754/820
Fax: 088-435 770
Jalan Gaya
82 & 84, Jalan Gaya
88000 Kota Kinabalu, Sabah
Tel : 088-251 177
Fax: 088-223 629
Sinsuran
Lot 4, 5, & 6, Block K
Sinsuran Complex
88000 Kota Kinabalu
Sabah
Tel : 088-237 758
Fax: 088-212 511
Keningau
Lot No. 1, Block B-8
Jalan Arusap
89000 Keningau, Sabah
Tel : 087-330 301
Fax: 087-330 294
Kota Marudu
Shoplot No. 8, Block E
Sedco Shophouses
P.O. Box 260
89108 Kota Marudu, Sabah
Tel : 088-661 104
011-816 715
Fax: 088-661 106
Kundasang
Shoplot No. 6, Block B
Sedco Shophouses
P.O. Box 152
89308 Ranau, Sabah
Tel : 088-889 679
Fax: 088-889 676
Lahad Datu
Lot 1 MDLD 4709
Jalan Kastam Lama
91100 Lahad Datu, Sabah
Tel : 089-883 911/5
Fax: 089-883 916
Luyang Damai
Ground & 1st Floor
Shoplot No. 2 & 3
Block A, Luyang Commercial Centre
Damai Plaza, Phase III
Jalan Damai
88300 Kota Kinabalu, Sabah
Tel : 088-249 073/084/085/109
Fax: 088-249 064
Sandakan
59-61, Jalan Tiga
P.O. Box 224
Tel : 089-275 193
089-216 771/089-222 693
Fax: 089-271 641
Tambunan
Lot 1, Block B, Sedco Shophouses
W.D.T. 55
89659 Tambunan, Sabah
Tel : 087-771 171
Fax: 087-771 157
Tenom
Shoplot No. 1 & 2, Block A
Pangie Light Industrial Complex
Jalan Jungkat
Tenom New Township
P.O. Box 379
89909 Tenom, Sabah
Tel : 087-737 757/60/61
Fax: 087-737 762
SARAWAK
Kuching
178, Jalan Chan Chin Ann
93100 Kuching, Sarawak
Tel : 082-257 129
Fax: 082-257 275
Miri
Ground & 1st Floor
Lot 353, Block 7
Miri Concession Land District
(Pelita Commercial Centre)
Jalan Miri Pujut
98000 Miri, Sarawak
Tel : 085-427 535
Fax: 085-439 535
Satok
Ground & 1st Floor
Shoplot No. 8 & 9
Section 11, Jalan Kulas
93400 Kuching, Sarawak
Tel : 082-237 707/717/763/767
Fax: 082-235 567
Sibu
Ground Floor
32, Jalan Bako
Brooke Drive 3
96000 Sibu, Sarawak
Tel : 084–317 628
Fax: 084–317 148
Tawau
1086, Jalan Utara
W.D.T. 127
91009 Tawau, Sabah
Tel : 089-776 483/4
Fax: 089-763 287
159
A N N U A L
R E P O R T
2 0 0 7
group directory
as at 30 June 2007
ALLIANCE INVESTMENT BANK BERHAD
(formerly known as Alliance Merchant Bank Berhad)
(A participating organisation of Bursa Malaysia
Securities Berhad)
Head Office
20th Floor, Menara Multi-Purpose
Capital Square
50100 Kuala Lumpur
Tel : 03-2692 7788
Fax: 03-2692 8787
Website: www.allianceinvestmentbank.com.my
PENINSULAR MALAYSIA
Desa Sri Hartamas
No. 33, Plaza Crystalville
Jalan 23/70A, Desa Sri Hartamas
50480 Kuala Lumpur
Tel : 03-6203 3366
Fax: 03-6203 3396
SELANGOR
Seri Kembangan
No. 1503B, Ground Floor
Jalan Besar
43300 Seri Kembangan
Selangor
Tel : 03-8945 7922
Fax: 03-8945 7909
PERLIS
JOHOR
Kangar
2nd Floor, Podium Block
Bangunan KWSP
01000 Kangar, Perlis
Tel : 04-976 5200
Fax: 04-976 0411
Kluang
No. 46 & 48
Jalan Dato’ Kapten Ahmad
86000 Kluang, Johor
Tel : 07-771 7922
Fax: 07-771 7909
KEDAH
PAHANG
Alor Setar
Lot T-30, 2nd Floor, Wisma PKNK
Jalan Sultan Badlishah
05000 Alor Setar, Kedah
Tel : 04-731 7088
Fax: 04-731 8428
Kuantan
A-397, A-399 & A-401
Taman Sri Kuantan III
Jalan Berserah
Tel : 09-566 0800
Fax: 09-566 0801
PERAK
Sitiawan
No. 43 & 44, Ground Floor
Taman Sentosa, Jalan Lumut
32000 Sitiawan, Perak
Tel : 05-691 0910
Fax: 05-691 0908
Kuala Terengganu
No. 1D & 1E, Jalan Air Jerneh
20300 Kuala Terengganu
Terengganu
Tel : 09-631 7922
Fax: 09-631 3255
Kuala Lumpur
No. 8, Jalan Binjai
Off Jalan Ampang
50450 Kuala Lumpur
Tel : 03-2166 7922
Fax: 03-2166 7909
KELANTAN
Kota Bahru
Lot 6&7, Section 25
Jalan Sultan Yahya Petra
Bandar Kota Bahru
15200 Kota Bahru, Kelantan
Tel : 09-743 2588
Fax: 09-743 7588
160
B E R H A D
SARAWAK
Sibu
No. 32, 1st Floor
Jalan Bako
96000 Sibu, Sarawak
Tel : 084-347 922
Fax: 084-341 909
SABAH
Kota Kinabalu
Suite 1-9-E1, 9th Floor
CPS Tower
No. 1, Jalan Centre Point
88000 Kota Kinabalu
Sabah
Tel : 088-253 922
Fax: 088-261 010
ALLIANCE INVESTMENT
MANAGEMENT BERHAD
Management Berhad)
23-01, 23rd Floor
Capital Square
50100 Kuala Lumpur
Tel : 03-2698 4299
Fax: 03-2693 0792
Website: www.allianceimb.com.my
TERENGGANU
KUALA LUMPUR
M A L A Y S I A N
EAST MALAYSIA
( 6 6 2 7 - X )
ALLIANCE TRUSTEE BERHAD
3rd Floor
Capital Square
50100 Kuala Lumpur
Tel : 03-2697 6333
03-2694 4888
Fax: 03-2694 6200
analysis of shareholdings
as at 30 June 2007
Analysis of Shareholdings
Class of securities
Authorised share capital
Issued and paid-up share capital
Voting rights
:
:
:
:
Ordinary shares of RM1.00 each
RM2,000,000,000
RM1,548,105,929
One vote per ordinary share
Shareholdings Distribution Schedule
Size of Shareholdings
No. of Holders
% of Holders
No. of Shares
% of Shares
1,621
4,906
9,633
2,321
382
3
8.59
26.00
51.06
12.30
2.02
0.02
36,906
3,961,670
39,650,659
65,058,186
906,208,133
533,190,375
0.00
0.26
2.56
4.20
58.54
34.44
18,886
100.00
1,548,105,929
100.00
Less than 100
100 - 1,000
1,001 - 10,000
10,001 - 100,000
100,001 - less than 5% of issued shares
5% and above of issued shares
Total
Thirty (30) Largest Shareholders
Name
No. of Shares
%
351,160,206
22.68
1.
Mayban Nominees (Tempatan) Sdn Bhd
- DBS Bank for Vertical Theme Sdn Bhd
2.
CIMSEC Nominees (Tempatan) Sdn Bhd
- CIMB Bank Bhd for Vertical Theme Sdn Bhd
98,697,569
6.38
3.
Employees Provident Fund Board
83,332,600
5.38
4.
HSBC Nominees (Asing) Sdn Bhd
-Exempt AN for Morgan Stanley & Co. Incorporated
70,852,298
4.58
5.
Citigroup Nominees (Asing) Sdn Bhd
- Merrill Lynch International Ltd
65,597,668
4.24
6.
- Exempt AN for Coutts Bank Von Ernst Ltd
61,813,376
3.99
7.
Medimetro (M) Sdn Bhd
56,000,000
3.62
8.
Citigroup Nominees (Tempatan) Sdn Bhd
- CPB for Dato’ Chua Ma Yu
50,000,000
3.23
9.
Malaysia Focus Investment Fund Limited
49,228,700
3.18
10.
-Exempt AN for Credit Suisse
48,002,576
3.10
161
A N N U A L
R E P O R T
2 0 0 7
analysis of shareholdings
as at 30 June 2007
Thirty (30) Largest Shareholders (cont’d)
Name
No. of Shares
%
11.
Goh Ah Moi
31,770,900
2.05
12.
- HSBC-FS for Arisaig Asean Fund Limited
29,450,000
1.90
13.
Eden Engineering Sdn Bhd
22,295,763
1.44
14.
Atlasplus Sdn Bhd
21,927,408
1.42
15.
- Exempt AN for Clariden Leu Ltd
20,443,000
1.32
16.
HDM Nominees (Asing) Sdn Bhd
- Exempt AN for UOB Kay Hian Pte Ltd
20,011,276
1.29
17.
Magnum Corporation Berhad
19,520,000
1.26
18.
CIMSEC Nominees (Tempatan) Sdn Bhd
- CIMB Bank Berhad
15,710,500
1.01
19.
- Exempt AN for The Hongkong and Shanghai Banking Corporation Limited
12,935,000
0.84
20.
Mayfair Finance Corp
12,000,000
0.77
21.
Musallam Arab Investments Limited
10,000,000
0.65
22.
- Exempt AN for Citibank N.A. Singapore
10,000,000
0.65
23.
- Exempt AN for J.P. Morgan Bank, Luxembourg S.A.
8,300,000
0.54
24.
- Exempt AN for Mellon Bank
7,441,371
0.48
25.
- Exempt AN for J.P. Morgan Bank (Ireland) Public Limited Company
7,304,000
0.47
26.
- Chase Manhattan Trustees Limited for Pacific Trust
6,921,400
0.45
27.
- BBH and Co Boston for Prusik Asia Fund PLC
6,270,700
0.40
28.
- Exempt AN for JPMorgan Chase Bank, National Association
6,000,000
0.39
29.
- TNTC for Atlantis Asian Recovery Fund PLC
5,932,500
0.38
30.
- Exempt AN for JPMorgan Chase Bank, National Association
5,843,200
0.38
1,214,762,011
78.47
Total
162
M A L A Y S I A N
B E R H A D
( 6 6 2 7 - X )
substantial shareholders
as at 30 June 2007
No. of Ordinary Shares
Name of Substantial Shareholder
Vertical Theme Sdn Bhd
Direct
%
Indirect
449,857,775
29.06
–
%
Total
%
–
449,857,775
29.06
1
29.06
449,857,775
29.06
Langkah Bahagia Sdn Bhd
–
–
449,857,775
Duxton Investments Pte Ltd
–
–
449,857,7751
29.06
449,857,775
29.06
–
2
29.06
449,857,775
29.06
3
Lutfiah binti Ismail
–
449,857,775
Fullerton Financial Holdings Pte Ltd
(formerly known as
Asia Financial Holdings Pte Ltd)
–
–
449,857,775
29.06
449,857,775
29.06
Fullerton Management Pte Ltd
–
–
449,857,7754
29.06
449,857,775
29.06
5
29.06
449,857,775
29.06
Temasek Holdings (Private) Limited
–
–
449,857,775
Minister for Finance (Incorporated)
of Singapore
–
–
449,857,7756
29.06
449,857,775
29.06
90,210,400
5.83
–
–
90,210,400
5.83
Employees Provident Fund Board
Notes:
1. Deemed interested by virtue of Section 6A(4) of the Companies Act, 1965 held through Vertical Theme Sdn Bhd.
2. Deemed interested by virtue of Section 6A(4) of the Companies Act, 1965 held through Langkah Bahagia Sdn Bhd.
3. Deemed interested by virtue of Section 6A(4) of the Companies Act, 1965 held through Duxton Investments Pte Ltd.
4. Deemed interested by virtue of Section 6A(4) of the Companies Act, 1965 held through Fullerton Financial Holdings Pte
Ltd (formerly known as Asia Financial Holdings Pte Ltd).
5. Deemed interested by virtue of Section 6A(4) of the Companies Act, 1965 held through Fullerton Management Pte Ltd.
6. Deemed interested by virtue of Section 6A(4) of the Companies Act, 1965 held through Temasek Holdings (Private)
Limited.
163
A N N U A L
R E P O R T
2 0 0 7
directors’ shareholdings
as at 30 June 2007
In the Company
Direct Interest
Name of Directors
(held through spouse, Datin Teh Yew Kheng)
Indirect Interest
No. of Shares
% of Issued
Capital
No. of Shares
% of Issued
Capital
3,000
*
–
–
–
–
35,000
*
* negligible
Other than as disclosed above, none of the other Directors have any interests in the Company or in any of the Company’s
related corporation.
164
M A L A Y S I A N
B E R H A D
( 6 6 2 7 - X )
notice of annual general meeting
NOTICE IS HEREBY GIVEN THAT the 41st Annual General Meeting of Malaysian Plantations Berhad will be held at Sabah
Room, B2 Level, Shangri-La Hotel Kuala Lumpur, 11 Jalan Sultan Ismail, 50250 Kuala Lumpur on Tuesday, 28 August 2007
at 10.30 a.m. for the following purposes:
AGENDA
(1) To receive the Audited Financial Statements for the financial year ended 31 March 2007 together
with the Reports of the Directors and Auditors thereon.
Resolution 1
(2) To approve the payment of Directors’ fees of up to RM500,000 for each financial year commencing
from the financial year 31 March 2007.
Resolution 2
(3) To re-elect the following Directors who retire by rotation pursuant to Article 82 of the Company’s
Articles of Association:
(a) Tan Yuen Fah
(b) Phoon Siew Heng
(c) Tee Kim Chan
Resolution 3
Resolution 4
Resolution 5
(4) To re-elect Datuk Bridget Anne Chin Hung Yee, a Director who retires pursuant to Article 89 of the
Company’s Articles of Association.
Resolution 6
(5) To re-appoint Messrs Ernst & Young as auditors of the Company and authorise the Directors to fix
their remuneration.
Resolution 7
As Special Business to consider and, if thought fit, to pass the following resolution as Ordinary
Resolution:
(6) Authority to allot and issue shares pursuant to Section 132D of the Companies Act, 1965
Resolution 8
"THAT, pursuant to Section 132D of the Companies Act, 1965 and subject to the approvals of the
relevant governmental and/or regulatory authorities, the Directors be and are hereby empowered
to issue and allot shares in the Company from time to time and upon such terms and conditions and
for such purposes as the Directors may deem fit provided that the aggregate number of shares
issued pursuant to this resolution does not exceed ten per centum (10%) of the total issued share
capital of the Company for the time being and that such authority shall continue in force until the
conclusion of the next Annual General Meeting of the Company."
(7) To transact any other business for which due notice shall have been given in accordance with the
Company’s Articles of Association and/or the Companies Act, 1965.
BY ORDER OF THE BOARD
LEE WEI YEN (MAICSA 7001798)
Group Company Secretary
Kuala Lumpur
2 August 2007
165
A N N U A L
R E P O R T
2 0 0 7
notice of annual general meeting
Notes:
1. A member entitled to attend and vote at the meeting is entitled to appoint a proxy or proxies to attend and vote in his
stead.
2. A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Companies Act,
1965 shall not apply to the Company.
3. To be valid, the Form of Proxy, duly completed must be deposited at the registered office of the Company at 3rd Floor,
Menara Multi-Purpose, Capital Square, No. 8 Jalan Munshi Abdullah, 50100 Kuala Lumpur, not less than 48 hours before
the time set for holding the meeting.
4. A member who is an authorised nominee may appoint one (1) proxy in respect of each securities account it holds with
ordinary shares of the Company standing to the credit of the said securities account.
5. A member other than an authorised nominee shall be entitled to appoint not more than two (2) proxies to attend and
vote at the same meeting.
6. Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he specifies the proportions
of his holdings to be represented by each proxy.
7. If the appointor is a corporation, the Form of Proxy must be executed under its common seal or under the hand of an
officer or attorney duly authorised.
EXPLANATORY NOTE ON SPECIAL BUSINESS
Ordinary Resolution No. 8
The Ordinary Resolution No. 8 will empower the Directors to allot and issue shares in the Company up to an amount not
exceeding in total 10% of the issued share capital of the Company for such purposes as they consider would be in the best
interest of the Company. This authority, unless revoked or varied at a general meeting, will expire at the next Annual General
Meeting of the Company.
statement accompanying notice of
annual general meeting
The profiles of the Directors who are standing for re-election are set out on pages 5 to 9 of this Annual Report.
166
M A L A Y S I A N
B E R H A D
( 6 6 2 7 - X )
Shareholding represented by Proxy
form of proxy
M A L A Y S I A N P L A N TAT I O N S B E R H A D
(Company No. 6627-X) (Incorporated in Malaysia)
I/We (full name in block capitals) ______________________________________________________________________________
identity card no./company registration no._______________________________________________________________________
of _________________________________________________________________________________________________________
being a member/members of MALAYSIAN PLANTATIONS BERHAD hereby appoint ___________________________________
________________________________________________________________________ (I/C No. __________________________ )
of _________________________________________________________________________________________________________
or failing him ____________________________________________________________ (I/C No. __________________________ )
of _________________________________________________________________________________________________________
as my/our proxy/proxies to vote for me/us on my/our behalf at the 41st Annual General Meeting of the Company to be
held at Sabah Room, B2 Level, Shangri-La Hotel Kuala Lumpur, 11 Jalan Sultan Ismail, 50250 Kuala Lumpur on Tuesday,
28 August 2007 at 10.30 a.m. and at any adjournment thereof.
RESOLUTIONS
*FOR
1) To receive the Audited Financial Statements for the financial year
ended 31 March 2007 together with the Reports of the Directors
and Auditors thereon
Resolution 1
2) To approve the payment of Directors’ fees of up to RM500,000 for
each financial year commencing from the financial year
31 March 2007
Resolution 2
3) To re-elect the following Directors, who retire pursuant to Article 82
of the Company’s Articles of Association:
(a) Tan Yuen Fah
(b) Phoon Siew Heng
(c) Tee Kim Chan
*AGAINST
Resolution 3
Resolution 4
Resolution 5
4) To re-elect Datuk Bridget Anne Chin Hung Yee, a Director who
retires pursuant to Article 89 of the Company’s Articles of
Association
Resolution 6
5) To re-appoint Messrs Ernst & Young as auditors and authorise the
Directors to fix their remuneration
Resolution 7
6) To authorise Directors to issue shares pursuant to Section 132D of
the Companies Act, 1965
Resolution 8
* Please indicate with an “X” on how you wish your vote to be cast. If no specific direction as to voting is given, the proxy will vote or abstain at his discretion.
As witness my/our hand(s) this _________ day of _____________________ 2007.
_________________________________
Signature(s) of Member
Seal of Corporation
Notes:
1. A member entitled to attend and vote at the meeting is entitled to appoint a proxy or proxies to attend and vote in his stead.
2. A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company.
3. To be valid, the Form of Proxy, duly completed must be deposited at the registered office of the Company at 3rd Floor, Menara Multi-Purpose, Capital Square, No. 8 Jalan Munshi
Abdullah, 50100 Kuala Lumpur, not less than 48 hours before the time set for holding the meeting.
4. A member who is an authorised nominee may appoint one (1) proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said
securities account.
5. A member other than an authorised nominee shall be entitled to appoint not more than two (2) proxies to attend and vote at the same meeting.
6. Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he specifies the proportions of his holdings to be represented by each proxy.
7. If the appointor is a corporation, the Form of Proxy must be executed under its common seal or under the hand of an officer or attorney duly authorised.
A N N U A L
R E P O R T
167
2 0 0 7
fold this flap for sealing
then fold here
Affix Stamp
Group Company Secretary
Malaysian Plantations Berhad
Capital Square, No. 8 Jalan Munshi Abdullah
1st fold here
Inside BCover 25/07/2007 3:07 PM Page 1
group products and services
ALLIANCE BANK MALAYSIA BERHAD
PERSONAL BANKING
Wealth Management
• Alliance Bank GoldenCare Plus
• Alliance Bank FutureCare Series
• Alliance Bank FutureCare Series with
Critical Illness
• Alliance Bank EduCare
• Alliance Bank InvestCare
• Alliance Bank ManjaCare Plus
• Alliance Bank MaxiCare Plus
• Alliance Bank MedCare Plus
• Alliance Bank PrimeCare
• Alliance Legacy
• Alliance Privilege
Deposits
• AllianceSave Manjaku
• AllianceSave Pendidikan
• Savings Account/ Basic Savings Account
• Current Account/ Basic Current Account
• AllianceSave
• Alliance Senior Savers
• Fixed Deposits
• Alliance FDGold
• AllianceInvest
Loans
• Alliance Savelink Home Loans
• Alliance Conventional Home Loans
• Alliance Hire Purchase
ISLAMIC BANKING
Deposits
• Savings Account-i
• Current Account-i
• Basic Savings Account-i
• Basic Current Account-i
• General Investment Account-i
• Special Investment Account-i
• Mudharabah Savings Account-i
• Mudharabah Current Account-i
Financing
• Alliance CashVantage Personal Financing-i
• Alliance Home Financing-i
• i-Wish Home Financing-i
• Corporate & Commercial Financing
• Trade Financing
• Alliance Hire Purchase-i- Aitab
• Rakan Personal Financing-i
• i-Wish DepositLink Home Financing-i
Share Trading and Margin Facilities
• AllianceShare Margin Financing
• Alliance Share Trading
Cards
• Alliance Bank Gold and Classic Credit Cards
• Alliance Bank Platinum Credit Card
• IKEA Friends Credit Card
• Alliance Bank IACS Gold Credit Card
• Alliance Bank CPA Australia Gold Credit Cards
• Alliance Bank CNI Gold Credit Card
• eCosway Alliance Bank Platinum &
Gold Credit Cards
• Alliance Bank Chinese Independent School (CIS)
Affinity Credit Cards
• Alliance Bank Business Platinum Card
• IKEA Friends Loyalty Payment Card
• Alliance Bank CNI Gold Payment Card
• eCosway Alliance Bank Gold Payment Card
• Alliance Bank Chinese Independent School (CIS)
Payment Cards
• Alliance Bank International Debit Card
Personal Loans (Mass Market Segment)
• Rakan Personal Financing
• Rakan Personal Financing-i
Corporate & Commercial Financing
• Term Financing-i
• Leasing-i
C O R P O R AT E B A N K I N G
• Trade facilities - ECRS/LC/TR/BA/BP/BC
• Credit facilities - OD/TL/RC/PML/BF/TF
• Foreign exchange
• Guarantees
Trade Financing
• Letters of Credit-i
• Trust Receipt-i
• Shipping Guarantee-i
• Accepted Bills-i
• Bill of Exchange Negotiated/Purchase-i
• Export Credit Refinancing-i (ECR-i)
Pre-shipment & Post-shipment
• Bank Guarantee-i
• Murabahah Working Capital Financing-i
COMMERCIAL BANKING
• Credit facilities for SMI/SME
• Alliance SME Loans
• SME Schemes Promoted by
Cards
• ASLAM International Debit Card
ALLIANCE INVESTMENT BANK BERHAD
(formerly known as Alliance Merchant Bank Berhad)
Corporate Finance
• Initial Public Offerings – involving public issues of
new securities and/or offers for sale of existing
securities in companies seeking listing and quotation
on the Main Board, Second Board and Mesdaq
Market of Bursa Malaysia Securities Berhad as well as
listing of real estate investment trusts (REITs).
• Secondary Offerings – involving raising of funds
subsequent to the initial public offering through
rights issues, restricted issues, private placements and
special issues of both equity and equity-linked
instruments
• Debt Restructuring Advisory
• Merger, Takeover and Acquisition Advisory
• Independent advice to minority shareholders
• Valuation of companies
Debt Finance & Advisory
Customized solutions via Conventional and Islamic:
• Structured Financing
• Asset Securitisation
•
•
•
•
•
•
Project Financing
Fixed Rate Bonds
Floating Rate Notes
Variable Rate Notes
Commercial Papers/Medium Term Note Programmes
Loan Syndication Arrangement
Financial Markets
• Acceptance of authorised term deposits
• Foreign Transactions and hedging
• Inter-bank deposits & placements
• Treasury Bills
• Bank Negara Bills
• Cagamas Notes
• Negotiable Instruments of Deposit
• Bankers Acceptances
• Malaysian Government Securities
• Private Debt Securities
(formerly known as Alliance Unit Trust Management Berhad)
•
•
•
•
•
•
•
Equities
Fixed Income
Mixed/Balanced
Money Market
Fund Advisory Services
Alliance First Fund
Alliance Vision Fund
•
•
•
•
•
•
•
Alliance
Alliance
Alliance
Alliance
Alliance
Alliance
Alliance
Islamic Banking
• Bai’ Bithaman Ajil
• Murabahah Working Capital Financing
• Islamic Accepted Bills
• Mudharabah Investment Account Deposits
• Kafalah Bank Guarantee
Equity Capital Market
• Distribution Public Offers (IPO)
• Primary and Secondary shares placements
• Real Estate Investment Trusts (REITs)
• Accelerated Book-builds
• Underwriting syndication
ALLIANCE INVESTMENT MANAGEMENT BERHAD
Moneyplus Fund
Dana Adib
Tactical Growth Fund
Optimal Income Fund
Islamic Money Market
Global Equities Fund
Global Bond Fund
Corporate Banking
• Credit Facilities
• Bankers Acceptance
• Bank Guarantee
• Term Loans
• Cash Management
Stockbroking Services
• Institutional and Retail Share Trading
• Inter-broking Services
• Online Share Trading Services
• Share Margin Financing
• Nominees and Custodian Services
• Corporate Advisory Services
• Secondary Share Placements
ALLIANCE RESEARCH SDN BHD
(formerly known as KLCity Research Sdn Bhd)
•
•
•
•
•
Equity Research
Economic Research
Industry Research
Corporate Research
Investment Advisory Services
MALAYSIAN PLANTATIONS BERHAD (6627-X)
annual report 2007 laporan tahunan
Malaysian Plantations Berhad (6627-X)
Capital Square
No. 8, Jalan Munshi Abdullah
Tel: 03-2694 4888
Fax: 03-2694 6200

malaysian plantations berhad - Alliance Financial Group Berhad

Transcription

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