72 Bank pembangunan Malaysia berhad (16562-K)

directors’ report

The Directors have pleasure in submitting their report and the audited financial statements of the Group and of the Bank for the
financial year ended 31 December 2009.


PRINCIPAL ACTIVITIES

The Bank is principally engaged to undertake infrastructure project financing and to carry out the functions of a development bank
focusing on maritime, advanced manufacturing industries, high technology and export oriented industries. The principal activities of
the subsidiary companies are as disclosed in Note 38 to the financial statements.

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

RESULTS

Group Bank
RM'000 RM'000

Net profit for the year 320,064 375,998

Attributable to:
Shareholders of the Bank 307,553 375,998
Minority interests 12,511 -

320,064 375,998


There were no material transfers to or from reserves and provisions during the year under review except as disclosed in the financial
statements.

In the opinion of the Directors, the results of the operations of the Group and of the Bank during the financial year were not
substantially affected by any item, transaction or event of a material and unusual nature.

DIVIDENDS

Final tax exempt dividend on 3,078,724,049 ordinary shares, amounting to RM80,000,000 (2.60 sen net per ordinary share), in
respect of the financial year ended 31 December 2008 was declared on 25 June 2009 and approved for payment on 26 October
2009.

The dividend has been accrued and accounted for in equity as an appropriation of retained profit during the financial year.

At the forthcoming Annual General Meeting, a final tax exempt dividend in respect of the financial year ended 31 December 2009,
of 3.25% on 3,078,724,049 ordinary shares, amounting to a dividend payable of RM100,000,000 (3.25 sen net per ordinary share)
will be proposed for the shareholders’ approval. The financial statements for the current financial year do not reflect this proposed
dividend. Such dividend, if approved by the shareholders, will be accounted for in equity as an appropriation of retained profits in
the financial year ending 31 December 2010.


annual report 2009 73

DIRECTORS

The names of the Directors of the Bank in office since the date of the last report and at the date of this report are:

Datuk Dr Abdul Samad bin Hj Alias

Dato’ Ab. Halim bin Mohyiddin
Mohd Zarif Mohd Zaman
Syed Hussain bin Syed Hamzah
Siti Zauyah binti Md Desa
Mohd Zafer bin Mohd Hashim (appointed on 5 August 2009)
Haini binti Hassan (term ended on 13 March 2009)
Dato' Othman bin Jusoh (term ended on 3 April 2009)
Dato’ Tajuddin bin Atan (term ended on 1 May 2009)
Datuk Zakiah binti Hashim (term ended on 1 October 2009)
Dato’ Abdul Rahim bin Abu Bakar (term ended on 1 December 2009)


DIRECTORS’ BENEFITS

Neither at the end of the financial year, nor at any time during that year, did there subsist any arrangement to which the Bank was
a party, whereby the Directors might acquire benefits by means of the acquisition of shares in or debentures of the Bank or any
other body corporate.

Since the end of the previous financial year, no Director has received or become entitled to receive a benefit (other than benefits
included in the aggregate amount of emoluments received or due and receivable by the Directors as shown in Note 28 or the fixed
salary of a full time employee of the Bank) by reason of a contract made by the Bank or a related corporation with any Director or
with a firm of which the Director is a member, or with a company in which the Director has a substantial financial interest.

DIRECTORS' INTEREST

None of the Directors holding office at 31 December 2009 had any interest in the ordinary shares of the Bank and of its related
corporations during the financial year.


RATING BY EXTERNAL RATING AGENCIES

Details of the Bank’s ratings are as follows:

Rating Agency Date Rating Classification Rating Received

RAM Rating 02 July 2009 Issue rating on RM7 billion Conventional AAA
Medium-Term Notes Programme and
Islamic Murabahah Medium-Term Notes
Programme

MARC Rating 30 September 2009 Financial Institution rating AAA
74 Bank pembangunan Malaysia berhad (16562-K)

directors’ report

BUSINESS OUTLOOK

The world economy is anticipated to further improve in 2010 from the extremely challenging financial and global economic
environment of the past two years. Various economic indicators continued to show improvement, in spite of being subjected to
occasional retract. As for Malaysia, according to MIER, after sluggish growth of GDP in 2009, its GDP is expected to grow at 3.7%
in 2010 and 5.0% in 2011 in view of improving indicators.

As a development financial institution, the Bank is expected to further continue providing financing to the strategic sectors as
mandated namely, infrastructure, maritime as well as high technology. The Bank is now working closely with the Government of
Malaysia in supporting several Private Finance Initiative (PFI) infrastructure projects particularly on the educational sectors.

As for maritime, the Bank will continue financing the acquisition of vessels especially the offshore support vessels and tankers that
operate intra Asian region. Effort is also made to further enhance the growth of Malaysian registered vessels through the Bank’s
subsidiary, Global Maritime Ventures Berhad. The recently introduced Green Technology Fund augurs well with the Bank’s financing
activities in promoting the production of renewable energy as well as waste management. While providing strong support to the
government programs and projects, BPMB will be more proactive in maintaining its asset quality at an acceptable level.

In order to ensure its sustainability, the Bank will further enhance its risk management as well as managing the liquidity and funding
cost. The challenge is to attain an optimal funding mix to address the funding mismatch and interest rate risk whilst at the same
time balancing against the cost factor.
 
Moving forward, the Bank will always strive to balance its developmental role and profit sustainability in order to spur the nation’s
development agenda.

OTHER STATUTORY INFORMATION

(a) Before the income statements and balance sheets of the Group and of the Bank were made out, the Directors took reasonable
steps:

(i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of provision for
doubtful debts and satisfied themselves that all known bad debts had been written off and that adequate provision had
been made for doubtful debts; and

(ii) to ensure that any current assets which were unlikely to realise their values as shown in the accounting records in the
ordinary course of business had been written down to an amount which they might be expected so to realise.

(b) At the date of this report, the Directors are not aware of any circumstances:

(i) which would render the amount written off for bad debts or the amount of the provision for doubtful debts in the financial
statements of the Group and of the Bank inadequate to any substantial extent and the values attributed to current assets
in the financial statements of the Group and of the Bank misleading;

(ii) which have arisen which would render adherence to the existing method of valuation of assets or liabilities of the Group
and of the Bank misleading or inappropriate; and

(iii) not otherwise dealt with in this report or financial statements of the Group and of the Bank which would render any
amount stated in the financial statements misleading.




annual report 2009 75

OTHER STATUTORY INFORMATION (CONTD.)

(c) As at the date of this report, there does not exist:

(i) any charge on the assets of the Group or of the Bank which has arisen since the end of the financial year which secures
the liabilities of any other person; or

(ii) any contingent liability of the Group or of the Bank which has arisen since the end of the financial year.

(d) In the opinion of the Directors:

(i) no contingent liability or other liability has become enforceable or is likely to become enforceable within the period of
twelve months after the end of the financial year which will or may affect the ability of the Group or of the Bank to meet
its obligations when they fall due; and

(ii) no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial
year and the date of this report which is likely to affect substantially the results of the operations of the Group or of the
Bank for the financial year which this report is made.


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 24 February 2010.

Datuk Dr Abdul Samad bin Hj Alias Mohd Zafer bin Mohd Hashim

Kuala Lumpur, Malaysia



76 Bank pembangunan Malaysia berhad (16562-K)

STATEMENT BY DIRECTORS
PURSUANT TO SECTION 169(15) OF THE COMPANIES ACT, 1965

We, Datuk Dr Abdul Samad bin Hj Alias and Mohd Zafer bin Mohd Hashim, being two of the Directors of Bank Pembangunan
Malaysia Berhad, do hereby state that, in the opinion of the Directors, the accompanying financial statements set out on pages 80
to 172 are drawn up in accordance with Financial Reporting Standards as modified by Bank Negara Malaysia/Development Financial
Institutions Guidelines and the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the
Group and of the Bank as at 31 December 2009 and of the results and the cash flows of the Group and of the Bank for the year
then ended.

Signed on behalf of the Board in accordance with a resolution of the Directors dated 24 February 2010.

Datuk Dr Abdul Samad bin Hj Alias Mohd Zafer bin Mohd Hashim

Kuala Lumpur, Malaysia



annual report 2009 77

STATUTORY DECLARATION
PURSUANT TO SECTION 169(16) OF THE COMPANIES ACT, 1965 AND
SECTION 73(1)(E) OF THE DEVELOPMENT FINANCIAL INSTITUTIONS ACT, 2002

We, Dato’ Ab. Halim bin Mohyiddin and Mohd Zafer bin Mohd Hashim, the Director and Managing Director, respectively, of the Bank
who are primarily responsible for the financial management of Bank Pembangunan Malaysia Berhad, do solemnly and sincerely
declare that the financial statements set out on pages 80 to 172 are, to the best of our knowledge and belief, correct and we make
this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declarations
Act, 1960.

Subscribed and solemnly declared by
the abovenamed at Kuala Lumpur in
the Federal Territory on 24 February 2010. Dato’ Ab. Halim bin Mohyiddin

Mohd Zafer bin Mohd Hashim

Before me,
78 Bank pembangunan Malaysia berhad (16562-K)

Independent auditors’ report

to the members of Bank Pembangunan Malaysia Berhad (Incorporated in Malaysia)

Report on the financial Statements

We have audited the financial statements of Bank Pembangunan Malaysia Berhad, which comprise the balance sheets as at
31 December 2009 of the Group and of the Bank, and the income statements, statements of changes in equity and cash flow
statements of the Group and of the Bank for the year then ended, and a summary of significant accounting policies and other
explanatory notes, as set out on pages 80 to 172.

Directors’ responsibility for the financial statements

The directors of the Bank are responsible for the preparation and fair presentation of these financial statements in accordance
with Financial Reporting Standards as modified by Bank Negara Malaysia/Development Financial Institutions guidelines and the
Companies Act 1965 in Malaysia. This responsibility includes: designing, implementing and maintaining internal control relevant
to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud
or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the
circumstances.

Auditors’ responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance
with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and
perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.
The procedures selected depend on our judgment, including the assessment of risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s
preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also
includes evaluating the appropriateness of the accounting policies used and the reasonableness of accounting estimates made by
the directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion, the financial statements have been properly drawn up in accordance with Financial Reporting Standards as modified
by Bank Negara Malaysia/Development Financial Institutions guidelines and the Companies Act 1965 in Malaysia so as to give a
true and fair view of the financial position of the Group and of the Bank as at 31 December 2009 and of their financial performance
and cash flows of the Group and of the Bank for the year then ended.
annual report 2009 79

Report on other legal and regulatory requirements

In accordance with the requirements of the Companies Act 1965 in Malaysia, we also report the following:

(a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Bank and its subsidiaries
have been properly kept in accordance with the provisions of the Act.

(b) We are satisfied that the accounts of the subsidiaries that have been consolidated with the financial statements of the Bank
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.

(c) The auditors’ reports on the accounts of the subsidiaries were not subject to any qualification and did not include any comment
required to be made under Section 174(3) of the Act.

Other matters

This report is made solely to the members of the Bank, as a body, in accordance with Section 174 of the Companies Act, 1965 in
Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.







Ernst & Young Abdul Rauf bin Rashid
AF: 0039 No. 2305/05/10(J)
Chartered Accountants Chartered Accountant

Kuala Lumpur, Malaysia

24 February 2010

80 Bank pembangunan Malaysia berhad (16562-K)

BALANCE SHEETS
AS AT 31 DECEMBER 2009

Group Bank
Note 2009 2008 2009 2008
RM'000 RM'000 RM'000 RM'000
(Restated) (Restated)

ASSETS

Cash and short term deposits 3 1,782,493 2,735,534 1,069,687 1,991,986

Deposits and placements with financial institutions 4 256,600 245,877 256,554 245,831
Securities portfolio 5 2,606,873 2,554,918 2,603,937 2,547,579
Loans, advances and financing 6 20,027,407 17,285,986 19,894,198 17,184,260
Other assets 7 1,796,433 1,763,146 1,687,897 1,630,606
Investments in subsidiaries 8 - - 930,296 861,726
Interest in associates 9 978 978 - -
Interest in jointly controlled entities 10 177,992 133,555 - -
Property, plant and equipment 11 738,049 863,732 131,654 146,350
Prepaid land leases 12 3,911 4,021 3,911 4,021
Investment properties 13 17,866 18,836 8,267 8,444
Deferred tax assets 14 - 28,219 - 2,748

27,408,602 25,634,802 26,586,401 24,623,551
Asset classified as held for sale 40 79,402 - - -

TOTAL ASSETS 27,488,004 25,634,802 26,586,401 24,623,551

LIABILITIES

Deposits from customers 15 8,232,906 5,177,677 8,232,906 5,177,677
Other liabilities 16 190,592 190,384 79,253 102,745
Redeemable guaranteed notes 17 1,990,325 1,989,364 1,990,325 1,989,364
Term loans 18 8,613,109 9,900,747 8,246,901 9,490,873
Infrastructure support fund 19 715,882 662,326 715,882 662,326
Deferred income 20 152,232 447,689 152,232 447,689
Deferred tax liabilities 14 17,918 - 38,369 -

TOTAL LIABILITIES 19,912,964 18,368,187 19,455,868 17,870,674

Equity attributable to equity holders of the Bank

Share capital 21 3,078,724 3,078,724 3,078,724 3,078,724
Reserves 22 4,263,897 3,957,089 4,051,809 3,674,153

7,342,621 7,035,813 7,130,533 6,752,877

Minority interests 232,419 230,802 - -

Total equity 7,575,040 7,266,615 7,130,533 6,752,877

TOTAL EQUITY AND LIABILITIES 27,488,004 25,634,802 26,586,401 24,623,551


COMMITMENTS AND CONTINGENCIES 34(a) 9,307,014 6,223,186 9,160,904 6,168,985

The accompanying notes form an integral part of the financial statements.

annual report 2009 81

INCOME STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2009

Group Bank
Note 2009 2008 2009 2008
RM’000 RM’000 RM’000 RM’000
(Restated) (Restated)

Interest income 24 1,473,978 1,443,574 1,427,300 1,386,053

Interest expense 25 (661,052) (710,186) (659,498) (708,734)

Net interest income 812,926 733,388 767,802 677,319

Profit equalisation reserve 16(i) (1,071) - (1,071) -
Gain on disposal of a subsidiary 39(ii) - - - 303,725
Gain on disposal of building to a former subsidiary 39(iii) - 89,911 - 89,911
Non-interest income 26 276,845 411,158 118,649 116,917

Net income 1,088,700 1,234,457 885,380 1,187,872

Overhead expenses 27 (255,260) (248,526) (67,444) (65,524)

Operating profit 833,440 985,931 817,936 1,122,348

Loans and financing loss and allowance 30 (507,230) (41,165) (434,332) (40,748)

326,210 944,766 383,604 1,081,600
Share of results of jointly controlled entities 13,251 4,223 - -

Profit before taxation 339,461 948,989 383,604 1,081,600

Tax expense 31 (19,397) (35,811) (7,606) (6,932)

Profit for the year 320,064 913,178 375,998 1,074,668

Discontinued Operation
Profit for the year from discontinued operations 39(i) - 3,424 - -
Gain on disposal of discontinued operations 39(ii) - 20,141 - -

Profit for the year 320,064 936,743 375,998 1,074,668

Attributable to:
Shareholders of the Bank 307,553 884,302 375,998 1,074,668
Minority interests 12,511 52,441 - -

Profit for the year 320,064 936,743 375,998 1,074,668

Earnings per share attributable to the equity holders

of the Bank (sen) (Note 33):

Basic, for profit from continuing operations 9.99 27.96
Basic, for profit from discontinued operations - 0.77

Basic, for profit for the year 9.99 28.73

The accompanying notes form an integral part of the financial statements.

 < Attributable to equity holders of the Bank >
< Non-Distributable >
82
Unrealised Exchange Distributable
Share Capital General Statutory holding translation retained Minority Total
Group Note capital reserve reserve reserve reserve reserve profits Total interests equity
RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000
(Restated) (Restated) (Restated) (Restated) (Restated) (Restated) (Restated)

At 1 January 2008, as previously stated 3,078,724 1,000 10,114 642,589 41,710 (47,763) 2,482,874 6,209,248 190,993 6,400,241
Prior year adjustment
- Effect of Note 44(a) - - - - 429,935 15,637 (191,448) 254,124 23,585 277,709
- Effect of Note 44(b) - - - 16,719 - - 16,718 33,437 - 33,437
CONSOLIDATED

At 1 January 2008, as restated 3,078,724 1,000 10,114 659,308 471,645 (32,126) 2,308,144 6,496,809 214,578 6,711,387

Currency translation differences - - - - - 13,950 - 13,950 4,158 18,108

FOR THE YEAR ENDED 31 DECEMBER 2009

Unrealised net losses on revaluation

of securities available-for-sale - - - - (271,631) - - (271,631) - (271,631)

Net (losses)/gain not recognised in the

income statement - - - - (271,631) 13,950 - (257,681) 4,158 (253,523)
Disposal of a subsidiary - - (10,114) (7,617) 10,114 (7,617) - (7,617)
Net profit for the year - - - - - - 884,302 884,302 52,441 936,743
Transfer to statutory reserve - - - 537,334 - - (537,334) - - -
Dividends paid 32 - - - - - - (80,000) (80,000) (40,375) (120,375)

At 31 December 2008 3,078,724 1,000 - 1,196,642 192,397 (18,176) 2,585,226 7,035,813 230,802 7,266,615
Bank pembangunan Malaysia berhad (16562-K)

STATEMENT OF CHANGES IN EQUITY

 < Attributable to equity holders of the Bank >
< Non-Distributable >
Unrealised Exchange Distributable
Share Capital General Statutory holding translation retained Minority Total
Group Note capital reserve reserve reserve reserve reserve profits Total interests equity
RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000
(Restated) (Restated) (Restated) (Restated) (Restated) (Restated) (Restated)
annual report 2009

At 1 January 2009, as previously stated 3,078,724 1,000 - 1,177,958 8,649 (33,813) 2,769,917 7,002,435 207,608 7,210,043
Prior year adjustment
- Effect of Note 44(a) - - - - 183,748 15,637 (203,371) (3,986) 23,585 19,599
- Effect of Note 44(b) - - - 18,684 - - 18,684 37,368 - 37,368
- Effect of Note 44(c) - - - - - - (4) (4) (391) (395)

At 1 January 2009, as restated 3,078,724 1,000 - 1,196,642 192,397 (18,176) 2,585,226 7,035,813 230,802 7,266,615

Currency translation differences - - - - - (2,403) - (2,403) (4,406) (6,809)

Unrealised net gains on revaluation of
securities available-for-sale - - - - 81,658 - - 81,658 - 81,658

Net gain/(losses) not recognised

in the income statement - - - - 81,658 (2,403) - 79,255 (4,406) 74,849
Net profit for the year - - - - - - 307,553 307,553 12,511 320,064
Transfer to statutory reserve - - - 187,999 - - (187,999) - - -
Dividends paid 33 - - - - - - (80,000) (80,000) (6,488) (86,488)

At 31 December 2009 3,078,724 1,000 - 1,384,641 274,055 (20,579) 2,624,780 7,342,621 232,419 7,575,040

The accompanying notes form an integral part of the financial statements.

83
84 Bank pembangunan Malaysia berhad (16562-K)

STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2009

< Non distributable >

Unrealised Distributable
Share Statutory holding retained
Bank Note capital reserve reserve profits Total
RM'000 RM'000 RM'000 RM'000 RM'000
(Restated) (Restated) (Restated) (Restated)

At 1 January 2008, as previously stated 3,078,724 642,589 34,093 1,719,906 5,475,312

Prior year adjustments
- effect of Note 44(a) - - 521,091 - 521,091
- effect of Note 44(b) - 16,719 - 16,718 33,437

At 1 January 2008, as restated 3,078,724 659,308 555,184 1,736,624 6,029,840

Unrealised net losses on revaluation

of securities available-for-sale - - (271,631) - (271,631)

Net losses not recognised in the

income statement - - (271,631) - (271,631)
Net profit for the year - - - 1,074,668 1,074,668

Total recognised income and expense

for the year - - (271,631) 1,074,668 803,037
Transfer to statutory reserve - 537,334 - (537,334) -
Dividends paid 32 - - - (80,000) (80,000)

At 31 December 2008 3,078,724 1,196,642 283,553 2,193,958 6,752,877

annual report 2009 85

< Non distributable >

Unrealised Distributable
Share Statutory holding retained
Bank Note capital reserve reserve profits Total
RM'000 RM'000 RM'000 RM'000 RM'000
(Restated) (Restated) (Restated) (Restated)

At 1 January 2009, as previously stated 3,078,724 1,177,958 8,649 2,175,274 6,440,605

Prior year adjustment
- effect of Note 44(a) - - 274,904 - 274,904
- effect of Note 44(b) - 18,684 - 18,684 37,368

At 1 January 2009, as restated 3,078,724 1,196,642 283,553 2,193,958 6,752,877

Unrealised net gain on revaluation

of securities available-for-sale - - 81,658 - 81,658

Net gain not recognised in the

income statement - - 81,658 - 81,658
Net profit for the year - - - 375,998 375,998

Total recognised income and expense

for the year - - 81,658 375,998 457,656
Transfer to statutory reserve - 187,999 - (187,999) -
Dividends paid 32 - - - (80,000) (80,000)

At 31 December 2009 3,078,724 1,384,641 365,211 2,301,957 7,130,533

The accompanying notes form an integral part of the financial statements.

86 Bank pembangunan Malaysia berhad (16562-K)

CASH FLOW STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2009

Group Bank
2009 2008 2009 2008
RM'000 RM'000 RM'000 RM'000
(Restated) (Restated)

CASH FLOWS FROM OPERATING ACTIVITIES

Profit before taxation from:
Continuing operations 339,461 948,989 383,604 1,081,600
Discontinued operations - 3,424 - -
Adjustments for:
Share of profits in jointly controlled entities (13,251) (4,223) - -
Depreciation 74,434 69,993 13,719 9,262
Amortisation of prepaid lease rental 110 112 110 112
Depreciation of investment properties 430 1,931 177 438
Net (gain)/loss on disposal of property, plant and equipment (296) 148 (369) 64
Net gain on disposal of investment properties to SME Bank - (89,911) - (89,911)
(Gain)/loss on sale of securities portfolio (13,264) 811 (13,234) 1,174
Gain on disposal of a subsidiary - - - (303,725)
Dividend income:
- subsidiaries - - (24,580) (24,560)
- investment securities (55,610) (74,333) (55,448) (74,321)
Amortisation of premium less accretion of
discount of securities portfolio (12,613) (13,393) (12,613) (13,393)
Impairment/(write back of impairment) for:
- securities available-for-sale 4,667 9,904 1,000 11,032
- securities held-to-maturity 1,022 - 1,022 -
- investment in associates - (1,808) - (1,808)
Unrealised loss on foreign exchange 7,179 1,929 7,179 1,929
Allowance for doubtful debts and financing 607,525 100,491 504,484 57,671
Allowance for doubtful debt and financing written back (101,920) (52,702) (70,948) (15,172)
Bad debts and financing written off 5,652 6,947 1,486 -
Profit equalisation reserve 1,071 - 1,071 -
Infrastructure Support Fund (utilised)/written back 15,169 (2,601) 15,169 (2,601)
Deferred income recognised (137,437) (108,578) (137,437) (108,578)
Unrealised loss on derivative instruments 8,212 6,609 8,212 6,609

Operating profit before working apital changes 730,541 803,739 622,604 535,822
(Increase)/decrease in operating capital changes:
Deposits and placements with financial institutions (10,723) 601,833 (10,723) (73,388)
Loans, advances and financing (3,531,437) 430,784 (3,513,074) (193,063)
Other assets 111,794 3,441,078 (93,243) (1,124,163)
Fixed deposits and acceptances 3,055,229 3,046 3,055,229 3,046
Other liabilities (147,308) (3,219,672) 105,442 (14,445)

Cash generated from/(used in) operations 208,096 2,060,808 166,235 (229,599)
Income taxes paid (42,782) (71,760) (30,534) (53,884)

Net cash generated from/(used in) operating activities 165,314 1,989,048 135,701 (283,483)



annual report 2009 87

Group Bank
2009 2008 2009 2008
RM’000 RM’000 RM’000 RM’000
(Restated) (Restated)

CASH FLOWS FROM INVESTING ACTIVITIES

Dividends from securities portfolio 55,610 74,333 55,448 74,321
Dividends from subsidiaries - - 24,580 24,560
Purchase of securities portfolio (362,904) (20,000) (362,904) (20,000)
Purchase of property, plant and equipment (12,747) (189,775) (1,739) (136,829)
Purchase of investment properties - (1,596) - -
Proceeds from disposal/maturity of securities portfolio 386,969 216,270 386,969 217,785
Proceeds from disposal of property, plant and equipment 3,565 4,307 3,085 1,231
Proceeds from disposal of properties to SME Bank - 123,210 - 123,210
Proceeds from sale of SME Bank - - - 1,212,000
Cash and cash equivalent for disposal group - (363,359) - -
Proceeds from redemption of preference shares in associates - 500 - 500
Proceeds from redemption of preference shares in
investment securities 749 3,016 1 -

Net cash generated from/(used in) investing activities 71,242 (153,094) 105,440 1,496,778

CASH FLOWS FROM FINANCING ACTIVITIES

Net repayment from term loan (1,294,817) (270,083) (1,268,660) (238,548)
Settlement of redeemable guaranteed notes - (29,266) - -
Proceeds from Government compensation 185,220 319,419 185,220 187,665
Dividends paid (80,000) (160,000) (80,000) (160,000)
Repayment of hire purchase creditors - (38) - (38)

Net cash used in financing activities (1,189,597) (139,968) (1,163,440) (210,921)

NET (DECREASE)/INCREASE IN CASH
AND CASH EQUIVALENTS (953,041) 1,695,986 (922,299) 1,002,374
CASH AND CASH EQUIVALENTS
AT BEGINNING OF YEAR 2,735,534 1,039,548 1,991,986 989,612

CASH AND CASH EQUIVALENTS AT END OF YEAR 1,782,493 2,735,534 1,069,687 1,991,986

Cash and cash equivalents comprise:

Cash and short term deposits 1,782,493 2,735,534 1,069,687 1,991,986

The accompanying notes form an integral part of the financial statements.

88 Bank pembangunan Malaysia berhad (16562-K)

notes to the financial STATEMENTS

31 DECEMBER 2009

1. CORPORATE INFORMATION

Bank Pembangunan Malaysia Berhad (“the Bank”) is a public limited liability company, incorporated and domiciled in
Malaysia.

The registered office of the Bank is located at Level 16, Menara Bank Pembangunan, Bandar Wawasan, No. 1016, Jalan Sultan
Ismail, 50250 Kuala Lumpur.

The Bank is principally engaged to undertake infrastructure projects financing and to carry out the functions of a development
bank focusing on maritime, advanced manufacturing industries, high technology and export oriented industries while the
other entities within the Group are primarily involved in provision of financial services as a development bank, venture capital
investment and ship owning activities.

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

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the Directors
on 24 February 2010.


2. SIGNIFICANT ACCOUNTING POLICIES

2.1 Statement of Compliance and Basis of Preparation

The financial statements of the Group and of the Bank have been prepared in accordance with Financial Reporting
Standards (“FRSs”) as modified by Bank Negara Malaysia/Development Financial Institutions (“BNM/DFIs”) Guidelines
and the Companies Act, 1965 in Malaysia.

The financial statements incorporate those activities relating to Islamic Banking, which have been undertaken by the
Group. Islamic Banking refers generally to the granting of financing under Syariah principles.

The financial statements of the Group and of the Bank have been prepared under the historical cost convention unless
otherwise indicated in the accounting policies below.

2.2 Summary of Significant Accounting Policies

(a) Subsidiaries and Basis of Consolidation

(i) Subsidiaries

Subsidiaries are entities over which the Group has the ability to control the financial and operating policies so
as to obtain benefits from their activities. The existence and effect of potential voting rights that are currently
exercisable or convertible are considered when assessing whether the Group has such power over another
entity.

In the Bank’s separate financial statements, investments in subsidiaries are stated at cost less impairment
losses. On disposal of such investments, the difference between net disposal proceeds and their carrying
amounts is included in profit or loss.

annual report 2009 89

2. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

2.2 Summary of Significant Accounting Policies (Cont’d)

(a) Subsidiaries and Basis of Consolidation (Cont’d)

(ii) Basis of Consolidation

The consolidated financial statements comprise the financial statements of the Bank and its subsidiaries as at
the balance sheet date. The financial statements of the subsidiaries are prepared for the same reporting date
as the Bank.

Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control,
and continue to be consolidated until the date that such control ceases. In preparing the consolidated financial
statements, intragroup balances, transactions and unrealised gains or losses are eliminated in full. Uniform
accounting policies are adopted in the consolidated financial statements for like transactions and events in
similar circumstances.

Acquisitions of subsidiaries are accounted for using the purchase method. The purchase method of accounting
involves allocating the cost of the acquisition to the fair value of the assets acquired and liabilities and contingent
liabilities assumed at the date of acquisition. The cost of an acquisition is measured as the aggregate of the
fair values, at the date of exchange, of the assets given, liabilities incurred or assumed, and equity instruments
issued, plus any costs directly attributable to the acquisition.

Minority interests represents the portion of profit or loss and net assets in subsidiaries net 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’ equity since then.

(b) Associates

Associates are entities in which the Group has significant influence and that is neither a subsidiary nor an interest
in a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of
the investee but not in control or joint control over those policies.

Investments in associates are accounted for in the consolidated financial statements using the equity method of
accounting. Under the equity method, the investment in associate is carried in the consolidated balance sheet at
cost adjusted for post-acquisition changes in the Group’s share of net assets of the associate. The Group’s share
of the net profit or loss of the associate is recognised in the consolidated profit or loss. Where there has been a
change recognised directly in the equity of the associate, the Group recognises its share of such changes.

In applying the equity method, unrealised gains and losses on transactions between the Group and the associate
are eliminated to the extent of the Group’s interest in the associate. After application of the equity method, the
Group determines whether it is necessary to recognise any additional impairment loss with respect to the Group’s
net investment in the associate. The associate is equity accounted for from the date the Group obtains significant
influence until the date the Group ceases to have significant influence over the associate.

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.
90 Bank pembangunan Malaysia berhad (16562-K)

notes to the financial statements

31 DECEMBER 2009

2. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

2.2 Summary of Significant Accounting Policies (Cont’d)

(b) 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 associates, 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.

The most recent available audited financial statements of the associates are used by the Group in applying the equity
method. Where the dates of the audited financial statements used are not coterminous with those of the Group,
the share of results is arrived at from the last audited financial statements available and management financial
statements to the end of the accounting period. Uniform accounting policies are adopted for like transactions and
events in similar circumstances.

In the Bank’s separate financial statements, investments in associates are stated at cost less impairment losses. On
disposal of such investments, the difference between net disposal proceeds and their carrying amounts is included
in profit or loss.

(c) Jointly controlled entities

The Group has interests in joint ventures which are jointly controlled entities. A joint venture is a contractual
arrangement whereby two or more parties undertake an economic activity that is subject to joint control, and a
jointly controlled entity is a joint venture that involves the establishment of a separate entity in which each venturer
has an interest.

Investments in jointly controlled entities are accounted for in the consolidated financial statements using the
equity method of accounting. Under the equity method, the investment in jointly controlled entity is carried in the
consolidated balance sheet at cost adjusted for post-acquisition changes in the Group’s share of net assets of the
jointly controlled entity. The Group’s share of the net profit or loss of the jointly controlled entity is recognised in the
consolidated profit or loss. Where there has been a change recognised directly in the equity of the jointly controlled
entity, the Group recognises its share of such changes.

In applying the equity method, unrealised gains and losses on transactions between the Group and the jointly
controlled entity are eliminated to the extent of the Group’s interest in the jointly controlled entity. 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 jointly controlled entity. The jointly controlled entity is equity
accounted for from the date the Group obtains significant influence until the date the Group ceases to have
significant influence over the jointly controlled entity.

Goodwill relating to the jointly controlled entity 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 jointly controlled entity’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 jointly controlled
entity’s profit or loss in the period in which the investment is acquired.
annual report 2009 91

2. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

2.2 Summary of Significant Accounting Policies (Cont’d)

(c) Jointly controlled entities (Cont’d)

When the Group’s share of losses in the jointly controlled entity equals or exceeds its interest in the jointly controlled
entity, including any long-term interests that, in substance, form part of the Group’s net investment in the jointly
controlled entity, the Group does not recognise further losses, unless it has incurred obligations or made payments
on behalf of the jointly controlled entity.

The most recent available audited financial statements of the jointly controlled entities 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 polices are adopted for
like transactions and events in similar circumstances.

(d) Transactions Eliminated on Consolidation

Intra-group balances, and any unrealised income and expenses arising from intra-group transactions, are eliminated
in preparing the consolidated financial statements.

Unrealised gains arising from transactions with equity accounted investees are eliminated against the investment to
the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised
gains, but only to the extent that there is no evidence of impairment.

(e) Foreign Currency Transactions

In preparing the financial statements of the individual entities, transactions in currencies other than the entity’s
functional currency (foreign currencies) are recorded in the functional currencies using the exchange rates prevailing
at the dates of the transactions. At each balance sheet date, monetary items denominated in foreign currencies
are translated at the rates prevailing on the balance sheet date. Non-monetary items that are measured in terms of
historical cost in a foreign currency are not translated.

Exchange differences arising on the settlement of monetary items, and on the translation of monetary items, are
included in profit or loss for the period except for exchange differences arising on monetary items that form part of
the Group’s net investment in foreign operation. These are initially taken directly to the foreign currency translation
reserve within equity until the disposal of the foreign operations, at which time they are recognised in profit or
loss. Exchange differences arising on monetary items that form part of the Company’s net investment in foreign
operation are recognised in profit or loss in the Company’s separate financial statements or the individual financial
statements of the foreign operation, as appropriate.

Exchange differences arising on the translation of non-monetary items carried at fair value are included in profit or
loss for the period except for the differences arising on the translation of non-monetary items in respect of which
gains and losses are recognised directly in equity. Exchange differences arising from such non-monetary items are
also recognised directly in equity.






92 Bank pembangunan Malaysia berhad (16562-K)

notes to the financial statements

31 DECEMBER 2009

2. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

2.2 Summary of Significant Accounting Policies (Cont’d)

(f) Property, Plant and Equipment

All items of property, plant and equipment are initially recorded at cost. Subsequent costs are included in the asset’s
carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic
benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The
carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the income
statement during the financial period in which they are incurred.

Subsequent to recognition, property, plant and equipment are stated at cost less accumulated depreciation and any
accumulated impairment losses.

Freehold land has an unlimited useful life and therefore is not depreciated. Building-in-progress are also not
depreciated as these assets are not available for use. Depreciation of other property, plant and equipment is
provided for on a straight-line basis to write off the cost of each asset to its residual value over the estimated useful
life, at the following annual rates:

Building 50 years
Vessels 25 years
Furniture and equipment 3 - 10 years
Partitioning, installation and renovations 3 - 20 years
Motor vehicles 5 - 8 years
Dry-docking expenses 2.5 - 3 years

The residual values, useful life and depreciation method are reviewed at each financial year-end to ensure that the
amount, method and period of depreciation are consistent with previous estimates and the expected pattern of
consumption of the future economic benefits embodied in the items of property, plant and equipment.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are
expected from its use or disposal. The difference between the net disposal proceeds, if any and the net carrying
amount is recognised in profit or loss.

(g) Investment Properties

Investment properties principally comprise properties held for long-term rental yields or capital appreciation or both
and which are not occupied by the Group. Investment property is carried at cost less accumulated depreciation and
any impairment losses.

Freehold land is not depreciated. Freehold building is depreciated at an annual rate of 2%, calculated on a straight
line basis to write off the cost of each building over the estimated useful life.

Investment properties are measured initially at cost, including transaction costs. The carrying amount includes the
cost of replacing part of an existing investment property at the time that cost is incurred if the recognition criteria is
met and excludes the cost of day-to-day servicing of that property.

Investment properties are derecognised when either they have been disposed of or when the investment property
is permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gains or
losses on the retirement or disposal of an investment property are recognised in profit and loss in the year in which
they arise.
annual report 2009 93

2. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

2.2 Summary of Significant Accounting Policies (Cont’d)

(h) Leases

(i) Classification

A lease is recognised as a finance lease if it transfers substantially to the Group all the risks and rewards
incidental to ownership. Leases of land and building are classified as operating or finance leases in the
same way as leases of other assets and the land and buildings elements of a lease of land and buildings are
considered separately for the purposes of lease classification. All leases that do not transfer substantially all
the risks and rewards are classified as operating leases, with the following exceptions:

- Property held under operating leases that would otherwise meet the definition of an investment property
is classified as an investment property on a property-by-property basis and, if classified as investment
property, is accounted for as if held under a finance lease (Note 2.2(g)); and

- Land held for own use under an operating lease, the fair value of which cannot be measured separately
from the fair value of a building situated thereon at the inception of the lease, is accounted for as being
held under a finance lease, unless the building is also clearly held under an operating lease.

- Leasehold land held for own use is classified as operating lease and where necessary, the minimum lease
payments or the up-front payments made are allocated between the land and the buildings elements in
proportion to the relative fair values for leasehold interests in the land element and building element of
the lease at the inception of the lease. The up-front payment represents prepaid lease payments and are
amortised on straight-line basis over the lease term.

(i) Impairment of Assets

The carrying amount of the assets, except for inventories, deferred tax assets, non-current asset (or disposal group)
held for sales and financial assets (other than investments in subsidiaries and associates), are reviewed at each
reporting date to determine whether there is any indication of impairment. If any such indication exists, then the
asset’s recoverable amount is estimated. Recoverable amount for goodwill is estimated at each reporting date.

An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its
recoverable amount. A cash-generating unit is the smallest identifiable asset group that generates cash flows that
largely are independent from other assets and groups. Impairment losses are recognised in the income statement.
Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount
of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit (groups
of units) on a pro rata basis.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and fair value less costs
to sell. In assessing value in use, estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the
asset.

An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised
in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer
exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable
amount.

An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying
amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been
recognised. Reversals of impairment losses are credited to the income statement in the year in which the reversals
are recognised.

94 Bank pembangunan Malaysia berhad (16562-K)

notes to the financial statements

31 DECEMBER 2009

2. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

2.2 Summary of Significant Accounting Policies (Cont’d)

(j) Goodwill

Goodwill acquired in a business combination is initially measured at cost being the excess of the cost of business
combination over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent
liabilities. Following the initial recognition, goodwill is measured at cost less any accumulated impairment losses.
Goodwill is not amortised but instead, it is reviewed for impairment, annually or more frequently if events or
changes in circumstances indicate that the carrying value may be impaired. Gains and losses on the disposal of an
entity include the carrying amount of goodwill relating to the entity sold.

In respect of equity accounted investees, the carrying amount of goodwill is included in the carrying amount of the
investment. The entire carrying amount of the investment is tested for impairment when there is objective evidence
of impairment.

(k) Financial Instruments

Financial instruments are recognised in the balance sheet when the Group has become a party to the contractual
provisions of the instrument.

Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual
arrangement. Interest, dividends, gains and losses relating to a financial instrument classified as a liability, are
reported as expense or income. Distributions to holders of financial instruments classified as equity are charged
directly to equity. Financial instruments are offset when the Group has a legally enforceable right to offset and
intends to settle either on a net basis or to realise the asset and settle the liability simultaneously.

(i) Cash and Cash Equivalents

Receivables are carried at anticipated realisable values. Bad debts are written off when identified. An estimate
is made for doubtful debt based on a review of all outstanding amounts as at the balance sheet date.

(ii) Loan Receivables

Receivables are carried at anticipated realisable values. Bad debts are written off when identified. An estimate
is made for doubtful debt based on a review of all outstanding amounts as at the balance sheet date.

(iii) Payables

Payables are stated at cost which is the fair value of the consideration to be paid in the future for goods and
services received.

(iv) Interest Bearing Loans and Borrowings

All loans and borrowings are recorded at the amount of proceeds received, net of directly attributable transaction
costs. All borrowing costs are recognised as an expense in the income statement based on effective interest
method.
annual report 2009 95

2. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

2.2 Summary of Significant Accounting Policies (Cont’d)

(k) Financial Instruments (Cont’d)

(v) Equity Instruments

Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the period in
which they are declared.

The transaction costs of an equity transaction are accounted for as a deduction from equity, net of tax. Equity
transaction costs comprise only those incremental external costs directly attributable to the equity transaction
which would otherwise have been avoided.

(vi) Foreign Exchange Contracts, Interest Rate Swaps, Floater Annuity Swaps and Futures Contracts

All derivative financial instruments are measured at fair value and are carried as assets when the fair value is
positive and as liabilities when the fair value is negative. Any gain or loss arising from a change in the fair value
of the derivatives is recognised in the income statement.

(vii) Securities Portfolio

(i) Securities Held-For-Trading

Securities are classified as held-for-trading if they are acquired principally for the purpose of benefitting
from actual or expected short-term price movement or to lock in arbitrage profits. The securities held-
for-trading will be stated at fair value and any gain or loss arising from a change in their values and
derecognition of these securities are recognised in the income statements.

(ii) Securities Held-To-Maturity

Securities held-to-maturity are financial assets with fixed or determinable payments and fixed maturity
that the Group and Bank have the positive intent and ability to hold to maturity.

Unquoted shares in organisations set up for socio-economic purposes and equity instruments received
as a result of loan restructuring or loan conversion which do not have a quoted market price in an
active market and whose fair value cannot be reliably measured are also classified as securities held-to-
maturity.

Securities held-to-maturity are measured at accreted/amortised cost based on the effective yield method.
Amortisation of premium, accretion of discount and impairment as well as gain or loss arising from
derecognition of securities held-to-maturity are recognised in the income statement.

(iii) Securities Available-For-Sale

Securities available-for-sale are financial assets that are not classified as held-for-trading or held-to-
maturity. The securities available-for-sale are measured at fair value, or at cost (less impairment losses)
if the fair value cannot be reliably measured. The return and cost of the securities available-for-sale are
credited and charged to the income statement using accreted/amortised cost based on the effective yield
method. Any gain or loss arising from a change in fair value after applying the accreted/amortised cost
method are recognised directly in equity through the statement of changes in equity, until the financial
asset is sold, collected, disposed of or impaired, at which time the cumulative gain or loss previously
recognised in equity will be transferred to the income statement.

96 Bank pembangunan Malaysia berhad (16562-K)

notes to the financial statements

31 DECEMBER 2009

2. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

2.2 Summary of Significant Accounting Policies (Cont’d)

(l) Inventories

Inventories consist of lubricants on board for own consumption and are stated at cost in US Dollars and converted
to Ringgit Malaysia at a rate that approximates the rate of exchange at balance sheet date. The cost of lubricants
is based on the weighted average cost and includes expenditure incurred in acquiring the inventories and bringing
them to their existing location and condition.

(m) Employee Benefits

Short term employee benefit obligations in respect of salaries, annual bonuses, paid annual leave and sick leave are
measured on an undiscounted basis and are expensed as the related service is provided.

A provision is recognised for the amount expected to be paid under short term cash bonus if the Group has a
present legal or constructive obligation to pay this amount as a result of past service provided by the employee and
the obligation can be estimated reliably.

The Group’s contribution to the Employees Provident Fund is charged to the income statements in the year to which
they relate. Once the contributions have been paid, the Group has no further payment obligations.

(n) Liabilities

Deposits from customers, banks and financial institutions are stated at placement values and adjusted for accrued
interest.

Payables are measured initially and subsequently at cost. Payables are recognised when there is a contractual
obligation to deliver cash or another financial asset to another entity.

(o) Government Grants

Government grants are recognised at their fair value in the balance sheet where there is a reasonable assurance
that the grants will be received and all attaching conditions will be complied with. The Government grants are
presented in the balance sheet as “Infrastructure Support Fund” and “Deferred Income”.

Deferred income comprises claims received in relation to interest rate differentials on financing of Government
Infrastructure projects. Other claims received are recorded in the “Infrastructure Support Fund”.

Grants that compensate the Group for expenses incurred are recognised as income over the period necessary to
match the grants on a systematic basis to the costs that it is intended to compensate.

(p) Provisions

Provisions are recognised when the Group has a present obligation as a result of a past event and it is probable
that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable
estimate of the amount can be made. Provisions are reviewed at each balance sheet date and adjusted to reflect
the current best estimate. Where the effect of the time value of money is material, provisions are discounted using
a current 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.

annual report 2009 97

2. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

2.2 Summary of Significant Accounting Policies (Cont’d)

(q) Contingent Liabilities

Contingent liabilities consist of secured guarantees given to third parties on behalf of borrowers. Contingent liabilities
are disclosed in the notes to the accounts, unless the possibility of an outflow of resources embodying economic
benefits is remote.

Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated
reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow of economic benefits
is remote. Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence of
one or more future events are also disclosed as contingent liabilities unless the probability of outflow of economic
benefits is remote.

(r) Disposal Groups Assets Held for Sale and Discontinued Operation

Non financial assets (or disposal groups) are classified as held for sale if their carrying amount will be recovered
principally through a sale transaction rather than through continuing use. This condition is regarded as met only
when the sale is highly probable and the asset (or disposal group) is available for immediate sale in its present
condition subject only to terms that are usual and customary.

Immediately before classification as held for sale, the measurement of the non-current assets (or all the assets and
liabilities in a disposal group) is brought up-to-date in accordance with applicable FRSs. Then, on initial classification
as held for sale, non-financial assets or disposal groups (other than investment properties, deferred tax assets,
employee benefits assets and financial assets) are measured in accordance with FRS 5 that is at the lower of
carrying amount and fair value less costs to sell. Any differences are included in profit or loss.

A component of the Group is classified as a discontinued operation when the criteria to be classified as held for
sale have been met or it has been disposed and such a component represents a separate major line of business
or geographical area of operations, is part of a single co-ordinated major line of business or geographical area of
operations or is a subsidiary acquired exclusively with a view to resale.

(s) Revenue

Operating income for the Group consists of interest on loans and fixed deposits, income from leases, hire purchase
financing, confirming and factoring, income from Islamic financing, charter hire, demurrage and freight income,
income from acting as investment manager, income from investments and provision of advisory, consultancy and
related services pertaining to investments and income from sale of food products and general merchandise and
promotion of goods manufactured by Bumiputera entrepreneurs and rental of plant hire. Operating income for
the Company consists of interest on loans and fixed deposits, income from Islamic financing and income from
investments.
98 Bank pembangunan Malaysia berhad (16562-K)

notes to the financial statements

31 DECEMBER 2009

2. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

2.2 Summary of Significant Accounting Policies (Cont’d)

(s) Revenue (Cont’d)

Income recognition is as follows:

(i) Interest and Financing Income Recognition

Interest income is recognised in the income statement as it accrues, using the effective interest method.
Income from Islamic banking financing is recognised on an accrual basis using the effective profit method in
accordance with the principles of Syariah. When an account is classified as impaired (arrears for more than
six or twelve months (as further elaborated in Note(u)(i)) or where doubt as to the recoverability of an advance
exists) recognition of interest income is suspended until it is realised on a cash basis. The policy on suspension
of interest is in conformity with Bank Negara Malaysia/Development Financial Institutions Guidelines (“BNM/
DFI/GP3”) on classification of impaired loans/financing and provisioning for bad and doubtful debts, BNM/DFI/
GP3 except for loans to finance Government Infrastructure projects and commercial infrastructure projects
with long term supply agreements.

(ii) Income Recognition for Leasing, Hire Purchase Financing, Confirming and Factoring

Income earned on leasing and hire purchase confirming and factoring financing is recognised based on the
effective interest method.

(iii) Dividend Income

Dividend income is recognised when the Group’s right to receive payment is established.

(iv) Charter Hire, Demurrage and Freight Income

Revenue and expenses up to the balance sheet date are recognised for voyage which remain uncompleted as
at the balance sheet date, the income receivable for the voyage are pro-rated up to the balance sheet date and
all relevant costs are accrued.

(t) Income Tax

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. 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 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 as income or an expense and included in the profit or loss for the period, except when
it arises from a transaction which is recognised directly in equity, in which case the deferred tax is also recognised
directly in equity.

annual report 2009 99

2. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

2.2 Summary of Significant Accounting Policies (Cont’d)

(u) Basis of Valuation of Loans, Advances and Financing

Loans, advances and financing are carried at their outstanding principal and interest balances less interest in
suspense and allowance for bad and doubtful debts and financing.

(i) Basis of Valuation of Loans, Advances and Financing

Loans, advances and financing are carried at their outstanding principal and interest balances less interest in
suspense and allowance for bad and doubtful debts and financing.

Based on management’s evaluation of the portfolio of loan, lease, hire purchase, block discount and factoring
receivables, specific allowances for doubtful debts are made when the collectibles of receivables becomes
uncertain. In evaluating collectability, management considers several factors such as the borrower’s financial
position, cash flow projections, management, quality of collateral or guarantee supporting the receivables, as
well as prevailing and anticipated economic conditions.

A general allowance based on a set percentage of the total outstanding loans, net of interest in suspense and
specific allowance for doubtful debts is also maintained to cover possible losses which are not specifically
identified. This percentage is reviewed annually in the light of past experience and prevailing circumstances
and an adjustment is made to the overall general allowance, if necessary.

An uncollectible loan or portion of a loan classified as bad is written off after taking into consideration the
realisable value of the collateral, if any, when it is deemed that there is no prospect of recovery.

In respect of the classification of impaired loans and provisioning for bad and doubtful debts, the policy of the
Company states that a Government infrastructure loan and commercial loans with long term supply agreement
with the Government are classified as impaired when the principal or interest is overdue more than twelve (12)
months.

For policy on portfolio other than the above, the loans, advances and financing are classified as impaired when
the principal or interest is overdue more than six (6) months.

(ii) Non-Banking Operations

Debts considered to be uncollectible are written off while allowances are made for debts based on estimates
of possible losses that may arise from non-collection of receivables.

(v) Recognition of Interest and Financing Expenses

Interest expense and attributable profit (on activities relating to Islamic banking business) on deposits and borrowings
of the Group and the Bank are recognised in the income statement using the effective interest method, in the
period in which they are incurred.

(w) Foreclosed Properties

Foreclosed properties are those acquired in full or partial satisfaction of debts and are stated at the lower of cost
and fair value.

100 Bank pembangunan Malaysia berhad (16562-K)

notes to the financial statements

31 DECEMBER 2009

2. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

2.3 Changes in Accounting Policies and Effects Arising from Adoption of New and Revised FRSs and BNM’s
Circulars

(a) FRSs, Amendments to FRSs, Issues Committee (“IC”) Interpretations, Technical Releases (“TR”) and
Statement of Principles (“SOP”) issued but not yet effective

The Group and the Bank had not adopted the following FRSs, amendments to FRSs, IC Interpretations, TR and SOP
which have effective date as follows:

Effective for
financial periods
FRSs, Amendments to FRSs, IC Interpretations, TR and SOP beginning on or after

FRS 1 First-time Adoption of Financial Reporting Standards 1 July 2010

FRS 3 Business Combinations 1 January 2010
FRS 4 Insurance Contracts 1 January 2010
FRS 7 Financial Instruments: Disclosures 1 July 2009
FRS 8 Operating Segments 1 January 2010
FRS 101 Presentation of Financial Statements (revised in 2009) 1 January 2010
FRS 123 Borrowing Costs 1 January 2010
FRS 127 Consolidated and Separate Financial Statements 1 July 2010
FRS 139 Financial Instruments: Recognition and Measurement 1 January 2010
Amendments to FRS 1 First-time Adoption of Financial Reporting Standards 1 January 2010
Amendments to FRS 2 Share-based Payment: Vesting Conditions 1 January 2010
and Cancellations and 1 July 2010
Amendments to FRS 5 Non-current Assets Held for Sale and 1 January 2010
Discontinued Operations and 1 July 2010
Amendments to FRS 7 Financial Instruments: Disclosures 1 January 2010
Amendments to FRS 8 Operating Segments 1 January 2010
Amendments to FRS 107 Cash Flow Statements 1 January 2010
Amendments to FRS 108 Accounting Policies, Changes in Accounting Estimates and Errors 1 January 2010
Amendments to FRS 110 Events After the Balance Sheet Date 1 January 2010
Amendments to FRS 116 Property, Plant and Equipment 1 January 2010
Amendments to FRS 117 Leases 1 January 2010
Amendments to FRS 118 Revenue 1 January 2010
Amendments to FRS 119 Employee Benefits 1 January 2010
Amendments to FRS 120 Accounting for Government Grants and Disclosure
of Government Assistance 1 January 2010
Amendments to FRS 123 Borrowing Costs 1 January 2010
Amendments to FRS 127 Consolidated and Separate Financial Statements :
Cost of an Investment in a Subsidiary, Jointly Controlled
Entity r Associate 1 January 2010
Amendments to FRS 128 Investments in Associates 1 January 2010
Amendments to FRS 129 Financial Reporting in Hyperinflationary Economies 1 January 2010
Amendments to FRS 131 Interests in Joint Ventures 1 January 2010
Amendments to FRS 132 Financial Instruments: Presentation 1 January 2010
Amendments to FRS 134 Interim Financial Reporting 1 January 2010
Amendments to FRS 136 Impairment of Assets 1 January 2010
Amendments to FRS 138 Intangible Assets 1 January 2010
and 1 July 2010
annual report 2009 101

2. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

2.3 Changes in Accounting Policies and Effects Arising from Adoption of New and Revised FRSs and BNM’s Circulars
(Cont’d)

(a) FRSs, Amendments to FRSs, Issues Committee (“IC”) Interpretations, Technical Releases (“TR”) and
Statement of Principles (“SOP”) issued but not yet effective (Cont’d)

Effective for
financial periods
FRSs, Amendments to FRSs, IC Interpretations, TR and SOP beginning on or after

Amendments to FRS 139 Financial Instruments: Recognition and 1 January 2010
Measurement and 1 July 2010
Amendments to FRS 140 Investment Property 1 January 2010
IC Interpretation 9 Reassessment of Embedded Derivatives 1 January 2010
IC Interpretation 10 Interim Financial Reporting and Impairment 1 January 2010
IC Interpretation 11 FRS 2 - Group and Treasury Share Transactions 1 January 2010
IC Interpretation 12 Service Concession Arrangements 1 July 2010
IC Interpretation 13 Customer Loyalty Programmes 1 January 2010
IC Interpretation 14 FRS 119 - The Limit on a Defined Benefit Asset,
Minimum Funding Requirements and their Interaction 1 January 2010
IC Interpretation 15 Agreements for the Construction of Real 1 July 2010
IC Interpretation 16 Hedges of a Net Investment in a Foreign Operation 1 July 2010
IC Interpretation 17 Distributions of Non-cash Assets to Owners 1 July 2010
Amendments to IC
Interpretation 9 Reassessment of Embedded Derivatives 1 January 2010
TR i-3 Presentation of Financial Statements of
Islamic Financial Institutions 1 January 2010
SOP i-1 Financial Reporting from an Islamic Perspective 1 January 2010

FRS 4, Amendments to FRS 119, FRS 129 and FRS 140 and IC Interpretations 12, 13, 14 and 15 are not applicable to the
Group and the Bank. The other FRSs, amendments to FRSs, IC Interpretations, TR and SOP above are expected to have
no significant impact on the financial statements upon their initial application except for FRS 7, FRS 101 (revised in 2009)
and FRS 139. The Group and the Bank are exempted from disclosing the possible impact to the financial statements upon
the initial application of FRS 7 and FRS 139.

The adoption of FRS 101 (revised in 2009) will have the following impacts to the financial statements upon its initial
application:

- Entity to present, in a statement of changes in equity, all owner changes in equity. All non-owner changes in
equity (i.e. comprehensive income) are required to be presented in one statement of comprehensive income or
in two statements (a separate income statement and a statements of comprehensive income). Components of
comprehensive income are not permitted to be presented in the statement of changes in equity.

- When entity restated its comparative figures in financial statements or retrospectively applies a new accounting
policy, a statement of financial position must be presented as at the beginning of the earliest comparative period in
a complete set of financial statements.

- Entities must disclose amount reclassified to profit or loss that were previously recognised in other comprehensive
income and the income tax relating to each component of other comprehensive income, either in the statement of
comprehensive income or in the notes;

- New terminologies will replace ‘balance sheet’ with ‘statement of financial position’, and ‘cash flow statement’ with
‘statement of cash flows’.

102 Bank pembangunan Malaysia berhad (16562-K)

notes to the financial statements

31 DECEMBER 2009

2. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

2.3 Changes in Accounting Policies and Effects Arising from Adoption of New and Revised FRSs and BNM’s Circulars
(Cont’d)

(b) Voluntary Adoption of BNM’s Revised Guidelines on Financial Reporting for Licensed Institutions (“BNM/
GP8”)

With effect from 1 January 2007, the Group and the Bank voluntarily adopted partially the revised guidelines on
Financial Reporting for Licensed Institutions (“BNM/GP8”) issued by Bank Negara Malaysia on 5 October 2004
except for valuation of impaired loan. BNM/GP8 requires that impaired loans, advances and financing be measured
at their estimated recoverable amount, where by, additional allowance must be provided if the recoverable amount
(present value of estimated future cash flows discounted at original effective rate) is lower than the net book
value of the loans, advances and financing (outstanding amount of loans, advances and financing, net of specific
provision).

2.4 Functional and presentation currency

These financial statements are presented in Ringgit Malaysia (RM), which is the Bank’s functional currency. Some of
the Group’s subsidiaries have identified United States Dollar (USD) as their functional currency and have measured its
results and financial position for the current year in USD. The results and financial position of these companies were
subsequently translated into RM in accordance Note 2.2(e). All financial information presented in RM has been rounded
to the nearest thousand (RM’000) unless otherwise stated.

2.5 Significant Accounting Judgements and Estimates

The preparation of financial statements requires management to make judgements, estimates and assumptions that
affect the application of policies and reported amounts of assets, liabilities, income and expenses. Although these
estimates are based on management’s best knowledge of current events and actions, actual results may differ from
these estimates.

Critical accounting estimates and assumptions used that are significant to the financial statements and areas involving
higher degree of judgement and complexity are as follows:

(i) Fair Value Estimation of Securities Held-To-Maturity and Securities Available-For-Sale (Note 5)

The fair value of securities that are not traded in an active market are determined using valuation techniques based
on assumptions of market conditions existing at the balance sheet date, including reference to quoted market
prices and independent dealer quotes for similar securities and discounted cash flow method.

(ii) Deferred Tax (Note 14) and Income Taxes (Note 31)

The Group and the Bank are subject to income taxes in many jurisdictions and significant judgment is required in
estimating the provision for income taxes. There are many transactions and interpretations of tax law for which
the final outcome will not be established until some time later. Liabilities for taxation are recognised based on
estimates of whether additional taxes will be payable. The estimation process includes seeking expert advice
where appropriate. Where the final liability for taxation is different from the amounts that were initially recorded,
the differences will affect the income tax and deferred tax provisions in the period in which the estimate is revised
or the final liability is established.



annual report 2009 103

2. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

2.5 Significant Accounting Judgements and Estimates (Cont’d)

(iii) Allowances for Bad and Doubtful Debts (Note 6)

The Group and the Bank review the doubtful loans, advances and financing at each reporting date to assess whether
allowances should be recorded in the financial statements. In particular, judgement is required in the identification
of doubtful loans, and the estimation of realisation amount from the doubtful loans when determining the level of
allowance required.

The Group and the Bank have adopted certain criteria in the identification of doubtful loans, which include classifying
loans as non-performing when repayments are in arrears for more than six (6) months. Specific allowances for
doubtful loans are provided after taking into consideration of the values assigned to collateral.

The values assigned to collateral are estimated based on market value and/or forced sales value, as appropriate
and conforms with BNM/DFIs guidelines. In addition to the specific allowances made, the Group and the Bank
also make general allowance against exposure not specifically identified based on a certain percentage of total
outstanding loan net of interest in suspense and specific provision for credit risk. Such estimates are based on
assumptions about a number of factors and actual results may differ, resulting in future changes to the allowance.

(iv) Classification between Investment Properties and Property, Plant and Equipment

The Group has developed certain criteria based on FRS 140 in making judgement whether a property qualifies as an
investment property. Investment property is a property held to earn rentals or for capital appreciation or both.

Some properties comprise a portion that is held to earn rentals or for capital appreciation and another portion that
is held for use in the production or supply of goods or services or for administrative purposes. If these portions
could be sold separately (or leased out separately under a finance lease), the Group would account for the portions
separately. If the portions could not be sold separately, the property is an investment property only if an insignificant
portion is held for use in the production or supply of goods or services or for administrative purposes. Judgement is
made on an individual property basis to determine whether ancillary services are so significant that a property does
not qualify as investment property.

3. CASH AND SHORT TERM FUNDS

Group Bank
2009 2008 2009 2008
RM’000 RM’000 RM’000 RM’000

Cash and balances with other financial institutions 20,579 34,665 4,487 16,024
Money at call and deposit placements maturing
within one month 1,761,914 2,700,869 1,065,200 1,975,962

1,782,493 2,735,534 1,069,687 1,991,986

104 Bank pembangunan Malaysia berhad (16562-K)

notes to the financial statements

31 DECEMBER 2009

4. DEPOSITS AND PLACEMENTS WITH FINANCIAL INSTITUTIONS

Group Bank
2009 2008 2009 2008
RM’000 RM’000 RM’000 RM’000

Licensed banks 195,429 184,687 195,383 184,641

Other financial institutions 61,171 61,190 61,171 61,190

256,600 245,877 256,554 245,831

5. SECURITIES PORTFOLIO

Group Bank
Note 2009 2008 2009 2008
RM’000 RM’000 RM’000 RM’000
(Restated) (Restated)

Securities available-for-sale (i) 2,183,841 2,085,465 2,180,905 2,078,126
Securities held-to-maturity (ii) 423,032 469,453 423,032 469,453

2,606,873 2,554,918 2,603,937 2,547,579

(i) Securities available-for-sale

At fair value

Money market instruments:
Malaysian Government Securities 40,500 41,145 40,500 41,145

Quoted securities:
(In Malaysia)
Shares 601,212 501,164 600,226 500,069
Others 734 747 - -

601,946 501,911 600,226 500,069

Unquoted securities:
(In Malaysia)
Shares 1,401 636 1,378 615
Loan stock 318,669 1,951 318,647 1,951
Private debt securities 1,221,325 1,539,822 1,220,154 1,534,346

1,541,395 1,542,409 1,540,179 1,536,912

Total securities available-for-sale 2,183,841 2,085,465 2,180,905 2,078,126

annual report 2009 105

5. SECURITIES PORTFOLIO (cont’d)

(ii) Securities Held-To-Maturity

At amortised cost

Group Bank
2009 2008 2009 2008
RM’000 RM’000 RM’000 RM’000

Money market instruments:
Cagamas 97,903 98,197 97,903 98,197

97,903 98,197 97,903 98,197

Unquoted securities:
(In Malaysia)
Private debt securities 324,553 369,658 324,553 369,658
Loan stock 1,598 1,598 1,598 1,598

326,151 371,256 326,151 371,256

Less: Accumulated impairment (1,022) - (1,022) -

Total securities held-to-maturity 423,032 469,453 423,032 469,453

Indicative market value of the securities held-to-maturity are as follows:

Group Bank
2009 2008 2009 2008
RM’000 RM’000 RM’000 RM’000

Cagamas 97,078 96,986 97,078 96,986

Unquoted private debt securities 283,792 326,866 283,792 326,866

(iii) Other disclosures

Group Bank
2009 2008 2009 2008
RM’000 RM’000 RM’000 RM’000

One year to three years 3,000 3,000 3,000 3,000

Three years to five years 50,500 51,145 50,500 51,145
Over five years 84,903 85,197 84,903 85,197

138,403 139,342 138,403 139,342

106 Bank pembangunan Malaysia berhad (16562-K)

notes to the financial statements

31 DECEMBER 2009

6. LOANS, ADVANCES AND FINANCING

Group Bank
2009 2008 2009 2008
RM’000 RM’000 RM’000 RM’000

Loans and financing to industries

- Government Guaranteed 5,797,092 1,769,130 5,797,092 1,769,130
- Others 15,224,355 16,156,852 15,070,096 15,969,067

21,021,447 17,925,982 20,867,188 17,738,197

Allowance for doubtful debts:
- specific (1,112,789) (639,311) (958,530) (529,363)

- on impaired loans (415,236) (79,819) (415,236) (79,819)
- on non performing loans (697,553) (559,492) (543,294) (449,544)

- general (302,957) (336,412) (302,957) (334,556)

(1,415,746) (975,723) (1,261,487) (863,919)

Net loans and financing to industries 19,605,701 16,950,259 19,605,701 16,874,278

Staff loan 18,194 19,796 18,110 19,442

Loan to subsidiaries - - 270,387 290,540
Lease receivable 98,270 111,538 - -
Block discounting and factoring receivables 129,464 82,272 - -
Hire purchase receivables 168,829 94,863 - -
Ijarah receivables 54,795 63,686 - -

Other loans, advances and financing 469,552 372,155 288,497 309,982

Allowance for doubtful debts:

- specific (39,598) (30,208) - -
- general (8,248) (6,220) - -

(47,846) (36,428) - -

Net other loans, advances and financing 421,706 335,727 288,497 309,982

Net loans, advances and financing 20,027,407 17,285,986 19,894,198 17,184,260

Gross loans, advances and financing 21,490,999 18,298,137 21,155,685 18,048,179

Allowance for doubtful debts:
- specific (1,152,387) (669,519) (958,530) (529,363)

- on impaired loans (415,236) (79,819) (415,236) (79,819)
- on non performing loans (737,151) (589,700) (543,294) (449,544)

- general (311,205) (342,632) (302,957) (334,556)

Net loans, advances and financing 20,027,407 17,285,986 19,894,198 17,184,260

annual report 2009 107

6. LOANS, ADVANCES AND FINANCING (cont’d)

(i) Loans, advances and financing analysed by type are as follows:

Group Bank
2009 2008 2009 2008
RM’000 RM’000 RM’000 RM’000

Bai' Bithaman Ajil 246,420 530,103 199,503 518,518
Bank Guarantee 35,132 26,411 35,132 1,006
Bai Al-Inah 59,035 38,286 59,035 38,286
Bai Murabahah 57,792 - 57,792 -
Bai Istisna' 1,736,816 1,553,518 1,736,816 1,553,518
Bridging financing 570,445 66,863 550,826 39,405
Murabahah Dayn 1,454 71,121 1,454 7,475
Hire purchase 168,647 82,272 - -
Factoring 129,773 100,558 - -
Ijarah 79,610 92,491 24,814 28,666
Ijarah Muntahia Bittamalik 192,436 192,086 192,436 192,086
Infra support loan 225,985 279,376 225,985 279,376
Leasing 98,242 112,988 - -
Revolving financing 53,912 - - -
Revolving working capital 158,576 231,499 158,576 231,499
Revolving working capital without invoice 25,562 31,869 25,562 31,869
Term loan 17,550,479 14,834,201 17,787,071 15,071,980
Working capital 100,683 54,495 100,683 54,495

Gross loans, advances and financing 21,490,999 18,298,137 21,155,685 18,048,179

Allowance for bad and doubtful financing
- Specific (1,152,387) (669,519) (958,530) (529,363)
- on impaired loans (415,236) (79,819) (415,236) (79,819)
- on non performing loans (737,151) (589,700) (543,294) (449,544)
- General (311,205) (342,632) (302,957) (334,556)

Net loans, advances and financing 20,027,407 17,285,986 19,894,198 17,184,260

(ii) Loans, advances and financing analysed by type of customers are as follows:

Group Bank
2009 2008 2009 2008
RM’000 RM’000 RM’000 RM’000

Domestic business enterprises 21,472,805 18,278,341 21,137,575 18,028,737
Individual 18,194 19,796 18,110 19,442

Gross loans, advances and financing 21,490,999 18,298,137 21,155,685 18,048,179

108 Bank pembangunan Malaysia berhad (16562-K)

notes to the financial statements

31 DECEMBER 2009

6. LOANS, ADVANCES AND FINANCING (cont’d)

(iii) Loans, advances and financing analysed by interest/profit rate sensitivity are as follows:

Group Bank
2009 2008 2009 2008
RM’000 RM’000 RM’000 RM’000

Fixed rate
- Housing loans/financing 27,404 30,459 18,110 19,442
- Hire purchase receivables 166,529 100,558 - -
- Other fixed rate loans/financing 11,629,601 8,615,714 11,470,110 8,477,330
Variable rate
- Cost plus 8,616,687 9,031,124 8,616,687 9,031,124
- Other variable rates 1,050,778 520,282 1,050,778 520,283

Gross loans, advances and financing 21,490,999 18,298,137 21,155,685 18,048,179

(iv) Loans, advances and financing analysed by industry are as follows:

Group Bank
2009 2008 2009 2008
RM’000 RM’000 RM’000 RM’000

Agriculture, hunting & forestry 5,224 7,168 4,390 5,161

Applications & Instruments 515 4,113 515 4,113
Construction 8,058,896 4,873,501 7,979,874 4,797,464
Education 274,204 249,036 274,204 249,036
Electrical & Electronics 9,473 10,348 9,473 10,348
Electricity, gas and water supply 3,448,507 3,710,630 3,447,095 3,708,771
Finance, Insurance & Business 48,776 59,066 270,387 290,540
Food Processing 1,293 1,279 1,293 1,279
Hotel and restaurants 472,150 351,425 363,876 264,016
Housing 18,110 19,442 18,110 19,442
Manufacturing 1,515,273 1,681,179 1,355,773 1,520,786
Marine Related 209 6,894 209 6,894
Materials Technology 1,658 2,816 1,658 2,816
Medical & Pharmaceuticals 34,625 38,108 34,625 38,108
Mining & Quarrying 3,180 3,518 - -
Other community, social and personal service activities 164,262 161,899 102,020 107,439
Production Engineering 29,896 23,796 29,896 23,796
Public administration and defence 21,847 18,390 21,847 18,390
Real estate, renting and business activities 1,074,473 1,033,834 1,069,269 1,029,559
Shipping 128,554 174,460 128,554 174,460
Shipyard 28,047 17,310 28,047 17,310
Transport, storage and communications 6,151,827 5,849,925 6,014,570 5,758,451

Gross loans, advances and financing 21,490,999 18,298,137 21,155,685 18,048,179

annual report 2009 109

6. LOANS, ADVANCES AND FINANCING (cont’d)

(v) The maturity structure of the gross loans, advances and financing is as follows:

Group Bank
2009 2008 2009 2008
RM’000 RM’000 RM’000 RM’000

Maturity within one year 3,536,703 3,067,381 3,377,023 2,994,640

One year to three years 3,151,237 4,348,326 3,121,208 4,264,486
Three years to five years 4,213,875 2,486,360 4,072,954 2,442,806
Over five years 10,589,184 8,396,070 10,584,500 8,346,247

21,490,999 18,298,137 21,155,685 18,048,179

(vi) The loans and advances to subsidiaries are repayable over a period of three to seven years commencing from the date
of drawdown and are at interest rates ranging from 3.5% to 4.0% (2008 - 3.5% to 4.0%) per annum. Included in these
advances is a revolving facility amounting to RM60,000,000 (2008: RM60,000,000) at an interest rate equivalent to the
Bank’s average return on deposits.

(vii) Movements in the non-performing loans, advances and financing (“NPL”) are as follows:

Group Bank
2009 2008 2009 2008
RM’000 RM’000 RM’000 RM’000

Balance at beginning of year 889,102 1,120,854 663,963 838,283
Non-performing during the year 356,618 240,975 310,997 218,451
Reclassified as performing (40,153) (325,818) (33,644) (310,260)
Recovered during the year (64,713) (88,369) (26,350) (82,511)
Amount written off (71,955) (58,540) (35,968) -

Balance at end of year 1,068,899 889,102 878,998 663,963

Less:
- Specific allowance
- on non performing loans (737,151) (589,700) (543,294) (449,544)

Net non-performing loans, advances and financing 331,748 299,402 335,704 214,419

Gross loans, advances and financing 21,490,999 18,298,137 21,155,685 18,048,179
Less:
- Specific allowance
- on impaired loans (415,236) (79,819) (415,236) (79,819)
- on non performing loans (737,151) (589,700) (543,294) (449,544)

Net loans, advances and financing 20,338,612 17,628,618 20,197,155 17,518,816

Ratio of net NPL to net loans and financing
- on non performing loans 1.63% 1.70% 1.66% 1.22%

110 Bank pembangunan Malaysia berhad (16562-K)

notes to the financial statements

31 DECEMBER 2009

6. LOANS, ADVANCES AND FINANCING (cont’d)

(viii) Non-performing loans analysed by industry are as follows:

Group Bank
2009 2008 2009 2008
RM’000 RM’000 RM’000 RM’000

Agro resources-based - 181 - -
Applications & Instruments - 14,932 - -
Construction 275,802 222,528 204,277 155,926
Education 20,040 - 20,040 -
Electrical & Electronics 9,474 9,326 9,474 9,326
Electricity, gas and water supply 41,093 14,003 40,612 13,468
Finance, Insurance & Business 3,443 4,592 - -
Food Processing 1,293 1,279 1,293 1,279
Hotel and Restaurants 83,051 9,750 70,097 -
Manufacturing 271,104 316,497 213,085 247,847
Materials Technology 1,658 751 1,658 751
Other community, social and personal service activities 56,565 47,139 20,827 -
Production Engineering 2,883 3,448 2,883 3,448
Real estate, renting and business activities 11,051 15,324 11,051 11,049
Shipping 754 11,093 754 11,093
Shipyard 14,999 15,461 14,999 15,461
Transport, storage and communications 275,689 202,798 267,948 194,315

1,068,899 889,102 878,998 663,963

(ix) Movements in the allowance for bad and doubtful debts are as follows:

Group Bank
Specific allowance: 2009 2008 2009 2008
RM’000 RM’000 RM’000 RM’000

Balance at beginning of year 669,519 661,312 529,363 477,290
Allowance made during the year 288,841 99,875 185,800 57,671
Allowance made during the year against
Infrastructure Support Fund 4,084 - 4,084 -
Amount written back in respect of recoveries (55,324) (40,527) (24,180) (2,997)
Amount written back in respect of recoveries
transferred to Infrastructure Support Fund (15,169) (2,601) (15,169) (2,601)
Impairment losses 314,600 - 314,600 -
Amount written off (54,164) (48,540) (35,968) -

Balance at end of year 1,152,387 669,519 958,530 529,363

annual report 2009 111

6. LOANS, ADVANCES AND FINANCING (cont’d)

(ix) Movements in the allowance for bad and doubtful debts are as follows: (cont’d)

Group Bank
General allowance: 2009 2008 2009 2008
RM’000 RM’000 RM’000 RM’000

Balance at beginning of year 342,632 351,590 334,556 344,130

Allowance made during the year 132 616 - -
Amount written back (31,559) (9,574) (31,599) (9,574)

Balance at end of year 311,205 342,632 302,957 334,556

As a % of gross loans, advances and financing less
specific provisions 1.5% 2% 1.5% 2%

7. OTHER ASSETS

Group Bank
Note 2009 2008 2009 2008
RM’000 RM’000 RM’000 RM’000
(Restated)

Sundry receivables, deposits and prepayment (i) 434,085 455,917 344,373 356,910
Less: Allowance for doubtful debts (802) (808) (802) (802)

433,283 455,109 343,571 356,108

Trade receivables 37,745 18,962 - -

Less: Allowance for doubtful debts (8) (26) - -

37,737 18,936 - -

Amount receivable from Government in respect

of compensation for:
- Foreign exchange differences 91,888 87,902 91,888 87,902
- Infrastructure projects 85,361 85,361 85,361 85,361
Amount due from Minister of Finance Incorporated (ii) 1,061,373 1,056,017 1,061,373 1,056,017
Accrued interest receivable 21,122 28,664 21,117 28,664
Subsidiaries (iii) - - 33,288 1,963
Tax recoverable 51,358 16,666 51,299 14,591
Pool working fund (iv) 3,594 3,647 - -
Foreclosed properties 8,014 8,014 - -
Inventories 2,703 2,830 - -

1,796,433 1,763,146 1,687,897 1,630,606

112 Bank pembangunan Malaysia berhad (16562-K)

notes to the financial statements

31 DECEMBER 2009

7. OTHER ASSETS (cont’d)

(i) Included in the sundry receivables, deposits and prepayments of the Group is an amount due from related parties of
Global Maritime Ventures Berhad amounting to RM42,210,000 (2008 - RM105,393,000). The amounts are unsecured,
non-interest bearing and are repayable on demand.

Included in the sundry receivables, deposits and prepayments of the Group and the Bank is an amount due from a
former subsidiary, SME Bank, amounting to RM301,273,973 (2008 - RM308,994,000) of which RM300,000,000 (2008 -
RM300,000,000) relates to loan from Pension Trust Fund Council transferred to SME Bank, which bears interest of 5.0%
per annum and repayable over a period of 20 years, commencing on 22 November 2006.

(ii) The amount due from Minister of Finance Incorporated relates to proceeds receivable from disposal of the Bank’s
interest in SME Bank. The amount bears interest of 2% per annum and is repayable via a bullet repayment in 2013.

(iii) The amount due from subsidiaries are unsecured, interest free and repayable on demand.

(iv) Pool working fund represents advances from subsidiaries to the pool operators for operating funds of the vessels in
the pool. These advances are interest free, unsecured and are refundable only upon termination of the pool agreement
signed between the subsidiaries with the pool operators.

8. INVESTMENTS IN SUBSIDIARIES

Bank
2009 2008
RM’000 RM’000

Unquoted shares, at cost 862,700 862,700
Additional capital contribution due to waiver of debt 68,570 -

931,270 862,700
Less: Impairment losses (974) (974)

930,296 861,726

9. INTEREST IN ASSOCIATES

Group Bank
2009 2008 2009 2008
RM’000 RM’000 RM’000 RM’000
(Restated) (Restated)

At cost:
Unquoted ordinary shares 15 15 15 15
Group’s share of retained post acquisition reserve 978 978 - -

993 993 15 15
Unquoted redeemable preference shares 5,627 5,627 5,627 5,627

6,620 6,620 5,642 5,642

Less: Accumulated impairment (5,642) (5,642) (5,642) (5,642)

978 978 - -

annual report 2009 113

9. INTEREST IN ASSOCIATES (cont’d)

(i) Details of the associates are as follows:

Proportion of
Name of Associates Ownership
(incorporated in Malaysia) Interest Principal Activities
2009 2008
% %

Held through a subsidiary:

Ekuiti Teroka (Malaysia) Sdn Bhd 28.60 28.60 Venture capital company

The summarised financial statements of the associates are as follows:

2009 2008
RM’000 RM’000
(Restated)

Assets and liabilities
Total assets 1,851 748
Total liabilities 3 -
outstanding

Results:
Revenue 15 16
Profit for the year (4) (7)

10. INTEREST IN JOINTLY CONTROLLED ENTITIES

Group
2009 2008
RM’000 RM’000
(Restated)

At cost:
Unquoted ordinary shares 77,953 52,185
Group’s share of retained post acquisition reserve 21,817 11,374

99,770 63,559
Long term loans to jointly controlled entities 78,222 69,996

177,992 133,555

(i) Included in long term loans to jointly controlled entities is an amount of RM24,677,502 (2008 - RM28,040,350) which
bears interest rate of 7% per annum (2008 - 7%), payable every quarter and will be maturing in 2018. The remaining
amounts are unsecured, interest free and is payable on demand.
114 Bank pembangunan Malaysia berhad (16562-K)

notes to the financial statements

31 DECEMBER 2009

10. INTEREST IN JOINTLY CONTROLLED ENTITIES (cont’d)

(ii) Details of the jointly controlled entities are as follows:

Proportion of
Name of Jointly Controlled Entities Ownership
(incorporated in Malaysia) Interest Principal Activities
2009 2008
% %

Held through a subsidiary:

Wawasan Bulk Services Sdn Bhd 30.00 30.00 Ship management

Alam Eksplorasi Sdn Bhd 40.00 40.00 Ship-owning, ship operating, ship agency,
chartering and other related to shipping
industry

Alam Synergy I (L) Inc 40.00 40.00 Ship-owning, ship operator and charter hire
of vessel

Alam Synergy II (L) Inc 40.00 40.00 Ship-owning, ship operator and charter hire
of vessel

Alam Synergy III (L) Inc 40.00 40.00 Ship-owning, ship operator and charter hire
of vessel

Baycorp Ship Management Sdn Bhd 40.00 40.00 Ship management

Gagasan Sembilan Sdn Bhd 40.00 40.00 Ship-owning

Gagsan Ked Sdn Bhd 60.00 60.00 Ship-owning

Gagsan Paha Sdn Bhd 60.00 60.00 Ship-owning

Formasi Cekal Sdn Bhd 40.00 40.00 Ship-owning, ship operator and to
undertake all kind of contract to carry
merchant goods

Orkim Leader Sdn Bhd 40.00 40.00 Ship-owning and freighting

Orkim Power Sdn Bhd 40.00 40.00 Ship-owning and freighting

Orkim Merit Sdn Bhd 40.00 40.00 Ship-owning and freighting

Orkim Express Sdn Bhd 40.00 40.00 Ship-owning and freighting

Orkim Challenger Sdn Bhd 60.00 - Ship-owning and freighting

Orkim Discovery Sdn Bhd 60.00 - Ship-owning and freighting

Orkim Reliance Sdn Bhd 60.00 - Ship-owning and freighting

annual report 2009 115

10. INTEREST IN JOINTLY CONTROLLED ENTITIES (cont’d)

(ii) Details of the jointly controlled entities are as follows: (cont’d)

Proportion of
Name of Jointly Controlled Entities Ownership
(incorporated in Malaysia) Interest Principal Activities
2009 2008
% %

Held through a subsidiary: (cont’d)

JM Global 1 (L) Plc 49.00 49.00 Ship-owning and freighting

JM Global 2 (L) Plc 49.00 49.00 Ship-owning and freighting

Omni Offshore (L) Inc 40.00 40.00 Ship-owning and freighting

Budisukma Mesra Sdn Bhd 49.00 49.00 Ship-owning and freighting
(f.k.a Harum Prima Sdn Bhd)

Budisukma Mesra Dua Sdn Bhd 49.00 49.00 Ship-owning and freighting
(f.k.a Gerbang Mastika Sdn Bhd)

Budisukma Ikhlas Sdn Bhd 49.00 - Ship-owning and freighting

The voting rights for all the jointly controlled entities mentioned above are equal for both the joint venture parties.

During the financial year, certian subsidiaries entered into new ventures with third parties as follows:

(a) GMV-Orkim Sdn. Bhd. entered into a joint venture agreement with Orkim Sdn. Bhd. to acquire 60% interest in
Orkim Discovery Sdn. Bhd., Orkim Challenger Sdn. Bhd. and Orkim Reliance Sdn. Bhd. for a total cash consideration
of RM14,400,000.

(b) GMV-Global Sdn. Bhd. entered into a joint venture agreement with Global Carriers Bhd. to acquire 49% interest in
Budisukma Ikhlas Sdn. Bhd. for a cash consideration of RM5,880,000.

The summarised financial statements of the jointly controlled entities are as follows:

2009 2008
RM'000 RM'000
(Restated)

Assets and liabilities
Total assets 417,643 241,516
Total liabilities 320,053 177,957

Results:
Revenue 39,468 27,162
Profit for the year 13,251 3,904

11. PROPERTY, PLANT AND EQUIPMENT

116
Partitioning,
Furniture installation Mechanical Capital Dry-
Group Freehold and and Motor and work-in docking
land Buildings equipment renovations vehicles electricals Vessels progress expenses Total
31 DECEMBER 2009
2009 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

Cost

1 January 2009 19,909 82,125 41,032 5,042 2,941 35,778 1,175,421 13,980 42,651 1,418,879
Additions - - 5,075 5,266 - 1,660 29,640 (8,008) 7,344 40,977
Disposal/write-off - - (5,412) (133) (4) - - (203) (11,267) (17,019)
Transfer to assets held for sale - - - - - - (145,130) - (6,156) (151,286)
Effect of movements in exchange rates - - - - - - (17,430) - (447) (17,877)

At 31 December 2009 19,909 82,125 40,695 10,175 2,937 37,438 1,042,501 5,769 32,125 1,273,674

Accumulated Depreciation

1 January 2009 - 8,447 29,203 3,684 2,526 3,138 482,984 - 25,165 555,147
Charge for the year - 1,545 4,506 2,703 203 5,713 48,728 - 11,036 74,434
Disposals/write-off - - (2,939) (80) (4) - - - (11,267) (14,290)
Transfer to assets held for sale - - - - - - (69,069) - (2,815) (71,884)
notes to the financial statements

Effect of movements in exchange rates - - - - - - (7,482) - (300) (7,782)

At 31 December 2009 - 9,992 30,770 6,307 2,725 8,851 455,161 - 21,819 535,625

Net Carrying Amount 19,909 72,133 9,925 3,868 212 28,587 587,340 5,769 10,306 738,049

Bank pembangunan Malaysia berhad (16562-K)
11. PROPERTY, PLANT AND EQUIPMENT (CONT’D)

Partitioning,
Furniture installation Mechanical Capital Dry-
Group Freehold and and Motor and work-in docking
land Buildings equipment renovations vehicles electricals Vessels progress expenses Total
2008 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
annual report 2009

(Restated)
Cost

1 January 2008 (Restated) 1,995 16,383 39,214 5,650 3,283 - 1,111,054 11,697 28,779 1,218,055
Additions - - 3,724 30 1,232 - 43,518 3,655 12,716 64,875
Purshase from SME Bank 17,914 71,208 - - - 35,778 - - - 124,900
Disposal to SME Bank - (5,466) - - - - - - - (5,466)
Disposal/write-off - - (1,906) (638) (1,574) - - (1,372) - (5,490)
Effect of movements in exchange rates - - - - - - 53,019 - 1,156 54,175
Prior year adjustments - - - - - - (32,170) - - (32,170)

At 31 December 2008 19,909 82,125 41,032 5,042 2,941 35,778 1,175,421 13,980 42,651 1,418,879

Accumulated Depreciation

1 January 2008 (Restated) - 7,446 24,527 3,767 2,504 - 417,438 - 12,953 468,635
Charge for the year - 1,793 4,689 398 301 3,138 47,983 - 11,691 69,993
Disposal to SME Bank (530) - - - - - (530)
Disposals/write-off - (262) (13) (481) (279) - - - - (1,035)
Effect of movements in exchange rates - - - - - - 17,563 - 521 18,084

At 31 December 2008 - 8,447 29,203 3,684 2,526 3,138 482,984 - 25,165 555,147

Net Carrying Amount 19,909 73,678 11,829 1,358 415 32,640 692,437 13,980 17,486 863,732

117
118 Bank pembangunan Malaysia berhad (16562-K)

notes to the financial statements

31 DECEMBER 2009

11. PROPERTY, PLANT AND EQUIPMENT (CONT’D)

Furniture Partitioning Capital Mechanical
Bank Freehold and and Motor work-in and
land Buildings equipment installation vehicles progress Electricals Total
2009 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

Cost

At 1 January 2009 19,740 76,521 37,058 2,872 2,212 8,933 35,778 183,114
Additions - - 2,933 5,154 - (8,008) 1,660 1,739
Disposals/write off - - (5,292) (133) - (203) - (5,628)

At 31 December 2009 19,740 76,521 34,699 7,893 2,212 722 37,438 179,225

Accumulated Depreciation

1 January 2009 - 2,843 25,931 2,736 2,115 - 3,139 36,764
Charge for the year - 1,542 3,878 2,495 91 - 5,713 13,719
Disposals/write off - - (2,832) (80) - - - (2,912)

At 31 December 2009 - 4,385 26,977 5,151 2,206 - 8,852 47,571

Net Carrying Amount 19,740 72,136 7,722 2,742 6 722 28,586 131,654

2008

Cost

At 1 January 2008 1,826 5,313 35,321 3,480 2,554 6,651 - 55,145

Additions - - 3,643 30 1,232 7,024 - 11,929
Purchase from SME Bank 17,914 71,208 - - - - 35,778 124,900
Disposal to SME Bank - - (1,906) (638) - (4,742) - (7,286)
Disposals/write off - - - - (1,574) - - (1,574)

At 31 December 2008 19,740 76,521 37,058 2,872 2,212 8,933 35,778 183,114

Accumulated Depreciation

1 January 2008 - 1,891 21,362 2,919 2,120 - - 28,292
Charge for the year - 952 4,600 297 274 - 3,139 9,262
Disposal to SME Bank - - (31) (480) - - - (511)
Disposals/write off - - - - (279) - - (279)

At 31 December 2008 - 2,843 25,931 2,736 2,115 - 3,139 36,764

Net Carrying Amount 19,740 73,678 11,127 136 97 8,933 32,639 146,350

annual report 2009 119

12. PREPAID LAND LEASE

Group and Bank
2009 2008
RM'000 RM'000

Cost

At 1 January 5,521 5,521

At 31 December 5,521 5,521

Depreciation
At 1 January 1,500 1,388
Charge for the year 110 112

At 31 December 1,610 1,500

Carrying amount 3,911 4,021

13. INVESTMENT PROPERTIES

Group Bank
2009 2008 2009 2008
RM’000 RM’000 RM’000 RM’000

Cost
At 1 January 25,440 23,844 10,538 69,343
Addition during the year - 1,596 - -
Disposal to SME Bank - - - (55,435)
Disposals/write off (690) - - (3,370)

At 31 December 24,750 25,440 10,538 10,538

Depreciation and impairment loss
At 1 January 6,604 4,673 2,094 28,728
Charge for the year 430 1,931 177 438
Disposal to SME Bank - - - (27,072)
Disposals/write off (150) - - -

At 31 December 6,884 6,604 2,271 2,094

Carrying amount 17,866 18,836 8,267 8,444

120 Bank pembangunan Malaysia berhad (16562-K)

notes to the financial statements

31 DECEMBER 2009

13. INVESTMENT PROPERTIES (cont’d)

Group Bank
2009 2008 2009 2008
RM’000 RM’000 RM’000 RM’000

Included in the above are:

Freehold land 3,339 3,556 1,683 1,683
Buildings 14,527 15,280 6,584 6,761

17,866 18,836 8,267 8,444

(i) The Directors of the Group and the Bank estimated the fair values of the investment properties of the Group and the
Bank is RM22,344,710 (2008 - RM24,642,000) based on comparison with indicative market value stated in the Property
Market Report 2008.

14. DEFERRED TAX ASSETS/(LIABILITIES)

Group Bank
2009 2008 2009 2008
RM’000 RM’000 RM’000 RM’000
(Restated) (Restated)

At 1 January 28,219 (67,177) 2,748 (107,667)
Recognised in income statement (18,800) 4,394 (13,780) 19,413
Recognised in equity (27,337) 91,002 (27,337) 91,002

At 31 December (17,918) 28,219 (38,369) 2,748

Presented after appropriate offsetting as follows:
Deferred tax assets 85,367 98,468 85,566 98,369
Deferred tax liabilities (103,285) (70,249) (123,935) (95,621)

(17,918) 28,219 (38,369) 2,748

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set-off current tax assets against
current tax liabilities and when the deferred income taxes relates to the same fiscal authority.

annual report 2009 121

14. DEFERRED TAX ASSETS/(LIABILITIES) (cont’d)

The components and movements of deferred tax assets and liabilities during the financial year prior to offsetting are as
follows:

Defered tax assets of the Group:

Loan loss Impairment Property, Other
and loss on plant and temporary
allowances securities equipment differences Total
RM’000 RM’000 RM’000 RM’000 RM’000

At 1 January 2009 83,639 10,170 27 4,632 98,468
Recognised in income statement (7,900) (554) (27) (4,620) (13,101)

At 31 December 2009 75,739 9,616 - 12 85,367

At 1 January 2008 86,032 684 3,910 7,743 98,369
Recognised in income statement (2,393) 9,486 (3,883) (3,111) 99

At 31 December 2008 83,639 10,170 27 4,632 98,468

Deferred tax liabilities of the Group:

Unrealised Property, Other
holding plant and temporary
reserve equipment differences Total
RM’000 RM’000 RM’000 RM’000

At 1 January 2009 65,235 - 5,014 70,249
Recognised in income statement - 10,713 (5,014) 5,699
Recognised in equity 27,337 - - 27,337

At 31 December 2009 92,572 10,713 - 103,285

At 1 January 2008 156,237 1,712 7,597 165,546
Recognised in income statement - (1,712) (2,583) (4,295)
Recognised in equity (91,002) - - (91,002)

At 31 December 2008 65,235 - 5,014 70,249

122 Bank pembangunan Malaysia berhad (16562-K)

notes to the financial statements

31 DECEMBER 2009

14. DEFERRED TAX ASSETS/(LIABILITIES) (cont’d)

Defered tax assets of the Bank:

Loan loss Impairment Property, Other
and loss on plant and temporary
allowances securities equipment differences Total
RM’000 RM’000 RM’000 RM’000 RM’000

At 1 January 2009 83,639 9,486 5,035 209 98,369
Recognised in income statement (7,900) 140 (5,035) (8) (12,803)

At 31 December 2009 75,739 9,626 - 201 85,566

At 1 January 2008 86,032 - 1,314 892 88,238
Recognised in income statement (2,393) 9,486 3,721 (683) 10,131

At 31 December 2008 83,639 9,486 5,035 209 98,369

Deferred tax liabilities of the Bank:

Unrealised Property,
holding plant and
reserve equipment Total
RM’000 RM’000 RM’000

At 1 January 2009 95,621 - 95,621
Recognised in income statement - 977 977
Recognised in equity 27,337 - 27,337

At 31 December 2009 122,958 977 123,935

At 1 January 2008 186,623 9,282 195,905
Recognised in income statement - (9,282) (9,282)
Recognised in equity (91,002) - (91,002)

At 31 December 2008 95,621 - 95,621

Deferred tax assets have not been recognised in respect of the following items:

Group
2009 2008
RM’000 RM’000

Unutilised tax losses 73,911 12,906
Unabsorbed capital allowances 10,657 10,668

84,568 23,574

The unutilised tax losses and unabsorbed capital allowances of the Bank are available for offsetting against future taxable
profits subject to no substantial change in shareholdings under the Income Tax Act, 1967 and guidelines issued by the tax
authority.




annual report 2009 123

15. DEPOSITS FROM CUSTOMERS

Group Bank
2009 2008 2009 2008
RM’000 RM’000 RM’000 RM’000

Fixed deposits and negotiable instruments of deposits
- One year or less 8,232,906 5,177,677 8,232,906 5,177,677
- More than one year - - - -

8,232,906 5,177,677 8,232,906 5,177,677

(a) The deposits are sourced from the following types of deposit:

Group Bank
2009 2008 2009 2008
RM’000 RM’000 RM’000 RM’000

Non-Mudharabah
Others 8,028,906 5,177,677 8,028,906 5,177,677

Mudharabah
General investment deposits 204,000 - 204,000 -

8,232,906 5,177,677 8,232,906 5,177,677

(b) The deposits are sourced from the following types of customers:

Group Bank
2009 2008 2009 2008
RM’000 RM’000 RM’000 RM’000
(Restated) (Restated)

Business enterprises 4,407,346 1,310,883 4,407,346 1,310,883
Government and statutory bodies 3,825,560 3,866,794 3,825,560 3,866,794

8,232,906 5,177,677 8,232,906 5,177,677

124 Bank pembangunan Malaysia berhad (16562-K)

notes to the financial statements

31 DECEMBER 2009

16. OTHER LIABILITIES

Group Bank
2009 2008 2009 2008
RM’000 RM’000 RM’000 RM’000
(Restated)

Amount due to related companies 3,656 2,240 - -
Provision for taxation 1,615 5,144 - -
Provision for zakat 286 293 286 293
Accrued interest payable 51,036 65,237 51,036 65,237
Trade creditors 14,938 10,274 2,567 3,039
Sundry creditors and accruals 90,124 79,330 24,293 34,176
Profit equalisation reserve (Note 16 (i)) 1,071 - 1,071 -
Dividend payable 2,400 2,400 - -
Minority shareholders’ advance to subsidiaries 25,466 25,466 - -

190,592 190,384 79,253 102,745

The amount due to related companies and minority shareholder’s advances to subsidiaries are unsecured, non-interest bearing
and are repayable on demand.

(i) Movement in profit equalisation reserve ("PER")

Group Bank
2009 2008 2009 2008
RM’000 RM’000 RM’000 RM’000

At beginning of year - - - -
Provided during the year 5,705 - 5,705 -
Written back during the year (4,634) - (4,634) -

At end of the year * 1,071 - 1,071 -

* PER at the end of the financial year of which the shareholders' portion is RM696,000.







annual report 2009 125

17. REDEEMABLE GUARANTEED NOTES

Group and Bank

2009 2008
RM’000 RM’000

Guaranteed notes - -
Medium term notes* 1,000,000 1,000,000

1,000,000 1,000,000

Infrastructure notes - nominal value** 1,000,000 1,000,000

Less: Unamortised discount (9,675) (10,636)

990,325 989,364

1,990,325 1,989,364

Discount upon issuance 18,500 18,500
Amortisation to date (8,825) (7,864)

Unamortised discount 9,675 10,636

* These notes carry coupon rates ranging between 5.00% to 6.30% (2008 - 5.00% to 6.30%) per annum and are for
tenures of 5 years to 15 years.

** These notes are guaranteed by the Government of Malaysia. These notes carry coupon rates of 7.00% to 7.50%
(2008 - 7.00% to 7.50% ) per annum and are for tenures of 15 years to 25 years.

18. TERM LOANS

2009 2008
Due after Due within Due after Due within
twelve twelve twelve twelve
Group months months months months
RM'000 RM'000 RM'000 RM'000
(Restated) (Restated)

Loans from Government of Malaysia
- Unsecured: (Note 18(a))
Principal 790,029 - 790,029 -
Interest - 2,152 - 2,152

790,029 2,152 790,029 2,152

Loans from Employees Provident Fund

- Unsecured: (Note 18(b))
Principal 5,350,000 - 6,097,000 -
Interest - 36,336 - 64,355

5,350,000 36,336 6,097,000 64,355

126 Bank pembangunan Malaysia berhad (16562-K)

notes to the financial statements

31 DECEMBER 2009

18. TERM LOANS (cont’d)

2009 2008
Due after Due within Due after Due within
twelve twelve twelve twelve
Group months months months months
RM’000 RM’000 RM’000 RM’000
(Restated) (Restated)

Other loans - Unsecured:
(Note 18(c))
Principal 1,540,141 507,021 2,052,097 462,924
Interest - 21,222 - 22,316

1,540,141 528,243 2,052,097 485,240

Other loans - Secured:

(Note 18(d))
Principal 366,208 - 371,666 38,208

8,046,378 566,731 9,310,792 589,955

2009 2008
RM'000 RM'000
(Restated)

Total term loans 8,613,109 9,900,747

2009 2008
Due after Due within Due after Due within
twelve twelve twelve twelve
Bank months months months months
RM’000 RM’000 RM’000 RM’000
(Restated) (Restated)

Loans from Government of Malaysia

- Unsecured: (Note 18(a))
Principal 790,029 - 790,029 -
Interest - 2,152 - 2,152

790,029 2,152 790,029 2,152

Loans from Employees Provident Fund

- Unsecured: (Note 18(b))
- Unsecured:
Principal 5,350,000 - 6,097,000 -
Interest - 36,336 - 64,355

5,350,000 36,336 6,097,000 64,355

annual report 2009 127

18. TERM LOANS (cont’d)

2009 2008
Due after Due within Due after Due within
twelve twelve twelve twelve
Bank months months months months
RM’000 RM’000 RM’000 RM’000
(Restated) (Restated)

Other loans - Unsecured:
(Note 18(c))
Principal 1,540,141 507,021 2,052,097 462,924
Interest - 21,222 - 22,316

1,540,141 528,243 2,052,097 485,240

7,680,170 566,731 8,939,126 551,747

2009 2008
RM’000 RM’000

Total term loans 8,246,901 9,490,873

(a) Loans from Government of Malaysia

The loans from the Government of Malaysia due after twelve months are repayable as follows:

Group and Bank
Principal
2009 2008
Year due RM'000 RM'000

Due after 2011 790,029 790,029

Interest on the loan is charged at rates of 2.00% (2008 - 2.00%) per annum.

(b) Loan from Employee Provident Fund

Group and Bank

Principal
2009 2008
Note RM’000 RM’000

Loan 1 18(b)(i) - 997,000
Loan 2 18(b)(ii) 2,000,000 2,000,000
Loan 3 18(b)(iii) 3,100,000 3,100,000
Loan 4 18(b)(iv) 250,000 -

5,350,000 6,097,000

128 Bank pembangunan Malaysia berhad (16562-K)

notes to the financial statements

31 DECEMBER 2009

18. TERM LOANS (cont’d)

(b) Loan from Employee Provident Fund (cont’d)

(i) The loan is repayable via a bullet repayment in 2009;

(ii) The loan is repayable in 5 equal installments over a period of 5 years commencing 2019;

(iii) The loan is repayable in 6 installments over a period of 6 years, commencing 2019; and

(iv) Interest is repayable in semi-annual installments and the final repayment schedule is not fixed until the loan is fully
drawn down.

All the above loans are guaranteed by the Government of Malaysia and interest on the loans are charged at rates of
4.518% to 5.225% (2008: 5.00% to 8.00%) per annum.

(c) Other Loan - unsecured:

Group and Bank

Principal
2009 2008
Note RM’000 RM’000

Loan from:
Japan Bank of International Corporation
- Loan 1 18(c)(i) 134,572 319,236
- Loan 2 18(c)(ii) 1,123,370 1,272,631
Export Credit Agency 18(c)(iii) 267,649 406,526
Pension Trust Fund Council 18(c)(iv) 500,000 500,000
Bank Negara Malaysia 18(c)(v) 7,445 7,446
Pusat Tenaga Malaysia 18(c)(v) 14,125 9,125

2,047,161 2,514,964

Included in other loan - unsecured are:

(i) Loan from the Japan Bank for International Cooperation amounting to RM134,572,141 (¥4,110,627,300) [2008 -
RM319,236,067 (¥9,751,353,300)] which is repayable in semi-annual installments of Ringgit Malaysia equivalent
of ¥2,820,363,000 commencing from November 2002. Realised foreign exchange gain/loss on interest payment,
if any, from the long term Yen loan is accounted for in the income statements. The loan will mature in November
2010.

(ii) IT7 Loan from Japan Bank for International Cooperation amounting to RM1,123,370,392 (¥34,828,430,000) [2008 -
RM1,272,631,154 (¥39,472,222,000)] out of total loan facility of RM1,747,580,000 (¥59,000,000,000). The loan will
mature in March 2017. Realised foreign exchange gain/loss on interest payment, if any, from the long term Yen loan
is accounted for in the income statements.

(iii) Loan from Export Credit Agency (ECA) lenders amounting to RM267,648,722 ( 54,160,169) [2008 - RM406,525,695
( 83,386,184)]. This loan is repayable in semi-annual installments of Ringgit Malaysia equivalent of 10,832,034 and
will mature in June 2012.

annual report 2009 129

18. TERM LOANS (cont’d)

(c) Other Loan - unsecured: (cont’d)

(iv) Loan from Pension Trust Fund amounting to RM500,000,000 (2008 - RM500,000,000) which is repayable in 12
installments over a period of 6 years, commencing from 2015. This loan will mature in 2020.

(v) Loans from other institutions, namely from Bank Negara Malaysia (“BNM”) and Pusat Tenaga Malaysia amounting
to RM7,445,703 and RM14,124,970, respectively (2008 - RM7,445,703 and RM9,124,970).

Loans from Japan Bank for International Cooperation and ECA Lenders are guaranteed by Government of Malaysia. The
interest rates on other loan - unsecured for the Bank ranges from 0% to 5.875% (2008 - 0% to 5.875%) per annum during
the year.

(d) Other Loan - secured:

Group
Principal
2009 2008
Note RM'000 RM'000

Term loan 1 18(d)(i) 366,208 409,874

366,208 409,874

Included in other loan - secured of the Group are:

(i) Loans for tankers are secured by a first preferred cross-collaterised mortgage of the vessel, an assignment of
earnings derived from the pool and insurance of the vessels concerned.

The interest rate of the other loan - secured during the year ranged from 1.13% to 3.02% (2008: 3.02% to 5.56%) per
annum.


19. INFRASTRUCTURE SUPPORT FUND

Group and Bank

2009 2008
RM’000 RM’000

At 1 January 662,326 606,291
Net receivable during the year 42,471 53,434
Allowance made during the year against Infra Support Fund (4,084) -
Specific allowance written back 15,169 2,601

At 31 December 715,882 662,326

130 Bank pembangunan Malaysia berhad (16562-K)

notes to the financial statements

31 DECEMBER 2009

19. INFRASTRUCTURE SUPPORT FUND (cont’d)

The Government provides funds to the Bank in relation to its mandate to provide financing for Government infrastructure
projects. The amounts received are non-repayable and are accounted for during the year as follows:

(i) amounts to compensate against related costs are recognised in the income statement in relation to infrastructure
financing.

(ii) amounts utilised for purpose of payments on financing costs relating to the funding for an infrastructure loan are
transferred to Infrastructure Support Fund.

The amount was accounted as at 31 December as follows:

2009 2008
RM'000 RM'000

Amount received/receivable from Government during the year 51,769 63,211
Amount matched against costs and recognised as income (9,298) (9,777)
Transferred to Infrastructure Support Fund (42,471) (53,434)

- -

20. DEFERRED INCOME

Group and Bank

2009 2008
RM'000 RM'000

At 1 January 447,689 395,879
Received from Government during the year 137,437 160,388
Transferred to loans, advances and financing (295,457) -
Utilised during the year (137,437) (108,578)

At 31 December 152,232 447,689

The Government provide funds to the Bank in relation to its mandate to provide financing for Government infrastructure projects
financed by Employee Provident Fund and Pension Trust Fund Council. The above amounts received are non-repayable and are
utilised to compensate the cost of fund differential and loss of profit margin.


21. SHARE CAPITAL

Number of Ordinary
Shares of RM1 Each Amount
2009 2008 2009 2008
RM'000 RM'000 RM'000 RM'000

Authorised 10,000,000 10,000,000 10,000,000 10,000,000

Issued and fully paid 3,078,724 3,078,724 3,078,724 3,078,724

annual report 2009 131

22. RESERVES

Group Bank
2009 2008 2009 2008
RM'000 RM'000 RM'000 RM'000
(Restated) (Restated)

Non-distributable:
Capital reserve 1,000 1,000 - -
Statutory reserve 1,384,641 1,196,642 1,384,641 1,196,642
Unrealised holding reserve 274,055 192,397 365,211 283,553
Exchange translation reserve (20,579) (18,176) - -

1,639,117 1,371,863 1,749,852 1,480,195

Distributable:
Retained profits (Note 23) 2,624,780 2,585,226 2,301,957 2,193,958

4,263,897 3,957,089 4,051,809 3,674,153

The capital reserve of the Group arose from the capitalisation of bonus issue in certain subsidiaries in previous years.

The statutory reserves are maintained in compliance with the requirements of Section 39 of Development Financial Institution
Act 2002 (“the Act”) and are not distributable as cash dividends. Under the Act, the Bank is required to transfer at least 50%
of its profit after tax, up to 50% of its paid-up capital.


23. RETAINED EARNINGS

Prior to the year of assessment 2008, Malaysian companies adopted the full imputation system. In accordance with the
Finance Act 2007 which was gazetted on 28 December 2007, companies shall not be entitled to deduct tax on dividend paid,
credited or distributed to its shareholders, and such dividends will be exempted from tax in the hands of the shareholders
(“single tier system”). However, there is a transitional period of six years, expiring on 31 December 2013, to allow companies
to pay franked dividends to their shareholders under limited circumstances. Companies also have an irrevocable option to
disregard the 108 balance and opt to pay dividends under the single tier system. The change in the tax legislation also provides
for the 108 balance to be locked-in as at 31 December 2007 in accordance with Section 39 of the Finance Act 2007.

The Bank did not elect for the irrevocable option to disregard the 108 balance. Accordingly, during the transitional period, the
Bank may utilise the credit in the 108 balance as at 31 December 2009 and 2008 to distribute cash dividend payments to
ordinary shareholdings as defined under the Finance Act 2007. As at 31 December 2009 and 2008, the Bank has sufficient
credit in the 108 balance to pay franked dividends out of its entire retained earnings.


132 Bank pembangunan Malaysia berhad (16562-K)

notes to the financial statements

31 DECEMBER 2009

24. INTEREST INCOME

Group Bank
2009 2008 2009 2008
RM’000 RM’000 RM’000 RM’000
(Restated)

Loans, advances and financing
- Interest income other than recoveries from NPL 1,165,285 1,076,907 1,143,610 1,058,160
- Recoveries from NPL 10,437 63,002 8,335 61,638
Deferred income recognised 137,437 108,578 137,437 108,578
Money at call and deposit placement
with financial institutions 53,336 75,949 30,435 38,539
Investment securities
- securities available-for-sale 94,870 105,745 94,870 105,745

1,461,365 1,430,181 1,414,687 1,372,660

Amortisation of premium less accretion of discount 12,613 13,393 12,613 13,393

1,473,978 1,443,574 1,427,300 1,386,053

Included in the interest income from loans, advances and financing of the Bank is interest income from subsidiary amounting
to RM9,561,585 (2008 - RM11,222,529).

25. INTEREST EXPENSE

Group Bank
2009 2008 2009 2008
RM’000 RM’000 RM’000 RM’000

Deposits and acceptances 198,912 157,536 198,912 157,046

Term loans 329,244 419,414 329,124 419,414
Redeemable guaranteed notes 131,462 131,276 131,462 130,795
Others 1,434 1,960 - 1,479

661,052 710,186 659,498 708,734

26. NON-INTEREST INCOME

Group Bank
2009 2008 2009 2008
RM’000 RM’000 RM’000 RM’000
(Restated)

(a)    Other operating income:
Charter hire, demurrage and freight income 174,006 291,256 - -
Fee income 7,754 9,378 - -
Other operating income 1,664 1,872 - -

183,424 302,506 - -

annual report 2009 133

26. NON-INTEREST INCOME (cont’d)

Group Bank
2009 2008 2009 2008
RM’000 RM’000 RM’000 RM’000
(Restated)

(b) Investment income:

Gain/(loss) on sale of:
- securities available-for-sale 13,264 (811) 13,234 (1,174)
Gross dividends from:
- securities available-for-sale 55,610 74,333 55,448 74,321
- subsidiaries - - 24,580 24,560
(Impairment)/ write back of impairment for:
- securities available-for-sale (4,667) (9,904) (1,000) (11,032)
- securities held- to-maturity (1,022) - (1,022) -
- investment in associates - 1,808 - 1,808

63,185 65,426 91,240 88,483

(c)    Other income:

Fee income 29,382 10,196 29,821 11,908
Rental income:
- subsidiaries - - 453 1,976
- others 2,686 1,584 2,523 1,319
Gain/(loss) on disposal of property, plant and equipment 296 (148) 369 (64)
(Loss)/gain on foreign exchange:
- realised (710) 263 (1,026) -
- unrealised (7,179) (1,929) (7,179) (1,929)
Compensation from the Government:
- Infrastructure Support Fund for specific
provision written back (15,169) (2,601) (15,169) (2,601)
- allowance made during the year against
Infrastructure Support Fund 4,084 - 4,084 -
- on foreign exchange 5,998 9,622 5,998 9,622
Interest income on amount due from Minister
of Finance Incorporated 5,356 4,017 5,356 4,017
Realised income/(loss) from:
- Interest rate swap 9,945 8,821 9,945 8,821
- Floater annuity swap - (767) - (767)
- Contract forward - 1,534 - 1,534
Unrealised (loss)/income from:
- Interest rate swap (8,212) (7,606) (8,212) (7,606)
- Floater annuity swap - 1,067 - 1,067
- Contract forward - (70) - (70)
Others 3,759 19,243 446 1,207

30,236 43,226 27,409 28,434

Total non-interest income 276,845 411,158 118,649 116,917

134 Bank pembangunan Malaysia berhad (16562-K)

notes to the financial statements

31 DECEMBER 2009

27. OVERHEAD EXPENSES

Group Bank
Note 2009 2008 2009 2008
RM'000 RM'000 RM'000 RM'000
(Restated)

Personnel costs (i) 85,365 84,712 38,124 40,933
Establishment related expenses (ii) 80,382 75,096 18,097 14,398
Promotion and marketing expenses (iii) 1,049 1,057 931 892
General administrative expenses (iv) 88,464 87,661 10,292 9,301

255,260 248,526 67,444 65,524

(i) Personnel costs

Salaries, allowances and bonuses 66,052 74,903 29,775 32,327
Social security cost 279 257 222 210
Pension costs - Defined contribution plan 5,147 5,126 4,158 4,540
Other staff related expenses 13,887 4,426 3,969 3,856

85,365 84,712 38,124 40,933

(ii) Establishment related expenses

Depreciation:
- Property, plant and equipment 74,434 69,993 13,719 9,262
- Investment properties 430 1,931 177 438
Amortisation of prepaid lease rental 110 112 110 112
Rental of leasehold land and premises 214 - 150 404
Repairs and maintenance of property,
plant and equipment 2,360 2,573 1,209 1,894
Information technology expenses 2,834 487 2,732 2,288

80,382 75,096 18,097 14,398

(iii) Promotion and marketing expenses

Advertisement and publicity 1,049 1,057 931 892

(iv) General administrative expenses

General administrative expenses 87,560 86,836 10,077 9,118
Auditors’ remuneration:
Statutory audit:
- Current year 326 269 178 156
- underprovision in prior year 10 - 10 -
Other services 64 64 27 27
Sundry debtors written off 504 492 - -

88,464 87,661 10,292 9,301

annual report 2009 135

28. DIRECTORS' FEES AND REMUNERATION

Group Bank
2009 2008 2009 2008
RM’000 RM’000 RM’000 RM’000

Directors of the Bank:

Executive directors/Managing directors:

Salary and other remuneration,
including meeting allowances 445 622 445 622
Bonuses 250 - 250 -
Pension cost - Defined contribution plan 95 90 95 90
Benefits-in-kind 6 9 6 9

796 721 796 721

Non-executive directors:

Fees 194 133 194 133
Other remuneration 232 221 232 221

426 354 426 354

Directors of the Subsidiaries:

Non-executive directors:

Fees 173 99 - -
Other remuneration 111 74 - -

284 173 - -

Total 1,506 1,248 1,222 1,075

Total (excluding benefits-in-kind) 1,500 1,239 1,216 1,066

136 Bank pembangunan Malaysia berhad (16562-K)

notes to the financial statements

31 DECEMBER 2009

28. DIRECTORS’ FEES AND REMUNERATION (cont’d)

Group
2009 2008

Number of directors of the Bank whose remuneration falls into the following bands:

Number of executive directors:
RM700,001 to RM750,000 - 1
RM500,001 to RM550,000 1 -
RM250,001 to RM300,000 1 -

Number of non-executive directors:
RM150,001 to RM200,000 1 1
RM50,001 to RM100,000 1 3
RM0 to RM50,000 7 5

11 10

29. COMPENSATION TO KEY MANAGEMENT PERSONNEL

Key management personnel are defined as persons having authority and responsibility for planning, directing and controlling the
activities of the Group and the Bank directly or indirectly, including any director of the Group and the Bank. The remuneration
and compensation of Directors and other members of key management during the year was as follows:

Group Bank
2009 2008 2009 2008
RM’000 RM’000 RM’000 RM’000

Short term employee benefits 1,551 1,363 790 712

Included in the total key management personnel are:

Group Bank
2009 2008 2009 2008
RM’000 RM’000 RM’000 RM’000

Executive Directors' remuneration (Note 28) 796 721 796 721

annual report 2009 137

30. LOANS AND FINANCING LOSS AND ALLOWANCES

Group Bank
2009 2008 2009 2008
RM’000 RM’000 RM’000 RM’000

Allowance for bad and doubtful debts and financing:
General allowance
- made during the year 132 616 - -
- written back (31,559) (9,574) (31,599) (9,574)
Specific allowance
- made during the year 292,925 99,875 189,884 57,671
- impairment losses 314,600 - 314,600 -
- written back (70,493) (43,128) (39,349) (5,598)
Bad debts and financing
- written off 5,652 6,947 1,486 -
- recovered (4,027) (13,571) (690) (1,751)

507,230 41,165 434,332 40,748

31. TAX EXPENSE

Group Bank
2009 2008 2009 2008
RM'000 RM'000 RM'000 RM'000
(Restated) (Restated)

Income tax expense:
Current income tax 14,061 86,138 7,290 75,449
Overprovision in prior years (13,464) (45,933) (13,464) (49,104)

597 40,205 (6,174) 26,345

Deferred tax expense:

Origination and reversal of temporary differences 13,220 546 10,821 (6,735)
Effect of changes in tax rate - 2,440 - 2,440
Under/(over)provision in prior year 5,580 (7,380) 2,959 (15,118)

18,800 (4,394) 13,780 (19,413)

19,397 35,811 7,606 6,932

The Bank is exempted from paying tax on its statutory income from infrastructure projects approved by the Government
of Malaysia via Income Tax Act 1967: Income Tax Order (Exemption) (No. 46) 2002 from year assessment 2000 to year
assessment 2009.

Domestic income tax is calculated at the Malaysian statutory tax rate of 25% (2008: 26%) of the estimated assessable profit
for the year.
138 Bank pembangunan Malaysia berhad (16562-K)

notes to the financial statements

31 DECEMBER 2009

31. TAX EXPENSE (cont’d)

A reconciliation of income tax expense applicable to profit before taxation at the statutory income tax rate to income tax
expense at the effective income tax rate of the Group and of the Bank are as follows:

Reconciliation of effective tax expense

Group Bank
2009 2008 2009 2008
RM’000 RM’000 RM’000 RM’000

Profit before tax 339,461 948,989 383,604 1,081,600

Tax using Malaysian tax rate of 25% (2008 - 26%) 84,865 246,737 95,901 281,216
Effect of changes in tax rate - 2,952 - 2,440
Income not subject to tax (104,955) (163,569) (93,372) (220,441)
Non-deductible expenses 34,466 15,001 18,102 7,939
Over provision of deferred tax 5,580 (7,380) 2,959 (15,118)
Deferred tax assets not recognised on unabsorbed
business losses 17,662 - - -
Utilisation of previously unrecognised unabsorbed
capital allowances and tax losses (4,757) (18,584) (2,520) -
Other items - 6,587 - -

32,861 81,744 21,070 56,036

Over provision in prior years (13,464) (45,933) (13,464) (49,104)

Tax expense 19,397 35,811 7,606 6,932

32. DIVIDENDS

Dividends recognised in the current year by the Bank are:

Total
Sen per amount
share RM'000

2009

Final 2008 ordinary 2.60 80,000

2008

Final 2007 ordinary 2.60 80,000

At the forthcoming Annual General Meeting, a final tax exempt dividend in respect of the financial year ended 31 December
2009, of 3.25% on 3,078,724,049 ordinary shares, amounting to a dividend payable of RM100,000,000 (3.25 sen net per
ordinary share) will be proposed for the shareholders’ approval. The financial statements for the current financial year do not
reflect this proposed dividend. Such dividend, if approved by the shareholder, will be accounted for in equity as an appropriation
of retained profits in the financial year ending 31 December 2010.

annual report 2009 139

33. EARNINGS PER SHARE

The basic earnings per share (“EPS”) of the Group and the Bank are calculated by dividing the net profit for the year by the
weighted average number of ordinary shares in issue during the financial year.

Group Bank
2009 2008 2009 2008
RM’000 RM’000 RM’000 RM’000
(Restated) (Restated)

Profit from continuing operations attributable
to shareholders' of the Bank 307,553 860,737 375,998 1,074,668
Profit from discontinued operations attributable
to shareholders' of the Bank - 23,565 - -

Net profit for the year attributable

to shareholders' of the Bank 307,553 884,302 375,998 1,074,668


Number of ordinary shares in issue (’000) 3,078,724 3,078,724 3,078,724 3,078,724


Basic EPS (sen) for:

Profit from continuing operations 9.99 27.96 12.21 34.91
Profit from discontinued operations - 0.77 - -

Net profit for the year 9.99 28.73 12.21 34.91

34. COMMITMENTS AND CONTINGENCIES

(a) Loan and financing related commitments and contingencies of the Group and the Bank not included in these financial
statements are as follows:

Group Bank
2009 2008 2009 2008
RM'000 RM'000 RM'000 RM'000
(Restated)

Disbursement of loans to industries 8,704,751 5,583,225 8,704,751 5,583,225
Direct credit substitutes 44,818 86,433 44,818 86,433
Secured guarantees given to third
parties on behalf of borrowers 557,445 553,528 411,335 499,327

9,307,014 6,223,186 9,160,904 6,168,985

(b) Capital commitments of the Group and the Bank not included in these financial statements are as follows:

Capital expenditure
- approved but not contracted for 5,178 624 5,178 624




140 Bank pembangunan Malaysia berhad (16562-K)

notes to the financial statements

31 DECEMBER 2009

35. CAPITAL ADEQUACY

Bank
2009 2008
RM'000 RM'000
(Restated)

Tier 1 capital
Paid-up share capital 3,078,724 3,078,724
Other reserves 4,051,809 3,674,153

Total Tier 1 capital 7,130,533 6,752,877

Tier 2 capital
General allowance for bad and doubtful debts 302,957 334,556
Governments grants and subsidies 868,114 1,110,015

Total Tier 2 capital 1,171,071 1,444,571

Total capital 8,301,604 8,197,448
Less: Investment in subsidiaries (930,296) (861,726)

Total capital base 7,371,308 7,335,722

Breakdown of risk-weighted assets in the various categories of risk-weights:

Bank
2009 2008
RM’000 RM’000

10% - -
20% 451,818 573,664
50% 1,635,709 1,804,797
100% 21,280,036 22,173,167

23,367,563 24,551,628

Without deducting proposed dividend:

% %

Core capital ratio 30.51 27.50
Risk-weighted capital adequacy ratio 31.55 29.88

After deducting proposed dividend:

Core capital ratio 30.09 27.18
Risk-weighted capital adequacy ratio 31.12 29.55

annual report 2009 141

36. OTHER CONTINGENCIES

The Directors are of the opinion that provisions are not required in respect of these matters, as it is not probable that a future
sacrifice of economic benefits will be required or the amount is not capable of reliable measurement.

Group
2009 2008
RM'000 RM'000

Contingent liabilities not considered remote Litigation (unsecured)

A subsidiary is being sued by its client alleging for losses and damages arising from the
non-performance breach of the bridging loan and financial guarantee. No defence is filed
yet pending serving of the amended statament of claim. 15,196 -

A subsidiary is defending an action brought up by a client on negligence issue which has
resulted in collateral being forfeited by the Government. Based on legal advice, the
subsidiary has a fair chance in this case. 13,848 13,848

Litigation case against a subsidiary by a property developer who accuse that a property
charged to one of the subsidiary’s client was void. The same property has been used by
the subsidiary’s client as a collateral charged to the subsidiary. Therefore, the third party
is claiming for the collateral from the subsidiary. Based on legal advice, there is sufficient
evidence to prove that the collateral charged was valid. 2,000 2,000

Bank
2009 2008
RM'000 RM'000

The Bank is defending an action brought up by a client on misrepresentation issue which
has resulted in collateral being disposed without informing the client. Based on legal advice,
the Bank has fair chance in this case. 20,000 20,000

37. RELATED PARTY TRANSACTIONS

The Banks’s major transactions with its related companies consist mainly of extending credit facilities and giving of loans and
advances. The Directors of the Bank are of the opinion that these transactions have been entered into in the normal course of
business and have been established under negotiated basis. In addition to the transaction detailed elsewhere in the financial
statements, the Group and the Bank has the following transactions with related parties during the financial year:

Bank
2009 2008
RM'000 RM'000

Subsidiaries:
Rental of premises charged by a subsidiary - 34
Rental income from a subsidiary 453 1,976
Income from service level agreement 439 1,713
Building maintenance 540 1,893

142 Bank pembangunan Malaysia berhad (16562-K)

notes to the financial statements

31 DECEMBER 2009

38. COMPANIES IN THE GROUP

(a) The subsidiaries, all incorporated in Malaysia, are as follows:

Effective interest held

by the Bank
Name of the Company 2009 2008 Principal activities
% %

Pembangunan Leasing Corporation Sdn Bhd 100.00 100.00 Lease, hire purchase financing, factoring,
block discounting and investment holding

Maju Nominees (Tempatan) Sdn Bhd 100.00 100.00 Nominee and factoring

BPF Properties Sdn Bhd* 100.00 100.00 Property investment

BPMB Urus Harta Sdn Bhd 100.00 100.00 Property investment

Pembangunan Ekuiti Sdn Bhd 54.80 54.80 Investment manager and provision of
advisory, consultancy and related
services pertaining to investments

Global Maritime Venture Berhad 90.00 90.00 Venture capital investment

Emerald Upline Sdn Bhd ¹ 100.00 - Ship-owning

* In members' voluntary liquidation

¹ On 22 May 2009, Emerald Upline Sdn. Bhd. was incorporated with issued and paid up capital of RM2, represented by 2
ordinary shares of RM1.00 each respectively.

(b) Details of subsidiary companies of Global Maritime Ventures Berhad, all of which are incorporated in Malaysia, are as
follows:

Effective interest held

by the Group
Name of the Company 2009 2008 Principal activities
% %

Mutiara Navigation Sdn Bhd 70.00 70.00 Ship-owning

Intan Navigation Sdn Bhd 70.00 70.00 Ship-owning

Nilam Navigation Sdn Bhd 70.00 70.00 Ship-owning

Kasa Navigation Sdn Bhd 70.00 70.00 Ship-owning

Mayang Navigation Sdn Bhd 70.00 70.00 Ship-owning

Sari Navigation Sdn Bhd 70.00 70.00 Ship-owning

Tiara Navigation Sdn Bhd 70.00 70.00 Dormant
annual report 2009 143

38. COMPANIES IN THE GROUP (cont’d)

(b) Details of subsidiary companies of Global Maritime Ventures Berhad, all of which are incorporated in Malaysia, are as
follows: (cont’d)

Effective interest held

by the Group
Name of the Company 2009 2008 Principal activities
% %

Glory Incentive Sdn Bhd 100.00 100.00 Investment holding

GMV-ALAM Sdn Bhd 100.00 100.00 Investment holding

(f.k.a. Synergy Sparkle Sdn Bhd)

GMV-Gagasan Sdn Bhd 100.00 100.00 Investment holding
(f.k.a. Prestige Polar Sdn Bhd)

Tegas Senja Sdn Bhd 100.00 100.00 Investment holding

GMV-Bahtera Sdn Bhd 100.00 100.00 Investment holding
(f.k.a. Nilam Inisiatif Sdn Bhd)

GMV-Orion Sdn Bhd 100.00 100.00 Investment holding

(f.k.a. Global Satria Venture Sdn Bhd)

GMV-Regional Sdn Bhd 100.00 100.00 Investment holding

(f.k.a. Modular Majoriti Sdn Bhd)

GMV-Orkim Sdn Bhd 100.00 100.00 Investment holding
(f.k.a. Megakey Ventures Sdn Bhd)

GMV-Offshore Sdn Bhd 100.00 100.00 Investment holding

(f.k.a. Megan Metropolis Sdn Bhd)

GMV-Global Sdn Bhd 100.00 100.00 Investment holding

(f.k.a. Oriental Point Sdn Bhd)

GMV-Jasa Sdn Bhd 100.00 100.00 Investment holding

(f.k.a. Magna Jubilee Sdn Bhd)

GMV-Omni Sdn Bhd 100.00 100.00 Investment holding

(f.k.a. Implikasi Hebat Sdn Bhd)

Exiwealth Resources Sdn Bhd² 100.00 - Investment holding

² On 25 October 2009, the Group acquired Exiwealth Resources Sdn. Bhd. as a wholly owned subsidiary for a cash
consideration of RM2 pursuant to a joint venture between Global Maritime Ventures Berhad and Syarikat Borcos Shipping
Sdn. Bhd.



144 Bank pembangunan Malaysia berhad (16562-K)

notes to the financial statements

31 DECEMBER 2009

38. COMPANIES IN THE GROUP (cont’d)

(c) Details of subsidiary companies of Glory Incentive Sdn. Bhd., all of which are incorporated in Malaysia, are as follows:

Effective interest held

by the Group
Name of the Company 2009 2008 Principal activities
% %

Permata Navigation Sdn Bhd 70.00 70.00 Ship-owning

Gemala Navigation Sdn Bhd 70.00 70.00 Ship-owning

Ratna Navigation Sdn Bhd 70.00 70.00 Ship-owning

Kencana Navigation Sdn Bhd 70.00 70.00 Ship-owning

Ayu Navigation Sdn Bhd 70.00 70.00 Ship-owning

(d) Details of subsidiaries of Pembangunan Leasing Corporation Sdn Bhd, which are incorporated in Malaysia, are as
follows:

Effective interest held
by the Group
Name of the Company 2009 2008 Principal activities
% %

PLC Credit & Factoring Sdn Bhd 100.00 100.00 Insurance agency property management,
hire purchase financing and factoring

BI Credit & Leasing Berhad 100.00 100.00 Credit and leasing

(e) Details of a subsidiary company of BI Credit & Leasing Berhad, which is incorporated in Malaysia, are as follows:

Effective interest held

by the Group
Name of the Company 2009 2008 Principal activities
% %

KIB Nominee (Tempatan) Sdn Bhd 100.00 100.00 Nominee services








annual report 2009 145

39. DISPOSAL OF GROUP PREVIOUSLY CLASSIFIED AS HELD FOR SALE

(i) Discontinued Operations

In prior year, 25 January 2008, the Bank announced its decision to dispose of its entire holdings in Bank Perusahaan
Kecil & Sederhana Malaysia Berhad (“SME Bank”) to its ultimate shareholder, the Minister of Finance Incorporated
as part of its rationalisation exercise. SME Bank is principally engaged in acting as a development bank focusing on
small and medium size enterprises. The disposal is consistent with the Group’s long-term strategy to maximise growth
and profitability by focusing on infrastructure projects financing and to carry out the functions of a development bank
focusing on maritime, advanced manufacturing industries, high technology and export oriented industries. The disposal
of the subsidiary was completed on 31 March 2008.

An analysis of the result of recognised on the assets of disposal group is as follows:

31 March
2008
RM'000

Interest income 52,298
Interest expense/finance cost (14,860)

Net interest income 37,438

Net non-interest income 10,140

Net income 47,578

Administration and operating expenses (27,218)

Operating profit 20,360

Loan and financing loss and provision (17,804)

2,556
Share of results of associated companies 8,370

Profit before taxation 10,926

Tax expense (7,502)

Profit after taxation 3,424

31 March
2008
RM'000

Operating cash flows (942,146)
Investing cash flows (39,246)
Financing cash flows 150,604

Total cash flows (830,788)

The cost of investments in SME Bank on the Bank’s balance sheet as at 31 March 2008 is RM908,274,500.

146 Bank pembangunan Malaysia berhad (16562-K)

notes to the financial statements

31 DECEMBER 2009

39. DISPOSAL OF GROUP PREVIOUSLY CLASSIFIED AS HELD FOR SALE (Cont’d)

(ii) Disposal of Group previously classified as held for sale

(a) Group

SME Bank’s disposal was completed in prior year, on 31 March 2008. The disposal had the following effects on the
financial position of the Group as at 31 December 2008:

1 March
2008
RM’000

Assets disposed

Cash and short term deposits 848,641
Deposits and placements with financial institutions 540,305
Securities portfolio 240,661
Loans, advances and financing 2,691,767
Other assets 21,689
Interest in associates 59,355
Property, plant and equipment 133,499
Prepaid land leases 31,247
Investment property 76,935

Total assets 4,644,099

Liabilities disposed

Deposits from customers 15,000
Other liabilities 337,392
Term loans 2,715,052
Government funds 377,179

Total liabilities 3,444,623

Net assets disposed 1,199,476

Unrealised holding reserve recognised in income statement (7,617)

1,191,859
Total disposal proceeds (1,212,000)

Gain on disposal (20,141)

Disposal proceed settled by deferred payment 1,212,000

Cash inflow arising from disposal :

Cash consideration 1,212,000
Cash and cash equivalent of subsidiary disposed (848,641)

Net cash inflow of the Group 363,359

annual report 2009 147

39. DISPOSAL OF GROUP PREVIOUSLY CLASSIFIED AS HELD FOR SALE (CONT’D)

(ii) Disposal of Group previously classified as held for sale (cont’d)

(b) The Bank

In prior year, the disposal had the following effects on the financial results of the Bank as at 31 December 2008:

RM’000

Total disposal proceeds 1,212,000
Less: Cost of investment in subsidiary (908,275)

Gain on disposal 303,725

(iii) In prior year, on 1 April 2008, as part of the rationalisation exercise between the Group and SME Bank, the Group has
acquired Menara Bank Pembangunan from SME Bank, and SME Bank has in turn purchased Menara SME Bank and SME
Branches (collectively known as “SME Bank Buildings”) previously owned by the Group.

(a) Disposal of SME Bank Buildings

Group and Bank
Property,
Investment plant and
properties equipment Total
RM’000 RM’000 RM’000

Total disposal proceeds 118,274 4,936 123,210
Less: Net book value of building and related assets disposed (28,363) (4,936) (33,299)

Gain on disposal of SME Bank Building 89,911 - 89,911

(b) Purchase of Bank Pembangunan building and land and its related assets from SME Bank, comprising:

Group
and
Bank
RM’000

Freehold land 17,914
Buildings 71,208
Mechanical and electricals 35,778

124,900

148 Bank pembangunan Malaysia berhad (16562-K)

notes to the financial statements

31 DECEMBER 2009

40. ASSETS HELD FOR SALE

Group
2009 2008
RM’000 RM’000

As at 1 January - -
Reclassified from property, plant and equipment 79,402 -

As at 31 December 79,402 -

During the financial year, the Group classified two vessels as ssets held for sale. Memorandum of Agreements have been
signed for the sale of the vessels. Deposits had been received for the sale of the vessels, however the risks and rewards have
not been transferred to the purchasers.

As at 31 December 2009, the assets held for sale were pledged to a licensed financial institution for banking facilities granted
to the subsidiaries as disclosed in Note 18(d).

41. FINANCIAL INSTRUMENTS

Financial risk management objectives and policies

The Group’s financial risk management policies seek to enhance shareholder value. The Group focuses on the enterprise wide
risk exposure, which include credit, market, liquidity and operation risk and seeks to minimise potential adverse effects on the
financial performance of the Group.

As part of the Group’s strategy to integrate the management and control of risks across the various risk segments, a dedicated
function known as the Group Risk Management was established.

Financial risks management is carried out through risk assessment and reviews, internal control systems and adhered to
Group financial risk management policies, which are reported to and approved by the Board of Directors. The Board also
approves the treasury policies, which cover the management of these risks.

The main areas of financial risks faced by the Group are set out as follows:

Credit risk

Credit risk is the potential loss arising from customers or counterparties failing to meet their financial contractual obligations.
Management of credit risk is principally through lending directions and policies, which are instituted based on prevailing
business and economic conditions. Credit processes are also structured to ensure adherence of credit policies and to establish
impartiality in loan origination, approval, documentation, disbursement and settlement.

The Group Risk Management, is primarily involved in managing, enhancing asset quality, reviews concentration limits, according
to various categories such as customer, economic segment and product types and monitors credit portfolio risk. Industry risk
is also evaluated and monitored as dynamic changes in the economic environment has a direct impact on the Bank’s assets
quality.

annual report 2009 149

41. FINANCIAL INSTRUMENTS (cont’d)

Credit risk (cont’d)

The internal credit risk rating system is enhanced to better measure the credit worthiness of each customer. The primary
objectives are to provide a consistent approach in risk grading of the Group’s borrowers and to measure the risk of default by
borrowers objectively.

Internal single customer limit are regularly monitored to minimise the risk of over-concentration. The overall credit risk
management is subjected to an ongoing process for reviewing and enhancement.

Credit reviews on loan applications before being approved by the approving authorities are conducted. Various Credit Committee
have been established to review all loans to be submitted for the approval of the respective Board of Directors of the Bank and
subsidiaries.

Foreign Currency Risk

The Group is exposed to foreign currency risk as a result of its borrowings made in currencies other than Ringgit Malaysia.
The Group’s policy in managing its exposure to foreign currency risks is by hedging through forward contract deals.

Liquidity Risk

Liquidity risk is the risk that an enterprise will encounter difficulty in raising funds to meet its current and future payment
obligations associated with financial obligations when they fall due. The liquidity and cash flow risks are managed by maintaining
a diversity of funding sources and spreading debt repayments over a range of maturities.

The Group manages its liquidity requirement on a day-to-day basis to ensure that funds are readily available for its operational
needs, withdrawals of deposits and repayments to fund providers. The Group may raise funds locally and globally either
through government-to-government arrangements or direct negotiations. Other sources of funding through the capital market
are being explored on an on-going basis to ensure a diversity of funding source.

Operational Risk

Operational risk, which inherent in all business activities, is the risk of loss resulting from inadequate or failed internal processes,
people and systems, or from external events.

Operational Risk Management (ORM) takes place in a day-to-day basis at each business unit level. The Bank mitigates
its operational risk by having comprehensive internal controls, system and procedures, which are reviewed regularly and
subjected to periodical audits by Internal Auditors.

The Group may be exposed to a loss in earnings due to the interest rates structure of the balance sheet arising from interest
rates and yield curves changes. The sensitivity to interest rates arises from the mismatches in the reprising rates, cash
flows and other characteristic of the assets and their corresponding liability funding. The Group manages its interest rate risk
exposure through the use of fixed/floating rate debts and financial instruments.








42. INTEREST RATE RISK
150
The table below summarises the Group’s and Bank’s exposure to interest rate risk. The table indicates effective average interest rates at the balance
sheet date and the periods in which the financial instruments reprice or mature, whichever is earlier.

Group < Non-trading book > Effective
Up to 1 >1 - 3 >3 - 12 >1 - 5 Over 5 Non-interest interest 31 DECEMBER 2009
month months months years years sensitive Total rate
2009 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 %

Assets

Cash and short term deposits 1,762,029 - - - - 20,464 1,782,493 2.28

Deposits and placements
with financial institutions - 202,554 4,028 50,000 18 - 256,600 4.91
Securities portfolio
Available-for-sale 9,299 14,996 95,386 840,534 1,219,685 2,919 2,182,819 6.05
Held-to-maturity - - 4,022 101,414 318,618 - 424,054 5.56
Loans, advances and financing 652,993 297,606 1,927,979 7,181,030 9,967,799 - 20,027,407 7.45
Other assets - - - - - 1,796,433 1,796,433 -
Investment in associates - - - - - 978 978 -
Investment in jointly
controlled entities - - - - - 177,992 177,992 -
Property, plant and equipment - - - - - 738,049 738,049 -
Prepaid land lease - - - - - 3,911 3,911 -
notes to the financial statements

Investment properties - - - - - 17,866 17,866 -

Asset classified as held for sale - - - - - 79,402 79,402 -


Total Assets 2,424,321 515,156 2,031,415 8,172,978 11,506,120 2,838,014 27,488,004

Bank pembangunan Malaysia berhad (16562-K)
42. INTEREST RATE RISK (cont’d)

Group (Cont’d) < Non-trading book > Effective
Up to 1 >1 - 3 >3 - 12 >1 - 5 Over 5 Non-interest interest
month months months years years sensitive Total rate
2009 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 %
annual report 2009

Liabilities and Shareholders’ Equity

Deposits from customers 3,371,114 3,856,337 1,005,455 - - - 8,232,906 2.36

Other liabilities - - - - - 190,592 190,592 -
Redeemable guaranteed notes - - - 200,000 1,790,325 - 1,990,325 6.53
Long term loans 59,710 - 442,999 882,902 7,227,498 - 8,613,109 4.70
Infrastructure support fund - - - - - 715,882 715,882 -
Deferred income - - - - - 152,232 152,232 -
Deferred tax liabilities - - - - - 17,918 17,918 -

Total Liabilities 3,430,824 3,856,337 1,448,454 1,082,902 9,017,823 1,076,624 19,912,964

Shareholders’ equity - - - - - 7,342,621 7,342,621 -
Minority interests - - - - - 232,419 232,419 -

Total Liabilities and

Shareholders’ Equity 3,430,824 3,856,337 1,448,454 1,082,902 9,017,823 8,651,664 27,488,004 -


On-balance sheet interest
sensitivity gap (1,006,503) (3,341,181) 582,961 7,090,076 2,488,297 (5,813,650) - -
Off-balance sheet interest
sensitivity gap - - - - - - - -

Total interest sensitivity gap (1,006,503) (3,341,181) 582,961 7,090,076 2,488,297 (5,813,650) -


151
42. INTEREST RATE RISK (cont’d)
152
Group < Non-trading book > Effective
Up to 1 >1 - 3 >3 - 12 >1 - 5 Over 5 Non-interest interest
month months months years years sensitive Total rate
2008 (Restated) RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 %
31 DECEMBER 2009
Assets

Cash and short term deposits 2,683,690 - - - - 51,844 2,735,534 3.62
Deposits and placements
with financial institutions - 18 245,859 - - - 245,877 3.58
Securities portfolio
Available-for-sale - 10,009 75,189 1,086,631 876,967 7,339 2,056,135 5.57
Held-to-maturity - - 61,103 104,880 332,800 - 498,783 1.90
Loans, advances and financing 1,025,964 61,890 1,539,380 5,382,415 9,276,337 - 17,285,986 6.98
Other assets - - - - - 1,763,146 1,763,146 -
Investment in associates - - - - - 978 978 -
Investment in jointly
controlled entities - - - - - 133,555 133,555 -
Property, plant and equipment - - - - - 863,732 863,732 -
Prepaid land lease - - - - - 4,021 4,021 -
Investment properties - - - - - 18,836 18,836 -
Deferred tax assets - - - - - 28,219 28,219 -

notes to the financial statements

Total Assets 3,709,654 71,917 1,921,531 6,573,926 10,486,104 2,871,670 25,634,802

Bank pembangunan Malaysia berhad (16562-K)
42. INTEREST RATE RISK (cont’d)

Group (Cont’d) < Non-trading book > Effective

Up to 1 >1 - 3 >3 - 12 >1 - 5 Over 5 Non-interest interest
month months months years years sensitive Total rate
2008 (Restated) RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 %
annual report 2009

Liabilities and Shareholders’ Equity

Deposits from customers 756,084 1,580,394 2,841,199 - - - 5,177,677 3.68
Other liabilities - - - - - 190,384 190,384 -
Redeemable guaranteed notes - - - 200,000 1,789,364 - 1,989,364 6.71
Long term loans 88,823 1,071,630 434,646 1,264,859 7,040,789 - 9,900,747 5.05
Infrastructure support fund - - - - - 662,326 662,326 -
Deferred income - - - - - 447,689 447,689 -

Total Liabilities 844,907 2,652,024 3,275,845 1,464,859 8,830,153 1,300,399 18,368,187

Shareholders’ equity - - - - - 7,035,813 7,035,813 -
Minority interests - - - - - 230,802 230,802 -

Total Liabilities and

Shareholders’ Equity 844,907 2,652,024 3,275,845 1,464,859 8,830,153 8,567,014 25,634,802

On-balance sheet interest
sensitivity gap 2,864,747 (2,580,107) (1,354,314) 5,109,067 1,655,951 (5,695,344) - -
Off-balance sheet interest
sensitivity gap - - - - - - - -

Total interest sensitivity gap 2,864,747 (2,580,107) (1,354,314) 5,109,067 1,655,951 (5,695,344) -

153
42. INTEREST RATE RISK (cont’d)
154
Bank < Non-trading book > Effective
Up to 1 >1 - 3 >3 - 12 >1 - 5 Over 5 Non-interest interest
month months months years years sensitive Total rate
2009 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 %
31 DECEMBER 2009
Assets

Cash and short term deposits 1,065,199 - - - - 4,488 1,069,687 2.14
Deposits and placements
with financial institutions - 202,554 4,000 50,000 - - 256,554 4.91
Securities portfolio
Available-for-sale 9,299 14,996 95,386 840,534 1,219,668 - 2,179,883 6.06
Held-to-maturity - - 4,022 101,414 318,618 - 424,054 5.56
Loans, advances and financing 653,343 307,254 1,857,762 7,103,760 9,972,079 - 19,894,198 7.43
Other assets - - - - - 1,687,897 1,687,897 -
Investment in subsidiaries - - - - - 930,296 930,296 -
Investment in associates - - - - - - - -
Property, plant and equipment - - - - - 131,654 131,654 -
Prepaid land lease - - - - - 3,911 3,911 -
Investment properties - - - - - 8,267 8,267 -

Total Assets 1,727,841 524,804 1,961,170 8,095,708 11,510,365 2,766,513 26,586,401

notes to the financial statements

Bank pembangunan Malaysia berhad (16562-K)
42. INTEREST RATE RISK (cont’d)

Bank (Cont’d) < Non-trading book > Effective

Up to 1 >1 - 3 >3 - 12 >1 - 5 Over 5 Non-interest interest
month months months years years sensitive Total rate
2009 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 %
annual report 2009

Liabilities and Shareholders’ Equity

Deposits from customers 3,371,114 3,856,337 1,005,455 - - - 8,232,906 2.36
Other liabilities - - - - - 79,253 79,253 -
Redeemable guaranteed notes - - - 200,000 1,790,325 - 1,990,325 6.53
Long term loans 59,710 - 442,999 733,256 7,010,936 - 8,246,901 4.82
Infrastructure support fund - - - - - 715,882 715,882 -
Deferred income - - - - - 152,232 152,232 -
Deferred tax liabilities - - - - - 38,369 38,369 -

Total Liabilities 3,430,824 3,856,337 1,448,454 933,256 8,801,261 985,736 19,455,868

Shareholders’ equity - - - - - 7,130,533 7,130,533 -

Total Liabilities and

Shareholders’ Equity 3,430,824 3,856,337 1,448,454 933,256 8,801,261 8,116,269 26,586,401

On-balance sheet interest
sensitivity gap (1,702,983) (3,331,533) 512,716 7,162,452 2,709,104 (5,349,756) -
Off-balance sheet interest
sensitivity gap - - - - - - -


Total interest sensitivity gap (1,702,983) (3,331,533) 512,716 7,162,452 2,709,104 (5,349,756) -

155
42. INTEREST RATE RISK (cont’d)
156
Bank < Non-trading book > Effective
Up to 1 >1 - 3 >3 - 12 >1 - 5 Over 5 Non-interest interest
month months months years years sensitive Total rate
2008 (Restated) RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 %
31 DECEMBER 2009
Assets

Cash and short term deposits 1,975,962 - - - - 16,024 1,991,986 3.63
Deposits and placements
with financial institutions - - 245,831 - - - 245,831 3.33
Securities portfolio
Available-for-sale - 10,009 75,189 918,552 1,074,376 - 2,078,126 5.57
Held-to-maturity - - 61,103 104,880 303,470 - 469,453 1.90
Loans, advances and financing 1,025,964 61,890 1,428,631 5,136,237 9,531,538 - 17,184,260 6.95
Other assets - - - - - 1,630,606 1,630,606 -
Investment in subsidiaries - - - - - 861,726 861,726 -
Investment in associates - - - - - - - -
Property, plant and equipment - - - - - 146,350 146,350 -
Prepaid land lease - - - - - 4,021 4,021 -
Investment properties - - - - - 8,444 8,444 -
Deferred tax assets - - - - - 2,748 2,748 -

Total Assets 3,001,926 71,899 1,810,754 6,159,669 10,909,384 2,669,919 24,623,551

notes to the financial statements

Bank pembangunan Malaysia berhad (16562-K)
42. INTEREST RATE RISK (cont’d)

Bank (Cont’d) < Non-trading book > Effective

Up to 1 >1 - 3 >3 - 12 >1 - 5 Over 5 Non-interest interest
month months months years years sensitive Total rate
2008 (Restated) RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 %
annual report 2009

Liabilities and Shareholders’ Equity

Deposits from customers 756,084 695,999 3,725,594 - - - 5,177,677 3.68
Other liabilities - - - - - 102,745 102,745 -
Redeemable guaranteed notes - - - 200,000 1,789,364 - 1,989,364 6.53
Long term loans 88,823 1,071,630 396,437 1,008,501 6,925,482 - 9,490,873 5.37
Infrastructure support fund - - - - - 662,326 662,326 -
Deferred income - - - - - 447,689 447,689 -

Total liabilities 844,907 1,767,629 4,122,031 1,208,501 8,714,846 1,212,760 17,870,674

Shareholders’ equity - - - - - 6,752,877 6,752,877 -

Total Liabilities and

Shareholders’ Equity 844,907 1,767,629 4,122,031 1,208,501 8,714,846 7,965,637 24,623,551

On-balance sheet interest

sensitivity gap 2,157,019 (1,695,730) (2,311,277) 4,951,168 2,194,538 (5,295,718) -
Off-balance sheet interest
sensitivity gap - - - - - - -

Total interest sensitivity gap 2,157,019 (1,695,730) (2,311,277) 4,951,168 2,194,538 (5,295,718) -

157
158 Bank pembangunan Malaysia berhad (16562-K)

notes to the financial statements

31 DECEMBER 2009

43. FAIR VALUES

Financial instruments comprise financial assets, financial liabilities and also off-balance sheet derivatives. The fair value of a
financial instrument is the amount at which the instrument could be exchanged or settled between knowledgeable and willing
parties in an arm’s length transaction, other than in a forced or liquidation sale. The information presented herein represents
best estimates of fair values of financial instruments at the balance sheet date.

Loans, advances and financing to customers, where such market prices are not available, various methodologies have
been used to estimate the approximate fair values of such instruments. These methodologies are significantly affected
by the assumptions used and judgements made regarding risk characteristics of various financial instruments, discount
rates, estimates of future cash flows, future expected loss experience and other factors. Changes in the assumptions could
significantly affect these estimates and the resulting fair value estimates. Therefore, for a significant portion of the Group’s and
the Bank’s financial instruments, including loans, advances and financing to customers, their respective fair value estimates
do not purport to represent, nor should they be construed to represent, the amounts that the Group and the Bank could realise
in a sale transaction at the balance sheet date. The fair value information presented herein should also in no way be construed
as representative of the underlying value of the Group and the Bank as a going concern.

The on-balance sheet financial assets and financial liabilities of the Group and the Bank whose fair values are required to be
disclosed in accordance with FRS132 comprise all its assets and liabilities with the exception of investments in subsidiaries,
investments in associated companies, property, plant and equipment and provision for current and deferred taxation.

The estimated fair values of those on-balance sheet financial assets and financial liabilities as at the balance sheet date
approximate their carrying amounts as shown in the balance sheets, except for the following financial assets and liabilities:

2009 2008
Carrying Carrying Carrying Carrying
Value Fair Value Value Fair Value
Group RM’000 RM’000 RM’000 RM’000
(Restated) (Restated)

Financial Assets
Loans, advances and financing 20,027,407 19,736,080 17,285,986 17,249,765

Financial liabilities
Redeemable guaranteed notes 1,990,325 1,919,957 1,989,364 1,783,863
Term loans 8,613,109 7,760,489 9,900,747 9,025,314

Bank

Financial assets
Loans, advances and financing 19,894,198 19,661,375 17,184,260 17,015,409

Financial liabilities
Redeemable guaranteed notes 1,990,325 1,919,957 1,989,364 1,783,863
Term loans 8,246,901 7,394,281 9,490,873 8,419,015

annual report 2009 159

43. FAIR VALUES (cont’d)

The methods and assumptions used in estimating the fair values of other financial instruments are as follows:

(a) Cash and Short-term Funds

The carrying amount approximates fair value due to the relatively short maturity of the financial instruments.

(b) Deposits and Placements with Financial Institutions

The fair values of those financial instruments with remaining maturities of less than one year approximate their carrying
values due to their relatively short maturities. For those financial instruments with maturities of more than one year, the
fair values are estimated based on discounted cash flows using applicable prevailing market rates of similar remaining
maturities at the balance sheet date.

(c) Securities

Fair values of securities that are actively traded is determined by quoted bid prices. For non-actively traded securities,
independent broker quotations are obtained. Fair values of equity securities are estimated using a number of methods,
including net tangible assets.

(d) Loans, Advances and Financing

The fair values of variable and fixed rate loans with remaining maturity of less than one year are estimated to approximate
their carrying values. For fixed rate loans, variable rate loans and Islamic financing with maturities of more than one year,
the fair values are estimated based on expected future cash flows of contractual installment payments and discounted
at prevailing rates at balance sheet date offered for similar loans to new borrowers with similar credit profiles, where
applicable. In respect of Government infrastructure loans, the fair values are estimated after taking into account the
Government compensation received on these loans. For non-performing loans, the fair values are deemed to approximate
the carrying values, net of interest in suspense and specific allowance for bad and doubtful debts and financing.

(e) Deposits from Customers, Deposits and Placements of Banks and Other Financial Institutions

The fair values of deposits payable on demand and deposits and placements with maturities of less than one year
approximate their carrying values due to the relatively short maturity of these instruments. The fair values of fixed
deposits and placements with remaining maturities of more than one year are estimated based on discounted cash flows
using applicable rates currently offered for deposits and placements with similar remaining maturities. The fair value of
Islamic deposits are estimated to approximate their carrying values as the profit rates are determined at the end of their
holding periods based on the actual profits generated from the assets invested.

(f) Redeemable Guaranteed Notes

The fair values are estimated based on expected future cash flows of coupon and face value payments and discounted
at their quoted bid prices at balance sheet date or prevailing rates at balance sheet date obtained for similar notes with
similar maturities, where applicable.

160 Bank pembangunan Malaysia berhad (16562-K)

notes to the financial statements

31 DECEMBER 2009

43. FAIR VALUES (cont’d)

(g) Term Loans

The fair values are estimated based on expected future cash flows of contractual installment payments and discounted
at prevailing rates at balance sheet date obtained for similar loans with similar maturities, where applicable.

(h) Derivative Financial Instruments

Fair values of derivative instruments are normally zero or negligible at inception and the subsequent change in value is
favourable (assets) or unfavourable (liabilities) as a result of fluctuations in market interest rates or foreign exchange rates
relative to their terms.

The fair values of the Group’s and the Bank’s derivative instruments are estimated by reference to quoted market prices.
Internal models are used where no market price is available.


44. PRIOR YEAR ADJUSTMENTS

(a) Change in classification of an associate to investment securities

The Group and the Bank restated the opening balances of retained profits of the prior and current years to recognise
the effect of change in the classification of an investment in associate to appropriately reflect it as investment securities
available for sale. The effects on retained profits and current year’s net profit are disclosed in Note (d) below.

(b) Recognition of deferred tax assets originating during tax exempt period

The Group and the Bank restated the opening balances of retained profits and statutory reserves of the prior and current
year to recognise the effect of originating deferred tax assets on the general provision made on loans, financing and
advances from infrastructure projects approved by the Government of Malaysia during the tax exempt period. The
effects on retained profits, statutory reserve and current year’s net profit are disclosed in Note (d) below.

(c) Change in classification of investment in subsidiaries to jointly controlled entities

Prior to 1 January 2009, Gagasan Ked Sdn Bhd and Gagasan Paha Sdn Bhd (“Companies”) being Companies in which
the Global Maritime Ventures Berhad Group (the “GMV Group”), a subsidiary of the Bank, holds 60% shareholding were
classified as subsidiaries by virtue of the control the GMV Group exercised over these companies.

During the year, the Board of GMV Group, having considered the terms of the Joint Venture Agreements with the GMV
Group’s Joint Venture Partner, Gagasan Carriers Sdn Bhd, which set out the conduct of the Companies’ affairs, concluded
that it is more appropriate to classify the investments as jointly controlled entities as the GMV Group does not have
absolute control over their financial management and operation.

As a result, the GMV Group reclassified these Companies as jointly controlled entities and results of these Companies
have been de-consolidated and accounted for under the equity method in accordance with the Group’s accounting policy
set out in Note 2.2(c). The effects on the Group’s retained profits and current year’s net profit are disclosed in Note (d)
below.





annual report 2009 161

44. PRIOR YEAR ADJUSTMENTS (cont’d)

(d) Effect of prior year adjustment

Group Bank
2009 2008 2009 2008
RM’000 RM’000 RM’000 RM’000

Effects on retained profits:
At 1 January, as previously stated 2,769,917 2,482,874 2,175,274 1,719,906
Prior year adjustments
Note 44 (a) (203,371) (191,448) - -
Note 44 (b) 18,684 16,718 18,684 16,718
Note 44 (c) (4) - - -

At 1 January, as restated 2,585,226 2,308,144 2,193,958 1,736,624

Effect on statutory reserve:
At 1 January, as previously stated 1,177,958 642,589 1,177,958 642,589
Effects of:
Note 44 (b) 18,684 16,719 18,684 16,719

At 1 January, as restated 1,196,642 659,308 1,196,642 659,308

Effects on net profit for the year:

Net profit before adjustments 284,740 944,730 366,761 1,070,737
Effects of:
Note 44 (a) 26,087 (11,923) - -
Note 44 (b) 9,237 3,931 9,237 3,931
Note 44 (c) - 5 - -

Net profit for the year 320,064 936,743 375,998 1,074,668

162 Bank pembangunan Malaysia berhad (16562-K)

notes to the financial statements

31 DECEMBER 2009

44. PRIOR YEAR ADJUSTMENTS (cont’d)

(d) Restatement of comparatives due to prior year adjustment:

Increase/(decrease)

Previously Note Note Note
Group stated 44(a) 44(b) 44(c) Restated
RM’000 RM’000 RM’000 RM’000 RM’000

Balance Sheets:
Cash and short term deposit 2,752,713 - - (17,179) 2,735,534
Securities portfolio 2,062,770 492,148 - - 2,554,918
Other assets 1,764,988 - - (1,842) 1,763,146
Interest in associates 412,278 (411,300) - - 978
Interest in jointly controlled entities 110,539 - - 23,016 133,555
Property, plant and equipment 895,902 - - (32,170) 863,732
Deferred tax assets/(liabilities) 52,100 (61,249) 37,368 - 28,219
Other liabilities 193,362 - - (2,978) 190,384
Term loan 9,925,549 - - (24,802) 9,900,747
Reserves 3,923,711 (3,986) 37,368 (4) 3,957,089
Minority interest 207,608 23,585 - (391) 230,802

Income Statements:

Interest income 1,443,664 - - (90) 1,443,574
Non-interest income 337,704 73,578 - (124) 411,158
Overhead expenses (248,751) 225 (248,526)
Share of results of associates 85,501 (85,501) - - -
Share of results of jointly
controlled entities 4,229 - - (6) 4,223
Tax expense (39,742) - 3,931 - (35,811)

Bank

Balance Sheets:
Securities portfolio 2,055,431 492,148 - - 2,547,579
Interest in associates 125,609 (125,609) - - -
Deferred tax assets/(liabilities) 57,015 (91,635) 37,368 - 2,748
Reserves 3,361,881 274,904 37,368 - 3,674,153

Income Statements:
Tax expense (10,863) - 3,931 - (6,932)

annual report 2009 163

45. ISLAMIC BANKING BUSINESS

The state of affairs as at 31 December 200 and results for the financial year ended on this date under the Islamic Banking
business of the Group included in the Group financial statements are summarised as follows:

Balance sheets as at 31 December 2009

Group Bank
2009 2008 2009 2008
Note RM'000 RM'000 RM'000 RM'000

Assets

Cash and short-term funds (a) 13,174 139,950 5,717 132,708

Deposits and placements
with financial institutions (b) 2,554 13,772 2,554 13,772
Advances and financing (c) 2,061,171 2,465,959 2,061,171 2,455,649
Other assets (d) 1,342 7,612 1,341 7,611

Total assets 2,078,241 2,627,293 2,070,783 2,609,740

Liabilities

Other liabilities (e) 197,749 1,001,453 186,811 986,192
Deposit from customers 204,000 - 204,000 -
Long term advances 502,515 502,515 502,515 502,515
Redeemable guaranteed notes 400,000 400,000 400,000 400,000
Islamic general fund 773,977 723,325 777,457 721,033

Total liabilities and Islamic banking funds 2,078,241 2,627,293 2,070,783 2,609,740

Commitments and contingencies (n) 3,733,858 3,440,428 3,733,858 3,440,428

Income statements for the financial
year ended 31 December 2009

Income derived from investment
of depositors' funds (f) 1,902 - 1,902 -
Income derived from investment
of shareholder's funds (g) 161,442 145,493 163,221 143,552
Allowance for losses on financing and advances (h) (86,783) (34,903) (83,306) (37,634)
Profit equalisation reserve (1,071) - (1,071) -

Total distributable income 75,490 110,590 80,746 105,918

Income attributable to the depositors (i) (866) - (866) -

Total net income 74,624 110,590 79,880 105,918

Overhead expenses (j) (1,022) (837) (506) (902)
Finance cost (k) (22,800) (22,800) (22,800) (22,800)

164 Bank pembangunan Malaysia berhad (16562-K)

notes to the financial statements

31 DECEMBER 2009

45. ISLAMIC BANKING BUSINESS (Cont’d)

Balance sheets as at 31 December 2009 (Cont’d)

Group Bank
2009 2008 2009 2008
Note RM’000 RM’000 RM’000 RM’000

Profit before taxation and Zakat 50,802 86,953 56,574 82,216

Taxation and Zakat (l) (150) (288) (150) (288)

Profit after taxation and Zakat 50,652 86,665 56,424 81,928

Discontinued Operation Profit for
the year from discontinued operations (m) - 3,407 - -

Profit for the year 50,652 90,072 56,424 81,928

Statement of changes for the financial year ended 31 December 2009

Capital Retained
funds profits Total
RM'000 RM'000 RM'000

Group

As at 1 January 2008 1,152,964 45,627 1,198,591
Arising from disposal of a subsidiary (565,338) - (565,338)
Net profit for the year - 90,072 90,072

As at 31 December 2008 587,626 135,699 723,325

Net profit for the year - 50,652 50,652

As at 31 December 2009 587,626 186,351 773,977

Bank

As at 1 January 2008 597,400 41,705 639,105
Net profit for the year - 81,928 81,928

As at 31 December 2008 597,400 123,633 721,033

Net profit for the year - 56,424 56,424

As at 31 December 2009 597,400 180,057 777,457

annual report 2009 165

45. ISLAMIC BANKING BUSINESS (Cont’d)

Cash flow statements for the financial year ended 31 December 2009

Group Bank
2009 2008 2009 2008
RM'000 RM'000 RM'000 RM'000

Cash flows from operating activities

Profit before tax and zakat 50,802 86,953 56,574 82,216

Adjustments for:
Allowance for doubtful debts 100,826 39,711 96,220 37,634
Bad debts written off 2,129 498 - -
Profit equalisation reserve 1,071 - 1,071 -
Allowance for doubtful debts written back (14,799) - (12,914) -

Operating profit before working capital changes 140,029 127,162 140,951 119,850
Changes in working capital:
Other assets 6,270 (3,503) 6,269 (3,504)
Other liabilities (804,928) 479,138 (800,605) 493,000
Deposits & placements with financial institutions 11,218 (13,436) 11,218 (13,436)
Deposit from customers 204,000 - 204,000 -
Advances and financing 316,635 (771,399) 311,176 (777,618)

Cash generated from operations (126,776) (182,038) (126,991) (181,708)

Zakat paid - - - -

Net cash used in operating activities (126,776) (182,038) (126,991) (181,708)

Cash flows from financing activities

Net proceeds from long-term advances - 100,515 - 98,000
Proceeds from issuance of bond - - - -

Net cash generated from financing activity - 100,515 - 98,000

Cash and cash equivalents (Note A)

Net decrease in cash and cash equivalents (126,776) (81,523) (126,991) (83,708)
Cash and cash equivalents at beginning of year 139,950 221,473 132,708 216,416

Cash and cash equivalents at end of year 13,174 139,950 5,717 132,708

166 Bank pembangunan Malaysia berhad (16562-K)

notes to the financial statements

31 DECEMBER 2009

45. ISLAMIC BANKING BUSINESS (Cont’d)

(A) Cash and Cash Equivalents

Cash and cash equivalents included in the cash flow statements comprise the following balance sheet amounts:

Group Bank
2009 2008 2009 2008
RM’000 RM’000 RM’000 RM’000

Cash and short term funds 13,174 139,950 5,717 132,708

Notes to the financial statements for the financial year ended 31 December 2008

(a) Cash and short-term funds

Group Bank
2009 2008 2009 2008
RM’000 RM’000 RM’000 RM’000

Cash and bank balances with financial institutions 7,615 7,662 158 420
Money at call and deposit placements maturing
within one months 5,559 132,288 5,559 132,288

13,174 139,950 5,717 132,708

(b) Deposits and placements with financial institutions

Group Bank
2009 2008 2009 2008
RM’000 RM’000 RM’000 RM’000

Licensed banks 2,554 13,772 2,554 13,772

(c) Advances and financing

Group Bank
2009 2008 2009 2008
RM’000 RM’000 RM’000 RM’000

Bai Bithaman Ajil 231,580 797,257 200,695 760,251
Bai’ Inah - BIN 157,236 102,962 157,236 102,962
Al-Ijarah 29,615 35,336 29,476 35,179
Bai’Istisna 3,090,999 4,359,498 3,090,999 4,359,498
Ijarah Muntahia Bitamalik - IJM 228,707 241,452 228,707 241,452
Bai’ Murabahah - BAM 77,533 77,533
Murabahah Dayn 1,477 1,477
Staff Loan 29,046 29,902 29,046 29,902
AITAB 578 751 - -
Unearned income (1,544,594) (2,946,220) (1,543,317) (2,946,220)

annual report 2009 167

45. ISLAMIC BANKING BUSINESS (Cont’d)

(c) Advances and financing (Cont’d)

Group Bank
2009 2008 2009 2008
RM’000 RM’000 RM’000 RM’000

Gross loans, advances and financing 2,302,177 2,620,938 2,271,852 2,583,024

Allowance for bad and doubtful
advances and financing:
- specific (209,822) (110,670) (179,497) (83,277)
- general (31,184) (44,309) (31,184) (44,098)

Net advance and financing 2,061,171 2,465,959 2,061,171 2,455,649

(i) The maturity structure of the gross loans, advances and financing are as follows:

Group Bank
2009 2008 2009 2008
RM'000 RM'000 RM'000 RM'000

Receivable after 12 months 1,820,368 2,231,589 1,799,607 2,203,985
Receivable within 12 months 481,806 389,349 472,242 379,039

2,302,174 2,620,938 2,271,849 2,583,024

(ii) Movements in the non-performing loans, advances and financing (“NPL”) are as follows:

Group Bank
2009 2008 2009 2008
RM’000 RM’000 RM’000 RM’000

Balance at beginning of year 352,108 335,932 149,390 89,352
Non-performing during the year 43,785 93,225 40,484 98,092
Reclassified as performing (5,083) - -
Recovered during the year (3,851) (46,986) - (31,500)
Amount written off (35,987) (30,063) - (6,554)

Balance at end of year 350,972 352,108 189,874 149,390

Less:
- Specific allowance (209,822) (110,670) (179,497) (83,277)

Net non-performing loans, advances and financing 141,150 241,438 10,377 66,113

168 Bank pembangunan Malaysia berhad (16562-K)

notes to the financial statements

31 DECEMBER 2009

45. ISLAMIC BANKING BUSINESS (Cont’d)

(c) Advances and financing (Cont’d)

(ii) Movements in the non-performing loans, advances and financing (“NPL”) are as follows: (Cont’d)

Group Bank
2009 2008 2009 2008
RM’000 RM’000 RM’000 RM’000

Gross loans, advances and financing 2,302,177 2,620,938 2,271,852 2,583,024
Less:
- Specific allowance (209,822) (110,670) (179,497) (83,277)

Net loans, advances and financing 2,092,355 2,510,268 2,092,355 2,499,747

Ratio of net NPL to net loans and financing 6.75% 9.62% 0.50% 2.64%

(iii) Movements in the allowance for bad and doubtful debts are as follows:

Group Bank
Specific allowance: 2009 2008 2009 2008
RM’000 RM’000 RM’000 RM’000

Balance at beginning of year 110,670 80,206 83,277 55,052
Allowance made during the year 100,826 30,464 96,220 28,225
Amount written back (1,674) - - -

Balance at end of year 209,822 110,670 179,497 83,277

General allowance:

Balance at beginning of year 44,309 35,075 44,098 34,689
Allowance made during the year - 9,571 - 9,409
Amount written back (13,125) (337) (12,914) -

Balance at end of year 31,184 44,309 31,184 44,098

As a % of gross loans, advances and financing
less specific provisions 1.5% 2% 1.5% 2%

annual report 2009 169

45. ISLAMIC BANKING BUSINESS (Cont’d)

(d) Other assets

Group Bank
2009 2008 2009 2008
RM’000 RM’000 RM’000 RM’000

Other receivables 1,342 7,612 1,341 7,611

(e) Other liabilities

Group Bank
2009 2008 2009 2008
RM’000 RM’000 RM’000 RM’000

Other payables 391 107 - -

Allowance for zakat - - 286 5
Accrued profit payable 4,982 4,117 4,982 4,117
Profit equalisation reserve 1,071 - 1,071 -
Inter divisions 191,305 997,229 180,472 982,070

197,749 1,001,453 186,811 986,192

(f) Income derived from investment of depositors' funds

Group Bank
2009 2008 2009 2008
RM’000 RM’000 RM’000 RM’000

Finance Income
Financing and advances 1,835 - 1,835 -
Fee income:
- Other income 67 - 67 -

1,902 - 1,902 -

(g) Income derived from investment of shareholders funds

Group Bank
2009 2008 2009 2008
RM’000 RM’000 RM’000 RM’000

Finance Income
Financing and advances 145,291 139,146 147,070 137,205
Deposit placement with financial institution 1,522 6,347 1,522 6,347

146,813 145,493 148,592 143,552

Fee Income:
- Other income 14,629 - 14,629 -

161,442 145,493 163,221 143,552

170 Bank pembangunan Malaysia berhad (16562-K)

notes to the financial statements

31 DECEMBER 2009

45. ISLAMIC BANKING BUSINESS (Cont’d)

(h) Advances and financing loss and allowance

Group Bank
2009 2008 2009 2008
RM’000 RM’000 RM’000 RM’000

Bad debts and financing written off 2,129 498 - -
Bad debts recovered (1,373) (5,306) - -
Specific allowance
- made during the year 100,826 - 96,220 28,225
- written back (1,674) (337) - -
General allowance
- made during the year - 40,048 - 9,409
- written back (13,125) - (12,914) -

86,783 34,903 83,306 37,634

(i) Income attributable to depositors

Group Bank
2009 2008 2009 2008
RM’000 RM’000 RM’000 RM’000

Deposit from customers
- Mudharabah Fund 866 - 866 -

(j) Overhead expenses

Group Bank
Note 2009 2008 2009 2008
RM'000 RM'000 RM'000 RM'000

Personnel costs (i) 380 366 380 366
General administrative expenses (ii) 642 471 126 536

1,022 837 506 902

(i) Personnel costs

Salaries, allowances and bonuses 295 301 295 301

Social security cost 2 2 2 2
Pension costs - Defined contribution plan 55 61 55 61
Other staff related expenses 28 2 28 2

380 366 380 366

annual report 2009 171

45. ISLAMIC BANKING BUSINESS (Cont’d)

(j) Overhead expenses (Cont’d)

Group Bank
2009 2008 2009 2008
RM’000 RM’000 RM’000 RM’000

(ii) General administrative expenses

General administrative expenses 642 471 126 536

642 471 126 536

The above has been determined after charging amongst other items the following:

Shariah Committee's remuneration 61 38 61 38

(k) Finance cost

Group Bank
2009 2008 2009 2008
RM’000 RM’000 RM’000 RM’000

Bonds and notes 22,800 22,800 22,800 22,800

(l) Taxation and zakat

Group Bank
2009 2008 2009 2008
RM’000 RM’000 RM’000 RM’000

Zakat 150 288 150 288

172 Bank pembangunan Malaysia berhad (16562-K)

notes to the financial statements

31 DECEMBER 2009

45. ISLAMIC BANKING BUSINESS (Cont’d)

(m) Discontinued operations and disposal group classified as held for sale

Group
2009 2008
RM'000 RM'000
(restated)

Net income - 19,107
Administration and operating expenses - (12,037)

Operating profit - 7,070

Loan and financing loss and provision - (3,663)

Profit before taxation - 3,407

Taxation and zakat - -

Profit after taxation - 3,407

The following amounts have been included in arriving at loss before tax of discontinued operation:

Group
2009 2008
RM’000 RM’000
(restated

Finance cost - (22)

Depreciation of property, plant and equipment - 1,009

(n) Commitment and contingencies

Group Bank
2009 2008 2009 2008
RM’000 RM’000 RM’000 RM’000

Disbursement of loans to industries 3,733,858 3,440,428 3,733,858 3,440,428

3,733,858 3,440,428 3,733,858 3,440,428