Company No: P. CIMB Bank Berhad (Incorporated in Malaysia) Reports and Financial Statements for the financial year ended 31 December 2009

Transcription

1 Reports and Financial Statements for the financial year ended 31 December 2009

2 Reports and Financial Statements for the financial year ended 31 December 2009 Contents Pages Directors Report 1 10 Statement by Directors 11 Statutory Declaration 11 Independent Auditors Report Balance Sheets Income Statements 17 Statements of Changes in Equity Cash Flow Statements Summary of Significant Accounting Policies

3 Directors Report for the financial year ended 31 December 2009 The Directors have pleasure in submitting their Report and the Audited Financial Statements of the Group and of ( CIMB Bank or the Bank ) for the financial year ended 31 December Principal activities The principal activities of the Bank during the financial year are commercial banking and the provision of related financial services, including Islamic banking. The principal activities of the significant subsidiaries as set out in Note 11 to the Financial Statements, consist of Islamic banking, offshore banking, debt factoring, trustees and nominee services, and property ownership and management. There was no significant change in the nature of these activities during the financial year. Financial results The Bank RM 000 RM 000 Net profit after taxation and zakat - Equity holders of the Bank 1,993,868 1,469,073 - Minority interests 23,048-2,016,916 1,469,073 Dividends The dividends on ordinary shares and redeemable preference shares paid or declared by the Bank since 31 December 2008 were as follows: RM 000 In respect of the financial year ended 31 December 2008: Interim gross dividend of 6.72 sen per redeemable preference share, less 25% income tax, paid on 18 March ,000 The Directors do not recommend the payment of any final dividend for the financial year 31 December

4 Directors Report Reserves, provisions and allowances There were no material transfers to or from reserves or provisions or allowances during the financial year other than those disclosed in the Financial Statements and notes to the Financial Statements. Bad and doubtful debts, and financing Before the Financial Statements of the Group and of the Bank were made out, the Directors took reasonable steps to ascertain that proper action had been taken in relation to the writing off of bad debts and financing and the making of allowance for doubtful debts and financing, and satisfied themselves that all known bad debts and financing had been written off and that adequate allowance had been made for doubtful debts and financing. At the date of this Report, the Directors are not aware of any circumstances which would render the amounts written off for bad debts and financing, or the amount of the allowance for doubtful debts and financing in the Financial Statements of the Group and the Bank, inadequate to any substantial extent. Current assets Before the Financial Statements of the Group and of the Bank were made out, the Directors took reasonable steps to ascertain that any current assets, other than debts, which were unlikely to realise in the ordinary course of business, their values as shown in the accounting records of the Group and the Bank had been written down to an amount which they might be expected so to realise. At the date of this Report, the Directors are not aware of any circumstances which would render the values attributed to current assets in the Financial Statements of the Group and the Bank misleading. Valuation methods At the date of this Report, the Directors are not aware of any circumstances which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and the Bank misleading or inappropriate. 2

5 Directors Report Contingent and other liabilities At the date of this Report, there does not exist: (a) (b) any charge on the assets of the Group or the Bank which has arisen since the end of the financial year which secures the liability of any other person; or any contingent liability of the Group or the Bank which has arisen since the end of the financial year other than in the ordinary course of banking business. No contingent or other liability of any company in the Group has become enforceable or is likely to become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the Directors, will or may substantially affect the ability of the Bank and its subsidiaries to meet their obligations when they fall due. Change of circumstances At the date of this Report, the Directors are not aware of any circumstances not otherwise dealt with in this Report or the Financial Statements of the Group and of the Bank, that would render any amount stated in the Financial Statements misleading. Items of an unusual nature In opinion of the Directors: (a) (b) the results of the Group s and the Bank s operations for the financial year have not been substantially affected by any item, transaction or event of a material and unusual nature other than those disclosed in Notes 49 and 55 to the Financial Statements; and except as disclosed in Note 50 to the Financial Statements, there has not arisen in the interval between the end of the financial year and the date of this Report any item, transaction or event of a material and unusual nature likely to affect substantially the results of the operations of the Group or the Bank for the financial year in which this Report is made. 3

6 Directors Report 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: Directors Tan Sri Dato Seri Haidar bin Mohamed Nor Dato Sri Mohamed Nazir bin Abdul Razak Tan Sri G.K. Rama Iyer Dato Dr. Mohamad Zawawi bin Ismail Datuk Dr. Syed Muhamad bin Syed Abdul Kadir Dato Zainal Abidin bin Putih Dato Mohd Shukri bin Hussin Dato Seri Yeap Leong Huat Dato Dr. Gan Wee Beng Sulaiman bin Mohd Tahir (appointed on 1 October 2009) Tunku Dato Ahmad Burhanuddin (resigned on 30 September 2009) In accordance with Article 97 of the Bank s Articles of Association, Dato' Seri Yeap Leong Huat, Datuk Dr. Syed Muhamad bin Syed Abdul Kadir and Dato' Sri Mohamed Nazir bin Abdul Razak retire from the Board at the forthcoming Annual General Meeting and being eligible, offer themselves for re-election. Tan Sri Dato Seri Haidar bin Mohamed Nor and Tan Sri G.K. Rama Iyer who are above the age of seventy (70) years, retire from the Board at the Annual General Meeting pursuant to Section 129 of the Companies Act, Under Section 129(6) of the Companies Act, 1965 it is proposed to pass a resolution to re-elect them as Directors of the Bank to hold office until the next Annual General Meeting of the Bank. 4

7 Directors Report Directors interests in shares and share options According to the Register of Directors Shareholdings, the beneficial interests of the Directors who held office at the end of the financial year in the shares and share options of the ultimate holding company during the financial year are as follows: Number of ordinary shares of RM1 each As at 1 January Acquired Disposed As at 31 December Ultimate holding company CIMB Group Holdings Berhad (formerly known as Bumiputra-Commerce Holdings Berhad ( CIMB Group )) Tan Sri G.K. Rama Iyer** 25, ,812 Dato Dr. Mohamad Zawawi bin Ismail 4,000 - (4,000) - Dato Sri Mohamed Nazir bin Abdul Razak^ 27,953,261 - (490,000) 27,463,261 Dato Mohd Shukri bin Hussin 300, ,112 Tunku Dato Ahmad Burhanuddin 182, ,000 Dato Zainal Abidin bin Putih# 55, ,000 Dato Seri Yeap Leong Huat - 111, ,000 Centurion Investments Sdn Bhd Indirect Interest Dato Seri Yeap Leong Huat* 200,000 - (200,000) - Emerald Lodge Sdn Bhd Indirect Interest Dato Seri Yeap Leong Huat* - 100, ,000 Note: Includes shareholding of spouse/child, details of which are as follows: Number of ordinary shares of RM1 each As at 1 January Acquired Disposed As at 31 December ** Puan Sri Vijayalakshmi a/p Krishnaswamy 18, ,812 ** Ganapathy Srihari a/l Rama Iyer 6, ,000 ^ Datin Sri Azlina binti Abdul Aziz 4,000, ,000,000 # Datin Jasmine binti Abdullah Heng 10, ,000 # Mohamad Ari Zulkarnain bin Zainal Abidin 5, ,000 *Daryl Yeap Liew Sym 24,000 - (24,000) - None of the other Directors in office at the end of the financial year had any interest in the shares and share options of the Bank, the holding company, the ultimate holding company and the Bank s related companies. 5

8 Directors Report Directors benefits Since the end of the previous financial year, no Director of the Bank has received or become entitled to receive any benefit (other than the benefits included in the aggregate amount of emoluments received or due and receivable by Directors shown in Note 42 to the Financial Statements or the fixed salary as a full time employee of the Bank) by reason of a contract made by the Bank or a related corporation with the 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. Neither at the end of the financial year, nor at any time during the financial year, did there subsist any other arrangements to which the Bank is a party with the object or objects of enabling Directors of the Bank to acquire benefits by means of the acquisition of shares in, or debentures of, the Bank or any other body corporate other than share options of the ultimate holding company. 6

9 Directors Report 2009 Business Plan And Strategy To date, CIMB Bank's profitability has been resilient, despite weak economic conditions and intense competition as management s efforts to grow CIMB into an established full-fledged market leading regional banking franchise has brought about significant cross border value enhancement. CIMB Bank has strengthened its risk management practices to maintain the credit quality of its loan portfolios, improve cost efficiencies and ensure liquidity and capital positions stay strong. During the year, CIMB Bank has also progressively increased its provision and core capital to improve protection against potential losses in an uncertain environment. CIMB Bank will continue to focus on developing and strengthening its distribution capabilities and invest in human capital to ensure that the Group is well positioned to exploit opportunities in the financial markets. Outlook for 2010 The entry of new foreign players under Phase 3 of the Financial Sector Master Plan will increase the intensity of competition in the banking industry. The more intense competitive landscape over the longer term is expected to enhance the industry s efficiency and competitiveness. This could, however, have negative implications on margins and the smaller banks that do not have the benefit of scale and niche expertise, and which may see their profits and growth compromised over the longer term. With increasing competition arising from deregulation and globalisation, CIMB Bank aims to be a provider of differentiated solutions to clients not only in Malaysia, but across the region. An entrenched regional presence and distribution network on top of our already established regional banking franchise should create multiple opportunities, especially with regard to enlarging our customer base. Moving forward, CIMB Bank aims to remain competitive in seizing new opportunities in the market and will continue to expand its activities regionally in Southeast Asia. 7

10 Directors Report Ratings by External Rating Agencies Details of the ratings of the Bank and its debt securities are as follows: Rating Agency Rating Classification Definition Rating Agency Malaysia Berhad Date accorded: November 2009 Long Term Rating : AAA Short Term Rating : P1 Outlook : Stable Malaysian Rating Corporation Berhad Date accorded: December 2009 Moody s Investors Services Ltd Date accorded: July 2009 Fitch Ratings Ltd Date accorded: July 2009 Standard & Poor s Rating Agency Date accorded: December 2009 Long Term Rating : AA+ Short Term Rating : MARC-1 Outlook : Stable Long Term Rating: A3 Long Term Subordinated Debt : Baa1 Short Term Rating : P-1 Outlook : Stable Long Term Ratings: BBB+ Long Term Subordinated Debt : BBB Short Term Rating : F2 Outlook : Stable Long Term Rating: BBB+ Short Term Rating : A-2 Outlook : Stable Indicates a superior capacity to meet its financial obligations. Indicates very strong capacity to meet its financial commitments and ability to withstand adversity. The institution also possesses a good track record and has no readily apparent weaknesses. Indicates good credit quality. However, elements may be present that suggest a susceptibility to impairment over the long term. Indicates currently low expectation of credit risk. Capacity for timely payment of financial commitment is adequate. However, adverse changes in circumstances and in economic conditions are more likely to impair this capacity. Indicates adequate capacity to meet its financial commitments. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitments. 8

11 Directors Report Shariah Committee All the Islamic banking businesses of the CIMB Group come under the purview of the CIMB Islamic Shariah Committee, which resides at CIMB Islamic Bank Berhad ( CIMB Islamic ). As per BNM/GPS1 (Guideline on the Governance of Shariah Committee for Islamic Financial Institutions), the Shariah Committee advises the Group on the operations of its Islamic banking business to ensure that the Group is not involved in any elements/activities which are not approved under Shariah. In advising on such matters, the Shariah Committee also considers the views of the Shariah Council/Committees of relevant authorities like Bank Negara Malaysia and the Securities Commission on issues relating to the activities and operations of Islamic banking and financing. Composition of the Shariah Committee: 1. Sheikh Professor Dr. Mohammad Hashim Kamali (Chairman) 2. Sheikh Nedham Muhammad Seleh Yaqooby 3. Sheikh Dr. Haji Mohd Nai m bin Haji Mokhtar 4. Sheikh Associate Professor Dr. Shafaai Bin Musa 5. Sheikh Dr. Yousef Abdullah Al Shubaily 6. The late Sheikh Dr. Haji Zainudin bin Jaffar (until 25 October 2009) Zakat obligations CIMB Islamic is obliged to pay business zakat to comply with the principles of Shariah. CIMB Islamic does not pay zakat on behalf of the shareholders or depositors. Significant events during the financial year Significant events during the financial year are disclosed in Note 49 to the Financial Statements. Subsequent events after the financial year Significant subsequent events after the financial year are disclosed in Note 50 to the Financial Statements. 9

12 Directors Report Ultimate holding company The Directors regard CIMB Group Holdings Berhad (formerly known as Bumiputra-Commerce Holdings Berhad), a quoted company incorporated in Malaysia, as the Bank s ultimate holding company. Auditors The auditors, PricewaterhouseCoopers, have expressed their willingness to continue in office. Signed on behalf of the Board of Directors in accordance with their resolution. Tan Sri Dato Seri Haidar bin Mohamed Nor Director Sulaiman bin Mohd Tahir Director Kuala Lumpur 30 March

13 Statement by Directors Pursuant to Section 169(15) of the Companies Act, 1965 We, Tan Sri Dato Seri Haidar bin Mohamed Nor and Sulaiman bin Mohd Tahir, being two of the Directors of, hereby state that, in the opinion of the Directors, the Financial Statements set out on pages 15 to 254 are drawn up so as to give a true and fair view of the state of affairs of the Group and of the Bank as at 31 December 2009 and of the results and cash flows of the Group and of the Bank for the financial year ended on that date, in accordance with the provisions of the Companies Act, 1965, the MASB Approved Accounting Standards in Malaysia for Entities Other Than Private Entities and Bank Negara Malaysia Guidelines. Signed on behalf of the Board of Directors in accordance with their resolution. Tan Sri Dato Seri Haidar bin Mohamed Nor Director Sulaiman bin Mohd Tahir Director Kuala Lumpur 30 March 2010 Statutory Declaration Pursuant to Section 169(16) of the Companies Act, 1965 I, Kim Kenny, being the officer primarily responsible for the financial management of CIMB Bank Berhad, do solemnly and sincerely declare the Financial Statements set out on pages 15 to 254 are, in my opinion, correct and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, Kim Kenny Subscribed and solemnly declared by the abovenamed Kim Kenny at Kuala Lumpur before me, on 30 March Commissioner for Oaths 11

14 Independent Auditors Report to the members of (Company No: P) Report on the Financial Statements We have audited the Financial Statements of, 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 financial year then ended, and a summary of significant accounting policies and other explanatory notes, as set out on pages 15 to 254. 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 the Companies Act, 1965, the MASB Approved Accounting Standards in Malaysia for Entities Other Than Private Entities and the Bank Negara Malaysia Guidelines. 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 judgement, 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 Bank 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 Bank s internal control. An audit also includes evaluating the appropriateness of 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. 12

15 Independent Auditors Report to the members of (Continued) (Company No: P) Report on the Financial Statements (continued) Opinion In our opinion, the Financial Statements have been properly drawn up in accordance with the Companies Act, 1965, the MASB Approved Accounting Standards in Malaysia for Entities Other Than Private Entities and the Bank Negara Malaysia Guidelines so as to give a true and fair view of the financial position of the Group and of the Bank as of 31 December 2009 and of their financial performance and cash flows for the financial year then ended. 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) (b) (c) (d) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Bank and its subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Act. We have considered the financial statements and the auditors reports of all the subsidiaries of which we have not acted as auditors, which are indicated in Note 11 to the Financial Statements. We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Bank s Financial Statements are in form and content appropriate and proper for the purposes of the preparation of the Financial Statements of the Group and we have received satisfactory information and explanations required by us for those purposes. The audit reports on the accounts of the subsidiaries did not contain any qualification or any adverse comment made under Section 174(3) of the Act. 13

16 Independent Auditors Report to the members of (Continued) (Company No: P) 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. PricewaterhouseCoopers (No. AF: 1146) Chartered Accountants Sridharan Nair (No. 2656/05/10 (J)) Chartered Accountant Kuala Lumpur 30 March

17 Balance Sheets as at 31 December 2009 Th e G ro u p Th e B a n k Note Assets RM'000 RM'000 RM'000 RM'000 Cash and short-term funds 2 25,023,098 21,966,362 17,699,691 14,308,346 Securities purchased under resale agreements 4,260,951 2,967,770 2,857,456 2,967,770 Deposits and placements with banks and other financial institutions 3 3,402,596 2,139,459 11,934,278 4,967,910 Securities held for trading 4 13,818,079 9,564,281 10,152,185 6,517,399 Available-for-sale securities 5 8,080,319 7,360,190 6,524,708 6,503,390 Held-to-maturity securities 6 12,875,251 11,625,970 10,702,270 8,685,401 Derivative financial instruments 24 3,504,962 5,335,535 3,203,614 5,126,006 Loans, advances and financing 7 113,480,642 95,687,146 84,456,367 84,922,177 Other assets 8 2,119,150 2,095,571 1,607,800 1,933,236 Deferred taxation 9 301, , , ,993 Tax recoverable 2, , ,786 Statutory deposits with central banks ,857 2,723, ,983 2,453,934 Investment in subsidiaries ,816,500 2,245,919 Investment in jointly controlled entity , , , ,448 Investment in associate , , , ,814 Amount due from holding company and ultimate holding company 14 47, ,350 14, ,872 Amount due from subsidiaries , ,618 Amount due from related companies ,818 90, ,989 90,819 Goodwill 17 4,923,701 3,695,075 3,555,075 3,559,075 Intangible assets , , , ,857 Prepaid lease payments 19 16,340 29,618 12,511 25,197 Property, plant and equipment , , , ,047 Investment properties , ,175 96, , ,790, ,068, ,147, ,027,189 Non-current assets/disposal groups held for sale ,224 82,452 73,902 42,712 Total assets 196,016, ,150, ,221, ,069,901 Liabilities Deposits from customers ,872, ,090, ,449, ,570,259 Deposits and placements of banks and other financial institutions 23 14,180,946 15,149,296 17,633,397 17,104,280 Obligations on securities sold under repurchase agreements 565, Derivative financial instruments 24 3,462,938 4,849,035 3,261,121 4,820,357 Bills and acceptances payable 4,056,811 3,091,173 2,826,165 3,085,915 Amount due to Cagamas Berhad 335, , , ,818 Amount due to ultimate holding company 14 55, Amount due to subsidiaries , ,140 Amount due to related companies 16 9,710 15, ,398 Other liabilities 25 3,149,346 2,751,252 2,463,818 2,400,962 Provision for taxation and zakat 109,169 5, ,395 - Bonds , Irredeemable Convertible Unsecured Loan Stocks , ,000 Other borrowings 28 1,027,500 1,039, Subordinated obligations 29 4,106,716 4,573,212 4,199,805 5,386,548 Redeemable preference shares 30(a) 751, , ,126, ,039, ,393, ,216,677 Liabilities directly associated with non-current assets/disposal groups classified as held for sale 56-29, Total liabilities 179,126, ,069, ,393, ,216,677 15

18 Balance Sheets as at 31 December 2009 (Continued) Th e Grou p Th e Ban k Note RM'000 RM'000 RM'000 RM'000 Equ i ty Capital and reserves attributable to equity holders of the Bank Ordinary share capital 31 3,764,466 2,974,009 3,764,466 2,974,009 Reserves 33 12,640,620 9,859,290 10,834,235 8,649,475 16,405,086 12,833,299 14,598,701 11,623,484 Perpetual preference shares , , , ,000 Redeemable preference shares 30(b) 29,740 29,740 29,740 29,740 Minority interests 256,040 18, Total equity 16,890,866 13,081,918 14,828,441 11,853,224 Total equity and liabilities 196,016, ,150, ,221, ,069,901 Commitments and contingencies ,557, ,223, ,521, ,630,457 Credit equivalent 24 11,866,251 16,621,342 10,723,435 14,936,213 Net assets per ordinary share (RM)

19 Income Statements for the financial year ended 31 December 2009 The Bank Note RM'000 RM'000 RM'000 RM'000 Interest income 35 6,958,548 7,341,222 5,977,783 6,935,440 Interest expense 36 (2,729,639) (3,625,092) (2,394,512) (3,448,667) Net interest income 4,228,909 3,716,130 3,583,271 3,486,773 Income from Islamic banking operations , ,390 6,794 1,575 Non-interest income 37 1,997,968 1,375,773 1,804,412 1,827,037 Net income 6,942,994 5,432,293 5,394,477 5,315,385 Overheads 38 (3,714,232) (2,697,439) (2,974,731) (2,552,656) Profit before allowances 3,228,762 2,734,854 2,419,746 2,762,729 Allowances for losses on loans, advances and financing 39 (680,234) (602,714) (400,486) (569,733) (Allowance for)/write-back of losses on other receivables (189) Allowance for commitment and contingencies (21,199) - (21,000) - (Allowance for)/write-back of impairment losses 40 (12,531) 46,481 (61,191) (8,323) Profit after allowances 2,514,609 2,179,090 1,937,069 2,184,696 Share of results of jointly controlled entity 12 6,858 3, Share of results of associate 13 23,602 (40,565) - - Profit before taxation and zakat 2,545,069 2,141,778 1,937,069 2,184,696 Taxation and zakat 43 (528,153) (567,080) (467,996) (506,660) Net profit after taxation and zakat 2,016,916 1,574,698 1,469,073 1,678,036 Attributable to : Equity holders of the Bank 1,993,868 1,572,746 1,469,073 1,678,036 Minority interests 23,048 1, ,016,916 1,574,698 1,469,073 1,678,036 Earnings per share attributable to ordinary equity holders of the Bank - basic/fully diluted (sen) Dividend: - per ordinary share of Nil sen (2008: 2.00 sen) less Nil (2008: 26%) tax per ordinary share of Nil sen (2008: 2.22 sen) less Nil (2008: tax exempt) per redeemable preference share of 6.72 sen (2008: sen) less 25% (2008: 26%) tax

20 Statements of Changes in Equity for the financial year ended 31 December 2009 Note Share capital RM 000 Redeemable Preference shares RM 000 Share premium RM 000 Statutory reserve RM 000 Attributable to equity holders of the Bank Revaluation reserve - Exchange availablefor-sale fluctuation Merger reserve securities deficit RM 000 RM 000 RM 000 Capital reserve RM 000 Hedging reserve RM 000 Retained profits RM 000 Total RM 000 Perpetual preference shares RM 000 Minorit y interests RM 000 Total equity RM 000 At 1 January ,974,009 29,740 4,157,074 3,158,429 (54,418) 131,117 (1,085,928) 735,457 (122,336) 2,939,895 12,863, ,000 18,879 13,081,918 Net change in available-forsale securities, net of tax (39,058) (39,058) - - (39,058) Currency translation difference , ,580 (388) 27,192 Income and expense recognised directly in equity ,580 (39,058) (11,478) - (388) (11,866) Net profit for the financial year ,993,868 1,993,868-23,048 2,016,916 Total recognised income and expense for the financial year ,580 (39,058) ,993,868 1,982,390-22,660 2,005,050 Transfer to statutory reserves , (429,139) Interim dividends for the financial year ended 31 December (150,000) (150,000) - - (150,000) Dividend paid to minorities (12,825) (12,825) Issue of shares due to rights issue 31,34 123, , ,000, ,000,005 Conversion of ICULS , , ,000 Arising from net investment hedge in overseas operations and subsidiaries ,961-18, ,961 Acquisition of subsidiary , (14,575) 53, , ,757 At 31 December ,764,466 29,740 5,033,622 3,587,568 41,168 92,059 (1,085,928) 735,457 (103,375) 4,340,049 16,434, , ,040 16,890,866 18

21 Statements of Changes in Equity Note Share capital RM 000 Redeemable Preference Shares RM 000 Share premium RM 000 Statutory reserve RM 000 Attributable to equity holders of the Bank Revaluation reserve - Exchange availablefluctuation for-sale Merger reserve securities deficit RM 000 RM 000 RM 000 Capital reserve RM 000 Hedging reserve RM 000 Retained profits RM 000 Total RM 000 Perpetual preference shares RM 000 Minorit y interests RM 000 Total equity RM 000 At 1 January ,974,009-4,157,074 2,548,169 (139,230) 98,644 (1,085,928) 735,457-2,617,149 11,905, ,000 29,727 12,135,071 Net change in available-forsale securities, net of tax Currency translation difference , ,527 - (178) 85,349 Income and expense recognised directly in equity , ,833 - (178) 85,655 Net profit for the financial year ,572,746 1,572,746-1,952 1,574,698 Total recognised income and expense for the financial year , ,572,746 1,658,579-1,774 1,660,353 Transfer to statutory reserves , (610,260) Final dividends for the financial year ended 31 December (300,000) (300,000) - - (300,000) Special interim dividend for the financial year ended 31 December (310,000) (310,000) - - (310,000) Capitalised to Redeemable Preference Shares - 29, (29,740) Arising from net investment hedge in overseas operations and subsidiaries (122,336) - (122,336) - - (122,336) Acquisition of subsidiary , , ,167 Disposal of subsidiary (715) (715) - (12,622) (13,337) At 31 December ,974,009 29,740 4,157,074 3,158,429 (54,418) 131,117 (1,085,928) 735,457 (122,336) 2,939,895 12,863, ,000 18,879 13,081,918 19

22 Statements of Changes in Equity The Bank Note Share capital RM 000 Redeemable Preference Shares RM 000 Share premium RM 000 Statutory reserve RM 000 Non-distributable Distributable Revaluation reserve - Exchange availablefluctuation for-sale Merger Capital Hedging Retained reserve securities deficit reserve reserve profits RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 Total RM 000 Perpetual preference shares RM 000 Total equity RM 000 At 1 January ,974,009 29,740 4,157,074 3,174,009 (48,473) 81,632 (1,047,872) 746,852 (122,336) 1,708,589 11,653, ,000 11,853,224 Net change in available-forsale securities, net of tax (47,097) (47,097) - (47,097) Currency translation difference , ,275-17,275 Income and expense recognised directly in equity ,275 (47,097) (29,822) - (29,822) Net profit for the financial year ,469,073 1,469,073-1,469,073 Total recognised income and expense for the financial year ,275 (47,097) ,469,073 1,439,251-1,439,251 Transfer to statutory reserves , (367,268) Interim dividends for the financial year ended 31 December (150,000) (150,000) - (150,000) Issue of shares due to right issue 31,34 123, , ,000,005-1,000,005 Conversion of ICULS , , ,000 Arising from net investment hedge in overseas operations and subsidiaries ,961-18,961-18,961 At 31 December ,764,466 29,740 5,033,622 3,541,277 (31,198) 34,535 (1,047,872) 746,852 (103,375) 2,660,394 14,628, ,000 14,828,441 20

23 Statements of Changes in Equity The Bank Note Share capital RM 000 Redeemable Preference Shares RM 000 Share premium RM 000 Statutory reserve RM 000 Non-distributable Distributable Revaluation reserve - Exchange availablefluctuation for-sale Merger Capital Hedging Retained reserve securities deficit reserve reserve profits RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 Total RM 000 Perpetual preference shares RM 000 Total equity RM 000 At 1 January ,974,009-4,157,074 2,601,434 (32,769) 55,458 (1,047,872) 746,852-1,242,868 10,697, ,000 10,897,054 Net change in available-forsale securities, net of tax , ,174-26,174 Currency translation difference (15,704) (15,704) - (15,704) Income and expense recognised directly in equity (15,704) 26, ,470-10,470 Net profit for the financial year ,678,036 1,678,036-1,678,036 Total recognised income and expense for the financial year (15,704) 26, ,678,036 1,688,506-1,688,506 Transfer to statutory reserves , (572,575) Final dividends for the financial year ended 31 December (300,000) (300,000) - (300,000) Final dividends for the financial year ended 31 December (310,000) (310,000) - (310,000) Capitalised to Redeemable Preference Shares - 29, (29,740) Arising from net investment hedge in overseas operations and subsidiaries (122,336) - (122,336) - (122,336) At 31 December ,974,009 29,740 4,157,074 3,174,009 (48,473) 81,632 (1,047,872) 746,852 (122,336) 1,708,589 11,653, ,000 11,853,224 21

24 Cash Flow Statements for the financial year ended 31 December 2009 Th e Grou p The Bank RM'000 RM'000 RM'000 RM'000 Cash flows from operating activities Profit before taxation and zakat 2,545,069 2,141,778 1,937,069 2,184,696 Depreciation of property, plant and equipment 189, , , ,860 Amortisation of intangible assets 117, , , ,346 Amortisation of prepaid lease payments 1,332 1, Gain on disposal of property, plant and equipment (20,080) (6,393) (24,484) (5,076) Gain on disposal of prepaid lease payments (250) (244) - - Fair value loss on investment properties 3,678 2,141 3,300 2,141 Property, plant and equipment written off 4, , Net gain from disposal of available-for-sale securities (117,092) (108,326) (47,830) (103,283) Net gain from disposal of held-to-maturity securities (24,505) (4,089) (2,790) (4,089) Net loss from hedging derivatives 5,132 5,891 8,162 5,891 Unrealised (gain)/loss from revaluation of securities held for trading (122,892) 166,791 (95,364) 80,659 Unrealised loss/(gain) from revaluation of derivative financial instruments 339,495 (112,452) 337,782 (129,712) Unrealised gain on foreign exchange (197,373) (184,132) (154,492) (231,312) Allowance for/(write-back of) impairment losses on securities 8,531 (46,481) 22,191 (49,855) Allowance for impairment losses on intangible 1, Allowance for impairment losses on prepaid lease payments Allowance for impairment losses on property, plant and equipment 28, Interest income on available-for-sale securities (313,038) (221,779) (287,388) (219,603) Interest income on held-to-maturity securities (606,598) (189,912) (442,517) (165,422) Interest expense on subordinated obligations 227, , , ,565 Interest expense on redeemable preference shares 44,140 87,015-42,875 Accretion of discount less amortisation of premium (131,797) (133,081) (110,130) (141,766) Allowances for bad and doubtful debts and financing 1,047, , , ,734 Allowance for impairment loss in subsidiaries ,178 Allowance for/(write-back of) losses on other receivables 189 (469) - (23) Loss/(gain) from disposal of subsidiaries - 2,669 - (23,693) Gain on disposal of associate - (2,904) - - Gain on disposal of certain assets and liabilties of subsidiary (30,000) Dividend income (42,665) (51,234) (204,733) (124,413) Goodwill impairment 4,000-39,000 37,000 Share of profit of jointly controlled entity (6,858) (3,253) - - Share of (profit)/loss of associates (23,602) 40, Transfer from profit equalisation reserve - (2,200) - - 2,931,778 2,758,028 2,156,815 2,527,954 22

25 Cash Flow Statements The Bank RM'000 RM'000 RM'000 RM'000 (Increase)/decrease in operating assets Securities purchased under resale agreements (1,293,181) 1,341, ,314 1,341,201 Deposits and placements with banks and other financial institutions 3,047,557 2,971,856 (6,966,368) 371,455 Securities held for trading 437,347 4,536,619 (3,503,074) 4,249,937 Loans, advances and financing (10,711,990) (16,033,205) (383,491) (12,828,316) Amount due from holding company and ultimate holding company 231, ,026 16,411 Amount due from subsidiaries , ,814 Amount due from related companies (907,892) 9,442 (904,170) (17,457) Other assets 3,300,094 (184,946) 344,035 (361,638) Statutory deposits with central banks 1,881, ,732 1,791, ,049 Increase/(decrease) in operating liabilities Deposits from customers 9,904,338 15,436,105 13,879,652 7,797,661 Deposits and placements of banks and other financial institutions (1,987,175) (4,080,365) 529,117 (3,215,649) Securities sold under repurchase agreements 565,097 (605,780) - (1,000) Derivative financial instruments 119,056 (401,381) 36,420 (278,416) Bills and acceptances payable 949,476 (1,371,940) (259,750) (1,376,229) Amount due to Cagamas Berhad (658,206) (1,010,889) (658,206) (1,010,889) Amount due to holding company and ultimate holding company 55, Amount due to subsidiaries - - (59,472) (130,328) Amount due to related companies (5,722) 13,518 (9,113) 9,398 Other liabilities (2,359,420) (96,073) 222,565 (219,063) Cash flows generated from operations 5,499,507 3,597,184 6,628,805 (2,375,105) Taxation paid (171,557) (728,241) (97,448) (691,532) Net cash generated from/(used in) operating activities 5,327,950 2,868,943 6,531,357 (3,066,637) 23

26 Cash Flow Statements The Bank Note RM'000 RM'000 RM'000 RM'000 Cash flows from/(used in) investing activities Proceeds from disposal of subsidiaries 54,663 59,101-59,101 Proceeds from disposal of associate - 3, Dividend income 4,062 40, , ,380 Investment in associate (245,034) (595,814) (245,034) (595,814) Interest income received from available-for-sale securities 280, , , ,561 Interest income received from held-to-maturity securities 332, , , ,003 Net purchase of available-for-sale securities (642,934) (438,099) (22,002) (425,981) Net purchase/reclassification of held-to-maturity securities (1,166,492) (8,108,803) (1,979,133) (5,264,700) Purchase of property, plant and equipment (260,924) (223,201) (217,852) (217,077) Proceeds from disposal of property, plant and equipment 70,063 17,564 34,629 13,217 Proceeds from disposal of intangible assets 1, Proceeds from disposal of prepaid lease payments 930 1, ,871 Purchase of intangible assets (228,045) (51,531) (215,743) (49,122) Acquisition of subsidiary, net of cash (512,236) - (972,628) - Net cash used in investing activities (2,311,818) (8,943,482) (2,717,753) (6,040,561) Cash flows from/(used in) financing activities Dividends paid (162,825) (610,000) (150,000) (610,000) Interest expense paid on subordinated notes (223,305) (145,948) (235,656) (189,746) Interest expense paid on redeemable preference shares (44,140) (87,015) - (42,875) Repayment of redeemable asset backed bonds - (31,772) - - Proceeds from issuance of subordinated obligations 293,841 3,500,000-3,500,000 Proceeds from issuance of bonds 443, Proceeds from issuance of ordinary shares 1,000,005-1,000,005 - Repayment of redeemable preference shares - (1,300,000) - (1,300,000) Repayment of subordinated notes (1,312,350) (1,058,400) (1,037,736) (1,058,400) Net cash (used in)/generated from financing activities (5,723) 266,865 (423,387) 298,979 Net increase/(decrease) in cash and short term funds during the financial year 3,010,409 (5,807,674) 3,390,217 (8,808,219) Effects of exchange rate differences 46,327 (590) 1, Cash and cash equivalents at beginning of financial year 21,966,362 27,774,626 14,308,346 23,115,966 Cash and cash equivalents at end of financial year 2 25,023,098 21,966,362 17,699,691 14,308,346 24

27 Summary of Significant Accounting Policies for the financial year ended 31 December 2009 The following accounting policies have been used consistently in dealing with items that are considered material in relation to the Financial Statements. A Basis of preparation The Financial Statements of the Group and the Bank are prepared under the historical cost convention, modified by the revaluation of available-for-sale securities, securities held for trading, all derivative contracts, investment properties and non-current assets/disposal groups held for sale. The Financial Statements of the Group and the Bank have been prepared in accordance with the Financial Reporting Standards, MASB Approved Accounting Standards in Malaysia for Entities Other Than Private Entities, Bank Negara Malaysia ( BNM ) Guidelines, Shariah requirements and the provisions of the Companies Act, The Financial Statements incorporate those activities relating to Islamic banking which have been undertaken by the Bank and its wholly-owned subsidiaries, CIMB Islamic Bank Berhad ( CIMB Islamic ) and CIMB Bank (L) Limited. Islamic banking refers generally to the acceptance of deposits, granting of financing and dealing in Islamic Securities under the Shariah principles. BNM has granted indulgence to the Group and the Bank and other local banks in Malaysia from complying with the requirements on the impairment of loans under the revised Guideline on Financial Reporting for Licensed Institutions ( BNM/GP8 ). Paragraph 4, Appendix A of the revised BNM/GP8 requires the impaired loans to be measured at their estimated recoverable amount. This requirement is principally similar to the requirement under FRS 139 Financial Instruments: Recognition and Measurement. In 2008, BNM issued a revised circular on BNM/GP3 which requires impaired credit facilities to be measured at their recoverable amount. This requirement supersedes paragraph 4, Appendix A of the revised BNM/GP8. In view of the implementation of FRS 139 in Malaysia with effect from 1 January 2010, the Group and the Bank and other local banks in Malaysia will be deemed to be in compliance with the requirement on the impairment of loans under the revised BNM/GP8 if the allowance for non-performing loans, advances and financing is computed based on BNM s guidelines on the Classification of Non-Performing Loans and Provision for Substandard, Bad and Doubtful Debts ( BNM/GP3 ) requirements. 25

28 Summary of Significant Accounting Policies A Basis of preparation (Continued) The preparation of Financial Statements in conformity with the provisions of the Companies Act, 1965, Financial Reporting Standards and Bank Negara Malaysia Guidelines requires the use of certain critical accounting estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Financial Statements, and the reported amounts of income and expenses during the reported period. It also requires the Directors to exercise their judgement in the process of applying the Group s and the Bank s accounting policies. Although these estimates and judgement are based on the Directors best knowledge of current events and actions, actual results may differ from those estimates. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the Financial Statements, are disclosed in Note 51. (a) Standards, amendments to published standards and interpretations that are effective and applicable to the Group and Bank There were no new accounting standards, amendments to published standards and interpretations that were effective and applicable to the Group and the Bank for the financial year ended 31 December

29 Summary of Significant Accounting Policies A (b) Basis of preparation (Continued) Standards, amendments to published standards and interpretations to existing standards that are applicable to the Group and the Bank but not yet effective The new and revised standards, amendments to published standards and interpretations that are applicable to the Group but which the Group and the Bank have not early adopted, are as follows: The revised FRS 3 "Business combinations" (effective prospectively from 1 July 2010). The revised standard continues to apply the acquisition method to business combinations, with some significant changes. For example, all payments to purchase a business are to be recorded at fair value at the acquisition date, with contingent payments classified as debt subsequently re-measured through the income statement. There is a choice on an acquisition-by-acquisition basis to measure the non-controlling interest in the acquiree either at fair vale or at the non-controlling interest s proportionate share of the acquiree s net assets. All acquisition-related costs should be expensed. and the Bank will apply this standard from financial years beginning on or after 1 January FRS 8 "Operating Segments" (effective from 1 July 2009) replaces FRS Segment Reporting. The new standard requires a management approach, under which segment information is reported in a manner that is consistent with the internal reporting provided to the chief operating decision-maker. The improvement to FRS 8 (effective from 1 January 2010) clarifies that entities that do not provide information about segment assets to the chief operating decision-maker will no longer need to report this information. Prior year comparatives must be restated. and the Bank will apply this standard from financial years beginning on or after 1 January The revised FRS 101 Presentation of financial statements (effective from 1 January 2010) prohibits the presentation of items of income and expenses (that is, non-owner changes in equity ) in the statement of changes in equity. Non-owner changes in equity are to be presented separately from owner changes in equity. All non-owner changes in equity will be required to be shown in a performance statement, but entities can choose whether to present one performance statement (the statement of comprehensive income) or two statements (the income statement and statement of comprehensive income). Where entities restate or reclassify comparative information, they will be required to present a restated balance sheet as at the beginning comparative period in addition to the current requirement to present balance sheets at the end of the current period and comparative period. and the Bank will apply this standard from financial years beginning on or after 1 January

30 Summary of Significant Accounting Policies A (b) Basis of preparation (Continued) Standards, amendments to published standards and interpretations to existing standards that are applicable to the Group and the Bank but not yet effective (Continued) The revised FRS 127 "Consolidated and separate financial statements" (effective prospectively from 1 July 2010) requires the effects of all transactions with noncontrolling interests to be recorded in equity if there is no change in control and these transactions will no longer result in goodwill or gains and losses. The standard also specifies the accounting when control is lost. Any remaining interest in the entity is remeasured to fair value, and a gain or loss is recognised in profit or loss. and the Bank will apply this standard from financial years beginning on or after 1 January FRS 139 Financial Instruments: Recognition and Measurement (effective from 1 January 2010) establishes principles for recognising and measuring financial assets, financial liabilities and some contracts to buy and sell non-financial items. Hedge accounting is permitted under strict circumstances. The amendments to FRS 139 provide further guidance on eligible hedged items. The amendment provides guidance for two situations. On the designation of a one-sided risk in a hedged item, the amendment concludes that a purchased option designated in its entirety as the hedging instrument of a one-sided risk will not be perfectly effective. The designation of inflation as a hedged risk or portion is not permitted unless in particular situations. The improvement to FRS 139 clarifies that the scope exemption in FRS 139 only applies to forward contracts but not options for business combinations that are firmly committed to being completed within a reasonable timeframe. and the Bank will apply this standard from financial years beginning on or after 1 January