These financial statements are originally issued in Indonesian language
PT BANK DKI
NOTES TO THE FINANCIAL STATEMENTS Continued For the Years Ended December 31, 2006 and 2005
In Full Rupiah
44
DRAFT
For Discussion Purpose Only April 26, 2007
To be Finalized Agreed by
: Date
:
32. Commitments and Contingencies
As part of normal banking business, the Bank has commitments and contingencies that are not presented in the financial statements.
The following is a summary of the Bank’s commitments and contingencies at the equivalent Rupiah contractual amounts:
2006 2005
Rp Rp
Commitments Commitments Payable
Rupiah Unused Loan Facilities Granted
231,831,210,393 142,293,209,252
Foregn Currencies Outstanding Irrevocable LC
for Export and Import Purposes 17,157,488,520
-- Total Commitment Payables
248,988,698,913 142,293,209,252
Total Commitments-Net 248,988,698,913
142,293,209,252 Contingencies
Contingent Receivables Rupiah
Interest Receivables on Non Performing Loans 44,013,852,797
69,733,571,588 Others
18,292,581,904 10,992,975,187
Total Contingent Receivables 62,306,434,701
80,726,546,775
Contingent Payables Rupiah
Bank Guarantees 329,580,580,137
142,091,091,964 Foreign Currency
Bank Guarantees 51,346,098,663
15,126,376,254 Total Contingent Payables
380,926,678,800 157,217,468,218
Total Contingent - Net 318,620,244,099
76,490,921,443 Commitments and Contingencies-Net
567,608,943,012 218,784,130,695
For the year ended December 31, 2006, Bank has recorded estimated loss from commitments and contingencies amounted to Rp 6,299,153,778 2005: Rp 1,645,764,436.
Bank involved in various legal cases either as prosecutor or the party that is prosecuted by third parties as well as Bank’s asset. Significant legal cases per December 31, 2006 are as follows:
a. Rental of sub branch Tangerang;
b. Embezzlement of customers’ fund at sub branch Kalimalang by accused employees of the Bank;
c. Request from Djunaidy A former General Director of the Bank regarding employee service entitlement;
d. Request PT Alfa Karsa Persada as guarantor to PT Gelar Gatra Laras Contractor and Bank Bank
Guarantee Issuer. In relation to the above mentionned legal cases, the Bank has provided provision of nil as of December 31, 2006
2005: Rp 6,019,420,905. Management believes that the allowance for loss is adequate to cover the loss possibility of the uncollected
commitments and contingencies.
These financial statements are originally issued in Indonesian language
PT BANK DKI
NOTES TO THE FINANCIAL STATEMENTS Continued For the Years Ended December 31, 2006 and 2005
In Full Rupiah
45
DRAFT
For Discussion Purpose Only April 26, 2007
To be Finalized Agreed by
: Date
:
33. Risk Management
Credit Risk Credit Risk management has been conducted based on prudential principles and fulfills the regulations that
governs by Bank Indonesia. The Bank has granting policies and the related explanations used as guidance in disbursing and managing loans. Loans disbursements are conducted through analysis of character, capital,
capacity, business condition, and availability collateral.
Placement Risk Placements transaction in the Bank consists of interbank call money, time deposits, and certificate of deposits.
Placement Risk is risk that arises because the inability of counterparts to pay the obligation either the interest or principle on the due date.
To anticipate and control the placement risk, the Bank performs: a.
Selecting and placing on bank with a good reputation and owned by the Government. b.
Spreading the risk with placements funds in several banks. c.
Monitoring the health of the bank in which Bank will place through reliable sources of information. d.
Determining limits on Treasury Division when conducting the placement. The limits consist of total limit, transaction limit and period limit.
e. Settlement Division that process all administration works that related with transaction is conducted by Treasury
Division under the Financial Control and Technology PKT for foreign currency. Rupiah transactions are conducted in Main Branch.
Market Risk Market Risk represents the potential risk for the Bank due to the changes in interest rates and foreign exchange
rate in the market where the Bank operates. Market Risk is attached in all Bank’s activities including borrowings, deposits, securities and others.
Bank has measured market risk the scoring analysis of net open position PDN.
