Confidence and prosperity
Orient Commercial Joint Stock Bank
No.: 03 /2014/BC-BKS
Ho Chi Minh City, 21st April 2014
REPORT OF THE SUPERVISORY BOARD
ON OCB’S OPERATION AND EVALUATION OF 2013 FINANCIAL
STATEMENT
OCB Annual General Meeting Of Shareholders in 2014
-
Pursuant to the functions and duties of the Supervisory Board as defined in the Law
on Credit Institutions and the Charter of Orient Commercial Joint Stock Bank
(OCB);
-
Pursuant to the operational rules of the Supervisory Board;
-
As per financial statements and operation of OCB in 2013.
The Supervisory Board would like to report to the General Meeting of Shareholders
on the operation of the Supervisory Board and the results of the OCB’s 2013 financial
statements as follows:
SUPERVISORY BOARD’S OPERATION:
I.
The OCB Supervisory Board has 5 members, including 3 full-time members. In the
year, the Supervisory Board has operated in accordance with the law and regularly
exchanged works under the duties of the Supervisory Board.
1) Performing the functions of the Supervisory Board:
In 2013, the Supervisory Board performed the functions and duties in accordance
with the law, focusing on the following works:
-
Monitoring compliance with the legal provisions and the OCB Charter in
governance and administration, the observance of the accounting regime, conducting
periodic evaluation of financial statements as required, notifying the BOD and
General Director.
-
Performing the internal audit function, directing the Internal Audit Department to
perform the internal audit plan as approved by the Supervisory Board after
discussion with the General Director and with consent of the Chairman of BOD.
-
Updating and monitoring the list of major shareholders, shareholders who are
concerned persons of the BOD members, Supervisory Board members, General
Director of OCB as prescribed.
-
Supervising and overseeing the implementation of editing recommendations of SBV
Inspectors, making the reports relating to the Supervisory Board, Internal Audit in
accordance with the law and as required by the inspection and supervision
authorities of SBV.
2) Performing the internal audit function:
Based on the approved 2013 audit plan, Internal Audit Department performed 08
inspections and audits under the program.
The units were inspected and audited under the approved plan and plan of
adjustment. The plan adjustment was based on the practice in OCB in the second half of
the year, evaluation of the risk level of the operations by the time of adjustment, and
existing resources of the Internal Audit Department.
Through inspection and auditing results, the Internal Audit Department
recommended BOD, Supervisory Board, Executive Board and other units a number of
problems. In addition to works under the set plan, Internal Audit Department also
performed other works according to the functions and tasks such as:
 Acting as a focal point to coordinate in working with Inspection Teams of SBV
at Head Office and Branches in 2013;
 Other unexpected tasks at the request of leadership.
II.
IMPLEMENTATION OF THE RESOLUTION
GENERAL MEETING OF SHAREHOLDERS
OF
THE
ANNUAL
1. Implementation of targets set in the Resolution of the General Meeting of
Shareholders as follows:
Table 1: Data of planned items according to the balance sheet as at 31st December 2013
Unit: billion VND
Items
Total assets
Mobilized capital
In which:
Mobilization from TT1
Total outstanding loans
In which:
+ Outstanding loans:
+ Corporate bonds
Non-performing loans
Charter capital
Profit before tax
Pre-provision operating
profit
Network
Percentage
Target
of
assigned Implementation completion
by GMS in
in 2013
compared
2013
to the plan
in 2013
Percentage of
implementation
compared to
2012
28,756
24,045
32,795
28,514
114.0%
119.0%
119.6%
127.3%
19,245
18,954
19,903
20,646
103.4%
109.0%
124.00%
119.00%
< 3%
4,000
320
20,179
467
2,9%
3,234
321
81.0%
100.0%
105.60%
570
99
619
95
108.60%
96%
111.33%
102.15%
117.00%
311.00%
2. Implementation of the Resolution on profit distribution and fund establishment
in 2012 as follows:
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 Funds were established as specified
 By 31st December 2013, issuance of 10% share (323.4 billion) has not been done
(without fee collection) to increase the charter capital from the fund of reserve
and addition to the Charter Capital and retained profits to shareholders because
the Bank complied the regulations on time of share issuance after its purchase of
the treasury shares.
III.
EVALUATION OF 2013 FINANCIAL STATEMENTS:
On basis of 2013 financial statements prepared by the Executive Board, audit reports
of International Deloitte Auditing Company, the Supervisory Board would like to report
data on financial statements 2013 of OCB to the General Meeting of Shareholders as
follows:
1) The balance sheet as at 31st December 2013
Unit: billion VND
A/ TOTAL ASSETS
Cash and deposits and placements with the State Bank of Vietnam and
other credit institutions
Securities for business, investment, long term capital contribution
Lending to customers
Fixed assets and other available assets
B/ TOTAL LIABILITIES AND EQUITY
32,795
4,506
6,012
19,974
2,303
32,795
28,830
8,614
19,903
313
1/ LIABILITIES
Deposits and placements from other credit institutions
Customers’ deposits and other mobilization
Other liabilities.
2/ EQUITY
Equity and funds
Equity of credit institutions
Charter capital
Treasury shares
Share premium
Funds of credit institutions
Retained earnings (accumulated)
3,965
3,243
3,234
(90)
99
220
502
2) Business results in 2013:
Unit: billion VND
ITEMS
TOTAL OPERATING INCOME
TOTAL OPERATING EXPENSE
Implementatio Implementatio
n in 2013
n in 2012
1,229
1,066
610
510
Compariso
n of
2013/2012
115.29%
119.60%
3
Net operating income before credit risk
provisions
Credit risk provisions
TOTAL PROFIT BEFORE TAX
Total corporate income tax expense
PROFIT AFTER TAX
619
298
321
80
241
556
252
304
74
230
111.33%
118.25%
105.60%
108.00%
104.78%
From above data, the Supervisory Board confirms data on the balance sheet and
business income 2013 of OCB give a true and fair view in material aspects.
IV.
COMMENTS ON OPERATION:
After monitoring the Bank’s operation in 2013, the Supervisory Board commented
as follows:
1. Basically complete business targets, specifically:
- Total assets reached 114% of the target
- Mobilized capital reached 119% of the target
- Total outstanding loans (including 467 billion VND of corporate bonds)
reached 109% of the target
- Total profit before tax reached 100% of the target
- Non-performing loan ratio reached 2.9%, which satisfies the target (<3%)
- Operational risk provisions were made fully as specified
- Charter capital increase and profit distribution, etc. were not conducted
according to the Resolution approved by the General Meeting of
Shareholders due to compliance with the laws in purchase of treasury shares.
2. Be active in write-off of non-performing loans, accrued interest, but actually,
non-performing loan ratio remained high, mainly focusing on some customers
and the Bank is actively addressing by many measures as prescribed by law for
quick recovery.
3. Operating expenses rose faster than growth of income, especially personnel
costs, other costs, which should be managed strictly and appropriately to the size
and development of the Bank.
4. Provisions were made in line with the actual situation; but for the provisions
used for risk handling, it is necessary to have the strict treatment plan in order to
recover in accordance with the law.
5. Make amendments and explanations of the recommendations of the SBV
Inspector in 2012 and 2013.
V.
ACTION PLAN IN 2014:
Based on the orientation of the OCB’s 2014 action plan, the Supervisory Board
focus on some important works as follows:
1. Perform a full range of functions and tasks of the Supervisory Board under the
provisions of laws and regulations of OCB.
4
2. Supervise and assist in write-off of non-performing loans, bad debts, recovery of
accrued interest.
3. Monitor the operational costs, using equity.
4. Approve policies, plans of internal audit in 2013 under the authority of the
Supervisory Board.
5. Review the system of internal processes and regulations issued by OCB in the
material activities, give comments for completion in accordance with the legal
regulations.
VI.
RECOMMENDATIONS:
From the practice of the Supervisory Board, OCB’s business results and financial
statements in 2013, the Supervisory Board would like to propose to the General
Meeting of Shareholders to:
1. Approve the 2013 financial statements presented by the BOD to the Meeting.
2. Adopt contents presented by the BOD to the Meeting.
3. Facilitate the operations of the Supervisory Board, propose to the GMS to authorize
the Supervisory Board to issue and modify rules and regulations as prescribed by
the law.
The Supervisory Board hereby reports to the GMS on activities of the Supervisory
Board, evaluation of financial statements and business results in 2013 of the Bank.
Sincerely,
FOR THE SUPERVISORY BOARD
Head of Board
NGUYEN VAN BA
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