Stewardship

Other Disclosure Requirements Under the Prescribed Format Issued by the Central Bank of Sri Lanka for Preparation of Annual Financial Statements of Licensed Commercial Banks

Disclosure requirements Description

1. Information about the Significance of Financial Instruments for Financial Position and Performance

1.1

Statement of Financial Position

1.1.1
Disclosures on categories of financial assets and financial liabilities. Notes to the Financial Statements: Note 24 - Classification of Financial Assets and Financial Liabilities
1.1.2
Other Disclosures
(i) Special disclosures about financial assets and financial liabilities designated to be measured at fair value through profit or loss, including disclosures about credit risk and market risk, changes in fair values attributable to these risks and the methods of measurement. Significant Accounting Policies: Note 6.1.3.1.2 - Financial Assets Designated at Fair Value Through Profit or Loss Note 6.1.4.1.2 - Financial LiabilitiesDesignated at Fair Value Through Profit or Loss
(ii) Reclassifications of financial instruments from one category to another. Significant Accounting Policies: Note No. 6.1.5 - Reclassification of Financial Assets and Liabilities
(iii) Information about financial assets pledged as collateral and about financial or non-financial assets held as collateral. Notes to the Financial Statements: Note 67.1.3 - Collateral Held
(iv) Reconciliation of the allowance account for credit losses by class of financial assets. Notes to the Financial Statements: Note 32.2 - Movement in Provision for Individual and Collective Impairment During the Year
(v) Information about compound financial instruments with multiple embedded derivatives. The Bank does not have compound financial instruments with multiple embedded derivatives.
(vi) Breaches of terms of loan agreements. None

1.2

Statement of Comprehensive Income

1.2.1
Disclosures on items of income, expense, gains and losses. Notes to the Financial Statements: Notes 11 - 21 to the Financial Statements.
1.2.2
Other Disclosures
(i) Total interest income and total interest expense for those financial instruments that are not measured at fair value through profit and loss. Notes to the Financial Statements: Note 12 - Net Interest Income
(ii) Fee income and expense. Notes to the Financial Statements: Note 13 - Net Fees and Commission Income
(iii) Amount of impairment losses by class of financial assets. Notes to the Financial Statements: Note 17 - Impairment Charges for Loans and Other Losses
(iv) Interest income on impaired financial assets. Notes to the Financial Statements: Note 12.1 - Interest Income from Impaired Loans and Receivables to Other Customers

1.3

Other Disclosures

1.3.1
Accounting Policies for financial instruments. Significant Accounting Policies: Note 6.1 - Financial Instruments - Initial Recognition, Classification and Subsequent Measurement
1.3.2
Information on hedge accounting. The Bank did not elect to follow hedge accounting.
1.3.3
Information about the fair values of each class of financial asset and financial liability, along with:
(i) Comparable carrying amounts. Notes to the Financial Statements: Note 25.1 - Assets and Liabilities Measured at Fair Value and Fair Value Hierarchy Note 25.3 - Financial Instrument Not Measured at Fair Value and Fair Value Hierarchy
(ii) Description of how fair value was determined. Significant Accounting Policies: Note 4 - Fair Value Measurement
(iii) The level of inputs used in determining fair value. Notes to the Financial Statements: Note 25.3 - Financial Instruments Not Measured at Fair Value and Fair Value Hierarchy Note 25.4 - Valuation Techniques and Inputs in Measuring the Fair Values Note 37.5 (b) - Information on Valuations of Freehold Land and Buildings of the Bank
(iv)(a) Reconciliations of movements between levels of fair value measurement hierarchy. (b) Additional disclosures for financial instruments that fair value is determined using level 3 inputs. There were no movements between levels of fair value hierarchy during the period under review. Notes to the Financial Statements: Note 25.2 - Significant Unobservable Inputs Used as at December 31, 2015 in Measuring Fair Value of Land and Buildings Categorised as Level 3
(v) Information if fair value cannot be reliably measured. Notes to the Financial Statements: Note 33 - Financial Investments - Available-for-Sale

2.

Information about the Nature and Extent of Risks Arising from Financial Instruments

2.1

Qualitative Disclosures

2.1.1
Risk exposures for each type of financial instrument. Significant Accounting Policies: Note 3 - Financial Risk Management Notes to the Financial Statements: Note 67 - Financial Risk Review
2.1.2
Management's objectives, policies and processes for managing those risks. Significant Accounting Policies: Note 3 - Financial Risk Management Refer the Section on 'Managing Risk at Commercial Bank' for comprehensive disclosure of management's objectives, policies and processes
2.1.3
Changes from the prior period. There was no major policy changes during the period under review

2.2

Quantitative Disclosures

2.2.1
Summary of quantitative data about exposure to each risk at the Reporting date. Notes to the Financial Statements: Note 67 - Financial Risk Review
2.2.2
Disclosures about credit risk, liquidity risk, market risk, operational risk, interest rate risk and how these risks are managed.
(i) Credit Risk
(a) Maximum amount of exposure (before deducting the value of collateral), description of collateral, information about credit quality of financial assets that are neither past due nor impaired and information about credit quality of financial assets. Notes to the Financial Statements: Note 67.1.1 - Credit Quality Analysis Note 67.1.3 - Collateral Held
(b) For financial assets that are past due or impaired, disclosures on age, factors considered in determining as impaired and the description of collateral on each class of financial asset. Notes to the Financial Statements: Note 67.1.1 (b) - Age Analysis by Class of Financial Assets Note 17 - Impairment Charges for Loans and Other Losses - Collateral Valuation and description of collaterals Significant Accounting Policies: Note 6.1.10 - Identification and Measurement of Impairment of Financial Assets for factors considered in determining the Financial Assets as Impaired
(c) Information about collateral or other credit enhancements obtained or called. Notes to the Financial Statements: Note 67.1.3 - Collateral Held
(d) Other disclosures (As required by the Section H of the Banking Act Direction No. 07 of 2011 on Integrated Risk Management Framework for Licensed Banks). Refer the Section on 'Managing Risk at Commercial Bank'
(ii) Liquidity Risk
(a) A maturity analysis of financial liabilities. Notes to the Financial Statements: Note 60 - Maturity Analysis - Group Note 67.2.2 - Maturity Analysis of Financial Assets and Financial Liabilities - Bank
(b) Description of approach to risk management. Significant Accounting Policies: Note 03 - Financial Risk Management Refer the Section on 'Managing Risk at Commercial Bank'
(c) Other disclosures (As per Section H of the Banking Act Direction No. 07 of 2011 on Integrated Risk Management Framework for Licensed Banks). Refer the Section on 'Managing Risk at Commercial Bank'
(iii) Market Risk
(a) A sensitivity analysis of each type of market risk to which the Bank is exposed. Notes to the Financial Statements: Note 67.3 - Market Risk
(b) Additional information, if the sensitivity analysis is not representative of the Bank's risk exposure. None
(c) Other disclosures (As required by the Section H of the Banking Act Direction No. 7 of 2011 on Integrated Risk Management Framework for Licensed Banks). Notes to the Financial Statements: Note 67.4 - Operational Risk Refer the Section on 'Managing Risk at Commercial Bank'
(iv) Operational Risk
Disclosures as required by the Section H of the Banking Act Direction No. 7 of 2011 on Integrated Risk Management Framework for Licensed Banks. Refer the Section on 'Managing Risk at Commercial Bank'
(v) Equity Risk in the Banking Book
(a) Qualitative Disclosures
  • Differentiation between holdings on which capital gains are expected and those taken under other objectives including for relationship and strategic reasons.
Significant Accounting Policies: Note 6.1.3.1.1 - Financial Assets - Held-for-Trading Significant Accounting Policies: Note 6.1.3.4 - Financial Investments - Available-for-Sale
  • Discussion of important policies covering the valuation and accounting of equity holdings in the banking book.
Significant Accounting Policies: Note 4 - Fair Value Measurement
(b) Quantitative Disclosures
  • Value disclosed in the Statement of Financial Position of investments, as well as the fair value of those investments; for quoted securities, a comparison to publicly quoted share values where the share price is materially different from fair value.
Notes to the Financial Statements: Note 30 - Other Financial Instruments - Held-for-Trading Note 33 - Financial Investments - Available-for-Sale Note 34 Financial Investments - Loans and Receivables Note 35 - Investments in Subsidiaries Note 36 - Investments in Associates
  • The types and nature of investments
  • The cumulative realised gains/(losses) arising from sales and liquidations in the reporting period.
Notes to the Financial Statements: Note 14 - Net Gains/(Losses) from Trading Note 15 - Net Gains/(Losses) from Financial Investments
(vi) Interest Rate Risk in the Banking Book
(a) Qualitative Disclosures
  • Nature of interest rate risk in the banking book (IRRBB) and key assumptions.
Notes to the Financial Statements: Note 67.3.1 - Exposure to Market Risk - Trading and Non-Trading Portfolios Refer the Section on 'Managing Risk at Commercial Bank'
(b) Quantitative Disclosures
  • The increase/(decline) in earnings or economic value (or relevant measure used by management) for upward and downward rate shocks according to management's method for measuring IRRBB, broken down by currency (as relevant).
Notes to the Financial Statements: Note 67.3.2 - Exposure to Interest Rate Risk - Sensitivity Analysis Refer the Section on 'Managing Risk at Commercial Bank'
2.2.3
Information on Concentrations of Risk. Notes to the Financial Statements: Note 67.1.4 - Concentrations of Credit Risk

3.

Other Disclosures

3.1

Capital

3.1.1
Capital Structure
(i) Qualitative Disclosures
Summary information on the terms and conditions of the main features of all capital instruments, especially in the case of innovative, complex or hybrid capital instruments. Notes to the Financial Statements: Note 67.5 - Capital Management
(ii) Quantitative Disclosure
(a) The amount of Tier 1 capital, with separate disclosure of:
  • Paid-up share capital/common stock
  • Reserves
  • Non-controlling interests in the equity of subsidiaries
  • Innovative instruments
  • Other capital instruments
  • Deductions from Tier 1 capital
(b) The total amount of Tier 2 and Tier 3 capital (c) Other deductions from capital (d) Total eligible capital
Notes to the Financial Statements: Note 67.5 - Capital Management
3.1.2
Capital Adequacy
(i) Qualitative Disclosures
A summary discussion of the Bank's approach to assessing the adequacy of its capital to support current and future activities. Notes to the Financial Statements: Note 67.5 - Capital Management Refer the Section on 'Managing Risk at Commercial Bank'
(ii) Quantitative Disclosures
(a) Capital requirements for credit risk, market risk and operational risk (b) Total and Tier 1 capital ratios Refer the Section on 'Managing Risk at Commercial Bank'