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Other Disclosure Requirements Under the Prescribed Format Issued by the Central Bank of Sri Lanka for Preparation of Annual Financial Statements of Licensed Specialised 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. Note 25 to the financial statements Analysis of Financial Instruments by Measurement basis
1.1.2 Other Disclosures Not designated.
  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. Note 5.2.1 - Designated fair value
Please refer Integrated risk management report
  ii. Reclassifications of financial instruments from one category to another. Significant accounting policies:
Note 5.2.2 - Reclassification of financial instruments
  iii. Information about financial assets pledged as collateral and about financial or non-financial assets held as collateral. Note 48.1 - Assets pledged as security
  iv. Reconciliation of the allowance account for credit losses by class of financial assets. Notes to the financial statements:
Note 32.2 - Movement in specific and collective allowance for impairment
  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 11 - 22 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 - Interest income
  ii. Fee income and expense. Note 13 to the financial statements:
Net fee and commission income
  iii. Amount of impairment losses by class of financial assets. Note 18 to the financial statements:
Impairment for loans and other losses.
  iv. Interest income on impaired financial assets.  

1.3

Other Disclosures

  
1.3.1 Accounting policies for financial instruments. Significant accounting policies:
Note 5.2.5 - Financial instruments - initial recognition, classification and subsequent measurement.
1.3.2 Information on hedge accounting. The Bank does not adopt 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 64.3 to 64.4 - Fair value measurement
  ii. Description of how fair value was determined. Notes to the financial statements:
Note 64.1.
  iii. The level of inputs used in determining fair value. Notes to the financial statements:
Note 64.7 to 64.13.
  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.
  v. Information if fair value cannot be reliably measured. Notes to the financial statements:
Note 64.5 to 64.12.

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. Please refer the report on Integrated risk management.
2.1.2 Management’s objectives, policies, and processes for managing those risks. Please refer the section relating to Integrated risk managements objectives, policies and processes.
2.1.3 Changes from the prior period. Notes to the financial statements:
Note 62.2 - Reclassification of comparative figures

2.2

Quantitative Disclosures

  
2.2.1 Summary of quantitative data about exposure to each risk at the reporting date. Please refer the section relating to Integrated risk managements objectives, policies and processes.
Notes to the Financial Section Note - 65
2.2.2 Disclosures about credit risk, liquidity risk, market risk, operational risk, interest rate risk and how these risks are managed. Please refer the section relating to Integrated risk managements objectives, policies and processes.
Notes to the Financial Statements Note - 65
  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. Note 32.1.3 on industry analysis.
  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. Note 32.1.3 on industry analysis.
Note 65.2.2.1 & 65.2.2.3 on loans and advances and impairment analysis.
  c. Information about collateral or other credit enhancements obtained or called. Note 65.2.2.3 Analysis of Security Values of Loans to and Receivables from other customers
  d. For other disclosures, please refer Banking Act Direction No. 7 of 2011 on Integrated Risk Management Framework for Licensed Banks (Section H). The section on ‘Integrated risk management’.
Note 65.2 Credit Risk
  ii. Liquidity Risk  
  a. A maturity analysis of financial liabilities. Notes to the financial statements:
Note 65.3.2.3 Maturity analysis of financial liabilities.
  b. Description of approach to risk management. The section on ‘Integrated risk management’.
  c. For other disclosures, please refer Banking Act Direction No. 7 of 2011 on Integrated Risk Management Framework for Licensed Banks (Section H). Please refer the section on ‘Integrated risk management’. Note 65.3 Liquidity Risk
  iii. Market Risk  
  a. A sensitivity analysis of each type of market risk to which the entity is exposed. Notes to the financial statements:
Note 65.4 - Market risk
  b. Additional information, if the sensitivity analysis is not representative of the entity’s risk exposure. None
  c. For other disclosures, please refer Banking Act Direction No. 7 of 2011 on Integrated Risk Management Framework for Licensed Banks (Section H). Please refer the section on ‘Integrated risk management’.
Note 65.4 Market Risk
  iv. Operational Risk  
  Please refer Banking Act Direction No. 7 of 2011 on Integrated Risk Management Framework for Licensed Banks (Section H). Notes to the financial statements:
Note 65.5 - Operational risk
  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.
 Notes to the financial statements:
Note 65.4.2.3 - Equity price risk
 
  • Discussion of important policies covering the valuation and accounting of equity holdings in the banking book.
 Note 5.2.5
  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.
  • 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 33 - Financial investments - Available-for-sale
Note 35 - Investments in subsidiaries
Note 36 - Investments in associates
Note 16 - Net gain/loss 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.
 Please refer the section on ‘Integrated risk management’.
  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).
 Please refer the section on ‘Integrated risk management’ and Note 65.4.2.12  
2.2.3 Information on concentrations of risk. Please refer the section on ‘Integrated risk management’.

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 65.6.2
  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 65.6.2 - Financial risk 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. Please refer the section on ‘Integrated risk management’.
  ii. Quantitative Disclosures  
  a. Capital requirements for credit risk, market risk and operational risk Please refer the section on ‘Integrated risk management’.
  b. Total and Tier 1 capital ratio Please refer the section on ‘Integrated risk management’.