COMPLIANCE WITH DISCLOSURE REQUIREMENTS OF THE CENTRAL BANK OF SRI LANKA

Compliance with the Disclosure Requirements Specified by the Central Bank of Sri Lanka for Preparation of Annual Financial Statements of Licensed Commercial Banks.
1
Information about the significance of financial instruments for the financial position and performance
1.1
Statement of Financial Position
Reference

1.1.1

Disclosures on categories of financial assets and financial liabilities

Note 18 to the Financial Statements

1.1.2

Other disclosures

i Special disclosures about the 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 55 - Fair value of financial instruments

ii Reclassifications of financial instruments from one category to another.

Not Applicable

iii Information about financial assets pledged as collateral and about financial or non-financial assets held as collateral.

Note 56.1 to the Financial Statements

iv Reconciliation of the allowance account for credit losses by class of financial assets.

Note 25.5(a) to the Financial Statements

v Information about derivative financial instruments.

Note 22 to the Financial Statements

vi Information about compound financial instruments with multiple embedded derivatives.

Not Applicable

vii Breaches of terms of loan agreements.

Note 50 to the Financial Statements
1.2
Statement of Comprehensive Income

1.2.1

Disclosures on items of income, expense, gains and losses

Note 4 to 14 of 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.

Note 5.1 and 5.2 to the Financial Statements

ii Fee income and expense.

Note 6 to the Financial Statements

iii Amount of impairment losses by class of financial assets.

Note 10 to the Financial Statements

iv Interest income on impaired financial assets.

Note 5.4 to the Financial Statements
1.3
Other Disclosures

1.3.1

Accounting policies for financial instruments

Accounting Policies for each type of Financial Instrument presented in the Statement of Financial Position is disclosed under the respective notes. Pages 302 to 408.

1.3.2

Information on hedge accounting

Note 22 to the Financial Statements

1.3.3

Information about the fair values of each class of financial asset and financial liability, along with:

i Comparable carrying amounts.

Note 55 - Fair value of financial instruments

ii Description of how fair value was determined.

Note 55 - Fair value of financial instruments

iii The level of inputs used in determining fair value.

Note 55 - Fair value of financial instruments

iv Reconciliations of movements between levels of fair value measurement hierarchy, additional disclosures for financial instruments that fair value is determined using level 3 inputs.

Note 55(b) - Fair value of financial instruments

v Information if fair value cannot be reliably measured.

Not Applicable
2
Information about the nature and extent of risks arising from financial instruments
2.1
Qualitative disclosures
Reference

2.1.1

Risk exposures for each type of financial instrument

Note 56 - Risk Management of the Financial Statements

2.1.2

Management's objectives, policies, and processes for managing those risks

Note 56 - Risk Management of the Financial Statements

2.1.3

Changes from the prior period

Not Applicable

2.2

Quantitative disclosures

2.2.1

Summary of quantitative data about exposure to each risk at the reporting date.

Note 56 - Risk Management of the Financial Statements

2.2.2

Disclosures about credit risk, liquidity risk, market risk, operational risk, interest rate risk and how these risks are managed.

Note 56 - Risk Management of the Financial Statements
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.

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.

c. Information about collateral or other credit enhancements obtained or called.

d. For other disclosures, refer Basel III Minimum Disclosure Requirement under Pillar III as per the Banking Act Direction No.01 of 2016 on Capital Requirements under Basel III for Licensed Banks

Note 56.1 - Risk Management of the Financial Statements
ii Liquidity Risk

a. A maturity analysis of financial liabilities.

b. Description of approach to risk management.

c. For other disclosures, refer Basel III Minimum Disclosure Requirement under Pillar III as per the Banking Act Direction No.01 of 2016 on Capital Requirements under Basel III for Licensed Banks

Note 56.3 - Liquidity Risk and funding management of the Financial Statements
iii Market Risk

a. A sensitivity analysis of each type of market risk to which the entity is exposed.

b. Additional information, if the sensitivity analysis is not representative of the entity's risk exposure.

c. For other disclosures, refer Basel III Minimum Disclosure Requirement under Pillar III as per the Banking Act Direction No.01 of 2016 on Capital Requirements under Basel III for Licensed Banks

Note 56.2 - Market Risk of the Financial Statements
iv Operational Risk

Refer Basel III Minimum Disclosure Requirement under Pillar III as per the Banking Act Direction No.01 of 2016 on Capital Requirements under Basel III for Licensed Banks

Pages from136 to 186 - Operational Risk of the Financial Statements
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.

  • Discussion of important policies covering the valuation and accounting of equity holdings in the banking book

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 realized gains/ (losses) arising from sales and liquidations in the reporting period.

Note 56.2(f) - Equity Price Risk of the Financial Statements
vi Interest rate risk in the Banking Book

a. Qualitative disclosures

  • Nature of interest rate risk in the Banking Book (IRRBB) and key assumptions

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).

Note 56.2(a) - Interest Rate Risk of the Financial Statements

2.2.3

Information on concentration of risk

Note 56.1 - Risk Management of the Financial Statements
3
Other Disclosures
3.1
Regulatory requirements on Capital and Liquidity
Reference

3.1.1

Key Regulatory Ratios – Capital and Liquidity

Page 170 on Risk Management

3.1.2

Basel III Computation of Capital Ratios

Page 170 on Risk Management

3.1.3

Basel III Computation of Leverage Ratio

Not Applicable

3.14

Basel III Computation of Liquidity Coverage Ratio

Page 172 on Risk Management

3.1.5

Main Features of Regulatory Capital Instruments

Page 173 on Risk Management

3.2
Risk Weighted Assets (RWA)

3.2.1

Summary discussion on adequacy /meeting current and future capital requirements

Page 138 on Risk Management

3.2.2

Credit Risk under Standardised Approach : Credit Risk Exposures and Credit Risk Mitigation (CRM) Effects

Pages 174 to 179 on Risk Management

3.2.3

Credit Risk under Standardised Approach: Exposures by Asset Classes and Risk Weights

3.2.4

Market Risk under Standardised Measurement Method

3.2.5

Operational Risk under Basic Indicator Approach
3.3
Linkage between Financial Statements and Regulatory Exposures

3.3.1

Differences between Accounting and Regulatory Scopes and Mapping of Financial Statement Categories with Regulatory Risk Categories

Pages 180 to 183 on Risk Management

3.3.2

Explanations of differences between accounting and regulatory exposure amounts
3.4
Risk Management

3.4.1

Bank Risk Management Approach

Pages 136 to 186 on Risk Management

3.4.2

Risk Management related to Key Risk Exposures