The tables below provide a reconciliation between line items in the Statement of Financial Position and categories of financial assets and financial liabilities of the Group and the Bank:
As at December 31, 2017 | Note | Held for
Trading (HFT) Rs. ’000 |
Held to
Maturity (HTM) Rs. ’000 |
Loans and
Receivables Rs. ’000 |
Available
for Sale (AFS) Rs. ’000 |
Other amortised
cost Rs. ’000 |
Total Rs. ’000 |
|
Financial assets | ||||||||
Cash and cash equivalents | 27 | – | – | 34,673,424 | – | – | 34,673,424 | |
Balances with central banks | 28 | – | – | 45,546,349 | – | – | 45,546,349 | |
Placements with banks | 29 | – | – | 17,633,269 | – | – | 17,633,269 | |
Derivative financial assets | 30 | 2,334,536 | – | – | – | – | 2,334,536 | |
Other financial instruments – Held for trading |
31 | 4,410,913 | – | – | – | – | 4,410,913 | |
Loans and receivables to banks | 32 | – | – | 640,512 | – | – | 640,512 | |
Loans and receivables to other customers | 33 | – | – | 742,444,130 | – | – | 742,444,130 | |
Financial investments – Available for sale | 34 | – | – | – | 154,913,643 | – | 154,913,643 | |
Financial investments – Held to maturity | 35 | – | 69,365,796 | – | – | – | 69,365,796 | |
Financial investments – Loans and receivables |
36 | – | – | 48,712,477 | – | – | 48,712,477 | |
Total financial assets | 6,745,449 | 69,365,796 | 889,650,161 | 154,913,643 | – | 1,120,675,049 | ||
Financial liabilities | ||||||||
Due to banks | 43 | – | – | – | – | 60,244,892 | 60,244,892 | |
Derivative financial liabilities | 44 | 3,678,494 | – | – | – | – | 3,678,494 | |
Securities sold under repurchase agreements |
– | – | – | – | 49,532,385 | 49,532,385 | ||
Due to other customers/ deposits from customers |
45 | – | – | – | – | 857,269,981 | 857,269,981 | |
Other borrowings | 46 | – | – | – | – | 23,786,094 | 23,786,094 | |
Subordinated liabilities | 52 | – | – | – | – | 25,165,924 | 25,165,924 | |
Total financial liabilities | 3,678,494 | – | – | – | 1,015,999,276 | 1,019,677,770 |
As at December 31, 2016 | Note | Held for Trading (HFT) Rs. ’000 |
Held to Maturity (HTM) Rs. ’000 |
Loans and Receivables Rs. ’000 |
Available for Sale (AFS) Rs. ’000 |
Other amortised cost Rs. ’000 |
Total Rs. ’000 |
|
Financial assets | ||||||||
Cash and cash equivalents | 27 | – | – | 32,924,227 | – | – | 32,924,227 | |
Balances with central banks | 28 | – | – | 43,935,258 | – | – | 43,935,258 | |
Placements with banks | 29 | – | – | 11,718,499 | – | – | 11,718,499 | |
Derivative financial assets | 30 | 1,052,829 | – | – | – | – | 1,052,829 | |
Other financial instruments – Held for trading |
31 | 4,987,798 | – | – | – | – | 4,987,798 | |
Loans and receivables to banks | 32 | – | – | 624,458 | – | – | 624,458 | |
Loans and receivables to other customers | 33 | – | – | 620,129,488 | – | – | 620,129,488 | |
Financial investments – Available for sale | 34 | – | – | – | 160,092,522 | – | 160,092,522 | |
Financial investments – Held to maturity | 35 | – | 63,626,598 | – | – | – | 63,626,598 | |
Financial investments – Loans and receivables |
36 | – | – | 51,824,026 | – | – | 51,824,026 | |
Total financial assets | 6,040,627 | 63,626,598 | 761,155,956 | 160,092,522 | – | 990,915,703 | ||
Financial liabilities | ||||||||
Due to banks | 43 | – | – | – | – | 71,098,391 | 71,098,391 | |
Derivative financial liabilities | 44 | 1,515,035 | – | – | – | – | 1,515,035 | |
Securities sold under repurchase agreements |
– | – | – | – | 69,628,961 | 69,628,961 | ||
Due to other customers/ deposits from customers |
45 | – | – | – | – | 743,310,613 | 743,310,613 | |
Other borrowings | 46 | – | – | – | – | 9,270,154 | 9,270,154 | |
Subordinated liabilities | 52 | – | – | – | – | 24,849,539 | 24,849,539 | |
Total financial liabilities | 1,515,035 | – | – | – | 918,157,658 | 919,672,693 |
The tables below provide a reconciliation between line items in the Statement of Financial Position and categories of financial
assets and financial liabilities of the Bank:
As at December 31, 2017 | Note | Held for Trading (HFT) Rs. ’000 |
Held to Maturity (HTM) Rs. ’000 |
Loans and Receivables Rs. ’000 |
Available for Sale (AFS) Rs. ’000 |
Other amortised cost Rs. ’000 |
Total Rs. ’000 |
|
Financial assets | ||||||||
Cash and cash equivalents | 27 | – | – | 33,224,619 | – | – | 33,224,619 | |
Balances with central banks | 28 | – | – | 44,801,446 | – | – | 44,801,446 | |
Placements with banks | 29 | – | – | 17,633,269 | – | – | 17,633,269 | |
Derivative financial assets | 30 | 2,334,536 | – | – | – | – | 2,334,536 | |
Other financial instruments – Held for trading |
31 | 4,410,913 | – | – | – | – | 4,410,913 | |
Loans and receivables to banks | 32 | – | – | 640,512 | – | – | 640,512 | |
Loans and receivables to other customers | 33 | – | – | 737,446,567 | – | – | 737,446,567 | |
Financial investments – Available for sale | 34 | – | – | – | 154,714,132 | – | 154,714,132 | |
Financial investments – Held to maturity | 35 | – | 63,562,752 | – | – | – | 63,562,752 | |
Financial investments – Loans and receivables |
36 | – | – | 48,712,477 | – | – | 48,712,477 | |
Total financial assets | 6,745,449 | 63,562,752 | 882,458,890 | 154,714,132 | – | 1,107,481,223 | ||
Financial liabilities | ||||||||
Due to banks | 43 | – | – | – | – | 57,120,991 | 57,120,991 | |
Derivative financial liabilities | 44 | 3,678,494 | – | – | – | – | 3,678,494 | |
Securities sold under repurchase agreements | – | – | – | – | 49,676,767 | 49,676,767 | ||
Due to other customers/ deposits from customers |
45 | – | – | – | – | 850,127,511 | 850,127,511 | |
Other borrowings | 46 | – | – | – | – | 23,786,094 | 23,786,094 | |
Subordinated liabilities | 52 | – | – | – | – | 25,165,924 | 25,165,924 | |
Total financial liabilities | 3,678,494 | – | – | 1,005,877,287 | 1,009,555,781 |
As at December 31, 2016 | Note | Held for Trading (HFT) Rs. ’000 |
Held to Maturity (HTM) Rs. ’000 |
Loans and Receivables Rs. ’000 |
Available for Sale (AFS) Rs. ’000 |
Other amortised cost Rs. ’000 |
Total Rs. ’000 |
|
Financial assets | ||||||||
Cash and cash equivalents | 27 | – | – | 30,193,589 | – | – | 30,193,589 | |
Balances with central banks | 28 | – | – | 43,873,205 | – | – | 43,873,205 | |
Placements with banks | 29 | – | – | 11,718,499 | – | – | 11,718,499 | |
Derivative financial assets | 30 | 1,052,829 | – | – | – | – | 1,052,829 | |
Other financial instruments – Held for trading |
31 | 4,987,798 | – | – | – | – | 4,987,798 | |
Loans and receivables to banks | 32 | – | – | 624,458 | – | – | 624,458 | |
Loans and receivables to other customers | 33 | – | – | 616,018,228 | – | – | 616,018,228 | |
Financial investments – Available for sale | 34 | – | – | – | 160,023,471 | – | 160,023,471 | |
Financial investments – Held to maturity | 35 | – | 60,981,298 | – | – | – | 60,981,298 | |
Financial investments – Loans and receivables |
36 | – | – | 51,824,026 | – | – | 51,824,026 | |
Total financial assets | 6,040,627 | 60,981,298 | 754,252,005 | 160,023,471 | – | 981,297,401 | ||
Financial liabilities | ||||||||
Due to banks | 43 | – | – | – | – | 67,608,811 | 67,608,811 | |
Derivative financial liabilities | 44 | 1,515,035 | – | – | – | – | 1,515,035 | |
Securities sold under repurchase agreements |
– | – | – | – | 69,867,469 | 69,867,469 | ||
Due to other customers/ deposits from customers |
45 | – | – | – | – | 739,563,494 | 739,563,494 | |
Other borrowings | 46 | – | – | – | – | 9,270,154 | 9,270,154 | |
Subordinated liabilities | 52 | – | – | – | – | 24,849,539 | 24,849,539 | |
Total financial liabilities | 1,515,035 | – | – | – | 911,159,467 | 912,674,502 |
The Group measures the fair value using the following fair value hierarchy, which reflects the significance of the inputs used in making the measurement. An analysis of fair value measurement of financial and non-financial assets and liabilities is provided below:
Inputs that are quoted market prices (unadjusted) in an active market for identical instruments.
When available, the Group measures the fair value of an instrument using active quoted prices or dealer price quotations (assets and long positions are measured at a bid price; liabilities and short positions are measured at an ask price), without any deduction for transaction costs. A market is regarded as active if transactions for asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis.
Inputs other than quoted prices included within Level 1 that are observable either directly (i.e., as prices) or indirectly (i.e., derived from prices).
This category includes instruments valued using:
Inputs that are unobservable.
This category includes all instruments for which the valuation technique includes inputs not based on observable data and the unobservable inputs have a significant effect on the instrument’s valuation.
This category includes instruments that are valued based on quoted prices of similar instruments for which significant unobservable adjustments or assumptions are required to reflect difference between the instruments.
Valuation techniques include net present value and discounted cash flow models, comparison with similar instruments for which observable market prices exist. Assumptions and inputs used in valuation techniques include risk-free and benchmark interest rates, risk premiums in estimating discount rates, bond and equity prices, foreign exchange rates, expected price volatilities and corrections.
Observable prices or model inputs such as market interest rates are usually available in the market for listed equity securities and Government Securities such as Treasury Bills and Treasury Bonds. Availability of observable prices and model inputs reduces the need for management judgement and estimation while reducing uncertainty associated in determining the fair values.
Models are adjusted to reflect the spread for bid and ask prices to reflect costs to close out positions, credit and debit valuation adjustments, liquidity spread and limitations in the models. Also, profit or loss calculated when such financial instruments are first recorded (“Day 1” profit or loss) is deferred and recognised only when the inputs become observable or on derecognition of the instrument.
The following table provides an analysis of assets and liabilities measured at fair value as at the reporting date, by the level in the fair value hierarchy into which the fair value measurement is categorised. These amounts were based on the values recognised in the Statement of Financial Position:
GROUP | BANK | |||||||||
Note | As at December 31, 2017 | Level 1 Rs. ’000 |
Level 2 Rs. ’000 |
Level 3 Rs. ’000 |
Total Rs. ’000 |
Level 1 Rs. ’000 |
Level 2 Rs. ’000 |
Level 3 Rs. ’000 |
Total Rs. ’000 |
|
Non-financial assets | ||||||||||
Property, plant and equipment | ||||||||||
Land and buildings | 26.2 | – | – | 11,559,056 | 11,559,056 | – | – | 11,218,112 | 11,218,112 | |
Total non-financial assets at fair value |
– | – | 11,559,056 | 11,559,056 | – | – | 11,218,112 | 11,218,112 | ||
Financial assets | ||||||||||
Derivative financial assets | 30 | |||||||||
Currency swaps | – | 1,067,259 | – | 1,067,259 | – | 1,067,259 | – | 1,067,259 | ||
Forward contracts | – | 1,264,900 | – | 1,264,900 | – | 1,264,900 | – | 1,264,900 | ||
Spot contracts | – | 2,377 | – | 2,377 | – | 2,377 | – | 2,377 | ||
Other financial instruments – Held for trading | 31 | |||||||||
Government securities | 4,096,168 | – | – | 4,096,168 | 4,096,168 | – | – | 4,096,168 | ||
Equity shares | 314,745 | – | – | 314,745 | 314,745 | – | – | 314,745 | ||
Financial investments – Available for sale | 34 | |||||||||
Government securities | 154,366,556 | – | – | 154,366,556 | 154,167,169 | – | – | 154,167,169 | ||
Equity securities | 500,278 | – | 46,809 | 547,087 | 500,278 | – | 46,685 | 546,963 | ||
Investment in unit trust | – | – | – | – | – | – | – | – | ||
Total financial assets at fair value | 159,277,747 | 2,334,536 | 46,809 | 161,659,092 | 159,078,360 | 2,334,536 | 46,685 | 161,459,581 | ||
Total assets at fair value | 159,277,747 | 2,334,536 | 11,605,865 | 173,218,148 | 159,078,360 | 2,334,536 | 11,264,797 | 172,677,693 | ||
Financial liabilities | ||||||||||
Derivative financial liabilities | 44 | |||||||||
Currency swaps | – | 2,656,376 | – | 2,656,376 | – | 2,656,376 | – | 2,656,376 | ||
Interest rate swaps | – | 4,462 | – | 4,462 | – | 4,462 | – | 4,462 | ||
Forward contracts | – | 1,015,648 | – | 1,015,648 | – | 1,015,648 | – | 1,015,648 | ||
Spot contracts | – | 2,008 | – | 2,008 | – | 2,008 | – | 2,008 | ||
Total liabilities at fair value | – | 3,678,494 | – | 3,678,494 | – | 3,678,494 | – | 3,678,494 |
GROUP | BANK | |||||||||
As at December 31, 2016 | Note | Level 1 Rs. ’000 |
Level 2 Rs. ’000 |
Level 3 Rs. ’000 |
Total Rs. ’000 |
Level 1 Rs. ’000 |
Level 2 Rs. ’000 |
Level 3 Rs. ’000 |
Total Rs. ’000 |
|
Non-financial assets | ||||||||||
Property, plant and equipment | ||||||||||
Land and buildings | 26.2 | – | – | 7,743,071 | 7,743,071 | – | – | 7,528,891 | 7,528,891 | |
Total non-financial assets at fair value |
– | – | 7,743,071 | 7,743,071 | – | – | 7,528,891 | 7,528,891 | ||
Financial assets | ||||||||||
Derivative financial assets | 30 | |||||||||
Currency swaps | – | 261,664 | – | 261,664 | – | 261,664 | – | 261,664 | ||
Forward contracts | – | 788,808 | – | 788,808 | – | 788,808 | – | 788,808 | ||
Spot contracts | – | 2,357 | – | 2,357 | – | 2,357 | – | 2,357 | ||
Other financial instruments – Held for trading |
31 | |||||||||
Government securities | 4,693,989 | – | – | 4,693,989 | 4,693,989 | – | – | 4,693,989 | ||
Equity shares | 293,809 | – | – | 293,809 | 293,809 | – | – | 293,809 | ||
Financial investments – Available for sale |
34 | |||||||||
Government securities | 159,642,243 | – | – | 159,642,243 | 159,573,316 | – | – | 159,573,316 | ||
Equity securities | 246,548 | – | 47,271 | 293,819 | 246,548 | – | 47,147 | 293,695 | ||
Investment in unit trust | – | 156,460 | – | 156,460 | – | 156,460 | – | 156,460 | ||
Total financial assets at fair value |
164,876,589 | 1,209,289 | 47,271 | 166,133,149 | 164,807,662 | 1,209,289 | 47,147 | 166,064,098 | ||
Total assets at fair value | 164,876,589 | 1,209,289 | 7,790,342 | 173,876,220 | 164,807,662 | 1,209,289 | 7,576,038 | 173,592,989 | ||
Financial liabilities | ||||||||||
Derivative financial liabilities | 44 | |||||||||
Currency swaps | – | 663,714 | – | 663,714 | – | 663,714 | – | 663,714 | ||
Forward contracts | – | 849,011 | – | 849,011 | – | 849,011 | – | 849,011 | ||
Spot contracts | – | 2,310 | – | 2,310 | – | 2,310 | – | 2,310 | ||
Total liabilities at fair value | – | 1,515,035 | – | 1,515,035 | – | 1,515,035 | – | 1,515,035 |
Reconciliation from the beginning balance to the ending balance for the land and buildings in the Level 3 of the fair value hierarchy is available in Notes 39.1 to 39.4.
Reconciliation of Revaluation Reserve pertaining to land and buildings categorised as Level 3 in the fair value hierarchy is given in the Statement of Changes in Equity.
Note 39.5 (b) provides information on significant unobservable inputs used as at December 31, 2017 in measuring fair value of land and buildings categorised as Level 3 in the fair value hierarchy.
Note 39.5 (c) provides details of valuation techniques used and sensitivity of fair value measurement to changes in significant unobservable inputs.
Value of unquoted shares of Rs. 46.809 Mn. in Group and Rs. 46.685 Mn. in Bank as at end of the year 2017 (Rs. 47.271 Mn. in Group and Rs. 47.147 Mn. in Bank as at end 2016) categorised under financial investments – Available for sale whose fair value cannot be reliably measured is stated at cost in the Statement of Financial Position as permitted by the LKAS 39 on “Financial Instruments: Recognition and Measurement”.
Methodologies and assumptions used to determine fair value of financial instruments which are not already recorded at fair value in the Statement of Financial Position are as follows:
The fair value of fixed rate financial assets and liabilities carried at amortised cost (e.g. fixed rate loans and receivables, due to other customers, subordinated liabilities) are estimated based on the Discounted Cash Flow approach. This approach employs the current market interest rates of similar financial instruments as a significant unobservable input in measuring the fair value and hence it is categorised under Level 3 in the fair value hierarchy.
A significant increase/(decrease) in the market interest rate would result in lower/(higher) fair value being disclosed.
For financial assets and liabilities with short-term maturities or with short-term re-pricing intervals, it is assumed that the carrying amounts approximate to their fair value. This assumption is also applied to demand deposits and savings deposits which do not have a specific maturity.
The following table sets out the fair values of financial assets and liabilities not measured at fair value and related fair value hierarchy used:
GROUP | BANK | |||||||||||
As at December 31, 2017 | Note | Level 1 Rs. ’000 |
Level 2 Rs. ’000 |
Level 3 Rs. ’000 |
Total fair values Rs. ’000 |
Total carrying amount Rs. ’000 |
Level 1 Rs. ’000 |
Level 2 Rs. ’000 |
Level 3 Rs. ’000 |
Total fair values Rs. ’000 |
Total carrying amount Rs. ’000 |
|
Financial assets | ||||||||||||
Cash and cash equivalents | 27 | – | 34,673,424 | – | 34,673,424 | 34,673,424 | – | 33,224,619 | – | 33,224,619 | 33,224,619 | |
Balances with central banks | 28 | – | 45,546,349 | – | 45,546,349 | 45,546,349 | – | 44,801,446 | – | 44,801,446 | 44,801,446 | |
Placements with banks | 29 | – | 17,633,269 | – | 17,633,269 | 17,633,269 | – | 17,633,269 | – | 17,633,269 | 17,633,269 | |
Loans and receivables to banks | 32 | – | 640,512 | – | 640,512 | 640,512 | – | 640,512 | – | 640,512 | 640,512 | |
Loans and receivables to other customers |
33 | – | – | 741,818,598 | 741,818,598 | 742,444,130 | – | – | 736,821,035 | 736,821,035 | 737,446,567 | |
Financial investments – Held-to-maturity |
35 | 68,892,386 | – | – | 68,892,386 | 69,365,796 | 63,089,342 | – | – | 63,089,342 | 63,562,752 | |
Financial investments – Loans and receivables |
36 | – | – | 48,712,477 | 48,712,477 | 48,712,477 | – | – | 48,712,477 | 48,712,477 | 48,712,477 | |
Total financial assets not at fair value |
68,892,386 | 98,493,554 | 790,531,075 | 957,917,015 | 959,015,957 | 63,089,342 | 96,299,846 | 785,533,512 | 944,922,700 | 946,021,642 | ||
Financial liabilities | ||||||||||||
Due to banks | 43 | – | – | 60,244,892 | 60,244,892 | 60,244,892 | – | – | 57,120,991 | 57,120,991 | 57,120,991 | |
Securities sold under repurchase agreements |
– | 49,532,385 | – | 49,532,385 | 49,532,385 | – | 49,676,767 | – | 49,676,767 | 49,676,767 | ||
Due to other customers/ deposits from customers |
45 | – | – | 856,454,642 | 856,454,642 | 857,269,981 | – | – | 849,312,172 | 849,312,172 | 850,127,511 | |
Other borrowings | 46 | – | – | 23,786,094 | 23,786,094 | 23,786,094 | – | – | 23,786,094 | 23,786,094 | 23,786,094 | |
Subordinated liabilities | 52 | – | – | 25,731,210 | 25,731,210 | 25,165,924 | – | – | 25,731,210 | 25,731,210 | 25,165,924 | |
Total financial liabilities not at fair value |
– | 49,532,385 | 966,216,838 | 1,015,749,223 | 1,015,999,276 | – | 49,676,767 | 955,950,467 | 1,005,627,234 | 1,005,877,287 |
GROUP | BANK | |||||||||||
As at December 31, 2016 | Note | Level 1 Rs. ’000 |
Level 2 Rs. ’000 |
Level 3 Rs. ’000 |
Total fair values Rs. ’000 |
Total carrying amount Rs. ’000 |
Level 1 Rs. ’000 |
Level 2 Rs. ’000 |
Level 3 Rs. ’000 |
Total fair values Rs. ’000 |
Total carrying amount Rs. ’000 |
|
Financial assets | ||||||||||||
Cash and cash equivalents | 27 | – | 32,924,227 | – | 32,924,227 | 32,924,227 | – | 30,193,589 | – | 30,193,589 | 30,193,589 | |
Balances with central banks | 28 | – | 43,935,258 | – | 43,935,258 | 43,935,258 | – | 43,873,205 | – | 43,873,205 | 43,873,205 | |
Placements with banks | 29 | – | 11,718,499 | – | 11,718,499 | 11,718,499 | – | 11,718,499 | – | 11,718,499 | 11,718,499 | |
Loans and receivables to banks | 32 | – | 624,458 | – | 624,458 | 624,458 | – | 624,458 | – | 624,458 | 624,458 | |
Loans and receivables to other customers |
33 | – | – | 625,821,184 | 625,821,184 | 620,129,488 | – | – | 621,709,924 | 621,709,924 | 616,018,228 | |
Financial investments – Held to maturity |
35 | 62,777,800 | – | – | 62,777,800 | 63,626,598 | 60,132,500 | – | – | 60,132,500 | 60,981,298 | |
Financial investments – Loans and receivables |
36 | – | – | 51,824,026 | 51,824,026 | 51,824,026 | – | – | 51,824,026 | 51,824,026 | 51,824,026 | |
Total financial assets not at fair value | 62,777,800 | 89,202,442 | 677,645,210 | 829,625,452 | 824,782,554 | 60,132,500 | 86,409,751 | 673,533,950 | 820,076,201 | 815,233,303 | ||
Financial liabilities | ||||||||||||
Due to banks | 43 | – | – | 71,098,391 | 71,098,391 | 71,098,391 | – | – | 67,608,811 | 67,608,811 | 67,608,811 | |
Securities sold under repurchase agreements |
– | 69,628,961 | – | 69,628,961 | 69,628,961 | – | 69,867,469 | – | 69,867,469 | 69,867,469 | ||
Due to other customers/deposits from customers |
45 | – | – | 743,145,668 | 743,145,668 | 743,310,613 | – | – | 739,728,439 | 739,728,439 | 739,563,494 | |
Other borrowings | 46 | – | – | 9,270,154 | 9,270,154 | 9,270,154 | – | – | 9,270,154 | 9,270,154 | 9,270,154 | |
Subordinated liabilities | 52 | – | – | 24,175,367 | 24,175,367 | 24,849,539 | – | – | 24,175,367 | 24,175,367 | 24,849,539 | |
Total financial liabilities not at fair value | – | 69,628,961 | 847,689,580 | 917,318,541 | 918,157,658 | – | 69,867,469 | 840,782,771 | 910,650,240 | 911,159,467 |
The table below provides information on the valuation techniques and inputs used in measuring the fair values of derivative financial assets and liabilities in the Level 2 of the fair value hierarchy, as given in Note 26.1.
Type of financial instruments | Fair value as at December 31, 2017 (Rs. ’000) |
Valuation technique | Significant valuation inputs |
Derivative financial assets | 2,334,536 | Adjusted Forward Rate Approach This approach considers the present value of projected forward exchange rate as at the reporting date as the fair value. The said forward rate is projected, based on the spot exchange rate and the forward premium/discount calculated using extrapolated interest rates of the currency pairs under consideration. In computing the present value, interest rate differential between two currencies under consideration is used as the discount rate. |
|
Derivative financial liabilities | 3,678,494 |
|
Cash and cash equivalents include cash in hand, placements with banks and loans at call/short notice and highly liquid financial assets with original maturities within three months or less from the date of acquisition that are subject to an insignificant risk of changes in fair value and are used by the Group in the management of its short-term commitments. These items are brought to Financial Statements at face values or the gross values, where appropriate. There were no cash and cash equivalents held by the Group companies that were not available for use by the Group.
Cash and cash equivalents are carried at amortised cost in the Statement of Financial Position.
GROUP | BANK | |||
As at December 31, | 2017 Rs. ’000 |
2016 Rs. ’000 |
2017 Rs. ’000 |
2016 Rs. ’000 |
Cash in hand | 23,577,061 | 17,599,901 | 23,280,599 | 17,406,776 |
Coins and notes held in local currency | 20,846,435 | 15,497,697 | 20,836,652 | 15,488,867 |
Coins and notes held in foreign currency | 2,730,626 | 2,102,204 | 2,443,947 | 1,917,909 |
Balances with banks | 6,748,718 | 6,122,355 | 6,700,666 | 5,794,927 |
Local banks | – | – | – | – |
Foreign banks | 6,748,718 | 6,122,355 | 6,700,666 | 5,794,927 |
Money at call and at short notice | 4,347,645 | 9,201,971 | 3,243,354 | 6,991,886 |
Total | 34,673,424 | 32,924,227 | 33,224,619 | 30,193,589 |
The maturity analysis of cash and cash equivalents is given in Note 62.
Balances with central banks are carried at amortised cost in the Statement of Financial Position.
GROUP | BANK | |||||
As at December 31, | Note | Page No. | 2017 Rs. ’000 |
2016 Rs. ’000 |
2017 Rs. ’000 |
2016 Rs. ’000 |
Statutory balances with central banks | 28.1 | 45,546,349 | 43,935,258 | 44,801,446 | 43,873,205 | |
Total | 45,546,349 | 43,935,258 | 44,801,446 | 43,873,205 |
GROUP | BANK | |||
As at December 31, | 2017 Rs. ’000 |
2016 Rs. ’000 |
2017 Rs. ’000 |
2016 Rs. ’000 |
Balances with the Central Bank of Sri Lanka | 40,199,840 | 40,469,986 | 40,199,840 | 40,469,986 |
Balances with the Bangladesh Bank | 4,601,606 | 3,403,219 | 4,601,606 | 3,403,219 |
Balances with the Maldives Monetary Authority | 744,903 | 62,053 | – | – |
Total | 45,546,349 | 43,935,258 | 44,801,446 | 43,873,205 |
The Monetary Law Act requires that all commercial banks operating in Sri Lanka to maintain a statutory reserve on all deposit liabilities denominated in Sri Lankan Rupees. As required by the provisions of Section 93 of the Monetary Law Act, a cash balance is maintained with the Central Bank of Sri Lanka. As at December 31, 2017, the minimum cash reserve requirement was 7.50% of the rupee deposit liabilities (7.50% in 2016). There is no reserve requirement for foreign currency deposits liabilities of the Domestic Banking Unit (DBU) and the deposit liabilities of the Off-shore Banking Centre (OBC) in Sri Lanka.
The Bank’s Bangladesh operation is required to maintain the statutory liquidity requirement on time and demand liabilities (both local and foreign currencies), partly in the form of a Cash Reserve Requirement and the balance by way of foreign currency and/or in the form of unencumbered securities held with the Bangladesh Bank. As per the Bangladesh Bank regulations, the Statutory Liquidity Requirement as at December 31, 2017 was 19.50% (19.50% in 2016) on time and demand liabilities (both local and foreign currencies), which includes a 6.50% (6.50% in 2016) cash reserve requirement and the balance 13.00% (13.00% in 2016) is permitted to be maintained in foreign currency and/or also in unencumbered securities held with the Bangladesh Bank.
The Maldives Banking Act No. 24 of 2010 Section 25 requires the Bank to maintain a statutory reserve on all deposits liabilities denominated in both foreign currency and local currency deposits excluding interbank deposits of other banks in Maldives and Letter of Credit margin deposits. According to the Bank regulations of Maldives Monetary Authority, the Minimum Reserve Requirement (MRR) as at December 31, 2017 was 10% (10% in 2016). The reserve requirement for local currency is to be met in the form of Rufiyaa deposits, while reserve requirement for foreign currency is to be met in the form of US dollar deposits.
The maturity analysis of balances with central banks is given in Note 62.
GROUP | BANK | |||
As at December 31, | 2017 Rs. ’000 |
2016 Rs. ’000 |
2017 Rs. ’000 |
2016 Rs. ’000 |
Placements – within Sri Lanka | – | 1,094,821 | – | 1,094,821 |
Placements – outside Sri Lanka | 17,633,269 | 10,623,678 | 17,633,269 | 10,623,678 |
Total | 17,633,269 | 11,718,499 | 17,633,269 | 11,718,499 |
The maturity analysis of placements with banks is given in Note 62.
The Bank uses derivatives such as interest rate swaps, foreign currency swaps and forward foreign exchange contracts, etc. Derivative financial assets are recorded at fair value. Changes in the fair value of derivatives are included in “Net Gains/(Losses) from Trading” in the Income Statement.
Derivatives embedded in other financial instruments are treated as separate derivatives and recorded at fair value if their economic characteristics and risks are not closely related to those of the host contract and the host contract is not itself held for trading or designated at fair value through profit or loss. The embedded derivatives separated from the host are carried at fair value in the trading portfolio with changes in fair value recognised in the profit or loss.
GROUP | BANK | |||
As at December 31, | 2017 Rs. ’000 |
2016 Rs. ’000 |
2017 Rs. ’000 |
2016 Rs. ’000 |
Foreign currency derivatives | ||||
Currency swaps | 1,067,259 | 261,664 | 1,067,259 | 261,664 |
Forward contracts | 1,264,900 | 788,808 | 1,264,900 | 788,808 |
Spot contracts | 2,377 | 2,357 | 2,377 | 2,357 |
Total | 2,334,536 | 1,052,829 | 2,334,536 | 1,052,829 |
The maturity analysis of derivative financial assets is given in Note 62.
Financial assets are classified as held for trading if:
Financial assets held for trading are recorded in the Statement of Financial Position at fair value. Changes in fair value are recognised in profit or loss. Interest and dividend income are recorded in “Interest Income” and “Net Gains/(Losses) from Trading” respectively in the Income Statement, according to the terms of the contract, or when the right to receive the payment has been established.
The Group evaluates its financial assets held for trading, other than derivatives, to determine whether the intention to sell them in the near term is still appropriate. When the Group is unable to trade these financial assets, due to inactive markets and Management’s intention to sell them in the foreseeable future significantly changes, the Group may elect to reclassify these financial assets in rare circumstances.
Financial assets held-for-trading include instruments such as Government and other debt securities and equity instruments that have been acquired principally for the purpose of selling or repurchasing in the near term and derivatives, including separated embedded derivatives explained below, unless they are designated as effective hedging instruments.
GROUP | BANK | |||||
As at December 31, | Note | 2017 Rs. ’000 |
2016 Rs. ’000 |
2017 Rs. ’000 |
2016 Rs. ’000 |
|
Government securities | 31.1 | 4,096,168 | 4,693,989 | 4,096,168 | 4,693,989 | |
Equity securities | 31.2 | 314,745 | 293,809 | 314,745 | 293,809 | |
Total | 4,410,913 | 4,987,798 | 4,410,913 | 4,987,798 |
GROUP | BANK | |||
As at December 31, | 2017 Rs. ’000 |
2016 Rs. ’000 |
2017 Rs. ’000 |
2016 Rs. ’000 |
Treasury bills | 933,056 | 2,467,221 | 933,056 | 2,467,221 |
Treasury bonds | 3,163,112 | 2,226,768 | 3,163,112 | 2,226,768 |
Total Government securities | 4,096,168 | 4,693,989 | 4,096,168 | 4,693,989 |
The maturity analysis of other financial instruments held for trading is given in Note 62.
As at December 31, 2017 | As at December 31, 2016 | |||||||
Sector/name of the Company | No. of shares |
Market price Rs. |
Market value Rs. ’000 |
Cost of the investment Rs. ’000 |
No. of shares |
Market price Rs. |
Market value Rs. ’000 |
Cost of the investment Rs. ’000 |
Bank, Finance and Insurance | ||||||||
Central Finance Company PLC | 196,189 | 92.30 | 18,108 | 18,937 | 196,189 | 100.00 | 19,619 | 18,937 |
Citizens Development Business Finance PLC (Non-voting) | 101,965 | 56.00 | 5,710 | 3,398 | 101,965 | 62.10 | 6,332 | 3,398 |
Hatton National Bank PLC | 84 | 249.00 | 21 | 12 | 83 | 225.00 | 19 | 12 |
Lanka Ventures PLC | 100,000 | 55.00 | 5,500 | 3,033 | 100,000 | 42.50 | 4,250 | 3,033 |
National Development Bank PLC | 207,628 | 136.40 | 28,320 | 34,381 | 200,000 | 156.00 | 31,200 | 34,381 |
People’s Insurance PLC | 126,500 | 23.00 | 2,910 | 1,898 | 126,500 | 19.00 | 2,404 | 1,898 |
Sampath Bank PLC | 32,341 | 315.70 | 10,210 | 5,430 | 26,350 | 260.40 | 6,862 | 4,298 |
Subtotal | 70,779 | 67,089 | 70,686 | 65,957 | ||||
Beverage, Food and Tobacco | ||||||||
Lanka Milk Foods (CWE) PLC | 250,000 | 157.00 | 39,250 | 27,866 | 250,000 | 119.00 | 29,750 | 27,866 |
Melstacorp PLC | 245,960 | 59.50 | 14,635 | 9,814 | 245,960 | 59.30 | 14,585 | 9,814 |
Renuka Foods PLC (Non-voting) | 1,000 | 13.80 | 14 | 15 | 1,000 | 19.50 | 20 | 15 |
Subtotal | 53,899 | 37,695 | 44,355 | 37,695 | ||||
Chemicals and Pharmaceuticals | ||||||||
Chemical Industries Colombo Holding PLC (Non-voting) | 161,400 | 47.40 | 7,650 | 11,692 | 161,400 | 68.00 | 10,975 | 11,692 |
Haycarb PLC | 107,100 | 147.50 | 15,797 | 15,914 | 107,100 | 150.00 | 16,065 | 15,914 |
Subtotal | 23,447 | 27,606 | 27,040 | 27,606 | ||||
Construction and Engineering | ||||||||
Colombo Dockyard PLC | 75,000 | 88.50 | 6,638 | 16,685 | 75,000 | 78.60 | 5,895 | 16,685 |
Subtotal | 6,638 | 16,685 | 5,895 | 16,685 | ||||
Diversified Holdings | ||||||||
Hayleys PLC | 68,313 | 241.00 | 16,463 | 19,269 | – | – | – | – |
Hemas Holdings PLC | 60 | 126.00 | 8 | 2 | 60 | 98.00 | 6 | 2 |
John Keells Holdings PLC | 130,611 | 148.50 | 19,396 | 20,527 | 130,611 | 145.00 | 18,939 | 20,527 |
Subtotal | 35,867 | 39,798 | 18,945 | 20,529 | ||||
Healthcare | ||||||||
Ceylon Hospitals PLC | 121,900 | 83.00 | 10,118 | 12,868 | 121,900 | 87.40 | 10,654 | 12,868 |
Ceylon Hospitals PLC (Non-voting) | 61,100 | 65.30 | 3,990 | 4,423 | 61,100 | 69.50 | 4,246 | 4,423 |
Subtotal | 14,108 | 17,291 | 14,900 | 17,291 | ||||
Hotels and Travels | ||||||||
John Keells Hotels PLC | 267,608 | 8.80 | 2,355 | 3,473 | 267,608 | 10.90 | 2,917 | 3,473 |
Taj Lanka Hotels PLC | 212,390 | 15.90 | 3,377 | 6,625 | 212,390 | 25.20 | 5,352 | 6,625 |
Subtotal | 5,732 | 10,098 | 8,269 | 10,098 | ||||
Investment Trusts | ||||||||
Renuka Holdings PLC | 117,158 | 24.00 | 2,812 | 3,180 | 117,158 | 21.10 | 2,472 | 3,180 |
Renuka Holdings PLC (Non-voting) | 265,368 | 17.00 | 4,511 | 4,958 | 265,368 | 18.00 | 4,777 | 4,958 |
Subtotal | 7,323 | 8,138 | 7,249 | 8,138 | ||||
Land and Property | ||||||||
CT Land Development PLC | 15,000 | 45.50 | 683 | 531 | 15,000 | 53.10 | 797 | 531 |
Overseas Reality Ceylon PLC | 183,320 | 17.60 | 3,226 | 2,716 | 183,320 | 20.00 | 3,666 | 2,716 |
RIL Property PLC | 2,500,000 | 7.20 | 18,000 | 20,000 | – | – | – | – |
Subtotal | 21,909 | 23,247 | 4,463 | 3,247 | ||||
Manufacturing | ||||||||
ACL Cables PLC | 100,000 | 42.40 | 4,240 | 3,676 | 343,032 | 60.50 | 20,753 | 14,096 |
Dipped Products PLC | 200,000 | 85.00 | 17,000 | 24,239 | 200,000 | 86.80 | 17,360 | 24,239 |
Lanka Walltiles PLC | 60 | 99.40 | 6 | 5 | 60 | 99.70 | 6 | 5 |
Pelwatte Sugar Industries PLC | 12,300 | 0.10 | 1 | 351 | 12,300 | 0.10 | 1 | 351 |
Royal Ceramics Lanka PLC | 155,927 | 114.50 | 17,854 | 18,057 | 155,927 | 115.50 | 18,010 | 18,057 |
Subtotal | 39,101 | 46,328 | 56,130 | 56,748 | ||||
Plantations | ||||||||
Kotagala Plantations PLC | 201,750 | 12.20 | 2,461 | 9,172 | 201,750 | 8.90 | 1,796 | 9,172 |
Subtotal | 2,461 | 9,172 | 1,796 | 9,172 | ||||
Power and Energy | ||||||||
Hemas Power PLC | 106,249 | 18.20 | 1,934 | 2,053 | 106,249 | 22.30 | 2,369 | 2,053 |
Lanka IOC PLC | 685,984 | 28.00 | 19,208 | 15,013 | 685,984 | 31.70 | 21,746 | 15,013 |
Subtotal | 21,142 | 17,066 | 24,115 | 17,066 | ||||
Telecommunications | ||||||||
Dialog Axiata PLC | 949,172 | 13.00 | 12,339 | 6,300 | 949,172 | 10.50 | 9,966 | 6,300 |
Subtotal | 12,339 | 6,300 | 9,966 | 6,300 | ||||
Total | 314,745 | 326,513 | 293,809 | 296,532 | ||||
Mark to market gains/(losses) | (11,768) | (2,723) | ||||||
Market value of equity securities | 314,745 | 293,809 |
As at December 31, 2017 | As at December 31, 2016 | |||||
Industry/sector | Market value Rs. ’000 |
Cost of the investment Rs. ’000 |
% |
Market value Rs. ’000 |
Cost of the investment Rs. ’000 |
% |
Banking, finance and insurance | 70,779 | 67,089 | 22.49 | 70,686 | 65,957 | 24.06 |
Beverage, food and tobacco | 53,899 | 37,695 | 17.12 | 44,355 | 37,695 | 15.10 |
Chemicals and pharmaceuticals | 23,447 | 27,606 | 7.45 | 27,040 | 27,606 | 9.20 |
Construction and engineering | 6,638 | 16,685 | 2.11 | 5,895 | 16,685 | 2.01 |
Diversified holdings | 35,867 | 39,798 | 11.40 | 18,945 | 20,529 | 6.45 |
Healthcare | 14,108 | 17,291 | 4.48 | 14,900 | 17,291 | 5.07 |
Hotels and travels | 5,732 | 10,098 | 1.82 | 8,269 | 10,098 | 2.81 |
Investment trusts | 7,323 | 8,138 | 2.33 | 7,249 | 8,138 | 2.47 |
Land and property | 21,909 | 23,247 | 6.96 | 4,463 | 3,247 | 1.52 |
Manufacturing | 39,101 | 46,328 | 12.42 | 56,130 | 56,748 | 19.10 |
Plantations | 2,461 | 9,172 | 0.78 | 1,796 | 9,172 | 0.61 |
Power and energy | 21,142 | 17,066 | 6.72 | 24,115 | 17,066 | 8.21 |
Telecommunications | 12,339 | 6,300 | 3.92 | 9,966 | 6,300 | 3.39 |
Subtotal | 314,745 | 326,513 | 100.00 | 293,809 | 296,532 | 100.00 |
Mark to market gains/(losses) for the year | (11,768) | (2,723) | ||||
Market value of equity securities | 314,745 | 314,745 | 100.00 | 293,809 | 293,809 | 100.00 |
“Loans and receivables to banks” comprised non-derivative financial assets with fixed or determinable payments that are not quoted in an active market, other than:
“Loans and receivables to banks” include amounts due from banks. After initial measurement, Loans and receivables to banks are subsequently measured at amortised cost using the EIR, less provision for impairment, except when the Group designates loans and receivables at fair value through profit or loss. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees and costs that are an integral part of the EIR. The amortisation is included in “Interest Income” while the losses arising from impairment are recognised in “Impairment charges for loans and other losses” in the Income Statement.
GROUP | BANK | |||
As at December 31, | 2017 Rs. ’000 |
2016 Rs. ’000 |
2017 Rs. ’000 |
2016 Rs. ’000 |
Gross loans and receivables | 640,512 | 624,458 | 640,512 | 624,458 |
Less: Provision for impairment | – | – | – | – |
Net loans and receivables | 640,512 | 624,458 | 640,512 | 624,458 |
The maturity analysis of loans and receivables to banks is given in Note 62.
The Bank did not make any payments to counterparty banks for the oil hedging transactions with effect from June 02, 2009 in response to a Directive received from the Exchange Controller of the Central Bank of Sri Lanka. Consequently, one of the counterparty banks appropriated USD 4.170 Mn. (Rs. 640.512 Mn.) which has been kept as a deposit with them. This action has been contested by the Bank. In view of the stance taken by the Bank in this regard, both the deposit (made by the Bank) and the amount due to the said counterparty bank, have been recorded in the Statement of Financial Position.
GROUP | BANK | |||
As at December 31, | 2017 Rs. ’000 |
2016 Rs. ’000 |
2017 Rs. ’000 |
2016 Rs. ’000 |
United States Dollar | 640,512 | 624,458 | 640,512 | 624,458 |
Subtotal | 640,512 | 624,458 | 640,512 | 624,458 |
“Loans and receivables to other customers” comprised non-derivative financial assets with fixed or determinable payments that are not quoted in an active market, other than:
“Loans and receivables to other customers” include, Loans and Advances and Lease Receivables of the Group.
When the Group is the lessor in a lease agreement that transfers substantially all risks and rewards incidental to ownership of the asset to the lessee, the arrangement is classified as a finance lease. Amounts receivable under finance leases, net of initial rentals received, unearned lease income and provision for impairment, are classified as lease receivable and are presented within “Loans and receivables to other customers” in the Statement of Financial Position.
After initial measurement, “Loans and receivables to other customers” are subsequently measured at amortised cost using the EIR,
less provision for impairment, except when the Group designates loans and receivables at fair value through profit or loss. Amortised cost
is calculated by taking into account any discount or premium on acquisition and fees and costs that are an integral part of the EIR.
The amortisation is included in ‘Interest Income’, while the losses arising from impairment are recognised in ‘Impairment charges for loans and other losses’ in the Income Statement.
The Bank may enter into certain lending commitments where the loan, on drawdown, is expected to be classified as Held for trading because the intent is to sell the loans in the short term. These commitments to lend, if any, are recorded as derivatives and measured at fair value through profit or loss. Where the loan, on drawdown, is expected to be retained by the Bank and not sold in the short term, the commitment is recorded only when it is an onerous contract that is likely to give rise to a loss.
GROUP | BANK | |||||
As at December 31, | Note | 2017 Rs. ’000 |
2016 Rs. ’000 |
2017 Rs. ’000 |
2016 Rs. ’000 |
|
Gross loans and receivables | 760,453,937 | 637,982,536 | 754,707,977 | 633,390,907 | ||
Less: Provision for individual impairment | 33.2 | 7,853,654 | 8,453,457 | 7,853,654 | 8,453,457 | |
Provision for collective impairment | 33.2 | 10,156,153 | 9,399,591 | 9,407,756 | 8,919,222 | |
Net loans and receivables | 742,444,130 | 620,129,488 | 737,446,567 | 616,018,228 |
The maturity analysis of loans and receivables to other customers is given in Note 62.
GROUP | BANK | |||||
As at December 31, | Note | 2017 Rs. ’000 |
2016 Rs. ’000 |
2017 Rs. ’000 |
2016 Rs. ’000 |
|
Loans and receivables | ||||||
Overdrafts | 118,072,316 | 100,985,232 | 117,362,030 | 100,903,024 | ||
Trade finance | 58,291,188 | 43,088,097 | 58,275,965 | 43,088,097 | ||
Lease/hire purchase receivable | 33.3 | 40,766,415 | 39,040,966 | 37,865,183 | 35,993,964 | |
Credit cards | 9,639,046 | 6,679,059 | 9,639,046 | 6,679,059 | ||
Pawning | 1,339,259 | 1,239,785 | 1,339,259 | 1,239,785 | ||
Staff loans | 7,980,429 | 7,276,285 | 7,973,685 | 7,274,154 | ||
Housing loans | 53,628,645 | 47,275,462 | 53,628,645 | 47,275,462 | ||
Personal loans | 28,401,829 | 25,996,196 | 28,272,669 | 25,906,055 | ||
Term loans | ||||||
Short-term | 88,668,616 | 72,590,084 | 87,600,808 | 71,219,300 | ||
Long-term | 333,059,523 | 277,354,045 | 332,144,016 | 277,354,682 | ||
Loans granted from Investment Fund Account (IFA) | 33.4 | 3,499,574 | 3,974,359 | 3,499,574 | 3,974,359 | |
Bills of exchange | 17,107,097 | 12,482,966 | 17,107,097 | 12,482,966 | ||
Subtotal | 760,453,937 | 637,982,536 | 754,707,977 | 633,390,907 |
GROUP | BANK | |||
As at December 31, | 2017 Rs. ’000 |
2016 Rs. ’000 |
2017 Rs. ’000 |
2016 Rs. ’000 |
Sri Lankan Rupee | 600,058,048 | 506,118,547 | 595,745,318 | 501,609,126 |
United States Dollar | 113,192,698 | 94,727,963 | 112,496,635 | 94,645,778 |
Great Britain Pound | 892,245 | 695,403 | 892,245 | 695,403 |
Euro | 1,500,772 | 1,545,852 | 1,500,772 | 1,545,852 |
Australian Dollar | 690,992 | 514,017 | 690,992 | 514,017 |
Japanese Yen | 135,765 | 71,144 | 135,765 | 71,144 |
Singapore Dollar | 5,504 | 127 | 5,504 | 127 |
Bangladesh Taka | 43,164,009 | 34,174,199 | 43,164,009 | 34,174,199 |
Maldivian Rufiyaa | 737,167 | 23 | – | – |
Others | 76,737 | 135,261 | 76,737 | 135,261 |
Subtotal | 760,453,937 | 637,982,536 | 754,707,977 | 633,390,907 |
GROUP | BANK | |||
As at December 31, | 2017 Rs. ’000 |
2016 Rs. ’000 |
2017 Rs. ’000 |
2016 Rs. ’000 |
Agriculture and fishing | 71,041,888 | 63,529,644 | 70,786,178 | 63,332,661 |
Manufacturing | 115,028,848 | 92,030,456 | 114,980,885 | 91,982,499 |
Tourism | 47,671,546 | 46,086,461 | 46,808,711 | 45,919,393 |
Transport | 17,190,601 | 14,892,683 | 17,083,533 | 14,800,244 |
Construction | 106,784,977 | 81,259,365 | 106,328,774 | 81,187,168 |
Trading | 114,649,323 | 94,987,320 | 113,037,048 | 93,538,474 |
New economy (e-commerce, IT, etc.) | 17,479,610 | 15,111,861 | 17,479,610 | 15,111,861 |
Financial and business services | 46,764,237 | 49,066,227 | 47,393,198 | 49,740,977 |
Infrastructure | 20,886,155 | 17,894,260 | 20,886,155 | 17,894,260 |
Other services (education, health, media, etc.) | 64,040,605 | 57,961,305 | 63,062,660 | 56,923,320 |
Other customers | 138,916,147 | 105,162,954 | 136,861,225 | 102,960,050 |
Subtotal | 760,453,937 | 637,982,536 | 754,707,977 | 633,390,907 |
GROUP | BANK | |||||
Note | 2017 Rs. ’000 |
2016 Rs. ’000 |
2017 Rs. ’000 |
2016 Rs. ’000 |
||
Movement in provision for individual impairment | ||||||
Balance as at January 1, | 8,453,457 | 5,369,960 | 8,453,457 | 5,369,960 | ||
Charge/(write-back) to the Income Statement | 18 | 401,716 | 3,439,879 | 401,716 | 3,439,879 | |
Net write-off/(recoveries) during the year | (695,023) | (287,226) | (695,023) | (287,226) | ||
Exchange rate variance on foreign currency provisions | 30,057 | 51,080 | 30,057 | 51,080 | ||
Interest accrued/(reversals) on impaired loans and advances | (861,057) | (533,528) | (861,057) | (533,528) | ||
Other movements | 524,504 | 413,292 | 524,504 | 413,292 | ||
Balance as at December 31, | 7,853,654 | 8,453,457 | 7,853,654 | 8,453,457 | ||
Movement in provision for collective impairment | ||||||
Balance as at January 1, | 9,399,591 | 13,089,833 | 8,919,222 | 12,681,594 | ||
Charge/(write-back) to the Income Statement | 18 | 1,823,522 | (1,859,806) | 1,554,333 | (1,931,932) | |
Net write-off/(recoveries) during the year | (1,060,768) | (1,835,798) | (1,060,768) | (1,835,798) | ||
Exchange rate variance on foreign currency provisions | (6,192) | 5,362 | (5,031) | 5,358 | ||
Balance as at December 31, | 10,156,153 | 9,399,591 | 9,407,756 | 8,919,222 | ||
Total of individual and collective impairment | 18,009,807 | 17,853,048 | 17,261,410 | 17,372,679 |
GROUP | BANK | |||||
As at December 31, | Note | 2017 Rs. ’000 |
2016 Rs. ’000 |
2017 Rs. ’000 |
2016 Rs. ’000 |
|
Gross lease/hire purchase receivable | 40,766,415 | 39,040,966 | 37,865,183 | 35,993,964 | ||
Within one year | 33.3 (a) | 15,149,364 | 13,440,584 | 14,297,074 | 12,631,092 | |
From one to five years | 33.3 (b) | 25,307,569 | 25,250,003 | 23,564,939 | 23,358,999 | |
After five years | 33.3 (c) | 309,482 | 350,379 | 3,170 | 3,873 | |
Less: Provision for individual impairment | 33.3 (d) | 133,536 | 241,185 | 133,536 | 241,185 | |
Provision for collective impairment | 33.3 (e) | 642,502 | 681,035 | 254,128 | 262,381 | |
Net lease receivable | 39,990,377 | 38,118,746 | 37,477,519 | 35,490,398 |
GROUP | BANK | |||
As at December 31, | 2017 Rs. ’000 |
2016 Rs. ’000 |
2017 Rs. ’000 |
2016 Rs. ’000 |
Total lease/hire purchase receivable within one year | 19,613,099 | 17,390,714 | 18,418,203 | 16,232,578 |
Less: Unearned lease/hire purchase income | 4,463,735 | 3,950,130 | 4,121,129 | 3,601,486 |
Gross lease/hire purchase receivable within one year | 15,149,364 | 13,440,584 | 14,297,074 | 12,631,092 |
Less: Provision for individual impairment | 119,231 | 228,553 | 119,231 | 228,553 |
Provision for collective impairment | 351,640 | 364,252 | 214,659 | 228,060 |
Subtotal | 14,678,493 | 12,847,779 | 13,963,184 | 12,174,479 |
GROUP | BANK | |||
As at December 31, | 2017 Rs. ’000 |
2016 Rs. ’000 |
2017 Rs. ’000 |
2016 Rs. ’000 |
Total lease/hire purchase receivable from one to five years | 29,262,074 | 29,185,428 | 27,056,087 | 26,793,674 |
Less: Unearned lease/hire purchase income | 3,954,505 | 3,935,425 | 3,491,148 | 3,434,675 |
Gross lease/hire purchase receivable from one to five years | 25,307,569 | 25,250,003 | 23,564,939 | 23,358,999 |
Less: Provision for individual impairment | 14,305 | 12,632 | 14,305 | 12,632 |
Provision for collective impairment | 236,877 | 268,364 | 39,468 | 34,319 |
Subtotal | 25,056,387 | 24,969,007 | 23,511,166 | 23,312,048 |
GROUP | BANK | |||
As at December 31, | 2017 Rs. ’000 |
2016 Rs. ’000 |
2017 Rs. ’000 |
2016 Rs. ’000 |
Total lease/hire purchase receivable after five years | 311,269 | 354,646 | 3,215 | 4,480 |
Less: Unearned lease/hire purchase income | 1,787 | 4,267 | 45 | 607 |
Gross lease/hire purchase receivable after five years | 309,482 | 350,379 | 3,170 | 3,873 |
Less: Provision for individual impairment | – | – | – | – |
Provision for collective impairment | 53,985 | 48,419 | 1 | 2 |
Subtotal | 255,497 | 301,960 | 3,169 | 3,871 |
GROUP | BANK | |||
2017 Rs. ’000 |
2016 Rs. ’000 |
2017 Rs. ’000 |
2016 Rs. ’000 |
|
Balance as at January 1, | 241,185 | 93,710 | 241,185 | 93,710 |
Charge/(write-back) to the Income Statement | 55,258 | 209,134 | 55,258 | 209,134 |
Net write-off/(recoveries) during the year | (149,508) | (31,648) | (149,508) | (31,648) |
Interest accrued on impaired lease/hire purchase receivable | (15,171) | (32,268) | (15,171) | (32,268) |
Other movements | 1,772 | 2,257 | 1,772 | 2,257 |
Balance as at December 31, | 133,536 | 241,185 | 133,536 | 241,185 |
GROUP | BANK | |||
2017 Rs. ’000 |
2016 Rs. ’000 |
2017 Rs. ’000 |
2016 Rs. ’000 |
|
Balance as at January 1, | 681,035 | 953,696 | 262,381 | 556,776 |
Charge/(write-back) to the Income Statement | 75,108 | 1,154,843 | 105,388 | 1,133,109 |
Net write-off/(recoveries) during the year | (113,641) | (1,427,504) | (113,641) | (1,427,504) |
Balance as at December 31, | 642,502 | 681,035 | 254,128 | 262,381 |
As per the guidelines issued by the Central Bank of Sri Lanka, Investment Fund Account was established effective from January 1, 2011, by transferring tax savings as explained below:
(a) 5% of the Profits Before Tax (PBT) calculated for Income Tax (IT) purposes, on the dates of making self-assessment payments on IT. (b) 8% of the profits calculated for the payment of Value Added Tax (VAT) on financial services at the time of making payments on VAT.The sectoral distribution of loans disbursed under IFA is given below:
As at December 31, | 2017 | 2016 | ||||||
Sector | Range of interest rates (%) |
Tenure (Years) |
Amount
outstanding
(A) Rs. ’000 |
Pending disbursement
(B) Rs. ’000 |
Total
(A) + (B) Rs. ’000 |
Amount
outstanding
(A) Rs. ’000 |
Pending
disbursement
(B) Rs. ’000 |
Total
(A) + (B) Rs. ’000 |
(a) Cultivation of plantation crops/agriculture crops | 7.91 – 12.12 | 5.5 | 11,363 | – | 11,363 | 38,636 | – | 38,636 |
(b) Factory/mills modernisation/ establishment/expansion |
7.91 – 13.12 | 5.5 | 76,179 | – | 76,179 | 192,040 | – | 192,040 |
(c) Infrastructure development | 6.80 – 11.00 | 14.5 | 3,232,587 | 64,691 | 3,297,278 | 3,559,585 | 98,627 | 3,658,212 |
(d) Construction of hotels and for related purposes | 8.41 – 12.62 | 7 | 6,278 | – | 6,278 | 8,236 | – | 8,236 |
Capital outstanding of the loans granted | 3,326,407 | 64,691 | 3,391,098 | 3,798,497 | 98,627 | 3,897,124 | ||
(e) Interest receivable | 173,167 | – | 173,167 | 175,862 | – | 175,862 | ||
Carrying amount of the loans granted | 3,499,574 | 64,691 | 3,564,265 | 3,974,359 | 98,627 | 4,072,986 |
The requirement to maintain the Investment Fund Account was ceased effective from October 1, 2014 as per the instructions issued by the Central Bank of Sri Lanka.
As at December 31, | 2017 | 2016 | ||
Individually impaired loans and receivables Rs. ’000 |
Provision for individual impairment Rs. ’000 |
Individually impaired loans and receivables Rs. ’000 |
Provision for individual impairment Rs. ’000 |
|
Loans and advances | ||||
Overdrafts | 2,350,482 | 1,522,572 | 2,311,257 | 1,554,417 |
Trade finance | 906,384 | 533,034 | 749,241 | 507,360 |
Lease/hire purchase receivable | 295,761 | 133,536 | 444,882 | 241,185 |
Pawning | 484 | 7 | – | – |
Housing loans | 581,651 | 183,109 | 480,970 | 169,831 |
Personal loans | 8,583 | 5,024 | 6,586 | 4,338 |
Term loans | 18,899,904 | 5,476,372 | 18,109,141 | 5,976,326 |
Bills of exchange | – | – | – | – |
Total | 23,043,248 | 7,853,654 | 22,102,077 | 8,453,457 |
The net exposure of Rs. 15,189.594 Mn. (Rs. 13,648.620 Mn. As at December 31, 2016) is substantially covered by collaterals excluding machinery and stocks.
Available-for-sale financial investments include equity and debt securities. Equity investments classified as available for sale are those which are neither classified as held for trading nor designated at fair value through profit or loss. Debt securities in this category are intended to be held for an indefinite period of time and may be sold in response to needs for liquidity or in response to changes in the market conditions.
The Group has not designated any loans or receivables as available for sale. After initial measurement, available-for-sale financial investments are subsequently measured at fair value.
Unrealised gains and losses are recognised in Equity through OCI in the “Available for-sale reserve”. When these financial investments are disposed of, the cumulative gain or loss previously recognised in Equity is recycled to profit or loss through “Operating income”. Interest earned while holding available-for-sale financial investments is reported as “Interest income” using the EIR. Dividend earned while holding available-for-sale financial investments are recognised in the Income Statement as “Operating income” when the right to receive the payment has been established. The losses arising from impairment of such investments are recognised in the Income Statement in ‘Impairment charges for loans and other losses’ and removed from the “Available-for-sale reserve”.
GROUP | BANK | |||||
As at December 31, | Note | 2017 Rs. ’000 |
2016 Rs. ’000 |
2017 Rs. ’000 |
2016 Rs. ’000 |
|
Government Securities | 154,366,556 | 159,642,243 | 154,167,169 | 159,573,316 | ||
Government securities – Sri Lanka | 34.1 (a) | 154,366,556 | 159,642,243 | 154,167,169 | 159,573,316 | |
Government securities – Bangladesh | 34.1 (b) | – | – | – | – | |
Equity securities | 34.2 34.3 |
547,087 | 293,819 | 546,963 | 293,695 | |
Quoted shares (market value) | 34.2 (a) 34.3 (a) |
500,278 | 246,548 | 500,278 | 246,548 | |
Unquoted shares (at cost) | 34.2 (b) 34.3 (b) |
46,809 | 47,271 | 46,685 | 47,147 | |
Investment in unit trust | 34.4 34.5 |
– | 156,460 | – | 156,460 | |
Total | 154,913,643 | 160,092,522 | 154,714,132 | 160,023,471 |
There were no impairment losses on Financial Investments – Available for Sale as at December 31, 2017 (2016 – Nil).
The maturity analysis of Financial Investments – Available for Sale is given in Note 62.
GROUP | BANK | |||
As at December 31, | 2017 Rs. ’000 |
2016 Rs. ’000 |
2017 Rs. ’000 |
2016 Rs. ’000 |
Treasury bills | 15,367,792 | 17,827,210 | 15,168,405 | 17,758,283 |
Treasury bonds | 136,195,443 | 138,993,358 | 136,195,443 | 138,993,358 |
Sri Lanka sovereign bonds | 2,803,321 | 2,821,675 | 2,803,321 | 2,821,675 |
Subtotal | 154,366,556 | 159,642,243 | 154,167,169 | 159,573,316 |
During 2016, the Sri Lankan operation of the Bank reclassified part of the Treasury Bonds and Sovereign Bonds portfolio amounting
Rs. 34,646.318 Mn. (Face value Rs. 35,094.126 Mn.) classified as Available-for-sale (AFS) investments to the Held to maturity (HTM) category based on a detailed assessment of the actual intention and ability to hold to maturity. The said re-classification was effected after obtaining written approval from the Board of Directors and the Central Bank of Sri Lanka and this transfer also meets the requirement set out for reclassification under Sri Lanka Accounting Standard – LKAS 39 on “Financial Instruments: Recognition and Measurement”.
GROUP | BANK | |||
As at December 31, | 2017 Rs. ’000 |
2016 Rs. ’000 |
2017 Rs. ’000 |
2016 Rs. ’000 |
Treasury Bills | – | – | – | – |
Treasury Bonds | – | – | – | – |
Subtotal | – | – | – | – |
During 2016, Bangladesh operation of the Bank reclassified its total Available-for-sale (AFS) portfolio amounting to Rs. 9,556.057 Mn.
(Face Value Rs. 8,521.690 Mn.) to Held-to-maturity (HTM) category, based on a detailed assessment and the actual intention and ability to hold to maturity.
During 2016, Group reclassified part of available-for-sale investment securities to held-to-maturity category. The Group identified financial assets that would have met the definition of held to maturity (if they had not been designated as available-for-sale) for which at the date of reclassification it had the intention and ability to hold them until maturity.
The fair value of the reclassified available-for-sale investment securities was Rs. 44,202.375 Mn. which was considered to be the new amortised cost of the held-to-maturity portfolio at the date of reclassification.
The table below sets out the amounts actually recognised in profit or loss and OCI in respect of the financial assets reclassified out of available-for-sale investment securities.
2017 | 2016 | |||
Profit or loss Rs. ’000 |
OCI Rs. ’000 |
Profit or loss Rs. ’000 |
OCI Rs. ’000 |
|
Available-for-sale investment securities reclassified to held to maturity | ||||
Interest income | N/A | N/A | 2,830,744 | – |
Net impairment loss on financial assets | N/A | N/A | – | – |
Net change in fair value | N/A | N/A | – | – |
Amount transferred from AFS reserve to profit or loss | N/A | N/A | – | 243,331 |
Total | N/A | N/A | 2,830,744 | 243,331 |
The table below sets out the amounts that would have been recognised, if the reclassification had not been made.
2017 | 2016 | |||
Profit or loss Rs. ’000 |
OCI Rs. ’000 |
Profit or loss Rs. ’000 |
OCI Rs. ’000 |
|
Available-for-sale investment securities reclassified to held to maturity | ||||
Interest income | N/A | N/A | 2,830,744 | – |
Net impairment loss on financial assets | N/A | N/A | – | – |
Net change in fair value | N/A | N/A | – | (844,209) |
Total | N/A | N/A | 2,830,744 | (844,209) |
The effective interest rates on reclassified available-for-sale investment securities that were held as at the reporting date ranged from 5.25% to 10.74%, with expected recoverable cash flows of Rs. 65,838.057 Mn.
GROUP | BANK | |||||||
No. of shares |
Market price Rs. |
Market value Rs. ’000 |
Cost of
investment Rs. ’000 |
No. of shares |
Market price Rs. |
Market value Rs. ’000 |
Cost of investment Rs. ’000 |
|
Sector/type of securities | ||||||||
Quoted shares: | ||||||||
Bank, finance and insurance | ||||||||
DFCC Bank PLC | 3,496 | 122.80 | 429 | 155 | 3,496 | 122.80 | 429 | 155 |
Hatton National Bank PLC | 11,950 | 249.00 | 2,976 | 315 | 11,950 | 249.00 | 2,976 | 315 |
Nations Trust Bank PLC | 1,333 | 78.00 | 104 | 22 | 1,333 | 78.00 | 104 | 22 |
National Development Bank PLC | 5,424 | 136.40 | 740 | 215 | 5,424 | 136.40 | 740 | 215 |
Sampath Bank PLC | 4,600 | 315.70 | 1,452 | 72 | 4,600 | 315.70 | 1,452 | 72 |
Seylan Bank PLC | 1,015 | 87.20 | 89 | 24 | 1,015 | 87.20 | 89 | 24 |
VISA Inc. | 19,424 | USD 114.02 | 340,182 | – | 19,424 | USD 114.02 | 340,182 | – |
Subtotal | 345,972 | 803 | 345,972 | 803 | ||||
Land and property | ||||||||
RIL Property PLC | 19,596,200 | 7.20 | 141,093 | 156,770 | 19,596,200 | 7.20 | 141,093 | 156,770 |
Subtotal | 141,093 | 156,770 | 141,093 | 156,770 | ||||
Manufacturing | ||||||||
Alumex PLC | 714,200 | 18.50 | 13,213 | 9,999 | 714,200 | 18.50 | 13,213 | 9,999 |
Subtotal | 13,213 | 9,999 | 13,213 | 9,999 | ||||
Total | 500,278 | 167,572 | 500,278 | 167,572 |
GROUP | BANK | |||||||
No. of shares |
Market price Rs. |
Market value Rs. ’000 |
Cost of
investment Rs. ’000 |
No. of shares |
Market price Rs. |
Market value Rs. ’000 |
Cost of investment Rs. ’000 |
|
Sector/type of securities | ||||||||
Unquoted shares: | ||||||||
Bank, finance and insurance | ||||||||
Central Depository of Bangladesh Limited | 3,427,083 | BDT2.75 | 17,491 | 17,491 | 3,427,083 | BDT2.75 | 17,491 | 17,491 |
Credit Information Bureau of Sri Lanka | 5,637 | 100.00 | 564 | 564 | 4,400 | 100.00 | 440 | 440 |
Fitch Ratings Lanka Limited | 62,500 | 10.00 | 625 | 625 | 62,500 | 10.00 | 625 | 625 |
LankaClear (Pvt) Limited | 1,000,000 | 10.00 | 10,000 | 10,000 | 1,000,000 | 10.00 | 10,000 | 10,000 |
Lanka Financial Services Bureau Limited | 225,000 | 10.00 | 2,250 | 2,250 | 225,000 | 10.00 | 2,250 | 2,250 |
Lanka Ratings Agency Limited | 689,590 | 12.50 | 8,620 | 8,620 | 689,590 | 12.50 | 8,620 | 8,620 |
Society for Worldwide Interbank Financial Telecommunication (SWIFT) |
47 | EUR 841.90 | 7,259 | 7,259 | 47 | EUR 841.90 | 7,259 | 7,259 |
Total | 46,809 | 46,809 | 46,685 | 46,685 |
GROUP | BANK | |||
As at December 31, | 2017 Rs. ’000 |
2016 Rs. ’000 |
2017 Rs. ’000 |
2016 Rs. ’000 |
Sector/industry | ||||
Bank, finance and insurance | 392,781 | 47,612 | 392,657 | 47,488 |
Land and property | 141,093 | 156,770 | 141,093 | 156,770 |
Manufacturing | 13,213 | 9,999 | 13,213 | 9,999 |
Total | 547,087 | 214,381 | 546,963 | 214,257 |
GROUP | BANK | |||||||
No. of shares |
Market price Rs. |
Market value Rs. ’000 |
Cost of investment Rs. ’000 |
No. of shares |
Market price Rs. |
Market value Rs. ’000 |
Cost of investment Rs. ’000 |
|
Sector/type of securities | ||||||||
Quoted shares: | ||||||||
Bank, finance and insurance | ||||||||
DFCC Bank PLC | 3,496 | 122.50 | 428 | 155 | 3,496 | 122.50 | 428 | 155 |
Hatton National Bank PLC | 11,950 | 225.00 | 2,689 | 315 | 11,950 | 225.00 | 2,689 | 315 |
Nations Trust Bank PLC | 1,333 | 80.90 | 108 | 22 | 1,333 | 80.90 | 108 | 22 |
National Development Bank PLC | 5,424 | 156.00 | 846 | 215 | 5,424 | 156.00 | 846 | 215 |
Sampath Bank PLC | 3,914 | 260.40 | 1,019 | 72 | 3,914 | 260.40 | 1,019 | 72 |
Seylan Bank PLC | 1,015 | 90.00 | 91 | 24 | 1,015 | 90.00 | 91 | 24 |
VISA Inc. | 19,424 | USD 78.02 | 226,940 | – | 19,424 | USD 78.02 | 226,940 | – |
Subtotal | 232,121 | 803 | 232,121 | 803 | ||||
Manufacturing | ||||||||
Alumex PLC | 714,200 | 20.20 | 14,427 | 9,999 | 714,200 | 20.20 | 14,427 | 9,999 |
Subtotal | 14,427 | 9,999 | 14,427 | 9,999 | ||||
Total | 246,548 | 10,802 | 246,548 | 10,802 |
GROUP | BANK | |||||||
No. of shares |
Market price Rs. |
Market value Rs. ’000 |
Cost of investment Rs. ’000 |
No. of shares |
Market price Rs. |
Market value Rs. ’000 |
Cost of investment Rs. ’000 |
|
Sector/type of securities | ||||||||
Unquoted shares: | ||||||||
Bank, finance and insurance | ||||||||
Central Depository of Bangladesh Limited | 3,427,083 | BDT2.75 | 17,953 | 17,953 | 3,427,083 | BDT2.75 | 17,953 | 17,953 |
Credit Information Bureau of Sri Lanka | 5,637 | 100.00 | 564 | 564 | 4,400 | 100.00 | 440 | 440 |
Fitch Ratings Lanka Limited | 62,500 | 10.00 | 625 | 625 | 62,500 | 10.00 | 625 | 625 |
LankaClear (Pvt) Limited | 1,000,000 | 10.00 | 10,000 | 10,000 | 1,000,000 | 10.00 | 10,000 | 10,000 |
Lanka Financial Services Bureau Limited | 225,000 | 10.00 | 2,250 | 2,250 | 225,000 | 10.00 | 2,250 | 2,250 |
Lanka Ratings Agency Limited | 689,590 | 12.50 | 8,620 | 8,620 | 689,590 | 12.50 | 8,620 | 8,620 |
Society for Worldwide Interbank Financial Telecommunication (SWIFT) |
47 | EUR 978.01 | 7,259 | 7,259 | 47 | EUR 978.01 | 7,259 | 7,259 |
Total | 47,271 | 47,271 | 47,147 | 47,147 |
GROUP | BANK | |||
2017 Rs. ’000 |
2016 Rs. ’000 |
2017 Rs. ’000 |
2016 Rs. ’000 |
|
Sector/industry | ||||
Bank, finance and insurance | 279,392 | 48,074 | 279,268 | 47,950 |
Manufacturing | 14,427 | 9,999 | 14,427 | 9,999 |
Total | 293,819 | 58,073 | 293,695 | 57,949 |
GROUP | BANK | |||
As at December 31, | 2017 Rs. ’000 |
2016 Rs. ’000 |
2017 Rs. ’000 |
2016 Rs. ’000 |
Sector/industry | ||||
Bank, finance and insurance | ||||
Capital Alliance Investment Limited | – | – | – | – |
Total | – | – | – | – |
GROUP | BANK | |||
As at December 31, | 2017 Rs. ’000 |
2016 Rs. ’000 |
2017 Rs. ’000 |
2016 Rs. ’000 |
Sector/industry | ||||
Bank, finance and insurance | ||||
Capital Alliance Investment Limited | 156,460 | 153,849 | 156,460 | 153,849 |
Total | 156,460 | 153,849 | 156,460 | 153,849 |
Held-to-maturity financial investments are non-derivative financial assets with fixed or determinable payments and fixed maturities, that the Group has the positive intention and ability to hold to maturity, and which are not designated as at Fair value through profit or loss or Available-for-sale. After initial measurement, held-to-maturity financial investments are subsequently measured at amortised cost using the EIR, less provision for impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees that are an integral part of the EIR. The amortisation is included in “Interest Income” while the losses arising from impairment of such investments are recognised in ‘Impairment charges for loans and other losses’ in the Income Statement.
A sale or reclassification of a more than insignificant amount of held-to-maturity investments would result in the reclassification of all held-to-maturity investments as available-for-sale, and would prevent the Group from classifying investment securities as held to maturity for the current and the following two financial years. However, sales and reclassifications in any of the following circumstances would not trigger a reclassification:
GROUP | BANK | |||
As at December 31, | 2017 Rs. ’000 |
2016 Rs. ’000 |
2017 Rs. ’000 |
2016 Rs. ’000 |
Government Securities – Sri Lanka | 53,555,302 | 50,980,717 | 53,555,302 | 50,980,717 |
Treasury bonds | 38,675,911 | 36,599,599 | 38,675,911 | 36,599,599 |
Sri Lanka Sovereign Bonds | 14,879,391 | 14,381,118 | 14,879,391 | 14,381,118 |
Government Securities – Bangladesh | 10,007,450 | 10,000,581 | 10,007,450 | 10,000,581 |
Treasury bills | 1,197,755 | 1,524,677 | 1,197,755 | 1,524,677 |
Treasury bonds | 8,809,695 | 8,475,904 | 8,809,695 | 8,475,904 |
Government Securities – Maldives | 5,803,044 | 2,645,300 | – | – |
Treasury bills | 5,803,044 | 2,645,300 | – | – |
Total | 69,365,796 | 63,626,598 | 63,562,752 | 60,981,298 |
Please refer Notes 34.1 (a), 34.1 (b) and 34.1 (c) for the details of re-classification to Held-to-maturity (HTM) investments from
Available-for-sale (AFS) category effected during 2016.
The maturity analysis of financial investments – Held to maturity is given in Note 62.
Financial investments classified as loans and receivables include unquoted debt instruments. After initial measurement, these are subsequently measured at amortised cost using the EIR, less provision for impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees and costs that are an integral part of the EIR. The amortisation is included in “Interest Income” while the losses arising from impairment are recognised in “Impairment charges for loans and other losses” in the Income Statement.
GROUP | BANK | |||||
As at December 31, | Note | 2017 Rs. ’000 |
2016 Rs. ’000 |
2017 Rs. ’000 |
2016 Rs. ’000 |
|
Investments in Government securities | 36.1 | 40,566,702 | 40,076,392 | 40,566,702 | 40,076,392 | |
Other investments | 36.2 | 8,145,775 | 11,747,634 | 8,145,775 | 11,747,634 | |
Total | 48,712,477 | 51,824,026 | 48,712,477 | 51,824,026 |
GROUP | BANK | |||
As at December 31, | 2017 Rs. ’000 |
2016 Rs. ’000 |
2017 Rs. ’000 |
2016 Rs. ’000 |
Sri Lanka Development Bonds | 40,566,702 | 40,076,392 | 40,566,702 | 40,076,392 |
Total | 40,566,702 | 40,076,392 | 40,566,702 | 40,076,392 |
GROUP | BANK | |||||
As at December 31, | Note | 2017 Rs. ’000 |
2016 Rs. ’000 |
2017 Rs. ’000 |
2016 Rs. ’000 |
|
Debentures | 36.2.1 | 8,045,593 | 11,236,208 | 8,045,593 | 11,236,208 | |
Trust certificates | 36.2.2 | 98,087 | 511,208 | 98,087 | 511,208 | |
Corporate investments in Bangladesh | 36.2.3 | 2,095 | 218 | 2,095 | 218 | |
Total | 8,145,775 | 11,747,634 | 8,145,775 | 11,747,634 |
The maturity analysis of financial investments – Loans and receivables is given in Note 62.
GROUP | BANK | |||||||
As at December 31, | 2017 | 2016 | 2017 | 2016 | ||||
No. of debentures |
Carrying value Rs. ’000 |
No. of debentures |
Carrying value Rs. ’000 |
No. of debentures |
Carrying value Rs. ’000 |
No. of debentures |
Carrying value Rs. ’000 |
|
Central Finance Company PLC | 2,084,400 | 300,475 | 2,349,400 | 391,976 | 2,084,400 | 300,475 | 2,349,400 | 391,976 |
Commercial Leasing and Finance PLC | 10,000,000 | 1,097,500 | 10,000,000 | 1,097,767 | 10,000,000 | 1,097,500 | 10,000,000 | 1,097,767 |
Dunamis Capital PLC | 500,000 | 50,403 | 500,000 | 50,403 | 500,000 | 50,403 | 500,000 | 50,403 |
Hayleys PLC | 10,878,400 | 1,114,983 | 10,878,400 | 1,114,983 | 10,878,400 | 1,114,983 | 10,878,400 | 1,114,983 |
Hemas Holdings PLC | 525,900 | 54,048 | 525,900 | 54,048 | 525,900 | 54,048 | 525,900 | 54,048 |
Lanka Orix Leasing Company PLC | 20,000,000 | 2,045,370 | 20,000,000 | 2,045,370 | 20,000,000 | 2,045,370 | 20,000,000 | 2,045,370 |
Lion Brewery (Ceylon) PLC | 200,000 | 206,286 | 400,000 | 413,177 | 200,000 | 206,286 | 400,000 | 413,177 |
Mercantile Investments and Finance PLC | 418,650 | 42,551 | 418,650 | 42,551 | 418,650 | 42,551 | 418,650 | 42,551 |
MTD Walkers PLC | 3,000,000 | 307,373 | 3,000,000 | 307,373 | 3,000,000 | 307,373 | 3,000,000 | 307,373 |
Nawaloka Hospitals PLC | 2,290,000 | 237,167 | 2,290,000 | 237,167 | 2,290,000 | 237,167 | 2,290,000 | 237,167 |
Orient Finance PLC | 1,968,800 | 197,173 | 1,968,800 | 197,173 | 1,968,800 | 197,173 | 1,968,800 | 197,173 |
People's Leasing & Finance PLC | 328,800 | 36,045 | 6,924,200 | 751,180 | 328,800 | 36,045 | 6,924,200 | 751,180 |
Richard Pieris and Company PLC | 5,353,500 | 550,326 | 6,763,400 | 695,136 | 5,353,500 | 550,326 | 6,763,400 | 695,136 |
Singer (Sri Lanka) PLC | 9,598,100 | 997,423 | 9,598,100 | 998,155 | 9,598,100 | 997,423 | 9,598,100 | 998,155 |
Singer Finance (Lanka) PLC | 4,435,230 | 478,005 | 5,914,610 | 631,335 | 4,435,230 | 478,005 | 5,914,610 | 631,335 |
Softlogic Finance PLC | 3,223,400 | 330,465 | 3,223,400 | 330,465 | 3,223,400 | 330,465 | 3,223,400 | 330,465 |
DFCC Bank PLC | – | – | 18,000,000 | 1,857,008 | – | – | 18,000,000 | 1,857,008 |
Senkadagala Finance PLC | – | – | 200,684 | 20,941 | – | – | 200,684 | 20,941 |
Subtotal | 8,045,593 | 11,236,208 | 8,045,593 | 11,236,208 |
The above debentures are stated at amortised cost and classified under Financial Investments – Loans and Receivables due to the absence of an active market.
GROUP | BANK | |||
As at December 31, | 2017 | 2016 | 2017 | 2016 |
Carrying value Rs. ’000 |
Carrying value Rs. ’000 |
Carrying value Rs. ’000 |
Carrying value Rs. ’000 |
|
People's Leasing Company PLC | 48,111 | 213,303 | 48,111 | 213,303 |
Richard Pieris Arpico Finance Limited | 49,976 | 117,712 | 49,976 | 117,712 |
Assetline Leasing Company Limited | – | 141,699 | – | 141,699 |
Mercantile Investments & Finance PLC | – | 38,494 | – | 38,494 |
Subtotal | 98,087 | 511,208 | 98,087 | 511,208 |
GROUP | BANK | |||
As at December 31, | 2017 | 2016 | 2017 | 2016 |
Carrying value Rs. ’000 |
Carrying value Rs. ’000 |
Carrying value Rs. ’000 |
Carrying value Rs. ’000 |
|
Price bonds | 2,095 | 218 | 2,095 | 218 |
Sub total | 2,095 | 218 | 2,095 | 218 |
Subsidiaries are investees controlled by the Group. The Group “controls” an investee if it is exposed to, or has rights to, variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. The Group reassesses whether it has control if there are changes to one or more of the elements of control. This includes circumstances in which protective rights held (e.g. those resulting from a lending relationship) become substantive and lead to the Group having power over an investee.
The cost of an acquisition is measured at fair value of the consideration, including contingent consideration. The acquired identifiable assets, liabilities and contingent liabilities are measured at their fair values at the date of acquisition. Subsequent to the initial measurement the Bank continues to recognise the investments in Subsidiaries at cost.
The Financial Statements of Subsidiaries are included in the Consolidated Financial Statements from the date on which control commences until the date when control ceases.
The Financial Statements of all Subsidiaries in the Group have a common financial year which ends on December 31, except for the Serendib Finance Ltd., a licensed finance company, whose financial year ends on March 31. The Financial Statements of the Bank’s Subsidiaries are prepared using consistent accounting policies.
The reason for using a different reporting date by the aforesaid subsidiary is due to the requirement imposed by the Central Bank of Sri Lanka for licensed finance companies to publish their key financial data and key performance indicators for a 12-month period ending March 31 and 6 month period ending September 30, every year, in accordance with a format prescribed by the Director of the Department of Supervision of Non-Bank Financial Institutions of the Central Bank of Sri Lanka.
All intra-group balances, transactions, unrealised gains and losses resulting from intra-group transactions, income and expenses are eliminated in full.
There are no significant restrictions on the ability of Subsidiaries to transfer funds to the Parent (the Bank) in the form of cash dividend or repayment of loans and advances.
All Subsidiaries of the Bank have been incorporated in Sri Lanka except Commex Sri Lanka S.R.L. which was incorporated in Italy, Commercial Bank of Maldives Private Limited which was incorporated in the Republic of Maldives and CBC Myanmar Microfinance Company Limited which was incorporated in Myanmar.
GROUP | BANK | ||||||||||
As at December 31, | 2017 | 2016 | 2017 | 2016 | |||||||
Holding | Cost | Market value/ Directors’ valuation | Cost | Market value/ Directors’ valuation | Cost | Market value/ Directors’ valuation | Cost | Market value/ Directors’ valuation | |||
Note | % | Rs. ’000 | Rs. ’000 | Rs. ’000 | Rs. ’000 | Rs. ’000 | Rs. ’000 | Rs. ’000 | Rs. ’000 | ||
Local subsidiaries: | |||||||||||
Quoted: | |||||||||||
Commercial Development Company PLC |
92.97* | – | – | – | – | 269,821 | 780,963 | 272,363 | 845,755 | ||
(11,156,619 Ordinary shares) | (@ Rs. 70.00) | (@ Rs. 75.10) | |||||||||
(11,261,717 Ordinary shares as at December 31, 2016) |
(93.85 in 2016) | ||||||||||
Unquoted: | |||||||||||
ONEzero Company Limited | 100 | – | – | – | – | 5,000 | 5,000 | 5,000 | 5,000 | ||
(500,001 Ordinary shares) | (@ Rs. 10.00) | (@ Rs. 10.00) | |||||||||
(500,001 Ordinary shares as at December 31, 2016) |
|||||||||||
Unquoted: | |||||||||||
Serendib Finance Limited | 100 | – | – | – | – | 1,616,046 | 1,616,046 | 1,116,046 | 1,116,046 | ||
(53,352,686 Ordinary shares) | |||||||||||
(30,728,252 Ordinary shares as at December 31, 2016) |
|||||||||||
Foreign subsidiaries: | |||||||||||
Unquoted: | |||||||||||
Commex – Sri Lanka S.R.L. (incorporated in Italy) (**) |
100 | – | – | – | – | 112,400 | 69,622 | 193,080 | 27,140 | ||
(300,000 Ordinary shares) (300,000 Ordinary shares as at December 31, 2016) | |||||||||||
Commercial Bank of Maldives Private Limited |
55 | – | – | – | – | 1,040,934 | 1,040,934 | 1,014,843 | 1,014,843 | ||
(104,500 Ordinary shares) | |||||||||||
(104,500 Ordinary shares as at December 31, 2016) |
|||||||||||
CBC Myanmar Microfinance Co. Limited (***) |
100 | – | – | – | – | 64,512 | 64,512 | – | – | ||
(420,000 Ordinary shares) | |||||||||||
Gross Total | – | – | – | – | 3,108,713 | 3,577,077 | 2,601,332 | 3,008,784 | |||
Provision for impairment | 37.7 | (42,778) | – | (165,940) | – | ||||||
Net Total | – | – | – | – | 3,065,935 | 3,577,077 | 2,435,392 | 3,008,784 |
(*) During 2015, the Board of Directors of the Bank resolved to reduce the shareholding of Commercial Development Company PLC, (in which the Bank originally had a stake of 94.55%) to comply with the requirements of the Listing Rule No. 7.13 of the Colombo Stock Exchange on Minimum Public Holding. Accordingly, the Bank disposed 189,086 shares since November 2015 through the Colombo Stock Exchange and reduced the shareholding in the above Company to 92.97% by December 31, 2017 and is in the process of taking steps to dispose the required number of shares to adhere to the requirements of the Listing Rules.
Consequent to the above disposal, ownership interests of the Bank has changed while retaining control. As per SLFRS 10 on “Consolidated Financial Statements”, changes in a parent’s ownership interest in a subsidiary that do not result in the parent losing control are equity transactions and hence, the resulting gain/loss is recognised in equity.
(**) The investment made in Commex Sri Lanka S.R.L. – Italy has been written down to account for pre-operational expenses.
(***) The CBC Myanmar Microfinance Company Limited was incorporated as a fully owned subsidiary in Myanmar. The Bank obtained a licence from the Myanmar Microfinance Supervisory Enterprise to operate a non-savings deposit organisation.
GROUP | BANK | |||||
As at December 31, | Note | 2017 Rs. ’000 |
2016 Rs. ’000 |
2017 Rs. ’000 |
2016 Rs. ’000 |
|
Balance as at January 1, | – | – | 165,940 | 150,590 | ||
Charge/(write back) to the Income Statement | 18 | – | – | (42,484) | 15,350 | |
Pre-operational expenses written-off o/a Commex Sri Lanka S.R.L. – Italy | – | (80,678) | – | |||
Balance as at December 31, | – | – | 42,778 | 165,940 |
Associates are those entities in which the Group has significant influence, but not control, over the variable returns through its power over the investee. Significant influence is presumed to exist when the Group holds 20% or more of the voting power of another entity.
Investments in associates are accounted for using the equity method and are recognised initially at cost, in terms of Sri Lanka Accounting Standard – LKAS 28 on “Investments in Associates and Joint Ventures”. The Group’s investment includes goodwill identified on acquisition, net of any accumulated impairment losses. The Consolidated Financial Statements include the Group’s share of the income and expenses and equity movements of equity-accounted investees, after adjustments to align the Accounting Policies with those of the Group, from the date that significant influence commences until the date that significant influence ceases. Accordingly, under the Equity Method, investments in Associates are carried at cost plus post-acquisition changes in the Group’s share of net assets of the Associates and are reported as a separate line item in the Statement of Financial Position. The Income Statement reflects the Group’s share of the results of operations of the Associates. Any change in OCI of those investees is presented as part of the Group’s OCI. In addition, when there has been a change recognised directly in the equity of the Associate, the Group recognises its share of any changes, when applicable, in Equity through OCI. Unrealised gains and losses resulting from transactions between the Group and the Associate are eliminated to the extent of the interest
in Associate.
When the Group’s share of losses exceeds its interest in an equity-accounted investee, the carrying amount of that interest, including any long-term investments, is reduced to nil and the recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the investee. If the Associate subsequently reports profits, the Group resumes recognising its share of those profits only after its share of the profits equal the share of losses not recognised previously.
The Group discontinues the use of the Equity Method from the date that it ceases to have significant influence over an Associate and accounts for such investments in accordance with the Sri Lanka Accounting Standard – LKAS 39 on “Financial Instruments: Recognition and Measurement”.
Upon loss of significant influence over the Associate, the Group measures and recognises any retained investment at its fair value.
Any difference between the carrying amount of the Associate upon loss of significant influence and the fair value of the retained investment and proceeds from disposal is recognised in profit or loss.
After application of the Equity Method, the Group determines whether it is necessary to recognise an impairment loss on its investment in its Associate. At each reporting date, the Group determines whether there is objective evidence that the investment in the Associate is impaired. If there is such evidence, the Group calculates the amount of impairment as the difference between the recoverable amount of the Associate and its carrying value, and recognises the loss as “Share of profits of associates” in the Income Statement.
As at December 31, | 2017 | 2016 | |||||
Incorporation and operation |
Ownership interest |
No. of shares |
Cost | Carrying value |
Cost | Carrying value |
|
% | Rs. ’000 | Rs. ’000 | Rs. ’000 | Rs. ’000 | |||
Equity Investments Lanka Limited | Sri Lanka | 22.92 | 4,110,938 | 44,331 | 66,528 | 44,331 | 68,621 |
Commercial Insurance Brokers (Pvt) Limited |
Sri Lanka | 18.59 * | 120,000 | 100 | 43,316 | 100 | 40,238 |
44,431 | 109,844 | 44,431 | 108,859 |
(*) 20% stake of Commercial Insurance Brokers (Pvt) Limited is held by Commercial Development Company PLC, a 92.97% owned Subsidiary of the Bank, which is listed on the Colombo Stock Exchange. The Bank has a significant influence over financial and operating activities of Commercial Insurance Brokers (Pvt) Limited though it effectively holds only 18.59%.
Reconciliation of the summarised financial information to the carrying amount of the interest in Associates recognised in the Consolidated Financial Statements is as follows:
2017 | 2016 | |||||
Equity Investments Lanka Ltd. |
Commercial Insurance Brokers (Pvt) Ltd. |
Total | Equity Investments Lanka Ltd. |
Commercial Insurance Brokers (Pvt) Ltd. |
Total | |
Rs. ’000 | Rs. ’000 | Rs. ’000 | Rs. ’000 | Rs. ’000 | Rs. ’000 | |
Cost of investments | 44,331 | 100 | 44,431 | 44,331 | 100 | 44,431 |
Add: Share of profit applicable to the Group | – | |||||
Investment in associate – as at January 1, | 24,290 | 40,138 | 64,428 | 23,043 | 37,030 | 60,073 |
Total comprehensive income | 2,018 | 5,186 | 7,204 | 5,358 | 4,903 | 10,261 |
Profit/(loss) for the period recognised in income statement, net of tax |
(1,539) | 5,217 | 3,678 | 1,645 | 4,809 | 6,454 |
Profit or loss and other comprehensive income, net of tax |
3,557 | (31) | 3,526 | 3,713 | 94 | 3,807 |
Movement due to change in equity | – | (419) | (419) | – | (98) | (98) |
Transactions which are recorded directly in equity |
– | – | – | – | – | – |
Dividend received | (4,111) | (1,689) | (5,800) | (4,111) | (1,697) | (5,808) |
Balance as at December 31, | 66,528 | 43,316 | 109,844 | 68,621 | 40,238 | 108,859 |
For the year ended December 31, | 2017 | 2016 | ||||
Equity Investments Lanka Ltd. |
Commercial Insurance Brokers (Pvt) Ltd. |
Total | Equity Investments Lanka Ltd. |
Commercial Insurance Brokers (Pvt) Ltd. |
Total | |
Rs. ’000 | Rs. ’000 | Rs. ’000 | Rs. ’000 | Rs. ’000 | Rs. ’000 | |
Percentage ownership interest | ||||||
Revenue | 21,048 | 274,885 | 295,015 | 28,000 | 252,335 | 280,335 |
Expenses | (27,159) | (230,556) | (257,715) | (21,602) | (214,731) | (236,333) |
Income tax | (605) | (15,618) | (16,223) | 783 | (12,090) | (11,307) |
Profit from continuing operations, net of tax | (6,716) | 28,711 | 21,077 | 7,181 | 25,514 | 32,695 |
Group’s share of profit from continuing operations, net of tax |
(1,539) | 5,217 | 3,678 | 1,645 | 4,809 | 6,454 |
Other comprehensive income, net of tax | 15,519 | (166) | 15,353 | 16,201 | 499 | 16,700 |
Group’s share of other comprehensive income from continuing operations, net of tax |
3,557 | (31) | 3,526 | 3,713 | 94 | 3,807 |
Share of results of equity-accounted investee recognised in Income Statement and Statement of Profit or Loss and Other Comprehensive Income |
2,018 | 5,186 | 7,204 | 5,358 | 4,903 | 10,261 |
As at December 31, | 2017 | 2016 | ||
Equity Investments Lanka Ltd. |
Commercial Insurance Brokers (Pvt) Ltd. |
Equity Investments Lanka Ltd. |
Commercial Insurance Brokers (Pvt) Ltd. |
|
Rs. ’000 | Rs. ’000 | Rs. ’000 | Rs. ’000 | |
Percentage ownership interest | ||||
Non-current assets | 202,474 | 138,530 | 194,144 | 143,515 |
Current assets | 97,902 | 165,034 | 114,197 | 152,333 |
Non-current liabilities | (1,448) | (23,485) | (5,975) | (22,366) |
Current liabilities | (8,672) | (47,072) | (2,974) | (60,020) |
Net assets | 290,256 | 233,007 | 299,392 | 213,462 |
Group’s share of net assets | 66,528 | 43,316 | 68,621 | 40,238 |
Less: Unrealised profits | – | – | – | – |
Carrying amount of interest in associates | 66,528 | 43,316 | 68,621 | 40,238 |
The Group recognises the share of net assets of the Associates under the Equity Method to arrive at the Directors’ valuation.
The maturity analysis of Investments of Associates is given in Note 62.
The Group applies the requirements of the Sri Lanka Accounting Standard – LKAS 16 on “Property, Plant and Equipment” in accounting for its owned assets (including buildings under operating leases where the Group is the lessor) which are held for and used in the provision of services, for rental to others or for administrative purposes and are expected to be used for more than one year.
Property, plant and equipment is recognised if it is probable that future economic benefits associated with the asset will flow to the Group and cost of the asset can be reliably measured.
An item of property, plant and equipment that qualifies for recognition as an asset is initially measured at its cost. Cost includes expenditure that is directly attributable to the acquisition of the asset and subsequent costs (excluding the costs of day-to-day servicing) as explained in Note below. The cost of self-constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the asset to a working condition for its intended use and the costs of dismantling and removing the items and restoring the site on which they are located and capitalised borrowing costs. Purchased software which is integral to the functionality of the related equipment is capitalised as part of computer equipment.
When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items
(major components) of property, plant and equipment.
Subsequent expenditure is capitalised only when it is probable that the future economic benefits of the expenditure will flow to the Group. Ongoing repairs and maintenance are expensed as incurred.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset), is recognised in “Other Income (Net)” in profit or loss in the year the asset is derecognised.
When replacement costs are recognised in the carrying amount of an item of property, plant and equipment, the remaining carrying amount of the replaced part is derecognised as required by Sri Lanka Accounting Standard – LKAS 16 on “Property, Plant and Equipment”.
These are expenses of a capital nature directly incurred in the construction of buildings, major plant and machinery and system development, awaiting capitalisation. These are stated in the Statement of Financial Position at cost less any accumulated impairment losses. Capital work-in-progress is transferred to the relevant asset when it is in the location and condition necessary for it to be capable of operating in the manner intended by the Management (i.e. available for use).
Freehold land |
Freehold buildings |
Leasehold buildings |
Computer equipment |
Motor vehicles |
Office equipment, furniture and fixtures |
Capital work-in- progress |
Total 2017 |
Total 2016 |
|||
Note | Rs. ’000 | Rs. ’000 | Rs. ’000 | Rs. ’000 | Rs.’000 | Rs. ’000 | Rs. ’000 | Rs. ’000 | Rs. ’000 | ||
Cost/valuation | |||||||||||
Balance as at January 1, | 4,914,283 | 3,014,202 | 1,083,368 | 4,265,073 | 349,833 | 5,190,415 | 43,957 | 18,861,131 | 17,730,795 | ||
Additions/transfers during the year |
306,932 | 74,797 | 71,292 | 798,192 | 22,107 | 752,372 | 138,041 | 2,163,733 | 1,501,070 | ||
Transfer of accumulated depreciation on assets revalued |
– | (282,656) | (74,247) | – | – | – | – | (356,903) | – | ||
Surplus on revaluation of property |
2,175,514 | 1,418,299 | 252,168 | – | – | – | – | 3,845,981 | – | ||
Disposals during the year | (34,000) | (21,263) | – | (76,893) | (17,230) | (130,437) | (4,558) | (284,381) | (390,405) | ||
Exchange rate variance | – | – | – | (3,153) | (1,376) | (6,838) | – | (11,367) | 19,671 | ||
Transfers/adjustments | – | (5,351) | (477) | – | – | 5,828 | – | – | – | ||
Balance as at December 31, | 7,362,729 | 4,198,028 | 1,332,104 | 4,983,219 | 353,334 | 5,811,340 | 177,440 | 24,218,194 | 18,861,131 | ||
Accumulated depreciation and impairment losses | |||||||||||
Balance as at January 1, | – | 185,414 | 92,183 | 3,121,246 | 229,322 | 3,663,300 | – | 7,291,465 | 6,549,362 | ||
Charge for the year | 20 | – | 101,848 | 32,513 | 459,910 | 42,892 | 548,535 | – | 1,185,698 | 1,093,088 | |
Impairment loss | – | – | – | – | – | – | – | – | – | ||
Transfer of accumulated depreciation on assets revalued |
– | (282,656) | (74,247) | – | – | – | – | (356,903) | – | ||
Disposals during the year | – | (2,850) | – | (72,861) | (17,230) | (114,634) | – | (207,575) | (368,632) | ||
Exchange rate variance | – | – | – | (3,203) | (1,376) | (6,956) | – | (11,535) | 17,647 | ||
Transfers/adjustments | – | (55) | (2) | 1,109 | – | (1,052) | – | – | – | ||
Balance as at December 31, | – | 1,701 | 50,447 | 3,506,201 | 253,608 | 4,089,193 | – | 7,901,150 | 7,291,465 | ||
Net book value as at December 31, 2017 |
7,362,729 | 4,196,327 | 1,281,657 | 1,477,018 | 99,726 | 1,722,147 | 177,440 | 16,317,044 | |||
Net book value as at December 31, 2016 |
4,914,283 | 2,828,788 | 991,185 | 1,143,827 | 120,511 | 1,527,115 | 43,957 | 11,569,666 |
Note | Freehold land |
Freehold buildings |
Leasehold buildings |
Computer equipment |
Motor vehicles |
Office equipment, furniture and fixtures |
Capital work-in- progress |
Total 2016 |
Total 2015 |
||
Rs. ’000 | Rs. ’000 | Rs. ’000 | Rs. ’000 | Rs.’000 | Rs. ’000 | Rs. ’000 | Rs. ’000 | Rs. ’000 | |||
Cost/valuation | |||||||||||
Balance as at January 1, | 4,924,702 | 2,635,938 | 1,080,861 | 3,880,784 | 335,180 | 4,514,891 | 358,439 | 17,730,795 | 16,810,952 | ||
Additions/transfers during the year | – | 379,169 | 2,507 | 643,084 | 44,457 | 746,335 | (314,482) | 1,501,070 | 1,086,405 | ||
Transfer of accumulated depreciation on assets revalued |
– | – | – | – | – | – | – | – | – | ||
Surplus on revaluation of property | – | – | – | – | – | – | – | – | – | ||
Disposals during the year | (10,419) | (905) | – | (275,233) | (31,768) | (72,080) | – | (390,405) | (209,304) | ||
Exchange rate variance | – | – | – | 4,772 | 1,964 | 12,935 | – | 19,671 | 42,742 | ||
Transfers/adjustments | – | – | – | 11,666 | – | (11,666) | – | – | – | ||
Balance as at December 31, | 4,914,283 | 3,014,202 | 1,083,368 | 4,265,073 | 349,833 | 5,190,415 | 43,957 | 18,861,131 | 17,730,795 | ||
Accumulated depreciation and impairment losses | |||||||||||
Balance as at January 1, | – | 91,285 | 62,296 | 2,973,701 | 217,350 | 3,204,730 | – | 6,549,362 | 5,676,091 | ||
Charge for the year | 20 | – | 94,171 | 29,887 | 413,528 | 40,519 | 514,983 | – | 1,093,088 | 1,024,162 | |
Impairment loss | – | – | – | – | – | – | – | – | – | ||
Disposals during the year | – | (42) | – | (271,541) | (30,511) | (66,538) | – | (368,632) | (187,573) | ||
Exchange rate variance | – | – | – | 4,351 | 1,964 | 11,332 | – | 17,647 | 36,682 | ||
Transfers/adjustments | – | – | – | 1,207 | – | (1,207) | – | – | – | ||
Balance as at December 31, | – | 185,414 | 92,183 | 3,121,246 | 229,322 | 3,663,300 | – | 7,291,465 | 6,549,362 | ||
Net book value as at December 31, 2016 | 4,914,283 | 2,828,788 | 991,185 | 1,143,827 | 120,511 | 1,527,115 | 43,957 | 11,569,666 | |||
Net book value as at December 31, 2015 |
4,924,702 | 2,544,653 | 1,018,565 | 907,083 | 117,830 | 1,310,161 | 358,439 | 11,181,433 |
There were no capitalised borrowing cost related to the acquisition of property, plant and equipment during the year 2017 (2016 – Nil).
The carrying amount of Group’s revalued assets that would have been included in the Financial Statements had the assets been carried at cost less depreciation/amortisation is as follows:
As at December 31, | 2017 | 2016 | ||||
Cost | Accumula ted depreciation |
Net book value |
Cost | Accumulated depreciation |
Net book value |
|
Rs. ’000 | Rs. ’000 | Rs. ’000 | Rs. ’000 | Rs. ’000 | Rs. ’000 | |
Class of asset | ||||||
Freehold land | 951,487 | – | 951,487 | 742,730 | – | 742,730 |
Freehold buildings | 1,602,138 | 407,082 | 1,195,056 | 1,544,666 | 357,334 | 1,187,332 |
Leasehold buildings | 421,815 | 286,829 | 134,986 | 350,867 | 165,344 | 185,523 |
Total | 2,975,440 | 693,911 | 2,281,529 | 2,638,263 | 522,678 | 2,115,585 |
Note | Freehold land | Freehold buildings | Leasehold buildings | Computer equipment | Motor vehicles | Office equipment, furniture and Fixtures | Capital work-in- progress | Total 2017 | Total 2016 | ||
Rs. ’000 | Rs. ’000 | Rs. ’000 | Rs. ’000 | Rs. ’000 | Rs. ’000 | Rs. ’000 | Rs. ’000 | Rs. ’000 | |||
Cost/valuation | |||||||||||
Balance as at January 1, | 4,797,273 | 2,912,283 | 192,473 | 4,226,605 | 123,882 | 5,082,194 | 39,971 | 17,374,681 | 16,343,864 | ||
Additions/transfers during the year | 229,349 | 74,797 | 106 | 791,165 | 2,347 | 723,270 | 138,041 | 1,959,075 | 1,369,729 | ||
Transfer of accumulated depreciation on assets revalued |
– | (277,190) | – | – | – | – | – | (277,190) | – | ||
Surplus on revaluation of property | 2,151,512 | 1,390,702 | – | – | – | – | – | 3,542,214 | – | ||
Disposals during the year | (34,000) | (21,263) | – | (76,284) | – | (110,311) | (4,558) | (246,416) | (358,526) | ||
Exchange rate variance | – | – | – | (3,645) | (1,376) | (9,121) | – | (14,142) | 19,614 | ||
Transfers/adjustments | – | (5,351) | (477) | – | – | 5,828 | – | – | – | ||
Balance as at December 31, | 7,144,134 | 4,073,978 | 192,102 | 4,937,841 | 124,853 | 5,691,860 | 173,454 | 22,338,222 | 17,374,681 | ||
Accumulated depreciation and impairment losses | |||||||||||
Balance as at January 1, | – | 180,665 | 44,659 | 3,108,029 | 107,331 | 3,626,172 | – | 7,066,856 | 6,374,879 | ||
Charge for the year | 20 | – | 99,430 | 5,788 | 453,049 | 8,268 | 530,561 | – | 1,097,096 | 1,022,648 | |
Impairment loss | – | – | – | – | – | – | – | – | – | ||
Transfer of accumulated depreciation on assets revalued |
– | (277,190) | – | – | – | – | – | (277,190) | – | ||
Disposals during the year | – | (2,850) | – | (72,281) | – | (94,859) | – | (169,990) | (348,273) | ||
Exchange rate variance | – | – | – | (3,270) | (1,376) | (8,614) | – | (13,260) | 17,602 | ||
Transfers/adjustments | – | (55) | (2) | 1,109 | – | (1,052) | – | – | – | ||
Balance as at December 31, | – | – | 50,445 | 3,486,636 | 114,223 | 4,052,208 | – | 7,703,512 | 7,066,856 | ||
Net book value as at December 31, 2017 | 7,144,134 | 4,073,978 | 141,657 | 1,451,205 | 10,630 | 1,639,652 | 173,454 | 14,634,710 | |||
Net book value as at December 31, 2016 |
4,797,273 | 2,731,618 | 147,814 | 1,118,576 | 16,551 | 1,456,022 | 39,971 | 10,307,825 |
Note | Freehold land |
Freehold buildings |
Leasehold buildings |
Computer equipment |
Motor vehicles |
Office equipment – furniture and fixtures |
Capital work-in- progress |
Total 2016 |
Total 2015 |
||
Rs. ’000 | Rs. ’000 | Rs. ’000 | Rs. ’000 | Rs. ’000 | Rs. ’000 | Rs. ’000 | Rs. ’000 | Rs. ’000 | |||
Cost/valuation | |||||||||||
Balance as at January 1, | 4,797,273 | 2,534,238 | 189,966 | 3,864,859 | 127,798 | 4,475,277 | 354,453 | 16,343,864 | 15,493,095 | ||
Additions/transfers during the year | – | 378,045 | 2,507 | 620,541 | 6,177 | 676,941 | (314,482) | 1,369,729 | 986,735 | ||
Transfer of accumulated depreciation on assets revalued |
– | – | – | – | – | – | – | – | – | ||
Surplus on revaluation of property | – | – | – | – | – | – | – | – | – | ||
Disposals during the year | – | – | – | (275,233) | (12,057) | (71,236) | – | (358,526) | (177,835) | ||
Exchange rate variance | – | – | – | 4,772 | 1,964 | 12,878 | – | 19,614 | 41,869 | ||
Transfers/adjustments | – | – | – | 11,666 | – | (11,666) | – | – | – | ||
Balance as at December 31, | 4,797,273 | 2,912,283 | 192,473 | 4,226,605 | 123,882 | 5,082,194 | 39,971 | 17,374,681 | 16,343,864 | ||
Accumulated depreciation and impairment losses | |||||||||||
Balance as at January 1, | – | 88,587 | 38,850 | 2,964,201 | 106,732 | 3,176,509 | – | 6,374,879 | 5,540,004 | ||
Charge for the year | 20 | – | 92,078 | 5,809 | 409,811 | 9,485 | 505,465 | – | 1,022,648 | 961,492 | |
Impairment loss | – | – | – | – | – | – | – | – | – | ||
Transfer of accumulated depreciation on assets revalued |
– | – | – | – | – | – | – | – | – | ||
Disposals during the year | – | – | – | (271,541) | (10,850) | (65,882) | – | (348,273) | (162,124) | ||
Exchange rate variance | – | – | – | 4,351 | 1,964 | 11,287 | – | 17,602 | 35,507 | ||
Transfers/adjustments | – | – | – | 1,207 | – | (1,207) | – | – | – | ||
Balance as at December 31, | – | 180,665 | 44,659 | 3,108,029 | 107,331 | 3,626,172 | – | 7,066,856 | 6,374,879 | ||
Net book value as at December 31, 2016 | 4,797,273 | 2,731,618 | 147,814 | 1,118,576 | 16,551 | 1,456,022 | 39,971 | 10,307,825 | |||
Net book value as at December 31, 2015 |
4,797,273 | 2,445,651 | 151,116 | 900,658 | 21,066 | 1,298,768 | 354,453 | 9,968,985 |
There were no capitalised borrowing cost related to the acquisition of property, plant and equipment during the year 2017 (2016 – Nil).
The carrying amount of Bank’s revalued assets that would have been included in the Financial Statements had the assets been carried at cost less depreciation/amortisation is as follows:
As at December 31, | 2017 | 2016 | ||||
Cost | Accumulated depreciation |
Net book value |
Cost | Accumulated depreciation |
Net book value |
|
Rs. ’000 | Rs. ’000 | Rs. ’000 | Rs. ’000 | Rs. ’000 | Rs. ’000 | |
Class of asset | ||||||
Freehold land | 869,744 | – | 869,744 | 660,987 | – | 660,987 |
Freehold buildings | 1,542,173 | 399,003 | 1,143,170 | 1,484,701 | 350,755 | 1,133,946 |
Leasehold buildings | 190,203 | 55,217 | 134,986 | 190,574 | 50,471 | 140,103 |
Total | 2,602,120 | 454,220 | 2,147,900 | 2,336,262 | 401,226 | 1,935,036 |
The maturity analysis of property, plant and equipment is given in Note 62.
[As required by the Rule No. 7.6 (viii) of the “Continuing Listing Requirements” of the Colombo Stock Exchange]
Location | Extent (perches) |
Buildings (square feet) |
Revalued amounts land Rs. ’000 |
Revalued amounts buildings Rs. ’000 |
Net book value/ revalued Rs. ’000 |
Net book value before revaluation Rs. ’000 |
CEO’s Bungalow – No. 27, Queens Road, Colombo 3 | 64 | 5,616 | 961,000 | 39,000 | 1,000,000 | 550,910 |
Holiday Bungalow – Bandarawela, Ambatenne Estate, Bandarawela | 423 | 5,649 | 72,100 | 17,000 | 89,100 | 66,613 |
Holiday Bungalow – Haputale, No. 23, Lilly Avenue, Welimada Road, Haputale | 258 | 5,662 | 41,200 | 21,300 | 62,500 | 43,650 |
Branch Buildings | ||||||
Battaramulla – No. 213, Kaduwela Road, Battaramulla | 14 | 11,216 | 52,500 | 99,000 | 151,500 | 126,769 |
Battaramulla – No. 213, Kaduwela Road, Battaramulla | 13 | Bare Land | 50,000 | – | 50,000 | 50,000 |
Borella – No. 92, D S Senanayake Mawatha, Borella, Colombo 8 | 16 | 16,880 | 196,000 | 216,000 | 412,000 | 333,711 |
Chilaw – No. 44, Colombo Road, Chilaw | 35 | 9,420 | 91,754 | 42,390 | 134,144 | 98,672 |
Duplication Road – Nos. 405, 407, R A De Mel Mawatha, Colombo 03 | 20 | 4,194 | 220,400 | 10,000 | 230,400 | 231,814 |
Galewela – No. 49/57, Matale Road, Galewela | 99 | 5,632 | 29,700 | 16,300 | 46,000 | 36,358 |
Galle City – No. 59, Wackwella Road, Galle | 7 | 3,675 | 54,000 | 9,150 | 63,150 | 47,850 |
Galle Fort – No. 22, Church Street, Fort, Galle | 100 | 11,625 | 255,650 | 45,000 | 300,650 | 247,000 |
Gampaha – No. 51, Queen Mary’s Road, Gampaha | 33 | 4,775 | 74,025 | 11,595 | 85,620 | 67,208 |
Hikkaduwa – No. 217, Galle Road, Hikkaduwa | 37 | 7,518 | 35,670 | 27,780 | 63,450 | 49,184 |
Ja-Ela – No. 140, Negombo Road, Ja-Ela | 13 | 7,468 | 33,000 | 26,000 | 59,000 | 48,091 |
Jaffna – No. 474, Hospital Road, Jaffna | 78 | Bare Land | 1,000,000 | – | 1,000,000 | 581,000 |
Kandy – No. 120, Kotugodella Veediya, Kandy | 45 | 44,500 | 396,000 | 256,600 | 652,600 | 560,250 |
Kegalle – No. 186, Main Street, Kegalle | 85 | 2,650 | 156,700 | 7,200 | 163,900 | 134,250 |
Keyzer Street – No. 32, Keyzer Street, Colombo 11 | 7 | 6,100 | 82,000 | 24,000 | 106,000 | 80,050 |
Kollupitiya – No. 285, Galle Road, Colombo 3 | 17 | 16,254 | 225,000 | 68,000 | 293,000 | 173,036 |
Kotahena – No. 198, George R De Silva Mawatha, Kotahena, Colombo 13 | 28 | 26,722 | 197,000 | 210,000 | 407,000 | 331,845 |
Kurunegala – No. 4, Suratissa Mawatha, Kurunegala | 50 | 10,096 | 236,800 | 43,200 | 280,000 | 231,399 |
Maharagama – No. 154, High Level Road, Maharagama | 18 | 8,440 | 93,000 | 47,000 | 140,000 | 82,619 |
Matale – No. 70, King Street, Matale | 51 | 8,596 | 125,000 | 61,000 | 186,000 | 130,000 |
Matara – No. 18, Station Road, Matara | 38 | 8,137 | 60,080 | 28,770 | 88,850 | 73,990 |
Minuwangoda – No. 9, Siriwardena Mawatha, Minuwangoda | 25 | 5,550 | 56,250 | 17,483 | 73,733 | 47,541 |
Narahenpita – No. 201, Kirula Road, Narahenpita, Colombo 5 | 22 | 11,193 | 176,000 | 104,000 | 280,000 | 210,604 |
Narammala – No. 55, Negombo Road, Narammala | 41 | 5,353 | 61,605 | 19,910 | 81,515 | 69,094 |
Negombo – Nos. 24, 26, Fernando Avenue, Negombo | 37 | 11,360 | 136,000 | 36,000 | 172,000 | 100,280 |
Nugegoda – No. 100, Stanley Thilakaratne Mawatha, Nugegoda | 39 | 11,150 | 150,000 | 60,000 | 210,000 | 193,925 |
Nuwara Eliya – No. 36/3, Buddha Jayanthi Mawatha, Nuwara Eliya | 42 | 10,184 | 124,800 | 74,400 | 199,200 | 147,243 |
Panadura – No. 375, Galle Road, Panadura | 12 | 6,168 | 36,900 | 42,400 | 79,300 | 64,828 |
Pettah – People’s Park Shopping Complex, Colombo 11 | – | 3,147 | – | 67,000 | 67,000 | 50,091 |
Pettah – Stores – People’s Park Shopping Complex, Colombo 11 | – | 225 | – | 5,500 | 5,500 | 4,145 |
Pettah – Main Street – No. 280, Main Street, Pettah, Colombo 11 | 20 | 22,760 | 360,000 | 190,000 | 550,000 | 419,041 |
Trincomalee – No. 474, Power House Road, Trincomalee | 100 | Bare Land | 100,000 | – | 100,000 | 90,300 |
Union Place – No. 1, Union Place, Colombo 2 | 30 | 63,385 | 500,000 | 1,000,000 | 1,500,000 | 1,119,643 |
Wellawatte – No. 343, Galle Road, Colombo 6 | 45 | 51,225 | 650,000 | 1,100,000 | 1,750,000 | 715,791 |
Wennappuwa – Nos. 262, 264, Colombo Road, Wennappuwa | 36 | 9,226 | 54,000 | 31,000 | 85,000 | 67,103 |
Total | 7,144,134 | 4,073,978 | 11,218,112 | 7,675,898 |
[As required by the Rule No. 7.6 (viii) of the “Continuing Listing Requirements” of the Colombo Stock Exchange and the SLFRS 13 – “Fair Value Measurement”].
Date of Valuation: December 31, 2017
Name of professional valuer/location and address of property |
Method of valuation and significant unobservable inputs |
Range of estimates for unobservable inputs |
Net book value before revaluation of | Revalued amount of | Revaluation gain/(loss) recognised on | |||
Land | Buildings | Land | Buildings | Land | Buildings | |||
Rs. ’000 | Rs. ’000 | Rs. ’000 | Rs. ’000 | Rs. ’000 | Rs. ’000 | |||
H M N Herath | ||||||||
Chilaw No. 44, Colombo Road, Chilaw |
Market comparable method | 63,522 | 35,150 | 91,754 | 42,390 | 28,232 | 7,240 | |
|
Rs. 2,600,000 p.p. | |||||||
|
Rs. 5,000 p.sq.ft. | |||||||
|
10% | |||||||
Gampaha No. 51, Queen Mary’s Road, Gampaha |
Market comparable method | 57,575 | 9,633 | 74,025 | 11,595 | 16,450 | 1,962 | |
|
Rs. 2,250,000 p.p. | |||||||
|
Rs. 4,500 p.sq.ft. | |||||||
|
45% | |||||||
Minuwangoda No. 9, Siriwardena Mawatha, Minuwangoda |
Market comparable method | 31,250 | 16,291 | 56,250 | 17,483 | 25,000 | 1,192 | |
|
Rs. 2,250,000 p.p. | |||||||
|
Rs. 4,500 p.sq.ft. | |||||||
|
30% | |||||||
P B Kalugalagedara | ||||||||
Keyzer Street
No. 32, Keyzer Street, Colombo 11 |
Market comparable method | 56,000 | 24,050 | 82,000 | 24,000 | 26,000 | (50) | |
|
Rs. 11,000,000 p.p. | |||||||
|
Rs. 500 to Rs. 6,000 p.sq.ft. |
|||||||
Kollupitiya No. 285, Galle Road, Colombo 3 |
Market comparable method | 115,000 | 58,036 | 225,000 | 68,000 | 110,000 | 9,964 | |
|
Rs. 15,000,000 p.p. | |||||||
|
Rs. 1,250 to Rs. 5,000 p.sq.ft. |
|||||||
Kotahena No. 198, George R De Silva Mawatha, Kotahena, Colombo 13 |
Investment method | 140,000 | 191,845 | 197,000 | 210,000 | 57,000 | 18,155 | |
|
Rs. 2,800,000 p.m. | |||||||
|
18.18 | |||||||
|
4 months p.a. | |||||||
Mr R S Wijesuriya | ||||||||
Battaramulla No. 213, Kaduwela Road, Battaramula |
Market comparable method | 52,500 | 74,269 | 52,500 | 99,000 | – | 24,731 | |
|
Rs. 3,750,000 p.p. | |||||||
|
Rs. 8,500 p.sq.ft. | |||||||
Battaramulla No. 213, Kaduwela Road, Battaramulla |
Market comparable method | 50,000 | – | 50,000 | – | – | – | |
|
Rs. 3,750,000 p.p. | |||||||
Panadura No. 375, Galle Road, Panadura |
Market comparable method | 30,750 | 34,078 | 36,900 | 42,400 | 6,150 | 8,322 | |
|
Rs. 3,000,000 p.p. | |||||||
|
Rs. 6,500 p.sq.ft. | |||||||
Sarath G Fernando | ||||||||
Holiday Bungalow – Bandarawela Ambatenne Estate, Bandarawela |
Market comparable method | 56,700 | 9,913 | 72,100 | 17,000 | 15,400 | 7,087 | |
|
Rs. 75,000 to Rs. 250,000 p.p. |
|||||||
|
Rs. 4,250 to Rs. 4,750 p.sq.ft. |
|||||||
|
35% | |||||||
Holiday Bungalow – Haputale No. 23, Lilly Avenue,
Welimada Road, Haputale |
Market comparable method | 30,900 | 12,750 | 41,200 | 21,300 | 10,300 | 8,550 | |
|
Rs. 200,000 p.p. | |||||||
|
Rs. 3,500 to Rs. 6,500 p.sq.ft. |
|||||||
|
40% | |||||||
Kandy No. 120, Kotugodella Veediya, Kandy |
Market comparable method | 354,000 | 206,250 | 396,000 | 256,600 | 42,000 | 50,350 | |
|
Rs. 9,500,000 p.p. | |||||||
|
Rs. 6,500 to Rs. 10,000 p.sq.ft. |
|||||||
|
30% and 35% | |||||||
Kegalle No.186, Main Street, Kegalle |
Market comparable method | 128,000 | 6,250 | 156,700 | 7,200 | 28,700 | 950 | |
|
Rs. 1,250,000 to Rs. 3,000,000 p.p. |
|||||||
|
Rs. 6,000 p.sq.ft. | |||||||
|
55% | |||||||
Matale No. 70, Kings Street, Matale |
Market comparable method | 75,000 | 55,000 | 125,000 | 61,000 | 50,000 | 6,000 | |
|
Rs. 750,000 to Rs. 2,500,000 p.p. |
|||||||
|
Rs. 9,750 p.sq.ft. | |||||||
|
20% | |||||||
Nuwara Eliya No. 36/3, Buddha Jayanthi Mawatha, Nuwara Eliya |
Market comparable method | 82,000 | 65,243 | 124,800 | 74,400 | 42,800 | 9,157 | |
|
Rs. 2,000,000 to Rs. 3,000,000 p.p. |
|||||||
|
Rs. 9,750 p.sq.ft. | |||||||
|
25% | |||||||
Mr S A S Fernando | ||||||||
Galle City No. 59, Wackwella Road, Galle |
Market comparable method | 40,500 | 7,350 | 54,000 | 9,150 | 13,500 | 1,800 | |
|
Rs. 8,000,000 p.p. | |||||||
|
Rs. 2,000 to Rs. 3,000 p.sq.ft. |
|||||||
Galle Fort
No. 22, Church Street, Fort, Galle |
Market comparable method | 210,000 | 37,000 | 255,650 | 45,000 | 45,650 | 8,000 | |
|
Rs. 3,000,000 p.p. | |||||||
|
Rs. 3,180 p.sq.ft. | |||||||
Hikkaduwa
No. 217, Galle Road, Hikkaduwa |
Market comparable method | 26,370 | 22,814 | 35,670 | 27,780 | 9,300 | 4,966 | |
|
Rs. 750,000 to Rs. 1,100,000 p.p. |
|||||||
|
Rs. 3,000 to Rs. 4,000 p.sq.ft. |
|||||||
Matara No. 18, Station Road, Matara |
Market comparable method | 50,695 | 23,295 | 60,080 | 28,770 | 9,385 | 5,475 | |
|
Rs. 1,000,000 to Rs. 2,000,000 p.p. |
|||||||
|
Rs. 3,000 to Rs. 3,750 p.sq.ft. |
|||||||
Trincomalee No. 474, Power House Road, Trincomalee |
Market comparable method | 90,300 | – | 100,000 | – | 9,700 | – | |
|
Rs. 1,000,000 p.p. | |||||||
S T Sanmuganathan | ||||||||
Jaffna No. 474, Hospital Road, Jaffna |
Market comparable method | 581,000 | – | 1,000,000 | – | 419,000 | – | |
|
Rs. 5,000,000 p.p. | |||||||
Siri Nissanka | ||||||||
Borella No. 92, D S Senanayake Mawatha, Colombo 08. |
Market comparable method | 156,300 | 177,411 | 196,000 | 216,000 | 39,700 | 38,589 | |
|
Rs. 12,500,000 p.p. | |||||||
|
Rs. 12,750 p.sq.ft. | |||||||
CEO’s Bungalow No. 27, Queens Road, Colombo 03 |
Market comparable method | 544,850 | 6,060 | 961,000 | 39,000 | 416,150 | 32,940 | |
|
Rs. 15,000,000 p.p. | |||||||
|
Rs. 7,000 p.sq.ft. | |||||||
Narahenpita No. 201, Kirula Road, Narahenpita, Colombo 05 |
Market comparable method | 132,300 | 78,304 | 176,000 | 104,000 | 43,700 | 25,696 | |
|
Rs. 8,000,000 p.p. | |||||||
|
Rs. 9,350 p.sq.ft. | |||||||
Pettah – Main Street
No. 280, Main Street, Pettah, Colombo 11 |
Investment method | 280,000 | 139,041 | 360,000 | 190,000 | 80,000 | 50,959 | |
|
Rs. 2,557,500 p.m. | |||||||
Union Place
No. 1, Union Place, Colombo 02 |
Market comparable method | 450,000 | 669,643 | 500,000 | 1,000,000 | 50,000 | 330,357 | |
|
Rs. 18,000,000 p.p. | |||||||
|
Rs. 16,500 p.sq.ft. | |||||||
Duplication Road Nos. 405, 407, R A De Mel Mawatha, Colombo 03 |
Market comparable method | 229,349 | 2,465 | 220,400 | 10,000 | (8,949) | 7,535 | |
|
Rs. 11,000,000 p.p. | |||||||
|
Rs. 2,300 p.sq.ft. | |||||||
Maharagama No. 154, Highlevel Road, Maharagama |
Market comparable method | 53,250 | 29,369 | 93,000 | 47,000 | 39,750 | 17,631 | |
|
Rs. 5,250,000 p.p. | |||||||
|
Rs. 5,600 p.sq.ft. | |||||||
Nugegoda No. 100, Stanley Thilakaratne Mawatha, Nugegoda |
Market comparable method | 156,000 | 37,925 | 150,000 | 60,000 | (6,000) | 22,075 | |
|
Rs. 7,500,000 p.p. | |||||||
|
Rs. 8,350 p.sq.ft. | |||||||
Wellawatte No. 343, Galle Road, Colombo 06 |
Market comparable method | 249,520 | 466,271 | 650,000 | 1,100,000 | 400,480 | 633,729 | |
|
Rs. 15,000,000 p.p. | |||||||
|
Rs. 22,000 p.sq.ft. | |||||||
W D P Rupananda | ||||||||
Ja-Ela No. 140, Negombo Road, Ja-Ela |
Market comparable method | 29,000 | 19,091 | 33,000 | 26,000 | 4,000 | 6,909 | |
|
Rs. 2,500,000 p.p. | |||||||
|
Rs. 5,000 p.sq.ft. | |||||||
|
30% | |||||||
Negombo Nos. 24, 26, Fernando Avenue, Negombo |
Market comparable method | 73,000 | 27,280 | 136,000 | 36,000 | 63,000 | 8,720 | |
|
Rs. 3,000,000 to Rs. 4,000,000 p.p. |
|||||||
|
Rs. 4,000 to Rs. 5,250 p.sq.ft. |
|||||||
|
30% | |||||||
Pettah People’s Park Shopping Complex, Colombo 11 | Investment method | – | 50,091 | – | 67,000 | – | 16,909 | |
|
Rs. 460,000 p.m. | |||||||
|
18.18 | |||||||
|
4 months p.a. | |||||||
Pettah People’s Park Shopping Complex, Colombo 11 |
Investment method | – | 4,145 | – | 5,500 | – | 1,355 | |
|
Rs. 41,500 p.m. | |||||||
|
18.18 | |||||||
|
4 months p.a. | |||||||
Wennappuwa Nos. 262, 264, Colombo Road, Wennappuwa |
Market comparable method | 42,000 | 25,103 | 54,000 | 31,000 | 12,000 | 5,897 | |
|
Rs. 1,500,000 p.p. | |||||||
|
Rs. 3,750 to Rs. 5,250 p.sq.ft. |
|||||||
|
30% | |||||||
W S Pemaratne | ||||||||
Galewela No. 49/57, Matale Road, Galewela |
Market comparable method | 22,275 | 14,083 | 29,700 | 16,300 | 7,425 | 2,217 | |
|
Rs. 300,000 p.p. | |||||||
|
Rs. 2,350 to Rs. 4,000 p.sq.ft. |
|||||||
|
25% | |||||||
Kurunegala No. 4, Suratissa Mawatha, Kurunegala |
Market comparable method | 199,325 | 32,074 | 236,800 | 43,200 | 37,475 | 11,126 | |
|
Rs. 5,000,000 p.p. | |||||||
|
Rs. 3,500 to Rs. 4,750 p.sq.ft. |
|||||||
|
12% | |||||||
Narammala No. 55, Negombo Road, Narammala |
Market comparable method | 53,391 | 15,703 | 61,605 | 19,910 | 8,214 | 4,207 | |
|
Rs. 1,500,000 p.p. | |||||||
|
Rs. 4,000 p.sq.ft. | |||||||
|
7% | |||||||
Total | 4,992,622 | 2,683,276 | 7,144,134 | 4,073,978 | 2,151,512 | 1,390,702 |
p.p. – per perch p.sq.ft. – per square foot p.m. – per month p.a. – per annum
Description of the above valuation techniques together with narrative descriptions on sensitivity of the fair value measurement to changes in significant unobservable inputs are tabulated below:
Valuation technique | Significant unobservable valuation inputs (ranges of each property are given in the table above) |
Sensitivity of the fair value measurement to inputs |
Market comparable method This method considers the selling price of a similar property within a reasonably recent period of time in determining the fair value of the property being revalued. This involves evaluation of recent active market prices of similar assets, making appropriate adjustments for differences in size, nature, location, condition of specific property. In this process, outlier transactions, indicative of particularly motivated buyers or sellers are too compensated for since the price may not adequately reflect the fair market value. |
Price per perch for land Price per square foot for building Depreciation rate for building |
Estimated fair value would increase (decrease) if; Price per perch would increase (decrease) Price per square foot would increase (decrease) Depreciation rate for building would decrease (increase) |
Investment method This method involves the capitalisation of the expected rental income at an appropriate rate of years purchased currently characterised by the real estate market. |
Gross Annual Rentals Years purchase (Present value of 1 unit per period) Void period | Estimated fair value would increase (decrease) if; Gross Annual Rentals would increase (decrease) Years purchase would increase (decrease) Void period would decrease (increase) |
There were no restrictions existed on the title of the property, plant and equipment of the Group/Bank as at the reporting date.
There were no items of property, plant and equipment pledged as securities for liabilities as at the reporting date.
The compensation received/receivable from third parties for items of property, plant and equipment that were impaired, lost or given up as at the reporting date of the Bank is as follows:
As at December 31, | 2017 Rs. ’000 |
2016 Rs. ’000 |
Total claims lodged | 17,096 | 4,832 |
Total claims received | (11,573) | (1,643) |
Total claims rejected | – | – |
Total claims receivable | 5,523 | 3,189 |
The cost of fully depreciated property, plant and equipment of the Bank which are still in use is as follows:
As at December 31, | 2017 Rs. ’000 |
2016 Rs. ’000 |
Computer equipment | 1,458,542 | 1,205,702 |
Office equipment, furniture and fixtures | 2,044,143 | 1,748,517 |
Motor vehicles | 39,566 | 20,765 |
Following property, plant and equipment of the Bank were temporarily idle (until the assets are issued to the business units):
As at December 31, | 2017 Rs. ’000 |
2016 Rs. ’000 |
Computer equipment | 121,472 | 128,136 |
Office equipment, furniture and fixtures | 100,175 | 45,887 |
Following property, plant and equipment of the Bank were retired from active use:
As at December 31, | 2017 Rs. ’000 |
2016 Rs. ’000 |
Computer equipment | 182,080 | 160,181 |
Office equipment, furniture and fixtures | 98,637 | 100,681 |
There were no capitalised borrowing costs related to the acquisition of property, plant and equipment during the year 2017 (2016 – Nil).
The Group’s intangible assets include the value of acquired goodwill, trademarks, and computer software.
An intangible asset is recognised if it is probable that future economic benefits associated with the asset will flow to the entity and the cost of the asset can be measured reliably in accordance with the Sri Lanka Accounting Standard – LKAS 38 on “Intangible Assets”.
Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value as at the date of acquisition. Following initial recognition, these assets are stated in the Statement of Financial Position at cost, less accumulated amortisation and accumulated impairment losses, if any.
Subsequent expenditure on intangible assets is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is expensed as incurred.
The useful economic lives of intangible assets are assessed to be either finite or indefinite. Useful economic lives, amortisation and impairment of finite and indefinite intangible assets are described below:
Intangible assets with finite lives are amortised over the useful economic lives. The amortisation period and the amortisation method
for an intangible asset with a finite useful life are reviewed at least at each reporting date. Changes in the expected useful life or
the expected pattern of consumption of future economic benefits embodied in the asset are accounted for by changing the amortisation period or method, as appropriate, and are treated as changes in accounting estimates, which require prospective application.
The amortisation expense on intangible assets with finite lives is expensed as incurred.
Goodwill that arises on the acquisition of subsidiaries is presented with intangible assets. Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interests, and any previous interest held, over the net identifiable assets acquired and liabilities assumed.
Subsequent to initial recognition, goodwill is measured at cost less accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.
Software acquired by the Group is measured at cost less accumulated amortisation and any accumulated impairment losses.
Expenditure on internally developed software is recognised as an asset when the Group is able to demonstrate its intention and ability to complete the development and use the software in a manner that will generate future economic benefits, and can reliably measure the costs to complete the development. The capitalised costs of internally-developed software include all costs directly attributable to developing the software and capitalised borrowing costs, and are amortised over its useful life. Internally-developed software is stated at capitalised cost less accumulated amortisation and any accumulated impairment losses.
Subsequent expenditure on software assets is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is expensed as incurred.
Research costs are expensed as incurred. Development expenditures on an individual project are recognised as an intangible asset when the Group can demonstrate:
The technical feasibility of completing the intangible asset so that the asset will be available for use or sale.
Its intention to complete and its ability to use or sell the asset.
The asset will generate future economic benefits.
The availability of resources to complete the asset.
The ability to measure reliably the expenditure during development.
The ability to use the intangible asset generated.
Following initial recognition of the development expenditure as an asset, the asset is carried at cost less any accumulated amortisation and accumulated impairment losses.
As at the reporting date, the Group does not have development costs capitalised as an internally-generated intangible asset.
GROUP | BANK | |||||
As at December 31, | Note | 2017 Rs. ’000 |
2016 Rs. ’000 |
2017 Rs. ’000 |
2016 Rs. ’000 |
|
Computer software | 40.1 | 539,408 | 506,134 | 473,390 | 423,851 | |
Software under development | 40.2 | 311,748 | 226,490 | 303,420 | 216,794 | |
Goodwill arising on business combination | 400,045 | 400,045 | – | – | ||
Trademarks | 25 | – | – | – | ||
Total | 1,251,226 | 1,132,669 | 776,810 | 640,645 |
GROUP | BANK | |||||
As at December 31, | Note | 2017 Rs. ’000 |
2016 Rs. ’000 |
2017 Rs. ’000 |
2016 Rs. ’000 |
|
Cost/valuation | ||||||
Balance as at January 1, | 1,682,677 | 1,731,169 | 1,589,301 | 1,719,589 | ||
Additions during the year | 267,071 | 362,810 | 259,734 | 280,986 | ||
Disposals/write-off during the year | (8,355) | (413,059) | – | (413,059) | ||
Exchange rate variance | 1,522 | 1,757 | (1,450) | 1,785 | ||
Transfers/adjustments | – | – | – | – | ||
Balance as at December 31, | 1,942,915 | 1,682,677 | 1,847,585 | 1,589,301 | ||
Accumulated amortisation and impairment losses | ||||||
Balance as at January 1, | 1,176,543 | 1,414,305 | 1,165,450 | 1,411,058 | ||
Amortisation for the year | 20 | 229,764 | 173,790 | 209,766 | 165,903 | |
Impairment loss | – | – | – | – | ||
Disposals/write-off during the year | (1,114) | (412,756) | – | (412,756) | ||
Exchange rate variance | (1,686) | 1,204 | (1,021) | 1,245 | ||
Transfers/adjustments | – | – | – | – | ||
Balance as at December 31, | 1,403,507 | 1,176,543 | 1,374,195 | 1,165,450 | ||
Net book value as at December 31, | 539,408 | 506,134 | 473,390 | 423,851 |
GROUP | BANK | |||
2017 Rs. ’000 |
2016 Rs. ’000 |
2017 Rs. ’000 |
2016 Rs. ’000 |
|
Cost/valuation | ||||
Balance as at January 1, | 226,490 | 167,125 | 216,794 | 157,429 |
Additions during the year | 189,620 | 135,830 | 189,620 | 135,830 |
Transfers/adjustments | (104,362) | (76,465) | (102,994) | (76,465) |
Balance as at December 31, | 311,748 | 226,490 | 303,420 | 216,794 |
There were no restrictions on the title of the intangible assets of the Group as at the reporting date. Further, there were no items pledged as securities for liabilities. There were no capitalised borrowing costs related to the acquisition of intangible assets during the year 2017 (2016 – Nil).
The maturity analysis of intangible assets is given in Note 62.
GROUP | BANK | |||||
Note | 2017 Rs. ’000 |
2016 Rs. ’000 |
2017 Rs. ’000 |
2016 Rs. ’000 |
||
Cost/valuation | ||||||
Balance as at January 1, | 128,700 | 128,700 | 84,840 | 84,840 | ||
Additions during the year | – | – | – | – | ||
Balance as at December 31, | 128,700 | 128,700 | 84,840 | 84,840 | ||
Accumulated amortisation | ||||||
Balance as at January 1, | 20 | 22,732 | 21,280 | 11,304 | 10,362 | |
Amortisation for the year | 1,452 | 1,452 | 942 | 942 | ||
Balance as at December 31, | 24,184 | 22,732 | 12,246 | 11,304 | ||
Net book value as at December 31, | 104,516 | 105,968 | 72,594 | 73,536 |
The carrying amount of revalued assets that would have been included in the Financial Statements had the assets been carried at cost less amortisation is as follows:
GROUP | BANK | |||||
As at December 31, 2017 | Cost | Accumulated
amortisation |
Net book value |
Cost | Accumulated amortisation |
Net book value |
Rs. ’000 | Rs. ’000 | Rs. ’000 | Rs. ’000 | Rs. ’000 | Rs. ’000 | |
Class of asset | ||||||
Leasehold land | 101,298 | 16,573 | 84,725 | 14,846 | 12,245 | 2,601 |
Total | 101,298 | 16,573 | 84,725 | 14,846 | 12,245 | 2,601 |
GROUP | BANK | |||||
As at December 31, 2016 | Cost | Accumulated amortisation |
Net Book value |
Cost | Accumulated amortisation |
Net book value |
Rs. ’000 | Rs. ’000 | Rs. ’000 | Rs. ’000 | Rs. ’000 | Rs. ’000 | |
Class of asset | ||||||
Leasehold land | 23,715 | 6,827 | 16,888 | 14,846 | 3,783 | 11,063 |
Total | 23,715 | 6,827 | 16,888 | 14,846 | 3,783 | 11,063 |
The maturity analysis of Leasehold Property is given in Note 62.
GROUP | BANK | |||
As at December 31, | 2017 Rs. ’000 |
2016 Rs. ’000 |
2017 Rs. ’000 |
2016 Rs. ’000 |
Receivables | 46,212 | 36,511 | 46,171 | 36,511 |
Deposits and prepayments | 1,530,984 | 1,481,830 | 1,563,026 | 1,490,786 |
Clearing account balance | 6,135,630 | 6,370,312 | 6,135,630 | 6,370,312 |
Unamortised cost on staff loans (Day 1 difference) | 3,676,965 | 3,373,174 | 3,676,965 | 3,373,174 |
Other accounts | 5,973,186 | 5,220,732 | 5,876,370 | 5,167,383 |
Total | 17,362,977 | 16,482,559 | 17,298,162 | 16,438,166 |
The maturity analysis of other assets is given in Note 62.