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Part (XIII) – Tables, Forms and Filling Up Instructions
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Fifteenth Edition 886 September 2013
Consolidated Financial Statements for Islamic Banks Annex No. (131)
AAOIFI ILLUSTRATIVE CONSOLIDATED FINANCIAL STATEMENTS
FOR ISLAMIC BANKS [NAME OF THE BANK] Q.S.C. / S.A.Q.
FOR THE YEAR ENDED
31 DECEMBER
887
ABOUT THESE AAOIFI ILLUSTRATIVE CONSOLIDATED FINANCIAL STATEMENTS These illustrative consolidated financial statements of [Name of the Bank] Q.S.C. / S.A.Q. (“the Bank”,
together with its subsidairies referred to as “the Group”) as at the year ended 31 December 2012 are intended to illustrate the presentation and disclosure requirements of Financial Accounting Standards (“FAS”) as issued by the Accounting and Auditing Organisation for Islamic Financial Institutions (“AAOIFI”) effective as at 1 January 2012, International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standard Board (IASB) where a relevant AAOIFI standard is not issued, and the applicable provisions of Qatar Central Bank (“QCB”) regulations, together referred as (“the Applicable Standards”).
This publication illustrates the format for consolidated financial statements for Islamic banks in Qatar
involved in general Islamic banking activities, and which are not adopting FAS as a first time adopter. FASs and their interpretation change over time, accordingly, these illustrative consolidated financial statements should not be used as a substitute for referring to the standards and interpretation themselves.
These illustrative consolidated financial statements are not considered to be a definitive guide, as certain
standards can be applied in a different manner depending on the circumstances of the Group.
Suggested disclosures are cross-referenced to the underlying requirements in the texts of the relevant FAS / IFRS and interpretations or relevant QCB regulations. References are generally to the most recent version of the relevant FAS / IFRS or interpretation (unless specified otherwise) where the FAS / IFRS or interpretation has been adopted by the Group.
Part (XIII) – Tables, Forms and Filling Up Instructions
888
CAVEATS / NOTES These illustrative consolidated financial statements include line items and disclosures to illustrate items that,
although not applicable to the Group, are encountered in general practice. This does not mean that all possible disclosures have been covered.
The accounting policies disclosed in these illustrative consolidated financial statements reflect the facts and
circumstances of the fictitious Islamic banking group on which these consolidated financial statements are based. They should not be relied upon for a complete understanding of the requirements of AAOIFI or QCB regulations. The accounting policy disclosures appropriate for the Group depend on the facts and circumstances of that Group, including the accounting policy choices that Group makes, and may differ from the disclosures presented in these illustrative consolidated financial statements.
The presentation of line items for the primary statements is based on the format generally used by Islamic
banks in Qatar and is in compliance with QCB regulations. Items that are material in nature should be disclosed separately on the face of the relevant main statement in accordance with AAOIFI.
The consolidated statement of financial position has been presented in the broad order of liquidity because
such presentation usually provides reliable and more relevant information for a Bank, rather than separate current and non-current classification.
The ‘indirect’ method for the preparation of the statement of cashflows has been followed in these illustrative
consolidated financial statements based on QCB requirements.
These illustrative consolidated financial statements have excluded any impact of Zakah on the basis that this is borne by the owners directly. We have included a proforma of consolidated statement of ‘sources and uses of funds in zakah and charity funds’ for those instances where zakah is borne by the Bank.
Notes to these illustrative consolidated financial statements do not incorporate the bifurcation of balances
between jointly financed and self financed assets as illustrated in Annexure E of FAS 1 – ‘Example of the financial statements and disclosures’.
For ‘listed’ banks, the social and sports fund contribution should be accounted for through the statement of
changes in owners’ equity. These illustrative consolidated financial statements have been prepared on the basis that no financial liabilities
have been classified as fair value through profit and loss.
Expenses in the consolidated income statement have been presented according to their ‘nature’ as opposed to their ‘function’ in accordance with QCB requirements.
The equity method of accounting should be followed as the accounting policy for interests in joint ventures
based is based on QCB requirements.
For the purpose of these illustrative consolidated financial statements we have not considered any impairment related to non-financial assets. Any such impairment should be disclosed based on IFRS requirements, based on the fact that AAOIFI is silent on this.
In terms of presentation and where applicable, the most recent AAOIFI wordings / format has been followed, even if the actual standard has not yet been issued.
Earnings per share disclosure is mandatory for ‘listed’ banks.
889
CONTENTS AAOIFI ILLUSTRATIVE CONSOLIDATED FINANCIAL STATEMENTS
Page Consolidated statement of financial position 890 Consolidated income statement 891 Consolidated statement of changes in owners’ equity 892 Consolidated statement of cash flows 894 Consolidated statement of changes in restricted investments 895 Consolidated statement of sources and uses of charity funds 897 Consolidated statement of sources and uses of Qard Funds 898 Notes to the consolidated financial statements 899
NAME OF THE BANK (Q.S.C. / S.A.Q.) CONSOLIDATED STATEMENT OF FINANCIAL POSITION QAR ‘000s
The attached notes __ to __ form an integral part of these consolidated financial statements. 890
Reference As at 31 December Note 2012 2011
ASSETS FAS 1.30-38 Cash and balances with central banks 9 XXXX XXXX Due from banks 10 XXXX XXXX Financing assets 11 XXXX XXXX Investment securities 12 XXXX XXXX Investment in associates and joint ventures 13 XXXX XXXX Investment property 14 XXXX XXXX Fixed assets 15 XXXX XXXX Intangible assets 16 XXXX XXXX Other assets 17 XXXX XXXX TOTAL ASSETS XXXX XXXX
FAS 1.41-45 LIABILITIES Due to banks 18 XXXX XXXX Customer current accounts 19 XXXX XXXX Financing liabilities 20 XXXX XXXX Other liabilities 21 XXXX XXXX TOTAL LIABILITIES XXXX XXXX
FAS 1.41-45 EQUITY OF INVESTMENT ACCOUNT HOLDERS 22 XXXX XXXX FAS 1.41-45 OWNERS’ EQUITY Share capital 23(a) XXXX XXXX Legal reserve 23(b) XXXX XXXX Risk reserve 23(c) XXXX XXXX Fair value reserves 23(d) XXXX XXXX Foreign currency translation reserve 23(e) XXXX XXXX Other reserves 23(f) XXXX XXXX Retained earnings XXXX XXXX TOTAL EQUITY ATTRIBUTABLE TO EQUITY HOLDERS
OF THE BANK
XXXX XXXX Non-controlling interests 24 XXXX XXXX TOTAL OWNERS’ EQUITY XXXX XXXX TOTAL LIABILITIES, EQUITY OF INVESTMENT ACCOUNT
HOLDERS AND OWNERS’ EQUITY
XXXX XXXX
These consolidated financial statements were approved by the Board of Directors on DD/MM/YYYY and were signed on its behalf by:
-------------------------------------------- ------------------------------------------- Name, Title Name, Title
NAME OF THE BANK (Q.S.C. / S.A.Q.) CONSOLIDATED INCOME STATEMENT QAR ‘000s
The attached notes __ to __ form an integral part of these consolidated financial statements. 891
Reference For the year ended 31 December Note 2012 2011
FAS 1.46 - 52 Net income from financing activities 25 XXXX XXXX
Net income from investing activities 26 XXXX XXXX Total income from financing and investing activities XXXX XXXX
Fee and commission income 27 XXXX XXXX Fee and commission expense 27 XXXX XXXX Net fee and commission income XXXX XXXX
Foreign exchange gain / (loss) 28 XXXX XXXX Share of results of associates and joint ventures 13 XXXX XXXX Other income XXXX XXXX Total income XXXX XXXX
Staff costs 29 (XXXX) (XXXX) Depreciation and amortisation 15,16 (XXXX) (XXXX) Finance expense (XXXX) (XXXX) Other expenses 30 (XXXX) (XXXX) Total expenses (XXXX) (XXXX)
Net Impairment loss on investment securities 12 (XXXX) (XXXX) Net impairment loss on financing assets 11 (XXXX) (XXXX) Profit / (loss) for the year before return to investment
account holders
XXXX XXXX Return to investment account holders before the Bank’s
share as Mudarib
(XXXX) (XXXX) Bank’s share as Mudarib XXXX XXXX Net return to investment account holders (XXXX) (XXXX) Net profit / (loss) for the year before tax XXXX XXXX Tax expense 31 (XXXX) (XXXX) Net profit / (loss) for the year XXXX XXXX
Net profit / (loss) for the year attributable to:
Equity holders of the Bank XXXX XXXX Non-controlling interests 23 (XXXX) (XXXX) Profit / (loss) for the year XXXX XXXX
Earnings per share Basic earnings per share (QAR per share) 36 X.XX X.XX
Diluted earnings per share (QAR per share) 36 X.XX X.XX
NAME OF THE BANK (Q.S.C. / S.A.Q.) CONSOLIDATED STATEMENT OF CHANGES IN OWNERS’ EQUITY QAR ‘000s
The attached notes __ to __ form an integral part of these consolidated financial statements.892
Reference
Note Share
capital
Legal
reserve
Risk
reserve
Fair
value
reserves
Foreign
currency
translation
reserve
Other
reserves Retained
earnings
Total
equity
ttributable to
quity holders
of the Bank
Non-
controlling
interests
Total
owners’
equity
FAS 1. 58
-60
Balance at 1 January 2011 XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
Change in foreign currency
translation reserve
23e - - - - XXXX - XXXX - XXXX
Fair value reserve movement 23d - - - XXXX - - - XXXX - XXXX
Profit / (loss) for the year - - - - - - XXXX XXXX XXXX XXXX
Total recognised income and
expense for the year
XXXX XXXX XXXX XXXX XXXX
XXXX XXXX XXXX XXXX XXXX
Change in other reserves 23f - - - - - XXXX (XXXX) - - -
Dividends to owners - - - - - - (XXXX) (XXXX) - (XXXX)
Transfer to legal reserve 23b - XXXX - - - - (XXXX) - - -
Transfer to risk reserve 23c - - XXXX - - - (XXXX) - - -
Social and sports funds
appropriation
- - - - - - (XXXX) - - (XXXX)
Balance at 31 December 2011 XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
NAME OF THE BANK (Q.S.C. / S.A.Q.) CONSOLIDATED STATEMENT OF CHANGES IN OWNERS’ EQUITY (CONTINUED) QAR ‘000s
The attached notes __ to __ form an integral part of these consolidated financial statements.893
Reference
Note Share
capital
Legal
reserve
Risk
reserve
Fair
value
reserves
Foreign
currency
translation
reserve
Other
reserves Retained
earnings
Total
equity
ttributable to
quity holders
of the Bank
Non-
controlling
interests
Total
owners’
equity
FAS 1. 58
-60
Balance at 1 January 2012 XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
Change in foreign currency
translation reserve
23e - - - - XXXX - XXXX - XXXX
Fair value reserve movement 23d - - - XXXX - - - XXXX - XXXX
Profit / (loss) for the year - - - - - - XXXX XXXX XXXX XXXX
Total recognised income and
expense for the year
XXXX XXXX XXXX XXXX XXXX
XXXX XXXX XXXX XXXX XXXX
Change in other reserves 23f - - - - - XXXX (XXXX) - - -
Dividends to owners - - - - - - (XXXX) (XXXX) - (XXXX)
Transfer to legal reserve 23b - XXXX - - - - (XXXX) - - -
Transfer to risk reserve 23c - - XXXX - - - (XXXX) - - -
Social and sports funds
appropriation
- - - - - - (XXXX) - - (XXXX)
Balance at 31 December 2012 XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
NAME OF THE BANK (Q.S.C. / S.A.Q.) CONSOLIDATED STATEMENT OF CASH FLOWS QAR ‘000s
The attached notes __ to __ form an integral part of these consolidated financial statements. 894
Reference For the year ended 31 December Note 2012 2011
FAS 1. 53 - 57
Cash flows from operating activities
Net profit / (loss) for the year XXXX XXXX Adjustments for: Net impairment loss on financing assets 11 XXXX XXXX Impairment loss on investment securities 12 XXXX XXXX Depreciation and amortisation 15,16 XXXX XXXX Net loss / (gain) on sale of investment securities 26 XXXX (XXXX) Dividend income 26 XXXX XXXX Share of results of associates and joint ventures 13 XXXX XXXX Loss / (gain) on disposal of fixed assets XXXX XXXX
Profit / (loss) before changes in operating assets and liabilities XXXX XXXX
Change in reserve account with central banks
XXXX XXXX Change in due from banks XXXX XXXX Change in financing assets XXXX XXXX Change in other assets XXXX XXXX Change in due to banks XXXX XXXX Change in customer current accounts XXXX XXXX Change in other liabilities XXXX XXXX
XXXX XXXX Dividends received 26 XXXX XXXX Tax paid (XXXX) (XXXX)
Net cash from / (used in) operating activities XXXX (XXXX)
Cash flows from investing activities Acquisition of investment securities (XXXX) (XXXX) Proceed from sale of investment securities XXXX XXXX Acquisition of fixed assets 15 (XXXX) (XXXX) Proceed from sale of fixed assets XXXX XXXX Acquisition of investment property 14 (XXXX) (XXXX) Proceed from sale of investment property XXXX XXXX
Net cash from / (used in) investing activities XXXX (XXXX)
Cash flows from financing activities Change in investment accounts XXXX XXXX Proceeds from issuance of share capital 24 XXXX XXXX Proceeds from financing liabilities 20 XXXX XXXX Dividends paid (XXXX) (XXXX)
Net cash from / (used in) financing activities XXXX (XXXX)
Net increase / (decrease) in cash and cash equivalents XXXX (XXXX) Cash and cash equivalents at 1 January XXXX XXXX Effects of exchange rate changes on cash and cash equivalents
held
XXXX XXXX
Cash and cash equivalents at 31 December 37 XXXX XXXX
NAME OF THE BANK (Q.S.C. / S.A.Q.) CONSOLIDATED STATEMENT OF CHANGES IN RESTRICTED INVESTMENT ACCOUNTS QAR ‘000s
The attached notes __ to __ form an integral part of these consolidated financial statements. 895
At 1 January
2011
Movements during the year At 31 December 2011
Reference
No. of
Units
(‘000)
Value
per unit
in QAR
Total
value
Investment /
(withdrawals) Revaluation
Gross
income/
(loss)
Dividends
paid
Admin
expense
Bank’s
fee as an
agent
No. of
Units
(‘000)
Value
per unit
in QAR
Total
value
XXX XX XXXX XXXX XXXX XXXX XXXX (XXXX) (XXXX) XXX XX XXXX
FAS 1.61 -
64
Name of investment (e.g.
ABC Property fund / ABC
Investment W.L.L.)
XXX XX
XXXX
XXXX XXXX
XXXX
XXXX
(XXXX) (XXXX) XXX XX
XXXX
XXX XXXX XXXX XXXX XXXX XXXX (XXXX) (XXXX) XXX XXXX
NAME OF THE BANK (Q.S.C. / S.A.Q.) CONSOLIDATED STATEMENT OF CHANGES IN RESTRICTED INVESTMENT ACCOUNTS (CONTINUED) QAR ‘000s
The attached notes __ to __ form an integral part of these consolidated financial statements. 896
At 1 January 2012
Movements during the year At 31 December 2012
Reference
No. of
Units
(‘000)
Value
per unit
in QAR
Total
value
Investment /
(withdrawals) Revaluation
Gross
income/
(loss)
Dividends
paid
Admin
expense
Bank’s
fee as an
agent
No. of
Units
(‘000)
Value per
unit in
QAR
Total
value
XXX XX XXXX XXXX XXXX XXXX XXXX (XXXX) (XXXX) XXX XX XXXX
FAS 1.61 -
64
Name of investment (e.g.
ABC Property fund / ABC
Investment W.L.L.)
XXX XX
XXXX
XXXX XXXX
XXXX
XXXX
(XXXX) (XXXX) XXX XX
XXXX
XXX XXXX XXXX XXXX XXXX XXXX (XXXX) (XXXX) XXX XXXX
NAME OF THE BANK (Q.S.C. / S.A.Q.) CONSOLIDATED STATEMENT OF SOURCES AND USES OF CHARITY FUNDS QAR ‘000s
The attached notes __ to __ form an integral part of these consolidated financial statements.
897
Reference For the year ended 31 December 2012 2011 FAS 1.65 - 68 Sources of charity funds Contributions by the Bank XXXX XXXX Earnings prohibited by Sharia’a XXXX XXXX Total sources during the year XXXX XXXX Uses of charity funds Contributions to charitable organisations (XXXX) (XXXX) Other uses (XXXX) (XXXX) Total uses during the year (XXXX) (XXXX) Excess of sources over uses XXXX XXXX Balance at 1 January XXXX XXXX Undistributed charity funds at 31 December XXXX XXXX
NAME OF THE BANK (Q.S.C. / S.A.Q.) CONSOLIDATED STATEMENT OF SOURCES AND USES OF QARD FUNDS QAR ‘000s
The attached notes __ to __ form an integral part of these consolidated financial statements.
898
Reference For the year ended 31 December 2012 2011 FAS 1.69 - 73 Opening balance Good financings XXXX XXXX Funds available for financings XXXX XXXX XXXX XXXX Sources of Qard fund Allocation from current accounts XXXX XXXX Allocation from earnings prohibited by Shari’a XXXX XXXX Source outside the Bank XXXX XXXX Total of sources during the year XXXX XXXX Uses of Qard fund Financings to students XXXX (XXXX) Financingsto craftsmen XXXX (XXXX) Settlement of current accounts XXXX (XXXX) Total uses during the year XXXX (XXXX) Balance at 31 December Good Financings XXXX XXXX Funds available for financings XXXX XXXX XXXX XXXX
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
899
Reference
FAS 1.9
FAS 1.12
1.
REPORTING ENTITY
[Name] (“the Bank”) is an entity domiciled in the State of Qatar and was incorporated on
____ as _____ (nature of legal entity) under Emiri Decree no. __ of __. The commercial
registration number of the Bank is _____. The address of the Bank’s registered office is
[address]. The consolidated financial statements of the Bank for the year ended 31
December 2012 comprise the Bank and its subsidiaries (together referred to as “the
Group” and individually as ”Group entities”). The Bank is primarily involved in corporate,
retail and investment banking, and has ___ branches in Qatar and ___ internationally.
The Parent Company / Ultimate Controlling Party of the Group is ____.
The principal subsidiaries of the Group are as follows:
Company’s Name
Country of Incorportaion
Company’s Capital
Company’sActivities
Percentage of
ownership 2012
Percentage of ownership
2011 Sub 1 XXX XXX XXX XXX XXX Sub 2 XXX XXX XXX XXX XXX
FAS 1.12 2. BASIS OF PREPARATION
(a) Statement of compliance The consolidated financial statements have been prepared in accordance with Financial
Accounting Standards (“FAS”) issued by the Accounting and Auditing Organisation for
Islamic Financial Institutions (“AAOIFI”) and the applicable provisions of Qatar Central
Bank (“QCB”) regulations. In line with the requirements of AAOIFI, for matters that are
not covered by FAS, the Group uses guidance from the relevant International Financial
Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board
(“IASB”). FAS 1.12 (b) Basis of measurement The consolidated financial statements have been prepared on the historical cost basis
except for the following material items on the consolidated statement of financial position:
[State the assets and liabilities that are not measured on an historical cost basis]. FAS 1.10 (c) Functional and presentation currency These consolidated financial statements are presented in Qatari Riyals (“QAR”), which is
the Bank’s functional currency. Except as otherwise indicated, financial information
presented in QAR has been rounded to the nearest thousands. The functional currencies
for the Bank’s subsidiaries have been assessed as [........].
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
900
Reference
2.
BASIS OF PREPARATION (CONTINUED)
(d) Use of estimates and judgments IAS 1.122, 125
The preparation of the consolidated financial statements in conformity with FAS requires
management to make judgements, estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets, liabilities, income and expenses.
Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the period in which the estimate is revised and in any
future periods affected. Information about significant areas of estimation uncertainty and critical judgements in applying
accounting policies that have the most significant effect on the amounts recognised in the
consolidated financial statements are described in note 5.
3. SIGNIFICANT ACCOUNTING POLICIES The accounting policies set out below have been applied consistently to all periods presented
in these consolidated financial statements, and have been applied consistently by Group
entities. [The Group is required to amend / disclose appropriately when there is a change in accounting
policies in accordance with FAS 1].
(a) Basis of consolidation IFRS 3.3 (i) Business combinations Accounting for business combinations only applies if it is considered that a business has been
acquired. Under IFRS 3, ‘Business Combinations’, a business is defined as an integrated set of
activities and assets conducted and managed for the purpose of providing a return to investors
or lower costs or other economic benefits directly and proportionately to policyholders or
participants. A business generally consists of inputs, processes applied to those inputs, and
resulting outputs that are, or will be, used to generate revenues. If goodwill is present in a
transferred set of activities and assets, the transferred set is presumed to be a business. For acquisitions meeting the definition of a business, the acquisition method of accounting is
used as at the acquisition date, which is the date on which control is transferred to the Group. The Group measures goodwill at the acquisition date as the total of:
the fair value of the consideration transferred; plus
the recognised amount of any non-controlling interests in the acquiree; plus if the business
combination is achieved in stages, the fair value of the existing equity interest in the
acquiree; less
the net recognised amount (generally fair value) of the identifiable assets acquired and
liabilities assumed. When this total is negative, a bargain purchase gain is recognised immediately in consolidated
income statement. The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognised in consolidated income statement.
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
901
Reference
IFRS 3.3
3. (a) (i)
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Basis of consolidation (continued) Business combinations (continued) Costs related to the acquisition, other than those associated with the issue of debt or equity
securities, that the Group incurs in connection with a business combination are expensed as
incurred.
Any contingent consideration payable is recognised at fair value at the acquisition date. If the
contingent consideration is classified as equity, it is not remeasured and settlement is
accounted for within equity. Otherwise, subsequent changes to the fair value of the contingent
consideration are recognised in consolidated income statement. For acquisitions not meeting the definition of a business, the Group allocates the cost between
the individual identifiable assets and liabilities. The cost of acquired assets and liabilities is
determined by: (a) accounting for financial assets and liabilities at their fair value at the
acquisition date; and (b) allocating the remaining balance of the cost of purchasing the assets
and liabilities to the individual assets and liabilities, other than financial instruments, based on
their relative fair values at the acquisition date.
(ii)
Subsidiaries Subsidiaries are entities controlled by the Group. The financial statements of subsidiaries are
included in the consolidated financial statements from the date that control commences until
the date that control ceases. Control is the power to govern the financial and operating policies of an entity so as to obtain
benefits from its activities and is generally assumed when the Group holds, directly or
indirectly, majority of the voting rights of the entity. In assessing control, the Group takes into
consideration potential voting rights that currently are exercisable. The accounting policies of subsidiaries have been changed when necessary to align them with
the policies adopted by the Group.
(iii) Special purpose entities Special purpose entities (“SPEs”) are entities that are created to accomplish a narrow and well-
defined objective such as the securitisation of particular assets, or the execution of a specific
borrowing or financing transaction. An SPE is consolidated if, based on an evaluation of the
substance of its relationship with the Group and the SPE’s risks and rewards, the Group
concludes that it controls the SPE. The following circumstances may indicate a relationship in
which, in substance, the Group controls and consequently consolidates an SPE:
The activities of the SPE are being conducted on behalf of the Group according to its
specific business needs so that the Group obtains benefits from the SPE’s operation;
The Group has the decision-making powers to obtain the majority of the benefits of the
activities of the SPE or, by setting up an ‘autopilot’ mechanism, the Group has delegated
these decision-making powers;
The Group has rights to obtain the majority of the benefits of the SPE and therefore may be
exposed to risks incident to the activities of the SPE;
The Group retains the majority of the residual or ownership risks related to the SPE or its
assets in order to obtain benefits from its activities.
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
902
Reference
3.
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
IFRS 3.3 (a) Basis of consolidation (continued) (iii) Special purpose entities (continued)
The assessment of whether the Group has control over an SPE is carried out at inception and
normally no further reassessment of control is carried out in the absence of changes in the
structure or terms of the SPE, or additional transactions between the Group and the SPE. Day-to-
day changes in market conditions normally do not lead to a reassessment of control. However,
sometimes changes in market conditions may alter the substance of the relationship between the
Group and the SPE and in such instances the Group determines whether the change warrants a
reassessment of control based on the specific facts and circumstances. Where the Group’s
voluntary actions, such as financing amounts in excess of existing liquidity facilities or extending
terms beyond those established originally, change the relationship between the Group and an SPE,
the Group performs a reassessment of control over the SPE.
(iv) Loss of control Upon the loss of control, the Group derecognises the assets and liabilities of the subsidiary, any
non-controlling interests and the other components of equity related to the subsidiary. Any surplus
or deficit arising on the loss of control is recognised in consolidated income statement. If the Group
retains any interest in the previous subsidiary, then such interest is measured at fair value at the
date that control is lost. Subsequently it is accounted for as an equity-accounted investee or in
accordance with the Group’s accounting policy for financial instruments depending on the level of
influence retained.
(v) Non-controlling interests FAS 1.43 IAS 27.34
Interests in the equity of subsidiaries not attributable to the parent are reported in consolidated
statement of financial position in owners’ equity. Profits or losses attributable to non-controlling
interests are reported in the consolidated income statement as income attributable to non-
controlling interests. Losses applicable to the non-controlling interests in a subsidiary are allocated
to the non-controlling interests even if doing so causes the non-controlling interests to have a deficit
balance. The Group treats transactions with non-controlling interests as transactions with equity owners of
the Group. For purchases from non-controlling interests, the difference between any consideration
paid and the relevant share acquired of the carrying value of net assets of the subsidiary is
recorded in owners’ equity. Gains or losses on disposals to non-controlling interests are also
recorded in owners’ equity.
When the Group ceases to have control or significant influence, any retained interest in the entity is
remeasured to its fair value, with the change in carrying amount recognised in consolidated income
statement. The fair value is the initial carrying amount for the purposes of subsequently accounting
for the retained interest as an associate, joint venture or financial asset. In addition, any amounts
previously recognised in owners’ equity in respect of that entity are accounted for as if the Group
had directly disposed of the related assets or liabilities. This may mean that amounts previously
recognised in other equity are reclassified to consolidated income statement.
If the ownership interest in an associate is reduced but significant influence is retained, only a
proportionate share of the amounts previously recognised in equity is reclassified to consolidated
income statement where appropriate.
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
903
Reference 3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (a) Basis of consolidation (continued) (vi) Transactions eliminated on consolidation IAS 27.21
Intra-group balances, income and expenses (except for foreign currency transaction gains or
losses) arising from intra-group transactions, are eliminated in preparing the consolidated financial
statements. Unrealised losses are eliminated in the same way as unrealised gains, but only to the
extent that there is no evidence of impairment.
(vii) Associates Associates are entities over which the Group has significant influence but not control, generally
accompanying a shareholding of between 20% and 50% of the voting rights.
Investments in associates are accounted for by the equity method of accounting and are initially
recognised at cost (including transaction costs directly related to acquisition of investment in
associate). The Group’s investment in associates includes goodwill (net of any accumulated
impairment loss) identified on acquisition.
The Group’s share of its associates’ post-acquisition profits or losses is recognised in the
consolidated income statement; its share of post-acquisition movements in reserve is recognised in
equity. The cumulative post-acquisition movements are adjusted against the carrying amount of the
investment. When the Group’s share of losses in an associate equals or exceeds its interest in the
associate, including any other unsecured receivables, the Group does not recognise further losses,
unless it has incurred obligations or made payments on behalf of the associate.
IAS 28.25
Intergroup gains on transactions between the Group and its associates are eliminated to the extent
of the Group’s interest in the associates. Intragroup losses are also eliminated unless the
transaction provides evidence of an impairment of the asset transferred. For preparation of these
consolidated financial statements, equal accounting policies for similar transactions and other
events in similar circumstances are used. Dilution gains and losses in associates are recognised in
the consolidated income statement.
The Group’s share of the results of associates is based on financial statements made up to a date
not earlier than three months before the date of the consolidated statement of financial position,
adjusted to conform to the accounting policies of the Group.
The accounting policies of associates have been changed where necessary to ensure consistency
with policies adopted by the Group.
(viii) Joint ventures
Joint ventures are entities where the Group has a contractual arrangement with one or more parties
to undertake activities typically, through entities that are subject to joint control.
The Group recognises interests in a jointly controlled entity using the equity method of accounting.
The accounting policy given in Note 3(a) (vi) therefore applies for investments in joint ventures as
well.
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
904
Reference 3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (a) Basis of consolidation (continued) (viii) Joint ventures (continued)
The Group’s share of the results of joint ventures is based on financial statements made up to
a date not earlier than three months before the date of the statement of financial position,
adjusted to conform with the accounting policies of the Group. Intragroup gains on transactions
are eliminated to the extent of the Group’s interest in the investee. Intragroup losses are also
eliminated unless the transaction provides evidence of impairment in the asset transferred.
(ix) Funds management
The Group manages and administers assets held in unit trusts and other investment vehicles
on behalf of investors. The financial statements of these entities are not included in these
consolidated financial statements except when the Group controls the entity. Information
about the Group’s funds management is set out in note [x].
(b) Foreign currency (i) Foreign currency transactions and balances IAS 21.21,
23(a)
Foreign currency transactions are denominated, or that require settlement in a foreign currency
are translated into the respective functional currencies of the operations at the spot exchange
rates at the transaction dates.
Monetary assets and liabilities denominated in foreign currencies at the reporting date are
translated into the functional currency at the spot exchange rate at that date. Non-monetary
assets and liabilities denominated in foreign currencies that are measured at fair value are
retranslated into the functional currency at the spot exchange rate at the date that the fair value
was determined. Non-monetary assets and liabilities that are measured in terms of historical
cost in a foreign currency are translated using the exchange rate at the date of the transaction.
Foreign currency differences resulting from the settlement of foreign currency transactions and
arising on translation at period end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in consolidated income statement.
(ii) Foreign operations
The results and financial position of all the Group’s entities that have a functional currency
different from the presentation currency are translated into the presentation currency as
follows:
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
905
Reference 3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (b) Foreign currency (continued) (ii) Foreign operations (continued)
assets and liabilities for each statement of financial position presented are translated at the
closing rate at the reporting date;
income and expenses for each income statement are translated at average exchange rates
(unless this average is not a reasonable approximation of the cumulative effect of the rates
prevailing on the transaction dates, in which case income and expenses are translated at
the dates of the transactions); and
all resulting exchange differences are recognised in equity Exchange differences arising from the above process are reported in owners’ equity as ‘foreign
currency translation reserve’.
On consolidation, exchange differences arising from the translation of the net investment in
foreign entities, and of borrowings and other currency instruments designated as hedges of
such investments, are taken to ‘equity’. When a foreign operation is disposed of, or partially
disposed of, such exchange differences are recognised in the consolidated income statement
as part of the gain or loss on sale. Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as
assets and liabilities of the foreign entity and translated at the spot closing rate. When the settlement of a monetary item receivable from or payable to a foreign operation is
neither planned nor likely in the foreseeable future, foreign exchange gains and losses arising
from such a monetary item are considered to form part of the net investment in the foreign
operation and are recognised in owners’ equity, and presented in the foreign exchange
translation reserve in owners’ equity.
(c) Investment securities
FAS 25.4-14
Investment securities comprise investments in debt-type and equity-type financial instruments.
(i) Classification FAS 25.4-14
Debt-type instruments are investments that have terms that provide fixed or determinable
payments of profits and capital. Equity-type instruments are investments that do not exhibit
features of debt-type instruments and include instruments that evidence a residual interest in
the assets of an entity after deducting all its liabilities. Debt-type instruments
Investments in debt-type instruments are classified into the following categories: 1) at
amortised cost or 2) at fair value through income statement.
A debt-type investment is classified and measured at amortised cost only if the instrument is
managed on a contractual yield basis or the instrument is not held for trading and has not been
designated at fair value through the income statement.
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
906
Reference 3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (c) Investment securities (continued)
(i) Classification (continued) Debt-type investments classified and measured at fair value through income statement include
investments held for trading or designated at fair value through income statement. At inception, a
debt-type investment managed on a contractual yield basis, can only be designated at fair value
through income statement if it eliminates an accounting mismatch that would otherwise arise on
measuring the assets or liabilities or recognising the gains or losses on them on different bases. Equity-type instruments
Investments in equity type instruments are classified into the following categories: 1) at fair value
through income statement or 2) at fair value through equity. Equity-type investments classified and measured at fair value through income statement include
investments held for trading or designated at fair value through income statement.
An investment is classified as held for trading if acquired or originated principally for the purpose
of generating a profit from short-term fluctuations in price or dealer’s margin. Any investments
that form part of a portfolio where there is an actual pattern of short-term profit taking are also
classified as ‘held for trading’.
Equity-type investments designated at fair value through income statement include investments
which are managed and evaluated internally for performance on a fair value basis.
On initial recognition, the Bank makes an irrevocable election to designate certain equity
instruments that are not designated at fair value through income statement to be classified as
investments at fair value through equity.
(ii) Recognition and derecognition FAS 25.16
Investment securities are recognised at the trade date i.e. the date that the Group contracts to
purchase or sell the asset, at which date the Group becomes party to the contractual provisions
of the instrument. Investment securities are derecognised when the rights to receive cash flows
from the financial assets have expired or where the Group has transferred substantially all risk
and rewards of ownership.
(iii) Measurement FAS 25.15-27
Initial recognition Investment securities are initially recognised at fair value plus transaction costs, except for
transaction costs incurred to acquire investments at fair value through income statement which
are charged to consolidated income statement.
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
907
Reference 3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (c) Investment securities (continued) (iii) Measurement (continued)
Subsequent measurement Investments at fair value through income statement are remeasured at fair value at the end of
each reporting period and the resultant remeasurement gains or losses is recognised in the
consolidated income statement in the period in which they arise. Subsequent to initial
recognition, investments classified at amortised cost are measured at amortised cost using the
effective profit method less any impairment allowance. All gains or losses arising from the
amoritisation process and those arising on de-recognition or impairment of the investments, are
recognised in the consolidated income statement.
Investments at fair value through equity are remeasured at their fair values at the end of each
reporting period and the resultant gain or loss, arising from a change in the fair value of
investments are recognised in the consolidated statement of changes in owners’ equity and
presented in a separate fair value reserve within equity. When the investments classified as fair
value through equity are sold, impaired, collected or otherwise disposed of, the cumulative gain
or loss previously recognised in the consolidated statement of changes in equity is transferred to
the consolidated income statement.
Investments which do not have a quoted market price or other appropriate methods from which to
derive a reliable measure of fair value when on a continuous basis cannot be determined, are
stated at cost less impairment allowance, (if any). (iv) Measurement principles
FAS. 25.15-27
Amortised cost measurement The amortised cost of a financial asset or liability is the amount at which the financial asset or
liability is measured at initial recognition, minus capital repayments, plus or minus the cumulative
amortisation using the effective profit method of any difference between the initial amount
recognised and the maturity amount, minus any reduction for impairment. The calculation of the
effective profit rate includes all fees and points paid or received that are an integral part of the
effective profit rate.
Fair value measurement Fair value is the amount for which an asset could be exchanged or an obligation settled between
well informed and willing parties (seller and buyer) in an arm’s length transaction. The Group
measures the fair value of quoted investments using the market closing price for that instrument.
For unlisted investments, the Group recognises any increase in the fair value when they have
reliable indicators to support such an increase and to evaluate the fair value of these
investments. These reliable indicators are limited to the most recent transactions for the specific
investment or similar investments made in the market on a commercial basis between willing and
informed parties.
(d) Financing assets
Financing assets comprise Shari’a compliant financing provided by the Group with fixed or
determinable payments. These include financing provided through Murabaha, Mudaraba,
Musharaka, Musawama, Ijarah, Istisna’a, Wakala and other modes of Islamic financing.
Financing assets are stated at their amortised cost less impairment allowances (if any)
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
908
Reference 3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (d) Financing assets (continued) FAS 2.2-11 FAS 3.3-18 and, FAS 4.3-16 FAS 8.4
Murabaha and Musawama Murabaha and Musawama receivables are sales on deferred terms. The Group arranges a
Murabaha and Musawama transaction by buying a commodity (which represents the object of the
Murabaha) and selling it to the Murabeh (a beneficiary) at a margin of profit over cost. The sales
price (cost plus the profit margin) is repaid in installments by the Murabeh over the agreed period.
Murabaha and Musawama receivables are stated net of deferred profits and impairment
allowance (if any).
Based on QCB instructions Chapter VII, Section D, Para 3/2/1, The Bank applies the rule of
binding the purchase orderer to its promise in the Murabaha sale, and not enters into any
Murabaha transaction in which the purchase orderer does not undertake to accept the goods if
they meet the specifications.
Mudaraba Mudaraba financing are partnerships in which the Group contributes the capital and work. These
contracts are stated at fair value of consideration given less impairment allowance (if any). Musharaka Musharaka financing are partnerships in which the Group contributes the capital. These contracts
are stated at fair value of consideration given less impairment allowance (if any).
Ijarah Ijarah receivables arise from financing structures when the purchase and immediate lease of an
asset are at cost plus an agreed profit (in total forming fair value). The amount is settled on a
deferred payment basis. Ijarah receivables are carried at the aggregate of the minimum lease
payments, less deferred income (in total forming amortised cost) and impairment allowance (if
any). Istisna’a Istisna’a is a sales contract in which the Group acts as ‘al-sani’ (a seller) with an ‘al-mustasni’ (a
purchaser) and undertakes to manufacture or otherwise acquire a product based on the
specification received from the purchaser, for an agreed upon price.
Istisna’a revenue is the total price agreed between the seller and purchaser including the Group’s
profit margin. The Group recognises Istisna’a revenue and profit margin based on percentage of
completion method by taking in account the difference between total revenue (cash price to
purchaser) and Group’s estimated cost. The Group’s recognises anticipated losses on Istisna’a
contract as soon as they are anticipated.
[FAS No. 10 Istisna’a and Parallel Istisna’a provides an alternative accounting treatment for
Istisna’a contracts as the completed contract method. The completed contract method should be
applied when both the percentage of completion and expected cost to complete the Istisna’a
contract cannot be estimated with reasonable accuracy at the end of the reporting period.]
Wakala Wakala contracts represent agency agreements between two parties. One party, the provider of
funds (Muwakkil) appoints the other party as an agent (Wakeel) with respect to the investment of
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
909
Reference 3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(e) Other financial assets and liabilities
(i) Recognition and initial measurement
The Group initially recognises due from banks, financing assets, customer current accounts,
due to banks, and financing liabilities on the date at which they are originated. All other
financial assets and liabilities are initially recognised on the [trade date / settlement date] at
which the Group becomes a party to the contractual provisions of the instrument.
A financial asset or financial liability is measured initially at fair value plus, for an item not at
fair value through income statement, transaction costs that are directly attributable to its
acquisition or issue.
(ii) De-recognition of financial assets and financial liabilities
The Group de-recognises a financial asset when the contractual rights to the cash flows
from the financial asset expire, or when it transfers the financial asset in a transaction in
which substantially all the risks and rewards of ownership of the financial asset are
transferred or in which the Group neither transfers nor retains substantially all the risks and
rewards of ownership and it does not retain control of the financial asset. Any interest in
transferred financial assets that qualify for de-recognition that is created or retained by the
Group is recognised as a separate asset or liability in the consolidated statement of financial
position. On de-recognition of a financial asset, the difference between the carrying amount
of the asset (or the carrying amount allocated to the portion of the asset transferred), and
consideration received (including any new asset obtained less any new liability assumed) is
recognised in consolidated income statement.
The Group de-recognises a financial asset when the contractual rights to the cash flows
from the financial asset expire, or when it transfers the financial asset in a transaction in
which substantially all the risks and rewards of ownership of the financial asset are
transferred or in which the Group neither transfers nor retains substantially all the risks and
rewards of ownership and it does not retain control of the financial asset.
Any interest in transferred financial assets that qualify for de-recognition that is created or
retained by the Group is recognised as a separate asset or liability in the consolidated
statement of financial position. On de-recognition of a financial asset, the difference
between the carrying amount of the asset (or the carrying amount allocated to the portion of
the asset transferred), and consideration received (including any new asset obtained less
any new liability assumed) is recognised in consolidated income statement. The Group enters into transactions whereby it transfers assets recognised on its
consolidated statement of financial position, but retains either all or substantially all of the
risks and rewards of the transferred assets or a portion of them. If all or substantially all risks
and rewards are retained, then the transferred assets are not derecognised.
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
910
Reference 3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(e) Other financial assets and liabilities (continued)
(ii) De-recognition of financial assets and financial liabilities (continued)
In transactions in which the Group neither retains nor transfers substantially all the risks and
rewards of ownership of a financial asset and it retains control over the asset, the Group
continues to recognise the asset to the extent of its continuing involvement, determined by the
extent to which it is exposed to changes in the value of the transferred asset. In certain transactions the Group retains the obligation to service the transferred financial asset
for a fee. The transferred asset is de-recognised if it meets the de-recognition criteria. An asset
or liability is recognised for the servicing contract, depending on whether the servicing fee is
more than adequate (asset) or is less than adequate (liability) for performing the servicing. The Group de-recognises a financial liability when its contractual obligations are discharged or
cancelled or expire.
(iii) Offsetting Financial assets and liabilities are offset only when there is a legal or religious enforceable right
to set off the recognised amounts and the Group intends to either settle on a net basis, or to
realise the asset and settle the liability simultaneously.
(f) Impairment of financial assets
The Group assesses at each consolidated statement of financial position date whether there is
objective evidence that an asset is impaired. Objective evidence that financial assets (including
equity-type investments) are impaired can include default or delinquency by a counterparty /
investee, restructuring of financing facility or advance by the Group on terms that the Group
would not otherwise consider, indications that a counterparty or issuer will enter bankruptcy, the
disappearance of an active market for a security, or other observable data relating to a group of
assets such as adverse changes in the payment status of counterparty or issuers in the group,
or economic conditions that correlate with defaults in the group. In addition, for an investment in
equity-type instruments, a significant or prolonged decline in its fair value below its cost is
objective evidence of impairment.
QCB – P 336
Equity-type investments classified as fair value through equity
In the case of equity-type investments classified as fair value through equity and measured at
fair value, a significant (where market value has declined by a minimum of 20%) or prolonged
(where market value has declined for 9 months at least) decline in the fair value of an
investment below its cost is considered in determining whether the investments are impaired. If
any such evidence exists for equity-type investments classified as fair value through equity, the
cumulative loss previously recognised in the consolidated statement of changes in equity is
removed from equity and recognised in the consolidated income statement. Impairment losses
recognised in the consolidated income statement on equity-type investments are subsequently
reversed through equity.
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
911
Reference
3.
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(f) Impairment of financial assets (continued)
Financial assets carried at amortised cost (including investment in debt-type instruments classified as amortised cost)
For financial assets carried at amortised cost, impairment is measured as the difference
between the carrying amount of the financial assets and the present value of estimated cash
flows discounted at the assets’ original effective profit rate. Losses are recognised in
consolidated income statement and reflected in an allowance account. When a subsequent
event causes the amount of impairment loss to decrease, the impairment loss is reversed
through the consolidated income statement, to the extent of previously recognised impairment
losses. The Group considers evidence of impairment for financial assets carried at amortised
cost at both a specific asset and collective level. All individually significant financial assets are
assessed for specific impairment. All individually significant financial assets found not to be
specifically impaired are then collectively assessed for any impairment that has been incurred
but not yet identified. Financial assets that are not individually significant are collectively
assessed for impairment by grouping assets together with similar risk characteristics. In assessing collective impairment the Group uses (please mention the collective impairment
method e.g. flow rate method, statistical modelling of historical trends of probability of default,
delinquency method etc.) (g) Cash and cash equivalents IAS 7.46
Cash and cash equivalents include notes and coins on hand, unrestricted balances held with
central banks and highly liquid financial assets with maturities of three months or less from the
acquisition date that are subject to an insignificant risk of changes in their fair value, and are
used by the Group in the management of its short-term commitments. Cash and cash equivalents are carried at amortised cost in the consolidated statement of
financial position. (h) Investment property QCB – P339
Properties held for rental, or for capital appreciation purposes, or both, are classified as
investment property. For rental: Investment property is carried at cost less accumulated depreciation and impairment
allowances (if any). Cost includes expenditure that is directly attributable to the acquisition of the
investment property. For capital appreciation: Investment property is measured at fair value with any change therein
recognised in equity as fair value reserve. [QCB instructions, reference no. (Part VII-Chapter 8, First, 2/2/1 (B), for Islamic banks also
require investments in real estate made with the intention of selling, to be measured at fair value
and revaluation should be recognised in fair value reserve in equity.]
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
912
Reference
3.
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(i) Risk Management Instruments IFRS 7.21
Risk management instruments and hedge accounting [where applicable and approved by the Sharia’a Board]
Risk managementinstruments are measured at fair value on the consolidated statement of
financial position. The Group designates certain instruments as hedging instruments in qualifying hedging
relationships. On initial designation of the hedge, the Group formally documents the relationship
between the risk management instrument(s) and hedged item(s), including the risk management
objective and strategy in undertaking the hedge, together with the method that will be used to
assess the effectiveness of the hedging relationship. The Group makes an assessment, both at
the inception of the hedge relationship as well as on an ongoing basis, as to whether the
hedging instrument(s) is (are) expected to be highly effective in offsetting the changes in the fair
value or cash flows of the respective hedged item(s) during the period for which the hedge is
designated, and whether the actual results of each hedge are within a range of 80-125 percent. The Group makes an assessment for a cash flow hedge of a forecast transaction, as to whether
the forecast transaction is highly probable to occur and presents an exposure to variations in
cash flows that could ultimately affect consolidated income statement. These hedging relationships are discussed below.
Fair value hedges [where applicable]
When a risk management instrument is designated as the hedging instrument in a hedge of the
change in fair value of a recognised asset or liability or a firm commitment that could affect
consolidated income statement, changes in the fair value of the derivative are recognised
immediately in consolidated income statement together with changes in the fair value of the
hedged item that are attributable to the hedged risk. If the hedging derivative expires or is sold, terminated, or exercised, or the hedge no longer
meets the criteria for fair value hedge accounting, or the hedge designation is revoked, then
hedge accounting is discontinued prospectively. Any adjustment up to that point to a hedged
item, for which the effective profit method is used, is amortised to consolidated income
statement as part of the recalculated effective profit rate of the item over its remaining life. Cash flow hedges [where applicable]
When a risk management instrument is designated as the hedging instrument in a hedge of the
variability in cash flows attributable to a particular risk associated with a recognised asset or
liability or a highly probable forecast transaction that could affect consolidated income
statement, the effective portion of changes in the fair value of the risk management instrument is
recognised in equity in the hedging reserve. The amount recognised in equity is reclassified to
consolidated income statement as a reclassification adjustment in the same period as the
hedged cash flows affect consolidated income statement, and in the same line item in the
consolidated statement of changes in equity.
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
913
Reference
3.
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(i) Risk management instruments (continued) Cash flow hedges [where applicable]
Any ineffective portion of changes in the fair value of the risk management instrument is
recognised immediately in consolidated income statement. If the risk management instrument
expires or is sold, terminated, or exercised, or the hedge no longer meets the criteria for cash
flow hedge accounting, or the hedge designation is revoked, then hedge accounting is
discontinued prospectively. In a discontinued hedge of a forecast transaction the cumulative
amount recognised in equity from the period when the hedge was effective is reclassified from
equity to consolidated income statement as a reclassification adjustment when the forecast
transaction occurs and affects consolidated income statement. If the forecast transaction is no
longer expected to occur, then the balance in equity is reclassified immediately to consolidated
income statement as a reclassification adjustment.
Net investment hedges [where applicable] When a risk management instrument or a non-derivative financial liability is designated as the
hedging instrument in a hedge of a net investment in a foreign operation, the effective portion of
changes in the fair value of the hedging instrument is recognised in equity in the translation
reserve. Any ineffective portion of the changes in the fair value of the risk management
instrument is recognised immediately in consolidated income statement. The amount
recognised in translation reserve is reclassified to consolidated income statement as a
reclassification adjustment on disposal of the foreign operation.
(j) Fixed assets (i) Recognition and measurement IAS
16.73(a)
IAS 16.30 IAS 16.16 IAS 16.45 IAS 16.41, 71
Items of fixed assets are measured at cost less accumulated depreciation and impairment
losses.
Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost
of self-constructed assets includes the cost of materials and direct labour, any other costs
directly attributable to bringing the assets to a working condition for their intended use, the
costs of dismantling and removing the assets and restoring the site on which they are located
and capitalised borrowing costs. (Cost may also include transfers from equity of any gain or
loss on qualifying cash flow hedges of foreign currency purchases of fixed assets.)
[Alternatively after recognition of a fixed asset whose fair value can be measured reliably shall
be carried at a revalued amount, being its fair value recognised in equity at the date of the
revaluation less any subsequent accumulated depreciation and subsequent accumulated
impairment losses. Revaluations shall be made with sufficient regularity to ensure that the
carrying amount does not differ materially from that which would be determined using fair value
at the end of the reporting period.]
Purchased software that is integral to the functionality of the related equipment is capitalised as
part of related equipment. [When the Group has sotware that are not integral part of the
Equipment should be treated as intangible assets and accounting policy should be disclosed
accordingly]
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
914
Reference
3.
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(j) Fixed assets (continued) (i) Recognition and measurement (continued)
When parts of an item of fixed asset have different useful lives, they are accounted for as
separate items (major components) of fixed assets.
The gain or loss on disposal of an item of fixed asset is determined by comparing the proceeds
from disposal with the carrying amount of the item of fixed assets, and is recognised in other
income/other expenses in consolidated income statement.
(ii) Subsequent costs
The cost of replacing a component of fixed asset is recognised in the carrying amount of the
item if it is probable that the future economic benefits embodied within the part will flow to the
Group and its cost can be measured reliably. The carrying amount of the replaced part is
derecognised. The costs of the day-to-day servicing of fixed assets are recognised in
consolidated income statement as incurred.
Depreciation is recognised in consolidated income statement on a straight-line basis over the
estimated useful lives of each part of an item of fixed assets since this closely reflects the
expected pattern of consumption of the future economic benefits embodied in the asset and is
based on cost of the asset less its estimated residual value. Leased assets under finance
leases are depreciated over the shorter of the lease term and their useful lives. Land is not
depreciated.
The estimated useful lives for the current and comparative years are as follows:
XXX XX years
XXX XX years
Useful lives and residual values are reassessed at each reporting date and adjusted
prospectively, if appropriate.
(k) Goodwill
Goodwill that arises upon the acquisition of subsidiaries is included in intangible assets.
Subsequent to initial recognition goodwill is measured at cost less accumulated impairment
losses.
Intangible assets other than goodwill are amortised over their useful lives, and carried net of
accumulated amortisation and impairment losses. Useful life of intangible assets are as
follows:
Purchased software XX years
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
915
Reference
3.
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(l) Impairment of non-financial assets IAS 36.9 IAS 36.18, 80
[The carrying amounts of the Group’s non-financial assets, other than deferred tax assets
(where applicable) are reviewed at each reporting date to determine whether there is any
indication of impairment. If any such indication exists, then the asset’s recoverable amount is
estimated. For goodwill and intangible assets that have indefinite useful lives or that are not
yet available for use, the recoverable amount is estimated each year at the same time. An
impairment loss is recognised if the carrying amount of an asset or its Cash Generating Unit
(“CGU") exceeds its estimated recoverable amount.
The recoverable amount of an asset or CGU is the greater of its value in use and its fair value
less costs to sell. In assessing value in use, the estimated future cash flows are discounted to
their present value using a pre-tax discount rate that reflects current market assessments of
the time value of money and the risks specific to the asset or CGU.
For the purpose of impairment testing, assets that cannot be tested individually are grouped
together into the smallest group of assets that generates cash inflows from continuing use that
are largely independent of the cash inflows of other assets or CGU. Subject to an operating
segment ceiling test, for the purposes of goodwill impairment testing, CGUs to which goodwill
has been allocated are aggregated so that the level at which impairment testing is performed
reflects the lowest level at which goodwill is monitored for internal reporting purposes.
Goodwill acquired in a business combination is allocated to groups of CGUs that are expected
to benefit from the synergies of the combination.
The Group’s corporate assets do not generate separate cash inflows and are utilised by more
than one CGU. Corporate assets are allocated to CGUs on a reasonable and consistent basis
and tested for impairment as part of the testing of the CGU to which the corporate asset is
allocated.
IAS 36.102 IAS 36.104
Impairment losses are recognised in consolidated income statement. Impairment losses
recognised in respect of CGUs are allocated first to reduce the carrying amount of any
goodwill allocated to the CGU (group of CGUs) and then to reduce the carrying amount of the
other assets in the CGU (group of CGUs) on a pro rata basis.
An impairment loss in respect of goodwill is not reversed. In respect of other assets,
impairment losses recognised in prior periods are assessed at each reporting date for any
indications that the loss has decreased or no longer exists. An impairment loss is reversed if
there has been a change in the estimates used to determine the recoverable amount.
An impairment loss is reversed only to the extent that the asset’s carrying amount does not
exceed the carrying amount that would have been determined, net of depreciation or
amortisation, if no impairment loss had been recognised.]
(m) Customer current accounts
Balances in current accounts are recognised when received by the Bank. The transactions are
measured as the amount received by the Bank at the time of contracting. At the end of the
reporting period, these accounts are measured at amortised cost.
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
916
Reference
3.
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(n) Equity of investment account holders FAS 6.3-8
Equity of investment account holders are funds held by the Group, which it can invest at its
own discretion. The investment account holders authorises the Group to invest the account
holders’ funds in a manner which the Group deems appropriate without laying down any
restrictions as to where, how and for what purpose the funds should be invested.
The Bank charges a management fee (Mudarib fees) to investment account holders. Of the
total income from investment accounts, the income attributable to account holders is allocated
to investment accounts after setting aside provisions, reserves (profit equalisation reserve and
investment risk reserve) and deducting the Group’s share of income as a Mudarib. The
allocation of income is determined by the management of the Group within the allowed profit
sharing limits as per the terms and conditions of the investment accounts.
Investment accounts are carried at their book values and include amounts retained towards
the profit equalisation and investment risk reserves. The profit equalisation reserve is the
amount appropriated by the Group out of the Mudaraba income, before allocating the
Mudarib’s share, in order to maintain a certain level of return to the account holders on the
investments. The investment risk reserve is the amount appropriated by the Group out of the
income of investment account holders, after allocating the Mudarib’s share, in order to cater
against future losses for investment account holders.
(o) Distribution of profit between equity of investment account holders and owners
The Bank complies with the directives of the QCB as follows: Net profit is arrived at after taking into account all income and expenses at the end of
the financial year, and is distributed between investment account holders and owners. The share of profit of investment account holders is calculated on the basis of their daily
deposit balances over the year, after reducing the Bank’s agreed and declared
Mudaraba fee.
In case of any expense or loss, which arises out of negligence on the part of the Bank
due to non-compliance with QCB regulations and instructions, then such expenses or
loss, shall not be borne by the investment account holders. Such matter is subject to the
QCB decision.
In case the results of the Group at the year end are net losses, then QCB, being the
authority responsible for determining the Bank’s accountability for these losses, shall
decide how these shall be treated without violation to the Islamic Shari’a rules.
Due to pooling of investment funds with the Group’s funds for the purpose of
investment, no priority has been given to either party in the appropriation of profit.
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
917
Reference 3.
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(p) Restricted investment accounts FAS 6.9-14 and FAS 1.65
Restricted investment accounts represents assets acquired by funds provided by holders of
restricted investment accounts and their equivalent and managed by the Group as an
investment manager based on either a Mudaraba contract or (Wakala) agency contract. The
restricted investment accounts are exclusively restricted for investment in specified projects as
directed by the investments account holders. Assets that are held in such capacity are not
included as assets of the Group in the consolidated financial statements.
(q) Financing liabilities [Sukuk financing]
[Sukuk financing represents common shares in the ownership of assets or benefits or services
which bears fixed semi-annual profit and mature after __ years. Profits are recognised
periodically till maturity. Sukuks are recognised at amoritised cost. Sukuks are disclosed as a
separate line in the consolidated financial statements as “Sukuk financing”.] [Accounting policy statement for Sukuk may vary depending on the structure of the Sukuk and
characteristics attached to Sukuk.]
IAS 37.14 (r) Provisions
Provision is recognised if, as a result of a past event, the Group has a present legal or
constructive obligation that can be estimated reliably, and it is probable that an outflow of
economic benefits will be required to settle the obligation. Provisions are determined by
discounting the expected future cash flows at a pre-tax rate that reflects current market
assessments of the time value of money and, where appropriate, the risks specific to the
liability. IAS 37.72(a) (i) Restructuring
A provision for restructuring is recognised when the Group has approved a detailed and formal
restructuring plan, and the restructuring either has commenced or has been announced
publicly. Future operating losses are not provided for. (ii) Onerous contracts IAS 37.66
A provision for onerous contracts is recognised when the expected benefits to be derived by
the Group from a contract are lower than the unavoidable cost of meeting its obligations under
the contract. The provision is measured at the present value of the lower of the expected cost
of terminating the contract and the expected net cost of continuing with the contract. Before a
provision is established, the Group recognises any impairment loss on the assets associated
with that contract.
(s) Employee benefits IAS 19.44
Defined contribution plans The Group provides for its contribution to the State administered retirement fund for Qatari
employees in accordance with the retirement law, and the resulting charge is included within
the personnel cost under general and administration expenses in the consolidated income
statement. The Group has no further payment obligations once the contributions have been
paid. The contributions are recognised when they are due. [Defined benefits scheme accounting to be disclosed as applicable].
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
918
Reference 3.
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(s) Employee benefits (continued)
Short-term employee benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are
expensed as the related service is provided. A liability is recognised for the amount expected to
be paid under short-term cash bonus or profit-sharing plans if the Group has a present legal or
constructive obligation to pay this amount as a result of past service provided by the employee
and the obligation can be estimated reliably. IFRS 7.21 (t) Share capital and reserves (i) Share issue costs
Incremental costs directly attributable to the issue of an equity instrument are deducted from
the initial measurement of the equity instrument. (ii) Dividends on ordinary shares
Dividends on ordinary shares are recognised in equity in the period in which they are approved
by the Bank’s owners. [Dividends that are declared after the reporting date should be disclosed
as subsequent events.]
(u) Revenue recognition
Murabaha Profit from Murabaha transactions is recognised when the income is both contractually
determinable and quantifiable at the commencement of the transaction. Such income is
recognised on a time-apportioned basis over the period of the transaction. Where the income
from a contract is not contractually determinable or quantifiable, it is recognised when the
realisation is reasonably certain or when actually realised. Income related to non-performing
accounts is excluded from the consolidated income statement. Mudaraba Income on Mudaraba financing is recognised when the right to receive payment is established
or on distribution by the Mudarib, whereas losses are charged to the consolidated income
statement on declaration by the Mudarib.
Musharaka Income on Musharaka financing is recognised when the right to receive payments is
established or on distribution. Ijara Ijara income is recognised on time-apportioned basis over the lease period. Income related to
non-performing accounts is excluded from the consolidated income statement. Istisna’a Revenue and the associated profit margin are recognised in the Group’s consolidated income
statement according to the percentage of completion method or completed contract method. Wakala Income from Wakala placements is recognised on a time apportioned basis so as to yield a
constant periodic rate of return based on the balance outstanding.
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
919
Reference 3.
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(u) Revenue recognition (continued)
Income from investment banking services Income from investment banking services (presented in fee and commission income),
including placement, advisory, marketing and performance fees, is recognised as per
contractual terms when the service is provided and income is earned. This is usually when
the Group has performed all significant acts in relation to a transaction and it is highly
probable that the economic benefits from the transaction will flow to the Group. Significant
acts in relation to a transaction are determined based on the terms agreed in the contracts
for each transaction. The assessment of whether economic benefits from a transaction will
flow to the Group is based on the extent of binding firm commitments received from other
parties. Fees and commission income Fees and commission income that are integral to the effective profit rate on a financial asset
carried at amortised cost are included in the measurement of the effective profit rate of the
financial asset. Other fees and commission income, including account servicing fees, sales
commission, management, arrangement and syndication fees, are recognised as the related
services are performed. Dividend income Dividend income is recognised when the right to receive the dividend is established.
(v) Tax expense [where applicable] IAS 12.58 IAS 12.46
IAS 12.22(c),
39
Tax expense comprises current and deferred tax. Current tax and deferred tax are
recognised in consolidated income statement except to the extent that it relates to items
recognised directly in equity. Current tax is the expected tax payable or receivable on the
taxable income or loss for the year, using tax rates enacted or substantively enacted at the
reporting date, and any adjustment to tax payable in respect of previous years. Deferred tax (where applicable) is recognised in respect of temporary differences between
the carrying amounts of assets and liabilities for financial reporting purposes and the
amounts used for taxation purposes. Deferred tax is not recognised for:
temporary differences on the initial recognition of assets or liabilities in a transaction that
is not a business combination and that affects neither accounting nor taxable
consolidated income statement;
temporary differences related to investments in subsidiaries to the extent that it is
probable that they will not reverse in the foreseeable future; and
temporary differences arising on the initial recognition of goodwill. Deferred tax is measured at the tax rates that are expected to be applied to the temporary
differences when they reverse, based on the laws that have been enacted or substantively
enacted by the reporting date.
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
920
Reference 3.
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(v) Tax expense [where applicable] (continued) IAS 12.71, 74
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset
current tax liabilities against current tax assets, and they relate to taxes levied by the same
tax authority on the same taxable entity, or on different tax entities, but they intend to settle
current tax liabilities and assets on a net basis or their tax assets and liabilities will be
realised simultaneously. A deferred tax asset is recognised for unused tax losses, tax credits and deductible
temporary differences to the extent that it is probable that future taxable profits will be
available against which they can be utilised. Deferred tax assets are reviewed at each
reporting date and are reduced to the extent that it is no longer probable that the related tax
benefit will be realised.
IAS 33.10 (w) Earnings per share
[The Bank presents basic and diluted earnings per share (“EPS”) data for its ordinary
shares. Basic EPS is calculated by dividing the profit or loss attributable to owners of the
Bank by the weighted average number of ordinary shares outstanding during the period.
Diluted EPS is determined by adjusting the profit or loss attributable to owners and the
weighted average number of ordinary shares outstanding for the effects of all dilutive
potential ordinary shares.] (x) Segment reporting IFRS 8.5
[An operating segment is a component of the Group that engages in business activities from
which it may earn revenues and incur expenses, including revenues and expenses that
relate to transactions with any of the Group’s other components, whose operating results
are reviewed regularly by the Group Management Committee (being the chief operating
decision maker) to make decisions about resources allocated to each segment and assess
its performance, and for which discrete financial information is available.]
(y) Fiduciary activities
The Group acts as fund manager and in other fiduciary capacities that result in the holding
or placing of assets on behalf of individuals, corporate and other institutions. These assets
and income arising thereon are excluded from these consolidated financial statements, as
they are not assets of the Group.
(z) Repossessed collateral
Repossessed collaterals against settlement of customers’ debts are stated within the
consolidated statement of financial position under "Other assets" at their acquisition value
net of allowance for impairment. [According to QCB instructions, the Group should dispose of any land and properties
acquired against settlement of debts within a period not exceeding three years from the date
of acquisition although this period can be extended after obtaining approval from QCB.]
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
921
Reference 3.
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(aa) Earnings prohibited by Shari’a
The Bank is committed to avoid recognising any income generated from non-Islamic
sources. Accordingly, all non-Islamic income is credited to a charity account where the Bank
uses these funds for charitable purposes. (bb) Comparatives
Except when a standard or an interpretation permits or requires otherwise, all amounts are
reported or disclosed with comparative information. (cc) Parent bank financial information
Statement of financial position and income statement of the Parent bank as disclosed in
Note 45 are prepared following the same accounting policies as mentioned above except for
investment in subsidiaries, associates and joint ventures which are carried at cost. IAS 8.30, 31 (dd) New standards and interpretations
[The following should be disclosed: Standards and interpretations that were adopted by the Group for the first time this year,
if any;
New standards and interpretations issued but not yet effective as at and for the year ended 31 December 2012 and their likely impact on the consolidated financial statements of the Group; and
Standards and interpretations that were early adopted by the Group, if any.]
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
922
IFRS 7.31
4.
FINANCIAL RISK MANAGEMENT
(a) Introduction and overviewIFRS 7.31, 32 IFRS 7.33
The Group’s business involves taking on risks in a targeted manner and managing them
professionally. The core functions of the Group’s risk management are to identify all key risks
for the Group, measure these risks, manage the risk positions and determine capital
allocations. The Group regularly reviews its risk management policies and systems to reflect
changes in markets, products and best market practice.
The Group’s aim is to achieve an appropriate balance between risk and return and minimise
potential adverse effects on the Group’s financial performance. The Group defines risk as the
possibility of losses or profits foregone, which may be caused by internal or external factors.
[Please provide description of the risk management framework applied by the board of directors
and management.]
The risks arising from financial instruments to which the Group is exposed are financial risks,
which include credit risk, liquidity risk, market risks and operational risk.
IFRS 7.33 (b) Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial
instrument fails to meet its contractual obligations.
[The following disclosure needs to be made:
-the exposure to credit risk and how it arises.
-the Group’s objectives, policies and processes for managing the risk and the methods used to
measure the risk; and
-any changes from prior period.]
(i) Credit risk measurement
Financing assets (including. bank balances, due from banks, financing commitments and guarantees) [The Group should disclose models used for estimation of credit exposure]
Investment in debt-type securities [The Group should disclose models used for estimation of credit exposure]
Over-the-counter (OTC) risk management instrument s [The Group should disclose models used for estimation of credit exposure]
(ii) Risk limit control and mitigation policies [The Group should disclose processes used to mitigate credit risk]
Collateral [The Group should disclose description of collaterals used to mitigate credit risk]
Financing limits (for risk management instrument and financing books) [The Group should disclose limits on financings used to mitigate credit risk]
Master netting arrangements [The Group should disclose master netting arrangements used to mitigate credit risk]
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
923
Reference 4. FINANCIAL RISK MANAGEMENT (CONTINUED)IFRS 7.31 (b) Credit risk (continued) IFRS 7.33 (iii) Maximum exposure to credit risk before collateral held or other credit enhancements IFRS 7.36
2012 2011
Credit risk exposures relating to financial assets recorded on the consolidated statement of financial position are as follows:
Balances with central banks XXXX XXXX
Due from banks XXXX XXXX
Financing assets XXXX XXXX
Investment securities XXXX XXXX
Other assets XXXX XXXX
XXXX XXXX
Other credit risk exposures are as follows:
Acceptances XXXX XXXX
Guarantees XXXX XXXX
Letter of credit XXXX XXXX
Unutilised credit facilities XXXX XXXX
XXXX XXXX
The above tables represents a worse-case scenario of credit risk exposure to the Group,
without taking account of any collateral held or other credit enhancements attached. For assets
recorded on the consolidated statement of financial position, the exposures set out above are
based on net carrying amounts as reported on the consolidated statement of financial position.
(iv) Concentration of risks of financial assets with credit risk exposure IFRS 7.34(c) Geographical sectors
[The following table breaks down the Group’s credit exposure at their carrying amounts (without
taking into account any collateral held or other credit support), as categorised by geographical
region. For this table, (as an illustration in these illustrative consolidated financial statements),
the Group has allocated exposures to regions based on the country of domicile of its
counterparties.]
2012
Qatar
Other
GCC
Other
Middle
East Others Total
Assets recorded on the consolidated
statement of financial position:
Balances with central banks XXXX XXXX XXXX XXXX XXXX
Due from banks XXXX XXXX XXXX XXXX XXXX
Financing assets XXXX XXXX XXXX XXXX XXXX
Investment securities XXXX XXXX XXXX XXXX XXXX
Other assets XXXX XXXX XXXX XXXX XXXX
XXXX XXXX XXXX XXXX XXXX
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
924
Reference 4.
FINANCIAL RISK MANAGEMENT (CONTINUED)
(b) Credit risk (continued) IFRS 7.34(c) (iv) Concentration of risks of financial assets with credit risk exposure (continued) Geographical sectors (continued)
2011
Assets recorded on the consolidated
statement of financial position: Qatar
Other
GCC
Other
Middle
East Others Total
Balances with central banks XXXX XXXX XXXX XXXX XXXX
Due from banks XXXX XXXX XXXX XXXX XXXX
Financing assets XXXX XXXX XXXX XXXX XXXX
Investment securities XXXX XXXX XXXX XXXX XXXX
Other assets XXXX XXXX XXXX XXXX XXXX
XXXX XXXX XXXX XXXX XXXX
2012
Qatar
Other
GCC
Other
Middle
East Others Total
Acceptances XXXX XXXX XXXX XXXX XXXX
Guarantees XXXX XXXX XXXX XXXX XXXX
Letter of credit XXXX XXXX XXXX XXXX XXXX
Unutilised credit facilities XXXX XXXX XXXX XXXX XXXX
XXXX XXXX XXXX XXXX XXXX
2011
Qatar
Other
GCC
Other
Middle
East Others Total
Acceptances XXXX XXXX XXXX XXXX XXXX
Guarantees XXXX XXXX XXXX XXXX XXXX
Letter of credit XXXX XXXX XXXX XXXX XXXX
Unutilised credit facilities XXXX XXXX XXXX XXXX XXXX
XXXX XXXX XXXX XXXX XXXX
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
925
Reference IFRS 7.31 4. FINANCIAL RISK MANAGEMENT (CONTINUED)IFRS 7.32 (b) Credit risk (continued) (iv) Concentration of risks of financial assets with credit risk exposure (continued)IFRS 7.34(c) Industry sectors
[The following table, as an illustration, breaks down the Group’s credit exposure at carrying
amounts before taking into account collateral held or other credit enhancements, as categorised
by the industry sectors of the Group’s counterparties.]
Gross
exposure
2012
Gross
exposure
2011
Funded and unfunded
Government XXXX XXXX
Government agencies XXXX XXXX
Industry XXXX XXXX
Commercial XXXX XXXX
Services XXXX XXXX
Contracting XXXX XXXX
Real estate XXXX XXXX
Personal XXXX XXXX
Others XXXX XXXX
Contingent liabilities XXXX XXXX
XXXX XXXX
Credit risk exposure The tables below presents an analysis of financial assets by rating agency designation, based
on Standard & Poor’s ratings (or their equivalent):
2012 2011
Equivalent grades
AAA to AA- XXXX XXXX
A+ to A- XXXX XXXX
BBB+ to BBB- XXXX XXXX
BB+ to B- XXXX XXXX
Below B- XXXX XXXX
Unrated XXXX XXXX
XXXX XXXX
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
926
Reference
IFRS 7.31
IFRS 7.33
IFRS 7.36(c)
IFRS 7.34(a)
IFRS 7.37(b)
IFRS 7.34(a)
IFRS 7.36(c)
4. FINANCIAL RISK MANAGEMENT (CONTINUED) (b) Credit risk (continued) (v) Credit quality
Financing assets
Due from banks
Investment in debt-
type securities
2012 2011 2012 2011 2012 2011
Neither past due nor impaired (low risk):
[Investment grade XXXX XXXX XXXX XXXX XXXX XXXX
Standard monitoring XXXX XXXX XXXX XXXX XXXX XXXX
Special monitoring] * XXXX XXXX XXXX XXXX XXXX XXXX
Carrying amount XXXX XXXX XXXX XXXX XXXX XXXX
Past due but not impaired (special mentioned):
[Investment grade XXXX XXXX XXXX XXXX XXXX XXXX
Standard monitoring XXXX XXXX XXXX XXXX XXXX XXXX
Special monitoring] * XXXX XXXX XXXX XXXX XXXX XXXX
Carrying amount XXXX XXXX XXXX XXXX XXXX XXXX
Impaired
Substandard (overdue > 3 months) XXXX XXXX XXXX XXXX XXXX XXXX
Doubtful (overdue > 6 months) XXXX XXXX XXXX XXXX XXXX XXXX
Loss (overdue > 9 months) XXXX XXXX XXXX XXXX XXXX XXXX
XXXX XXXX XXXX XXXX XXXX XXXX
Less: impairment allowance-specific (XXXX) (XXXX) (XXXX) (XXXX) (XXXX) (XXXX)
Less: impairment allowance-collective (XXXX) (XXXX) (XXXX) (XXXX) (XXXX) (XXXX)
XXXX
XXXX
XXXX
XXXX
XXXX
XXXX
Carrying amount – net XXXX XXXX XXXX XXXX XXXX XXXX
Investment securities (debt)
At amoritised cost - - - - XXXX XXXX
Less: impairment allowance - - - - (XXXX) (XXXX)
Carrying amount – net - - - - XXXX XXXX
Total carrying amount XXXX XXXX XXXX XXXX XXXX XXXX
*[The Bank should disclose its grading in accordance with its internal risk grading system / QCB regulations
under these broader categories.]
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
927
Reference
IFRS 7.36(c)
4. (b) (v)
FINANCIAL RISK MANAGEMENT (CONTINUED) Credit risk (continued) Credit quality (continued) Impaired financing assets and investment in debt-type securities Individually impaired financing assets and investment in debt-type securities (other than those
carried at fair value through income statement) for which the Group determines that there is
objective evidence of impairment and it does not expect to collect all principal and profit due
according to the contractual terms of the financing / investment security agreement(s).
Investment in debt-type securities carried at fair value through income statement are not
assessed for impairment but are subject to the same internal grading system.
IFRS 7.34(a) Financing assets past due but not impaired
Past due but not impaired financing assets are those for which contractual profit or principal
payments are past due, but the Group believes that impairment is not appropriate on the basis of
the level of security/collateral available and/or the stage of collection of amounts owed to the
Group.
2012 2011
Upto 30 days XXXX XXXX
30 to 60 days XXXX XXXX
60 – 90 days XXXX XXXX
Gross XXXX XXXX
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
928
Reference 4. FINANCIAL RISK MANAGEMENT (CONTINUED) IFRS 7.36(d)
(b) (v)
Credit risk (continued) Credit quality (continued)
Renegotiated financing assets
Restructuring activities include extended payment arrangements, approved external management
plans, modification and deferral of payments. Restructuring policies and practices are based on
indicators or criteria that, in the judgement of local management, indicate that payment will most
likely continue. These policies are kept under continuous review. In the majority of cases,
restructuring results in the asset continuing to be impaired:
2012 2011
Continuing to be impaired after restructuring XXXX XXXX
Non–impaired after restructuring – would otherwise have been impaired XXXX XXXX
Non–impaired after restructuring – would otherwise not have been impaired XXXX XXXX
XXXX XXXX
(vi) Collateral
The determination of eligible collateral and the value of collateral are based on QCB
regulations and are assessed by reference to market price or indexes of similar assets.
The Group has collateral in the form of blocked deposit, pledge of shares or legal mortgage
against the past dues financing assets.
The aggregate collateral is QAR __ million (2011: QAR __ million) for past due up to 30 days,
QAR __ million (2011: QAR __ million) for past due from 31 to 60 days, QAR __ million (2010:
QAR __ million) for past due from 61 and 90 days, and QAR __ million (2010: QAR __ million)
for past due from 91 and above days. IFRS 7.38 (vii) Repossessed collateral
During the year , the Group obtained assets by taking possession of collateral held as security as
follows:
2012 2011
Real estate XXXX XXXX
Financial instruments XXXX XXXX
XXXX XXXX
Repossessed properties are sold as soon as practicable, with the proceeds used to reduce the
outstanding indebtedness. Repossessed property is classified in the consolidated statement of
financial position within other assets. The Group generally does not use the non-cash collateral
for its own operations.
(viii) Write-off policy
The Group writes off a financing asset or an investment in debt-type security balance, and any
related allowances for impairment losses, when Group determines that the financing asset or
security is uncollectible and after QCB approval is obtained.
This determination is made after considering information such as the occurrence of significant
changes in the borrower’s / issuer’s financial position such that the borrower / issuer can no
longer pay the obligation, or that proceeds from collateral will not be sufficient to pay back the
entire exposure. For smaller balance standardised financing assets, write-off decisions generally
are based on a product-specific past due status. The amount written off during the year was QAR
____ thousands (2011: QAR _______ thousands.).
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
929
Reference
4.
FINANCIAL RISK MANAGEMENT (CONTINUED)
IFRS 7.31 (c) Liquidity risk
IFRS 7.39
Liquidity risk is the risk that the Group is unable to meet its obligations when they fall due as a
result of e.g. customer deposits being withdrawn, cash requirements from contractual
commitments, or other cash outflows, such as debt maturities or margin calls for risk
management instrument s etc. Such outflows would deplete available cash resources for client
financing, trading activities and investments. In extreme circumstances, lack of liquidity could
result in reductions in the consolidated statement of financial position and sales of assets, or
potentially an inability to fulfil financing commitments. The risk that the Group will be unable to do
so is inherent in all banking operations and can be affected by a range of institution-specific and
market-wide events including, but not limited to, credit events, merger and acquisition activity,
systemic shocks and natural disasters. IFRS 7.39(b) (i) Management of liquidity risk [The Group should disclose the a description of how liquidity risk is managed.] (ii) Exposure to liquidity riskIFRS 7.34(a), 39(c)
The key measure used by the Group for managing liquidity risk is the ratio of net liquid assets to
deposits from customers. For this purpose net liquid assets are considered as including cash and
cash equivalents and investment grade debt securities for which there is an active and liquid
market less any deposits from banks, debt securities issued, other borrowings and commitments
maturing within the next month. A similar, but not identical, calculation is used to measure the
Group’s compliance with the liquidity limit established by QCB.
Details of the reported Group ratio of net liquid assets to deposits from customers at the reporting
date and during the year were as follows:
2012 2011
At 31 December XXXX XXXX
Average for the year XXXX XXXX
Maximum for the year XXXX XXXX
Minimum for the year XXXX XXXX
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
930
Reference 4. FINANCIAL RISK MANAGEMENT (CONTINUED)IFRS 7.31 (c) Liquidity risk (continued) (iii) Maturity analysis
Maturity analysis of Group’s assets are prepared on the basis of their expected maturity. Whereas maturity analysis of Group’s liabilities are prepared on the basis of their contractual maturity.
Carrying
amount
Less
than 1
month
1-3
months
3
months
– 1
year
1-5
years
More
than 5
years
2012
Balances with central banks XXXX (XXXX) (XXXX) (XXXX) (XXXX) (XXXX)
Due from banks XXXX (XXXX) (XXXX) (XXXX) (XXXX) (XXXX)
Financing assets XXXX (XXXX) (XXXX) (XXXX) (XXXX) (XXXX)
Investment securities XXXX (XXXX) (XXXX) (XXXX) (XXXX) (XXXX)
Other assets XXXX (XXXX) (XXXX) (XXXX) (XXXX) (XXXX)
Total financial assets XXXX (XXXX) (XXXX) (XXXX) (XXXX) (XXXX)
Due to banks XXXX (XXXX) (XXXX) (XXXX) (XXXX) (XXXX)
Financing liabilities XXXX (XXXX) (XXXX) (XXXX) (XXXX) (XXXX)
Other liabilities XXXX (XXXX) (XXXX) (XXXX) (XXXX) (XXXX)
Total financial liabilities XXXX (XXXX) (XXXX) (XXXX) (XXXX) (XXXX)
Equiy of investment account holders XXXX (XXXX) (XXXX) (XXXX) (XXXX) (XXXX)
Total XXXX (XXXX) (XXXX) (XXXX) (XXXX) (XXXX)
Difference XXXX (XXXX) (XXXX) (XXXX) (XXXX) (XXXX)
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
931
Reference 4. FINANCIAL RISK MANAGEMENT (CONTINUED)IFRS 7.31 (c) Liquidity risk (continued)IFRS 7.39 (iii) Maturity analysis (continued)
Carrying
amount
Less
than 1
month
1-3
months
3
months
– 1 year
1-5
years
More
than 5
years
2011
Balances with central banks XXXX (XXXX) (XXXX) (XXXX) (XXXX) (XXXX)
Due from banks XXXX (XXXX) (XXXX) (XXXX) (XXXX) (XXXX)
Financing assets XXXX (XXXX) (XXXX) (XXXX) (XXXX) (XXXX)
Investment securities XXXX (XXXX) (XXXX) (XXXX) (XXXX) (XXXX)
Other assets XXXX (XXXX) (XXXX) (XXXX) (XXXX) (XXXX)
Total financial assets XXXX (XXXX) (XXXX) (XXXX) (XXXX) (XXXX)
Due to banks XXXX (XXXX) (XXXX) (XXXX) (XXXX) (XXXX)
Financing liabilities XXXX (XXXX) (XXXX) (XXXX) (XXXX) (XXXX)
Other liabilities XXXX (XXXX) (XXXX) (XXXX) (XXXX) (XXXX)
Total financial liabilites XXXX (XXXX) (XXXX) (XXXX) (XXXX) (XXXX)
Equiy of investment account
holders XXXX (XXXX) (XXXX) (XXXX) (XXXX) (XXXX)
Total XXXX (XXXX) (XXXX) (XXXX) (XXXX) (XXXX)
Difference XXXX (XXXX) (XXXX) (XXXX) (XXXX) (XXXX)
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
932
Reference 4. FINANCIAL RISK MANAGEMENT (CONTINUED)IFRS 7.31 (c) Liquidity risk (continued)IFRS 7.39 (iv) Maturity analysis (Financial liabilities and risk management instrument s) IFRS 7.39(a)
IFRS
7.B11C(c)
7.B11D(e)
IFRS
7.39(b),
B11B
Carrying
amount
Gross
undisc-
ounted
cash
flows
Less
than 1
month
1-3
months
3
months
– 1
year
1-5
years
More
than 5
years
2012
Non-derivative financial liabilities
Due to banks XXXX XXXX (XXXX) (XXXX) (XXXX) (XXXX) (XXXX)
Financing liabilities XXXX XXXX (XXXX) (XXXX) (XXXX) (XXXX) (XXXX)
Other liabilities XXXX XXXX (XXXX) (XXXX) (XXXX) (XXXX) (XXXX)
Total liabilities XXXX XXXX (XXXX) (XXXX) (XXXX) (XXXX) (XXXX)
Equity of investment account
holders XXXX XXXX (XXXX) (XXXX) (XXXX) (XXXX) (XXXX)
Risk management
instruments
Risk Management: XXXX
Outflow (XXXX) (XXXX) (XXXX) (XXXX) (XXXX) (XXXX)
Inflow XXXX XXXX XXXX XXXX XXXX XXXX
XXXX (XXXX) (XXXX) (XXXX) (XXXX) (XXXX) (XXXX) IFRS 7.39(a)
IFRS
7.B11C(c)
7.B11D(e)
IFRS
7.39(b),
B11B
IFRS 7.39
(a), (c).
Carrying
amount
Gross
undisc-
ounted
cash
flows
Less
than 1
month
1-3
months
3
months
– 1 year
1-5
years
More
than 5
years
2011
Non-derivative financial liabilities
Due to banks XXXX XXXX (XXXX) (XXXX) (XXXX) (XXXX) (XXXX)
Financing liabilities XXXX XXXX (XXXX) (XXXX) (XXXX) (XXXX) (XXXX)
Other liabilities XXXX XXXX (XXXX) (XXXX) (XXXX) (XXXX) (XXXX)
Total liabilities XXXX XXXX (XXXX) (XXXX) (XXXX) (XXXX) (XXXX)
Equity of investment account
holders XXXX XXXX (XXXX) (XXXX) (XXXX) (XXXX) (XXXX)
Risk management instrument f
Risk Management XXXX
Outflow (XXXX) (XXXX) (XXXX) (XXXX) (XXXX) (XXXX)
Inflow XXXX XXXX XXXX XXXX XXXX XXXX
XXXX (XXXX) (XXXX) (XXXX) (XXXX) (XXXX) (XXXX)
[The Bank will need to disclose any significant differences between the expected cash flows
and the gross undiscounted cash flows.]
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
933
Reference 4. FINANCIAL RISK MANAGEMENT (CONTINUED)IFRS 7.31 (d) Market risks IFRS7.31,32
[The Group takes on exposure to market risks, which is the risk that the fair value or future cash
flows of a financial instrument will fluctuate because of changes in market prices. Market risks
arise from open positions in profit rate, currency and equity products, all of which are exposed to
general and specific market movements and changes in the level of volatility of market rates or
prices such as profit rates, credit spreads, foreign exchange rates and equity prices. The Group
separates exposures to market risk into either trading or non-trading portfolios. The market risks arising from trading and non-trading activities are concentrated in Group
Treasury and monitored by two teams separately. Regular reports are submitted to the Board of
Directors and heads of each business unit. Trading portfolios include those positions arising from market-making transactions where the
Group acts as principal with clients or with the market. Non-trading portfolios primarily arise from the profit rate management of the entity’s retail and
corporate banking assets and liabilities. Non-trading portfolios also consist of foreign exchange
and equity risks arising from the Group’s debt-type and equity-type investments.] (i) Management of market risks
[Overall authority for market risk is vested in ALCO. Group Market Risk is responsible for the
development of detailed risk management policies (subject to review and approval by ALCO) and
for the day-to-day review of their implementation. – Explain detailed management of market
risks.] (ii) Exposure to market risks – trading portfolios [if applicable]IFRS 7.41(a)
[The principal tool used to measure and control market risk exposure within the Group’s trading
portfolios is Value at Risk (VaR). The VaR of a trading portfolio is the estimated loss that will
arise on the portfolio over a specified period of time (holding period) from an adverse market
movement with a specified probability (confidence level). The VaR model used by the Group is
based upon a 99 percent confidence level and assumes a 10-day holding period. The VaR model
used is based mainly on historical simulation. Taking account of market data from the previous
two years, and observed relationships between different markets and prices, the model
generates a wide range of plausible future scenarios for market price movements.]
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
934
IFRS 7.31 4. FINANCIAL RISK MANAGEMENT (CONTINUED) (d) Market risks (continued) (ii) Exposure to market risks – trading portfolios [if applicable] (continued)
Although VaR is an important tool for measuring market risk, the assumptions on which the
model is based do give rise to some limitations, including the following:
A 10-day holding period assumes that it is possible to hedge or dispose of positions within
that period. This may not be the case for certain highly illiquid assets or in situations in
which there is severe general market illiquidity.
A 99 percent confidence level does not reflect losses that may occur beyond this level. Even
within the model used there is a one percent probability that losses could exceed the VaR.
VaR is calculated on an end-of-day basis and does not reflect exposures that may arise on
positions during the trading day.
The use of historical data as a basis for determining the possible range of future outcomes
may not always cover all possible scenarios, especially those of an exceptional nature.
The VaR measure is dependent upon the Group’s position and the volatility of market prices.
The VaR of an unchanged position reduces if market price volatility declines and vice versa.
The Group uses VaR limits for total market risk and specific foreign exchange, profit rate, equity,
credit spread and other price risks. The overall structure of VaR limits is subject to review and
approval by ALCO. VaR limits are allocated to trading portfolios. VaR is measured at least daily
and more regularly for more actively traded portfolios. Daily reports of utilisation of VaR limits are
submitted to Group Market Risk and regular summaries are submitted to ALCO. IFRS 7.41(b)
A summary of the VaR position of the Group’s trading portfolios at 31 December and during the
year is as follows:
At 31
December Average Maximum Minimum
2012 Foreign currency risk XXXX XXXX XXXX XXXX
Profit rate risk XXXX XXXX XXXX XXXX
Credit spread risk XXXX XXXX XXXX XXXX
Equity price risk XXXX XXXX XXXX XXXX
Covariance XXXX XXXX XXXX XXXX
Overall XXXX XXXX XXXX XXXX
2011 Foreign currency risk XXXX XXXX XXXX XXXX
Profit rate risk XXXX XXXX XXXX XXXX
Credit spread risk XXXX XXXX XXXX XXXX
Equity price risk XXXX XXXX XXXX XXXX
Covariance XXXX XXXX XXXX XXXX
Overall XXXX XXXX XXXX XXXX
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
935
Reference 4. FINANCIAL RISK MANAGEMENT (CONTINUED)IFRS 7.31 (d) Market risks (continued) (ii) Exposure to market risks – trading portfolios (continued)
The limitations of the VaR methodology are recognised by supplementing VaR limits with other
position and sensitivity limit structures, including limits to address potential concentration risks
within each trading portfolio. In addition, the Group uses a wide range of stress tests to model
the financial impact of a variety of exceptional market scenarios, such as periods of prolonged
market illiquidity, on individual trading portfolios and the Group’s overall position.
(iii) Exposure to profit rate risk – non-trading portfolios IFRS 7.34(a)
The principal risk to which non-trading portfolios are exposed is the risk of loss from fluctuations in
the future cash flows or fair values of financial instruments because of a change in market profit
rates. Profit rate risk is managed principally through monitoring profit rate gaps and by having pre-
approved limits for repricing bands. ALCO is the monitoring body for compliance with these limits
and is assisted by Group central Treasury in its day-to-day monitoring activities.
A summary of the Group’s profit rate gap position on non-trading portfolios is as follows: Repricing in:
Carrying
amount
Less
than 3
months
3-12
months
1-5
years
More
than 5
years
Non-profit
sensitive
Effective
profit rate
2012
Cash and balances with central
banks XXXX XXXX XXXX XXXX XXXX XXXX XXXX
Due from banks XXXX XXXX XXXX XXXX XXXX XXXX XXXX
Financing assets XXXX XXXX XXXX XXXX XXXX XXXX XXXX
Investment securities XXXX XXXX XXXX XXXX XXXX XXXX XXXX
XXXX XXXX XXXX XXXX XXXX XXXX XXXX
Due to banks (XXXX) (XXXX) (XXXX) (XXXX) (XXXX) (XXXX) (XXXX)
Financing liabilities (XXXX) (XXXX) (XXXX) (XXXX) (XXXX) (XXXX) (XXXX)
(XXXX) (XXXX) (XXXX) (XXXX) (XXXX) (XXXX) (XXXX)
Equity of investment account holders (XXXX) (XXXX) (XXXX) (XXXX) (XXXX) - (XXXX)
Consolidated statement of financial position items XXXX XXXX XXXX XXXX XXXX XXXX XXXX
Off consolidated statement of financial position items - XXXX XXXX XXXX XXXX XXXX XXXX
Profit rate sensitivity gap (XXXX) (XXXX) (XXXX) (XXXX) (XXXX) (XXXX) -
Cumulative profit rate sensitivity gap (XXXX) (XXXX) (XXXX) (XXXX) (XXXX) (XXXX) (XXXX)
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
936
IFRS 7.31 4. FINANCIAL RISK MANAGEMENT (CONTINUED) (d) Market risks (continued) (iii) Exposure to profit rate risk – non-trading portfolios (continued) IFRS 7.34(a)
Repricing in:
Carrying
amount
Less
than 3
months
3-12
months
1-5
years
More
than 5
years
Non-
profit
sensitive
Effective
profit rate
2011
Cash and balances with
central banks XXXX XXXX XXXX XXXX XXXX XXXX XXXX
Due from banks XXXX XXXX XXXX XXXX XXXX XXXX XXXX
Financing assets XXXX XXXX XXXX XXXX XXXX XXXX XXXX
Investment securities XXXX XXXX XXXX XXXX XXXX XXXX XXXX
XXXX XXXX XXXX XXXX XXXX XXXX XXXX
Due to banks (XXXX) (XXXX) (XXXX) (XXXX) (XXXX) (XXXX) (XXXX)
Financing liabilities (XXXX) (XXXX) (XXXX) (XXXX) (XXXX) (XXXX) (XXXX)
(XXXX) (XXXX) (XXXX) (XXXX) (XXXX) (XXXX) (XXXX)
Equity of investment account holders (XXXX) (XXXX) (XXXX) (XXXX) (XXXX) - (XXXX)
Consolidated statement of financial position items XXXX XXXX XXXX XXXX XXXX XXXX XXXX
Off consolidated statement of financial position items - XXXX XXXX XXXX XXXX XXXX XXXX
Profit rate sensitivity gap (XXXX) (XXXX) (XXXX) (XXXX) (XXXX) (XXXX) -
Cumulative profit rate sensitivity gap (XXXX) (XXXX) (XXXX) (XXXX) (XXXX) (XXXX) (XXXX)
Sensitivity analysis
The management of profit rate risk against profit rate gap limits is supplemented by monitoring the
sensitivity of the Group’s financial assets and liabilities to various standard and Non - standard
profit rate scenarios. Standard scenarios that are considered on a monthly basis include a 100
basis point (bp) parallel fall or rise in all yield curves worldwide and a 50 bp rise or fall in the
greater than 12-month portion of all yield curves. An analysis of the Group’s sensitivity to an
increase or decrease in market profit rates, assuming no asymmetrical movement in yield curves
and a constant financial position, is as follows:
Sensitivity of net profit
100 bp
parallel
increase
100 bp
parallel
decrease
2012
At 31 December (XXXX) XXXX
Average for the year (XXXX) XXXX
2011
At 31 December (XXXX) XXXX
Average for the year (XXXX) XXXX
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
937
Reference 4. FINANCIAL RISK MANAGEMENT (CONTINUED)IFRS 7.31 (d) Market risks (continued)IFRS 7.40(a) (iii) Exposure to profit rate risk – non-trading portfolios [if applicable] (continued)
Profit rate movements affect reported equity in the following ways:
retained earnings arising from increases or decreases in net profit and the fair value changes
reported in consolidated income statement; and
hedging reserves arising from increases or decreases in fair values of hedging instruments
designated in qualifying cash flow hedge relationships;
Overall non-trading profit rate risk positions are managed by Group Central Treasury, which uses
financial investments, advances to banks, deposits from banks and risk management instrument s
to manage the overall position arising from the Group’s non-trading activities. The use of risk
management instrument s to manage profit rate risk. (iv) Exposure to other market risks – non-trading portfolios
Foreign currency transactions The result of structural foreign exchange positions on the Group’s net investments in foreign
subsidiaries and branches, together with any related net investment hedges, is recognised in
equity. The Group’s policy is only to hedge such exposures when not doing so would have a
significant impact on the regulatory capital ratios of the Group and its subsidiaries. The result of
this policy is that hedging generally only becomes necessary when the ratio of structural
exposures in a particular currency to risk-weighted assets denominated in that currency diverges
significantly from the capital ratio of the entity being considered. In addition to monitoring VaR in
respect of foreign currency, the Group monitors any concentration risk in relation to any individual
currency in regard to the translation of foreign currency transactions and monetary assets and
liabilities into the respective functional currency of Group entities, and with regard to the
translation of foreign operations into the presentation currency of the Group (after taking account
of the impact of any qualifying net investment hedges).
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
938
Reference 4. FINANCIAL RISK MANAGEMENT (CONTINUED)IFRS 7.31 (d) Market risks (continued) (iv) Exposure to other market risks – non-trading portfolios (continued) IFRS 7.34(c)
Foreign currency transactions (continued)
Functional currency of Group entities
2012 2011
Net foreign currency exposure:
Pounds Sterling XXXX XXXX
USD XXXX XXXX
Euro XXXX XXXX
Other currencies XXXX XXXX
Foreign operations Net investments
2012 2011
Functional currency of foreign operation:
Pounds Sterling XXXX XXXX
USD XXXX XXXX
Euro XXXX XXXX
Increase /
(decrease) in profit or loss
Increase / (decrease) in equity
5% increase / (decrease) in currency exchange rate 2012 2011 2012 2011 Pound Sterling XXXX XXXX XXXX XXXXUSD XXXX XXXX XXXX XXXXEuro XXXX XXXX XXXX XXXXOther XXXX XXXX XXXX XXXX
Equity price risk
Equity price risk is the risk that the fair value of equities decreases as a result of changes in the
level of equity indices and individual stocks. The non-trading equity price risk exposure arises from
equity securities classified as fair value through income statement and fair value through equity.
The Group is also exposed to equity price risk and the sensitivity analysis thereof is as follows:
2012 2011
5% increase / (decrease) in [QE 30 index]
Increase / (decrease) in profit and loss XXXX XXXX
Increase / (decrease) in equity XXXX XXXX
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
939
The above analysis has been prepared on the assumption that all other variables such as profit
rate, foreign exchange rate, etc are held constant and is based on historical correlation of the
equity securities to the relevant index. Actual movement may be different from the one stated
above. Reference 4. FINANCIAL RISK MANAGEMENT (CONTINUED)IFRS 7.31 (e) Operational risks
[Operational risk is the risk of direct or indirect loss arising from a wide variety of causes
associated with the Group’s involvement with financial instruments, including processes,
personnel, technology and infrastructure, and from external factors other than credit, market and
liquidity risks such as those arising from legal and regulatory requirements and generally accepted
standards of corporate behaviour.
The Group’s objective is to manage operational risk so as to balance the avoidance of financial
losses and damage to the Group’s reputation with overall cost effectiveness and to avoid control
procedures that restrict initiative and creativity.
The primary responsibility for the development and implementation of controls to address
operational risk is assigned to senior management within each business unit. This responsibility is
supported by the development of overall Group standards for the management of operational risk
in the following areas: requirements for appropriate segregation of duties, including the independent authorisation
of transactions;
requirements for the reconciliation and monitoring of transactions;
compliance with regulatory and other legal requirements;
documentation of controls and procedures;
requirements for the periodic assessment of operational risks faced, and the adequacy of
controls and procedures to address the risks identified;
requirements for the reporting of operational losses and proposed remedial action;
development of contingency plans;
training and professional development;
ethical and business standards; and
risk mitigation, including insurance where this is effective.]
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
940
Reference 4. FINANCIAL RISK MANAGEMENT (CONTINUED)IFRS 7.31 (f) Capital management IAS 1.134 IAS 1.135(a) Regulatory capital IAS 1.135(a)(iii) IAS 1.135(d) IAS 1.135(b),(c)
The Group’s policy is to maintain a strong capital base so as to ensure investor, creditor and
market confidence and to sustain future development of the business. The impact of the level
of capital on owners’ return is also recognised and the Group recognises the need to
maintain a balance between the higher returns that might be possible with greater gearing and
the advantages and security afforded by a sound capital position. The Group and its individually regulated operations have complied with all externally imposed
capital requirements throughout the period.
The capital adequacy ratio of the Group is calculated in accordance with the Basel Committee
guidelines as adopted by the QCB.
The Group’s regulatory capital position under Basel II and QCB regulations at 31 December
was as follows:
2012 2011Tier 1 capital XXXX XXXXTier 2 capital XXXX XXXXTotal regulatory capital XXXX XXXX
[Tier 1 capital includes share capital, legal reserve, retained earnings and other reserves.]
[Tier 2 capital includes risk reserve (up to 1.25% of the risk weighted assets), fair value
reserves (45% if positive and 100 % if negative) and subordinated debt.]
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
941
Reference 4. FINANCIAL RISK MANAGEMENT (CONTINUED)IFRS 7.31 (f) Capital management (continued) Regulatory capital (continued) Risk weighted assets and carrying amounts
2012
Basel II
Risk
weighted
amount
2011
Basel II
Risk
weighted
amount
2012
Carrying
amount
2011
Carrying
amount
Balances with central banks XXXX XXXX XXXX XXXX Placements with banks and other financial institutions XXXX XXXX XXXX XXXX
Financing assets XXXX XXXX XXXX XXXX
Investment securities XXXX XXXX XXXX XXXX
Other assets XXXX XXXX XXXX XXXX Off balance sheet assets XXXX XXXX - -
Total risk weighted assets for credit risk XXXX XXXX XXXX XXXX
Risk weighted assets for market risk XXXX XXXX - XXXX Risk weighted assets for operational risk XXXX XXXX - XXXX
XXXX XXXX XXXX XXXX
2012 2011
Risk weighted assets XXXX XXXX
Regulatory capital XXXX XXXX
Risk weighted assets as a percentage of regulatory capital (capital ratio) XX% XX%
The minimum ratio limit determined by QCB is 10% and the current Basel II capital adequacy
requirement is 8%.
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
942
Reference
5.
USE OF ESTIMATES AND JUDGMENTS
(a) Key sources of estimation uncertainty The Group makes estimates and assumptions that affect the reported amounts of assets and
liabilities. Estimates and judgements are continually evaluated and are based on historical
experience and other factors, including expectations of future events that are believed to be
reasonable under the circumstances.
(i) Allowances for credit losses
Assets accounted for at amortised cost are evaluated for impairment on a basis described in
significant accounting policies.
The specific counterparty component of the total allowances for impairment applies to financial
assets evaluated individually for impairment and is based upon management’s best estimate of
the present value of the cash flows that are expected to be received. In estimating these cash
flows, management makes judgements about a counterparty’s financial situation and the net
realisable value of any underlying collateral. Each impaired asset is assessed on its merits, and
the workout strategy and estimate of cash flows considered recoverable are independently
approved by the Credit Risk function. Minimum impairment on specific counter parties are
determined based on the QCB regulations.
Collectively assessed impairment allowances cover credit losses inherent in portfolios of
financing and investment securities measured at amortised cost with similar credit risk
characteristics when there is objective evidence to suggest that they contain impaired financial
assets, but the individual impaired items cannot yet be identified. In assessing the need for
collective allowances, management considers factors such as credit quality, portfolio size,
concentrations and economic factors. In order to estimate the required allowance, assumptions
are made to define the way inherent losses are modelled and to determine the required input
parameters, based on historical experience and current economic conditions. The accuracy of
the allowances depends on the estimates of future cash flows for specific counterparty
allowances and the model assumptions and parameters used in determining collective
allowances.
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
943
Reference
5.
USE OF ESTIMATES AND JUDGMENTS (CONTINUED)
(a) Key sources of estimation uncertainty (continued) (ii) Determining fair values
The determination of fair value for financial assets and liabilities for which there is no
observable market price requires the use of valuation techniques as described in significant
accounting policies. For financial instruments that trade infrequently and have little price
transparency, fair value is less objective, and requires varying degrees of judgement depending
on liquidity, concentration, uncertainty of market factors, pricing assumptions and other risks
affecting the specific instrument. IAS 1.122 (b) Critical accounting judgements in applying the Group’s accounting policies (i) Valuation of financial instruments
The Group’s accounting policy on fair value measurements is discussed in the significant
accounting policies section.
The Group measures fair values using the following fair value hierarchy that reflects the
significance of the inputs used in making the measurements.
Level 1: Quoted market price (unadjusted) in an active market for an identical instrument.
Level 2: Valuation techniques based on observable inputs, either directly (i.e. as prices) or
indirectly (i.e. derived from prices). This category includes instruments valued using: quoted
market prices in active markets for similar instruments; quoted prices for identical or similar
instruments in markets that are considered less than active; or other valuation techniques
where all significant inputs are directly or indirectly observable from market data.
Level 3: Valuation techniques using significant unobservable inputs. This category includes
all instruments where 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 for similar
instruments where significant unobservable adjustments or assumptions are required to
reflect differences between the instruments.
Fair values of financial assets and financial liabilities that are traded in active markets are
based on quoted market prices or dealer price quotations. For all other financial instruments the
Group determines fair values using valuation techniques.
Valuation techniques include net present value and discounted cash flow models, comparison
to similar instruments for which market observable prices exist, Black-Scholes and polynomial
option pricing models and other valuation models. Assumptions and inputs used in valuation
techniques include risk-free and benchmark profit rates, credit spreads and other premia used
in estimating discount rates, bond and equity prices, foreign currency exchange rates, equity
and equity index prices and expected price volatilities and correlations. The objective of
valuation techniques is to arrive at a fair value determination that reflects the price of the
financial instrument at the reporting date, that would have been determined by market
participants acting at arm’s length.
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
944
Reference
5.
USE OF ESTIMATES AND JUDGMENTS (CONTINUED)
IAS 1.122 (b) Critical accounting judgements in applying the Group’s accounting policies (continued) (ii) Financial asset and liability classification
The table below analyses financial instruments measured at fair value at the end of the
reporting period, by the level in the fair value hierarchy into which the fair value measurement
is categorised: Level 1 Level 2 Level 3 Total
In millions 2012 Risk management instruments XXXX XXXX - XXXXInvestment securities XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
Risk management instruments XXXX XXXX - XXXX XXXX XXXX - XXXX
2011 Derivative assets held for risk management XXXX XXXX - XXXXInvestment securities XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
Risk management instruments XXXX XXXX - XXXX XXXX XXXX - XXXX
During the current year, due to changes in market conditions for certain investment securities,
quoted prices in active markets were no longer available for certain securities. However, there
was sufficient information available to measure fair values of those securities based on
observable market inputs. Hence, those securities, with a carrying amount of QAR ___ million,
were transferred from Level 1 to Level 2 of the fair value hierarchy. The Group’s accounting policies provide scope for assets and liabilities to be designated at
inception into different accounting categories in certain circumstances:
in classifying financial assets or liabilities as trading, the Group has determined that it meets
the description of trading assets and liabilities set out in accounting policies.
in designating financial assets or liabilities at fair value through income statement, the
Group has determined that it has met one of the criteria for this designation set out in
accounting policies.
Details of the Group’s classification of financial assets and liabilities are given in note 7.
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
945
Reference
5.
USE OF ESTIMATES AND JUDGMENTS (CONTINUED)
IAS 1.122 (b) Critical accounting judgements in applying the Group’s accounting policies (continued) (iii) Qualifying hedge relationships In designating financial instruments in qualifying hedge relationships, the Group has determined
that it expects the hedges to be highly effective over the period of the hedging relationship.
In accounting for risk management instrument s as cash flow hedges, the Group has
determined that the hedged cash flow exposure relates to highly probable future cash flows. (iv) Impairment of investments in equity and debt securities
Investments in equity and debt securities are evaluated for impairment on the basis described
in the significant accounting policies note. (v) Useful lives of fixed assets
The Group’s management determines the estimated useful life of fixed assets for calculating
depreciation. This estimate is determined after considering the expected usage of the asset,
physical wear and tear, technical or commercial obsolescence.
(vi) Useful life of intangible assets
The Group’s management determines the estimated useful life of its intangible asssets for
calculating amortisation. This estimate is determined after considering the expected economic
benefits to be received from the use of intangible assets.
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
946
6. OPERATING SEGMENTS
The Group has [report number] reportable segments, as described below, which are the Group’s strategic
divisions. The strategic divisions offer different products and services, and are managed separately based on the
Group’s management and internal reporting structure. For each of the strategic divisions, the Group Management
Committee reviews internal management reports on at least a [monthly / quarterly / half yearly / annually basis].
The following summary describes the operations in each of the Group’s reportable segments. [Please refer to IFRS
8 ‘Operating Segment’ to determine the reporting segments.]
EXAMPLES
Corporate Banking Includes financings, deposits and other transactions and balances with
corporate customers
Retail Banking Includes financings, deposits and other transactions and balances with
retail customers
Group central treasury Undertakes the Group’s funding and centralised risk management
activities through borrowings, issues of debt securities, use of risk
management instrument s for risk management purposes and investing
in liquid assets such as short-term placements and corporate and
government debt securities.
Asset Management Operates the Group’s funds management activities
Investment Includes the Group’s trading and corporate finance activities
Information regarding the results, assets and liabilities of each reportable segment is included below. Performance
is measured based on segment profit before tax, as included in the internal management reports that are reviewed
by the Group Management Committee. Segment profit is used to measure performance as management believes
that such information is the most relevant in evaluating the results of certain segments relative to other entities that
operate within these industries.
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
947
6. OPERATING SEGMENTS (CONTINUED)
(i) Information about operating segments 2012 Corporate
bankingRetail
bankingGroup central
treasury
Asset management
Investment Others Total
External revenue: Total income from financing and investing activities - XXXX XXXX - XXXX XXXX XXXX Net fee and commission income XXXX XXXX XXXX XXXX - - XXXX Foreign exchange gain / (loss) XXXX - - - XXXX XXXX XXXX Other income - - XXXX - XXXX XXXX XXXX Share of results of associates and joint ventures - - - - XXXX - XXXX Inter segment revenue - XXXX - - - (XXXX) - Total segment revenue XXXX XXXX XXXX XXXX XXXX XXXX XXXX
Other material non-cash items: Net impairment loss on investment securities - XXXX XXXX - - - XXXX Net impairment loss on financing assets - - - - XXXX - XXXX Reportable segment profit before tax XXXX XXXX XXXX XXXX XXXX XXXX XXXX
Reportable segment assets XXXX XXXX XXXX XXXX XXXX XXXX XXXX
Reportable segment liabilities XXXX XXXX XXXX XXXX XXXX XXXX XXXX
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
948
6. OPERATING SEGMENTS (CONTINUED)
(i) Information about operating segments (continued) 2011 Corporate
bankingRetail
bankingGroup central
treasury
Asset management
Investment Others Total
External revenue: Total income from financing and investing activities - XXXX XXXX - XXXX XXXX XXXX Net fee and commission income XXXX XXXX XXXX XXXX - - XXXX Foreign exchange gain / (loss) XXXX - - - XXXX XXXX XXXX Other income - - XXXX - XXXX XXXX XXXX Share of results of associates and joint ventures - - - - XXXX - XXXX Inter segment revenue - XXXX - - - (XXXX) - Total segment revenue XXXX XXXX XXXX XXXX XXXX XXXX XXXX
Other material non-cash items: Net impairment loss on investment securities - XXXX XXXX - - - XXXX Net impairment loss on financing assets - - - - XXXX - XXXX Reportable segment profit before tax XXXX XXXX XXXX XXXX XXXX XXXX XXXX
Reportable segment assets XXXX XXXX XXXX XXXX XXXX XXXX XXXX
Reportable segment liabilities XXXX XXXX XXXX XXXX XXXX XXXX XXXX
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
949
6. OPERATING SEGMENTS (CONTINUED) (ii) Reconciliation of reportable segment revenues, profit or (loss), assets and liabilities
2012 2011 Revenues Total revenue for reportable segments XXXX XXXXUnallocated amounts XXXX XXXXElimination of inter-segment revenue (XXXX) (XXXX)Consolidated revenue XXXX XXXX Profit or (loss) Total profit or (loss) for reportable segments XXXX XXXXUnallocated amounts XXXX XXXXConsolidated profit / (loss) before tax XXXX XXXX
Assets Total assets for reportable segments XXXX XXXXOther unallocated amounts XXXX XXXXConsolidated total assets XXXX XXXX Liabilities Total liabilities for reportable segments XXXX XXXXOther unallocated amounts XXXX XXXXConsolidated total liabilities XXXX XXXX
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
950
6. OPERATING SEGMENTS (CONTINUED) (iii) Geographical areas In presenting information on the bais of geographical areas, revenue is based on the geographical location of customers and assets are based on the geographical location of the assets.
QatarOther GCC
Middle East other than GCC Europe
North America
Rest of the
World Total 2012 External revenues XXXX XXXX XXXX XXXX XXXX XXXX XXXX
Non-current assets XXXX XXXX XXXX XXXX XXXX XXXX XXXX
2011 External revenues XXXX XXXX XXXX XXXX XXXX XXXX XXXX
Non-current assets XXXX XXXX XXXX XXXX XXXX XXXX XXXX
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
951
Reference 7. FAIR VALUE AND CLASSICIATION OF FINANCIAL INSTRUMENTSIFRS
7.6,8,25
The table below sets out the carrying amounts and fair values of the Group’s financial assets and financial liabilities:
*Fair value through income
statement
Fair value through
equity Amortised
cost
Total carrying amount
Fair value
2012 Cash and balances with central banks - - XXXX XXXX XXXXDue from banks - - XXXX XXXX XXXXFinancing assets - - XXXX XXXX XXXXInvestment securities:
- Measured at fair value XXXX XXXX - XXXX XXXX- Measured at amortised cost - - XXXX XXXX XXXX
Risk management instrument s XXXX - - XXXX XXXX XXXX XXXX XXXX XXXX XXXX Due to banks - - XXXX XXXX XXXXCustomer current accounts - - XXXX XXXX XXXXFinancing liabilities - - XXXX XXXX XXXXRisk management instruments XXXX - - XXXX XXXX XXXX - XXXX XXXX XXXX
*This category include all financial instruments mandatorily classified as ‘fair value through income statement’,’ held for trading’ and ‘designated as fair value through income statement’.
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
952
Reference 7. FAIR VALUE AND CLASSICIATION OF FINANCIAL INSTRUMENTS (CONTINUED) IFRS 7.6,8,25 The table below sets out the carrying amounts and fair values of the Group’s financial assets and financial liabilities:
*Fair value through income
statement
Fair value through
equity Amortised
cost
Total carrying amount
Fair value
2011 Cash and balances with central banks - - XXXX XXXX XXXXDue from banks - - XXXX XXXX XXXXFinancing assets - - XXXX XXXX XXXXInvestment securities:
- Measured at fair value XXXX XXXX - XXXX XXXX- Measured at amortised cost - - XXXX XXXX XXXX
Risk management instruments XXXX - - XXXX XXXX XXXX XXXX XXXX XXXX XXXX Due to banks - - XXXX XXXX XXXXCustomer current accounts - - XXXX XXXX XXXXFinancing liabilities - - XXXX XXXX XXXXRisk management instruments XXXX - - XXXX XXXX XXXX - XXXX XXXX XXXX
*This category include all financial instruments mandatorily classified as ‘fair value through income statement’,’ held for trading’ and ‘designated as fair value through income statement’.
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
953
8. BUSINESS COMBINATION(S) Subsidiaries acquired
Principal activity Date of
acquisition
Proportion of voting equity
interests acquired
(%)
Consideration transferred
QAR’0002012 Entity 1 Banking XX 20XX XX XXXXEntity 2 Asset Management XX 20XX XX XXXX XXXX [The reporting entity should provide here the details of each acquisition].
Consideration transferred 2012 2011 Cash XXXX XXXXFair value of other non cash consideration XXXX XXXXContingent consideration arrangement XXXX XXXXTotal XXXX XXXX Assets acquired and liabilities recognised at acquisition Entity 1 Entity 2 Current assets Cash and cash equivalents XXXX XXXXTrade and other receivables XXXX XXXX Non-current assets Fixed assets XXXX XXXX Current liabilities Trade and other payables (XXXX) (XXXX)Contingent liabilities (XXXX) (XXXX) Non-current liabilities Deferred tax liabilities (XXXX) (XXXX) XXXX XXXXNon-controlling interests The non-controlling interests (__% ownership interest in Entity 1) recognised at the acquisition date was measured
by reference to the fair value / [book value] of the non-controlling interests and amounted to QAR ____. This fair
value was estimated by applying the income approach.
[Please disclose the key inputs in determining the fair value of the NCI.]
[The Bank is required to disclose appropriate accounting policy for measuring non-controlling interests.]
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
954
8. BUSINESS COMBINATION(S) (CONTINUED)
Goodwill arising on acquisition Entity 1 Entity 2 Total Fair value of consideration transferred XXXX XXXX XXXXPlus: non-controlling interests (__% in entity 1, __% in entity 2) XXXX XXXX XXXXLess: fair value of identifiable net assets acquired (XXXX) (XXXX) (XXXX)Goodwill arising on acquisition XXXX XXXX XXXX
9. CASH AND BALANCES WITH CENTRAL BANKS
2012 2011
Cash XXXX XXXXCash reserve with QCB* XXXX XXXXOther balances with QCB XXXX XXXXBalances with other central banks XXXX XXXX XXXX XXXX
*The cash reserve with QCB (and part of balances with other central banks) is not available for use in the Group’s
day to day operations.
10. DUE FROM BANKS
2012 2011 Current accounts XXXX XXXXWakala placements with banks XXXX XXXXMudaraba placements XXXX XXXXCommodity Murabaha receivable XXXX XXXXImpairment against due from banks (XXXX) (XXXX)) XXXX XXXX
[The reporting entity should also disclose amount held under reverse repo transactions in due from banks.]
Impairment of bank balances
2012 2011 Balance in January XXXX XXXXForieng currency translation XXXX XXXXProvisions made during the year XXXX XXXXRecoveries during the year (XXXX) (XXXX) XXXX XXXX
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
955
11. FINANCING ASSETS (a) By type 2012 2011 Murabaha XXXX XXXXMusawama XXXX XXXXIstisna’a* XXXX XXXXIjarah Muntahia Bittamleek XXXX XXXXMudaraba XXXX XXXXDiminishing Musharaka XXXX XXXXOthers XXXX XXXXTotal financing assets XXXX XXXX Less: Deferred profit XXXX XXXX Specific impairment of financing assets to customers** XXXX XXXX Collective impairment of financing assets to customers XXXX XXXXNet financing assets (see note 1 below) XXXX XXXX
*Total carrying amount of Istisn’a contracts under processing is QAR _____ million (2011:QAR ______). **Should only include impairment against financing assets on the balance sheet. Impairment in respect of off-balance sheet items is disclosed under note 21. The total non-performing financing assets at 31 December 2012 amounted to QAR __ million, representing __% of the gross financing assets (2011: __ million, representing __%). Specific impairment of financing assets includes QAR __ million of profit in suspense (2011: QAR __ million.) Note 1 2012 2011
Government and related agencies XXXX XXXXNon-Banking Financial Institutions XXXX XXXXCorporate XXXX XXXXRetail XXXX XXXX XXXX XXXX
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
956
11. FINANCING ASSETS (continued) (b) Movement in the provision for impairment on financing assets:
2012 2011
Balance at 1 January XXXX XXXX
Foreign currency translation (XXXX) XXXX
Provisions made during the year XXXX XXXX
Recoveries during the year (XXXX) (XXXX)
XXXX XXXX
Written off during the year (XXXX) (XXXX)
Balance at 31 December XXXX XXXX
(c) Movement in the provision for impairment on financing assets- sector wise:
Corporates SMEs Retail Real Estate
MortgagesTotal
Balance at 1 January XXXX XXXX XXXX XXXX XXXXForeign currency translation XXXX XXXX XXXX XXXX XXXXProvision made during the year XXXX XXXX XXXX XXXX XXXXRecoveries during the year (XXXX) (XXXX) (XXXX) (XXXX) (XXXX)Provision related to subsidiaries XXXX XXXX XXXX XXXX XXXXUtilized/ Transfered XXXX XXXX XXXX XXXX XXXXBalance at 31 December 2012 XXXX XXXX XXXX XXXX XXXX
Balance at 1 January XXXX XXXX XXXX XXXX XXXXForeign currency differences XXXX XXXX XXXX XXXX XXXXProvision made during the year XXXX XXXX XXXX XXXX XXXXRecoveries during the year (XXXX) (XXXX) (XXXX) (XXXX) (XXXX)Provision related to subsidiaries XXXX XXXX XXXX XXXX XXXXUtilized/ Transfered XXXX XXXX XXXX XXXX XXXXBalance at 31 December 2011 XXXX XXXX XXXX XXXX XXXX
[As per the requirements of QCB for Ijarah financing, the Group can only enter into Ijarah Muntahia
Bittamleek agreements.]
[During the year, the Bank had written off fully provided bad debts after meeting the conditions stipulated in
the instructions of QCB amounting to QAR ______.]
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
957
11. FINANCING ASSETS (CONTINUED)
(d) By sector
2012 Murabaha Musawama Istisna’a Ijarah Muntahia
Bittamleek
Mudaraba Diminishing Musharaka
Others Total
Government and related agenices XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX Non-banking financial institutions XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX Industry XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX Commercial XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX Services XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX Contracting XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX Real estate XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX Personal XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX Others XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
Total financing assets XXXX XXXX XXXX XXXX XXXX
XXXX
XXXX XXXX Less: Deferred profit XXXX Provision for impairment on financing assets
XXXX
Net financing assets XXXX
[In accordance with paragraph 25 of FAS 1, the reporting entity should also disclose nature and amount of any assets which are restricted for a particular use or used as collateral for the Islamic bank’s obligations.]
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
958
11. FINANCING ASSETS (CONTINUED)
(c) By sector (continued)
2011 Murabaha Musawama Istisna’a Ijarah Muntahia Bittamleek
Mudaraba Diminishing Musharaka
Others Total
Government and related agenices XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX Non-banking financial institutions XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX Industry XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX Commercial XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX Services XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX Contracting XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX Real estate XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX Personal XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX Others XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
Total financing assets XXXX XXXX XXXX XXXX XXXX
XXXX
XXXX XXXX Less: Deferred profit XXXX Provision for impairment on financing assets
XXXX
Net financing assets XXXX
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
959
12. INVESTMENT SECURITIES 2012 2011 Quoted Unquoted Total Quoted Unquoted Total
Investments classified as fair value through income statement
- Investments classified as held for trading XXXX - XXXX XXXX - XXXX - Designated as fair value through income Statement:
equity-type investments XXXX XXXX XXXX XXXX XXXX XXXX
debt-type investments* - Fixed rate XXXX XXXX XXXX XXXX XXXX XXXX- Floating rate XXXX XXXX XXXX XXXX XXXX XXXX
XXXX XXXX XXXX XXXX XXXX XXXX
Debt-type investments classified at amortised cost*
- Fixed rate XXXX XXXX XXXX XXXX XXXX XXXX- Floating rate XXXX XXXX XXXX XXXX XXXX XXXX
Less: provision for impairment (XXXX) (XXXX) (XXXX) (XXXX) (XXXX) (XXXX) XXXX XXXX XXXX XXXX XXXX XXXX Equity-type investments classified as fair value through equity
XXXX XXXX XXXX
XXXX XXXX XXXX
XXXX XXXX XXXX XXXX XXXX XXXX
*The reporting entity should disclose any investment in the State of Qatar debt securities separately as part of debt-type instruments. [In accordance with paragraph 46 of FAS 26, the reporting should disclose fair value of investment carried at
amortised cost.]
[In accordance with paragraph 34 of FAS 25, the reporting entity should disclose any restrictions on investments,
their profits and sales.]
[In accordance with paragraph 35 of FAS 25, the reporting entity should disclose reasons for not being able to
determine the reliable measure for fair value for investment carried at cost along with the market for such
investments, and information on how the entity will dispose-off these investments.]
[In accordance with paragraph 41, 42 and 42 of FAS 25, the reporting entity should disclose the following for
investments carried at fair value:
Para 41 - Fair value hierarchy by category of investment presenting fair values used for investments which are
quoted in an active market, fair values measured for investments by reference to the directly or indirectly observable
inputs, and fair values measured by using inputs which are not directly based on observable market data.
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
960
12. INVESTMENT SECURITIES (CONTINUED)
Para 42 - Disclosure should be made of the amount of unrealised gain/ losses included in the income statement and
changes in equity during the year for each level fair value hierarchy discussed above.
Para 43 – Disclosure should be made for transfers between categories of fair value hierarchy mentioned in Para 41.]
[The reporting entity should also disclose amount of securities pledged against repurchase agreements.}
The cumulative change in fair value of equity-type investments designated as fair value through equity, during the
year is as follows: 2012 2011 Positive
fair valueNegative fair value
Total Positive fair value
Negative fair value
Total
Balance at 1 January XXXX (XXXX) XXXX XXXX (XXXX) XXXXNet change in fair value XXXX (XXXX) XXXX XXXX (XXXX) XXXXTransferred to consolidated income statement
(XXXX) XXXX XXXX
(XXXX) XXXX XXXX
Balance at 31 December XXXX (XXXX) XXXX XXXX (XXXX) XXXX
The movement in impairment of debt-type securities carried at amortised cost and equity-type securities (*) carried at
fair value through equity: 2012 2011Balance at 1 January XXXX XXXXCharge during the year XXXX XXXXReversal made during the year (XXXX) (XXXX)Amount written-off during the year (XXXX) (XXXX)Balance at 31 December XXXX XXXX
*In the case of equity-type investments classified as fair value through equity and measured at fair value, a
significant (where market value has declined by a minimum of 20%) or prolonged (where market value has declined
for 9 months at least) decline in the fair value of an investment below its cost is considered in determining whether
the investments are impaired. Please see page no (910), note 3(f) ‘Impairment of financial assets’.
13. INVESTMENT IN ASSOCIATES AND JOINT VENTURES
2012 2011Balance at 1 January XXXX XXXXForeign currency translation XXXX XXXXInvestments acquired during the year XXXX XXXXShare of results XXXX XXXXCash dividend (XXXX) (XXXX)Associates / joint ventures sold or transferred (XXXX) (XXXX)Other movements XXXX XXXXBalance at 31 December XXXX XXXX
Associates/ Company’s Ownership % Name of the Company Joint venture Country Activities 2012 2011
ABC Company XXXX XXXX XXXX XXXX XXXXXYZ Company XXXX XXXX XXXX XXXX XXXX
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
961
13. INVESTMENT IN ASSOCIATES AND JOINT VENTURES (CONTINUED)
The financial position, revenue and results of associates and joint ventures based on audited financial statements, as
at and for the year ended 31 December 2012 are as follows:
31 December 2012 ABC XYZ Total assets XXXX XXXX
Total liabilities XXXX XXXX
Total revenue XXXX XXXX
Net profit/loss
Share of profit / (loss) XXXX XXXX
31 December 2011 A B Total assets XXXX XXXX
Total liabilities XXXX XXXX
Total revenue XXXX XXXX
Net profit/loss
Share of profit / (loss) XXXX XXXX
[Associate / joint venture A is listed on ____, having a fair value of QAR ___ (2011: QAR ____).]
[The reporting entity should present here detailed disclosures for its investment in associates and joint ventures.
Disclosures may include presenting investments by type, movement in goodwill during the year, disclosure relating to
percentage of ownership of the reporting entity and disclosure of financial position of associates.]
IAS 31.54 (a)-(c) IAS 31.55 (a)-(b)
[The Group shall disclose the following in respect of joint ventures: any contingencies that the Group has incurred in relation to its investments in joint ventures,
and its share in each of the contingencies that have been incurred jointly with other venturers;
the Group’s share of the contingencies of joint ventures for which it is contingently liable; those contingencies that arise because the venturer is contingently liable for the liabilities of
the other venturers of a joint venture; any capital commitments of the Group in relation to its interests in joint ventures ans its
share in the capital commitments thst have been incurred jointly with other venturers; and the Group’s share of the capital commitments of the joint ventures themselves.]
14. INVESTMENT PROPERTY 2012 2011 Held for: Capital
appreciation Rental Total Capital
appreciationRental Total
Balance at 1 January XXXX XXXX XXXX XXXX XXXX XXXXAddition(s) XXXX XXXX XXXX XXXX XXXX XXXXDisposal(s) XXXX XXXX XXXX XXXX XXXX XXXXChanges in fair value XXXX XXXX XXXX XXXX XXXX XXXXImpairment (XXXX) (XXXX) (XXXX) (XXXX) (XXXX) (XXXX)Balance at 31 December XXXX XXXX XXXX XXXX XXXX XXXX [The above table assumes that investment property is fair valued. If the reporting entity follows cost model, than a
movement schedule in line fixed asset note should be presented along with fair value of investment property in
comparison to its costs.]
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
962
15. FIXED ASSETS Land and IT Fixtures Work Buildings* Equipment* and fittings In progress Total Cost Balance at 1 January 2011 XXXX XXXX XXXX XXXX XXXXAcquisitions / transfers XXXX XXXX XXXX XXXX XXXXDisposals (XXX) (XXX) (XXX) - (XXX)Foreign currency translation (XXXX) (XXXX) (XXXX) - (XXXX)
Balance at 31 December 2011 XXXX XXXX XXXX
XXXX XXXX Balance at 1 January 2012 XXXX XXXX XXXX XXXX XXXXAcquisitions / transfers XXXX XXXX XXXX XXXX XXXXDisposals (XXXX) (XXXX) (XXXX) - (XXXX)Foreign currency translation (XXXX) (XXXX) (XXXX) - (XXXX)
Balance at 31 December 2012 XXXX XXXX XXXX
XXXX XXXX Accumulated depreciation and impairment losses
Balance at 1 January 2011 XXXX XXXX XXXX - XXXXDepreciation charged during the year XXXX XXXX XXXX - XXXXImpairment during the year XXXX XXXX XXXX - XXXXDisposals (XXX) (XXX) (XXX) - (XXX)Foreign currency translation (XXXX) (XXXX) (XXXX) - (XXXX)
Balance at 31 December 2011 XXXX XXXX XXXX
- XXXX - Balance at 1 January 2011 XXXX XXXX XXXX - XXXXDepreciation charged during the year XXXX XXXX XXXX - XXXXImpairment during the year XXXX XXXX XXXX - XXXXDisposals (XXXX) (XXXX) (XXXX) - (XXXX)Foreign currency translation (XXXX) (XXXX) (XXXX) - (XXXX)
Balance at 31 December 2012 XXXX XXXX XXXX
- XXXX Carrying amounts Balance at 1 January 2011 XXXX XXXX XXXX XXXX XXXXBalance at 31 December 2011 XXXX XXXX XXXX XXXX XXXXBalance at 31 December 2012 XXXX XXXX XXXX XXXX XXXX
[The Group is required to disclose the impairment of fixed asset in the schedule, if any]
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
963
16. INTANGIBLE ASSETS
Purchased Goodwill software Total
Balance at 1 January 2011 XXXX XXXX XXXX Acquisitions XXXX XXXX XXXX Amortisation for the year XXXX XXXX XXXX
Balance at 31 December 2011 XXXX XXXX XXXX
Balance at 1 January 2012 XXXX XXXX XXXX Acquisitions XXXX XXXX XXXX Amortisation for the year XXXX XXXX XXXX
Balance at 31 December 2012 XXXX XXXX XXXX
Goodwill computation: Details on goodwill arising on acquisition are disclosed in note 38 Business combinations.
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
964
17. OTHER ASSETS
2012 2011 Accrued profit XXXX XXXXPrepayments and advances XXXX XXXXRepossessed collateral (i) XXXX XXXXPositive fair value of risk management instrument s XXXX XXXXSundry debtors XXXX XXXXDeferred tax asset XXXX XXXXClearing suspense accounts XXXX XXXXOthers XXXX XXXX XXXX XXXX
(i) This represents the value of the properties acquired in settlement of debts which are stated at their acquisition
value net of provision amounting to QR XXXX (2011: XXXX). The estimated market values of these properties
as at 31 December 2012 are not materially different from the carrying values.
18. DUE TO BANKS Note 2012 2011 Current accounts XXXX XXXXCommodity Murabaha payable XXXX XXXXShort term loans from banks* XXXX XXXXWakala payable 18.1 XXXX XXXX XXXX XXXX 18.1 Wakala payable includes various facilities with maturities ranging from [__ month – __ years] and carries a
profit rate [__% – __%] for fixed rate Wakalas and repo rate plus [__ % – __%] per annum for variable rate
Wakalas.
[*Includes amount held under repurchase agreements amounting to QR XXX (2011: XXXX)]
19. CUSTOMER CURRENT ACCOUNTS
2012 2011Current accounts by sector:
- Government XXXX XXXX- Non-Banking Financial Institutions XXXX XXXX- Corporate XXXX XXXX- Individuals XXXX XXXX
XXXX XXXX
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
965
20. FINANCING LIABILITIES [SUKUK FINANCING]
[The reporting entity should disclose the features of Sukuk financing. The following are some of the common features
of Sukuk Financing arrangements:
a) Amount of financing, net of issuance cost;
b) Disclosing that Sukuks are Shari’a complaint and approved by the Board of Directors of the Company;
c) Maturity of Sukuks;
d) Name of stock exchange in which the Sukuks are listed;
e) Details of arrangement relating to transfer of assets to the Sukuk Issuance Company [“the Issuer”], and/or
details relating to asset base of the Sukuk.;
f) Name of the Issuer;
g) Sukuk repurchase price at maturity; and
h) Profit percentage on Sukuks including method of profit and principal repayments.]
[The reporting entity should also present ‘Sukuk holders share of profit’ in the consolidated income statement after
the net profit for the year; if as per the Sukuk Financing Agreement, Sukuk holders are eligible towards share of
profit.]
21. OTHER LIABILITIES Note 2012 2011
Unearned commission income XXXX XXXXTax payable XXXX XXXXNegative fair value of risk management instrument s XXXX XXXXCash margins XXXX XXXXDividend payable XXXX XXXXUnclaimed balances XXXX XXXXDeferred tax liability XXXX XXXXClearing suspense accounts XXXX XXXXOther provisions 21.1 XXXX XXXXEmployees' end of service benefits 21.2 XXXX XXXXOthers XXXX XXXX XXXX XXXX
21.1 Movement in other provisions: (i
) Other provisions
Contingencie
s provision
Legal
provision
Other
provision
Total
2012
Total
2011
Balance at 1 January XXXX XXXX XXXX XXXX XXXX
Foreign currency translation (XXXX) (XXXX) (XXXX) (XXXX) (XXXX)
Provisions made during the year XXXX XXXX XXXX XXXX XXXX
XXXX XXXX XXXX XXXX XXXX
Provisions recovered during the year (XXXX) (XXXX) (XXXX) (XXXX) (XXXX)
Provisions paid and written off during the year (XXXX) (XXXX) (XXXX) (XXXX) (XXXX)
Balance at 31 December XXXX XXXX XXXX XXXX XXXX
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
966
21. OTHER LIABILITIES (CONTINUED)
21.2 Movement in employees’ end of service benefits is as follows: 2012 2011
Employees' end of
service benefits
Balance at 1 January XXXX XXXXCharge for the year XXXX XXXXPayments made during the year XXXX XXXXBalance at 31 December XXXX XXXX
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
967
22. EQUITY OF INVESTMENT ACCOUNT HOLDERS 2012 2011
Investment account holders balance before share of profit XXXX XXXXAdd: Distributed profits of investment account holders’ profit for the year (a) XXXX XXXXTotal investment account holders balance after share of profit (b) XXXX XXXX
By type: 2012 2011
Saving accounts XXXX XXXXTerm accounts XXXX XXXXCall accounts XXXX XXXXTotal (b) XXXX XXXX
By sector: Government XXXX XXXXBanks XXXX XXXXNon-banking financial institution XXXX XXXXRetail XXXX XXXXCorporate XXXX XXXXTotal (b) XXXX XXXX
2012 2011
Total investment account holders balance after share of profit (b) XXXX XXXXProfit equalisation reserve XXXX XXXXInvestment risk reserve XXXX XXXXShare in fair value reserve XXXX XXXXShare in other reserve (*) XXXX XXXXTotal investment account holders balance XXXX XXXX
(*) share of undistributed net profit from investments in associates and joint ventures after deducting the cash
dividends received as per regulations of QCB
[In accordance with paragraph 45 of FAS 1, the reporting entity should also disclose rights, conditions and
obligations of each type of investment accounts or its equivalent.]
[In accordance with paragraph 2/1/1 of FAS 5, the reporting entity should disclose the basis applied in allocation of
profit between owners’ equity and investment account holders.]
[The reporting entity should disclose here the basis of calculation of profit payable to investment account holders and
maturity wise profit distribution rates.] 2012 2011Share of investment account holders’ profit for the year (a) XXXX XXXXLess: transferred to profit equalisation reserve (XXXX) (XXXX)Less: Mudarib share (XXXX) (XXXX)Less: transferred to risk reserve (XXXX) (XXXX)Add: Profit equalisation reserves utilised, net (i) - -Add: Investment risk reserve utilised, net (ii) - -Owners’ contribution (if any) XXXX XXXXTotal profit distributed to investment account holders for the year XXXX XXXX
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
968
22. EQUITY OF INVESTMENT ACCOUNT HOLDERS (CONTINUED) (i) Profit equalisation reserves 2012 2011
Balance at 1 January XXXX XXXX
Amount apportioned from share in investment account holders profit XXXX XXXX
Amount utilised during the year - -Balance at 31 December (**) XXXX XXXX
(**) distributed as follows:
2012 2011
Investment account holders share XXXX XXXX
Equity share XXXX XXXX
XXXX XXXX
(i) Investment risk reserve 2012 2011
Balance at 1 January XXXX XXXXAmount apportioned from share in investment account holders profit XXXX XXXXAmount utilised during the year (**) (**)Balance at 31 December XXXX XXXX
[The profit equalisation reserve and investment risk reserve will revert to investment account holders as per terms and conditions of the Mudaraba contract.] [If investment account holder’s funds are commingled with the Group’s funds for investment, no priority is granted to any party for the purpose of investments and distribution of profits.] [The Group shall disclose any deductions made from its share in the mudaraba income and/or any expense borne by the Group on behalf of URIA.]
23. OWNERS’ EQUITY (a) Share capital Ordinary shares In millions of shares 2012 2011 On issue at -1 January XXXX XXXXNew shares issued XXXX XXXXOn issue at 31 December XXXX XXXX At 31 December 2012 the authorised share capital comprised ___ million ordinary shares (2011: ___ million), having a par value of QAR ____ each share. Out of these ____ million ordinary shares (2011: ____ million) are issued and fully paid. The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Bank.
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
969
23. OWNERS’ EQUITY (continued)
(b) Legal reserve In accordance with QCB Law no. 13 of 2012, 10% of net profit attributable to the owners of the Bank for the year is
required to be transferred to the reserve until the legal reserve equals 100% of the paid up share capital. This
reserve is not available for distribution except in circumstances specified in Qatar Commercial Companies Law No. 5
of 2002 and after QCB approval. During the year ended 31 December 2012 the appropriation made to legal reserve
amounts to QAR __ million (2011: QAR __ million).
The legal reserve includes share premium received on issuance of new shares in accordance with Qatar Commercial
Companies Law No.5 of 2002.
(c) Risk reserve In accordance with QCB regulations, a risk reserve should be created to cover contingencies on both the public and
private sector financing assets, with a minimum requirement of 2.5% of the total private sector exposure granted by
the Group inside and outside Qatar after the exclusion of the specific provisions and profit in suspense. The finance
provided to / or secured by the Ministry of Finance – Qatar or finance against cash guarantees is excluded from the
gross direct finance. Based on profit for the year, the total amount of the transfer made to the risk reserve was QAR
[______] million (2011: QAR [______] million).
[QCB instructions, reference no. (Part VII-Chapter 1, First, 4/3/4 (A, B and C), for Islamic banks require setting aside
the risk reserves according to the methodology provided in paragraphs (4/3/1) and (4/3/2) of the same reference.]
(d) Fair value reserves
Fair value reserves
Cash
flow
hedging
reserves
Investments
carried as
fair value
through
equity
Revaluation
of
investment
property
Total2012 Cash flow hedging reserves:
Effective portion of changes in fair value XXXX - - XXXXNet amount transferred to consolidated income statement (XXXX) - - (XXXX)
Investments carried as fair value through equity:
Movement in fair value through fair value reserve - XXXX - XXXXNet amount transferred to consolidated income statement - (XXXX) (XXXX) -
Revaluation of investment property: Movement in investment propety fair value - - XXXX XXXXNet amount transferred of consolidated income statement - - (XXXX) (XXXX)
XXXX XXXX XXXX XXXX
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
970
23. OWNERS’ EQUITY (continued)
(d) Fair value reserves (continued)
Fair value reserves
Cash
flow
hedging
reserves
Investments
carried as fair
value through
equity
Revaluation
of
investment
property Total2011 Cash flow hedging reserves:
Effective portion of changes in fair value XXXX - - XXXXNet amount transferred to consolidated income statement (XXXX) - - (XXXX)
Investments carried as fair value through equity:
Movement in fair value through fair value reserve - XXXX - XXXXNet amount transferred to consolidated income statement - (XXXX) (XXXX) -
Revaluation of investment property: Movement in investment propety fair value - - XXXX XXXXNet amount transferred of consolidated income statement - - (XXXX) (XXXX)
XXXX XXXX XXXX XXXX
[The reporting entity should disclose here segregation of fair value reserve between owners’ and investment account
holders.] (e) Foreign currency translation reserve The foreign currency translation reserve comprises all foreign exchange differences arising from the translation of the
financial statements of foreign operations as well as from the translation of liabilities and gains and losses on risk
management instrument s that hedge the Group’s net investment in foreign operations. (f) Other reserves
2012 2011
Group’s share in undistributed profit from investments in associates and joint ventures after deducting the received dividends
XXXX XXXX
Group’s share of profit equalization reserve XXXX XXXX
Other reserves XXXX XXXX XXXX XXXX
(g) Proposed dividend The Board of Directors has proposed a cash dividend of ___% of paid up share capital amounting to QAR __ million
– QAR ___ per share (2011 – ___% of paid up capital amounting to QAR ___ million – QAR ___ per share) which is
subject to approval at the Annual General Meeting of the owners of the Bank.
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
971
24. NON-CONTROLLING INTERESTS This represents the Group’s non-controlling interests in [Name of subsidiary] amounting to [Percentage].
25. NET INCOME FROM FINANCING ACTIVITIES
2012 2011
Murabaha and Musawama XXXX XXXXMudaraba XXXX XXXXMusharaka XXXX XXXXIjarah XXXX XXXXIstisna’a XXXX XXXXOthers XXXX XXXX XXXX XXXX
26. NET INCOME FROM INVESTING ACTIVITIES
2012 2011
Income from inter-bank placements with Islamic banks XXXX XXXXIncome from investment in debt-type instruments XXXX XXXXNet gain or loss on sale of equity-type investments XXXX XXXXNet gain or loss on sale of debt-type investments XXXX XXXXFair value gain / (loss) on investment securities carried as fair value through income statement
XXXX (XXXX)
Dividend income XXXX XXXX XXXX XXXX
27. NET FEE AND COMMISSION INCOME
2012 2011
Management fee income XXXX XXXXCommission income XXXX XXXXAdvisory fee income XXXX XXXXPlacement fee income XXXX XXXXArrangement fee XXXX XXXXStructuring fee XXXX XXXXMarketing fee income XXXX XXXXPerformance fee income XXXX XXXX XXXX XXXXCommission expense XXXX XXXXNet fee and commission income XXXX XXXX
28. FOREIGN EXCHANGE GAIN / (LOSS)
2012 2011
Dealing in foreign currencies XXXX XXXXRevaluation of assets and liabilities XXXX XXXX XXXX XXXX
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
972
29. STAFF COSTS
2012 2011
Basic salaries XXXX XXXXStaff pension fund costs XXXX XXXXStaff indemnity costs XXXX XXXXTraining XXXX XXXXOther XXXX XXXX XXXX XXXX
30. OTHER EXPENSES
2012 2011
Rent XXXX XXXXRepairs and maintenance XXXX XXXXInsurance costs XXXX XXXXCommunication and utilities XXXX XXXXBoard of Directors’ remuneration XXXX XXXXService expenses XXXX XXXXAdvertising and marketing expenses XXXX XXXXSubscription fees XXXX XXXXLegal and professional fees XXXX XXXXIT expenses XXXX XXXXOther expenses XXXX XXXX XXXX XXXX
31. TAX EXPENSE
2012 2011
Current tax expense Current year XXXX XXXXAdjustments for prior years XXXX XXXX Deferred tax expense Origination and reversal of temporary differences XXXX XXXXReduction in tax rate XXXX XXXXRecognition of previously unrecognised tax losses XXXX XXXX XXXX XXXXTotal tax expense XXXX XXXX
IAS 12.81 [The Group is also required to show a numerical reconciliation between tax expense (income)
and the product of accounting profit multiplied by the applicable tax rate(s),disclosing also the basis on which the applicable tax rate(s) is (are) computed or numerical reconciliation between the average effective tax rate and the applicable tax rate, disclosing also the basis on which the applicable tax rate is computed.]
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
973
32. CONTINGENT LIABILITIES AND COMMITMENTS
Reference 32. Contingent liabilities and commitments 2012 2011 a) Contingent liabilities Unused facilities-cancellable XXXX XXXX Unused facilities- non cancellable XXXX XXXX Acceptances XXXX XXXX Guarantees XXXX XXXX Letters of credit XXXX XXXX Others XXXX XXXX XXXX XXXX
b) Commitments Profit rate swaps XXXX XXXX Other risk management instrument s XXXX XXXX Total XXXX XXXX
Unused facilities
Commitments to extend credit represent contractual commitments to make financings and revolving credits. The majority of these expire in the next year. Since commitments may expire without being drawn upon, the total contractual amounts do not necessarily represent future cash requirements.
Acceptances, Guarantees and Letters of credit
Acceptances, guarantees and letters of credit commit the group to make payments on behalf of customers in the event of a specific event. Guarantees and standby letters of credit carry the same credit risk as financings. [Please explain other commitments and contingencies.]
Lease commitments Non-cancellable operating lease rentals are payable as follows: 2012 2011 Less than one year XXXX XXXX Between one and five years XXXX XXXX More than five years XXXX XXXX XXXX XXXX [The Group leases a number of branches and office premises under operating leases. The
leases typically run for a period of up to __ years, with an option to renew the lease after that period. Lease payments are increased every three to five years to reflect market rentals.]
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
974
33. CONCENTRATION OF ASSETS, LIABILITIES AND EQUITY OF INVESTMENT ACCOUNT HOLDERS [IN
ACCORDANCE WITH PARAGRAPH 16 OF FAS 1]
Geographical sector Following is the concentration of assets, liabilities and equity of investment account holders into geographical sectors regions:
2012 Qatar Other GCC Europe North
America Others Total
Cash and balances with central banks XXXX XXXX XXXX XXXX XXXX XXXXDue from banks XXXX XXXX XXXX XXXX XXXX XXXXFinancing assets XXXX XXXX XXXX XXXX XXXX XXXXInvestment securities XXXX XXXX XXXX XXXX XXXX XXXXInvestment property XXXX XXXX XXXX XXXX XXXX XXXXIntangible assets XXXX XXXX XXXX XXXX XXXX XXXXFixed assets XXXX XXXX XXXX XXXX XXXX XXXXOther assets XXXX XXXX XXXX XXXX XXXX XXXXTotal assets XXXX XXXX XXXX XXXX XXXX XXXX
Liabilities and equity of investment account holders
Liabilities
Placements from financial institutions XXXX XXXX XXXX XXXX XXXX XXXXCustomer current accounts XXXX XXXX XXXX XXXX XXXX XXXXFinancing liabilities XXXX XXXX XXXX XXXX XXXX XXXXOther liabilities XXXX XXXX XXXX XXXX XXXX XXXXTotal liabilities XXXX XXXX XXXX XXXX XXXX XXXX Equity of investment account holders XXXX XXXX XXXX XXXX XXXX XXXX Total liabilities and equity of investment account holders XXXX XXXX XXXX XXXX XXXX XXXX
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
975
33. CONCENTRATION OF ASSETS, LIABILITIES AND EQUITY OF INVESTMENT ACCOUNT HOLDERS
(CONTINUED)
Geographical sector (continued) Following is the concentration of assets, liabilities and equity of investment account holders into geographical sectors regions:
2011 Qatar Other GCC Europe North
America Others Total
Cash and balances with central banks XXXX XXXX XXXX XXXX XXXX XXXXDue from banks XXXX XXXX XXXX XXXX XXXX XXXXFinancing assets XXXX XXXX XXXX XXXX XXXX XXXXInvestment securities XXXX XXXX XXXX XXXX XXXX XXXXInvestment property XXXX XXXX XXXX XXXX XXXX XXXXIntangible assets XXXX XXXX XXXX XXXX XXXX XXXXFixed assets XXXX XXXX XXXX XXXX XXXX XXXXOther assets XXXX XXXX XXXX XXXX XXXX XXXXTotal assets XXXX XXXX XXXX XXXX XXXX XXXX
Liabilities and equity of investment account holders
Liabilities
Placements from financial institutions XXXX XXXX XXXX XXXX XXXX XXXXCustomer current accounts XXXX XXXX XXXX XXXX XXXX XXXXFinancing liabilities XXXX XXXX XXXX XXXX XXXX XXXXOther liabilities XXXX XXXX XXXX XXXX XXXX XXXXTotal liabilities XXXX XXXX XXXX XXXX XXXX XXXX Equity of investment account holders XXXX XXXX XXXX XXXX XXXX XXXX Total liabilities and equity of investment account holders XXXX XXXX XXXX XXXX XXXX XXXX
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
976
34. CONCENTRATION OF ASSETS, LIABILITIES AND EQUITY OF INVESTMENT ACCOUNT HOLDERS
Industrial sector Following is the concentration of assets, liabilities and equity of investment account holders into industrial sectors regions:
2012 Real
estate Construction,
engeering and
maufacturing
Oil and gas
Financial services
Individuals Others Total
Cash and balances with central banks XXXX XXXX XXXX XXXX XXXX XXXX XXXXDue from banks XXXX XXXX XXXX XXXX XXXX XXXX XXXXFinancing assets XXXX XXXX XXXX XXXX XXXX XXXX XXXXInvestment securities XXXX XXXX XXXX XXXX XXXX XXXX XXXXInvestment property XXXX XXXX XXXX XXXX XXXX XXXX XXXXIntangible assets XXXX XXXX XXXX XXXX XXXX XXXX XXXXFixed assets XXXX XXXX XXXX XXXX XXXX XXXX XXXXOther assets XXXX XXXX XXXX XXXX XXXX XXXX XXXXTotal assets XXXX XXXX XXXX XXXX XXXX XXXX XXXX
Liabilities and equity of investment account holders
Liabilities
Placements from financial institutions XXXX XXXX XXXX XXXX XXXX XXXX XXXXCustomer current accounts XXXX XXXX XXXX XXXX XXXX XXXX XXXXFinancing liabilities XXXX XXXX XXXX XXXX XXXX XXXX XXXXOther liabilities XXXX XXXX XXXX XXXX XXXX XXXX XXXXTotal liabilities XXXX XXXX XXXX XXXX XXXX XXXX XXXX Equity of investment account holders XXXX XXXX XXXX XXXX XXXX XXXX XXXX Total liabilities and equity of investment account holders XXXX XXXX XXXX XXXX XXXX XXXX XXXX
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
977
34. CONCENTRATION OF ASSETS, LIABILITIES AND EQUITY OF INVESTMENT ACCOUNT HOLDERS
(CONTINUED)
Industrial sector (continued) Following is the concentration of assets, liabilities and equity of investment account holders into industrial sectors regions:
2011 Real
estate Construction, engeering and maufacturing
Oil and gas
Financial services
Individuals Others Total
Cash and balances with central banks XXXX XXXX XXXX XXXX XXXX XXXX XXXXDue from banks XXXX XXXX XXXX XXXX XXXX XXXX XXXXFinancing assets XXXX XXXX XXXX XXXX XXXX XXXX XXXXInvestment securities XXXX XXXX XXXX XXXX XXXX XXXX XXXXInvestment property XXXX XXXX XXXX XXXX XXXX XXXX XXXXIntangible assets XXXX XXXX XXXX XXXX XXXX XXXX XXXXFixed assets XXXX XXXX XXXX XXXX XXXX XXXX XXXXOther assets XXXX XXXX XXXX XXXX XXXX XXXX XXXXTotal assets XXXX XXXX XXXX XXXX XXXX XXXX XXXX
Liabilities and equity of investment account holders
Liabilities
Placements from financial institutions XXXX XXXX XXXX XXXX XXXX XXXX XXXXCustomer current accounts XXXX XXXX XXXX XXXX XXXX XXXX XXXXFinancing liabilities XXXX XXXX XXXX XXXX XXXX XXXX XXXXOther liabilities XXXX XXXX XXXX XXXX XXXX XXXX XXXXTotal liabilities XXXX XXXX XXXX XXXX XXXX XXXX XXXX Equity of investment account holders XXXX XXXX XXXX XXXX XXXX XXXX XXXX Total liabilities and equity of investment account holders XXXX XXXX XXXX XXXX XXXX XXXX XXXX
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
978
35. MATURITY PROFILE
2012 Up to 3
months 3 to 6
months 6 months - 1
year 1 to 3 years
Over 3 years
Total
Cash and balances with central banks XXXX XXXX XXXX XXXX XXXX XXXXDue from banks XXXX XXXX XXXX XXXX XXXX XXXXFinancing assets XXXX XXXX XXXX XXXX XXXX XXXXInvestment securities XXXX XXXX XXXX XXXX XXXX XXXXInvestment property XXXX XXXX XXXX XXXX XXXX XXXXIntangible assets XXXX XXXX XXXX XXXX XXXX XXXXFixed assets XXXX XXXX XXXX XXXX XXXX XXXXOther assets XXXX XXXX XXXX XXXX XXXX XXXXTotal financial assets XXXX XXXX XXXX XXXX XXXX XXXX
Liabilities and equity of investment account holders
Liabilities
Placements from financial institutions XXXX XXXX XXXX XXXX XXXX XXXXCustomer current accounts XXXX XXXX XXXX XXXX XXXX XXXXFinancing liabilities XXXX XXXX XXXX XXXX XXXX XXXXOther liabilities XXXX XXXX XXXX XXXX XXXX XXXXTotal liabilities XXXX XXXX XXXX XXXX XXXX XXXX Equity of investment account holders XXXX XXXX XXXX XXXX XXXX XXXX Total liabilities and equity of investment account holders XXXX XXXX XXXX XXXX XXXX XXXX Maturity gap XXXX XXXX XXXX XXXX XXXX XXXX
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
979
35. MATURITY PROFILE (CONTINUED)
2011 Up to 3
months 3 to 6 months 6 months - 1
year 1 to 3 years
Over 3 years
Total
Cash and balances with central banks XXXX XXXX XXXX XXXX XXXX XXXXDue from banks XXXX XXXX XXXX XXXX XXXX XXXXFinancing assets XXXX XXXX XXXX XXXX XXXX XXXXInvestment securities XXXX XXXX XXXX XXXX XXXX XXXXInvestment property XXXX XXXX XXXX XXXX XXXX XXXXIntangible assets XXXX XXXX XXXX XXXX XXXX XXXXFixed assets XXXX XXXX XXXX XXXX XXXX XXXXOther assets XXXX XXXX XXXX XXXX XXXX XXXXTotal financial assets XXXX XXXX XXXX XXXX XXXX XXXX
Liabilities and equity of investment account holders
Liabilities
Placements from financial institutions XXXX XXXX XXXX XXXX XXXX XXXXCustomer current accounts XXXX XXXX XXXX XXXX XXXX XXXXFinancing liabilities XXXX XXXX XXXX XXXX XXXX XXXXOther liabilities XXXX XXXX XXXX XXXX XXXX XXXXTotal liabilities XXXX XXXX XXXX XXXX XXXX XXXX Equity of investment account holders XXXX XXXX XXXX XXXX XXXX XXXX Total liabilities and equity of investment account holders XXXX XXXX XXXX XXXX XXXX XXXX Maturity gap XXXX XXXX XXXX XXXX XXXX XXXX
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
980
36. BASIC AND DILUTED EARNINGS PER SHARE
[This disclosure is mandatory for listed Banks]
Earnings per share are calculated by dividing the net profit for the year attributable to the owners of the Bank by the
weighted average number of ordinary shares in issue during the year.
2012 2011
Profit for the year attributable to the owners of the Bank XXXX XXXX
Weighted average number of outstanding shares XXXX XXXX
Earning per share (QAR) XX.XX XX.XX
The weighted average number of shares have been calculated as follows:
2012 2011
Weighted average number of shares at 1 January XXXX XXXX
[Effect of bonus share issue] XXXX XXXX
Weighted average number of shares at 31 December XXXX XXXX
[In the event if any potentially dilutive shares outstanding at any time, the dilutive earnings per shares needs to be disclosed separately in the financial statements.]
[The Group will be required to adjust the EPS in case of right issues etc. (please refer IAS 33 for more guidance)] 37. CASH AND CASH EQUIVALENTS
For the purpose of the statement of cash flows, cash and cash equivalents comprise the following balances with
maturities of less than three months: 2012 2011Cash and balances with central banks (excluding restricted QCB and other central banks reserve account) XXXX
XXXX
Due from banks XXXX XXXX XXXX XXXX
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
981
38. RELATED PARTIES
Parties are considered to be related if one party has the ability to control the other party or exercise significant
influence over the other party in making financial and operating decisions. Related parties include the significant
owners’ and entities over which the Group and the owners’ exercise significant influence, directors and executive
management of the Group. [The Group is required to disclose the names of its related parties, nature of related party relationships as well as
nature of the transactions with them and outstanding balances.] The related party transactions and balances included in these consolidated financial statements are as follows: 2012 2011
Subsidiary and associated companies
Board of directors
Others
Subsidiary and associated companies
Board of directors
Others
Assets: xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx Liabilities: xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx Off balance sheet items:
xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx Consolidated income statement items:
xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx
IAS 24.17
Transactions with key management personnel
Key management personnel and their immediate relatives have transacted with the Group during the year as follows:
2012 2011
IAS 24.17(a),
(b)
Mortgage and other secured financings XXXX XXXX Credit card XXXX XXXX Other financings XXXX XXXX XXXX XXXX
IAS 24.17(b) [The reporting entity should provide details of profit rates charged against the market rates,
secured financings granted etc.] IAS 24.17
(c),(d)
[The reporting entity should provide details of any impairment loss recognised.]
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
982
Reference
38.
RELATED PARTIES (CONTINUED)
IAS 24.16 Key management personnel compensation for the year comprised:
2012 2011
Short-term employee benefits XXXX XXXX Long-service leave XXXX XXXX Post-employment benefits XXXX XXXX Share-based payment transactions XXXX XXXX XXXX XXXX
IAS 24 .25
[If a Government has control, joint control or significant influence over the Group. The Group is
required to disclose the the name of the government and the nature of its relationship with the
Group (ie control, joint control or significant influence) and information in sufficient detail to enable
users to understand the effect of related party transactions on consolidated financial statements
i.e.
(i) the nature and amount of each individually significant transaction; and
(ii) for other transactions that are collectively, but not individually, significant, a qualitative or
quantitative indication of their extent.]
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
983
Reference
IFRS 7.22(b)
39. RISK MANAGEMENT INSTRUMENTS Notional / expected amount by term to maturity Positive Negative Notional within 3 - 12 1-5 More than fair value fair value amount 3 months months years 5 years
At 31 December 2012: Risk management instruments held as cash flow hedges: Profit rate swaps XXXX XXXX XXXX XXXX XXXX XXXX XXXX Forward foreign exchange contracts XXXX XXXX XXXX XXXX XXXX XXXX XXXX Total XXXX XXXX XXXX XXXX XXXX XXXX XXXX
At 31 December 2011: Risk management instruments held as cash flow hedges: Profit rate swaps XXXX XXXX XXXX XXXX XXXX XXXX XXXX Forward foreign exchange contracts XXXX XXXX XXXX XXXX XXXX XXXX XXXX Total XXXX XXXX XXXX XXXX XXXX XXXX XXXX
IFRS 7.22(a) [COMMENTRY ON RISK MANAGEMENT INSTRUMENTS]
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
984
40. ZAKAH
Zakah is directly borne by the owners. The Group does not collect or pay Zakah on behalf of its owners in
accordance with the [Articles of Association].
41. SHARI’A SUPERVISORY BOARD1
The Shari’a supervisory Board of the Group consists of ___ scholars who are specialised in Shari’a principles and
they ensure the Group’s compliance with general Islamic principles and work in accordance with the issued Fatwas
and guiding rules. The Board’s review includes examining the evidence related to documents and procedures
adopted by the Group in order to ensure that its activities are according to the principles of Islamic Shari’a.
42. SOCIAL RESPONSIBILITY
The Group discharges its social responsibilities through donations to charitable causes and organisations when
profits are reported.
43. SUBSEQUENT EVENTS
[Based on paragraph 24 of FAS 1, the reporting should disclose details of any event subsequent to the date of the
statement of financial position which might have a significant effect on the Group’s financial position or results of its
operations, including those events which may cause significant change in the banks activities or size, or which may
restrict management’s ability to take action.]
44. COMPARATIVE FIGURES
The comparative figures presented for 2011 have been reclassified where necessary to preserve consistency with
the 2012 figures. However, such reclassifications did not have any effect on the consolidated net profit / (loss), or
the total consolidated equity for the comparative year.
1 Refer to articles no. (106, 107 and 108) of QCB Law no. (13) of 2012.
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
985
45. STATEMENT OF FINANCIAL POSITION OF THE PARENT BANK
Reference As at 31 December 2012 2011
ASSETS FAS 1.30-38 Cash and balances with central banks XXXX XXXX Due from banks XXXX XXXX Financing assets XXXX XXXX Investment securities XXXX XXXX Investment in subsidiaries, associates and joint ventures XXXX XXXX Investment property XXXX XXXX Fixed assets XXXX XXXX Intangible assets XXXX XXXX Other assets XXXX XXXX TOTAL ASSETS XXXX XXXX
FAS 1.41-45 LIABILITIES Due to banks XXXX XXXX Customer current accounts XXXX XXXX Financing liabilities XXXX XXXX Other liabilities XXXX XXXX TOTAL LIABILITIES XXXX XXXX
FAS 1.41-45 EQUITY OF INVESTMENT ACCOUNT HOLDERS XXXX XXXX FAS 1.41-45 OWNERS' EQUITY Share capital XXXX XXXX Legal reserve XXXX XXXX Risk reserve XXXX XXXX Fair value reserves XXXX XXXX Foreign currency translation reserve XXXX XXXX Other reserves XXXX XXXX Retained earnings XXXX XXXX TOTAL OWNERS’ EQUITY XXXX XXXX TOTAL LIABILITIES, EQUITY OF INVESTMENT ACCOUNT
HOLDERS AND OWNERS’ EQUITY XXXX XXXX
NAME OF THE BANK (Q.S.C. / S.A.Q.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at and for the year ended 31 December 2012 QAR ‘000s
986
46. INCOME STATEMENT OF THE PARENT BANK
Reference For the year ended 31 December 2012 2011
FAS 1.46 - 52 Income from financing activities XXXX XXXX
Income from investing activities XXXX XXXX Total income from financing and investing activities XXXX XXXX
Fee and commission income XXXX XXXX Fee and commission expense XXXX XXXX Net fee and commission income XXXX XXXX
Foreign exchange gain / (loss) XXXX XXXX Other income XXXX XXXX Total income XXXX XXXX
Staff costs (XXXX) (XXXX) Depreciation and amortisation (XXXX) (XXXX) Other expenses (XXXX) (XXXX) Total expenses (XXXX) (XXXX)
Net impairment loss on investment securities (XXXX) (XXXX) Net impairment loss on financing assets (XXXX) (XXXX) Profit / (loss) for the year before return to investment
account holders
XXXX XXXX Return to investment account holders before the Bank’s
share as Mudarib
XXXX XXXX Bank’s share as Mudarib (XXXX) (XXXX) Less: net return to investment account holders (XXXX) (XXXX) Profit / (loss) for the year before tax XXXX XXXX Tax expense (XXXX) (XXXX) Profit / (loss) for the year XXXX XXXX