Back Custom print Link Text Only Rich Text Print

  • PD-1 PD-1 Annual disclosure requirements

    • PD-1.1 PD-1.1 Introduction

      • PD-1.1.1

        The purpose of the contents of this chapter is to set out the Agency's requirements relating to the disclosure of information in the bank's annual audited financial statements ('Annual Report'). This chapter also refers to the Bahrain Commercial Companies Law of 2001 (as amended) and the Bahrain Stock Exchange regulations relating to public disclosure and reporting requirements.

      • PD-1.1.2

        For the purpose of this module, the following definitions apply:

        (a) 'Director' includes any person who occupies the position of a Director and any person who appears to the Agency to be a Director (howsoever called) of the applicant/licensed locally incorporated banks and its subsidiaries;
        (b) 'Chief Executive/General Manager' means a person who is responsible under the immediate authority of the Directors for the conduct of the applicant/licensed locally incorporated bank, including its subsidiaries and overseas branches, and Bahrain branches of foreign banks;
        (c) 'Manager' means a person who, under the immediate authority of a Director or the chief executive/general manager, exercises major managerial function(s) or is responsible for maintaining accounts or other records of the applicant/licensed bank; and
        (d) 'Interest in the shares' shall include, but not be limited to, direct and/or indirect ownership of such shares, the right of voting associated with such shares, the right to receive dividends payable on such shares, and/or any right, regardless of the form thereof, to purchase (or otherwise acquire an interest in) such shares at any time.

    • PD-1.2 PD-1.2 Publication of annual audited financial statements (Annual Reports)

      • PD-1.2.1

        Locally incorporated banks are required to publish their audited financial statements per the rules set out in the BMA law, Bahrain Commercial Companies Law of 2001 (as amended) and the Bahrain Stock Exchange regulations (this latter obligation only applies to banks listed on the Bahrain Stock Exchange).

      • PD-1.2.2

        The audited financial statements should be prepared in accordance with the Financial Accounting Standards (FAS) issued by the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI). For products and activities not covered by AAOIFI, International Accounting Standards (IAS) should be followed.

    • PD-1.3 PD-1.3 Disclosure in the annual audited financial statements (Annual Reports)

      • General

        • PD-1.3.1

          The audited financial statements should be prepared in accordance with the Financial Accounting Standards (FAS) issued by the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI).

        • PD-1.3.2

          For products and activities not covered by the standards listed in paragraph PD-1.3.1, banks should follow the requirements of the International Accounting Standards (IAS) for preparation of audited financial statements.

      • Approval by the Board of Directors

        • PD-1.3.3

          The accounts should be approved by the bank's Board of Directors, signed (normally by the Chairman and the Chief Executive Officer) and annotated as follows:

          "These accounts were approved by the Board of Directors on [date] and signed on their behalf by [name/title] and [name/title]".

      • Investment accounts

        • PD-1.3.4

          Restricted investment accounts are to be reported off balance sheet in the financial statements. Banks must provide disclosures as per the requirements of FAS 1: Presentation and Disclosure in the Financial Statements of Islamic Banks and Financial Institutions issued by AAOIFI.

        • PD-1.3.5

          Unrestricted investment accounts are to be reported on balance sheet in the financial statements. The assets financed by the unrestricted investment accounts are to be included under the Assets section on the balance sheet (net of provisions). The equity of the unrestricted investment accounts should be shown between the liabilities and owners' equity sections. Disclosures and presentations must be in accordance with FAS 1 issued by AAOIFI.

      • Consolidation issues

        • PD-1.3.6

          Where a parent or a group company operating in Bahrain receives funds on an unrestricted basis and these funds are invested with another group company on a restricted basis, these should be eliminated on consolidation. In the consolidated financial statements, investment of the PSIA outside the group should be reported as Unrestricted Investment Accounts. Disclosures and presentation should be in accordance with FAS 1 issued by AAOIFI.

      • Compliance

        • PD-1.3.7

          The Annual Report should include a declaration by the external auditors that no violations have taken place of:

          (a) the Bahrain Commercial Companies Law of 2001 (as amended);
          (b) the BMA Law that might have had a material effect on the business of the bank or on its financial position; and
          (c) the licensing and authorisation requirements and other rules and regulations issued by the Agency.

          In so far as the violations have any material impact on the financial statements of the bank.

    • PD-1.4 PD-1.4 Additional disclosure in the annual audited financial statements of banks listed on the Bahrain Stock Exchange (BSE)

      • PD-1.4.1

        The content of this section is applicable only to locally incorporated banks listed on the Bahrain Stock Exchange (BSE).

      • PD-1.4.2

        The disclosure requirements set out in this section for banks referred to under paragraph PD-1.4.1 are in addition to those set out in section PD-1.3.

      • Interests of Directors, chief executive officers and managers

        • PD-1.4.3

          Without prejudice to any other requirement of Bahrain law (or any other direction of the Agency), the Directors' Report section of the annual audited financial statements of banks should contain details of the interests of Directors, chief executive officers and managers (persons as defined under section PD-1.1, respectively) in the shares of such banks. Such details should include:

          (a) total interests in the shares of such banks by individual persons mentioned above, and
          (b) changes in such interests from the previous financial year to the current financial year.

        • PD-1.4.4

          For the purpose of the disclosure required under paragraph PD-1.4.3, any interests in the shares of a bank held by the spouse(s) or children of a Director, or any other person the control of whose interests in such shares lies ultimately with the Director, shall be deemed to be the interests of the relevant Director. For a definition of 'interest in the shares', see paragraph PD-1.1.2(d).

    • PD-1.5 PD-1.5 Disclosure relating to precious metals and commodities trading activities

      • PD-1.5.1

        The content of this section is applicable to all licensed banks authorised to carry out activities related to trading in precious metals and commodities in accordance with the requirements set out under chapter LR-5.

      • Dealing authorisation

        • PD-1.5.2

          All licensed banks authorized to carry out such dealing activities are required to show in their audited annual financial statements, as a note to or on the face of the balance sheet and profit and loss account, in addition to the disclosure requirements stated in this chapter, accounts detailing assets and liabilities related to precious metals and commodities and their profit and loss account income attributable to such dealing.