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  • PD-1.3 PD-1.3 Disclosures in the Annual Audited Financial Statements

    • Introduction

      • PD-1.3.1

        In addition to the disclosures required under the International Financial Reporting Standards (IFRS) and/or Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI), licensees must provide timely information which facilitates market participants' assessment of them. The disclosure requirements set out in this Section must be included in the annual audited financial statements either as an Appendix or in the notes, at the discretion of the concerned licensee. The disclosures must be addressed in clear terms and with appropriate details to help achieve a satisfactory level of transparency.

        January 2014

      • PD-1.3.2

        If a licensee is unable to achieve full compliance with the requirements stated in this Chapter, a meeting should be held with the relevant Supervision Director at the CBB in the presence of the concerned external auditor to discuss the reasons for such non-compliance prior to the finalisation of the annual audited financial statements. It is the responsibility of the licensee to call for such meetings.

        January 2014

    • Financial Performance and Position

      • PD-1.3.3

        The audited financial statements must include a discussion of the main factors that influenced the licensee's financial performance for the year, explaining any differences in performance between the current year and previous years and the reasons for such differences, and discussing factors that will have a significant influence on the licensee's future financial performance.

        January 2014

    • Corporate Governance and Transparency

      • PD-1.3.4

        The following information relating to corporate governance must be disclosed in the audited financial statements:

        (a) Information about the Board structure (e.g. the size of the Board, Board committees) and the basic organisational structure (lines of business structure and legal entity structure);
        (b) Information about the profession, business title, and experience in years of each Board member and the qualifications and experience in years of all heads of function;
        (c) Descriptive information on the managerial structure, including:
        (i) Committees;
        (ii) Segregation of duties;
        (iii) Reporting lines; and
        (iv) Responsibilities;
        (d) Nature and extent of transactions with related parties (as defined by IFRS and AAOIFI as appropriate);
        (e) Information about any changes in the structures (as mentioned in Subparagraphs PD-1.3.4(a) to PD-1.3.4(c)) from prior periods;
        (f) The communications strategy approved by the Board (including the use of the licensee's website) which should undertake to perform at least the following:
        (i) The disclosure of all relevant information to stakeholders on a periodic basis in a timely manner; and
        (ii) The provision of at least the last three years of financial data on the licensee's website;
        (g) Names of shareholders owning 5% or more and, if they act in concert, a description of the voting, shareholders' or other agreements among them relating to acting in concert, and of any other direct and indirect relationships among them or with the licensee or other shareholders; and
        (h) Information on the directorships held by the directors on other boards.
        January 2014

      • PD-1.3.5

        Licensees are required to maintain a website.

        January 2014

    • Capital Structure – Qualitative Disclosures

      • PD-1.3.6

        All licensees must disclose summary information of the terms and conditions of the main features of all capital instruments listed in Paragraph PD-1.3.7.

        January 2014

    • Capital Structure – Quantitative Disclosures

      • PD-1.3.7

        All licensees must disclose the amount of capital with separate disclosures of:

        (a) Authorised capital;
        (b) Paid-up share capital/common stock; and
        (c) Breakdown of reserves and retained earnings.
        January 2014

    • Capital Adequacy

      • PD-1.3.8

        All licensees must present a summary of the licensee's approach to assessing the adequacy of capital and adherence to the gearing requirements to support current and future activities.

        January 2014

    • Credit Risk – Quantitative Disclosures

      • PD-1.3.9

        All licensees must disclose the distribution of exposures by industry and provide for each major industry:

        (a) Amount of impaired loans/facilities and past due loans/facilities, based on an aging schedule;
        (b) Specific and collective impairment provisions and write-offs for the period, shown separately;
        (c) Charges for specific impairment provisions and write-offs during the period; and
        (d) Reconciliation of changes in provisions for impairment.
        January 2014

    • Operational Risk Disclosures

      • PD-1.3.10

        All licensees must disclose quantitative information on any material legal contingencies including pending legal actions, and a discussion and estimate of the potential liabilities, in addition to qualitative statements about how licensees manage and control such risks.

        January 2014

    • Compliance

      • PD-1.3.11

        The audited financial statements must include a declaration by the external auditor that it did not come across any violations of the requirements below during the course of its audit work that would have any material negative impact on the financial position of the licensee:

        (a) The Bahrain Commercial Companies Law (as amended); and
        (b) The CBB Law and any related Regulations, Resolutions and Directives issued by the CBB (as amended from time to time) where a violation might have had a material negative effect on the business of the licensee or on its financial position.
        January 2014

      • PD-1.3.12

        The notes to the audited financial statements must disclose the amount of any penalties paid to the CBB during the period of the report together with a factual description of the reason(s) given by the CBB for the penalty (see Module EN).

        January 2014