Financial Statements
For the period ended 31st March 2014
DFCC VARDHANA BANK PLC
Income Statement
For the 3 Months ended
31.03.2014
31.03.2013
LKR '000
LKR '000
Income
2,440,013
2,349,378
Interest income
Less: Interest expense
Net interest income
2,177,585
1,471,277
706,307
2,184,217
1,365,860
818,357
174,851
4,169
170,681
148,310
1,448
146,862
Fee and commission income
Less: Fee and commission expense
Net fee and commission income
Net gain from trading
Net loss from financial instruments at fair value through profit or loss
32,519
16,464
(18,961)
(91,734)
Net gain from financial investments
Other operating income (net)
Total operating income
45,927
28,094
964,567
14,922
77,197
982,069
Less: Impairment for loans and other losses
Individual impairment
Collective impairment
Net operating income
278,160
143,755
134,406
686,406
211,331
111,857
99,474
770,738
228,110
194,134
Less: Operating expenses
Personal expenses
Depreciation and amortisation
Other expenses
Operating profit before value added tax
Less: Value added tax on financial services
Operating profit before income tax
Less: Income tax expense
Profit for the period
49,504
43,074
293,447
115,345
25,598
89,747
34,294
233,013
300,518
43,497
257,021
83,137
55,453
173,884
0.20
0.79
Basic earnings per share (LKR)
Statement of Comprehensive Income
For the 3 Months ended
31.03.2014
31.03.2013
LKR '000
LKR '000
Profit for the period
55,453
173,884
Other comprehensive income
Gains on re-measuring available-for-sale financial assets
(11,624)
(6,880)
Other comprehensive income for the period
(11,624)
(6,880)
Total comprehensive income for the period
43,829
167,004
Statement of Financial Position
As at
Assets
Cash and cash equivalents
Balances with Central Bank
Placements with banks
Derivative financial instruments
Other financial assets- held for trading
Loans and receivables to banks
Loans and receivables to other customers
Financial investments – available for sale
Financial investments – held to maturity
Property and equipment
Intangible assets
Other assets
Total assets
Notes
31.03.2014
LKR '000
31.12.2013
LKR '000
(Audited)
2,576,104
3,446,969
1,621,073
155,803
949,699
2,948,371
51,567,039
24,225,805
516,764
562,266
182,245
1,560,198
90,312,334
2,554,447
2,870,492
662,886
182,262
953,935
4,627,347
50,831,412
14,828,099
537,745
556,507
176,249
1,156,355
79,937,736
4,292,138
154,627
70,958,509
4,039,817
1,027,751
36,380
42,702
130,877
1,664,365
82,347,167
1,932,815
172,385
64,998,544
2,348,414
1,000,301
48,388
81,481
120,154
1,313,916
72,016,398
5,392,785
135,193
1,916,804
520,385
7,965,167
5,392,785
135,193
1,861,351
532,009
7,921,338
Total liabilities and equity
90,312,334
79,937,736
Off-balance sheet items and contra accounts
Contingencies
Commitments and contra accounts
15,477,450
12,846,872
14,520,155
12,627,713
897
136
867
135
Liabilities
Due to banks
Derivative financial instruments
Due to other customers
Other borrowings
Subordinated term debts
Group balances payable
Current tax liability
Deferred tax liability
Other liabilities
Total liabilities
Equity
Stated capital (284,177,007 ordinary shares)
Statutory reserve fund
Retained earnings
Other reserves
Total equity
Memorandum information
Number of employees
Number of branches and extension offices
1
2
Statement of Changes in Equity
Other reserves
Balance as at 31.12.2012
Stated capital
Statutory
reserve fund
Statutory
investment
fund
Fair value
reserve
Retained
earnings
Total equity
LKR '000
LKR '000
LKR '000
LKR '000
LKR '000
LKR '000
3,182,519
103,971
264,840
20,144
1,569,077
5,140,551
Total comprehensive income for the period
Profit for the 03 months ended 31st March 2013
Other comprehensive income
Total comprehensive income for the period
-
-
-
(6,880)
(6,880)
173,884
173,884
173,884
(6,880)
167,004
Transfers to reserves during the period
-
-
42,961
-
(42,961)
-
Total transactions with equity holders
-
-
42,961
-
(42,961)
-
Transactions with equity holders
Balance as at 31.03.2013
3,182,519
103,971
307,801
13,264
1,700,000
5,307,555
Balance as at 31.12.2013
5,392,785
135,193
440,009
92,000
1,861,351
7,921,338
Total comprehensive income for the period
Profit for the 03 months ended 31st March 2014
Other comprehensive income
Total comprehensive income for the period
-
-
-
(11,624)
(11,624)
55,453
55,453
55,453
(11,624)
43,829
-
-
-
-
-
-
Transactions with equity holders
Transfers to reserves during the period
Total transactions with equity holders
Balance as at 31.03.2014
5,392,785
135,193
440,009
80,376
1,916,804
7,965,167
Statement of Cash Flows
For the 3 months ended 31 March
Cash flows from operating activities
Interest and net commission receipts
Interest payments
Recovery of loans previously written off
Receipts from other operating activities
Cash payments to employees and suppliers
Payment of retirement benefit obligation
Value Added Tax and Nation Building Tax paid
Operating cash flow before changes in operating assets and liabilities
2014
LKR '000
2013
LKR '000
1,886,103
(1,328,859)
150
238,018
(509,499)
(1,798)
(23,182)
260,933
1,757,766
(1,284,208)
2
84,251
(524,945)
(37,953)
(5,087)
(576,476)
(322,700)
(307,270)
(412,250)
(3,005,974)
(171,744)
5,779,702
8,700
50,815
268,642
5,162,346
(16,000)
5,146,346
3,744,314
62,615
41,299
61,378
314,551
(23,153)
291,398
(11,738,489)
(851,353)
12,142
575,936
(61,259)
(12,063,023)
(736,156)
(200,466)
(111,850)
10,810
435,692
63
(19,177)
(621,084)
Cash flows from financing activities
Increase / (decrease) in due to banks
Increase in borrowing under repurchase agreements
Net cash generated from financing activities
2,368,793
1,696,454
4,065,247
(1,272,469)
1,504,293
231,824
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of the period
Cash and cash equivalents at end of the period
(2,851,430)
7,048,620
4,197,190
(97,862)
4,881,219
4,783,357
2014
LKR '000
1,733,053
2,464,137
4,197,190
2013
LKR '000
2,614,300
2,169,057
4,783,357
Increase in operating assets
Deposits held for regulatory or monetary control purposes
Loans and receivables to other customers
Increase in other assets
Increase in operating liabilities
Deposits from customers
Derivatives financial instruments
Negotiable certificates of deposit
Increase in other liabilities
Net cash generated from operating activities before income tax
Income taxes paid
Net cash generated from operating activities
Cash flows from investing activities
Purchase of financial investments - available for sale
Increase in financial investments - held to maturity
Increase in loans and receivables to banks
Decrease in financial investments - held for trading
Net proceeds from sale and maturity of financial investments
Proceeds from sale of property and equipment
Purchase of property, equipment and intangible assets
Net cash used in investing activities
Composition of cash and cash equivalent at end of the period
Cash and cash equivalents
Placements with banks
Analysis of Financial Instruments by Measurement Basis
As at 31 March 2014
Held for trading
LKR'000
Assets
Cash and cash equivalents
Balances with central bank
Placements with banks
Derivative financial instruments
Other financial assets -held for trading
Loans and receivables to banks
Loans and receivables to other customers
Financial investments - available for sale
Financial investments – held to maturity
Total financial assets
LKR'000
Available for
Held to maturity
sale
LKR'000
155,803
949,699
-
2,576,104
3,446,969
1,621,073
2,948,371
51,567,039
-
24,225,805
1,105,502
62,159,554
24,225,805
Held for trading
LKR'000
Liabilities
Due to banks
Derivative financial instruments
Due to other customers
Other borrowings
Subordinated term debt
Total financial liabilities
Loans and
receivables at
amortised cost
LKR'000
516,764
516,764
Total
LKR'000
2,576,104
3,446,969
1,621,073
155,803
949,699
2,948,371
51,567,039
24,225,805
516,764
88,007,625
Total
Amortised cost
LKR'000
154,627
154,627
4,292,138
70,958,509
4,039,817
1,027,751
80,318,214
Held for trading
Loans and
receivables at
amortised cost
LKR'000
LKR'000
4,292,138
154,627
70,958,509
4,039,817
1,027,751
80,472,841
As at 31 December 2013
LKR'000
Assets
Cash and cash equivalents
Balances with central bank
Placements with banks
Derivative financial instruments
Other financial assets held-for-trading
Loans and receivables to banks
Loans and receivables to other customers
Financial investments - available for sale
Financial investments – held to maturity
Total financial assets
182,262
953,935
1,136,197
Held for trading
LKR'000
Liabilities
Due to banks
Derivative financial instruments
Due to customers
Other borrowings
Subordinated term debt
Total financial liabilities
172,385
172,385
2,554,447
2,870,492
662,886
4,627,347
50,831,412
61,546,584
Available for
Held to maturity
sale
LKR'000
14,828,099
14,828,099
Total
Amortised cost
LKR'000
1,932,815
64,998,544
2,348,414
1,000,301
70,280,074
LKR'000
1,932,815
172,385
64,998,544
2,348,414
1,000,301
70,452,459
LKR'000
537,745
537,745
Total
LKR'000
2,554,447
2,870,492
662,886
182,262
953,935
4,627,347
50,831,412
14,828,099
537,745
78,048,625
Notes to the Financial Statements
As at
1
1.1
31.03.2014
LKR'000
Loans and Receivables to Other Customers
Gross loans and receivables (Note 1.1)
Less: Individual impairment (Note 1.2.1)
Collective impairment (Note 1.2.2)
Net loans and receivables
54,644,052
1,743,152
1,333,861
51,567,039
54,330,900
2,307,712
1,191,776
50,831,412
Loans and Receivables to Other Customers - By product
By product-Domestic Currency
Overdrafts
Trade finance
Credit cards
Pawning
Staff loans
Term loans
19,133,689
7,510,224
131,160
3,014,488
357,884
16,319,449
19,230,658
8,258,437
114,956
3,426,803
338,030
14,663,361
1,569,711
1,564,221
49,600,826
1,507,927
825,880
48,366,052
311,919
3,958,200
773,107
5,043,226
275,450
4,840,862
848,536
5,964,848
54,644,052
54,330,900
2,307,712
143,755
194,331
513,903
81
1,743,152
1,751,939
539,023
5,563
18,703
7,516
2,307,712
1,191,776
134,406
44,962
18,786
18,490
7
1,333,861
898,239
244,812
718
2,438
95,660
50,091
1,191,776
3,077,013
3,499,488
1,776,389
12,038,246
46,489,712
201,137
645,781
61,151,265
1,810,785
12,172,735
40,951,828
648,251
586,707
56,170,306
126,894
1,285,745
8,386,127
8,478
9,807,244
70,958,509
98,900
981,546
7,746,631
1,161
8,828,238
64,998,544
Lease rentals receivable
Securities purchased under resale agreements
By product-Foreign Currency
Overdrafts
Trade finance
Term loans
Gross Loans and Receivables
1.2
Movements in Individual and Collective Impairment during the period for Loans and Receivables
to Other Customers
1.2.1 Individual Impairment
Opening balance
Add: Charge to income statement
Exchange rate difference on foreign currency impairment allowance
Adjustments / transfers
Less: Write-off during the year
Interest waivers
Exchange rate difference on foreign currency impairment allowance
Closing balance
1.2.2 Collective Impairment
Opening balance
Add: Charge to income statement
Exchange rate difference on foreign currency impairment allowance
Past due capitalisation of interest suspended
Adjustments / transfers
Less: Write-off of loans
Interest waivers
Exchange rate difference on foreign currency impairment allowance
Closing balance
Total impairment
2
31.12.2013
LKR'000
Due to Other Customers - By product
By product-Domestic Currency
Demand deposits (current accounts)
Savings deposits
Fixed deposits
Margin deposits
Certificate of deposits
By product- Foreign Currency
Demand deposits (current accounts)
Savings deposits
Fixed deposits
Margin deposits
Certificate of deposits
Total
3. Accounting policies
The accounting policies and methods of computations are consistent with those policies and methods followed
during the previous financial year.
4. Comparative information
Where items are regrouped, comparative information is also adjusted to conform to the 3 months ended
31 March 2014 presentation.
5. Events Occurring after the Statement of Financial Position Date
Directors have recommended the payment of a final dividend of LKR 0.50 cents per share for the year ended 31
December 2013, which was approved by the shareholders at the Annual General Meeting held on 25 April 2014.
No other circumstances or material events have occurred since the statement of financial position date, which
require disclosure or adjustments to the financial statements.
6. In Pursuance of the policies announced by the Government encouraging consolidation of certain banking
businesses, the Bank’s parent company DFCC Bank and NDB Bank made a joint disclosure to the Colombo
Stock Exchange on 10 January 2014.
Selected Performance Indicators
As at
31.03.2014
As at
31.12.2013
Regulatory capital adequacy
Core capital (Tier 1 capital) , LKR Mn
7,572
7,578
Total capital base, LKR Mn
Core capital adequacy ratio, as % of risk weighted assets
(Minimum requirement, 5%)
8,302
14.27%
8,304
14.57%
Total capital adequacy ratio, as % of risk weighted assets
(Minimum requirement, 10%)
15.65%
15.97%
Gross non - performing advances ratio, % (net of interest in suspense)
6.77%
5.06%
Net non - performing advances ratio, % (net of interest in suspense and provisions)
4.17%
2.29%
Interest margin, %
3.37%
4.37%
Return on assets (After tax) %
0.26%
0.88%
Return on equity, %
2.83%
11.36%
Domestic banking unit
26,839
20,321
Off-shore banking unit
1,114
1,215
39%
39%
34%
40%
Asset quality (Quality of loan portfolio)
Profitability
Regulatory liquidity
Statutory liquid assets, LKR Mn.
Statutory liquid assets ratio, %
(Minimum requirement, 20%)
Domestic banking unit
Off-shore banking unit
CERTIFICATION:
We, the undersigned, being the Chairman , the Chief Executive Officer and Head of Accounting and Reporting of DFCC Vardhana Bank PLC,
Certify jointly that:
(a) the above statements have been prepared in compliance with the format and definitions prescribed by the Central Bank of Sri Lanka;
(b) the information contained in these statements have been extracted from the unaudited financial statements of the Bank unless indicated as audited.
J M S Brito
Chairman
Date : 08.05.2014
Lakshman Silva
Director & Chief Executive Officer
Date: 08.05.2014
D S J Wettasinghe
Head of Accounting & Reporting
Date: 08.05.2014
DFCC Vardhana Bank PLC
73, W A D Ramanayake Mw, Colombo 02.
Tel: 2371371 Fax: 2371372
Website: www.dfcc.lk