STATEMENT OF cash flow
Accounting Policy
The Statement of Cash Flow has been prepared by using ‘The Direct Method’, whereby gross cash receipts and gross cash payments of operating, investing and financing activities have been recognized. For the purpose of the preparation of the Statement of Cash Flow, cash and cash equivalents include cash and cash equivalents, balances with the Central Bank of Sri Lanka and placements with banks net of unfavourable nostro account balances, as presented in the Statement of Financial Position.
|
Bank |
Group |
| For the year ended 31 December |
2016 |
2015 |
2016 |
2015 |
|
LKR ’000 |
LKR ’000 |
LKR ’000 |
LKR ’000 |
| Cash flows from operating activities |
|
|
|
|
| Interest received |
26,492,391 |
20,765,613 |
26,770,059 |
21,038,450 |
| Fee and commission income received |
2,253,226 |
2,016,259 |
3,273,243 |
2,765,456 |
| Dividend income received |
481,457 |
942,293 |
81,208 |
(636) |
| Other operating income received |
1,370,942 |
1,700,796 |
1,377,172 |
1,870,590 |
| Interest paid |
(19,700,090) |
(13,134,957) |
(19,705,603) |
(13,134,957) |
| Personnel costs paid |
(3,387,278) |
(3,162,861) |
(3,488,904) |
(3,280,182) |
| Other expenses paid |
(2,574,442) |
(2,415,887) |
(3,121,736) |
(2,519,663) |
| Operating profit before changes in operating assets and liabilities (a) |
4,936,206 |
6,711,256 |
5,185,439 |
6,739,058 |
| Net increase in loans and receivables to other customers |
(17,564,396) |
(34,473,636) |
(17,568,625) |
(34,473,636) |
| Net increase due to other customers |
18,271,867 |
32,941,814 |
18,271,867 |
32,941,814 |
| Net (increase)/decrease in other assets |
130,036 |
(95,262) |
174,537 |
(179,272) |
| Net increase/(decrease) in other liabilities |
(297,687) |
1,587,663 |
(319,036) |
1,640,173 |
| Net cash inflow/(outflow) from operating activities before taxation |
5,476,026 |
6,671,835 |
5,744,182 |
6,668,137 |
| Tax on Financial Services paid |
(985,188) |
(1,005,492) |
(985,188) |
(1,005,492) |
| Income taxes paid |
(643,843) |
(1,211,841) |
(732,167) |
(1,254,368) |
| Super Gain Tax Paid by the Parent Company |
– |
(732,081) |
– |
(833,548) |
| Super Gain Tax Paid by non-controlling interest |
– |
– |
– |
(21,123) |
| Net cash provided by/(used in) operating activities |
3,846,995 |
3,722,421 |
4,026,827 |
3,553,606 |
| Cash flows from investing activities |
|
|
|
|
| Net changes in financial investments |
(6,741,637) |
(5,078,640) |
(6,740,813) |
(5,078,362) |
| Net changes in investments in subsidiaries/associates |
– |
(103,826) |
– |
(53,947) |
| Expenditure on property, plant & equipment |
(612,468) |
(594,790) |
(654,471) |
(637,259) |
| Proceeds from sale of property, plant & equipment |
10,556 |
15,817 |
11,759 |
42,580 |
| Net cash used in investing activities |
(7,343,549) |
(5,761,439) |
(7,383,525) |
(5,726,988) |
| Cash flows from financing activities |
|
|
|
|
| Issue of shares |
2,958 |
11,957 |
2,958 |
45,031 |
| Net proceeds from issue of subordinated debts |
– |
8,914,408 |
– |
8,914,408 |
| Interest paid on subordinated debts |
(2,032,761) |
(1,719,085) |
(2,032,761) |
(1,719,085) |
| (Decrease)/increase in other borrowings |
6,363,234 |
4,164,980 |
6,363,234 |
4,164,980 |
| Dividends paid to non-controlling interests |
– |
– |
(45,977) |
(41,283) |
| Dividends paid to shareholders of the Bank |
(664,029) |
(1,806,863) |
(664,029) |
(1,806,863) |
| Net cash provided by/(used in) financing activities |
3,669,402 |
9,565,397 |
3,623,425 |
9,557,188 |
| Net increase in cash and cash equivalents |
172,848 |
7,526,379 |
266,727 |
7,383,806 |
| Cash and cash equivalents at the beginning of the year |
19,958,129 |
12,431,750 |
19,985,201 |
12,601,395 |
| Cash and cash equivalents at the end of the year |
20,130,977 |
19,958,129 |
20,251,928 |
19,985,201 |
|
Bank |
Group |
| For the year ended 31 December |
2016 |
2015 |
2016 |
2015 |
|
LKR ’000 |
LKR ’000 |
LKR ’000 |
LKR ’000 |
| Reconciliation of cash and cash equivalents |
|
|
|
|
| Cash and cash equivalents |
5,018,438 |
11,821,503 |
5,139,389 |
11,848,575 |
| Balances with the Central Bank of Sri Lanka |
11,815,277 |
6,999,898 |
11,815,277 |
6,999,898 |
| Placements with banks |
3,297,262 |
1,153,619 |
3,297,262 |
1,153,619 |
|
20,130,977 |
19,975,020 |
20,251,928 |
20,002,092 |
| Unfavourable balances in Nostro accounts (Note 36) |
– |
(16,891) |
– |
(16,891) |
|
20,130,977 |
19,958,129 |
20,251,928 |
19,985,201 |
The balances with the Central Bank of Sri Lanka represent the reserve maintained for the rupee deposit liabilities of the Bank and it is not available to finance the Bank's day-to-day operations.
(a) Reconciliation of Operating Profit before Changes in Operating Assets and Liabilities
|
Bank |
Group |
| For the year ended 31 December |
2016 |
2015 |
2016 |
2015 |
|
LKR ’000 |
LKR ’000 |
LKR ’000 |
LKR ’000 |
| Operating profit before tax on financial services |
5,335,004 |
5,447,875 |
5,093,546 |
5,715,283 |
| Gains on sale of property, plant & equipment |
(9,109) |
(4,356) |
(11,883) |
(10,150) |
| Accrual for interest income |
(2,125,855) |
(402,236) |
(2,206,395) |
(420,812) |
| Accrual for interest expenses |
430,845 |
511,067 |
436,358 |
511,067 |
| Accrual for general expenses |
35,406 |
85,130 |
45,555 |
93,342 |
| Contribution made to pension fund |
16,927 |
15,284 |
16,927 |
15,284 |
| Depreciation of property, plant & equipment |
329,327 |
284,744 |
364,909 |
317,798 |
| Amortization of intangible assets |
105,464 |
85,673 |
126,077 |
103,598 |
| Gains on disposal of investments |
(260) |
(23,758) |
(228) |
(206,190) |
| Impairment for loans and receivables |
1,378,686 |
711,833 |
1,378,686 |
711,833 |
| Provision/(reversals) of investments in subsidiaries |
(11,733) |
– |
45,887 |
34,312 |
| Accrued dividend income |
(548,496) |
– |
– |
– |
| Fair value adjustments on investment property |
– |
– |
(104,000) |
(126,307) |
| Operating profit before changes in operating assets and liabilities |
4,936,206 |
6,711,256 |
5,185,439 |
6,739,058 |
The Notes to the Financial Statements disclosed on this Annual Report form an integral part of these Financial Statements.
