Home' Trinidad and Tobago Guardian : December 31st 2013 Contents B45
Consolidated Financial Statements for the year ended September 2013
First Citizens Holdings Limited and its Subsidiaries
3 Financial Risk Management (continued)
3.6 Capital management (continued)
Tier 1 (Core) Capital
Non controlling interest
Less intangible asset
Total Tier 1
Tier 2 (Supplementary) Capital
Fair value reserves
Eligible reserve provision
Total Tier 2 Capital
Risk adjusted assets
Qualifying capital to risk adjusted assets
Core capital to qualifying capital
3.7 Fair value of financial assets and liabilities
(a) Financial instruments not measured at fair value
The following table summarises the carrying amounts and fair values of those financial assets and
liabilities presented on the Group's consolidated statement of financial position at an amount
other than their fair value.
Cash and due from other banks
2,168,246 2,481,640 2,168,246 2,481,640
Statutory deposits with
6,738,987 4,446,808 6,738,987 4,446,808
- Loans to customers
11,516,921 10,321,665 13,950,103 11,063,776
- Held to maturity
1,692,664 1,633,245 1,661,980 1,704,706
- Other loans and receivables
1,583,739 1,715,979 1,590,564 1,739,717
- Loan notes
2,489,053 2,555,484 2,757,247 2,853,021
- Finance leases
20,998,302 18,892,840 21,118,848 18,992,271
Other funding instruments
4,632,823 6,038,847 4,691,502 6,060,059
2,451,566 2,448,358 2,742,577 2,807,415
Letter of credit
The fair values of the Group's financial instruments are determined in accordance with International
Accounting Standard (IAS) 39 "Financial instruments: Recognition and Measurement".
Financial instruments where carrying value is equal to fair value
Due to their liquidity and short-term maturity, the carrying values of certain financial instruments
approximate their fair values. Financial instruments where carrying value is approximately equal to
fair value include cash and due from other banks and statutory deposits with the Central Bank.
Loans to customers less allowance for loan losses
Loans to customers are net of specific and other provisions for impairment, which reflects the
additional credit risk. The estimated fair value of these loans represents the discounted amount of
future cash flows based on prevailing market rates.
Held to maturity investments
Fair value for held to maturity assets is based on market prices or broker/dealer price quotations.
Where this information is not available, fair value is estimated using the discounted cash flow
valuation methodology where all cash-flows of the instruments are discounted at an appropriate
yield, plus a credit spread where applicable. The fair value of the held to maturity portfolio is done
for disclosure purposes only.
Other loans and receivables
Other loans and receivables are net of provisions for impairment. The estimated fair value of
receivables represents the discounted amount of estimated future cash flows expected to be
received. Expected cash flows are discounted at current market rates to determine fair value.
Receivables are generally for a period of less than one year.
The fair value of these notes are calculated using discounted cash flow analyses of comparable
government borrowing rates for the terms indicated.
Due to their liquidity and short-term maturity, the carrying values of some customer deposits
approximate their fair value. The fair value of the other customer deposits are computed using
discounted cash flow analyses at current market interest rates.
The fair value of the Series A, Series B and the TT$500 million bonds is calculated using discounted
rates and have been discounted using the prevailing market rate of similar instruments.
Note due to parent company
This note is payable on demand (no maturity stated). The fair value of this note approximates its
(b) Fair value hierarchy
IFRS 7 specifies a hierarchy of valuation techniques based on whether the inputs to these valuation
techniques are observable or unobservable. Observable inputs reflect market data obtained from
independent sources; unobservable inputs reflect the Group's market assumptions. These two
types of inputs have created the following fair value hierarchy:-
includes listed equity securities and debt instruments on exchanges.
asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices). This
level includes debt instruments.
(unobservable inputs). This level includes equity investments and debt instruments with
significant unobservable components.
This hierarchy requires the use of observable market data when available. The Group considers
relevant and observable market prices in its valuations where possible.
The following table shows an analysis of financial instruments measured at fair value by level of
the fair value hierarchy:
As at 30 September 2013
Financial assets designated
at fair value
- Equity securities
Available-for-sale financial assets:
1,530,103 6,961,252 120,189 8,611,545
Total Financial Assets
1,530,103 6,961,252 120,557 8,611,913
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
(expressed in Trinidad and Tobago dollars)
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