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PRU-EPRS 1.22 Instructional Guidelines

1. All figures relating to income statement items in any of the quarterly returns should correspond to the current reporting period (quarter) and not cumulative or year-to-date amounts.
2. The instructional guidelines below are regarding certain specific data elements in the form.
3. As noted earlier, this return should only be completed by Authorised Firms that operate in or from the DIFC through a Branch.

Statement of Profit and Loss

Item No. Item Instructional Guidelines
B900_1010 Interest income Include both actually received interest and receivable interest which has accrued but has not yet been received, generated for example by:
•  Cash and liquid assets;
•  Trading securities;
•  Investment securities;
•  Derivatives in the non-trading book;
•  Loans and advances;
•  Investment / loans to parent entity / loans to associates / joint venture;
•  Other investments; and
•  Other interest earning assets
B900_1020 Interest expense Include both interest actually paid and interest payable which has accrued but has not yet been paid, linked to, for example:
•  Deposits;
•  Other borrowings;
•  Derivatives in the non-trading book;
•  Bonds, notes and other borrowings;
•  Loan capital;
•  Loan from parent entity;
•  Loan from associates / joint ventures;
•  Other interest bearing liabilities.
B900_2010 Fee and commission income Include charges made for services provided by the reporting institution, for example the provision of:
•  Current account facilities;
•  Corporate advice;
•  Investment management and trustee services;
•  Guarantees and indemnities;
•  Commission on the sale of insurance of travellers cheques; and
•  Foreign exchange services (if they can be separately identified).
B900_2020 Fees and commission expense Include charges for all services rendered to the company by third parties (excluding those which have the character of interest).
B900_3200 Net income from trading securities Include all profits or losses (including revaluation profits or losses) other than those arising from the sale of investments in subsidiary or associated companies, trade investments or the amortisation of premiums or discounts on the purchase of fixed maturity investments which are not held for dealing.
B900_3300 Net income from investment securities Include net income / (losses) from investments other than the trading securities, such as available for sale and held to maturity investments.
B900_3400 Income from Islamic Contracts Income derived from any Islamic business undertaken by the Authorised Firm.
B900_3500 Other operating income Include under this heading income from any other source (other than extraordinary items), for example:
•  Revaluations of foreign exchange positions;
•  Revaluation of any investment in subsidiaries or associates (if equity accounting);
•  Share of profits from associated companies (if reporting on a consolidated basis);
•  Profit or loss on the sale of non-trading assets — e.g. premises, equipment, subsidiary and associated companies and trade investments; and
•  Revaluation surpluses / deficits — following normal accounting practice.
B900_3610 General provisions Total provisions to cover non-specific bad debt provisions.
B900_3620 Specific provisions Total of provisions made against specific Exposures.
B900_3640 Provisions for Islamic Contracts Those provisions arising from any Islamic business undertaken
B900_3650 Other To include, for example, provisions made for taxation or dividends.
B900_3700 Staff expenses Include, for example:
•  Salary costs;
•  Employer's contribution to any pension scheme; and
•  Costs of staff benefits paid on a per capita basis such as private medical insurance.
B900_3800 Depreciation & Amortisation Charges relating, for example, to depreciation / amortisation of property, plant and equipment and other amounts written off in respect of tangible and intangible fixed assets.
B900_3900 Other operating expenses Examples of expenses can be as follows:
•  Occupancy expenses — for example, rates, rent, insurance of building, lighting, heating, maintenance costs and subsidised restaurants;
•  Equipment;
•  Other overhead expenses; and
•  All other expenditure not falling into one of the other specific categories.

Statement of Assets

Item No. Item Instructional Guidelines
B900_4110 and B900_4120 Cash and Balances with Central Banks Include, for example, the following amounts:
•  Notes and coins;
•  Long positions in Gold bullion (including Tola Bars); and
•  Amounts placed with central banks including funds required to be placed on deposit with central banks and monetary authorities.
B900_4140 Treasury bills and other eligible bills Treasury bills issued by the national governments or by the Central banks on behalf of the governments. Also include bills issued by other entities, which are eligible for rediscounting with the central bank.
B900_4130 Money market placements Include Deposits at call and other money market placements with banks or other money market participants
B900_4210 Trading securities Include investments acquired principally for the purpose of selling or repurchasing it in the near term for short-term-profit-taking. This would include but not limited to, debt, equity and hybrid instruments
B900_4211 Derivative financial instruments Include, for example, positions representing the following instruments, recorded at fair value:
•  Forward and Futures contracts in Currencies, Interest rates and other financial assets;
•  Forward rate agreements;
•  Currency and interest rate swaps;
•  Credit Derivatives; and
•  Option contracts on currency, interest rate and other financial assets.

These Derivatives include both the exchange-traded and over-the-counter versions.
B900_4220 Designated at fair value through profit & Loss Include all financial instruments which are, upon initial recognition, designated by the entity as financial assets to be measured at fair value through profit or loss other than the trading securities included in B900_4210.
B900_4230 Investment securities — available for sale Include non-Derivative financial assets that are designated as available for sale by the firm or that have not been classified under any of the other categories of investment in section B900_420T.
B900_4240 Investment securities — held to maturity Include non-Derivative financial assets with fixed or determinable payments and fixed maturity that the firm has positive intention and ability to hold to maturity.
B900_4810 Investments in associates, subsidiaries and JVs Include investments in entities, including unincorporated entities such as partnerships, over which the firm has significant influence and where the entity in question is neither a subsidiary nor a joint venture operation
B900_4410 and B900_4420 Loans and advances Amounts arising from, for example:
•  Revolving credit facilities;
•  Credit cards outstanding balances;
•  Housing loans (both variable and fixed rates);
•  Term loans (both variable and fixed rates);
•  The book value of assets leased out under finance lease agreements;
•  Loans made under conditional hire purchase contracts;
•  Advances purchased by or assigned to the reporting institutions, factoring or similar arrangements; and
•  Other loans and advances.
The items listed above are indicative examples and are not exhaustive universe of items to be reported under this item.

The amounts reported should be gross of provisions (as specific and general provisions should be reported in the Liabilities section of the balance Sheet) and net of interest receivable.
B900_4510 Murabaha and Istina'a receivables Report here all receivables relating to Murabaha and Istisna'a contracts. Refer to FAS 2 and FAS 10 of AAOIFI respectively.
B900_4520 Ijarah assets and receivables Include Ijarah assets net of depreciation / amortisation and Ijarah receivables. Refer to FAS 8 of AAOIFI.
B900_4530 Mudaraba Financing Capital provided on a Mudaraba basis should be reported here. Refer to FAS 3 of AAOIFI.
B900_4540 Musharaka Financing Report capital provided on a Musharaka basis. Refer to FAS 4 of AAOIFI. Investment in the Share capital of another company should be reported under "Other investments".
B900_4550 Other investments Include any other investments undertaken through Islamic Contracts, including Parallel Istisna'a assets (refer FAS 10 of AAOIFI) and capital provided on Salam contracts (refer FAS 7 AAOIFI).
B900_4820 Fixed assets Include, for example, the value of the following:
•  Plant and equipment, the residual value of items leased out under an operating lease (excluding balances relating to named Ijarah assets which should be included separately in item B900_4520); and
•  Own premises being occupied or developed for occupation by the Authorised Firm, property (excluding property acquired / held available for sale which should be included in "Other Assets", item B900_4720).
The amounts reported here should be net of accumulated depreciation and amortisation.
B900_4610 Goodwill Include amounts relating to any purchased goodwill.
B900_4620 Other intangible assets Items to be included:
•  Capitalised development costs
•  Brand names, trademarks and similar rights
•  Licences and exchange seats which may be held as part of the Authorised Firm's trading requirement.
B900_4720 Other assets Assets that have not been included in any of the items above. In particular, positions in short term securities held with the intention of resale, sundry debtors, prepayments and accrued income not identified elsewhere.
B900_5010 Direct credit substitutes These relate to the financial requirements of Counterparty where the risk of loss to the Authorised Firm on the Transaction is equivalent to a direct claim on the Counterparty. Include here
•  Guarantees of a financial nature to stand behind the current obligations of Clients (e.g. loan guarantees);
•  Guarantees of leasing operations;
•  Letters of credit and Stand-by letters of credit to the extent that they do not qualify for inclusion in item no. B900_5030 "Trade related contingents" below;
•  Guarantees of a capital nature such as undertakings given to a non bank financial company which are considered as capital by the appropriate regulatory body. Guarantees given to a company not connected to the reporting institution should be risk weighted at 100% and those for connected companies should be deducted from the reporting institution's capital base; and
•  Acceptances granted and risk participation in bankers' acceptances. Where the reporting institution's own acceptances have been discounted by that institution the nominal value of the bills held should be deducted from the nominal amount of the bills issued under the facility and a corresponding on balance sheet entry made.
B900_5020 Transaction related contingents These Exposures relate to the on-going trading activities of a Counterparty where the risk of loss to the reporting institution depends on the likelihood of a future event which is independent of the creditworthiness of the Counterparty. They are essentially guarantees that support particular non financial obligations rather than a Client's financial obligations. Include here:
•  Advance payment guarantees
•  Performance bonds including bid or tender bonds, warranties and indemnities (indemnities given for lost Share certificates or bills of lading and guarantees of the validity of papers rather than of payment under certain conditions should be reported here);
•  Stand by letters of credit relating to a particular contract or to non financial transactions (including arrangements backing, inter alia, subcontractors' and supplier's performance, labour and materials, contracts and bids).
B900_5030 Trade related Contingents Report short term self-liquidating trade related items such as documentary letters of credit issued by the reporting institution that are collateralised by the underlying shipment i.e. the credit provides for the reporting institution to retain title to the underlying shipment. letters of credit issued without provision for the reporting institution to retain title to the underlying shipment should be reported under direct credit substitutes above.
B900_5040 Sale and Repurchase Agreements Only report here sale and repurchase agreements where the asset sold is not reported on the balance sheet. Where the asset is off balance sheet, the appropriate Counterparty weighting is determined by the issuer of the security and not according to the Counterparty with whom the Transaction has been undertaken.
B900_5050 Forward Assets Purchases The appropriate Counterparty weighting should be determined by the asset to be purchased and not the Counterparty with whom the contract has been entered into. Include commitments for loans and other on balance sheet items with certain drawdown. Exclude foreign currency spot Deposits with value date of up to two working dates after trade date.
B900_5060 Forward Deposits Placed Relates to agreements between two parties whereby one will pay and the other receive an agreed rate of interest on a Deposit to be placed by one with the other at some pre-determined rate in the future. The weight should be determined according to the Counterparty with whom the Deposit will be placed. Exclude foreign currency spot Deposits with value date of up to two working dates after trade date.
B900_5070 Uncalled partly- paid shares and securities Only include here if there is a specific date for a call. If there is no specific date for a call, the item should be included as a long term commitment under item no. B900_510T, "Other Commitments".
B900_5080 NIF's and RUF's Note issuance and revolving underwriting facilities should include the reporting institutions underwriting obligations of any maturity. Where the facility has been drawn down by the borrower and the notes are held by someone other than the Authorised Firm, the underwriting obligation should continue to be reported at the nominal amount.
B900_5090 Endorsement of Bills These should be reported at the full nominal amount, less any amount for bills which the institution now holds but had previously endorsed. Endorsement of bills not accepted by banks will attract the Counterparty risk weighting of the issuer. If it has been endorsed by another bank, a reduced risk weighting applies.
B900_510T Other Commitments All other undrawn commitments are reportable here, divided into commitments under and over one year.
B900_5210 Assets funded by restricted PSIAs Total amount of assets managed under Restricted PSIA by the Authorised Firm.

Statement of Total Liabilities

B900_610T Deposits Separately identify deposits due to the Financial Institutions in item B900_6002. All other deposits are to be reported in the other deposit section, item B900_6004.
B900_630T Total Provisions All specific and general provisions in respect of loans and Advances and other receivables should be reported here. Exclude provisions against Islamic Contracts which should be reported in item no B900_6640.
B900_660T Liabilities arising from Islamic Contracts Liabilities arising from Islamic Contracts include advances received against Salam contracts (defined in Para 3 and 19 of FAS 7 issued by AAOIFI and Ijarah investment payables (refer to FAS 8 of AAOIFI).
B900_6010 and B900_6020 Creditors and other Liabilities Report all items not included in any of the above, such as proposed dividends payable, sundry accruals and deferred income etc.
B900_6400 Derivative financial instruments — held for trading Include liabilities arising out of positions representing the following instruments, recorded at fair value:
•  Forward and Futures contracts in Currencies, Interest rates and other financial assets;
•  Forward rate agreements;
•  Currency and interest rate swaps;
•  Credit Derivatives; and
•  Option contracts on currency, interest rate and other financial assets.

These Derivatives include both the exchange-traded and over-the-counter versions.
Derived from GM5/2007 (Made 16th December 2007). [VER1/12-07]
[Amended] [VER2/04-13]