BBK annual report eng 21.5.5

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Notes to the Consolidated Financial Statements (continued)31 December 200436 Fair value of financial instrumentsThe table below sets out the estimated carrying values and fair values of those on and off balance sheet financial instruments where fair values arematerially different from carrying amounts in the consolidated financial statements:31 December 2004 31 December 2003Carrying Fair Carrying Fairvalue value Difference value value DifferenceBD ’000 BD ’000 BD ’000 BD ’000 BD ’000 BD ’000Financial assetsNon-trading investment securities 179,535 179,561 26 152,114 154,757 2,643As explained in note 7, included under non-trading investments are unquoted investments amounting to BD 33.794 million (2003: BD 12.092 million)for which fair value cannot be reliably determined.In addition, due to time and cost benefit constraints and the lack of a secondary market, it is not practicable to determine the fair value of loans andadvances to customers.37 Capital adequacyThe risk asset ratio calculated in accordance with the capital adequacy guidelines approved by the Bahrain Monetary Agency, for the Group is as follows:2004 2003BD ’000 BD ’000Capital base:Tier 1 capital 110,581 105,325Tier 2 capital 49,531 32,582Total capital base (a) 160,112 137,907Credit risk weighted exposure:On-balance sheet 748,459 733,609Off-balance sheet 94,228 83,196Total 842,687 816,805Market risk weighted exposure:On-balance sheet - -Off-balance sheet 7,993 7,300Total 7,993 7,300Total risk weighted exposure (b) 850,680 824,105Capital adequacy (a/b * 100) 18.82% 16.73%Minimum requirement 12% 12%38 Legal claimsAs at 31 December 2004, there were 17 legal suits pending against the Group aggregating BD 1.341 million (2003: BD 1.297 million). Based on theopinion of the Group's legal advisors, the management believes that no liability is likely to arise from these suits and does not consider it necessaryto carry any provisions in this regard.
39 Deposit protection schemeDeposits held with the Bahrain operations of the Group are covered by the Deposit Protection Scheme (the Scheme) established by the BahrainMonetary Agency regulation concerning the establishment of Deposit Protection Scheme and Deposit Protection Board. No liability is due until oneof the member commercial banks of the Scheme is unable to meet its deposit obligations.40 ComparativesThe comparative figures in these financial statements for the previous year have been reclassified where necessary to conform with the current year'spresentation. Such reclassification has not affected the previously <strong>report</strong>ed net income, total assets, total liabilities and shareholders' equity of the Group.Annual Report 2004 60 | 61
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Annual Report2004
Page 3 and 4:
Our VisionBank of Bahrain and Kuwai
Page 5 and 6:
Financial Highlights2000 2001 2002
Page 7 and 8:
Chairman’s StatementFinancial per
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AppreciationOn behalf of the Board
Page 11 and 12: Hamad Ahmad Al BusairiDirectorMoham
Page 13 and 14: 95%Bahrainisation levelBBK became t
Page 15 and 16: CustomersTo meet the challenges pos
Page 17 and 18: 34%Utilization in internet home ban
Page 19 and 20: Abdul Karim Ahmed BucheeryAmit Kuma
Page 21 and 22: Operating expensesTotal operating e
Page 23 and 24: Treasury bills and inter-bank depos
Page 25 and 26: Liquidity riskLiquidity risk is def
Page 27 and 28: Additional DisclosuresI. Corporate
Page 29 and 30: 9. DutiesThe Committee shall:9.1. D
Page 31 and 32: Board of DirectorsGeneral ManagerCh
Page 33 and 34: XII. Disclosure Standards Requireme
Page 35 and 36: Consolidated Financial Statements34
Page 37 and 38: Consolidated Income StatementYear e
Page 39 and 40: Consolidated Statement of Changes i
Page 41 and 42: 3 Significant accounting policies (
Page 43 and 44: 3 Significant accounting policies (
Page 45 and 46: 6 Loans and advances to customers20
Page 47 and 48: 7 Non-trading investment securities
Page 49 and 50: 16 Cumulative changes in fair value
Page 51 and 52: 22 Segmental information (continued
Page 53 and 54: 25 DerivativesIn the ordinary cours
Page 55 and 56: 26 Commitments and contingent liabi
Page 57 and 58: 30 Interest rate risk management (c
Page 59 and 60: 30 Interest rate risk management (c
Page 61: 33 Liquidity risk (continued)As of
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BBK annual report eng 21.5.5

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