Annual Report 2007 - Seylan Bank

TABLE OF CONTENTS
2 - 3 ➧ Financial Highlights & Financial Calendar 2007
4 ➧ Summary of Performance Indicators
Executive Reviews
6 - 7 ➧ Founder Chairman’s Statement
8 - 9 ➧ Message from Chairperson
10 - 13 ➧ General Manager’s Review
14 - 17 ➧ Board of Directors
18 - 19 ➧ Senior Management Team
Management Discussion and Analysis
22 ➧ Corporate Banking and FCBU
23 ➧ Sharebroking, Leasing and Pawning
24 ➧ Development Banking
25 ➧ Agricultural Banking Division
26 ➧ Grameen Banking
26 ➧ Private Banking
27 ➧ Information Technology
27 ➧ Treasury & International Operations
28 - 31 ➧ Products & Services Offered
Sustainability Reporting
34 - 35 ➧ Corporate Social Responsibility
36 ➧ Our Human Capital
37 - 39 ➧ Corporate Governance
40 - 42 ➧ Risk Management
Financial Reports
46 - 54 ➧ Annual Report of the Board of Directors on the
affairs of the Company
55 ➧ Directors’ Responsibility for Financial Reporting
56 ➧ Audit Committee Report
57 ➧ Auditors’ Report
58 ➧ Income Statement
59 ➧ Balance Sheet
60 ➧ Statement of Changes in Equity
61 ➧ Cash Flow Statement
62 - 108 ➧ Notes to the Accounts
109 ➧ Ten Year Summary
110 ➧ Value Added Statement
111 - 113 ➧ Investors’ Information
114 - 117 ➧ Branch Network
118 - 119 ➧ Country Profile & Economic Indicators
120 - 121 ➧ Highlights of the year
122 - 123 ➧ History and Milestones
124 ➧ Geographical Analysis
125 ➧ Glossary
126 ➧ Notice of Meeting
➧ Form of Proxy (Enclosed)
Seylan Bank PLC – Annual Report 2007
1

2003
2004
2005
2006
2007
TURNOVER
LKR Mn.
8,000 10,000 12,000 14,000 16,000 18,000 20,000 22,000
RETURN ON AVERAGE ASSETS & EQUITY
29
ROE%
ROAA%
1.2
NET PROFIT BEFORE TAX AND
AFTER TAX LKR Mn.
Net profit before Vat
2003
& corp. tax
Net profit after Vat
2004
& corp. tax
2005
2006
2007
0 500 1000 1500 2000 2500
COST TO INCOME RATIO
%
74
25
21
17
13
9
1.0
0.8
0.6
0.4
0.2
70
66
62
58
54
5
0.0
2003 2004 2005 2006 2007
ROE ROAA
SHAREHOLDER VALUE
16
EPS LKR
Share Price LKR
60
50
2003 2004 2005 2006 2007
Cost to income ratio (%)
YIELD, COST & SPREAD
%
18
12
8
4
2003
2004
2005
2006
2007
0
2003 2004 2005 2006 2007
EPS
Share Price
DEPOSITS & ADVANCES
LKR Mn.
Deposits
Advances
45
30
15
0
15
12
9
6
3
0
2003 2004 2005 2006 2007
Average interest yield (%)
Average interest cost Spread
ASSETS
LKR Mn.
2003
2004
2005
2006
2007
40,000 50,000 60,000 70,000 80,000 90,000 100,000 110,000 70,000 80,000 90,000 100,000 110,000 120,000 130,000 140,000
INCOME vs COST
LKR Mn.
12,000
10,500
9,000
7,500
6,000
4,500
3,000
1,500
2003 2004 2005 2006 2007
Operational expenses
Total net income
3,500
3,000
2,500
2,000
1,500
1,000
5000
0
OTHER INCOME
LKR Mn.
2003 2004 2005 2006 2007
Foreign Exchange Income
Fee & Commission Income
Investment Income
Others

F I N A N C I A L H I G H L I G H T S
Bank
Group
2007 2006 % Change 2007 2006 % Change
Restated
Restated
During the year
(LKR'000)
Income 21,079,885 17,183,481 22.68 22,808,262 18,684,144 22.07
Net Profit Before Income Tax 1,439,069 1,606,882 (10.44) 1,669,664 1,663,948 0.34
Income Tax on Profits 515,880 718,814 (28.23) 535,142 730,816 (26.77)
Net Profit After Taxation and Minority Interest 923,189 888,068 3.95 1,020,686 874,651 16.70
Revenue to Government 1,099,913 1,187,821 (7.40) 1,127,220 1,204,563 (6.42)
Gross Dividend (Note 1) 255,901 255,232 0.26 255,901 255,232 0.26
At the Year End
Shareholders' Funds 7,036,235 6,368,278 10.49 8,244,774 7,482,518 10.19
Retained Profit 3,374,839 2,681,112 25.87 3,949,125 3,160,306 24.96
Deposit from Customers 111,299,612 100,078,809 11.21 112,436,861 100,078,809 12.35
Loans & Advances (Excluding Bills and Leases) 89,017,069 83,901,504 6.10 89,976,544 85,038,415 5.81
Total Assets 143,921,568 130,306,108 10.45 156,376,183 140,458,883 11.33
Information per Ordinary Share
Earnings (LKR) 5.50 6.69 (17.79) 6.08 6.59 (7.74)
Dividends (LKR) (Note 1) 1.50 1.50 - 1.50 1.50 -
Net Asset Value (LKR) 41.90 37.90 10.55 49.13 44.57 10.23
Market Value (LKR) - Voting Shares 32.00 35.00 (8.57)
- Non Voting Shares 8.00 9.75 (17.95)
Statutory/Other Ratios (%)
Core Capital 7.49 7.01 6.85 8.92 8.44 5.69
Total Capital 10.98 9.89 11.02 12.72 11.70 8.72
Liquidity 21.72 21.59 0.60
Price Earnings Ratio - Voting (Times) 5.82 5.23 11.25
Dividend Cover (Times) 3.61 3.48 3.74
Capital Funds to Liabilities, Commitments
& Contigent Liabilities 4.36 4.34 0.65
Note 1: Dividends for year 2007 are accounted for as per the accounting standard SLAS 12 (Revised).
1 UNAUDITED QUARTERLY FINANCIAL STATEMENTS
1.1 1st Quarter - 31st MARCH 2007
• Issued to Colombo Stock Exchange - 25th May 2007
• Published in newspapers - 29th May 2007
1.2 2nd Quarter - 30th JUNE 2007
• Issued to Colombo Stock Exchange - 16th August 2007
• Published in newspapers - 20th August 2007
1.3 3rd Quarter - 30th SEPTEMBER 2007
• Issued to Colombo Stock Exchange - 9th November 2007
• Published in newspapers - 13th November 2007
1.4 4th Quarter - 31st DECEMBER 2007
• Issued to Colombo Stock Exchange - 28th February 2008
• Published in newspapers - 29th February 2008
2 AUDITED FINANCIALACCOUNTSANDANNUAL REPORT
YEAR ENDED 31st DECEMBER 2007
• Issued to the Colombo Stock Exchange - June 2008
• Circulated to Shareholders & Debenture holders - June 2008
3 21st ANNUAL GENERAL MEETING - 30th June 2008
4 PREFERENCE DIVIDEND PAYABLE
YEAR ENDED 31st DECEMBER 2007 - 30th June 2008
5 FIRST & FINAL (ORDINARY) DIVIDEND PAYABLE
YEAR ENDED 31st DECEMBER 2007 - 7th July 2008
Seylan Bank PLC – Annual Report 2007
3

SUMMARY OF PERFORMANCE INDICATORS
Measure 2007 2006 2005 2004 2003
Restated
SIZE
Assets Growth % 10.45 14.70 28.83 10.16 18.11
Contingent / (Total Assets+Contingent) % 11.30 12.29 14.36 19.22 18.14
Interest Earning Assets / Total Assets % 84.51 86.06 84.27 81.70 81.51
Cash & Reserves / Total Assets % 7.48 7.57 7.89 8.97 7.52
Risk Weighted Assets Growth % 5.37 19.04 22.22 12.62 30.27
PROFITABILITY
Return on Average Assets % 0.67 0.73 0.68 0.49 0.80
Return on Average Equity % 13.84 16.25 15.76 9.65 18.30
Net Profit / (Total Assets + Commitments & Contingencies) % 0.55 0.58 0.52 0.37 0.60
Net Interest Margin (NII / Avg Int Earn. Assets) % 5.80 5.90 6.28 5.70 6.05
Net Interest Income / Total Income % 32.18 35.67 40.22 38.88 36.20
Cost to Income Ratio % 66.31 59.08 56.76 62.01 59.12
Average Interest Yield % 15.06 13.56 12.56 11.37 12.82
Average Interest Cost % 9.21 7.54 6.07 5.45 6.37
Interest Rate Spread % 5.85 6.02 6.50 5.93 6.45
Int Yield on Customer Advances % 16.48 14.55 13.50 12.28 13.83
Int Cost on Customer Deposits % 8.71 7.07 5.78 5.04 6.10
Spread on Customer Deposits & Advances % 7.77 7.48 7.72 7.24 7.73
Profit Handout (Note 1) % 27.72 28.74 49.02 32.72 20.46
Growth Rate of Equity % 10.49 37.65 12.72 (5.98) 53.33
Earnings per Share LKR 5.50 6.69 8.20 4.85 10.40
Ordinary Dividends per Share (Note 1) LKR 1.50 1.50 2.00 1.60 1.50
ASSET QUALITY
Loss Provisions LKR Mn. 4,972.23 4,558.57 4,266.81 4,430.70 3,008.75
Provision Recoveries LKR Mn. 720.47 873.84 599.95 195.46 76.19
Provisions / Loans+Bills+Leases % 4.69 4.53 4.85 6.36 5.28
NPL with Interest in Suspense LKR Mn. 16,345.32 13,950.66 13,501.64 13,059.00 11,611.40
NPL with Interest in Suspense / Gross Loans % 15.39 13.85 15.34 18.74 20.39
Interest In Suspense on Advances LKR Mn. 3,302.17 2,724.67 2,290.63 2,439.11 2,293.28
NPL excluding IIS LKR Mn. 13,043.15 11,225.99 11,211.00 10,619.89 9,318.12
NPL excluding IIS / Gross Loans % 12.68 11.45 12.74 15.24 16.36
Int In Suspense / Gross Loans % 3.11 2.70 2.60 3.50 4.03
Net Assets Value per Share LKR 41.90 37.90 55.36 49.12 52.24
CAPITAL ADEQUECY
Leverage on Share Capital Times 19.45 19.46 23.56 20.49 17.34
Leverage on Capital Funds(Including Debentures) Times 10.49 10.69 12.31 11.04 9.53
Percentage Earnings Retained (Note 1) % 72.28 71.26 50.98 67.28 79.54
Equity / Deposits, Borrowings & Securities
Sold under Repurchase Agreements % 5.81 5.84 4.87 5.72 6.74
Equity / Total Assets % 4.87 4.86 4.07 4.65 5.45
Equity / Loans+Bills+Leases % 7.17 6.79 5.68 6.53 8.45
LIQUIDITY & FUNDING
Loans+Bills+Leases / Deposits, Borrowings & Securities
Sold under Repurchase Agreements % 80.98 85.98 85.79 87.59 79.79
Customer Deposits / (Deposits, Borrowings & Debentures) % 88.28 88.37 86.81 91.13 87.34
Liquid Assets / Total Assets % 24.14 22.06 20.40 19.68 23.97
Liquid Assets / Deposits, Borrowings & Securities
Sold under Repurchase Agreements % 28.81 26.50 24.40 24.19 29.64
Net Lending or (Borrowings) in Call Money Market LKR Mn. (4,429.60) (2,537.97) (3,320.61) (858.51) (2,233)
OTHER DATA
Number of Banking Centres 114 116 116 112 109
Number of Staff Members 3,871 3,934 3,700 3,280 3,250
Profits per Staff LKR '000 238 226 186 117 182
Number of Ordinary Shares - Voting 000 43,560 43,560 43,560 43,560 43,560
- Non Voting 000 123,560 123,560 40,000 40,000 40,000
Share Prices as at 31st December - Voting LKR 32.00 35.00 36.75 30.00 47.00
- Non Voting LKR 8.00 9.75 16.25 16.50 20.25
Note 1: Dividends for year 2007 are accounted for as per the accounting standard SLAS 12 (Revised).
4
Seylan Bank PLC – Annual Report 2007

E X E C U T I V E R E V I E W S

FOUNDER CHAIRMAN’S STATEMENT
Our Bank has performed exceedingly well,
despite numerous obstacles and a very
challenging economic environment in
Sri Lanka.The credit should lie primarily
with our very dedicated team, who have,
unreservedly ensured that a dynamic and
motivated spirit must be retained and
nurtured to keep the growth curve
Seylan has enjoyed thus far, firm and
strong.
The General Manager/Chief Executive’s
Review of Operations will give you a
detailed account of the performance of
the bank.
Seylan Bank continues to post significant
results, with profit before taxation at
Rs.1439 Mn. One of our constant
concerns this year has been the high
taxation regime imposed on the banking
and financial sector, where nearly
50 percent of the Bank’s profits are
contributed towards taxation. Our
taxation this year touched a daunting
Rs.500 Mn, which to any bank in this
country can significantly affect bottom
lines.This also negates growth possibilities
as investment into development, products
and services are severely restrained.
When Seylan Bank was conceptualized, it
was birthed to be a bank with a
difference, A bank, that while complying to
the laws of the land and the industry, will
operate on a platform not dictated to by
the western world of banking. Ours is an
indigenous bank, one that has always
worked for the development of the
country on facets of sustainable
development.The birth of our bank, the
concept and the structure has always
worked on being primarily Sri Lankan in
feel, in thought and deed.
It became imperative for us to infuse new
technological initiatives and other services
to give us access to our customers.The
mobile banking units and the new palm
top banking initiatives were both born
due to need and the obstacles and
challenges encountered.
It is important that the regulators and
authorities realize and acknowledge the
role we play and have played in the past
in uplifting the standard of those within
the rural economy. Sri Lanka’s banking
industry must not and cannot be aligned
to that of the developed world.We must
be perceived and observed as an
individual country, using some of the best
practices prevalent around the world but
imposing compliance and governance
initiatives that would be applicable to the
local context we work in.
I have also espoused the foundation for
harmony, unity, equity and empowerment
within the Bank, founding it on the
principles of being ‘Sri Lankan’. My team is
multi-religious, multi-ethnic and multicultural,
infusing the holistic view of being
primarily Sri Lankan. Our platform for
growth has been on poverty alleviation,
rural development and developing a new
breed of entrepreneurs, which in turn
builds a sustainable economy. But
provisioning as is done now, goes against
all principles of development, rural and
Grameen banking because credit here, is a
fundamental right. At the same time, it is
worth pointing out that Seylan Bank has
6
Seylan Bank PLC – Annual Report 2007

Ours is an indigenous bank,
one that has always worked
for the development of the
country on facets of
sustainable development.
Deshamanya Dr Lalith Kotelawala
Founder Chairman / Managing Director
almost a perfect recovery rate from the
Grameen practice of approximately
300,000 women who are now off the
poverty line for nearly eight years.The
fruit of the funding doesn’t stay with the
individual entrepreneur but permeates the
entire community and eventually the rural
economy through agricultural projects and
SME ventures.
One of the primary facets that keeps
Sri Lanka’s economy afloat, the expatriate
housemaids and workers who injected
Rs.1.4 Bn. into the economy through our
bank, are also assisted by us in numerous
ways – funding, housing, remittance
channels and insurance being some of
them.What we espouse is sustainable
development and empowerment – not
just funding in name but rather a
partnership we form and strengthen over
the years.
Appreciations
It is indeed heartwarming for me to have
worked with a team of professionals
whose aspirations are similar to mine,
where the vision of being the Bank with a
Heart remains firmly ingrained in every
decision we make.The Seylan Team, aptly
led by Mr. Ajitha Pasqual the General
Manager/ CEO and a very competent
Senior Management team have always
been supportive of our vision.
I would also like to convey my
appreciation to Deshamanya Dr P R
Anthonis and Mr. S C O De Livera, the
two directors who will be retiring this year,
for their unstinted support in keeping the
Bank’s fundamental principles
implemented. I welcome on to the Board,
Mr. Shirley De Silva, Mrs. Leonie
Seneviratne and Mr. Chandrasiri Kotigala
who undoubtedly will continue our ethos.
To the Board of Directors, then you for
your constant co-operaton without which,
sustaining the bank might be quite a
challenge.
Deshamanya Dr. Lalith Kotelawala
Founder Chairman / Managing Director
Seylan Bank PLC – Annual Report 2007
7

MESSAGE FROM CHAIRPERSON
It has indeed been a journey of learning
and experiences and being able to harness
those facets for the betterment of the
country. Seylan began as an indigenous
bank for the people of this country and
we have not lost sight of that vision
through our eventful rise to the top as
one of the leading banks in Sri Lanka.
Through this journey, we have ensured
that our brand of sustainable development,
i.e. alleviating poverty from the grass root
level became broad based and integrated.
You will see that this aspect of sustainable
development is the ethos upon which
Seylan was founded as we strongly believe
that development must be holistic and not
just for individuals or a particular industry.
Our bank has continued to overcome
challenges through innovation and prudent
strategy.We have been able to work
through inflation and skyrocketing interest
rates and even a regulatory environment
that sometimes did not pose an even
playing field for a totally Sri Lankan Bank
like ours. However, we have continued to
be the Bank with a Heart. Product and
service development have been based on
customer needs and not simply to match
global banking trends, although
technologically we have a pioneering IT
strategy that enables us to take our
products and services to customer
segments that generally do not have
access to banking.
Through this, my personal journey with
the bank has been one of gathering
information and enjoying experiences of
working with different segments of people.
One such has been with the women
entrepreneurs of this country, who I
strongly believe hold the key to the future.
If one looks at our economy and the most
upwardly mobile segments that contribute
8
Seylan Bank PLC – Annual Report 2007

Having been steeped in the
Seylan philosophy of being the
Bank with a Hear t, I wanted
to ensure that the women in
Sri Lanka are given a helping
hand to display their true
potential.
Lady Dr Sicille P C Kotelawala
Chairperson
to the national treasury, all three primary
sectors are fuelled by women.The tea
industry, the apparel sector and the large
number of human resources deployed
abroad and whose monetary remittances
add significantly to the running of our
population, Rajina taps into their skills,
lifestyles and their talents to give them a
pathway to development integrating the
true vision of Seylan Bank helping it to
move forward in its journey of serving the
people of this country, truly with a heart.
economy.
One of the most significant features I have
introduced is our new unit, Rajina,
dedicated to the women. I wanted to
ensure that the women of Sri Lanka are
given a helping hand to display their true
Lady Dr. Sicille P C Kotelawala
Chairperson
potential, which I believe is infinite.With
women comprising over 50% of our
Seylan Bank PLC – Annual Report 2007 9

GENERAL MANAGER’S REVIEW
Each year seems to pose numerous
challenges both in the external
environment and also for the banking
industry. From an external perspective,
even though Sri Lanka weathered
alarmingly escalating oil prices and spiraling
defense expenditure due to the
protracted fighting in the North and East
which also saw a spillover into the south,
the country continued its resilient stance.
For the banking industry, it has been a year
of weathering a rising storm with a very
high taxation regime, further tightening of
controls and the emergence of more
regulations stifling strident growth.
However, in our customary style, the
Seylan Team put their shoulders to the
wheel to triumph again this year posting
good results despite the challenging
environment and continuing the upward
momentum through innovation and
creativity to maintain our bottom line.
Globally we have seen a mortgage crisis in
the US a challenge to the regime towards
the end of 2008.The US mortgage crisis
did have a significant effect on the global
markets and the stock exchanges
worldwide wherein the global banking
industry did face some tough challenges.
Some banks were heavily leveraged in
unfamiliar territory, taking more risks for
more returns which hence saw a
considerable contribution to the fall off.
Traditional retail banks however have been
showcasing growing portfolios and closer
to home, Indian and also the Chinese
banks have seen a buoyant market.
Overview of the economy
Having displayed a growth of 7.4% last
year, this year Sri Lanka had to cope with
increasing defense expenditure, rising oil
prices and cost of living, but admirably
posted a 6.8 per cent growth at end 2007.
Growth was fuelled by above market
performances in both the industry and
service sectors and an impressive
recovery in the agriculture sector. Rubber
and tea both benefited from favourable
weather conditions.The industry and
service sectors recorded a growth of 7.6
per cent and 7.1 per cent respectively as
at end December 2007.There was strong
demand for tea from the CIS countries
and the Middle East which naturally saw
high earnings in tea with the highest ever
price for tea recorded in November 2007.
Cumulative export earnings showed
approximate growth of 11 per cent YOY
showcased at around US $ 6,877 Mn, with
cumulative expenditure on imports
recording an YOY increase of 8 per cent
to stand at US $ 10, 142 Mn. However,
into this equation emerged record oil
prices which went above US $ 97 per
barrel towards the end of this year,
contributing immensely to the higher
import portfolio. In tandem with this,
development activity was seen with the
increase in the import of investment
goods including machinery, equipment and
building materials.The cumulative deficit in
the trade balance improved marginally,
while private remittances increased by
over 15 per cent during this period
helping to finance nearly 70 per cent of
the trade deficit. Overall balance of
payments registered an estimated surplus
of US $531 Mn.
There was an upward movement in
inflation since mid 2007 largely due to the
removal of fuel subsidies and increases in
prices of imported food products.
However, it is believed that the pass
through of international price increases
will have a favorable impact on containing
future inflation by eliminating the need for
subsidising them through expansionary
borrowings by the government.With this
one time increase gradually dissipating, it
was anticipated that inflation would most
likely remain between 16 to 20 per cent
during the first half of 2008. Inflation
remains a cause of concern and to contain
this, the Central Bank has adopted a tight
monetary policy stance which includes the
tight reserve money programme
implemented this year and an even tighter
one planned for 2008.The Central Bank
also revealed that it had achieved the
targets for reserve money by end
December 2007, showing Rs.264.4 Bn. as
against the targeted Rs.267.6 Bn, assisted
by a series of monetary instruments and
tight monetary policy.
Growth in credit to the private sector
decelerated from 24 per cent to 19.3 per
cent by end December 2007, while net
credit to the Government, was maintained
within the budgeted level. Credit to public
corporations increased in the light of
higher credit utilised by the Ceylon
Petroleum Corporation (CPC) and we
feel the recent upward revision of retail
prices of petroleum products is an astute
move that will improve the cash flow of
the CPC as well as contain inflation in the
long run. The economic growth target
anticipated for 2008 is 7 per cent, inflation
containment at 10 percent and Reserve
money to be increased by 15 per cent
on average.
Overview of the Bank’s performance
The Bank continued to post impressive
results, which is creditable, having had to
work in a non-conducive environment.
Profit before taxation stands at Rs.2,023
Mn, a decrease of 2.54 per cent over last
year’s Rs.2,076 Mn, while net profit
increased by 3.95 per cent, from
10
Seylan Bank PLC – Annual Report 2007

The Seylan Team put their
shoulders to the wheel to
triumph again this year posting
good results despite the
challenging environment and
continuing the upward momentum
through innovation and creativity.
Ajita M Pasqual
Director / General Manager /
Chief Executive Officer
Rs.888.068 Mn. in 2006 to Rs.923.189 Mn
this year. The high taxation regime
continues to effect us, standing at nearly
50 per cent overall and the introduction of
the additional requirements of 0.1% of the
performing portfolio being classified for
provisioning which saw immense pressure
on maintaining our bottom line. Our
taxation expenditure this year is
approximately Rs.500 Mn, which naturally
affected our bottom line figures. This has
also seen future progress and the ability of
the banks to plough more capital into the
banking business being somewhat
curtailed. The high interest rates also saw
a fallback on repayments by customers
with income levels decreasing and very
high inflation. It has certainly been a tough
year for survival with daily expenditure
and cost of living becoming prohibitive and
the banking sector, especially the retail
banking seeing tougher times ahead due
to the constrained economic situation that
is exacerbated due to the protracted
civil strife.
Group turnover increased by 22.32 per
cent, with our advances portfolio
increasing by 5.81 percent due to a
concerted effort deployed in growing our
deposit base. Growth in fee based income
increased by 9.97 % over last year’s
Rs.1,332 Mn. to Rs.1,465 Mn. this year.
Brief Operational Analysis
As a detailed Operational Review is
featured in this report, I will simply touch
on a few important areas that have
influenced the Bank’s performance over
the year. Innovation and customer service
continued to be our key growth drivers
and as a team, I’m proud that Seylan has
always risen above the murky waters to
triumph.The hurdles we have to cross are
constant, but the team has always found
opportunities in these and used their
innovation and creativity to overcome the
problems.Their solutions have always been
customer centric, working in line with our
concept of caring for our customer.‘The
Bank with a heart’ is inherent in their
actions and I find that customers have
grown to expect these personal levels of
service from us, in line with the vision of
our Founder Chairman Deshamanya
Dr. Lalith Kotelawala.
Caring for the people
A good example is our pioneering Palm
Top banking product, conceptualized by
our Founder Chairman and designed by a
Singaporean based company, which is now
permeated into the rural parts of the
country through 150 specially recruited
and trained Business Development
Officers. On the concept of taking banking
to the doorstep of the customer, we have
overcome the regulatory hurdles in
establishing branches and ATMs, by giving
the added convenience of doorstep
banking. Recalling the novelty we created
in taking mobile banking to the more
difficult areas of the country, Palm Top
banking too reflects our commitment to
reach out to people and has proved to be
a boon to the micro and SME sectors.The
Agricultural Banking Unit which was
formulated and established this year is yet
Seylan Bank PLC – Annual Report 2007
11

GENERAL MANAGER’S REVIEW
another facet in ensuring that Seylan is an
integral partner in uplifting the rural
economy.
Expanding our presence
We have been hampered by regulatory
measures in physically expanding our
presence via branches and ATMs.
However, as mentioned before, Palm Top
banking permeated through 150 Business
Development Officers and our thirty
mobile banking units have been a crucial
facet in the bank’s penetration and image
building process.We currently have a
network of 114 branches encompassing
92 fully functional branches, 22 sub
branches and 109 ATMs. In our bid to
strategically cross sell our products and
services within the Group, our ATM
network is currently being utilized by
group companies including The Finance
Company, Ceylinco Savings Bank and
Ceylinco Development Bank.While a
rapid Seylan ATM expansion may not be
seen too near in the future, to overcome
the regulatory hurdles, we are pursuing tie
ups with other leading banks in Sri Lanka
for ATM partnerships.
Our novel approach to deposit
mobilization has seen an increase in our
portfolio, a growth of 11.21% over last
year, even though we have been cautious
about expanding our lending portfolio due
to the prevalent economic situation within
the country.
Ceylinco FastCash, which is the Group’s
branded money remittance solution has
had immense success among the
Sri Lankan diaspora especially in the
Middle East. Represented by over 1,400
agents worldwide, Seylan Bank is the
principal partner for Ceylinco FastCash,
ensuring a smooth transfer of funds with
value additions like SMS alerts included for
hassle free transactions.We also ventured
into a partnership with Korea Exchange
Bank on a similar money transfer initiative
and target areas for the future include
Saudi Arabia, Qatar & Kuwait in the
Middle East, Maldives & Cypress.
Promoting credit cards
We continue to remain the market leader
in VISA card issuing in Sri Lanka and
currently account for a nearly 600,000
card base.The growth in business has
been phenomenal, displaying 85% mainly
due to Seylan magnanimously absorbing
the stamp duty on our customer’s behalf,
the only bank to do so.The innovative
card products including the Travel Card,
Visa Platinum and the Ceylinco FastCash
Wish Card we have within our portfolio
has also buffeted our card portfolio.
Probably one of our biggest successes in
this business has been the introduction of
our instant credit card, which through
decentralization of issuing formalities has
seen impressive growth in our portfolio in
the outstation segment.
In line with the visionary thinking of our
Founder Chairman Deshamanya Dr. Lalith
Kotelawala and Chairperson, Lady Dr. Mrs.
S P C Kotelawala to compliment our
product Seylan Rajina was launched
exclusively for the Sri Lankan woman,
Seylan also introduced the Rajina credit
card in a bid to strengthen and empower
women towards self development.
Given our success in Sri Lanka, next year
will see us pursue the franchise in the
Maldives as we have seen very good
payback returns.We are looking at a
partnership with one of the major
Maldivian groups.
Business Developments
The year has seen us concentrate very
heavily on credit recovery and
consolidation with personalized
intervention where necessary. Debt
restructuring also took on added
momentum with monitoring and
evaluation being continuous. Under the
Founder Chairman’s guidance, a
specialized Debt Restructuring Unit was
established and we have seen a
restructuring of about Rs.7 Bn. over the
last two years, which is an impressive
record. Nearly 95% of the portfolio is
currently performing.
While we already have some partnerships
in the Maldives, we are aggressively looking
at other overseas markets as well, with
Tonga and the Pacific being among them.
We have established relationships with
some large banks in the Middle East which
has helped us with our remittance
business and in enabling us to look at
other business opportunities as well.
Compliance
Having a dedicated Compliance Unit to
study and conform to the Central Bank
guidelines, Seylan was one of the first
banks to employ a specialist IT company
and gain external IT support for our foray
in the BASEL II milieu. Kalypto
Technologies India now partners us in this
venture and we have met our targeted
deadlines to be geared for BASEL II
compliance.We have also met and
complied with the single borrower limit
for the Group.
An integrated Risk Management
Committee was established this year
where progress is mapped and monitored
periodically. Credit, market and operational
risk are studied holistically and
independently to ensure the Bank
maintains a prudent stance.
12
Seylan Bank PLC – Annual Report 2007

GENERAL MANAGER’S REVIEW
Challenges in the future
The signs we foresee into 2008 and
beyond signals a more consolidated
regime, working on a platform of
prudence and carefulness. However,
Seylan firmly believes in seeking
opportunities in challenges and threats
and have already fed the wheel into
developing innovative products and
enhancing service levels to create a
conducive banking environment for the
people of Sri Lanka.While technology will
remain a driving force in growth, we will
continue to keep the pulse on the
everyday customer, interacting with them
to ensure they obtain the personalized
service they look to the bank for.With
more banks, especially from overseas
entering the market, we also anticipate
tighter competition for quality business.
To our valued business partners, thank you
for joining us in our journey in achieving a
common goal.We remain inspired by each
and every one of you to take our vision
forward and to ensure that the Bank with
a Heart truly lives up to its name.
Ajita M Pasqual
Director / General Manager /
Chief Executive Officer
Appreciations
Having seen the increasing challenges over
the years, the most rewarding aspect of
my heading the operations of this bank
has been the wholehearted confidence
placed in me by the Founder Chairman,
The Chairperson and Board of Directors.
To our Founder Chairman, Deshamanya
Dr Lalith Kotelawala and Chairperson
Lady Dr. S P C Kotelawala I thank you for
the vision, direction and leadership you
have unstintingly given me. Our
shareholders have continued to have
unshaken faith in us. As I mentioned earlier,
the Seylan Team deserves magnanimous
praise for their courageous and dynamic
stance in ensuring a consistent growth
pattern for the bank.Their commitment
deserves the highest recognition. Our
customers have continued to remain with
us through all these years and have been
an integral facet in our success.Thank you
for your committed loyalty in ensuring that
Seylan continues to be a part of your life.
Seylan Bank PLC – Annual Report 2007 13

BOARD OF DIRECTORS
1 2 3 4 5 6
14
Seylan Bank PLC – Annual Report 2007

7 8 9 10 11 12
Seylan Bank PLC – Annual Report 2007 15

BOARD OF DIRECTORS
1 DESHAMANYA DR LALITH
KOTELAWALA
A.M.Ex.A.(Lond), F.B.I.M., M.I.C.M.
(Lond & Sri Lanka), FIMgt (UK), HFIB (Sri Lanka),
FABE(UK), PhD(Sri J)., CCMI (UK)
Founder Chairman / Managing Director
Chairman/Managing Director since the
inception of the Bank in 1987. Chairman
of over 250 companies under Ceylinco
Consolidated with many market leaders,
over 30,000 employees, over 450
branches and 15 branch offices around
the world. Established Ceylinco Sarana
Fund 25 years ago for the upliftment of
the under privileged people in the
country. Introduced and set up the
Grameen Banking concept (banking to
the poor) which has over 90,000
customers with a commendable recovery
rate.Was appointed the Chairman of the
Economic Development Commission of
the North Western and Central Regions
during 2003/2004.Was awarded the
AcNielsen Peoples Award for “Peoples
Social Worker” of the years 2006 and
2007. He is also the Honorary Consul
General for Singapore in Sri Lanka.
2 LADY DR SICILLE P C KOTELAWALA
Chairperson
Appointed to the Board on 8th August
1996 and was designated as its Joint
Deputy Chairperson on 1st April 2004.
She was appointed Chairperson of the
Bank on 1st February 2008.
She is the Deputy Chairperson of The
Finance Company (TFC), Ceylinco
Limited (Ceylinco House), Ceylinco
Universal Group and the Ceylinco Hotels
Group, and is also closely associated with
the Jewellery and Diamond entities of the
Ceylinco Group.
She is the Honorary Consul General for
the Republic of Cyprus in Sri Lanka,
Counsellor for InternationalTrade for the
Kingdom of Belgium. She is the
Representative of Asia Society NY in
Sri Lanka and a Member of its
International Council. In May 2005 she
received the award “The Leading Women
Entrepreneurs of the World 2005"
awarded by the Star Group – USA and
held inVancouver, Canada.
She was also knighted with the ‘Order of
the Crown of the Kingdom of Belgium’ by
His Majesty King Albert II King of the
Belgians in November 2006. She was
inducted in November 2006 to the
Women’s Leadership Board of the
Harvard University, John F Kennedy
School of Government in Boston, USA.
In November ’07, she was honoured with
a Doctorate for her Business
Entrepreneurship with Corporate Social
Responsibility by the Open International
University for Complementary Medicines
at its 45th World Medical Congress held
in Sri Lanka. She received this honour
from the First Lady of Sri Lanka, Madam
Shiranthi Rajapakse.
3 R RENGANATHAN
FCA, FSCMA
Deputy Chairman / Chief Financial
Officer
Appointed to the Board of Seylan Bank
on 8th August 1996 and was soon after
appointed Executive Director of the Bank.
He currently functions as the Deputy
Chairman / Chief Financial Officer.
Chairman of Seylan Bank Asset
Management Ltd and Deputy Chairman
of many companies under Ceylinco
Consolidated mainly in the field of
banking and healthcare. He is also the
Chief Executive Director (Life) of
Ceylinco Insurance PLC, which is the
market leader in the Sri Lanka insurance
industry.As Deputy Chairman of Ceylinco
Healthcare Services Ltd, was responsible
for the setting up of the first private
sector RadiationTreatment Centre in
Sri Lanka.
4 A M PASQUAL
B.Sc. (Busi.Admin.), USA
Director / General Manager /
Chief Executive Officer
Joined Seylan Bank in January 2003 as the
Additional General Manager, was
appointed General Manager / Chief
Executive on 1st January 2004 and as
Director on 12th January 2004. Counts
over 25 years experience in Banking.
Commenced his Banking career with
Hongkong & Shanghai Banking
Corporation in June 1980 and has had
wide experience and exposure in
Corporate Banking,Trade Finance and
Treasury.
5 MS M SABARATNAM
Attorney-At-Law & Notary Public
Director
Appointed as a Director of Seylan Bank
on 28th April 1997 and was in charge of
legal issues of the Bank until January 2008.
Deputy Chairperson of several Ceylinco
Consolidated companies.Was responsible
for conceptualizing and operating
Ceylinco Building Society. Has wide
experience in property development and
all aspects of real estate, credit
management, factoring, debt
administration, restructuring loans, and
credit evaluation.As Director Legal/Chief
Legal Officer of the Ceylinco Group, has
wide experience in all aspects of
corporate law, law of property, personal
law, recovery, finance, banking and
insurance and corporate secretarial work.
6 K A S JAYATISSA
ACIS, FSCMA, Dip.in.Acct., BSc (Mgt) Sp.Hons.,
FCA, MCMI, CIPA
Director
Appointed as a Director of Seylan Bank
on 14th December 2004. He
commenced his career as a
Superintendent of Audit at the Auditor
General's Department and is a specialist
in Financial Management,Taxation and
Education. He is the Deputy Chairman of
Ceylinco Educational & Financial Services
Group of Companies which includes
Ceylinco Sussex Educational Services Ltd.
16
Seylan Bank PLC – Annual Report 2007

BOARD OF DIRECTORS
which operates the largest English
medium School Network in Sri Lanka. He
also acts as the Director Finance ofThe
Finance Co Ltd. He further serves as
Finance Director of several other
companies of Ceylinco Consolidated.
Ceylinco UpadhidhareeVyaparika Shakthi
& CeylincoThakshanika Nipunatha Shakthi
which are innovative projects come under
his direct purview.Appointed as Chairman
of the Audit Committee of the Bank with
effect from 12th March 2008.
7 PT SIRISENA
BCom (Hons), M.A. (Econ.)
Director - Compliance
Appointed as a Director of Seylan Bank
on 28th March 2005.Acts as the
Chairman of Integrated Risk Management
Committee of the Bank. Has extensive
experience in financial markets and
banking supervision and regulation. Has
held several senior positions including the
post of Director, Bank Supervision and
Director, Financial Markets during his
employment at the Central Bank of
Sri Lanka. Played an active role in the
financial sector reform program
undertaken during the previous decade.
Based on his experience, the Asian
Development Bank provided him with
the opportunity of working for the
Maldives Monetary Authority as an
advisor on upgrading of banking
supervision capabilities in Maldives.
Also serves as a Financial Consultant to
the Ceylinco Group.Appointed to the
Audit Committee with effect from
12th March 2008.
8 S K M PERERA
Director – InformationTechnology
Appointed as a Director of Seylan Bank
with effect from 28th April 1997 and is in
charge of InformationTechnology of the
Bank.Also the Deputy Chairman/ Chief
Executive of the Golden Key Group of
Ceylinco Consolidated and Director -
InformationTechnology ofThe Finance
Co. Ltd and serves on the Board of a
number of other companies under
Ceylinco Consolidated. Chairman of
Barter Card Lanka Limited.
9 A D JEGASOTHY
Attorney-At-Law & Notary Public, F.I.C.M, F.C.I.C.,
M.I.C.M.(LOND)
Director
Appointed to the Board from the date of
incorporation of the Bank in 1987 and
was also acting as Joint Secretary of the
Bank until 1999. Prior to joining the
Ceylinco Group as Legal Officer in 1974,
was attached to M/s De Silva & Mendis,
Solicitors and Notaries Public.Was also
associated with M/s Coward Chance,
Firm of Solicitors, UK. Counts over 30
years of experience in financial and legal
sectors.At present holds the position as
Deputy Chairman/Managing Director of
International Consultancy and Corporate
Services (Pvt) Ltd which handles
corporate secretarial matters for many
companies in Ceylinco Consolidated.
A member of the Audit Committee of
the Bank.
10 J G S DE SILVA
Director – International & Development
Banking
Appointed as a Director of Seylan Bank
on 11th May 2007. Mr. De Silva joined
Seylan Bank in March 1989 and has held
the position of Branch Manager,Area
Manager, Senior Manager – Corporate
Banking. He has also headed the Credit
Control, Legal & Recoveries Divisions of
the Bank as Chief Manager and Assistant
General Manager and headed the
Regional Banking Division as Deputy
General Manager being in charge of 78
branches, 14 convenient Banking Centers
and also Leasing Department and Piyasa
Centre of the Bank. Prior to being
appointed as a Director, Mr. De Silva was
functioning in the capacity of Senior
Deputy General Manager – International
& Development Banking. He counts over
38 years’ of experience in the banking
field which include service at Grindlays
Bank, Colombo, Emirates International
Bank Ltd, Dubai, Bank of Credit &
Commerce International Ltd (BCCI),
Colombo and at Seylan Bank since 1989.
11 MRS L SENEVIRATNE
AFA (UK)
Director
Appointed as Director of Seylan Bank on
1st February 2008. Mrs. Leonie
Seneviratne counts over 35 years’
experience. She has a background of
both Development Banking and
Commercial Banking. Prior to joining
Seylan Bank she was at DFCC Bank. She
is specialized in Credit Management with
expertise of over 30 years in this field
encompassing areas such asTrade
Finance, Project Finance (both large and
small & medium scale), Leasing, Share
Underwritings, Syndicate loans,
Corporate, Personal and Retail Banking.
She joined Seylan Bank in June 1989 and
during her tenure at the bank has served
inter alia as Manager Export Credit,
Senior Manager Corporate Credit, Chief
Credit Controller,Assistant General
Manager – Corporate Credit, Deputy
General Manager - Metropolitan Banking
and thereafter Senior Deputy General
Manager Region I. She presently has
overall management control and
supervision of credit, operations and
administration of branches in the
Colombo region. She also serves on the
Board of Seylan Merchant Bank since
June 2007.
12 C KOTIGALA
Attorney-at-Law & Notary Public
Director - Legal
Appointed as Director of Seylan Bank on
1st February 2008. Joined Seylan Bank in
March 1995 as Manager Legal and
instrumental in forming the Legal
Department of Seylan Bank PLC. Held
positions as Senior Manager Legal, Chief
Manager Legal,Assistant General Manager
Legal, Deputy General Manager Legal and
Senior Deputy General Manager Legal
until his appointment as Director Legal of
the Bank. Counts over 24 years in the
legal field and over 20 years‘ experience
in the banking sector including service at
Hatton National Bank.
Seylan Bank PLC – Annual Report 2007
17

SENIOR MANAGEMENT TEAM
Mr Ajita Pasqual, BSc - Econ & Business
Administration - Director / General
Manager / Chief Executive
Mr Ajantha Madurapperuma, CFA
(USA), MBA (Sri J'pura), FCMA (UK),
AIB (Sri Lanka) - Senior DGM -
Corporate & Foreign Currency Banking
Mr Tissa Nanayakkara, AIB (Sri Lanka)
(P I) - SDGM - Seylan Card Centre
Mr Samuel J Jebaratnam, FIB, PGEDBM,
MBA - DGM - Bancassurance & Coordinator
to Director/General
Manager/CEO
Mr S H Indrapala de Silva, AIB
(Sri Lanka), FIPFM (UK), FICIA
(Canada) - DGM - Region II
Mr P S L Kithsiri Perera, B.Com
(Special) (Sri J'pura), AIB (Sri Lanka)
DGM - Operations/ Administrative
Services
Mr V Kulendra Seyone, DGM -
Business Development
Mr Sarath Dias-Bandaranayake, FIB,
AIB, Dip. In Mgt., National Dip. In
Training & Development (NDTD)
DGM - Audit & Inspection
Mr K D W Rohana, AIB (Sri Lanka),
Dip. In Business & Fin. Adm. (ICASL) -
DGM - Region IV
Dr P Niranjan, PhD (North West - NY),
MBA (IIU.EU), FSSM (UK), FBMA (UK),
FACOM (UK), FICIA (Canada), AIB (SL),
MAAT (SL), AIPFM (UK), Dip.In Business
Mgt (India)
Mr A R M Hannan, M.Sc. in IT (Keele) -
DGM - Information and
Communication Technology
Mr Ranjith X Fonseka, Asso. Dip. In
Information Technology (Aus) - DGM -
e-Commerce & IT Inernational
Mr Chitral de Silva, Ex. Dip in Business
Administration (University of
Colombo) - DGM - Development
Banking
Mr R N Divulwewa, Post Grad. Ex. Dip.
In Bank Mgt. - DGM - Region VI
Ms Shalini M S Perera, ACIB (UK),
MBA (Sri J'pura) - DGM - Corporate
& Foreign Currency Banking
Mr S Palihawadana, BSc - DGM / Chief
Dealer
Mr S L A Azeez, AIB, FSCMA, FCMA
(London) - AGM - Compliance
Mr Ravi Dissanayake, AIB (Sri Lanka)
(P I) - AGM - Personal Assistant to
DIR/GM/CEO
Mr Cyril Gamage, AGM - Private
Banking
18
Seylan Bank PLC – Annual Report 2007

Mr Sunanda Perera, B.Sc, MBCS, CITP -
AGM - Information Technology
(Special Project)
Mr Hiran Amarasinghe, B.A (Hons)
UK, FCCA (UK) - AGM - Treasury
Ms Rohini Weerakkody, AIB (Sri Lanka),
Dip. In Bank Mgt. (IBSL), MBA
(Huddersfield) - AGM - Operations
Mr T J Pathirage MBA (Sri J'pura),
B.Com, CISSP (USA), CISA (USA),
CISM (USA), CCSE (USA), AIB, ISO
27001/BS7799, Lead Auditor (IRCA)
AGM - Information Systems Audit
Mr Shafeek Samad, MBA - AGM -
International
Mr Lalantha Kulatunga, AGM - Debt
Restructuring Unit
Mr Suresh Amerasekera, Advanced
Diploma In Mgt. Accounting (Awarded
by The Chartered Institute of Mgnt.
Accountants) AGM - Region V
Mr Nandalal R Ranasinghe, Diploma in
Bank Management - AGM - Treasury &
International Audit
Mr Delvin Pereira, MBA (Australia) -
AGM - Region VII
Mr Christie Nanayakkara, AIB
(Sri Lanka), MBA (University of
Western Sydney) - AGM - Credit
Review (Corporate Banking)
Mr A A Emmanuel, B.Sc, Dip. In
Business Admn. AGM - Region VIIII
Mr Kamal Deshapriya, ACMI (UK), DIP
MASS COM (Sri J'pura) - AGM - Sales
Mrs Damayanthi Tillekeratne
AGM - International / Exports
Mr M K Prematilleke, Diploma in Bank
Management (IBSL), Post Graduate
Diploma in Economic Development
(Colombo) - AGM - Legal
Mr Sirilal Amarasinghe, National
Diploma in Technology (Mechanical
Engineering), AIB (PI)
AGM - Development Banking
Mr Neomal Suraweera, AIB
(London) (PI) - AGM - Region I
Mrs Deeshani P Gooneratne, MBA
(Lester UK), MIPM, CIM (Final Stage)
AGM - Human Resources
Mrs Yasanthi Udurawana
AGM - Stock Brokering and Leasing
Mrs Gillian Edwards, AIB (PI), Post
Graduate Executive Diploma in Bank
Management - AGM - R VI
Seylan Bank PLC – Annual Report 2007 19

M A N A G E M E N T D I S C U S S I O N A N D
A N A LY S I S

CORPORATE BANKING AND FCBU
By employing astute plans and strategic
policies over the last few years, we have
seen our performance reach upwards and
this year, Corporate Banking and FCBU
achieving higher profitability with
controlled growth of advances.
The consolidation implemented in the
past and the renewed strategies for
analysis and monitoring saw refocused
attention on some of the larger facilities.
This year proved to be a fresh new start, a
renaissance seen after consolidation,
restructuring and refocus to ensure the
viability of our associations. Prudential
provisioning was made throughout and as
a result, this year we began to enjoy the
benefits of such steps taken in the past.
Credit expansion this year was prudent
and cautious, working on qualitative rather
than quantitative aspects with particular
concentration on existing clientele.
Our client portfolio remains stable despite
the external volatility experienced over
the year and we remain confident that
stability will remain as we have shifted our
focus now to a more export oriented
portfolio that are less affected by
domestic volatility.We have also astutely
managed our Non Performing ratios
devoid of deterioration and made
significant recoveries from our old
accounts, which were fully provided for.
With the implementation of the Internal
Credit Rating system into our evaluation
processes, we are now more streamlined
in evaluating our credit requests.We are
probably the first local commercial bank to
have a comprehensive and penetrative
ICR system comprising seven modules
which not only encompass corporate
banking but can be used across the Bank’s
other functions as well.The modules are
designed to evaluate the credit quality of
the facility, while also evaluating the entity
of the customer, the package structure and
the collateral, finally positioning an overall
rating for the evaluation. More automation
is being added to the credit evaluation
process, where documents will be routed
through the Intranet to move into a
paperless environment rather than
physical reliance on hard copies.This
infuses efficiency and speed into the credit
process.The module has been purchased
and will be established within the system
in the first half of 2008, which will then
see a complete migration into a
paperless system.
Given that the customer remains key to
our success and sustainability of
performance, we continue our relationship
building endeavours using both formal and
informal approaches to ensure that we
remain long term partners in a journey
undertaken together with our customers.
One to one visits, discussions and dialogue
revolving around the service excellence
strategy are all advantageous courses we
undertook during the year to ensure we
maintain and strengthen those
relationships. In addition, the team training
levels and initiatives continue to be
improved as dealing with corporate
customers, our team needs to be highly
informed and completely updated.This is a
priority for us and our training calendar
involves specific knowledge centric skill
building programmes geared to give our
people an edge over competitors. About
forty hours of training is imparted to each
team member within the unit, where soft
skills, service, IT literacy, specialist and
technical areas are all addressed.
While the Sri Lankan client portfolio will
continue to be the focus, we are also
pursuing attractive destinations like the
Maldives, where we observe good returns
on investment and better cash flows.We
intend to increase our FCBU presence
and also to work through syndicates in
reaching out to that market. Given the
increasingly tight monetary policy that has
to be balanced with increasing demand for
credit, we strongly believe we must
prioritize the requirements of our existing
customers as we do have an immense
obligation to their needs first, before
reaching out to add new customers
to our portfolio.
22
Seylan Bank PLC – Annual Report 2007

SHAREBROKING, LEASING AND PAWNING
Share broking
The market this year has not been
conducive to business growth with it
showing immense volatility To combat the
adverse situation, our modus was to
concentrate on our existing customer
base, ensuring they gain the advantage
of our excellent customer service and
caring attitude.
However, we expect a few IPOs in the
next year as according to regulatory
requirements, all insurance companies
must go public.This should see some
activity within the market, which we will
ensure our customers gain advantage of.
Leasing
The high interest rate regime did not
augur well for the leasing industry overall
this year.With the added negatives of high
duty and various taxes being added to the
cost of vehicles, the industry did not see
much growth. However, we combated the
negatives by using the path of strategic
partnerships with Vehicle dealers to
increase the growth over last year.
We tied up with AMW for six months on
the Maruti rang of vehicles, General Sales
Company for the Bolero Load Carrier,
Unimo Enterprises for the Kalisa and
Kenari range, Suncity Trading for the Isuzu
Single Cab, Dimo for Chrysler and Abans
for the Kargo King.These brought better
deals for our valued customers Not seeing
a respite in the external environment for
the next year, we hope to continue similar
initiatives with vehicle dealers in order to
give our customers better options
and also to continue our upward
growth curve.
Meanwhile we also embarked on
enhancing our automation process,
electronically linking 92 branches and the
five departments related to leasing.This
ensures that our leasing approval is now
instant, with customer information
accessible at a touch of a button for
efficient processing and improved
monitoring
Pawning
Pawning this year was positioned as a
strategic business facet of the Bank
worked on to improve and enhance the
business opportunities that we could
foresee by improving our reach by
increasing our reach to many considerable
areas we have seen a commendable 130%
growth in our pawning portfolio. By using
the concept of below the line marketing
strategies and using favourable gold prices
in the market, we embarked on a
marketing drive that positioned gold
jewellery as an appreciating investment
which could be converted to instant cash
in the event of crisis or for a long term
commitment, since it’s the most
convenient mode to obtain funds sans the
hassle of paper work and time in obtaining
conventional facilities at present.We also
promoted our flexible payment terms
which includes the renewal of the pledge
by paying interest in full, making part
payments or enhancing the amount based
on new payment terms.
Our aim is to increase our market share
which we feel will give considerable boost
to our bottom line. Our delivery channels
will be increased this year in tandem with
enhanced training for our team who will
work on a job rotation basis and are
trained to have pride in the job
description motivated with incentives
and rewards. Our long term objective is
that pawning business will contribute at
least 10% to the bottom line revenue of
the bank.
Seylan Bank PLC – Annual Report 2007
23

DEVELOPMENT BANKING
Development Banking continues to
feature a growth curve year on year and
2007 was no different. Our performance
met the anticipated targets but not
without a number of challenges including a
spiraling interest rate regime that curbed
our bottom line figures.This is due to very
astute management measures imbued into
our strategies which included focused
concentration on a few large projects,
primarily our flagship one, Celestial
Apartments, instead of a wide and varied
portfolio which may not have withstood
the external economic challenges.
With Celestial Apartments, which is
historic to the skyline of Colombo given
that it will be the tallest building once
completed, by meeting construction
deadlines, the large project loan did
contribute significantly via interest income.
We have also partnered an indigenous
Sri Lankan industrial operation, Micro Cars,
working with an entrepreneur who has
moved into the very competitive market
of designing, manufacturing and assembling
motor vehicles in Sri Lanka. Given that the
Bank’s consistent mission has been to
always support and encourage
entrepreneurship, the Micro Cars venture
got our fullest support and we are
honoured to have been a part of its
success, while the venture has also
considerably contributed to our
profitability.The vehicle portfolio is
growing and this year they introduced an
SUV into the market and given incentives
to the public sector officials who possess
vehicle permits.
Financing extended this year to a large
scale poly bag manufacturing plant also
contributed to our bottom line figures.
Our purview has always extended to
nurturing the rural economy through
micro and small entrepreneurs who work
in clusters. However, the current economic
challenges did not sit well with some of
them, forcing a restructuring of the
repayment pattern and collection
rescheduling. A cluster of carpenters we
financed were advised on restructuring
and we have managed to consolidate that
business area quite effectively.We had also
assisted the farming communities residing
in the border villages in the East with solar
powered electricity in the past.These
repayments too were restructured
successfully with the Promoter
undertaking the responsibility of
repayment, giving the communities the
opportunity to make payments with the
next crop season.
Due to timely and far-sighted strategies
implemented, the Bank has been able to
manage the non-performing portfolio
effectively, using good rescheduling,
monitoring and recovery initiatives.
Compared to last year’s recovery,
our net recovery this year has been a
considerable Rs.55 Mn.
Our products and services portfolio has
also been extended this year. Using the
Group’s own fund remittance product
Ceylinco FastCash, we extended the
prospect of housing loans for the purchase
of land or house or even complete
construction to the expatriate diaspora
whose track record of regular remittances
has been good.We handled a significant
number of housing loans as a result of this.
The Executive Super Loan is yet another
innovative combination product that gives
executives the option of financing a
housing loan, vehicle loan and even
furniture and equipment.The product
became a very popular one and we intend
to increase the momentum next year.
We have also striven to reach as many
people as possible especially in the rural
and more difficult areas, encouraging them
to be economically sustainable.
Development Banking Unit handled a
Credit Clinic in Embilipitiya targeting
individuals and small scale organizations,
literally taking the concept of banking to
their doorsteps. Our funding options
geared for these lower and middle income
groups give credit on reasonable terms,
longer repayment options, more flexibility
and attractive interest rates.We try our
best to uplift the rural economy through
these development initiatives.
Our future strategy will entail the
introduction of instant loan facilities to the
Sri Lankan expatriate community to
encourage more investment and a larger
infusion of their money into the economy.
We intend to extend this facility for
children’s education, purchase of
household items and entrepreneurship
ventures. However, the biggest challenge
we foresee are the rising interest rates
that seem to show no slowing down and
as a result, is not conducive to large scale
investment at present.We have to ensure
that our focus therefore must be on the
continuity and sustainability of the projects
we fund, which will require emphasis on
pre-analysis of the viability of the project
and subsequent sustainability.
24
Seylan Bank PLC – Annual Report 2007

AGRICULTURAL BANKING DIVISION
Having always espoused the philosophy of
poverty alleviation from a bottom-up
approach, Seylan has continued to be a
long term partner in uplifting and
developing the agricultural sector in the
country. Having commenced grant facilities
for cultivation ten years ago monitored by
the Development Banking division, the
Founder Chairman pragmatically decided
to incorporate a dedicated department
for this purpose.The Agricultural Banking
Division now handles cultivation loans and
a range of related services for the farming
community around the country.
Seylan Govi Saviya granted loans for
cultivation, Seylan Govi Kedella extended
housing loans, a Crop Insurance Policy
safeguards the farmer with life, accidental
and hospitalization covers and post
harvest credit facilities ensures a ready
market for the produce.
Since the implementation of ABD, the
following has been recorded:
Cultivation Loans
355.0 Mn
Housing Loans
14.5 Mn
Purchasing Facilities
296.3 Mn
Other Term Loans
100.8 Mn
In 2007, the ABD granted:
Cultivation Loans
119.0 Mn
Housing Loans
14.3 Mn
Purchasing loans
145.7 Mn
Other Term Loans
90.0 Mn
2007 also saw the launch of a value
addition to our emphasis on agricultural
development. On the Founder Chairman’s
initiative, Agricultural Service Centres were
launched around the country under the
aegis of a new company, Seylan
Agricultural Credit Company Limited.
The new service centers are known as
Agricultural and SME Service Centres and
extend services including technical and
marketing advice to micro and SME
entrepreneurs. Seven centers were
opened during 2007 with twenty
earmarked for the first quarter of 2008
and a total of 100 by end 2008.While
partnering farmers in the development of
their agricultural feats, we also involve
ourselves in village infrastructure
development to ensure that livelihood
support is also included in our
partnership.
Seylan Bank PLC – Annual Report 2007
25

GRAMEEN BANKING
A unique concept that has been
formulated on the vision of Founder
Chairman Deshamanya Dr Lalith
Kotelawela, Grameen Banking was set up
in March 2005 on the tenets of Nobel
Laureate Dr Muhammad Yunoos,Working
on the principles of uplifting the poor to
make them sustainable, the Bank’s
Grameen department has performed
exceptionally well having touched
approximately 350,000 transactions in this
short span of time.
Micro financing has been a long felt need
in Sri Lanka and the Bank has thus fulfilled
a vital niche that has thus far not been
focused upon.Total advances since
inception have been about Rs.6.5 Bn. with
2007 figures being Rs.2.6 Bn. One of the
most significant aspects of Grameen
banking has been that the recovery rate
has been 100%, attributable to daily
monitoring, imparting technical advice and
consultation which have led to very strong
relationships being nurtured with our
micro entrepreneurs through the Ceylinco
Grameen Group.
With loans varying from Rs.10,000 to
Rs.100,000 for each self employment
project worked on a gradient and payback
ability, the Bank added value extensions by
providing housing, leasing and commercial
loan facilities for those who are funded
upto Rs.40,000.The loans vary and include
shop/house loans as well as agricultural
loans which are disseminated by the
Grameen Credit Company.
PRIVATE BANKING
One of our most significant developments
in private banking this year was the launch
of our VIP Center in Colombo 3, which
should be operational by the beginning of
next year.While business growth has
increased to a turnover of about Rs.10 Mn.
monthly, our services are penetrative,
inclusive and involves a wide range of
services offered in a flexible convenient
manner through highly trained professional
investment advisors. On a service axis
that’s constantly improving as we believe
service excellence is the crucial advantage
in private banking, our target customer
profile has now extended to the
diplomatic corps whose emphasis is on
dependability, trust, confidence and
absolute commitment.
26
Seylan Bank PLC – Annual Report 2007

INFORMATION TECHNOLOGY
Seylan Bank’s over 100 branches and
convenient centers have been linked to a
single automated network with the solid
foundation of IT platform to provide
efficient & speedy services to our
customers both locally & globally.
Seylan Bank’s IT infrastructure has over
the period enabled ‘Anytime Anywhere’
banking services to be provided through
the electronic delivery channels which
includes telephone, internet, SMS banking,
SMS Alerts,Visa Debit/Credit Cards, POS
etc.The SMS banking has been further
enhanced to facilitate fund transfers, utility
bill payments and mobile phone reloads.
Seylan Bank is the only bank in Sri Lanka
to provide 24 hour customer service.
Besides this, the prestigious Asian Banker
award for the ‘2007 Best Branch
Automation & Networking’ received by
Seylan Bank recognizes the unique benefits
offered by Deshamanya Dr. Lalith
Kotelawala’s Palm Top Banking concept.
This scheme, which enables a bank
representative to take the banking directly
even to customers in rural areas to
conduct banking transactions such as
balance inquires, cash deposits,
withdrawals, accepting cash for fixed
deposits, Fast Cash delivery etc.
Progressing further, the Bank has taken the
initiative to streamline the credit appraisal
process by introducing a comprehensive
solution for credit rating/scoring for
corporate & retail portfolio and credit risk
/appraisal and work flow mechanism.
TREASURY AND INTERNATIONAL OPERATIONS
The market condition did not see much
change this year, retaining similar levels of
volatility as last year. However, the treasury
increased gains with prudent management
of its portfolio, achieving a net profit of
LKR 701Mn. – an increase of 44.54% over
the budgeted figure for the treasury profit
center for the year and an increase of
28.2% over the previous year.
Despite interest rates spiraling almost
uncontrollably during the course of the
year, ending around 15%, the treasury was
able to use astute measures to mitigate
losses and increase profits for the bank
during the year the treasury division made
an exchange income of LKR 457.5 Mn.,
interest income on loans and advances of
LKR 151 Mn., interest income on
placements with other banks LKR 229.3
Mn. and capital gains of LKR 13.3 Mn.
The treasury committee also adopted
tactical measures to maintain the bank’s
deposits base by matching high cost
deposits mobilised by branches with high
yielding treasury products – a win-win
situation.We also encouraged branches
that had a low advances portfolio with
high deposits base to use this method to
grow their bottom line and also keep the
momentum of deposits mobilisation.
Seylan Bank PLC – Annual Report 2007
27

PRODUCTS & SERVICES OFFERED
Since our inception, we have always conceptualised and designed our
products and services on the concept of caring, keeping the axiom of ‘The
bank with a heart’ at the core of our innovations. Each of our products is
most often designed to fulfil a dire need ensuring that the end target
audience will benefit immensely from the product or service with Corporate
Social Responsibility platforms forming the core of our products.We have
always kept our customers needs, hopes and aspirations foremost in our
mind opening up opportunities, chartering avenues and creating lifestyles in a
caring manner that has given them the trust and confidence to become long
term partners on a life long journey. Some of the products and services we
launched on our ‘caring’ platform are synopsised below:
Seylan Palm Top Banking
A definite revolution in fusing the banking
and IT industries, Seylan Bank launched
PalmTop Banking for the first time in
Sri Lanka, with significant partnerships
initiated with NCS Singapore. Operated
through our specialised team of Business
Development Officers (BDOs), the
concept extends our ‘anytime anywhere’
banking concept that much further by
taking the bank literally to the doorstep of
the customer. Developed by the NCS
Group, a leading IT and communication
engineering service provider in the Asia
Pacific and Middle Eastern regions, the
BDOs are equipped with a Personal Digital
Assistant (PDA) and a small portable
printing device to carry out secure banking
transactions. Functions include cash and
cheque deposits, cash withdrawals, Ceylinco
Fast Cash remittance disbursement, loan
application and account opening with the
additions of loan applications and customer
credit checking to be added on this year.
Seylan Tikiri
Our most unique children’s product yet -
inculcating the habit of saving with rewards
in order to create a savings culture among
the future generation! This year, we tied in
multi-award winning child star Sarala
Kariyawasam as the Tikiri Brand
Ambassador, infusing a ‘role model’ concept
for young children to follow this bright
young star’s journey to filmdom and
stardom.The numerous Tikiri promotions
were branded very effectively by Sarala
and included the Hong Kong Disneyland
promotions which saw 25 Tikiri account
holders make their way for three days of
fun and games at the famed theme park
accompanied by a parent each and bank
officials as well as a children’s carnival at the
Guruge Nature Park in Ja Ela which saw
over 500 Tikiri account holders enjoy a full
day of rides, games, karaoke, singing and
dancing competitions.
Seylan Merit Rewards
Yet another one of our innovative unique
current and savings schemes, Seylan Merit
Rewards pioneered the concept of rewards
for savings, introducing gifts and grants to
commemorate special occasions and
milestones in customers’ lives. Over 17,000
account holders were rewarded without a
draw so far. Seylan Merit Rewards assists
personal current and savings account
holders with grants for surgery,
bereavements, accidental or natural
disasters and in happier times of marriage,
professional/academic achievements
winning and national or international events,
child births and 60th birthdays and golden
wedding anniversaries and inventions.
Encouraging the savings culture among the
people of Sri Lanka, Seylan Merit Rewards
extends the benefits to immediate family
members as well.
Seylan 2 in 1
One of our newest most innovative
services within our portfolio, Seylan 2 in 1
is an Automated Investment Manager
which converts funds in current accounts
into savings balances, enabling customers,
who are also eligible for Seylan Merit
Rewards to earn interest overnight.The
interest earned is calculated daily and
credited to the savings account on a
weekly basis.This is the first such product
in Sri Lanka with a monthly statement
replacing the traditional passbook and
giving customers the opportunity of paying
all standing orders, loan recoveries and
bank charges through the savings account.
28
Seylan Bank PLC – Annual Report 2007

PRODUCTS & SERVICES OFFERED
Seylan 5 Star Deposits
The newest fixed deposit product in our
portfolio, with a period of 5 years. Interest
could be earned monthly, annually or at
maturity. In addition to interest earned
0.1% of the deposit value per month is
awarded in form of a utility voucher for the
first year. Utility vouchers could be used to
pay water, electricity, SLT, Lanka Bell, Dialog
on mobitel bills.
Seylan Piyasa
2007 proved to be a challenging year due
to the spiralling interest rate regime we
had to contend with, forcing us to increase
our rates in tandem with market rates.
However, given the caring stance we
espouse and realising that housing is a
primary need for all citizens of this country,
Seylan Piyasa continued to assist people in
gaining a home for themselves.The housing
loan portfolio increased by Rs.1 Bn. in
2007 recording an approximately 15%
growth in total. Our value additions in
obtaining loans include applications online
and customers being enabled to work out
their own calculations through our website.
Next year, our plans will include the
evolution of a land bank which customers
can view on our website, where we will
also use the synergies available within the
Group’s other real estate development
companies. Our services will also be made
more accessible through the dedicated
Piyasa Center to be re- launched in
Colombo 5 in the coming year.
Ceylinco FastCash
One of the most innovative money
remittance solutions aimed at the
Sri Lankan diaspora around the world,
Ceylinco FastCash is now represented in
12 countries by 2,400 agent locations
worldwide. Seylan Bank enables the
smooth functioning of the remittance
service and has worked in partnership with
a number of organisations to ensure that
the Sri Lankan expatriates have a hassle
free remitting facility when transferring
money to Sri Lanka.
Seylan Bank signed up with Korea
Exchange Bank which has a network of
over 300 branches in South Korea to
enable Sri Lankan expatriates remit their
funds through any Seylan Bank branch
enabling the beneficiary to have access to
these funds islandwide.
Together with Ceylinco Consolidated UK
Limited, Seylan Bank launched a personal
and housing loan facility to the Sri Lankan
diaspora in the United Kingdom, in
conjunction with Ceylinco FastCash
International Money Remittance Service.
The facility is extended towards educating
children, purchase of electronic items, land
and house and renovation of existing
homes.Those eligible for the loan scheme
are the expatriates who use Ceylinco
FastCash and will have the value addition
of a ‘WishCard’ which is the Ceylinco
FastCash loyalty card which incorporates
additional services including cash delivery
to the customer’s doorstep, medical care
for family members in Sri Lanka and instant
advice to the beneficiary and sender of
money transfers via SMS.
Co Branded Debit Cards
TFC Debit Cars and Seylan Merchant
Debit Cards were introduced in order to
strengthen the card base, while providing
Deposit holders to have access to Visa
network, in Sri Lanka.
Instant Credit Cards
Our instant credit card concept specifically
required decentralisation of issuing
formalities and required us to move away
from the norm of a centralised issuing
system. Although considered a bold move,
the decentralisation did prove to be the
most successful move in increasing our
business portfolio.With our belief that the
outstations have untapped potential in card
business, 2008 will see more emphasis on
card business decentralisation with the
opening of about ten card centers as well
as the launch of the latest chip card which
will be in line with future trends. In tandem
with our emphasis on the outstations, we
have also launched a concerted effort of
increasing our merchant portfolio, which
will also increase avenues of cash
withdrawals which can now be done either
through the ATM, via a visit to the bank or
through the POS.The latter will be
extended for other banking functions as
well as including loan repayments.
Seylan Credit and Debit Cards
Being one of the largest Visa card issuing
banks in Sri Lanka, this year proved to be
Seylan Bank PLC – Annual Report 2007
29

PRODUCTS & SERVICES OFFERED
the best for theVisa credit card business in
Sri Lanka. Despite the external environment
grappling with numerous challenges
including the imposition of a stamp duty on
card transactions, Seylan made the astute
move of absorbing the stamp duty on the
customer’s behalf as well as signing up with
some of the country’s most prestigious
organisations to partner with us, which saw
the boom in businesses.The organisations
include Sri Lankan Navy, Sri Lankan Airlines
Flight Crew, Pilots’ Guild and the
Engineering divisions,The Gymkhana Club,
members of Ceylinco Consolidated
including Ceylinco Development Bank and
Ceylinco Grameen. Usage grew by 54%
which is well above industry growth.
Country’s first ever Gold Debit Card was
launched in order to fill the void of an up
market prepaid electronic payment
instrument.
Advertising and promotional campaigns
included a cash draw of Rs.250,000 for Visa
Card usage during the Avurudu and
Christmas seasons.
The Travel Card,Visa Platinum card, the
Ceylinco FastCash Wish Card and the
instant Credit Card all introduced last year
also lent buoyancy to our card portfolio.
The Seylan Visa Travel Card replaces the
hassle of Travellers Cheques and even has
the facility of obtaining more than one card
for travel and devoid of any commissions
to be charged when encashing TCs.Value
additions in this Travel Card include
emergency medical insurance for upto
US $ 50,000.
Seylan Rajina Credit Cards
This unique credit card is targeted
specifically towards women. Seylan Rajina,
launched in August 2007, aims to
strengthen women from all walks of life
empowering them to achieve their dreams.
Offering a host of benefits including highest
interest rates on savings and fixed deposits,
using micro women entrepreneurs as role
models, Seylan Rajina will encourage
women to use the credit card astutely to
better their lives and further their
entrepreneurial ventures.
Seylan Rajini Enterprise
Launched in 2007 , Seylan Rajini Enterprise
aims to empower women to better the
living standards of their families through
development of their entrepreneurial skills.
With women increasingly playing a primary
role in the family, community and rural
development, it is imperative that our
“Bank with a Heart” extends our caring
purview to these women who most often
have financial challenges to overcome.The
concept allows Sri Lankan women above
18 years of age to obtain consultation and
advice from specialist officers, empower
themselves with financial knowledge, be
confident in transacting banking business,
gain loans for business, travel, medical, and
even vehicles.They can also qualify for
prizes and compensation as rewards on a
similar platform to Seylan Merit Rewards
and get the facilities of specially branded
credit and debit cards. A unique aspect to
the Seylan Rajini Enterprise is that Rajini
Fixed Deposits will also incorporate special
interest rates for women affected by
marital disharmony.
Visa Debit Cards
Our Visa Debit Card business doubled this
year, proving to be an extremely successful
year.We were also the first bank in
Sri Lanka to launch the Visa Debit Gold in
a bid to increase convenience for the
customer, where transactions can be done
directly with the merchant without having
to withdraw cash from the ATM first.
WishCard
The Ceylinco FastCash WishCard, a debit
card for all Ceylinco FastCash users around
the world launched this year, enables
beneficiaries to get the remittance credited
to their WishCard without having to visit
the branch and use it like any Visa debit
card.
e-banking products
• Internet Banking
Launched in 2000, Seylan Bank’s
Internet Banking service enables
account / credit card holders the
opportunity to carry out a variety of
banking functions such as fund transfers,
utility bill payments at their convenience
at the click of a button.The Seylan
Internet Banking service can be
accessed on www.eseylanet.com
• SMS Banking
Launched in early 2004, Seylan is the
pioneer bank in Sri Lanka for operating
this service with all mobile phone
operators in the country.This service
covers all current and savings account
30
Seylan Bank PLC – Annual Report 2007

PRODUCTS & SERVICES OFFERED
holders of Seylan bank, subscribing to
any digital cellular network within
Sri Lanka and provides a host of
banking functions such as account
balance inquiries, fund transfers, utility
bill payments, SMS alerts and even
mobile phone reloads.
• Seylan Phone Banking
Launched in 1998, Seylan Phone
Banking or ‘Seylaphone’ has become a
widely used tool for account holders to
carry out their basic banking functions
using fixed line touch phones or mobile
phones.This facility is provided free of
charge and lets account holders use it
in their preferred language.
• Internet Payment Gateway
Launched in April 2004, this service
provides vendors the opportunity to
display and market their products /
services online while also enabling
Internet browsers with the facility of
making payments for goods or services
through the Seylan Payment Gateway
by using their VISA credit card or
debiting their Savings or Current
account. Over the last few years, Seylan
Bank PLC has offered Internet Payment
Gateway solutions to a number of
clients based locally as well as overseas
which includes eChanneling, Ceylinco
Life and The Finance Company.
Cool Cash
Cool Cash is a youth savings account
which was launched in January 2006
targeting at the age group between 18-29
years.This is a unique savings account
which gives Cash rewards on the account
holder’s birthday in addition to the 1%
premium on interest in comparison to the
normal savings account.
The Account holder is also entitled to a
branded Cool Cash ATM and debit card
which enables him/her to encash their
Birthday gifts from their nearest ATM
Machine and in addition they can also
make payments for goods and services at
any outlet instead of paying cash.
In order to involve more young adults and
encourage more participation the
minimum balance that the account holder
should maintain has been brought down
from LKR 25,000/- for a period of 12
months preceding his/her birthday to LKR
5,000/- for any 8 calendar months
preceding his/her birthday.
Seylan Shakthi – 4Year Fixed Deposit
Seylan Shakthi is a fixed deposit invested
for a period of 4 years. Interest is earned
monthly, annually or at maturity.The
minimum amount one could invest is
Rs.100,000. In addition to interest earned,
0.1% of the deposit value per month is
awarded in the form of utility vouchers for
the 1st year.These utility vouchers could be
used to pay or as part payment of
electricity, water, SLT, Lanka Bell, Dialog or
Mobitel bills.
Seylan Harasara – Senior Citizens
Account Scheme
Seylan Harasara was specially designed to
honour senior citizens of our country over
50 years of age. Current Accounts, Savings
Accounts and Fixed Deposits of such
account holders are covered under Seylan
Harasara.
Harasara Account holders are entitled to
free membership to Ceylinco Swift Care
“Doctor on wheels” health scheme and
they carry a Harasara easy identification
card with their photograph on it.
When placing a fixed deposit, senior
citizens can enjoy an enhanced rate of
1.5% p.a. If the accountholder is between
the age group of 50 years to 65 years and
has a fixed deposit in excess of Rs.100,000
with an investment period of 1 year or
above, he/she is entitled to a critical
insurance cover for 20 illnesses.
Rs.10,000/- in a current account or
Rs.20,000/- in a savings account maintained
for a continuous period of 6 calendar
months, they can enjoy Merit Rewards
benefits. Under this scheme they are entitled
to a wrist-watch on their 60th birthday.
In addition to Merit Rewards benefits, if
they maintain Rs.10,000/- in a current
account or Rs.20,000/- in a savings account
for a continuous period of 12 calendar
months and if accountholders are above
70 years of age, reimbursement of the cost
incurred on miscellaneous medical
expenses upto pre-determined limits apply.
One year subscription on reading material
such as Readers Digest magazine, local
news papers, etc on a one-off basis with a
maximum limit of Rs.5,000/- is available to
such qualifiers among senior citizens.
Seylan Bank PLC – Annual Report 2007
31

S U S TA I N A B I L I T Y R E P O RT I N G

CORPORATE SOCIAL RESPONSIBILITY
We are synonymous with being the Bank
with a heart and it’s truly espoused in
everything we do. Our whole ethos, culture,
attitude and even our products and services
are geared on a CSR platform of caring. Our
CSR projects are identified and implemented
to make a difference in the lives of those we
touch.We ensure that those projects have a
positive impact on those stakeholders and
strive to create a sustainable partnership that
will see them through long term
development. From our work with migrant
workers especially in the Middle East,
through to the farmers in the most difficult
agricultural areas in the country, to destitute
students who work doubly hard to gain
an education, Seylan Bank continues
building sustainable partnerships for
their improvement.
We also strive to create harmony in the
communities we work in through our
Avurudu Ganu Denu and cultural pageants
by contributing sponsorships and part
sponsorships towards the Mulkirigala Poson
Kalapay,Tissamaharama Raja Maha Perahera
and Gangarama Navam Perahera. Over the
years, we have touched the lives of
thousands of people in Sri Lanka through our
personal interactions via our Business
Development Officers, our Student Bank
Representatives, our specialist Agricultural
Advisors and the hundreds of customer
service team members island wide who are
always on hand to impart a smile, a kind
word and a listening ear.This we continue to
do, on a daily basis.
Given below is a snapshot of a few projects
we have been involved in this year:
Infrastructure Development
Given our emphasis on uplifting the
agricultural economy of the country, our
Agricultural Banking Department together
with its affiliations continue working with the
farmers, not only in funding but also in
technical, marketing and in development of
their environment. 225 families benefited
from the construction of a drinking water
well in the destitute agricultural village of
Ethimalawewa in Siyambalanduwa in
Moneragala, now having access to good
drinking water, decreasing kidney related
diseases among the community. Before the
construction of the well, villagers used to
travel about three kilometers on bicycles or
hand tractors to find potable water.
1 Contribution to Cancer Hospital
Seylan Card Centre donated a percentage of Credit Card income during
the month of September 2007 to the Cancer Hospital – Maharagama to
mark the Birthday of Deshamanya Dr. Lalith Kotelawala – Chairman,
Ceylinco Consolidated.
The contribution made by Seylan Card Centre was made use of to
purchase Imunocytochemistry Reagents for Cancer Hospital –
Maharagama.
2 Singapore trip to whiz-kid and family :
Young Basuru Weerakoon with the letter confirming the package tour
soon after the presentation by Deshamanya Dr. Lalith Kotelawala.
Standing next to him from left Director / General Manager / Chief
Executive, Ajitha Pasqual, Manager Seylan Bank Horana Branch,
Chaminda Mendis, Deputy General Manager Business Development,V.K.
Seyone and Senior Deputy General Manager Legal, C Kotigala. From
right parents and sister of Basuru, Brand Manager,Tikiri, Dimmini
Senarathne, Chief Manager Marketing, Udaya Shanker and Assistant
General Manager Sales, Kamal Deshapriya.
34
Seylan Bank PLC – Annual Report 2007

CORPORATE SOCIAL RESPONSIBILITY
Encouraging education
The hitherto never before seen achievement
by Chagi Basuru Weerakoon who scored a
perfect score of 200 in the Year Five
Scholarship examination was duly felicitated
by Seylan Bank. Being a Tikiri Account holder
and in recognition of his unique feat, Basuru
together with his parents, was presented with
a five night six day tour of Singapore,
covering both educational and entertainment
aspects, such as the Discovery and Science
Center, Jurong Bird Park, the Night Safari and
the Sentosa Island in Singapore.
We donated IT equipment which included
computers and printers for the welfare of
personel of the Saliyapura Gajaba Regiment
in order to work towards skills development
and broaden educational horizons.
We also presented 1,000 school bags at the
annual Christmas party for children afforded
by the speaker of Parliament. Inclusive of this
donation the Bank had provided an aggregate
of 4,400 school bags to destitute students
during the year.
Shelter for all
Seylan Bank presented a house to Ms. Amila
Nadeeshani, a contestant at the Sirasa Super
Star contest 2007 in recognition of her
talents.
Better healthcare
The Seylan Card centre used a percentage of
its credit card income to donate funds for an
Imunocytochemistry Reagents centre for the
Cancer Hospital, Maharagama.The practice is
conducted annually, where funds are
presented to the Cancer Hospital to
purchase much needed equipment.
The Lady Ridgeway Hospital too was
presented with Rs.100,000 to purchase
essential items required for the doctors and
patients in the OPD of the hospital. In
addition, the surgical ward was also painted
as a voluntary project initiated by the Sarana
Fund in which 120 Seylan Bank staff
members participated.
A new two storied Children’s Resource
Centre and doctors quarters are to be
constructed for the Embilipitiya Base
hospital with a contribution of Rs.5 Mn.
from Seylan Bank.
3 Seylan Bank co-sponsord the Gangarama Navam Perahera in February
2007. Here the Director / Legal Mr. C Kotigala hands over the
sponsorship cheque to Ven. Galaboda Gnanessara thero at the temple.
4 Dr. R Wimal Jayantha Director Lady Ridgeway Hospital accepting
equipment worth LKR 100,000/- from DIR/GM/CEO Mr. Ajitha Pasqual.
Seylan Bank PLC – Annual Report 2007
35

OUR HUMAN CAPITAL
Our team’s forte has always been to care.
It is this strength that has taken our
customer service levels beyond the norm
and propelled Seylan Bank into the minds
of the people as a “Bank with a heart”.
Built on the trusses of professionalism,
talent and skills worked liberally through
with dynamism, motivation and
commitment, our team has excelled in
very challenging circumstances to emerge
triumphant.
Training and development continues to be
an integral thread that runs through each
and every team member who realises and
recognizes the importance and crucial
need of continuously improving knowledge,
while permeating that knowledge culture
among fellow team members.With the
main focus hedging on giving opportunities
to learn and develop, we urge our team to
work towards higher level positions that
entail more responsibilities and encourage
Having begun a complete IT infusion into
HR processes made HR information more
accessible to our team. Moving towards a
paperless environment, online application
processes being formulated for leave,
performance appraisals, having all personal
files in a digital form.The year 2008 will see
training and development modules
included, helping team members to match
required training programmes to individual
needs, job roles and career aspirations.
Staff Training Programmes 2007
No of Participants in
Training Programmes 2007
In-house
Training Programme (67%)
Local (23%)
Foreign (10%)
In-house
Training Programme (7,981)
Local (419)
Foreign (91)
Being the only ISO certified HR
departments in the banks of Sri Lanka and
recertified this year, we have imbued
streamlined processes and standards for
recruitment, succession, development,
rewards and recognition to ensure that
our HR systems compliment our end
vision of meeting and exceeding customer
service expectations.
lateral moves to perform.We also
encourage a multi-skilling environment so
that our team members are equipped to
undertake a variety of disciplines,
responsibilities and competencies.
Training permitted to all staff in the Bank
with an average of 24 hours per employee,
variety of internal and local programmes,
and sending as many for overseas
programmes to get international exposure.
Encouraging our team to excel in extra
curricular activities, we currently house a
large number of sportsmen who represent
district and national teams, while also
having among us a winning team that has
continuously excelled to emerge winners
at the Inter-Bank Mastermind Quiz
annually.
Age Analysis of Staff
Grade Analysis
2,000
1,750
1,500
1,250
1,000
750
500
250
0
25< 26-35 36-45 46-55 55>
Management,
Chief &
Senior
Managers
Managers &
Asst.
Managers
Executive I
&
Executive II
BKA I - III
Others
36
Seylan Bank PLC – Annual Report 2007

CORPORATE GOVERNANCE
Corporate Governance has been defined
as the process used to manage the
business affairs of the company with the
view of enhancing business prosperity and
corporate accountability with the
objective of realizing long term
shareholder value whilst safeguarding the
interest of other stakeholders.
In order to consolidate our position as a
strong and indigenous bank, the Bank has
adopted several measures towards
achieving good corporate governance,
comprising success-oriented corporate
management and responsible corporate
monitoring.
Board of Directors and Delegation of
Authority
The Board is headed by the Founder
Chairman and comprises twelve Directors.
Their collective experience in different
spheres of expertise enables them to
provide the necessary stewardship to the
organization by setting out strategies to
meet the overall objectives of the
company of improving performance,
profitability and growth, meeting corporate
social responsibilities and enhancing value
to shareholders and other stakeholders.
The Board is accountable to the
shareholders for the Bank’s overall
performance and its responsibilities
include :-
• Ensuring internal and external
information flows and appropriate
financial reporting
• Approving annual budgets and
corporate plan and approving annual
and interim financial statements.
Board Meetings
The Board meets regularly during the year
and convenes special board meetings
whenever necessary.The Board allocates
adequate time to matters of the Board
and the Bank.The Board met seven times
in 2007.The attendance of the Directors
at these meetings is given below:
Bank’s expense. Sub-committees also
advise /make recommendations to the
Board on matters coming within their
purview.The Board sub-committees
include the Audit Committee, Credit
Committee and the Integrated Risk
Management Committee, a brief
description of which is given in this report.
In addition to the Board meetings and
other monthly meetings and subcommittee
meetings, matters are referred
to the Directors also by circular
resolutions. Such resolutions are mainly
restricted to matters of a routine nature
Name Meetings Attendance Excused
Dr J L B Kotelawala 7 5 2
Lady Dr S P C Kotelawala 7 5 2
Mr R Renganathan 7 7 --
Mr A M Pasqual 7 7 --
Mr A D Jegasothy 7 7 --
Mr S K M Perera 7 6 1
Ms M Sabaratnam 7 5 2
Dr P R Anthonis (retired w.e.f. 01.02.08) 7 7 --
Mr S C O de Livera (retired w.e.f. 01.02.08) 7 7 --
Mr K A S Jayatissa 7 4 3
Mr P T Sirisena 7 7 --
Mr J E P A de Silva (resigned w.e.f. 11.05.07) 3 2 1
Mr J G S de Silva (apptd. on 11.05.07) 4 3 1
• Providing strategic direction by the
formulation of strategies and business
policies and ensuring effective
implementation of same.
• The appointment of the CEO and
succession planning of the corporate
management
• Ensuring adherence to legal and ethical
standards.
• Reviewing and strengthening internal
control, risk management and audit
systems
• Approval of credit facilities exceeding
the delegated limits of the executive
Credit Committee.
In addition, the Board has formed several
sub committees focusing attention on
specific areas of review with Executive
Directors possessing expertise in their
respective fields being assigned to head
each area. Monthly meetings are also held
for Recoveries & Litigation, Special
Collections, Information Technology and
Marketing with the respective designated
Executive Directors and Senior
Management with the participation of the
Deputy Chairman and CEO.The Board
seeks independent professional advice on
any matters whenever required at the
unless exceptionally, there are matters
which require the Board’s urgent approval.
Board Sub-committees
Audit Committee
The Audit committee, comprising three
non-executive Directors met four times
during the year under review. It functions
as an independent unit entrusted with
monitoring the internal controls and
processes of the Bank and directly reports
to the Board of Directors.The Deputy
General Manager Internal Audit acts as the
Secretary to the Audit Committee and
submits Quarterly Compliance Reports to
Seylan Bank PLC – Annual Report 2007
37

CORPORATE GOVERNANCE
the Committee for review.The external
auditors also attend this meeting and
therefore have direct access to the Audit
Committee to report on any matters
independently to the Board.The CEO and
members from Senior Management also
attend this meeting by invitation as and
when required. During the year, the
Director overlooking compliance was also
co-opted to this Committee.The report
of the Audit Committee is given on page
56 of the Annual Report.
Credit Committee
The authority over the function of credit
administration has been delegated to the
levels of Management, from the
Director/GM/CEO down to the level of
Branch Managers with limits being
stipulated in accordance with the level of
authority.The Credit Committee of the
Board of Directors comprising three
Executive Directors approves facilities in
excess of the General Manager’s delegated
authority limits and within its own limits.
Facilities approved by the Committee are
also submitted to the Board for review.
Facilities exceeding Credit Committee’s
limits are referred to the Board of
Directors for approval.
Integrated Risk Management Committee
As a part of good governance and also
Basel II compliance, an integrated Risk
Management Committee was established
headed by Mr. P T Sirisena - Director
Compliance and comprising the following
Directors:
Mr A M Pasqual - Director/General
Manager/CEO
Mrs L Seneviratne - Director (formerly Snr.
DGM – Region I)
and 4 members of the Senior
Management.The Committee formulates
strategies and policies for managing risks
and is also responsible for establishing
adequate systems and controls to ensure
that overall risks remain within acceptable
levels. It is also responsible for establishing
independent risk management units in key
areas viz. credit, operational and trading;
development of in-house skills for effective
risk management, make provision to
obtain expertise from external sources
and ensuring that the risk management
units employ sound techniques to limit
and manage different types of risk.The
committee generally meets on a monthly
basis and holds additional meetings when
required.The committee met 10 times
during the year.The committee reports to
the Board of Directors.
Conflict of Interest
The Directors are conscious of their
obligation to ensure that no conflict of
interest arises in the decision making
process. Directors having direct or indirect
interests in any contract or proposed
contract with the company refrain from
participating in discussions or voting on
matters whenever such conflict of interest
arises. Directors’ interests in contracts
both direct or indirect are specified in
Note 42 and 43 to the Audited Accounts
and have been disclosed and declared at
the meetings of the Directors and entered
in the Interest Register.
Chairman and the Chief Executive
Officer
As an essential feature of corporate
governance, the functions of the CEO
have been separated from those of the
Chairman.The CEO’s functions are carried
out by Director/General Manager of the
Bank. He heads the Senior Management
team of the Bank and is accountable to
the Board of Directors. He is entrusted
with the overall management and
operations of the Bank. He also heads the
Bank’s Treasury Committee and the ALCO.
The Treasury Committee monitors the
current market conditions and liquidity
position while ALCO does the Assets and
Liability Management process.The
Director/GM/CEO also chairs the Credit
Policy Committee, which reviews the
credit policy and guidelines of the Bank,
quality of the portfolio, develops strategies
for recovery and manages credit risks.
Re-election of Directors
As per the Articles of Association, except
for the Managing Director, 1/4th of the
other Directors are required to retire by
rotation at every annual general meeting
of the Company. Such Directors are
eligible for re-election with the Board’s
recommendation and approval of
shareholders. In addition, any Directors
appointed during the year to fill a casual
vacancy or by way of addition to the
Board are also due to retire at the annual
general meeting following their
appointment and with the
recommendation of the Board, are eligible
for re-election.The Directors subject to
retirement at the next annual general
meeting are given in the Notice of
Meeting appearing on page 126 of the
Annual Report.
Regulatory Compliance with Corporate
Governance Rules
As at date, the Mandatory Code of
Corporate Governance promulgated by
the Central Bank of Sri Lanka has been
challenged in the Supreme Court of
Sri Lanka and in the Court of Appeal of
Sri Lanka. Since certain provisions of the
said Code overlap Corporate Governance
requirements set out in Section 6 of the
Listing Rules of the Colombo Stock
Exchange, the outcome of the above
litigation will determine the composition
of the Board of Directors of the Bank and
the extent of compliance with the
aforesaid Code and the Corporate
Governance rules of the Colombo Stock
Exchange.
Supply of information
The Bank has in place a structured
management information system in place
to provide the Board all relevant
information and data required to take
38
Seylan Bank PLC – Annual Report 2007

CORPORATE GOVERNANCE
decisions. Management Accounts and
other regional and departmental
performance reports are submitted to the
Board well in advance of each meeting.
Other adhoc reports called for are also
provided as and when required. Members
of Senior Management are also invited to
the Board to provide clarifications on
matters coming within their purview.
Internal Control Systems
The Board is committed to ensuring that
an effective internal control system is in
operation as it believes that a sound
financial and operational risk control is a
prerequisite to conduct banking business
in an orderly manner.The two major
internal control systems include the
internal audit and information system
audit.Through an effective Internal Audit
mechanism, the risks associated with
business decisions are closely monitored,
assessed and wherever deemed necessary,
tools employed to manage risks are
introduced and existing systems further
strengthened.The process of identifying
and evaluating and effectively managing
risks associated with business processes
and their supporting functions is reviewed
by the Board on a quarterly basis through
the Audit Committee.
The Information Systems Audit (ISA)
Department plays a key role in Bank’s
internal control system and IT Governance
structure.
The IS audit provides Information System
Assurance, Security and Risk Management
services to the Bank ensuring that the
Corporate IS assets are safeguarded and
banking services are delivered in an
efficient, reliable and effective manner
whilst protecting stakeholders’ interest.
The ISA department is engaged in
implementing IT Governance and
Information Security management
programs that are in compliance with the
industry standards and the best
professional practices such as Control
Objectives for Information and Related
Technologies (COBIT), ISO 27001 and
Basel II etc.
Compliance
The Bank’s Compliance Department is
responsible for ensuring the Bank’s
compliance with banking regulations and
the compliance requirements under
specific statutes namely, the Prevention of
Money Laundering Act, No. 5 of 2006, the
Convention on the Suppression of
Terrorist Financing Act, No. 25 of 2005
and the Financial Transactions Reporting
Act, No. 6 of 2006. During the year, the
bank has initiated action to fully implement
the additional requirements in terms of
Central Bank's regulations on Know Your
Customer (KYC) and Customer Due
Diligence (CDD).
Monthly, quarterly and half yearly
compliance reports are forwarded to the
Central Bank confirming the Bank’s
compliance with the regulations under the
Banking Act No. 30 of 1988 and the
subsequent amendments.The Board is
apprised of the status of compliance by
the Bank on a regular basis whilst a
detailed compliance report is submitted
on a quarterly basis.
Financial Reporting and Corporate
Disclosure Policy
The Bank has over the years continuously
published its Quarterly Financial
Statements supplemented with the
necessary explanatory notes and
observations for the information of its
shareholders and other stakeholders. Strict
adherence is made to all accounting
formats and other procedures laid down
by regulatory authorities such as the
Colombo Stock Exchange and the Central
Bank in the disclosure and submission of
such information. Financial statements are
prepared in accordance with the Sri Lanka
Accounting Standards. Any other financial
and non-financial information, which is
price sensitive or warrants the
shareholders’ and stakeholders’ attention
and consideration, is promptly disclosed to
the public.
Directors’ Responsibility for Financial
Reporting
A statement of Directors’ responsibility for
Financial Reporting is given on page 55 of
the Annual Report.
Major transactions
During the year, there were no major
transactions entered into by the company
falling within the definition of Section 185
of the Companies Act No. 7 of 2007
which materially affected the asset base of
the company.
Relations with shareholders
The Board encourages the active
participation of the shareholders at its
Annual/Extraordinary General Meetings.
The Board which includes the respective
heads of the Audit, Credit and Integrated
Risk Management Committees are present
at the AGM to respond to any queries
from the shareholders. Shareholders are
free to communicate with the Bank and
their requirements and queries are
promptly addressed. Suggestions made by
them are implemented whenever possible.
Corporate Social Responsibility
Synonymous with the Bank’s motto of
being the Bank with a heart, the Bank
continues to carry out CSR activities
touching the lives of thousands of people
and building sustainable partnerships with
its stakeholders.The Bank’s culture,
attitude, product differentiation and
customer care all stem from its vision to
be the most caring and trusted bank
fulfilling the needs of society, uplifting the
lives of the poor and marginalized
segments of society and enriching the lives
of the Sri Lankan people.
Seylan Bank PLC – Annual Report 2007
39

RISK MANAGEMENT
Management of Risks
Risk management in a bank is fundamental to its success.A commercial bank
such as ourselves is endowed with two responsibilities, which are to
safeguard the interests of our valued customers and to provide a reasonable
return to our shareholders.When undertaking the normal banking business,
the Bank faces a variety of risks that are inherent.The only way forward is to
mitigate those risks by controlling risks and also providing adequate capital
so as to provide shareholder value addition, by obtaining the correct level of
risk – reward tradeoff.
The main areas of risks that are of concern are: market risk, credit risk and
operational risk.The Bank considers, Basel II as a way forward, and has
addressed all these key areas of risks:
Credit Risk
Risk Management Structure
Credit risk is the risk that a counter party The Bank has two main committees
may not oblige by making a repayment of reporting on matters pertaining to risk
capital and interest on the due date. It is management to the Board of Directors.
also associated with the likelihood of a The Integrated Risk Management
default that may occur as a result of a Committee (IRMC) was formed in order
downgrade in credit rating, insolvency or to ensure that there is sufficient board
bankruptcy.
oversight to risk management.This has
made the IRMC as the apex risk
Operational Risk
management committee in the bank, while
Operational risk is the loss that may be
the Asset & Liability Management
incurred as a result of the failure of
Committee (ALCO) deals with
systems, people and internal processes or
matters pertaining to mismatches in the
from external events.
maturity ladder, liquidity & interest rate
Market Risk
risk management.
Market Risk is defined as “the risk that the
Integrated Risk Management Committee
value of ‘on’ or ‘off’ balance sheet positions
IRMC is vested with the responsibility of
will be adversely affected by movements in
formulating strategies and policies for
stock prices, interest rates and
managing risks and establishing adequate
exchange rates”.
systems and controls to ensure that
Risk Management Framework
overall risks remain within acceptable
The risk management framework
levels.The IRMC is a board appointed
embodies a set of processes to identify, committee to oversee the functions of risk
measure, mitigate, and control the various management and the risk management
risks falling within the three main
unit. Coming within the purview of the
categories of risks i.e. credit, operational IRMC, is the committee to implement the
and market.
Business Continuity Plan (BCP).
Functionally, the BCP is totally responsible
to identify key risk indicators (KRIs) and
risk drivers that could result in business
disruption. Some of the areas that the
BCP focuses are disaster recovery in the
area of IT which is already being looked
into exhaustively. In order to undertake
this extensive study which would include
event analysis, impact / severity &
frequency, the bank has identified a team
of specialists who will be responsible for
carrying out tests by simulating
contingency events. On completion of
implementation, the project will be
handed over to the designated in-house
team.The BCP project is expected to
take-off early 2008 and to be completed
within a period of three months.The BCP
program will initially include business areas
such as treasury, corporate banking, IT and
branches. Once the initial project is
completed, the project team will further
expand the scope of the project by
including all branches and units of the
bank.This will enable the bank to meet
regulatory requirements to have BCP
in place.
Asset & Liability Committee (ALCO)
The Asset & Liability Committee oversees
the development in regard to interest rate
risks and liquidity risks arising out of
mismatches.The bank has in place
specialized software to generate ALM
reports which in turn are tabled at the
ALCO meeting. As mentioned previously,
the ALCO reviews the maturity ladder,
and takes steps to manage and mitigate
interest rate and liquidity risks.
Treasury Committee
Treasury Committee meets on a daily
basis in order to review market conditions
and make decisions to harness increased
profitability.The Treasury Committee is
headed by the Director/General
40
Seylan Bank PLC – Annual Report 2007

RISK MANAGEMENT
Manager/Chief Executive and monitors
the advance/deposit ratio, interest rate
fluctuations and the liquidity position of
the Bank on a daily basis.
Risk Management Unit
When the bank set up its independent
Risk Management Unit (RMU) in July 2007
it further strengthened and reinforced the
risk management framework. Obviously,
this was to cater to the wide variety of
businesses which require the Bank to
identify, measure, aggregate and manage
our risks effectively and to allocate capital.
On the other hand the Bank had to
adhere to the new regulatory
requirements arising from the
implementation of Basel II by the Central
Bank of Sri Lanka. Hence, the formation of
the RMU enabled the Bank to achieve
both conformance and performance
monitoring in the area of risk
management. Risk management issues are
reported to the Board through the
Director in charge of the department.This
structure has enabled the bank to have a
risk management unit with Board
oversight as required under the
supervisory pillar.The integrated
approach in risk management has enabled
the Bank to adopt a more holistic
approach to managing risk rather than a
piecemeal approach.
The RMU has taken the initiative to
compile a data base for credit losses from
the year 2007, and the data is being
gathered in the form of a survey. Once the
data has been collected, analysis would be
done thereafter in order to determine the
default probabilities (PD), exposure at
default (EAD) and loss given default
(LGD). RMU will continue to repeat this
exercise throughout the next few years in
readiness for the higher approaches in
Credit Risk. Accordingly the Bank will be in
readiness for the implementation of
internal ratings based approach (IRB)
under Basel II.
The RMU intend carrying out stress tests
at portfolio level using variables such as
economic factors, taxation rates, cyclical
effects, correlation etc to determine the
impact of credit risk at portfolio level.
Risk Management Measures Adopted by
the Bank
Basel II Implementation
With the required software in place the
Bank will be in a position to be effectively
compliant with Basel II where the capital
charge for Credit Risk, Operational Risk
and Market Risk will be automatically
computed.The staff of the user
departments / branches have been
provided with training on the use of the
software and as well as the concepts
pertaining to risk management and
Basel II.
Credit Risk Mitigation
Controlling risks is part of our credit risk
mitigation process, and coming under the
purview of the IRMC is to ensure that the
strategies to mitigate risks are monitored.
Information is gathered from branches and
regions and an analysis of the data
gathered forms the basis of the findings
and these are reported at the monthly
meetings of the IRMC. Credit risk
mitigation is also done at loan level, and in
order to assist in the decision making
process, the Bank has also introduced a
credit rating module which groups
customers into various categories such as
credit cards, leasing, housing, corporate,
personal, and SME to assess their credit
worthiness based on separate models.
Additionally, a loan appraisal module is also
in place to assist in analyzing information
pertaining to customer loan applications,
and the model varies in accordance with
the borrower type. For the proper
recording of collateral assigned on credit
facilities, the Bank has introduced a
Collateral Recording Module (CRM).
Moreover, the Movement Account
Delinquency Module (MAD) has also
been installed to identify delinquent
overdrafts, and to appropriately classify
and suspense interest.This module helps in
recording recoveries of such delinquent
facilities.
Credit authorization limits are set out in
the Bank’s credit policy, and approvals for
higher limits are reviewed at Senior
Management level for approval purposes.
Operational Risk
The Bank believes in minimizing the
Operational Risk by having a well-trained
and adequately skilled staff, which is being
achieved through substantial investment in
staff training. Delegated authority levels
and transaction authority limits are well
defined for better controls of the
operational areas.The Operations
Department sets guidelines and
procedures by way of circular instructions
and monitors daily operational functions.
Information system based audits are
constantly carried out in order to have
constant vigilance and surveillance of the
bank’s computer network.The Bank’s
Audit Committee functions independently
and reports directly to the Board of
Directors.
Liquidity Risk
The ALCO is chaired by the
Director/General Manager/CEO and
together with the Senior Management
monitors the performance within the
guidelines set for the management of
liquidity risk.The treasury committee
which meets on a daily basis to monitor
the liquidity position makes appropriate
Seylan Bank PLC – Annual Report 2007
41

RISK MANAGEMENT
decisions pertaining to liquidity risk
management. A concerted effort is made
by the bank to reduce liquidity risks and
this is done by (a) controlling the growth
of the loan book in order to maintain a
prudential liquidity ratio, (b) maintaining a
portfolio of liquid and tradable assets
including Treasury bills and bonds at the
optimum levels to meet any contingency,
and (c) arranging adequate credit lines
with local banks and foreign
correspondent banks.
Treasury Risk Management / Mid-Office
The Treasury is equipped with dedicated
and sophisticated software, web trading
platforms of reputed international banks
and a highly skilled and trained staff. Seylan
Bank ensures segregation of duties,
responsibilities and reporting structures
between Front Office and Back Office
with a Middle Office monitoring the
approved limits. At the treasury, exposure
limits are established dealer-wise,
counterparty-wise, product-wise,
currency-wise and the limits are constantly
reviewed and monitored for better
controls.
The Treasury mid office (TMO) is a desk
that provides risk management for the
treasury department.This desk monitors
the market risk, and also other aspects
such as the demarcation between the
trading portfolio and the investment
portfolio. It also monitors counterparty
limits for money market deals as well as
foreign exchange deals.The TMO uses
specialized software for the preparation of
ALM reports such as structural liquidity
reports etc.
Compliance
The key focus in the Compliance
Department is to manage risks by
ensuring the criteria laid down in the
Prevention of Money Laundering Act and
the Financial Transactions Reporting Act
(FTRA) as well as the guidelines and
regulations issued by the CBSL are met.
This measure prevents the Bank from
operational risks that may arise out of
compliance issues, and any legal and
reputation risk.
Technology Risk
This is managed by the Information
Systems Audit (ISA), which has in place
several measures such as password
encryption, authorization, restricted access
to systems, firewalls, software to control
spam and virus attacks, and other
specialized software to monitor intrusions.
Strategic Risk
Every quarter, the Bank reviews its
strategies on all risk aspects at a
Management Conference and takes
strategic decisions to review performance
against the budgeted targets.Whenever,
strategy changes are required in order to
compete in a changing market
environment, then brain-storming sessions
are held either bank-wide or among
selective groups and new strategies are
developed thereafter.The strategy selected
is taken up for further review and if found
acceptable it is implemented.
42
Seylan Bank PLC – Annual Report 2007

FUTURE OUTLOOK
Having overcome considerable challenges over the year, some of them
unanticipated, we look forward to a better year in 2008. However, given the
forecasts, the country remains on a ‘wait and see’ footing which does not
augur well for a pro-growth development strategy that must be implemented
in order to achieve the 7% GDP growth the economy envisages next year.
Peace in the country continues to remain a priority. If the war dissipates and a
peaceful settlement is negotiated/reached, then Sri Lanka can look forward to
pragmatic development which would naturally permeate to all economic
sectors.The positive impact will see resurgence in economic activity and
growth levels on a high curve.Tourism, property development and
infrastructure projects are areas that will see the most immediate response.
However, if the positive environment does not emerge with the anticipated
peace, 2008 will be an year of consolidation and recovery.We predict inflation
continuing its climb while interest rates will also retain its volatility.We are
also working in an increasingly regulated environment which sometimes stifles
the Bank’s growth. But our stance would be to seek opportunities in the
challenges we foresee, working to uplift the rural economy developing an
entrepreneurial and SME culture, empowering the farmer, enhancing the
migrant worker and educating our younger generation to gain productive
employment through skills development.
Seylan Bank PLC – Annual Report 2007 43

F I N A N C I A L R E P O RT S

ANNUAL REPORT OF THE BOARD OF DIRECTORS
ON THE AFFAIRS OF THE COMPANY
In compliance with the provisions of the
Companies Act No. 7 of 2007, the
Directors present hereto their Report on
the state of affairs of the Company for the
year ended 31st December, 2007.The
Report also provides information as
required by the Listing rules of the
Colombo Stock Exchange, recommended
best accounting practices and other
disclosures deemed relevant to the
stakeholders of the Company.
The Report was approved by the
Directors on May 13th, 2008.
General
Seylan Bank PLC was incorporated as a
public limited liability company under the
Companies Act No. 17 of 1982 and
obtained a listing for its Ordinary voting
shares on the Colombo Stock Exchange
on 5th January 1989. It is an approved
licensed commercial bank under the
Banking Act No. 30 of 1988.The Bank was
re-registered under the Companies Act
No. 7 of 2007 on 30th May 2007.
Review of the Year
The Founder Chairman’s and
Chairperson’s Statements on pages 6 & 7
and pages 8 & 9 respectively and the
General Manager’s Review on pages 10 to
13 give a detailed review of the
operations and state of affairs of the
Company and form an integral part of this
report.
Principal Activities of Bank and
Subsidiaries
The principal business activity of the Bank
is commercial banking and related
activities such as accepting of deposits,
personal banking, trade financing, off-shore
banking, resident and non-resident foreign
currency operations, travel related
services, corporate and retail credit,
project financing lease financing, rural
credit, issuing of local and international
credit cards, telebanking facilities, SMS and
internet banking, internet payment
gateway and dealing in government
securities etc. Other out of the box
activities to which the Bank has given
impetus to are graduate entrepreneurship
loans, specialized agricultural credit,
financing of small time exporters and
importers, women’s entrepreneurship and
many facets of development banking and
palmtop banking.
Subsidiaries and Sub-subsidiaries
The Bank’s subsidiaries and subsubsidiaries
and their principal activities are
given below:
Branch Network & Expansion
As at 31st December 2007, the Bank had
92 branches and 22 extension offices
totaling to 114 in operation, a list of which
is given on pages 114 to 117 of the
Annual Report.The Bank did not renew its
Colombo Airport Branch lease in 2007
resulting in the number of branches
reducing from 93 to 92. Furthermore for
the convenience of customers, the deposit
centres at Kadadora and Maswela were
also merged and re-located as one
extension office at Mawela.The Bank also
has 83 student savings centers as at end
2007.
New Product Development
During the year 2007, Seylan launched
eZPay, South Asia’s first mCommerce
initiative with Dialog and NDB Bank that
allows Seylan Visa Card holders to
purchase goods, pay bills, transfer money
and perform banking transactions via
mobile phones via eZPay.This service will
also be extended to cover other
telecommunication providers as well.
The Bank also introduced Rajina, a total
financial solutions product for ladies. Rajina
offers a host of financial benefits to enrich
the lives of enterprising Sri Lankan
Women.
Seylan Merchant Bank PLC - Merchant Banking
Ceylinco Seylan Developments Ltd - Property Development
Seylan Bank Asset Management Ltd - Dealing in Government Securities
Sub-subsidiaries
SMB Money Brokers (Pvt) Ltd - Money Market Activities
SMB Real Estate Ltd - Real Estate and Property Development
Seylan Merchant Leasing PLC - Leasing
SMB Securities (Pvt) Ltd - Equity & debt trading activities
-
Seylan 5 Star Deposits, a five-year deposit
product was also introduced during the
year.
The Bank launched ‘2 in 1’ Automated
Investment Manager’ which converts funds
in current accounts into savings balances
enabling customers who are also eligible
for Seylan Merit Rewards to earn balances
overnight.
Seylan Palm Top Banking, a revolutionary
product, fusing the banking and IT
industries was launched in October 2007.
This product operates through Seylan’s
team of business development officers and
46
Seylan Bank PLC – Annual Report 2007

ANNUAL REPORT OF THE BOARD OF DIRECTORS...
enables customers to carry out banking
transactions anywhere, anytime.
Financial Statements
The Financial Statements of the Bank and
the Group are given on pages 58 to 110
of the Annual Report.
Auditors’ Report
The Auditors’ Report on the Financial
Statements is given on page 57 of the
Annual Report.
Significant Accounting Policies
Significant Accounting Policies adopted in
preparation of the Financial Statements
are given on pages 62 to 68 of the Annual
Report.
Income
The income of the Bank as at 31st
December 2007 was Rs.21,079,884,904/-
(Rs.17,183,480,348/- in 2006) whilst the
income of the Group was
Rs.22,808,262,305/ -(Rs.18,684,142,263/-
in 2006).
Profit
A summary of the consolidated
profitability of the operations of the
Group during the year ended
31st December 2007 is given below:
Taxation
Provision for taxation has been computed
at the rates given in Note 8 to the
financial statements.
Dividends
Preference Dividend
The Directors recommend the payment
of a Preference dividend of Rs.1.54 per
share to the Preference shareholders
registered with the Bank as at the
entitlement date for the year ended 31st
December 2007.The dividend rate is a
pre-determined rate as per the
Prospectus to the Issue viz. one
percentage point over the one year
Weighted Average Treasury Bill rate at the
primary auctions held during March of the
preceding year i.e. March, 2007.The
Preference Dividend is payable on 30th
June 2008.The Bank paid a preference
dividend of Rs.1.14 per share for the year
2006.
Ordinary Dividend
The Directors recommend the payment
of a First and Final Ordinary Dividend of
Rs.1.50 per share to the ordinary (voting
and non-voting) shareholders, for the year
ended 31st December 2007 payable on
7th July 2008.The Bank paid a first and
final dividend of Rs.1.50 per share for the
year 2006.
Solvency Test
The Board has made an assessment of the
solvency of the Bank and also obtained a
Statement of Solvency from its External
Auditors that the Solvency Test will be
satisfied immediately after the payment of
the proposed dividend by the Bank in
accordance with Sections 56 and 57 of
the Companies Act No. 7 of 2007.
Capital Expenditure
The total capital expenditure incurred on
the acquisition of property, plant and
equipment during the year amounted to
Rs.1,293,942,214/- details of which are
given in Note 26 to the Accounts.
Property, Plant and Equipment
The details of the property, plant and
equipment are given in Note 26 to the
Accounts.
Reserves
Total reserves (including statutory Reserve
Fund) of the Group as at 31st December
2007 amounted to Rs.5,702,353,950/-
(Rs.4,940,097,226/- in 2006) details of
which are given in Notes 37 to the
Accounts.
Rs.’000
2007 2006 (restated)
Profit before taxation 1,669,664 1,663,948
Less :Taxation 535,142 730,816
Profit after taxation 1,134,522 933,132
Attributable to Minority Interest (113,836) (58,481)
Net profit attributable to Shareholders 1,020,686 874,651
Retained profit brought forward after dividend 2,905,074 1,964,033
Profit available for appropriation 3,925,760 2,838,684
Transfer to Reserve Fund (45,366) (47,314)
Other Transfers 68,731 368,936
Balance carried forward 3,949,125 3,160,306
-
Donations
During the year, the Company made
donations amounting to Rs.56,407,813/-.
(Donations made in 2006 amounted to
Rs.34,432,389/-).
Stated Capital
In terms of Section 58 of the Companies
Act No. 7 of 2007, share capital and share
premium have been reclassified as stated
capital. Accordingly, the Stated Capital of
the Bank as at 31st December 2007 was
Rs.2,542,420,326/- consisting of
Seylan Bank PLC – Annual Report 2007
47

ANNUAL REPORT OF THE BOARD OF DIRECTORS...
43,560,000 ordinary (voting) shares,
3,390,100 non-redeemable, noncumulative,
non-convertible and nonvoting
Preference shares and 123,560,000
non-voting ordinary shares and share
premium of Rs.837,319,324/-.
Shareholdings
As at 31st December 2007, there were
7,962 and 5,878 registered ordinary
(voting) and ordinary (non-voting)
shareholders and 972 non-redeemable,
non-cumulative, non- convertible and nonvoting
Preference shareholders
respectively of the Bank. An analysis of the
distribution of the ordinary voting and
non-voting shareholders are given on page
112 of the Annual report.The twenty
largest Ordinary Voting and Non-voting
shareholders of the Bank are given on
page 111 of the Annual Report.
Debt Capital
The Bank had the following Listed Debt as
at 31st December 2007, details of which
are given on pages 112 & 113 of the
Annual Report:
each (2007/2012 – Issue 2). Both Issues
were to meet capital adequacy
requirements of the Bank.
Investors’ Information
Information including earnings, profitability,
dividend, net assets and market value per
share is given under Financial Highlights
appearing on page 3 of the Annual Report.
Information pertaining to share prices
(both voting and non-voting) and
debenture prices is given on pages 112 &
113 of the Annual Report.
Directorate
The Board of Directors of the Bank as at
31st December 2007 were as follows :
1 Deshamanya Dr J L B Kotelawala
2 Lady Dr Sicille P C Kotelawala
3 Mr R Renganathan
4 Mr A M Pasqual
5 Mr A D Jegasothy
6 Mr S K M Perera
7 Ms M Sabaratnam
8 Dr P R Anthonis
9 Mr S C O De Livera
the Annual General Meeting of the Bank
held on 26th June 2007 and was reelected.
Dr P R Anthonis and Mr S C O De Livera
retired from the Board of Directors on
01st February 2008. Mr C Kotigala and
Mrs L Seneviratne were appointed to the
Board of Directors of the Bank with effect
from the said date.
In terms of Article 87 of the Articles of
Association of the Bank, Mr C Kotigala and
Mrs L Seneviratne retire as directors at
the Annual General Meeting and being
eligible, offer themselves for re-election.
In terms of Article 95 of the Articles of
Association of the Company, Directors,
M/s R Renganathan, S K M Perera and K A
S Jayatissa retire by rotation at the Annual
General Meeting and being eligible offer
themselves for re-election.
Appointment as Chairperson
Lady Dr Sicille P C Kotelawala was
appointed as Chairperson of the Bank
with effect from 1st February 2008.
Type
No. of Debentures
of Rs. 100/- each
Unsecured Subordinated Redeemable Five Year
Debentures - 2003/2008 15,000,000
-do - - 2006/2011 12,573,150
-do - - 2007/2012 7,494,000
-do - - 2007/2012 (Issue 2) 5,592,850
-
Redesignations
With effect from 1st February 2008
Dr. J.L.B. Kotelawala was redesignated
Founder Chairman / Managing Director
and Mr. R. Renganathan as Deputy
Chairman / Chief Financial Officer
of the Bank.
Debentures issued in 2007
In May 2007 the Bank concluded a public
quoted issue of 7,494,000 Unsecured
Subordinated Redeemable five-year
Debentures of Rs.100/- each amounting
to Rs.749,400,000/-. In December 2007
the Bank raised a further sum of
Rs.559,285,000/- by the issue of 5,592,850
Unsecured Subordinated Redeemable
five-year Listed Debentures of Rs.100/-
10 Mr K A S Jayatissa
11 Mr P T Sirisena
12 Mr J G S De SIlva
Mr J E P A de Silva resigned from the
Board with effect from 11th May 2007
and Mr J G S De Silva was appointed to
the Board with effect from the said date.
In terms of Article 87 of the Articles of
Association, Mr J G S De Silva retired at
48
Seylan Bank PLC – Annual Report 2007

ANNUAL REPORT OF THE BOARD OF DIRECTORS...
Directors’ holdings of securities in the
Bank
Details of Directors’ holdings in securities
in the Bank as at 31st December 2007 are
given below:
Shareholdings (Voting, Non-voting & Preference )
Directors’ Interest in Contracts
The Directors have no direct or indirect
interests in any contract or proposed
contract of the company, except those
specified in Note 41 and 42 to the
Audited Accounts which have been
disclosed and declared at the meetings of
the Directors. As a practice, Directors
have refrained from voting on matters in
which they were directly or indirectly
interested.
31.12.2007 31.12.2006
Dr J L B Kotelawala 529,525(V) 529,525(V)
37,300(P)
37,300(P)
Dr J L B Kotelawala (joint with
Lady Dr Sicille P C Kotelawala) 181,500(V) 181,500(V)
Lady Dr Sicille P C Kotelawala 6,554(V) 6,554(V)
6,554(NV) 6,554(NV)
Mr R Renganathan 70,100(V) 48,600(V)
Mr A M Pasqual 4,000(V) 4,000(V)
33,000(NV) 33,000(NV)
Mr A D Jegasothy 8,369(V) 8,369(V)
Mr A D Jegasothy
(joint with Mrs C F R Samaranayake) 8,369(NV) 8,369(NV)
Ms M Sabaratnam 150(V) 150(V)
150(NV)
150(NV)
Mr S K M Perera 1,000(V) 1,000(V)
1,000(NV) 1,000(NV)
Dr P R Anthonis 21,800(V) 21,800(V)
(retired w.e.f. 01/02/2008)
Mr S C O De Livera 4,537(V) 4,537(V)
(retired w.e.f. 01/02/2008) 4,537(NV) 4,537(NV)
Mr K A S Jayatissa 100(V) 100(V)
Mr P T Sirisena 1,000(V) 1,000(V)
6,957(NV) 6,957(NV)
Mr J G S De Silva 1,044(V) 1,044(V)
2,044(NV) 2,044(NV)
Debentureholdings
31.12.2007 31.12.2006
Dr J L B Kotelawala (2007/12) 50,000 -
Lady Dr Sicille P C Kotelawala (2006/11 & 2007/12 Issue 2) 15,000 5,000
Mr A M Pasqual (2007/12) 2,500 -
Ms M Sabaratnam (2007/12) 11,000 -
-
Directors’ Interests Register
Disclosures required to be made in the
Annual Report of the Board in terms of
Section 168 (1) (e) of the Companies Act
No. 7 of 2007 with regard to entries in
the Interest Register have been disclosed
in Note 41 – ‘Directors’ interest in
Contracts’ and Note 42 ‘Related Party
Transactions’ in the Audited Accounts.
Directors’ other interests are set out as an
annexure to this Report.
Directors’ Remuneration
Directors’ remuneration paid in respect of
the Bank and Group during the year under
review is given in Note 6 to the Audited
Accounts.
Board Sub-committees
The following board sub-committees were
also formed as at 31st December 2007:
Audit Committee
Members: M/s K A S Jayatissa-(Chairman)
(appointed w.e.f. 12.03.08), A D
Jegasothy and P T Sirisena (appointed
w.e.f. 12.03.08)
Credit Committee
Members: Dr J L B Kotelawala
(Chairman) / Mr R Renganathan and Ms
M Sabaratnam
Integrated Risk Management Committee
M/s P T Sirisena (Chairman), A M
Pasqual, Mrs L Seneviratne
Going Concern
The Directors are satisfied that the Bank
has adequate resources to continue its
operations in the foreseeable future.The
financial statements of the Bank have
accordingly been prepared on a going
concern basis.
Directors’ Responsibility for Financial
Reporting
The Directors are responsible for the
preparation of the financial statements of
the Bank to reflect a true and fair view of
its state of affairs.The Directors are of the
view that these financial statements have
been prepared in conformity with the
Sri Lanka Accounting Standards, the
Companies Act No. 7 of 2007and the
Seylan Bank PLC – Annual Report 2007
49

ANNUAL REPORT OF THE BOARD OF DIRECTORS...
Banking Act No. 30 of 1988 as amended
and the listing rules of the Colombo Stock
Exchange.The Directors are accordingly
satisfied that the financial statements
presented herein give a true and fair view
of the state of affairs of the Bank and the
group as at 31st December 2007 and the
profit for the year then ended.
Corporate Governance
The Bank has put in place systems and
procedures to ensure the implementation
of sound corporate governance principles.
An overview of such practices adopted
within the Bank is given on page 37 to 39
of the Annual Report.
Regulatory Compliance with Corporate
Governance Rules
As at date, the Mandatory Code of
Corporate Governance promulgated by
the Central Bank of Sri Lanka has been
challenged in the Supreme Court of Sri
Lanka and in the Court of Appeal of Sri
Lanka. Since certain provisions of the said
Code overlap corporate governance
requirements set out in Section 6 of the
Listing Rules of the Colombo Stock
Exchange, the outcome of the above
litigation will determine the composition of
the Board of Directors of the Bank and the
extent of compliance with the aforesaid
Code and the Corporate Governance
rules of the Colombo Stock Exchange.
Corporate Social Responsibility
The Bank’s corporate social responsibility
endeavours are given in pages 34 & 35 of
the Annual Report.
Statutory Payments
The Directors are satisfied that to the best
of their knowledge and belief, all statutory
payments due to the government, other
regulatory institutions and to the
employees of the Bank have been made
upto date.
Employees Share Owning Scheme
The Bank has in place several employee
share owning trusts established to provide
an additional benefit to the employees at
the time of their retirement/resignation
over and above their gratuity entitlement.
The trusts have acquired shares of the
Bank from time to time. All shares held by
the trusts have been purchased at the
market price/s prevailing at the time.
Post Balance Sheet Events
No events have occurred after the
balance sheet date which would require
adjustments to or disclosure in the
Accounts, other than those given in Note
40 to the Accounts.
Auditors
The retiring Auditors, M/s KPMG Ford,
Rhodes,Thornton & Co., Chartered
Accountants have signified their willingness
to continue in office and a resolution to
re-appoint them as Auditors and
authorising the Directors to fix their
remuneration will be proposed at the
Annual General Meeting.
M/s KPMG Ford, Rhodes,Thornton & Co.
are also the Auditors of the Bank’s
subsidiaries viz. Seylan Merchant Bank PLC,
Seylan Bank Asset Management Ltd and
sub-subsidiaries viz. SMB Money Brokers
(Pvt) Ltd, SMB Real Estate Ltd, Seylan
Merchant Leasing PLC and SMB
Securities (Pvt) Ltd.
A sum of Rs.3,945,000/- is payable to the
Auditors as consolidated Audit Service
fees for the year under review (company –
Rs.3,000,000/-), Rs.1,755,000/- as Auditrelated
fees (company – Rs.1,625,000/-)
and Rs.433,160/- as Non-Audit fees
(company – Nil).
Based on the declaration made by M/s
KPMG Ford Rhodes Thornton & Co, and
as far as the directors are aware, the
Auditors do not have any relationship with
or interest in the Company or its
subsidiaries or sub-subsidiaries other than
those disclosed in the above paragraphs.
Notice of Meeting
Notice of Meeting relating to the Twenty
First Annual General Meeting of the Bank
is given on page 126 of the Annual Report.
For and on behalf of the Board
Mr R Renganathan
Deputy Chairman/Chief Financial Officer
Mr A M Pasqual
Director/General Manager/Chief Executive
(Ms) M R S Gunasekara
Company Secretary
13th May 2008.
50
Seylan Bank PLC – Annual Report 2007

ANNUAL REPORT OF THE BOARD OF DIRECTORS...
Interest Register
Details of Directors' Interests in Contracts and proposed contracts, Directors' direct / indirect shareholdings, accommodation granted to
Directors, remuneration paid to Directors and related party transactions are given in Notes 6, 41 and 42 of the Audited Accounts and
in the Annual Report of the Board.
In addition, all other directorships as at 31st December 2007 disclosed and declared by the Directors pursuant to Section 192(2) of the
Companies Act No.7 of 2007 are given below:
Name of Director Directorships held in other Entities Position held
DR J L B KOTELAWALA Ceylinco Consolidated Chairman
(Chairman of all companies under Ceylinco Consolidated except the following viz.
C A S Recoveries & Custodial Services (Pvt) Ltd,
Seylan Bank Asset Management Ltd, Seyfest (Pvt) Ltd,
Seybest (Pvt) Lltd, Sotse (Pvt) Ltd, Esots (Pvt) Lltd, Seyshop (Pvt) Ltd)
LADY DR SICILLE P C KOTELAWALA Ceylinco Children Education Foundation Ltd Deputy Chairperson
Ceylinco Employees Sports Complex (Pvt) Ltd
Deputy Chairperson
Ceylinco Freight International (Pvt) Ltd
Deputy Chairperson
Ceylinco Global Services Ltd
Deputy Chairperson
Ceylinco Hotel Coffee Co. Ltd
Deputy Chairperson
Ceylinco Maini (Pvt) ltd
Deputy Chairperson
Ceylinco Overseas (Pvt) Ltd
Deputy Chairperson
Ceylinco Sisila Medura (Pvt) Ltd
Deputy Chairperson
Ceylinco Tourist Hotels Limited
Deputy Chairperson
Ceylinco Travels & Tours Ltd
Deputy Chairperson
Ceylinco Universal Services (Pvt) Ltd
Deputy Chairperson
Lunar Residencies (Pvt) Ltd
Deputy Chairperson
Onano Centre (Pvt) Ltd
Deputy Chairperson
South Asian Travels Ltd
Deputy Chairperson
TFC Agro (Pvt) Ltd
Deputy Chairperson
Utopia Projects (Pvt) Ltd
Deputy Chairperson
Ceylinco Consolidated
Director
(Director of all other companies under Ceylinco Consolidated except the
following companies viz. C A S Recoveries & Custodial Services (Pvt) Ltd,
Seylan Bank Asset Management Ltd, Seyfest (Pvt) Ltd, Seybest (Pvt) Ltd,
Sotse (Pvt) Ltd, Esots (Pvt) Ltd, Seyshop (Pvt) Ltd, Ceylinco Industries (Pvt) Ltd,
Ceylinco Printing & Stationery (Pvt) Ltd, Ceylinco Computer Forms (Pvt) Ltd,
Ceylinco Grameen Portfolio Mgmt (Pvt) Ltd,
Ceylinco Grameen Development Fund Co. (Pvt) Ltd,
Ceylinco Hairdressers (Pvt) Ltd, Ultratech Ceylinco (Pvt) Ltd)
MR R RENGANATHAN C.D.B ESOP Trust Fund (Pvt) Ltd Deputy Chairman
Ceylinco Pensions (Pvt) Ltd
Deputy Chairman
Seraka Investments Ltd
Deputy Chairman
Serene Resorts Ltd
Deputy Chairman
Ceylinco Capital Market Ltd
Director
Ceylinco Children Education Foundation Ltd
Director
Ceylinco Global services Ltd
Director
Ceylinco Hospital Services Ltd
Director
Ceylinco Industrial Property Development Co. Ltd
Director
Ceylinco Overseas (Pvt) Ltd
Director
Ceylinco Seraka Ltd
Director
Ceylinco Tourist Hotels Ltd
Director
Ceylinco Universal Ltd
Director
Ciesot (Pvt.) Limited
Director
Seylan Bank PLC – Annual Report 2007
51

ANNUAL REPORT OF THE BOARD OF DIRECTORS...
Name of Director Directorships held in other Entities Position held
Eceylinco.com (Pvt) Ltd
Openarc Global Solutions (Pvt) Ltd
Sarana International (Pvt) Ltd
Seylan Agricultural Credit Co. Ltd
Seylan Credit Card Company Ltd
Seylan Exim Co. (Pvt) Ltd
Seylan Gold Investments Ltd
SMB Money Brokers (Pvt) Ltd
Director
Director
Director
Director
Director
Director
Director
Director
MR A M PASQUAL Ceylinco Corporate Finance (Pvt) Ltd Director
Ceylinco Leisure Properties Ltd
Director
Seylan Agricultural Credit Co. Ltd
Director
Seylan Exim Co. (Pvt) Ltd
Director
Seylan Gold Investments Ltd
Director
MR A D JEGASOTHY Ceylinco Design & Project Mgmt Co. (Pvt) Ltd Deputy Chairman/MD
Blue Diamond Cutters Ltd
Director
Blue Diamonds Brilliance (Pvt) Ltd
Director
Ceyenergy Electronic Company (Pvt) Ltd
Director
Ceyfco Property Co. (Pvt) Ltd
Director
Ceylinco Green Agro Lanka (Pvt) Ltd
Director
Ceylinco Profit Sharing Investment Corp. Ltd
Director
Ceylinco Education Group Ltd
Director
Ceylinco Home Nursing Services (Pvt) Ltd
Director
Ceylinco Hospital Services Ltd
Director
Ceylinco Lifestyle Residencies Co. Ltd
Director
Ceylinco Medical Services (Pvt) Ltd
Director
Ceylinco Professional Development Co. (Pvt) Ltd
Director
Ceylinco Profit Sharing Investment Corp. Ltd
Director
Ceylinco Shriram Capital Management Services Co. (Pvt) Ltd
Director
Ceylinco Technology Infrastructure (Pvt) Ltd
Director
Ceypower Cascades (Pvt) Ltd
Director
Eceylinco.com (Pvt) Ltd
Director
Enspire Technologies (Pvt) Ltd
Director
Green Agro Lanka (Pvt) Ltd
Director
Seraka Investments Ltd
Director
SMB Money Brokers (Pvt) Ltd
Director
MR S K M PERERA Bartercard Lanka Ltd Chairman
Asia 400 (Pvt) Ltd
Deputy Chairman/CED
Ceyenergy Electronic Company (Pvt.) Ltd.
Deputy Chairman/CED
Ceylec Ltd
Deputy Chairman/CED
Ceylinco Consumer Electronics Ltd
Deputy Chairman/CED
Ceylinco Hospital Services Ltd
Deputy Chairman/CED
Ceylinco hospitals Ltd
Deputy Chairman/CED
Ceylinco Midigama Fruit Farms (Pvt) Ltd
Deputy Chairman/CED
Ceylinco Midigama Trading Co. Ltd
Deputy Chairman/CED
CNT International Ltd
Deputy Chairman/CED
Golden Energy Co. Ltd
Deputy Chairman/CED
Golden Key Agrokem Company Ltd
Deputy Chairman/CED
Golden Key Call Centre Ltd
Deputy Chairman/CED
52
Seylan Bank PLC – Annual Report 2007

ANNUAL REPORT OF THE BOARD OF DIRECTORS...
Name of Director Directorships held in other Entities Position held
Golden Key Communications (Pvt) Ltd
Golden Key Consumer Durables Ltd
Golden Key Consumer Products Ltd
Golden Key Designer Homes Ltd
Golden Key Eye Hospital Ltd
Golden Key Holdings Ltd
Golden Key Management Services Ltd
Golden Key Minerals Ltd
Golden Key Motor Company Ltd
Golden Key Real Estate Agency Ltd
Golden Key Reproductive Health Ltd
Golden Key Tea Factory Ltd
Golden Key Travels (Pvt) Ltd
Impression Creative Solutions Ltd
Lanka Ecom Technologies Ltd
Lumen Technologies Ltd
The Golden Key Institute Of Information Technology Ltd
The Golden Key Trading Co. Ltd
Ceylinco Capital Ltd
Ceylinco Children Education Foundation Ltd
Ceylinco Design & Project Management Co. (Pvt) Ltd
Ceylinco Pharmaceuticals Ltd
Ceylinco Securities Share Ownership Trust Company (Pvt) Ltd
Eceylinco.com (Pvt) Ltd
Lanka Electronic Payment Systems (Pvt) Ltd
The Finance Portfolio Mgmt Co. Ltd
Deputy Chairman/CED
Deputy Chairman/CED
Deputy Chairman/CED
Deputy Chairman/CED
Deputy Chairman/CED
Deputy Chairman/CED
Deputy Chairman/CED
Deputy Chairman/CED
Deputy Chairman/CED
Deputy Chairman/CED
Deputy Chairman/CED
Deputy Chairman/CED
Deputy Chairman/CED
Deputy Chairman/CED
Deputy Chairman/CED
Deputy Chairman/CED
Deputy Chairman/CED
Deputy Chairman/CED
Director
Director
Director
Director
Director
Director
Director
Director
(MS) M SABARATNAM Ceylinco Housing Development Corp. (Pvt) Ltd Deputy Chairperson/CED
Ceylinco Prosperity (Pvt) Ltd
Deputy Chairperson/CED
C.D.B Esop Trust Fund (Pvt) Ltd
Director
Ceylinco Business School (Pvt) Ltd
Director
Ceylinco IFA Training Services (Pvt) Ltd
Director
Ceylinco Industrial Property Developments (Pvt) Ltd
Director
Ceylinco IT Solutions (Pvt) Ltd
Director
Ceylinco Overseas (Pvt) Ltd
Director
Ceylinco Pensions (Pvt.) Limited
Director
Ceylinco Profit Sharing Investment Corp. Ltd
Director
Ceylinco Sussex Educational Publishers (Pvt) Ltd
Director
Ceylinco Tourist Hotels Ltd
Director
CT & FC Portfolio Management (Pvt) Ltd
Director
CT & FC Secretarial Services (Pvt) Ltd
Director
F & G Markcom (Pvt) Ltd
Director
F & G Consultancy Services (Pvt) Ltd
Director
F & G Housing (Pvt) Ltd
Director
Fingara Town & Country Club (Pvt) Ltd
Director
San Michelle Resorts Ltd
Director
Sarana International (Pvt) Ltd
Director
TFC Import & Export Co. (P) Ltd
Director
TFC Residencies Ltd
Director
The Finance Portfolio Management Co. Ltd
Director
Seylan Bank PLC – Annual Report 2007 53

ANNUAL REPORT OF THE BOARD OF DIRECTORS...
Name of Director Directorships held in other Entities Position held
MR S C O DE LIVERA Ceylinco Sports Complex Ltd Director
(since retired)
MR K A S JAYATISSA Ceylinco IFA Training Services (Pvt) Ltd Deputy Chairman
Ceylinco IT Solutions (Pvt) Ltd
Deputy Chairman
Ceylinco Multi Crop Exporters (Pvt) Ltd
Deputy Chairman
Ceylinco Profit Sharing Investment Corp. Ltd
Deputy Chairman
Ceylinco Sussex Business School (Pvt) Ltd
Deputy Chairman
Ceylinco Sussex Educational Publishers (Pvt) Ltd
Deputy Chairman
Ceylinco Sussex Teacher Training College Ltd
Deputy Chairman
Ceylinco Sussex Vocational Training (Pvt) Ltd
Deputy Chairman
CT & FC Portfolio Management (Pvt) Ltd
Deputy Chairman
CT & FC Secretarial Services (Pvt) Ltd
Deputy Chairman
The Finance Portfolio Management (Pvt) Ltd
Finance Director / CEO
Ceylinco Capital Ltd
Director
Ceylinco Corporate Finance (Pvt) Ltd
Director
Ceylinco E V Company (P) Ltd
Director
Ceylinco Gemcorp International Ltd
Director
Ceylinco Grameen Agricultural Credit (Pvt) Ltd
Director
Ceylinco Grameen Products Ltd
Director
Ceylinco Green Agro Lanka Co. (Pvt) Ltd
Director
Ceylinco Homes International (Lotus Towers) Ltd
Director
Ceylinco Housing Development Corporation (Pvt) Ltd
Director
Ceylinco Housing Property Fund Ltd
Director
Ceylinco Leisure Properties Ltd
Director
Ceylinco Property Fund Co. Ltd
Director
Ceylinco Prosperity (Pvt) Ltd
Director
CLC Asset Management (Pvt) Ltd
Director
CTV Network (Pvt) Ltd
Director
F & G Consultancy Services (Pvt) Ltd
Director
F & G Housing (Pvt) Ltd
Director
F & G Markcom (Pvt) Ltd
Director
Fingara Town & Country Club (Pvt) Ltd
Director
San Michele Resorts Ltd
Director
San Sen Holdings (Pvt) Ltd
Director
Sarana International (Pvt) Ltd
Director
Seylan Agricultural Credit Co. Ltd
Director
Seylan Exim Co. (Pvt) Ltd
Director
TFC Agro (Pvt) Ltd
Director
TFC Import & Export Co. (P) Ltd
Director
TFC Residencies Ltd
Director
TFC Tank Preservation Co. (Pvt) Ltd
Director
MR P T SIRISENA Ceylinco Design & Project Management Co. (Pvt) Ltd Director
Ceylinco Grameen Agricultural Credit Ltd
Director
Ceylinco Group Library
Director
Ceylinco Profit Sharing Investment Corporation Ltd
Director
Seylan Exim Co. (Pvt) Ltd
Director
MR J G S DE SILVA Ceylinco ERA (Pvt) Ltd Director
Seylan Exim Co. (Pvt) Ltd
Director
Trans Lanka Solutions (Pvt) Ltd
Director
54
Seylan Bank PLC – Annual Report 2007

DIRECTORS’ RESPONSIBILITY FOR
FINANCIAL REPORTING
The Bank’s Financial Statements for the
year 2007 prepared and presented in this
report are in conformity with the
requirements of the Sri Lanka Accounting
Standards, the Companies Act No. 7 of
2007, the Banking Act No. 30 of 1988 as
amended.The Financial Statements reflect
a true and fair view of the state of affairs
of the Group as at that date.
The Board of Directors has instituted an
effective and comprehensive system of
Internal Control.This comprises Internal
Check, Internal Audit, Information Systems
Audit and the whole system of Financial
and other controls required to carry on
the business of banking in an orderly
manner, safeguard its assets and secure as
far practicable the accuracy and reliability
of the records.
The Bank’s Auditors, M/s KPMG Ford,
Rhodes,Thornton & Co. carry out reviews
and test checks on effective internal
control, as they consider appropriate and
necessary for providing their opinion on
the Financial Statements.
The Bank Supervision Department of the
Central Bank of Sri Lanka carries out
periodical examinations to ensure
conformity to the provisions of the
Banking Act and the relevant guidelines
arising therefrom.
M/s KPMG Ford, Rhodes,Thornton & Co.
have examined the Financial Statements
made available together with all other
financial records and related information
and expressed their opinion which
appears on page 57 of the Annual Report.
BY ORDER OF THE BOARD
(Ms) M R S Gunasekara
Company Secretary
13th May 2008
The Board of Directors oversees the
Management responsibility for financial
reporting by their regular meetings during
which monthly Management Accounts are
also reviewed.
Seylan Bank PLC – Annual Report 2007
55

AUDIT COMMITTEE REPORT
The Audit Committee comprising three
non-executive Directors of the Bank has
conducted four quarterly meetings during
the year.The Deputy General Manager,
Audit & Inspection functions as the
Secretary to the Committee whereas the
Assistant General Manager Information
Systems Audit reports on activities relating
to Information Systems of the Bank.
The External Auditors attended one of
the Audit Committee Meetings during the
year. Further, the Director/General
Manager/CEO or his representative takes
part in Audit Committee Meetings for the
purpose of clarifying matters raised by the
committee. Director Compliance attended
Meetings for the purpose of reporting on
matters relating to the standard of
Compliance of the Bank and Risk
Management which were reviewed by the
Committee. Senior Manager – Finance too
attends all meetings for the purpose of
reporting on the progress of the
implementation of Basel II requirements.
From time to time, as and when
requirements arise, Heads of Ranges and
Heads of Human Resource Management
are required to be present at the meetings
in order to obtain various clarifications.
strengthen procedures & internal control
systems with a view to managing
Operational Risk & improving overall
quality of the Bank.
A summary of all the above activities
highlighting any matters of importance is
submitted to the Board of Directors on a
quarterly basis.
The Audit Committee has recommended
to the Board of Directors that M/s KPMG
Ford Rhodes,Thornton & Company,
Chartered Accountants be appointed as
Auditors for the financial year ending 31st
December 2008, subject to the approval
of the Shareholders at the next Annual
General Meeting.
K.A.S. Jayatissa
Chairman
Audit Committee
19th March 2008
The Committee reviewed the progress of
Audits and Inspections carried out by the
Internal Audit & Information Systems
Audit Departments of the Bank as against
the Audit Plan approved by the
Committee for the year, on a quarterly
basis.Taking all these into consideration
the Committee made its
recommendations from time to time to
56
Seylan Bank PLC – Annual Report 2007

Seylan Bank PLC – Annual Report 2007 57

INCOME STATEMENT
For the year ended 31st December Bank Bank Group Group
NOTE 2007 2006 2007 2006
Rs.'000 Rs.'000 Rs.'000 Rs.'000
Restated
Restated
Income 2 21,079,885 17,183,481 22,808,262 18,684,144
Interest Income 3 17,806,815 14,123,852 19,061,484 15,394,855
Interest Expenses 4 11,022,689 7,994,959 12,077,944 9,028,979
Net Interest Income 6,784,126 6,128,893 6,983,540 6,365,876
Other Income 5 3,273,070 3,059,629 3,746,778 3,289,289
10,057,196 9,188,522 10,730,318 9,655,165
Less: Operating Expenses 6
Personnel Costs 2,801,723 2,257,009 2,959,430 2,406,162
Premises, Equipment & Establishment Expenses 1,252,689 1,154,061 1,312,087 1,204,817
Fee and Commission Expenses 43,156 83,524 51,327 92,521
Provision for Staff Retirement Benefit 415,036 321,730 427,225 328,240
Other Overhead Expenses 2,156,422 1,611,756 2,310,774 1,739,796
Diminution / (Appreciation) in Value of Investments (7) 58 9,270 18,054
Goodwill on Consolidation - - - (263)
6,669,019 5,428,138 7,070,113 5,789,327
Profit on Ordinary Activities before Loan loss Provision,Tax & Associate
Company Profit 3,388,177 3,760,384 3,660,205 3,865,838
Less : Loan Losses & Provisions 7 1,365,075 1,684,495 1,398,870 1,728,143
Profit on Ordinary Activities before Taxes & Associate Company profit 2,023,102 2,075,889 2,261,335 2,137,695
Share of Associate Company Profits after Tax - - 407 -
Profit on Ordinary Activities before Taxes 2,023,102 2,075,889 2,261,742 2,137,695
Less:Value Added Tax on Profit 584,033 469,007 592,078 473,747
Profit on Ordinary Activities After VAT before Tax 1,439,069 1,606,882 1,669,664 1,663,948
Less:Tax on Profits on Ordinary Activities 8 515,880 718,814 535,142 730,816
Profit on Ordinary Activities After Taxes 923,189 888,068 1,134,522 933,132
Attributable to Minority Interest - - 113,836 58,481
Net Profit Attributable to Shareholders of the Bank 923,189 888,068 1,020,686 874,651
Basic Earnings Per Share (Rs.) 9 5.50 6.69 6.08 6.59
The Significant Accounting policies and notes to the Financial Statements which appear on pages 62 to 108 form an integral part of these
Financial Statements.
58
Seylan Bank PLC – Annual Report 2007

BALANCE SHEET
As at 31st December Bank Bank Group Group
NOTE 2007 2006 2007 2006
Rs.'000 Rs.'000 Rs.'000 Rs.'000
Restated
Restated
Assets
Cash and Short Term Funds 11 2,853,324 2,951,333 2,878,887 3,003,567
Balance with Central Bank of Sri Lanka 12 7,915,660 6,913,224 7,915,741 6,913,338
Treasury Bills and Bonds Eligible for Rediscounting With Central Bank 13 11,113,286 4,534,735 15,511,396 5,820,220
Treasury Bonds Maturing after One Year 14 11,273,746 11,598,950 12,183,121 13,794,630
Government and other Securities held for dealing Purpose 15 150 143 282 287
Placements with and loans to other Banks, Finance Companies & Other 16 1,129,923 1,448,038 1,186,405 1,473,016
Investment Securities 17 1,221,218 158,491 1,411,734 323,628
Securities purchased under Resale Agreements 454,648 1,300,000 1,192,922 1,337,283
Bills of Exchange 18 1,967,091 1,827,824 1,967,091 1,827,824
Loans and Advances 19 89,017,069 83,901,504 89,976,544 85,038,415
Lease Rentals Receivable Not Later Than One Year 20 2,816,480 2,782,481 3,632,268 3,824,375
Lease Rentals Receivable Later Than One Year And
not later than five years 21 3,847,427 4,728,476 5,585,106 6,681,006
Lease Rentals Receivable Later Than Five Years 22 3,310 18,641 14,806 18,641
Investments in Subsidiary Companies 23 1,093,407 1,048,559 - -
Investments in Associate Companies - - 49,950 -
Investment Properties 24 149,394 175,326 1,607,633 1,425,470
Group Balances Receivable 25 411,629 369,847 - -
Property Plant & Equipment 26 3,690,014 3,135,030 5,179,324 4,644,555
Other Assets 27 4,963,792 3,413,506 6,042,793 4,295,612
Intangible Assets 28 - - 26,848 28,286
Deferred Tax Assets 32.a - - 13,332 8,730
Total Assets 143,921,568 130,306,108 156,376,183 140,458,883
Liabilities
Deposits 29 111,299,612 100,078,809 112,436,861 100,078,809
Borrowings 30 6,169,776 4,080,171 8,386,673 7,566,992
Securities sold under re-purchase agreements 3,121,654 4,304,398 8,888,114 7,527,218
Group Balances Payable 31 497,663 485,510 - -
Current Taxation 472,306 817,297 541,082 911,700
Provision for Deferred Taxation 32.b-d 41,948 341,281 41,948 341,764
Other Liabilities 33 9,798,024 9,047,729 10,318,289 9,598,411
Debentures 34 5,484,350 4,782,635 5,806,547 5,331,023
Total Liabilities 136,885,333 123,937,830 146,419,514 131,355,917
Equity
Stated Capital 35 2,542,420 2,542,420 2,542,420 2,542,420
Statutory Reserve Fund 36 468,250 422,091 474,661 429,295
Reserves 37 4,025,565 3,403,767 5,227,693 4,510,803
7,036,235 6,368,278 8,244,774 7,482,518
Minority Interest 1,711,895 1,620,448
Total Equity 7,036,235 6,368,278 9,956,669 9,102,966
Total Liabilities & Equity 143,921,568 130,306,108 156,376,183 140,458,883
Commitments & Contingencies 38 24,335,965 22,924,450 24,344,830 22,947,626
The Significant Accounting policies and notes to the Financial Statements which appear on pages 62 to 108 form an integral part of these
Financial Statements.
It is certified that the Financial Statements have been prepared in compliance with the requirements of the Companies Act No. 7 of 2007.
Approved and signed for and on behalf of the Board.
R. Renganathan
Deputy Chairman / Chief Financial Officer
Deshamanya Dr. Lalith Kotelawala
Founder Chairman / Managing Director
A. Pasqual
Director/General Manager/Chief Executive
Mrs. S Gunasekara
Company Secretary
13th May 2008
Colombo
Seylan Bank PLC – Annual Report 2007
59

STATEMENT OF CHANGES IN EQUITY
For the year ended 31st December 2007 - Bank
(Rs.000)
Stated Capital
Share Share Reserve Retained Revaluation Other
Capital Premium Fund Profits Reserve Reserves Total
Restated Restated Restated Restated
As at 01.01.2006 869,501 674,922 377,688 1,914,643 77,717 711,808 4,626,279
Issue of Non Voting Ordinary Shares 835,600 208,900 1,044,500
Net Profit Attributable to the Shareholders of the Bank 888,068 888,068
Dividends - Note 10 (337,196) (337,196)
Debenture / Non Voting Share Issue Expenses (46,503) (46,503)
Transfers from / to Retained Profits 44,403 215,597 (260,000) -
Deferred Tax Impact on Revaluation Reserve (11,502) (11,502)
Other Transfers 204,632 204,632
Balance as Restated as at 31.12.2006 1,705,101 837,319 422,091 2,681,112 270,847 451,808 6,368,278
As at 01.01.2007 1,705,101 837,319 422,091 2,681,112 270,847 451,808 6,368,278
Issue of Non Voting Ordinary Shares -
Net Profit Attributable to the Shareholders of the Bank 923,189 923,189
Dividends - Note 10 (255,232) (255,232)
Transfers from / to Retained Profits 46,159 25,770 (71,929) -
Deferred Tax Impact on Revaluation Reserve -
Other Transfers - -
As at 31.12.2007 1,705,101 837,319 468,250 3,374,839 198,918 451,808 7,036,235
For the year ended 31st December 2007 - Group
(Rs. 000)
Stated Capital
Share Share Reserve Retained Revaluation Other Minority Total
Capital Premium Fund Profits Reserve Reserves Total Interest Equity
Restated Restated Restated Restated Restated
As at 01.01.2006 869,501 674,922 381,981 2,301,229 528,337 975,904 5,731,874 1,438,518 7,170,392
Reversal of negative goodwill 31,553 31,553 31,553
Value of deemed disposal 248 (1,635) (1,578) (2,965) 4,840 1,875
Balance as Restated as at 01. 01. 2006 869,501 674,922 381,981 2,333,030 526,702 974,326 5,760,462 1,443,358 7,203,820
Issue of Non Voting Ordinary Shares 835,600 208,900 1,044,500 97,000 1,141,500
Net Profit Attributable to the Shareholders 874,651 874,651 58,481 933,132
Dividends - Note 10 (337,196) (337,196) (18,698) (355,894)
Debenture / Non Voting Share Issue Expenses (46,503) (46,503) (46,503)
Transfers from / to Retained Profits 47,314 297,749 (83,661) (260,000) 1,402 78,914 80,316
Deferred Tax Impact on Revaluation Reserve (11,502) (11,502) (11,502)
Transfers from / to revaluation reserve - (80,316) (80,316)
Increase / decrease in Share Premium - (1,113) (1,113)
Other Transfers (7,928) 204,632 196,704 42,822 239,526
Balance as Restated as at 31.12.2006 1,705,101 837,319 429,295 3,160,306 636,171 714,326 7,482,518 1,620,448 9,102,966
As at 01.01.2007 1,705,101 837,319 429,295 3,160,306 636,171 714,326 7,482,518 1,620,448 9,102,966
Issue of Non Voting Ordinary Shares - -
Net Profit Attributable to the Shareholders 1,020,686 1,020,686 113,836 1,134,522
Dividends - Note 10 (255,232) (255,232) (18,122) (273,354)
Debenture / Non Voting Share Issue Expenses - -
Transfers from / to Retained Profits 45,366 24,901 (71,929) (1,662) 1,662 -
Deferred Tax Impact on Revaluation Reserve - -
Transfers from/to revaluation reserve - -
Increase / decrease in Share Premium - (131) (131)
Other Transfers (1,536) (1,536) (5,798) (7,334)
As at 31.12.2007 1,705,101 837,319 474,661 3,949,125 564,242 714,326 8,244,774 1,711,895 9,956,669
60
Seylan Bank PLC – Annual Report 2007

CASH FLOW STATEMENT
Bank Bank Group Group
2007 2006 2007 2006
Rs.'000 Rs.'000 Rs.'000 Rs.'000
Cash flows from operating activities
Interest Received 16,586,353 13,312,785 17,747,989 14,597,384
Fees and commission receipt 1,465,027 1,335,122 1,712,499 1,582,148
Interest payments (11,022,689) (7,994,959) (12,077,944) (9,028,979)
Exchange income 603,824 600,899 603,824 600,899
Receipt from other operating activities 804,674 1,063,740 804,674 1,063,740
Cash payments to employees and suppliers (6,053,627) (4,943,298) (6,381,959) (5,227,974)
Payments on other operating activities (43,156) (83,524) (51,327) (92,521)
Operating profit before changes in operating assets 2,340,406 3,290,765 2,357,756 3,494,697
Balances with Central Bank (1,002,436) (1,004,932) (1,002,403) (1,004,929)
(Increase) / Decrease in operating assets :
Funds advanced to customers (5,469,039) (12,305,671) (4,897,812) (13,260,358)
Increase / (Decrease) in operating liabilities :
Deposits from customers 11,989,846 14,007,484 13,127,095 14,007,484
Negotiable certificates of deposit (769,043) 237,371 (769,043) 237,371
Cash Generated from Operations 7,089,734 4,225,017 8,815,593 3,474,265
Income taxes paid (1,050,169) (129,363) (1,093,400) (163,220)
Gratuity Paid (60,123) (53,636) (62,149) (53,887)
Net cash from operating activities 5,979,442 4,042,018 7,660,044 3,257,158
Cash flows from investing activities
Investment in Subsidiary & Associate Company shares / debentures (44,848) (18,903) (49,000) -
Dividends received 21,418 22,191 5,102 4,177
Treasury Bonds maturing after one year 325,204 (2,823,046) 1,611,509 (805,017)
Purchase of Dealing Securities - (200) - (200)
Proceeds from sale of Dealing Securities - - 12 290
Purchase of Non Dealing Securities (1,072,727) - (1,114,272) (31,763)
Proceeds from sale of Non Dealing Securities 10,000 - 17,035 50,317
Purchase of property, plant and equipment (1,293,942) (581,360) (1,332,288) (630,476)
Proceeds from sale of property, plant and equipment 446,577 25,812 460,947 73,456
Proceeds from sale of Investment property 149,740 137,500 163,413 137,500
Purchase of investment property - (62) (15,000) (216,248)
Net cash from investing activities (1,458,578) (3,238,068) (252,542) (1,417,964)
Cash flows from financing activities
Issue of Debentures 1,408,685 1,419,565 1,681,244 1,618,801
Redemption of Debentures (706,970) (549,060) (1,205,720) (896,013)
Increase in Share Capital & Share Premium - 1,044,500 - 1,141,500
Net increase / (decrease) in other borrowings 711,906 111,126 1,858,443 (1,294,627)
Dividends paid (254,258) (329,517) (273,091) (348,694)
Share / Debenture Issue Expenses (45,037) (46,503) (46,243) (46,503)
Net cash from financing activities 1,114,326 1,650,111 2,014,633 174,464
Net increase in cash and cash equivalents 5,635,190 2,454,061 9,422,135 2,013,658
Cash and cash equivalents at beginning of period 8,786,068 6,332,007 10,161,070 8,147,412
Cash and cash equivalents at end of period 14,421,258 8,786,068 19,583,205 10,161,070
Reconciliation of Cash and Cash Equivalents
Cash and Short Term Funds 2,853,324 2,951,333 2,878,887 3,003,567
Treasury Bills / Bonds maturing less than one year 11,113,286 4,534,735 15,511,396 5,820,220
Securities Purchased under Resale Agreements 454,648 1,300,000 1,192,922 1,337,283
14,421,258 8,786,068 19,583,205 10,161,070
Seylan Bank PLC – Annual Report 2007
61

NOTES TO THE ACCOUNTS
1 SIGNIFICANT ACCOUNTING POLICIES
1.1 GENERAL
Seylan Bank PLC is a public quoted company incorporated
on August 28, 1987 and domiciled in Sri Lanka.The
Consolidated Financial Statements of the Bank for the year
ended December 31, 2007 comprise the Bank (parent
company) and its Subsidiaries (together referred to as the
Group).
The Financial Statements were authorised for issue on
13th May 2008.
1.1.1 Principal Activities of the Bank
Bank
The principal activities of the Bank are banking and related
activities such as accepting deposits, personal banking,
trade financing, off-shore banking, resident and nonresident
foreign currency operations, travel related
services, corporate and retail credit, project financing, lease
financing, rural credit, issuing of local and international
credit cards, telebanking facilities, Internet banking, dealing
in Government Securities, etc
1.1.2 Accounting Convention
The financial statements are presented in Sri Lanka rupees,
rounded to the nearest thousand.The Balance Sheet,
Income Statement, Statement of Cash Flow and the
Statement of Changes in Equity are prepared in
conformity with generally accepted accounting principles
and the Sri Lanka Accounting Standards (SLAS) laid down
by the Institute of Chartered Accountants of Sri Lanka
(ICASL) applied consistently on a historical cost/modified
historic cost basis, with no adjustments being made for
inflationary factors affecting the financial statements
except that certain land and buildings, dealing securities
and investment properties are stated at valuation.Where
appropriate the policies are explained in the succeeding
notes.
The preparation and presentation of the Financial
Statements are in compliance with the requirements of
the Companies Act No. 7 of 2007 and Banking Act No. 30
of 1988 and amendments thereto.
All values presented in the financial statements are in
Sri Lankan Rupees Thousands (Rs.‘000s) unless otherwise
indicated. Figures in brackets indicate deductions.
1.1.3 Foreign Currency Translation (SLAS 21)
(a) Transactions in foreign currencies in Domestic Banking
Unit are translated to Sri Lankan Rupees at the middle
rate of exchange ruling at the date of the transaction.
Monetary items denominated in foreign currencies at the
Balance Sheet date are translated to Sri Lankan Rupees at
the middle rate of exchange ruling at that date. Foreign
exchange differences arising on the settlement or
reporting of the Bank’s monetary items at rates different
from those which were initially recorded are dealt in the
Income Statement.
(b) Non monetary assets & liabilities denominated in foreign
currency that are stated at historic cost at the balance
sheet date are translated to Sri Lankan rupees at the
foreign exchange rates ruling at that date.
Forward exchange contracts are valued at the forward
market rates ruling on the date of the Balance Sheet.
Unrealised gains and losses are dealt with through the
Income Statement.
(c) FCBU balances have been converted at closing rate for all
monetary items and historic rate for non monetary items.
Income Statement of the FCBU has been converted at
the monthly average rate. Any difference is absorbed to
the income statement.
1.1.4 Taxation
Provision for taxation is made on the basis of the profit for
the year as adjusted for taxation purposes in accordance
with the provisions of the Inland Revenue Act No.10 of
2006.
1.1.5 Deferred Taxation
Seylan Bank PLC
Deferred tax is provided using the balance sheet liability
method providing for temporary differences between the
carrying amounts of the assets & liabilities for financial
reporting purposes and the amount used for taxation
purposes.
Deferred tax assets including those related to temporary
tax effects of income tax losses and credits available to be
carried forward are recognized only to the extent that it is
probable that future taxable profits will be available against
which the asset can be utilized. Deferred tax assets are
reviewed at each reporting date and are revalued to the
extent that it is no longer probable that the related tax
benefit will be realized.
Seylan Merchant Bank PLC
Deferred tax assets and liabilities are recognised for all
temporary differences. Deferred tax assets are recognised
62
Seylan Bank PLC – Annual Report 2007

NOTES TO THE ACCOUNTS
for all deductible temporary differences, carrying forward
of unused tax credit and tax losses, to the extent that it is
probable that taxable profit will be available against which
the deductible temporary differences, and the carrying
forward of unused tax credits and unused tax losses can
be utilised.
The carrying amount of deferred tax assets is reviewed at
each Balance Sheet date and reduced to the extent that it
is no longer probable that sufficient taxable profit will be
available to allow all or part of the deferred tax assets to
be utilised. Unrecognized deferred tax assets are
reassessed at each Balance Sheet date and are recognised
to the extent that it has become probable that future
taxable profit will allow the deferred tax assets to be
recovered.
Deferred tax assets and liabilities are measured at tax
rates that are expected to apply to the year when the
asset is realised or liability is settled, based on the tax rates
and tax laws that have been enacted or substantively
enacted as at the Balance Sheet date.
Income tax relating to items recognised directly in equity
is recognised in equity.
Deferred tax assets and deferred tax liabilities are offset, if
a legally enforceable right exists to set off current tax
assets against current liabilities and deferred taxes relate
to the same taxable entity and the same taxation
authority.
Ceylinco Seylan Development Ltd
Deferred taxation is provided on the liability method.The
tax effect of all timing differences which occur as a result
of items being allowed for income tax purposes in a
period different from that when they are recognized in
the Financial Statements are included as a provision for
deferred taxation at current rates of taxation.
Deferred taxation is provided on the liability method in
respect of:
a) Tax excess of depreciation allowances over historical cost
depreciation.
The company has a brought forward tax loss of
Rs.723,592,143/=.
Considering the above tax effect of such timing differences
have been excluded from the tax expenses for the period
under review and periods preceding it.
Seylan Bank Asset Management Ltd
Provision has been made for deferred taxation during the
year by reference to SLAS – 14 (Revised 2005). Deferred
taxation is provided based on balance sheet method for
temporary differences to the extent that they are
expected to reverse in the future.The balance in the
deferred taxation account represents, income tax
applicable to the difference between the tax base of the
assets on which tax depreciation has been claimed and
accounting written down value of such assets offset by the
provision for retirement benefit which is deductible for
income tax purposes only on payments and carried
forward tax losses.
1.1.6 VAT on Financial Services
The base for the computation of VAT on financial services
is the accounting profit before income tax is adjusted for
the emoluments of employees and subsequent economic
depreciation computed on prescribed rates.
1.1.7 Events After the Balance Sheet Date
All material post balance sheet events have been disclosed
in Note 40 to the financial statements.
1.2 GROUP CONSOLIDATION POLICY
(a) Subsidiaries / Associates
The group financial statements comprise a consolidation
of the financial statements of the company and its
subsidiaries incorporated in Sri Lanka, Seylan Bank Asset
Management Ltd (100%), Seylan Merchant Bank PLC
(42.88%) including non voting shares and an indirect
holding, and Ceylinco Seylan Developments Ltd (51.01%)
with a indirect holding.The financial statements of Seylan
Merchant Bank PLC comprise a consolidation of the
company and its subsidiaries SMB Money Brokers (Pvt)
Ltd. , Seylan Merchant Leasing Ltd. , SMB Real Estate Ltd.
and SMB Securities (Pvt) Ltd.
b) Other material timing differences in so far as a liability is
reasonably expected to crystallize.
Since the company enjoys 7 years tax holiday from the
year of assessment 2003/2004, certain timing differences
will not reverse for a considerable period.
Subsidiary Companies
Seylan Bank Asset Management Ltd.
Ceylinco Seylan Developments Ltd.
Seylan Merchant Bank PLC.
Nature of Business
Primary Dealer
Property Developers
Financial Services
Seylan Bank PLC – Annual Report 2007
63

NOTES TO THE ACCOUNTS
(b)
Sub Subsidiaries
Nature of Business
SMB Money Brokers (Pvt) Ltd. Money Brokers
Seylan Merchant Leasing Ltd. Leasing
SMB Real Estate Ltd.
Real Estate
SMB Securities (Pvt) Ltd.
Stock Brokering
Associate Company of Seylan Merchant Bank PLC
SMB Kenanga Investment
Corporation Ltd.
Investment Banking
The total profit/loss of the subsidiaries are included in the
consolidated Income Statement, and the proportion of
the Profit or Loss after taxation applicable to outside
Shareholders is shown under the heading "Minority
Interest” (SLAS 26). All assets and liabilities of the
company and its subsidiaries are included in the group
balance sheet.The interest of the outside shareholders in
the net assets of the group is stated separately in the
consolidated balance sheet within Equity under the
heading “Minority Interest”.
Inter- Group Transactions
Inter-group balances and inter-group transactions and
resulting unrealised profits are eliminated in full in the
consolidated financial statements.
increased or decreased to recognise the group share of
retained profits and losses of the associate company since
the date of acquisition.
1.3 ASSETS AND BASIS OF THEIR VALUATION
1.3.1
(a) Treasury Bills and Bonds
Seylan Bank PLC
The Bank has changed its Accounting Policy on Reporting
Securities Portfolio to fall in line with the directions made
by the Monetary Board of the Central Bank of Sri Lanka
under S 46 (1) of the Banking Act No. 30 of 1988
amended by the Banking (Amendment) Act No. 33 of
1995 and Act No. 2 of 2005. Accordingly, the Bank has
adopted a policy of marking to market its “Trading
Portfolio” of Government Securities from June 2006 on a
prospective basis.
Securities purchased under Re-sale Agreements are
advances collateralised by purchase of treasury bills and
treasury bonds from the public subject to a commitment
to re-sell them at a predetermined price. Such securities
remain on the Balance Sheet of the Bank and the asset is
recorded in respect of the consideration paid and interest
accrued thereon.
(c)
(d)
(e)
Profit and Loss
In arriving at the profit attributable to the Shareholders of
Seylan Bank Ltd, the total profits or losses of the
subsidiaries are included in the consolidated income
statement after eliminating inter-group transactions and
the portion of the profit or loss after taxation applicable
to non group Shareholders.
Assets and Liabilities
All Assets and Liabilities of the company and its subsidiaries
are included in the consolidated Balance sheet.The
proportionate interest of the non group Shareholders in the
net assets employed is stated separately in the consolidated
balance sheet under the heading “Minority Interest”.
Non Uniformal Accounting Policies
The impact of non uniformal accounting policies adopted
by subsidiaries has been adjusted in the consolidated
accounts for 2007 which amounted to Rs.176,045/- in total.
SMB Kenanga Investment Corporation Ltd.
Profit / loss of the Associate Company has been recorded
under the equity method of accounting.The carrying value
of investment in the consolidated balance sheet is hereby
(b)
(c)
Seylan Bank Asset Management Ltd
In line with the regulations of the Central bank of
Sri Lanka (CBSL), Seylan Bank Asset Management Limited
changed it’s accounting policy on reporting securities
portfolio commencing from June 2003. Accordingly, the
Trading Portfolio is being marked to market based on the
weighted average rates circulated by CBSL and gains or
losses recognised in the Profit & Loss Account.
Advances to Customers
Advances to customers are stated in the balance sheet
net of provisions for possible loan losses and also net of
interest which is not accrued to revenue. Bank’s policy is
to zerowise interest in suspense of non performing loans
and advances after 12 months.
Specific provision for loan losses and leases:
Provisions for possible loan losses are made on the basis
of continuous review of all advances to customers, in
accordance with the applicable accounting standard and
the requirement as given by the Central Bank of Sri Lanka
based on an aged classification of advances as follows.
64
Seylan Bank PLC – Annual Report 2007

NOTES TO THE ACCOUNTS
Period Outstanding Classification Provision Required
Net of Realisable
Value of Securities
6-12 Months Sub-Standard 20%
12-18 Months Doubtful 50%
18 Months and over Loss 100%
(d)
Investment Securities
These are acquired and held for yield or capital growth in
the medium /long term. Such securities are recorded at
cost. Changes in market values of these securities are not
taken into account unless there is considered to be a
permanent diminution in value.
As per the “Hair Cut Rule”of the Central Bank of Sri Lanka,
the extent upto which securities can be discounted for
provisioning purposes is 75% at the time of first
provisioning for non-performing loans between 6-30
months, 60% for non-performing loans between 31-42
months, 50% for those between 43-54 months and 40%
for those over 55 months. It will be at the discretion of the
management for cases over 4 years in the loss category.
Bank makes a general provision of 1/10th of 1% on a
quarterly basis commencing from 4th quarter ended
31.12.2006 (as per direction issued on 21st November
2006) of total performing loans & advances and overdue
loans & advances that have not been classified as
substandard, doubtful or loss for provisioning purposes in
terms of the directions issued on 22nd August 1997 under
the Section 46A of Banking Act on suspension of interest
on non performing advances and classification of bad &
doubtful debts for provision purposes.
1.3.2 Investments (SLAS 22)
(a) Investments in Subsidiaries
Investments in Subsidiaries are stated at cost in the Bank’s
Financial Statements in accordance with the Sri Lanka
Accounting Standard No. 26 on Consolidated Financial
Statements and Accounting for Investments in Subsidiaries.
(b) Investments in Associates
Investments in Associates are accounted under the Equity
Method in Consolidated Financial Statements accordance
with the Sri Lanka Accounting Standard No. 27 on
Accounting for Investments in Associates
(c) Dealing Securities
These are marketable securities acquired and held with
the intention to resale over a short period of time. Such
securities are recorded at market values, adjustments for
changes in market values is accounted for in the income
statement.
The quoted ordinary shares classified as Dealing Securities
were recorded at the lower of cost or market value on a
aggregate portfolio basis.
Unquoted investments are stated at cost.
(e)
(f)
Investment Properties
Investments in Land that are not occupied substantially for
use by or in the operations of the bank are classified as
Investment Properties. Investment Properties of the
company are stated based on cost model.
Investment property is recognized if it is probable that
future economic benefits that are associated with the
investment property will flow to the bank and cost of the
investment property can be reliably measured.
An investment property is measured initially at its cost.
The cost of a purchased investment property comprises
of its purchase price and any directly attributable
expenditure.
The bank applies the cost model for investment properties
in accordance with Sri Lanka Accounting Standard 40, -
Ïnvestment Property” (revised 2005). Accordingly, land
classified as investment properties are stated at cost.
Other Investments
Where the group interest in equity is less than 20% and
or in companies where the Bank does not exercise
significant influence and/ or control over the financial and
operating policies, investments are valued at cost.
1.3.3 Property, Plant and Equipment
(a) Property, Plant and Equipment are recorded at cost of
purchase or valuation together with any incidental
expenses thereon.The assets are stated at cost or
valuation less accumulated depreciation which is provided
for on the basis specified in (b) below.
(b)
(c)
Capital work-in progress is stated at cost. It includes
expenses of a capital nature directly incurred in the
construction of buildings awaiting capitalization.
Depreciation is provided at the rates indicated below on
straight-line basis over the period appropriate to the
estimated lives of the different types of assets.
Seylan Bank PLC.
Assets purchased prior to 01st January 99 have been
depreciated over the remaining useful life based on the
Seylan Bank PLC – Annual Report 2007
65

NOTES TO THE ACCOUNTS
revised depreciation rates. Assets purchased after 01st
January 99 have been depreciated based on revised rates.
Previous
Revised
Life
Life
Period Rate Period Rate
Freehold Building 25 Yrs 4.0% 40 Yrs 2.5%
Motor Vehicles 3 Yrs 33 1/3 % 5 Yrs 20%
Computer Equipment 5 Yrs 20% 6 Yrs 16.67%
Office Equipment,
Furniture & Fittings
& Leased Assets 3-10Yrs 33 1/3-10% 3-10Yrs 33 1/3-10%
Assets are depreciated from the month of purchase /
available for use to the month of disposal. Depreciation is
not provided for freehold land.
Seylan Merchant Bank PLC
Motor Vehicles
Computers
Office Equipment, Furniture & Fittings
Leased Assets
20% per annum
20% per annum
20% per annum
20% per annum
Depreciation of an asset begins when it is available for use
and ceases at the earlier of the date that the asset is
classified as held for sale and the date that the asset is
derecognized. Leased assets are depreciated over the
shorter of the leased term and their useful lives.
Depreciation is not provided for freehold land.
Seylan Bank Asset Management Ltd.
Building Improvements
Motor Vehicles
Computer Software & Hardware
Office Equipment, Furniture & Fittings
20% per annum
20% per annum
20% per annum
20% per annum
Assets are depreciated from the month of purchase to
the month of disposal.
Ceylinco Seylan Developments Ltd.
Property, Plant and Equipment are recorded at cost of
purchase or valuation together with any incidental
expenses thereon.The Assets are stated at cost or
valuation less accumulated depreciation which is provided
for on the basis specified below.
The Property at No.90 Galle Road, Colombo 03, which
includes the Leasehold Land, Buildings and equipment, and
comprises towers namely East. East tower was revalued
on Accredited Capitalisation (Investment) basis.The
surplus arising on the revaluation was transferred to
capital reserve account.
(d)
(e)
The value pertaining to the East tower is apportioned on
a square feet area basis and is stated at valuation less
accumulated depreciation under Property, Plant &
Equipment.
Freehold Land, Antiques & Ornamental paintings are not
depreciated. Leasehold land & buildings are depreciated
over the remaining unexpired lease period.The
depreciation of other assets is provided on the straight
line method at varying rates per annum based on their
useful lives as follows:-
Depreciation Rate Useful Life (Years)
Leasehold Land 1.23% Over 81 Years
Building 1.23% Over 81 Years
Furniture & Fittings 10% Over 10 Years
Equipment 20% Over 05 Years
Interior Decor 50% Over 02 Years
Motor Cars 20% Over 05 Years
Motor Cycle 25% Over 04 Years
Tools 33.33% Over 03 Years
Cutlery & Crockery 50% Over 02 Years
Equipment-West tower 50% Over 02 Years
Furniture-West tower 33.33% Over 03 Years
Interior-West tower 33.33% Over 03 Years
Maintenance Management Software 20% Over 05 Years
Accounting software 20% Over 05 Years
General Plant & Equipment 5% Over 20 Years
Depreciation of an asset begins when it is available for use
whereas depreciation of an asset ceases at the earlier of
the date that the asset is classified as held for sale and the
date that the asset is derecognized.
The Bank applies the revaluation model for the entire
class of Freehold Land & Building. Such properties are
carried at revalued amounts being its fair value at the date
of revaluation less any subsequent depreciation and
subsequent accumulated impairment losses.
The cost of replacing part of an item of Property, Plant
and Equipment is recognized in the carrying amount of
the item if it is probable that the future economic benefits
embodied within that part will flow to the bank and its
cost can be reliably measured.The costs of day to day
servicing of Property, Plant and Equipment are charged to
the income statement.
66
Seylan Bank PLC – Annual Report 2007

NOTES TO THE ACCOUNTS
(f) Impairment of Property, Plant and Equipment
Seylan Bank PLC., Seylan Bank Asset Management Ltd &
Seylan Merchant Bank PLC
Carrying amounts of the assets are reviewed at each
reporting date to determine whether there is any indication
of Impairment. If such indication exists, and where the
carrying values exceed the estimated recoverable amount,
the assets are written down to their recoverable amount.
Impairment losses are recognized in the Income Statement.
Ceylinco Seylan Developments Ltd
The carrying values of property, plant & equipment are
reviewed for impairment annually or when events or
changes in circumstances indicate the carrying value may
not be recoverable. If any such indications exist, and where
the carrying values exceed the estimated recoverable
amount, the assets are written down to their recoverable
amount. Impairment losses are recognized in the income
statement unless it reverses a previous revaluation surplus
for the same assets.
1.3.5 Stocks
Bank’s policy for the stock accounting is weighted average
method.
1.4 LIABILITIES AND PROVISIONS
1.4.1 Deposits from Customers
Deposits include non interest bearing deposits, saving
deposits, term deposits, deposits redeemable at call and
certificates of deposit.They are brought to account at the
gross value of the outstanding balance. Interest paid is
charged to the income statement.
1.4.2 Borrowings
Borrowing include refinance borrowings, call and time
deposits, vostro balances and borrowings from financial
institutions.They are brought to account at the gross value
of the outstanding balance.
1.4.3 Securities Sold under Re-purchase Agreement
Securities sold under agreements to re-purchase are
recorded separately in the financial statements.The
difference between the sale and the purchase price
represents interest expense which is recognized in the
income statement over the period of the re-purchase
agreement.
1.4.4 Retirement Benefits
Gratuity
Full provision has been made in accounts for retiring
gratuity from the first year of service of the employee in
conformity with SLAS.16 -Retirement Benefit Costs.
However according to the payment of Gratuity Act No.12
of 1983, the liability for gratuity to an employee arises only
on completion of five years of continuous service.
Further Bank makes an additional provision of half a
months on basic salary for the staff members who have
completed 10 years or above service at their retirement.
The arising additional liability is considered as a Past
Service Cost and accordingly 1/5th is charged over the
next 5 years commencing from 1/1/2005 for the liability
arising up to 31/12/2004.New liability for periods
thereafter is charged in the same period.
The bank has not carried out an actuarial valuation of
investments of Gratuity Trust Fund since all investments
are risk free.
Gratuity provisions are mainly funded by the Bank to a
separate Gratuity Trust fund, which is an approved
investment for tax purposes.The Bank makes annual
contributions to the fund not exceeding a total sum
equivalent to half a months salary of each and every
employee as depicted in the last month of the accounting
year together with an additional 25% of the total thereof.
Employee Provident Fund (EPF)
The bank and employees contribute to the approved
private Provident Fund.The total amount recognised as an
expense for the current year is Rs.192.30 Mn. (Rs.158.46
Mn. in 2006)
Employee Trust Fund (ETF)
The total amount recognised as an expense to the Bank
for contribution to ETF for current year is Rs.48.10 Mn.
(Rs.39.77 Mn. in 2006)
1.4.5 Commitments and Contingencies
All discernible risks are accounted for in determining the
amount of Other Liabilities.
1.5 INCOME STATEMENT
1.5.1 Revenue Recognition
Interest Income : Interest receivable is recognised on an
accrual basis. Interest ceases to be taken into revenue
when the recovery of interest or principal is in arrears for
over three (3) months. [Six (6) months in the case of
Seylan Merchant Bank PLC ] Thereafter interest on
advances is accounted for on a cash basis.
Seylan Bank PLC – Annual Report 2007
67

NOTES TO THE ACCOUNTS
Interest on non-performing debts is credited to the
“Interest in Suspense” account which is netted in the
Balance Sheet against the relevant balance.
1.5.2 Accounting for Lease Income
All leases are Finance Leases. As such, income recognised
is the interest component of the lease rentals receivable
during the year.
Finance Leases:
Assets Leased to customers which transfer substantially all
the risks and rewards associated with ownership other
than the legal title are classified as finance leases. Amount
receivable under finance leases are included under “Lease
Rental Receivable”. Leasing balances are stated in the
Balance Sheet after deduction of initial rentals received.
The excess of aggregate rentals receivable over the cost
of the leased assets constitutes the total unearned income.
The unearned income is taken into revenue over the term
of the lease, commencing from the month in which the
lease is executed in proportion to the remaining
receivable balance of the lease.
1.5.3 Accounting for Operating Lease income
Seylan Merchant Bank PLC rental income is recognized as
revenue on a straight line basis over the term of lease.
However no accrued rental income is recognized where
any portion of capital or interest is in arrears for six
months or more. In such cases interest income is
accounted for on a cash basis.
1.5.4 Fee and commission Income
All fee and commission income have been recorded on
cash basis.
1.5.5 Real Estate Income
Seylan Merchant Bank PLC recognized income when the
properties are sold and buyers have taken possession of
such properties. For this purpose properties are deemed
to be sold once 25% of the outright sales price has been
received.
1.5.6 Profit or Loss on sale of Property Plant and Equipment /
Investments
Gains or losses of a revenue nature on the disposal of
property plant and equipment and share portfolio are
accounted for in the Income Statement.
1.5.7 Dividend Income
Dividend Income is recognised in the period in which it is
declared.
1.5.8 Interest Expenses
Interest payable is recognised on an accrual basis. Other
expenses have been recognised in the accounts as they
are incurred in the period to which they relate. As per the
Allowed Alternative treatment of any borrowing cost is
expensed in the income statement in the period in which
they are incurred.
1.6 SEGMENT REPORTING
A segment is a distinguishable component of the group
that is engaged in providing services within a particular
economic environment which is subject to risk and
rewards that are different from those of other segments.
In accordance with the Sri Lanka Accounting Standard No.
28 on Segment Reporting, segment information is
presented in respect of the Group.The segments comprise
banking, leasing, dealing and property / investment.
Inter-segment transactions are based on fair market prices.
1.7 CASH FLOW
The Cash Flow has been prepared using the Direct
Method of preparing cash flows in accordance with the
Sri Lanka Accounting Standard 9,“Cash Flow Statements”.
Cash & cash equivalents comprise short term highly liquid
investments that are readily convertible to known
amounts of cash and are subject to an insignificant risk of
changes in value.The cash & cash equivalents include cash
in hand, balances with banks, placements with banks ,
money at call and short notice and money market funds.
1.8 INTANGIBLE ASSETS -
SEYLAN MERCHANT BANK PLC
Intangible assets comprise the initial acquisition cost of the
license fee at the inception for stock brokering license
incurred in 2006.The cost is amortised using the straight
line basis at the rate of 20% per annum commencing from
the date of acquisition.The amortised amount is based on
the best estimate of its useful life, such that the cost is
amortised fully at the end of the useful life.The
amortisation cost is recognized as an expense in the
Income Statement.
1.9 COMPARATIVE FIGURES
Where necessary, amounts shown for the previous year
have been reclassified to correspond to current year to
facilitate comparison.
1.10 DIRECTORS’ RESPONSIBILITY STATEMENT
Please refer page 55 for the statement of the Directors’
responsibility.
68
Seylan Bank PLC – Annual Report 2007

NOTES TO THE ACCOUNTS
Bank Bank Group Group
2007 2006 2007 2006
Rs.'000 Rs.'000 Rs.'000 Rs.'000
2 Income
Gross Income 21,079,885 17,183,481 22,808,262 18,684,144
21,079,885 17,183,481 22,808,262 18,684,144
Income of the Company resulted mainly from the business of Banking and related activities.
3 Interest Income
Customer Advances 15,418,267 12,419,628 16,009,576 13,018,882
Treasury Bills, Bonds & Placements with Other banks 2,179,457 1,676,796 2,766,558 2,265,884
Interest Income on Debentures 35,699 27,428 14,310 12,778
Other Interest Income 173,392 - 271,040 97,311
17,806,815 14,123,852 19,061,484 15,394,855
4 Interest expenses
Customer Deposits 9,206,231 6,569,483 9,198,828 6,569,483
Borrowings & Refinance 717,836 501,254 1,165,727 912,681
Treasury Bills & Bonds Repurchased 449,083 404,927 984,642 949,915
Interest expenses Debentures 649,539 519,295 699,966 583,884
Other Interest Expenses - - 28,781 13,016
11,022,689 7,994,959 12,077,944 9,028,979
5 Other Income
Net Foreign Exchange Gain 603,824 600,899 603,824 600,899
Dividend Income from Dealing Securities - Quoted 15 20 1,154 1,339
Dividend Income from Investment Securities - Quoted 2,594 2,407 2,594 2,407
- Unquoted 1,345 269 1,354 431
Dividend Income from Investments in Associates / Subsidiaries 17,464 19,496 - -
Capital Gains / (Losses) from Government Securities 12,150 (25,146) 22,609 (27,063)
Fee & Commission Income 1,465,027 1,332,192 1,497,956 1,349,813
Profit / (Loss) on Sale of Property, Plant & Equipment 310,405 11,988 316,178 18,298
Profit / (Loss) on Sale of Investment Property 55,572 53,764 58,563 53,764
Profit / (Loss) on Sale of Investment Securities - - 146 37,007
Gains / (Loss) on sale of Dealing Securities - - 19,407 (30,809)
Revaluation gain on Investment Property - - 203,776 -
Bad Debts Written Back & Recovered 804,674 1,063,740 804,674 1,063,740
Others - - 214,543 219,463
3,273,070 3,059,629 3,746,778 3,289,289
6 Operating Expenses
Operating Expenses includes the following :-
Directors' emoluments 57,744 42,830 86,349 59,609
Auditors' remuneration - Audit 3,902 2,711 5,413 4,180
- Other Audit 1,434 2.177 1,538 2,255
- Non Audit - - 659 486
Depreciation 602,786 533,187 652,749 581,201
Donations 56,408 34,432 62,950 41,497
Expenses on Litigation 77,830 56,798 80,860 58,219
Issue Expenses On Debentures ** 45,037 - 46,243 -
** Policy of setting off issue expenses on Debentures from the Share Premium Account up to 2006 was changed to comply to the Stated
Capital concept in accordance with Companies Act No. 07 of 2007 by charging such expenses to the Income Statement from 2007
Seylan Bank PLC – Annual Report 2007
69

NOTES TO THE ACCOUNTS
Bank Bank Group Group
2007 2006 2007 2006
Rs.'000 Rs.'000 Rs.'000 Rs.'000
7 Loan Losses and Provisions
Provision for Bad & Doubtful Debts - Specific 1,037,628 1,567,542 1,049,114 1,591,540
Provision for Bad & Doubtful Debts - General 303,448 71,974 303,448 71,974
Direct Write Off 23,999 44,979 46,308 64,629
1,365,075 1,684,495 1,398,870 1,728,143
8 Taxation
8.a Charges to Taxation is as follows :
Bank Bank Group Group
2007 2006 2007 2006
Rs.'000 Rs.'000 Rs.'000 Rs.'000
Restated
Restated
Taxation based on profits for the year 808,410 914,784 829,401 933,658
Effect on Change of Tax Rate - Note 32 b - 87,625 - 88,108
Reversal From Deferred Tax -
Note 32.a, 32.b (299,333) (283,595) (304,418) (293,967)
Withholding Tax on Dividend - - 3,356 -
(Over) / Under provision of taxes in
previous years 6,803 - 6,803 3,017
515,880 718,814 535,142 730,816
8.b Reconciliation of Accounting Profit and Taxable Income
Bank Bank Group Group
2007 2006 2007 2006
Rs.'000 Rs.'000 Rs.'000 Rs.'000
Profit as per the Income Statement 1,439,069 1,606,882 1,669,664 1,663,948
Add : Disallowable Expenses 5,274,914 4,481,225 6,032,964 4,475,460
Less : Allowable Expenses 3,465,848 3,177,020 4,609,605 3,177,020
Exempt / Allowable Income 388,071 65,751 391,479 65,751
Add : Aggregate Allowable Income - - 581,165 -
Statutory Income of the Business 2,860,064 2,845,336 3,282,709 2,896,637
Less : Dividend / Interest Income from
Primary Market Activities 560,047 242,960 560,047 242,960
Aggregate Disallowable Income - - 245,681 -
Tax Losses set off - - 11,749 -
Assessable Income 2,300,017 2,602,376 2,465,232 2,653,677
Less : Qualifying Payments - -
Taxable Income 2,300,017 2,602,376 2,465,232 2,653,677
Bank - Domestic Banking Unit &
On Shore Profits - 35% 2,269,354 794,273 2,568,346 898,920 2,434,569 794,273 2,619,647 898,920
Off Shore Profits - 20% 30,663 6,133 34,030 6,806 30,663 6,133 34,030 6,806
Seylan Bank Asset Management Ltd - 35% - - - - 5,923 409
Seylan Merchant Bank PLC - 30% - - - - 866 2,745
Ceylinco Seylan Developments Ltd - 35% - - - - 14,143 15,528
Social Responsibility Levy (SRL) - 8,004 - 9,058 8,063 9,250
2,300,017 808,410 2,602,376 914,784 2,465,232 829,401 2,653,677 933,658
Effective Tax Rate (%) 56.18 56.93 49.67 56.11
70
Seylan Bank PLC – Annual Report 2007

NOTES TO THE ACCOUNTS
(i)
(ii)
Income tax on profits has been computed at the rate of 35% on the taxable income arising from the domestic operations and On-Shore
Banking operations of FCBU and 20% on the taxable income from off-shore banking operations of the Foreign Currency Banking Unit
together with 1% SRL.
According to the Section 123 A of the Inland Revenue Act (Amended by Act No 19 of 2003), any person who derives income from the
secondary market transactions in government securities is entitled to a notional tax credit in relation to the tax payable by such person.
Notional tax credit would be determined by grossing up of the income from the secondary market transactions to an amount equal to
1/9 of same and credit to be afforded for a like sum. Accordingly Bank has accounted for Rs.90,104,340/= as notional tax credit for the
year 2007. (Rs.61,990,778/= for 2006.)
9 Basic Earnings Per Share
Basic Earnings Per Share has been calculated by dividing profit after taxation , minority interest and Preference Dividends by the
weighted average number of ordinary shares in issue and total number of shares in issue (Both Voting and Non Voting) during the year
ended 31st December 2006 and 31st December 2007 respectively.
Bank Bank Group Group
2007 2006 2007 2006
Rs.'000 Rs.'000 Rs.'000 Rs.'000
Net Profit attributable to Shareholders of the Bank 923,189 888,068 1,020,686 874,651
Preference Dividends (3,857) (2,934) (3,857) (2,934)
919,332 885,134 1,016,829 871,717
Number of Ordinary Shares 167,120 167,120 167,120 167,120
Weighted average No. of Ordinary Shares 167,120 132,303 167,120 132,303
Basic Earnings Per Share (Rs.) 5.50 6.69 6.08 6.59
10 Dividends
Proposed Dividends is accounted for in terms of Sri Lanka Accounting Standards 12 - Events after the Balance Sheet date (revised).
Bank Bank Group Group
2007 2006 2007 2006
Rs.'000 Rs.'000 Rs.'000 Rs.'000
Ordinary Share Dividends (10.a) 251,367 334,240 251,367 334,240
Preference Share Dividends (10.b) 3,865 2,956 3,865 2,956
255,232 337,196 255,232 337,196
10.a Ordinary Share Dividend
Net Dividend 227,403 300,816 227,403 300,816
Tax deducted at source 23,964 33,424 23,964 33,424
Gross Dividend 251,367 334,240 251,367 334,240
10.b Preference Share Dividend
Net Dividend 3,865 2,956 3,865 2,956
Tax deducted at source - - - -
Gross Dividend 3,865 2,956 3,865 2,956
Bank Bank Group Group
2007 2006 2007 2006
Rs.'000 Rs.'000 Rs.'000 Rs.'000
11 Cash and Short term Funds
Cash in hand 2,405,817 2,767,592 2,415,150 2,776,860
Cash at Bank - - 16,230 42,966
Balances with Banks 447,507 183,741 447,507 183,741
2,853,324 2,951,333 2,878,887 3,003,567
Seylan Bank PLC – Annual Report 2007
71

NOTES TO THE ACCOUNTS
12 Balance with Central Bank of Sri Lanka
Cash balance is required to be maintained with the Central Bank of Sri Lanka according to statutory requirements. At present, the
minimum cash reserve requirement is 10% of the deposit liabilities.
Bank Bank Group Group
2007 2006 2007 2006
Rs.'000 Rs.'000 Rs.'000 Rs.'000
13 Treasury Bills and Bonds Eligible For Rediscounting with the Central Bank
Treasury Bills 5,900,230 464 6,081,960 38,215
Treasury Bills under Repos' - - 3,151,664 23,986
Treasury Bonds 1,632,791 2,486,271 1,701,228 2,555,205
Treasury Bonds under Repos' 1,734,915 2,048,000 2,731,194 3,202,814
Sri Lanka Development Bonds - (US Dollar) 1,845,350 - 1,845,350 -
11,113,286 4,534,735 15,511,396 5,820,220
14 Treasury Bonds Maturing after One Year
Bank Bank Group Group
2007 2006 2007 2006
Rs.'000 Rs.'000 Rs.'000 Rs.'000
Treasury Bonds 2,280,204 2,536,345 2,493,786 2,941,265
Treasury Bonds under Repos' 2,274,297 2,666,355 2,970,090 4,457,115
Sri Lanka Development Bonds - (US Dollar) 6,719,245 6,396,250 6,719,245 6,396,250
11,273,746 11,598,950 12,183,121 13,794,630
15 Government and other securities held for dealing purposes
Bank Bank Group Group
2007 2006 2007 2006
Rs.'000 Rs.'000 Rs.'000 Rs.'000
Quoted (note 15.a) 150 143 282 287
Total 150 143 282 287
15.a Quoted (Analysis of Group)
Held by Seylan Bank PLC at Market Value (refer note 15.a.1) 150 143
Held by Seylan Merchant Bank PLC at Cost (refer note 15.a.2) 132 144
282 287
Seylan Bank PLC
15.a.1 Quoted
31.12.2007 31.12.2006
No.of Ord. Cost Market Value No.of Ord. Cost Market Value
Shares Rs.'000 Rs.'000 Shares Rs.'000 Rs.'000
Vallibel Power Erathna PLC 75,000 200 150 75,000 200 143
200 150 200 143
72
Seylan Bank PLC – Annual Report 2007

NOTES TO THE ACCOUNTS
Seylan Merchant Bank PLC
15.a.2 Quoted
31.12.2007 31.12.2006
No.of Ord. Cost Market Value No.of Ord. Cost Market Value
Shares Rs.'000 Rs.'000 Shares Rs.'000 Rs.'000
Pugoda Textile Mills Ltd. 7,500 253 - 7,500 253 -
Magpek Exports Ltd. 125,000 5,000 - 125,000 5,000 -
Hemas Holdings Ltd. - - - 75 8 8
ACL Cables Ltd - - - 33 3 3
Nawaloka Hospitals Ltd. 100,000 532 230 100,000 532 330
Diminution in Value (5,653) (5,653)
132 230 144 341
Bank Bank Group Group
2007 2006 2007 2006
Rs.'000 Rs.'000 Rs.'000 Rs.'000
16 Placements with and Loans to Other Banks, Finance Companies & Other
Banks 1,129,923 1,448,038 1,184,112 1,471,621
Finance Companies 1,293 -
Others 1,000 1,395
1,129,923 1,448,038 1,186,405 1,473,016
17 Investment Securities Bank Group
31.12.2007 31.12.2006 31.12.2007 31.12.2006
Rs.'000 Rs.'000 Rs.'000 Rs.'000
Quoted (note 17.a) 28,201 38,201 67,555 66,237
Unquoted (note 17.b) 1,193,017 120,290 1,344,179 257,391
Total 1,221,218 158,491 1,411,734 323,628
17.a Quoted
Held by Seylan Bank PLC (refer note 17.a.1) 28,201 38,201 28,201 38,201
Held by Seylan Merchant Bank PLC (refer note 17.a.2) 33,196 20,668
Held by Ceylinco Seylan Developments Ltd (refer note 17.a.3) 2,394 2,394
Held by Seylan Bank Asset Management Ltd. (refer note 17.a.4) 3,764 4,974
Total 28,201 38,201 67,555 66,237
17.b Unquoted
Held by Seylan Bank PLC (refer note 17.b.1) 1,193,017 120,290 1,193,017 120,290
Held by Seylan Merchant Bank PLC (refer note 17.b.2) 74,342 66,042
Held by Ceylinco Seylan Developments Ltd (refer note 17.b.3) 8,034 8,034
Held by Seylan Bank Asset Management Ltd (refer note 17.b.4) 68,786 63,025
Total 1,193,017 120,290 1,344,179 257,391
Seylan Bank PLC – Annual Report 2007
73

NOTES TO THE ACCOUNTS
Seylan Bank PLC
17.a.1 Quoted
31.12.2007 31.12.2006
No.of Ord. Cost Market Value No.of Ord. Cost Market Value
Shares Rs.'000 Rs.'000 Shares Rs.'000 Rs.'000
Arpico Finance Company PLC 60,651 4,356 4,822 60,651 4,356 5,762
Ceylinco Insurance PLC 933,055 11,399 172,615 933,055 11,399 156,287
The Finance Company PLC 110,160 1,606 6,665 110,160 1,606 6,004
Blue Diamonds Jewellery
World Wide PLC 3,815,243 10,818 10,683 3,815,243 10,818 14,116
Ceylinco Finance PLC 2,700 22 45 2,700 22 54
Debentures
Hatton National Bank PLC - (13.75%) - - 10,000 10,000
(100,000 Debentures of Rs.100/= each)
28,201 194,830 38,201 192,223
17.b.1Unquoted
31.12.2007 31.12.2006
No.of Ord. Directors No.of Ord. Directors
Shares Cost valuation Shares Cost valuation
Rs.'000 Rs.'000 Rs.'000 Rs.'000
Credit Information Bureau of Sri Lanka 2,900 290 * 3,588 2,900 290 2,330
Transnational Lanka Records
Solutions (Pvt) Ltd. 1,000,000 10,000 * 12,164 1,000,000 10,000 10,290
Lanka Clear (pvt) Ltd 1,000,000 10,000 * 20,373 1,000,000 10,000 30,950
Debentures
Singer Sri Lanka Ltd (12.50%) 75,000 75,000 75,000 75,000
(750,000 Debentures of Rs.100/= each)
Hatton National Bank PLC - (10%) 25,000 25,000 25,000 25,000
(250,000 Debentures of Rs.100/= each)
Commercial Paper
Lanka Orix Leasing Company PLC. 1,072,727 1,072,727 - -
1,193,017 1,208,852 120,290 143,570
* The valuation is based on Net assets per share basis as per the Audited Financial Statements of these Companies as at following dates:
Credit Information Bureau of Sri Lanka - 31st December 2006
Transnational Lanka Records Solutions (Pvt) Ltd. - 30th June 2007
Lanka Clear (Pvt) Ltd - 31st March 2007
74
Seylan Bank PLC – Annual Report 2007

NOTES TO THE ACCOUNTS
Seylan Merchant Bank PLC
17.a.2 Quoted
31.12.2007 31.12.2006
No.of Ord. Cost Market Value No.of Ord. Cost Market Value
Shares Rs.'000 Rs.'000 Shares Rs.'000 Rs.'000
The Finance Co PLC 108,997 5,652 6,594 108,997 5,652 5,940
Ceylinco Insurance PLC 81,400 14,831 15,059 - - -
Blue Diamonds Jewellery World Wide PLC 3,180,280 47,818 8,905 3,180,280 47,818 11,767
Metal Recyclers Colombo Ltd 69 3 - 69 3 -
Lanka Indian Oil Co. Ltd 40,400 2,131 869 40,400 2,131 1,151
Royal Ceramics Lanka PLC 41,000 2,013 1,312 410,000 2,013 1,476
Ceylon Glass Co. Ltd 265,000 1,012 530 265,000 1,012 636
Grain Elevators Ltd 38,700 958 503 38,700 958 522
Tokyo Cement Co. Ltd - - - 100,000 1,836 1,700
Kotmale Holding Ltd 15,000 236 165 15,000 236 184
Galadari Hotel Ltd 15,400 280 146 15,400 280 173
Reefcomber Hotel Co. Ltd 107,700 242 97 107,700 242 118
Ruhunu Hotels Ltd 10,000 213 68 10,000 213 110
John Keells Holdings Ltd - - - 42 6 8
Sierra Cables Ltd 5,400 16 9 5,400 15 11
Touchwood Investment PLC - - - 1,000 152 146
Dialog Telecom PLC 9,000 256 180 10,000 284 265
Commercial Bank PLC - 585 450 - 500 463
(50,000 Preference Shares of Rs.10 /= each)
Commercial Bank PLC - - - 1,500 367 285
(1,500 Ordinary Shares of Rs.10 /= each)
Diminution in value (43,050) - (43,050)
33,196 34,887 20,668 24,955
17.b.2Unquoted
31.12.2007 31.12.2006
No.of Ord. Cost No.of Ord. Cost
Shares Rs.'000 Shares Rs.'000
Ceylinco Sports Complex Ltd. 300,000 3,000 300,000 3,000
Ceylinco Express (Pvt) Ltd. 37,050 371 37,050 371
Ceylinco Savings Bank Ltd 1,189,600 11,896 1,189,600 11,896
Ceywins Telemedical Services (Pvt) Ltd 500,000 5,000 300,000 3,000
Ceylinco Freight International (Pvt) Ltd 68,000 680 68,000 680
Openarc Global Solutions (Pvt) Ltd 45,000 450 45,000 450
Ceylinco Investment & Reality (Pvt) Ltd 100,000 1,000
South Asian Travels Ltd 30,000 300
Ceylinco Coloured Stones (Pvt) Ltd 500,000 5,000
Seraka Invesment Ltd 48,645 48,645
(5,655,900 Non Cumulative,
Non redeemable, Preference shares)
Diminution in value (2,000) (2,000)
Total 74,342 66,042
Seylan Bank PLC – Annual Report 2007
75

NOTES TO THE ACCOUNTS
Ceylinco Seylan Developments Ltd.
17.a.3 Quoted
31.12.2007 31.12.2006
No.of Ord. Cost Market Value No.of Ord. Cost Market Value
Shares Rs.'000 Rs.'000 Shares Rs.'000 Rs.'000
Ceylinco Finance PLC 200,000 2,000 3,300 200,000 2,000 4,000
Associated Property Developers Ltd. 100 1 7 100 1 6
C T Land Developers Ltd. 100 1 2 100 1 17
Ceylinco Housing & Real Estate Co. Ltd. 250 2 8 250 2 9
Colombo Fort Land & Building Company Ltd. 100 1 - 100 1 21
Overseas Realty Ceylon Ltd. 100 - 1 100 - 1
Kelsey Developments Ltd. 100 1 2 100 1 3
Associated Property Development Ltd. 100 2 3 100 2 6
Colombo Land &
Development Company Ltd. 1,250 - 2 1,250 - 6
East West Company Ltd. 100 1 1 100 1 1
Equity One Ltd. 100 1 2 100 1 3
O'nally Holdings Ltd. 100 1 3 100 1 3
York Arcade Holdings Ltd. 100 - 1 100 - 1
Blue Diamonds Jewellery
Worldwide PLC 170,000 383 476 170,000 383 63
2,394 3,808 2,394 4,140
17.b.3Unquoted
31.12.2007 31.12.2006
No.of Ord. Cost No.of Ord. Cost
Shares Rs.'000 Shares Rs.'000
Ceylinco Venture Capital Co. Ltd. 95,000 950 95,000 950
Ceylinco Sports Complex Ltd. 220,000 2,200 220,000 2,200
Ceycom Global Communications Ltd. 40,500 405 40,500 405
Asian Finance Ltd. 75,000 750 75,000 750
Ceylinco Savings Bank. Ltd. 25,000 250 25,000 250
Ceylinco - Cisco Security
Corporation (Pvt) Ltd. 10,000 100 10,000 100
Ceylinco International Property
Developers (Pvt) Ltd. 50,000 500 50,000 500
Ceyenergy Electronics Co. (Pvt) Ltd. 15,000 150 15,000 150
Ceylinco Swift Care (Pvt) Ltd. 75,000 750 75,000 750
Independent Financial News &
Views (Pvt) Ltd. 4,900 49 4,900 49
Ceylinco International Realty (Pvt) Ltd. 200,000 2,000 200,000 2,000
e.Ceylinco. Com (Pvt) Ltd. 60,000 600 60,000 600
International Consultancy &
Corporate Services (Pvt) Ltd. 2,500 25 2,500 25
Ceylinco PLC Technology (Pvt) Ltd 177,500 1,775 177,500 1,775
Diminution in Value (2,470) (2,470)
8,034 8,034
76
Seylan Bank PLC – Annual Report 2007

NOTES TO THE ACCOUNTS
Seylan Bank Asset Management Ltd.
17.a.4 Quoted
31.12.2007 31.12.2006
No.of Ord. Cost Market Value No.of Ord. Cost Market Value
Shares Rs.'000 Rs.'000 Shares Rs.'000 Rs.'000
Blue Diamond Jewellery Worldwide PLC 1,344,200 10,725 3,764 1,344,200 10,725 4,794
Diminution in Value (6,961) (5,751)
3,764 3,764 4,974 4,794
17.b.4Unquoted
31.12.2007 31.12.2006
No.of Ord. Cost No.of Ord. Cost
Shares Rs.'000 Shares Rs.'000
Ceylinco Venture Capital Co. Ltd. 500,000 5,000 500,000 5,000
Ceylinco Foliage Exports (Pvt) Ltd. 850,000 8,500 700,000 7,000
Ceylinco - CISCO Ranaviru
Services (Pvt) Ltd. 50,000 500 50,000 500
Ceylinco Niranjan Invention (Pvt) Ltd. 33,249 350 33,249 350
Ceylinco Travels & Tours Ltd. 100,000 1,000 100,000 1,000
Ceylinco Tourist Hotels Ltd. -
Hotel Ceysands 33,000 3,500 33,000 3,500
Ceylinco Development Bank Ltd. 700,000 7,000 300,000 3,000
Ceylinco Vocational Training (Pvt) Ltd. 148,200 1,482 148,200 1,482
The Finance & Guarantee Co Ltd 300,000 3,000 300,000 3,000
Ceylinco Employees Sports
Complex (Pvt) Ltd. 200,000 2,000 200,000 2,000
Ceylinco Lexcon Services (Pvt) Ltd 77,847 778 45,000 450
Ceylinco Automobiles Ltd 500,000 5,000 500,000 5,000
CTV Creations Ltd - - 50,000 500
Tropical Foliage Ltd 150,000 1,500 150,000 1,500
Ceylinco Bio Tech Ltd 150,000 1,500 150,000 1,500
Ceylinco ERA (Pvt) Ltd 1,000,000 10,000 1,000,000 10,000
Ceylinco Seylan Housing &
Commercial Properties Ltd 20,000 200 20,000 200
Ceylinco Building Society Ltd 10,000 5,000 10,000 5,000
Ceylinco Aruna Accessories (Pvt) Ltd 25,000 250 25,000 250
The Sitar (Pvt) Ltd 380,000 3,800 380,000 3,800
Independent Financial News &
Views (Pvt) Ltd 100,000 1,000 100,000 1,000
Ceylinco Coloured Stones (Pvt) Ltd 100,000 10,000 100,000 10,000
Ceylinco Freight International (Pvt) Ltd 400,000 4,000 400,000 4,000
Ceylinco Hotels Ltd 475,000 4,750 275,000 2,750
Ceylinco Cellular Company (Pvt) Ltd 100,000 1,000 100,000 1,000
South Asian Travels Ltd 500,000 5,000
Ceylinco Packaging Company Ltd 500,000 5,000
Ceylinco Cisco Cash Management &
Transit Company (Pvt) Ltd 500,000 500
Ceylinco Development Bank Ltd - 4,000
(400,000 Preference Shares of Rs.10/= each)
Diminution in Value (24,324) (16,257)
Debentures
Ceylinco Vocational Training (Pvt) Ltd 988 988
(8,000 Debentures of Rs.100/= each)
Ceylinco Savings Bank 1,500 1,500
(15,000 Debentures of Rs.100/= each)
Diminution in Value (988) (988)
68,786 63,025
Seylan Bank PLC – Annual Report 2007
77

NOTES TO THE ACCOUNTS
Bank Bank Group Group
2007 2006 2007 2006
Rs.'000 Rs.'000 Rs.'000 Rs.'000
18 Bills of Exchange
Export Bills 1,511,320 1,369,780 1,511,320 1,369,780
Import Bills 184,471 99,662 184,471 99,662
Local Bills 272,408 358,382 272,408 358,382
1,968,199 1,827,824 1,968,199 1,827,824
Less: Interest in Suspense (Note 19.c) - - - -
Provision for Bad & Doubtful Debts (Note 19.c) (1,108) - (1,108) -
1,967,091 1,827,824 1,967,091 1,827,824
19 Loans and Advances
Overdrafts 28,688,151 29,087,054 28,688,151 29,087,054
Trust Receipt Loans 4,490,310 4,308,150 4,490,310 4,308,150
Staff Loans 2,641,602 1,860,177 2,648,805 1,866,309
Refinance Loans 1,678,877 1,745,349 1,678,877 1,754,237
Other Loans 59,546,870 54,039,121 60,596,946 55,257,326
97,045,810 91,039,851 98,103,089 92,273,076
Less: Loan loss Provision (Note 19.c) (4,800,752) (4,442,507) (4,825,312) (4,463,135)
Interest in suspense (Note 19.c) (3,227,989) (2,695,840) (3,301,233) (2,771,526)
89,017,069 83,901,504 89,976,544 85,038,415
Bank Bank Group Group
2007 2006 2007 2006
Rs.'000 Rs.'000 Rs.'000 Rs.'000
Specific General Specific General Specific General Specific General
19.a Movement in Loan Loss Provision
Balance brought forward 4,484,545 74,020 4,264,762 2,046 4,596,566 74,020 4,352,785 2,046
Additional Provision made 1,037,628 303,448 1,567,542 71,974 1,049,114 303,448 1,591,540 71,974
Reversal of Provision for write off (217,784) - (528,065) - (220,794) - (528,065) -
Recoveries made during the year (720,473) - (873,840) - (720,473) - (873,840) -
Exchange Rate variance on foreign
currency Provisions 10,842 - 54,146 - 10,842 - 54,146 -
4,594,758 377,468 4,484,545 74,020 4,715,255 377,468 4,596,566 74,020
Bank Bank Group Group
2007 2006 2007 2006
Rs.'000 Rs.'000 Rs.'000 Rs.'000
19.b Movement in Interest in Suspense
Balance brought forward 2,724,668 2,290,632 2,845,993 2,412,373
Interest Suspended during the year 2,023,777 1,581,477 2,085,667 1,623,099
Interest recovered during the year (1,063,846) (987,079) (1,115,461) (1,029,117)
Reversal of Interest for write off / Write down (383,761) (165,482) (383,761) (165,482)
Exchange Rate variance on foreign currency Provisions 1,327 5,120 1,327 5,120
3,302,165 2,724,668 3,433,765 2,845,993
78
Seylan Bank PLC – Annual Report 2007

NOTES TO THE ACCOUNTS
Bank Bank Group Group
2007 2006 2007 2006
Rs.'000 Rs.'000 Rs.'000 Rs.'000
Loan Loss Interest in Loan Loss Interest in Loan Loss Interest in Loan Loss Interest in
Provision Suspense Provision Suspense Provision Suspense Provision Suspense
19.c Analysis of Provision for Loan Losses and
Interest in Suspense
Bills of Exchange 1,108 - - - 1,108 - - -
Loans and Advances 4,800,752 3,227,989 4,442,507 2,695,840 4,825,312 3,301,233 4,463,135 2,771,526
Lease Rental Receivable 170,366 74,176 116,058 28,828 266,303 132,532 207,451 74,467
4,972,226 3,302,165 4,558,565 2,724,668 5,092,723 3,433,765 4,670,586 2,845,993
Bank Bank Group Group
2007 2006 2007 2006
Rs.'000 Rs.'000 Rs.'000 Rs.'000
19.d 1 Non performing assets included in the Bills of Exchange,
Loans and advances, Pro notes & Lease Rentals receivable
on which interest is not being accrued are as follows.
Total Non Performing Advances Excluding Former BCCI Advances 12,983,954 11,150,009 13,347,852 11,420,972
Former BCCI Advances 59,199 75,980 59,199 75,980
13,043,153 11,225,989 13,407,051 11,496,952
Bank
Bank
31.12.07 31.12.06
Advances Advances Change
Rs.'000 % Rs.'000 % %
Total Gross Loans and Advances including Bills of
Exchange, Pro Notes, Lease Rentals Receivable
and Group Balance Receivable 106,187,541 ** 100,747,256 ** 5.40
Interest In Suspense (3,302,165) (2,724,668) 21.20
Total Loans and Advances including Bills of Exchange,
Pro Notes, Lease Rentals Receivable and Group
Balance Receivable (Net of interest in suspense) 102,885,375 ** 98,022,588 ** 4.96
Non performing Advances (Gross) 16,345,318 15.39 13,950,657 13.85 17.17
Non performing Advances *** 13,043,153 12.68 11,225,989 11.45 16.19
(net of Interest in Suspense)
Less : Provision for Bad & Doubtful Debts (4,972,226) (4,558,565) 9.07
Net Non Performing Advances 8,070,927 7.84 6,667,424 6.80 21.05
** As a percentage of total loans and advances as at 31st December.
Rs.8,070.927 Mn. net non performing advances is covered by tangible securities valued at approximately Rs.10,038.590 Mn.
2007 2006
*** Non Performimg Advances (with BCCI) Rs.'000 Rs.'000
Bills of Exchange 41,858 35,150
Loans & Advances 12,274,799 10,819,504
Lease Rentals Receivable 726,496 371,335
Total 13,043,153 11,225,989
Seylan Bank PLC – Annual Report 2007
79

NOTES TO THE ACCOUNTS
19.d 2 As per the direction issued by Central Bank of Sri Lanka on 31.12.2004 the Non Performing Ratio Net of Interest In Suspense after
inclusion of Investment Properties is as follows. (with BCCI)
2007 2006
% %
Non Performing Ratio before adjustment for
Investment Properties 12.68 11.45
Non Performing Ratio after adjustment 12.86 11.60
19.e Balance outstanding on advances granted to Employee share Owning Trust Companies ,
Amount Outstanding Amount Outstanding
Name of Trust as at 31.12.2007 as at 31.12.2006
Rs.'000
Rs.'000
Seybest (Pvt) Ltd. 32,896 34,953
Sesot (Pvt) Ltd. 5,301 7,844
Sotse (Pvt) Ltd. 30,530 31,594
Esot (Pvt) Ltd. 33,462 35,483
Seyshop (Pvt) Ltd. 32,932 34,988
19.f Concentration of Credit Risk
Sector wise analysis of bank's credit portfolio given below reflects the bank's exposure to credit risk in the various sectors of the economy.
Bank Bank Group Group
2007 2006 2007 2006
Rs.'000 % Rs.'000 % Rs.'000 % Rs.'000 %
Food, beverages and tobacco 3,191,771 3.29 3,397,062 3.73 3,212,387 3.28 3,420,697 3.71
Agriculture, agro business and fisheries 4,650,060 4.79 4,028,416 4.42 4,772,682 4.87 4,168,994 4.52
Textiles and Wearing apparel 6,542,493 6.74 6,431,074 7.06 6,587,287 6.71 6,482,427 7.03
Wood and paper products 1,164,700 1.20 1,338,062 1.47 1,198,262 1.22 1,376,539 1.49
Rubber and leather products 1,136,857 1.17 1,232,968 1.35 1,180,861 1.20 1,283,415 1.39
Metals , Chemicals and Engineering 2,705,538 2.79 2,124,180 2.33 2,792,482 2.85 2,223,855 2.41
Hotels 2,028,900 2.09 2,054,745 2.26 2,048,433 2.09 2,077,138 2.25
Services 7,137,750 7.36 5,781,706 6.35 7,537,507 7.68 6,239,997 6.76
Others 68,487,741 70.57 64,651,638 71.03 68,773,188 70.10 65,000,014 70.44
97,045,810 100.00 91,039,851 100.00 98,103,089 100.00 92,273,076 100.00
Bank Bank Group Group
2007 2006 2007 2006
Rs.'000 Rs.'000 Rs.'000 Rs.'000
20 Lease Rentals Receivable Within One Year
from the Balance Sheet date 4,006,834 3,918,565 5,380,187 5,446,031
Less: Unearned Income (945,812) (991,198) (1,349,084) (1,339,738)
3,061,022 2,927,367 4,031,103 4,106,293
Less: Interest in Suspense (Note 19.c) (74,176) (28,828) (132,532) (74,467)
Less: Loan Loss provision (Note 19.c) (170,366) (116,058) (266,303) (207,451)
2,816,480 2,782,481 3,632,268 3,824,375
21 Lease Rentals Receivable Later Than One Year and not later
than five years from the Balance Sheet date (note 21 a) 4,608,007 5,651,516 6,741,578 8,064,159
Less: Unearned Income (760,580) (923,040) (1,156,472) (1,383,153)
3,847,427 4,728,476 5,585,106 6,681,006
21.a Lease Rentals Receivable 4,748,595 5,799,745 6,914,935 8,245,335
Less : Deposit of Rentals (140,588) (148,229) (173,357) (181,176)
4,608,007 5,651,516 6,741,578 8,064,159
80
Seylan Bank PLC – Annual Report 2007

NOTES TO THE ACCOUNTS
Bank Bank Group Group
2007 2006 2007 2006
Rs.'000 Rs.'000 Rs.'000 Rs.'000
22 Lease Rentals Receivable Later Than Five Years
from the Balance Sheet date (22 a) 3,523 19,737 16,787 19,737
Less: Unearned Income (213) (1,096) (1,981) (1,096)
3,310 18,641 14,806 18,641
Less : Provision for Bad & Doubtful Debts - - - -
Interest in Suspense - - - -
3,310 18,641 14,806 18,641
22 a. Lease Rentals Receivable 3,523 19,737 16,787 19,737
Less : Deposits of Rentals - - - -
3,523 19,737 16,787 19,737
23 Investments in Associates and Subsidiaries - Bank
23.a
Ordinary Shares
Seylan Merchant Bank PLC
Principal Number % Cost Market Number % Cost Market
Activity of Holding as at Value of Holding as at Value
Shares 31.12.2007 31.12.2007 Shares 31.12.2006 31.12.2006
Rs.000' Rs.000' Rs.000' Rs.000'
Merchant
Banking 23,071,066 42.88 260,919 161,497 23,071,066 42.88 260,919 173,033
Property
Ceylinco Seylan
Developments Ltd Development 37,203,584 51.01 358,916 334,832 37,206,009 51.02 358,916 306,950
Seylan Bank Asset Primary
Management Ltd Dealers 14,000,000 100.00 300,000 14,000,000 100.00 300,000 -
Debentures
Seylan Merchant Bank PLC
(50 Mn. -14%, 60 Mn. -12.75%, 63.572 Mn.- 16%) - 100.00 173,572 - 100.00 128,724 -
1,093,407 1,048,559
23.b The holding in Ceylinco Seylan Developments Ltd. is as follows :
Total number of Shares of % Cost as at % Cost as at
Ceylinco Seylan Holding 31.12.2007 Holding 31.12.2006
Developments Ltd Rs.000' Rs.000'
Ordinary Shares
Direct Holding :
37,203,584 Ordinary shares of Rs.10/- each. 73,982,430 50.29 358,916 50.29 358,916
Indirect Holding:
Shares held through Seylan Merchant Bank PLC
1,243,343 Ordinary shares of Rs.10/- each. 73,982,430 0.72 5,696 0.73 5,760
51.01 364,612 51.02 364,676
Seylan Bank PLC – Annual Report 2007
81

NOTES TO THE ACCOUNTS
23.c The holding in Seylan Merchant Bank PLC is as follows :
Total number of Shares of % Cost as at % Cost as at
Seylan Merchant Holding 31.12.2007 Holding 31.12.2006
Bank PLC Rs.000' Rs.000'
Ordinary Shares
Direct Holding - Voting
23,071,066 Ordinary shares of Rs.10/- each. 445,031,200 51.84 260,919 51.84 260,919
Direct Holding - Non Voting 100,000,000 - - -
Total Direct Holding 545,031,200 42.33 260,919 42.33 260,919
Indirect Holding :
Shares held through Seylan Bank Asset Management Ltd.
3,000,000 Non Voting Ordinary shares of Rs.1/- each. 100,000,000 0.55 3,000 0.55 3,000
42.88 263,919 42.88 263,919
Bank Bank Group Group
2007 2006 2007 2006
Rs.'000 Rs.'000 Rs.'000 Rs.'000
24 Investment Properties
Balance as at 01st January 175,326 175,264 1,425,470 1,209,222
Add : Additions during the year - 62 15,000 216,248
Revaluation during the year - - 203,776 -
Less : Disposals during the year (7,932) - (18,613) -
Set off Against Bad Debts Provision made (18,000) (18,000)
Balance as at 31st December 149,394 175,326 1,607,633 1,425,470
Bank has accounted its Investment Properties at cost and depreciation is not required since these properties consist of Land.Bank
revalues these Properties periodically on a systematic basis for disclosure purpose.
24.a Investment Properties (Bank) - 2007
Bank
Cost/
Valuation
Rs.'000
Bank
Market Value/
Directors
Valuation
Rs.'000
Address
Kohalwila Road,Gonawala,Gampaha. 6,166 10,054
Walpolawatte, Kudawaskaduwa, 28,799 28,920
Wadduwa **
Kahapola, Piliyandala 114,429 144,133
149,394 183,107
** Arrangements have been made to dispose the property at a price of Rs.28,920,000/= and market value represents the agreed sale price.
The Difference between the Cost and the Market Value (Rs.18 Mn.) has been set off against the bad debts provision made.
82
Seylan Bank PLC – Annual Report 2007

NOTES TO THE ACCOUNTS
24.b Investment Properties (Group) - 2007
Group
Cost/
Valuation
Rs.'000
Group
Market Value/
Directors
Valuation
Rs.'000
Address
Kohalwila Road,Gonawala,Gampaha. 6,166 10,054
Walpolawatte, Kudawaskaduwa, 28,799 28,920
Wadduwa
Kahapola, Piliyandala 114,429 144,133
Maradana Road, Borella 11,189 18,250
Halpe village, Katana 647 855
Dorakumbura, Kurunegala 669 669
Nugegoda, Kotte 15,000 15,030
Ceylinco Seylan Towers (West Tower) 1,226,545 1,226,545
90, Galle Road, Colombo 3
No.257, Union Place, Colombo 2 204,189 204,189
1,607,633 1,648,645
Bank Bank Group Group
2007 2006 2007 2006
Rs.'000 Rs.'000 Rs.'000 Rs.'000
25 Group Balances Receivable
Name of Company
Seylan Merchant Bank Plc 299,939 293,897 - -
Ceylinco Seylan Developments Ltd 111,689 75,874 - -
Seylan Bank Asset Management Ltd 1 76 - -
TOTAL 411,629 369,847 - -
26 Property, Plant and Equipment
Bank Free Hold Lease Hold Free Hold Lease Hold Computer Machine/ Furniture/ Motor Leased CapitalWork 31.12.2007 31.12.2006
Land Land Building Building Equipment Equipment Fittings Vehicles Assets in Progress Total Total
Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000
Cost / Valuation
Balance as at 01st January (Reclassified) 398,659 22,603 1,079,396 14,147 3,187,584 948,453 758,468 436,849 58,510 25,323 6,929,992 6,213,913
Additions for the Year 175,879 - 1,225 3,908 826,690 83,835 86,487 113,258 - 2,660 1,293,942 581,360
Surplus on revaluation - - - - - - - - - - - 177,091
Disposals (90,795) - (44,322) - (18,484) (10,168) (4,207) (68,496) (23) - (236,495) (42,372)
Transfers 9,925 - (9,925) 25,322 (949) (1,188) 2,123 206 (192) (25,322) - -
As at 31st December 493,668 22,603 1,026,374 43,377 3,994,841 1,020,932 842,871 481,817 58,295 2,661 7,987,439 6,929,992
Accumulated Depreciation
Balance as at 01st January (Reclassified) - - 63,206 935 2,120,088 744,781 624,455 182,987 58,510 - 3,794,962 3,317,864
Charge for the year - - 26,837 356 376,744 79,030 42,005 77,814 - - 602,786 533,187
Revaluation adjustment on
accumulated depreciation - - - - - - - - - - - (27,541)
Disposals - - (12,966) - (18,484) (8,897) (4,206) (55,747) (23) - (100,323) (28,548)
Transfers - - - - (380) 1,626 (1,163) 109 (192) - - -
As at 31st December - - 77,077 1,291 2,477,968 816,540 661,091 205,163 58,295 - 4,297,425 3,794,962
Net book value as at 31.12.2007 493,668 22,603 949,297 42,086 1,516,873 204,392 181,780 276,654 - 2,661 3,690,014
Net book value as at 31.12.2006 398,659 22,603 1,016,190 13,212 1,067,496 203,672 134,013 253,862 - 25,323 3,135,030
Seylan Bank PLC – Annual Report 2007
83

NOTES TO THE ACCOUNTS
26 Property, Plant and Equipment
Group Free Hold Lease Hold Free Hold Lease Hold Computer Machine/ Furniture/ Motor Leased CapitalWork 31.12.2007 31.12.2006
Land Land Building Building Equipment Equipment Fittings Vehicles Assets in Progress Total Total
Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000
Cost / Valuation
Balance as at 01st
January (Reclassified) 402,317 663,152 1,826,126 14,147 3,262,411 1,060,014 796,294 458,445 79,670 26,363 8,588,939 7,883,824
Additions for the Year 175,879 - 4,261 3,908 842,955 90,280 88,738 114,366 10,280 1,621 1,332,288 630,476
Surplus on revaluation - - - - - - - - - - - 177,091
Disposals (94,127) - (44,322) - (18,502) (11,540) (6,835) (71,547) (5,867) - (252,740) (102,452)
Transfers 9,925 - (9,925) 25,322 6,265 (1,188) 2,123 1,838 (9,038) (25,322) - -
As at 31st December 493,994 663,152 1,776,140 43,377 4,093,129 1,137,566 880,320 503,102 75,045 2,662 9,668,487 8,588,939
Accumulated Depreciation
Balance as at 01st January (Reclassified) - 15,768 81,574 935 2,161,971 774,144 643,486 200,168 66,338 - 3,944,384 3,438,017
Charge for the year - 7,884 36,046 356 388,496 89,479 47,009 80,060 3,419 - 652,749 581,201
Revaluation adjustment on
accumulated depreciation - - - - - - - - - - - (27,541)
Disposals - - (12,966) - (18,502) (10,163) (6,555) (58,218) (1,566) - (107,970) (47,293)
Transfers - - - - 6,834 1,626 (1,163) 1,741 (9,038) - - -
As at 31st December - 23,652 104,654 1,291 2,538,799 855,086 682,777 223,751 59,153 - 4,489,163 3,944,384
Net book value as at 31.12.2007 493,994 639,500 1,671,486 42,086 1,554,330 282,480 197,543 279,351 15,892 2,662 5,179,324
Net book value as at 31.12.2006 402,317 647,384 1,744,552 13,212 1,100,440 285,870 152,808 258,277 13,332 26,363 4,644,555
26.a Freehold / Leasehold Land & Buildings - Bank
Address Extent Cost/ Accmulated Net Book
Valuation Depreciation Value as at
31.12.2007
Rs.'000 Rs.'000 Rs.'000
Free Hold
Mt. Lavinia
198, Galle Road, Ratmalana 26.30 P 23,908 2,771 21,137
Badulla
10, Cocowatte Rd, Badulla 1R 6.40P 62,590 417 62,173
Kochchikade
66, 66 1/1, 68 2/1, Chilaw Rd 8.0 P 5,228 687 4,541
Ambalangoda
24 A,Galle Rd, Ambalangoda 20.0P 25,400 214 25,186
Avissawella
71, Ratnapura Rd, Avissawela 19.13P 9,574 1,588 7,986
Galle
34 1st Cross Street, 20.0P 36,000 242 35,758
Talbort Town, Galle
Kollupitiya
428 3/1, R A De Mel Mawatha, 14.90P 106,227 2,945 103,282
Colombo 03
Grandpass
401&401/20,Prince of Wales
Avanue, Colombo 14 1R 6.0P 44,372 173 44,199
Hingurakkoda
13&14, Airport Road, Hingurakkoda 0.0196H 12,000 281 11,719
Bandarawela
240,Badulla Road, Bandarawela 27.01P 31,958 297 31,661
84
Seylan Bank PLC – Annual Report 2007

NOTES TO THE ACCOUNTS
Address Extent Cost/ Accmulated Net Book
Valuation Depreciation Value as at
31.12.2007
Rs.'000 Rs.'000 Rs.'000
Sarikkamulla
97, Galle Road, Sarikkamulla 11.56 P 4,059 993 3,066
Tissamaharama
547, Debarawewa,Tissamaharama 0.091H 11,193 389 10,804
Raddolugama
171, National Housing Scheme,
Raddolugama 12.80 P 11,500 183 11,317
Negombo
115, Greens Road, Negombo 1R 23.96 P 33,750 - 33,750
Nuwara Eliya
Lot G, Park Road, Nuwara Eliya 19.08 P 6,365 1,455 4,910
Maradagahamula
150, Divulapitiya Road, 35.0 P 7,569 957 6,612
Maradagahamula
Anuradhapura
23-A1, Anuradhapura 43.65 P 3,500 548 2,952
Embilipitiya
New Town Road, Embilipitiya 22.1P 27,295 352 26,943
Nugegoda
211, High Level Rd, Nugegoda 23.57P 36,061 1,624 34,437
Nawalapitiya
77/1,79,Dolosbage Rd, Nawalapitiya 10.52P 5,719 331 5,388
Rathnapura
6 Good shed Road Ratnapura 9.31P 24,552 476 24,076
Embilipitiya
Pettigala Road Embilipitiya 32.9P 5,500 - 5,500
Private Banking
No. 02, Deal Place, Colombo 03. 19.0P 175,879 - 175,879
Gampola
44,Kandy Road, Gampola 13.5P 15,599 619 14,980
Head Office
90, Galle Road, Colombo 04. (Level -1,2,13,14) 31,704 794,244 59,535 734,709
(Square Feet)
1,520,042 77,077 1,442,965
Lease Hold
Nuwara Eliya
12, Lawson Street, Nuwara Eliya 20.28P 65,980 1,291 64,689
Grand Total 1,586,022 78,368 1,507,654
1 The Bank carried out a revaluation of its Freehold land by a professionally qualified external valuer in the year 2001. Freehold land
amounting to Rs.29,482,901/= has been stated at a revalued amount of Rs.107,200,000/=,Where the revaluation reserve of
Rs.32,217,099 /= relates to revaluation made in 1993 & the balance of Rs.45,500,000 /= relates to the year 2001.The appreciation of land
value has been accounted in the Revaluation Reserve.
2 Bank has revalued its freehold land & buildings not valued for last 7 years through professionally qualified independent valuers in the year
2006.The revaluation was carried out by taking into account the observable prices in active market or recent market transactions on an
arm's length basis.The revaluation surplus, amounting to Rs.204.63 Mn has been credited to the Revaluation Reserve Account.
3 The Revaluation reserve was created through the revaluation of Property, Plant & Equipment.The Revaluation Reserve was reduced in
2007 for the transfer of revaluation reserve to equity on the properties sold in 2007 amounting to Rs.71,929,097/-.
Seylan Bank PLC – Annual Report 2007
85

NOTES TO THE ACCOUNTS
Bank Bank Group Group
2007 2006 2007 2006
Rs.'000 Rs.'000 Rs.'000 Rs.'000
27 Other Assets
Deposits & Prepayments 368,360 500,293 454,407 625,619
Interest Receivable 723,497 269,918 852,320 305,709
Clearing House Balance 1,956,668 1,259,776 1,956,668 1,259,776
Due from Gratuity Trust Fund 421,215 348,526 421,215 348,526
Investment in Projects - - 541,115 425,714
Other Assets 1,494,052 1,034,993 1,817,068 1,330,268
4,963,792 3,413,506 6,042,793 4,295,612
28 Intangible Assets
Goodwill (28.a) - -
Deferred Expenses / Others 26,848 28,286
- - 26,848 28,286
28.a Movement in Goodwill
Goodwill brought forward - (31,553)
Transferred to goodwill - (263)
Reversed to Income Statement - 263
Transferred to Retained Profits - 31,553
Goodwill Carried forward - - - -
29 Deposits
Demand Deposits 11,574,359 10,814,107 11,574,359 10,814,107
Savings Deposits 34,791,903 35,576,318 34,832,102 35,576,318
Time Deposits 61,598,939 49,584,930 62,695,989 49,584,930
Certificates of Deposits 3,334,411 4,103,454 3,334,411 4,103,454
111,299,612 100,078,809 112,436,861 100,078,809
29.a Due within one year 101,864,073 77,161,939 102,775,233 77,161,939
Due after one year 9,435,539 22,916,870 9,661,628 22,916,870
111,299,612 100,078,809 112,436,861 100,078,809
29.b Deposits from
Non Bank Customers 109,122,124 98,230,406 110,259,373 98,230,406
Banks 519,864 267,646 519,864 267,646
Finance Companies 1,657,624 1,580,757 1,657,624 1,580,757
111,299,612 100,078,809 112,436,861 100,078,809
30 Borrowings
Call Money Borrowings 4,429,603 2,537,974 4,518,602 2,690,540
Refinance Borrowings 1,429,686 1,173,463 1,436,826 1,271,017
Other Borrowings 310,487 368,734 2,431,245 3,605,435
6,169,776 4,080,171 8,386,673 7,566,992
30.a Due Within one year 4,712,043 2,865,121 4,771,501 5,475,271
1 - 5 years - - 2,070,160 871,151
After Five years 1,457,733 1,215,050 1,545,012 1,220,570
6,169,776 4,080,171 8,386,673 7,566,992
30.b Assets pledged as Security
The Bank has not pledged any of its assets to secure the liabilities as at 31st December 2007
86
Seylan Bank PLC – Annual Report 2007

NOTES TO THE ACCOUNTS
Bank Bank Group Group
2007 2006 2007 2006
Rs.'000 Rs.'000 Rs.'000 Rs.'000
31 Group Balances Payable
Seylan Merchant Bank Plc 91,261 65,458 - -
Ceylinco Seylan Developments Ltd. 4,110 7,862 - -
Seylan Bank Asset Management Ltd 402,292 412,190 -
497,663 485,510 - -
Bank Bank Group Group
2007 2006 2007 2006
Rs.'000 Rs.'000 Rs.'000 Rs.'000
32 Deferred Taxation
32.a Deferred Tax Assets
Balance brought forward - - 8,730 (1,642)
Charge / Reversal for the year - Note 8 - - 4,602 10,372
Balance Carried forward - - 13,332 8,730
Analysis of Deferred Tax Asset - Group
2007 2006
Temporary
Temporary
Difference Tax Difference Tax
Rs.'000 Rs.'000 Rs.'000 Rs.'000
Property, Plant & Equipment (4,234) (1,482) (5,033) (1,762)
Gratuity 1,618 566 1,211 424
Tax Losses Carried forward 40,707 14,248 28,765 10,068
38,091 13,332 24,943 8,730
Bank Bank Group Group
2007 2006 2007 2006
Rs.'000 Rs.'000 Rs.'000 Rs.'000
32.b Deferred Tax Liability
Balance brought forward 341,281 525,749 341,764 525,749
Effect on rate change - Note 8 - 87,625 - 88,108
Transferred from revaluation reserve - Note 37.b - 11,502 - 11,502
Charge/ Reversal for the year - Note 8 (299,333) (283,595) (299,816) (283,595)
Balance Carried forward 41,948 341,281 41,948 341,764
32.c Analysis of Deferred tax Liability - Bank
2007 2006
Temporary
Temporary
Difference Tax Difference Tax
Rs.'000 Rs.'000 Rs.'000 Rs.'000
Property, Plant & Equipment 916,706 320,847 877,771 307,220
Revaluation 32,862 11,502 32,862 11,502
Leasing 182,810 63,984 481,674 168,586
Gratuity (635,060) (222,271) (343,200) (120,120)
B & D Provision (377,468) (132,114) (74,020) (25,907)
119,850 41,948 975,087 341,281
Seylan Bank PLC – Annual Report 2007
87

NOTES TO THE ACCOUNTS
32.d Analysis of Deferred Tax Liability - Group
2007 2006
Temporary
Temporary
Difference Tax Difference Tax
Rs.'000 Rs.'000 Rs.'000 Rs.'000
Property, Plant & Equipment 916,706 320,847 879,151 307,703
Revaluation 32,862 11,502 32,862 11,502
Leasing 182,810 63,984 481,674 168,586
Gratuity (635,060) (222,271) (343,200) (120,120)
B & D Provision (377,468) (132,114) (74,020) (25,907)
119,850 41,948 976,467 341,764
32.e Prior year adjustments
1 Bank has accounted for the deferred tax asset created due to the bad debts general provision made as per the Direction issued by
Central Bank of Sri Lanka on 21st November 2006.The total adjustment of Rs.25.91 Mn. has been accounted in the taxation of 2006.
2 Bank has adjusted for the deferred tax impact on the revaluation component on the building constructed. Accordingly a transfer of
Rs.11.50 Mn. was made between the revaluation reserve and the deferred tax liability for 2006.
Bank Bank Group Group
2007 2006 2007 2006
Rs.'000 Rs.'000 Rs.'000 Rs.'000
33 Other Liabilities
Accrued Expenses & Interest Payable 3,553,267 3,339,739 3,828,342 3,408,924
Deposit Funding Accounts 1,990,444 1,350,668 1,990,444 1,350,668
Dividend Payable 15,416 14,442 16,111 14,442
Provision for Gratuity (33.a) 1,276,474 855,716 1,304,147 874,018
Others 2,962,423 3,487,164 3,179,245 3,950,359
9,798,024 9,047,729 10,318,289 9,598,411
33.a Movement in Gratuity Provision
Balance as at 1st January 855,716 587,622 874,018 604,417
Add : Provision made during the year 415,036 321,730 427,225 328,240
Add :Transferred from Gratuity Trust Fund 65,845 - 65,845 -
Less :Transferred to Gratuity Trust Fund - - (792) (4,752)
Less : Payments (60,123) (53,636) (62,149) (53,887)
Balance as at 31st December 1,276,474 855,716 1,304,147 874,018
34 Debentures
Bank Group
Bank Amount Amount
Year of Redemption Private/Public Rate Floating Outstanding Outstanding
Issue Period Issue Annual Monthly Floating (03 Months) as at 31/12/2007 as at 31/12/2007
(Annual) Rs.'000 Rs.'000
2003 2003-2008 Public Issue 10.00% 9.00% 12.00% - 1,500,000 1,500,000
2004 2004-2009 Private Issue 12.50% 11.75% - - 457,100 457,100
2005 2005-2010 Private Issue 14.50% - - - 699,000 699,000
2006 2006-2011 Public Issue 13.50% 13.00% 15.00% - 1,257,315 1,257,315
2006 2006-2011 Private Issue 15.00% 14.00% 17.00% - 162,250 162,250
2007 2007-2012 Public Issue - I 16.75% 15.75% 16.42% - 749,400 749,400
2007 2007-2012 Public Issue - II 18.00% 17.00% 19.77% 19.97% 559,285 559,285
2007 2007-2012 Private Issue 19.50% - - - 100,000 100,000
Seylan Merchant Bank PLC - Public Issue - 322,197
5,484,350 5,806,547
88
Seylan Bank PLC – Annual Report 2007

NOTES TO THE ACCOUNTS
Bank Bank Group Group
2007 2006 2007 2006
Rs.'000 Rs.'000 Rs.'000 Rs.'000
35 Stated Capital
Ordinary Shares - Voting (35.a) 435,600 435,600 435,600 435,600
Ordinary Shares - Non Voting (35. b) 1,235,600 1,235,600 1,235,600 1,235,600
Preference Shares - Non Redeemable, Non Cummulative, 33,901 33,901 33,901 33,901
Non Convertible and Non - Voting (35.c)
Share Premium (35.d) 837,319 837,319 837,319 837,319
2,542,420 2,542,420 2,542,420 2,542,420
In accordance with section 58 of Companies Act No. 07 of 2007, Share Capital & Share Premium has been reclassified as Stated Capital.
35.a Ordinary Shares - Voting
Balance as at January 435,600 435,600 435,600 435,600
43,560,000 Ordinary Shares - Voting 435,600 435,600 435,600 435,600
35.b Ordinary Shares - Non Voting
Balance as at January 1,235,600 400,000 1,235,600 400,000
Issued during the year - 835,600 - 835,600
123,560,000 Ordinary Shares - Non Voting 1,235,600 1,235,600 1,235,600 1,235,600
35.c Preference Shares
Balance as at January 33,901 33,901 33,901 33,901
3,390,100 Preference Shares 33,901 33,901 33,901 33,901
35.d Movement in Share Premium
Balance as at 1st January 837,319 674,922 837,319 674,922
Premium on Non Voting share issue - 208,900 - 208,900
Less : Share/Debenture issue expenses** - (46,503) - (46,503)
Balance as at 31st December 837,319 837,319 837,319 837,319
** Please refer Note 6 on Debenture Issue Expenses
Bank Bank Group Group
2007 2006 2007 2006
Rs.'000 Rs.'000 Rs.'000 Rs.'000
Restated
Restated
36 Statutory Reserve Fund
Balance as at 01st January 422,091 377,688 429,295 381,981
Add :Transferred during the year ** 46,159 ** 44,403 45,366 47,314
Balance as at 31st December 468,250 422,091 474,661 429,295
** 5% of Net Profit After Tax
Statutory Reserve Fund represents the statutory requirement in terms of the section 20 (1) and (2) of the Banking Act No. 30 of 1988.
37 Reserves
Capital Reserve (37.a) 418,021 418,021 418,021 418,021
Revaluation Reserve (37.b) 198,918 270,847 564,242 636,171
Contingency Reserve (37.c) - - - -
General Reserve (37.d) 33,787 33,787 33,787 33,787
Capital Redemption Reserve Fund (37.e) - - 258,997 258,997
Reserve on Script Issue* - - 3,521 3,521
Retained profits 3,374,839 2,681,112 3,949,125 3,160,306
4,025,565 3,403,767 5,227,693 4,510,803
* The Reserve on Script Issue was created during the year 2004 by Seylan Merchant Leasing Ltd. with the intention to issue bonus
shares to raise the Share Capital.
Seylan Bank PLC – Annual Report 2007
89

NOTES TO THE ACCOUNTS
Bank Bank Group Group
2007 2006 2007 2006
Rs.'000 Rs.'000 Rs.'000 Rs.'000
Restated
Restated
37.a Movement in Capital Reserve
Balance as at 1st January 418,021 418,021 418,021 418,021
Balance as at 31st December 418,021 418,021 418,021 418,021
Consists of the Debenture Redemption Reserve Fund of Rs.400 Mn. transferred to Capital Reserve in 2004.
Debenture Redemption Reserve Fund was created for the redemption of five year Debentures amounting to Rs.400 Mn. issued in
November, 1999. Balance consisting of Rs.18 Mn. transferred to Capital Reserve in 1991.
37.b Movement in Revaluation Reserve
Balance as at 1st January 270,847 77,717 636,171 528,337
Transferred to / from Revaluation Reserve (71,929) 204,632 (71,929) 119,336
Transferred to / from Deferred Tax (Refer Note 32.e.2) - (11,502) - (11,502)
Balance as at 31st December 198,918 270,847 564,242 636,171
Bank - Details of Revalaution Reserve is given in note 26.a 1 to 3 to the financial statements.
Group - Other than Bank, Revaluation Reserve includes the Surplus on revaluation of Fixed Assets of Ceylinco Seylan Developments Ltd.
37.c Movement in Contingency Reserve
Balance as at 1st January - 260,000 - 260,000
Add :Transferred during the year - (260,000) - (260,000)
Balance as at 31st December - - - -
37.d Movement in General Reserve
Balance as at 1st January 33,787 33,787 33,787 33,787
Balance as at 31st December 33,787 33,787 33,787 33,787
Consist of Rs.25 Mn. transferred in 1995 to General Reserve, Rs.2.7 Mn. transferred from Bad Debts Reserve & Rs.6 Mn. transferred from
Contingency Reserve in 2002 to General Reserve.
37.e Movement in Capital Redemption Reserve Fund
Balance as at 1st January - - 258,997 259,785
Less : Adjustment on consolidation - - - (788)
Balance as at 31st December - - 258,997 258,997
Capital Redemption Reserve Fund was created at the time of redeeming the Preference Shares of Ceylinco Seylan Developments Ltd.
38 Commitments and Contingencies
In the normal course of business, the Bank makes various commitments and incurs certain contingent liabilities with legal recourse to its
customers. No material losses are anticipated as a result of these transactions.
Bank Bank Group Group
2007 2006 2007 2006
Rs.'000 Rs.'000 Rs.'000 Rs.'000
38.a Commitments
Undrawn Credit Lines 5,720,730 4,603,132 5,720,730 4,603,132
Capital Commitments 276,024 57,930 276,024 57,930
5,996,754 4,661,062 5,996,754 4,661,062
90
Seylan Bank PLC – Annual Report 2007

NOTES TO THE ACCOUNTS
Bank Bank Group Group
2007 2006 2007 2006
Rs.'000 Rs.'000 Rs.'000 Rs.'000
38.b Contingencies
Acceptances 3,962,480 4,059,355 3,962,480 4,059,355
Stand by Letters of Credit 241,938 347,962 241,938 347,962
Guarantees 8,609,486 8,011,642 8,618,351 8,034,818
Documentary Credit 3,845,032 3,959,121 3,845,032 3,959,121
Bills for Collection 1,625,544 1,850,756 1,625,544 1,850,756
Forward exchange Contracts (Net) 54,731 34,552 54,731 34,552
18,339,211 18,263,388 18,348,076 18,286,564
Total Commitments and Contingencies 24,335,965 22,924,450 24,344,830 22,947,626
38.c Cases against the Bank
1 Bank filed case bearing No. 128/2001(1) in Commercial High Court of Colombo against constituent claiming dues with interest, Plaintiff’s
case closed and re-fixed for Trial on 28/1/2008 and constituent filed action against the Bank in Commercial High Court Case No. 14/98
(1) claiming damages that Bank has rejected further facilities in wrongful manner, judgement received on 9/3/2005 against the Bank and
both the parties appealed against the judgment. Appeal is not yet listed.
2 Labour Tribunal Applications have been filed by employees of the Bank who had been terminated under LT Case Nos;
a) Colombo Case No 1/377/97 - Order on 22/2/2008
b) Case No. 13/294/2001 - Trial on 22/2/2008
c) LT 2/1201/6 - Calling on 24/1/2008
d) LT 2/1092/06 - Trial on 31/1/2008
e) LT TLW/37/05 - Order on 31/1/2008
3 Action No. 18399/MR in D C Colombo has been filed by a constituent of BCCI claiming the proceeds of a dollar draft deposited in his
rupee account which has been seized by the liquidator of BCCI. Evidence concluded. Order delivered against the Bank. Bank lodged
appeal in Court of Appeal under Case Nos. CA (Rev)1788/04 & CA (NIT) 91/04 to be mentioned on 13/12/2007.
4 D C Colombo Case No. 12820 transferred to Commercial High Court of Colombo Case No. 157/2001 (1) the company has filed action
against the Bank with regard to dishonouring a guarantee issued by BCCI. Notice of Appeal & Petition of Appeal filed.
5 Case No. 137/99 (1) in Commercial High Court of Colombo filed against the Bank by joint deposit holders claiming that Bank has no right
to utilize the dividends of deposit held under lien.Trial concluded on 14th September 2006. Ordered to file written submission at the
Registry. Judgment was on 22/2/2007. Judgment delivered in favour of the Bank. Plaintiff appealed against judgment.
6 D C Negombo Case No 2178/SPL case filed by liquidator of a company claiming Bank has wrongfully utilized the funds for outstanding
after initiating winding up proceedings.
After inquiry court held against the Bank. Appeal lodged (Case No. CALA 2/2002). Case has been re-fixed for argument on 25/5/2007.
The judgment was delivered on 17/9/2007 against the Bank and we appealed to the Supreme Court on 26/10/2007, and has been
re-fixed for support on 29/02/2008.
7 D C Colombo Case No. 15958/M a Company has filed a case, that the Bank has honoured a guarantee wrongfully and claiming the same.
Judgment given in favour of the Company for Rs.200,000- and we have filed an appeal which is to be listed.Writ issued pending appeal
subject to the Bank tendering a Bank guarantee in favour of the Plaintiff.
8 Legal action instituted by a constituent in D C Chilaw under Case No. 312/M in respect of payment of cheques.Written submission filed
by both parties and order is due on 28/2/2008.
9 Our constituent has filed action in Commercial High Court of Colombo under Case No. H C (Civil) 172/01 (1) against the Bank alleging
fraudulent transactions effected to his current account by his partner with the knowledge of the Bank. Case is fixed for settlement on
31/1/2008.
10 D C Mt Lavinia Case No. 4246/03/M plaintiff claiming damages for executing the writ in D C Mt Lavinia Case No. 1585/98/M in her
premises.The court ordered to lay by the Case No. 4246/03/M until the claim Case No. 234/CL is concluded.The plaintiff of the case
No. 4246/M has filed another case against Seylan Bank claiming the assets seized belonged to her and said case is fixed for further Inquiry
on 5/2/2008.
Seylan Bank PLC – Annual Report 2007
91

NOTES TO THE ACCOUNTS
11 Commercial High Court Case No. 157/2007/MR Elk Farm (Pvt) Limited claiming that we have honoured a 3rd party cheque which is
allegedly forged by the customer and credited to his account.Trial on 7/2/2008.
Based on the available information and current status of the above cases, the Bank is not in a position to quantify the potential financial
impact if any, as at the Balance Sheet date. Further, the Bank confirms that there is no case which is not disclosed above which would
have a material impact on the financial position of the Bank.
39 CAPITAL COMMITMENTS
Capital expenditure approved by the Board of Directors for which provision has not been made in these accounts amounted to
approximately -
Bank
Group
2007 2006 2007 2006
Rs. Rs. Rs. Rs.
Approved and Contracted for 276.02 Mn 57.93 Mn 276.02 Mn 57.93 Mn
Approved but not Contracted for 370.65 Mn 176.10 Mn 370.65 Mn 176.10 Mn
40 POST BALANCE SHEET EVENTS
Subsequent to the date of the Balance Sheet, no circumstances have arisen which would require adjustments to or disclosure in the
financial statements, except for what is given below.
Directors have recommended a Preference dividend of Rs.1.54 per share and Ordinary dividend of Rs.1.50 per share for the year ended
December 31, 2007 (Preference dividend of Rs.1.14 per share and Ordinary dividend of Rs.1.50 per share in 2006), which will be
declared at the next Annual General Meeting.
In accordance with Sri Lanka Accounting Standard No 12 - (Revised) Events After the Balance Sheet Date, this proposed final dividend
has not been recognized as a liability as at December 31, 2007
The following changes to the Directorate took place at the Board meeting held on February 1, 2008.
Lady Dr. Sicille P C Kotelawala was appointed as Chairperson whilst Deshamanya Dr. J L B Kotelawala was redesignated as Founder
Chairman / Managing Director and Mr. R Renganathan was redesignated as Deputy Chairman / Chief Financial Officer. Mr. Chandrasiri
Kotigala and Mrs. Leonie Seneviratne were appointed as Directors in place of Dr. P R Anthonis and Mr. S C O de Livera who retired
from the Board of Directors of the Bank.
41 DIRECTOR'S INTEREST IN CONTRACTS WITH THE COMPANY
a Deshamanya Dr. Lalith Kotelawala, Mr. R. Renganathan, Ms M Sabaratnam, Lady Dr. S.P.C. Kotelawala and Mr. K.A.S Jayatissa who are
Directors of the Bank, are also Directors of Sarana International (Pvt) Ltd. for which the Bank has contributed Rs.29,050,000/- & made
Rs.240,000 for group expenses, sponsorships & miscellaneous expenses during the year.
b
Investments made by Directors in Seylan Bank PLC Shares / Debentures
Number of Number of Number of Number of
Ordinary Ordinary Non Preference Debentures
Voting Shares Voting Shares Shares
Deshamanya Dr.Lalith Kotelawala 529,525 37,300 50,000
Lady Dr. S.P.C Kotelawala 6,554 6,554 15,000
Mr. R. Renganathan 70,100
Ms M. Sabaratnam 150 150 11,000
Mr. A. M Pasqual 4,000 33,000 2,500
Mr. A.D Jegasothy 8,369
Mr. S.K.M Perera 1,000 1,000
Dr. P.R Anthonis 21,800
Mr. S.C.O De Livera 4,537 4,537
Mr. K.A.S. Jayatissa 100
Mr. P.T. Sirisena 1,000 6,957
Mr. J.G.S. De Silva 1,044 2,044
Deshamanya Dr. Lalith Kotelawala (joint with Lady Dr. S.P.C. Kotelawala) 181,500
92
Seylan Bank PLC – Annual Report 2007

NOTES TO THE ACCOUNTS
c
Accommodation Granted to Directors for Credit Cards
Name of Director Credit Card Limit (Rs.) Security Type
Deshamanya Dr. Lalith Kotelawala 13,000,000 a)
Lady Dr. S.P.C Kotelawala 15,000,000 a)
Mr. R. Renganathan 950,000 b)
Mr. A. M. Pasqual 500,000
Mr. A.D Jegasothy 1,000,000 c)
Mr. S.K.M. Perera 500,000
Ms. M. Sabaratnam 1,000,000 d)
Dr. P.R. Anthonis 500,000
Mr. S.C.O De Livera 500,000
Mr.J G.S. De Silva 500,000
Mr. K.A.S. Jayatissa 1,000,000 e)
Mr. P.T. Sirisena 500,000
a) Rs.0.5 Mn clean and the balance was secured on cash deposits amounting to Rs.6.0Mn & GBP 56,000.
b) Rs.0.5 Mn clean and the balance was secured on cash deposits amounting to Rs.0.521 Mn.
c) Rs.0.5 Mn clean and the balance was secured on cash deposits amounting to Rs.0.556 Mn.
d) Rs.0.5 Mn clean and the balance was secured on cash deposits amounting to Rs.1 Mn.
e) Rs.0.5 Mn clean and the balance was secured on cash deposits amounting to Rs.6 Mn.
d
Other Accommodation Granted to Directors
Mr. A.M. Pasqual was granted total credit facilities of Rs.20,582,000 up to the year ended 31 st December 2007 and out of which
Rs.6,000,000 under Housing Loan against Mortgage over property and additional Housing Loan totaling to Rs.7,000,000/- and Term
Loan of Rs.3,558,000/- against deposits. Further Rs.4,024,000/- credit facility against Employee Provident Fund.
e
Compensation to Directors (Key Management Personnel)
Rs.
Short Term Employee Benfits 58,231,561
(Includes Monetary and Non Cash Benefit)
f
Transactions by Close Relations of Directors
Total Investment in Seylan Bank PLC Debentures in Rupees 200,000
Total Number of Shares held as at 31.12.2007 20,650
g All the other interests of each Director, direct or indirect in financial and other arrangements are disclosed under Note 42,
related party transactions.
Seylan Bank PLC – Annual Report 2007
93

NOTES TO THE ACCOUNTS
42 Related Party Transactions
The Bank had the following financial dealings during the year 2007 with companies which are considered related parties & unless otherwise stated,transactions were carried out in the
ordinary course of business on an arms length basis at commercial rates with the companies mentioned below.The parties given below are considered related mainly due to significant
influence arising as a result of common Directorships and through shareholdings.These companies, names of the Directors and the nature of transactions entered into are listed below.
Party/Parties Name of Director Relationship Aggregate Amount of Accommodation Service Obtained/Other Transactions
Accommodated Outstanding as at 31.12.2007
Nature of Interest in Nature of Service Amount Amount
Accommodation Suspense Bad & Doubtful Payable/Receivable Paid/Received
Non Provision Debt Provision
Limit Funded Funded for the year for the year
Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn./(USD) Rs.Mn. Rs.Mn.
Subsidiary Companies
Ceylinco Seylan Deshamanya Chairman Overdraft 20.000 21.224 Rent 78.315
Developments Ltd Dr. Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director Leasing 0.440 0.440 Reimbursement of work orders 0.802
Mr. R. Renganathan Director Guarantee 10.245 Reimbursement of Electricity 58.441
Mr. A.D. Jegasothy Director Term Loan 15.000 15.000 Reimbursement of Water 2.143
35.440 36.664 10.245 - - Reimbursement of Rates 3.330
Primary Mortgage Bond for Rs.17.6 Mn. over condominium units 3&4 Ceylinco Reimbursement of Tax Paid 0.853
Seylan Towers. Market Value 42.6 Mn. Reimbursement of Insurance 7.580
Forced Sale Value 36.0 Mn. Absolute ownership over Lease Assets Reimbursement of Professional Fees 4.025
Secondary Mortgage Bond for Rs.9.40 Mn. over condominium units 3 & 4 Others 5.282
Ceylinco Seylan Towers Market Value 21.3 Mn. 160.771
Forced Sale Value for Rs.18.0 Mn. Primary Mortgage Bond for Rs.21.0 Mn.
over condominium unit 8 Ceylino Seylan Towers.
Market Value 32.7 Mn. Forced Sale Value 28.0 Mn. Dividend Income 17.464
Deposit made for Rent & Security Rs.75.0 Mn. Service Charges Recovered 6.669
24.133
Seylan Deshamanya Chairman Overdraft 37.000 19.837 Fees for Parking Vehicle 0.870
Merchant Bank PLC Dr.Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director Treasury Loan 153.000 153.000 Other Reimbursement Expenses 0.045
Mr. R. Renganathan Director Short Term Loan 50.000 50.000
Dr P.R. Anthonis Director 0.915
Mr. A.D. Jegasothy Director 240.000 222.837 - - -
Mortgage for Rs.2,402,000/- over shares of Blue Diamond Jewellary. Market Value Rs.6,725,600
Lien over rupee fixed deposit Rs.50.0 Mn. belongs to SMB Kenanga Int.Co.Ltd
Seylan Bank PLC has invested in Rs.173.57 Mn. in Debentures.
Special Irrevocable power of Attorney over lease agreements totaling Rs.205 Mn. against
performing loans for Rs.615 Mn. Service Charges Recovered 76.109
Repo with Bank for Rs.69.825 Mn.
Seylan Bank Asset Mr. R. Renganathan Director Interest Expenses 37.286
Management Ltd Ms.M. Sabaratnam Director 37.286
Mr. A.M. Pasqual Director
Service Charges Recovered 3.282
Reverse Repo with Bank for Rs.400.724 Mn. 3.282
Other Companies
Ceylinco Insurance PLC. Deshamanya Chairman Overdraft 107.250 3.549 Insurance Premium 0.490 67.062
Dr. Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director Rent 25.844
Mr. R. Renganathan Joint Chief Guarantee 6.179 Other Reimbursement Expenses 0.140
Executive Director 107.250 3.549 6.179 - -
Mr. A.D. Jegasothy Director Lien over Rupee Fixed Deposits for Rs.52.7 Mn. and Treasury Bond Rs.75.0 Mn.
Company's investment in Seylan Bank PLC debentures amounted to Rs.519.590 Mn.
Company Purchased property from Seylan Bank PLC amounting to Rs.379.200 Mn. 0.490 93.046
Company's investment in Seylan Bank PLC shares in number is 2,178,000
ordinary voting shares 5,105,422 ordinary non voting shares & Service Charges Recovered 0.381 2.807
986,950 preference shares Insurance Claimed 0.051
Banc assurance Income Received 7.060
0.381 9.918
Ceylinco Finance PLC Deshamanya Chairman Professional Fees & Registrars Fees
Dr. Lalith Kotelawala O/A Debentures issue 0.378
Lady Dr. S.P.C. Kotelawala Director Security Service 1.700
Mr. S.K.M. Perera Director 2.078
Company's investment in Seylan Bank PLC shares in number is 2,140,226
ordinary voting shares & 3,994,910 ordinary non voting shares Service Charges Recovered 0.012
0.012
Blue Diamonds Jewellery Deshamanya Chairman Overdraft 197.235 Purchases of Jewellery 0.421
Worldwide PLC Dr. Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director Term loan 77.396
Mr. A.D. Jegasothy Director Revolving Import Loan 0.015
- 274.646 - -
Secured on Stock of jewellery worth USD 2,033 Mn.
Guarantee margin of Rs.0.865 Mn. 0.421
Cumulative Bad and Doubtful Debt provision was $ 2.536 Mn. as at year end.
94
Seylan Bank PLC – Annual Report 2007

NOTES TO THE ACCOUNTS
Party/Parties Name of Director Relationship Aggregate Amount of Accommodation Service Obtained/Other Transactions
Accommodated Outstanding as at 31.12.2007
Nature of Interest in Nature of Service Amount Amount
Accommodation Suspense Bad & Doubtful Payable/Receivable Paid/Received
Non Provision Debt Provision
Limit Funded Funded for the year for the year
Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn./(USD) Rs.Mn. Rs.Mn.
The Golden Key Credit Deshamanya Chairman Overdraft 10.000 26.160 Registered Office Expenses 0.060
Card Company Ltd. Dr. Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director Call Centre Expenses 5.520
Mr. S.K.M. Perera Deputy Chairman Card Commission 0.070
Mr. A.D. Jegasothy Director
10.000 26.160 - - - 5.650
Primary Mortgage for Rs.15.0 Mn.
Secondary Mortgage for Rs.24.0 Mn. Service Charges Recovered 0.003
Company's investment in Seylan Bank PLC debentures amounted to Rs.7.0 Mn. 0.003
Company's investment in Seylan Bank PLC shares in number is 58,537 ordinary voting
shares & 58,537 ordinary non voting shares
Middleway Ltd. Deshamanya Chairman Overdraft 0.013
Dr. Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director
Mr. A.D. Jegasothy Director
- 0.013 - - -
Company's investment in Seylan Bank PLC shares in number is 1,100 Ordinary voting shares
The Finance Company PLC Deshamanya Chairman Overdraft 108.550 71.317 Card Commission 3.874
Dr. Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director Leasing 61.393 61.393 Transfer of Funds for Loan settlement 1.350
Mr. A.D. Jegasothy Director Piyasa W'Niwasa 129.938 129.938
Mr. S.K.M. Perera Director Term Loan 10.730 10.730 5.224
Ms. M. Sabaratnam Director 310.611 273.378 - - -
Mr. K.A.S. Jayatissa Director Primary Mortgage bond for Rs.42.25 Mn. & Secondary Mortgage Bond For
Rs.20.6 Mn. Service Charges Recovered 2.127 0.549
Temporary Mortgage Bond for Rs.8.4 Mn. Lien over fixed deposit Rs.2.276 Mn.
Company's investment in Seylan Bank PLC debentures amounted to Rs.5.0 Mn. 2.127 0.549
Proceeds from Sale of Investment Property Rs.137.500 Mn.
Amount receivable from the Company during the year 2008 O/A of sale of
investment property is Rs.137.500 Mn.
Company's investment in Seylan Bank PLC shares in number is 1,473,223 Ordinary voting shares
Ceylinco CISCO Security Deshamanya Chairman Overdraft 66.440 65.510 Cash Transport 1.636
Corporation (Pvt.) Ltd. Dr. Lalith Kotelawala 66.440 65.510 Security services 0.818 128.024
Lady Dr. S.P.C. Kotelawala Director Installation & servicing charges 0.030
Mr. A.D. Jegasothy Director Other reimbursement expenses 0.069
Consultancy Fees 0.003
Travelling 0.560
0.818 130.322
Lien over Rupee Fixed Deposit Rs.41.10 Mn.
Company's investment in Seylan Bank PLC debentures amounted to Rs.0.1 Mn. Service Charges Recovered 0.049
0.049
Ceycom Global Deshamanya Chairman
Communication Ltd Dr. Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director Letter of Credit 11.280 11.280
Mr. S.K.M. Perera Deputy Chairman
Mr. A.D. Jegasothy Director
11.280 - 11.280 - -
Domestic Letter of Credit issued from Dialog Telecom US$ 123,000
Ceylinco Ltd. Deshamanya Chairman Overdraft 20.000 18.979 Service Agreements 0.025
Dr. Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Deputy Term Loan 5.230 5.230 Group Expenses 0.900
Chairperson Guarantees 0.240 Electricity 0.032
Mr. R. Renganathan Director 25.230 24.209 0.240 Water 0.001
Temporary Overdraft Facility Security Expenses 0.013
Mortgage over 1,587,398 shares. Market Value of the shares Rs.276,207,252 Rent / Maintenance 8.787
Guarantee margin 0.241 Mn. 9.758
Company's investment in Seylan Bank PLC shares in number is 1,680,896
Ordinary voting shares Service Charges Recovered 0.012
0.012
Ceymo Automobile Mr. A.D. Jegasothy Director Overdraft 0.024
Manufacturers (Pvt.) Ltd.
- 0.024 - - -
Ceylinco Land Deshamanya Chairman Overdraft 16.000 3.280 Service charges recovered 0.002
Exchange (Pvt) Ltd. Dr. Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director
16.000 3.280 - - - 0.002
Lien over Fixed Deposits Rs.17.7 Mn.
Seylan Bank PLC – Annual Report 2007
95

NOTES TO THE ACCOUNTS
Party/Parties Name of Director Relationship Aggregate Amount of Accommodation Service Obtained/Other Transactions
Accommodated Outstanding as at 31.12.2007
Nature of Interest in Nature of Service Amount Amount
Accommodation Suspense Bad & Doubtful Payable/Receivable Paid/Received
Non Provision Debt Provision
Limit Funded Funded for the year for the year
Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn./(USD) Rs.Mn. Rs.Mn.
Ceylinco PLC Deshamanya Chairman Overdraft 0.009 Loyalty Card Commission 1.369
Technology (Pvt) Ltd. Dr. Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director Term Loan 2.096 2.096
Mr. R. Renganathan Director 1.369
Mr. A.D. Jegasothy Director
2.096 2.105 - - -
Rupee Fixed deposit for 5.0 Mn.
Rupee Fixed deposit for 4.877 Mn.
Ceylinco Worldwide Deshamanya Chairman Overdraft 0.750 1.017
Trading (Pvt) Ltd. Dr. Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director
0.750 1.017 - - -
Lien over Rupee Million 30 Fixed Deposits.
Independent Financial Deshamanya Chairman Overdraft 1.552 1.443 Press advertising in Aratuwa,
News & Views (Pvt) Ltd. Dr. Lalith Kotelawala Newspapers & Subscription
Lady Dr. S.P.C. Kotelawala Director Leasing 1.956 1.956 for Aratuwa. 4.523
Mr. K.A.S. Jayatissa Director Service Charges 0.081
3.508 3.399 - - - 4.604
Lease over Rupee fixed deposit Rs.1.8 Mn.
Rupee Fixed deposit for Rs.1.250 Mn.
Key Research & Deshamanya Chairman Conducting Market Research & Staff Survey 4.262
Information Ltd. Dr. Lalith Kotelawala Professional fees 1.636
Lady Dr. S.P.C. Kotelawala Director Training 1.858
Mr. S.K.M. Perera Deputy Chairman
7.756
Ceylinco Deshamanya Chairman Overdraft 0.900 0.937 Medical Expenses 1.342
SwiftCare (Pvt) Ltd. Dr. Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director Direct Medical Expenses 0.822
Mr. A.D. Jegasothy Director Membership subscription for senior citizens 0.295
0.900 0.937 2.459
Golden Key Deshamanya Chairman Computer Software 10.972
Software Solutions Ltd. Dr. Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director Computer Related Expenses 10.781
Mr. S.K.M. Perera Deputy Chairman Service Agreement 0.403
22.156
Ceylinco Tax & Financial Deshamanya Chairman Leasing 0.466 0.466 Consultancy Payments 0.055 0.632
Consultants (Pvt) Ltd. Dr. Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director Professional Fee 3.559
Ms. M. Sabaratnam Director 0.466 0.466 - - - 0.055 4.191
Mr. K.A.S. Jayatissa Deputy Chairman
Absolute ownership over the vehicle. Service Charges Recovered 0.115
- 0.115
M/S De Livera Associates Mr. S. C. O. De Livera Senior Partner Lawyers Fees(For Direct Services) 3.975
(Partnership)
3.975
Ceylinco Hotels Ltd. Deshamanya Chairman Providing of Meals & Refreshments 16.126
Dr. Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director Leasing 4.505 4.505 Other Reimbursement Expenses 0.071
Mr. R. Renganathan Director
4.505 4.505 - 16.197
Absolute ownership over the vehicle
Ceylinco Consultancy & Deshamanya Chairman Consultancy Services 0.268
Allied Services (Pvt) Ltd. Dr. Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director Legal Fees 0.023
Mr. R. Renganathan Director Security Services 0.016
Ms. M. Sabaratnam Deputy Chairperson Sundry Expenses 0.066
Mr. K.A.S. Jayatissa Director 0.373
The Golden Key Co. Ltd. Deshamanya Chairman Computer Software / Hardware Purchases 49.987
Dr. Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director Computer related Expenses 163.751
Mr. S.K.M. Perera Deputy Chairman
Mr. A.D. Jegasothy Director 213.738
96
Seylan Bank PLC – Annual Report 2007

NOTES TO THE ACCOUNTS
Party/Parties Name of Director Relationship Aggregate Amount of Accommodation Service Obtained/Other Transactions
Accommodated Outstanding as at 31.12.2007
Nature of Interest in Nature of Service Amount Amount
Accommodation Suspense Bad & Doubtful Payable/Receivable Paid/Received
Non Provision Debt Provision
Limit Funded Funded for the year for the year
Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn./(USD) Rs.Mn. Rs.Mn.
Ceylinco Networking Deshamanya Chairman Overdraft 0.314 Professional Fees 0.747
Technologies Ltd. Dr. Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director Service Agreement 4.511
Mr. S.K.M. Perera Deputy Chairman 0.314 Computer Related 2.450
7.708
Ceylinco Deshamanya Chairman Air Ticket & Visa Fees 8.678
Travels & Tours Ltd. Dr. Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director Training & Other expenses 3.461
Mr. S.K.M. Perera Director
Mr. R. Renganathan Director 12.139
Ceylinco CISCO Security Deshamanya Chairman Cash Transport Expenses 0.140 43.683
Transport & Allied Dr. Lalith Kotelawala
Services (Pvt) Ltd. Lady Dr. S.P.C. Kotelawala Director Cash Sorting Charges 1.197
Mr. A.D. Jegasothy Director
Company's investment in Seylan Bank PLC debentures amounted to Rs.0.1 Mn. 0.140 44.880
Ceylinco Deshamanya Chairman Director's Pension Scheme 1.935
Consolidated (Pvt) Ltd. Dr. Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director Director's Medical Expenses 0.145
Mr. R. Renganathan Director Advertising Charges 0.100
Mr. A.D. Jegasothy Director Group Expenses 23.371
Ms. M. Sabaratnam Director Donations 3.500
Mr. K.A.S. Jayatissa Director Other Expenses 1.705
Mr. S.K.M. Perera Director 30.756
The Golden key Card Deshamanya Chairman Printing of ID's 0.178
Technologies Ltd. Dr. Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director
Mr. S.K.M. Perera Director 0.178
Ceylinco International Deshamanya Chairman Overdraft 1.620 0.893
Trading Company Ltd. Dr. Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director Letter of credit 0.016
Mr. A.D. Jegasothy Director Service Charges Recovered 0.048
1.620 0.893 0.016 - - 0.048
Lien over Repo for Rs.1.8 Mn.
Ceylinco Deshamanya Chairman Letter of Credit 0.245 Furniture & Office Equipment 5.954
Industries (Pvt) Ltd. Dr. Lalith Kotelawala (Usance Margin)
Lady Dr. S.P.C. Kotelawala Director 5.954
Service Charges Recovered 0.005
- - 0.245 - - 0.005
Letter of credit margin Rs.0.245 Mn.
Ceylinco Computer Deshamanya Chairman Letter of Credit 18.000 9.959 Printing Charges 2.896
Forms (Pvt) Ltd. Dr. Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director Overdraft 4.500 4.299 Computer Stationery 10.961
Stationery Purchased 0.019
22.500 4.299 9.959 - - 13.876
Mortgage over Printing Machinery.
Lien over FD Rs.50.0 Mn. for Rs.2.0 Mn. Assign. Over sales for Rs.1.217 Mn.
C A S Recoveries & Mr K.A.S Jayatissa Director Seizing Charges 2.132
Custodial Services (Pvt) Ltd 2.132
Ceylinco Printing & Deshamanya Chairman Printing Charges 14.401
Stationery (Pvt) Ltd. Dr. Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director Advertising Charges 0.464
Stationery Expenses 2.765
17.630
Asian Finance Ltd. Deshamanya Chairman Overdraft 30.000 3.669
Dr. Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director
Service Charges Recovered 0.032
30.000 3.669 - - - 0.032
Primary Mortgage Bond over immovable property for 60% of the forced sale value
maximum Rs.30.0 Mn.
Company's investment in Seylan Bank PLC shares in number is 108,532 Ordinary voting
shares & 32 Ordinary non voting shares
Seylan Bank PLC – Annual Report 2007
97

NOTES TO THE ACCOUNTS
Party/Parties Name of Director Relationship Aggregate Amount of Accommodation Service Obtained/Other Transactions
Accommodated Outstanding as at 31.12.2007
Nature of Interest in Nature of Service Amount Amount
Accommodation Suspense Bad & Doubtful Payable/Receivable Paid/Received
Non Provision Debt Provision
Limit Funded Funded for the year for the year
Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn./(USD) Rs.Mn. Rs.Mn.
Ceylinco Packaging Deshamanya Chairman Overdraft 10.000 10.509
Company Ltd.
Dr. Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director Leasing 8.551 8.551
18.551 19.060 - - -
Pledge over 440,000 shares of Ceylinco Insurance Co Ltd.
Absolute ownership of the Leased Assets.
American Deshamanya Chairman Leasing 5.515 5.515 Service Charges Recovered 0.020
Education Centre Ltd. Dr. Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director Overdraft 5.000 1.178
Mr K.A.S.Jayatissa Director 0.020
Mr. A.D. Jegasothy Director
10.515 6.693 - - -
Absolute ownership over the vehicle Rs.4.8 Mn.
Ceylinco Grameen Deshamanya Chairman Overdraft 85.000 46.603 Salaries 2.514
Credit Co Ltd
Dr. Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director Purchase of Tikiri bags 0.966
Mr. A.D. Jegasothy Director
85.000 46.603 - - - - 3.480
Securitization of receivable on loans Rs.200.0 Mn./ Overdraft Agreement
Company's investment in Seylan Bank PLC debentures amounted to Rs.10.00 Mn.
Ceylinco Investments & Deshamanya Chairman Rent 0.121
Realty (Pvt) Ltd Dr. Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director 0.121
Ms. M. Sabaratnam Director
Mr. K.A.S. Jayatissa Director Company's investment in Seylan Bank PLC share in number is 15,211 Ordinary voting shares
Ceylinco Developers Ltd Deshamanya Chairman Over draft 13.300 6.473 Sponsorship Expenses 0.043
Dr. Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director Guarantees 0.101
13.300 6.473 0.101 0.043
Letter of credit margin for Rs.0.101 Mn.
Lien over Fixed Deposits amounting to Rupees 11.70 Mn.
Lien over Foreign Currency Banking Unit funds for GBP 14,988
Company's investment in Seylan Bank PLC share in number is 1,394,400 Ordinary voting shares
Sesot (Pvt) Ltd Deshamanya Chairman Term Loan 11.977 5.300
Dr. Lalith Kotelawala 11.977 5.300 - - -
Lady Dr. S.P.C. Kotelawala Director Rs.46.210 Mn. Payable to Seylan Bank PLC.
Mr. R. Renganathan Director Dividend Received from Seylan Bank PLC amounted to Rs.3.275 Mn.
Mr. A.D. Jegasothy Director
Mr. A.M. Pasqual Director
Seybest (Pvt) Ltd Mr. R. Renganathan Director Term Loan 54.510 32.896
54.510 32.896 - - -
Rs.12.900 Mn. Payable to Seylan Bank PLC.
Dividend Received from Seylan Bank PLC amounted to Rs.3.275 Mn.
Seyshop (Pvt) Ltd Mr. J.G.S. De Silva Director Term Loan 54.375 32.932
54.375 32.932 - - -
Rs.12.900 Mn. Payable to Seylan Bank PLC.
Dividend Received from Seylan Bank PLC amounted to Rs.3.275 Mn.
Sotse (Pvt) Ltd Mr. A.M. Pasqual Director Term Loan 38.550 30.530
Mr. K.A.S. Jayatissa Director 38.550 30.530 - - -
Rs.6.700 Mn. Payable to Seylan Bank PLC.
Dividend Received from Seylan Bank PLC amounted to Rs.1.507 Mn.
Esots (Pvt) Ltd Mr. K.A.S. Jayatissa Director Term Loan 53.860 33.462
53.860 33.462 - - -
Rs.11.900 Mn. Payable to Seylan Bank PLC.
Dividend Received from Seylan Bank PLC amounted to Rs.3.250 Mn.
Seyfest (Pvt) Ltd Mr. S.C.O. De Livera Director
Ms. M. Sabaratnam Director Rs.23.00 Mn. Payable to Seylan Bank PLC.
Mr. P.T. Sirisena Director Dividend Received from Seylan Bank PLC amounted to Rs.3.275 Mn.
Credit facilities have been allowed at preferential
rates of interest since these facilities were utilized to
purchase shares which are allotted to the employees
in proportion to their Gratuity.
Ceylinco Cisco Technology Deshamanya Chairman Consultancy Expenses 0.099
& Consultancy (Pvt) Ltd Dr. Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director Installation & Other Charges . 0.274
Security Expenses 0.009 7.535
Other Expenses 0.127
0.009 8.035
98
Seylan Bank PLC – Annual Report 2007

NOTES TO THE ACCOUNTS
Party/Parties Name of Director Relationship Aggregate Amount of Accommodation Service Obtained/Other Transactions
Accommodated Outstanding as at 31.12.2007
Nature of Interest in Nature of Service Amount Amount
Accommodation Suspense Bad & Doubtful Payable/Receivable Paid/Received
Non Provision Debt Provision
Limit Funded Funded for the year for the year
Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn./(USD) Rs.Mn. Rs.Mn.
Ceylinco Express (Pvt)Ltd Deshamanya Chairman Guarantees 0.350
Dr. Lalith Kotelawala Overdraft 3.700 1.995 Courier Charges 0.004 8.176
Lady Dr. S.P.C. Kotelawala Director Term Loan 0.909 0.909
Mr. A.D. Jegasothy Director 4.609 2.904 0.350 - - 0.004 8.176
Company's investment in Seylan Bank PLC debentures amounted to Rs.0.1 Mn.
Margin on guarantees Rs.0.385 Mn. Fixed Deposits for Rs.3.740 Mn.
CTV Creations (Pvt) Ltd Deshamanya Chairman
Dr. Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director Advertising Expenses 51.976
Mr. K.A.S. Jayatissa Director
51.976
International College of Deshamanya Chairman Overdraft 1.090 1.148
Business Technology Ltd Dr. Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director
Mr. A.D. Jegasothy Director 1.090 1.148 - - -
Mr. R. Renganathan Director
Lien over Rupee Fixed Deposits for Rs.1.212 Mn.
Ceylinco Freight Deshamanya Chairman Over draft 6.500
International (Pvt) Ltd Dr. Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director Guarantees 1.350
Mr. R. Renganathan Director 6.500 - 1.350 - -
Lien over Rupee Fixed Deposits for Rs.2.018,437.80. Lien over Fixed Deposit for Rs.3,552,450/-.
Ceylinco International Deshamanya Chairman Overdraft 12.687 12.687
Realty (Pvt) Ltd Dr. Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director
Mr. A.D. Jegasothy Director 12.687 12.687
Ms. M. Sabaratnam Director Company's investment in Seylan Bank PLC shares in number is 63,000 ordinary voting shares
F&G Management Deshamanya Chairman Overdraft 1.620 1.738
Services (Pvt) Ltd Dr. Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director
Ms. M. Sabaratnam Director 1.620 1.738
Mr. K.A.S. Jayatissa Director
Lien over Themas Ranpatha Deposits for Rs.1.8 Mn.
Ceylinco Capital Deshamanya Chairman Card Commission 2.133
Investment Co (Pvt) Ltd Dr. Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director Company’s investment in Seylan Bank PLC shares in number is 57,000
Mr. A.D. Jegasothy Director Ordinary Voting Shares and 57,000 Ordinary Non Voting Shares 2.133
Ceylinco Real Estate Deshamanya Chairman Overdraft 2.485
Developers Ltd
Dr. Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director Term Loan 96.860 96.860
Leasing 0.241 0.241
97.101 99.586 - - -
Primary mortgage bond for Rs.90.0 Mn. over property FSV - Rs.70.0 Mn.
Society - Love and Deshamanya Chairman Leasing 4.507 4.507 Group Expenses 2.760
Understanding (SOLO U) Dr. Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director Legal Fees 0.091
Mr R. Renganathan Director 4.507 4.507 - 2.851
Mr. A.D. Jegasothy Director Absolute ownership over the vehicle.
Ms. M. Sabaratnam Director
Mr. S.K.M. Perera Director
Mr. K.A.S. Jayatissa Director
Cisco Informations Security Deshamanya Chairman Security Services 0.028
Services (Pvt) Ltd Dr. Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director Local Training 0.142
Mr. R. Renganathan Director
Mr. A.M. Pasqual Director 0.170
Ceylinco Group Deshamanya Chairman Lease 0.962 0.962 Library Books 3.112
Libraries Ltd
Dr. Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director
Mr. R. Renganathan Director
Mr. K.A.S. Jayatissa Director 0.962 0.962 3.112
Ms. M. Sabaratnam Director Absolute ownership over motor vehicle
Mr. A.D. Jegasothy Director
Mr. S.K.M. Perera Director
Seylan Bank PLC – Annual Report 2007
99

NOTES TO THE ACCOUNTS
Party/Parties Name of Director Relationship Aggregate Amount of Accommodation Service Obtained/Other Transactions
Accommodated Outstanding as at 31.12.2007
Nature of Interest in Nature of Service Amount Amount
Accommodation Suspense Bad & Doubtful Payable/Receivable Paid/Received
Non Provision Debt Provision
Limit Funded Funded for the year for the year
Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn./(USD) Rs.Mn. Rs.Mn.
Ceylinco Grameen Deshamanya Chairman Insurance 0.015
Automobiles (Pvt) Ltd Dr. Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director Purchases of Vehicle 0.135
0.150
Ceylinco CISCO Ranaviru Deshamanya Chairman Salary Expenses 0.248
Services (Pvt) Ltd Dr. Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director
Mr. K.A.S. Jayatissa Director
Mr. A.D. Jegasothy Director
Mr. S.K.M Perera Director
South Asian Travels Ltd Deshamanya Chairman Overdraft 15.000
Dr. Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director
Mr. R. Renganathan Director
Mr. S.K.M Perera Director 15.000 - -
Assignment over book debits (Present balance Rs.29.718 Mn.)
Ceylinco Seylan Housing & Deshamanya Chairman Term Loan 42.552 42.552
Commercial Properties Ltd Dr. Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director
Mr. R. Renganathan Director
Ms. M. Sabaratnam Director
Mr. A.M. Pasqual Director 42.552 42.552
Mr. K.A.S. Jayatissa Director
Secured by property mortgage totalling to Rs.44.450 Mn.
Seylan Merchant Deshamanya Chairman Card Commission 0.314
Leasing PLC Dr. Lalith Kotelawala Interest Expenses 7.213
Lady Dr. S.P.C. Kotelawala Director Overdraft 0.405
Mr. R. Renganathan Director
Mr. A.D. Jegasothy Director - 0.405
Ms. M. Sabaratnam Director 7.527
Company's investment in Seylan Bank PLC debentures amounted to Rs.6.0 Mn.
Ceylinco Cisco Cash Deshamanya Chairman Security Charges 8.794
Management & Transit Dr. Lalith Kotelawala
Company (Pvt) Ltd. Lady Dr. S.P.C. Kotelawala Director 8.794
IC & CS Software Deshamanya Chairman Overdraft 0.766 Computer Software 0.086
Solutions(Pvt)Ltd Dr. Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director
Mr. A.D. Jegasothy Deputy Chairman
Mr. S.K.M. Perera Director 0.086
Mr. P.T. Sirisena Director - 0.766 -
Lien over Resdient Foregin Currency Account for $13,785/-
Ceylinco Healthcare Deshamanya Chairman Medical Expenses 1.238
Services Ltd
Dr. Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director
Mr. R. Renganathan Deputy Chairman 1.238
Ms. M. Sabaratnam Director
Service Charge Recovered 0.015
0.015
Golden Key International Deshamanya Chairman Tikiri Gifts Purchased 3.991
Trading Co Ltd. Dr. Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director
Mr. S.K.M. Perera Deputy Chairman 3.991
Ceylinco Savings Bank Ltd Deshamanya Chairman Card Commission 0.091
Dr. Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Joint Deputy
Chairperson
Mr. R. Renganathan Joint Deputy
Chairman 0.091
Mr. S.C.O. De Livera Director
Ceylinco Tomei Ltd Deshamanya Chairman Purchase of Jewellery For Cool Cash Draw 0.503
Dr. Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Deputy Chairperson 0.503
100
Seylan Bank PLC – Annual Report 2007

NOTES TO THE ACCOUNTS
Party/Parties Name of Director Relationship Aggregate Amount of Accommodation Service Obtained/Other Transactions
Accommodated Outstanding as at 31.12.2007
Nature of Interest in Nature of Service Amount Amount
Accommodation Suspense Bad & Doubtful Payable/Receivable Paid/Received
Non Provision Debt Provision
Limit Funded Funded for the year for the year
Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn./(USD) Rs.Mn. Rs.Mn.
Ceylinco Deshamanya Chairman Overdraft 2.267
Renewables (Pvt) Ltd Dr. Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Deputy Chairperson
Mr. K.A.S. Jayatissa Director
- 2.267 -
Ceylinco ERA (Pvt) Ltd Deshamanya Chairman Leasing 0.920 0.920 Group Expenses 2.640
(E.R.A)
Dr. Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director Term Loan 5.000 5.000
Mr. K.A.S. Jayatissa Director 2.640
Mr. J.G.S. De Silva Director 5.920 5.920
Absolute ownership over the vehicles.
Ceylinco Lexcon Deshamanya Chairman Professional Fees 0.395
services (Pvt) Ltd Dr. Lalith Kotelawala Legal Fees 0.325
Lady Dr. S.P.C. Kotelawala Director
Mr. R. Renganathan Director
Ms. M. Sabaratnam Director 0.720
Ceylinco Consolidated Deshamanya Chairman Training Expenses 1.400
Overseas (Pvt) Ltd Dr. Lalith Kotelawala Advertising Charges 60.428
Lady Dr. S.P.C. Kotelawala Director Marketing Expenses 4.500
66.328
The Finance & Gurantee Deshamanya Chairman Overdraft 0.246
Company Ltd
Dr. Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director - 0.246 - - -
Ms. M. Sabaratnam Director
Mr. K.A.S. Jayatissa Director Temporary excess against effects since settled
Company's investment in Seylan Bank PLC debentures amounted to Rs.1.91 Mn.
ST.Nicholas Education Deshamanya Chairman
Services Ltd
Dr. Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director Overdraft 2.000 1.765
Mr. A.D. Jegasothy Director
Mr. S.K.M. Perera. Director 2.000 1.765 -
Temporary Overdraft Facility
Ceylinco Investment Deshamanya Chairman Foreign Affairs Expenses 6.000
Company Ltd
Dr. Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Deputy Chairperson Foreign Travel 25.000
Mr. A.D. Jegasothy Director Travel Expenses 48.000
Advertising Expenses 85.600
Professional Fees 17.000
Other Reimbursement Expenses 4.034
185.634
Company's investment in Seylan Bank PLC shares in number is
64,260 Ordinary voting shares Service Charge Recovered 0.495
TFC Homes (Pvt) Ltd. Deshamanya Chairman Overdraft 50.000 48.048
Dr. Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director Letter of Credit 26.511
Ms. M. Sabaratnam Director
Mr. K.A.S. Jayatissa Director
Mr. A.D. Jegasothy Director 50.000 48.048 26.511
Lien over Foreign Currency Banking Unit balance GBP-32,673.89
Lien over Foreign Currency Banking Unit balance USD-274,161.93
Seylan Bank Employees Trustees of the Company Debenture Interest 36.000
Provident Fund
Investment in Seylan Bank PLC Debentures amounted to Rs.300 Mn.
Ceylinco Building Deshamanya Chairman Term Loan 40.310 40.310
Society Ltd
Dr. Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director Leasing 3.403 3.403
Ms. M. Sabaratnam Deputy Chairperson
Mr. K.A.S. Jayatissa Director
Mr. A.D. Jegasothy Director 43.713 43.713
MBD(1)-18.6 Mn., MBD(1)s for Rs.11.4 Mn., MBD(1) for Rs.15.0 Mn.
Mr. R. Renganathan Director MV 60.0 Mn. , FSV-55.0 Mn., Ins Value-22.0 Mn.
Absolute ownership over the vehicle
Seylan Bank PLC – Annual Report 2007
101

NOTES TO THE ACCOUNTS
Party/Parties Name of Director Relationship Aggregate Amount of Accommodation Service Obtained/Other Transactions
Accommodated Outstanding as at 31.12.2007
Nature of Interest in Nature of Service Amount Amount
Accommodation Suspense Bad & Doubtful Payable/Receivable Paid/Received
Non Provision Debt Provision
Limit Funded Funded for the year for the year
Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn./(USD) Rs.Mn. Rs.Mn.
The Finance Property Deshamanya Chairman Leasing 0.799 0.799
Fund Co Ltd
Dr.Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director
Mr S.K.M.Perera Director
Mr.K.A.S.Jayatissa Director 0.799 0.799
Ms.M.Sabaratnam Director
Absolute ownership over the vehicle.
Ceylinco Micro Deshamanya Chairman Computer Related Expenses 21.265
Technologies Ltd Dr.Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director Computer Software 0.242
Mr S.K.M.Perera Deputy Chairman Computer Stationery 0.264
21.771
The Sitar (Pvt) Ltd Deshamanya Chairman Overdraft 1.000 Service Charges Recovered 0.484
Dr.Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director Leasing 2.230 2.230
Mr.R.Renganathan Director
3.230 2.230
Lien over Repo Rs.1.0 Mn. 0.484
Absolute ownership over the vehicle.
Ceylinco Exhibition and Deshamanya Chairman Sponsorship Expenses 0.040
Conventions (Pvt) Ltd Dr.Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director 0.040
Seylan Credit Card Co Ltd Deshamanya Chairman Leasing 4.493 4.493 Management Fees 48.254
Dr.Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director
Mr.R.Renganathan Director
Mr A.M.Pasqual Director 4.493 4.493 48.254
Mr S.K.M.Perera Director Absolute ownership over office equipment. Service Charges Recovered 0.793
Company's investment in Seylan Bank PLC debentures amounted to Rs.10.0 Mn.
0.793
Ceylinco Leasing Deshamanya Chairman Overdraft 0.002
Corporation Ltd Dr.Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director
Mr K.A.S.Jayatissa. Director - 0.002 -
Collection & Commision Charges 1.035
1.035
Service Charges Recovered 0.006
0.006
Ceylinco Deshamanya Chairman Overdraft 2.500 0.797
Construction Co Ltd Dr.Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director
2.500 0.797
Lien over Themas Ranpatha Deposits for Rs.2.7 Mn.
The Magnum Fund Ltd Deshamanya Chairman OverDraft 0.002
Dr.Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director
Mr.A.D.Jegasothy Director
Mr.R.Renganathan Director 0.002
Ceylinco Financial Deshamanya Chairman Overdraft 0.500 0.252
Consultancy Co (Pvt) Ltd Dr.Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director
Mr.A.D.Jegasothy Director
0.500 0.252
Ceylinco Diamond Deshamanya Chairman Purchase of Jewellery 0.047
Trading (Pvt) Co Ltd Dr.Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director Company’s investment in Seylan Bank PLC shares in number is 5,286
Ordinary Voting Shares. 0.047
Ceylinco Grameen Deshamanya Chairman Legal Fees 0.030
Consultancy
Dr.Lalith Kotelawala
Services (Pvt) Ltd
Lady Dr. S.P.C. Kotelawala Director 0.030
Ceylinco Digital Deshamanya Chairman Computer Hardware 0.001
House (Pvt) Ltd Dr.Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director Purchasing Computer Items 0.075
Ms.M.Sabaratnam Director
Mr.K.A.S.Jayatissa Deputy Chairman 0.076
102
Seylan Bank PLC – Annual Report 2007

NOTES TO THE ACCOUNTS
Party/Parties Name of Director Relationship Aggregate Amount of Accommodation Service Obtained/Other Transactions
Accommodated Outstanding as at 31.12.2007
Nature of Interest in Nature of Service Amount Amount
Accommodation Suspense Bad & Doubtful Payable/Receivable Paid/Received
Non Provision Debt Provision
Limit Funded Funded for the year for the year
Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn./(USD) Rs.Mn. Rs.Mn.
Ceylinco Toll Integrated Deshamanya Chairman Transport Charges 1.240
Logistics(Pvt) Ltd. Dr.Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Deputy Chairperson Travelling 0.072
1.312
Ceylinco Sussex Deshamanya Chairman Term Loan 46.749 46.749 Donations 1.000
Educational Services Ltd Dr.Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director
Ms. M.Sabaratnam Director 46.749 46.749
Mr K.A.S.Jayatissa. Deputy Primary Mortgage Bond 40.0 Mn. - Term Loan 1,2,3
Chairman Primary Mortgage Bond 15.0 Mn., SMB 2.25 Mn. 1.000
International Consultancy Deshamanya Chairman Telephone Expenses 0.165
and Corporate
Dr.Lalith Kotelawala
Services (Pvt) Ltd
Lady Dr. S.P.C. Kotelawala Director
Mr. P.T.Sirisena Director
Mr A.D.Jegasothy. Deputy Chairman 0.165
Ceyhomes Credit & Deshamanya Chairman Service Charges Recovered 0.003
Investments Ltd Dr.Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director
Mr. K.A.S.Jayatissa Director
Ms M.Sabaratnam Deputy Chairperson 0.003
Ceylinco Takaful Ltd Deshamanya Chairman Insurance Premium 0.368
Dr.Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director
Mr A.D.Jegasothy Director
Ms M.Sabaratnam Director
Mr K.A.S.Jayatissa Deputy Chairman 0.368
Mr P.T.Sirisena Director
Fingara International Deshamanya Chairman Sundry Expenses 0.117
Criket Academy(Pvt)Ltd Dr.Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director
Mr K.A.S.Jayatissa Director
Ms M.Sabaratnam Director 0.117
Ceylinco Ornamental Deshamanya Chairman Sundry Expenses 0.112
Fish Aquarium(Pvt) Ltd Dr.Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director
Mr K.A.S.Jayatissa Deputy Chairman 0.112
The Golden key Institute of Deshamanya Chairman Computer Software 0.527
ComputerTechnology Ltd Dr.Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director Training Expenses 1.147
Mr S.K.M.Perera Deputy Chairman
1.674
Key Rating Ltd Deshamanya Chairman Evaluation Expenses on Social Responsibility 0.330
Dr.Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director
Mr S.K.M.Perera Deputy Chairman
Mr P.T.Sirisena Director 0.330
F&G Real Estate Co Ltd Deshamanya Chairman
Dr.Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director
Mr.K.A.S.Jayatissa Director
Ms M.Sabaratnam Director
Company's investment in Seylan Bank PLC debentures amounted to Rs.1.660 Mn.
Ceylinco Institute of Deshamanya Chairman Training Expenses 0.548
Information Technology Dr.Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director
Ms M.Sabaratnam Director
Mr K.A.S.Jayatissa Deputy Chairman 0.548
Ceylinco Global Profit Deshamanya Chairman Training Expenses 0.630
Sharing Investment Dr.Lalith Kotelawala
Corp Ltd
Lady Dr. S.P.C. Kotelawala Director
Mr K.A.S.Jayatissa Deputy Chairman 0.630
Seylan Bank PLC – Annual Report 2007
103

NOTES TO THE ACCOUNTS
Party/Parties Name of Director Relationship Aggregate Amount of Accommodation Service Obtained/Other Transactions
Accommodated Outstanding as at 31.12.2007
Nature of Interest in Nature of Service Amount Amount
Accommodation Suspense Bad & Doubtful Payable/Receivable Paid/Received
Non Provision Debt Provision
Limit Funded Funded for the year for the year
Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn./(USD) Rs.Mn. Rs.Mn.
Ceylinco Sisila Deshamanya Chairman Donation 5.000
Medura (Pvt) Ltd Dr.Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director
Mr A.M.Pasqual Director
Ceylinco Finance & Deshamanya Chairman
Infrastructure Ltd Dr.Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director Overdraft 1.181
Mr.K.A.S.Jayatissa Director
Mr S.K.M.Perera Director
Mr A.M.Pasqual Director
- 1.181 - - -
Hire Drive (Pvt) Ltd Deshamanya Chairman
Dr.Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director Overdraft 0.668
- 0.668 - - -
Ceylinco Internet Deshamanya Chairman Guarantees 0.270
Services Limited Dr.Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director - - 0.270 - -
Mr.S.K.M.Perera Director
Margin for Gurantee amounting to Rs.2.580 Mn.
Ceylinco Niranjan Deshamanya Chairman Overdraft 0.002
Invention (Pvt) Ltd Dr.Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director
Mr.S.K.M.Perera Deputy Chairman - 0.002 - - -
Ceylinco Housing Ltd Deshamanya Chairman
Dr.Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director Overdraft 5.300 1.348
5.300 1.348
Themas Ranpath for Rs.5.9 Mn.
Ceylinco Development Deshamanya Chairman Overdraft 75.000 11.466
Bank Ltd
Dr.Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director Guarantees 50.000
Ms M.Sabaratnam Director Card Commision 0.140
Mr.K.A.S.Jayatissa Director
Mr R.Renganathan Deputy Chairman 125.000 11.466 - 0.140
Mr.A.D.Jegasothy Director Company's investment in Seylan Bank PLC debentures amounted to Rs.26.00 Mn.
Lien over Rupee Fixed deposit Rs.134.762 Mn.
Ceylinco Housing & Deshamanya Chairman
Real Estate Co ltd Dr.Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director Overdraft 1.998
- 1.998 - - -
Temporary excess against effects since settled
Company's investment in Seylan Bank PLC shares in number is 127,050 Ordinary NonVoting shares
Ceylinco Grameen Shop Deshamanya Chairman
House(Pvt) Ltd
Dr.Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director Overdraft 0.355
Mr.K.A.S.Jayatissa Director - 0.355 - - -
Mr.J.G.S.De Silva Director Temporary excess against effects since settled
Ceylinco Automobiles Ltd Deshamanya Chairman
Dr.Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director Letter of Credit 1.657
Mr.R.Renganathan Director
- - 1.657 - -
Letter of Credit margin Rs.1,671,000/-
Finance & Gurantee Deshamanya Chairman Overdraft 17.334 17.334
Property
Dr.Lalith Kotelawala
Developers(Pvt) Ltd
Lady Dr. S.P.C. Kotelawala Director 17.334 17.334 - - -
Mr.K.A.S.Jayatissa Director
Ms M.Sabaratnam Director
Company's investment in Seylan Bank PLC shares in number is 49,000 Ordinary voting
shares & 49,000 Ordinary non voting shares
Company's investment in Seylan Bank PLC debentures amounted to Rs.1.66 Mn.
104
Seylan Bank PLC – Annual Report 2007

NOTES TO THE ACCOUNTS
Party/Parties Name of Director Relationship Aggregate Amount of Accommodation Service Obtained/Other Transactions
Accommodated Outstanding as at 31.12.2007
Nature of Interest in Nature of Service Amount Amount
Accommodation Suspense Bad & Doubtful Payable/Receivable Paid/Received
Non Provision Debt Provision
Limit Funded Funded for the year for the year
Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn./(USD) Rs.Mn. Rs.Mn.
Ceywin Grains (Pvt) Ltd Deshamanya Chairman Overdraft 1.161
Dr.Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director
Mr.K.A.S.Jayatissa Director - 1.161 -
The Ceylon Services & Deshamanya Chairman Overdraft 1.500 1.544
Supplies Company Ltd Dr.Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director
Mr S.K.M.Perera Deputy Chairman 1.500 1.544 -
Lien over Rupee fixed deposit Rs.2.7 Mn.
SMB Real Estate Ltd Deshamanya Chairman Overdraft 1.350 0.948 Interest Expenses 0.211
Dr.Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director
Mr.R.Renganathan Director 1.350 0.948 -
Mr.A.D.Jegasothy Director Lien Over RFD's Rs.1.5 Mn.
Ceylinco Investments Deshamanya Chairman Overdraft 0.798
Corporation Ltd Dr.Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director Overseas Training 5.700
- 0.798 -
5.700
Ceylinco Universal Ltd Deshamanya Chairman Handling Fee / SCCL Staff Salary 0.260
Dr.Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director Company’s investment in Seylan Bank PLC shares in number is 3,194
Mr.R.Renganathan Director Ordinary Voting Shares and 3,194 Ordinary Non Voting Shares 0.260
SMB Securities (Pvt) Ltd Deshamanya Chairman Overdraft 0.039
Dr.Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director
- 0.039 -
Ceylinco Homes Deshamanya Chairman Term Loan 2,412.000 2,412.000
International (Lotus) Dr.Lalith Kotelawala Leasing 6.997
Tower Ltd Lady Dr. S.P.C. Kotelawala Director Short Term Loan 421.720 421.720
Mr K.A.S. Jayatissa Director Guarantees 4.850 4.850
2,838.570 2,840.717 4.850
Primary Mortgage Bond 300.0 Mn., SMB 200.0 Mn.,TMB 300.0 Mn. & MBD 200.0 Mn.
Cash deposits of USD 6,718,799.25 & GBP 5,121,878.85
Ceylinco Shriram Securities Deshamanya
Chairman
Holdings Limited Dr.Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director Company's investment in Seylan Bank PLC debentures amounted to Rs.1.0 Mn.
Ceylinco Asset Deshamanya Chairman
Management (Pvt) Ltd Dr.Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director Company's investment in Seylan Bank PLC shares in number is 455,000 Ordinary voting shares
Ceylinco Deshamanya Chairman
Capital Market Ltd Dr.Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director
Mr.R.Renganathan Director Company's investment in Seylan Bank PLCshares in number is 24,905 Ordinary Non voting shares
Ceylinco Hair Deshamanya Chairman
Dressers (Pvt) Ltd Dr.Lalith Kotelawala Company's investment in Seylan Bank PLC shares in number is 332 Ordinary Non voting shares
Ceylinco Deshamanya Chairman
Investcorp. (Pvt) Ltd Dr.Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director Company's investment in Seylan Bank PLC shares in number is 300 Ordinary voting shares
Ceylinco Deshamanya Chairman
Pensions. (Pvt) Ltd Dr.Lalith Kotelawala
Lady Dr. S.P.C. Kotelawala Director
Mr.R.Renganathan Deputy Chairman
Ms M.Sabaratnam Director Company's investment in Seylan Bank PLC shares in number is 4,500 Ordinary voting shares
Ceylinco Shriram Deshamanya Chairman
Asset Management Dr.Lalith Kotelawala
Company (Pvt) Ltd Lady Dr. S.P.C. Kotelawala Director Company's investment in Seylan Bank PLC shares in number is 50,000 Ordinary non voting shares
Ceylinco Shriram Capital Deshamanya Chairman Overdraft 0.003
Management
Dr.Lalith Kotelawala
Services (Pvt) Ltd. Lady Dr. S.P.C. Kotelawala Director - 0.003 - - -
Company's investment in Seylan Bank PLC shares in number is 64,000 Ordinary voting shares
& 65,000 Ordinary non voting shares
Deposits with the Bank by the Companies within the Ceylinco Group was Rs.2,191.565 Mn., as at 31st December 2007.
Seylan Bank PLC – Annual Report 2007
105

NOTES TO THE ACCOUNTS
43 Maturity Analysis
Bank
43 (a) An analysis of the total assets employed as at 31 st December 2007 based on the remaining period at the Balance Sheet date to the
respective contractual maturity dates is given below.
Up to 3 3 to 12 1 to 3 3 to 5 More Than Total as at
Months Months Years Years 5 Years 31.12.2007
Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000
Interest Earning Assets
Bills of Exchange 1,674,891 214,280 77,920 - - 1,967,091
Loans & Advances 30,068,998 24,723,117 16,402,444 6,817,579 11,004,931 89,017,069
Lease Receivable 1,075,998 1,740,482 3,206,156 641,271 3,310 6,667,217
Balances with Banks 447,507 - - - - 447,507
Short Term Funds 1,129,923 - - - - 1,129,923
Investments in Debentures - 194,850 60,000 - 18,720 273,570
Treasury Bills / Bonds 5,655,262 5,458,024 9,686,456 1,504,810 82,480 22,387,032
Securities purchased under
Resale Agreements 454,648 - - - - 454,648
40,507,227 32,330,753 29,432,976 8,963,660 11,109,441 122,344,057
Non Interest Earning Assets
Cash In Hand 2,405,817 - - - - 2,405,817
Balances with CBSL 7,915,660 - - - - 7,915,660
Investments 150 1,072,727 - - 968,328 2,041,205
Investment Property 149,394 149,394
Group Balances Receivable 411,629 411,629
Property, Plant & Equipment - - - - 3,690,014 3,690,014
Other Assets 4,963,792 4,963,792
15,846,442 1,072,727 - - 4,658,342 21,577,511
Total Assets 56,353,669 33,403,480 29,432,976 8,963,660 15,767,783 143,921,568
43 (b)An analysis of the total liabilities as at 31st December 2007 based on the remaining period at the Balance Sheet date to the respective
contractual maturity dates is given below.
Interest Bearing Liabilities
Deposits 72,141,934 18,148,120 2,040,639 2,127,840 5,266,720 99,725,253
Securities sold under
re-purchase agreements 2,675,894 445,760 - - - 3,121,654
Borrowings 4,712,043 - - - 1,457,733 6,169,776
Debentures - 1,500,000 1,156,100 2,828,250 - 5,484,350
79,529,871 20,093,880 3,196,739 4,956,090 6,724,453 114,501,033
Non Interest Bearing Liabilities
Deposits 11,002,459 571,560 340 - - 11,574,359
Other Liabilities 9,782,608 - - - - 9,782,608
Deferred Taxation - - - 41,948 - 41,948
Tax Payable 472,306 - - - - 472,306
Dividend Payable 15,416 - - - - 15,416
Group Balances Payable 497,663 497,663
Shareholders Funds - - - - 7,036,235 7,036,235
21,770,452 571,560 340 41,948 7,036,235 29,420,535
Total Liabilities 101,300,323 20,665,440 3,197,079 4,998,038 13,760,688 143,921,568
Notes : “Up to 3 months” Interest Bearing Liabilities includes the Bank’s Savings Deposits base of Rs.29.53 Bn.
“More than 5 years” Interest Bearing Liabilities reflect the Bank’s Tikiri Deposits Base of Rs.5.26 Bn.
Shareholders’ funds are classified into the more than 5 years category since no contractual date of maturity can be identified.
106
Seylan Bank PLC – Annual Report 2007

NOTES TO THE ACCOUNTS
43 Maturity Analysis
Group
43 (c) An analysis of the total assets employed as at 31 st December 2007 based on the remaining period at the Balance Sheet date to the
respective contractual maturity dates is given below.
Up to 3 3 to 12 1 to 3 3 to 5 More Than Total as at
Months Months Years Years 5 Years 31.12.2007
Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000
Interest Earning Assets
Bills of Exchange 1,674,891 214,280 77,920 - - 1,967,091
Loans & Advances 30,201,986 25,062,324 16,834,869 6,867,394 11,009,971 89,976,544
Lease Receivable 1,566,456 2,065,812 4,204,196 1,380,910 14,806 9,232,180
Balances with Banks 447,507 - - - - 447,507
Short Term Funds 1,160,536 25,869 - - - 1,186,405
Investments in Debentures - 100,000 - 1,500 - 101,500
Treasury Bills / Bonds 6,533,351 8,978,045 10,509,914 1,565,819 107,388 27,694,517
Securities purchased under
Resale Agreements 1,190,791 2,131 - - - 1,192,922
42,775,518 36,448,461 31,626,899 9,815,623 11,132,165 131,798,666
Non Interest Earning Assets
Cash In Hand 2,427,920 3,460 - - - 2,431,380
Balances with CBSL 7,915,741 - - - - 7,915,741
Investments 283 1,072,727 - - 287,456 1,360,466
Investment Property 176,899 - - - 1,430,734 1,607,633
Property, Plant & Equipment - - 78,297 15,948 5,085,079 5,179,324
Other Assets 5,059,070 332,875 658,452 11,458 21,118 6,082,973
15,579,913 1,409,062 736,749 27,406 6,824,387 24,577,517
Total Assets 58,355,431 37,857,523 32,363,648 9,843,029 17,956,552 156,376,183
43 (d)An analysis of the total liabilities as at 31st December 2007 based on the remaining period at the Balance Sheet date to the respective
contractual maturity dates is given below.
Interest Bearing Liabilities
Deposits 72,561,075 18,640,139 2,056,221 2,331,604 5,273,463 100,862,502
Securities sold under
re-purchase agreements 7,874,585 1,011,303 2,226 - - 8,888,114
Borrowings 3,942,294 829,207 522,141 1,548,019 1,545,012 8,386,673
Debentures 51,581 1,466,189 1,400,398 2,823,958 64,421 5,806,547
84,429,535 21,946,838 3,980,986 6,703,581 6,882,896 123,943,836
Non Interest Bearing Liabilities
Deposits 11,002,459 571,560 340 - - 11,574,359
Other Liabilities 9,901,765 249,954 115,308 35,151 - 10,302,178
Deferred Taxation - - - 41,948 - 41,948
Tax Payable 541,082 - - - - 541,082
Dividend Payable 16,111 - - - - 16,111
Shareholders Funds - - - - 8,244,774 8,244,774
Minority Interest - - - - 1,711,895 1,711,895
21,461,417 821,514 115,648 77,099 9,956,669 32,432,347
Total Liabilities 105,890,952 22,768,352 4,096,634 6,780,680 16,839,565 156,376,183
Seylan Bank PLC – Annual Report 2007
107

NOTES TO THE ACCOUNTS
44 Segment Reporting - Group
Banking Leasing Treasury Property/ Eliminations/ Consolidated
Investments Unallocated Restated
2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006
Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000
Revenue
Interest 16,016,633 12,626,548 - - 2,307,479 2,127,174 44,230 964 49,508 60,359 18,417,850 14,815,045
Exchange 135,418 178,679 - - 463,037 383,261 - - 5,369 38,959 603,824 600,899
Lease Income / Brokering - - 643,634 579,810 - - - - - - 643,634 579,810
Commissions & Fee Income 1,329,206 1,126,651 30,306 7,019 210,994 213,902 - - (72,550) 2,241 1,497,956 1,349,813
Other 1,105,919 1,161,268 105,579 46,697 74,868 (54,900) 477,080 256,856 (118,448) (71,344) 1,644,998 1,338,577
Total Revenue From
External Customers 18,587,176 15,093,146 779,519 633,526 3,056,378 2,669,437 521,310 257,820 (136,121) 30,215 22,808,262 18,684,144
Total Revenue 18,587,176 15,093,146 779,519 633,526 3,056,378 2,669,437 521,310 257,820 (136,121) 30,215 22,808,262 18,684,144
Segment result 3,480,605 2,784,351 150,264 179,261 662,413 445,955 4,653 7,210 (2,619,001) (1,734,775) 1,678,934 1,682,002
Depreciation charge for the Year. 216,437 193,331 8,951 10,525 12,843 20,222 32,888 13,484 381,630 343,639 652,749 581,201
Unallocated Income / Expenses 9,270 18,054
Profit from Operations 1,669,664 1,663,948
Income tax expense (535,142) (730,816)
Profit After Income tax 1,134,522 933,132
Minority Interest (113,836) (58,481)
Net Profit for the year 1,020,686 874,651
OTHER INFORMATION
Segment assets 127,510,850 114,683,298 3,587,094 4,191,246 18,060,368 15,129,480 4,132,805 3,649,437 7,574,229 6,749,806 160,865,346 144,403,267
Segement Amortisations (1,555,165) (1,380,332) (59,267) (51,872) (90,292) (80,633) (97,663) (69,466) (2,686,776) (2,362,081) (4,489,163) (3,944,384)
Total Assets 125,955,685 113,302,966 3,527,827 4,139,374 17,970,076 15,048,847 4,035,142 3,579,971 4,887,453 4,387,725 156,376,183 140,458,883
Segment liabilities 123,400,915 111,821,444 3,527,827 3,542,242 17,492,665 14,696,533 1,308,436 960,597 689,671 335,101 146,419,514 131,355,917
Shareholders Funds 8,244,774 7,482,518 8,244,774 7,482,518
Minority Interest 1,711,895 1,620,448 1,711,895 1,620,448
Total liabilities 123,400,915 111,821,444 3,527,827 3,542,242 17,492,665 14,696,533 1,308,436 960,597 10,646,340 9,438,067 156,376,183 140,458,883
Cash flows from
Operating activities 7,513,437 3,273,752 357,164 (286,681) 770,970 478,452 58,557 228,278 (1,040,084) (436,643) 7,660,044 3,257,158
Cash flows from
Investing activities 2,346,526 2,249,433 91,466 (27,501) (2,083,307) (2,821,079) (126,356) (429,296) (480,871) (389,521) (252,542) (1,417,964)
Cash flows from
Financing activities (104,543) (159,839) (282,125) 460,929 (46,053) 145,975 19,548 214,874 2,427,806 (487,475) 2,014,633 174,464
Capital Expenditure (567,506) (178,334) (8,007) 16,606 (2,321) (281) (20,012) (17,325) (734,442) (451,142) (1,332,288) (630,476)
108
Seylan Bank PLC – Annual Report 2007

TEN YEAR SUMMARY
Ten Year Summary of Financial Statements
(Rs.000)
Year Ended 31st December 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998
Restated Restated Restated
Trading Results
Gross Income 21,079,885 17,183,481 13,090,715 10,072,376 9,973,644 8,988,278 8,475,059 6,745,575 5,823,794 4,995,267
Profit Before Income Tax 1,439,069 1,606,882 1,061,033 478,291 705,953 677,989 278,435 256,536 181,532 239,822
Taxation 515,880 718,814 373,200 69,648 114,539 10,021 5,928 10,932 9,729 10,308
Profit after Taxation 923,189 888,068 687,833 408,643 591,414 667,968 272,507 245,604 171,803 229,514
Dividends Proposed (Ordinary) Rs.1.50 Rs.1.50 20% 16% 15% 15% 12.5% 12% 10% 10%
Per Share Per Share
Balace Sheet
ASSETS
Cash & Short Term Funds 26,824,927 21,833,056 17,322,763 12,080,206 15,669,097 11,673,027 10,634,811 10,582,643 10,846,407 7,942,191
Statutory Deposit with
Central Bank of Sri Lanka 7,915,660 6,913,224 5,908,292 5,050,665 3,951,940 3,866,450 3,351,904 3,617,909 3,197,215 3,094,863
Investments 1,370,762 333,960 333,755 649,117 1,076,728 1,201,947 1,075,990 658,291 451,192 426,208
Bills of Exchange 1,967,091 1,827,824 2,154,916 2,210,842 1,745,701 1,652,786 1,502,995 2,009,411 787,115 778,873
Loans, Advances & Leases 95,684,286 91,431,102 79,314,465 60,613,807 49,903,047 42,998,354 37,254,770 33,408,337 27,294,611 24,669,698
133,762,726 122,339,166 105,034,191 80,604,637 72,346,513 61,392,564 53,820,470 50,276,591 42,576,540 36,911,833
Investment in Subsidiary 1,093,407 1,048,559 1,029,656 1,095,231 1,435,231 1,444,275 1,444,275 1,441,011 1,000,644 987,862
Other Assets 5,375,421 3,783,353 4,648,548 3,698,682 4,285,255 2,961,309 3,090,017 1,691,530 1,677,526 1,215,283
Property, Plant & Equipment 3,690,014 3,135,030 2,896,049 2,785,092 1,984,070 1,980,472 1,947,968 2,518,481 2,058,093 1,938,863
143,921,568 130,306,108 113,608,444 88,183,642 80,051,069 67,778,620 60,302,730 55,927,613 47,312,803 41,053,841
LIABILITIES
Deposits from Customers 111,299,612 100,078,809 85,833,954 68,301,154 59,362,955 52,431,165 47,859,511 41,695,054 37,079,882 32,136,678
Borrowings & Debentures 14,775,780 13,167,204 13,037,404 6,648,055 8,606,998 6,355,156 4,400,760 6,947,041 4,523,237 2,805,111
Other Liabilities 10,322,219 9,860,078 9,998,624 9,296,381 7,838,625 6,106,586 5,796,800 5,291,888 3,906,187 4,433,281
Taxation 472,306 817,297 105,420 (187,856) (145,304) (46,339) (55,800) (32,156) (19,885) (15,758)
Dividends 15,416 14,442 6,763 21,716 22,396 85,006 63,426 55,588 46,516 45,906
136,885,333 123,937,830 108,982,165 84,079,450 75,685,670 64,931,574 58,064,697 53,957,415 45,535,937 39,405,218
EQUITY
Stated Capital - Share Capital 1,705,101 1,705,101 869,501 869,501 869,501 469,501 446,141 435,600 435,600 435,600
- Share Premium 837,319 837,319 674,922 696,235 713,399 183,167 194,485 202,144 202,144 202,144
Reserve Fund 468,250 422,091 377,688 343,296 303,146 289,158 275,799 270,349 265,437 262,001
Reserves 4,025,565 3,403,767 2,704,168 2,195,160 2,479,353 1,905,220 1,321,608 1,062,105 873,685 748,878
7,036,235 6,368,278 4,626,279 4,104,192 4,365,399 2,847,046 2,238,033 1,970,198 1,776,866 1,648,623
TOTAL LIABILITIES & EQUITY 143,921,568 130,306,108 113,608,444 88,183,642 80,051,069 67,778,620 60,302,730 55,927,613 47,312,803 41,053,841
Commitments and Contingencies 24,335,965 22,924,450 22,942,795 20,983,027 17,743,062 13,206,586 10,083,442 10,274,265 8,266,319 8,280,156
Seylan Bank PLC – Annual Report 2007
109

VALUE ADDED STATEMENT
Value added is the wealth the Bank has been able to create by providing clients with a quality, value added service.
2007 2006
RS.000 % RS.000 %
Restated
Value added
Income earned by providing banking services 20,275,211 16,119,741
Cost of services (13,853,118) (10,308,246)
Value added by banking services 6,422,093 5,811,495
Non-banking income 804,674 1,063,740
Provision for bad debts (1,365,075) (1,684,495)
5,861,692 5,190,740
Value allocated
To employees
Salaries, wages and other benefits 3,173,560 54.14 2,557,072 49.26
To providers of Capital
Dividends to shareholders 255,232 4.35 337,196 6.50
To Government
Income tax 515,880 718,814
Stamp Duty 50,201 14,487
VAT 2,294 2,967
VAT on Profits 584,033 469,007
Debit Tax 9,749 1,162,157 19.83 7,138 1,212,413 23.36
To Expansion and growth
Retained Income 667,957 11.40 550,872 10.61
Depreciation 602,786 1,270,743 10.28 533,187 1,084,059 10.27
5,861,692 100.00 5,190,740 100.00
110
Seylan Bank PLC – Annual Report 2007

INVESTORS’ INFORMATION
Twenty Largest Shareholders as at 31st December 2007
2007 2006
Ordinary Voting Shares No. of Shares % No. of Shares %
1 Dollar Distribution (Pvt) Ltd 2,178,000 5.00 2,178,000 5.00
2 Dr T Senthilverl 2,178,000 5.00 2,178,000 5.00
3 Seyfest (Private) Limited 2,177,996 5.00 2,177,996 5.00
4 Seyshop (Private) Limited 2,177,900 5.00 2,177,900 5.00
5 Seybest (Private) Limited 2,177,900 5.00 2,177,900 5.00
6 Sesot (Private) Limited 2,177,900 5.00 2,177,900 5.00
7 Esots (Private) Limited 2,160,857 4.96 2,160,857 4.96
8 Ceylinco Finance PLC
(Former Name : Ceylinco Securities & Financial Services Ltd) 2,140,226 4.91 2,140,226 4.91
9 Ceylinco Insurance PLC 1,756,460 4.03 1,756,460 4.03
10 Ceylinco Limited 1,680,896 3.86 1,680,896 3.86
11 National Savings Bank 1,510,900 3.47 1,510,900 3.47
12 The Finance Company PLC 1,473,223 3.38 1,473,223 3.38
13 Ceylinco Developers Ltd 1,394,400 3.20 1,394,400 3.20
14 Softlogic Holdings (Pvt) Ltd 1,200,000 2.76 1,200,000 2.76
15 Sotse (Pvt) Ltd 1,002,331 2.30 1,002,331 2.30
16 Lanka Milk Foods (CWE) Limited 769,380 1.77 769,380 1.77
17 Mr R K Seenivasagam 538,800 1.24 538,800 1.24
18 Dr J L B Kotelawala 529,525 1.22 529,525 1.22
19 Mr S K Sivakumar 498,700 1.14 498,700 1.14
20 Ceylinco Asset Management Co. Ltd 455,000 1.04 455,000 1.04
Sub Total 30,178,394 69.28 30,178,394 69.28
Balance Shares held by other voting shareholders 13,381,606 30.72 13,381,606 30.72
(7,942 shareholders) (8,007 shareholders)
Total Voting shares 43,560,000 100.00 43,560,000 100.00
2007 2006
Ordinary Non-Voting Shares No. of Shares % No. of Shares %
1 Dr T Senthilverl 10,441,400 8.45 313,700 0.25
2 Mr S V Somasunderam 9,468,800 7.66 9,418,800 7.62
3 Elgin Investments Limited 6,000,800 4.86 5,150,800 4.16
4 Janashakthi Insurance Co. Ltd – NICPH
(Formerly National Insurance Corporation Ltd A/c No.2) 4,600,000 3.72 4,600,000 3.72
5 National Savings Bank 4,540,900 3.67 4,540,900 3.67
6 Mr T D R Karunaratne 4,000,000 3.23 4,000,000 3.23
7 Janashakthi Insurance Co. Ltd – (Policy Holders)
(Former Name : Janashakthi Insurance Co. Ltd) 4,000,000 3.23 4,000,000 3.23
8 Ceylinco Finance PLC
(Former Name : Ceylinco Securities & Financial Services Ltd) 3,994,910 3.23 3,994,910 3.23
9 Mrs P N Bhatt 3,827,928 3.10 3,833,828 3.10
10 Ceylinco Insurance PLC A/C No. 1 (Life Fund) 3,283,962 2.65 3,283,962 2.65
11 Softlogic Holdings (Pvt) Ltd 3,200,000 2.58 3,200,000 2.58
12 Akbar Brothers Ltd A/c No.1 2,634,900 2.13 2,509,900 2.03
13 Bank of Ceylon A/c Ceybank Unit Trust 1,839,500 1.49 1,430,200 1.15
14 Ceylinco Insurance PLC 1,756,460 1.42 1,756,460 1.42
15 Mr H L Rikhye 1,642,900 1.33 1,392,900 1.12
16 Mr N R Somaiya 1,248,500 1.01 166,500 0.13
17 Employees’Trust Fund Board 1,099,400 0.88 1,099,400 0.88
18 Sinhaputhra Finance Ltd 1,083,000 0.88 1,108,000 0.89
19 Galleon International Master Fund, SPC Ltd 1,076,200 0.87 - -
20 Mrs E B H A Perera 1,036,500 0.84 1,555,100 1.25
Sub Total 70,776,060 57.28 66,204,640 53.58
Balance Shares held by other Non-voting shareholders 52,783,940 42.72 57,355,360 46.42
(5,858 shareholders) (5,803 shareholders)
Total Non-voting shares 123,560,000 100.00 123,560,000 100.00
Seylan Bank PLC – Annual Report 2007
111

INVESTORS’ INFORMATION
Analysis of the Distribution of Shareholders as at 31st December 2007
ORDINARY (VOTING) SHARES
ORDINARY (NON-VOTING) SHARES
Range of Shareholding Percentage Percentage
No. of No. of (%) of No. of No. of (%) of
Shareholders Shares Shareholding Shareholders Shares Shareholding
1 – 1,000 6,337 1,597,611 3.67 2,732 1,335,645 1.08
1,001 – 5,000 1,263 2,761,365 6.34 1,810 4,973,555 4.02
5,001 – 10,000 154 1,120,621 2.57 549 4,279,810 3.47
10,001 – 50,000 148 2,850,245 6.54 580 12,845,197 10.40
50,001 – 100,000 25 1,736,064 3.98 101 7,577,619 6.13
100,001 – 500,000 17 4,270,616 9.80 78 16,277,334 13.17
500,001 – 1,000,000 3 1,837,705 4.22 8 5,494,780 4.45
1,000,001 & Above 15 27,385,773 62.87 20 70,776,060 57.28
TOTAL 7,962 43,560,000 100.00 5,878 123,560,000 100.00
Resident/Non Resident
Resident 7878 43,325,302 99.46 5820 111,437,380 90.19
Non-Resident 84 234,698 0.54 58 12,122,620 9.81
Individuals/Institutions
Individuals 7686 12,840,005 29.48 5647 68,914,386 55.77
Companies 276 30,719,995 70.52 231 54,645,614 44.23
ORDINARY SHARES (QUOTED)
Voting (SEYB-N)
Non-Voting (SEYB-X)
2007 2006 2007 2006
No. of shares issued 43,560,000 43,560,000 123,560,000 123,560,000
Dividends Rs.1.50 Rs.1.50 Rs.1.50 Rs.1.50
per share per share per share per share
Share prices
Highest Rs. 42.00 50.00 10.50 19.50
Lowest Rs. 25.00 30.00 07.75 09.25
Last traded Rs. 32.00 35.00 08.00 09.75
Percentage of Public Holdings 75.28% 74.92% 92.34% 92.27%
DEBENTURES (QUOTED)
Debentures 2003/2008
(Listed on CSE in January 2004)
(SEYB D64, D65 & D66) Monthly Interest Annual Interest Floating
(9%) (10%) rate of interest
2007 2006 2007 2006 2007 2006
No. of Debentures issued 1,369,250 13,368,000 262,750
Debenture Prices
Highest Rs. Not 88.00 73.03 90.00 Not traded
Lowest Rs. traded 83.64 73.03 81.00 during the
Last traded Rs. In 2007 88.00 73.03 89.98 years 2006 & 2007
Debentures 2006/2011
(Listed on CSE in July 2006)
(SEYB D86, D87 & D88) Monthly Interest Annual Interest Floating
(13%) (13.5%) rate of interest
2007 2006 2007 2006 2007 2006
No. of Debentures issued 7,646,400 4,620,800 305,950
Debenture Prices
Highest Rs. 99.91 99.65 80.00 Not 80.00 Not
Lowest Rs. 71.00 98.50 80.00 traded 80.00 traded
Last traded Rs. 71.00 99.65 80.00 in 2006 80.00 in 2006
112
Seylan Bank PLC – Annual Report 2007

INVESTORS’ INFORMATION
Debentures 2007/2012
(Listed on CSE in June 2007)
(SEYB D118, D119 & D120) Monthly Interest Annual Interest Floating
(15.75%) (16.75%) rate of interest
2007 2006 2007 2006 2007 2006
No. of Debentures issued 2,916,200 4,275,450 302,350
Debenture Prices
Highest Rs. 100.00 - 100.00 - Not -
Lowest Rs. 100.00 - 95.99 - traded -
Last traded Rs. 100.00 - 100.00 - in 2007 -
Debentures 2007/2012 - Issue 2
(Listed on CSE in January 2008)
(SEYB D127, D128, D129 & D130) Monthly Interest Annual Interest Floating rate of interest Floating rate of interest
(17.00%) (18.00%) payable quarterly payable annually
2007 2006 2007 2006 2007 2006 2007 2006
No. of Debentures issued 2,089,550 2,962,400 433,350 107,550
Debenture Prices
Highest Not - Not - Not - Not -
Lowest traded - traded - traded - traded -
Current Period Previous Comparative Period
31.12.2007 31.12.2006
Restated
Interest rate of comparable Government security 17.63% 13.55%
Debt / Equity ratio 0.79 0.76
Interest Cover 3.22 4.09
Quick asset ratio 0.74 0.83
Interest Yield as at date of last trade
2003/2008 Issue
Annual Interest * / (05/12/2006) * 11.11%
Monthly Interest * / * * *
Floating Interest * / * * *
2006/2011 Issue
Annual Interest (24/08/2007) / * 16.88% *
Monthly Interest (19/10/2007)/(24/11/2006) 19.44% 13.85%
Floating Interest (24/08/2007) / * 18.75% *
2007/2012 Issue I
Annual Interest (06/12/2007) 16.75% -
Monthly Interest (06/12/2007) 16.94% -
Floating Interest * * -
2007/2012 Issue II
Annual Interest * * -
Monthly Interest * * -
Floating Interest * * -
Yield to maturity of trade done on
2003/2008 Issue
Annual Interest * / (05/12/2006) * 16.05%
Monthly Interest * / * * *
Floating Interest * / * * *
2006/2011 Issue
Annual Interest (24/08/2007) / * 21.56% *
Monthly Interest (19/10/2007)/(24/11/2006) 25.21% 13.10%
Floating Interest (24/08/2007) / * 23.31% *
2007/2012 Issue I
Annual Interest (06/12/2007) 16.64% -
Monthly Interest (06/12/2007) 15.75% -
Floating Interest * * -
2007/2012 Issue II
Annual Interest * * -
Monthly Interest * * -
Floating Interest * * -
* No trading during the period
Seylan Bank PLC – Annual Report 2007
113

BRANCH NETWORK
Ambalangoda - AMB
No. 24 A, Galle Road, Ambalangoda
0912258010-11, 0912258710
0912258010(f)
Anuradhapura - ANP
No. 250, Main Street, Anuradhapura
02522-24649, 2236372
0252223116(f)
025-2224547, 2236370
Attidiya - ATD
No.214, Main Road, Attidiya, Dehiwela
2738453, 2729696, 4203565
2722967(f)
Awissawella - AWL
No. 71, Ratnapura Road, Awissawella
0362222007, 2232265
0362222009(f)
0365673333 - Direct
Ampara - AMP
Regal Cinema Complex
No.129, D S Senanayake Street, Ampara
063-22-24897, 063-22-24898,
063-22-24899
Balangoda - BAL
No.123, Barnes, Ratwatte Mawatha,
Balangoda
0452287107, 0452287007
0452287344(f)
Batticaloa - BCL
No. 06, Lloyds Avenue, Batticaloa
0652224419, 0652224587
0652224353(f)
06522245871
Bandaragama - BDG
No.17A, Horana Road, Bandaragama
0382290706, 0382290460
0382291125(f)
Badulla - BDL
No. 10, Cocowatta Road, Badulla
055-4499524, 0552222073, 0552223773,
2223414
0552222884(f)
Bandarawela - BDW
No. 240, Badulla Road, Bandarawela
0572223144, 0572231085
0572222964(f)
Bogawanthalawa - BGW
No. 79 Main Street, Bogawanthalawa
0522267576
0522267578(f)
Borella - BLA
No. 1119, Maradana Road, Borella
2678189 – 193
2681194(f)
Beliatta - BLT
No. 50,Walasmulla Road, Beliatta
0472251478, 0472243461, 0472243441
0472243619 (f)
Boralesgamuwa - BOR
No. 24, Kesbewa Road, Boralesgamuwa
2518867, 2517550, 2509823-4, 2517548-9
509526(f)
Cinnamon Gardens - CGD
No. 4, Baptist Chapel Road, Colombo 07
2683726, 2694966, 2697552, 2695214,
5340347
2683725(f)
Chilaw - CHW
No. 46, Kurunegala Road, Chilaw
0322222121, 2223455, 2223499, 4860550
0322223279(f)
Colombo South - CLS
No. 30 Galle Road, Colombo 06
2593405-7, 2594856, 4510594, 2510524
2593406(f)
Ceylinco House - CHB
No. 69 Janadhipathi Mawatha,
Colombo 01
4714655, 2714651, 2445840-3
2447990(f)
Dehiwela - DEH
No. 166D, Galle Road, Dehiwela
2727844, 2738843, 2726395, 4201756
2739128(f)
Dehiattakandiya - DKY
No. 83/84 Main Street, Dehiattakandiya
0272250268,2250034-5
0272250034(f)
Embilipitiya - EMB
53, New Town Road, Embilipitiya
0472230340 – 2, 0472261187
0472230342(f)
First City Office - FCO
No. 33 Sir Baron Jayathilake Mawatha,
Colombo 01
2437901-7, 2329525, 4725005-9
2439834 & 2329509(f)
Free Trade Zone - FTZ
Unit No. 3 Plaza Complex, KIPZ,
Katunayake
2252566-7
2252567(f)
Gampaha - GAM
No. 1J, Bauddhaloka Mawatha, Gampaha
0332222618, 2226511, 2227525, 2222656
0332222934(f)
Galle - GLE
No. 34, 1st Cross Street,Talbot Town, Galle
0912234642 (DataLine) 091-2234542,
091-2232242, 091-2223514
0912234542(f)
Gampola - GMP
No. 44 Kandy Road, Gampola
0812352740-2, 4485435
0812352740(f)
Ganemulla - GNM
No.187/1, Kirindiwitta Road, Ganemulla
0332260230,2260738
0332260737(f)
Grandpass - GNP
No. 401,Prince of Wales Avenue,
Colombo 14
2331726, 2451061, 4610175
2440117(f)
Hambantota - HBT
No. 32 & 34 Wilmot Street, Hambantota
0472220507, 2220518
0472220519(f)
114
Seylan Bank PLC – Annual Report 2007

BRANCH NETWORK
Hatton - HTN
No. 42, Dunbar Road, Hatton
051222234, 2222347
0512222682(f)
Homagama - HMG
No. 94B, High Level Road, Homagama
4442022, 4442021, 2855065
2855066(f)
Hingurakgoda - HNG
No. 13 & 14 Airport Road, Hingurakgoda
0272246242, 0272246087
0272246043(f)
Horana - HOR
No. 49 Panadura Road, Horana
0342261176, 0342261018, 0342262963,
0342263518(f)
Havelock Town - HVL
No. 164,166 Havelock Road, Colombo 05
2596550-3
2596549 & 2597498(f)
Ja-ela - JLA
No.74, Negombo Road, Ja-ela
2237421, 5558373,
2237416(f)
Jaffna - JFN
No. 560- 562, Hospital Road, Jaffna
0212223755
0212223047(f)
Kalubowila - KAL
No. 32, S De S Jayasinghe Mawatha,
Kalubowila
4202648, 4201550
2822870 (f)
5557567
Kiribathgoda - KBG
No. 52 Kandy Road, Kiribathgoda
2912378, 2910581, 4936902
2912379(f)
Kochchikade - KCH
66. Chilaw Road, Kochchikade
0312277580, 0312277661,
0312277341(f)
Kadawatha - KDW
No. 28B Ganemulla Road, Kadawatha
2925594 –5, 4816821
2925596(f)
Kandy - KDY
No. 65 Kings Street, Kandy
08122233484, 22232767,
08122232322(f)
Kegalle - KEG
No. 143, Colombo Road, Kegalle
0352222007, 2223537 –8
0352222006(f)
Koggala - KGG
No.9, Export Processing Zone, Koggala,
Habaraduwa
0912283389-90
0912283389(f)
Kurunegala - KGL
No. 54, Colombo Road, Kurunegala
0372223581- 2, 0372224276 -8
0372224277(f)
Kekirawa - KKW
No. 6,Yakalla Road, Kekirawa
0252264590 –1,
0252264592(f)
Kalutara - KLT
No.338 Main Street, Kalutara
0342223175, 0342225035, 0342225037,
0342223033(f)
Kottawa - KOT
No. 34, Nawsiri Building, High Level Road,
Kottawa
2842682 –3, 4304784
2851292(f)
Kollupitiya - KPY
No. 428 R A De Mel Mawatha,
Colombo 03
2576911 – 3, 2565172, 2564084
2577913(f)
2576914(f)
Katuneriya - KTN
No. 99/1, Colombo - Chilaw Road,
Katuneriya
0312256939, 2257764
0312253149(f)
Kattankudy - KKY
No.230, Main Street, Kattankudy
0652246625, 0652247456
0652246696 (f)
Kuliyapitiya - KUL
No. 137, Hettipola Road, Kuliyapitiya
0374696450, 0372281510, 0372281450
0374696450 (f)
Maradagahamula - MDG
No. 150, Divulapitiya Road,
Maradagahamula
0312246377, 2246096
0312246378(f)
Maradana - MDN
No. 250 Sri Sangaraja Mawatha,
Colombo 10
2334184 –5, 2473773, 2478161
2473280 (f)
Maharagama - MHG
No. 201, High Level Road, Maharagama
2850648, 2850629, 2841997 – 8
2850649 (f)
Malabe - MLB
No. 821 A Kaduwela Road, Malabe
4404323, 2560403, 2561415
2561414(f)
Mount Lavinia - MLV
No. 198 Galle Road, Ratmalana
2731266 – 7,2 723272, 4213189, 2213194
2723271(f)
Moratuwa - MOR
No. 509, Galle Road, Rawathawatta,
Moratuwa
2647900 –2, 2642953–4, 2645430,
4211244
2647901(f)
Manampitiya - MNP
Main Street, Manampitiya
0272226585
0272224455(f)
Mawanella - MWN
No. 21 Court Road, Mawanella
0352246007, 2246988,
0352246989(f)
Seylan Bank PLC – Annual Report 2007
115

BRANCH NETWORK
Matara - MTB
No. 45 Anagarika Dharmapala Road,
Matara
0412221181 –2, 0412222393,
0412223064(f)
Mathugama - MTG
No 6, Aluthgama Road, Mathugama
0342247544 –5
0342247091(f)
Matale - MTL
No. 166 - 168,Trincomalee Street, Matale
0662223241 –2, 0662232934,
0662232935 –6, 4460123
0662223215 & 0662232935(f)
Mirigama - MRG
No. 42, Danowita Road, Mirigama
0332273000 –3
0332273000(f)
Millennium - MLN
No. 90 Galle Road, Colombo 03
2456135, 2456103, 2456110, 2456144,
2456109, 2452502
2452506(f)
Meegoda - MEG
Meegoda Economic Centre
Meegoda
2830820
Negombo - NEG
No. 141, Rajapakse Broadway, Negombo
0312224336 –7, 0312224302,
0312224334
0312224335(f).
Nawalapitiya - NLP
No.77, 77/1, Dolosbage Road,
Nawalapitiya
0542222018, 0542222056 –7,
0542222018(f)
Nugegoda - NUG
No.211, High Level Road, Nugegoda
2811180 –1, 2829054,
2811182(f)
Nuwara Eliya - NLY
No.48, Park Road, Nuwara Eliya
0522223026, 2223593, 0522234338
0522223002(f)
Nawala - NWL
No.48A, Narahenpita Road, Nawala
4547397, 4547855, 2807329, 2807331,
2806727, 4547411, 2807330
2805779(f)
Nittambuwa - NIT
No. 195/1, Colombo Road, Nittambuwa
0332296650
Old Moor Street - OMS
No. 315 – 317, Old Moor Street,
Colombo 12
2421483, 5358885, 5354658
2331774(f)
Pettah - PET
No. 96, Main Street, Colombo 11
2337823 –6, 2441471, 4715982, 2718341,
4716455
2337826(f)
Panadura - PND
No. 401, Galle Road, Panadura
0382233172-4,
0382238355, 0382235304(f)
Polonnaruwa - POL
Lake View Building, Lake View Junction,
Polonnaruwa
0272223168, 2224590
0272223169(f)
Puttalam - PTL
No. 56 Kangani Kulam Street, Puttalam
0322265580, 2265194
0322265469(f)
Pelmadulla - PEL
No. 17 Galwatta Road, Pelmadulla.
0452275037
Raddolugama - RDL
171, National Housing Scheme,
Raddolugama
2292778, 2292251 –2
2292372(f)
Ratnapura - RNP
No. 6 Goodshed Road, Ratnapura
0452223111, 2223730, 0452231730
0452222111(f)
Ruwanwella - RWN
No.52, Main Street, Ruwanwella
0362267445/7(f)
Sarikkamulla - SKL
No. 97 Galle Road, Sarikkamulla, Panadura
0382235264 –5
0382233082(f)
Savings & Travel - STB
No. 202 – 204, Main Street, Colombo 11
4718344 –5,
2347138 (f)
2345797
Soysapura - SYS
No. 164/2, Soysapura, Moratuwa
2622756, 5524673
2612003(f)
Tissamaharamaya - TSA
No. 547, Debarawewa,Tissamaharama
0472237161 –2, 0472237458 –9
0472237163(f)
Thalawakele - TLK
No.08, Kotmale Road,Thalawakele
0522258635
0522258638/9(f)
Trincomalee - TCO
No. 289, 289/1, Central Road,Trincomalee
0262227701 & 2 (f)
Vavuniya - VNY
No. 45, 2nd Cross Street,Vavuniya
0242222633 – 4, 2220077, 2224800
0242222933(f)
Warakapola - WKP
No. 192, Main Street,Warakapola
0352267628 –9,
0352267123(f)
Wattala - WTL
No. 276, Negombo Road,Wattala
2933589 –90
2931603(f)
Welimada - WLM
No.107, Nuwaraeliya Road,Welimada
0572245617, 0572245350 (f)
0572245395
116
Seylan Bank PLC – Annual Report 2007

BRANCH NETWORK
Weliveriya - WLW
Seylan Bank Ltd,Weliweriya Branch,
New Kandy Road,Weliveriya
0332255021 0332255291
0332255355(f)
Yakkala - YKL
No. 104, Kandy Road,Yakkala
0332222492, 0332226378
0332233527(f)
0332233526
CONVENIENT BANKING
CENTRES
Piliyandala - PLY
No.85/1, Horana Road, Piliyandala
0112604982
Dambulla - DBL
No. 601, Anuradhapura Road, Dambulla
0662283022-3
Veyangoda - VNG
No. 177 Main Street,Veyangoda
0332295050 –1
Beruwala - BRW
No.82, Galle Road, Beruwala
0342279887
0342279888 (f)
Kotikawatte - KTW
No. 260/A, I.D.H. Road, Kotikawatta
0112418863
Minuwangoda - MNG
No. 40, Cargills Building, Colombo Road,
Minuwangoda
0112299004-5
Kirulapone - KRP
No.280, High Level Road, Colombo 06
0112829054
0112768432 (f)
Ingiriya - ING
No. 23, Central Building, Padukka Road,
Ingiriya
0342269754, 0342269900
Mawathagama - MWG
No. 56, Kurunegala Road,
Mawathagama
0372298666-7
Baduraliya - BDR
No. 92, Ratnapura Road, Baduraliya
0342246733
Kirindiwela - KRW
No. 17, Gampaha Road, Kirindiwela
0332269709
Ranpokunagama - RPK
No.1, Maduwegedara, Nittambuwa
0332282241-2
Kotahena - KTH
No.310/2, George R De Silva Mawatha,
Colombo 13
0112399660,
0112393033(f)
Pallekele - PLK
BOI, Pallekele
0812423135
Kotiyakumbura - KTK
No. 5, Main Street, Kotiyakumbura
0352289035,
0352289067(f)
Kotagala - KTG
190,Wootton Bazaar, Kotagala
051-2222797(f)
051-2222844
Yatiyantota - YTN
No.51/1/2, Ginigathhena Road,
Yatiyantota
0362267480
0362267481(f)
Katugastota - KTU
No.444, Katugastota Road, Kandy
081-2212870
Hasalaka - HSK
No.95, 96, Co-operative Society Building,
Kandy Road, Hasalaka
055 2258324
055 2258325 (f)
Samanthurai - SMT
No.113, Hijra Junction, 1st Street,
Samanthurai
067-2261284
067-2261285 (f)
Wijerama - WJR
525, High Level Road,
Wijerama Junction, Gangodawila,
Nugegoda
011-4301878
DEPOSIT CENTRES
Mawela - MWL
No.53, Mawela, Maswela
081-4927683
Seylan Bank PLC – Annual Report 2007
117

COUNTRY PROFILE & ECONOMIC INDICATORS
Country : The Democratic Socialist Republic
of Sri Lanka
Capital : Sri Jayawardenapura, Kotte
Commercial Capital : Colombo
Population : 20.01 Mn. a
Land Area : 62,705 Sq. m (Excluding Inland Water)
Per capita Income : US$ 1,617
Income Distribution : 0.46 (Gini Coefficient)
Human Development Index : 0.743
Literacy Ratio : 92.5%
Life expectancy (2004) : Male - 71.7 Years
Female - 77.0 Years
Dependency Ratio (2003) : 49.3
Poverty Headcount ratio : 15.2
Population Density : 319
Availability of Electricity : 80.0 (Per 100 Households)
Telephone Density per 100 : 53.6 (Including Cellular Phone)
Internet & E-mail Subscribers : 10.1 (per 1000 persons)
Economic Indicators 2007 a 2006 2005
GDP (Rs. Bn) 3,578 2,939 2,453
Per Capita GDP US$ 1,617 1,421 1,241
GDP Growth Rate % 6.8 7.7 6.2
CCPI (1952 = 100) 17.5 13.7 11.6
CCPI (2002 = 100) 15.8 10.0 11.0
National Saving (% of GDP) 23.3 22.3 23.8
National Investment (% of GDP) 27.9 28.0 26.8
Government Debt (% of GDP) 85.8 88.7 90.6
Government Debt (Foreign % of GDP) 37.9 38.4 39.0
Sectoral Composition of the Economy 2007 a 2006 2005
(as % GDP)
Agri. Forestry and Fishing 11.9 12.3 17.2
Industry 28.5 28.2 27.0
Services 59.6 59.5 55.7
Government Finance 2007 a 2006 2005
(as % of GDP)
Revenue 15.8 16.3 15.5
Expenditure & Net lending 23.5 24.3 23.8
Overall Deficit -7.7 -8.0 -8.4
Labour Force & Employment 2007 a 2006 2005
Labour Force 7,489 7,599 7,312
Participation rate % 49.8 51.2 49.3
Unemployment rate % 6.0 6.5 7.2
Employed Persons by Sectors %
Agriculture 31.3 32.2 30.3
Industry 26.6 26.6 26.3
Services and Other 42.1 41.2 43.3
External Trade 2007 a 2006 2005
Export (US$ Mn) 7,740 6,883 6,347
Import (US$ Mn) 11,301 10,254 8,863
Trade balance (US$ Mn) -3,560 -3,371 -2,516
Exchange Rates Annual Average
US$ 110.62 103.96 100.50
Euro 151.63 130.63 125.10
GBP 221.46 191.53 182.87
Indian Rupee 2.69 2.30 2.28
Monetary Aggregate 2007 2006 2005
(point to point % change)
Reserve Money 10.2 21.2 15.8
Narrow Money (M1) 2.7 12.6 22.4
Broad Money (M2b) C 16.6 17.8 19.1
Money Multiplier for M2b 5.31 5.02 5.16
Velocity of (M2b) 2.73 2.65 2.61
Banking Industry 2007 a 2006 2005
Total No of Com. Banks 23 23 22
No of Com. Bank Branches & other outlets 4,203 3,537 3,112
ATMs (per 100,000 persons) 7.1 5.6 4.25
Credit Card Issued (per 100,000 persons) 4,447 4,080 3,244
Banking Density
(bank branches per 100,000 persons) 9.7 7.6 7.3
Commercial Banks 2007 a 2006 2005
Total Assets (Rs. Bn.) 1,790.7 1,560.0 1,275.5
Deposits (Rs. Bn.) 1,370.3 1,121.4 945.5
Loans & Advances (Rs. Bn.) 1,030.7 880.8 672.5
Interest Rates on Deposits & Lending 2007 2006 2005
Commercial Banks
Savings Deposits 3.00-16.50 3.00-10.50 3.00-10.25
Average Weighted Deposits Rate (AWDR) 10.31 7.6 6.24
Average Weighted Fixed Deposits Rate (AWFDR) 15.49 11.50 9.25
Foreign Currency Saving Deposits-Us Dollars 0.20-4.25 0.20-4.25 0.20 -3.00
Foreign Currency Fixed Deposits
(1Year)-Us Dollars 2.00-6.50 2.00-5.50 1.50 -4.60
Average Weighted Prime Lending Rate (AWPR) 17.95 15.19 12.24
Average Weighted Lending Rate (AWLR) 18.08 16.56 15.36
Foreign Currency Loans Us Dollars 4.00-10.00 4.00-10.00 2.00 -7.00
Share Market Indices 2007 2006 2005
All Share Price Index (1985=100) 2,541.0 2,722.4 1,922.2
Milanka Price Index (1998=1000) 3,291.9 3,711.8 2,451.1
Market Price Earning Ratio (a) 11.6 14 12.4
Market Capitalization (Rs. Bn.) (a) 821 835 584
• a Provisional
• Source : Central Bank of Sri Lanka & Other Publications
118
Seylan Bank PLC – Annual Report 2007

Sectoral Classification of GDP
10
8
6
4
2
Sector Composition of
Economy 2006
Rate LKR/US$
Policy Interest Rate of the
Central Bank
20
18
16
14
12
10
8
0
Agriculture
Industrial
Services
2005 2006 2007
Agri, Livestock & Forestry (11.9)
Industry (28.5)
Service (59.6)
6
2003
Dec.
Repo Rate
2004
Dec.
2005
Dec.
2006
Dec.
Reverse Rapo Rate
2007
Dec.
Bank Rate
Saving & Lending Rate of
Commercial Banks
External Trade
US $ MN
20
18
16
14
12
10
8
6
4
2
0
2004 2005 2006 2007
AWDR
AWPR
AWFDR
AWLR
-4,000 -2,000 0 2,000 4,000 6,000 8,000 10,000 12,000
Trade Balance Import Export
External Value of Sri Lanka Rupees
Money Supply
Share Market Indicators
Rate LKR/US$
110
105
100
95
90
85
80
75
70
65
60
55
50
2003 2004 2005 2006 2007
Exchange Rate
Depreciation
7
6
5
4
3
2
1
0
-1
-2
% Change
1,500
1,200
900
600
300
0
2003 2004 2005 2006 2007
Narrow Money M1 Broad Money M2
Consolidated Broad Money M2b
Market Capitalization Rs.Bn
4,000
3,500
850
750
3,000
650
2,500
550
2,000
450
1,500
1,000
350
500
250
0
150
2003 2004 2005 2006 2007
ASPI MPI Market Capitalisation
Seylan Bank PLC – Annual Report 2007 119

HIGHLIGHTS OF THE YEAR
1
1
1 Launch of ‘Seylan Rajina’
‘Seylan Rajina’ an account specially designed to
assist Women was launched in August with a view
of providing a total financial solution to all
Sri Lankan women.The Launch took place with the
presence of Sri Lanka’s First Lady Madam Shiranthi
Rajapaksa.
2 1st Bank to join the eZ Pay Network
Seylan Bank was the first Bank to enter into an
agreement with Dialog and NDB Bank to offer the
eZ pay facility to all Seylan Visa Card Members.
With eZ Pay card members can access their Bank
Accounts and pay for goods and services using
their mobile phones.
3 Seylan – Ceylinco Grameen Co-Branded Credit
Card
Seylan Bank together with Ceylinco Grameen
launched a Co-Branded Credit Card for Ceylinco
Grameen Customers.
4 Launch of the Ceylinco Fast Cash Wish Card
Ceylinco Fast Cash tied up with Seylan Cards to
launch a unique Card for Ceylinco Fast Cash
remittance receivers. Once the money is remitted
from overseas customers can withdraw money
from ATMs or use the Card to purchase goods at
merchant outlets.
Once the initial remittance is received, card
members do not have to visit the Branch to collect
funds as the remitter could remit funds directly to
the card.This is a pre-paid card and could be
obtained from any Seylan Bank branch without
having to maintain an account with the Bank.
5 Launch of Co-Branded Debit Cards with The
Finance Company Ltd & Seylan Merchant Leasing
Seylan Bank together with The Finance Company
Ltd & Seylan Merchant Leasing Launched Co-
Branded Debit Cards for their customers.These
cards are linked to the customer’s account allowing
the Customers to draw funds at ATMs and
purchase goods at merchant outlets.

6 Launch of Seylan Visa Platinum
Credit Card
Adding another Card to the Family
of Cards, Seylan Bank launched the
Seylan Visa Platinum Credit Card in
January.The Seylan Visa Platinum
Card is issued to the elite card
members of the Bank with credit
limits of Rs.750,000/- and above.
7 Launch of the Debit Gold Card for
the 1st time in Sri Lanka
Seylan Bank launched the Country’s
1st Debit Gold Card in January
setting yet another milestone in the
Card Industry.The Debit Gold Card
is a prestigious Card, which is issued
to Privilege Card Members who use
their Cards extensively.
8 Specially designed ‘Rajina’Card
Lady Dr. Sicille Kotelawala handed
over the 1st specially designed
“Rajina” Credit Card to first Lady
Madam Shiranthi Rajapaksa.
9 “Tikiri” Kite Festival
The National Kite Festival was
sponsored by Seylan Tikiri and was
held at the Mt.Lavinia beach for the
fifth year in succession.
Deputy General Manager Business
Development and Promotions, Mr.
V.K. Seyone presenting the bicycle to
the winner of the best overall kite.
10 Dreams come true for Seylan’s
“Tikiri” kids.
Seylan Bank takes pride in having
delighted winning “Tikiri” kids with a
trip to Disneyland, Hong Kong along
with their parents.
The tour group at the entrance to
their dream world.
11 Dance item by Hindu Ladies College
Colombo 06
12 DIR.GM/CEO Mr., Ajita Pasqual
ceremonially receives the Tikiri
Diamond Cricket Championship
trophy, to be awarded to the
winners of the final
13 Seylan Bank introduces “Palm Top
Banking” for the first time in
Sri Lanka.
Seylan Bank recently introduced the
Palm Top Banking facility for the first
time in Sri Lanka.
The first transaction was made by
Ceylinco Consolidated and Seylan
Bank Founder Chairman
Deshamanya Dr. Lalith Kotelawala, at
the ceremonial launch on 29th
October 2007.
Palm Top Banking will operate
through a team of Mobile Business
Development Officers (BDO’s) who
will call over wherever the customer
wishes and attend to his/her banking
requirements on-line.
Standing from left :
Assistant General Manager Sales –
Mr. Kamal Deshapriya and senior
Marketing Executive – Mr. Chaluka
Deshamanya Dr. Lalith Kotelawala.
14 International/FCBU Divisions
awarded ISO 9001:2000
DIR/GM/CEO Mr. Ajita Pasqual
(Center) is being handed over the
ISO 9001:2000 certification by Mr.
B.A.Sumanasiri, Manager – Systems
and Services Certifiation of SGS
Lanka Pvt Ltd. (on the right) in the
presence of Seylan Bank’s Director
International and Development
Banking, Mr. J G Shirley de Silva (one
the left).
15 “Sarala” Brand Ambassador for Tikiri
Sarala receives cheque from Chief
Manager – Marketing, Udaya Shanker.
On the left are Sarala’s parents and
in the right are Brand Manager –
Tikiri, Dimmini Senarathne, Accounts
Director Holmes Pollard & Scott,
Subashini Loganathan and Associate
Creative Director, Holmes Pollard &
Scott, Kavindya Jayasekera.

HISTORY AND MILESTONES
In 1986, our Chairman Deshamanya Dr Lalith Kotelawala began a
mission to fulfill a long felt need for a truly Sri Lankan commercial
bank. From its inception, the Bank has focused on customer
service and now offers a variety of convenient banking services.
The total number of service centres have now risen to over one
hundred thereby playing a lead role in the financial sector of
Sri Lanka.
The Bank has been in the forefront in marketing several
technology based products and services. Seylan Bank’s social
responsibility and its commitment has grown significantly.The
Bank participated in several welfare projects and programmes
such as promotion of sports, celebration of festivities and also
plays a lead role in community service projects.
1988
• The license to commence banking business was issued by the
Central Bank of Sri Lanka on 18th March 1988.The soft
opening was conducted by Chairman Deshamanya Dr Lalith
Kotelawala on 24th March 1988 introducing Saturday Banking
from the very inception.
1992
• Sri Lankan Branch of the Bank of Credit and Commerce
International (BCCI) was taken over, and recommenced its
operations as the Chatham Street branch of Seylan Bank.
• Seylan Bank recorded history as the first bank to introduce an
indigenous credit card - Seylan Card.
• Two subsidiaries, namely, Seylan Merchant Bank Ltd. and
Ceylinco Seylan Developments Ltd. were incorporated.
1993
• The Bank obtained the agency for USA based ’Western Union’
money transfer system which facilitates transfer of money
between countries within minutes.
1994
• Commencement of the bank’s first overseas operation
occurred with the takeover of Hadi Express Exchange in Dubai
and subsequently linked up with the Saudi American Bank in
order to provide ’Speed Cash’ service to customers, which was
another money transfer system to assist Sri Lankans working in
the Middle East.
• Obtained membership in SWIFT (Society for Worldwide
Interbank Financial Tele-communications), to relay documentary
credits, customer instructions and bank transfers etc.
1995
• Linked with Visa International Network, to issue Visa Classic
and Visa Gold Credit Cards, launched ATM card namely
’SMART’ (Seylan Multi Action Rapid Teller) and introduced
Seylaphone service.
1996
• Commenced the second overseas operation as Sri Lanka
Express Exchange in Oman.
1997
• Introduced the ’Profit Centre Concept’ in 1997 enhancing the
autonomy of branches.
• Marking its 10th Anniversary, Seylan Bank moved into its new
Headquarters Building namely Ceylinco Seylan Towers, situated
in Kollupitiya and opening of the Millennium Branch.
1999
• The Bank introduced a PC based system for budgeting and
performance assessment.The first awards ceremony under this
system was also held this year.
2000
• The Y2K issue was successfully handled.
2001
• The Chatham Street Branch moved into ’Ceylinco House’ and
was renamed as the ’Ceylinco House Branch’.
• This year also saw the introduction of Visa Electron Card,Visa
Affinity Cards to old boys of St. Joseph’s, St. Peter’s and St.
Benedicts.
• The Rewards Plus Scheme was replaced with the ’Merit
Rewards’ Scheme.
• The Bank’s ’Govisarupatha’ won the prestigious Asian Banking
Award under the category for the best product coming under
the micro-credit project.
2002
• The dawn of peace in 2002, enabled the Bank to establish
branches in Jaffna and Trincomalee, and also the establishment
of three convenient banking centres in Piliyandala, Dambulla
and Veyangoda.
• The Bank won the best Business Expansion Award at Western
Union Middle East and South Asia Regional Conference held in
Goa.
122
Seylan Bank PLC – Annual Report 2007

2002
• Western Union won an award for the ’Service Brand of the
Year’ at Brand Excellence 2002.
• The Bank’s logo underwent a change in order to reflect the
flexibility of the institution and to denote its greater orientation
to customer expectations.
2003
• The Bank recorded the highest profits in its entire history.
• Business Today Magazine positions the Bank as the number 3
corporate in Sri Lanka, and LMD Magazine ranks the bank at
number 4.
• The balanced scorecard system has advanced with the
introduction of balanced scorecard based budgeting.
• The formation of a specialised Development Banking Unit to
serve the SME sector of the country and facilitate poverty
alleviation.
• Mrs Rohini Nanayakkara relinquishes her duties as GM/CEO,
with Mr Ajita Pasqual named as her successor from 2004.
2004
• Mr Ajita Pasqual assumed duties as DIR / GM / CEO of the
Bank
• Bank became the largest issuer of VISA cards in Sri Lanka.
• Bank was among the award winners of “National Business
Excellence Awards 2004” organised by the National Chamber
of Commerce of Sri Lanka.
• “Merit Reward” won the Silver Award for “Service Brand of
the Year” at SLIM awards 2004.
• Bank won the “International – Diaspora Initiatives Award”,
awarded by Western Union International.
• Our chairman Deshamanya Dr Lalith Kotelawala has been
nominated as the “most socially responsible Sri Lankan” by
LMD’s readership.
• Some branches located in Southern and North East coastal
belts were affected by the Tsunami, which occurred on the
26th December 2004. Some employees of the bank and a
large number of customers became victims of this biggest
natural disaster ever to hit Sri Lanka.
• Seylan Bank together with the other Ceylinco group
companies, actively involved in the nation’s re-building
programs with the guidance and directions of the Chairman
Deshamanya Dr. Lalith Kotelawala.
2005
• Passed Rs.1 Bn. milestone in profitability before corporate tax.
• LMD, together with Sting Consultants adjudged Seylan as
among the top 20 brands in the country
• Ceylinco Group (Where Seylan is one of the largest stake
holders) was rated as one of the three “Most Respected
Sri Lankan Entities” by the LMD.
• The role of the “Business Process Re-engineering (BPR)”
exercise was completed in August 2005
• Successfully obtained the ISO 9001:2000 certified for HR &
SDC.
2006
• Reached Rs.100 Bn. milestone in Customer Deposit base as at
December 2006
• Bank tied up with Ceylinco Fast Cash (One of the Ceylinco
group companies) and with some of the leading money
transfer providers in the world in order to facilitate cost
effective, secured & convenient service to the private inward
remittance senders.
2007
• Seylan bank introduced the concept of “Palm Top Banking” for
the first time in Sri Lanka
• “Seylan Rajina” a product specially designed to assist
women was launched to provide a total financial solution to
all Sri Lankan women
• International/FCBU Divisions were awarded with
ISO 9001:2000.
• Seylan bank organized a trip to Disneyland for winning Tikiri
kids along with their parents
Seylan Bank PLC – Annual Report 2007 123

GEOGRAPHICAL ANALYSIS
Deposits & Advances
As at 31st December 2007
Province No of Deposits % Advances %
Branches (Rs.Mn) Including
Leasing
(Rs.Mn)
Western 47 75,738 68.0% 76,970 80.4%
Southern 7 6,002 5.4% 3,026 3.2%
Uva 3 1,940 1.8% 833 0.9%
North Central 5 2,200 2.0% 1,424 1.5%
North Western 8 6,945 6.2% 3,463 3.6%
Eastern 5 3,367 3.0% 1,412 1.5%
Northern 2 2,110 1.9% 902 0.9%
Sabaragamuwa 9 6,070 5.5% 3,303 3.5%
Central 8 6,928 6.2% 4,351 4.5%
Total 94 111,300 100% 95,684 100%
Commitments & Contingencies
As at 31st December 2007
Rs.Mn
Province No of Stand by Guarantees Documentary Bills Forward Total
Branches Acceptances Letter of Credit For Exchange
Credit Collection Contracts
Western 47 3,712 242 6,426 3,435 1,498 55 15,368
Southern 7 17 - 328 85 20 - 450
Uva 3 - - 168 7 - - 175
North Central 5 16 - 284 26 1 - 327
North Western 8 88 - 383 72 25 - 568
Eastern 5 - - 197 12 7 - 216
Northern 2 6 - 118 4 5 - 133
Sabaragamuwa 9 28 - 279 34 6 - 347
Central 8 95 - 426 170 64 - 755
Commitments 5,997
Total 94 3,962 242 8,609 3,845 1,626 55 24,336
124
Seylan Bank PLC – Annual Report 2007

GLOSSARY
Capital Adequacy Ratio
Core Capital : The amount of Core Capital
that should be maintained as a percentage
of Risk Weighted Assets
Total Capital : The amount of Core &
Supplementary Capital as a percentage of
Risk Weighted Assets
Core Capital (Tier I)
The sum of Paid-Up Ordinary Shares,
Non-Cumulative and Non-redeemable
Preference Shares, Share Premium,
Statutory Reserve Fund, Published Profits
and Minority Interest less Goodwill
Supplementary Capital (Tier II)
The sum of Revaluation Reserve, General
Provisions, Hybrid Capital Instruments and
Approved subordinated Term Debts
Core Retail Deposits
Total of Demand and Savings Deposits
Dividend Cover
The Net Profit after tax of the bank as
number of times of the gross dividend
Effectiveness
Doing the Right Thing. Refers to the
quality of output. Mostly measured in Net
Interest Income per unit of Assets
Efficiency
Doing Things Right. Refers to the ratio of
output to input. Mostly measured in Cost
to Income ratio
Equity Earning Rate
Profit After Tax and Dividends as a
percentage of Equity at the beginning of
the year
Equity Growth Rate
The percentage increase in total equity
over the year under review
Equity
Total of Shareholders’ funds; share capital
+ statutory reserves + other reserves
GDP (Gross Domestic Product)
The value of all goods and services
produced domestically by an economy
during a specified period, usually an year.
GDP, adjusted for inflation, gives GDP in
real terms
Interest Earning Assets
Assets, which earn interest – the total of
Advances, Bills, Leases, Government Bills &
Bonds, Call Money and Placements with
other institutions
Interest In Suspense
Interest Income of Non Performing Loans;
these are accrued but not considered as
profits
Interest Rate Spread
The difference between the effective
interest yield and the effective interest
cost of the bank
Leverage
Liabilities as number of times of Equity
Liquid Assets
Cash, Bills, Short Term Funds, Balance with
Central Bank & Dealing Securities
Net Profit Rate
Profit after tax as a percentage of turnover
Non Performing Loans
Loans which are not activated for 3
months or more
Price Earning Ratio
Market price of the Bank’s share as
number of times of the earnings per share
Profit Handout
Dividends as a percentage of Profit After
Tax
Provisions for Bad & Doubtful Debts
Provisions made for possible loan losses
according to the period of nonperformance
and the exposure over the
collateral
REPOs
Repurchase Agreements;The securities
sold to creditors (who lend money for
funding purposes), with the intention of
buying them back at a set price
Return on Avg.Assets (ROAA)
Profit after tax as a percentage of Average
Assets
Return on Equity (ROE)
Profit after tax as a percentage of Average
Equity
Risk Weighted Assets
The assets and off balance sheet items
weighted according to the risk involved as
stipulated by the Central Bank
Seylan Bank PLC – Annual Report 2007
125

NOTICE OF MEETING
NOTICE IS HEREBY GIVEN THAT the Twenty First Annual
General Meeting of Seylan Bank PLC will be held on Monday,
30th June 2008 at 10.30 a.m. at the Grand Ballroom, Galle Face
Hotel, No.2 Galle Road, Colombo 3 for the following purposes:
ROUTINE BUSINESS
1 To receive and consider the Annual Report of the Board
of Directors on the Affairs of the Company and the
Audited Financial Statements for the year ended 31st
December 2007 together with the Report of the Auditors
thereon.
2 To re-elect Mr R Renganathan who retires by rotation at
the Annual General Meeting in terms of Article 95 of the
Articles of Association of the Company, as a Director.
3 To re-elect Mr S K M Perera who retires by rotation at the
Annual General Meeting in terms of Article 95 of the
Articles of Association of the Company, as a Director.
4 To re-elect Mr K A S Jayatissa who retires by rotation at
the Annual General Meeting in terms of Article 95 of the
Articles of Association of the Company, as a Director.
8. To declare a first and final (ordinary) dividend as
recommended by the Directors.
9. To re-appoint Auditors for the ensuing year and authorise
the Directors to determine their remuneration.
10. To authorise the Board of Directors to determine
donations for 2008.
11. To transact any other business of which due notice shall
be given.
BY ORDER OF THE BOARD
(Ms) M R S Gunasekara
Company Secretary
Colombo,
21st May, 2008
5 To re-elect Mr C Kotigala at the Annual General Meeting
in terms of Article 87 of the Articles of Association of the
Company, as a Director.
6 To re-elect Mrs L Seneviratne at the Annual General
Meeting in terms of Article 87 of the Articles of
Association of the Company, as a Director.
7 To declare a preference dividend as recommended by the
Directors.
Notes
(a)
A member entitled to attend/vote is entitled to appoint a proxy to attend/vote instead of him/her. A proxy holder need not be a
member of the Company. A form of proxy is enclosed for this purpose.
(b) The completed form of Proxy should be deposited at the Office of the Company Secretary at Ceylinco Seylan Towers, No. 90,
Galle Road, Colombo 03 not less than 48 hours before the time appointed for the holding of the Annual General Meeting.Only
registered holders will be permitted to attend the Annual General Meeting.
(c)
Shareholders/proxy holders are requested when attending the Annual General Meeting to bring with them their National Identity
Cards or any other form of valid identification.
126
Seylan Bank PLC – Annual Report 2007