The Case Study - Seylan Bank

Seylan Bank PLC Annual Report 2009 119ANNUAL REPORT OF THE BOARD ON THE STATEOF AFFAIRS OF THE COMPANYThe board of directors presents hereto their Report on the State of Affairs of the Company for the year ended31st December 2009. The Report also provides information as required by the Listing Rules of the ColomboStock Exchange, best accounting practices and other disclosures deemed relevant to the stakeholders ofthe Company. The Report was approved by the directors on 17th February 2010.GeneralSeylan Bank PLC was incorporated on 28th August 1987 as a public limited liability company under theCompanies Act No. 17 of 1982 and obtained a listing for its ordinary voting shares on the Colombo StockExchange on 5th January 1989. It is an approved licensed commercial bank under the Banking Act No. 30 of1988. The Bank was re-registered under the Companies Act No. 07 of 2007 on 30th May 2007.Principal ActivityThe principal activity of the Bank is commercial banking and provision of related financial services suchas accepting of deposits, personal banking, trade financing, off-shore banking, resident and non-residentforeign currency operations, travel-related services, corporate and retail credit, pawn broking, projectfinancing, 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.Changes to the Group StructureThe Bank gradually commenced divesting its investment during the fourth quarter of 2009 in Seylan MerchantBank PLC and accordingly, the Bank’s holding in the entity dropped to 49.58% (Voting Shareholding) as at31st December 2009. As such Seylan Merchant Bank PLC ceased to be a subsidiary of the Bank from thefourth quarter of 2009.SubsidiariesThe Bank’s subsidiaries as at 31st December 2009 and their principal activities are given below:Seylan Developments PLC- Property DevelopmentSeylan Bank Asset Management Limited - Dealing in Government Securities*Seylan Merchant Bank PLC- Merchant Banking(deconsolidated with effect from 1st October 2009)* On 12th February 2010, the boards of Seylan Bank PLC and Seylan Bank Asset Management Limited (SAM)decided to amalgamate as per the provisions of Section 242 (1) of the Companies Act No. 07 of of 2007. Theamalgamated company will be Seylan Bank PLC. The amalgamation is to take effect on 31st March 2010. Approvalin principle has already been obtained for the aforesaid amalgamation from the Central Bank of Sri Lanka.Review of OperationsA review of the operations during the financial year 2009 and the performance of the Bank are given in theManagement Report appearing on pages 57 to 62 of the Annual Report, which report forms an integral partof this Report.Branch NetworkIn November 2009, the Bank opened a branch in Nelliady and two convenient banking centres at Manipayand Chakanai. Two branches viz. Malabe and Ja-Ela were relocated during the year.