The Case Study - Seylan Bank

Seylan Bank PLC Annual Report 2009 145Notes to the Consolidated Financial StatementsThe total profit/loss of the subsidiaries are included in the Consolidated Income Statement, and theproportion 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 inthe Group Balance Sheet. The interest of the outside shareholders in the net assets of the Group is statedseparately in the Consolidated Balance Sheet within Equity under the heading ‘Minority Interest’.1.4.1.2 Transactions Eliminated on Consolidation(a) Intra-Group TransactionsIntra-group balances and transactions and any unrealised gains arising from intra-group transactions, areeliminated in preparing the Consolidated Financial Statements. Unrealised losses are eliminated in the sameway as unrealised gains except that they are only eliminated to the extent that there is no evidence of impairment.(b) Profit and LossIn arriving at the profit attributable to the shareholders of Seylan Bank PLC, the total profits or losses of thesubsidiaries are included in the Consolidated Income Statement after eliminating intra-group transactionsand the portion of the profit or loss after taxation applicable to non-group shareholders.(c) Assets and LiabilitiesAll 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 inthe Consolidated Balance Sheet under the heading ‘Minority Interest’.(d) Non-Uniform Accounting PoliciesThe impact of non-uniform accounting policies adopted by subsidiaries has been adjusted in the consolidatedaccounts. The details of the adjustments are disclosed in Note 48.1.4.2 Foreign Currency TranslationTransactions in foreign currencies in Domestic Banking Unit are translated to Sri Lankan Rupees at themiddle rate of exchange ruling at the date of the transaction. Monetary items denominated in foreigncurrencies at the Balance Sheet date are translated to Sri Lankan Rupees at the middle rate of exchangeruling at that date. Foreign exchange differences arising on the settlement or reporting of the Bank’smonetary items at rates different from those which were initially recorded are dealt in the Income Statement.Non-monetary assets and liabilities denominated in foreign currency that are stated at historic cost at theBalance 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 BalanceSheet. Unrealised gains and losses are dealt with through the Income Statement.Foreign Currency Banking Unit (FCBU) balances have been converted at closing rate for all monetaryitems and historic rate for non- monetary items. Income Statement of the FCBU has been converted at themonthly average rate. Differences arising from conversion are recognised in the Income Statement.Assets and Basis of their Valuation1.4.3 Statutory Deposit with Central BanksThe Monetary Law Act requires that all commercial banks operating in Sri Lanka maintain reserves againstall deposit liabilities denominated in Sri Lankan Rupees. The details of reserve requirements are givenin Note 15.