The Case Study - Seylan Bank

Seylan Bank PLC Annual Report 2009 185Notes to the Consolidated Financial StatementsPrincipalActivityNumber ofShares%HoldingCost as at31.12.2009Directors’Valuation31.12.2009Number ofShares%HoldingCost as at31.12.2008Directors’Valuation31.12.200831.12.2009 Rs. ‘000 Rs. ‘000 31.12.2008 Rs. ‘000 Rs. ‘000Unquoted - Ordinary SharesSeylan Bank AssetManagement LtdPrimaryDealers 19,750,000 100.00 501,250 573,234 19,750,000 100.00 501,250 420,914Total 860,166 926,668 948,529 638,94123.1 Reasons for DeconsolidationAs the Bank does not exercise control over the activities of Seylan Merchant Bank PLC and has no intentionto do so in the future, the board resolved during the last quarter to gradually divest its investment in thisentity. Further, there are no common directors to exercise influence, any longer. Accordingly, the Bank sold1,006,500 shares during the last quarter of the year and by 31st December 2009 the Bank’s holding in theentity dropped to 42.45%. As such, Seylan Merchant Bank PLC has been deconsolidated with effect from1st October 2009 in the Group accounts of the Bank and the investment is classified as ‘Investment Securities’in the Bank’s Financial Statements.23.2 Jointly-controlled OperationsThe Bank had a jointly-controlled operation for the Seylan Credit Card activities. The Bank reconstituted thisoperations at the year end under a new Memorandum of Understanding. However, no adjustments were requiredin the Bank’s Financial Statements.BANKGROUP2009 2008 2009 2008(Restated)Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’00024. Group Balances ReceivableName of CompanySeylan Merchant Bank PLC – 342,314 – –Seylan Developments PLC 349,028 280,866 – –Seylan Bank Asset Management Limited 459,627 – – –Total 808,655 623,180 – –