BANK of CEYLON Many Things to Many People

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BANK OF CEYLON Many things to many people. ANNUAL REPORT 2011

Many things to many people.

The Bank of Ceylon is many things to many people. We serve over ten million customers islandwide and our commitment to each of them remains steadfast. Our multi-faceted offering is one of our greatest strengths. From the smallest child’s savings account to corporate credit for state and private sector companies, we serve at every level. Where others specialise their portfolios, we expand ours. This is how we stay relevant, supportive and diverse. It is why so many different people come to us and stay with us for generations.

Bank of Ceylon. We’re many things to many people.

...it is why so many “different people come to us and stay with us for generations.” CONTENTS

Business Highlights 02 Financial Highlights 03 Financial Highlights - Graphical Review 04 Vision & Mission 06 Historical Review 08 Chairman’s Message 15 General Manager’s Review 17 Board of Directors 18 Corporate Management 20 Executive Management Team 24 Management Discussion & Analysis 30 Risk Management 56 Corporate Governance 65 Board & Board Subcommittees 88 Report of Board Subcommittees 89 Sustainability Report 98 GRI Standard Disclosures Index 152

Annual Report of the Directors on the State of Affairs of the Bank of Ceylon 160 Directors’ Interest in Contracts 164 Directors’ Statement on Internal Control 169 Independent Assurance Report 171 Directors Responsibility for Financial Reporting 172 Report of the Auditor General 173 Income Statement 174 Balance Sheet 175 Statement of Changes in Equity 176 Cash Flow Statement 177 Significant Accounting Policies 180 Notes to the Financial Statements 196 Capital Adequacy 268 Investor Information 272 Products & Services 288 Group Structure 293 Subsidiaries & Associates 294 Correspondent Banks by Country 300 Exchange Companies by Country 306 Glossary of Financial/Banking Terms 307 Corporate Offices 312 BoC Service Points 314 Corporate Information Inner Back Cover Banking Investment Banking Islamic Finance Trade Banking Corporate Banking Development Banking Personal & Treasury International Banking Off-shore

ANNUALBANK OF CEYLONREPORT ANNUAL2011 REPORT 2011 1 Business Highlights

Leading the treasury operations of Leader in inward foreign remittances the local foreign exchange market with over 43% market share. with over 50% market share.

Single borrower exposure Highest ranked capacity in excess of Sri Lankan bank in the Bankers Almanac. Rs.13 bln Expanded the Bank’s The Bank successfully issued the third series of 5 year unsecured, operations to subordinated debentures listed on the 970 service Colombo Stock Exchange to raise points Rs.5 bln

Worldwide network reaching

‘BoC Premier Centre’ was established to provide Personal Banking Services 2 840 foreign correspondents. for high net worth individuals.

Representing largest off-shore banking operations with the highest Bank achieved a market share of assets. remarkable volume of

Bank of Ceylon’s National Long-Term advances crossing Rating has been upgraded to ‘AA+ (lka) Rs.500 bln milestone. BANK OF CEYLON ANNUAL REPORT 2011 stable outlook’ Fitch Ratings Lanka Ltd Financial Highlights

Bank Group 2011 2010 Change 2011 2010 Change Rs.Million Rs.Million % Rs.Million Rs.Million %

Results of Operations Total income 71,368 63,363 12.6 75,055 66,654 12.6 Profit before financial VAT and taxation 18,062 14,054 28.5 18,212 14,990 21.5 Profit before taxation 15,546 10,053 54.6 15,851 11,075 43.1 Income tax expense 4,025 3,687 9.2 4,364 4,162 4.9 Profit after taxation 11,521 6,365 81.0 11,487 6,913 66.2 Value to Government 10,387 10,785 (3.7) 10,781 11,386 (5.3) Financial Position Shareholders' equity (Capital and Reserves) 40,163 28,132 42.8 43,382 31,261 38.8 Total assets 835,540 714,954 16.9 856,393 730,065 17.3 Gross loans and advances 552,792 382,310 44.6 568,615 392,708 44.8 Deposits from customers 588,765 524,233 12.3 597,139 529,319 12.8 Asset Quality Non-performing assets 11,416 12,638 (9.7) 12,746 13,701 (7.0) Net exposure 4,135 5,338 (22.5) 4,953 5,841 (15.2) NPA Ratio % 2.1 3.3 (1.2) 2.2 3.5 (1.3) Net exposure/Shareholders' equity % 10.3 19.0 (8.7) 11.4 18.7 (7.3) Per Share Data (Rs) Earnings per share 2,304 1,273 81.0 2,273 1,352 68.1 Net assets per share 8,033 5,626 42.8 8,400 6,039 39.1 Performance Ratios (%) Return on average assets 2.0 1.6 0.4 2.0 1.7 0.3 3 Return on average equity 33.7 24.0 9.7 30.8 23.8 7.0 Interest margin 3.2 3.1 0.1 3.3 3.3 0.0 Cost to income 50.9 53.7 (2.9) 51.3 53.9 (2.6) Statutory Ratios (%) Liquid assets ratio (Domestic) (minimum requirement 20%) 23.4 28.7 (5.3) N/A N/A N/A Capital adequacy ratios : Core capital adequacy ratio (minimum requirement 5%) 8.5 10.3 (1.8) 9.3 11.4 (2.1) Capital adequacy ratio (minimum requirement 10%) 11.6 13.7 (2.1) 12.8 15.2 (2.4) BANK OF CEYLON ANNUAL REPORT 2011 Financial Highlights

Graphical Review

PBT & PAT (Rs. Billion) Total Assets (Rs. Billion) 4.5 07 2.8 07 437.9 5.2 08 3.6 08 484.4 4.2 09 3.1 09 538.2 10.1 10 6.4 10 715.0 15.5 11 11.5 11 835.5 Profit Before Tax Profit After Tax

Cost to Income (%) Value to Government (Rs. Billion)

68.3 07 4.4 67.5 08 4.6 64.2 09 5.5 53.7 50.9 10 10.8 10.4 07 08 09 10 11 11

Total Deposits & Advances (Rs. Billion) Capital & Reserve (Rs. Billion) 308.9 07 293.4 07 21.1 316.1 08 23.1 4 280.9 08 408.6 09 275.0 09 24.9 524.2 10 382.3 10 28.1 588.8 11 552.8 11 40.2 Total Deposits Total Advances

RoAE (%) RoAA (%) 33.7 2.0

1.6 24.0

1.1 16.1 1.1 14.6 0.8 12.9 07 08 09 10 11

BANK OF CEYLON ANNUAL REPORT 2011 07 08 09 10 11 11 10 09 08 07 11 10 09 08 07 No. ofAccounts Inward Remittances 481b relationships. in strongcustomer Organic growthrooted 42% Service Points A Branches Extension Offices TMs 25% (Million) (Rs. Billion) 33% 147.5 7.0 154.3 7.5 166.9 8.4 9.3 201.1 10.1 247.3 Over 2010 23% Growth Rs. 46 Bln Increase of 10 Over 52 ATMs Points 30 Service 09 Branches added Points New Service Customer AccountBase Mln

BANK OF CEYLON ANNUAL REPORT 2011 5 BANK OF CEYLON ANNUAL REPORT 2011 6 Bankers tothe NATION Vision Provide world-classbankingservicesacross the Be aproﬁtablecatalystforequitabledevelopment Give allourstafftherecognitionandrewardstobe with allour Foster mutuallyrewardingcustomerrelationships the bestteamofachieversinserviceexcellence. nation asabeaconforprogressandgrowth. covering urbanandruralareas.

customers, exceedingtheirexpectations. Customers Mission Owners Society Staff

BANK OF CEYLON ANNUAL REPORT 2011 7 Historical Review

Bank of Ceylon has evolved continuously over the years, undergoing changes in its business operations, branch network, ownership, people, products and services to emerge as the largest financial service provider in Sri Lanka. Such progress is summarised below: 1996 Joint venture with Nepal Bank establishes Nepal Bank of Ceylon 1979 Limited. Off-shore banking operations commence with the establishment of the Foreign Currency Banking 1954 Unit. 1998 Central Office moves from City MoU with Government results in greater management autonomy Office to premises at GOH Building. 1980 and target-based performance. Computer Division establishes; 1939 automation of business operations Bank of Ceylon establishes as the 1959 Authorised capital enhances to commences nation’s first modern, locally- Rs. 50 million by Act of Parliament. 2000 owned bank. Ceremonially opens Authorised capital further on 1st August by Governor, Sir enhances to Rs. 50 billion by Act Andrew Caldecott, at the present- 1981 1961 Branch opens in Malé, Republic of of Parliament. day premises of the City Office. Nationalisation. The Government Maldives. of Ceylon becomes sole owner of 1941 Bank of Ceylon. Operations commence in 2004 1985 Real estate subsidiary Mireka Kandy with opening of a branch Kachcheri branch network set up Head Office moves to 32-storey Capital Land (Private) Limited 8 office. Other branches open in alignment with the Government’s BoC Tower in Colombo. forms to invest in Havelock City, subsequently in other large District Administration System. outstation towns: Galle, Jaffna the largest single condominium and Trincomalee. development in Sri Lanka. 1973 1988 Agriculture Service Centre Installation of the first BoC 1946 Automated Teller Machine ushers Foreign Department established. concept implements. Operations commence at over 350 Agricultural in the electronic banking era. 2005 Operates from offices at the Balance Sheet footings top Service Centre Branches, with the Grand Oriental Hotel (GOH) Rs. 300 billion the largest asset implementation of Comprehensive Building, Colombo Fort. base of any Sri Lankan bank. Rural Credit Scheme. 1989 Wide range of relief, rehabilitation Ceybank Visa credit card and reconstruction activities 1949 introduces in collaboration with First overseas branch opens undertaken and financed in the 1978 Visa International. in London shortly after Non-Resident Foreign Currency aftermath of the December 2004 Independence; it is the thirteenth tsunami. (NRFC) deposit scheme introduced. bank branch to be opened. 1995 Overseas branch network 1953 expands with offices in Madras BANK OF CEYLON ANNUAL REPORT 2011 C Loganathan becomes first Sri and Karachi. Lankan General Manager. 2011 Fitch Ratings Lanka 2006 Wins IBM/FISERV prise for the Ltd upgrades Bank fastest implementation of an online core banking system in of Ceylon’s National Asia Pacific region. long-term rating to 2007 “AA+(lka)” stable Raises US$ 210 million, the largest internationally syndicated debt by any Sri Lankan issuer; appointed outlook which is the Co-Manager of historic US$ 500 million debut bond issued by the highest rating given to a Government of Sri Lanka. local commercial bank 2008 in Sri Lanka, presently. Raises Rs. 4.2 billion via a listed subordinated rupee debenture of 5 years; raises US$ 21.6 million via a private placement of a 5-year subordinated dollar debenture. The Bank moves a further step forward

2009 with introduction of 9 The ﬁrst state bank to launch an Islamic Banking Unit, which operates through Island-wide on-line leasing system network. covering branch 2010 network. Converts the London branch to a Subsidiary of BoC to be used as a Gateway to EU. Establishes a specialised Investment Banking BoC opens Premier unit. Bank successfully raises Rs. 5 billion in the second public issue of unsecured, subordinated Banking Centre for redeemable ﬁve-year debentures.

Private Banking. BANK OF CEYLON ANNUAL REPORT 2011 Deposits

The Bank reduced interest rates in 2009 and continued to further reduce it in August 2011 which resulted in a significantly lower net interest margin. The Bank was geared to make this sacrifice in order to support the rapid development activities in the country. Our major objectives were not merely aimed at achieving profits, but also at being of immense service to the community at large.

We believe that this remarkable position is a testimony to the strength of our brand, public acknowledgement of our strong corporate governance practices, financial strength, as well as a good risk management framework which ensured that our exposure to volatile markets remained at the lower end of the industry average. This position of being in a strong footing is affirmed by our national long term rating which was upgraded to AA+ (lka). Deposits Dr. Gamini Wickramasinghe Chairman &GCTUVCMGJQNFGTU an importanteconomic nucleusof transformation of the nationinto development, envisionedthe Chinthana frameworkfor of SriLanka,undertheMahinda investor appetite.TheGovernment economic landscapeprompting competitive forceintheglobal Sri Lankahasemergedasa year in2011. over 8%forthesecondconsecutive maintain aneconomicgrowthrateof an impressiveeffortbythenationto the abovelimitations,itwasindeed to adverseweatherconditions.Given challenges onthedomesticfrontdue Moreover, thecountryenduredfurther and wideningofthetradedeficit. trend intheworldcrudeoilprices also underpressurewiththeupward East. Thedomesticeconomywas as thepoliticalturmoilinMiddle demand inglobalmarketsaswell low levelsofconsumerpurchasing as nationalexportswereaffectedby world economicandfinancialcrisis Lanka wasnottotallyimmunetothe sluggish recoveryduring2011.Sri the advancedeconomiesfaceda was expectedtogrowin2011, under review. Thoughglobaloutput uneven throughout2011,theyear The globaleconomicrecoverywas Economic Environment Message Chairman’s &GCTUVCMGJQNFGTU market andfinanceoverseasprojects. nearly halfoftheforeignremittance banking arenahelpeduscapture moves towardstheinternational in economicactivity. Ourstrategic greater privatesectorparticipation government policieswhichpromote important stepwhenconsideringthe and construction.Thiswasan tourism, fisheries,education,housing role inotherprioritysectorssuchas projects. TheBankalsoplayedakey significant investmentsingovernment provision ofworkingcapitaland infrastructure developmentactivities, thereby supportingoperationsin partnerships withtheprivatesector, ensures thecontinuationofour sheet, animportantfactorthat The Bankpostedastrongbalance Bank’s Performance Asian countries. economic growthratein2011among 12 intact,whichisthesecondhighest Lanka's 8%growthforecastfor2011- Asian DevelopmentBankhaskeptSri right direction.Furthermore,the that thecountryismovingin positive projectionsfor2012confirms witnessed inSriLankaandthe economic growthduring2011 the worldinfuture.Thesteady sectors willbeimmensely beneficial Support renderedtowardsthese line fishinganddairydevelopment. as boatrepairs,mendingnets,long and fisheriesbasedactivitiessuch and servicesderivedfromagriculture outreach revolvedaroundproducts core businessactivities.TheBank’s These wereallarticulatedinour fisheries basedbankingactivities. growth cultureandagricultural support totheSMEsector, anorganic economy andprovidingfinancial serving allimportantsectorsofthe expand ourservicesinthemarket, strategy providedusopportunitiesto The Bank’s wellfocusedlending East. economy, especiallyintheNorthand as serviceprovisionsacrossthe support byeasingloansaswell unprecedented demandformonetary strides toassistinthecountry’s economic development,tookmajor Government’s pursuitofsocio- Bank ofCeylon,alignedwiththe of allprovincesthecountry. The through economictransformations a sustainabledevelopmenttrail momentum hasbeentoensure rebound throughahighgrowth of theGovernmentinaneconomic One ofthemainpolicychallenges sustainable economic development, and contributingto thecountry’s meeting theneedsofpeople In upholdingitsobjectivesof improve incomeandrurallivelihoods. productivity, ensurefoodsecurityand ecological practices,increasefarm concept aimstoscaleupagro- in theAnuradhapuradistrict.This order todevelopafewmodelvillages programme calledDoramadalavain initiated avillagedevelopment productivity programmes.TheBank projects inkeepingwiththecountry’s Corporate SocialResponsibility(CSR) the Bankhasembarkedonmajor On adifferentpolicyperspective, more self-sufficientandsustainable. view ofmakingthecountry’s economy distributor tomarketer-withthe value chain-producertoretailer, and advisorysupportacrosstheentire Bank providedcontinuousfinancial improving domesticagriculture,the with theGovernment’s goalof fishery productexports.Inalignment enhancing exportearningsthrough also hopestoassistthecountryin improved qualityoflife.TheBank outflow andusheringinahealthy reducing theforeignexchange fishery productimportsthereby as itwillhelptocurtailmilkand

BANK OF CEYLON ANNUAL REPORT 2011 15 BANK OF CEYLON ANNUAL REPORT 2011 16 Message Chairman’s to AA+(lka). long termratingwhichwasupgraded footing isaffirmedbyournational This positionofbeinginastrong markets remainedatthelowestlevel. ensured thatourexposuretovolatile risk managementframeworkwhich financial strength,aswellagood corporate governancepractices, acknowledgement ofourstrong strength ofourbrand,public position isatestimonytothe We believethatthisremarkable service tothecommunityatlarge. profits, butalsoatbeingofimmense were notmerelyaimedatachieving the country. Ourmajorobjectives the rapiddevelopmentactivitiesin make thissacrificeinordertosupport income. TheBankwasgearedto in asignificantlylowernetinterest it inAugust2011whichresulted 2009 andcontinuedtofurtherreduce The Bankreducedinterestratesin deposits intheBankgrewby12%. advances inabsoluteterms.The volume decreaseinnonperforming portfolio managementensuredthe performing advancesto2.1%.The quality ofitsassets,limitingthenon growth, theBankensuredgood of 44.6%,yetinspitethisrecorded The advancesgrewatahigherrate rate of17%,reachingRs.836billion Bank recordedatotalassetgrowth As aresultoftheaboveactivities, protection andculturaldevelopment. poverty alleviation,nationalheritage health, environmentprotection, include educationaloutreach, the Bank’s CSR initiativesalso the Government’s Budgetfor2012 growth projectionsunveiledin include achievingthebroadbased The Bank’s futurestrategicgoals banking system. country throughafull-fledgedworld further foreignremittancestothe whole newglobalplatformandbring banking businessactivitiesontoa will divertouralreadyincreased sector. Ourplanstoexpandglobally the Banktoengagewithprivate will providemoreopportunitiesfor The inflowofforeigninvestment progressive pathahead. establishes thatweareontoa rate oftouristarrivalsfurther Competitive Index.Theremarkable Engagement IndexandtheGlobal Doing Business’Index,theCivic global rankings,whichincludethe achieved significantpositionsin Lankan economy. SriLankahas have multipliereffectsontheSri its growthtrajectorywhichwill strengthening andsustaining development oftourism,thereby intends tocapitaliseonthe As wemoveforward,theBank specifically ecotourism. more valueaddedservicesintourism, heritage, wearecertaintobringin natural resourcebaseandcultural As SriLankaisblessedwitharich the touristindustryintraregionally. especially withtheexpectedboomin new opportunitiesshouldemerge, growth ofourregion.However, be impedimentstotheeconomic in EuropeandtheMiddleEastcan faltering USrecoveryandcrises economic slowdowncausedbya 2012 isanticipated,effectsofglobal While achallengingoutlookfor Future Outlook of Ceylonhavededicated themselves Management andstaffoftheBank year. TheCorporate andExecutive an operationalprogressduringthe management oftheBanktoachieve her untiringeffortsandeffective I thanktheGeneralManagerfor challenging period. in reachingourgoalsduringa Their counselhasbeeninvaluable our longtermstrategiccourse. co-operation intheirguidanceover for theirunstintedsupportand I thankmycolleaguesontheBoard and support. respective officialsfortheirguidance General, AttorneyGeneralandthe the CentralBankofSriLanka,Auditor of FinanceandPlanning,Governor Planning, SecretarytotheMinistry the DeputyMinisterofFinanceand Minister ofFinanceandPlanning, Mahinda Rajapakse,whoisalsothe I thankHisExcellency, President Acknowledgements set targetsfor2012. the rightdirectiontoaccomplishour market. Overall,weareproceedingin increase accessibilitytothedomestic socio-economic growthwillaspireto in thedevelopmentofSriLanka’s expansion drive.TheBank’s role centres thatwillassistintheSME will continuetoestablishmore Centre inKurunegalalastyearand bank toestablishanSMEAdvisory Ceylon becamethefirstcommercial entrepreneurship. TheBankof promote theSMEsectorandmicro policy offinancialinclusionto improving uponthegovernment’s development, tourism,educationand construction, infrastructure earmarking exports,agriculture, which focusonsustainablegrowth, appreciated. unions oftheBankisalsodeeply important roleplayedbythetrade with appreciation.Thepositiveand is dulyrecognisedandacknowledged correspondents andexternaladvisors auditors, legaladvisers,consultants, The myriadcontributionsby services tothem. the deliveryofexemplarybanking continue tocommitourselvestoward loyalty andpatronagewewill customers fortheircontinued I extendmysincerethankstoour On behalfoftheBankCeylon, appreciated. path ofprogresswhichismuch wholeheartedly towardsarigorous Colombo 16th March2012 Chairman Dr. GaminiWickramasinghe “Bankers totheNation.” to thecountryandpeopleas successes andcontinueourservices firm determinationtobuildonour now lookstothefuturewitha the pastyear, theBankofCeylon with prideatourachievementsin and sustained.Whilewelookback Bank hasenvisagedwillbeachieved long termgrowthtrajectorythatthe opportunities. Iamconfidentthatthe has beenpresentedwithnew the bankingindustryinSriLanka and robusteconomicgrowth, With theanticipateddevelopment Conclusion and weweredeemed thenumber Banks asratedbyAsianBanker bank inAsiaandPacificoutof500 acceptance asthe17thstrongest The Bankgainedinternational recognition. Sri Lanka,averysignificant domestic commercialbankin We arenowthehighestrated outlook byFitchRatingLankaLtd. was upgradedtoAA+withaStable success stories.TheBank’s rating remarkable achievementsandmany BoC concludedtheyear2011with and fulfillingcustomerexpectations. major partnerineconomicprogress continuing itsleadingroleasthe produce spectacularresultsin2011, this rapidlygrowingeconomyand was wellpositionedtopenetrateinto island widereach,BankofCeylon capital base,liquiditystrengthand in goodstead2011.Withasound that enabledthebankingsectortobe business weretheinfluencingfactors momentum andtheoptimismin Sri Lanka’s economicgrowth Overview Review General Manager's General Manager/ChiefExecutiveOfficer Ms. WANalani 2011. core bankingactivitiesbytheendof retain itsmarketleadershipinmany the Bank,whichenabledBankto excellence andimprovedefficiencyof performance improvement,service were facilitatedbythecontinuous These recognitionsandaccolades Chamber ofCommerceSrilanka. 2011 organisedbyTheNational Business ExcellenceAwards in of thebankingsectoratNational Finance UK.We emergedthewinner one brandinthecountrybyBrand the endofyear. Grossloans and 16.9% reachingRs.836billionat The Bank’s assetbasegrewby income. both interestincomeandnon-interest activities, resultinginanincrease mainly fromtheBank’s corebanking the lastyear. Growthwasrecorded achieving agrowthof54.6%over the highesteverprofitinitshistory, of Rs.15.5billionfortheyear2011, The Bankpostedaprofitbeforetax Performance Financial &Operational customer servicepoints. strongest domesticfranchisewith966 SME Centres.Today we havethe the foundationforsettingupDistrict was establishedinKurunegala,laying a dedicatedadvisorycenterforSMEs which isakeydriveroftheeconomy, order tostrengthentheSMEsector based ontheneedsassessment.In will berolledovertotheprovinces to highnet-worthcustomers.This Centre wassetupinColombotocater customer needs,aPremierBanking to businessscalingupandchanging offices and404ATMs. Responding fully fledgedbranches,248extension total customerservicepointsto318 added duringtheyearexpandingour extension officesand52ATMs were financial inclusion.9branches,30 areas acrosstheIsland,promoting expand thebranchnetworkintorural The Bankinvesteditsresourcesto 2011 from3.3%in2010. Performing Assetsratioto2.1%in through thereductionofNon the assetsqualityimprovedfurther and reachedRs.552.8billion,while advances oftheBankgrewby44.6% segments ofthesociety, intheir 2011, supportingourcustomersinall reduced furtherduringsecondhalfof for lendingcontinuedtobelowerand advances. Ouraverageinterestrates continuing tomanagenonperforming liquidity andprofitabilitywhile quality andgrowthofassets,capital, between keyindicatorssuchasthe A goodbalancewasmaintained further. operations toowerestrengthened banking operationsandtreasury trade financeactivities,offshore inward remittances,NRFCdeposits, coverage. Ourmarketleadershipin international correspondencebanking review wemaintainedthelargest By theendofyearunder operational risktoagreatextent. interventions andtheassociated This substantiallyreducedthemanual on-line throughtheITinfrastructure. benefits ofconnectingallbranches 51% in2011,astheBankreaped the cost/incomeratioreducingto improved furtherduringtheyearwith expansion, ouroperationalefficiency Notwithstanding thecapacity

BANK OF CEYLON ANNUAL REPORT 2011 17 activities demonstrate theBank's The CorporateSocial Responsibility branches in2012. complete rollovertotherestof system in2011whilewehopeto 100 brancheswerelinkedtothis customer servicestandardsandover to furtherimproveourprocessesand solution wasimplementedinorder financial year. Anend-to-endleasing across thecountryatendof presence ofabout402ATM points services wasdemonstratedbythe The growthofelectronicbanking superior servicestoourcustomers. and effectivenessinordertooffer network providedgreaterefficiency service delivery, includingourATM and contactpointsforexcellent performance. Ourretailchannel helped consolidateourexceptional The Bank’s serviceexcellencestrategy challenges. order topreparetheBankforfuture talented staffatdifferentlevelsin we recruitedwell-qualifiedand benefits inthefuture.Lastyear investments willgeneratefurther the board.We believethatthese growth inourcustomerbaseacross infrastructure ensuredasustainable technology, humanresourcesand Continued investmentsininformation segments. Retail BankingandCorporate sector contributionsofboththe 2011 wasprimarilyfromtheprivate generation. Thecreditgrowthin interest incomeandfeebased the strategiesadoptedbothinnet during 2011,reapingtheresultsof and RetailBankingperformedwell International, InvestmentandTreasury units, Corporate&OffshoreBanking, The individualstrategicbusiness growth. efforts tocontributeeconomic systemic importance oftheBank. growth momentumandreckoningthe end of2012,keepingpacewiththe keep Tier Iratioabove10%bythe appropriate retentionstrategyto Tier 1capitalbase,includingthe avenues forstrengtheningthe arises. TheBankisnowexploring capital intheeventnecessity with furtherheadroominTier II Bank iswellwithincomfortlevels, The totalcapitaladequacyofthe Capital Adequacy companies. improved dividendsfromgroup targets. TheBankwasabletorealise delivering group’s performance improving theirprofitabilityand entities in2011,substantially from ourSubsidiariesandAssociate We witnessedgoodperformances promising prospectsfor2012. in assetsandprofitstheyhave during theyearachievinggrowth Male andChennai,performedwell Analysis, ouroverseasbranchesin Management Discussionand As furtherelaboratedinthe Subsidiaries Overseas Branchesand the setgoals. the staffarecommittedtoachieving as theBank'smanagementteamand achieved byend2012asenvisaged, confident thattheplanwillbefully delivered promisingresults.Iam and reviewedannuallyhassofar corporate planlaunchedin2009 I amproudtomentionthatour report. which isincludedelsewhereinthis evidenced bythesustainabilityreport, the bettermentofsociety. Thisis country bycontributingtowards socio economicdevelopmentofthe commitment tostrengtheningthe objectives. nation achieveitssocio-economic we willcontinuetosupportthe as atruepartnerindevelopment, the leadingfinancialinstitutionand building thenation,castonusas We appreciatetheresponsibilityof within thetimeschedule. towards IFRScomplianceiswell liability management.Ourpreparation on riskmanagementandasset practices, managementinformation systems toenhanceriskmanagement further improvingriskmanagement for 2012.We areintheprocessof Liability Managementareinourplans Money LaunderingandAsset& related, toRiskManagement,Anti systems. ManymoreITsolutions quality ofmanagementinformation and balances,thusupgradingthe programme togetherwithchecks efficiency throughITrenaissance service levelsandoperational The Bankaimstofurtherimprove network. enhancement andextendtheATM to mobiliseinwardremittances expand theoverseasstaffstrength overseas correspondentrelationships, and treasuryoperations,enhance underway todevelopinternational very ambitious,plansarealready future, asthoseinthepast,are leadership. Sinceourgoalsforthe and furtherconsolidateourmarket We willstrivetocontinuouslyretain challenges prevailingintheeconomy. projected resultsamidstthecurrent prudent strategiestoachieveits The Bankwilladoptcarefullychosen with thecountry’s developmentplan. corporate planandinaccordance which iswellarticulatedinour moderate growthintheyear2012 The Bankexpectstoachievea Future Prospects Colombo 16th March2012 General Manager W ANalani co-operation. continued loyalty, commitmentand to themfordemonstratingtheir My sincerethanksareextended the Bank’s valuesandhighstandards. dedicated supportwhilemaintaining the tradeunionsunleashedtheir Our staffmemberstogetherwith service duringtheyear. Remuneration fortheirvaluable Audit, HumanResourcesand Governance, RiskManagement, Committees includingCorporate members oftheBoardSub- I alsothanktheChairmanand leadership toguideuscontinuously. Directors fortheirstewardshipand and membersoftheBoard I wouldliketothankourChairman for thesupportextendedtous. and allofficialsoftheseinstitutions Auditor General,theAttorneyGeneral the CentralBankofSriLankaand Finance &Planning,theGovernorof to theGeneralTreasury, Ministryof I amverygratefultotheSecretary ahead. growing qualityofserviceintheyears we wishtodelivercontinuously great resultsfortheyear2011and them, wewouldnothaveachieved performance oftheBank.Without led tofurthergrowthinthestellar they placedinusthisyear, which appreciate thetrustandconfidence To ourloyalcustomers,Igratefully Appreciations Board of Directors

Dr. Gamini Wickramasinghe Mr. S.R. Attygalle Mr. Raju Sivaraman Ms. Nalini Abeywardene Mr. Chandrasiri de Silva Mr. K.L. Hewage Mr. V. Kanagasabapathy Ms. Janaki Senanayake Siriwardane Chairman Ex officio Director Director Director Director Director Alternate Director Secretary to the Board/Secretary, Bank of Ceylon Attorney-at-Law, LLB, MBA Appointed as the Chairman of the Board of Bank of Ceylon in May Appointed as a Director to the Board of Bank of Ceylon in June Appointed as a Director to the Board of Bank of Ceylon in Appointed as a Director to the Board of Bank of Ceylon in May Appointed as a Director to the Board of Bank of Ceylon in May Appointed as a Director to the Board of Bank of Ceylon in June Appointed as the Alternate Director to Mr. S.R. Attygalle, the Ex officio Director from 2007 and re-appointed in May 2010. Serves as an Independent 2010 and serves as the Non-Executive Ex officio Director. January 2006 and re-appointed in June 2007 and May 2010. 2010. Serves as a Non-Executive Director. 2010. Serves as a Non-Executive Director. 2010. Serves as an Independent Non-Executive Director. July 2010. Serves as a Non-Executive Alternate Director to the Ex officio Director on the Non-Executive Director. Serves as an Independent Non-Executive Director. Board. He was also serving as the Alternate Director to former Ex officio Directors since Mr. Attygalle brings to the Board the knowledge that bridges the Ms.Abeywardene brings to the Board her experience in the field Being a practicing lawyer Mr. de Silva brings to the Board his Mr. Hewage brings to the Board his experience of over 40 years March 2006. Dr.Wickramasinghe brings to the Board business experience in Bank's goals with Government's objectives and the experience Counting over 30 years of experience in architecture and of commercial law and 25 years of management experience in specialized experience in law, as well as business, insurance, etc. in the spheres of consultancy, management, training, project both domestic and international markets with his extensive senior in financial services sector. management, Mr.Sivaraman brings to the Board business the private sector tea industry. She was formerly attached to a He was a former Director of People’s Bank, People’s Merchant finance, marketing, agriculture development and extension, Mr. Kanagasabapathy brings to the Board his wide experience in the public sector of level experience obtained in the United Kingdom and Belgium. He experience in public and private sectors. He served as a leading legal firm in the country. Bank PLC and People’s Insurance Company Limited and also a planting, etc. over 35 years in several senior capacities such as Director/Additional Director General of was the Chairman of the Securities & Exchange Commission of Sri He was a Senior Economist of the Central Bank of Sri Lanka for Director of Merchant Bank of Sri Lanka PLC, Road Development former Chairman of People’s Travels Limited. Public Finance, Director General of Public Enterprises and Financial Management Reform Lanka from 2006 to 2009 and the Insurance Board of Sri Lanka from a number of years and has also served as a Director and Acting Authority, Design Centre, Mireka Capital Land (Private) Limited She was a Commissioner of the Human Rights Commission of Mr. Hewage served as the Chairman of People’s Merchant Bank Co-ordinator and Financial Management Advisor of the Ministry of Finance & Planning. 2006 to 2008. Chairman of National Savings Bank and a Director of Shell and Property Development PLC. Sri Lanka from 2006 to 2009. He is the Chairman of BOC Travels (Private) Limited and a PLC, the Chairman/Chief Executive Officer of Janatha Fertilizer He also served as a Director of People’s Bank, State Mortgage & Investment Bank and Gas Lanka Limited. He served as the Director General of the Director of Hotels Colombo (1963) Limited. Enterprises Limited, Sri Lanka State Plantations Corporation, Merchant Credit of Sri Lanka Limited. He is the founder of Informatics Group of Companies, one of the Department of Public Enterprises of the Ministry of Finance & Mr. Sivaraman is the Associate Consultant of Plan 3 Architects in She is a Member of the Board of Management of the Galle Sri Lanka State Printing Corporation and Provincial Road largest software development houses in the country. He is also the Planning till the end of 2011. India and Managing Director of Arch-Triad Consultants (Private) Heritage Foundation of the Ministry of National Heritage and Mr. de Silva is an Attorney-at-Law and holds a Master’s Degree Development Authority (Western Province). He also served as He is presently the Senior Financial Consultant of the Academy of Financial Studies Chairman of Bank of Ceylon (UK) Limited, Property Development Limited, an architectural consultancy firm since 1980. He is also Cultural Affairs and a Director of Hotels Colombo (1963) Limited, in International Trade Law from the University of Wales, a Member of the Board of Directors of People’s Bank, Janatha which is the training arm of the Ministry of Finance & Planning. He is a Director on the PLC, Ceybank Holiday Homes (Private) Limited, Koladeniya He is presently a Deputy Secretary to the Treasury. He is also a the Chairman of Ceylease Financial Services Limited and also BOC Travels (Private) Limited and Mussendapotta Estates United Kingdom. Estates Development Board and as the General Manager of Sri Boards of Merchant Bank of Sri Lanka PLC, Lanka Hydraulic Institute Limited, Hotel Hydropower (Private) Limited and a Director of Mireka Capital Land Director of the Sri Lanka Ports Authority, a member on the Board serves as a Director of Merchant Credit of Sri Lanka Limited and (Private) Limited. Lanka Institute of Co-operative Management. Developers Lanka PLC and De La Rue Lanka Currency and Security Print (Private) (Private) Limited and The Lanka Hospitals Corporation PLC. of Postgraduate Institute of Science, University of Peradeniya Milco (Private) Limited. He is the Managing Director of Ram Limited. He is also the Chairman of the Distance Learning Centre, Council Member of and an observer on the Board of Investments of Sri Lanka. Developers (Private) Limited. He served as a Member of the Ms. Abeywardene is an Attorney-at-Law. He is the Chairman of Ceybank Asset Management Limited. The Institute of Chartered Accountants of Sri Lanka and The Institute of Public Finance Dr.Wickramasinghe holds a Master’s Degree in Systems Analysis National Police Commission from 2006 to 2009 and is He also serves as a Member of the Governing Council of the and Development Accountancy. He is a Member of the National Salaries and Cadres from the University of Aston, Birmingham, United Kingdom and a Mr. Attygalle holds a Bachelor of Science (B.Sc) Degree in re-appointed in 2012. He also serves as a Council Member and University of Visual and Performing Arts. Commission. Doctorate in Business Administration (DBA) from the Manchester Mathematics from the University of Colombo, Sri Lanka and a Treasurer of the Sri Lanka Institute of Architects over a period of Metropolitan University, United Kingdom. He is a Fellow of the Master’s Degree in Economics from Warwick University, six years. He holds a Bachelor of Science (B.Sc.) Degree in Bio Science Mr. Kanagasabapathy is a Fellow Member of The Institute of Chartered Accountants of Chartered Management Institute (FCMI), United Kingdom, British United Kingdom. from the University of Kelaniya, Sri Lanka and Master of Science Sri Lanka and holds a Master’s Degree in Public Administration from Harvard University, Computer Society (FBCS) and also of the Institute of Bankers of Sri Mr.Sivaraman is a Chartered Architect holding a Master’s Degree (M.Sc.) Degree in Agricultural Extension from the University of U.S.A. He is also a Fellow Member of the Institute of Public Finance and Development Lanka (IBSL). in Architecture (M.Sc. Arch.) from the University of Moratuwa, Reading, United Kingdom. Accountancy, The Institute of Certified Management Accountants of Sri Lanka and The Sri Lanka and a Fellow Member of the Sri Lanka Institute of Association of Accounting Technicians of Sri Lanka. Architects (F.I.A.). 18 19 BANK OF CEYLON ANNUAL REPORT 2011 BANK OF CEYLON ANNUAL REPORT 2011 Corporate Management

Ms. W.A. Nalani K. Dharmasiri C. Samarasinghe His exposure to both the domestic and by the Fiserv Aspac Private Limited & IBM He is an Associate Member of the Institute of Joined the bank in 1983, Mr. Lionel is a career Associate Faculty Member of the Banks’ K. Gamage Jinadasa General Manager Additional General Manager (Recovery) Additional General Manager international arena has contributed significantly Corporation as the fastest implemented core Bankers of Sri Lanka. banker with over twenty eight years experience Training Institute, Mr. Gunasekara has readily Chief Legal Officer to sustain BoCs leadership position in banking project in the Asia Pacific Region. in banking and financial services. He has responded to uplifting the knowledge of the Appointed General Manager in August 2011. Appointed Additional General Manager in June (Product & Development Banking) Appointed Chief Legal Officer in August 2011. treasury and international operations. He has Was instrumental in introducing a fully specialized in areas of treasury, international bank’s staff. A member of the Corporate Management since 2011, a member of the Corporate Management H.M. Mudiyanse Mr. Gamage is an Attorney-at-Law and also Appointed Additional General Manager in June extensive experience in trade finance, treasury automated budgetary control mechanism in operations and investment banking. 2002 and also held the positions of Senior since 2002. He bears a First Class Honours Deputy General Manager holds a LLB Degree from the University of 2011, a member of the Corporate Management operations, offshore banking, international, the core banking system across branch net He is a Non-Executive nominee Director on Deputy General Manager and the Additional Degree in Commerce in 1974 and holds a (Sales & Channel Management) Colombo, Sri Lanka. since 2006. He holds a Bachelor’s Degree in retail banking and investment banking. Mr. work. He held the positions of CEO of the Primary the Boards of Ceybank Asset Management General Manager prior to appointment as the Bachelor of Philosophy in Economics in 1976 Arts (Special) with a Second Class from the Weerasekara led the Recovery Division of the Mr. Mudiyanse joined the bank in August Dealer Unit of the bank and headed the (Private) Limited since August 2010 and General Manager. from the University of Colombo, Sri Lanka. He joined the Legal Department in 1980 University of Colombo, Sri Lanka in 1975 Bank in 2006. Prior to the assignment to the She is a Non-Executive nominee Director on 1973 and was appointed as Deputy General Treasury and Investment Unit. He received Ceybank Holiday Homes (Private) Limited and was a Deputy Chief Legal Officer since and also holds a Bachelor of Philosophy in grade of Deputy General Manager in 2006, the Board of BoC Travels (Private) Limited since Manager (Human Resource) in October broad exposure and extensive training in since June 2009. He served as a Non-Executive Joined the bank in April 1975. Ms. Nalani Mr. Dharmasiri brings a rich and diversified 2002. Has acquired diversified experience in Economics from the University of Colombo, Sri he served in the London branch and was December 2008 and served as a Non-Executive 2010 and thereafter as Deputy General treasury management and forex dealing nominee Director on the Board of Merchant is a career banker with over thirty six years banking experience both locally and abroad, recovery, industrial relations and human rights. Laanka in 1976. Joined the bank in 1975. successful in enhancing inward remittances nominee Director on the Board of Property Manager (Sales & Channel Management) in activities in London from 1988 to 1989. He Credit of Sri Lanka from 2008 to 2009. of experience in diversified fields such as since joining the bank in 1975, which Prior to joining the legal department, he had and treasury activities of the bank. He played Development & Management Limited from August 2011. served as Head of Treasury at the BoC branch corporate and offshore banking, credit recovery includes monitoring and restructuring served in retail banking segment of the bank. In his current position he leads the retail and a pivotal role in subsidiarization of the BoC 2006 to 2008. in Karachi. He is an Associate Member of the Institute of and retail banking. She was also actively of non performing assets, strategic development banking activities including branch in London and expansion of the His extensive experience in retail banking Bankers of Sri Lanka. involved in the implementation of IT solutions planning, corporate financial reporting and He is also a Faculty Member at the Central card business, electronic delivery channels, correspondent banking network. She is an Associate Member of the Institute of is held in good stead for managing and He is a Non-Executive Director on the Boards for trade finance activities in the bank. reorganization of branches. He has also held Training Institute of the Bank. Bancassurance and Islamic Banking arm. Bankers of Sri Lanka. developing the bank’s branch network in of Lanka Hospitals (Private) Limited since Ms. Dayani Fernando key positions in Audit, Corporate & Offshore Prior to the assignment of Deputy General his present position. Prior to the present She is a Non-Executive nominee Director on He is a Non-Executive nominee Director on the 2010, Property Development (Private) Limited Deputy General Manager Banking. He held overseas assignments as the Manager, Mr. Samarasinghe was instrumental assignment, he provided leadership to Ms. Janaki Senanayake Siriwardane the Board of Merchant Bank of Sri Lanka PLC. Board of Merchant Credit of Sri Lanka (Private) M.K. Nandasiri since 2009 and Primary Dealer Association Country Manager at BoC branch in Male from in establishing a large financial house based North Western Province as the Assistant (Corporate & Offshore Banking) Secretary to the Board/Secretary, She also serves as Director on the Boards of Limited (MCSL) since 2006 and serves as the Deputy General Manager since 2007. He is also an Alternate Director 1997 to 2000 and Managing Director of Nepal in the Middle East and centralization of bank’s General Manager. Appointed Deputy General Manager Credit Information Bureau, Institute of Bankers Chairman of both Audit & Risk Management of Ceybank Unit Trust since 2006 and is the Bank of Ceylon Bank of Ceylon Limited in Nepal, in 2002. back office functions. He has also served in (Support Services) (Corporate & Offshore Banking) in September of Sri Lanka, BoC Travels (Private) Limited, Committees of MCSL. first Vice President of the Sri Lanka Forex Appointed as Secretary to the Board/Secretary, Support Services, Recovery, Sales & Channel Having obtained a First Class Honours in He has been an Alternate Director of the 2011. Ms. Dayani Fernando holds a Degree BoC Property Development & Management Association. Bank of Ceylon in December 2005. Joined Bank A Non-Executive nominee Director on Management and Credit Cards. Economics from the University of Colombo, Institute of Bankers of Sri Lanka since October in Bachelor of Commerce (Honours) from Ms. Deepa Wanniaratchi of Ceylon in 1996. She also serves as Secretary (Private) Limited, Hotels Colombo (1963) the Boards of Lanka Securities (Private) Sri Lanka in 1974 together with a Bachelor 2010. Mr. Mudiynase also served as a Non- the University of Colombo, Sri Lanka and a Limited, Ceybank Holiday Homes (Private) Deputy General Manager Mr Lionel obtained his Bachelor of Arts Degree to all the subcommittees of the Board. Limited and BoC Management and Support He is the Non-Executive Chairman on the of Philosophy in Economics in 1975, M.K. Executive Director on the Boards of Ceybank from the University of Colombo, Sri Lanka in Bachelor of Philosophy in Economics from the Limited, Ceybank Assets Management (Private) Services (Private) Limited. He also served Board of Transnational Lanka Record Solutions (Finance & Planning) Nandasiri joined the bank in 1975. He holds the Holiday Homes (Private) Limited, Wayamba same University. Prior to present appointment, 1980. She is an Attorney-at-Law by profession and Limited, Lanka Clear (Private) Limited, BoC as a Non-Executive nominee Director on the (Private) Limited since 2006 and serves as position of Deputy General Manager (Support Chamber of Commerce, Industrial Service she served over five years as Assistant General Appointed Deputy General Manager (Finance was a practicing lawyer. She also holds a Management & Support Services (Private) Boards of Janashakthi Insurance Company a Non-Executive Director on the Board of Services) since May 2009. Bureau and the Wayamba Development Bank Manager (Offshore Banking). & Planning) in April 2008. D.M. Gunasekara Bachelor’s Degree in Law and a MBA from the Limited and Bank of Ceylon (UK) Limited. Limited, Ceybank Holiday Homes (Private) Ceybank Holiday Homes (Private) Limited since from 2007 to 2010. Limited, Hotels Colombo 1963 Limited, BoC Deputy General Manager University of Colombo, Sri Lanka. She is the President of the Association 2010. A member of the Bankers Technical Joined the bank in May 1975. She holds His experience in both domestic and She has diversified experience in retail and Property Development (Private) Limited, BoC Assistance Committee since 2007, he also international banking operations has taken Mr. Mudiyanse, an Associate Member of the (Retail Banking) corporate banking for thirty six years and has of Professional Bankers of Sri Lanka a Bachelor’s Degree in Commerce from Immediately prior to joining the bank, Ms. Travels (Private) Limited, Mireka Capital Land served as a Director on the Board of Merchant through management and leadership roles Institute of Bankers of Sri Lanka, and obtained Appointed Deputy General Manager in October specialized in corporate credit management and Committee Member of the Alumni the University of Peradeniya, Sri Lanka Siriwardane was employed in the private (Private) Limited, BoC Property Development Credit of Sri Lanka from 2006 to 2008. in the branch network. With his exposure a Postgraduate Diploma in Executive Bank 2010 and was in-charge of Sales & Channel and administration. During her tenure at BoC Organization, University of Colombo. She obtained in 1974. In 2004, she obtained a sector handling company secretarial work. & Management (Private) Limited and towards trade finance, he provided the Management from the same institute in 2001. Management until taking over of Retail Banking London branch, she has acquired a thorough also serves as a Director on the Committee of Postgraduate Diploma in Business & Financial She was also a visiting lecturer, examiner and Sabaragamuwa Development Bank. leadership to automate the trade finance Division in August 2011. Mr. Gunasekara joined knowledge in overseas branch operations Rotary Club of Colombo Central. H.M.A.B. Weerasekara Administration from the Institute of Chartered moderator on Commercial and Industrial Law operations in the bank, and also for training the bank in 1983 after having graduated from including trade finance. Additional General Manager Accountants of Sri Lanka in association P.A. Lionel at the Industrial Management Department of He is also an Associate Member of the Institute of staff in that area. He served as Country the University of Colombo, Sri Lanka with a She was a co-winner of the “Zonta Award for (International & Treasury) with the Cranfield University School of Deputy General Manager the University of Kelaniya, Sri Lanka. She is of Bankers of Sri Lanka. Manager of the BoC branch in Chennai Special Degree in Public Finance & Taxation in She also serves as a member in the Technical Excellence” in banking category awarded by Management, UK. (Investments & Human Resource) also the Company Secretary for some of the Appointed Additional General Manager from 2005 to 2008. He was the Assistant 1981. and Evaluation Committee of Ceylon Zonta Club of Colombo for the year 2009. Subsidiaries of the Bank. (International & Treasury) in August 2011, a She has wide experience in diverse fields General Manager (Pettah) prior to the present Appointed Deputy General Manager in Petroleum Corporation and as a Non-Executive She holds a Bachelor of Arts Degree in member of the Corporate Management since such as managing large technology projects, assignment. October 2010. Holds the position of Deputy Commencing his career with retail banking, nominee Director of Ceylease Financial Economics and a Bachelor of Philosophy in 2006. Mr. Weerasekara joined the bank in May bank restructuring under financial sector General Manager (Investments & Human Mr. Gunasekara has amassed a wealth Services Limited and affiliate of BoC, for the Economics from the University of Colombo, 1975, having graduated from the University reforms, credit & recovery management A Non-Executive nominee Director on the Resource) since August 2011. Previously of knowledge and experience in credit past three years. Sri Lanka. She is also a Fellow Member of the of Colombo, Sri Lanka in Economics in 1972. and corporate & retail banking. Prior to the Board of Grand Oriental Hotel since September held the position of Deputy General Manager management and administration. Serving at Institute of Bankers of Sri Lanka. Additionally, he holds a Bachelor of Philosophy present assignment, she provided leadership 2009. He was also the President of the Trade (Investment Banking). the BoC London branch from 1997 to 2000, She is an Associate Member of the Institute of in Industrial Management in 1974 from the to implement the bank’s current core banking Finance Association of Bankers of Sri Lanka he obtained comprehensive experience Bankers of Sri Lanka. same University. system island-wide, which was awarded during the year 2010. in international banking operations. As an 20 21

Board of Directors (Contd.) BANK OF CEYLON ANNUAL REPORT 2011 BANK OF CEYLON ANNUAL REPORT 2011 Corporate Management

W.A. Asoka Rupasinghe corporate, retail and international trade. and obtained a Doctorate in Business Dr. Lionel Siriwardena Dr. Siriwardena holds a Master of Arts Chief Financial Officer He was seconded to the Saudi British Bank Administration from the Irish International Head of Research & Development Degree in Economics from the University Appointed as Chief Financial Officer an associate of HSBC Holdings PLC, UK, University (EU) in 2005. Appointed Head of Research and of Kelaniya, Sri Lanka in 1980 and obtained in October 2009. Graduating from the as Manager Corporate Banking Eastern Development of the Bank of Ceylon in a Doctorate in Social Sciences from the He is also a Fellow Member of The Institute University of Sri Jayawardanapura Sri Province Saudi Arabia and was responsible August 2009. University of Wargeningen, the Netherland of Chartered Accountants of Sri Lanka Lanka, Mr. Rupasinghe holds a Special for re-structuring the Credit Control & Credit in 1989. and also a Fellow Member of the Certified Degree in Business Administration in 1991 Risk Departments. Dr. Siriwardena has over twenty two Management Accountants of Sri Lanka. and a MBA in Finance from the University of years experience in the banking sector He played a pivotal role in the successful Southern Queensland Australia in 2007. Rohan Peiris handling macroeconomic research, financial issue of the debut sovereign bond for USD performance analysis and forecasting. Head of Information Technology Prior to joining Bank of Ceylon, he worked 500 Million for the Government of Sri Lanka He has special exposure on business as Head of Corporate Financial Affairs at in 2007. Joined Bank of Ceylon in February 2009, as process re-engineering, productivity Commercial Bank of Qatar and Head of the Head of Information Technology, from management, organizational restructuring Mr. Fernandopulle is a Trustee of Joseph Finance and Administration at Securities & his previous position at DFCC Vardhana and customer care. Fraser Memorial Hospital since 2010, Exchange Commission of Sri Lanka. Bank. President of Sri Lanka branch of the Prior to his appointment as Head of A Non-Executive nominee Director of Chartered Institute of Bankers, London since Mr. Peiris holds a Master’s Degree in Research and Development in Bank of Ceylease Financial Services Limited since 2009 and a Fellow of the Chartered Institute Information Technology from Keele Ceylon, he served at the United Nations March 2010, Mr. Rupasinghe is also a of Bankers, London. University, UK in 2002. Development Programme (UNDP) Regional Fellow Member of The Institute of Chartered Centre for Asia Pacific Region as a Senior Dr. W.G. Karunadasa Counting over twenty nine years experience Accountants of Sri Lanka. Researcher from 2005 to 2009 and Research Chief Internal Auditor in the fields of data processing and Director at the People’s Bank from 1991 to information & communication Technology, Trevine Fernandopulle Appointed the Chief Internal Auditor of the 2004. He was also a Research Consultant he is specialized in software development Chief Risk Officer Bank of Ceylon in March 2009. for UNDP Maldives, Lao PDR and Sri Lanka & project management and pioneering in Graduated from Imperial College, London from 2008 to 2009, Regional Researcher Dr. Karunadasa has over thirty one years facilities management. with a Bachelor of Science in 1977 in for microfinance and rural development experience in the fields of accounting, addition to a Master’s Degree in Statistics at the Asia Pacific Rural Agricultural Credit auditing and financial management. He also served at Pan Asia Bank and Association (APRACA) from 2001 to 2004, from the London School of Economics in Merchant Bank of Sri Lanka. He was the editor of Economic Review from 1991 1978, Mr. Fernandopulle joined the bank Prior to enlisting at BoC, he headed appointed as the National Consultant on IT to 2004, visiting lecturer at the University as the Chief Risk Officer in May 2009 after the Internal Audit Department of large Projects funded by United Nations Industrial of Colombo from 1995 to 1997 and Visiting retirement from the services of HSBC as commercial & financial establishments. Development Organization (UNIDO) in 1990 Research Fellow at the University of Burgen, Deputy CEO Sri Lanka. Further, he served on the Board of Directors/ and served in many committees of national Norway and the University of Wageningen, Corporate Management of The Finance interest. He is also Information Technology In a Banking career spanning thirty one the Netherland from 1979 to 1980. Company PLC from 1988 to 2001. Infrastructure Library (ITIL) certified. He is years, he has specialized in corporate also a Chartered member of the British banking and risk management whilst Dr. Karunadasa holds a Master’s Degree in Computer Society. acquiring wide experience in all aspects of Business Administration from the University commercial banking, including treasury, of Sri Jayawardenapura, Sri Lanka in 1996 22 BANK OF CEYLON ANNUAL REPORT 2011 Our people are our greatest strength. It is our common cause to deliver 'Many things to many people'... BANK OF CEYLON ANNUAL REPORT 2011 24 Management Team Executive 10 07 04 01 AGM-CorporateCredit Mr. PJJayasinghe AGM-Western ProvinceNorth 04. Ms. WKIKularatne AGM-CreditAudit 03. Ms. RGVSGunathilake AGM-Metropolitan Branch 02. Ms.YAMPKarunadharma 01. AGM-NorthCentralProvince Mr. DNJCosta CountryManager-London 08 Mr. KBSBandara AGM-AdministrativeServices 07. Ms. KADPemadasa 06. Mr. HKWGunasinghe 05. 11 08 05 02 AGM -Product&DevelopmentBanking AGM-SupportServices Mr. KTKarunaratne AGM-Western ProvinceSouth 12. Mr. DNLFernando AGM-InformationSystemAudit 11. Mr. TMutugala AGM-Budget&Strategic Planning 10. Mr. WPRHFonseka 09. 12 09 06 03 AGM-BusinessProcess Re-EngineeringProject Mr. GHChandrasiri 16. AGM-International Mr. WGAriyaratne 15. AGM-CountryManagerChennai Mr. TMSafa 14. AGM-Country Manager-Male Mr. DMLCKumara 13. 22 19 16 13 AGM-Training &Development Mr. GDSilva 20. AGM-Treasury Mr. SMCJayasuriya 19. AGM-UvaProvince Mr. GLPJinasoma 18. AGM-RiskManagement/Compliance Mr. MLJFernando 17. 23 20 17 14 AGM-BoCCardCentre Mr. WMSWanasinghe 24. AGM-NorthernProvince Mr. KEDSumanasiri 23. AGM-CorporateRelations Mr. DPKGunasekera 22. AGM-EasternProvince Mr. CWWelagedara 21. 24 21 18 15

BANK OF CEYLON ANNUAL REPORT 2011 25 BANK OF CEYLON ANNUAL REPORT 2011 26 Management Team Executive AGM-Marketing Ms. SEkanayake 28. AGM-SuperannuationSchemes Mr. HGNihal 27. AGM-NorthWestern Province Mr. EMUBandara 26. AGM-SouthernProvince Mr. DKNPiyasoma 25. 34 31 28 25 AGM-HumanResourceOperations Mr. LGNCyril 32. AGM-ConsumerProduct Management Mr. TPGRanaweera 31. AGM-PettahBranch Ms.CKJayarathne 30. AGM-Accounting & MIS Ms.HMRatnayake 29. 35 32 29 26 AGM-Recovery(Provinces) Mr. MASumanaratne 36. AGM-SabaragamuwaProvince Mr. PMPremadasa 35. AGM-InvestmentBanking Mr. HSJayawardana 34. AGM-OverseasBranches Mr. RMHaputhanthri 33. 36 33 30 27 43 40 37 AGM-Province&Branch Audit Mr. JMDBJayasundera 40. AGM-Trade Services Mr. DMGCDevasinghe 39. AGM-CentralProvince Ms.EMSKDangampola 38. AGM-BranchCredit Mr. WCKWickramarachchi 37. AssistantDirectorIT/ (Operations/Tech. Support) Mr. JagathKurundukumbura 43. AssistantDirectorIT (Operations/Tech.Support) Mr. HRFFonseka 42. DeputyChiefLegal Officer(Credit) Ms.SHRanawaka 41. 44 41 38 DeputyChiefLegal Officer(Recovery) Ms.NTSHSilva 45. (International&Investment Banking) DeputyChiefLegal Officer Ms.MGunasekera 44. 45 42 39

BANK OF CEYLON ANNUAL REPORT 2011 27 The healthy economic environment witnessed during 2010 continued during 2011 as well, with many of the key macro variables reﬂecting stability and improvement. Growth outlook remains positive with the sustained growth in industry and services sectors and the recovery of the agriculture sector after ﬂoods contributed to achieve the estimated real Gross Domestic Product (GDP) growth for 2011 of 8.3%.

Mortgage Loans

Vehicle Loans Business Loans

Analy Discus Mana

BANK OF CEYLON ANNUAL REPORT 2011 30 & Analysis Management Discussion

g si

s g si s ement ement ion & ion & s expenditure. income withcontrolof spread andfeebased business volumes,interest as aresultofincreasein Rs. 5,493millionfrom2010 Profit beforeTax wasupby Profit beforeTax 11 10 09 08 07 Rs. Billion 4.2 4.5 5.2 10.1 15.5

BANK OF CEYLON ANNUAL REPORT 2011 31 BANK OF CEYLON ANNUAL REPORT 2011 32 & Analysis Management Discussion 11 10 09 08 07 % result ofincreasedaftertaxprofit. 9.7% overthepreviousyearasa recording animpressivegrowthby was 33.7%attheendof2011 Profitability, asmeasuredbyRoAE Equity onAverage Return 11 10 09 08 07 both locallyandinternationally. source fundsatcompetitiveprices year mainlyduetobank'sability in interestspreadovertheprevious The Bankshowsanimprovement Interest Spread % 0.8 1.1 1.1 1.6 2.9 2.0 3.0 3.1 3.1 3.2 RoAA. expenses resultedintheimproved together withsustaining structure allocation totheappropriateyield Bank’s continuousprofitable asset onAverageReturn Assets allocation exercise. andbank’sstructure soundasset as aresultofchangeinthefunding Net interestmarginimprovedto3.2% Net InterestMargin 11 10 09 08 07 % 11 10 09 08 07 % 12.9 14.6 16.1 24.0 2.5 2.6 2.6 3.0 33.7 3.1 deposit growth. thereby posingmorechallengestoour new competitorsenteredthemarket institutions inmobilisingdepositsand stiff competitionfromnonbanking the yearbankingsectorencountered 12.3% overthepreviousyear. During The depositbaseoftheBankgrewby Deposit fromCustomers 11 10 09 08 07 % 11 10 09 08 07 Rs. Billion 2.1 275.0 280.9 382.3 293.4 3.3 3.9 4.9 5.7 552.8 credit riskmanagement measures. improved recoveries andsound The reductionismainlydueto from 3.3%in2010to2.1%2011. sustain itsNPAs whichwasreduced The Banksuccessfullymanagedto Advances Ratio Non-performing private sector. last year. Growthmainlycamefrom showing a45%growthcomparedto to Rs.552.8billionattheendof2011 The Bank’s GrossAdvancesreached to Customers Gross Loans&Advances 11 10 09 08 07 Rs. Billion 308.9 316.1 408.6 524.2 588.8

BANK OF CEYLON ANNUAL REPORT 2011 33 BANK OF CEYLON ANNUAL REPORT 2011 34 and surplusonrevaluationofassets. This ismainlyduetoretentionofprofit year 2011reflectingagrowthof42.8%. reached toRs.40.2billionattheendof The Shareholders’equityoftheBank Equity Holders Attributable tothe Capital &Reserves & Analysis Management Discussion limit of20% liquidity wellabove theregulatory The Bankmaintained asound Assets Ratio Liquid Statutory 11 10 09 08 07 11 10 09 08 07 % % 11.4 11.6 50.9 53.7 13.7 14.2 64.2 15.9 67.5 68.3 Regulatory Minimum is10%. Regulatory capital adequacywasreducedto11.6%. Due totheassetsgrowthin2011 Adequacy Ratio Total Capital expenses. income andcontrolledoperating improving asaresultofgrowthin The Bank’s CosttoIncomeratiois Cost toIncomeRatio 11 10 09 08 07 11 10 09 08 07 Rs. Billion % 21.1 23.1 24.9 28.1 21.2 21.1 23.4 40.2 24.2 28.7 expected togrow slowly becauseof and developingeconomiesisalso than anticipated.Growthinemerging 2011 Japanesetsunamiwasstronger The disturbancecausedbytheMarch with afiscaldeficitanddebtcrisis. the EuropeanUnionisbamboozled economy isnotingoodshape,while high unemploymentrate.TheUS are facingasluggishgrowthand Most oftheadvancedeconomies only 1.6%. whilst advancedeconomiesgrewat economies expanded6.2%in2011 output ofemerginganddeveloping maintained around3.8%in2011.The from thelevelreportedin2010and Global growthhasdecelerated raised. living standardscanbesupportedand capita, whichwilldeterminehowfast a slowdowninaverageoutputper risk aheadfortheglobaleconomyis of theoutputgrowth,biggest risks associatedwithslowingdown according toIMF. Apartfrom the and downsiderisksaregrowing uneven, confidencehasfallensharply, has weakenedandbecomemore last twodecades.Globalactivity somewhat belowtheaverageof 3 percentperyearonaveragerate during thisdecadetoapproximately new phaseandlikelytoslowdown Global growthisenteringacritical Global GrowthContext Operating Environment Economic Background& recorded lowlevelsofbelow5%. unemployment toremainaround economic activitiessupported reconstruction andexpansionof to infrastructuredevelopment, 2.0%. Employmentgenerationdue sector isestimatedtogrowby in 2011,whilsttheagriculture grow by8.6%and10.1%respectively and industrysectorsexpectedto growth emanatedfromtheservices A significantcontributiontothe growth for2011of8.3%. real GrossDomesticProduct(GDP) contributed toachievetheestimated the agriculturesectorafterfloods, services sectorsandtherecoveryof sustained growthinindustryand outlook remainspositivewiththe stability andimprovement.Growth the keymacrovariablesreflecting during 2011aswell,withmanyof witnessed during2010continued The healthyeconomicenvironment Environment Sri Lanka’s Economic 7.4% in2011lowerthanexpected. China andIndiagrewby9.2% and aweakeningofinternaldemand. the worseningexternalenvironment Yen by 7.8%byend2011. Sterling Poundby2.4%andJapanese by 0.1%anddepreciatedagainst Rupee appreciatedagainsttheEuro by 3.2%afterwardsatend2011.The Dollar by0.5%untilitdepreciated Rupee appreciatedagainsttheUS Rupee by3%Budget2012.The government decidedtodevaluethe further externalimbalances, As aprecautionaryactiontoavoid in history. 2011, achievingthehighestarrivals arrivals wereup30.8%to855,975in rupee defendintervention.Tourist losing reservesintheprocessof to USD6.2billionbyNovember, USD 8.1billioninJuly. Sincereduced (ACU) recordedthehighestvalueof reserves withAsianClearingUnion expanding tradedeficit.Theforeign the mainportionincompensating the firstelevenmonthsof2011was billion inworkerremittancesduring on-year growthof23.8%toUSD4.6 the tradeaccountby111.3%.Ayear- 18.4 billionwideningthedeficitof expenditure jumpedby53.2%toUSD 22.2% toUSD9.6billionandimport period, exportearningsincreasedby debt component.Duringthesame exchange rate,reservesandforeign 2010 valueandkeptpressurisingthe USD 8.8billionalreadydoubledthe eleven months,thetradedeficitof concern fortheeconomy. Forthefirst deficit andremainedthemajor in recordingthehighestevertrade import expenditurein2011resulted earnings andrapidincreasein A considerableincreaseinexport immediately reflected inmarket This upwardpressurewas Rupee depreciationinNovember. the lowinterestregimeuntil interest ratesadjustedtomaintain Following thepolicyratesmarket downward adjustmentinJanuary. low levelsandunchangedafterone The policyinterestratesremainedat fall toanestimated78.2%in2011. in 2010whiletheDebttoGDPratio to 1.5%ofGDPfrom2.1%recorded deficit toGDPisexpectedimprove the overallfiscalsituation.Revenue economic activitieshelpedtoimprove in governmentrevenuewiththehigh of GDP. Asubstantialimprovement maintain thebudgetdeficitbelow7% The fiscalpolicyin2011wasto in December. remain insingledigitrecording6.7% average inflationhascontinuedto inflationary pressures,theannual projected levels.Evenwiththese was considerablehigherthanthe growth of19.8%inOctoberwhich has alreadyrecordedayear-on-year November. Broadmoneysupply(M2b) with 33.3%year-on-year growthin has climbedtorecordhighlevels A privatesectorcreditexpansion

BANK OF CEYLON ANNUAL REPORT 2011 35 BANK OF CEYLON ANNUAL REPORT 2011 36 Review Financial movements ofinterestratesall Rate (AWDR), whichreflectsthe monthly Average Weighted Deposit rates, touched10.8%andthe benchmark forselectedlending (AWPLR), whichservesasa Weighted PrimeLendingRate interest ratesasmonthlyAverage & Analysis Management Discussion 9% overthebudget Total Loans YOY up12% Rs. 588.8Bln 5% belowthebudget Total Deposits YOY up55% Rs.15.5 Bln 16% overthebudget Profit BeforeTax YOY up45% Rs. 552.8Bln and profitability. Thebankingsector reported bycapital,assetquality improved duringtheyearas The financialsystemwasfurther end 2011. commercial banks,surpassed7.2%by interest bearingdepositsheldby

from 3.3%lastyear 2.1% NPA improved YOY up13% Rs. 71.4Bln 1% overthebudget Gross Revenue YOY up17% Rs. 835.5Bln 1% belowthebudget Total Assets- single digit.Depreciationofthe Inﬂation isexpectedtoremainwithin all threemainsectorsoftheeconomy. to growby7.2%in2012supported The SriLankaneconomyisprojected Economic Outlookfor2012 economic activities. higher creditgrowthandexpanding recorded substantialgrowthdrivenby

dropped belowitsexpectedlevel. further increaseifdollarinflow stress onUSDollarliquiditywould reserves. Underthesecircumstances Rupee wouldeasethepressureon introduced in2011by CentralBankofSriLanka The operatingexpenses werecontainedduringtheyearwitha5.1% increase.Theincreaseintheexpenses wasmainlyduetobank o neeticm % 4. 4. 4. 41.3 44.9 47.8 41.7 Non interestincome(%) e neeticm % 6. 6. 6. 64.8 64.0 62.4 67.9 Net interestincome(%) te prtn noe 8 96 5 1,151 753 946 687 Other operatingincome e an rmivsmnsi euiis ,9 51 ,6 3,106 1,961 581 1,199 Net gainsfrominvestmentsinsecurities iiedi cm 425401348469 Dividend income oeg xhnepot ,7 287 ,6 409 1,567 2,887 1,179 Foreign exchangeprofit e e n omsinicm 251 ,5 371 5,545 3,711 3,455 2,571 2011 2010 Net feeandcommissionincome 2011 2010 s ilo Rs.Million Rs.Million Staff expenses (Decrease) (excluding depreciation) Premises, equipmentandestablishment Amount Operating Expenses as aresultofmarktomarketlosssecuritiesheldfortrading. Composition ofnon-interestincometothenetoperatingdropped31.5%from 41.3%.Themainreasonforthisdropisa Increase/ the growth. previous yearalsocontributedto in feeincomeby18.8%overthe Rupee againsttheUSD.Increase due todepreciationofSriLankan increase inexchangeincome banking activitieswithaslight as aresultofsustainablecore income reachedtoRs.75.1billion Composition to Rs71.4billionwhilegroup Total revenueoftheBankreached Income from bothmarktomarketvaluationof despite thenegativecontribution for theBankstoodatRs.11.5billion previous year. Thenetprofitaftertax remarkable growthof54.6%overthe of Rs.15.5billionbyachievingthe The Bankreportedapretaxprofit Profitability % ercainAotsto nfie ses Depreciation/Amortisation onfixedassets te prtn xess Other operatingexpenses oa prtn xess Total operatingexpenses Cost-to-income ratio(%)

11 10 09 08 07 Total IncomeforFiveYears 2.8% contrasttotheyear2010. and costtoincomeratiodecreasedby 33.7%. TheNIMof2011was3.2% while RoAEincreasedfrom24.0%to RoAA increasedto2.0%from1.6% shares andﬁnancialinstruments.The Bank (5Year CAGR9.2%) 10,365 16,897 2,145 3,474 50.9 913 4 71 842 1,1 55 10,310 206 129 2,016 298 566 2,908 1,7 80 820 16,077 5. (.) (2.8) 53.7 Group (5Year CAGR9.4%) (Rs. Billion) 50.2 61 13 21 52.3 5 64 13 5 18 11 10 09 08 07

60.2 Rs. Billion 62.4 63.4 63.5 66.1 Profit BeforeTax 66.7 71.4 2.8 3.1 75.1 3.6 11 10 09 08 07 4.2 Cost Structure 4.5 2007 2008200920102011 5.2 Staff RetirementBenefits Personnel Expenses 11 10 09 08 07 Rs. Million 12,638.5 12,638.5 13,816.0 13,816.0 11,334.3 6.4 negative contributionfromnetgaininvestmentinsecurties Net OperatingIncomeforFiveYears 's branchexpansionand thecostofdepositinsurancescheme Bank (5Year CAGR15.6%) Profit AfterTax 10.1 11.5 Other OperatingExpenses Premises, EquipmentandEst.Exp. 15.5 18.9 Group (5Year CAGR15.8%) 20.1 after tax. while 41.9%forprofit five yearswas36.2% before taxforlast growth fortheprofit Compounded annual 22.0 23.1 23.1 24.5 (Rs. Billion) (1,271) 1,377 1,746 6,636 30.3 31.5 72.7 713 32.7 33.7

36.1

BANK OF CEYLON ANNUAL REPORT 2011 37 BANK OF CEYLON ANNUAL REPORT 2011 38 euiissl ne e ucaeareet Total assetsoftheBankstoodatRs.835.5billionas31stDecember2011upby120.6or16.9%YOY. Loans -todepositratio(%) Total liabilitiesandequity Capital andreservesattributabletotheequityholdersofBank Total liabilities Other liabilities Debentures Tax payable&defferedtaxliabilities Securities soldunderre-purchaseagreements Borrowed funds Deposits fromcustomers Total assets Other assets Fixed assetsandinvestmentproperties Loans &advances euiisprhsdudrr-sl gemns Securities purchasedunderre-saleagreements Investments Placements withbanksandﬁnancialinstitutions Cash andbalanceswithbanksﬁnancialinstitutions As at31December Financial Position & Analysis Management Discussion Composition ofAssets 15.7% 4.0% 2011 65.1%

15.2% Other assets Investments Liquid assets Loans 20.5% 2010 3.3% 52.1% 24.1% liquidity positionthroughouttheyear. billion duetomaintenanceofsound increased by22.8%YOYtoRs.49.1 other bank'sandfinancialinstitutions and leases.Cashbalancewith yielding assetssuchaspawning the increaseismainlyonbetter investment insecurities.Oftheloan, as advancestocustomerswell the growthinhighyieldassetssuch Bank improvedduringtheyearwith The overallassetsstructureofthe relatively highergrowth. consumption andothersshoweda such asmanufacturing,housing, emphasised whilesomesectors a balancedcreditgrowthwas concentration whichappearsbelow, by 69.3%.Aspartofthecredit by ourretailsectorwhichgrew 2010. Thiswasmainlycontributed major contributorwas50.0%over sector creditgrowthwhichisthe a YOYgrowthof44.6%.Theprivate year toreach552.8billionrecording the Rs.500billionmarkduring The Bank'sloanportfolioexceeded s ilo Rs.Million Rs. Million 835,540 795,377 588,765 835,540 543,652 193,383 40,163 20,601 41,366 93,674 10,938 14,545 49,098 48,724 22,849 2,247 1,075 93.9 2011 2010 53,522 72.9 40,840 17,706 28,132 15,258 38,706 52,445 5,786 714,954 686,822 524,233 714,954 372,722 2,658 195,222 42,680 39,998 (Note: Average balanceswere taken withopeningandclosingbalancesonly) Funding reduction inlendingratesover3years. The Bankcontinuedtomaintainalowerlevelofinterestratesthroughouttheyearinordersupportdevelopmentactivitieso (Note: Average balancesweretakenwithopeningandclosingonly) H G D A C B E J F I Non interestbearingliabilities Total interestbearingliabilities interest bearingliabilities Debentures andother Borrowed funds Deposits fromcustomers Laiiis21 0020 082007 2008 2009 2007 2010 2008 2011 2009 2010 Liabilities 2011 Assets Loans &advancestocustomers Total interestearningassets earningassets Investment securities&otherinterest Non interestearningassets 17.0% Credit Concentration 0.2 0.2 1.2 5.0% 2.0 2.0 3.0 3.0 4.8% 3.9 4.2 4.8 2.7% 2011 5.0 6.1 8.0 2011 9.1 70.5% 11.3 11.9 (%) 2010 14.8% 5.4% Rs.Million Average Rs.Million balance Average Average balance 145,467 2,8 5.8% 629,780 6,6 5.3% 465,561 3.9% 5,8 9.4% 458,187 8,0 8.9% 7.7% 686,003 227,816 1199.5% 91,159 3003.8% 73,060 89,245 2010 2.5% 25.0 73.3% rate 29.3 rate Rs.Million Rs.Million Average balance Average Average balance Others Equity Debentures Borrowings Deposits 33.7 1,4 3218,1 82,759 85,718 93,221 117,444 0,5 .%480892 7,2 .%35319.1% 325,341 9.6% 375,421 9.2% 418,088 6.1% 509,154 9,4 .%308085 6,4 .%25897.3% 235,829 8.0% 263,843 8.5% 310,870 5.6% 394,143 1,9 10 6,8 39 7,0 25 5,6 12.2% 253,867 12.5% 277,801 13.9% 268,085 11.0% 318,894 5,3 .%42741.%49821.%324811.7% 10.3% 362,478 108,611 12.1% 11.4% 409,802 132,001 11.7% 8.6% 452,764 184,679 9.1% 6.6% 555,734 236,840 2291.%6,1 69 2841.%5,4 17.1% 54,448 19.8% 62,894 16.9% 60,019 10.0% 72,239 27244 71936 86453 5048.0% 35,064 5.3% 48,684 3.6% 47,199 4.4% 42,772 0845,4 13745,622 51,337 58,545 70,864 36.1 - Government&SOE's J - Foreclosed - Properties Consumption&Others I - H Hotels,Travel &Services Housing G - - F Agriculture&Fisheries E - Manufacturing - Banking,FinanceandInsurance D - Wholesale&Retail C - Export&Import B - A rate rate consolidating investor confidence. strengthening thesubordinatedcapitalof Bank.Theissuewasoversubscribed,further through subordinateddebentureslistedon Colombo StockExchangeinNovember2011by additional fundingsourcedfromborrowing instruments. TheBankraisedRs.5.0billion the depositinfundingmixfrom73.3%of 2010to70.5%in2011wasmainlydue result oftheBank'sadditionaleffortondeposit mobilisation.Howeverthereductionin A significantportionoftheBank'sfundingie.70.5%comprisecustomerdepositsasa Rs.Million Rs.Million Average balance Average Average balance f thecountry. Thetableabovebearstestimonytotheconsecutive rate rate Rs.Million Rs.Million Average Average Average balance balance rate rate rate Rs.Million Rs.Million Average balance Average Average balance rate rate rate

BANK OF CEYLON ANNUAL REPORT 2011 39 BANK OF CEYLON ANNUAL REPORT 2011 40 11 10 09 08 07 result ofthecontinuousrecoveryeffort aswellpreventivemeasuresfromimprovedriskmanagementpractices. Management oftheNPA hasbeenoneofthefocusareasBankwithobjectivetoachievingaboveindustryaverage.NPA w offer mediumtolongtermcredit. the tenorgapandenabledBankto component wasincreasedtobridge 46.1% in2010.Thetimedeposit deposits increasedto48.3%from from 17.1%lastyear, whiletime demand depositsreducedto15.3% Rs. 588.8billion.Thecompositionof YoY byRs.64.5billion,12.3%to Deposits fromcustomersincreased Deposit fromcustomers & Analysis Management Discussion vrg aacs21 2010 2011 Average balances Total Other deposits Time deposits Saving deposits Current deposits Non PerformingAssets 2.1% 3.3% o efrigAst NPA Ratio Non PerformingAssets Rs.Million 5649 24,841 15,995 556,499 8,771 262,819 201,190 Volume 8,6 - 89,661 (Rs. Million) 3.9% 4.9% 289 75 2,829 11,334 11,416 Interest Cost Rs.Million 48.3% 12,639 5.7% 13,816 15,542 2011 0.4% Rs.Million 15.3% 4640 22,069 466,420 14,411 7,589 215,600 176,145 Volume 7,7 - 72,277 238 69 2,398 36.1% H G D A C B J E F I Industry-wise NPA Analysis 0 0 Interest Cost 2 2 Rs.Million Others Time Saving Demand 4 5 5 6 6 7 7 2011 8 8 8 9 46.1% 11 10 09 08 07 Loans toDepositRatio 13 2010 oa eoisL/DRatio Total Deposits 2010 0.6% 67% 17 73% (%) 17.1% 36.3% 89% 94% 95% Total Advances (Rs. Billion) 275.0 28 280.9 293.4 308.9 316.1 30 as keptat2.1%in2011a 33 382.3 408.6 - Government&SOEs J - Foreclosed - Properties Consumption&Others I - Housing&Construction H - Hotels,Travels &Services G - F Agriculture&Fisheries E - Manufacturing - D Banking,Finance& Insurance - Wholesale&Retail C - Export&Import B - A 524.2 552.8 588.8 reduction incapitaladequacyratioinlinewithincreaseofloanbook. Capital adequacyratiodecreasedfrom13.7%to11.6%asaresultofincreaseinrisk-weightedassets.Highercapitalallotment Capital adequacyratio(%) Core capitaladequacyratio(%) Total risk-weightedassets Operational risk Value AddedTax Dividend andValue totheGovernment in 2010. The soundliquiditypositionoftheBankwasmaintainedwhichabove theminimumrequirement,eventhoughitwasdecreasedb Liquid assetratio(%) Total liquidassets Total liabilitybasesubjecttominimumliquidassetsrequirement Liquid Assets Risk- weightedassets Total capitalbaseafterdeductions Supplementary capitalafterdeductions Deductions Supplementary capital Core capitalafterdeductions Deductions Core capital As at31December Capital andLiquidityRatios value paidtothegovernment. Reduction intheValue AddedTax ratesandincometaxbythe government’s budgetproposalfortheyear2011 isthemainc Total valuetoGovernment Proﬁt beforeVAT &tax Total Dividends Income tax Market risk Credit risk

forcreditriskwascausedto ause forthereduction intotal Rs.Million Rs.Million Rs.Billion 381,720

y 5.3%to23.4%from28.7% 322,218 44,438 11,926 32,512 18,062 10,387 42,456 (2,696) (3,038) 14,622 35,550 17,046 57.5% 2,516 3,846 4,025 136.0 582.4 11.6 01 2010 2011 2011 2010 2010 2011 23.4 8.5 13.7 28.7 33,778 8,444 10,953 25,334 143.2 499.9

76.7% 12,779 198,284 3,096 3,687 10.3 28,007 4,001 245,963 14,054 10,784 34,900 (2,509) (2,673)

BANK OF CEYLON ANNUAL REPORT 2011 41 BANK OF CEYLON ANNUAL REPORT 2011 42 who serveasasinglepointofcontact a relationshipmanagerandofficers, Each corporatecustomerisassigned large corporationsandinstitutions. corporate clients,includingmany provides bankingservicesto The corporatebankingsegment Off-shore Banking Corporate & & Analysis Management Discussion Business Line Performances Business LinePerformances services inasmallscale. services InvestmentBanking the BankalsooffersIslamicFinanceservices, Banking,andDevelopmentBanking.Inaddition International and off-shoreBanking,RetailBanking.,Treasury Services, core businessisdividedintomainlinesnamelyCorporate uiesfcss21 ihihs2012andbeyond 2011Highlights To capturenewopportunitiesfromthe • To enhancebusinesscapabilitiesbyproviding • To maintainextendedcustomerrelationship • Business focuses expanding scopeoftheoff-shorebusiness. total solutionstothecustomer. while exercisingprudentriskmanagement. and developbusinesseswithmajorenterprises project loansincludingsyndication, operations, moneymarketloans, revolving creditlinesfortradefinance long &shorttermloanfacilities, & foreigncurrencywhichincludes customers bothinSriLankanRupees range ofproductstoitscorporate needs. Thesegmentextendsawide for thecustomer’s entirebanking Internetbanking. • One-stopservicetoallcorporatecustomers. • CrossedmilestoneofRs.4billioncommission • OverRs.150billiondepositbase. • Astronggrowthof31.4%incorporateloans • income. (NPA 1.42%) over 2010whilemaintainingcreditquality. all thesectorsineconomy. portfolio tocreateabalanceamong The Bankactivelymanagesitsloan services. management facilitiesandadvisory bonds, variousdepositproducts,fund Issuance ofguaranteesandbid The Bank's To focusmoreonoffshorelending forviable • To attracttradefinancebusiness ofSMEs • To continueimprovementofinternalprocesses • To continuefocusonprivatesectorlending • Corporatelendingtodiversifiedactivities • Chennai &Malé. business venturesthroughbrancheslocatedin transmission solutions. through branchnetworkbyprovidingimage through automation. portfolio. strategies tomaintainahealthyadvances through theimplementationofmarketbased economy. infrastructure projects&prioritysectorsinthe in theeconomywithmorefocusonlarge 2011. deposit baseasofDecember31, Rs. 150.5billion)oftheBank'stotal sector accountedfor25.6%(i.e. The depositofcorporatebanking over lastyear. Rs. 270.2billion,agrowthof31.4% total corporateloanportfoliowas As ofDecember31,2011,theBank’s finance loans,automobile lending productssuchashome to itsretailcustomers,including range ofproductsandservices sectors, theBankoffersabroad in boththebankingandnon-banking subsidiaries andassociatecompanies 31, 2011.Together withtheBank's across SriLankaasofDecember network totalledover402ATMs extension offices.TheBank'sATM 31, 2011,totalled316branches,248 Sri Lankawhich,asofDecember over 10millionretailaccountsin banking solutionproviderinSriLanka, The Bankisoneofthelargestretail Retail Banking to allthefinancialrequirementsof corporate bankingsegmentcaters The Trade Servicesbusinessunitof Trade services uiesfcss21 ihihs2012andbeyond 2011Highlights • Revenue diversification Rationalisetheinternaloperationandwork • DevelopmentofITinfrastructuretofacilitate • Business focuses towards thesynergies channels. the customerwithtechnologybaseddelivery 72.5% ofdepositfundingtheBank. Rs. 426.6billiondepositswhichis The retailbankingsectorcontributes investment products. banking suchasBancassuaranceand banking offersbeyondtraditional and creditcards.Inaddition,retail deposits andsavingsaccounts, products, suchasdemandandterm loans, andpersonaldeposit etc. Thetotalimportandexport of letterscredit/standbyLCs facilities, establishment/advise pre-shipment &postshipment various productswhichinclude importers andexportersbyproviding Introducedofonlinetax/dutypaymentsystem • TheunitreceivedtwoNationalLevel • Improvedthequalityofoperationby • Securedmarketleadershiponimports& • internet facilitating importerstopaythecustomdutyvia Productivity Awards forquality circles. obtaining ISO9001-2008certification respectively exports withamarketshare67.7%&19.4% to servehighnetworthclients. Platinum-Black Card'wasintroduced Visa andMasterCard.In2011,‘Visa to itscustomersinassociationwith international creditanddebitcards The Bankoffersdomesticand branches. to individualsdirectlythroughits customers. TheBankprovidesloans total loansandadvancesto constituted 48.8%oftheBank's as ofDecember31,2011,which customers wasRs.269.5billion banking loansandadvancesto The amountoftheBank'sretail 8% oftheBank'sloans&advances to Rs.44.2billionwhichconstitute billion whileoutstandingamounted unit duringtheyearwasRs.116.7 credits grantedbytradeservices Implementationofimagingsolutionsinbranch • ImplementationofloanmodulethroughClient • • Maintain leadership. Expansionoftradefinancebusinessthrough • Morefocusontradefinancebusinessfor • the country. network toattractmoretradecustomersacross Trade Client Trade facilitybyaddingmorefeatures. enhance feebasedincome. promotions withitsotherproducts. credit cardproductsthroughcross- The Bankalsogrowsitsdebitand credit cardswasRs.1,952.0billion. the totaloutstandingbalanceonits cards. AsofDecember31,2011, credit cardsandover2milliondebit by theBankandissuedover85,000 were over4,571merchantsserviced As ofDecember31,2011,there December 2011. 3,257 millionfortheyearended31 unit earnedafeeincomeofRs. to customers.Thetradeservice

BANK OF CEYLON ANNUAL REPORT 2011 43 BANK OF CEYLON ANNUAL REPORT 2011 44 Retail Banking & Analysis Management Discussion uiesfcss21 ihihs2012andbeyond To captureandretaintheaccountsofyoung • To fosterfinancialliteracyand • Servicepointsrationalisationprogrammeby • 2011Highlights To furtherautomatetheretailbankingproducts • To reviewandadjusttheBank’s wealth • To buildontheBank’s corestrengthsand • Business focuses generation inclusion intheruralsector customer touch-points. enhancement ofcustomerreach,widening and servicesoffering. environment to thechangingoperatingandregulatory management businessstrategyinresponse business reinforce leadingpositioninretailbanking Bancassurancedivisionoperatedwith 50staff • Training programmesfortheenhancementof • Introduction ofEasyPaymentSchemeforcredit • Increased merchantturnoverofthecreditcard • IntroductionofBusinessPrivilegeandFlexi • TheBankwasabletoopen92,748accountsfor • Established359unitsof“schoolsavingsunit” • Appointmentof274customercareofficersat • Numberofbranchesincreasedby9and • Automatedleasingfinancingandmorethan100 • LedtheSriLankanDebitcardsmarketby • StartedvariousprojectswithGovernmentof • EstablishedtheBank’s premiercentrefocusing • Maintainedmarketpositioninretaillending • strength. programme. 300 youngstershavebeentrainedunder this investors inNorthernandEasternprovinces. entrepreneurial skillsoftheyoungprospective card holders. business overbyRs.3.0billion. cards. additional depositofRs.119million. the yearfromschoolsavingsunitsmobilisingan Island wide. retail bankingsector. making thetotal970. points hasincreasedby91duringthisyear 404 (includingMalé).Thenumberofservice increased by52totallingtheATM networkto northern area.NumberofATMs linkedhasbeen have beenupgradedtobranchstatusinthe banking business.Sevenextensionoffices extension officesby30inordertoexpandthe branches rolledovertothesystem. issuing morethan2.0millioncards. to estatesectoremployeesandcreditcards) Sri Lankaforpersonalfinancing(Loanschemes financial planningservices. wealth managementproductsandprofessional on clientneedsandofferingtailormade with 63.4%growth. Strengthencreditcardoperationsbyissuing • To improveBancassurance&increasecadreup • CustomerserviceexcellencethroughICT. • RegionalHighNetworthCentresforthe • Newvaluepropositionforallproductsto • To reachexcellenceinperformancethe • Furtherstreamlinecreditapprovalprocessesto • LeasingSystemrollovertotheremaining • EstablishofSMEserviceunitstocaterthe • Continueexpansionofgeographicalcoverage • business new creditcardsandimprovevolumeof to 100coverallbranches. convenience ofhighnetworthcustomers. capture newmarketsegments. increase creditcardreceivablesbyend2012. credit cardmarket,theBankexpectstofurther reduce theprocessingtime. branches national developmentagenda. rural developmentofthecountryinlinewith customers. securities transactionsforits management andgovernment foreign exchangeservices,fund funding positionfurtherproviding managing itsdomesticliquidityand contribution towardstheBankby operations ensuringmaximum responsible fortheBank'streasury The Bank'sTreasury Divisionis Treasury Services Managementoffixedincomeportfolio the • ManagementofforeignexchangetheBank 2012andbeyond • To raiseforeignfundstomeettheBank’s • To helpkeyinstitutionswhoseekourassistance • To manageliquidityoftheBankinacost • 2011Highlights To focusoninvestmentproductsforpersonal • To optimiserisk-adjustedreturninaccordance • Pro-activemanagementoftheBank’s balance • Business focuses Bank. exposures. and managingtheriskinforeigncurrency funding needs. instruments. to sourcetheirfundingthroughdiversified effective manner. customers aswellcorporatecustomers. with markettrends. response tomarketchanges. sheet andadjusttheasset&liabilitymixin the Bank'scorporatecustomerssuch risk hedgingderivativeinstrumentsto and offeringforeignexchange in proprietarytradingofcurrencies foreign currencyexposure,engaging Division alsomanagestheBank's in governmentsecurities.Treasury Treasury Divisioninvestsmainly As partofliquiditymanagement, SourcingmorethanUSD700millionborrowings • Co-arrangerforthefourthinternational • EstablishmentofVaR &stresstestingsystem • Maintainedsoundliquidityratiowhichisabove • Increasedinvestmentinfixed-rategovernment- • Maintainedleadingpositionoftreasury • for fundingtheassetgrowth. sovereign bondissueofUSD1billion. portfolios. to monitortreasuryportfolioandequity the statutoryrequirement. enhancement. related securitieswithlongerdurationforyield operation. opportunities andtrends. by takingadvantageofmarket profits fromitstradingportfolio The Bankalsoseekstooptimise currency options. swaps, currencyswapsandforeign as forwardcontracts,interestrate To introducenewtreasurysystemsandlook • To developtreasurybasedderivativeproducts. • To raisingUSD500millionthroughan • Continueleadingpositionoftreasuryoperation. • untapped marketsegments. treasury billsandbondsbypenetratinginto forward toincreasingcustomerportfolioasof international bondduring2012.

BANK OF CEYLON ANNUAL REPORT 2011 45 BANK OF CEYLON ANNUAL REPORT 2011 46 remittances andtradefinancingin syndication, treasuryproducts, deposit servicesaswellloan in London.TheDivisionprovided fully ownedforeignsubsidiarybased branches inMalé&Chennai,anda The Bankhastwointernational Banking International & Analysis Management Discussion uiesfcss21 ihihs2012andbeyond 2011Highlights MaintainmarketleadershipinInward • To focusonInwardremittancesproducts • Business focuses Remittances. customers. for personalcustomersaswellcorporate 3.1% oftheBank'soperatingprofits of foreignbranchesaccountedfor employees arebased.Operatingprofit countries whereSriLankanmigrant destination coveringmostofthe inward remittancesinremitter representatives engagedinhandling By yearendtheBankhadatotalof23 banks over118countries. relationships withmorethan840 also responsibleforcorrespondent our UKsubsidiary. TheDivisionis both foreignbranchesaswell Numberofcorrespondentbanksincreasedto • IncreasedthenumberofBoCe-cash • ImprovedmarketshareofInwardRemittances • Increasednumberofrepresentativesworking • Introducedaspecialrewardschemeforthe • Joinedwith“PayQuick”globalremittance • 840 byadding31in2011. remittances. exchange housesandreceived794,625 remittances arrangementsupto54banks/ up to43.5%compared43.2%in2010. Middle East. abroad upto23includingEuropeandthe recipients ofinwardremittances. Arabia. system ofNationalCommercialBankSaudi East, EuropeandNorthAmerica. abroad, primarilyintheMiddle on remittancesfromexpatriates from SriLanka,withaconcentration channels totransfermoneyand The Divisionprovidedanumberof date. loans andadvancesasofthesame represented 1.5%oftheBank'snet advances madefromforeignbranches Bank's depositswhilegrossloansand branches represented1.8%ofthe in theyear2011.Depositsforeign To enhanceouroperationalwork flowto • NRFCpromotionalprogrammesaddingfurther • To increaserepresentativeoffices inimportant • To expandcorrespondentnetworkandexchange • To introduceWeb basedfundtransfersystem • RemittancesoverRs300billionin2012. • home. facilitate ourremittancestocustomersbackat value toourcustomers. destinations. house relationship. measures. enhance thecustomerverificationsecurity efficient processingofinwardremittancesand enabling arealtimefundtransfersystemfor the previousyear. which wasanincreaseof22%over value ofUSD2.2billionin2011, Bank processedremittancestothe which arerepresentedglobally. The and EzRemitremittancesystems X-press Money, Coinstar, PayQuick is aparticipantintheMoneyGram, remittance transactions.TheBank migrant employeeswiththeir Middle EasttoassistSriLankan almost allExchangeHousesinthe remittance arrangementswith to SriLanka.TheBankmaintains share ofallinwardremittances The Bankenjoyeda43.5%market International Banking banking servicestounderservedand and effectivewaysofdelivering focuses ondevelopinginnovative The DevelopmentBankingDivision Banking Development uiesfcss21 ihihs2012andbeyond 2011Highlights Finance and inculcatethesavingshabitamong • • Micro financing ExpansionoflendingtoSmall&Medium • Facilitateagricultureandagrobasedindustries • Business focuses uiesfcss21 ihihs2012andbeyond 2011Highlights Business focuses the fishingcommunity Project. perennial crops.Inaddition,witha tea andcoconutdevelopment agriculture sector, fisheriessector, micro-farming tomicro-enterprise Division includescreditfacilitiesto services oftheDevelopmentBanking The availablebankingproductsand underdeveloped partsofSriLanka. Assistancetowardscoconutcultivation impetus • Extendedtimelyandadequatefinanceto • SurpassedRs247.3billionininward • Improvementofcapitalstructureinorderto • Duringtheyear2011capitalofbranch Theprofitincreasedby100%toMVR109 • Malé Branch Theprofitincreasedby43%toINR133millions • Chennai Branch Overseas Branches to plant/replantduring theyear. declining trend.BoCgrantedloansin thisregard to coconutsectorproductionwhichhad seen Agreement. introduced undertheForwardSales Contract mechanism andinsurance.Themarketlinkage transportation, storage,marketing,farm consisting ofproduction,processing,packaging, farmers withacomprehensivepackage the previousyear. remittances whichwasanincreaseof22%over enhance thesingleborrowerexposurelimits retained profitofMaléBranch. increased toMVR150millionbyinfusionof millions overlastyear. million toUSD25 over lastyear. IncreasedcapitalfromUSD10 cater theSMEsalloverisland. with theecofriendlyrequirements for SMEdevelopmentprojects,onpar conditions. Speciallydesignedloans available withflexibletermsand educational loanschemesaremade higher educationtoeverySriLankan, view toprovidingassistanceobtain To focusonnationalfoodsecurity • To facilitateHomeGardenprojects. • To set-upscientificallymanaged unitsacross • To supportFisheriesdevelopment. • To continueaPovertyAlleviation MicroFinance • OpenanewbranchinAdduAttolSouthern • UpgradingSWIFTsystemviadirectlinkwith • To openextensionofficeatMahabodhitemple • To opentwonewbranchesinTuticorin and • To provideATM accessandInternetBanking • To establishextensionofficesattachedto • To furtherexpandoverseasbranchesbusiness. • programmes. Livestock DevelopmentLoanScheme. the countryunderGovernmentinitiativeAgro- Project (PAMP) Maldives Head Office complex Caimbatore facilities tocustomersofoverseasbranches. overseas branches.

BANK OF CEYLON ANNUAL REPORT 2011 47 BANK OF CEYLON ANNUAL REPORT 2011 48 Development Banking & Analysis Management Discussion uiesfcss21 ihihs2012andbeyond ProjectFinancecoupledwithvaluechain • 2011Highlights PovertyalleviationandcreationofIncome • To reachouttothelowerrunginsociety, theso- • Business focuses management generating activities terms. to negotiatewithfinanceprovidersonequal them tobeabankablesegmentenabling them intoself-helpgroupsandempowering called non-bankablesector, sociallymobilising Creditfacilitieswere deliveredundertheNew • Refinancecreditprogrammesarebeing • Addressed theimmediatefinancialneedsof • Established13,670groupsamongthe • Training ofsmallenterpriseentrepreneurs • ActivelypromotedSMEbusinessandintroduced • Fundsreleasedtodevelopfishingsectorand • BoChasallocatedRs.1.4billionfor640projects • Financed1,600unitswithaloanvolumeof • Rs.2,069 million. Comprehensive Rural CreditScheme(NCRCS) implemented were takingplace. (agriculture, fisheriesandcottageindustries) the peripherywhererealeconomicactivities mapped outanexpansionstrategy, focusingon the InternallyDisplacedPersons(IDPs)and future wealthgeneratorsinthecountry. majority ofthemwomen,whoyearntobecome line. Formed73,831self-helpgroupmembers, population beloworjustabovethepoverty the Bank’s in-housestaff. in additiontothespecialtrainingprovided programmes conductedIsland-wideandthisis across thecountry. Morethan3training SME loansgrantedisRs.2.0billion national economicdevelopmentagenda.Total special SMEfinancepackagesinlinewiththe association withtheFisheriesMinistry. was allocatedtodevelopingfishingindustryin related industries.ApproximatelyRs.1.0billion under thescheme amounting toRs.470millionhavebeengranted identified bythebranches.Morethan300loans 2500 dairyfarmerswiththeprocessingplant. such projectatPelwatte,Buttala,linkingaround linked withdairyfarmers.BoChasfundedone the settingupofmilkprocessingplantsthatare Rs. 500million.Thisprogrammealsoenvisages Work inassociationwiththeplannedSME • Continuewithrefinancecreditlines. • Continuedevelopmentbankingactivitiesrelated • Continueskilldevelopmentofsmallenterprise • Continuemicrofinancing • To continuetomaintainabove10%agriculture • to thebankingchannel. banking centrestoengagemoreentrepreneurs to povertyelimination. entrepreneurs bywayoftraining lending ofthetotalportfolio. stakeholders. with nationalandinternational of thisemergingindustrylinking wishes toexplorenewavenues is immenseandthereforetheBank of theclientsunderIslamicBanking of meetingfinancialrequirements However weunderstandthepotential was consideredasanichemarket. in 2011.IslamicBankingindustry and theoperationswereexpanded compliant productsinyear2009 cater thedemandsofShari’ah the IslamicBankingUnit(IBU)to The BankofCeylonestablished Islamic Finance during theyeartoportfolio. Ijara etc.,arethenewadditions of Guarantee,ForeignCurrencybased products tovarioussectors,Letters products, expansionofWakala Placement accounts,foreigncurrency 928% overlastyear. is Rs.121millionwithagrowthof The totalincomegeneratedfromIBU portfolio of668%overthelastyear. 2.59 million.Thegrowthinadvance a foreigncurrencyfacilityofUSD a totalsumofRs.3,019millionand Correspondingly theIBUhasgranted is agrowthof416%over2010. Rupees andforeigncurrency)which to Rs.2,305million(SriLankan a fundportfolioin2011amounting Islamic BankingUnitreachedtowards Officer, tomonitorthesecompanies. headed bytheBank'sChiefFinancial has alsoestablishedaseparateunit, these affiliatedcompanies.TheBank directors appointedbytheBankto practices andcodeofconductforthe rules, guidelines,riskmanagement management charterthatsetsoutthe The Bankhasasubsidiary total investmentofRs.7.1billion associate companies,representinga included 13subsidiariesand5 As ofDecember31,2011,theGroup Associates Subsidiaries and IFRStrainingsessions • Meetingwiththechairmenand • Two performancereviewsessions • initiatives werecarriedout During theyearfollowing governance practices the needtoimprovecorporate chief executiveofficerstoaddress with subsidiariesandassociates.

BANK OF CEYLON ANNUAL REPORT 2011 49 BANK OF CEYLON ANNUAL REPORT 2011 50 system. additional featureintroducingIVR aims toequipmobilebankingwith premiums. Inthefuture,Bank and paymentsoflifeinsurance mobile credittop-ups,billpayments Bank andtootherbanksinSriLanka, enquiries, fundtransferwithinthe check bookrequests,tradingaccount balance enquiries,mini-statements, available facilitiesincludeaccount Depending onthemodeofaccess, the Bank'sbranches. in connectionwithaccountsatallof recognition. Theserviceisavailable and reinforcetheBank'sbrand to improvecustomerretention banking servicehasthepotential The Bankbelievesthatitsmobile maximise convenienceandsecurity. their mobilephones,withanaimto banking servicestocustomersvia offers lowcost,around-the-clock The Bank'smobilebankingservice Mobile BankingServices recognition. and reinforcetheBank'sbrand to improvecustomerretention hasthepotential banking service The Bankbelievesthatitsmobile & Analysis Management Discussion the Bank'sbranches. in connectionwithaccountsatallof through linkagewithotherbank’s another setofATMs forcustomers of ourownATMS, theBankprovided Kaduruwela. Whileservingwith404 commissioned inNovember2011at the 400thATM oftheBankwas ATM networkswereenhancedand extension ofﬁces. connecting allthebranchesand fast, reliableandsecureintranet in somebranchestoestablisha systems havenowbeenimplemented established andIPbasedsurveillance improvements, secondarylinkswere Other thaninfrastructure customer requirements. banking productscateringtospeciﬁc customer baseprovidedavarietyof base exceeded9million.Centralised The Banks’on-linerealtimecustomer Information Technology service. customers areenrolledtoobtainthis BoC i-Netservice.Morethan15,000 through itsBoCe-Bankserviceand services toitspersonalcustomers The Bankprovidesinternetbanking Internet Banking

The service isavailable The service customer usescredit/debitcards. message fromtheBank,whenevera engine oftheBanktoreceiveatext was introducedrecentlyviatheSMS Special securityfeature‘SMSalert’ banking gatewayviaPaymate. functions allowedunderinternet persons (PtoP)andmostofthe utility bills,transferringbetween the checkingofbalances,paying via themobilephonebyfacilitating enables thecustomertodobanking Mobile Bankingsolution‘Paymate’ via theinternetbankinggateway. and EmployeeTrust Fundpayments customs payments,mobilereloads settlements, Insurancepayments, utility payments,creditcard inquiries, pasttransactionhistory, and processfundtransfers,balance entire portfolioonasinglescreen of thecountrytoreviewBank enlargement ofdigitalinfrastructure introduced consideringthe Internet BankingFacilitywas switching. disaster recoveringcentreforATM implemented afullyautomated time atthebranch.TheBankalso quick cashdepositswithoutspending ATM networkwhichnowusedfor as waterbills,electricity to handleutilitypaymentssuch on thecorebankingapplication functionalities wereimplemented in theBoCinfrastructure.New extension officeswereincluded customer service.Morethan200 central hubincreasedefficiencyin with properintegrationtothe branches andextensionoffices application systemsatnew Implementation ofcorebanking greater convenience. thus givingthecustomersmuch and theprocessingtobecentralised, documentation canbedecentralised solution, suchthattraderelated of implementinganimaging present theBankisinprocess information extraction.At to addressdelayinmanagement generator ‘Trade Stat’wasintroduced electronically. Aspecialreport reports andadvicestocustomers was improvedforsendingoutput Trade Financeapplicationsoftware information instantly. centralised controlforhandling the LCprocesseasieralongwith with elementsnecessarytomake back officefunctionalitiestogether was enhancedwithfullyintegrated solution fortradefinancecustomers currency web-basedfront–end as aspecialsecurityfeature.Multi incorporated tocreditcardsystems and Terminal lineencryptionwas through chipcardimplementation Credit cardsystemsimproved transaction coststotheBank. minimise riskandeffectivelyreduces helps tomaximiseefficiencyand reconciliation facilities.Thesolution transactions perdaywithinbuilt is capableofhandlingmillions application system‘E-cash’which transfers throughinhousedeveloped connected tohandleworldwidefund of 46agents(overseas)were By theendof2011,totalnumbers accounts electronically. of transferringfundstobeneficiary 2011 withthesystembeingcapable were increasedover600,000itemsin system improvement,annualvolumes As aresultofinwardremittances are inthepipeline. Intelligence Tools withdashboards at limitedlocationswhileBusiness also nowfacilitated24*7Banking Lanka PortsAuthority. TheBankhas for customerstotransactwithSri done toestablishaspecialgateway Initial backgroundworkisbeing unavailability timewindow. managed tocutdownthesystem of theCorebankingapplicationand done totheendofdayprocessing tuning andenhancementswere towards apaperlesssociety. System soft copiesenablingtheBanktodrive reconciliations, throughemailandin such asSWIFTwithautomated provide multipledeliverychannels generation systemwasenhancedto introduced. Customerstatement digit validationatsourcewerealso Lanka. Enhancementsforcheck Chartered AccountantsofSri settlements ofTheInstitute EPF, InlandRevenueandpayment telecom andinsurancepayments, (ie. Handhelds-iPad,Blackberry, been enabledtomobiledevices features. Web mailfacilityhas upgraded toincorporateadditional Treasury managementsystemwas solution fortheBankwhile implementation IslamicBanking IT Divisionengagedin transaction processing. to facilitateon-line,realtime connected totheCustomsSystems Internet Bankingfacilitywhichisalso pay theirtaxesandleviesusingthe so thatexporters/importerscould of thecountry. Thisfurtherenhanced almost alltheimportersandexporters goods. Thefacilityisenjoyedby possible malpracticesinclearing network. Thisreducesdelaysand through theislandwidebranch collection ofdutyandtaxlevies Sri LankaCustomsforrealtime A gatewaywasintroducedto and operatingsystems. heterogeneous applicationsystems by theICTteamcoveringall and developmentsdonein-house This wasenabledvianewdesigns processes. automated extractionandencryption of SriLanka.Itisdonemonthlyvia to theCreditInformationBureau branch wideloansandadvances The Bankisalsocurrentlyuploading features whileensuringefficiency. fund transferswithenhancedsecurity to facilitate‘bankbank’sameday Sri LankaInterbankPaymentSystems Modernisation wascarriedoutto Continuation plan for 24*7system Disaster Recovery andBusiness Management andTransfer Pricing. card maintenance,AssetandLiability which coverstotalcreditrating,score Management applicationsystem Money Launderingsoftware,Risk handle ‘BOCInfinity’operations,Anti of acquiringspecialsoftwareto ISO27001 andisalsointheprocess that theBankwouldimplement Policy oftheBankwillalsoensure Information SystemSecurity at thecallcentre. Tamil andEnglishthrough30agents clock inallthreelanguagesSinhala, effective customerservicearoundthe will beabletoprovideefficientand handles callcentreoperationsand exiting applicationsystemthat The Bankdecidedtoupgradethe open sourcesoftwareintheBank. open sourcearchitecture,introducing recoveries. Thesystemisrunningon system forrealtimepaymentsand and integratedtothecorebanking process withminimummanualinputs based solutionwithon-lineapproval cover allthebranches.Itisaweb roll outplanwillbeextendedto branches workingonlineandbranch portfolio throughrunningwith100 software tohandleitsleasing The Bankimplementedapplication ensure virussecurity. installed onallworkstationsto of ‘EndPointProtection’isbeing addition tothisthelatestversion been trebledoverthelastyear. In Mobiles), whileemailaccesshas the chequestobackofficeasand providing scannermachinestosend Bank toreducethebranchworkby entire chequeclearingprocessinthe office functionshastakenoverthe Further strengtheningtheback Central BackOffice 2011. Continuity SteeringCommitteeduring those werediscussedattheBusiness Plan havemetandtheminutesof The CommitteeofBusinessContinuity taking placeattheCentre. work comfortablyincaseofdisaster given allthefacilitiesforstaffto for theBusinessContinuityPlanwere successful. Thepremisesreserved capability andtheoperationswas Bank officerstotestthesystem were carriedout,onewiththeCentral revised attheendof2011.Two tests The Planwasapprovedin2009and Business ContinuityPlan programmes. local andinternationaltraining are continuouslyupdatedthrough employees attachedtoITdivision Professional competenceof software in2011. Rs 285.8milliononIThardwareand during theyear. TheBankinvested of theBCP/DRPwereconducted priority andcompletetestingrounds availability weregivenahighlevelof

BANK OF CEYLON ANNUAL REPORT 2011 51 BANK OF CEYLON ANNUAL REPORT 2011 52 report. sustainability reportinthisannual resource activitiesisprovidedinthe A comprehensiveanalysisofhuman Human Resources was Rs.52million. incurred tomodernised35branches invested Rs.60million.Theamount To relocateof53branches,theBank open 30newextensionofﬁces. than thatRs.103millionincurredto by investingRs.210million.Other Aluthgama includingPremierecentre, in Ambalangoda,Kadawatha, new buildingswascompleted During theyearconstructionof funds. generated internally through to funditscapitalexpenditures service excellence.TheBankexpects banking systemupgradestoincrease development togetherwithcore service points&ITinfrastructure building projectsforexpansionof expenditure in2012,principallyfor considerable amountofcapital The Bankanticipatesinvestinga for efﬁcientcustomerservicesetc. points, technologicalupgrading allocated forexpansionsservice million andmainlycapitalexpenditure a capitalexpenditureofRs.2,355 During theyearBankhasmade Capital Expenditures customer duetodelays. reduce thelossofinterestby reduce physicaltransactioncostand clearing. Thishascontributedto of theimagechequefor place butonlytheteletransmission physical transferofchequeswilltake clearing functions.Inthisprocess,no when receivedtobesubmittedfor & Analysis Management Discussion

ak euiis(rvt)Lmtd 12071155 711 150 5,911 75 280 1,875 277 40 (49) 41 Ceylon (UK)Limited.Setoutbelowis afurtherdescriptionoftheGroup’s primarysubsidiaries. 2,709 Each oftheGroup’s subsidiarieslistedaboveareincorporatedinSriLanka,otherthan theBankof 38 729 (Private) Limited (79) 4 Transnational LankaRecordsSolutions 43 13,181 (1) Mireka CapitalLand(Private)Limited 49 2,087 261 1,004 Lanka Securities(Private)Limited 100 33 Financial CompanyLimited 0 120 780 Southern Development 39 Ceybank AssetManagementLimited 2 214 5,980 56 1,579 Associates 88 17 26 200 101 0 100 137 MBSL SavingsBankLimited 55 100 3 Bank ofCeylon(UK)Limited 308 100 86 332 100 Koladeniya Hydropower(Private)Limited MBSL InsuranceCompanyLimited 2,409 9,936 Ceybank HolidayHomes(Private)Limited 660 Ceylease FinancialServicesLimited 1,607 Merchant CreditofSriLankaLimited 93 72 Hotels Colombo(1963)Limited BOC Travels (Private)Limited Management (Private)Limited BOC PropertyDevelopmentand Services (Private)Limited BOC ManagementandSupport Merchant BankofSriLankaPLC Property DevelopmentPLC Subsidiaries ()(Rs. (%) Bank's The followingtablesetsouttheGroup'ssubsidiariesandassociatesasofDecember31,2011. Subsidiaries andAssociates Million) ownership 0 100 102 91 1,032 0 1,010 9 100 1 100 58 7 34 177 3 81 39 25 60 42 Capital Stated Stated Assets Total after Tax Profit Profit Koladeniya Hydropower(Private)Ltd. business throughtheinvestmentof has movedintopowergeneration House inKandy. TheCompany Building atKollupitiya&Ceybank & maintaintheBoCMerchantTower management agreementtomanage the PropertyDevelopmentPLChasa Head officeBuilding.Inaddition, utility andvalueofBankCeylon manage, developandsustainthe business operationsaretomaintain, Company. TheCompany'sprincipal the Bankhasa93.16%interestin Exchange. AsofDecember31,2011, is listedontheColombostock Building inColomboandtheCompany of theBankCeylonHeadOffice PLC asadeveloperandmanager established PropertyDevelopment In 15thOctober1980,theBank Property DevelopmentPLC travel relatedservices. business operationsaretoengagein Company. The Company’s principal Bank hasa100%interestinthe Ltd. AsofDecember31,2011,the established theBOCTravels (Private) In 11thApril1995,theBank BOC Travels (Private)Ltd. Ceybank houseinKandy. Merchant Tower inColombo03& renting ofofficespaceBoC principal businessoperationsare in theCompany. TheCompany’s 2011, theBankhasan100%interest (Private) Ltd.AsofDecember31, Development &Management Bank establishedtheBOCProperty On 24thSeptember1993,the Limited and Management(Private) BOC PropertyDevelopment legal services. activities, corporatesecretarial& fund management,capitalmarket finance, corporateadvisoryservices, leasing &hirepurchase,trade principal businessoperationsinclude in theCompany. TheCompany’s 2011, theBankhasa72.14%interest of BoCgroup.AsDecember31, 1982, asamerchantbankingarm ("MBSL") establishedon4thMarch Merchant BankofSriLankaPLC PLC Merchant BankofSriLanka services. operations includeprovisionofhotel The Company’s principalbusiness a 99.99%interestintheCompany. December 31,2011,theBankhas established on9thJuly1963.Asof Hotels Colombo(Private)Ltdwas (Private) Ltd. Hotels Colombo sales. facilities, realestatedevelopment& lease, hirepurchase,commercialloan operations includegrantingfinancial Company’s principalbusiness has a55%interestintheCompany. As ofDecember31,2011,theBank was establishedon18July1970. Ceylease FinancialServicesLimited Services Limited Ceylease Financial services. real estatedevelopment&related & othercreditfacilities,pawningand lease facilities,hirepurchase,loans acceptance ofdeposits,granting business operationsinclude the Company. Company’s principal the Bankhasan85.79%interestin 1983. AsofDecember31,2011, established on30thNovember Merchant CreditofSriLankaLimited Sri LankaLimited Merchant Creditof guest housesinSriLanka conducting pilgrimsrests,hotels,& managing, operating,maintaining& principal businessoperationsinclude in theCompany. TheCompany’s 2011, theBankhasan100%interest April, 1986.AsofDecember31, Limited wasestablishedon23rd Ceybank HolidayHomes(Private) (Private) Limited Ceybank HolidayHomes achieve itsintendedgoals. staffing wasdonetopositionitself a fullyownedsubsidiary, required After conversionoftheBranchto Bank ofCeylon(UK)Limited life &generalinsuranceproducts. business operationsincludeoffering Sri Lankaandcompany’s principal is asubsidiaryofMerchantBank MBSL InsuranceCompanyLimited Limited MBSL InsuranceCompany

BANK OF CEYLON ANNUAL REPORT 2011 53 BANK OF CEYLON ANNUAL REPORT 2011 54 TheBankhasearmarkedthe • 2012isachallengingyearforBoC • Target Challenges Targets and Beyond 2012- & Analysis Management Discussion and technicalknow-how. segment byprovidingfinancing strengthened todevelopthis SME lendingwillbefurther truly thebankerstonation. initiatives ofthecountrybybeing in theeconomicdevelopment will significantlybeinvolved districts during2012.TheBank develop thisconceptintoother The Bankwillendeavoursto opened inKurunegaladistrict. As suchthefirstSMEunitwas only tocatersthismarket. in eachdistrictwillbeopened development. SpecialSMEunits is keytoSriLanka’s economic the BankrecognisesthatSME SME sectorasapriorityarea trillion. sheet historytoreachRs.one another milestoneofitsbalance Group asitenvisagesmarking Inviewofservicingemerging • FitchratingsLankahasupgraded • Plansareunderwaytoupgrade • positioning thissubsidiaryinthe Bank explorespossibilitiesof services inUnitedKingdom.The offers commercialbanking a subsidiaryoftheBankwhich Ceylon (UK)Limitedoperatesas and MaléBranches.Bankof planned expansionofChennai network internationallyincluding new strategiestoexpandits niche marketstheBankisdrawing enhance itsrating. its ratingindicatorstofurther while itcontinuestoimprove exploring aninternationalrating commercial bank.TheBankisnow the highestrateddomestic With thisratingtheBankisnow from 'AA(lka)'Positiveoutlook. rating to'AA+(lka)'stableoutlook the Bank'snationallong-term customer services excellence throughbetter in ordertoincreaseservice and thefrontendtellersystem the existingcorebankingsystem AccordingtoCBSLRoadMap • skill needsareagreatchallenge. realities andguidingtowardstoday’s transformation tofacethesenew bag fortheyear2012.TheBank’s expectations willgiveamixed Arab uncertaintyandthecountry’s capital account,Europeancrisisand investor perception,liberalised floating environment,changing of Ceylon.Theexchangerates Sri LankaaswellfortheBank 2012 willbeachallengingyearfor Challenges funds onlythrough thelocal challengeable taskforsourcing and investments,itisahighly mismatch ofnationalsaving for expectedgrowth.Dueto have fundandcapitalavailability a bigchallengeforallbanksto will bedoubled.Thiscreates by 2016,bankingsectorassets international tradingparties. diaspora aswelltofacilitate services totheSriLankan and exchangehousestoprovide network correspondencebanks expand ittoover1000worldwide remittances. FurthertheBankwill to mobilisedepositsandinward number ofSriLankadiasporalive Euro Zonecountrieswherealarge TheBankhasidentifiedthatitis • Withrapidchangeinthe • minimising operationalrisk. more customerfriendlywhile all itsproceduresmakingthem is intheprocessredesigning economy. Accordingly, theBank opportunities inafastbooming processes inordertocapture important torevisititsinternal par withtechnologyadvancement. country, itisnecessarytokeepin leading domesticbankofthe technologies. Therefore,asa our marketwithsophisticated overseas banksenteredinto In therecentpastanumberof expectations haveincreased. technological environment,the leading positioninthemarket. market growthbysecuringits order tomaintaingrowthover funds atcompetitivepricesin international marketstosource gap. TheBankhastomoveinto available tofillthefunding has toconsiderdifferentoptions system. Inthissituation,theBank TheInstituteofChartered • Thegovernmentrecently • Humantalentmobilisationis • In2011,theBankadopteda • appraisal methodologies.These some modificationstocredit record keeping,including internal processofaccounting, significant adjustmentstothe 2012. Thesestandardsrequire are effectivefrom1stJanuary standards andmostofthem already issuednewaccounting Accountants ofSriLankahas local banksincludingthatofBoC. credit growthopportunitiesfor trend willdriveoutsomepotential financial intermediaries.This to sourcefundsgloballywithout domestic corporatesarepermitted regulations. Asaresult,thelocal relaxed someforeignexchange liberalised thecapitalaccountand supply. required skillsareinlimited for alimitedtalentpoolandthe Bank asthemarketwillcompete viewed tobeachallengeforthe rapid expansionoftheloanbook. same levelofNPA ratiowiththe challenging tasktomaintainthe down theNPA ratio.Itisavery number ofstrategiestobring challenge totheBank. customer baseposingagreater products, servicesandlarge volume andlargenumbersof and complicatedduetobusiness accounting standardsiscomplex application ofanewset each level.Therefore,successful comply withnewrulesarevitalat and operationalinstructionsto The knowledgeenhancement in linewiththesenewrules. statement shouldbechanged items andoftheincome The recognitionofbalancesheet new informationrequirements. standards requiretocapture bank. domestic commercial is nowthehighest rated With thisratingtheBank Positive outlook. from 'AA(lka)'/ Stable outlook to 'AA+(lka)'/ rating long-term Bank's national upgraded the Lanka has Fitch Ratings

BANK OF CEYLON ANNUAL REPORT 2011 55 Ris

BANK OF CEYLON ANNUAL REPORT 2011 56 Independentoversight:The • Risktransparency: • Protectingthereputation: • Protectingthefinancialstrength: • on thefollowingprinciples, risk managementframeworkisbased adequately compensated.TheBank’s within thedefinedriskappetiteand ensure thattherisksassumedare integrated itsRiskManagementto Bank. BankofCeylon(BoC)has strength andthereputationof strategy aretoprotectthefinancial objectives oftheriskmanagement the bankingbusiness.Theprimary financial risksisanintegralpartof Management ofvarioustypes Risk Management processes. integrity oftherisks&control the businessunitstoensure and operatesindependentlyof reports directlytotheBoard Management Division(IIRMD) Independent IntegratedRisk informed. disclosed tokeepstakeholders management andadequately are wellunderstoodbysenior risks undertakenbytheBank transparency isessentialsothat members. an overridingconcernforallstaff fundamental andisconsidered Protecting astrongreputationis streams. the Bank’s capitalandincome of potentiallyadverseeventson are inplacetolimittheimpact Risk controlsandmitigationplans Risk GovernanceStructureofBoC assists theBoardinfulfillingits which isaBoardsubcommittee Risk ManagementCommittee(IRMC) aggregate RiskAppetite.Integrated and responsibleforsettingtheBank’s management policies&strategies at thefountainheadofallrisk The Bank’s BoardofDirectorsis governance structuresince2008. BoC hasinplaceanintegratedrisk Risk Appetite Board Oversight situation Strategizing forstress scope Defining business Formulating strategies Establishing vision Setting thetone Macro k Committee (ALCO),andOperational (CPC), Asset&LiabilityManagement such asCreditPolicyCommittee number ofManagementCommittees management oftheBankanda Executive ownershipiswithsenior the riskmanagementfunction. to theoperationandeffectivenessof oversight responsibilitieswithrespect Risk Profile & Risk Management Framework ar ir Business-wide Macro Micro Techniques andMIS Tools, Methodologies, People Management Controlling &Monitoring Policies &Procedures 3 linesofdefense Executive Ownership management functionoftheBank, As anoversightoftherisk and InternalAudit. Business/Operational Units,IIRMD through thethreelinesofdefensei.e. management ofriskisensured risks theBankisexposedto.Proper involved inmanagingthevarious Committee (ORMEC),whichare Risk ManagementExecutive Risk Culture Ownership Organizational management business andrisk The relationshipbetween manage itsrisks capability/capacity to Management authorities accountabilities, and responsibilities, understanding ofits Business owners culture. of establishingaconduciverisk Appetite withtheultimateobjective Management FrameworktotheRisk links theelementsinBank’s Risk when conductingitsactivities.IIRMD control theprinciplerisksassumed to identify, measure, monitor, and has acomprehensiveframework deliver itscorepurposes,theBank In ordertoeffectivelyandefficiently Risk Framework Risk Appetite& through continuousriskawareness. Bank hasfosteredasoundriskculture managing andmitigatingrisk,the of responsibilityandtheirrolein of theinherentrisksintheirareas To ensurethatallstaffareaware and RiskAppetite&StressTesting Risk, BusinessContinuityPlanning Credit Risk,MarketOperational through riskmanagementpoliciesfor manage andmonitorvariousrisks a comprehensiveriskstrategyto management. Boardhasapproved Bank’s principles regardingrisk Bank provideasummaryofthe Risk ManagementPoliciesofthe Directors throughtheIRMC. (CRO) whoreportstotheBoardof and headedbytheChiefRiskOfficer revenue generatingbusinessunits division independentfromthe IIRMD functionsasaseparate Risk FrameworkanditslinktoAppetite Profile andRiskAppetite. trade-offs astheyestablishtheRisk in theidentificationofrisk/reward management activelyparticipates of itsbusinessplan.TheExecutive outcomes intheimplementation considering arangeofpossible whilst pursuingitsbusinessstrategy, of riskthatBoCispreparedtosustain Risk Appetiteisdefinedasthelevel Element Framework optimisation Risk andcontrol reporting Monitoring and and aggregation Risk quantification Frequentriskassessmentprocesstoidentify Risk assessment Clearriskappetitestatementapprovedby Risk governance Transaction RiskLimits collateral. Exposure toStockMarketas Maximum AmountofAccommodation Concentration Limits Diversification Requirementsand Geographic &Sector-wise Concentration Limits Diversification Requirementsand Industry/Sector/Product aiu odnso onAst InterestRateRiskbasedonPVBP Maximum holdingsofLoanAssets rdtRs aktRs OperationalRisk MarketRisk Credit Risk Key RiskAppetiteLimits Linkage toRiskAppetite to optimisecost/benefit Controls areestablishedinlinewithriskappetite risk basedlimitsonappetite Monitoring andreportingofperformanceagainst prioritise focusonriskmanagementandcontrol. Regular quantificationandaggregationofriskto of riskappetite. new andchangingrisklandscapeinthecontext the top’andafoundationforriskculture. delegated authorities.Thissetsthe‘tonefrom the Boardandembodiedinriskpolicy appetite limitstheBankmaintains When settingthequantitativerisk as setoutinthebudget. map, theprioritiesofgovernment market dynamics,regulator’s road into considerationglobal&local on abottomupapproachandtakes the riskappetitestatementarebased The overallrisklimitsstipulatedin limits Foreign ExchangeRiskbasedonVaR concentration limits Equity RiskbasedonVaR limitsand limits

Risk Culture Limits basedonOperationalLosses (KRI) Limits basedonKeyRiskIndicators Basel II Limits forsevenRiskTypes under IIRMD. testing exercisescarriedoutbythe This isperformedthroughstress and capitalrequirementsregularly. situations, theBankmonitorsliquidity necessary. To copewiththedynamic regularly reviewsthemwhere monitors riskappetitelimitsand in. Therefore,IIRMDcontinuously the Bankandenvironmentitoperates the changingbusinessstrategiesof and aresubjecttochangeinlinewith The riskappetitelimitsaredynamic events thattheBankwillnottolerate. of riskandsetstheunacceptable to tolerateforparticularcategories the maximumimpactBoCiswilling aspect ofriskappetiteissetoutas capital requirements.Thequalitative a prudentialmarginoverregulatory

BANK OF CEYLON ANNUAL REPORT 2011 57 BANK OF CEYLON ANNUAL REPORT 2011 58 StressesduetoOperational • Stresses toLiquidity • Stresses toCreditExposures • Stresstestingonbusiness • Bank SpecificScenarios the BoardthroughIRMC. adequacy &liquidityandsubmittedto tested againstBank'scapital 2011 severalscenarioswerestress testing initsriskcultureandduring The Bankhasembeddedstress management actionsareinitiated. where necessary, appropriate of anystresstestsandensuring, reviewing andchallengingtheresults forum isprimarilyresponsiblefor approach, processesandresults.The overseeing thestresstesting The IRMCisthemainforum and liquidity. Bank’s performances,balancesheet impact ofstressscenariosonthe concentrations andforecastingthe scenarios, assessingmaterialrisk the impactofrecessionary different wayssuchasunderstanding Stress testingbenefitstheBankin potential impactoncapital. management tool,toidentifythe utilises StressTesting asakeyrisk by quantitativemodels.Bank do notappearinthedataexamined bank. Thesetypesofeventssimply are themainthreatstocapitalofa sometimes called“blackswans” Unforeseen randomevents Framework Stress Testing Risk Management growth anddecliningdeposits assumptions suchascredit deterioration. continued tolimit asset quality monitoring ofriskswhichwillbe envisaged willrequireclose The strongeconomicgrowth operational risk. management ofcredit,marketand several factorsincludingeffective this ratingwasachieveddueto and financialprofile.Furthermore, state ownership,strongfranchise the largestbankinSriLanka,full its highsystemicimportanceas October 2011.BoC’s ratingreflects to ‘AA+(lka)’from‘AA(lka)’in Fitch RatingsupgradedBoC’s rating rating AAA (lka)longterm risk profiletowards Aligning theBank’s the minimumrequiredbyCBSL. with Tier 1capitalratiowellabove BoC remainssufficientlycapitalised The recenttestssupportthefactthat with moretransparency. better understandandmanagerisks lines ofbusinesstoallowthem Bank’s seniormanagementandtothe risk positionsarereportedtothe explanations basedoncurrentmarket Stress testresults,trendsand Scenariosofsignificantmacro- • Stressestomarketmovements • Systemic Scenarios combinations oftheseevents. earnings, capitalandliquidityor economic eventsthatmayaffect and interestrates Loss Events Failures /UnexpectedOperational credit risk.Withthis objective,limits and avoidanceofconcentration aimed atbetterriskmanagement recognise theneedformeasures the Board.Thecreditpolicies policies, whichareapprovedby process isarticulatedinitscredit The Bank’s creditriskmanagement risk onabank-widebasis. analyse, manageandcontrolcredit to creditpolicy, proceduresandto tasked withhandlingissuesrelating General ManageroftheBankis Committee, whichisheadedbythe of Directors.TheCreditPolicy to creditriskrestswiththeBoard activities thatexposestheBank for allaspectstheconductof Final authorityandresponsibility well asattheportfoliolevel. credit riskatthetransactionlevelas parameters. HencetheBankmanages risk exposureswithinacceptable of returnbymaintainingcredit is tomaximiserisk-adjustedrate goal ofBoC’s creditriskmanagement long termsuccessoftheBank.The management andessentialtothe comprehensive approachtorisk risk isacriticalcomponentof that effectivemanagementofcredit agreed terms.BoChasidentified they falldueinaccordancewith meet itsobligationsasandwhen borrower orcounterpartywillfailto Credit riskisthepotentialthat Management Credit Risk status. upgrade itslongtermratingtoAAA profitability theBankintendsto With improvedassetqualityand portfolio canbedescribedasfollows: mitigate creditriskoftheloan Procedures adoptedbyBoCto Risk managementPoliciesand activities. nature andcomplexityoftheBank’s requirements andadequateforthe with prudentpracticesandregulatory documented, welldefined,consistent portfolio levels.Thesepoliciesare the individualtransactionand and managementofcredit,atboth granting, maintenance,monitoring conditions andguidelinesforthe Credit policieslaydownthe industries orsectors. group ofborrowersorspecific exposure toanysingleborrower, have beenprescribedfortheBank’s mitigation activities. together withriskmanagement/ report anyexcessesorexceptions comprehensive reportingsystemsto The Bankmaintainsaccurateand etc. growth rates,NPA ratios,profitability considering factorssuchasindustry These industrylimitsarereviewed and theCreditPolicyofBank. forth intheRiskAppetitedocument limits forindustryexposuresasset borrowers, theBankmaintainssub set outinrelationtosingle/group these overallcreditexposurelimits capital fundsoftheBank.Within of SriLanka(CBSL)basedonthe mandated bytheCentralBank considering prudentialmeasures The creditexposurelimitsarefixed Credit ExposureCeilings priced risks. disproportionate share ofunder- and suchmethodologywouldavoid a promote consistencyinassetpricing methodology todisciplineand Bank hasariskbasedpricing Risk BasedPricing process. effectiveness ofthecreditgranting while improvingtheefficiencyand risk managementrequirements branch networktoalignwithcredit model wasintroducedtothe A computerbasedretail-scoring evaluation andmonitoringprocess. strengthen thepre-sanctioncredit attention wasgivenduring2011to retail creditportfoliointheBank, culture andtomaintainaquality In ordertopromoteahealthycredit Credit ScoringModels the ratinggrid. Basel IIrequirementsasdetailedin and upgradedtobecompliantwith financial parameterswasreviewed includes bothfinancialandnon The borrowerratingmodel,which loan lossreserves. problem credits,andtheadequacyof credit portfolio,concentrations, of theoverallcharacteristics allow moreaccuratedetermination credit exposuresoftheBank.Thiswill degree ofcreditriskinthedifferent is agoodmeansofdifferentiatingthe structured internalriskratingsystem internal riskratingsystem.Awell- as thetotalportfolio,isuseofan quality ofindividualcredits,aswell An importanttoolinmonitoringthe Credit RatingModel System Credit RiskAssessment Bank’s riskmanagementpolicy. assets isexplainedindetailthe of ‘potentialhigh-risk’and‘high-risk’ measures areapplied.Administration and appropriateriskmitigating impaired assetsarecloselymonitored exposures, whichareidentifiedas All loansandothercreditrisk list” exposures. updates arecarriedoutfor“watch significant loans.Morefrequent out atleastannuallyforindividually A comprehensivereviewiscarried quality. rating processandassessingportfolio maintaining theintegrityofcredit effectiveness ofloanadministration, the Bankusessameinevaluating review mechanismisinplaceand administration. Awellstructuredloan qualitative improvementsincredit loan bookandtobringabout evaluating thequalityof effective toolforconstantly Loan reviewmechanismisan Periodic CreditReviews Rating Grid 4Loss Doubtful Substandard D4 Specialmention D3 Unwarranted D2 Very high D1 C High Relativelyhigh CC Morethanaverage CCC B Average Low BB BBB Very low A Lowest AA DefaultRiskLevel AAA Rating loan proceduremanualsoftheBank. forth inthecreditpolicyand Requirements forcollateral,isset and riskofeachextensioncredit. be drivenprimarilybythepurpose required amountofcollateralshall The choiceofcollateralandthe whenever prudent. Bank encouragesadequatecollateral unsecured loanandthereforethe risk thananotherwiseequivalent well-secured loanhaslesscredit loan intoagoodloan.However, a does not,byitself,convertabad The Bankrecognisesthatcollateral management. essential componentofcreditrisk transferred toacounterpartyisan which creditriskisreducedorit refers totheprocessthrough Credit riskmitigation,which Credit RiskMitigation defined lendinglimits,etc. credit concentrationlimits,inadequately administration, absenceofprudential factors aredeficienciesinloanpolicies/ government policies,etc.Theinternal restrictions, economicsanctions, exchange andinterestrates,trade of commodity/equityprices,foreign state oftheeconomy, wideswings factors. Theexternalfactorsarethe depends onbothexternalandinternal Credit riskoftheBank’s portfolio Portfolio Level Credit RiskManagementat process. credits andtoimprovethecollection strategies torehabilitateproblem concentrate ondevelopingeffective The experiencedrecoveryteam, billion. contingencies amounttoRs.314 Bank’s totalcommitmentsand diversified acrossdifferentsectors. Bank totalingtoRs.552.8billion.are Gross loansandadvancesofthe the Bank. improved theoverallprofitabilityof customer basewhichhassignificantly is usedtoservethisdiversified lines. Anappropriateproductmix across differentsectorsandbusiness balanced growthinitsloanbook Bank endeavorstomaintainawell- Concentration Risk and qualityofthecreditportfolio. monitoring theoverallcomposition Bank hasaneffectivemechanismfor Credit ExposuresbySectors 21% 11% Financial BusinessServices Others Construction Direct Government Pawning Other Services Trade Transport Tourism Manufacturing Agriculture &Fishing 7% 16% 5% 2% 7% 13% 4% 2% 12%

BANK OF CEYLON ANNUAL REPORT 2011 59 BANK OF CEYLON ANNUAL REPORT 2011 60 Risk Management Asset Quality recovery approach. good resultsfortheBank'sfocused NPAs andthisstrategyyieldedvery mechanism forspeedyrecoveryofits Bank adoptsastrongfollow-up Geographic Diversification 48% CreditExposureby 25% 24% Product Type NCP CP EP NP SP WP Loans underSchemes Overdrafts Staff Loans Leasing Pawning Loans Trade Finance 2% 8% 3% 14% Overseas FCBU Corporate UVA SUB NWP 3% 18% 5% 3% 3% 21% 4% 3% 3% 4% 4% 5% 2010. as at31stDecember2011was62.8%against56.9% its assetportfoliofromanydownsidegrowthrisks.Bank’s NPA CoverageRatio Bank maintainsasatisfactoryprovisioncoverageratiotoprotectthequalityof on page185to187. given undertheAccountingPolicies The provisioningpolicyoftheBankis the regulationsimposedbyCBSL. applicable AccountingStandardsand and advancesinaccordancewiththe of acontinuousreviewallloans and advancesismadeonthebasis Provision fornon-performingloans Provisioning Policies 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 0 NPA Trend overthelast3years 31.03.2009 Transport Tourism Manufacturing Agriculture &Fishing 30.06.2009

30.09.2009

31.12.2009

31.03.2010 Other Other Services Trade Construction

the BoardofDirectorsand risk proﬁleforseniormanagement, transparency intotheBank’s market operating performanceandprovide return decisions,reducevolatilityin seeks tofacilitateefﬁcientrisk/ of itsriskappetite.Therefore,IIRMD Bank tounacceptablelossesoutside relationship anddoesnotexposethe the Bankoptimisesrisk-reward Risk Managementistoensurethat The primaryobjectiveofMarket sensitivity analysis. at-risk (VaR), stresstestingand limits, riskappetitevalue- This frameworkincludesmarketrisk market riskmanagementframework. portfolios throughacomprehensive within itstradingandnon-trading BoC managesmarketriskcentrally Risk Management Market &Liquidity 30.06.2010

30.09.2010

31.12.2010

31.03.2011

30.06.2011

30.09.2011

31.12.2011 business riskmanagers. report ismonitoredbytheappropriate prices suchasoil,goldandtea.The risk andmovementsincommodity interest rate,foreignexchange,equity addresses allkeyriskfactorssuchas against agreedlimits.Thisreport the Bank’s marketriskexposures A dailymarketriskreportsummarises Regularandad-hocreportingof • Performanceofstresstestingand • Defining,reviewingand • • Independent measurement, Reviewofmarketriskpolicy • the followingfunctions: regulators. IIRMDisresponsiblefor IRMC market risktotheBoardthrough qualitative riskassessments monitoring oflimits market risks monitoring andcontrolofdifferent framework 51% NPA byProductType Leasing Loans Overdrafts Loans underSchemes Staff Loans Pawning Trade Finance 16% 17% 3% 1% 11% 1% Market RiskManagementFramework is measuredasthepotentialvolatility net interestincome.Interestraterisk interest ratesdonotadverselyaffect sensitivity sothatmovementsin goal istomanageinterestrate financial instruments.Bank'soverall significant marketriskexposureto Interest rateriskrepresentsthemost Management Interest RateRisk Maturity AnalysisofTreasury Corporate Bond Trading Portfolio 23% 9% Verification and Back Office Desk inspection of

transactions Market Risk Management 0 -1years Above 5years 4 -5years 3 -4years 2 -3years 1 -2years Integrated RiskManagementCommittee(IRMC) 6% Policy 25% Market Money 8% Desk Board ofDirectors 29% Front Office USD/LKR ALCO Desk and bills. trading portfoliosoftreasurybonds impact ofinterestratechangesonour is calculatedweeklytomonitorthe Present Value perBasisPoint(PVBP)* by theALCO. various hedgingdecisionsapproved conditions ismitigatedthrough impact ofeverchangingmarket from theseactivitiesaswellthe the balancesheet.Interestraterisk interest ratesensitivepositionson lending anddeposittakingcreate Client facingactivities,primarily by changesinmarketinterestrates. in thenetinterestincomecaused portfolio dueto1basis pointchangeininterestrate. * PVBPistheestimated changeinthevalueofTreasury Bills& Bonds (Rs. Million) December 31 PVBP Analysis-BondTrading Portfolio 01 4 2 3 481 236 227 447 2011 00 65 34 37 729 357 344 675 2010 Income Fixed Desk Reporting Middle Office Monitoring risk limits and approval Cash Flow Domestic 20p+0b 10p-200bp -100bp +100bp +200bp

Immediate changeinrates Liquidity Risk Management the Bank. liquidity managementisdonewithin with theBank,alldependonway counter partiesaccepttotransact being athreattoitsreputation,where undertaking unacceptablelossesor obligations astheyfallduewithout challenge. Bank’s abilitytomeetits in atimelymannercontinuestobe funding riskandidentifyingissues varied transactionstotrackdaily, position. Withalargenumberof implications fortheoverallliquidity that theBankundertakeshas Almost everyfinancialtransaction risks. risk isregardedasoneofthemajor financial institutions.AtBoCLiquidity liquidity managementstrategiesby emphasised theneedforsound The recentglobalfinancialcrisis more criticalnowthaneverbefore. Effective managementofliquidityis its ImportancetoBoC Liquidity Managementand Rs.Mn 80,000 20,000 40,000 60,000 a e a p a Jun May Apr Mar Feb Jan Unencumbered SecuritiesavailableforFunding 012010 2011 the BoardofDirectors. scenarios arepresentedtoIRMCand events. Theresultsofcertainspecific, of specific,extremebutplausible carried outtodeterminetheeffects Further, periodicstresstestsare emergency borrowingfacilities. government bondsandhasagreed high qualityliquidassetssuchas management, theBankmaintains As partofitssoundliquidityrisk prudent managementofliquidityrisk. liquidity ratiosarealsomonitoredfor funding decisionstobemade.Key and liabilityprofiletherebyenabling identify themismatchesinasset maturity analysishelpstheBankto the residualtimetomaturity. This the respectivetimebandsconsidering of assetsandliabilitiesareplacedin process. Cashinflowsandoutflows while theIIRMDmonitorsentire Bank wideliquidityriskmanagement Unit (ALM)isresponsibleforthe The AssetandLiabilityManagement u u e c o Dec Nov Oct Sep Aug Jul

BANK OF CEYLON ANNUAL REPORT 2011 61 BANK OF CEYLON ANNUAL REPORT 2011 62 mark tomarket process. decreases beingmonitored onadaily equity securityprices withincreases/ trading portfoliois directlylinkedto equity securitiesheldintheBank’s term pricemovements.Thevalueof the purposeofbenefitingfromshort the ColomboStockExchangefor positions inthesecuritieslisted portfolio limit,Bankmaintains Within theBoardapprovedtrading trading equities. fluctuate, affectingthevalueof possibility thatequitypriceswill Equity priceriskarisesfromthe Equity Risk confidence level. the Bankmayincurinagivenperiodat99% ** VaR istheestimated maximumlossthat management. basis andreportedtotheexecutive was alsocalculatedonadaily of thesamedirection,10dayVaR** requirements. Aspertheguidelines one yeartocomplywithBaselII and lateritwasexpandedtoover calculated basedon30dayhorizon for foreignexchangeriskwas At theinitialperiodof2010,VaR authorities. and approvedbytherelevanthigher any limitexceptionsaredulyreported measurements. IIRMDassuresthat limits, riskappetitelimitsandVaR counterparty limits,moneymarket foreign exchangeriskthrough BoC onadailybasismonitors prescribed regulatorylimits. open positionswellbelowthe client business.TheBankmaintains subject toregulatorlimitsfacilitate takes foreignexchangepositions of foreignexchangepositions.Bank rates whichaffecttheBank’s value movements inforeignexchange capital thatarisesfromadverse or prospectiverisktoearningsand Foreign exchangeriskisthecurrent Foreign ExchangeRisk Risk Management diversification benefits. equity portfolioinordertocapturethe maintaining awelldiversifiedtrading portfolio. Bankiscommittedto concentration riskintheequity of investmentinordertomanage levels fortotalandpercentagelevel limits aresetestablishingexpected Through theInvestmentPolicy, businesses. are notpartofthecorporatelending Committee thatincludeofficerswho are approvedbytheInvestment measurements. Allinvestments Policy, riskappetitelimitsandVaR limits stipulatedintheInvestment The Bankmonitorsequityriskthrough Rs.Mn 100 120 140 160 180 200 220 240 260 4% 9% Trading EquityPortfolio 4% 3% Equity VaR (MonthlyAvg) Banks Finance&Insurance Plantations Beverage Food&Tobacco Investment Trusts Construction Chemicals &Pharmaceuticals Diversified Holdings Hotels &Travels Manufacturing Others Power &Energy Sector Exposures 3% 11% u u e c o Dec Nov Oct Sep Aug Jul 3% 6% 12% 28% 17% 2011 for 2011. Equity VaR ata99%confidencelevel shows thebehaviourofovernight executive management.Thechart on aweeklybasisandreportedto VaR forequityriskismeasured system ofinternal controlsthat Bank operateswithinarobust operational risktechniques.The drives thedevelopmentofadvanced international bestpracticesand operational riskpracticeswith BoC benchmarksitsinternal Appetite. these eventstobeinlinewithitsRisk Bank seekstoreducethelikelihoodof material significancearerareandthe normal courseofbusiness.Those occur andareacceptedaspartofthe small significanceareexpectedto Losses fromoperationalrisksof it wouldnotbepossibletodoso. all operationalrisksandinanyevent It isnotcosteffectivetoeliminate typical ofanyorganisation. the Bank’s businessactivitiesandare risk. Operationalrisksareinherentin excludes strategicandreputation events. Thisincludeslegalriskbut and systems,orfromexternal or failedinternalprocesses,people of lossresultingfrominadequate Operational riskisdefinedasthe Management Operational Risk those risks. procedures forthemanagementof provision ofadequateresourcesand for itsoperationalrisksandthe business areatakesresponsibility Under thisframework,eachindividual for therelevantbusinessprocess. with themanagementresponsible framework withownershipresiding requires acommonbank-wide management ofoperationalrisk The Bankbelievesthateffective to preventrecurrenceinfuture. matters andmakesrecommendations units andthecommitteereviews the noticeofORMECbybusiness Operational riskissuesarebroughtto programme istrulyenterprise-wide. to ensurethattheriskmanagement committee alsoprovidesthemeans standards fortheBank.The maintaining thehighestoperational with aviewtoimplementingand address cross-functionalriskissues ORMEC hastheauthorityto January 2008. operational riskunderBaselII,since to calculatethecapitalchargefor BoC appliesBasicIndicatorApproach damage. unacceptable lossesorreputation and risktakenwithoutexposingto enables businesstobetransacted RCSA techniquesto identifyrisks, Managers ofthebusinessunitsuse in placetomitigatethoserisks. unit andevaluatesthekeycontrols material riskswithineachbusiness The Bankidentifiesandassessesall Risk Assessments includes thefollowingelements. The operationalriskframework approach. the Banktomaintainacoordinated experiences aresharedthroughout external lossdata.Knowledgeand reporting &analysisofinternaland (KRI) reportingandthecollection, analysis, KeyRiskIndicators Self Assessment(RCSA),scenario These includeRiskandControl and reportingofoperationalrisks. bank-wide toolsforthemanagement The Bankutilisesanumberof policy. in theoperationalriskmanagement the minimumrequirementsdetailed management frameworkthatmeets and operateanoperationalrisk business unitsrequiredtoimplement the organisationalstructurewithall is implementedvertically, through management policy. Thisframework in theBank’s operationalrisk of theseelementsaresetout mandatory requirementsforeach profile oftheBank.Theminimum, and measuretheoperationalrisk elements whichallowstomanage framework comprisesanumberof The operationalriskmanagement operational riskmanagement. Methodologies &Processesfor Procedure &Strategyand Structure &GovernancePolicies, and itcomprisesofOrganisational well establishedoverseveralyears governance frameworkoftheBankis Operational riskmanagement Management Framework Operational Risk are usedbytheoperationalrisk management framework.Reports of aneffectiveoperationalrisk of operationalriskisakeycomponent The ongoingmonitoringandreporting Reporting decision making. risk appetitelevelstodrivetimely levels exceedacceptablerangesor to alertmanagementwhenrisk used asearlywarningsandmonitored appetite ofthebusiness.KRIsare thresholds thatreflecttherisk profile. KRIsincludemeasurable Bank tomonitoritsoperationalrisk KRIs aremetricswhichallowthe Key RiskIndicators analysis ofinformation. operational riskmeasurementand supplements Bank’s ongoing The centraliseddatabase the businessunits. associated withriskeventsfacedby enables identificationofthecauses business levelandbyrisk-eventtype, analysis, performedbothataline-of- and lossesaswelltrends.Such data, permittinganalysisoferrors monitoring operationalrisk-event The Bankhasaprocessfor events. recurrence and/ormagnitudeofrisk processes orcontrols,toreducethe improvements areneededforthe and analyzetoidentifywhere the Bankforreportingriskevents A standardthresholdisusedacross Risk Events the Bank. required toreducethelevelofrisk decisions onwhat,ifany, actionis business unitsarethenabletomake the riskappetiteofBank.The risks areeffectivelymanagedwithin in placeandassesswhetherthe evaluate theeffectivenessofcontrols quarterly basis. report issubmittedtotheIRMCona ORMEC meetings,whereasummary Events arereportedtothemonthly KRI andreportsonOperationalLoss methodology suchasRCSAprocess, operational riskmanagement exposures identifiedthrough Bank wideoperationalriskissues, control operationalriskprofile. to understand,monitor, manageand function andbybusinessfunctions commitment tothe effective This policyoutlines theBank's Management Committee(FRMC). of referencefortheFraudRisk Management Policyandterms Bank approvedtheFraudRisk During theyearunderreview Fraud RiskManagement P - let,Pout Clients,Products & - CPB Business EmploymentPracticesand - EMP Workplace Practices EF - External IF - Safety Abbreviations ofLevel1LossEvents Internal Fraud Fraud EMP EMP DPA CPB EDP DPA CPB EDP BD BD EF EF IF IF Frequency ofRiskEvents Severity ofRiskEvents 1% 3% 4% 4% 4% 4% 5% 7% 8% 11% 18% 2011 2011 28% frauds andnatural disasters. of securities,employee orthirdparty errors andomissions, physicalloss of thirdpartyclaimsresultingfrom losses whichmayoccurasaresult to mitigatetheimpactofoperational insurance asarisktransferstrategy approach, theBankalsouses As partofitsriskmanagement Insurance Chairman ofthecommittee. all stakeholders.TheCROactsasthe creating fraudawarenessamongst fraud riskmanagementpolicyand ensuring theimplementationof FRMC oftheBankisentrustedwith confirmed incidentsoffraud. damage, resultingfromsuspectedor and assetsoftheBankfromlossor aims toprotectthebrands,reputation of incidentsfraud.Thispolicyalso prevention, reductionanderadication 2010 2010 D - xcto,Dlvr Execution, Delivery& - EDP Businessdisruption& Process - BD System Management Damageto - DPA physical failures assets 64% 66% 82% 91%

BANK OF CEYLON ANNUAL REPORT 2011 63 BANK OF CEYLON ANNUAL REPORT 2011 64 ORMEC andtheIRMC. functioning ofBCPandreportstothe scenarios. IIRMDoverseesthe in aneventofvariouspre-defined facilitate continuingcriticaloperations with alternativearrangementsto center isinplaceoutsidecitylimits A fullyfledgeddisasterrecovery for allthekeypersonnelofBank. awareness programswereconducted locations involved.Businesscontinuity the levelofparticipationandphysical increasing thecomplexity, varying provinces. Thesetestsweredonewith and selectedbranchescoveringall including allcriticaldepartments tests werecarriedoutbytheBank review, successfulsimulation continuity. Duringtheyearunder and oversightoftheBank’s business Unit isresponsibleforgovernance Business ContinuityCoordinating and subsequentlyrevised. developed anddocumentedin2006 recovery strategieswereinitially The Bank’s BCPincludingdisaster disasters ofvaryingdegree. of theorganisationinevent continue orrestoretheoperations and systemsthatisnecessaryto sets outtheprocesses,procedures comprehensive planofactionsthat Continuity Management.Itisa (BCP) isacomponentofBusiness The Bank’s BusinessContinuityPlan Situations Managing Emergency mentioned therein. the informationsecuritycontrols and recommendedimplementing Directors approvedtherevisedISP requirements. TheBoardof Management System(ISMS) 27001:2005 InformationSecurity Security Policy(ISP)asperISO The BankhasrevisedtheInformation Information SystemSecurity Risk Management Bank closelymonitors theimpact with regulatoryrequirements.The which buildstrustwhilecomplying standards ofintegrityandbehaviour, the Bank.TheBankholdsitselftohigh Compliance isapartoftheculture Compliance Framework Commission andotherregulators. the CBSL,Securities&Exchange has acloseworkingrelationshipwith circulars andguidelines.TheBank in fullcompliancewiththedirections, requires allcommercialbankstobe The CBSListheleadregulatorand damage totheBank'sreputation. business and/orfranchise,aswell from regulatorysanctions,tolossof potential financiallossresulting regulatory requirementsrangesfrom of non-compliancewithlegaland its entirestaffoftheBank.Therisk Compliance Officer, butconcerns responsibility oftheBank'sdedicated diligence. Complianceisnotjustthe and toalwaysactwithcaredue of applicablelawsandregulations fully withboththespiritandletter Bank remainscommittedtocomply and regulatoryrequirements.The monitoring ofcompliancewithlegal the needforformalandstructured have placedgreateremphasison the introductionofnewlegislations, industry, changestoregulationsand Ongoing reformsintheBanking compliance failuresareidentified. appropriate correctiveactionswhen to ensurethatmanagementtakes organises itscompliancefunction sound policiesintheBank,BoC and codeofconduct.To enhance regulations, organisationstandards of itsfailuretocomplywithlaws, the Bankmaysufferasaresult financial losses,orlosstoreputation, or regulatorysanctions,material Compliance Riskistheriskoflegal Compliance Risk guidelines ascoretoitsbusiness the regulatoryrequirementsand The Bankconsiderscompliancewith Regulatory Compliance Bank operatesin. supervisors inthegeographies relationships withregulatorsand maintaining constructiveworking Unit ischargedwithdevelopingand on regulatoryissues.TheCompliance obligations andalsoprovidesadvice are familiarwithregulatory training toensurethatallemployees The ComplianceUnitprovidesregular processes andsystems. established rightcontrolsinthe new productdevelopments,has involvement intheearlystagesof compliance risk.ComplianceUnit’s to ensureconsistentmanagementof the businessandoperationalunits requirements. Itworkscloselywith and proceduresotherregulatory units toensureadherencepolicies independently monitorsthebusiness requirements buttheComplianceUnit units, adheringwiththecompliance decentralised acrossallbusiness Compliance functionsare is accessibletoallstaffoftheBank. Compliance ProcedureManual,which Bank hasinplaceacomprehensive breaches arepromptlyreported.The are adheredtoandensuresthat statutory andregulatoryrequirements effectively andmonitorstoensurethat that thecomplianceprocessoperates The Compliancefunction,ensures place arobustcomplianceframework. and regulations,theBankhasputin In ensuringcompliancewithlaws been broken. reputation damageevenifnolawhas significant adversepublicityand markets whichmayresultin customers, employeesandthe of itsactionsontheshareholders, to theBank. laws andinternalcontrolspertaining prudential requirements,regulations, were nomaterialnoncompliancewith During theperiodunderreviewthere the Bank. laws andinternalcontrolsaffecting prudential requirements,regulations, Board ensurescompliancewithall Corporate Governancedirectives,the and goodgovernance.Asperthe Financing (CTF) (AML)/ CombatingTerrorist Anti MoneyLaundering activities. Laundering andTerrorist Financing to controlandmonitortheMoney CTF standalonesoftwaresolution introducing anadvanceAML/ Compliance Unitisworkingtowards correspondent bankrelationships. for allBoCcustomersincluding KYC/CDD measuresareapplied ‘third partydepositors’details.Strong with thenewregulationssuchas were reviewedandupdatedinline year, Bank'spoliciesandprocedures employees oftheBank.Duringthis awareness programmesforallthe has conductedcontinuoustrainingand programmes. TheComplianceUnit & maintenanceofAML/CTF monitoring andtheestablishment & verification,record-keeping, such ascustomeridentification policies whichincludeobligations thereafter theBankhasimplemented Due Diligence(CDD)rulesin2007and Know Your Customer(KYC)/ banks. AccordinglyCBSLhasissued applicable tolicensedcommercial of SriLankahasenactedlaws standards ofAML&CTF, Government international bestpracticesandglobal crime acrosstheworld.Inresponseto anti-money launderingandfinancial legislative requirementsrelatedto implementing thenewdirectiveand There hasbeensubstantialfocuson

nance Gover porate Cor- provided forinthesaidDirection. the statutegoverningBank,as 53 of1938anditsamendments, the BankofCeylonOrdinanceNo. that theyarenotinconsistentwith with thesaidDirectiontoextent to thebestofitsabilitycomply Sri Lanka.TheBankhastakensteps Banks issuedbytheCentralBankof Governance forLicensedCommercial Direction No.11of2007onCorporate The BankisboundbytheBankingAct the progress. practices andcontinuouslymonitors applicable governancerulesandbest focuses ontheimplementationof subcommittee oftheBoardprimarily Governance Committee,whichisa Nomination andCorporate Conscious oftheabove, practice. over manymattersofpolicyand substantial influenceandleadership in theSriLankaeconomy, carrying and dominantroletheBankplays Government ownsitandthepivotal the Bankespeciallybecause, maintaining publicconfidencein also fundamentalinattractingand a soundsystemofgovernanceis framework. Itfirmlybelievesthat and implementingitssustainability financial growth,competitiveness element inenhancingtheBank’s corporate governanceasavital with bestpracticesinrespectof with itsstrategyofbeinginline The BankofCeyloncontinues Corporate Governance

and regulations. processes beyondtheapplicablerules governance frameworkandthe efforts tocontinuallyimprovethe process andismakingconscious governance intoitsvalueaddition incremental approachinembedding improvement itfollowsan In itssearchforcontinuous stakeholders areunderstoodandmet. ensuring thatitsobligationstoall creating trustandtransparency on parwithbestpractices,while standards fortheBankanditsstaff enables theBoardtosetvaluesand very highethicalstandards.This The Boardiscommittedtofollowing stakeholders. Communication Policycoveringallits the Bank.TheBankhasadopteda in theeffectiveperformanceof in corporategovernanceasithelps either adirectoranindirectinterest large. Allpartiesmentionedhave issued bytheBank)andsocietyat regulators, investors(indebentures International Banks,suppliers, Directors, management,employees, depositors, customers,theBoardof comprise thesingleshareholder, vision oftheBank.Thestakeholders between themandthestrategic many stakeholders,therelationships The governanceintheBankcovers

Accountants ofSriLankain2008. Lanka andtheInstituteofChartered and ExchangeCommissionofSri issued jointlybytheSecurities Practice onCorporateGovernance, of conformancetotheCodeBest amendments theretoandthelevel of SriLanka,andsubsequent Banks issuedbytheCentralBank Governance forLicensedCommercial Direction No.11of2007onCorporate requirements oftheBankingAct the Bank’s adherencetodisclosure The disclosuresbelowdemonstrate Corporate Governance. Continuing ListingRequirementson stipulated inSection7.10ofthe from complyingwiththedirections Stock ExchangeexemptedtheBank Direction No.11of2007,theColombo in theabovementionedBankingAct complying withdirectionslaiddown of SriLanka.SincetheBankis Institute ofCharteredAccountants Commission ofSriLankaandthe by theSecuritiesandExchange Corporate Governanceissuedjointly uses theCodeofBestPracticeson in corporategovernance,theBank As aguidelineforbestpractices -

BANK OF CEYLON ANNUAL REPORT 2011 65 BANK OF CEYLON ANNUAL REPORT 2011 66 Corporate Governance Sri Lanka. Level ofCompliancewiththeBankingActDirectionNo.112007onCorporateGovernanceforLicensedCommercialBanksissued RNILSLEVELOFCOMPLIANCE Theboardshallstrengthenthesafetyandsoundnessofbankbyensuring 3 (1)(i) 3 (1)TheResponsibilitiesoftheBoard PRINCIPLES ) Identifyanddesignatekeymanagementpersonnel,asdefined in theInternational f) ) Reviewtheadequacyandintegrityofbank’s internalcontrolsystems and e) ) Approveimplementationofapolicycommunicationwith allstakeholders, d) ) Identifytheprincipalrisksandensureimplementationofappropriatesystemsto c) ) Approvetheoverallbusinessstrategyofbank,includingriskpolicy b) ) Approveandoverseethebank’s strategicobjectivesandcorporatevalues a) implementation ofthefollowing: (iii) exercise controloverbusinessactivities,operationsandriskmanagement; (iii) directactivities;and (ii) significantlyinfluencepolicy; (i) Accounting Standards,whoareina position to: management informationsystems; including depositors,creditors,share-holdersandborrowers; manage therisksprudently; least thenextthreeyears; and riskmanagementproceduresmechanismswithmeasurablegoals,forat ensure thatthesearecommunicatedthroughoutthebank; information systemsthroughtheAuditCommittee. the Bank’s internalcontrolsystemsandmanagement The Boardreviewedtheadequacyandintegrityof Complied. guidelines. at theendofyear. TheBankadheredtothepolicy A CommunicationPolicyisinplaceanditwasreviewed Complied. the Board. Management ReportsaresubmittedtoIRMCandthen Committee (IRMC)whichreportstotheBoard.Risk ensured throughtheIntegratedRiskManagement of theappropriatesystemstomanagerisksare credit, market,operationandstrategictheavailability adopted. Identificationoftheprinciplerisksrelatingto Principal risksareidentifiedthroughtheRiskPolicy Complied. includes riskmanagementproceduresandmechanisms. In addition,theBankhasadoptedaRiskPolicywhich approved bytheBoardindicatedmeasurablegoals. Plan basedonthesaidCorporatewhichwasalso 2011 to2013whichwasadoptedbytheBoard.Action into therollingCorporatePlanpreparedforyears Overall businessstrategyoftheBankwasincorporated Complied. held withprovincialteams. the launchofCorporatePlanandbywaymeetings rolling CorporatePlanandtheyarecommunicatedwith The Bank’s objectives andvaluesareincorporatedinthe Complied. considered askeymanagementpersonnel. General Managersandofficersinthe alliedgradeare The BoardofDirectors,GeneralManager andDeputy Complied. by theCentralBankof RNILSLEVELOFCOMPLIANCE PRINCIPLES ) Periodicallyassesstheeffectivenessofboarddirectors’owngovernance i) Ensurethatthereisappropriateoversightoftheaffairsbankbykey h) Definetheareasofauthorityandkeyresponsibilitiesforboarddirectors g) ) Ensurethatthebank hasanappropriatesuccessionplanforkeymanagement j) i theselection,nominationandelectionofdirectorskeymanagement (i) practices, including: management personnel,thatisconsistentwithboardpolicy; themselves andforthekeymanagementpersonnel; i) h aaeeto oflcso neet;adComplied. themanagementofconflictsinterests;and (ii) ii thedetermination ofweaknessesandimplementationchangeswhere (iii) personnel; personnel; necessary; Committee andreportedtotheBoardthroughitsminutes. periodically bytheNominationandCorporateGovernance Implementation ofgovernancepracticesarereviewed Complied. operation. obtain clarificationsrelatingtotheirrespectiveareasof called totheBoardmeetingsasandwhenneeded management personnel.Keypersonnelare based ontheActionPlanmadeavailabletoallkey towards theachievementofCorporatePlanobjectives The Boardcarriesoutthistaskbyreviewingtheprogress Complied. in theirjobprofilesanddescriptions. The tasksofthekeymanagementpersonnelareidentified clearly identified. whereby theauthorityandresponsibilitiesofBoardis A BoardCharterisinplacewhichreviewedperiodically Complied. appointed bytheBoardafterainterview. was established.Allkeymanagementpersonnelare which istheenactmentbyBankofCeylon of CeylonOrdinanceNo.531938anditsamendments in chargeofthesubjectFinancetermsBank of SriLanka,theDirectorsareappointedbyMinister Bank ofCeylonbeingwhollyownedbytheGovernment in place. A PolicyonConflictsofInteresthasbeenadoptedandis Any conflictsofinterestsarereportedtotheBoard. management personnel. A successionplanisinplacetheBankforkey Complied. reported totheBoard. compliance withtheapplicablegovernancepracticesand Governance Committeeinitsoverallevaluationofthe by theabovementionedNominationandCorporate Any weaknessinthegovernancepracticesaremonitored Complied.

BANK OF CEYLON ANNUAL REPORT 2011 67 BANK OF CEYLON ANNUAL REPORT 2011 68 Corporate Governance 1 v Theboardproceduresshallensurethatnoticeofatleast 7daysisgivenofaregular 3 (1)(v) Theboardshallensurethatarrangements areinplacetoenablealldirectorsinclude 3 (1)(iv) Theboardshallmeetregularlyandmeetingsbeheldatleasttwelvetimes 3 (1)(iii) TheBoardshallappointthechairmanandchiefexecutiveofficerdefine 3 (1)(ii) RNILSLEVELOFCOMPLIANCE PRINCIPLES ) Eecs u iiec ntehrn n vrih fetra uios TheAuditorGeneral istheexternalauditorof Exerciseduediligenceinthehiringandoversightofexternalauditors. m) Understandtheregulatoryenvironmentandensurethatbankmaintainsan l) meetings, reasonablenoticemaybe given. board meetingtoprovidealldirectorsanopportunityattend.Forother board bank. and proposalsrelatetothepromotionofbusinessmanagement ofrisksthe matters andproposalsintheagendaforregularboardmeetingswheresuch matters shall beavoidedasfarpossible. Obtaining theboard’s consentthroughthecirculationofwrittenresolutions/papers involve activeparticipationinpersonofamajoritydirectorsentitledtobepresent. a yearatapproximatelymonthlyintervals.Suchregularboardmeetingsshallnormally officer inlinewithDirection3(5)oftheseDirections. approve thefunctionsandresponsibilitiesofchairmanchiefexecutive Meetregularly, onaneedsbasis,withthekeymanagementpersonneltoreview k) effective relationshipwithregulators; objectives; policies, establishcommunicationlinesandmonitorprogresstowardscorporate issued aremadeavailabletotheDirectors. regulatory requirements.Anyfreshdirections,circulars On appointmentasDirectorstheyareexposedtoallthe Complied. provided forintheConstitutionofcountry. targets. progress towardsthecorporateobjectivesandfinancial the keymanagementpersonnelofBanktoreview to theweeklyreviewmeetingsChairmanhaswith needs basisinreviewingpoliciesetc.Thisisaddition The Boardmeetsthekeymanagementpersonnelona Complied. meeting. of theyear. Reasonable noticeisgivenbeforeanyspecial circulated totheBoardofDirectorsbefore thebeginning The annualcalendarofBoardmeetingsismadeand Complied. management ofriskstheBank. proposals relatetothepromotionofbusinessand include anyitemtotheagendawheresuchmattersand The BoardCharterensuresthatDirectorsareallowedto Complied. resolutions werepassed. minimal. Duringtheyearunderreviewtwocircular this AnnualReport.Passingcircularresolutionswere Directors duringtheyear2011aregivenonpage95of basis. Numberofmeetingsheldandtheattendance The BoardofBankCeylonmeetsonatwicemonth Complied. the GeneralManager, ChairmanandtheBoard. A BoardCharterisinplacedefiningtheresponsibilitiesof Executive Director. Ceylon OrdinancereferredtoaboveandheisaNon- charge ofthesubjectFinanceintermsBank However, theChairmanisappointedbyMinisterin No.53 of1938anditsamendments. of FinanceasprovidedintheBankCeylonOrdinance the priorapprovalofMinisterinchargesubject to astheGeneralManagerinBankofCeylonwith The BoardappointstheChiefExecutiveOfficerreferred Bank as RNILSLEVELOFCOMPLIANCE Theboardproceduresshallensurethatadirector, whohasnotattendedatleasttwo- 3 (1)(vi) PRINCIPLES 1 x)Thereshallbeaprocedureagreed bytheboardtoenabledirectors,uponreasonable 3 (1)(xi) Minutesofboardmeetingsshallberecordedinsufficientdetailsothatitispossible 3 (1)(x) Thecompanysecretaryshallmaintaintheminutesofboardmeetingsandsuch 3 (1)(ix) Alldirectors shallhaveaccesstoadviceandservicesofthecompanysecretarywith 3 (1)(viii) TheboardshallappointacompanysecretarywhosatisfiestheprovisionsofSection43 3 (1)(vii) however, beacceptableasattendance. a director. Participationatthedirectors’meetingsthroughanalternatedirectorshall, attended theimmediatelyprecedingthreeconsecutivemeetingsheld,shallceasetobe thirds ofthemeetingsinperiod12monthsimmediatelyprecedingorhasnot duties tothebank. advice todirectorsassisttherelevantdirectorordischarge his/her/their bank’s expense.Theboardshallresolvetoprovideseparateindependentprofessional request, toseekindependentprofessionaladviceinappropriatecircumstances, atthe thedecisions andboardresolutions. (f) theboard’s knowledge andunderstandingoftheriskstowhichbankisexposed (e) thetestimoniesandconfirmationsofrelevantexecutiveswhichindicate (d) thefact-findingdiscussionsandissuesofcontentionordissentwhichmay (c) themattersconsideredbyboard; (b) asummaryofdataandinformationusedbytheboardinitsdeliberations; (a) following: Therefore, theminutesofaboardmeetingshallclearlycontainorreferto supervisory authoritiestoassessthedepthofdeliberationsatboardmeetings. in performingitsduties.Theminutesshallalsoserveasareferenceforregulatoryand to gatherfromtheminutes,aswhetherboardactedwithduecareandprudence director. shall beopenforinspectionatanyreasonabletime,onnoticeby followed. a viewtoensuringthatboardproceduresandallapplicablerulesregulationsare functions specifiedinthestatutesandotherregulations. the secretariatservicestoboardandshareholdermeetingscarryoutother of theBankingActNo.301988,whoseprimaryresponsibilitiesshallbetohandle and anoverviewoftheriskmanagementmeasuresadopted; laws andregulations; compliance withtheboard’s strategiesandpoliciesadherencetorelevant prudence; illustrate whethertheboardwascarryingoutitsdutieswithduecareand ensures compliancewiththisDirection. The SecretarytotheBoardmonitorsattendanceand This situationhasnotarisenintheyearunderreview. to suchadvicewhendeemednecessary. Independent ProfessionalAdviceandtheBoardcanresort The BankhasadoptedaPolicyforDirectors’Accessto Complied. Detailed minutesarekeptcoveringthegivencriteria. Complied. Complied. Complied. statutes andapplicableregulations. No. 30of1988.Shecarriesoutthetasksspecifiedin satisfies theprovisionsofSection43BankingAct An attorney-at-lawistheSecretarytoBoard.She Complied.

BANK OF CEYLON ANNUAL REPORT 2011 69 BANK OF CEYLON ANNUAL REPORT 2011 70 Corporate Governance 3 (2)(i) 3 (2)TheBoard’s Composition Theboardshall adoptaschemeofself-assessmenttobeundertakenbyeachdirector 3 (1)(xvii) Theboardshallpublishinthebank’s AnnualReport,anannualcorporategovernance 3 (1)(xvi) Theboardshallensurethatthebank iscapitalisedatlevelsasrequiredbythe 3 (1)(xv) LEVELOFCOMPLIANCE Theboardshall,ifitconsidersthatthebankis,orislikelytobe,unablemeetits 3 (1)(xiv) Theboard shallhaveaformalscheduleofmattersspecificallyreservedtoitfor 3 (1)(xiii) Directorsshallavoidconflictsofinterests,ortheappearanceinterest, 3 (1)(xii) PRINCIPLES h ubro ietr ntebadsalntb esta n o oeta 3 AccordingtotheBankofCeylonOrdinanceNo The numberofdirectorsontheboardshallnotbelessthan7andmore than13. annually, andmaintain recordsofsuchassessments. report settingoutthecompliancewithDirection3oftheseDirections. Monetary Boardintermsofthecapitaladequacyratioandotherprudentialgrounds. situation ofthebankpriortotakinganydecisionoraction. depositors andothercreditors,forthwithinformtheDirectorofBankSupervision obligations orisabouttobecomeinsolventsuspendpaymentsdue authority. decision toensurethatthedirectionandcontrolofbankisfirmlyunderits item attheboardmeeting. is interestedandhe/sheshallnotbecountedinthequorumforrelevantagenda any ofhis/hercloserelationoraconcern,inwhichdirectorhassubstantialinterest, director shallabstainfromvotingonanyboardresolutioninrelationtowhichhe/sheor Directions] whohavenomaterialinterestinthetransaction,arepresent.Further, a meeting, whereindependentnon-executivedirectors[refertoDirection3(2)(iv)ofthese the boardhasdeterminedtobematerial,mattershoulddealtwithata a directorhasconflictofinterestinmattertobeconsideredbytheboard,which in theiractivitieswith,andcommitmentsto,otherorganisationsorrelatedparties.If Direction). under thegeneralprovisionsgiven 3(9)(ii)ofthis Board consistsof6Directors.(Thisdeviation ispermitted on theBoardofBankCeylonis6and thepresent and itsamendmentsthenumberofDirectors permitted Corporate GovernanceCommitteeoftheBoard. evaluation exerciseisfacilitatedbytheNominationand and theevaluationrecordsaremaintained.The The selfassessmentoftheBoardiscarriedoutannually Complied. Report oftheBank. Complied withbyincludingthisreportintheAnnual Adequacy Ratios. to theBoard.Pleasereferpage3forCapital this throughthemonthlyfinancialinformationsubmitted requirements oftheMonetaryBoard.TheBoardensures The Bankisfullycompliantwithcapitaladequacy The situationhasnotarisen. control oftheBank. reserved toitfordecisionidentifythedirectionand section addressesthescheduleofmattersspecifically under thesectiononPowersReservedtoBoard.This The BoardCharterinplaceaddressesthisDirection Complied. interest anditisrecordedinminutes. fortnightly, Directorsdeclareiftheyhaveanyconflictof the Board.Inaddition,ateveryBoardmeetingheld statement istakenonayearlybasisandtabledbefore shareholder etc.istabledbeforetheBoard.This companies etc.inwhichhe/sheisadirector/partner/ appointment ofaDirectorstatementinformingthe Such Directorisnotcountedinthequorum.On making onmattersinwhichtheyhaveaninterest. interested Directorsdonotparticipateinthedecision Any interestsaredisclosedtotheBoardand A PolicyonConflictofInteresthasbeenadopted. Complied. .53 of1938 RNILSLEVELOFCOMPLIANCE Thetotalperiodofserviceadirectorotherthanwhoholdsthe (A) 3 (2)(ii) PRINCIPLES 2 i)Theboardshallhaveatleastthreeindependentnon-executivedirectorsoronethird 3 (2)(iv) Anemployeeofabankmaybeappointed,electedornominatedasdirectorthe 3 (2)(iii) 2 v Intheeventanalternatedirectorisappointedtorepresent anindependentdirector, 3 (2)(v) AdirectorwhohascompletednineyearsasatJanuary1,2008,orcompletes Inthiscontext,thefollowinggeneralexemptionshallapply: (B) ) isanemployeeoradirectormaterialshareholderin companyorbusiness f) representsaspecificstakeholderofthebank; e) hasacloserelationwhoisdirectororchiefexecutiveofficermemberofkey d) hasbeenemployedbythebankduringtwoyearperiodimmediatelypreceding c) currentlyhasorhadduringtheperiodoftwoyearsimmediatelyprecedinghis/her b) hasdirectandindirectshareholdingsofmorethan1percentthebank; a) A non-executivedirectorshallnotbeconsideredindependentifhe/she: applicable fromJanuary1,2010onwards. of thetotalnumberdirectors,whicheverishigher. Thissub-directionshallbe the bank. In suchanevent,oneoftheexecutivedirectorsshallbechiefofficer executive directorsshallnotexceedone-thirdofthenumberboard. bank (hereinafterreferredtoasan“executivedirector”)providedthatthenumberof director. the personsoappointedshallalsomeet thecriteriathatappliestoindependent January 1,2008. office shallbeinclusiveofthetotalperiodserviceservedbysuchdirectorupto position ofchiefexecutiveofficershallnotexceednineyears,andsuchperiodin maximum periodof3yearscommencingJanuary1,2009. such termatanytimepriortoDecember31,2008,maycontinueforafurther I. inwhichanyoftheotherdirectorsbankhaveatransaction asdefinedin III. inwhichanyoftheotherdirectorsbankareemployedor II. whichcurrently hasatransactionwiththebankasdefinedinDirection3(7)of I. organisation: child; this purpose,a“closerelation”shallmeanthespouseorfinanciallydependant management personneloramaterialshareholderofthebankanotherbank.For the appointmentasdirector; Direction 3(7)hereof,exceeding10percentoftheregulatorycapitalbank. appointment asdirector, anybusinesstransactionswiththebankasdescribedin in thebank; Direction 3(7)oftheseDirections,exceeding10percentregulatorycapital are materialshareholders;or or these Directions,exceeding10percentoftheregulatorycapitalbank, Not applicable. Directors. 18 and19ofthisAnnualReportundertheProfiles appointment ofthepresentDirectorsaregivenonpages for aperiodexceeding9years.Year andmonthofthe Presently noDirectorofBankCeylonhasbeeninoffice Directors ontheBoardofBankCeylon. as aDirectorofitandthereforetherearenoExecutive No employeeofBankCeylonhasbeenappointed Direction no.3(2)(viii)below. and 19withtheProfilesofDirectorsalsounder specified inthisDirection.Theyareidentifiedonpages18 identified asIndependentDirectorsbasedonthecriteria Executive Directors.OutofthemthreeDirectorsare The entireBoardofBankCeylonconsistsNon- Complied. Directors. No AlternateDirectorswereappointed forIndependent

BANK OF CEYLON ANNUAL REPORT 2011 71 BANK OF CEYLON ANNUAL REPORT 2011 72 Corporate Governance 2 xi Adirectororanemployeeofabankshallnotbeappointed,electednominated 3 (2)(xii) Ifadirectorresignsorisremovedfromoffice,theboardshall: 3 (2)(xi) Alldirectorsappointedtofillacasualvacancyshallbesubjectelectionby 3 (2)(x) Thereshallbeaformal,consideredandtransparentprocedurefortheappointment 3 (2)(ix) LEVELOFCOMPLIANCE Theindependentnon-executivedirectorsshallbeexpresslyidentifiedassuchinall 3 (2)(viii) Ameetingoftheboardshallnotbedulyconstituted,althoughnumberdirectors 3 (2)(vii) Non-executivedirectorsshallbepersonswithcredibletrackrecordsand/orhave 3 (2)(vi) PRINCIPLES associate companyofthefirstmentionedbank. as adirectorofanotherbankexceptwheresuchissubsidiarycompany oran issueastatement confirmingwhetherornotthereareanymattersthatneedtobe (b) announcethedirector’s resignationorremovalandthereasonsforsuch (a) shareholders atthefirstgeneralmeetingaftertheirappointment. succession ofappointmentstotheboard of newdirectorstotheBoard.Thereshallalsobeproceduresinplacefororderly non-executive directorsintheannualcorporategovernancereport. names ofthechairman,executivedirectors,non-executivedirectorsandindependent shall disclosethecompositionofboard,bycategorydirectors,including corporate communicationsthatdisclosethenamesofdirectorsbank.Thebank This sub-directionshallbeapplicablefromJanuary012010onwards. half ofthenumberdirectorspresentatsuchmeetingarenon-executivedirectors. required toconstitutethequorumatsuchmeetingispresent,unlessmorethanone strategy, performanceandresources. necessary skillsandexperiencetobringanindependentjudgmentbearonissuesof brought totheattentionofshareholders. director’s disagreementwiththebank,ifany;and or resignationincludingbutnotlimitedtoinformationrelatingtherelevant Minister. the Bank.Anyresignationisalsoreferredtosame the GovernmentofSriLanka,soleshareholder the appointmentsaswellremovalsonbehalfof The MinisterinchargeofthesubjectFinancedoes office asanexofficiodirector. by theBoardofDirectorsBankCeylonshallhold a DeputyGeneralManagerofBankCeylonnominated Sanwardana BankActNo.41of2008whichrequiresthat to thePradeshiyaSanwardanaBankunder than fortheappointmentofaDeputyGeneralManager Directors ofanotherbankwhichisnotasubsidiary, other Neither DirectorsnoremployeesofBankCeylonare Not applicable. the enablingenactment. Minister inchargeofthesubjectFinanceterms Not applicablesincetheappointmentsaremadeby Mr. K.L.Hewage-IndependentNon-ExecutiveDirector • Mr. ChandrasirideSilva-Non-ExecutiveDirector • Ms.NaliniAbeywardane-Non-ExecutiveDirector • Mr. RajuSivaraman-IndependentNon-Executive • Mr. S.R.Attygalle-Non-ExecutiveExofficioDirector • Dr. GaminiWickramasinghe-IndependentNon- • below: The compositionoftheBoardDirectorsareasgiven Complied. are Non-Executive. Complied with.AlltheBoardmembersofBankCeylon Complied. Director Director) or inhisabsenceMr. V. Kanagasabapathy(Alternate Executive Director 5 i The rolesofchairmanandchiefexecutiveofficershallbeseparatenot 3 (5)(i) 3 (5)TheChairmanandChiefExecutiveOfficer LEVELOFCOMPLIANCE Thedirectorsshallcarefullystudyandclearlyunderstandthedelegationarrangements 3 (4)(i) 3 (4)ManagementfunctionsdelegatedbytheBoard Theageofapersonwhoservesasdirectorshallnotexceed70years.Inthiscontext, 3 (3)(i) 3 (3)CriteriatoassessthefitnessandproprietyofDirectors PRINCIPLES 5 i)Thechairmanshallbeanon-executivedirectorandpreferablyanindependent director 3 (5)(ii) Theboardshallreviewthedelegationprocessesin placeonaperiodicbasistoensure 3 (4)(iii) Theboardshallnotdelegateanymatterstoacommittee,chiefexecutiveofficer, 3 (4)(ii) Inthiscontext,thefollowinggeneral exemptionshallapply: (A) 3 (3)(ii) Apersonshallnotholdofficeasadirectorofmorethan20companies/entities/ 3 (3)(ii) performed bythesameindividual. in place. further maximumperiodof3yearscommencingJanuary1,2009. reach theageof70yearspriortoDecember31,2008maycontinueinofficefora A directorwhohasreachedtheageof70yearsasatJanuary1,2008orwould the followinggeneralexemptionshallapply: Senior Directorshallbedisclosedin thebank’s Annual Report. terms ofreferencetoensureagreater independentelement.Thedesignationofthe designate anindependentdirectoras theSeniorDirectorwithsuitablydocumented as well.Inthecasewherechairman isnotanindependentdirector, theboardshall that theyremainrelevanttotheneedsofbank. functions. would significantlyhinderorreducetheabilityofboardasawholeto dischargeits executive directorsorkeymanagementpersonnel,toanextentthatsuchdelegation Ifanypersonholdspostsinexcessofthe limitationasabove,suchpersonshall Standards Act,No.15of1995. as SpecifiedBusinessEntitiesintermsoftheSriLankaAccountingandAuditing companies/entities/ institutions,notmorethan10companiesshallbethoseclassified institutions inclusiveofsubsidiariesorassociatecompaniesthebank.Ofsuch20 above-mentioned limitationandnotifytheMonetaryBoardaccordingly. within amaximumperiodofthreeyearsfrom1January2009complywiththe Ceylon areheldbytwodifferentindividuals. Officer referredtoastheGeneralManagerinBankof The positionsoftheChairmanandChiefExecutive Complied. in awaythatitdoesnothindertheabilityofBoard. revoke suchdelegation.DelegationisdonebytheBoard prescribed bytheBoard.TheBoardhaspowerto delegation issubjecttoconformingallregulations than thepowertoappointGeneralManagerandsuch Board. TheBoardmaydelegateanyofitspowersother amendments providesfordelegationoffunctionsthe Bank ofCeylonOrdinanceNo.531938andits Complied. compliance withthisrule. All thepresentBoardmembersofBankCeylonarein Executive Director. The ChairmanofBankCeylonisanIndependentNon- Complied. that theyremainrelevanttotheneedsofBank. Delegated powersarereviewedperiodicallytoensure Complied. Not applicable. rule. Directors ofBankCeylonareincompliancewiththis

BANK OF CEYLON ANNUAL REPORT 2011 73 BANK OF CEYLON ANNUAL REPORT 2011 74 Corporate Governance 5 i)Thechairman shallnotengageinactivitiesinvolvingdirectsupervision ofkey 3 (5)(ix) Thechairmanshallfacilitatetheeffective contributionofnon-executivedirectorsin 3 (5)(viii) Thechairmanshallencouragealldirectorstomakeafullandactivecontributionthe 3 (5)(vii) Thechairmanshallensurethatalldirectorsareproperlybriefedonissuesarisingat 3 (5)(vi) LEVELOFCOMPLIANCE Thechairmanshallbeprimarilyresponsiblefordrawingupandapprovingtheagenda 3 (5)(v) Thechairmanshall:(a)provideleadershiptotheboard;(b)ensurethatboard 3 (5)(iv) Theboardshalldiscloseinitscorporategovernancereport,whichbeanintegral 3 (5)(iii) PRINCIPLES management personneloranyother executivedutieswhatsoever. directors. particular andensureconstructiverelations betweenexecutiveandnon-executive the bank. board’s affairsandtaketheleadtoensurethatboardactsinbestinterests of manner. board meetingsandalsoensurethatdirectorsreceiveadequateinformationinatimely drawing upoftheagendatocompanysecretary. by theotherdirectorsforinclusioninagenda.Thechairmanmaydelegate for eachboardmeeting,takingintoaccountwhereappropriate,anymattersproposed appropriate issuesarediscussedbytheboardinatimelymanner. works effectivelyanddischargesitsresponsibilities;(c)ensurethatallkey officer andtherelationshipsamongmembersofboard. material/relevant relationship(s)],ifany, betweenthechairmanandchiefexecutive and thenatureofanyrelationship[includingfinancial,business,familyorother part ofitsAnnualReport,theidentitychairmanandchiefexecutiveofficer Complied. The fullBoardconsistsofNon-Executive Directors. Complied. Complied. Chairman ensurestheimplementationofthisprocess. giving themadequateinformationtotakedecisions.The provided totheBoardoncontentsofmemoranda in additiontothememoranda,detailedexplanationsare Board meeting.However, intheeventofanyurgent issue submitted asmuchpossiblepriortothedateof before theBoardmeeting.Anylatememorandaarealso Generally Boardmemorandaarecirculated6to7days through theBoardmemorandasubmittedtoBoard. Adequate informationisprovidedinatimelymanner Complied. proposed tobeincludedbyanyBoardmember. the GeneralManagerandanyotherrelevantitems drawn upbasedonthememorandasubmittedthrough the authoritydelegatedbyChairman.Theagendais The SecretarytotheBoarddrawsupagendaunder Complied. manner deliberatesallkeyissues. discharging itsresponsibilities.TheBoardinatimely and ensuresthattheBoardfunctionseffectivelyin The ChairmanprovidesleadershiptotheBoard Complied. with theChiefExecutiveOfficers. they alsohavenosuchrelationshipsamongstthemand Directors alsohavesubmitteddeclarationsstatingthat described inthisDirection. the year2011statingthattheyhavenorelationshipsas both theChiefExecutiveOfficerswhoheldofficeduring Declarations havebeenobtainedfromtheChairmanand 2011. 12th August2011andMs.W.A. Nalanifrom13thAugust Manager inBankofCeylon)-Mr.B.A.C. Fernandoupto The ChiefExecutiveOfficer(referredtoastheGeneral Chairman- Dr. GaminiWickramasinghe. 3 (6)(ii) LEVELOFCOMPLIANCE EachbankshallhaveatleastfourboardcommitteesassetoutinDirections 3 (6)(i) 3 (6)BoardappointedCommittees ChiefExecutiveOfficershallfunctionastheapexexecutive-in-chargeofday-today 3 (5)(xi) Thechairmanshallensure thatappropriatestepsaretakentomaintaineffective 3 (5)(x) PRINCIPLES ) l ebr ftecmitesalb o-xctv ietr.Complied. Thecommitteeshallmakerecommendationsonmattersinconnectionwith: c) Allmembersofthecommitteeshallbenon-executivedirectors. b) ) Thechairmanofthecommitteeshallbeanindependentnon-executivedirector a) The followingrulesshallapplyinrelationtothe their dutiesandrolesattheannualgeneralmeeting. committee. Theboardshallpresentareportoftheperformanceoneachcommittee, and maintainminutes,records,etc.,underthesupervisionofchairman directly totheboard.Allcommitteesshallappointasecretaryarrangemeetings 3 (6)(ii),(6)(iii),(iv)and(v)oftheseDirections.Eachcommitteeshallreport management ofthebank’s operationsandbusiness communicated totheboard. communication withshareholdersandthattheviewsofare i theappointmentofexternalauditorforauditservicestobeprovidedin (i) who possessesqualificationsandexperienceinaccountancyand/oraudit. i) theimplementationofCentralBankguidelinesissued toauditorsfrom (ii) ii teapiaino h eeatacutn tnad;adThesignificantaccountingpoliciesthathavebeen theapplication oftherelevantaccountingstandards;and (iii) compliance withtherelevantstatutes; time totime; Audit Committee : permission oftheCentralBankSriLanka. the ChairmanofAuditCommitteemeetingswith and experienceinaccountancyaudit,functionsas Non-Executive Directorandwhoholdsqualifications Alternate DirectortotheExofficioDirector, whoisa this AnnualReportonpages88to94. on theperformanceofeachcommitteeareincludedin supervision oftheChairmenCommittees.Reports subcommittees andmaintainsminutesetc.underthe the BoardhasbeenappointedasSecretarytoall together withtherecommendations.TheSecretaryto reporting directlytotheBoardbysubmittingminutes established asrequiredunderthisDirectionwhichare Governance andIntegratedRiskManagement)havebeen Resources &Remuneration,NominationCorporate Four subcommitteesoftheBoard(viz.Audit,Human Complied. the GeneralManager. The BoardCharterspecificallyreferstosuchauthorityof Complied. communicated. to theBoardandviewsofshareholderarethus of FinanceisalwaysappointedastheExofficioDirector representative oftheMinistryinchargesubject Government ofSriLanka,whoisthesoleshareholder. A Effective communicationismaintainedwiththe General intermsoftheConstitutionSriLanka. Not applicablesincetheBank’s Auditoristhe Complied. recommendations ontheapplication ofsuchpolicies. statements andtheCommitteemakes thenecessary are reviewedbytheCommitteewithfinancial developed basedontheSriLankaAccountingStandards

BANK OF CEYLON ANNUAL REPORT 2011 75 BANK OF CEYLON ANNUAL REPORT 2011 76 Corporate Governance RNILSLEVELOFCOMPLIANCE PRINCIPLES ) Thecommitteeshall,beforetheaudit commences,discussandfinalisewiththe f) Thecommitteeshalldevelopandimplementapolicyontheengagementofan e) Thecommitteeshallreviewandmonitortheexternalauditor’s independence d) ) Thecommitteeshallreviewthefinancialinformationofbank,inorderto g) i) theserviceperiod,auditfeeandanyresignationordismissalofauditor; (iv) ii theco-ordination betweenfirmswheremorethanoneauditfirmisinvolved. (iii) thepreparationoffinancialstatementsforexternalpurposesin accordance (ii) anassessmentofthebank’s compliancewiththerelevantDirectionsin (i) external auditorsthenatureandscopeofaudit,including: whetherthenatureofnon-auditservices,relatedfeelevelsand III. whethertherearesafeguardsinplacetoensurethatisnothreatthe II. whethertheskillsandexperienceofauditfirmmakeitasuitableprovider I. audit services,thecommitteeshallconsider: external auditor’s independenceorobjectivityinrelationtotheprovisionofnon- not impairtheexternalauditor’s independenceorobjectivity. Whenassessingthe shall ensurethattheprovisionbyanexternalauditorofnon-auditservicesdoes statutes, regulations,requirementsandguidelines.Indoingso,thecommittee external auditortoprovidenon-auditservicesthatarepermittedundertherelevant applicable standardsandbestpractices. and objectivitytheeffectivenessofauditprocessesinaccordancewith ii significantadjustmentsarisingfromtheaudit; (iii) anychangesinaccounting policiesandpractices; (ii) majorjudgmentalareas; (i) focus particularlyon: accounts andquarterlyreportsbeforesubmissiontotheboard,committee shall reporting judgmentscontainedtherein.Inreviewingthebank’s annualreportand accounts andquarterlyreportspreparedfordisclosure,thesignificant financial monitor theintegrityoffinancialstatementsbank,itsannualreport, expiry ofthreeyearsfromthedatecompletionpreviousterm. and thattheparticularAuditpartnerisnotre-engagedforauditbefore provided thattheengagementofAuditpartnershallnotexceedfiveyears, with relevantaccountingprinciplesandreportingobligations; financial reporting; relation tocorporategovernanceandthemanagement’s internalcontrolsover threat totheobjectivityand/orindependenceofexternalauditor. fee levelsindividuallyandinaggregaterelativetotheauditfirm,poseany provision ofsuchservicesbytheexternalauditor;and objectivity and/orindependenceintheconductofauditresultingfrom of thenon-auditservices; The AuditorGeneralistheofBank. the ConstitutionofSriLanka. Independence oftheAuditorGeneralisguaranteedunder Sri Lanka. Auditor oftheBankintermsConstitution Not applicableinviewoftheAuditorGeneralbeing monthly, quarterly andannualfinancials. This isacontinuingprocesscarriedoutinreviewing Complied. Direction. Auditor Generaltodiscussthemattersreferredinthis with therelevantmanagementpersonnelmet The ChairmanandMembersoftheAuditCommittee The AuditorGeneralistheofBank. RNILSLEVELOFCOMPLIANCE PRINCIPLES ) Thecommitteeshalltakethefollowingstepswithregardtointernalaudit j) Thecommitteeshallreviewtheexternalauditor’s managementletterandthe i) Thecommitteeshalldiscussissues,problemsandreservationsarisingfromthe h) ) TheCommitteeshallconsiderthemajorfindings ofinternalinvestigationsand k) v thecompliancewithrelevantaccountingstandardsandotherlegal (v) thegoingconcernassumption;and (iv) I Reviewtheadequacyofscope,functionsandresourcesinternal I. function ofthebank: management’s responsethereto. personnel, ifnecessary. those mattersthatmayneedtobediscussedintheabsenceofkeymanagement interim andfinalaudits,anymatterstheauditormaywishtodiscussincluding I Reviewtheinternalauditprogrammeandresultsofprocess II. II Reviewanyappraisalorassessmentoftheperformanceheadand III. v Recommendanyappointmentorterminationofthehead,seniorstaff iv. . Ensurethatthecommitteeisappraisedofresignationsseniorstaff v. i Ensurethattheinternalauditfunctionisindependentofactivitiesitaudits vi. management’s responsesthereto. requirements. authority tocarryoutitswork; audit department,andsatisfyitselfthatthedepartmenthasnecessary recommendations oftheinternalauditdepartment; and, wherenecessary, ensurethatappropriateactionsaretakenonthe senior staffmembersoftheinternalauditdepartment; members andoutsourcedserviceproviderstotheinternalauditfunction; reasons forresigning; resigning seniorstaffmembersandoutsourcedserviceproviderstosubmit and anyoutsourcedserviceproviders,toprovideanopportunitythe members oftheinternalauditdepartmentincludingchiefauditor care; and thatitisperformedwithimpartiality, proficiencyanddueprofessional Follow upactionistakenaccordingly. Complied. discuss anymatterintheabsenceofManagement. and norequestwasmadeintheyearunderreviewto representative ispresentatallAuditCommitteemeetings The AuditorGeneralistheauditorofBankandhis reservations arisingfromtheinterimandfinalaudits. The Committeediscussesissues,problemsand Complied. Complied. tabled beforetheAuditCommittee. evaluation processbytheChiefInternalAuditorandis staff iscarriedoutaccordingtotheBoardapproved the AuditCommittee.Performanceevaluationofsenior Appraisal oftheChiefInternalAuditoriscarriedoutby be withtherecommendationofCommittee. outsourced serviceprovidersaretobeappointeditwould Board approvedpromotionschemeoftheBank.Ifany Board. Otherseniorpositionsarefilledasperthe is recommendedbytheAuditCommitteeto Appointment /terminationofChiefInternalAuditor Complied withwhensuchsituationsarise. Complied. the Bank. Committee andheisindependentof anyoperationsof Auditor reportsdirectlytotheBoard throughtheAudit According totheorganisationstructure,ChiefInternal Complied.

BANK OF CEYLON ANNUAL REPORT 2011 77 BANK OF CEYLON ANNUAL REPORT 2011 78 Corporate Governance RNILSLEVELOFCOMPLIANCE PRINCIPLES 3 (6)(iii) ) Thecommitteeshallhave: m) l Thechieffinanceofficer, thechiefinternalauditorandarepresentativeof l) ) Theboardshalldiscloseinaninformativeway, o) Thecommitteeshallmeetregularly, withduenoticeofissuestobediscussedand n) ) Thecommitteeshalldeterminetheremunerationpolicy(salaries,allowancesand a) Remuneration Committee The followingrulesshallapplyinrelationtothe Thecommitteeshallreviewarrangementsbywhichemployeesofthebankmay, q) Thesecretaryofthecommittee(whomaybecompanyorhead p) i) authoritytoobtainexternalprofessionaladviceandinvite outsiderswith (iv) fullaccesstoinformation;and (iii) theresourceswhichitneedstodoso; (ii) explicitauthoritytoinvestigateintoanymatterwithinitstermsofreference; (i) external auditorswithouttheexecutivedirectorsbeingpresent. committee. However, atleasttwiceayear, thecommitteeshallmeetwith the chiefexecutiveofficermayalsoattendmeetingsuponinvitationof external auditorsmaynormallyattendmeetings.Otherboardmembersand ii detailsofattendanceeachindividualdirectoratsuchmeetings. (iii) thenumberofauditcommitteemeetingsheldinyear;and (ii) detailsoftheactivitiesauditcommittee; (i) shall recorditsconclusionsindischargingdutiesandresponsibilities. key managementpersonnelofthebank. other financialpayments)relatingtodirectors,ChiefExecutiveOfficer(CEO) and body foroverseeingthebank’s relationswiththeexternalauditor. matters andforappropriatefollow-upactiontoactasthekeyrepresentative proper arrangementsareinplaceforthefairandindependentinvestigationofsuch internal controlorothermatters.Accordingly, thecommitteeshallensurethat in confidence,raiseconcernsaboutpossibleimproprietiesfinancialreporting, committee meetings. of theinternalauditfunction)shallrecordandkeepdetailedminutes relevant experiencetoattend,ifnecessary. : Human Resourcesand of Ceylon. There arenoExecutiveDirectorsontheBoardofBank General participateatallCommitteemeetings. General ManagerandarepresentativeoftheAuditor The ChiefFinancialOfficer, theChiefInternalAuditor, the Complied. maintained oftheseCommitteemeetings. the issuestobediscussed.Theminutesaremadeand The Committeemeetsregularlyandgivesduenoticeof Complied. Complied. management personnel. (General ManagerinthecaseofBankCeylon)andkey makes recommendationsontheremunerationofCEO in chargeofthesubjectFinance.TheCommittee once inthreeyearswiththeapprovalofMinister Ministry. Remuneration ofBankOfficialsarereviewed Any deviationismadewiththeapprovalofsaid by theMinistryinchargeofsubjectFinance. Directors’ remunerationisbasedonthecircularsissued significant findingsarereportedtotheCommittee. The BankhasadoptedaWhistleBlowerPolicyand Complied. Complied. and detailsofattendancearegivenonpage95. The Committeemettwelvetimesduringtheyear2011 Committee Reportonpages89and90. Activities oftheCommitteearereportedinAudit Complied. 3 (6)(iv) RNILSLEVELOFCOMPLIANCE PRINCIPLES ) TheCEOshallbepresentatallmeetingsofthecommittee,exceptwhenmatters d) ThecommitteeshallevaluatetheperformanceofCEOandkeymanagement c) Thecommitteeshallsetgoalsandtargetsforthedirectors,CEOkey b) ) Thecommitteeshallsetthecriteriasuchasqualifications,experienceandkey c) Thecommitteeshallconsiderandrecommend(ornotrecommend)there-election b) Thecommitteeshallimplementaproceduretoselect/appointnewdirectors, a) The followingrulesshallapplyinrelationtothe relating totheCEOarebeingdiscussed. incentives. for revisingremuneration,benefitsandotherpaymentsofperformance-based personnel againstthesettargetsandgoalsperiodicallydeterminebasis management personnel. the postofCEOandkeymanagementpositions. attributes requiredforeligibilitytobeconsideredappointmentorpromotion to responsibilities. made bythedirectorconcernedtowardsoveralldischargeofboard’s of currentdirectors,takingintoaccounttheperformanceandcontribution CEO andkeymanagementpersonnel. Nomination Committee : year. Matters relatingtoCEOwerenotdiscussedduringthe Complied. basis bythefullBoard. performance oftheCEOisalsocarriedoutonanannual Board onaperiodicbasis.Aseparateevaluationofthe personnel. Performanceonsameisreviewedbythefull of theCorporatePlanthroughkeymanagement of theBank.CEOisresponsibleforimplementation the ActionPlanpreparedbasedonCorporate management personnelaredocumentedanddetailedin Non-Executive Directors.Goalsandtargetsforthekey No targetsfortheDirectorsaresetsinceallofthem management positions. to beeligibleselectedorpromoted tothekey promotion schemesstipulatetheattributes required No 53of1938anditsamendments. The Boardapproved Finance asspecifiedintheBankofCeylon Ordinance Directors andtheMinisterinchargeofsubject accepted procedurewiththeapprovalofBoard The GeneralManagerisappointedbasedontheBank’s Not applicableinviewofthereasonsgivenabove. in thisregard. of theCommitteegivenonpage92thisAnnualReport recommended bythisCommittee.Pleasereferthereport Bank ofCeylon.Changestosuchapprovedschemesare scheme fortheselection/appointmentofstaff role inthatregard.ThereisaBoardapprovedprocedure/ the subjectofFinanceandhenceCommitteeplaysno The DirectorsareappointedbytheMinisterinchargeof under theTerms ofReferencethisCommittee. applicable corporategovernanceprinciplesareincluded Direction, certainotherdutiespertainingtoupholdingthe duties oftheNominationCommitteegivenunderthis Corporate GovernanceCommittee.Inadditiontothe Bank ofCeylonhasestablishedaNominationand

BANK OF CEYLON ANNUAL REPORT 2011 79 BANK OF CEYLON ANNUAL REPORT 2011 80 Corporate Governance 3 (6)(v) RNILSLEVELOFCOMPLIANCE PRINCIPLES ) Thecommitteeshallassessallrisks,i.e.,credit,market,liquidity, operational and b) Thecommitteeshallconsistofatleastthreenon-executivedirectors,chief a) Committee: The followingrulesshallapplyinrelationtothe TheCommitteeshallbechairedbyan IndependentDirectorandpreferablybe f) Thecommitteeshallconsiderandrecommendfromtimetotime,therequirements e) ) Thecommitteeshallensurethatdirectors,CEOandkeymanagementpersonnel d) companies, riskmanagementshallbedone,bothonabankbasisandgroupbasis. and managementinformation.Inthecaseofsubsidiarycompaniesassociate strategic riskstothebankonamonthlybasisthroughappropriateriskindicators the committee. of theboardwithinframeworkauthorityandresponsibilityassignedto work withkeymanagementpersonnelverycloselyandmakedecisionsonbehalf i.e., credit,market,liquidity, operationalandstrategicrisks.Thecommitteeshall executive officerandkeymanagementpersonnelsupervisingbroadriskcategories, meetings byinvitation. constituted withamajorityofIndependentDirectors.TheCEOmaybepresentat and keymanagementpersonnel. of additional/newexpertiseandthesuccessionarrangementsforretiringdirectors Direction 3(3)andassetoutintheStatutes. are fitandproperpersonstoholdofficeasspecifiedinthecriteriagiven Integrated RiskManagement which includesriskmanagementinthesubsidiaries. subsidiaries (aswellasassociatestotheextentpossible) Directors nominatedbytheBanktoBoardsofits Management Charterforimplementationbyallthe addition, theBankhasintroducedaSubsidiaries studies aredoneasandwhentheneedarises.In conducts workshopsonriskmanagementandimpact In thecaseofsubsidiariesandassociates,Bank submitted totheBoard. Risks areassessedbytheCommitteeasrequiredand their presence. are invitedtothemeetingwhenCommitteeneeds assist theCommittee.Otherkeymanagementpersonnel and theChiefRiskOfficerparticipatesatmeetingsto Officer (referredtoastheGeneralManagerinBank) of threeNon-ExecutiveDirectorsandtheChiefExecutive This CommitteebeingaBoard’s subcommittee,consists Complied. 92 ofthisAnnualReportfordetailsinregard. Please referthereportofCommitteegivenonpage Complied. is inplacewithregardtokeymanagementpersonnel. no roleintheappointmentofDirectors.Asuccessionplan the subjectofFinanceandassuchthisCommitteeplays The DirectorsareappointedbytheMinisterinchargeof this requirement. the requireddeclarationsandaffidavitscomplyingwith The BankhassubmittedtotheCentralofSriLanka Compiled. 7 i Theboardshalltakethenecessarystepstoavoidanyconflictsofinterestthatmay 3 (7)(i) 3 (7)Relatedpartytransactions LEVELOFCOMPLIANCE PRINCIPLES h TheCommitteeshallestablishacompliancefunctiontoassessthebank’s (h) TheCommitteeshallsubmitariskassessmentreportwithinweekofeach g) TheCommitteeshalltakeappropriate actionsagainsttheofficersresponsible f) TheCommitteeshallmeetatleastquarterlytoassessallaspectsofrisk e) TheCommitteeshalltakepromptcorrectiveactiontomitigatetheeffectsof d) TheCommitteeshallreviewtheadequacyandeffectivenessofallmanagement c) ) Aconcerninwhichanyofthebank’s directorsoracloserelationofany of the g) Ashareholderowningamaterialinterestinthebank; f) Acloserelationofanythebank’s directorsorkeymanagementpersonnel; e) Anyofthebank’s keymanagementpersonnel; d) Anyofthedirectorsbank; c) Anyofthebank’s associatecompanies; b) Anyofthebank’s subsidiarycompanies; a) purposes ofthisDirection: following categoriesofpersonswhoshallbeconsideredas“relatedparties” forthe arise fromanytransactionofthebankwithperson,andparticularly function andreporttothecommitteeperiodically. officer selectedfromkeymanagementpersonnelshallcarryoutthecompliance approved policiesonallareasofbusinessoperations.Adedicatedcompliance compliance withlaws,regulations,regulatoryguidelines,internalcontrolsand directions. meeting totheboardseekingboard’s views,concurrenceand/orspecific Supervision. recommended bythecommittee,and/orasdirectedDirectorofBank for failuretoidentifyspecificrisksandtakepromptcorrectiveactionsas management includingupdatedbusinesscontinuityplans. requirements. by thecommitteeonbasisofbank’s policiesandregulatorysupervisory specific risksinthecasesuchareatlevelsbeyondprudentdecided risk limitsasspecifiedbythecommittee. address specificrisksandtomanagethosewithinquantitativequalitative level committeessuchasthecreditcommitteeandasset-liabilityto bank’s directorsoranyofitsmaterialshareholdershasasubstantialinterest. compliance reportstotheCommitteeandBoard. The ComplianceOfficersubmitsmonthlyandquarterly areas ofbusinessoperations. guidelines, internalcontrolsandapprovedpoliciesonall assess itscompliancewithlaws,regulations,regulatory Compliance unithasbeenestablishedattheBankto Board meeting. Committee meetingsaresubmittedtothenextimmediate are placedbeforetheBoard.Inadditionminutesof Risk assessmentreportssubmittedtotheCommittee Bank. Complied withsubjecttotheDisciplinaryCodeof Report. Compiled. Detailsaredisclosedonpage95ofthisAnnual Compiled. Compiled. Annual Report. “Related PartyDisclosures”onpages259to263ofthis normal courseofbusinessaredisclosedinNote49on Transactions carriedoutwithrelatedpartiesinthe system. Transactions aremonitoredthroughanautomated A policyonRelatedPartyTransactions hasbeenadopted. Complied.

BANK OF CEYLON ANNUAL REPORT 2011 81 BANK OF CEYLON ANNUAL REPORT 2011 82 Corporate Governance RNILSLEVELOFCOMPLIANCE Theboardshallensurethatthebankdoesnotengageintransactionswithrelated 3 (7)(iii) Thetypeoftransactions withrelatedpartiesthatshallbecoveredbythisDirection 3 (7)(ii) PRINCIPLES 7 i)Abank shallnotgrantanyaccommodationtoofitsdirectorsor acloserelation 3 (7)(iv) ) Maintainingreportinglinesandinformationflowsthatmayleadtosharing e) Providingservicestoorreceivingfromarelated-party withoutan d) Providingofpreferentialtreatment, suchasfavourableterms,coveringtrade c) Chargingofalowerrateinterestthanthebank’s bestlendingrateorpaying b) Grantingof“totalnetaccommodation”torelatedparties,exceedingaprudent a) and includetreatment,includingthe: carrying onthesamebusiness.Inthiscontext,“morefavourabletreatment”shallmean “more favourabletreatment”thanthataccordedtootherconstituentsofthebank parties asdefinedinDirection3(7)(i)above,amannerthatwouldgrantsuch Thecreationormaintenanceofreportinglinesandinformationflowsbetween d) Theprovisionofanyservicesafinancialornon-financialnatureprovidedtothe c) Thecreationofanyliabilitiesthebankinformdeposits,borrowingsand b) Thegrantofanytypeaccommodation,asdefinedintheMonetaryBoard’s a) shall includethefollowing: Board aswell. be securedbysuchsecurityasmay from timetobedeterminedbytheMonetary director concerned,votinginfavour of suchaccommodation.Thisaccommodationshall of directors,withnotlessthantwo-thirds ofthenumberdirectorsotherthan of suchdirectorunlessaccommodation issanctionedatameetingofitsboard parties, exceptasrequiredfortheperformanceoflegitimatedutiesand functions. potentially proprietary, confidentialorotherwisesensitiveinformationwithrelated evaluation procedure; the normalcourseofbusinessundertakenwithunrelatedparties; losses and/orwaivingfees/commissions,thatextendbeyondtheterms granted in comparable counterparty; more thanthebank’s depositrateforacomparabletransactionwithanunrelated The“totalnetaccommodation”shallbecomputedbydeductingfromthetotal ii. “Accommodation”shallmeanaccommodationasdefinedintheBankingAct i. purposes ofthissub-direction: percentage ofthebank’s regulatorycapital,asdeterminedbytheboard.For to suchrelatedparties. proprietary, confidentialorotherwisesensitiveinformationthatmaygivebenefits the bankandanyrelatedpartieswhichmayleadtosharingofpotentially bank orreceivedfromthebank, investments, Directions onmaximumamountofaccommodation, years ormore. parties inthebank’s sharecapitalanddebtinstrumentswithamaturityof5 accommodation, thecashcollateralandinvestmentsmadebysuchrelated Directions, No.7of2007onMaximumAmountAccommodation. 263 ofthisAnnualReport. Note 49on“RelatedPartyDisclosures”pages259to out inthenormalcourseofbusinessisdisclosed Information inthisregard,whicharetransactionscarried Complied. with its related parties in the manner declared under 3(7)(i). with itsrelatedpartiesinthemannerdeclaredunder3(7)(i). interest thatmayarisefromanytransactionoftheBank The Boardtakesnecessarystepstoavoidanyconflictsof Complied. Complied. 8 i h or hl nueta:Complied. The boardshallensurethat: 3 (8)(i) 3 (8)Disclosures LEVELOFCOMPLIANCE Whereanyaccommodationhasbeengrantedbyabanktopersonorclose a) 3 (7)(v) PRINCIPLES 8 i)TheboardshallensurethatthefollowingminimumdisclosuresaremadeinAnnual 3 (8)(ii) Abankshallnotgrantanyaccommodationor“morefavourabletreatment”relating 3 (7)(vi) 7 vi Noaccommodationgrantedbyabankunder Direction3(7)(v)and3(7)(vi)above,norany 3 (7)(vii) . suchstatementsarepublishedinthenewspapersanabridgedform,Sinhala, b. annualauditedfinancialstatementsandquarterlyare a. Thissub-direction,however, shallnotapplytoadirectorwhoatthetimeof d) Anydirectorwhofailstocomplywiththeabovesub-directionsshallbedeemed c) WheresuchsecurityisnotprovidedbytheperiodasinDirection3(7)(v) b) ) Astatementtotheeffectthatannualauditedfinancialstatementshave been a) Report: accommodation grantedasperDirection3(7)(v)above. or whensecuredbysecurityasmaybeapprovedtheMonetaryBoardinrespectof interest otherthanonthebasisofaschemeapplicabletoemployeessuchbank employee ortoanyconcerninwhichthecloserelationhasasubstantial to thewaiveroffeesand/orcommissionsanyemployeeoracloserelationsuch void andofnoeffect. prior approvaloftheMonetaryBoardandanyremissionwithoutsuchshallbe part ofsuchaccommodation,noranyinterestduethereonshallberemittedwithoutthe appointment ofthepersonasadirector. approved forthatpurposebytheMonetaryBoard,withinoneyearfromdateof steps shallbetakenbythebanktoobtainnecessarysecurityasmay interest, andsuchpersonissubsequentlyappointedasadirectorofthebank, relation ofapersonortoanyconcerninwhichthehassubstantial Tamil andEnglish. that supervisory andregulatoryauthoritiesapplicableaccountingstandards, and prepared andpublishedinaccordancewiththeformatsprescribedby was grantedunderaschemeapplicabletoallemployeesofsuchbank. grant oftheaccommodationwasanemployeebankand public. to havevacatedtheofficeofdirectorandbankshalldisclosesuchfact from thedateofappointmentsuchdirector, whicheverisearlier. time ofthegrantaccommodationoratexpiryaperiodeighteenmonths accommodation, togetherwithinterest,ifany, withintheperiodspecifiedat (a) above,thebankshalltakestepstorecoveranyamountdueonaccountof inclusive ofspecificdisclosures. prepared inlinewithapplicableaccounting standardsandregulatoryrequirements, addresses this. review. Theautomatedsystemmentionedunder3(7)(i) No suchsituationhasarisenduringtheyearunder Complied. documented. of theBank.Procedureinpracticethisregardwouldbe general staffloanschemesapplicabletoallemployees of theBankonmorefavourabletermsunlessunder No accommodationhasbeengrantedtoanyemployee No sucheventtookplaceduringtheyearunderreview. Complied.

BANK OF CEYLON ANNUAL REPORT 2011 83 BANK OF CEYLON ANNUAL REPORT 2011 84 Corporate Governance 9 i CompliancewiththisDirectionshallcommence fromJanuary012008onwardsand 3 (9)(i) 3 (9)Transitional andothergeneralprovisions LEVELOFCOMPLIANCE PRINCIPLES i Astatementoftheregulatoryandsupervisoryconcernsonlapsesinbank’s risk i) Areportsettingoutdetailsofthecompliancewithprudentialrequirements, h) Theexternalauditor’s certificationofthecompliancewiththeseDirectionsin g) Theaggregatevaluesofremuneration paidbythebanktoitskeymanagement f) Total netaccommodationasdefinedin3(7)(iii)grantedtoeachcategoryofrelated e) Detailsofdirectors,includingnames,fitnessandpropriety, transactionswiththe d) Theexternalauditor’s certification ontheeffectivenessofinternalcontrol c) ) Areportbytheboardonbank’s internalcontrol mechanismthatconfirms b) specifically provided forinthisDirection by orbeforeJanuary012009except whereextendedcompliancedateshavebeen all licensedcommercialbanksshall fully complywiththeprovisionsofthisDirection such concerns. disclosed tothepublic,togetherwithmeasurestakenbybank address by theDirectorofBankSupervision,ifsodirectedMonetaryBoard tobe management, ornon-compliancewiththeseDirectionsthathavebeenpointed out non-compliances. regulations, lawsandinternalcontrolsmeasurestakentorectifyany material annual corporategovernancereportspublishedafterJanuary1,2010. accommodation grantedanddepositsorinvestmentsmadeinthebank. management personnel,setoutbybroadcategoriessuchasremunerationpaid, personnel andtheaggregatevaluesoftransactionsbankwithitskey also bedisclosedasapercentageofthebank’s regulatorycapital. parties. Thenetaccommodationgrantedtoeachcategoryofrelatedpartiesshall bank andthetotaloffees/remunerationpaidbybank. prepared orpublishedafterDecember31,2008. mechanism referredtoinDirection3(8)(ii)(b)above,respectofanystatements accounting principlesandregulatoryrequirements. statements forexternalpurposeshasbeendoneinaccordancewithrelevant regarding thereliabilityoffinancialreporting,andthatpreparation the financialreportingsystemhasbeendesignedtoprovidereasonableassurance No suchsituationhasarisen. regulations, lawsandinternalcontrolsaffectingtheBank. no materialnon-compliancetoprudentialrequirements, Please referpage64ofthisAnnualReport.Therewere Complied. this regard. General willbedealtwithin2012.Alsoreferpage87in engagement. AnyrecommendationsmadebytheAuditor on theauditingframeworkissuedbyICASLforthis requirements underDirectionNo.11of2007,based of compliance/factualfindingsonthe The AuditorGeneralhasgivenareportonthestatus Disclosures” Please referpages259to263under“RelatedParty Complied. Please referNote49onpages259to263fordetails. Complied. on Directors'fees. transactions andfeespage197forspecificamount pages 259to263onRelatedPartyDisclosuresfor Please referpages18and19fordetailsofDirectors, Complied. Chartered AccountantsofSriLanka.(ICASL) on theauditingframeworkissuedbyTheInstituteof internal controlmechanismoverfinancialreportingbased The BankhasobtainedanAssuranceReportonthe Complied. Please referpage169. Complied. Complied. of CharteredAccountantsSriLankaareindicatedbelow- Level ofcompliancewiththeCodeBestPracticeonCorporateGovernanceissuedjointlybySecuritiesandExchangeCommis New Directors Appointment of ujc icoueResponse Disclosure ShouldidentifytheIndependentNon-ExecutiveDirectors. • Board Balance CEO Chairman and Subject LEVELOFCOMPLIANCE Inrespectofthebanksthat havebeenincorporatedbyspecificstatutesinSriLanka, 3 (9)(ii) PRINCIPLES 9 v IfforanyreasonsuchasillhealthorincapacityprovidedintheBankingAct, 3 (9)(v) IntheeventofaconflictbetweenanyprovisionsthisDirectionand 3 (9)(iv) ThisDirectionshallapplytothebranchesofforeignbanksoperatinginSriLanka 3 (9)(iii) respective statutes. provisions ofthisDirectionthatarenotinconsistentwiththe provisions oftherespectivestatutes,providedtheytakestepstocomplywithall the boardsasspecifiedinsuchstatutesshallcontinuetofunctiontermsof exemption. the MonetaryBoard,andafterahearing,Boardmaylimitperiodof A and3(3)(ii)shouldnotbeavailedof,suchgroundmaynotifiedtothepersonby Monetary BoardconsidersthatexemptionsreferredtoinDirections3(2)(ii)B,(3)(i) Articles ofAssociationmaybefollowed. a morestringentstandardthanthatspecifiedinthisDirection,suchprovisionsthe Direction shallprevail.However, iftheArticlesofAssociationanindividualbankset Articles ofAssociation(orInternalRules)pertainingtoanybank,theprovisionsthis accounts ofthebranchoperationsinSriLanka. parent bank’s annualcorporategovernancereporttogetherwithitsand such bank’s countryofincorporation.Thebranchaforeignbankshallalsopublishits to theextentthatitisnotinconsistentwithregulationsandlawsapplicablein whethersuchdirectorcanbeconsideredindependent. • and thenamesofcompaniesinwhichDirectorholdsdirectorshipsor • thenatureofhisexpertiseinrelevantfunctionalareas; • abriefresumeofeachsuchdirector; • When newdirectorsareappointed,thefollowingdetailsshouldbedisclosed. IfaNon-ExecutiveDirectorisidentifiedas“Independent”,notwithstanding • decision tocombinethepositions Chairman/CEO andSeniorIndependentDirectorappointedjustification ofthe If ChairmanandCEOisonethesameperson,discloseNameof the memberships inboardcommittees; determination shouldbedisclosed. the existenceofanyfactors,giveninDirectionreasonfor such above againsttherelevantsections. statutes applicabletoithasbeenspecificallymentioned continued tofunctionintermsoftheprovisions Any non-compliancesandwhereBankofCeylonhas enactment. Ordinary No53of1938anditsamendments,theenabling not inconsistentwiththeprovisionsofBankCeylon with allapplicableprovisionsofthisDirectionthatare Bank ofCeylonhastakenallpossiblemeasurestocomply Not applicable Not applicable Not applicable Complied. Lanka issuedbytheCentralBankofSriLanka. Governance forLicensedCommercialBanksinSri Banking ActDirectionNo.11of2007onCorporate Independent Directorsareidentifiedasperthe individuals. The postsofChairmanandCEOareheldbytwo sion ofSriLanka&theInstitute

BANK OF CEYLON ANNUAL REPORT 2011 85 BANK OF CEYLON ANNUAL REPORT 2011 86 Corporate Governance Committee Remuneration Members of ShouldreportthattheCompanyisagoingconcern,withsupportingassumptionsand Going Concern Ethics Conduct and Code ofBusiness Response NamesoftheMembers theAuditCommitteeshouldbedisclosed. • Audit Committee Transactions Major Remuneration Disclosure of Disclosure Disclosures Board Related performance of Board Appraisal Committee Nomination Subject Remuneration CommitteeReport The namesofmembersRemunerationCommitteeshouldbedisclosed inthe qualifications asnecessary. TheChairmanmustcertifythathe/sheisnotawareofanyviolationthe • Shouldalsodiscloseanaffirmativedeclarationthattheyhaveabidedbysuch • ShoulddisclosewhethertheCompanyhasaCodeofBusinessConduct&Ethics • Complied. Basisfordeterminingtheindependenceofauditors. • All MajorTransactions enteredintobytheCompanyshouldbedisclosed. AStatementofRemunerationPolicy anddetailsofremunerationtheBoardas • number/percentageofcommittee meetingsattendedduringtheyear. • namesoftheCommitteesinwhich theDirectorservesasChairmanora • number/percentageofboardmeetings oftheCompanyattendedduringyear; • namesofcompaniesinwhichthe Directorconcernedservesasadirectorand/or • namesofotherlistedcompanies inSriLankawhichtheDirectorconcerned • immediatefamilyand/ormaterialbusinessrelationshipswithotherdirectorsof • name,qualificationandbriefprofile; Pleaseseepage92. • The followingdetailspertainingtoeachDirectorshouldbedisclosed. Should disclosehowperformanceevaluationshavebeenconducted. Complied.Pleasereferpage92ofthisAnnual The ChairmanandmembersoftheNominationCommitteeshouldbeidentified. provisions ofthisCode. Code. for directorsandmembersoftheseniormanagementteam. a whole. member; and the factthathe/sheholdsotherdirectorshipsinGroupCompanies; serves asadirector; the Company; Complied. Compliance certificatesareobtainedannually. separate CodeofEthicsforemployees. Bank hasaCodeofEthicsforDirectors.Thereis remuneration oftheBoardforyear2011. Remuneration Policy. Pleasereferpage197for Please referpage91forinformationon Annual Report. Remuneration CommitteeReporton page91ofthis Committee aregivenintheHumanResources and Names oftheMembersRemuneration Complied. Complied. the Constitution. independence oftheAuditorGeneralisensuredby as enshrinedintheConstitutionofSriLanka.The The AuditoroftheBankisGeneral and 90. given intheAuditCommitteeReportonpages89 Names ofMemberstheAuditCommitteeare Page 95 Page 88 Page 95 Pages 18and19 Pages 18and19 relationships. Directors haveconfirmedthattheynosuch Pages 18and19 Annual Report- Complied. Pleasereferfollowingpagesofthis Governance Committee. Report fordetailsoftheNomination&Corporate aaiSnnyk iiadn Dr. GaminiWickramasinghe Colombo 21st March2012 Secretary totheBoard Secretary, Janaki SenanayakeSiriwardane Bank of did notidentifyanysignificantinconsistenciestothosereportedaboveby theBoard. on CorporateGovernanceissuedbytheCentralBankofSriLanka.Hisfindings giveninhisreport,werenotmateriallydifferen upon proceduresengagementsissuedbyTheInstituteofCharteredAccountants ofSriLanka,tomeetthecompliancerequiremento Ceylon/ The AuditorGeneralhasperformedproceduresinaccordancewiththeprinciples setoutinSriLankaStandardsonRelatedServi Chairman Report FromtheAuditorGeneralonComplianceRequirement oftheCorporateGovernanceDirectionNo.112007 Report Audit Committee Report Governance Response Corporate Report TheBoardofDirectorsshouldincludeaStatementResponsibilityforthe • Management Statements Financial Disclosure ShouldcontainthefollowingdeclarationsmadebyDirectors Directors Report Subject hudstottewr are u yteCmite Complied.Pleasereferpages89and90. Should setouttheworkcarriedbyCommittee. principles andprovisionsoftheCode. Should disclosethemannerandextenttowhichCompanyhascompliedwith prospectsforthefuture. • materialdevelopmentsinhuman resources/industrialrelations;and • financialperformance; • socialandenvironmentalprotection activitiescarriedoutbytheCompany; • internalcontrolsystemsandtheiradequacy; • risksandconcerns; • opportunitiesandthreats; • industrystructureanddevelopments; • the followingissues: Should includea‘ManagementDiscussionandAnalysisReport’discussingatleast Auditorsshouldalsohaveastatement abouttheirreportingresponsibility • Theyhaveconductedareview of internalcontrolscoveringfinancial,operational • Thebusinessisagoingconcernwithsupportingassumptionsorqualificationsas • TheCompanyhasmadeallendeavourstoensuretheequitabletreatmentof • TheDirectorshavedeclaredallmaterialinterestsincontractsinvolvingthe • TheCompanyhasnotengagedinanyactivities,whichcontraveneslawsand • preparation andpresentationoffinancialstatements. assurance oftheireffectivenessandsuccessfuladherenceherewith. and compliancecontrolsriskmanagementhaveobtainedreasonable necessary; and shareholders; interested; Company andrefrainedfromvotingonmattersinwhichtheywerematerially regulations; Sri Lanka. Bank hasonlyoneshareholder, theGovernmentof Complied. Complied bythisexercise. Complied. Pleasereferpages30to55. Complied. Referpage173. Complied. Referpage172. t tothemattersdisclosedaboveand ces 4400applicabletoagreed- f theDirectionNo.11of2007

BANK OF CEYLON ANNUAL REPORT 2011 87 BoardBoard & Board Subcommittees & Board of Directors

• Dr. Gamini Wickramasinghe (Chairman) Independent Non - Executive Director

• Mr. S.R. Attygalle Non - Executive Ex officio Director Board• Mr. Raju Sivaraman Independent Non - Executive Director

• Ms. Nalini Abeywardene Non - Executive Director

• Mr. Chandrasiri de Silva Non - Executive Director

• Mr. K.L. Hewage Subcom- Independent Non - Executive Director • Mr. V. Kanagasabapathy Non - Executive Alternate Director to Mr. S.R. Attygalle, Ex officio Director mittees88

Human Resources & Nomination & Integrated Risk Audit Committee Remuneration Corporate Management Committee Governance Committee Committee Chairman Chairperson Chairman Chairman Mr. V. Kanagasabapathy Ms. Nalini Abeywardene Mr. Raju Sivaraman Mr. V. Kanagasabapathy (Alternate Director to (Alternate Director to Mr. S.R. Attygalle) Members Members Mr. S.R. Attygalle) Mr. Raju Sivaraman Mr. S.R. Attygalle Members Mr. Chandrasiri de Silva (or his alternate Members Mr. Raju Sivaraman Mr. K.L. Hewage Mr. V. Kanagasabapathy) Mr. Raju Sivaraman Mr. K.L. Hewage Mr. K.L. Hewage Mr. K.L. Hewage BANK OF CEYLON ANNUAL REPORT 2011 mittees Subcom of Board Report Report ofBoardSubcommittees Report The followingDirectorsservedasthe Non-Executive DirectorsoftheBoard. The AuditCommitteecomprisesthree Composition andQuorum RegularlyupdatetheBoardabout • EnsuringthattheBoardismade • Evaluatingtheadequacyand • Reviewingtheinternal • Monitoring,reviewingand • Reviewingthefinancial • include interalia;thefollowing; Charter oftheAuditCommittee, which areclearlyidentifiedinthe The mainroleandresponsibilities, Role oftheCommittee Report Audit Committee appropriate recommendations. Committee activitiesandmake business, inatimelymanner. condition oraffairsofthe significantly impactthefinancial aware ofmatterswhichmay effectiveness ofinternalcontrols. responses tothem. together withManagement’s subsequent followupaudits management lettersand audit reports,external internal auditfunction. effectiveness oftheBank’s evaluating theadequacyand report, accountsetc. financial statements,itsannual monitor theintegrityofBank’s information oftheBankinorderto members. The quorumoftheCommitteeistwo appearing onpages18and19. the Directors’biographicaldetails by thememberscanbeseenfrom to theCommitteefrompositionsheld The widerangeofexperiencebrought arrangement. concurrence obtainedforsuch Sri Lankawasinformedandits of theBank.TheCentralBank Lanka, whichisthesoleshareholder represents theGovernmentofSri Direction No.11of2007ashe Independent Directorinthesaid terms ofthedefinitiongivenforan be consideredindependentin Committee, eventhoughhecannot to chairthemeetingsofAudit with experienceinthefieldsrequired, services ofaCharteredAccountant or audit.BankofCeylonisusingthe and experienceinaccountancyand/ independent andholdqualifications the AuditCommitteeshouldbe of SriLanka,theChairman Banks issuedbytheCentralBank Governance forLicensedCommercial No. 11of2007onCorporate According toBankingActDirection Mr. K.L.Hewage- Mr. RajuSivaraman- Attygalle, ExofficioDirector) (Alternate DirectortoMr. S.R. Mr. V. Kanagasabapathy- year underreview- members oftheCommitteeduring Member Member Chairman

Committee. functions astheSecretaryto of Ceylon/SecretarytotheBoard presence. TheSecretary, Bank when theCommitteerequirestheir are invitedtoattendthemeetings other staffmembersoftheBank members oftheManagementand meetings byinvitation.Theother The GeneralManagerattendsthe Management ontheCommittee. There arenomembersofthe necessary. the Management’s presencewhen to meettheCommitteewithout is availabletotheExternalAuditor present atthemeetings.Opportunity Chief FinancialOfﬁceroftheBankare Bank), ChiefInternalAuditorandthe General (ExternalAuditorofthe A representativeoftheAuditor Effectiveness ofthe • Internal Audit under review- following activitiesduringtheyear The Committeecarriedoutthe available. memoranda fordiscussionweremade of meetingstogetherwithdetails/ 95. Forallthesemeetingsduenotice meetings isgiveninthetableonpage attendance ofCommitteemembersat during theyearunderreview. The The Committeemet12times Meetings andActivities monitored bywayofregular Audit Planforyear2011was implementation oftheInternal

Reviewedtheresponses • Reviewedthereportof • External Audit Formulatingofasystemto • ApprovedtheInternalAuditPlan • AuditCommitteeCharterwas • ReviewedtheBusinessContinuity • Reviewedsignificantinternal • matters referredtointhe by theManagementon Committee onPublicEnterprises submitted totheParliamentary issues highlighted. Bank toavoidrecurrenceofthe corrective measurestakenbythe thereto andfolloweduponthe Letter, Management’s responses December 2010,Management the Bankforyearended31st of SriLankaontheaccounts Auditor GeneraltotheParliament ICOs isstillinprogress. Officers (ICOs)andperformanceof responsibilities ofInternalControl monitor andcontrolthefunctional for year2012. reviewed andupdated. Bank. Plan/Disaster RecoveryPlanofthe avoid recurrenceinfuture. taking timelycorrectiveactionto responses theretowithaviewto audit findingsandManagement’s necessary. up actionwastakenwhere reports andappropriatefollow -

BANK OF CEYLON ANNUAL REPORT 2011 89 BANK OF CEYLON ANNUAL REPORT 2011 90 AssistedtheBoardinensuring • Financial Reporting Reviewedthereportsof • Arrangedandhelddiscussions • Reviewedthequarterlyreview • Report ofBoardSubcommittees Report accounting standards. authorities andapplicable the supervisoryandregulatory the requirementsprescribedby published inaccordancewith statements arepreparedand statements andquarterlyfinancial that annualauditedfinancial recommendations. action andfollowinguponthe with aviewtotakingcorrective Branch andChennai in respectoftheBank’s Male’ Male’ andIndiarespectively, the regulatorsforbanksin and ReserveBankofIndia, Maldivian MonetaryAuthority issued byCBSL. 2007 onCorporateGovernance Banking ActDirectionNo.11of of auditincompliancewiththe finalise thenatureandscope during theyeartodiscussand with theAuditorGeneraltwice action onoutstandingissues. by CBSLwithaviewtoexpediting Statutory Examinationscarriedout Bank ofSriLanka(CBSL)onthe reports submittedtotheCentral Parliament. Auditor General’s Reporttothe Initiatedafollowupmeetingwith • Supervision andauditof Anawarenessprogramme • Awareness Programmes Reviewedcomplianceunder • Recommendedtheappointment • Reviewedquarterlyfinancial • ReviewedtheInternalControls. • Committee toprovideaframework on aninitiativeoftheAudit Management Charter, introduced based ontheSubsidiaries discussing theirperformance the subsidiariesandassociates appointed bytheAuditorGeneral. Managers andprivateauditfirms collective presenceofbothBranch Committee byarrangingthe facilitated throughtheAudit carrying outBranchauditswas guidelines andinstructionsin appointed byhimtogivethem for theprivateauditfirms arranged bytheAuditorGeneral Corporate Governance. progress oftheimplementation. (IFRS) andfollowinguponthe Financial ReportingStandards implementation ofInternational professional assistanceforthe Accountants toobtain of areputedfirmChartered statements forpublication. of BankCeylon Subsidiaries &Associates resolved/action taken. which 111wereinvestigatedand complaints werereceived,outof in 2011.Duringtheperiod119 review. Thispolicy wasreviewed operation duringtheyearunder the WhistleBlowerPolicywasin audit mattersetc.referredtoas accounting, internalcontroland received bytheBankregarding retention andtreatmentofcomplaints The procedureforthereceipt, Procedure ForComplaints basis. on outstandingmattersaregular Committee. Followupactionistaken the recommendationsmadeby is obtainedforimplementationof Board andapprovalofthe and ratifiedatmeetingsofthe the Committeemeetingsaretabled Board Secretariat.Allminutesof proceedings aremaintainedatthe Adequate minutesoftheCommittee Minutes/Reporting totheBoard ApprovedtheAnnualCalendarof • IntroducedaPolicyonConflictof • Other activities 2012. the AuditCommitteeforyear Interest. and associatesshouldfunction. Directors onBank’s subsidiaries within whichtheNominee Colombo 16th March2012 Chairman, AuditCommittee V. Kanagasabapathy any materialmisstatements. the auditedaccountsarefreefrom position andtheresultsdisclosedin safeguarded andthatthefinancial assurance thattheBank’s assetsare are inplacetoprovidereasonable necessary ‘checks&balances’ the Committeeisofviewthat this AnnualReport.Accordingly, report onitisgivenelsewherein the DirectorsandAuditorGeneral’s Statement onInternalControlby the Bank. adequacy oftheInternalControls Committee regularlyreviewsthe due professionalcare.TheAudit with impartiality, proficiencyand it auditsandthatisperformed Bank isindependentoftheactivities that theinternalauditfunctionof Auditor. TheCommitteeisconfident performance oftheChiefInternal Audit functionfor2011andthe out. ItalsoevaluatedtheInternal of theCommitteewascarried A selfevaluationoftheperformance Conclusion following servedasthemembersof is aNon-ExecutiveDirector. The Chairperson oftheCommittee four membersoftheBoard.The The Committeecomprisesof Composition andQuorum DeterminingtheHumanResource • Reviewingstaffmattersreferred • Evaluatingtheperformanceof • Settinggoalsandtargetsforthe • Determiningtheremuneration • Sri Lankaareasfollows- Lanka issuedbytheCentralBankof Licensed CommercialBanksinSri of 2007onCorporateGovernancefor on theBankingActDirectionNo.11 Committee, whicharemainlybased The mainresponsibilitiesofthe Role oftheCommittee Committee Report and Remuneration Human Resources Structure oftheBank. Policy andOrganisational to itbytheBoard. incentives. payments ofperformancebased remuneration, benefitsandother determining thebasisforrevising targets andgoalsperiodically the GMandKMPagainstset GM andKMP. (KMP) oftheBank. and KeyManagementPersonnel to theGeneralManager(GM) other financialpayments)relating policy (salaries,allowancesand Secretary totheCommittee. Secretary totheBoardfunctionsas The Secretary, BankofCeylon/ Committee requirestheirpresence. to attendthemeetingswhen other membersofthestaffareinvited relating totheGMarediscussed.The all meetingsexceptwhenmatters two members.TheGMispresentat The quorumoftheCommitteeis Mr. K.L.Hewage-Member Member Mr. ChandrasirideSilva- Mr. RajuSivaraman-Member Chairperson Ms. NaliniAbeywardene- review. the Committeeduringyearunder Directors isdeterminedinaccordance Bank ofCeylon,theremuneration Directors. However, inthecaseof remuneration policyrelatingto Committee hastodeterminethe Act DirectionNo.11of2007,this According toaforesaidBanking basis. on outstandingmattersaregular Committee. Followupactionistaken the recommendationsmadeby obtained forimplementationof and approvaloftheBoardthusis and ratifiedatmeetingsoftheBoard the Committeemeetingsaretabled is giveninpage95.Allminutesof attendance ofmembersatmeetings during theyearunderreview. The The Committeehasmet4times Meetings &Activities on theActionPlan andreporttothe of KMPbasedonthe achievements for theGMtoevaluateperformance procedures adoptedintheBankis With regardtoevaluatingKMPthe the CorporatePlanthroughKMP. responsible fortheimplementationof Plan andActionPlan.TheGMis are embodiedintherollingCorporate Goals andtargetsforGMKMP 2012. The nextsalaryrevisionisduein was nosalaryrevisioninyear2011. makes itsrecommendation.There deliberates ontheproposalsand the salaryrevision,Committee Ceylon Ordinance.Priortofinalising provisions oftheaforesaidBank of Financeinaccordancewiththe the Ministerinchargeofsubject once in3yearswiththeapprovalof including theGMandKMPisrevised The remunerationofemployees on ayearlybasis. fully disclosedintheAnnualReport remuneration giventoDirectorsare by theMinistry. Thedetailsofthe when newregulationsareissued provisions, whichisreviewedasand place preparedbasedontheabove Bank hasaremunerationpolicyin and benefitsgiventothem.The regard totheDirectors’remuneration also takenintoconsiderationwith that establishedBankofCeylonare amendments, theActofParliament Ordinance No.53of1938andits The provisionsintheBankofCeylon of SriLanka,thesoleshareholder. Planning onbehalfoftheGovernment issued bytheMinistryofFinance& with thecircularsandinstructions carried outofrecentrecruitments. recruitment withadetailedanalysis process ofreviewingthepolicyon The Committeehasinitiatedthe doing it.Thispolicyisnowinplace. be considered,andtheprocedureof grounds thecommendationsshould Policy, whichwouldindicateonwhat the finalisationofCommendation Committee alsorequiredexpediting promotions totheabovegrades.The committee formedtoreviewthe based onthereportofspecial Manager &DeputyGeneral the postsofAssistantGeneral the existingselectioncriteriafor In thisyear, theCommitteereviewed Directors areNon-Executive. Directors arenotgivensinceallthe Board fortheirratification.Targets for Colombo 16th March2012 Committee Human Resources&Remuneration Chairperson, Nalini Abeywardene remuneration matters. in regardtohumanresourceand Board initsoversightresponsibilities The Committeeshallassistthe Conclusion

BANK OF CEYLON ANNUAL REPORT 2011 91 BANK OF CEYLON ANNUAL REPORT 2011 92 Reviewing periodicallytheBank’s • Determiningthemethods • Consideringandrecommending • EnsuringthatGMandKMPare • Settingthecriteriasuchas • Implementingproceduresto • for thefollowing: The Committeeismainlyresponsible Role oftheCommittee Committee Report Governance and Corporate Nomination Report ofBoardSubcommittees Report Code ofEthics. process. annual performanceevaluation effectiveness andsupportingthe and eachBoardCommittee’s evaluations oftheBoard’s and executionoftheannual arrangements forKMP. new expertiseandsuccession requirements ofadditional/ from timetotime,the statutes. of SriLankaandassetoutinthe Lanka issuedbytheCentralBank Licensed CommercialBanksinSri 2007 onCorporateGovernancefor Banking ActDirectionNo.11of given inDirectionNo.3(3)ofthe office asspecifiedinthecriteria fit andproperpersonstohold the keymanagementpositions. promotion tothepostofGMand considered forappointmentor key attributesforeligibilitytobe qualifications, experienceand Management Personnel(KMP). Manager (GM)andKey select/appoint theGeneral the caseofBank Ceylon,which appoint newdirectors.However, in implement aproceduretoselect/ Nomination Committeehasto Act DirectionNo.11of2007,the According totheaforesaidBanking basis. on outstandingmattersaregular Committee. Followupactionistaken the recommendationsmadeby is obtainedforimplementationof the Boardandapprovalof are tabledandratifiedatmeetingsof minutes oftheCommitteemeetings at meetingsisgivenonpage95.All attendance ofCommitteeMembers during theyearunderreview. The The Committeemet4times Meetings andActivities Committee. functions astheSecretaryto of Ceylon/SecretarytotheBoard presence. TheSecretary, Bank when theCommitteerequirestheir are invitedtoattendthemeetings invitation. Othermembersofstaff GM attendsthemeetingsby Mr. K.L.Hewage-Member Kanagasabapathy) (or hisalternateMr. V. Mr.S.R.Attygalle -Member Mr. RajuSivaraman-Chairman review: Committee duringtheyearunder Directors servedasmembersofthe Non-Executive Director. Thefollowing of theCommitteeisanIndependent members oftheBoard.TheChairman The Committeecomprisesofthree Committee The Compositionofthe Facilitated theBoardin • • Recommended identifying Initiatedrevisitingthe • Initiateddevelopingatalentpool • Discussedandfolloweduponthe • Ensuredthatapprovedpromotion • Recommendedanewperformance • RecommendedthePolicyon • activities - Committee carriedoutthefollowing During theyearunderreview, the appointment ofDirectors. play anyroleinconnectionwiththe Nomination Committeedoesnot & itsamendments.Assuchthe Ceylon OrdinanceNo.53of1938 Finance, asprovidedintheBankof Minister inchargeofthesubject Directors arecarriedoutbythe of SriLanka,theappointment is whollyownedbytheGovernment carrying outitsself evaluation Directors. relevant exposureprogrammesto organisation structureoftheBank. in differentmanageriallevels. the presentrequirements. Policy takingintoconsideration preparation ofanewPromotion General Manager. a DeputyGeneralManagerand set ofcriteriarequiredtobecome Recommended documentingthe General Managers)oftheBank. General Manager&Deputy available toselecttheKMP(viz. schemes andproceduresare the KMP. be appliedbankwideincluding and potentialappraisalsystemto Succession Planforadoption. Reviewedtheauthorities • Recommendedtheadoptionof • Emphasisedtheimportance • Recommendedtheadoptionof • Determinedthelevelof • Colombo 16th March2012 Committee Nomination &CorporateGovernance Chairman, Raju Sivaraman practices oftheBank. enhance theCorporateGovernance The Committeewillendeavourto Conclusion delegated bytheBoard. Policy onConflictofInterest. programmes compulsorily. whilst requiringcertaintraining on theareasrelevanttobanking Development Programmes(CDP) of conductingContinuous competencies. to enhancetheirmanagement Managers andhighergrades Training Programmesfor new CompetencyDevelopment with it. 2007 withaviewtocomplying Banking ActDirectionNo.11of compliance withtheaforesaid out bytheBoard. General Managerwhichiscarried the formatforevaluationof assessment. Alsorecommended by preparingthereportonself process tobecarriedoutandalso recommending theevaluation subcommittee performanceby exercise includingthatofthe Adequacyandeffectivenessofall • Risklimitsandpoliciesthat • Policies,programmesand • Management Committee:- in theCharterofIntegratedRisk the followingwhichareidentified reviewing and/orrecommending Committee isresponsiblefor In additiontotheabove, and managementinformation. through appropriateriskindicators operational andstrategicrisks risks suchascredit,market,liquidity, Committee focusesonandreviews management. Inthisconnectionthe responsibilities forallaspectsofrisk the Boardinfulfillingitsoversight of theCommitteearetoassist The mainroleandresponsibilities Role oftheCommittee Committee Report Management Integrated Risk Committee. risk limitsasspecifiedbythe within quantitativeandqualitative risks andtomanagethose Committee toaddressspecific Assets &LiabilityManagement such astheCreditCommitteeand Management LevelCommittees Chief RiskOfficer. risks, asrecommendedbythe market, liquidityandoperational establish appetiteforcredit, compliance. relating toriskmanagementand Management CommitteeCharters Adequacyandeffectivenessof • Appropriateactionsagainstthe • Correctiveactiontomitigatethe • Riskmanagementreportsonthe • Member Mr.K.L.Hewage Member Mr. RajuSivaraman Attygalle, ExofficioDirector) (Alternate DirectortoMr. S.R. Chairman Mr. V. Kanagasabapathy year underreview- members oftheCommitteeduring The followingDirectorsservedasthe Composition andQuorum operational andcompliancerisks. to credit,market,liquidity, monitoring andmitigationrelating risk identification,measurement, or otherwise. the DirectorofBankSupervision corrective actionasdirectedby identify specificrisksandprompt officers responsibleforfailureto requirements. and regulatorysupervisory on thebasisofBank’s policies levels decidedbytheCommittee such risksarebeyondtheprudent effects ofspecificrisksincase control suchrisks. identify, measure,monitorand risks andactionsundertakento emerging marketandregulatory risk profileoftheBank,aswell OperationalRiskManagement - CreditRiskManagement - Reviewed thefollowingreports • review aresummarisedbelow- Committee duringtheyearunder Activities carriedoutbythe an appropriatereturn. controlled andmanaged;earning type ofbusiness;affordable;properly appropriate; relativetothescaleand properly identifiedandunderstood; ensuring thatrisksbeingtakenare; minimise risksbuttooptimiseitby the Committeeisthereforenotto taking risks.TheaimoftheBankand that banksareinthebusinessof carrying outitsresponsibilities, The Committeeisconscious,when page 95. at meetingsisgiveninthetableon attendance ofCommitteemembers during theyearunderreview. The The Committeemet7times Meetings andActivities Committee requirestheirpresence. to attendthemeetingswhen other membersofthestaffareinvited the SecretarytoCommittee.The Secretary totheBoardfunctionsas The Secretary, BankofCeylon/ members. The quorumoftheCommitteeistwo their participationismandatory. Officer participateatallmeetingsand The GeneralManagerandChiefRisk the Bank: and assessedtheriskprofileof Followed upontheactivities • Initiatedactiontoassistthe • Recommendedtheadoptionof • RecommendedtotheBoard • RecommendedtotheBoard • RecommendedtotheBoard • Reviewedquarterlythe • Arrangementsareatanadvanced • Interestrateandforeign - StressTesting andScenario - ComplianceRiskManagement - MarketRiskManagement - Management Committee. of theAssetandLiability functions. subsidiaries tomanagetheirrisk Recovery Policyguidelines. the Bank. recovery unitoftheCardCentre off Policyforthecollectionand Reactivation PolicyandWrite adoption oftheSettlementPolicy, limits forsecuritiestransactions. the InvestmentCommitteeand Policy andTerms ofReference adoption oftherevisedInvestment Appetite andLimitSetting. adoption ofthePolicyonRisk Reports submitted. comprehensive Compliance Solution. Anti MoneyLaunderingSoftware and marketrisksalsoan for managingcredit,operational the-art riskmanagementsystem stage topurchaseastate-ofexchange risks Analysis

BANK OF CEYLON ANNUAL REPORT 2011 93 BANK OF CEYLON ANNUAL REPORT 2011 94 outstanding matters. and followupactionistakenon and ratifiedatmeetingsoftheBoard the Committeemeetingsaretabled recommendations. Allminutesof Board bywayofminutesgivingits The Committeereportedtothe Thesaidunitalsocontinuesto IndependentIntegratedRisk • Approvedtheannualcalendarof • Report ofBoardSubcommittees Report Head Office. the criticalbusinessunitsat on BusinessContingencyPlanfor conduct awarenessprogrammes following itup. Branches andthisCommitteeis operational departmentsincluding and itisbeingintroducedtoall the Trade ServicesDepartment Certification and5Ssystemto Standards Organisation(ISO) has introducedInternational Management Division(IIRMD) Committee for2012. the IntegratedRiskManagement Colombo 16th March2012 Management Committee Chairman, IntegratedRisk as AlternatetoMr.S.R.Attygalle V. Kanagasabapathy Risk ManagementCommittee. recommendation oftheIntegrated are submittedtotheBoardon relevant RiskAssessmentReports and managementinformation.The through appropriateriskindicators strategic risksonamonthlybasis market, liquidity, operationaland task, theIIRMDassessescredit, standards. Inaccomplishingthis complying withinternational management andcompliance, meeting thechallengesofrisk satisfactory progresstowards the viewthatBankhasmade annually. TheCommitteeisof of theCommitteeiscarriedout A selfevaluationoftheperformance Conclusion Board &SubcommitteeMeetings Attendance ofDirectorsat oo etnshl 01 30 No.of Meetingsheld r ..eae2 1 28 No.Attended No.Attended No.Attended No.Attended Mr. K.L.Hewage No.Attended Names ofDirectors r ..tyal 72 2 1 NotamemberoftheCommittee 27 *Attended 2meetingsbyinvitation Key 30 27 Mr. S.R.Attygalle) (Alternate Directorto Mr. V. Kanagasabapathy 29 Mr. ChandrasirideSilva Mr. RajuSivaraman Mr. S.R.Attygalle Dr. GaminiWickramasinghe s aiiAewree2 3 24 Ms. NaliniAbeywardene anBad AdtCmite HumanResources AuditCommittee Main Board *1 7 12 5* 2447 2447 2447 & Remuneration Committee & Corporate Governance Nomination Committee Integrated Risk Management Committee

BANK OF CEYLON ANNUAL REPORT 2011 95 As the biggest ﬁnancial service provider in the island and a national entity owned by its people, we are mindful of our role in sustaining the community and the environment where we carry out our operations.

Our Bank has formulated its corporate goals, mid-term strategy and operational policy to align with the sustainable development framework, which is summed up by the Brundtland Commission’s deﬁnition.

Our strategic focus on sustainable development spreads across 3 broad dimensions; economic, social and environmental impacts of our operations.

Agri Business

Fisheries Micro Farming Repor Sustai

BANK OF CEYLON ANNUAL REPORT 2011 98 socio-economic development initiatives. encourages ustoinnovate inmulti-pronged asit diversity asawelcome opportunity Wepoor andurbantorural. considerthis across corporatestothemarginalised Our customerbaseisdiverse.Itspreads landscape. wealth creationacrossthesocio-economic sectors, intheprocessfacilitatingequitable helping disadvantagedandvulnerable scale entrepreneursandsimplythepoor, small artisans, fishermen, farmers, rural withthecentre,empowering periphery doorsteps,connectingthe torural services development drivebringingfinancial inthenational is acommittedparticipant financial intermediary, BoChasbeenand Venturing beyondthetraditionalroleofa BANKERS TOTHENATION friend-in-need, mentor-andaswecallourselvesTHE The beacon,trendsetter, pathfinder, travellingcompanion, landmarks initswakeandprojectingitselfasanational icon. and Bank ofCeylonhascomealongwaycreatinghistory Established 72yearsbackasasmalllocalcommercialBank, The journey Sustainability Report

sustainable development. towards ofour journey This isthestory the next. and thefutureofournextgeneration endangered planet,itsfragileenvironment In thisquest,wedocarefor degrees. environment invarying impacting thesociety, itseconomyandthe extending tohours,daysandmonths, some onlyforafewminutes,others there arethousandsofinteractionsdaily, throughout thecountry, bigandsmall, In ourover10millionrelationships n

t n t ability also availableatourwebsitewww.boc.lk. community, academicsandmulti-lateralagenciesinitiativesinterestedineconomic, socialandenvironmentalimpactsofour supplements thatoutlinesanddrawsreportcontents,contentqualityreportingboundaries.Itisintendedforusebyourst which isthewidelyacceptedglobalframeworkforsustainabilityreporting.ThereportalsoincorporatesG-3.1 This sustainabilityreporthasbeenpreparedgoingbytheGlobalReportingInitiative(GRI)frame-workandguidelines,ourthir A Word AboutThisReport Previous reportcoveringtheperiod01.01.2010-31.12.2010wasissuedinMarch2011 Date ofthemostrecentpreviousreport The reportcoverstheperiod1stJanuary2011to31stDecember2011. Reporting period Caringfor thefragileplanet-ourenvironmentalimpact • Leapsand bounds-oureconomicimpact • Reaching out-oursocialimpact • Thebest -ourwayofdoingthingssustainablecorporategovernance • Notjustacommercialbank-institutional sustainability • stakeholder engagement. social andenvironmentalimpactahighlevelof on sustainability. Theselectedtopicshavesignificanteconomic, reportedwhicharepresentedonanfive-prongedapproach on selectedtopicsandGRIperformanceindicatorsthatwouldbe our vision,missionandmaturityofover72years,wehavedecided Based ontheexpectationsandinterestsofourstakeholders Defining reportcontent The Bank’s overseasoperationshavenotbeenconsideredforreporting. The reportcoverstheBankanddoesnotextendtocoversubsidiariesassociates. Report boundary Contact telephoneNos:+94112471615-2203928E-mailaddress:[email protected] “BOC Square”,No1,BankofCeylonMawatha,Colombo1. contact FinancialAccountingUnitat10thFloor, BankofCeylon, In theeventofanyquestions/clarificationsregardingthisreport,readersareinvitedto Contact pointforclarificationsregardingthereport BoC publishesthesustainabilityreportannuallyasapartofitsAnnualReport Reporting cycle d attemptunderGRIguidelines, indicators andfinancialsector akeholders, theSriLankan operations.Thereportis y

BANK OF CEYLON ANNUAL REPORT 2011 99 BANK OF CEYLON ANNUAL REPORT 2011 100 • Environmental conservation Financialinclusivenessthrough • Tailor-made andcustomer-friendly • Outreachexpansion(including • development. crucial inourquestforsustainable elements whichinourbelief,is is prioritisedonthefollowingkey and expectations.Reportcontent and addressesstakeholderconcerns environmental andsocialperformance significant footprintsineconomic, five aspectsandindicatorsreflectour The selectedtopicsgroupedunder Materiality The Issueof Report Sustainability the nature. underlying themeislivingcloseto and re-cyclinginitiativesetc.The preservation, energyconservation habitat development,eco-system village initiative,organicfarming, and protectionthroughmodel others. equal footingwiththerestof as asatisfiedcustomerbaseonan bankable lowerrunginthesociety converting theso-callednon- barefoot banking-convincingand premier banking) systems, personalbankingand Islamic banking,mobilepayment finance, SMEs,professionals, market segments(i.e-micro- focused atdifferentcustomer/ financial productsandservices customers. community existingandexpected of thestakeholdersegments, would substantiallybenefittwo increase indeliverypoints)that information. of specificallygendersensitive it wasconfinedonlytotheextent across theboardwhereaspreviously considered gender-wise break-down labour practicesthisyearwehave In presentingcomparativedataon and datameasurement reporting inthescope,boundaries Significant changesfromtheprevious results/performance. and substantiallyinfluencereported data asawholedoesnotexceed5% Margin oferrorinthequantitative Dataavailableatoutside • Dataavailable/collectedby • On-linecore-bankingsystem • TheBank’s periodical/annual • sources. has beenextractedfromseveral Quantitative informationinthereport Data Measurement Investinginthecountry’s future- • Communityengagementsinhealth • Team buildingwithtransparent • Lanka) agencies(e.g: CentralBankofSri Bank different units/divisionswithinthe financial reports the childrenandyouth social harmony. education basedinitiativesand diversity, sportsandleisure, care, nationalheritage,cultural plans life balanceanddefinedbenefit path andskilldevelopment,work- human resourcepractices,career External Assurance exceeding customer expectations. rewarding, serviceexcellence customers focusonmutually The two-wayprocesswithour Customers Appropriatingadequatereturns • Aligningthestrategicfocusof • key perspectives. the generalpublic-isbasedontwo –the shareholderowneronbehalfof Our relationshipwiththegovernment The GovernmentofSriLanka Shareholder-owner relationship Identifying ourstakeholdersandtheir Engagement Stakeholder of BDOInternationalLimited. Chartered Accountantsandamember and assured'B+'byBDOPartners, of 'B'onthisreportwhichischecked BoC selfdeclaresareportinglevel where theimpactismostlyfelt. it isreportedunderthesegment segments (e.g:modelvillageconcept) topic traversesacrosstwoormore and reportedtopics.Whenevera different stakeholdersegments demarcations inreportingunder This yearthereareclearcut practices inonereader-friendly table. disclosures/indicators onlabour introduced todisplayallmandatory A teamprofilecharthasbeen (dividends) tothestakeholders. of thecountry. development approachandgoals the Bankinlinewithholistic together. The underlyingthemeisgrowing supplier capacitydevelopment. transparent sourcingmechanismand through qualitysupplylines, relationship withoursuppliers We createandmaintainarewarding Suppliers work-life balance. opportunity, careerpathavenuesand achievers supportedwithequal build themupasthebestteamof most valuedofourassets-would Interaction withourteam-the Employees reporting andtimelines. rating agenciesrelyonourfinancial Measurers ofourperformance,the Rating agencies diversity andsocialharmony. environmental protection,cultural hand- inhealthcare,education, beyond, beingabeaconandhelping financial serviceproviderbutgoing Bankers tothenation.,notonlyasa For them-thecommunity, wearethe Community pay-back timelines. transparent transactionprocessand covenants, bestbusinesspractices, expect prudentuse,adherenceto Fundprovidersanddebentureholders Fund Providers with us. on risks,opportunitiesandcontrols Commission etc)sharetheirconcerns Lanka andSecuritiesExchange Our regulators(CentralBankofSri Regulators Stakeholder EngagementProcess Creating andengagingaviablelocal supplychain Suppliers Trade unionsaspartnersin wayforwardwithrecognition, • Facilitiesforcultural,socialandreligious groupings, leisure • Definedbenefitplan • Soft-skilldevelopment,languageandITliteracy • Plannedtrainingandskilldevelopmentboth localandinternational • Mutuallyagreedperformancegoalsetting,continuousassessment • Transparent recruitmentprocess,assignmentpolicy, andresults • best asset Beyond amerework-placeapproach,focusingthestaffaspartners- Employees andTrade Unions TheultimateaimistomakebankingwithBoCanexhilarating Capacitydevelopmentandempowermentofcustomersegments • Businessprocesssimplification,customerfacilityupgrading, • Taking careofvulnerablecustomersegments-thepoor, thesenior • Customerneed/perceptionidentification, • improved, expandedandvalueaddedonanongoingbasis. delighting them.Customerservicechannels,productsandservicesare We focusonexceedingcustomerexpectationlevelsorrather Customers Frequency/Timeline Activeparticipationinnationaldevelopmentinitiativesincluding • LevelofEngagementand Process Alignandco-ordinatetheBank’s strategicbusinessplanand • The Government Stakeholder GroupandEngagementFocus representation, collectivebargainingandindustrialharmony facilities, workplacesafetyandhealth-care on differentcareerpaths future potential. against agreedgoalsandscoringsystemforperformance/behavior/ oriented careerdevelopmentplanning country encompassingallitsdiversity. experience foreveryoneresultinginwealthcreationacrossthe centric focus. harmonising internallayoutatdeliverypointswithacustomer- and easyaccess. citizens andthedifferently-ablebyprovidingtailor-made products strategic investmentsinkeyareas work andinitiatives. corporate goalswiththeGovernment’s nationaldevelopmentframe- Sitevisits • Physicalpresence attheopeningoftenders • Publicnotices inprintmedia • Registration andreviewofsuppliers • Engagementwithtradeunions onanon-going • Training programs onpre-arrangedtimelines • Unitlevelmeetingsandperformancereviewon • Scholarshipcommittee • HRpolicycommittee • Sustainingindustrialpeace • Buildingupcore-competencies • Training programmes • Transfer boardsandotheremployee • Performancereviewforums • One-to-onemeetingswithtradeunions • Whistleblowerpolicy • • In-house newsletter/magazine Internalcirculars • Staffmeetingsatunit/divisionlevel • Complyingwiththerequirementsofcustomer • Customercapacitydevelopmentworkshops • Easyaccessfacilityfordifferentlyabled • • Customer surveys • Whistleblower process Doorstepvisits • Interactionwithdifferentcustomergroups-i.e: • • Customer meetings/seminars Customercomplaint/suggestionboxesat • Messagedeliverywithmonth-endstatement • • Electronic mail/SMS Writtencommunicationandresponse • Reviewsessionsondevelopmentinitiatives • Meetingswithothergovernmentministriesand • FrequentmeetingswithMinistryofFinance • basis weekly/monthly basis representative mechanisms charter introducedbytheregulator. persons Industry chambers delivery points departments and Planning On goingbasis/onrequest pre-arranged schedules with specificengagementsand This isanon-goingprocess Other aspects-ongoing Registration- everytwoyears On request

BANK OF CEYLON ANNUAL REPORT 2011 101 BANK OF CEYLON ANNUAL REPORT 2011 102 Report Sustainability Theendresultwouldbeprudentusageoffunds,pay-backon Periodicreview(one-on-oneandgroupbased)withfundingagencies • Submitcompliancecertificatesinlinewithcontractualobligations • Disclosureoffinancialposition(Interim/annualreports) • agreements Adherence toterms,conditionsandcovenantsundermulti-lateral Submissionofperiodicalfinancialandnon-financialinformation • Disclosureofratingsensitiveinformationonperiodicalbasis • Rating Agencies Participationinreligious/cultural/sports/socialactivities • Communityawarenessinitiatives • Communityinvestmentsininfrastructure • Community Fund providers fundprovidersandmulti-lateral lendingagencies Boardandmanagementcommitmentassurance • Adhereandpromotegoodgovernancepractices • Frequency/Timeline ComplywithSriLankanaccountingstandardssetbytheInstituteof • LevelofEngagementandProcess Complywithregulations,guidelinesandindicatorsinitiatedby • Stakeholder GroupandEngagementFocus Regulators timelines withcommensurateyieldlevels focusing onprogress/obligations/remedialaction Chartered AccountantsofSriLanka. Colombo StockExchange,BaselIIinitiativeandotherregulators Central BankofSriLanka(CBSL),MinistryFinanceandPlanning,

Periodicmeetingswithfundprovidersonneed • Submissionoffinancialreports • Performancereviewofprogrammes/initiatives • One-on-onemeetingsbeforeratingis • Feedbackfromcommunity • Voluntary socialengagements • Communitydevelopmentinitiatives • GamUdanaprogrammeatprovinciallevel • Pre-arrangedcommunitymeetings • Publicationoffinancialstatementsonquarterly • SubmissionoffinancialstatementstoColombo • Performancereviewofprogrammes/initiatives • ComplianceofficeratHeadofficetoliaisewith • On-sitevisitstoassurecompliance • PeriodicreviewsessionsconductedbyCBSL • basis determined basis Stock Exchange the regulator financials Quarterly submissionof agencies periodically Reviews donebyfunding by theratingagency Annually scheduledmeetings This isanongoingprocess. On-going basis Key Topics ThatHaveArisenThroughStakeholderEngagement Sri Lankawhilelineministrieshandletheprogrammesrelevanttothem. coordinated bytheRegionalDevelopmentDivisionofCentralBank enhancement andpovertyalleviationetc.Someoftheseprogrammesare development drive,dairysectorempowerment,fisheriescapacity grass rootlevelsocio-economicdevelopment.Theseincludethenorth-east OurResponse The Governmenthasinitiatedseveraldevelopmentprogrammesfocusedat Government asaStakeholder action. perception levelsrevealedatthissurveywasconsideredfornecessary The surveywascarriedoutbyamarketresearchcompanyandcustomer the perceptionlevel. The Banksanctionedacustomerperceptionsurveyduringtheyeartoassess Customer PerceptionSurvey Stakeholder Concern credit. Our outreachresultsinsocialmobilisation,micro-financeandsmallfarmer We areinthefrontlineatGovernment-led developmentinitiatives. in 2012. been completed.Itwillbereplicatedinotherprovincesandheadofficeunits A seriesofcustomercareworkshopsacrosstheSouthernprovincehavealready in place. valuable inputtostrengthenfuturecustomerunderstanding.Actionplanis Customer perceptioncameupwithimportantindicationsandconsideredas

BANK OF CEYLON ANNUAL REPORT 2011 103 BANK OF CEYLON ANNUAL REPORT 2011 104 where wecarryoutouroperations. community andtheenvironment mindful ofourroleinsustainingthe entity ownedbyitspeople,weare provider intheislandandanational Being thebiggestfinancialservice needs. of futuregenerationstomeettheir without compromisingtheability - meetingtheneedsofpresent Brundtland Commission’s definition, work, whichissummedupbythe sustainable developmentframe- operational policiestoalignwiththe goals, mid-termstrategiesand Our Bankhasformulateditscorporate lined upfordevelopment. and thesocietyelementsaretobe productive sectorsandconsumption consideration suchaswealth, care, equalopportunityandeconomic factors suchaseducation,health should besustainedwhilepeople consisting cultures,groupsandplaces and environmentcommunity eco-system services,resources and eco-systems,lifesupport Nature includingearth,bio-diversity what tosustainanddevelop. is twosidesofthecoin.Itabout Sustainable developmentinreality The Chairman’s statement Report Sustainability root levelproducersandmassscale and downstream.Therearegrass middle areinter-connected, up stream distinct, bothendsandthoseinthe Although theyaredifferentaswell high networthtothemarginalised. professionals toschooldrop-outs,the corporates tothemicro-enterprises, customer segmentsrangingfrom sustain diverseneedsofdifferent and servicesaredirectedto Within thisframework,ourproducts them. economic valuedistributionamong towards themmeasuredacross our stakeholdersandobligations and assimilatestheaspirationsof this overalldevelopmentprogramme business strategyisintandemwith development masterplan.Our five hubsinthecountry’s future driven bythegovernmentand the nationaleconomicpriorities The economicfocuscentresaround Economic Sustainability operations. and environmentalimpactsofour broad dimensions;economic,social development spreadsacross3 Our strategicfocusonsustainable work development frame- with thesustainable policies toalign and operational strategies mid-term corporate goals, its formulated Our Bankhas us. Working alongthisline,we our materialconsumptionconcerns As aresponsiblecorporatecitizen, Preservationoftheenvironment • Minimisingenvironmentalimpact • along twodrivelines. Our environmentaldimensionruns Sustainability Environmental Socialmobilisationamongthe • Outreachexpansiontoreach • complementary pathways. takes usontwodistinctyetmutually demographical. Thiscommitment the landscape,geographicaland access forfinancialservicesacross We arecommittedtoequitable a wayforward. chain developmentalongthelinesas facilitating marketlinkagesandvalue in between.Ourstrategyfocuseson intermediaries andsupportservices processors andawholegamutof environmental preservation. promoting publicawarenesson habitats andbio-diversity) we livein(eco-systems, operations. includes customerbusiness from ouroperationswhichalso marginalised socialsegments. niche markets geographies intheperipheryand are twoexamples. Arunella andGreenforestAssociation Our partnershipwithRividina concern towardsourfragileplanet. and institutionswhoshareour We partnerwithlikemindedgroups farming aswell. renewable sourcesandmixed- projects, powergenerationthrough agriculture, nature-friendlylivestock such asforestry, sustainable focus extendstogreeninvestments delivery. Goingbeyond,ourstrategic in placeforcreditevaluationand management frameworkwhichis by acomprehensiveenvironmental business operationsarefocused mechanisms. Impactsbycustomer practices andenergy/fuelsaving in materialusage,re-cycling have initiatedreductionprocesses and sports. religious andculturaldiversity, leisure Our concernspreadsacrosstheir we carefortheirhealthandsafety. one ofourmajorfocuses.Notonlydo Work lifebalanceamongourteamis landscape. dimensions spilloverintothesocial in economicandenvironmental broad framework.Evenourinitiatives community investmentswithina rights, decentlabourpracticesand discrimination, respectforhuman issues, equalopportunity, non- wide rangeofinter-connected In asocialcontext,welookat Social Sustainability commendable. mobilisation carriedoutsofaris at theirdoorsteps.Thesocial interact withtheirfellowvillagers, community itself,whomoveinand animators- chosenfromamongthe East. We haveourfieldworkers- periphery, particularly intheNorth- customers- isgaininggroundinthe that poorcanbemadeprofitable concept- whichisbasedonthefact espouse comesalongside.This The barefootbankingconceptwe virtually overnight. points atAgrarianServicesCentres, established over300ruralservice three decadesback,whentheBank itself-reminding ustheboldeffort Katukurunda. Thisishistoryrepeating Pulmodai andOluvil,Mattegoda Vavunathivu, MarassanaandUpcot, locations isimpressive.Kiranand financial services.Thelistofournew without anyformalpresencein islands andevenisolatedoutposts farming belt,fishingcommunities, economically activevillages, now movingoutintothehinterland- in allmajorcitiesandtownshipsis machines. BoCwhichhasapresence extension officesandautomaticteller consisting offullyfledgedbranches, largest onlinedeliverypointnetwork As oftheendyearBoChad Our ReportCard We considerthemasourfuturecustomerbase. attention towardsthepoor. among allsocialsegmentswithspecial focused onbalancedeconomicgrowth Our strategyandcorporategoalsare and SupportServices(Private)Limited owned subsidiary, BOCManagement provincial levelsupportarm.Ourfully branches forSMElendingwitha having inplace,exclusivelydedicated wheel, willbestrengthenedby sector, avitalcogintheeconomic at highnetworthcustomers.SME on topremierbankingserviceaimed implemented in2012.We willmove We haveseveralinitiativestobe The Future and leisureactivities. excellence whilewesupportedsports them, thescholarswithacademic our assistancetothecreamamong investment. We continuedwith in thecountryasitsfuture BoC considerstheyounggeneration coming years. will replicateintheotherprovinces of justoversevenmonths.Thismodel impressive resultswithinatimespan at Doramandalawahasshown facilities. Thefirstmodelvillage resources noradequateinfrastructure villages languishingwithneitherthe community inastringofdry-zone well asthesocialupliftmentof balance intheenvironmentas to strengtheningtheecological model villageinitiative,withaview This year, welaunchedtheBOC 16th March2012 Chairman Dr. GaminiWickremasinghe, on thewayforward. BoC hastakenthatinitialstepandis journey startswiththeinitialstep". proverb says"Eventhelongest formidable task.Yet, asaChinese We areawarethatthisisa wealth creationareality. be ourSMEbasemakingequitable customer base,whowillultimately poor. We considerthemasourfuture with specialattentiontowardsthe growth amongallsocialsegments are focusedonbalancedeconomic Our strategyandcorporategoals undertaken in2012. station amajorCSRprojectwillbe Re-building theJaffnarailway with aleadingdairyprocessor. dairy processingmodel,apartnership northern partofthecountrythrougha development intheWanni region, the will forayintosustainableeconomic

BANK OF CEYLON ANNUAL REPORT 2011 105 BANK OF CEYLON ANNUAL REPORT 2011 106 Report Sustainability matRssOpportunities Risks Wildlyfluctuating/depletedcash • Climate changeanderraticweatherpatterns Opportunities Impact Impacts ofSustainabilityTrends onOurOperations Risks Dropinfarm-gatepriceand • Extensive smallfarmercreditresultsinglutsupply Impact How OurOperationsImpactStakeholders Key Impacts,RisksandOpportunities pollution control Stringent environmentalguidelinesand diverse products Thriving smallbusinessesproducingarangeof nqial elhacmlto Social alienationandanimosity • Inequitable wealthaccumulation at servicepointlevel puts pressureonhumanresources Extensive andfrequentfield-levelsocialengagement contamination anddecibellevels environment throughwastedisposal,waterway Start upSMEs/largerventuresaffectingthe eco-systems, habitatsandbio-diversity Development programmewithnegativeinroadsinto usage Large scalefarmcreditincreaseagro-chemical Fundinadequacytoimplement • Expectedcashflowsdonot • Non-availabilityofamarketing • Work stressanddissatisfaction • Work stoppageandclosure • Probablelegalprocess • • Community complaints Full/partialdestructionofeco- • Cnaiaino h niomn Fundingfororganicfertilizerproduction • Contaminationoftheenvironment • flows inclimatesensitiveprojects meet thesupply inadequate marketmechanismto in operations guidelines andexpectedchanges materialise mechanism among theteam segments across marginalisedsocial bio-diversity systems, lossofhabitatsand • Crop insurance Cropsthataredrought/floodresistant.e.g:cashew/paddy • Climatebusinessfinance • Innovativefinancialinstrumentstostock/holdcommodities • Marketlinkages,valuechainfinance • Waste disposalsystems • Water recyclingplants • operations. Soft loanfacilitiestoalignwithenvironment-friendly Formationofproducermarketingoutlets • Marketlinkagewithretailchains • Empowermentprocessforcommunitygroupstoacquire • Viable micro-financeplatformaimingatfinancial • Re-planningworkinghours • Softloansforprocessstreamlining,wastedisposal,water • Alternativepowergenerationthroughrenewable energy • • Green investments • Forestry Back tonatureinitiatives Raisingorganicfarmingtocommercialscale • varieties thatcanwithstandprolongedwaterlogging legal identitythatwouldlessenfieldworkerdependence inclusiveness recycling sources that theorganisation canmake sustainability concernstheinfluence The economicdimensionof nation. the Bankandcreateswealthto financial performanceandgrowthof strategies toenhancesustainable term objective,theBankdrivesits strategy. While maintainingthislong of theBankCeylonbusiness through theeffectiveimplementation economic prioritiesofthecountry designed toachievethenational sustainability policyoftheBankis The economicdimensionofthe Economic Sustainability economic, environmentalandsocial. dimensions ofsustainability: strategy focusesonthreemain when developingitssustainability opportunities. AccordinglytheBank, of sustainabilityrelatedriskand formulated withdueconsideration The corebusinessstrategyhasbeen social responsibility. can beachievedthroughimplanting Corporate SocialResponsibility(CSR) values, cultureandtrustthat economic activitieswithournations’ BoC combinesustainablefinance/ sustainability. Thereforeweat that ithastoplaywithregard understands thesignificantrole of thecornerstoneindustries, Bank ofCeylon,operatinginone Introduction policy andframe-work The Bank’s Sustainability eco system,land, air andwater. have onnaturalresourcesincluding the influenceorganisationcan dimension ofsustainabilityconcerns BoC’s policyonenvironmental Sustainability Environmental financial exclusion. facilities tothelesswell-offreduce nation whileprovidingbasicbanking and consideringtheneedsof following strictevaluationprocedures banking” bylendingresponsibly groups. BoCfocuseson“sustainable services toallsociodemographic to provideaccessfinanceand Further, theBankiscommitted economic environment. contributing toasustainablesocio- needs ofthesociety, thereby accordingly tomeettheevolving services oftheBankarealsoaligned economic order. Theproductsand avoid negativeimpactinthesocio term andlong-terminorderto segregated intoshorttomedium- on tenurebasedeconomicgains, activities oftheBankarefocused investment”. Inthisprocessthe and to“promotingcommunity sustainable economicdevelopment” look forwardto“contribution the ManagementofBank sustainability setoutabove, the broaddimensionofeconomic its stakeholders.Therefore,under on thefinancialdevelopmentof within whichitoperates.BoCadopts Bank canmakeonthesocialsystem concerned withtheinfluence sustainability policyoftheBankis The socialdimensionofthe Social Sustainability Participationinenvironment • Refusingtolendbusinesses • Lendingtoenvironmentalfriendly • to definetheothers'impactthrough, on theenvironmentandcontributing negative impacttheBankmayhave minimising oreliminatingany citizen. ThereforetheBankensures resources asaresponsiblecorporate by makingeveryefforttoconsume our day-to-daybankingactivities We incorporatesustainabilityin ris of w “ has been projects. friendly programmethroughCSR environment and, unacceptable harmtothe whose actionscause other services, through interestsubsidiesand entities andencouragethem core businessstrategy it sustainability related k h an

d ue consi d o f pp ormulated ormulated Towards OurHumanCapital for collectivebargaining. trade unionaffairs,empoweringthem cordial atmosphereforemployee practices anddisciplinaryprocedures, establishing transparentlabour awareness ofourstaffmembers commitment includestrainingand monitoring andfollowup.Our setting outclearHRpolicies, establishing decentlabourpractices to dischargeitsresponsibilities BoC hasaligneditsHRpractices achievers inserviceexcellence’. and rewardstobethebestteamof potential andgivetherecognition ‘give allourstafftoreachtheirfull Bank ofCeylonalwaysstrivesto True toourmissionstatement,the and othergeneralsocietalaspects. resources oftheBank,humanrights, society encompassingthehuman a comprehensivepolicytowardsthe ortunities. d eration eration ”

BANK OF CEYLON ANNUAL REPORT 2011 107 BANK OF CEYLON ANNUAL REPORT 2011 108 within whichitoperates. environment andsocialconditions the enhancementofeconomic, into theBank’s contributiontowards sustainability, providing aninsight performance awidercontextof basis thatwillpresenttheBank’s on sustainabilityanannual The Bankwillissueareport Sustainability Reporting act withdueskill,careanddiligence. in theconductofitsbusinessandto standards ofintegrityandfairdealing It isthepolicyofBoCtoobservehigh have employedchildlabour. providing partiesiftheyindicateto accepting anyoutsourcedandservice employment ofchildlabourandnot of itscustomersthatengagein businesses orentrepreneurship labour ineveryformbynotpromoting management andstrictlyavoidschild and fairnessinourhumanresource and adoptstheprincipleofjustice The Bankadvocatesequalopportunity Rights Towards PreservingHuman Report Sustainability assigned tothem. specific impactareasthathavebeen Members oftheCommitteemonitor the Bank’s SustainabilityCommittee. implemented bytheBankthrough sustainability policyframeworkas oversee andmonitorthe The BoardofDirectorsregularly Line How itWorks Downthe Sustainability Process- Sustainability Committee Composition oftheBank’s Sustainability Committee Manager-product And Development Banking Public RelationOfficer Manager-sales And Manager- Support Chief Finance Additional General Deputy General Deputy General Officer Services Channel Secretary Marketing Manager-human Deputy General Head of Resources progress atthesediscussions. review forumsatprovincial/headoffice levelandbranches/unitsrelaytheir Work planprogressandimplementationissuesarediscussedatmonthly the provincialmanagementisco-optedinthisexercise. (relevant headofficebusinessunitsandthebranchnetwork).Assistance of Committee membersimplementtheactionplanthroughlinemanagement Nature,bio-diversityandhabitatprotection initiatives • Interactionwithenvironmentallobby • Corporatesocialresponsibilityinitiatives • Head ofMarketing • Provincial development Outreachexpansionpolicyandprogress • Deputy GeneralManager(SalesandChannelManagement) Interactionwithtradeunions • Work lifebalanceinitiatives • Careerpathdevelopment • Team skilldevelopmentandlifelonglearning • Humanrightsissues • DefinedbenefitplanobligationsandFundadequacy • Decentlabourpractices • Deputy GeneralManager(HumanResources) IndirecteconomicbenefitsarisingoutoftheBank’s operations • Distributionofincomeamongstakeholders • Economicvalueaddition-trendmonitoring • Chief FinancialOfficer Deliverypointambience,customeraccessandservicelevelsupport • Recyclingandenergysavingmechanisms • Initiativestowardsreducingcarbonfootprint • Material,energyandfuelusage • Deputy GeneralManager(Supportservices) Developmentlendingportfolio-Theextentofitscontributiontospurthe • Productinnovationanddevelopmenttomeetcustomerperception • Micro-financeplatformandhowitisimplementedacrosstheBranch • Additional GeneralManager(Product&DevelopmentBanking) priority sectorgrowthalongkeydrivelines expectations network. screening. Central Environmental Authorityetc) clearance certificateissuedbythe documentary evidence(Environmental at projectsite/customerlocationand This aspectiscoveredbyfieldvisits requirements hasbeenintroduced. to environmentalandsocial Monitoring mechanisminregard delivery.) credit evaluationstagepriorto i.e; (initialacceptancestageand assessed/screened attwolevels, Environmental andsocialrisksare • • • approach isthree-fold. arising outofcreditdelivery. This on environmentalandsocialimpacts The Bankhassetinplacepolicies Services Dimension Products and Disclosures onManagementapproach earners. the lifestandardofregularincome schemes whichintendstouplift credit cards,personalloan Personal Finance: programmes. alleviation andothermicro-credit group mobilisationandpoverty the basiccriterion,insolidarity background andincomelevelis Micro-finance: mandatory. SLS certificationhasbeenmade Lanka Standards(SLS),obtaining whose productsfallunderSri credit. Inregardtoprojects is mandatorytobeeligiblefor place, environmentalclearance impact assessmentorinits large projects.Environmental to creditgivenforSMEsand Project finance: Socio-economic Thisrelates Suchas frame-work. sustainability isembeddedwithinthis results byyear2012.)Economic in assetsandtenbillionbottomline Ten Twelve business planisbasedonthe The Bank’s shorttomediumterm financial servicessector. the competitiveedgewithin goals andstrategy, whileretaining guided bythecountry’s economic Bank, oursustainabilitypolicyis providers inthat,asastate-owned We differwithotherfinancialservice Dimension Economic business unitsundertheirpurview. off-shore banking)andrespective General Manager(Corporateand Manager (RetailBanking)andDeputy ownership lieswithDeputyGeneral Active ownership: on SMEprojectsfundedbytheBank. would betaskedforfieldlevelaudit action. Independentexternalauditors recommends remedial/corrective field visits,atbusinesslocationsand engages inperiodicalauditincluding Audit: towards effectivecompliance. advice/soliciting expertadvice during aprojectlife-cyclebyoffering environmental/social issuescropup The Bankinteractswithclientswhen credit trainingprogrammes. operational instructionsandin-house disseminated throughtheBank’s assessment/delivery/monitoring is covenants forstaffinvolvedincredit social requirements/conditions/ Awareness onenvironmental/ In-housecreditauditunit theme(Rupeestrillion Active One creation acrossthewholesocial promotion andequitablewealth generation, assetcreation,export benefits, suchasemployment indicators. Therearehardtoquantify line, assetgrowthandotherfinancial Our focusdoesnotstopatbottom Indirect EconomicBenefits support rolesarefilledlocally. Sri Lankanstaffwhileoperational/ supervisory positionsareheldby operations, managementand locally. Incase ofouroverseas senior management,isrecruited the totalworkforceincluding In SriLankanoperations,asapolicy, own delegatedprocurementlevels. with province/branchhavingtheir Supply policyhasbeendecentralised focused towardslocalsupplylines. Supply andprocurementpolicyis training period. compensation doublesupafterthe with comprehensivetrainingandthe All recruitsoftheBankareprovided or abovethelocalminimumwage. Entry levelwageismaintainedatpar Market Presence be viewedinthiscontext. addition andincomedistributionisto owned bythepublic.Economicvalue financial strengthandprofitare the entirecountryasitsassetgrowth, The Bank’s bottom lineresultsaffect Value chainfinancing • Communityinvestmentinitiatives • Contributiontosustainable • distinct lines. The approachrunsalongthree economic development their operationalactivities. maintain acostconcernapproachin and businessunitsareexpectedto time) arecarriedout.Branches (switching offattheendofoffice monitored andonsitechecks emergency. Power consumptionis place asbackuppowerincaseof Diesel poweredgeneratorsarein the nationalgridforitsoperations. The Bankuseselectricalpowerfrom testing. regular servicingandmechanical by effectivevehiclemaintenance, Emissions areplannedtobereduced re-cycling. dispatching itsentirewastepaperfor are inplace.TheBankhasapolicyof and mobilebankingsolutionsthat online bankingnetwork,ATM points a resultofelectroniccommunication, Paper usageisgraduallyreducedas routine usage. consumption islimitedtoofficelevel material, water, energyandpaper a directmaterialconsumer, theBank’s Being aserviceorganisationandnot Dimension Environmental identified promotionaldrives. shows, door-to-door campaignsand through theentireyearwithroad This wasanongoingprocessrunning with aholisticapproachandstrategy. mobilisation throughoutthecountry Another areaoffocusisinsavings approach. credit programmeisonplus we serve.Thethrustofourmicro- in thedisadvantagedcommunities spectrum. Thisismoresoevident

BANK OF CEYLON ANNUAL REPORT 2011 109 BANK OF CEYLON ANNUAL REPORT 2011 110 wealth creationacross thecountryas We recognisetheneedforequitable Society Social Dimension work. business unitsandthedeliverynet works inliaisonwithdifferent is theownerofthisprocessand The Bank’s SustainabilityCommittee credit. purification plantsonconcessionary that havebeenassistedwithwater paddy millsinNorth-Centralprovince capacity. Acase inpointislargescale or environment-friendlyoperational certification levels(e.g:SLS/ISO)and/ to acquirerequired/mandatory time, assistingproject-proponents issues cropupduringprojectlife- Bank interveneswhenenvironmental under creditevaluation/delivery, the Apart fromenvironmentalscreening toxic-free farmlands. agriculture-based dry-zonevillagesas of transformingpredominantly been launchedwiththeaim BOC modelvillageinitiativehas bio-gas generationetc) (Dairy farmingbasedonshedrearing, livestock projects. tourism) andnature-friendlyagro- sources, forestry, re-cycling,eco- (power generationusingrenewable organic farming,greeninvestments Credit evaluation/deliverytargets etc. water harvest,eco-systemprotection biodiversity/habitat preservation,rain activists andthemediaonpromoting organisations, environmental interacting withcommunity beyond theworkplace.We are Our environmentalfocusextends Beyond Work Place Report Sustainability given timeframe. of villagelevelmini-bankswithina which wouldtransformintoastring the countryasamid-termgoal, 25,000 solidaritygroupsthroughout The Bankexpectstohelpsetup Socialmobilisationofthepoor • Outreachexpansiontofacilitate • inclusiveness. approach aimingatfinancial formulated adouble-pronged Given thisscenario,wehave financial services. have accesstocustomer-friendly urban slumsandtenementsdonot poor, bothintheruralperipheryand segment amongthepopulation, It isalsoidentifiedthatasubstantial in nationaldevelopmentinitiatives. a coreissuethatshouldbeaddressed development.) compensation/promotion/career evaluation/job rotationandtransfer/ the entirework-life(recruitment/ status. Thisconceptrunsalong ethnicity/religion/social andfinancial discrimination intermsofgender/ equal opportunityemployerwithno Equal opportunity: Definedbenefitplans • Work-life balance • Skilldevelopmentandtraining • Careerpathdevelopment • • Performance-based appraisal • Equal opportunity Labour policyisbasedonsixpillars. well asinternationalinitiatives(ILO). guided bySriLankanlabourlawsas Our labourrelationsandpracticesare Decent Work Labour Practicesand initiatives through innovativeempowerment communities disadvantaged andoff-the-road BoC isan development initiatives. be addressed innational as acoreissue thatshould across the country wealth creation need forequitable We recognisethe retirement obligationsoftheteam. been establishedtoaccommodate elected BoardofTrustees has benefit planadministeredbyan Defined benefitplan: activities, leisureandholidaying. and culturalgroupings,sports,artistic practices are,assistanceforreligious head office.Otherworklifebalance and amedicalofficerisavailableat plan isinplaceonworksafety place andbeyond.Anorganised Team BoCislookedafteratwork Work-life Balance faculty. with acorefacultyandanassociate Bank hasanin-housetrainingfacility skill developmentandtraining.The Assistant GeneralManagerhandles A separatedivisionheadedbyan Skill developmentandtraining: scoring systemisinplace. promotion policywithadefined Career development: behaviours and(c)futurepotential. aspects; (a)goalachievement(b) Employees areappraisedonthree which coverstheentirework-force. This isatime-testedappraisalsystem Performance-based appraisal: Adefined Laidout

Manager (Humanresources.) direct supervisionofDeputyGeneral rights issueswhichareunderthe Personnel departmenthandleshuman The industrialrelationsunitat communication facilities. provided withfreeofficespaceand functioning withintheBank.Theyare There aresixrecognisedtradeunions employee representatives. collective bargainingprocesswith every threeyearsbasedona and non-salarybenefitsarerevised The Bank’s compensationstructures for incidentsofchildlabour. and screenscustomercreditrequests the Bankdoesnotemploychildlabour compulsory/child labour. Asapolicy, association andpreventionofforced/ uphold non-discrimination,freedomof segments(customers andsuppliers)to the Bankencouragesitsstakeholder While practicingnon-discrimination, declarations bindingonSriLanka. well asinternationalcovenantsand Socialist RepublicofSriLankaas constitution oftheDemocratic for humanrightsasdefinedbythe of thecorevaluesisrespect BoC’s underlying principleandone Human Rights giant. The sixpillarsthatmakeBoCthe a 8,000plus,dedicatedBoCteam. service pointsacrossthecountryand 10.1 millioncustomeraccounts,966 capitalisation ofRs40billion,over total revenueofRs71billion, asset baseofRupees836billion, Government ofSriLanka,hasan The Bank,whollyownedbythe benchmarks alongtheway. years, creatinglandmarksaswell in leapsandboundsforthepast72 entrepreneurs. Sincethenitevolved the emerginglocalbusinessmenand indigenous bankthatwouldcaterto the BankofCeylonordinanceasan 1939, whenitwassetupunder the countrytracesitsoriginsto state-owned commercialbankin our trademark-BOC,thelargest Bank ofCeylon,betterknownas Our Profile Not justacommercialBank everywhere. Theseservicepointsare community outposts-virtually economic centresandperipheral townships, emergingvillage in allthemajortowns,smaller We serveacrosstheentireisland- Our LocalPresence OUTREACH… Analysis. under ManagementDiscussionand Colombo 1.Moredetailsaregiven No.1 BankofCeylonMawatha, Our headquartersisat'BOCSquare' The Location Where We are- & Analysis. presented inManagementDiscussion Our corebusinessfunctionsare shown ontheinnerbackcover. ties (subsidiariesandassociates)are Our corporateinformationandfamily Legal FormandStructure pitn tok 966 point 402 network Entireservice • 248 AutomaticTeller points • feeder 316 Branch` Extensionoffices linkedtoa • Fullyfledged Branches • levels providedbythem. classified accordingtotheservice at ExchangeHousesinnineMiddle - Bankappointedrepresentatives subsidiary inLondon(BOCUKLimited) Male andChennai-awhollyowned With twooverseasbranches-in Our GlobalPresence Corporatesector-listedpublic • following marketsegments. operations arecentredonthe Our financialservicesandrelated Markets Served global locations. in virtuallyallstrategicallyimportant and France,wehaveasolidpresence stationed inItaly, Japan,SouthKorea Jordan), BusinesspromotionOfficers Dubai, SaudiArabia,Israeland Emirates, Kuwait,Bahrain,Oman, Eastern countries(Qatar, UnitedArab private companies,government companies andunlistedpublic/

BANK OF CEYLON ANNUAL REPORT 2011 111 BANK OF CEYLON ANNUAL REPORT 2011 112 Report Sustainability banking units(CorporateBranch, specifically createdcorporate Corporate bankingishandledat Highnetworthcustomers.We • • Islamic banking • Micro-finance-self-employed and Personalbankingincluding • Middlemarket/Retailbanking • • Off-shore operations personalised service. a separatecustomergroupfor have identifiedthissegmentas under/un-employed individual capacity needs ofbusinessmenintheir employees andpersonalbanking government andprivatesector including theSMEsector. than thatofcorporatesector. turnover andassetlevelsless segment. Businessentitieswith statutory bodies. departments andcorporations, by economicsectorengagement. We havegroupedourcustomerbase across thedeliverypointnetwork. unit linkedwithbankingwindows Islamic bankingisbyacentralised administrative setup. to theGovernment’s provincial and balance8provincessimilar into twoadministrativeunits Western Provincehasbeensplit provincial networkof10provinces. market isadministeredundera market/retail andmicro-finance Branch bankingwhichcoversmiddle finance. division handlesinternationaltrade delivery systemswhileTrade Finance international transactionsand International Divisionfocuseson Kandy, Galle,Kurunegala) bigger outstationbranches(e.g: Off-shore bankingunit),andalso Metropolitan, PettahBranchesand activities arehandledbypermanent Core operationsinallourbusiness the Bankappearonpage288. The productsandservicesprovidedby Our ProductsandServices • Consumption Housing,constructionsand • • Tourism • Manufacturing industries Agriculture,plantationindustry • Banking,financialservicesand • Wholesaleandretailtrading • Importandexporttrade • broadly definedsectors. our customersareoperatingacross8 set upbyparliamentarylegislation) boards, corporationsandauthorities and state-ownedenterprises(statutory Apart fromGovernmentofSriLanka property development and fisheries insurance correspondence dispatch) and customerstatement part ofdrivers,securitypersonnel support services(janitorialservices, employs outsourcingforidentified and contractedstaff.TheBank displayed infinancialstatements. accumulated shareholderfunds the growthindeliverypointsand corporate structureotherthan There werenochangesinour Ownership on Size,Structureor The ReportingPeriod Significant ChangesDuring iiohh - • Kilinochchi - eliya Nuwara • Pitigala • - • Kaluwanchikudy • Kaduruwela the bestfivebranches. measurement scalewereselectedas Five branchesthatreachedtothe systems. efficient andrewardingdelivery centres atthesametimeproviding that branchesshouldberunasprofit excellence. Theunderlyingthemeis twin pillarsofprofitabilityandservice competition processtoreflectthe and revampedthebestbranch We hadacompleteturnaround Focus forExcellence Business Units Healthy CompetitionAmong Northern Province Central Province Southern Province Eastern Province North CentralProvince Productivity Promotion National ProductivitySecretariat-Ministryof Productivity Promotion National ProductivitySecretariat-Ministryof rn iac L rn aigBadrtn AA+ Brandrating Brandrating Brand FinancePLC Institution Sri LankaStandards Sri Lanka The NationalChamberofCommerce Professionals League ofAmericanCommunication nttt fCatrdAcutnso r ak 01Ana eotAad akn etrBronze Bankingsector 2011AnnualReportAwards Institute ofCharteredAccountantsSriLanka services MercomInc International AcademyofCommunicationArtsand raiainIsiueNtr fCmeiinCtgr Award Category NatureofCompetition services MercomInc International AcademyofCommunicationArtsand Organisation/Institute Our Achievements-Awards Won in2011 awards-2010 National QualityCircle awards-2010 National QualityCircle ult aaeetsse Trade financeservicesatthe Quality managementsystem Awards-2011 National BusinessExcellence 00Vso wrsAna eotcmeiinBronze Annualreportcompetition 2010 Vision awards 01ItrainlACaad iaca aa ak Gold Financialdata:Banks 2011 InternationalARCawards 01ItrainlACaad o-rdtoa nulrpr Gold Non-Traditional annualreport 2011 InternationalARCawards sector Manufacturing andservices sector Manufacturing andservices Trade servicesDivision akn etrGold Banking sector Trade services-Goaldiggers Special commendation-BOC Smart Bees 2nd placeBOCTrade services SLS ISO9001:2008 ISO 9001:2008

BANK OF CEYLON ANNUAL REPORT 2011 113 BANK OF CEYLON ANNUAL REPORT 2011 114 drivelines inoursustainabilitystrategy bykey development -issupported wide and beingacatalystincountry lines ofaccountability. implementation andensuresclear reviews internalstructuresforpolicy making body, itformulatesstrategy, Bank’s businesses.Asthepolicy through themanagementof delivering sustainablevalue to stakeholdersforcreatingand The BoardofDirectorsisresponsible Mandate Board isexplainedinpages18and19. management. Compositionofthe agricultural scienceandplantation human rights,builtenvironment, economic research,publicfinance, commercial andinternationallaw, technology, businessadministration, background whichincludeinformation and credentialsfromawide professionals withprovenexpertise of SriLanka.TheBoardcomprises of theshareholder, theGovernment the MinisterofFinance,onbehalf Board ofDirectorsisappointedby The Highestgovernancebody, the Corporate Governance Engagement Commitments and Governance, Corporate excellence, statement, customerservice inourmission The triplethrust The best-ourwayofdoingthings Report Sustainability pppyypppy p yy gy , , best teamo Composition Breakdown ofBoard explained inpage88. mandate andresponsibilitiesare of theBoarddirectorsandtheir Composition ofthesub-committees opsto aeFemale Male Composition representation Minority group composition Total directors alternate Non-executive directors ex-officio Non-executive directors Non-executive directors non-executive Independent 2- 02 01 06 - 01 - 01 01 01 - 03 f achievers to theBoardofDirectors Recommendation/Direction Employees toProvide Shareholders and Mechanism for Governance page 66. explained indetailunderCorporate interest isapparent.Thisaspect making processwhenconflictof from deliberationsanddecision their conflictofinterestsandabstain Members oftheBoardselfdeclare Board ofDirectors conflicts ofinterestinthe Processes inplacetoavoid and workerfacilitiesintheperiphery. path avenues,savingsmobilisation practices, equalopportunity, career during theperiodcenteredonlabour Employee concerns/recommendation Employeeconcernsand • Governmentasthesole • before interaction. Unions consulttheirmembership Union representation.Trade governance isbywayofTrade recommendations towards through theMinistryofFinance. recommendations anddirections shareholder relaysits strategy. key drivelinesinoursustainability wide developmentissupportedby and beingacatalystincountry excellence, bestteamofachievers statement, customerservice The triplethrustinourmission in pages6and7ofthisreport. These twostatementsareindicated statements internally developed Vision, missionandother support thismission. and worklifebalanceinitiatives path development,workplacesafety Equal opportunity, transparentcareer Team ofAchievers. Rewards tobetheBest Bestowing Recognitionand Enhancedservicequalityand • Expandedsegmentaloutreach • Innovativedeliverychannels • Servicepointexpansion • perspectives. is centeredonfourdistinct Customer outreachexpansion expectations exceeding their customer relationship Mutually rewarding branch concept,5Sconcept) process re-engineering,model delivery pointambience(business and professionalsector) (Islamic banking,premierbanking (Mobile andInternetbanking) performing theoverseerrole. Directors istheownerwithCIA Audit CommitteeoftheBank Owner oftheProcess Unethicalactsthatwouldharm • • Misrepresentation/false • Unlawful/illegal acts Actionsthatmayleadtoincorrect/ • work. would bewithinadefinedframe- employees. Thescopeofcomplaints customers, generalpublicand Complaints areentertainedfrom Scope ofComplaints through theBoard’s AuditCommittee. reporting totheBoardofDirectors by theChiefInternalAuditordirectly whistleblower complaintsisheaded level. Organisationalsetuphandling operational failuresandefficiency to voicetheirconcernsontheBank’s stakeholders alike)areencouraged Whistleblowers (employeesandother Practice Whistle-Blower Policyand towards equitablewealthcreation. are designedandputintooperation concessionary tariffandflexibleterms focused developmentlendingon banking modelandperiphery- Field workerbasedbarefoot Communities Across UrbanandRural for EquitableDevelopment Be aProfitableCatalyst health and/orBank’s image corporate governance,financial internal reports statements infinancial/audit/ incomplete financialreporting heavy agrochemicaluse. is weaningthefarmersawayfrom village conceptwherethethrust stance andlaunchedthemodel pesticides. TheBanktookaproactive large scaleuseofagro-chemicalsand result ofwatercontaminationby in thenorth-centraldryzone,is rural farmercommunity, especially malfunction prevalentamongthe scientifically proven,thatkidney widespread contention,stillnot To citeanexample,thereisa sustainability anddevelopment. in findingthebalancebetween principle, asthesituationdemands, declaration of1992andareusingthis We acceptprinciple15intheRio Precautionary Approach the year Outcome -complaintsreceivedduring identity protectedwhendesired. maintained andcomplainants’ Total privacyoncomplaintsis Protection Complainant Privacyand estimated timelineforresolution. and thecomplainantadvisedof All complaintsareacknowledged Timeline forResolution Category No of Noof Category privacy customer Breach of data customer Loss of complaints 1Resolved 11 Resolved 08 Outcome BloombergFinanceLP • SriLankaLawLibrary • BarAssociationofSriLanka • AsiaPacificAgriculturalandRural • • International Development TheCeylonChamberofCommerce • SriLankaBanksAssociation • InstituteofBankersSriLanka • Related Associations Membership inIndustry and development. between sustainability in findingthe balance the situationdemands, this principle, 1992 andareusing Rio declarationof principle 15inthe We accept Credit Association(APRACA) Association (SriLankachapter) (Guarantee) Limited GlobalReportingInitiative(GRI) • SocialManagementFramework • InternationalFinancialReporting • BaselIIguidelines • We Subscribe/Endorse Initiatives/Charters towhich Externally Developed G 3.1guidelines programme World BankfundedSMELoan under SMEdeFlineofcredit,a implementation on apre-settimelinefor Standards (IFRS)-We are as

BANK OF CEYLON ANNUAL REPORT 2011 115 BANK OF CEYLON ANNUAL REPORT 2011 116 communities. transport systemsandratherisolated in awiderterrainwithinadequate where bankingoutletsaredispersed the moreevidentinperiphery transaction timeforthem.Thisisall base resultsinreducedtraveland service pointsclosetothecustomer Reaching outandestablishing services networkinSriLanka. the mostwidespreadonlinefinancial offices andATMs) We nowpossess service points(Branches,extension our deliverynetworkconsistedof966 cities andtowns.Bytheendof2011, additional servicepointsinlarger rural pocketsaswellcreating We arefocusingonlessdeveloped Growing Our DeliveryNetworkis Across theCountry Reaching out in focus. practices supportedbyreallifecases of ourcommitmentsandlabour development initiatives,socialbenefit customer valueaddition,community sectors inthecountry’s economy, assistance extendedtopriority customer segments,financial adopted byustoreachdiverse strategy, differentmethodologies context, thelogicbehindouroutreach sense aswellonademographical and performanceinageographical delves onouroutreachstrategy This sectiononreachingout, Customer focusedbanking Reaching out Report Sustainability create them. do notsearchforopportunities;we opportunities thereareimmense.We day toexistence.Forusthe the ordinarypeoplemanagetheir fishing villages,islands-where isolated outposts,farmingbelt, urban centresintothehinterland- spreading outofthesenorth-eastern In thisbackdrop,weatBoCare beginnings. vistas- newopportunities- Trincomalee andBatticaloa.New Point-Pedro, MannarandVavuniya, the fadnowistoflockJaffnaand Now thatnormalcyhasreturned, the peopleinNorth-East. BoC hasbeenatowerofstrengthto the Bankdidfunctioncontinuously. temporarily shiftedintermittently-yet past, deliverypointshadtobe as wellhope.Duringtheturbulent North-East sharingtheirhardships We werewiththepeoplein Wanni, BatticaloaandTrincomalee. were thereinJaffnapeninsulaand Even duringthe30plusyearwar, we Focus North-East isaCasein the country far thewidestcashpointnetworkin ATM pointsroseby52,makingit with remarkablebusinessgrowth. them byupgradingextensionoffices 9 fullyfledgedbranches,sevenoutof them intheNorthernProvinceand new extensionoffices.Thebulkof During theyearBanksetup30 be languishingoutside theformal the povertylinearereportedto social segmentjustaboveorbelow in SriLanka,consistingofthe At present,asubstantialpopulation opportunities. and aspirations,inherentskills the downtoearth,theircapabilities BoC believesintheordinarypeople - Swahili(EastAfrican)proverb go there. Far awayisfaraway, onlyifyoudon’t BoC Way Barefoot Banking- at GrassRoots- Reaching out income generatingactivities. now has500customersandassistedofthemwithcredittosetup The mini-bank,Delftextensionofficemannedbyatwo-memberBoCteam Island fortheirbankingneeds. community hastheirownbank.EarliertheyhadtotakeaboatKayts Certainly nottillBoCsetupamini-branchintheisland.Now, theisolated it wasnotthepreferreddestinationofbankers. rest ofJaffnapeninsula.Withscarceresourcesandinaccessiblelocation, from thelandmassbyaswathofocean.Povertylevelhereishigherthan fishermen, farmersandcraftsmen.Theyareanisolatedcommunitycutoff island(47 squarekilometers)ispopulatedbycirca2,700people,mostly mainland bycauseway, Delftcanonlybereachedbyboat.Thistiny mainland. Unlikemostoftheotherislandswhicharelinkedwith second largestislandinthecountryislocated36milesawayfrom The islandofDelft,westernmostoffJaffnapeninsulaandthe Reaching outacrossbarriers A caseinfocus capacity tosustainthemovertime. financial strengthandinstitutional and ruralthriftsocietiesdonothave when donorfundsareexhausted interest rates,NGOsmaywrapup money lendercreditentailexorbitant three sourcesarefragile.Informal and ruralthriftloansocieties.All Governmental Organisations(NGO) informal moneylenders,someNon- financial needsaretakencareofby living amidstseverehardships.Their in thesocietytryingtoekeouta segment, thedestitutelowerrung is theso-callednon-bankable low-cost financialservices.This banking sectorwithoutaccessto be, savingsup(saving overaperiod different savingsconcepts.Itmay system. Ontheotherhand,poorhave the morefamiliarusage-Seettu and CreditAssociations)ortouse may optforROSCA(RotatingSavings mainstream bankingsystem.They poor save.Maybenotwithinthe Savings- thisisthecatchword.The need tobeharnessed. will powerandinborntalent,that other resources,-grit,determination, apart fromcapital,theyhavemany mean capital,yes,theydo.However, people lackresources.Ifresources General consensusisthatthese will bemadestrong. They maybeweaknow, butcanand capabilities, resourcesandskills. have incommontheirownidentity, and vulnerablynon-poor. They active poor, poorestofthepoor three broadgroups.i.e:economically This socialsegmentconsistsof groups, with2,800 beingformedin Bank hashelpedsetupover16,000 eligibility. Overthepast2-3years nutrition level–determinesthe level, diseasesusceptibilityand quality, basicsanitation,educational questionnaire coveringfamilylife identification process-onepage to 8memberspergroup.Asimple small solidaritygroups(SGs)of5 base. We aremobilisingtheminto and aformidablefuturecustomer segment, thepoor, asaprofitable We haveidentifiedthissocial day’s work. cost andlossofatleastahalf based bankbranchentailsatransport their doorstep.Goingtoatown- friendly financialservicesprobablyat they needeasyaccesstopoor- (a combinationofboth)Inanyway, savings) andsavingsthrough paid backthroughaseriesoffuture savings down(creditupfronttobe towards alumpsumattheend) service points service network consisted of966 norming andperforming. stages; namely, forming,storming, Group formationistakenthroughfour own groupsbasedondiversefactors. people inthevillagewhoformtheir formation withinthelargerpoolof not formgroups.Itonlyfacilitates by thefacilitator, theBankdoes painstaking andconstantguidance While groupformationrequires life mosaicofordinarypeople. determined tosucceedinlife.Areal peelers andyes-house-wives dairymen, teapluckersandcinnamon school dropouts,toddytappersand cultivators, traditionalfishermenand are itinerantlabourersandchena Amongst ourSHGmembership,there Central hills.EveninColomboslums. Wanni totheplantationcommunity in potentially richandnewlyre-settled Uva provincetoJaffnapeninsulaand ethnic diversity, harshbackwoodsin communities, ethnicenclavesto zone farmerstosouthcoastfishing the entireisland-fromariddry- These solidaritygroupscutacross and disadvantagedcommunities. is asubstantialconcentrationofpoor rural andurbanpocketswherethere 2011 alone.TheBanktargetsthe end of2011, cities andtowns. Bythe points inlarger service well ascreatingadditional pocketsas developed rural We arefocusingonless our delivery our delivery

initiatives aresuccessfullypracticed. the islandwheresocialmobilisation on exposurevisitstootherpartsin officials. Thegroupsarealsotaken programmes forelectedgroup/society literacy andleadershipdevelopment by specificallydesignedfinancial project (PAMP).This isfollowed Poverty AlleviationMicrofinance Bank ofSriLankaunderJICAfunded program designedbytheCentral members istakenthrougha5module Capacity buildingamonggroup cycle needs. economic activitiesbutalsoforlife are offeredrepeatcredit,notonlyfor borrowers whopaybacktheirloans loan defaultisrare.Successful fellow members.Withpeerpressure, themselves actasguaranteefortheir generating activities.Groupmembers credit(savings down)forincome become eligibletoobtainmicro- couple ofmonths,groupmembers performance insavingsupfora When thegroupshowsconsistent account, whichgrowsovertime. savings isdepositedtothegroup consensus isreachedat.Combined where issuesarediscussedand weekly savingsandmeetings elected leadership,pre-planned Socially mobilisedgroupshavean

BANK OF CEYLON ANNUAL REPORT 2011 117 BANK OF CEYLON ANNUAL REPORT 2011 118 Report Sustainability water, tucking theirtrouserswhichanywaygetssodden. refreshing andamusingtoseeourteam memberswadinginthigh-deep during rains.Yet, thevillagersandbankofficersarenotdeterred. Itisboth dries upduringtheannualdroughtonly tobecomeabrownishrapid The villageandthehighlandfieldsareseparatedbyastream(Oya)which consensus arrivedat. discussed (howtoselltheHarvest?Whatplantnestseason)and members havetoanswertoughquestionsbytheothers.Issuesare Society meetingsareno-nonsenseaffairs.Errantgroupsandgroup cultivation wouldbeusedtobolstertheSociety’s loanablefundbase. millet(kurakkan) alloncommunalbasis.Theincomefromthe one acre,cassavaplotofanotheracreandhalfanfinger their ownfields.Goingbeyond,theSocietyhasplantedamaizeplotof fields arenowcoveredingreenery. Theyhavenotstoppedatcultivating BoC whichextendedcropfinancecredittoitsmembers.Theirhighland No more.TheSocietyhasestablishedarewardingrelationshipwith funds. farmers, theywerefrequentlysubjectedtoharshweatheranddriedup farming, theonlyavailableactivityinthispoorhamlet.Mostlymaize led byvillagewomenwhohaveflockedtogethertoriseabovesubsistence linked withPadiyatalawabranchinruralUva.The24membersocietyis Kehelulla Mithuru(Friends)Developmentsocietyisagroupingof5SHGs Friends-in-need A caseinfocus BoC SolidarityGroupPerformance exit pointforBoC. virtual mini-bankatvillagelevel.The members, ultimatelyevolvingintoa which inturnwouldre-lendtoits consider bulkloansforthesociety lend. Atthisstage,theBankwould distinct legalidentitytoborrowand the Registrarofcompaniesgivingita linked withBoCandregistered as avillagesavingsandcreditsociety centre wouldovertimebeupgraded representing allmember-SHGs. This leadership andaworkingcommittee form avillagecentre,withanelected Bank, 05-15SHGsareencouragedto and regularrelationshipwiththe savings, apparentsocialmobilisation consistent performancewithgrowing When SHGsinavillage,show Asset creationamongthelow-incomecustomersegment-Rs1.2billion 70% growthinfinancialassistance 75% increaseinregisteredvillagesocieties 100% growthinvillagecentres 19% growthingroupmembership 18% increaseingroupformation Economic activitiesstarted Savings down(loans)(Rs.millions) Volume ofgroupsavings(Rs.millions) No ofvillagesocieties No ofvillagecentres No ofgroupmembers No ofgroupsformed Nature of Programme No of Noof Nature ofProgramme eia o ad rdr soito 1150 1 - Trincomalee Awareness workshoponleasefinance Seminar forKandyTraders Association andmarketingforlocal/globalreach management,projectmanagementskills projectreportcontent,cashflow aspiringSMEborrowers-coverageon Entrepreneur capacitydevelopmentamong enhancement (livestock,poultryetc) and technicalknowledge development, cashflowmanagement basic bookkeeping,entrepreneurship marketing, financialliteracyand is needbased.Ittraversesacross Extent ofcapacitydevelopment our diversecustomersegments. on capacitydevelopmentamong -Growing together- wearefocused a cuefromtheunderlyingtheme at servicepoint/doorstep.Taking beyond ourproductsandservices much valuedstakeholdergroupgoes Engagements withourcustomers,a Development Programs Customer Capacity Segments Diverse Customer Reaching Outto programmes programmes n 01End2010 End 2011 26,358 87,824 16,396 1,297 held 200 410 150 1 3340 3 30 Participation 17,065 73,356 13,586 762 205 08 customer sustainability inacompetitivebusinessenvironment. This year, we initiatedasocialmanagementframeworkfocusinglongterm Management Framework Bringing theCustomersinto aMutuallyRewardingSocial Initiatives Towards CustomerServiceExcellence This wouldbeextendedtocovertheentireBank 5S conceptinitiatedat50branchesandseveralheadofficedivisions. Service QualityStandards Customer careworkshopsheldfortheentireSouthernProvinceteam Province Daily cashcollectionatbusinessdoorstepselectedbranchesinWestern Personalised Service 13 Leasefairsheldacrosstheislandfacilitatingon-siteapproval/delivery branch/province Asset valuationreviewprocessrevampedbyincreasingvettingauthorityat Asset Valuation Reduction inLeasefinanceinterestrate/equitycontribution(up-frontrental) Automation ofLeasefinanceapprovalprocesswithonline Pilot programmetostreamlinetitleacceptanceonimmovableproperty delay Loan requesttrackingsystemintroducedforeasyidentificationinapproval segment reducingpaperwork/approvaltime New creditapprovalformat/scoringmodelintroducedforretailcustomer 32 cutting downontimetakenforloanapproval 01 Delegated creditdeliveryauthorityatbranch/provincelevelwasincreased Credit Delivery Exposure visit-solidaritygroupmembers officials Capacity developmentprogrammeforgroup leaders Financial literacyworkshopforsolidaritygroup 50 Introductory modulesaheadofgroupformation Noof Poverty alleviationmicrofinanceproject- women entrepreneurs-Tangalle 1 Siriliya trainingprogrammeforlowincome Badulla Awareness workshopformigrantworkers- Work shop for Central provincial council members womencustomers-SouthernProvince Awareness workshopforaspiring Nature ofProgramme programmes programmes 6589 873 16 18 ,3 132,130 9,635 held 150 500 1 1 125 1 Participation customer businesses. and effectivelabourrelationsatour industrial peace,socialharmony We seethisasanopportunityfor place accidents,andminimumwages. leave, workercompensationonwork maternity benefitsincludingpaid of association,definedbenefitplans, of maximumworkinghours,freedom rights angleincludingtheacceptance of labourpracticeswithahuman encouraged tocomplywitharange framework wheretheyare brought underthesocialmanagement SME scalecustomershavebeen products. light) andoffersShari'ahcompliant under thebrand,AN-NOOR(the Our Islamicbankingarmperforms facet inourholisticoutreachstrategy. viable customersegment,adistinct We haveidentifiedthesectorasa within thecountry. in predominantlyMuslimenclaves This customersegmentisgrowing and borrowing. free transactionsinlendingmoney transactions- thenotionofinterest- religious perspectivesincommercial segment withaconcertedfocuson banking. Here,weidentifyasocial as apartofmainstreamcommercial as anichemarkethasnowevolved Islamic banking,earlierlookedup Islamic Banking Into NewVistas option available. process. Thebestqueuemanagement eliminating paperusageinthe and supportsthego-greenconcept virtual roundtheclockbanking insurance premiapayments.Itis payments, fundtransfersand solution facilitatesutilitybill lifecycle needs. groups forprofessionalaswell packages fordiverseprofessional the year, we created flexiblecredit administrative apparatus.During care, educationalexcellenceand industrial development,health force behindinfrastructureand economic development,thedriving are akeyelementinsocio- The professionalsinthecountry Customer Segment Professionals asaDistinct BoC Solution Our MobileBanking Banking Towards Paperless the pioneerinIslamicFinance. securing thesecondpositionbehind share of10.2%alongtheway years, wehavecarvedoutamarket Within ashorttimespanofthree sector isencouraging. wealth creationpotentialinthe market potential.Thismeansthat penetration islessthan5%ofthe estimated atRs250billion.Present Islamic bankingmarketinSriLankais PayMate , ourmobilebanking

BANK OF CEYLON ANNUAL REPORT 2011 119 BANK OF CEYLON ANNUAL REPORT 2011 120 f Revival/start-up ofSMEventures • OutreachexpansionwithinJaffna • angles. plan. Ourfocusspreadsonseveral with thegovernment’s development North-East developmentintandem The Bankhasitsownstrategyin The renaissancehasnowarrived. infrastructure devastation. lifestyle nottomentioncolossal of jobs,break-downindayto frequent displacement,scarcity population facedintermittentand during the30yearperiodand behind. Theeconomyherecontracted two provinceswhicharelagging development oftheNorth-East- development planisintegrated Lankan government’s post-conﬂict One ofthethrustsinSri East Reaching OuttotheNorth- d with thegovernment’s development intandem Th Report Sustainability strate ocus spreadsonseveralangle belt intheEasternProvince. interior areaswestofthecoastal peninsula, islands,Wanni and eve e Ban l opment p gy p inNort k g

million forprojectrehabilitation. operations withaloanfacilityofRs 7 high securityzonehasrecommenced This industrywhichwaswithinthe Tellippalay Elephant AluminiumWorks - ventures. for severalpeninsulabasedSME During theyear, weextendedfinance establish itselfandwearewiththem. sector inJaffnaistryingtore- With normalcybeingrestored,SME well asimprovisation. were knownfortheirinnovationas economy. Jaffnabasedindustrialists the livewireinNorthernProvince Before thewarbegan,SMEswere Ventures Revival/Start upofSME Community/socialdevelopmentin • Grassrootlevelfinancingfor • h a broadercontext livelihood development micro sector/foodcropsand as itsown l h an. -East -East Ou r s million. start-up financialassistanceofRs50 peninsula, theprojectwasgiven complex, thefirstofitskindinJaffna A leisureandentertainment Elite EntertainmentPark refurbishment financed aloanofRs20millionfor been handedbackandwehave forces duringthewar. Ithasnow hotel wastakenoverbythearmed Once alandmarkinJaffna,the Subhash Hotel-Jaffna activities. programme thatwill covervirtuallyall programme, acomprehensive credit introduced Vadakkin Vasantham way alongtheway, CentralBank Credit programmes.Meanwhile,half group basedPovertyalleviation ventures weretargetedbysolidarity At thebottom,start–upmicrolevel livestock developmentprogramme. Dairy unitswerefinancedunderagro- perennial cropsandpoultrysector. crops andKrushiNavodayaforthe Scheme (NCRCS)forshorttermfood New ComprehensiveRuralCredit arms tomeettheneedforfinance. We engagedmultiplecreditdelivery mushrooming economicactivities. business unitsthatwillsupport use localraw-materialsandsmall cottage levelindustriesthatwould (agricultural wellsandpipelines) and cashew),irrigationsystems vegetables, perennialcrops(grapes crops suchaspaddy, onionsand strategy centeredonshorttermfood level. Ourshorttomediumterm North-East hadtostartatgrassroot Bringing innormalcytothetattered Livelihood Development Results Sector withSpectacular Short Term FoodCrops-a Point Pedrobranches. Kilinochchi, Vavuniya, Chunnakam and Main contributorswereAchchuvely, short termcropfinanceunderNCRCS. Province accountsfor59%ofthe fertile inthecountry. Now, Northern tracts inWanni areamongthemost in thepeninsulaandfallowland soil aroundChunnakam-Achchuvely sign. Itshouldbeaslateritered the NorthernProvincewasawelcome A surgeinshorttermcroploans Rest oftheprovinces Northern province Northern ProvincewithRestoftheProvinces NCRCS FacilitiesDisbursed:Comparisonwith 1,4 0 4 41 59 844 1,225 50 50 16,542 16,468 loans No of market conditions. decline inthefaceofdisrupted turbulent past,itwentintoaforced vineyards. However, duringthe best explainedbytheflourishing The ingenuityofJaffnafarmersis in Jaffnaagriculturallandscape. Grape cultivationisadistinctfeature Grape cultivationinthepeninsula Back toBasics Uthpaththy programme. and confectioneryitems)whichwas facilitatedbytheBankunderYarl million withCargillsFoodcitytosupply Palmyrahproducts(handicrafts Society, PointPedro.Thesocietyhasaworkingarrangement worthRs2.5 This groupisoneofthe10groupsamalgamated asThendralDevelopment at Rs45,000payingtheirduesbeforethemonthlydeadline. products) Allfivemembershaveobtainedsavingsdown(loans)averaging diverse economicactivities(poultry, home-madesweetsandpalmyrah Rs 68,700withtheBank.Gnanoli,headedbyMsSRajaniisengagedin linked withBoCPointPedrobranch.Thegrouphassavingsof The five-memberall-womensolidaritygroup,styledGnanoliis with theoutsideworld Bonding amongthemselvesand A caseinfocus Amount % 012008 2011 Rs. Million disbursed Noof % 0439 9 89 795 91 20,453 loans ,0 0 11 102 9 2,100 assisted byus. Here isthestoryofafarmer-borrower was launchedbyChunnakambranch. to assistgrapefarmersinWalikamam practice. Amid-termloanprogramme in thistraditionalagricultural Now, wehaveinitiatedaresurgence Amount % Rs. Million disbursed %

BANK OF CEYLON ANNUAL REPORT 2011 121 BANK OF CEYLON ANNUAL REPORT 2011 122 peninsula. the fruit)fromSG producers inthe confectionery andsweetsfrom made outofpalmyrahleafand Palmyrah basedproducts(Items arrangement, Cargillssources micro entrepreneurs.Underthis between themandJaffnabased and facilitatedamarketlinkage retail chain,CargillsFoodcity BoC teamedupwiththeleading Going beyondroutinecreditdelivery, and buildsconfidence. and tradingoutletsempowersthem between microsectorentrepreneurs issues. Creatingmarketlinkages failed asaresultofmarketingrelated Numerous smallbusinesseshave products athemajorchallenge. entrepreneurs, marketingtheir For smallscaleproducersand Yarl UthpaththyProgramme Urelu East,Chunnakam - SGnanneswaran, my feet.” that helpedmetostandon proceeds. ItwastheBank Rs 1millionfromsales I havesavedalmost Dambulla economiccentre. me togetafootholdat 4,500 kg.TheBankhelped exceeded harvest Rs 500,000.Lastyear, my bank. Ireceivedaloanof got financialhelpfromthe around50 grape farmers unfavourable. Thistimewe much in thepastwerevery balance. Marketconditions a loanagainstmysavings that timeIcouldonlyget Chunnakam branch.At opened in2001at “I hadasavingsaccount Report Sustainability crop financeunderNCRCS. BoC isthesinglelargestlenderfor together withpotatoandonions. of latemaizehasgainedpopularity the majorportionoffunding,since Apart frompaddywhichaccountsfor marketing issues. days consideringthepost-harvest given amaximumperiodof270 is atharvestwithpaddybeing Bank ofSriLanka.Repayment different cropsdeterminedbyCentral scales offinanceandacreagefor interest rates(8%)andbasedon NCRCS atcomparativelyverylow Facilities areconsideredunder crops e.ggingerandturmeric. and low-countryselectedcash selected vegetablesbothup-country include cereals,pulses,rootcrops, paddy and32othercropswhich Small farmercropfinancecovers Short Term CropProduction Lending Development at theGrassRoots A HelpingHand

financial assistancefromBoC. engaged inhisfather’s lifestyle),heattributeshis successinlifetothe Happily marriedandwith3children (2 marrieddaughtersandason In 1995,theBankrecognisedhimas abestfarmer. farm mechanisation(2two-wheeltractors)andpaidthemback. In additiontoregularcroploanssince1985,hehasobtainedcreditfor 5 acresofownpaddyandanother4leasedoutfields bustling townshipofHingurakgoda.Everyseason,heandhissoncultivate colony, arather isolatedsettlercommunity, 15kilometresawayfromthe Galamuna extensionoffice,asecond-generationfarmerin At theotherend,isMrPLAAppuhamy, a58yearoldcustomerat relationship withBoC. Married andwith3childrenKirubanantharisbeamingabouthisfruitful Vanni. out soilisregularlyenrichedwithcow-dungbroughtoverfromdistant spread acrossonion,chillie,bananaandpaddycovering8acres.Theworn facilities uptoRs250,000eachseason.Hisvariedagriculturalventures He isaregularNCRCSborrowerwithKaytsbranchobtainingcredit Velanai, aweatheredislandoffJaffnapeninsula. Mr SKirubanantharisa63yearoldhardenedfarmeratSaravanaieast, common goalandahelpinghand Worlds sharinga apart-yet A caseinfocus agro-livestock developmentloanscheme bulk o and landvehicles. Popularitems for agriculturalmachinery, equipment (farmer power)toconsiderfinance programme styledGoviShakthi The Bankintroducedaloan major portionofagriculturaloutput. in thedry-zonewhichaccountfora mechanisation, moreparticularly necessitate introductionoffarm as harvestingandlabourshortage timelines forlandpreparationaswell draught animalherds,limited agricultural lands,diminishing Expansion andclearingofnew Farm Mechanisation zone highlands. a profitableandpopularcropindry- contracts. Today, maizehasbecome the linkageswereonforwardsales large scalefoodprocessors.Mostof them withmaizeprocessorsand post-harvest issuesbutwelinked farmers withfundsandadviceon endeavour. Notonly, wedidassist under NCRCSwentalongwayinthis in thisachievementasourfunding talks ofAflatoxins.We canrejoice sufficient inmaizeandnooneeven Aflatoxin. Now, wearealmostself that SriLankanmaizehadalotof There wasacommonlyheldbelief manufacturers andfoodprocessors. maize wereimportedbyanimalfeed A fewyearsback,largequantitiesof The SuccessStoryofMaize amounts toRs526million. aswell asexpansions) (start-ups farmers Our fundingfordairy f this pp f unding hasbeenbywayo gy that 35%ofthefishermen inthe In thisbackdrop,itisestimated the sector. programme thatwouldfurtherexpand This yeartheBankpioneeredaloan community isalsoinoperation. entrepreneurship amongthefishing and savingsprogrammestodevelop the fishingandtailor- madeloan employment programmesamong for finance.Additionally, self- ice plantshavebeenconsidered services suchasfreezertrucksand well asaquacultureandsupport fishing, ornamentalfishcultureas fishery withmulti-dayboats,inland mechanised dayboats,mid-sea fishery usingtraditionalcraftand All majorsub-sectors(coastal institutional capacity. income levelsoffishermenand programmes consideringitsdiversity, sector wasassistedwithmultiple its fullpotential,thefishery A sectorthathassofarnotharnessed Fisheries Sector with aloanvolumeofRs450million. borrowers werefinanciallyassisted harvesters. Around5,000farmer of seeders,weedersandcombine irrigation systemsandvariedrange tractors, waterpumpsandsprayers, were, two-wheelandfourwheel p Innovation Traditional Fishingvs that caneffectively harvestTuna larger fishingvessels(Longliners) This scenariofocusesustowards trawlers present. with biggerboats,longlinersand seem outdatedinthepresentcontext, These traditionalfisherypractices multi-day boats. carried outwithrelativelysmaller economic zone.Midseafishingis shelf, nottomentiontheexclusive tapped thefish-richcontinental of theharvest)hasnotadequately dominated bycoastalfishing(54% a productivityof7.39MT. Thesector, only 1.73MTwithThailandyielding productivity perfishermanwhichis neighbours. Acaseinpointisour is stilllaggingbehindourAsian by traditionalfisherytechniques Sri Lankanfishingindustrydominated earnings. with lessthan2%ofourexport potential inithasnotbeenharnessed need ofthecountry. Theexport provides 70%oftheanimalprotein we focusonfisheries.Thissector One keyeconomicactivitywhich assistance. 15% ofthemhavereceivedfinancial country areBoCcustomerswhile The f

Indian breeds. cross-bred (Jersey, Friesian)and is onherdup-grading withEuropean such asmilkingmachinery. Thefocus maintenance andfarmmechanisation capacity aswellquality, pasture shed construction,up-gradingherd interest subsidy. Fundinghascovered compensates lenderbankswithan of CentralBankSriLankawhich livestock developmentloanscheme funding hasbeenbywayofagro- to Rs526million.Thebulkofthis ups aswellexpansionsamounts Our fundingfordairyfarmers,start- supply chain. processing plantslinkedwiththe having inplaceanetworkofmilk farmer level(producerfarmers)and and yieldenhancementatdairy approach, viz,-capacityexpansion strategy isbasedonatwin-pronged domestic milkproduction.This strategic plantoexpandandupgrade the governmenthasformulateda added products.Inthisbackdrop, form ofpowderedmilkandvalue milk requirementisimportedinthe At present80%ofthecountry’s Promoting DairySector National Priorities Spearheading vessel manufacturers. with interestedprojectpromotersand to thissectorhavingengagements We havemadeexploratoryforaysin (Sea bassandMilkfish). the eastcoast)foridentifiedspecies locations arecountlesslagoonson probed iscagerearing(theideal demand. Anotherareathatcanbe of whichhaveheavyinternational Spanish mackerel(Seerfish)both (Yellow finTuna andSkipjack)

BANK OF CEYLON ANNUAL REPORT 2011 123 BANK OF CEYLON ANNUAL REPORT 2011 124 paddy/maize. linkage funding in facilitating market BoC isthepioneerin farm school. in-house trainingatMahaberiyatenna farmers weretakenonfieldvisitsand development instructors.Selected by veterinarysurgeonsandlivestock planned modulesandtechnicalinput awareness work-shopswithpre- organised aseriesofdairyfarmer them withveterinaryservicesand farmers intofarmergroupslinked mind, theBankhasmobiliseddairy yield enhancement.Withthisin control andpreventionmilk herd healthmanagement,disease transit points,artificialinsemination, veterinary services,breederfarmsand extension servicesintheformof Dairy farmersectorneedsextensive Report Sustainability Our groupinvestmentinthisprojectisestimatedatRs100million. with asupplychainof1,000dairyfarmersinWanni. across a3yeartimeline.Wheninfullswing,theprojectwouldlinkup chain, pasteurisedmilkandyoghurtproductionvalueaddedproducts to passthrough3projectphasesi.e.Chillingcentresandmilksupply been allocatedandlanddevelopmentisunderway. Theprojectisplanned processing plantatKilinochchi.Theland,inextent8acreshasalready BoC andwellknownconglomerateCargillsPLCistosetupamilk Province. Yarl panamDairyDevelopmentlimited,ajointventurebetween Services (Private)limitedisgearingtodevelopagri-businessinNorthern BoC throughitsfullyownedsubsidiary, BOCManagementandSupport Yarlpanam project dairy A caseinfocus Production andHealth. with theDepartmentofAnimal practices workingincollaboration herd qualityandanimalhusbandry steps havebeentakentoupgrade have beenformedandconstructive industry inboth.Dairyfarmerclusters meaningful stepstodevelopthedairy provinces. TheBankhastaken war developmentdriveinthetwo a predominantplaceinthepost- and milkprocessingshouldoccupy Therefore, revivalofdairyfarming been adairyfarmingprovince. The North-Easthastraditionally totaled Rs6billion. maize processorsduringtheyear processors suchasricemillersand Volume ofcreditreleasedfor maize. market linkagefundinginpaddy/ BoC isthepioneerinfacilitating farmers andprocessor-buyers both. mutually rewardingforproducer- market mechanismthatwouldbe towards aworkableandviable purchase hasbecomeanecessity volumes inharvest,fundingforcrop off-season. Asaresultofsheer supply andrisingpricesduringthe of harvestwherethereisaglutin entail marketingissuesatthetime maize, onionsandvegetables) Expanding cropharvest(paddy, Strengthening FoodSecurity Linkages Creating Market units units andprocessing employment atfarmer Direct/indirect milk processingunits Credit disbursementfor Rs526 Total loandisbursement (Milking cows) Total herdcapacity expansion) farmer units(startup/ Number ofdairy at AGlance Dairy SectorAssistance persons million Rs 377 million 3,063 5,000 1,400 need assessment, marketanalysis, (regulatory framework,customer a diverserangeofsubjects (30 traininghours)andcovered officers ranfor4consecutivedays Programmes forcreditappraisal during thefirsthalfofyear. programs weredesignedandheld to backuptheinitiative.Thetwin programmes speciallydesigned The resultwasaseriesoftraining and management/marketingskills. entrepreneurs withfinancialliteracy evaluation officersaswell This initiativeneedstrainedcredit districts inthecountry. development inalladministrative solely forthepurposeofSMEsector provinces andabankbranchset-up be followedbySMEunitsinall10 office todrivethesector. Thiswill an independentSMEunitathead the year, theBanksetinmotion linkages intheprocess.During up streamanddownstreammarket and largescaleindustries,creating bridges thegapbetweenmicrosector economic developmentinanycountry, SME sector, thecatalystfornational SME Sector supply linefortheprocessors. the producersandanuninterrupted mechanism ensuresastablepricefor the producersandprocessors.This by ForwardSalesContractsbetween Part ofthisvolumewasbackedup 2011 Maha 2011 Yala Noof Season facilities 4 2,642 3,385 44 34 Rs Millions Amount Amount Development CreditProgramsIntroducedin2011 sessions throughcasestudies. methodology) andalsowork-shop investment appraisal,projectvisit including cashflowforecastand evaluation, financialevaluation management evaluation,technical applicants andoffertechnicaladvice/assistance. The programmeistobecarriedoutwith pro-activeparticipationofTea SmallholderDevelopment Authoritywhichwouldregister financed forre-planting,infillingand plantationstart-ups. Tea smallholders,smallholder societiesandprivatelyheldteaplantations(asopposedtoregional plantationcompanies)would identified asteagrowingareas. The programmeisfundedbytherecoveriesmadeoutofADB Tea DevelopmentProjectandoperativein14districts Tea DevelopmentProject-RevolvingCreditline The eligibilityisrestrictedtoindividualborrowers. project sectors. and fisherysectors.Theobjectiveistorevivethecapacitiesefficiency levelofdisasteraffectedunitsfallingintothe Focus willbeondisaster(naturalorman-made)affectedmicro,smalland mediumscaleenterprises(MSMEs)involvedinLivestoc Prosperity LoanProgram(Saubhagya) Target ventures Other thanhomegardeningandcommercialagriculture,theprogrammewouldalsoaccommodateinnovativeselfemployment innovative andatthesametimeintensiveagriculturemodels. gardens towardsacommercialscale.Theunderlyingthemeistransformingtraditionalsubsistencelevelhomeinto Targeted atindividualsand/orgroupsofwithinthelow-incomesocialsegment,programmewouldraisehome Credit ProgrammeforHorticultureandSelfemployment Target group:Individualsandgroupsofindividualsorcompaniesengagedinhavingexpertise/experienceagro-industries development The expectationisthattheprogrammewoulddrivetraditionalcropbasedagricultureandanimalhusbandrytowardsvaluechain veterinary services,feedsupply, milkcollectionandchillingcenters,retailnetwork. and valueaddition.Thiswouldnecessarilybuildupforwardbackwardmarketintegration.e.g:breederfarms,transit This programmeenvisagesagriculturalvalueadditionthroughinnovativeagro-industryinitiatives,includingmilkprocessing Viskam CreditProgramme Programme Profile,ObjectiveandTarget BorrowerGroup marketing forlocalandglobalreach. project proposalpreparationand focused onfinancialrecordkeeping, One- dayentrepreneurworkshop 340 participants Entrepreneur program 3 workshops Outcome inthisInitiative services sector-Rs.742million projects, thebulkgoingtowards delivery wasRs.2.0billionfor257 During theyear, totalSMEloan participants Loan officertraining10programs866 specified Construction sector-Rs.109million. Wood products-Rs.122millionand Food processing-Rs.550million,

be k Rs. Million Usage ,0 942 1,000 Fund 5 54 50 0 90 100 512 15 Rs. Million Usage In Fund 2011

BANK OF CEYLON ANNUAL REPORT 2011 125 BANK OF CEYLON ANNUAL REPORT 2011 126 Report Sustainability ammcaiain ,5 824 2,657 526 Noof 2,367 1,437 includingagri-business/perennial crops 33,010 Agriculture basedlivelihooddevelopment Farm mechanisation Dairy farming-ALDLprogramme Small farmercredit-cropfinance Category Wealth CreationAcrosstheNation Target Programme Profile,ObjectiveandTarget BorrowerGroup M rjcs 272,051 257 377 6,027 256 03 5,896 78 560 82,196 SME projects Milk processingplants Creating selfemploymentavenues Commodity purchase Fisheries sector- repayment plansrunninginto8yearsandlowtransactioncostsfixedat1%ofthedisbursement. flexible terms,relaxedcollateralcover, concessionaryinterestratesthataremorefavourableforsmallborrowers,extended A creditplanexclusivelyforwomenentrepreneurs,Siriliyafocusesondynamic,skilledentrepreneurs.Keyfeaturesare Siriliya CreditProgramme Target beneficiarygroup:Individuals,groupsofindividualsandfisheriescompaniesregisteredwiththeFisheriesDepartment. communication equipment,supplychain(Iceplants)andtransportfacilities(Freezertrucks)farmmanagement. Facilities wouldbeconsideredforfishingvessels(dayboats,multi-daycraft,Longliners,)gear, navigationand under theplannedprogramme. Diverse segmentsinthesector(coastalfishery, midanddeepseafishing,Inlandfishery andevenfishfarming)wouldbeassisted Aquatic Resources. The programmeoperatesintandemwiththenationalfisherydevelopmentinitiatedbyMinistryofFisheriesand result inpositivecashflowsandenhancedyieldlevelsthefisherysector. The Bank’s internally generatedresourcesfundthisprogrammewhichwouldsubstantiallyincreasethenationalfishcatchand Fishery CreditProgramme(DiyawaraDiriya) Beneficiaries 5681,478 5,628 Loan Volume Loan Volume Rs. Million Central BankofSriLankaconfirmsourbenchmarksindevelopmentcredit. Our FootprintsinDevelopmentLending totalloandelivery 32.7% - 39.9% - PovertyAlleviationMicrocreditprogramme • Awakening NorthCreditscheme • 37.5%of - NCRCSscheme(Shorttermcropfinance) • We arethemarketleaderin, Rs. Million Usage ,0 226 1,000 Fund 0 304 500 Rs. Million Usage In Fund 2011 included underthetheme. education andlifebalancehavebeen groupings. Initiativesfocusingon inter-action withsocio-economic care, communityresponsibilityand under nationalheritage,health Our socialinitiativesaregrouped and commitment. in ourinitiativeswastheirdedication assistance. Themajordrivingfactor to backupmaterialandfinancial also extendstheirvoluntarytime development initiativesbutourteam towards diversecommunity give materialandfinancialsupport are inourDNA.Notonlywedo root levelandsocialresponsibility Community developmentatthegrass Overview development. members incommunity hours spentbyourteam recreation andvoluntary diversity, and sports cultural andreligious care, socialinfrastructure, national heritage,health initiatives promoting community development Here, wetalkaboutour the Community Reaching outto poverty line. around 2,000,90%ofthembelowthe Ranorawa servesacommunity The dilapidatedruralhospitalat care beingamajorareaofconcern. of socio-economicissues,health zone villagesfacingamultitude Mahavilachchiya aretypicaldry- Bogas wewa,Panorawaand of Dunumandalawa,Oyamaduwa, Ranorawa andsurroundingvillages initiative. was selectedbyusforamajorCSR Wilpattu nationalpark,Ranorawa North-East ofAnuradapuracloseto An impoverishedruralcommunity Development Initiative Ranorawa RuralHospital Health Care Generation The Next site. newsletter andlaunchingofitsweb we supportedtheDaladaMaligawa In additiontosponsoringtheperahera sacred toothrelic. and ceremoniesconnectedwiththe dance rhythmsandfolkmusic,rituals to witnesstheage-oldtraditions, with thousandsoftouristsflocking event whichdrawsattentionglobally country, Daladaperahera.Thisisan biggest culturalpageantinthe This yeartoowesupportedthe Perahera. Extravaganza -KandyDalada The UltimateCultural National Heritage was heldon7thMarch2012. work. TheopeningoftheHospital allocated torenovation/construction CSR fundingofRs.6millionwas spacious lobbyforpatients. toilet andwashroomfacilities facility, clinic,dispensary, drug stores, consultation rooms,surgicaldressing unit, (OPD).OPDwouldhave2doctor setting upanewoutpatienttreatment existing hospitalinfrastructureand initiative planstorenovatethe Ranorawa hospitalmodernisation infrastructure facilities. excavation implementsandidentified costs oftheCDFpersonnel, has sofarmettheaccommodation landscaping isinprogress.TheBank putting uppilgrimfacilitiesand renovating thepresentdaymuseum, excavation withinanidentifiedarea, restoration workwhichconsistsof the CivilDefenseForce.(CDF)The Department withlabourofferedby is managedbytheArcheological of NationalHeritage.Restoration restoration projectbytheMinistry declared alandmarkarcheological Digawapi inAmparadistricthasbeen A historicsitedatingbackto110B.C, Digavapi RestorationProject traditions. of BuddhistandHindureligious colourful pageantisaperfectblend dubbed SurinduniKataragama,the the annualprocessionisheld.Aptly more sointhemonthofAugustwhen diversity offaiththroughouttheyear, draws thousandsofdevoteesina the south-east,Kataragamatemple Venerated pilgrimcongregationin The EsalaPageantatKataragama

BANK OF CEYLON ANNUAL REPORT 2011 127 BANK OF CEYLON ANNUAL REPORT 2011 128 trees werepruned,conservedand with buffalograss.Theancientshade repaired, conservedandalsoturfed Bastion andAurorawas The fortiﬁcationbetweentheUtretch Ministry ofNationalHeritage. Galle HeritageFoundationofthe Department ofArchaeologyandthe with therecommendationof Fort Galle.atacostofRs950,000/- Regional OfﬁceSouthernProvince Eglinton HousenowthehomeofBoC Galle Fort,oppositethe19thcentury at theUNESCOWorld Heritage siteof CSR Projectcompletedin2010/2011 Galle FortRenovations Report Sustainability renovations. Photographs depictbefore&after developed andconserved. repaired andtheparkingareawas The roadandrampartwalkwas stone protectionbarrierserected. bank andcarriedoutabaseline Sri Lanka,BoCjoinedwithPeoples Initiated bytheCentralBankof educational needsoftheirchildren. health servicesandsanitation, dilapidated abodes,inadequate the faceofdisruptedinfrastructure, a wholegamutofpressingissuesin already resettled.Thesepeopleface now comingbackwith375families village duringtheturbulentpastare war. Thevillagerswhoabandonedthe severely affectedbythe30yearlong Batticaloa district,whichwas Unichchai isaremotevillagein Programme Unichchai Village Adoption Rs 2.5millionasaCSRinitiative. The Bankcontributedasumof based logistics. livelihood developmentandeducation reconstruction, sanitaryfacilities, needs centredaroundhouse need assessment.Theimmediate survey amongthevillagersaimedat based logistics. development andeducation facilities, livelihood sanitary reconstruction, centred aroundhouse The immediateneeds at needassessment. the villagersaimed among baseline survey outa bank andcarried joined withPeoples Bank ofSriLanka,BoC Initiated bytheCentral

specifically assignedfieldworkers. threshold isunderwaywith bringing themtocreditdelivery villagers intosolidaritygroupsand The nextstepofmobilisingthe management. The projectiscoordinatedbyprovince investments Community Renovation ofGalagedarahospital Ward no33atKandyGeneralhospitalrenovatedwithvoluntarylabourofemployees hospital. Partner sponsorforTheTrial -the27day, 680kilometrewalkforconstruction ofachildcancerwardatJaffnageneral anniversary Voluntary blooddonationcampaignsatheadofficebuildingandvariousprovinciallocationsfocusingontheBank’s Renovation ofward24atKurunegalageneralhospital Epilepsy taskforce-awarenesswalkon Logistical assistancetoAsianspinalcordnetwork’s 10thASCoNconference Sri LankaEyeDonationSociety-sponsorship National RabiesEradicationCampaignconductedbyAnimalWelfare andProtectionAssociation Sponsored the8thacademicconferenceofSriLankacollegeObstetriciansandGynecologists Sri LankaCancersociety-Nationalwalkforcancer. sponsorshipandparticipationofemployees Repairs andrenovationstowards45atKurunegalageneralhospitalwith2dayvoluntarylabourofemployees Renovating/refurbishing Mahiyanganayahospitalwithemployeevoluntarylabourrunninginto4days Establishment ofaherbalgardenatMedagamaAyurvedic hospital Re-wiring andrenovatingBibilebasehospital Voluntary cleaninginitiativebystaffatRambewa,EppawalahospitalsandAnuradapuraruralhospital Renovation ofawardatAnuradapurageneralhospitalwithvoluntaryparticipationthestaff Mobile medicalclinicatGomarankadawala,250patientsofferedtreatment of a13memberKoreanphysicianteam.1,064patientsweretreated. Acupuncture treatmentclinicheldatKappalthuraiAyurveda hospitalinTrincomelee withtheprofessionalassistance National dangerousdrugscontrolBoard-Counsellingworkshop Construction ofanemergencytreatmentunitatWellawaya hospital-Moneragaladistrict HEALTH CARE Other CSRinvolvementsduringtheyear

BANK OF CEYLON ANNUAL REPORT 2011 129 BANK OF CEYLON ANNUAL REPORT 2011 130 Report Sustainability The CeylonChamberofCommerce- Tourism productmeetmart Federation ofChambersCommerce- FCCISL-Entrepreneuroftheyear Coconut GrowersAssociation-Annual generalmeetingandagriculturefair National ChamberofExportersSri Lanka-NCE25thanniversarycelebrations Chamber ofConstructionIndustrySri Lanka-Seminaronroadconstruction The CeylonChamberofCommerce-BestCorporateCitizensaward2011 National ChamberofCommerceSriLanka-BusinessExcellence awards2011 Lanka ExhibitionandConferenceServices-JaffnaTrade fair2011 Sri LankaChamberofSmallandMediumIndustries-IndustrialExcellence awards2011 Lanka Exhibitionandconferenceservices-BatticaloaInternationalTrade Exhibition National ChamberofExportersSriLanka-19thAnnualNCEExportaward National ChamberofCommerceSriLanka-Ayurveda Expo2011 Institution ofIncorporatedEngineers-INCOTrade fair Sri LankaBureauofForeignEmployment-25thanniversary Sri LankaExportDevelopmentBoard-Expobazaar2011 Ceylon ChamberofCommerce-BestCorporateCitizenaward RELATIONSHIP WITHTRADECHAMBERS-SPONSORSHIPS Walawe SuperCross-Motorshow- Divineguma exhibition-KegalleBalikaVidyalaya Childrens’ Artcompetition-DiganaBranch Deyata KirulaexhibitionatButtala Island-wide bestfarmercontest(SooraGoviya)sponsorshipatBadulla of 1,000villagers. Gam udana(villagereawakening)programmeatWellawaya MahindaRajapakseCommunityhallwiththeparticipation Largest graniteBuddhastatueatRideegama Renovating theroadleadingtoAdam’s peak(Sripada) Kandy DistrictArtsfestivalorganisedbytheSecretary, Kandy 45th anniversaryofKandyYoung mens’BuddhistAssociation General convocationceremony-UniversityofPeradeniya Independence daycelebrationsatBogambara,Kandy Elders’ daycelebrationatKaithadyHome,Jaffna Construction of3unitpilgrimsrestatChurchourHolyMother-Madhu Employee participationindengueawarenesscampaignsacrossthehighlysusceptibleareas Devotee assistanceprogrammeatTalawila feast Voluntary reliefworkbyemployeesatfloodaffectedareasincludingdistributionofsuppliesanddryrations Tree plantingcampaignsatprovincelevelontheBank’s 72ndanniversary Renovation/repair ofclocktowerandironfenceatBadullatown Salutation programmeforpre-schoolteachersatKamburupitiya Imaduwa Collaborated withSunerafoundationtodonate100childrenssavingspassbooksdifferentlyabledchildrenat Savings awarenesscampaignswithemployeevoluntaryparticipationthroughroadshowsanddoortocampaign COMMUNITY RESPONSIBILITY excellence. an idealplatformtowardseducational high-achieving nationalschoolsandis secondary educationatprestigious, enables successfulstudentstopursue country’s educational system.It is consideredawatershedinthe Year 5scholarshipexamination Programme Hapana Scholarship Nation’s Future Investing inthe Reaching outtothefuture eu oo atcpnsVneNo of Participants Venue NoofParticipants Venue eeul aaVdaaa esrpr 0 atinSlaVdaaa eiaa350 BasthianSilvaVidyalaya, Kekirawa 500 Medemulla MahaVidyalaya, Melsiripura baauaMdlSho 2 hnrjtiMh iyly,Ykaa275 ChandrajothiMahaVidyalaya, Yakkala 128 Ibbagamuwa ModelSchool iaeaNtoa col iaea65KtknaSnaoh iyly,Dnoua400 KatukendaSangabodhiVidyalaya, Dankotuwa 625 Migalewa NationalSchool, rc iyly,Rjnaaa40Paehy ah uioim uahigaa350 PradeshiyaSabhaAuditorium,Bulathsinghala 400 Tract 5Vidyalaya, Rajanganaya eitaady ainlSho ,0 ohpty oe col adw 450 PothupitiyaModelSchool,Wadduwa 1,200 Dehiattakandiya NationalSchool aaeiCmuiyHl,Aaaawl 0 eautaKnauaMh iyly,Swgm 300 SewamukthaKandawuraMahaVidyalaya, Sewagama 500 Mahaweli CommunityHall,Aralaganwila ercClee oaa30Atnkdwl aaVdaaa otpty 532 AttanakadawalaMahaVidyalaya, Kottapitiya 350 Pedric College,Horana adrgm ainlSho,Bnaaaa50UaaaapiaySho,Uaaaa500 UdawalawaprimarySchool, 550 Bandaragama NationalSchool, aiaMsi aiaVdaaa utlm50 oaaeaNtoa col oaaea700 GodakawelaNationalSchool, 500 Fatima MuslimBalikaVidyalaya, Puttalam atniaNtoa col atnia50Rmaaal aaVdaaa iiaa500 RambadagallaMahaVidyalaya, Ridigama 500 Nattandiya NationalSchool, eieoaMh iyly,Blnoe70Ktpl ainlSho,Ksoaa400 KotapolaNationalSchool,Kosmodara 740 Weligepola MahaVidyalaya, Balangode aaat eta col aaat 5 eynaaNtoa col450 DeyyandaraNationalSchool 450 Kahawatte CentralSchool, anl ainlSho,Pnaa40BnaaaaaNtoa col ohhygm 400 BandaranayakaNationalSchool,Nochchiyagama 450 Pannala NationalSchool, id olg,Caaahhr 0 idrh iyly,Pmdw 600 SiddarthaVidyalaya, Pemaduwa 500 Hindu College,Chavakachcheri aia eoilNvdaSho,Mnpy40SbtaPiaySho,Spgsad 400 SobithaPrimarySchool,Sapugaskanda 450 Manipay MemorialNavodyaSchool, tSbsinMh iyly,Knaa 5KrniiaMh iyly,Gnmla350 KirindiwitaMahaVidyalaya, Ganemulla 85 St SebastianMahaVidyalaya, Kandana iiaaaMh iyly,Seua31PtiaaVdaaa iitl 600 PathirajaVidyalaya, Mihintale 311 Divisamara MahaVidyalaya, Seeduwa ats olg,Rtoa60MdwcciaMdaMh iyly 600 MedawachchiyaMadyaMahaVidyalaya 600 Baptist College,Rattota atgm aaVdaaa atgm 0 aiiMdaMh iyly,Bnoa550 GaminiMadyaMahaVidyalaya, Bentota 400 Wattegama MahaVidyalaya, Wattegama nmlw iaaWmlrtaVdaaa iiia40Mhwty iyly,Ahrgry 400 MahawathyaVidyalaya, Athurugiriya 410 Inamaluwa Vijaya WimalaratnaVidyalaya, Sigiriya aaaaVdaaa iapn 0 MPrr iyly,Ytynoa500 NMPereraVidyalaya, Yatiyantota 308 Mahanama Vidyalaya, Tirappane r uaaoh aaVdaaa niia40AuuaaMydnaVdaaa eiwt 260 AtulugamaMayadunnaVidyalaya, Dehiowita 400 Sri SumanajothiMahaVidyalaya, Ingiriya etpl aaVdaaa etpl 0 edny ainlSho 600 Teldeniya NationalSchool 600 Hettipola MahaVidyalaya, Hettipola tBreetsClee oghwl 5 ats olg,Rtoa600 BaptistCollege,Rattota 450 St BernedettesCollege,Polgahawela oa olg,Mnrgl 9 an ainlSho,Rna450 RannaNationalSchool, 695 Royal College,Moneragala across theisland(e.g:Weligepola reflect thatunder-developed pockets The listofschoolschosenasvenues where accesstoprivatetutionisrare. developed schoolsintheperiphery of thisprogrammewasonless- benefiting 34,879students.Thrust 70 pre-examinationwork-shops publication andfinanciallyassisted alongside 'Hapana'educational BoC continuedwithitspartnership year. running throughthefirsthalfof This wasacontinuousoperation on lessprivilegedsmallruralschools. the westernprovince,focushadbeen were giventhisopportunity. Evenin Lunugamwehera andAralaganwila) Rajanganaya, Migalewa, in Elaheracolonisationscheme, close toTantirimale, Attanakadawala poverty-ridden area,Pemaduwa which isconsideredasamajor guidance andbalancedlifeplanning. -shop whichfocusedonparental accommodated ataseparatework parents numbering28,092were balance. Theaccompanying as preparationandpsychological on theexaminationcontentaswell East weregivenafulldayworkshop entire countryincludingtheNorth- These studentsrepresentingthe

BANK OF CEYLON ANNUAL REPORT 2011 131 BANK OF CEYLON ANNUAL REPORT 2011 132 Other EducationalInitiatives Report Sustainability trained 3,000studentsinvestingRs 89 millionintheprocess. etc. TheBankpaysaperdiemstipend totheselectedtrainees.Thisyear, we them tocustomercare,frontofficetransactions, fieldwork,loanrecovery school leavers.Theyareofferedasix monthstintatbankbranches,exposing For aconsiderableperiod,BoChasbeen givingin-housetrainingtoaspiring Among themarehundredsofstudentsfromnotsoaffluentsocialbackground. with onlyaselectedfewwinningthechanceforfreeuniversityeducation. Each year, thousandsofstudentsfacetheuniversity entranceexamination Assisting FutureLeaders-SchoolLeaverProgramme Result 20scholarshipsonmeritforthehighestmarks inthefourstreams(Science, • 72scholarshipsatRs30,000eachforstudents selectedforanyUniversity • 18+ ScholarshipProgramme Rs 5,000onthefinalyearatuniversity. Initially, themonthlypaymentissetatRs1,000increasingannuallytoreach No of Participants They areawardedamonthlystipendfromyear6allthewayuptograduating. highest marksatyear5scholarshipexaminationinSinhalaandTamil medium. The Bankawards2uniquescholarshipstothetwostudentswhoobtain Rankekulu NENAPAHANA Programme when theyreachuniversityentrancethreshold. These awards,creditedtotheiraccountswillgrowwiththemandbeaboon examination wereawardedcashpricesamountingtoRs20millionintotal. account holderswhosecuredhighestmarksattheyear5scholarship This year, atotalnumberof2,000studentsoutourRankakuluchildrens’ Rankekulu ScholarshipProgramme Initiative Venue NoofParticipants Venue arrwl ay aaVdaaa50MrtaaaMh iyly,Mdeia200 MuruthawalaMahaVidyalaya, Middeniya 500 Banrarawela MadyaMahaVidyalaya hrptaNtoa col maatt 0 agmtaVdaaa inwl 300 SangamittaVidyalaya, Pinnawala 500 Theraputta NationalSchool,Ambalantota iih ay aaVdaaa ikel 5 plgm aaVdaaa700 IpologamaMahaVidyalaya 750 Vijitha MadyaMahaVidyalaya, Dickwella eiy rgaad col eiy 0 uahnnaVdaaa aap 450 SugathanandaVidyalaya, Madampe 500 Gelioya PragnanandaSchool, hdaah aaVdaaa aaa70Dtgmn aaVdaaa ohhr 400 DutugemunuMahaVidyalaya, Pothuhera 700 Bhadrawathi MahaVidyalaya, Galaha ltgm aaVdaaa ltgm 5 nieeoaMh iyly,Ptgl 720 IndipelegodaMahaVidyalaya, Pitigala 250 Aluthgama MahaVidyalaya, Aluthgama iilaMh iyly,Iagd 0 aaas aaVdaaa hnal 500 RajapakseMahaVidyalaya, Ahungalla 500 Kiriella MahaVidyalaya, Idangoda aadny ainlSho 5 iiaheaMdaMh iyly 1,000 GinigathhenaMadyaMahaVidyalaya 150 Karandeniya NationalSchool is aaVdaaa auaa50SiaaVdaaa atn1,200 SripadaVidyalaya, Hatton 500 Tissa MahaVidyalaya, Kalutara uuawhr aaVdaaa80MhbdaMh iyly,Wloa500 MahabeddaMahaVidyalaya, Welioya 840 Lunugamwehera MahaVidyalaya Mathematics, ArtsandCommerce) based onadraw. This year, wetrained1,547studentsinvestingRs 89millionintheprocess. marks inSinhalesemedium. This year, therewerethreewinnersastwostudentshadsecuredidentical 250scholarshipsfortop10placesineachofthe25districts • 1,750scholarshipsofRs10,000eachonislandwidemerit • universities of Education(AdvancedLevel)examinationtosecureadmissionNational the bestamongour18+accountholderswhodidwellatGeneralCertificate This yearweawardedatotalof92scholarshipsvaluedatRs2.8million,to How OurLittleSaversSave aig nt 2,418 Rs.492million 423,252 account Average savingsbalanceinan Total savingsvolume Savings units maintained atschools Total numberofsavingsaccounts BoC Educationalloan programmeassuresahasslefree pathwaytowardsacademicachievement. institutions. enables deservingstudentstocomplete highereducationoverseasoratprivatesectormanagedlocaltertiary educational selection cutoffpointishigh,extending loanfacilitiesforeducationalpurposesitselfisaninvestmentthe future.It With onlyalimitednumberofplaces availableinthenationaluniversitysystemwherecompetitionaswell as the Educational Loans Certificate ofEducation(Ordinarylevel)examinationin2011. A seriesofeducationalseminarswereheldinNorth-Western provinceforthebenefitofstudentswho sat fortheGeneral Helping theYouth Towards Excellence to acquirefinancialliteracyandaccountingskills. savings unitsaremannedbystudentsthemselves,givingthemanopportunity awareness amongtheminbankingandfinancialservices.Theseschool Result inculcate thebankinghabitamongschoolchildrenbutalsotocreate We haveestablishedschoolsavings unitsacrosstheislandnotonlyto Rankekulu Sansada-SchoolSavingsUnits administration withinabankingperspective. application inbusinesssystems,marketingaspectsbankingand operations, financialreportingandaccounting,Informationtechnology and offeredpracticaljobinsightsonhumanresourcedevelopment,treasury Accounting, InformationTechnology, Marketingandgeneralbusinessunits They wereaccommodatedatHumanResources,Treasury, Financial undergraduates referredtousbythenationaluniversitysystem As apartofthisinitiative,yeartoowegaveonthejobtrainingto up nationalexcellenceispartofourheritage. academic excellenceandeducationalbenchmarks.Asanationalicon,building We haveacloseinter-action withnationaluniversitiesintheirquestfor Graduate Training Initiative Initiative Rs1,100 As oftheendyear, 2,418schoolsavingsunitswereinoperation. discussion withseniorbankers. on-the-job exposurewiththebalancecoveredbyinter-active sessionsand Out ofthelengthtrainingwhichraninto6months,80%wascoveredby This yearwetrained442undergraduates. million for268beneficiaries. under thissegmentwasRs122 Year ourtotalloandisbursement participation- 30,000students Duration- 21days

BANK OF CEYLON ANNUAL REPORT 2011 133 BANK OF CEYLON ANNUAL REPORT 2011 134 development, closely aligningwith wealth creationand economic force behindthequestfornational strong, isourmajorasset-thedriving The teamBoC,nowover8,000 country. job-seeking highachieversinthe BoC isamuchpreferredamongthe career pathdevelopmentpotential, industry averagesandexcellent at parorevenhigherthanthe ensuring jobsecurity, compensation performance andfinancialstanding back into70plusyears,solidpast With strongcredentialsrunning An Overview balance. adherence andwork-life humanrights performance, development plansand benefits,skill non-salary defined benefitplan, development opportunities, compensation policy, career new hiresandturnover, the hiringprocess,rateof levels- and performance a rangeofmeasurements labour relationsthrough This sectionlooksatour our team the achievers- Reaching outto Report Sustainability compensation. Forusallarealike. child labourandgender-based We donotpracticeandcondone half ofourfrontlineteamarewomen. members workingwithus.Morethan differently abled-andgiftedteam employer. Thereare200plus We areanequalopportunity them assignedatprovinciallevel. and morefrontlinestaff80%of spread ingender, consistsofmore This teamisgettingyounger, evenly expectations, goalsandstrategy. the Government’s nationbuilding in thecountry. job-seeking high achievers amongthe preferred BoC isamuch attitude andaptitudetobecome assess theircapacity, capability, test areinvitedforinterviewto body. Highachieversattheplacement Examinations, theNationaltesting and evaluatedbytheDepartmentof independently planned,carriedout etc) aretestedataplacementtest (Attorneys-at-law andAccountants out graduatesandprofessionals from thepoolofnewlypassed prospective ManagementTrainees of Education(Advancedlevel)and assistants withGeneralCertificate level. Bothgroups,aspiringstaff transparent atthetwo-wayentry Our recruitmentpolicyissignificantly playing field Transparent entry-Alevel mlyeCtgr New Employee Category New EmployeeHiresandTurnover in2011 ehia tf 2 500 0 05 21 Technicalstaff aaeetTane 3 6 01 0 167 132 Trainees Management ytmAayt 0 Analysts System ea fcr 0 officers Legal yit 71000 0 160 07 Typists ertra Assat 0 800 0 38 02 Assistants Secretarial oa 6 7 01 0 379 168 Total Rate ofnewhireturnover=0.2% New hiremale:femaleratio=31:69 Hires male 5100 1800 professional outfit. it muchyoungerandarefreshingly the BoCteam,alongwaymaking This year, 547newmembersjoined the lessdevelopedperiphery. geographical balancetiltingtowards job relatedtravelingandcreatinga provincial basis,significantlyreducing years, recruitmentsweremadeon family. Thisyear, asintheprevious a frontlinememberoftheBoC female Hires New Turnover The year During male Turnover The year female During Team Profile Outsourced On contract Permanent type/gender Team byEmployment Total Support staff Front linestaff Middle Management Senior Manager Chief Manager Executive Management Corporate Management* By EmploymentCategory Total Uva Province Southern Province Sabaragamuwa Province North Western Province North CentralProvince Northern Province Eastern Province Central Province Western Province Head office By GeographicalDistribution *The corporatemanagementmembersinclude6contractedemployees Total 55 andover 45-54 years 35-44 years 25-34 years 18-24 years By AgeGroup New EmployeeHires Total Uva Province Southern Province Sabaragamuwa Province North Western Province North CentralProvince Northern Province Eastern Province Central Province Western Province Head office By Region aeFml aeFemale Male Female Male 1,076 3,963 3,969 1,791 1,521 3,969 418 118 186 347 205 338 269 217 247 386 855 919 168 160 168 70 73 34 14 18 11 12 35 15 20 10 13 26 012010 2011 0 0 4 4 8 4,152 4,152 2,676 1,369 4,152 1,236 817 208 364 255 320 239 222 150 341 379 316 379 22 02 16 50 26 11 10 53 33 28 23 28 32 26 13 27 79 90 4 0 0 1,058 4,233 4,239 1,781 1,517 4,239 1,069 102 723 192 379 234 347 253 216 202 392 955 503 191 312 503 86 70 31 15 28 60 32 58 54 53 52 62 93 11 0 0 0 3,971 3,971 2,630 1,218 3,971 181 355 220 325 237 202 190 367 896 998 788 253 534 788 201 38 40 25 16 63 92 60 74 83 98 49 60 0 0 4 0 0 1 8 Sabaragamuwa Province North Western Province North CentralProvince Total 55 andover 45-54 years 35-44 years 25-34 years 18-24 years by AgeGroup Employee Turnover Total Uva Province Southern Province Sabaragamuwa Province North Western Province North CentralProvince Northern Province Eastern Province Central Province Western Province Head office Region/Gender Employee Turnover by Southern Province Northern Province Western Province Eastern Province Central Province 51% Uva Province Head office Permanent Staff2011 Male 0 0 0 0 ,0 ,0 1,400 1,200 1,000 800 600 400 200 0 Work ForcebyGeographicalDistribution Female 49% Male aeFml aeFemale Male Female Male 11 11 Female 0 1 3 7 2010 0 2011 1 0 1 0 2 0 1 1 0 5 Total Work Force2011 1% Outsourced Permanent 12% 25 21 25 0 1 1 2 2 3 0 5 2 2 1 1 6 3 87% Contracted 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10 10 0 0 2 7 1 0 0 0 0 0 0 0 2 7 1

BANK OF CEYLON ANNUAL REPORT 2011 135 BANK OF CEYLON ANNUAL REPORT 2011 136 the Bank. career pathswithin select theirdistinct encouraged to Our teamis different specialisations others wouldmoveonto stay ingeneralbankingwhile representatives- theirtradeunions. bargaining processwithemployee three yearsbasedonacollective allowances) arerevisedevery allowances, specificjob-related travelling andsubsistence encashment, overtimepayments, benefits (medicalbenefits,leave Salary structuresandnon-salary with therestofbankingindustry. Our compensationpolicymatches Employee Compensation Report Sustainability Corporate Management Executive Management Middle Management Senior Manager Chief Manager Front linestaff Workforce byemploymentcategory Support staff Male 40% 53% 67% 70% 76% 74% Female 96% 60% 47% 33% 30% 26% 24% Entry LevelWage lending, projectfinance, backoffice banking, micro-finance, SME International tradefinance,corporate as treasuryoperations,credit, on todifferentspecialisationssuch banking whileotherswouldmove Bank. Someopttostayingeneral their distinctcareerpathswithinthe Our teamisencouragedtoselect Career PathDevelopment Some optto rie yit Rs. 10,000 Rs. 25,000 Rs. 12,500 Management Trainees Trainee typists Staff Assistants 4% Promotions areawardedongrade- happened twiceintherecentpast. the ChiefExecutiveofficer. Ithas entry-level employeetobecome a secondtier(staffassistantgrade) in amannerwhereitispossiblefor Promotion policyofBoCisdesigned achievements andworkstandards. Team isregularlyrewardedfortheir chosen fields. and local/overseasexposureintheir provided withonthejobtraining and riskmanagementetc.Theyare management, financialaccounting operations, recoveryandremedial national levelachievements. performance basedappraisaland length, specificcommendations, academic qualifications,service and pointsscoredonprofessional/ to performanceattheinterview decided ataninterviewgivingweight at thepresentlevel.Promotionsare testing andmandatoryservicespan is basedonsuccessfuljob-related clearly definedsyllabuses.Eligibility up toseniormanagerlevelwith a job-basedtestingsystemforgrades placement policy. TheBankconducts wise cadrerequirementsandthe Actuarial valuation donebyMessrs gaps inthefunds.Themostrecent determine thefeasibilityandfunding out periodicalactuarialvaluationsto Outside actuarialconsultantscarry employees. Employees Trust Fundonbehalfofall In addition,theBankcontributesto feasibility andinvestmentpolicy. and clarificationssoughtonfund where questionscanberaised Meetings convenedbythefunds are invitedfortheAnnualGeneral manner. Memberbeneficiaries done inatransparentandprudent Investments underthefundsare employee/pensioner representatives. Boards ofTrustees whichinclude three fundsareadministeredby Fund arecontributoryfunds.All BOC WidowsandOrphans’Pension Bank ofCeylonProvidentFund,and a non-contributorypensionplan. Ceylon EmployeesPensionFundis Defined benefitplan.TheBankof their work-life.We haveourown Our teamislookedafterbeyond Defined BenefitPlan Non-salary Benefits Promotions in2011 euiyofie 17 3 Security officer 13 officer Senior Legal Legal officerI Legal officerII 24 Security officer 172 70 Deputy Chief Chief Manager 121 Senior manager Manager Number Officer Trainee Promoted to 11 11 added on. critical illnesscategory benefitswere took agiantleapforwardwhere benefits toourpensionermembers as well.Duringtheyear, medical to pensionersandtheirlifepartners Coverage underthisplanextends dependants. children between18-25assubscribed members tolinkstillunmarried nominally contributoryalsoallows to 18years.Theschemewhichis spouse andunmarriedchildrenup The schemecoverstheteammember, kidney transplant,brainsurgeryetc). require majorsurgery(heartby-pass, also coverscriticalillnesseswhich hearing aidsandcontactlenses treatment includingspectacles, maternity expenses,corrective hospitalisation, surgicalexpenses, under routinemedicalexpenses, and reimbursesactualexpenses scheme coversallemployees A comprehensivemedicalassistance We careforthehealthofourteam. Medical AssistanceScheme Retiringteammembersare • Team memberswhoprematurely • This benefitistwo-fold. Terminal Benefits pensions. 5,103 pensionersdrawingmonthly Rs 46.5billionandtherewere accumulated fundbalancewas By end2011,BOCPensionFund‘s down to6%. BOC pensionfundhasnarrowed 2011 confirmthatfundinggapin Piyal S.Goonaillake&Associatesin payment of24monthspension offered acommutedpension based onthelengthofservice. leave theBankarepaidgratuities Benefits in2011 Value ofNon-salary front seatatBoC. Training andskilldevelopmenttakea outgoing team.Thisisthereasonwhy professionally honed,committedand soft skills.Whatweneedisa development andfine-tuned knowledge upgrade,skill team BoCneedscontinuous To bethebestteamofachievers, Development Training andSkill option everysixmonths. Provident Fundbalanceswithtopoff to obtainfacilitiesagainsttheir In addition,theyarealsoeligible • Educational purposes • Emergency needs Purchaseofcomputers/motorcars • Acrosstheboardutility • • Construction/acquisition of rates for; assistance atsubsidisedinterest comprehensive packageoffinancial We offerourteammembersa Facilities Concessionary Loan reimbursed Medical benefits Fund orphans’ Pension Widows and Contribution to Provident Fund Contribution to Amountin Pension Fund Contribution to Category for specifiedgrades requirements houses Rs Million 386 456 526 1,608 members. need assessmentofindividualteam element ontraininganddevelopment appraisal whichhasaspecificreport from theperformanceandpotential for teamrequirementemanates perspectives inbanking.Directinput development strategyandchanging requirements, Bank’s business annually basedontheteam Training programsareplanned Program Planning chosen fordiversesubjectareas. and outsideexpertsspecifically serving withawealthofexperience of seniorbankersbothretiredand is anassociatefacultyconsisting recruited oncontractbasis.There by anexperiencededucationist, English Languageunitisheaded professional backgrounds.Distance faculty withsoundacademicand is byafourmemberin-housecore Program planningandco-ordination Teaching Faculty visual trainingaids. supporting unit,alibraryandaudio- learning centre,anadministrationand dining hall,adistantEnglishlanguage facilities formalesandfemales,a an auditorium,segregatedhostel of air-conditioned lecturehalls, Highlevel Road.Thisfacilityconsists next toourMaharagamaBranchon accessible locationatMaharagama, in apurposefullybuiltandeasily Central Training Instituteishoused Resources) to DeputyGeneralManager(Human Assistant GeneralManagerreporting Our trainingarmisheadedbyan

BANK OF CEYLON ANNUAL REPORT 2011 137 BANK OF CEYLON ANNUAL REPORT 2011 138 Report Sustainability Soft SkillsDevelopment best skills, relationshipmarketing,customerserviceexcellence,motivationandmindsetdevelopment,leadershipatits Marketing andCustomerCare- instruments International Trade Operations- point, ElectronicBanking,E-mailandInternet Information Technology Application management trainees,branchmanager, seniormanager, executiveofficer Induction ProgrammesforNewHires/Promotees SLIPS operations in ICBS,ICBSforeffectivebranchmanagement,CentralBackofficestaff,internalauditfunctions, International ComprehensiveBankingSystem(ICBS) performance andpotentialappraisal Management lending process financing, pawningoperations,SMEcreditappraisal,awarenessoncard Credit Program Category Extent, ScopeandParticipationofIn-HouseTraining ProgrammesHeldDuringtheYear shop, awarenessprogrammeforlegalofficers,securedtransactionregulatoryworksharetradingfacilityatBoC branch productivityworkshop,labourlawandindustrialrelations,ATM operations-balancing,CRIBoperationswork General Banking -Advancedcreditmanagement,basicoperations,managementincorporatesector, lease - Riskmanagement,juniordisciplinaryoutdoorexperientiallearning, -Awareness programmeforsupportstaff,productivityenhancementinacompetitiveenvironment, - Personalgroomingandbusinessetiquette Managing forresults,teambuildingworkshop,productawarenessandmarketing International Trade operations,SWIFTpayments,foreigncurrencydepositsand - Multichannelpaymentsystem,leasingoperationautomation,MSPower -Bankingtrainees,secretarialassistants,traineetypists, -ICBSprogrammefornewentrants,Officers’responsibility programmes Number of Number of 3 1 1,776 819 38 2 6 893 164 20 0 6119 76 07 46 226 65 04 828254 139 288 40 08 03 2,381 545 572 27 970 266 18 169 20 Training hours participants Number of Number of 00261735146 156 315 311 Cost 137 112 276 No.ofTraining Programmes 314 2010 2011 Year Banking Trainees Staff Assistants Executive Officers Executive Management Corporate Management mlyeCtgr oo riigHusN fEpoesAverage HoursofTraining NoofEmployees NoofTraining Hours Employee Category Employee Training Analysis Training -Exposure nhueOesa oa RsMillion Local Overseas In-house 41332,191 14,123 98465,338 29,854 86127,780 68,681 ,6 1,454 1,864 0 1,941 606 MF MFMFMFMFMF 0121 0121 012010 2011 2010 2011 2010 2011 71843,165 17,128 80054,409 68,000 ,7 78,902 5,879 ,0 3,360 2,008 3 1,664 832 2301,262 22,300 ,3 2,380 2,730 ,1 29,301 1,511 553 65 528 35 Per Year/Gender ,9 3,586 3,292 ,8 2,762 2,680 ,9 2,725 1,496 086 70 824 48 913 19 07 10 712 17 312 13 014 20 012 20 19 11 910 19 612 16 213 22

BANK OF CEYLON ANNUAL REPORT 2011 139 BANK OF CEYLON ANNUAL REPORT 2011 140 of grievancesbyteam members. human rights,there wereinstances In asmuchwe respectanduphold used thesefacilitiesduringtheyear. employees andtheirfamilymembers drawing lots.Atotalnumberof2,418 school vacationhavebeenby especially inweekendsandduring bookings inmostofthelocations, a resultofmultipleapplications, popular withtheemployeesandas These propertieshavebecomevery accommodation andmeals. offered concessionarytariffinboth given priorityinbookingsand Employees andtheirfamiliesare by theBank’s Welfare Department. subsidiary. Bookingsarehandled (Private) Limited,afullyowned managed byBOCHolidayHomes hill country. Thesepropertiesare Anuradapura, Kataragamaandthe Pilgrims’ Restsandlodgesat We ownastringofHolidayhomes, Monotony Taking aBreakfrom Work-Life Balance Report Sustainability rights violations. division receives andaddressescomplaints onhuman grievances and seekredress.Human Resources is anestablished mechanismforthem toairtheir already beenidentified, picturesque Giritalewewahas Necessary landoverlooking Polonnaruwa isinthepipeline. A newholidayhomeatGiritale, another restatNuwaraeliya. Construction workisinprogressfor for occupationby2012. This facilityisexpectedtobeready pilgrims’ restsinthissacredtown. making itoneofthebestaffordable wing with20roomsatAnuradapura The Bankcommencedaddinganew oia oe afa0 08 04 Holiday Home,Jaffna oia oe idl 410 04 Holiday Home,Lindula oia oe uaaeia0 12 04 Holiday Home,Nuwara-eliya oia oe auae0 7 03 Holiday Home,Haputale oia oe adrwl 410 04 Holiday Home,Bandarawela oia uglw ataa0 15 04 Holiday Bungalow, Hanthana pe/oe lnar uglw iky 023 10 Upper/Lower GlencairnBungalow, Dickoya ebn et uaaeia1 47 14 Ceybank Rest,Nuwara-eliya ebn et aaaaa26plus6 Ceybank Rest,Kataragama ebn et nrdpr 052 20 Numberof Ceybank Rest,Anuradapura Name andLocation Following facilitiesaremaintainedatpresent. Bus halls Rooms There Occupancy Maximum 126 Health Care,Work-Place SafetyandSportsFacilities Stadium, Jaffnawiththeparticipationofcirca450sportsmenandwomen. The Bank’s all-islandsportsmeetinthisyearwasheldatDuraiappah receive anannualgrantthatfinancestheiractivities. Sports andrecreationalclubsareinplaceatbranchlevel.These participation. We allowpaidleaveforteammembers forsportpracticesandtournament annual sportsmeetsonapre-arrangedbasis. Each provinceandHeadofficebusinesssupportdivisionshaveheldtheir (Cricket, Soccer, Swimming,Netball,Indoorgamesetc) Bank’s SportsClubmobilisesandorganisestheteaminsportsactivities building toensureefficientevacuationplanning. Emergency evacuationdrillswereheldonanirregularbasisatHeadoffice office building. Regularly trainedfloorwardenshavebeenassignedtoallfloorsattheHead medical professionals. health andworkplacesafety. Thesessionswereconductedbyeminent The Welfare Departmenthasconductedseveralprogrammesconcerning Taprobane buildingswhichhousearound3,000teammembers. Two fullyequippedgymnasiumshavebeenlocatedatHeadofficeand units, divisionsandbranches. First aidboxesandfireprotectionequipmentareinplaceatallbusiness 3.00pm onwardsforconsultationandmedicalassistanceofteammembers. An in-housemedicalofficerisavailableatHeadofficebuildingdailyfrom Summary ofReportedHumanRightsGrievances addresses complaintsonhumanrightsviolations. air theirgrievancesandseekredress.HumanResourcesdivisionreceives and grievances byteammembers.Thereisanestablishedmechanismforthemto In asmuchwerespectandupholdhumanrights,therewereinstancesof Human Rights response fromtheteam. contest whichreceivedenormous programmes andaspellmaster Literary Associationconductssimilar well astheirchildren.TheEnglish competition foremployeesas writers andholdsanannualliterary sessions withreputedartistsand room, regularlyconductsinteractive Association runsalibrary/reading within theBank.TheSinhalaLiterary Two literaryAssociationsareactive breaking- Iftharceremony. Navarathri pooja,andRamzanfast- campaigns, Christmascarolsand include, PirithceremoniesandSil activities andceremonies.They associations andengageinreligious denominations haveformedreligious cultural activity. Allmajorreligious themselves inreligiousgroupingsand We encourageourteamtobond Diversity Cultural andReligious reac ee aeFml Total 06 Female Male 03 from 2010andresolvedduringtheyear 03 Total numberofgrievancesbroughtforward Total numberofresolvedgrievancesin2011 reported in2011 Total numberofhumanrightsgrievances Grievance level 10 16 03-03 05 11

BANK OF CEYLON ANNUAL REPORT 2011 141 BANK OF CEYLON ANNUAL REPORT 2011 142 in 2010. improvement fromthe16%recorded reflects ayieldof30%,significant Value additionofRs8.4billion increased by14%yoy. NetEconomic Total returnoninvestedcapital Economic Value Addition over Rs10billion. and taxespaidtothegovernmentis between thetwoyears.Dividends more orlessremainedatsamelevels Our employeecompensationhas distribution amongourstakeholders. measured byvalueadditionand improving oureconomicperformance, Over theyears,wehavebeen Economic Performance Economics ofsustainability Leaps andBounds Report Sustainability escapes thequantifyingprocess. so manyventures,bigandsmall, with somanypeoplestartingup generation throughoutthecountry we helpedcreateandemployment and contributionfelt.Marketlinkages where wehavemadeourpresence stabilisation inpaddyisonekeyarea considerable interest.Themarket There areotherfactorswith larger businesses. economy -SMEs,microsectorand growth acrossallsectorsinthe - stakeholdersbutalsospurred assured asteadyincomefordepositor interest rateregime.Ithasnotonly BoC maintainsacustomer-focused Indirect EconomicBenefits Average shareholders'funds Invested Capital Economic Value Addition bill rate *Weighted average12monthstreasury cnmcVleAdd8413 ,1 16 4,114 30 8,441 Economic Value Added Profit aftertaxationasreported Return onInvestedCapital Revaluation reserves Opportunity costofinvestedcapital* revaluation surplus Depreciaton attributabletothe Bonus sharesissuedin2006 Total returnoninvestedcapital sMlin%R.ilo % Rs.Million % Rs.Million (4,613) 269 9 (2,619) (1,400) 34,147 11,521 814100 28,134 10039 11,060 9.31% (461) 012010 2011 26,515 222 9 (2,232) 490100 24,990 (1,400) 6,365 ,4 25 6,346 8.93% (125) (19) o h erEdd3 eebr2011 For theYear Ended31December Sources andDistributionofIncome Interest income Sources ofIncome Foreign exchangeprofit Fee &commissionincome Investment income Other income To Depositors&otherlenders Distribution ofIncome To Suppliersandserviceproviders To Employees - Asdividends To Governments VAT onfinancialservices) - Astaxation(Includingincometax, - Reserves Retained bytheBank - Depreciation/amortisation - Provisionforloanloss(Net) - Deferredtax Reversaloffallinvalueinvestments Rs. Million 60,745 36,229 10,365 0436,9 1915,8 48,875 58,581 61,961 61,990 70,453 0436,9 1915,8 48,875 58,581 61,961 61,990 70,453 1,746 7,142 1,377 6,125 3,846 6,115 7,675 (557) (426) (815) 913 426 Rs. Million 0835,7 96442,286 49,684 53,077 50,843 1203,6 59929,453 35,989 38,267 31,200 0301,1 ,7 8,769 9,273 10,517 10,310 ,1 ,5 ,8 3,099 4,084 4,255 6,013 ,7 ,0 8 1,624 981 2,309 3,575 ,5 5 4 687 946 753 1,150 ,9 ,9 ,8 3,578 4,487 4,799 5,393 ,9 ,4 4 846 846 1,346 3,096 ,4 ,1 ,1 3,370 3,612 4,216 7,640 ,6 ,3 ,1 1,997 2,715 1,738 3,269 2010 0 ,6 ,8 1,179 2,886 1,567 409 4 7 5 760 754 873 842 9 0 7 (75) 775 302 192 8(7 3 177 130 (97) 48 Rs. Million 2009 Rs. Million 2008 Rs. Million 2007

BANK OF CEYLON ANNUAL REPORT 2011 143 BANK OF CEYLON ANNUAL REPORT 2011 144 allocated amongthekeystakeholdersofBank. The followingtableillustratesthatthevaluegeneratedduringperiodwas Value Addition Report Sustainability s iln%R.Mlo % Rs.Millon % Rs.Millon Providing bankingservices Income earnedby Value Added Cost ofservices banking services Value addedby Non -bankingincome Provision forbaddebts au loain Value addedtax Income tax GovernmentofSriLanka Dividends paidto To Government(B) other benefits Salaries, wages& To Employees(A) Value Allocation Value addition related investmentsin companies Provision forfallinvalueof To Expansion &growth external funds To Providers of To Government To Employees Value Allocation Deferred taxation & amortisation Depreciation Retained profit To Expansion&Growth(D) Interest ondebentures &otherborrowings Interest onrefinance Funds (C) To ProvidersofExternal

196 71,926 3,2) (31,023) (5) (557) 44 (434) 4,0 40,903 10,365 07734,337 40,727 13828.0 11,388 2,516 3,599 0771003,3 100.0 34,337 100.0 40,727 913 ,4 9.4 3,846 ,6 24.4 15.0 9,961 6,115 ,1 22.1 9,013 7,674 3,779 7,609 815 426 012010 2011 D B A C

25.5

59,783 (741 (27,461) 32,322 3,575 (1,560) 10,310 30.0 07631.3 10,736 21 12.1% 22.1% 26.6% 31.3% 28.0% 30.0% 24.4% 25.5% ,9 9.0 3,096 ,4 22.3 7,640 ,3 26.6 9,132 2,954 6,178 4,001 3,639 ,5 12.1 4,159 3,269 012010 2011 842 48

28% 22% 2011 24% 26% To Providers ofExternalFunds To Government To Employees To Expansion&Growth 27% 12% 2010 31% 30% burden onourenvironment.There- is thatweshouldnotbeaclumsy cycling processes.Ourpointofview and fuelsavinginitiativesre- leads ustoexplorepossibleenergy consumption level.Suchconcern We areconcernedaboutour Our MaterialConsumption environmental activist and AlternativeNobelprizewinning -Vandana Shiva-Indianphysicist you.” carrying that theplanetis It isgoodtoknow on yourshoulder. theworld carrying “You arenotAtlas Environmental focus Caring forthefragileplanet volume and partnerships withenvironmental activism. volume andpartnerships ofenvironmentalimpacts,ourgreen investment in terms how wemeasureandrespondtoourcustomeroperations cycling processesandenergysavinginitiativesinplace, our materialconsumption,carbonfootprint,wastere- environment inwhichweoperate.Thediscussioncovers In thissegment,focusisonhowbestwecareforthe development, aperfectharmony. balance betweenenvironmentand frame workwhichwouldushera introducing environmentmanagement having interactionwiththemand We arecreatingawareness, level ofenvironmentalimpact. and Agriculturesegmentshasa more particularlyinIndustry environment. Theiractivities, substantial impactsonthe segment, ourcustomers,have On theotherhand,akeystakeholder to live. to makethisplanetabetterplace bit ofimaginationcangoalongway initiatives showsthatevenalittle cycling processesandenergysaving Eetiiy 59,922Gigajoules - • Electricity Fe - 4,038Gigajoules - • Fuel Our energyfootprint Fuel usageperemployee(liters) Fuel usageasarateonaverageassets Fuel consumption(litres)onbusinesstravel Fuel 2010 Usage peremployee Usage rateonaverageassets Water usage(litre) 2011 Water Consumption peremployee(Mwh) Consumption rateonaverageassets Electricity consumption(Mwh) Electricity Resource/Consumption ratio Our ConsumptionVolumes 261,115 120.25% 33.72% 2.15% 16,571 100.42 932,242 1.78 28.53 799,837 271,430 127.6% 29.04 16,208 85.56 43.3% 1.73 2.6%

BANK OF CEYLON ANNUAL REPORT 2011 145 BANK OF CEYLON ANNUAL REPORT 2011 146 scarcity andhigher prices. would collectively contributetofood higher incomes,slowercrop-yield even higher. Expanding population, prices areexpectedtodrivethe steadily since2010.Increasingoil Food pricescontinuetoincrease teeming withaplethoraofproblems. already congestedmegacities an uncontrollablemigrationtowards agricultural societies,resultingin change thatdisruptsanddissipates populations, unpredictableclimate tangled, inthebackdropofbulging the calamity. The issuegets in EasternAfricaareexperiencing the future.Evennow, someparts becoming ahugequestionmarkfor World over, foodsecurityis Agro-Ecology An InnovativeExperimentin BOC ModelVillage Concept Authority. licensed bytheCentralEnvironmental printers wasdisposedtoarecycler monitors, centralprocessingunitsand of 100noseachincomputer Discarded electronicwasteconsisting Electronic (IT)Waste 220carboncredit • 6,999,290.76litresofwater • 660,726m3oflandfill • 386,524.71litresofoil • 880,968kwhofelectricity • • 3,744 trees 220,242 kg.Thisinitiativehassaved; disposed duringtheyearwas network. Volume ofpaperwaste paper atHeadofficeandthebranch A recyclercollectstheentirewaste Waste paper Initiatives Waste Re-cycling Report Sustainability Increase productivitystandards • Facilitate financialand • Developagricultureandlivestock • Createavillagebased,replicable • What welookatisto; and theactionplan. strategy ofdomesticfoodproduction complements thegovernment’s Our modelvillageinitiative administration unit. division whichisthevillagelevel in eachGramaSevaNiladhari gardens acrossthecountryat100 plan ofdeveloping1millionhome- behind thegovernment’s ambitious country. Thiswasthereasoning possible foodinsecurityinthe is theonlyviablestrategytomeet Food productionatdomesticlevel Branches havebeengiventargetstoreduceelectricity/fuelconsumptionby5-10%fromthepresentlevels Travelling togetherforofficialpurposesintroduced.Thiswouldminimiseuseofvehicles. Lights inlobbyareas,pantries,washroomsareswitchedofforminimumlightingmaintained Air conditioningrestrictedtooneweekend/month Chiller runninghoursreducedby1.30adayonweekdays New purchasesofcomputersonlywithLCDdisplay. Introducing CO2sensorandVCDsystemtocontrol15kwexhaustfansinthebasement completed) Replacement of2*36magneticballastwithelectronicandefficientluminaryinofficeareas(partially Replacement of2*18linearfluorescentfittingswithCFLinwashrooms Energy/Fuel SavingInitiatives and nutritionoffarm families at villagelevelandensurehealth the villagecommunity organisational empowermentof villages value chainsintheselected resources development utilisinglocal model aimedatsustainable and integrated agro-ecological

initiative. in essenceisa Provincial governmentlevel.This and departmentsatCentral in andliaisewithrelevantMinistries commercial farming.BoCwouldbuy organic farming,marketlinkagesand empowering women,cropintegration, enhancement, partnershipbuilding, uplifted byinvestinginknowledge Family-based agriculturewouldbe productivity andsustainability. re-orient agriculturalsystemstowards up agro-ecologicalpracticesthat manner thateachhouse-holdscales The villageswouldbemodeledina The Model diversity. with waterscarcityandhighcrop adverse climaticconditionsandbeset waters ishighlysusceptibleto which isnotyetfedbyMahaweli and North-Easternhalfofthisdistrict called boundaryvillages.Northern ethnic conﬂictasthevictimsofso suffered duringthreedecadesof pilot projectwheremostpeople Anuradhapura dry-zoneareaforthe We haveselectedavillagefrom

"Back toNature" Monitoringandfollow-up • Strengtheningtheservicessector • Farmplanningwithindividual • Assessingsocialandagricultural • Needassessmentbasedon • Creationoffarmergroups/ • Team buildingwithpartner • Capacitybuildingatoperational • Action Plan as asupportingarm finances technology, water, marketingand seed andplantingmaterials, house-holds intermsofcapacity, pre-schools etc) solutions, communitycentres, infrastructure needs(Water background ofthevillage demographical andecological participation ofwomen associations withmajority agencies level Village Empowerment Grass RootAssociations Continuous Monitoring Related Infrastructure Technological Inputs Financial Support Capacity Building Market Linkages Farm Planning sustainable organicfamilyfarming. Solidarity groupswereformed.Organicfarmingwasintroducedandahome The bankstartedmobilisingthevillagers withaviewtochangingthemindsetandeducatingthemorganise array ofbankingfacilitieswasinplace. When themodelvillagewasinaugurated on06thMay2011,aminibankwithanAutomaticTeller machineandan liaison. Aprojectofficewassetupwiththeparticipationofvillagefamilies. manage theprojectasresidentconsultantwhileaDevelopmentofficer attheBankwasassignedasBank’s The bankneededanin-houseteamtodrivethisinitiative.AretiredDeputy DirectorofAgriculturewasengagedto home gardeningtocaterfamilynutritionandavoidmarketdependency forfood. With thewaterissueresolved,focuswasonorganicfarming,efficient useofwateranddevelopinghealthy from lifethreateninghealthhazardswasachallenge. villagers havelosttheirlivesduetokidneyfailures.Weaning themawayfromagro-chemicalsandprotecting are thevictimsofwaterbornedeceasesandgroundwaterpollution.Doramadalawawasnoexception.Many Villages inNorth-centralprovince areknowntobeheavyagro-chemicalandchemicalfertilizerconsumers.They construction andpipelines. their helpidentified40plussitestodigwells.38ofthemweresuccessfulandtheBankextendedfinanceforwell alternative wasanetworkofagriculturalwells.HeretheBankteamedupwithWater resourcesBoardandwith a result,theyweretrappedintoseasonalpovertyduetoseverescarcityofwaterduringdryseasons.Theonly does nothaveatraditionalvillageirrigationtankandthecommunityreliesonuncertainrainsforcultivation.As continuously croppedupwasthescarcewaterresources.UnlikeothervillagesinNorth-centralprovince,village As thefirststep,Bankcarriedoutabaselinesurveycoveringallhouse-holds.Oneofkeyissuesthat ShowcaseBoCcommitmentforCorporateSocialResponsibility(CSR)whilstattractinglargemassestotheBank • Promoteimportsubstitutionandcombatinflationatthevillagelevel • Increasetheproductivitystandardsatvillagelevelandtherebyincreasingcontributiontonational • Developavillagebasedreplicableintegratedagro-ecologicalfarmingmodelforsustainabledevelopment • Developagriculture,dairyandlivestockrelatedvaluechainsintheselectedvillages • Financialandorganisationalempowermentofvillagefarmingfamiliesmostlywomentodevelopsustainable • Developaviablestrategytofaceemergingfoodinsecurity • It wasaptlyselectedbytheBanktoinitiatefirstmodelvillagewithfollowingobjectives childhood inthisvillagethatnowconsistsof6hamletspopulatedby240families. King Pandukhabaya’s reigncircathirdcenturyB.C.Historicalchroniclessaythattheyoungprincespenthisearly 4 kilometersfromMihintaletown.ItissaidtobeoneoftheoldestvillagesinSriLanka,tracingitshistorybeyond Doramadalawa isatypicalruralcommunityoffthebeatentrack,located3kilometersawayfromA9road,just Doramadalawa A caseinfocus for financialservicesintheselectedvillages food production and commerciallyviableagro-ecologicalfarmingsystems

BANK OF CEYLON ANNUAL REPORT 2011 147 BANK OF CEYLON ANNUAL REPORT 2011 148 Report Sustainability be linkedwithneighboringvillages demonstrate idealagro-ecologicalfarmingandsustainabledevelopment to village youthaswell.Itwouldbethecentrepointinthisinitiativeto economy. This would beexpandedtocovervocationaltrainingthe support armisbuildingfamilyenterprisesandscalingupthe information disseminatingunitandanagricultureextensionservice Divimansala communitycentre,whichwillhouseanITAgricultural cultural activities” very peacefulnowwithstrongunitycollectiveparticipationinreligiousand farming orotherbusinessandmarketingactivities.Theentirevillageis Young peoplewhowereidlingbeforearenowmostlyengagedeitherin very greenfamilyfarmswithvarietiesofvegetables,fruitsandgrains. many ofthefarmsthatwerefullweedsbeforearenowturninginto regularly vestingthetempletooffermeals(Dane).Iamhappyseethat “I canseemoreandpeoplecomingtotheBankfortransactions cultural transformation. of thismodelvillagestatedhisviewstherapideconomic,socialand Doramadalawa templepriestwhoisfullyawareoftheentiredevelopment other. combined withlivestock)wherethetwoactivitiescancomplementeach now gleamingwithgreenery. Thebankpromotedmixedfarming(farming and onions)toaugmenttheircashflows.Fallowfieldsofyesterdayare medicinal plantsinsome.Almostallstartedcommercialcrops(Maize a wholearrayofvegetablebeds,compostheaps,fruittreesandeven Now, whenonevisitsthevillagethereareinnovationsandimprovisations, transport andotherservices. village rangingfromfamilyfarmproducers,agroprocessing,marketing, branch startedfinancingandempoweringoftheentirevaluechainin marketing linkages,processinganddiversificationDoramadalawabank had. Assustainablelivelihoodsoffarmingfamiliesdependverymuchon all householdscommencedhomegardensinwhateverlittlespacethey on organicfertilizerbasedhomegardening.Backatthevillage,almost Gannoruwa modelhome-gardeningfacilitytogetfirsthandknowledge gardening contestsetinplace.Villagers weretakenonafieldvisitto period of07months Doramandalawa Minibankwithina Credit facilitiesgrantedat finance Lease crop finance Short term tractors Two wheel tractors Four wheel units employment Self farming Poultry purposes Commercial crops Perennial 1,330,000 gardening 07 Home Dairy units systems Irrigation pumps wells/water Agricultural Facility Type of loans No of 0 348,000 02 915,127,157 09 2,407,550 46 240,000 01 1,274,000 01 1,525,000 11 700,000 03 1,240,000 07 635,000 11 325,000 06 7,571,000 36 Disbursed Disbursed Amount (Rs) on creatingpublicawareness as wellpresentationfocuses won manyaccoladesforitscoverage channel. Thisprogrammethathas telecast overnationalRupavahini Sunday morningfeatureprogramme Rividina Arunella,thehighlypopular BoC continuedwithitssponsorshipof Rividina Arunella environment itself. the winnerofcoursebeing has beenarewardingpartnership, logistics-our branchnetwork.It these initiativesandthedelivery know-how. We, thefundstodrive set up,outreachcapacity, skillsand process. Theyhavetheorganisational sustainability focus.Itisatwo-way protection isakeyelementinour dedicated towardsenvironmental individuals, groupsandentities Partnering withlikeminded environmental activism Creating relationshipswith located onarable agricultural lands. A floricultureproject atMeepilimana,Nuwaraeliyain Central hillsfocusingonfoliageand cutflowersfortheexportmarket.Th Hujay InternationalMultiflora(Pvt) Limited treatment includingPanchakarmabased onage-oldAyurvedic concepts andconcoctions.Thefacilitywasgrantedforrefurbishment A renownedAyurveda resortatWadduwa whichoffersholisticAyurveda wellness(Herbalbaths,Herbaloilmassage,traditional Ay Siddhalepa Ayurveda Resorts blending withthesurroundinglagoons, mangroveswamp,beachandsaltpans. sea frontagewithatotalextentof184acreswillhousevillas,lagoonhomes, mangrovechalets,agolfcourseandshopping/art An upmarketeco-friendlyleisurefacilityplannedunderKalpitiyaintegrated Tourism Developmentplan.Thislocationwithboth Dutch BayResorts penstock, headracechannelandpowerplanthasreceivedenvironmental clearancefromtheCentralEnvironmentalAuthority. in theRatnapuradistrict.Environmentalimpactassessmenthasbeencompleted andconstructionofaweiracrossDenawakaganga, Eco-friendly PowerDevelopers(Pvt)Limited national grid,lesseningthedependenceonfossilfuelandthermalpower. Kalpitiya ontheNorth-westerncoastline.Theprojectwouldcontributeelectricity outofrenewableenergysources(windpower) Senok WindEnergy(Pvt)Limited isontoaWindpowergenerationprojectwithtotal of15.5MWatMampuri, awareness hasgonetothegrass mobilisation aimedatenvironmental environmental protectionandsocial voluntary organisationinvolvedin Green forestAssociation,alocal Green ForestAssociation vegetable beds. cylinders anddiscardedtyre hanging gardens,leafyvegetable of necessity, pottedcultivationsand innovations imaginationsborneout poverty alleviation,awholearrayof security, womenempowermentand and nutrition,goodfood goes beyond,venturingintohealth sustainable agriculturalpracticesbut at environment-friendly, toxic-free concrete jungle.Itdoesnotstop can bepracticedevenintheurban farmers, butalife-styleinitselfthat a merevocationconfinedtorural sustainable agriculturethatitisnot

planstosetinmotionahydropowerplantof1.5MWatDenawakaGanga, Kadurugaldola Initiative a little-knownminioninthe won byJayanthipuraJuniorschool, competition. Firstplacethisyearwas the North-EastparticipatedIn 400 plusschoolsincludingsomein and awardswonbythestudents. special environmentalprogrammes foliage andfloweringplants and abodes)classroommaintenance, the nature(ponds,mini-reservoirs creative structuresthatblendwith gardening, agriculturalcrops,forestry, waste managementinitiatives,home The thrustoftheprogrammeison environment-focused innovation. the oneswithbestconservationand island widetoselectandreward an annualcompetitionamongschools award winningassociationconducts optimum learningenvironment.This The ideaistocreateabalancedand environmental initiativesatschools. root levelwheretheypromote district levelawards. funding national,provincialand for thethirdyearinsuccession The Banksponsoredtheprogramme going beyondtheschoolpremises. place withtheirinnovations,some College, Colombosecuredthesecond Polonnaruwa districtwhileRoyal one billion. investments withaloanbookofRs in toclimatefinanceandgreen finance, wehavegraduallymoved Going beyondtraditionalbusiness projects haspaidbackdividends. for environmental-friendly, innovative Our creditdeliverypolicyofsearching Green Investments e projectis lagoonand galleries tothe . urvedic

Commitment In Commitment In Rs. Million Funding Funding 150 120 670 35 60

BANK OF CEYLON ANNUAL REPORT 2011 149 BANK OF CEYLON ANNUAL REPORT 2011 150 Trigger changesintheexistingenvironment • Exposure tonoiselevel/groundvibration • Exposure totoxicchemicals,spillsorhazardouswasteduringoperations • Probable conflictswithnaturalresourcesmanagement • Lossofsensitivehabitatsandspecies • Conflictwithexistinglandusezoning • Evidenceofwaterstagnationduetoborrowing • Stormwatercollectionanddisposal • Groundwatertypeanddepthofthe table • Soilconditionandsoilerosionpotential • Factors ConsideredinEnvironmentalEvaluationPhase Report Sustainability of environmentalimpact Classification ofprojectsinterms nta cenn Thiswouldcoverthefollowingaspects. RelatedComplianceFactorsandAction Initial screening Industries/projectsthatareoff-limitsunderprojectparameterstakenoffproject-propon Checking againstexclusionarylist Level ofcompliance This isaphasedoutapproach,runningthroughtheprojectlife-cycle. We haveintroducedanenvironmentalmanagementframe-workforSMEprojectswhichwillbereplicatedandrolledoveracrossthe Initiatives toMitigateEnvironmentalImpactinCustomerBusinessOperations Environmental ImpactManagementinLending oioig• Submissionofprogressreports • Reviewwithon-site verification • Environmentalassessmentandcompliancewithlicensingprocesstreatmenttechnologytocomplyset Monitoring • Loan sanction Loan Appraisal and transport II Lowpollutionpotential - EIII • Moderatepollutionpotential - EII • Highpollutionpotential - EI • hazardous waste. All projectsareclassifiedinto3broadcategoriesmeasuredacrossnoise,airemission,wastewater, solidwasteand • • questionnaire • • Annualenvironmentalauditbyanindependentauditor • Initiateremedialmeasures • Ticking againstconstruction/operationalimpacts • Planned wastedisposalmethod Waste generation: Land clearingplan: mangrove, coastalscrubetc Surrounding environment: standards Gases,wastewater, solidwasteandhazardousquantities Whethertreesaretobecutandtheextentofintendedclearing Whetheritincludeswetlands,builtupareas,scrubforest,watercourses,lagoons, ent submitsacompleted total loanportfolio. performance criteria. measure andreportthesustainability and internalcontrolsystemsto establishing appropriateprocesses performance criteriaforreportingand issues, determiningthesustainable of stakeholdersandmaterial among otherthings,identification These responsibilitiesinclude Sustainability ReportingGuidelines. Reporting Initiatives(GRI-G3) which arederivedfromGlobal sustainability practicesandpolicies in accordancewiththeBank’s and presentationoftheReport responsible forthepreparation The Managementofthebankis REPORT MANAGEMENT ONTHE RESPONSIBILITY OFTHE Limitedassuranceonkey • Reasonableassuranceon • Report”). Sustainability Report2011(“the on thefollowingelementsof provide anindependentassurance Ceylon (“Bank”)engagedusto The managementofBank ENGAGEMENT AND SCOPEOFTHE INTRODUCTION REPORT -2011 SUSTAINABILITY BANK OFCEYLONONTHE THE STAKEHOLDERS OF ASSURANCE REPORTTO INDEPENDENT Report. information presentedinthe performance indicatorsandother Report. pages 142,143and144ofthe performance asspecifiedon the informationonfinancial Accountants issuedbytheICASL. the CodeofEthicsforprofessional the independencerequirementsof engagement, wehavecompliedwith it wasprepared.Inconductingour purpose otherthanthatforwhich person otherthantheBankorforany any relianceonthisReportto assumption ofresponsibilityfor February 2012.We disclaimany engagement letterdated10th the Bankinaccordancewithour This Reportismadesolelyto reasonable assuranceengagement. matters thatmightbeidentifiedina become awareofallsignificant to obtainassurancethatwewould and consequentlydoesnotenable reasonable assuranceengagement substantially lessinscopethana A limitedassuranceengagementis limitations ofassuranceengagement. assurance becausethereareinherent assurance isnotanabsolutelevelof of assurance.However, reasonable Reasonable assuranceisahighlevel Sri Lanka(“ICASL”) Institute ofCharteredAccountants Financial Information’,issuedbythe than AuditsorReviewsofHistorical 3000): ‘AssuranceEngagementsother on AssuranceEngagements(SLSAE accordance withSriLankaStandard based ontheworkperformedin engagement andexpressconclusions reasonable andlimitedassurance Our responsibilityistoperforma OUR RESPONSIBILITY financial performanceasreportedon We reconciledtheinformationon Financial Information CARRIED OUT ASSURANCE PROCEDURES thecalculationperformedby • theinformationtrendsin • theinformationvalidation • theinformationreportedby • thesystemsusedtogenerate, • December 2010and2011. of theBankforyearsended31st with theauditedfinancialstatements pages 142,143and144oftheReport Key PerformanceIndicators Interviewingthesenior • Reviewingthesystemusedto • InquiringrelevantBank’s • information presentedintheReport: assurance proceduresonother We plannedandperformedfollowing Other Information recalculation. Bank onasamplebasisthrough discussions withmanagementand business level; processes atcorporateand corporate level; the relevantbusinessunitsto information; aggregate andreportthese based onreviewsof: year ended31stDecember2011 Performance Indicatorsforthe the data/informationonKey We reviewedthereliabilityof policies formaterialissuesand sustainability strategyand the evidenceconcerning business unitlevelandobtained at corporatelevelandselected management andrelevantstaff the informationinReport generate, aggregateandreport information intheReport. aggregation andpresentationof process forcollection,analysis, personnel tounderstandthe Readingtheinformationpresented • Reviewingandvalidatingthe • Colombo 23rd March2012 CHARTERED ACCOUNTANTS Nothinghascometoourattention • Theinformationonfinancial • as describedabove,weconcludethat: Based ontheproceduresperformed, CONCLUSION performance oftheBank. experience with,sustainability with ouroverallknowledgeof,and whether thatinformationisinline in theReporttodetermine Report. information containedinthe operation oftheBank. implementation ofthoseacross Guidelines. GRI (G3)SustainabilityReporting policies whicharederivedfrom sustainability practicesand accordance withtheBank’s in allmaterialrespects, the Reportarenotpresented, other informationpresentedin key performanceindicatorsand that causesustobelieve December 2010and2011. the Bankforyearsended31st audited financialStatementsof Report isproperlyderivedfromthe pages 142,143and144ofthe performance asspecifiedon

BANK OF CEYLON ANNUAL REPORT 2011 151 BANK OF CEYLON ANNUAL REPORT 2011 152 Report Sustainability o ecito oainRfrnePageNo. Location/Reference Description No. GRI StandardDisclosuresIndex . Statementfromthemostseniordecisionmakeroforganisationaboutrelevancesustainability tothe StrategyandAnalysis 1.1 1 . ecito fkyipcs ik n potnte Ssanblt eot106 SustainabilityReport Descriptionofkeyimpacts,risksandopportunities 1.2 . Nameoftheorganisation OrganisationalProfile 2.1 2 . rmr rns rdcs n/rsrie Product&Services Primarybrands,products,and/orservices 2.2 . Operationalstructureoftheorganisation,includingmaindivisions,operatingcompanies,subsidiaries,andjoint 2.3 . oaino raiainshaqatr 'BOCSquare', Locationoforganisation’s headquarters 2.4 . Numberofcountrieswheretheorganisationoperatesandnameswitheithermajoroperationsorthat 2.5 . aueo wesi n ea om Innerback Natureofownershipandlegalform 2.6 . akt evd(nldn egahcbekon etr evd n ye fcsoesbnfiire)Management Marketsserved(includinggeographicbreakdown,sectorsserved,andtypesofcustomers/beneficiaries) 2.7 . cl fterprigognsto uiesHglgt 2-4 BusinessHighlights Scaleofthereportingorganisation 2.8 . infiatcagsdrn h eotn eidrgrigsz,srcue ronrhpSsanblt eot 98-150 SustainabilityReport Significantchangesduringthereportingperiodregardingsize,structure,orownership 2.9 .0Aad eevdi h eotn eid utiaiiyRpr 113 SustainabilityReport Awards receivedinthereporting period 2.10 . eotn eid(.. sa/aedrya)frifrainpoie 1st January2011to Reportingperiod(e.g.,fiscal/calendaryear)forinformationprovided ReportParameters 3.1 3 . aeo otrcn rvosRpr December2010- Dateofmostrecentprevious Report 3.2 . eotn yl ana,bena,ec)Annual Reportingcycle(annual,biennial,etc.) 3.3 . otc on o usin eadn h eoto t otnsSsanblt eot99 Sustainability Report Contactpointforquestionsregardingthe report oritscontents 3.4 . Definingreportcontent 3.5 . BoundaryoftheReport 3.6 . tt n pcfi iiain ntesoeo onayo h eotSsanblt eot 99-100 SustainabilityReport Stateanyspecificlimitationsonthescope orboundaryoftheReport 3.7 . Basisforreportingonjointventures,subsidiaries, leasedfacilities,outsourcedoperations,andotherentitiesthat 3.8 . Datameasurement techniquesandthebasesofcalculations, includingassumptionsandtechniquesunderlying 3.9 .0Explanationoftheeffectanyrestatement ofinformationprovidedinearlierreport,andthereasons forsuch 3.10 .1Significantchangesfrompreviousreporting periodsinthescope,boundaryormeasurementmethods appliedin 3.11 .2Tbeietfigtelcto fteSadr icoue nteRpr utiaiiyRpr 152 SustainabilityReport Table identifyingthelocation oftheStandardDisclosuresinReport 3.12 .3Plc n urn rciewt eadt ekn xenlasrnefrteRpr utiaiiyRpr 100 SustainabilityReport Policy andcurrentpractice withregardto seekingexternal assuranceforthe Report 3.13 organisation anditsstrategy. ventures. are specificallyrelevanttothesustainabilityissuescoveredinReport can significantlyaffectcomparabilityfromperiodtoand/orbetween organisations. estimations appliedtothecompilationofIndicatorsandotherinformation intheReport re-statement the Report utiaiiyRpr 104 Sustainability Report Bank ofCeylon Discussion &Analysis Management Mawatha, Colombo1 No. 1,BankofCeylon utiaiiyRpr 99-100 Sustainability Report Discussion &Analysis 31st December2011 Issued inMarch2011 utiaiiyRpr 99 Sustainability Report utiaiiyRpr 99 Sustainability Report utiaiiyRpr 100 Sustainability Report utiaiiyRpr 100 Sustainability Report utiaiiyRpr 100 Sustainability Report utiaiiyRpr 100 Sustainability Report 30 -55 30 -55 cover GRI StandardDisclosuresIndex o ecito oainRfrnePageNo. Location/Reference Description No. . Governancestructureoftheorganisation,includingcommitteesunderhighestgovernancebody responsible Governance,CommitmentsandEngagement 4.1 4 . niaewehrSprioyBadmme sas neeuieofie No IndicatewhetherSupervisoryBoardmemberisalsoanexecutiveofficer 4.2 . Fororganisationsthathaveaunitaryboardstructure,statethenumberofmembershighest governance 4.3 . Mechanismsforshareholdersandemployeestoproviderecommendationsordirectionsthehighestgovernance 4.4 . Linkagebetweencompensationformembersofthehighestgovernancebody, seniormanagers,andexecutives, 4.5 . rcse npaefrtehgetgvrac oyt nuecnit fitrs r vie CorporateGovernance Processesinplaceforthehighestgovernancebodytoensureconflictsofinterestareavoided 4.6 . Processfordeterminingthequalificationsandexpertiseofmembershighestgovernancebody 4.7 . Internallydevelopedstatementsofmissionorvalues,codesconductandprinciplesrelevanttoeconomic, 4.8 . Proceduresofthehighestgovernancebodyforoverseeingorganisation’s identificationandmanagementof 4.9 .0Processesforevaluatingthehighestgovernancebody’s ownperformance,particularlywithrespecttoeconomic, 4.10 .1Epaaino hte n o h rcuinr praho rnil sadesdb h raiainSustainabilityRepor Explanationofwhetherandhowtheprecautionaryapproachorprincipleisaddressedbyorganisation 4.11 .2Externallydevelopedeconomic,environmental,andsocialcharters,principles,orotherinitiativestowhichthe 4.12 .3Membershipsinassociations(suchasindustryassociations)and/ornational/international advocacyorganisations 4.13 .4Ls fsaeodrgop nae yteognsto utiaiiyRpr 101-102 Sustainability Report Listofstakeholdergroupsengagedbytheorganisation 4.14 .5Bssfrietfiainadslcino tkhleswt hmt nae utiaiiyRpr 101-102 SustainabilityReport Basisforidentificationandselectionofstakeholderswithwhom toengage 4.15 .6Apoce osaeodreggmn,icuigfeunyo naeetb yeadb tkhle ru SustainabilityRepo Approachestostakeholderengagement,includingfrequency ofengagementbytypeandstakeholdergroup 4.16 .7Keytopicsandconcernsthathavebeenraisedthroughstakeholder engagement,andhowtheorganisationhas 4.17 . icoueo aaeetapoc oeooi set utiaiiyRpr 109-110 Sustainability Report Disclosureonmanagementapproachtoeconomic aspects ManagementApproach andPerformanceIndicatorsEconomic 5.1 5 C DirectEconomicvaluegeneratedanddistributed,including revenues,operatingcosts,employeecompensation, EC1 C iaca mlctosadohrrssadopruiisfrteognsto’ ciiisdet lmt hneInsignificant FinancialImplicationsandotherrisksopportunitiesfor the organisation’s activitiesduetoclimatechange EC2 C oeaeo h raiainsdfie eetpa biain utiaiiyRpr 137 Sustainability Report Coverageoftheorganisation’s definedbenefitplanobligations EC3 for specifictasks,suchassettingstrategyororganisationaloversight. body thatareindependentand/ornon-executivemembers body and theorganisation’s performance guiding theorganisation’s strategyoneconomic,environmentalandsocialtopics environmental andsocialperformancethestatusoftheirimplementation compliance withinternationallyagreedstandards,codesofconduct,andprinciples economic, environmental,andsocialperformance,includingrelevantrisksopportunities,adherenceor environmental, andsocialperformance organisation subscribesorendorses in whichtheorganisation responded tothosekeytopicsandconcerns,includingthroughitsreporting Governments donations andothercommunityinvestments, retainedearnings,andpaymentstocapitalproviders utiaiiyRpr 88 Sustainability Report Report Corporate Governance Report Corporate Governance linkage There isnosuch Report Committees Board andSub Committees Board andSub Committees Board andSub Sustainability Report Committees Board andSub Sustainability Report utiaiiyRpr 115 Sustainability Report utiaiiyRpr 115 Sustainability Report utiaiiyRpr 103 Sustainability Report utiaiiyRpr 142-144 Sustainability Report t101-102 rt 107 t 65 -87 65 -87 65 -87 88 -94 88 -94 88 -94 88 -94 107 107

BANK OF CEYLON ANNUAL REPORT 2011 153 BANK OF CEYLON ANNUAL REPORT 2011 154 Report Sustainability o ecito oainRfrnePageNo. Location/Reference Description No. GRI StandardDisclosuresIndex C infiatfiaca sitnercie rmGvrmn TheBank does not SignificantfinancialassistancereceivedfromGovernment EC4 C Rangeofratiosstandardsentrylevelwagecomparedtolocalminimumatsignificantlocations EC5 C oiy rcie,adpooin fsedn nlclybsdsplesa infiatlctoso prto Supplyprocedur Policy, practices,andpromotionsofspendingon-locally-basedsuppliersatsignificantlocations ofoperation EC6 C Procedures forlocalhiringandproportionofseniormanagementhiredfromthecommunityatlocations EC7 C Development andimpactofinfrastructureinvestmentsservicesprovidedprimarilyforpublicbenefit-through EC8 C nesadn n eciigsgicn nieteooi mat nldn h xeto mat utiaiiyRpr 145 SustainabilityReport Understanding anddescribingsignificantindirecteconomicimpact,includingtheextentofimpacts EC9 . icoueo aaeetapoc oevrnetlapcsSsanblt eot109 Sustainability Report Disclosureonmanagementapproachtoenvironmentalaspects 5.2 N aeil sdb egto oueSsanblt eot145 SustainabilityReport Materialsusedbyweightorvolume EN1 N ieteeg osmto ypiayeeg oreNotReported None Directenergyconsumptionbyprimarysource EN3 Percentageofmaterialsusedthatarerecycledinput EN2 N nieteeg osmto ypiaysuc Notreported Indirectenergyconsumptionbyprimarysource EN4 N nrysvddet osrainadefiinyipoeet utiaiiyRpr 146 Sustainability Report Energysavedduetoconservationandefficiencyimprovements EN5 N Initiativestoprovideenergy-efficientorrenewableenergy-basedproductsandservices,reductionsinenergy EN6 N oa ae ihrwlb oreInsignificant Notreported Total waterwithdrawalbysource EN8 Initiativestoreduceindirectenergyconsumptionandreductions achieved EN7 N ae ore infiatyafce ywtdaa fwtrInsignificant Water sourcessignificantlyaffectedbywithdrawalofwater EN9 N0Pretg n oa oueo ae eyldadrue idvriyNone.waterisnot PercentageandtotalvolumeofwaterrecycledreusedBiodiversity EN10 N1Locationsofsizelandowned,leased,managedin,oradjacentto,protectedareasand EN11 N2Descriptionofsignificantimpactsactivities,products,andserviceson biodiversityinprotectedareasand EN12 operation significant operation commercial, in-kind,orprobonoengagement Environmental Materials Energy requirements asaresultoftheseinitiatives Water high biodiversityvalueoutsideprotectedarea of highbiodiversityvalueoutsideprotected areas from theGovernment financial assistance receive significant utiaiiyRpr 136-141 Sustainability Report manual procurement policy is governedbythe utiaiiyRpr 136-141 Sustainability Report utiaiiyRpr 127-133 Sustainability Report utiaiiyRpr 146 Sustainability Report recycled areas Biodiversity valued protected areasorhigh are locatedwithinthe No operationalunits Biodiversity do notaffectonthe product orservices Bank activities e GRI StandardDisclosuresIndex o ecito oainRfrnePageNo. Location/Reference Description No. E1 aiaspoetdo etrdNone Habitatsprotectedorrestored 7EN13 N4Srtge,cretatos n uuepasfrmngn mat nboiest utiaiiyRpr 146-150 SustainabilityReport Strategies,currentactions,andfutureplansformanagingimpactsonbiodiversity EN14 N6Ttldrc n nietgenos a msin ywih NotReported Total directandIndirect greenhousegasemissionsbyweight EN16 NumberofIUCNRedlistspeciesandnationalconservationwithhabitatsinareasaffectedby EN15 N7Ohrrlvn nietgenos a msin ywih NotReported Otherrelevantindirectgreenhouse gasemissionsbyweight EN17 N8Iiitvst euegenos a msin n euto civdNotReported Initiativestoreducegreenhouse gasemissionsandreductionachieved EN18 N9Eisoso zn-eltn usacsb egtNotReported Emissionsofozone-depleting substancesbyweight EN19 N0Nx O,adohrsgicn i msin ywih NotReported Nox,SOx,andothersignificant airemissionsbyweight EN20 N1Ttlwtrdshre yqaiyaddsiainNotReported Total waterdischarged byqualityanddestination EN21 N2Ttlwih fwseb yeaddsoa ehdNotReported Total weightofwaste bytypeanddisposalmethod EN22 N3Ttlnme fvlmso infiatsil NotReported Total numberofvolumes ofsignificantspills EN23 N4Weight oftransported,imported,exportedortreatedwastedeemedhazardousunderthetermsBasel EN24 N6Iiitv omtgt niomna mat fpout n evcs n xeto matmtgto None Initiativetomitigateenvironmental impactsofproductsandservices,extentimpactmitigation EN26 Identifysize,protectedstatus andbiodiversityvalueofwaterbodiesrelatedhabitatssignificantlyaffectedby EN25 N7Pretg fpout odadterpcaigmtrasta r elie yctgr None Significantenvironmentalimpactsoftransportingproductsandothergoodsmaterialsusedfor the EN29 Monetaryvalueofsignificant finesandtotalnumberofnon-monetarysanctionsfornon-compliancewith EN28 Percentageofproductssold andtheirpackagingmaterialsthatarereclaimedbycategory EN27 N0Ttlevrnetlpoeto xedtr n netet ytp utiaiiyRpr 149 SustainabilityReport Total environmentalprotectionexpenditureandinvestmentsbytype EN30 A oa okoc yepomn ye mlyetcnrc,adrgo utiaiiyRpr 135 SustainabilityReport Total workforcebyemployment type,employmentcontract,andregion LA1 . Disclosureonmanagement approachtosocialaspects 5.3 A oa ubradrt fepoe unvrb g ru,gne,rgo utiaiiyRpr 135 SustainabilityReport Total numberandrateof employeeturnoverbyagegroup,gender, region LA2 A Benefitsprovidedtofull-timeemployees that arenotprovidedtotemporaryorpart-timeemployees,bymajor LA3 A ecnaeo mlye oee ycletv agiigareet Ssanblt eot134-139 SustainabilityReport Percentageofemployeescoveredbycollective bargainingagreements LA4 A Minimumnoticeperiod(s)regardingoperational changes,including whetheritisspecifiedincollective LA5 Emissions, EffluentsandWaste operations, bylevelofextinctionrisk Convention AnnexI,II,IIIandVIIIpercentageoftransportedwasteshippedinternationally Products andServices the reportingorganisation’s dischargesofwaterandrunoff organisation’s operations,andtransportingmemberoftheworkforce Transport environmental lawsandregulations Compliance Overall Labour PracticesandDecentWork Social operations agreements species not affecttheRedlist Bank operationsdo Not Reported operations Not relevanttoour utiaiiyRpr 98-150 Sustainability Report None utiaiiyRpr 134-139 Sustainability Report utiaiiyRpr 134-139 Sustainability Report 109

BANK OF CEYLON ANNUAL REPORT 2011 155 BANK OF CEYLON ANNUAL REPORT 2011 156 Report Sustainability o ecito oainRfrnePageNo. Location/Reference Description No. GRI StandardDisclosuresIndex A Percentageoftotalworkforcerepresentedinformaljointmanagement-workerhealthandsafetycommitteesthat LA6 A ae fijr,ocptoa iess otdy n betes,ado okrltdftlte yrgo Notreported Ratesofinjury, occupationaldiseases,lostdaysandabsenteeism,ofwork-relatedfatalitiesbyregion LA7 A Education,training,counselling,prevention,andrisk-controlprogrammesinplacetoassistworkforcemembers, LA8 A elhadsft oiscvrdi omlareet ihtaeuin None Healthandsafetytopicscoveredinformalagreementswithtradeunions LA9 A0Aeaehuso riigprya e mlyeb mlyectgr utiaiiyRpr 134-139 SustainabilityReport Average hours oftrainingperyearemployeebycategory LA10 A1Programmesforskillsmanagementandlifelonglearningthatsupportthecontinuedemployabilityofemployees LA11 A2Pretg o mlye eevn eua efrac n aerdvlpetrvesSsanblt eot134-139 Sustainability Report Percentageofemployeesreceivingregularperformanceandcareerdevelopmentreviews LA12 A3Compositionofgovernancebodiesandbreakdownemployeespercategoryaccordingtogender, age,group, LA13 R Percentageandtotalnumberofsignificantinvestmentagreementsthatincludehumanrightsclausesorhave HR1 A4Rtoo ai aayo e owmnb mlyectgr There isnodifference Ratioofbasicsalarymentowomenbyemployeecategory LA14 R Percentageofsignificantsuppliersandcontractorsthathaveundergonescreeningonhumanrightsactions HR2 R Total hoursofemployeetrainingonpoliciesandproceduresconcerningaspectshumanrightsthatarerelevant HR3 R oa ubro niet fdsrmnto cin ae utiaiiyRpr 141 Sustainability Report Total numberofincidentsdiscriminationactionstaken HR4 R Operationsidentifiedinwhichtherighttoexercisefreedomofassociationandcollectivebargainingmaybeat HR5 R Operationsidentifiedashavingsignificantriskorincidentsofchildlabour, andmeasurestakentocontributethe HR6 R Operationsidentifiedashavingsignificantriskforincidentsofforcedorcompulsorylabour, andmeasures takento HR7 R Percentageofsecuritypersonneltrainedintheorganisation’s policiesor proceduresconcerningaspectsofhuman HR8 R oa ubro niet fvoain novn ihso nieospol n cin ae Noincidents of Total numberofincidentsviolationsinvolvingrightsindigenouspeopleandactionstaken HR9 R1 Percentageandtotalnumberofoperationsthathavebeensubjecttohumanrightsreviewsand/orimpact HR 10 R1 Numberofgrievances relatedtohumanrightsfiled,addressedandresolvedthroughformalgrievance HR 11 help monitorandadviceonoccupationalhealthsafetyprogrammes their families,orcommunitymembersregardingseriousdiseases and assisttheminmanagingcareerendings minority groupmembership,andotherindicatorsofdiversity undergone humanrightsscreening Human Rights taken to operations,includingthepercentageofemployeestrained significant risk,andactionstakentosupporttheserights elimination ofchildlabour contribute totheeliminationofforcedorcompulsorylabour rights thatarerelevanttooperations assessment mechanisms utiaiiyRpr 134-139 Sustainability Report utiaiiyRpr 134-139 Sustainability Report utiaiiyRpr 134-139 Sustainability Report utiaiiyRpr 134-139 Sustainability Report Not Reported in basicsalary Not Reported Not Reported Not Reported utiaiiyRpr 107-110 Sustainability Report utiaiiyRpr 107-110 Sustainability Report None indigenous people violation ofrights Not reported utiaiiyRpr 141 Sustainability Report o ecito oainRfrnePageNo. Location/Reference Description No. GRI StandardDisclosuresIndex O Nature,scope,andeffectivenessofanyprogrammespractices thatassesandmanagetheimpactsof SO1 O ecnaeadttlnme fbsns nt nlsdfrrssrltdt orpinNotreported Percentageandtotalnumberofbusinessunitsanalysedfor risksrelatedtocorruption SO2 O ecnaeo mlye rie nognsto’ nicruto oiisadpoeue Notreported percentageofemployeestrainedinorganisation’s anti-corruptionpoliciesandprocedures SO3 O cin ae nrsos oicdnso orpinNotreported Actionstakeninresponsetoincidentsofcorruption SO4 O ulcplc oiin n atcpto npbi oiydvlpetadlbyn Notreported Publicpolicypositionsandparticipationinpublicdevelopment andlobbying SO5 O oa au ffiaca n nkn otiuin opltclpris oiiin,adrltdisiuin ycutyNone Total valueoffinancialandin-kindcontributionstopoliticalparties,politicians,relatedinstitutionsbycountry SO6 O Total numberoflegalactionstakenforanti-competitivebehaviour, anti-trust,andmonopolypracticestheir SO7 R Lifecycle stagesinwhichhealthandsafetyimpactsofproductsservicesareassessedforimprovement, PR1 Monitoryvalueofsignificantfinesandtotalnumbernon-monetarysanctionsfornon-compliancewithlaws SO8 R Total number ofincidentsnon-compliancewithregulationsandvoluntarycodesconcerninghealthsafety PR2 R Type ofproductandserviceinformationrequiredbyprocedures,percentagesignificantproducts PR3 R Total number ofincidentsnon-compliancewithregulationsandvoluntarycodesconcerningproductservice PR4 R rcie eae ocsoe aifcin nldn eut fsresmauigcsoe aifcinSustainabilityRepor Practices relatedtocustomersatisfaction,includingresultsofsurveysmeasuringsatisfaction PR5 R Programs foradherencetolaws,standards,andvoluntarycodesrelatedmarketingcommunications,including PR6 R Total number ofincidentsnon-compliancewithregulationsandvoluntarycodesconcerningmarketing PR7 R oa ubro usatae opansrgrigbece fcsoe rvc n osso utmrdt SustainabilityRe Total numberofsubstantiatedcomplaintsregardingbreaches ofcustomerprivacyandlossesdata PR8 Optional Mandatory Monetaryvalueofsignificantfinesfornon-compliancewithlawsandregulationsconcerningthe provisionand PR9 Third Party Declared Checked Checked operations oncommunities,includingentering,operating,andexiting Society outcomes percentage ofsignificantproductsandservicescategoriessubjecttosuchprocedures Product Responsibility regulations impacts ofproductsandservicesduringtheirlifecycle,bytypeoutcomes services subjecttosuchinformationrequirements information andlabelling,bytypeofoutcomes. advertising, promotion,andsponsorship communications, includingadvertising,promotion,andsponsorshipbytypeofoutcomes use ofproductsandservices Self GRI In Accordance 2002 +BB A+ A B+ B C+ C

Report Externally Assured

Report Externally Assured utiaiiyRpr 146-148 Sustainability Report None Not reported Not material operations Not relevanttoour Not relevant None Not reported None Not material ot115 port 103 t

BANK OF CEYLON ANNUAL REPORT 2011 157 Fitch Ratings Lanka has upgraded the Bank’s national long-term rating to 'AA+(lka)' stable outlook from 'AA(lka)' positive.

With this rating the Bank has come to the top of the domestic commercial banks rating league.

Financial Reports Annual Report of the Directors on the State of Affairs of the Bank of Ceylon 160 Directors’ Interest in Contracts 164 Directors’ Statement on Internal Control 169 Independent Assurance Report 171 Directors Responsibility for Financial Reporting 172 Report of the Auditor General 173 Income Statement 174 Balance Sheet 175 Statement of Changes in Equity 176 Cash Flow Statement 177 Signiﬁcant Accounting Policies 180 Notes to the Financial Statements 196

Credit/Debit Cards Foreign Currency Deposits

Gold BANK OF CEYLON ANNUAL REPORT 2011 160 . Review oftheyear’s performance 2.5 Vision, MissionandCorporateConduct 2.4 ChangestotheGroupstructure 2.3 Subsidiaries&Associates 2.2 PrincipalactivitiesoftheBank 2.1 ReviewoftheBusiness 2. General 1. Annual ReportoftheDirectorsonStateAffairsBankCeylon performance ofthe Bank/GroupandontheSriLankan economy. The Chairman’s Messageonpages 15and16dealswiththeyear’s pursuing theobjectivesstatedunder‘Vision’ and‘Mission’. Report. TheBankmaintainshighethical standardsinitsactivitieswhilst The Bank’s Vision andMissionaregivenonpage67ofthisAnnual review. There wasnochangetothegroupstructureduringyearunder other thanchangesmentionedunderSignificantAccountingPolicies. activities oftheBankandGroupduringyearunderreview, There werenosignificantchangesinthenatureofprincipal Significant AccountingPoliciestotheFinancialStatementsonpage180. The principalactivitiesofSubsidiariesandAssociatesaregivenunder and otherfinancialservices. credit cardfacilities,off-shorebanking,foreigncurrencyoperations corporate financing,dealinginGovernmentsecurities,pawnbroking, lease financing,investmentbanking,Islamicbancassurance, banking, personaldevelopmentfinancing,mortgage The principalactivitiesoftheBankduringyearwerecommercial Stock Exchange. redeemable debenturesissuedbytheBankarelistedonColombo owned bytheGovernmentofSriLanka.Theunsecuredsubordinated under theBankofCeylonOrdinanceNo.531938.Theiswholly Act No.30of1988andwasdulyincorporatedon1stAugust1939 The BankofCeylonisalicensedcommercialbankundertheBanking Directors approvedtheFinancialStatementson16thMarch2012. Commercial BanksissuedbytheCentralBankofSriLanka.The Direction No.11of2007onCorporateGovernanceforLicensed and certaindisclosuresrequiredtobemadeundertheBankingAct disclosures laiddownbytheColomboStockExchangeListingRules of 1988andamendmentsthereto.Thereportalsoincludescertain the BankofCeylonOrdinanceNo.531938,andBankingActNo.30 on thoseFinancialStatements,conformingtotherequirementsof December 2011,oftheBankandGroupAuditors’Report audited consolidatedFinancialStatementsfortheyearended31st presenting theirreportontheaffairsofBanktogetherwith The BoardofDirectorstheBankCeylonhaspleasurein 2.10 Accounting Policies 2.9 Auditor’s Report Directors’responsibilitiesforfinancialreporting 2.8 2.7 Corporate donations Branchexpansionoftheyear 2.6 year underreview. changes intheaccountingpoliciesadopted bytheBankduring Statements aregivenonpages180 to 195.Therehavebeenno The accountingpoliciesadoptedinthe preparationofFinancial is givenonpage173ofthisAnnualReport. Statements oftheBankanditsSubsidiariesasat31stDecember2011 Financial StatementsoftheBankandConsolidated Socialist RepublicofSriLanka.ReporttheAuditorGeneralon the provisionsofArticle154ConstitutionDemocratic The AuditorGeneralistheofBankCeyloninterms this ReportoftheDirectors. given onpage172ofthisAnnualReportandformsanintegralpart The StatementofDirectors’ResponsibilityforFinancialReportingis accordance withtheprovisionsofCompaniesActNo.72007. the caseofSubsidiaries,FinancialStatementsarepreparedalsoin amendments andtheListingRulesofColomboStockExchange.In its amendments,BankofCeylonOrdinanceNo.531938and Sri LankaAccountingStandards,BankingActNo.30of1988and have beenpreparedinconformitywiththerequirementsof affairs. TheDirectorsareoftheviewthattheseFinancialStatements Statements thatwillreflectatrueandfairviewofthestate The DirectorsareresponsibleforthepreparationofFinancial Responsibility activities. the BankhasincurredRs.49.4milliononCorporateSustainability& Rs. 5.5milliondonationsweregrantedduringtheyear. Inaddition, of Ceyloncantransact. does notincludepeerbank’s ATMs throughwhichcustomersofBank the yearacrossislandbringingouttotalto402.Thisnumber enhancing customerconvenience.TheBankinstalled52ATMs during branches wereincreasedby9.Thenetworkwasfurtherexpanded extension officesduringtheperiodunderreview. Thenumberof The Bankextendeditsservicesthroughtheadditionof30new fair reviewofBank’s affairsformanintegralpartofthisReport. analysis ofbusinessoperationstheBank.Thesereportsthatprovidea Management Discussion&Analysisonpages30to55,provideadetailed description oftheoperationsBankduringyearunderreview. The GeneralManager’s Reviewonpages17and18providesadetailed DividendsandReserves 5.1 Profit 5 4 Gross Income 3 Future Developments Table 1 loan lossesandcontingenciesbeforeVAT &tax Profit fortheyearafterpaymentofallexpensesandprovidingdepreciation, possible au de a nfiaca evcs 25575 40123 25988 (4,126,961) (2,569,828) (4,001,253) (2,515,755) Value addedtaxonfinancialservices hr fpoto soit opne eoetx--2875212,898 208,715 - - Share ofprofitAssociatecompaniesbeforetax rfi eoeicm a 1,4,6 002591,5,0 11,075,485 15,851,208 10,052,569 15,545,765 Profit beforeincometax noetxepne(,2,7)(,8,5)(,6,4)(4,162,289) (4,364,345) (3,687,257) (4,024,970) Income taxexpense rfi o h er 1507563532 146836,913,196 11,486,863 6,365,312 11,520,795 Profit fortheyear rnfr opraetrsrefn 3,0 2,0 3,0 127,500 230,500 127,500 230,500 Transfers topermanentreservefund Appropriations rnfr opiaydae ikrsre 061 28238,2 248,213 80,621 248,213 80,621 Transfers toprimary dealer riskreserve rnfr oohrrsre 110 - 81,110 - - - 1,570,276 - 1,484,073 Dividends Transfers tootherreserves Transfers toinvestment fundaccount reported in2010. Rs.11,487 millionin2011fromtheprofitaftertaxofRs.6,913 in 2010)theprofitaftertaxforyearofGroupincreasedto year. AfterdeductingRs.4,364millionforincometax(Rs.4,162 to Rs.15,851million,anincreaseof43%incomparisontheprevious The pre-taxprofitoftheGroupalsoincreasedfromRs.11,075million Details ofprofitrelatingtotheBankandGrouparegiveninTable 1. million profitaftertaxreportedin2010. to Rs.11,521million,whichisa81%increasecomparedRs.6,365 in 2010)forincometax,theprofitaftertaxyear2011amounted for thepreviousyear. AfterdeductingRs.4,025million(Rs.3,687 reflecting anincreaseof55%,comparedtoRs.10,053millionrecorded The Bankrecordedapre-taxprofitofRs.15,546millionin2011 (2010 -95%)oftotalincometheGroup. to thepreviousyear. TheBank’s totalincomeaccountedfor95% 2011 wasRs.75,055millionasagainstRs.66,654incomparison 85% ofthetotalincome.ThegrossincomeGroupforyear The mainincomeoftheGroupisinterestincome,whichcomprises Report. Management Discussion&Analysisonpages30to55ofthisAnnual presented intheChairman'sMessageonpages15and16 An overviewofthefutureplansanddevelopmentBankis 5.3 Reserves 5.2 Dividends Property, Plant&Equipment 6 of thefollowing. December 2011(2010-Rs.25,196million).TheGroupreservesconsist The totalreservesoftheGroupstoodatRs.37,002millionas31st Bank asdividendsfortheyear. (2010-Rs.3,096million) reserves. Accordingly, asumofRs.3,846millionhasbeenpaidbythe after deductionoftax,loanlossprovisionandanysuchportionfor Government, theshareholderofBank,prudentlybasedonprofits The Bankdeterminesthedividendsinconsultationwith Note 31toFinancialStatementsonpages233ofthisAnnualReport. million (2010-Rs.1,232million)thedetailsofwhicharegivenin of property, plant&equipmentduringtheyearamountedtoRs.1,905 The totalcapitalexpenditureincurredbytheGrouponacquisition emnn eev ud308002,777,500 3,008,000 Permanent reservefund eauto eev ,6,5 178,692 4,666,054 Revaluation reserve rmr elrseilrs eev 5,0 776,683 857,304 Primary dealerspecialriskreserve xhnetasainrsre4037565,745 430,347 Exchange translationreserve te eevs5557504,437 585,547 - 1,570,276 Other reserves Investment fundaccount eandpot 5841920,393,029 25,884,129 Retained profits Total 1,6,2 40382 82231 14,989,548 18,212,321 14,053,822 18,061,520 ,4,1 ,9,1 ,4,1 3,096,410 3,846,410 3,096,410 3,846,410 Rs.’000 2011 akGroup Bank Rs.’000 2010 7016725,196,086 37,001,657 Rs.’000 Rs.’000 2011 2011 Rs.’000 Rs.’000 2010 2010

BANK OF CEYLON ANNUAL REPORT 2011 161 BANK OF CEYLON ANNUAL REPORT 2011 162 21 Listofdirectors 12.1 Directors 12 CorporateSustainabilityandResponsibility 11 10 Share Information IssueofDebentures 9 8.2 Shareholding 8.1 Stated StatedCapitalandShareholding capital 8 Value ofFreeholdProperties 7 Annual ReportoftheDirectorsonStateAffairsBankCeylon r auSvrmn o-xctv Independent Non-Independent Non-Executive Exofficio Non-Executive Sivaraman Mr.Raju Mr. SRAttygalle (Chairman) Dr. GaminiWickramasinghe Executive/Non Name oftheDirector were asfollows. The DirectorsoftheBankwhoheldofficeduringyearunderreview Report. of thepresentDirectorsaregivenonpages18and19thisAnnual skills andexperiencetotheBoard.Thequalifications hold anyexecutivepositionsintheBank.Theybringawiderangeof 2011 consistsofsixmembersincludingtheChairmanandtheydonot The BoardofDirectorstheBankCeylonasat31stDecember Sustainability Report. Responsibility (CS&R)aredetailedonpages98to157underthe The programmescarriedoutundertheCorporateSustainabilityand Rs.2,273 andRs.8,400respectively, fortheperiodunderreview. The earningspershareandnetassetsoftheGroupwere Sheet aregiveninNote40totheFinancialStatementsonpage248. Bank. ThedetailsofdebenturesoutstandingasatthedateBalance maturity gapsandtostrengthenthesupplementarycapitalbaseof million). Theproceedsofthesedebentureswereutilisedtobridgethe to Rs.6,000millionasat31stDecember2011(2010-Rs.22,083 The Grouphadissueddebentures(bothlistedandunlisted)amounting The GovernmentofSriLankaisthesoleshareholderBank. shares. December 2011wasRs.5,000millionconsistingof5,000,000ordinary The totalissuedandfully-paidupcapitaloftheBankasat31st Rs.9,038 million(2010-Rs.4,242million). December 2011isincludedinNote31toFinancialStatementsat The valueoffreeholdpropertiesownedbytheGroupasat31st o-xctv Independent Non-Executive Executive Status Independence Status of 12.6 Directors’ allowances/fees Directors' interestsindebenturesissuedbytheBank/Group 12.5 Directors’ interestsincontracts 12.4 12.3 Directors’ meetings 12.2 Board subcommittees TheDirectorsareclassifiedasIndependentonthebasis r eaeNnEeuieIndependent Non-Executive Non-Independent Mr. SRAttygalle) Non-Independent (Alternate directorto Mr. VKanagasabapathy Non-Executive Mr. KLHewage Non-Executive Mr. ChandrasirideSilva Ms. NaliniAbeywardene the financialyearended31stDecember 2011aregivenonpage197. The Directors’remunerationinrespect oftheGroupandBankfor No. 53of1938anditsamendments. the MinistryofFinance&PlanningandBankCeylonOrdinance 24th March2008allissuedbytheDepartmentofPublicEnterprises 58 dated29thApril2011,PF/PE/2319thJuly2002,letter of theprovisions/contentsinPublicEnterprisesCircularNos.PED The allowances/feespayabletoBoardofDirectorsaremadeinterms beginning andattheendofyear. no debenturesregisteredinthenameofanyotherDirectorasat in theDebentureRegisterasat31stDecember2011.Therewere in debenturesissuedbytheBankduringyear2008andappears Dr. GaminiWickramasinghe(Chairman)hasinvestedUS$349,000 contracts orproposedwiththeBank. therein, theDirectorshavenoanydirectorindirectinterestinother at meetingsoftheBoardDirectors.Exceptforcontractsgiven are givenonpages164to168Theseinterestshavebeendeclared Directors’ interestsincontractswiththeBank,bothdirectandindirect given onpage95ofthisAnnualReport. Attendance ofDirectorsatBoardandsubcommitteemeetingsare given onpage88ofthisAnnualReport. control overaffairsoftheBank.Thesubcommitteecompositionis aforesaid BankingActDirectionNo.11of2007toensureoversight The Boardhasformedfoursubcommitteescomplyingwiththe Sri Lanka. for LicensedCommercialBanksissuedbytheCentralBankof given inBankingActDirectionNo.11of2007onCorporateGovernance o-xctv Non-Independent Non-Executive 1. CorporateGovernance 14. 13.2 Internal control 13.1 Risk RiskManagement andSystemofInternalControls management 13 No. 11of2007. compliance withtheprovisionsof abovementionedDirection The Boardhasobtainedareportfrom theAuditorGeneralon pages 65to87ofthisAnnualReport. They aredescribedintheCorporateGovernanceReportappearingon of SriLankaandTheInstituteCharteredAccountantsLanka. Governance issuedjointlybytheSecuritiesandExchangeCommission Direction No.11of2007andtheCodeBestPracticeonCorporate directions issuedbytheCentralBankofSriLankaunderBankingAct and practicesthatareinconformitywithCorporateGovernance effectively withinCorporateGovernancepractices.Theseprocedures and compliancefunctionsoftheBankaredirectedcontrolled corporate governancestructureandprocess.Thefinancial,operational The BoardofDirectorsiscommittedtowardsmaintaininganeffective of thisAnnualReport. on Directors’StatementInternalControlanditisgivenpage171 The BoardhasobtainedanAssuranceReportfromtheAuditorGeneral principles andregulatoryrequirements. purposes hasbeendoneinaccordancewithrelevantaccounting reporting andthatthepreparationofFinancialStatementsforexternal provide reasonableassuranceregardingthereliabilityoffinancial has confirmedthatfinancialreportingsystembeendesignedto report isgivenonpages169and170ofthisAnnualReport.TheBoard Corporate GovernanceforLicensedCommercialBanks.Theabove Direction No.3(8)(ii)(b)ofBankingActNo.112007on a statementontheinternalcontrolmechanismofBankasper Annual ReportandtheFinancialStatements.TheBoardhasissued internal controlduringtheyearunderreviewanduptodateof The Directorsaresatisfiedwiththeeffectivenessofsystem Committee iscontainedonpages89and90ofthisAnnualReport. fiduciary responsibilities.TheReportoftheChairmanAudit The AuditCommitteehelpstheBoardofDirectorstodischargetheir Audit Committee. and comprehensivesystemofinternalcontrolsintheBankthrough The BoardofDirectorshasensuredtheimplementationaneffective are detailedonpages56to64ofthisAnnualReport. risks. ThespecificmeasurestakenbytheBankinmitigatingrisks The BoardofDirectorsassumesoverallresponsibilityformanaging 21. Going Concern PostBalanceSheetEvents 20. 19. Environmental Protection StatutoryPayments 18. OutstandingLitigation 17. CompliancewithLawsandRegulations 16. HumanResources 15. Colombo 21st March2012 Secretary, BankofCeylon/Secretary totheBoard Janaki SenanayakeSiriwardane By orderoftheBoard, going concernbasisinpreparingtheFinancialStatements. adequate tocontinueitsoperations.Therefore,ithasappliedthe The DirectorsareconfidentthattheresourcesofBank Report, thatwouldrequireadjustmentsordisclosure. the intervalbetweenendoffinancialyearanddatethis The Directorsareoftheviewthatnomaterialeventshavearisenin environment aregiveninSustainabilityReportonpages98to157. to theenvironment.Further, precautionstakentoprotectthe The Bankhasnotengagedinanyactivity, whichhascauseddetriment and inrelationtoemployeeshavebeenmadeontime. The BoardconfirmsthatallstatutorypaymentsduetotheGovernment financial resultsorfutureoperationsoftheBank. against theBankwillnothaveamaterialimpactonreported The Directorsareoftheopinionthatlitigationcurrentlypending which formsanintegralpartofthisReport. regulations aregivenonpage64underReportRiskandCompliance and regulations.DetailsoftheBank’s compliancewiththelawsand the Grouphasnotengagedinanyactivitiescontraveninglaws The Directors,tothebestoftheirknowledgeandbeliefconfirmthat detailed intheSustainabilityReportonpages98to157ofthisReport. The Bank’s Human ResourceManagementpoliciesandpracticesare their contributiontowardstheachievementofcorporateobjectives. to strengthenthemuch-valuedhumancapitalinorderoptimise important fortheBanktodevelopthem.Severalmeasuresweretaken One ofthemostvaluableassetsBankisitsemployeesandit

BANK OF CEYLON ANNUAL REPORT 2011 163 BANK OF CEYLON ANNUAL REPORT 2011 164 entities wheretheChairmanoraDirectorofBankissuchentities,aredetailedbelow: Financial Statementsonpages259to263.Inaddition,thetransactionsthathavebeencarriedoutinordinarycourseofbu Related partydisclosuresasrequiredbytheSriLankaAccountingStandardNo.30(Revised2005)on‘RelatedPartyDisclosures’ Directors' InterestinContracts *Currencies inthousands (Private) Limited Mireka CapitalLand Currentaccount Chairman Property DevelopmentPLC (Private) Limited Koladeniya Hydropower (Private) Limited Ceybank HolidayHomes Currentaccount Chairman Bank ofCeylon(UK)Limited Dr. GaminiWickramasinghe opn Relationship Company ietrCurrent account Director Currentaccount Chairman Currentaccount Chairman Letter ofguarantee Term loan Current account Letter ofguarantee Letter ofcredit Deposit forfuel Rent paidinadvance Repo balance Time deposit Letter ofcredit Other receivable Other payable Time deposit Other payable Placements (Nostro account) Transactions Nature of Nature of (Rs.2,733,720) US$ 24,000 5,000 2,498

(Rs.2,585,644) (Rs.4,965,821) (Rs.1,105,875) (Rs.911,240) US$22,700 EURO 7,500 GBP 28,300 (Rs.81,979) (Rs.65,593) (Rs.53,674) US$ 8,000 '000* Limit EURO 445 (RS.229) 235,179 180,400 907,000 GBP 467 US$ 471 247,429 13,496 16,614 US$2 1,256 2,562 3,300 5,822 1,496 2,103 907 795 81 Balance/Amount outstanding as (Rs.2,531,163) (Rs.8,395,450) (Rs.5,932,068) (Rs.2,639,955) EURO 40,000 EURO 17,801 at 31.12.11 US$ 22,700 GBP 48,749 (Rs.73,619) (Rs.15,576) 235,179 454,200 755,400 GBP 427 US$ 138 (Rs.174) 181,675 '000* 86,815 1,533 3,000 4,502 3,711 US$ 2 siness inanarm'slengthbasiswith 907 700 are detailedinNote49tothe 22 78 - - - - Balance/Amount 100% cashmargin Limited Investment (Singapore)Pte placed byShingKwan Clean basis&Time deposits Related shippingdocuments outstanding as t 31.12.10 at '000* Security . Two DrivethroughATMs havebeen purchasedfromInformatics(Private)Limited. 3. Bank hascalledforquotationsfromInformatics(Private)Limited/ InfrasoftTechnologies2. Limitedand3iInfotechLimit ** 1. Visual** 1. ComputingSystems(Private)Limited (A companybelongingtoInformaticsGroup)hasbeenappointedprovidemaint *Currencies inthousands r ak ot uhrt ietrSavingsaccount Director Sri LankaPortsAuthority Mr. S.R.Attygalle Savingsaccount Chairman Informatics GroupofCompanies** Corporation PLC The LankaHospitals obtain anAntiMoneyLaundering(AML) softwaresolutiononStandaloneModelbasis. opn Relationship Company ietrSavingsaccount Director Letter ofcredit Repo balance Term loan Time deposit Time deposit Current account Savings account taxes) payable (excluding transaction value Procurement Letter ofguarantee Term loan Overdraft Time deposit Current account Savings account Repo balance Time deposit Time deposit Current account Current account Transactions Nature of Nature of (Rs.7,120,460) US$ 62,512 750,000 66,800 9,600

(Rs.6,230,402) (Rs.5,279,004) (Rs.207,700) US$54,698 US$46,346 (Rs.34,768) (Rs.17,279) (Rs.62,130) (Rs.1,290) (Rs.7,376) US$ 1,823 '000* Limit US$305 US$545 (Rs.184) 818,847 224,643 897,985 100,000 US$11 US$65 GBP98 24,500 43,927 54,938 60,000 GBP1 2,619 7,883 9 Balance/Amount

- - - - outstanding as ed/ DMS Software Engineering (Private) Limited to ed/ DMSSoftwareEngineering(Private) Limitedto (Rs.3,485,215) (Rs.2,576,560) at 31.12.11 US$ 31,256 US$ 23,107 (Rs.42,557) (Rs.52,905) US$381 941,000 591,113 US$ 474 (Rs.327) (Rs.172) 255,417 188,166 enance supportonTandem server. 24,636 '000* 55,084 46,663 4,531 2,883 US$ 3 US$ 2 927 68 8 -

- - - - - Balance/Amount Bank's constructivecontrol underlying goodsunder BOE, shippingdocuments, assets imported Negative pledgeoverthe Residential property NRFC deposit outstanding as t 31.12.10 at '000* Security BANK OF CEYLON ANNUAL REPORT 2011 165 BANK OF CEYLON ANNUAL REPORT 2011 166 * Arch-Triad Consultants(Private)Limited hasbeenappointedastheinteriordesignconsultantsforinterior/exteriorrefurbi ** *Currencies inthousands Directors' InterestinContracts Hotels Colombo (1963) Limited Director Current account Current Director Limited (1963) Colombo Hotels Ms. NaliniAbeywardene Limited Merchant CreditofSriLanka account Savings Director Limited (Private) Milco Limited** Arch -Triad Consultants(Private) Limited Ceylease FinancialServices Mr. RajuSivaraman Nugegoda andastheconsultantsfor projectofconstructinganewbuildingforBankCeylonatNelliady. opn Relationship Company Director Savings account Savings Director Director Managing Currentaccount Chairman Time deposit Letter ofguarantee Letter ofcredit Bridging ﬁnance Money marketloan Overdraft Series ofloan Time deposit Current account Lease Term loan Overdraft Time deposit Time deposit Current account value Consultancy service Other payable Repo balance Letter ofguarantee Letter ofcredit Money marketloan Bridging ﬁnance Series ofloan Overdraft Other receivable Transactions Nature of Nature of 100,000 100,000 250,000 700,000 100,000 350,000 450,000 10,000 50,000 50,000 50,000 50,000 4,000 2,500

(RS.466,543) US$4,096 '000* Limit (Rs.204) 642,651 315,431 340,000 39,538 11,310 50,000 23,601 90,386 16,880 10,000 11,487 37,519 US$2 6,029 2,500 15 Balance/Amount - 980 - - 8

------outstanding as at 31.12.11 315,431 210,000 25,498 50,875 19,566 79,610 27,111 '000* 50,000 27,000 26,689 1,465 2,589 1,577 shment ofSuperGradeBranch, 15 86 - - -

------} } Balance/Amount by PowerofAttorney Lease receivablesbacked Fixed deposits Stocks &bookdebts Clean shipping documents Bills ofexchange& Clean by PowerofAttorney purchase receivablebacked Lease receivable/hire Clean outstanding as t 31.12.10 at '000* Security * CeybankAssetManagement Limitedisthemanagingcompanyofaboveunittrusts. ** *Currencies inthousands ecatBn fSiLnaPCDrco Currentaccount Director Merchant BankofSriLankaPLC Mr. V.Kanagasabapathy Limited Ceybank AssetManagement Mr. K.L.Hewage oesClmo(93 iie ietrCurrentaccount Director Hotels Colombo(1963)Limited O rvl Piae iie himnCurrentaccount Chairman BOC Travels (Private)Limited Mr. ChandrasiriDeSilva BOC Travels (Private) Limited Director Current account Current Director Limited (Private) Travels BOC opn Relationship Company himnCurrentaccount Chairman Other payable Investment indebts Intra dayoverdraft Credit onchequelimit Grant onimmediate Letter ofguarantee Repo balance Money marketloan Series ofloan Overdraft Debenture Investment inunits** Repo balance Other receivable Time deposit Other payable Other receivable Letter ofguarantee Overdraft Debenture Time deposit Other payable Other receivable Letter ofguarantee Overdraft Debenture Time deposit Transactions Nature of Nature of 100,000 600,000 110,000 50,000 50,000 5,000 1,000 3,500 7,600 7,600

1,513,004 '000* Limit 595,320 140,000 10,625 17,400 40,000 46,384 58,765 90,386 16,880 10,000 50,000 35,410 10,000 50,000 35,410 23,601 50,000 50,000 1,799 1,083 1,240 1,240 619 619 Balance/Amount ------outstanding as at 31.12.11 1,309,174 81,647 25,916 35,725 19,566 79,610 10,000 40,000 27,558 10,000 40,000 27,558 '000* 10,000 13,486 50,000 50,000 8,200 1,083 2,589 794 794 ------} Balance/Amount Power ofAttorney Lease receivablebackedby Time deposits&debentures Book debts Time deposits&debentures Book debts outstanding as t 31.12.10 at '000* Security BANK OF CEYLON ANNUAL REPORT 2011 167 BANK OF CEYLON ANNUAL REPORT 2011 168 Directors' InterestinContracts *Currencies inthousands ak yrui nttt iie ietrCretacut 1 18 18 Currentaccount Director Lanka HydraulicInstituteLimited Currentaccount Chairman Distance learningCentreLimited Security Print(Private)Limited De LaRueLankaCurrency& Savingsaccount Director Hotel DevelopersLankaPLC opn Relationship Company ietrSavingsaccount Director Overdraft Time deposit Letter ofguarantee Letter ofcredit Overdraft Time deposit Current account Current account Repo balance SRCC &T) (Granted under Term loan Current account Savings account Transactions Nature of Nature of 350,000 30,000 2,000

(Rs.5,595) '000* Limit (Rs.359) 150,000 GBP32 18,658 43,750 11,250 18,807 US$3 JPY5 (Rs.7) 5,512 8,759 385 914 Balance/Amount -

- - outstanding as at 31.12.11 (Rs.3,749) (Rs.7,849) (Rs.3,754) (Rs.349) 213,000 78,750 16,262 15,962 US$ 34 GBP 46 GBP 22 '000* US$3 JPY5 (Rs.7) 8,243 2,586 1,912 281 842

Time deposit - Balance/Amount Loan agreement margin Time deposits&100%cash property Mortgage overcommercial outstanding as t 31.12.10 at '000* Security TheBoardhasestablishedanorganisation structurewithclearlydefined • Risk ManagementFramework following: adequacy andintegrityofthesysteminternalcontrolsinclude The keyprocessesthattheDirectorshaveestablishedinreviewing Key InternalControlProcesses implementing thepoliciesapprovedbyBoard. • designing, operatingandmonitoringasuitablesystemofinternal • formulating relatedpoliciesandprocedurestomanagetheserisks; • identifying andevaluatingtherisksfaced; • policies andproceduresonriskcontrolby; The managementassiststheBoardinimplementationofBoard’s of theBank. significant accountsoftheBankwereassessedalongwithkeyriskareas of SriLanka.Asperthesaidguidance,significantprocessesaffecting Statement ofInternalControlissuedbytheInstituteCharteredAccountants in accordancewiththeguidanceforDirectorsofBanksonDirectors’ The processisregularlyreviewedbytheBoardthroughAuditCommittee whole financialyearunderreview. business environmentandthison-goingprocesshasbeeninplaceforthe Bank isupdatedandreviewedfromtimetosuitthechangesin of businessobjectives.Theprocesswhichhasbeeninstitutedthroughoutthe monitoring andmanagingsignificantrisksthatmayaffecttheachievement The Bankhasinplaceanon-goingprocessforidentifying,evaluating, management andfinancialinformationoragainstlossesfrauds. than absoluteassuranceofeffectivenessagainstmaterialmisstatement and objectivesoftheBank.Itcanthereforeonlyprovidesreasonable,rather risk profile,ratherthantoeliminatetheoffailure,achievegoals framework isdesignedtomanagetheBank’s riskswithinanacceptable stakeholders’ interests.TheBoardisoftheviewthatinternalcontrol sound internalcontrolsystemtosafeguardtheBank’s resourcesandthe The Boardacknowledgesitsoverallresponsibilityformaintaininga Responsibility system ofinternalcontrolstheBank. that theBoardhasadoptedinreviewingadequacyandintegrityof Commercial BanksinSriLankawhichoutlinestheprocessesandprocedures Banking ActDirectionNo.11of2007,onCorporateGovernanceforLicensed (‘Statement’), thatwaspreparedinlinewithSection3(8)(ii)(b)ofthe The BoardispleasedtoprovidetheDirectors’StatementonInternalControl Introduction Directors' StatementonInternalControl of astrongcontrol environment.Ithasextendedtheresponsibilities of business andoperationalrequirements, whichsupportthemaintenance lines ofresponsibility, authoritylimitsandaccountability alignedto controls; and Report appearingonpages89and90. of theBankduringyearunderreviewaresetoutinAuditCommittee to betaken.FurtherdetailsofactivitiesundertakenbytheAuditCommittee Board alongwiththeminutesofmeetingsandfollowsuponaction Internal Audits.TheAuditCommitteesubmitsitsrecommendationstothe audit functionwithparticularemphasisonthescopeofauditsandquality of management andinternalcontrolsystem.Theyalsoreviewthe management, andevaluatestheadequacyeffectivenessofrisk by theinternalauditors,externalregulatoryauthoritiesand The AuditCommitteeoftheBankreviewsinternalcontrolissuesidentified are submittedtotheAuditCommitteeforreviewattheirregularmeetings. reviewed andapprovedbytheAuditCommittee.FindingsofInternal to provideanindependentandobjectivereport.Theannualauditplanis Branches, thefrequencyofwhichisdeterminedbylevelriskassessed, in respectofanynon-compliance.Auditsarecarriedoutonallunitsand using samplesandrotationalprocedures,highlightssignificantfindings and theeffectivenessofinternalcontrolsystemonanon-goingbasis The InternalAuditchecksforcompliancewithpoliciesandprocedures Internal AuditFunction Establishmentofthethree(3)linesDefenceConcept-risktakingunits, • Riskmanagementprinciples,policies,proceduresandpracticesare • TheBoardhasalsodelegatedtheresponsibilityofreviewing • approach. independent assuranceoftheeffectivenessriskmanagement and developingtoolsmethodologies.TheInternalAuditprovides control unitisresponsibleforsettingtheriskmanagementframework management ofrisksinherentintheirbusinessactivitieswhiletherisk Internal Audit.Therisktakingunitsareresponsiblefortheday-to-day risk controlunit(IndependentIntegratedRiskManagementUnit)and manner. violations oftheBank’s policiesandregulationsinasafeconfidential employees toreportactualorsuspectedmalpractice,misconduct The BankhasaWhistleBlowerPolicyinplace,providinganavenuefor applicable lawsandregulations,aremadeavailabletoallemployees. updated regularlytoensurerelevanceandcompliancewithcurrent/ basis. and evaluatedbytheBank’s riskmanagementfunction,onanon-going Committee. Theeffectivenessofriskmanagementsystemismonitored effectiveness ofriskmanagementtotheIntegratedRiskManagement the internalauditfunction. Audit Committeetoincludetheassessmentofinternalcontrols,through

BANK OF CEYLON ANNUAL REPORT 2011 169 BANK OF CEYLON ANNUAL REPORT 2011 170 the Bankcomplies withSection3(8)(ii)(b)oftheBanking ActDirection requirements oftheCentralBank Sri Lanka.TheBoardalsoconfirmsthat done inaccordancewithSriLankaAccounting Standardsandregulatory preparation oftheFinancialStatements forexternalpurposesthathasbeen reasonable assuranceonthereliability offinancialreportingandthe the financialreportingsystemof Bankhasbeendesignedtoprovide Based ontheaboveprocessesandprocedures,Boardconfirmsthat Confirmation Subsidiaries oftheBank. control effectivenessonanon-goingbasis.Theassessmentdidnotinclude in turnwereobservedandcheckedbytheInternalAuditfordesign accounts anddisclosuresoftheFinancialStatementsBank.These reviews allproceduresandcontrolsthatareconnectedwithsignificant In assessingtheinternalcontrolsystemonfinancialreporting,Bank Therearepoliciesandproceduresinplacetoensurecompliancewith • Aclearlydefinedframeworkwithappropriateempowermentand • Operationalcommitteeshavealsobeenestablishedwithappropriate • FoursubcommitteesoftheBoardaresetuptoassistperform • SubmissionofannualbusinessplanandbudgettotheBoardfor • provide effectiveinternalcontrolsincludethefollowing: The otherkeyelementsoftheproceduresestablishedbyBoardthat Other KeyElementsofInternalControl Directors' StatementonInternalControl business environmentorregulatoryguidelines. and areupdatedfromtimetointandemwithchangesthe and proceduresaresetoutintheBank’s OperatingInstructionCirculars internal controlandtheprescribedlawsregulations.Thesepolicies off operationalandcredititems. acquisitions anddisposalsofassets,awardingtendersaswellwriting- authority limitshasbeenapprovedbytheBoardforgrantingofcredits, and InformationTechnology SteeringCommittee. Committee, MarketingHumanResourcesPolicyCommittee Liability ManagementCommittee,CreditPolicyInvestment Bank’s businessoperations.ThesecommitteesincludetheAssetand empowerment toensureeffectivemanagementandsupervisionof scope andreporttotheBoardwiththeirrecommendations. These committeeshavetheauthoritytoexamineallmatterswithintheir these subcommittees,allofwhichhaveformalisedtermsreference. its oversightfunctions.Specificresponsibilitieshavebeendelegatedto to theBank’s policies. regulatory matters.TheBoardalsoapprovesanychangesoramendments the managementonkeyoperatingstatistics,aswelllegaland to betakenmitigaterisks.TheBoardreviewsregularreportsfrom on amonthlybasisallowingtimelyresponsesandcorrectiveactions approval. Actualperformancesarereviewedagainstthetargetedresults Colombo 21st March2012 Chairman -AuditCommittee Director Chairman By orderoftheBoard, page 171ofthisAnnualReport. Assurance ReportoftheAuditorGeneralconfirmingaboveisgivenon internal controlsystemoverfinancialreportingoftheBank.TheIndependent has adoptedinthereviewofdesignandcontroleffectiveness this StatementisinconsistentwithhisunderstandingoftheprocessBoard Board thatnothinghascometohisattentioncauseshimbelieve Based ontheproceduresperformed,AuditorGeneralhasreportedto Chartered AccountantsofSriLanka. Banks onDirector’s StatementonInternalControlissuedbytheInstituteof Standard onAssuranceEngagements(SLSAE)3050-AssuranceReportfor Director’s Statement onInternalControlinaccordancewithSriLanka The AuditorGeneral,theExternalofBankhasreviewedthis Review oftheStatementbyAuditorGeneral Lanka inrelationtotheDirector’s StatementonInternalControl. No. 11of2007onCorporateGovernanceforLicensedCommercialBanksinSri system ofinternalcontrolfortheBank. appropriately reflectstheprocessDirectorshaveadoptedinreviewing the is bothsupportedbythedocumentationpreparedorforDirectorsand This engagementhasbeenconductedtoassesswhethertheStatement Summary ofworkperformed issued bytheInstituteofCharteredAccountantsSriLanka. – AssuranceReportforBanksonDirectors’StatementInternalControl accordance withSriLankaStandardonAssuranceEngagementsSLSAE3050 Statement basedontheworkperformed.Iconductedmyengagementin My responsibilityistoissueareporttheBoardofDirectorson My responsibilitiesandcompliancewithSLSAE3050 of CharteredAccountantsSriLanka. section 3(8)(ii)(b)oftheBankingActDirectionNo.112007,byInstitute Directors’ StatementonInternalControl”issuedincompliancewiththe Statement inaccordancewiththe“GuidanceforDirectorsofBankson Management isresponsibleforthepreparationandpresentationof Management’s responsibility was assistedbyafirmofCharteredAccountantsinpublicpractice. year ended31December2011.IncarryingoutthisassuranceengagementI Control (“Statement”)ofBankCeylonincludedintheannualreportfor This reportistoprovideassuranceontheDirectors’StatementInternal Introduction the Directors’StatementonInternalControlofBankCeylon Assurance ReportoftheAuditorGeneraltoBoardDirectorson Independent AssuranceReport ())%2&,& Auditor General H ASSamaraweera the Bank. adopted inthereviewofdesignandeffectivenessinternalcontrol inconsistent withmyunderstandingoftheprocessBoardDirectorshas causes metobelievethattheStatementincludedinannualreportis Based ontheproceduresperformed,nothinghascometomyattentionthat Conclusion in fact,remedytheproblems. control aspectsofanysignificantproblemsdisclosedintheannualreportwill, to considerwhethertheprocessesdescribeddealwithmaterialinternal Bank’s riskandcontrolprocedures.SLSAE3050alsodoesnotrequireme all risksandcontrols,ortoformanopinionontheeffectivenessof SLSAE 3050doesnotrequiremetoconsiderwhethertheStatementcovers process adoptedbytheBoardofDirectors. and theexistenceofdocumentationonasamplebasisthatsupports The proceduresperformedarelimitedprimarilytoinquiriesofbankpersonnel

BANK OF CEYLON ANNUAL REPORT 2011 171 BANK OF CEYLON ANNUAL REPORT 2011 172 of thisAnnualReport. assurance regardingthereliabilityof financialreportingisgivenonpage169 that thefinancialreportingsystemhasbeendesignedtoprovidereasonable A reportbytheDirectorsonBank’s internalcontrolmechanismconfirming applied andpracticedwithinpredeterminedproceduresconstraints. that appropriateinfrastructure,controls,systemsandethicalbehaviour are be completelyeliminated,theBankendeavourstominimisethembyensuring prevent fraudandmismanagement.Whilstinherentresidualriskscannot strong controlenvironmenttoprotectandsafeguardtheBank'sassets and riskmanagementplaceconsiderableimportanceonmaintaining a The Directorsarealsoresponsibleforthesystemofinternalfinancialcontrols Internal Controls,RiskManagementandCompliance Statements. have continuedtoadoptthegoing-concernbasisinpreparingFinancial resources tocontinueinbusinessfortheforeseeablefuture.Accordingly, they The DirectorsareoftheviewthatBankandGrouphaveadequate Going Concern the Groupasat31stDecember2011. reflect atrueandfairviewofthestateaffairsBankCeylon Standards andotherregulatoryrequirements.Thesefinancialstatements amendments andDirectionsissuedunderit,theSriLankaAccounting No. 53of1938anditsamendments,BankingAct301988 are inconformitywiththerequirementsofBankCeylonOrdinance The FinancialStatementsfortheyear2011presentedinthisAnnualReport have beendisclosedandexplained. and estimatesthatarereasonableprudent.Materialdepartures,ifany, policies havebeenusedandappliedconsistentlysupportedbyjudgements year 2011presentedinthisAnnualReport,themostappropriateaccounting The DirectorsacknowledgethatinpreparingtheFinancialStatementsfor state ofaffairstheBank. Financial Statementsforeachfinancialyeargivingatrueandfairviewofthe accuracy atanytimethefinancialpositionofBankandpreparesproper the Bankmaintainsproperbooksofaccountswhichdisclosewithreasonable and Directions,theDirectorsofBankareresponsibleforensuringthat amendments readwiththeBankingActNo.30of1988andits In termsoftheprovisionsBankCeylonOrdinanceNo.531938andits Financial Statements the BankofCeylonandGroupissetoutinfollowingstatement. reporting. TheresponsibilityofDirectorsinrelationtofinancialreporting respective responsibilitiesoftheDirectorsandAuditorsinrelationtofinancial This StatementbytheBoardofDirectorsismadeespeciallytodistinguish Directors ResponsibilityforFinancialReporting Colombo 21st March2012 Secretary, BankofCeylon/SecretarytotheBoard Janaki SenanayakeSiriwardane By orderoftheBoard, control mechanismisgivenonpage171ofthisAnnualReport. The AuditorGeneral’s certificationontheeffectivenessofBank’s internal out intheReportofAuditorGeneralonpage173thisAnnualReport. responsibilities oftheAuditorinrelationtoFinancialStatementsareset and issuesthefinalopiniononFinancialStatementsofBank.The Socialist RepublicofSriLanka,theAuditorGeneralisBank Pursuant toprovisionsofArticle154theConstitutionDemocratic Audit Report pages 89and93respectivelyofthisAnnualReport. Committee andIntegratedRiskManagementareincludedon controls andriskmanagementprocedures.ThereportsoftheAudit ongoing basis,haveactedinstrengtheningtheeffectivenessofinternal The AuditCommitteeandIntegratedRiskManagementCommittee,onan Management DivisionandreportedtotheBoard. directives andguidelinesaremonitoredbytheIndependentIntegratedRisk basis fordiscussion.Compliancewithapplicablelaws,regulations,rules, on risktotheIntegratedRiskManagementCommitteeaquarterly and managematerialrisks.Arrangementsaremadetosubmitreports and guidelines.ManagementCommitteesareestablishedtomonitor The DirectorsandManagementhaveputinplaceriskmanagementpolicies assessments, theauditorconsiders internal controlrelevanttotheBank’s financial statements,whetherduetofraudorerror. Inmakingthoserisk assessment oftheriskmaterialmisstatementconsolidated The proceduresselecteddependontheauditor’s judgment,includingthe the amountsanddisclosuresinconsolidatedfinancialstatements. An auditinvolvesperformingprocedurestoobtainevidenceabout misstatements. about whethertheconsolidatedfinancialstatementsarefreefrommaterial requirements andplanperformtheaudittoobtainreasonableassurance Lanka AuditingStandards.ThoseStandardsrequirethatIcomplywithethical statements basedonmyaudit.IconductedauditinaccordancewithSri My responsibilityistoexpressanopinionontheseconsolidatedfinancial Auditor’s Responsibility are freefrommaterialmisstatements,whetherduetofraudorerror. necessary toenablethepreparationofconsolidatedfinancialstatementsthat Standards andforsuchinternalcontrolasManagementdeterminesis consolidated financialstatementsinaccordancewithSriLankaAccounting Management isresponsibleforthepreparationandfairpresentationofthese Management’s Responsibilityfortheconsolidatedfinancialstatements practice appointedbythemembersofrespectivesubsidiaries. of thesubsidiarieswereauditedbyfirmsCharteredAccountantsinpublic of theDemocraticSocialistRepublicSriLanka.Thefinancialstatements my directioninpursuanceofprovisionsArticle154(1)theConstitution accounting policiesandotherexplanatoryinformation,wascarriedoutunder Cash FlowStatementfortheyearthenended,andasummaryofsignificant the consolidatedIncomeStatement,ofChangesinEquityand comprising theconsolidatedBalanceSheetasat31stDecember2011and (“Bank”) anditssubsidiariesfortheyearended31stDecember2011 The auditoftheconsolidatedfinancialstatementsBankCeylon of CeylonanditsSubsidiariesfortheyearended31stDecember2011 Report oftheAuditorGeneralonFinancialStatementsBank Report oftheAuditorGeneral ())%2&$5 Auditor General H.A.S. Samaraweera constitution willbetabledinduecourse. My reporttoParliamentinpursuanceofprovisionsArticle154(6)the Report toParliament him bySections5(1)ofthesaidFinanceAct. Government GazetteNo.715of14May1992byvirtuepowersvested in Act, No.38of1971byanOrderthenMinisterFinancepublishedinthe The BankhasbeenexemptedfromtheprovisionsofPartIIFinance Exemption the BankingAct,No.30of1988andsubsequentamendments. These financialstatementshadbeenpresentedtheinformationrequiredby Report onOtherLegalandRegulatoryRequirements in accordancewithSriLankaAccountingStandards. 2011 andit’s financialperformanceandit’s cashflowsfortheyearthenended of thefinancialpositionBankanditssubsidiariesasat31stDecember In myopiniontheconsolidatedfinancialstatementsgiveaTrue andFairview Opinion to provideabasisformyauditopinion. I believethattheauditevidencehaveobtainedissufficientandappropriate financial statements. made bymanagement,aswellevaluatingtheoverallpresentationof of AccountingPoliciesusedandthereasonablenessaccountingestimates Bank’s internal control.Anauditalsoincludesevaluatingtheappropriateness but notforthepurposeofexpressinganopiniononeffectiveness order todesignauditproceduresthatareappropriateinthecircumstances, preparation andfairpresentationoftheconsolidatedfinancialstatementsin

BANK OF CEYLON ANNUAL REPORT 2011 173 BANK OF CEYLON ANNUAL REPORT 2011 174 Bank Group ioiyitrs - 1413 5,8 (18.8) 152,886 124,143 - - 68.1 - 6,760,310 11,362,720 4.9 81.0 (4,162,289) (4,364,345) 6,365,312 - 11,520,795 (2.0) 9.2 212,898 - (3,687,257) 208,715 (4,024,970) 5.0 202 - (37.7) - The significantaccountingpolicieson pages180to195andnoteson196266formanintegralpart oftheseFinancialS (17,363,180) (4,126,961) 16 (18,222,949) (2,569,828) Dividend pershare(Rs) (67.3) - Diluted earningspershare(Rs) 5.1 (1,725,997) (37.1) Basic earningspershare(Rs) (564,528) 100.0 (37.3) (16,076,692) (49.5) (4,001,253) Profit fortheyear (16,897,039) 1,394,539 - - (2,515,755) 10.6 Minority interest 5,716,051 874,687 (72.2) Equity holderoftheparent 2,887,551 (3,580,358) Attributable to: (3,960,352) 4.9 (1,559,894) (4.1) (37.2) 815,460 (433,619) (50.0) Profit fortheyear (8,731,783) 201 19.5 (2,299,079) (9,162,048) 1,367,953 Income taxexpense 5,134,033 (2,204,071) 201 201 75.6 859,401 15 2,565,380 (2,908,256) Profit beforeincometax 257,910 2.3 (3,473,941) 5.3 12 14 (5.7) 27.1 Share ofprofitAssociatecompaniesbeforetax 201 452,969 317.6 (2,751,960) 1,531,383 (8,044,072) Operating profit (2,266,119) 418,461 (2,896,478) (8,229,157) 1,945,775 13 (2,136,264) Value addedtaxonfinancialservices investmentsinrelatedcompanies 51.9 1,747,564 198 7.0 198 19.7 Operating profitbeforeVAT 468,998 10.5 327.3 10 11 (2,858,245) 1,150,558 Reversal ofprovisionforfallinvalue 712,625 (556,008) (3,057,677) 408,686 Recovery ofnonperformingadvances 1,377,013 15.7 (135.9) Provision forloanlosses (614,376) Change 1,746,285 3,508,297 6,486,213 197 197 Rs'000 20.1 16.8 (1,258,757) 7,507,428 Operating profitbeforeprovisions 53,051,981 8.3 6 (32,014,051) Rs'000 8 63,728,274 (37,383,766) 2010 (140.9) 18.8 Other operatingexpenses 19.5 16.1 (467,298) 3,105,791 Premises, equipmentandestablishmentexpenses Change 2011 6,012,728 (1,270,543) (505,983) Staff retirementbenefits 50,843,042 Rs'000 (31,200,050) 7,141,666 (36,228,708) 60,744,962 Personnel expenses 197 196 Operating expenses Rs'000 196 196 196 7 5 Operating income 3 4 2 Page Other operatingincome Note Net gain/(loss)frominvestmentinsecurities 2010 Dividend income Foreign exchangeprofit No 2011 % Net feeandcommissionincome % Fee andcommissionexpenses Fee andcommissionincome Net interestincome Interest expenses Interest income Income For theyearended31stDecember Income Statement 16 7,6,6 6,6,6 1. 7,5,9 6,5,9 12.6 66,653,894 75,054,699 12.6 63,362,866 71,368,168 196 1

1,4,6 1,5,6 5. 1,4,9 1,6,8 44.0 10,862,587 15,642,493 54.6 10,052,569 15,545,765 1,2,9 63532 10 14683 ,1,9 66.2 6,913,196 11,486,863 81.0 66.2 6,913,196 6,365,312 11,486,863 11,520,795 81.0 6,365,312 11,520,795 3,1,1 3,2,5 1. 3,2,1 3,8,8 10.5 32,684,186 36,125,111 11.2 30,322,455 33,717,317 2,1,5 1,4,9 2. 2,4,0 2,3,3 25.2 21,037,930 26,344,508 24.8 19,642,992 24,516,254 9 7 0 6.8 1.8 792 619.28 769.28 619.28 769.28 204 17 1,4,6 1,5,6 5. 1,5,0 1,7,8 43.1 11,075,485 15,851,208 54.6 10,052,569 15,545,765 1,6,2 1,5,2 2. 1,1,2 1,8,4 21.5 14,989,548 18,212,321 28.5 14,053,822 18,061,520 7 0 ,0.6 ,7.6 ,7.4 1,352.06 2,272.54 1,273.06 2,304.16 204 17 7 0 ,0.6 ,7.6 ,7.4 1,352.06 2,272.54 1,273.06 2,304.16 204 17 66563 ,4,3 1. 68302 ,3,0 16.2 5,930,205 6,893,052 19.7 5,545,430 6,635,683 1,2,7 1,4,6 1. 1,0,6 1,2,0 16.8 15,321,006 17,902,162 18.1 14,245,763 16,820,278 tatements. Colombo 16 March2012 Chairman Balance Sheet Investment properties Investment securities Government ofSriLankaRestructuringBonds Securities soldunderre-purchaseagreements Borrowed funds Deposits Liabilities Total assets Intangible assets Leasehold land Property, plantandequipment Other assets Investments inSubsidiarycompanies Investments inAssociatecompanies Current taxliabilities Insurance provision-nonlife Insurance provision-life Minority interest Total equityattributabletotheparent Other reserves Retained profits Permanent reservefund Stated capital Equity Total liabilities Debentures Other liabilities Deferred taxliabilities Dr. GaminiWickramasinghe Approved andsignedforonbehalf oftheBoardby, The BoardofDirectorsisresponsible forthepreparationandpresentationofthese FinancialStatements. Chief FinancialOfficer W AAsokaRupasinghe then ended. These FinancialStatementsgiveatrueandfairviewofthestateaffairs ofBank ofCeylonandtheGroupasat31stDecember2011itsprofit fortheyear The significantaccountingpoliciesonpages180to195andnotes 196 to 266formanintegralpartoftheseFinancialStatements. Commitments andcontingencies Total liabilitiesandequity Total equity As at31stDecember Loans &advancestocustomers Treasury bondsmaturingafteroneyear Placement withandloanstootherbanks Dealing securities Securities purchasedunderre-saleagreements Treasury bills,bondsandothereligiblebills Balances withCentralBanks Cash andshorttermfunds Assets Lease rentalsreceivable-afterfiveyears Lease rentalsreceivable-onetofiveyears Lease rentalsreceivable-withinoneyear Loans &advances Bills ofexchange Note 24.3 24.3 37.2 37.1 24.3 24.2 24.1 27 26 25 36 35 34 33 32 31 30 29 28 43 42 41 40 39 38 44 23 22 21 20 19 18

Page 228 222 221 218 245 245 244 244 243 233 233 231 230 217 246 245 217 253 252 252 248 247 247 216 255 215 214 214 206 205 205 205 No Director R Sivaraman 543,651,993 588,764,572 835,540,319 795,377,242 512,438,685 314,009,014 835,540,319 83,320,967 48,724,319 93,674,043 10,518,926 22,849,558 11,169,650 40,163,077 24,591,968 41,365,832 20,601,940 40,163,077 16,756,858 32,093,496 14,544,729 58,763,601 30,427,455 18,670,911 8,547,000 6,240,686 1,139,464 3,224,973 7,563,109 3,008,000 5,000,000 1,107,072 3,573,900 1,075,000 342,839 842,988 Rs '000 61,827 76,270 2011 - - - -

Bank 372,721,584 524,232,697 714,954,293 686,822,422 353,097,916 223,164,930 714,954,293 80,643,496 53,522,487 52,445,153 17,706,268 28,131,871 18,712,777 38,706,348 15,258,392 28,131,871 15,395,903 51,296,744 42,679,798 40,840,091 45,379,013 25,894,466 14,103,803 8,547,000 5,544,589 2,387,835 5,279,094 2,199,758 1,837,935 1,641,594 2,777,500 5,000,000 3,232,348 163,826 844,658 457,587 Rs '000 77,515 1,995 2010 - - - -

Change 2,999.1 367.8 109.3 141.9 360.7 (0.20) (48.2) (37.4) (65.9) (97.4) 45.9 89.7 78.6 29.0 12.3 16.9 18.2 75.5 42.8 31.4 35.0 15.8 45.1 42.8 40.7 16.9 29.5 17.5 32.4 10.6 (1.6) (9.0) 3.3 6.9 8.3 8.8 % ------General Manager W ANalani 558,875,421 597,138,584 856,392,516 813,010,200 516,734,711 314,747,426 856,392,516 83,596,782 99,780,805 12,721,462 23,889,748 17,237,374 48,559,119 42,001,657 25,884,129 22,134,513 42,526,549 43,382,316 17,389,216 59,611,717 30,427,455 18,789,308 33,497,189 18,811,887 8,547,000 1,282,677 7,452,293 1,289,186 3,008,000 1,146,511 8,109,528 5,000,000 1,380,659 4,028,861 1,616,849 165,874 117,376 412,910 328,251 106,682 Rs '000 61,827 2011 -

Group 382,587,797 529,318,700 730,065,076 698,803,579 355,265,395 224,942,115 730,065,076 81,118,367 57,432,015 18,313,650 52,968,787 30,196,086 20,393,029 16,417,750 39,434,565 31,261,497 16,015,528 46,348,696 25,894,466 13,754,857 51,749,203 47,773,386 40,840,091 8,547,000 7,370,308 6,743,744 1,284,563 4,560,906 2,422,527 2,777,500 2,025,557 5,000,000 1,065,411 3,805,443 386,867 119,978 170,404 252,773 489,525 Rs '000 66,937 2,224 2010 -

Change 2,680.0 155.6 142.3 134.2 300.4 (57.1) (46.8) (35.3) (60.6) (96.0) 46.1 73.7 30.4 72.6 12.8 17.3 29.9 59.4 63.4 39.1 26.9 34.8 16.3 45.5 29.6 38.8 39.9 17.3 28.6 17.5 36.6 (2.2) (0.1) (8.3) 3.1 8.3 7.8 8.6 5.9 % - - -

BANK OF CEYLON ANNUAL REPORT 2011 175 BANK OF CEYLON ANNUAL REPORT 2011 176 The significantaccountingpolicieson pages180to195andnoteson196266formanintegralpart oftheseFinancialS Total Retained Other Reserves Permanent Stated Statement ofChangesinEquity oe ae Cptl eev ud netet Ohr Rvlain pois equity profits Revaluation Other Investment reservefund Capital Page Note No fund account s'00 s'00 s'00 s'00 s'00 s'00 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 Bank aac sa s aur 00 50000 ,5,0 - 13370 2,9 1,1,8 24,898,587 15,819,588 125,299 1,303,700 - 2,650,000 5,000,000 Balance asat1stJanuary2010 e rfi o h er21 ,6,1 6,365,312 6,365,312 - - - - - Net profitfortheyear2010 iied o 00 73 0 30640 (3,096,410) (3,096,410) - - - - - 204 17.3 Dividends for2010 rnfr opraetrsrefn 2 5 2,0 - - - (2,0) - (127,500) - - - 127,500 - 252 42 Transfers topermanentreservefund Adjustment on conversion of odnbac noaSbiir 4. 24 - - - (956 (39,566) - - (39,566) - - - 254 43.5 LondonbranchintoaSubsidiary xhnetasainajsmn 35 5 ,4 - - 3,948 - - 3,948 - - - 254 43.5 Exchange translationadjustment rnfr opiaydae pca ikrsre 4. 24 - - - 2823 2823 - (248,213) - 248,213 - - - 254 43.3 Transfers toprimarydealerspecialriskreserve Balance asat31stDecember2010 aac sa s aur 01 50000 ,7,0 - 15625 2,9 1,1,7 28,131,871 18,712,777 125,299 1,516,295 - 2,777,500 5,000,000 Balance asat1stJanuary2011 e rfi o h er21 15075 11,520,795 11,520,795 - - - - - Net profitfortheyear2011 iied o 01 73 0 38640 (3,846,410) (3,846,410) - - - - - 204 17.3 Dividends for2011 rnfr oivsmn udacut 4. 23 14403 14403 - (1,484,073) 1,484,073 253 43.1 Transfers toinvestmentfundaccount rnfr opraetrsrefn 2 5 3,0 - - - (3,0) - (230,500) - - - 230,500 - 252 42 Transfers topermanentreservefund eauto upu 4. 24 - - - - 47070 4,710,770 - 4,710,770 - - - - 254 43.2 Revaluation surplus eerdtxefc nrvlainsrls Deferred taxeffectonrevaluationsurplus nfehl ulig 4. 24 - - - - (2,0) - (223,408) - (223,408) - - - - 254 43.2 onfreeholdbuildings xhnetasainajsmn 35 5 1051 (130,541) - - (130,541) - - - 254 43.5 Exchange translationadjustment rnfr opiaydae pca ikrsre 33 5 061 8,2) - (80,621) - 80,621 - - - 254 43.3 Transfers toprimarydealerspecialriskreserve Balance asat31stDecember2011 ttd emnn Ohrrsre Rtie neet equity interest Retained Otherreserves Permanent Stated oe ae cptl eev ud netet te eauto rft profits Revaluation Other Investment reservefund capital Page Note No fund account s'00 s'00 s'00 s'00 s'00 s'00 s'00 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 Group aac sa s aur 00 50000 ,5,0 - 16900 7,9 1,1,2 9086 27,534,141 950,856 17,115,523 178,692 1,639,070 - 2,650,000 5,000,000 Balance asat1stJanuary2010 e rfi o h er21 ,6,1 5,8 6,913,196 152,886 6,760,310 - - - - - Net profitfortheyear2010 iied o 00 73 0 30640 3,4) (3,134,553) (38,143) (3,096,410) - - - - - 204 17.3 Dividends for2010 rnfr opraetrsrefn 4 22 - 1750 1750 - - (127,500) - - - 127,500 - 252 42 Transfers topermanentreservefund dutet 18 (188) (188) ------Adjustments dutetdet hnei hrhlig - - - - - (061 (10,681) - (10,681) - - - - - Adjustment duetochangeinshareholding Adjustment on conversion of odnbac noaSbiir 4. 24 - - - (956 (39,566) - - - (39,566) - - - 254 43.5 LondonbranchintoaSubsidiary xhnetasainajsmn 35 5 82 (852) - - - (852) - - - 254 43.5 Exchange translationadjustment rnfr opiaydae pca ikrsre 4. 24 - - - 2823 2823 - - (248,213) - 248,213 - - - 254 43.3 Transfers toprimarydealerspecialriskreserve Balance asat31stDecember2010 aac sa s aur 01 50000 ,7,0 - 18685 7,9 2,9,2 10541 31,261,497 1,065,411 20,393,029 178,692 1,846,865 - 2,777,500 5,000,000 Balance asat1stJanuary2011 e rfi o h er21 13270 2,4 11,486,863 124,143 11,362,720 - - - - - Net profitfortheyear2011 iied o 01 73 0 38640 6,3) (3,910,244) (63,834) (3,846,410) - - - - - 204 17.3 Dividends for2011 rnfr oivsmn udacut 4. 23 15026 15026 - (1,570,276) 1,570,276 253 43.1 Transfers toinvestmentfundaccount rnfr opraetrsrefn 4 22 - 2050 2050 - - (230,500) - - - 230,500 - 252 42 Transfers topermanentreservefund rnfr oohrrsre 36 5 - - 110 (110 - - - (81,110) - 81,110 - - - 254 43.6 Transfers tootherreserves eauto upu 4. 24 - - - 47070 4,710,770 - - 4,710,770 - - - 254 43.2 Revaluation surplus eerdtxefc nrvlainsrls Deferred taxeffectonrevaluationsurplus nfehl ulig 4. 24 - - - - 2348 (223,408) - - (223,408) - - - - 254 43.2 onfreeholdbuildings dutetdet hnei hrhlig - - - - - (273 4,6 83,459 146,162 (62,703) - - - - - Adjustment duetochangeinshareholding ovrino soit o noSbiir o 0,7 108,777 108,777 ------Conversion ofAssociateCo.intoSubsidiary xhnetasainajsmn 35 5 1538 (135,398) - - - (135,398) - - - 254 43.5 Exchange translationadjustment rnfr opiaydae pca ikrsre 4. 24 - - - 8,2 - (061 - - (80,621) - 80,621 - - - 254 43.3 Transfers toprimarydealerspecialriskreserve Balance asat31stDecember2011

50000 ,7,0 ,1,9 1529 87277 28,131,871 18,712,777 125,299 1,516,295 - 2,777,500 5,000,000 50000 ,0,0 14403 ,6,7 46261 45198 40,163,077 24,591,968 4,612,661 1,466,375 1,484,073 3,008,000 5,000,000 50000 ,7,0 - ,4,6 1862 03309 ,6,1 31,261,497 1,065,411 20,393,029 178,692 1,846,865 - 2,777,500 5,000,000 50000 ,0,0 15026 ,7,9 46604 58419 ,8,5 43,382,316 1,380,659 25,884,129 4,666,054 1,873,198 1,570,276 3,008,000 5,000,000 trbtbet h aet ioiy Total Minority Attributable totheparent eevsrsre reserves reserve eevsrsre reserves reserve tatements. Cash andcashequivalents attheendofyear ahadcs qiaet ttebgnigo h er 5,8,0 5,7,1 6,2,4 59,404,321 61,528,243 59,375,919 56,783,601 Cash andcashequivalents atthebeginningofyear e nrae(erae ncs n aheuvlns (35791 25238 2,2,4) 2,123,922 (23,927,048) (2,592,318) (23,567,961) Net increase/(decrease)incashand cashequivalents Movement incashandequivalent duringtheyear Net cashgeneratedfromfinancing activities e nraei te orwns 4,2,9 1,4,3 4,4,9 21,664,892 42,348,790 18,642,032 41,228,890 Net increaseinotherborrowings e ucae(rcdsfo ae fscrte odudrr-ucaeareet 47818 93876 44968 20,0 (4,409,668) 19,318,786 (4,798,168) Net purchase/(procedesfromsale)of securitiessoldunderre-purchaseagreements amnso eepino eetrs (,5,0) (,0,0) (,7,0) (1,744,160) (2,877,500) (1,000,000) (2,450,000) Payments onredemptionofdebentures rcesfo su fdbnue ,0,0 2,7,1 60000 22,083,113 6,000,000 21,678,813 5,000,000 Proceeds fromissueofdebentures rcesfo su fsae ySbiir netkn - 0,0 - 201,000 - - Proceeds fromissueofsharesbySubsidiaryundertaking neetpyet 1,8,5) (,6,8) (15091 (9,566,680) (11,520,921) (9,162,180) (10,885,952) Interest payments iied omnrt hrhles - (384 (38,143) (63,834) - - Dividends tominorityshareholders iied adt oeneto r ak 40965 29325 40965 (2,923,205) (4,019,615) (2,923,205) (4,019,615) Dividends paidtoGovernmentofSriLanka Cash flowsfromfinancingactivities Net cashgeneratedfrom/(usedin)investingactivities rcesfo aeo rpry ln qimn 1,5 1,6 3,3 24,025 33,735 14,466 13,759 Proceeds fromsaleofproperty, plant&equipment rcesfo aeo oelsdpoete 031 286 031 72,896 50,351 72,896 50,351 Proceeds fromsaleofforeclosedproperties rcesfo netetpoete - 3,0 4,447 232,707 - - Proceeds frominvestmentproperties ucaeo netetpoete - 1,0) (2,659) (15,000) - - Purchase ofinvestmentproperties ucaeo eshl ad 30 1,2) (6) (16,521) (360) (16,521) (360) Purchase ofleaseholdlands ucaeo nagbeast 2523 1787 3240 (109,473) (342,450) (107,887) (275,283) Purchase ofintangibleassets ucaeo rpry ln qimn 10403 10352 15189 (1,106,282) (1,561,859) (1,043,502) (1,084,023) Purchase ofproperty, plant&equipment e ahefc nivsmn nohrSbiire soits I() - - - (187,186) - - - II(c) NetcasheffectoninvestmentinotherSubsidiaries &Associates e ahefc naqiiino usdais I() - - - (23,625) - - - II(b) NetcasheffectonacquisitionofSubsidiaries e ahefc nivsmn nBn fCyo U)Lmtd I() (,9,7) - - - (1,893,873) - II(a) NetcasheffectoninvestmentinBankof Ceylon(UK)Limited e ahefc nivsmn nSbiire soits Net casheffectoninvestmentinSubsidiaries&Associates e prhs)poed rmsl fscrte ucae ne esl gemns 3,6,9 (42506 92322 (3 39,223,242 (34,225,046) 39,765,091 Net (purchase)/proceedsfromsaleofsecuritiespurchasedunderre-saleagreements e prhs) rcesfo aeo eln euiis (,1,4) 5205 (,9,2) 643,727 (1,293,826) 532,015 (1,414,842) Net (purchase)/proceedsfromsaleofdealingsecurities e nraei rauyblsadohreiil il 1,1,2) (66804 1,8,6) (16,684,808) (13,388,660) (16,668,014) (13,510,227) Net increaseintreasurybillsandothereligible ucaeo netetscrte 79499 3,6,9) (,9,6) (32,038,217) (7,795,469) (31,567,092) (7,904,969) Purchase ofinvestmentsecurities rcesfo aeo netetscrte 43863 35575 2,0,5 23,762,240 23,506,358 23,575,775 24,358,623 Proceeds fromsaleofinvestmentsecurities neetrcie ,2,7 14991 ,6,0 1,453,841 1,762,108 1,439,981 1,624,175 Interest received iied eevd 7265 6,9 4299 257,910 452,969 468,998 712,625 Dividends received Cash flowsfrominvestingactivities

Net cashgeneratedfrom/(usedin)operatingactivities noetxpi 34927 12447 35628 (1,927,120) (3,576,228) (1,234,447) (3,439,227) Income taxpaid Net cashgeneratedfrom/(usedin)operatingactivitiesbeforeincometax

te prtn iblte ,7,0 (,6,1) 7773 (1,481,636) 797,773 (2,068,910) 1,171,501 Other operatingliabilities eoisfo utmr 37592 1,7,2 6,9,8 117,440,490 66,392,984 117,571,827 63,725,922 Deposits fromcustomers eoisfo te ak 0,5 1965 ,2,0 418,628 1,426,900 179,675 805,953 Deposits fromotherbanks Increase/(decrease) inoperatingliabilities (7,3,0) (1,0,7) (8,4,4) (117,535,012) (182,945,544) (116,704,471) (177,337,604) te prtn ses (,8,5) 11219 (,0,7) 2,372,359 (2,306,272) 1,122,159 (2,186,457) Other operatingassets rdtcr eevbe 7145 2964 7145 (259,654) (731,465) (259,654) (731,465) Credit cardreceivables ud dacdt utmr 198663 179598 153488 (110,016,719) (175,374,818) (107,935,978) (169,886,693) Funds advancedtocustomers eoishl o euaoyproe 45299 96098 45299 (9,630,998) (4,532,989) (9,630,998) (4,532,989) Deposits heldforregulatorypurposes (Increase)/decrease inoperatingassets Operating profitbeforechangesinoperatingassetsandliabilities au de a nfiaca evcspi 21395 36737 21413 (3,793,085) (2,174,133) (3,667,377) (2,133,955) Value addedtaxonfinancialservicespaid eoeyo on rte f npeiu er 105 086 631 97,452 96,381 70,866 81,095 Recovery ofloanswrittenoffinpreviousyears ahpyet osples (,0,6) (,1,8) (,1,3) (6,433,716) (5,810,734) (5,813,787) (5,904,961) Cash paymentstosuppliers ahpi oado eafo mlye 99338 95464 1,7,0) (10,265,315) (10,876,209) (9,544,644) (9,943,318) Cash paidtoandonbehalfofemployees enuac eepsi epc fcam - 707 4,897 87,037 - - Reinsurance receiptsinrespectofclaims enuac rmu ad - (9,7) (80,676) (192,379) - - Reinsurance premiumpaid nuac lis&bnfispi - 3693 (210,662) (346,973) - - Insurance claims&benefitspaid nuac rmu eevdfo oiyhles - 7815 558,840 788,105 - - Insurance premiumreceivedfrompolicyholders omsin es&rcit rmohroeaigatvte ,7,3 ,6,6 93198 7,896,404 9,381,998 7,265,660 8,674,132 Commission, fees&receiptsfromotheroperatingactivities neetpyet 2,2,8) (30960 2,0,1) (23,504,431) (22,603,912) (23,069,630) (22,021,083) Interest payments neetrcie 63359 4,8,7 5,0,8 49,584,152 59,105,788 47,286,478 56,343,509 Interest received Cash flowsfromoperatingactivities oe s'00 s'00 s'00 Rs'000 Rs'000 Rs'000 Rs'000 Note o h eredd3s eebr 21 21 21 2010 2011 2010 2011 For theyearended31stDecember Cash FlowStatement

2,7,5 4,5,4 2,5,5 49,476,563 25,658,252 46,554,246 24,075,155 I 32560 67361 76115 61,528,243 37,601,195 56,783,601 33,215,640 III 4,3,2 5,1,0) 4,6,4 (58,121,851) 40,863,846 (59,417,804) 42,334,920 (99806 02120 (04916 10,769,210 (90,449,146) 10,271,240 (89,978,036)

50549 25756 2,5,6 13,853,860 27,454,969 12,527,566 25,095,419 I (65889 1,0,8 8,7,1) 12,696,330 (86,872,918) 11,505,687 (86,538,809) 6,0,7 156252 86767 116,377,482 68,617,657 115,682,592 65,703,376

Bank Group 4,172,166) 00,746

BANK OF CEYLON ANNUAL REPORT 2011 177 BANK OF CEYLON ANNUAL REPORT 2011 178 te aal 250,121 (2,061) (283,068) Rs'000 (704,745) 2,126,247 (450,090) (217,340) (912,426) (2,087,235) Total investmentinBank ofCeylon(UK)LimitedsinceclassifiedasinvestmentinSubsidiary Exchange translationadjustment Cash outflowontheadditionalinvestment madeinBankofCeylon(UK)Limited Net identifiableassets&liabilities transferredtoBankofCeylon(UK)Limited Other payable Customer depositaccounts Deposits frombanks Other assets Property, plant &equipment Loans &advancestocustomers Securities heldonownaccount Net identifiableassets&liabilitiesin: (On 30thApril2010BankofCeylonbranchinLondonwasconvertedintoaSubsidiarynamed(UK)Limited) (a) NetcasheffectoninvestmentinBankofCeylon(UK)Limited Net casheffectoninvestmentinSubsidiaries&Associates Note II 2010 Bank prtn rfi eoecagsi prtn sesadlaiiis 2,9,1 1,2,6 74499 13,853,860 27,454,969 12,527,566 25,095,419 Operating profitbeforechangesinoperatingassetsandliabilities rvso aefrvleaddtxo nnilsrie 8,0 3385 9,9 333,876 395,696 333,875 381,800 Provision madeforvalueaddedtaxonfinancialservises rvso aefrsafpyet 2,0 7557 8,1 765,547 489,910 765,547 422,102 Provision madeforstaffpayments cra o xess 2968 4219 4,2 (429,106) 747,021 (422,149) 219,678 Accrual forexpenses mriaino eshl rpris 3 4 ,0 226 ,6 3,653 2,962 2,296 1,605 244 33 Amortisation ofleaseholdproperties mriaino nagbeast 4 4 620 483 994 59,076 99,944 54,873 96,270 244 34 Amortisation ofintangibleassets ercaino netetpoete 2 28 - 325 3,074 3,285 - - 228 27 Depreciation ofinvestmentproperties ercaino rpry ln qimn 3 23 8508 8,9 9961 889,616 949,631 784,993 815,088 243 32 Depreciation ofproperty, plant&equipment oelsdpoete 8 9 2,1) (675 3,5) (32,494) (33,355) (26,775) (28,616) 197 8 foreclosedproperties rfi nsl fpoet,pat&eupetad Profit onsaleofproperty, plant&equipmentand onls rvso 1 21 4369 ,5,9 5458 1,725,997 564,528 1,559,894 433,619 201 12 Loan lossprovision eeslo rvso o o efrigavne 7836 12707 7836 (1,297,087) (778,306) (1,297,087) (778,306) Reversal ofprovisionfornonperformingadvances eeslo rvso o iiuini au fivsmn (1,6) - - - - (815,460) Reversal ofprovisionfordiminutioninvalueinvestment e anfo eln euiis (2,8) (3,2) (4,3) (466,592) (447,531) (234,620) (328,285) Net gainfromdealingsecurities e anfo netetscrte 4876 10729 4760 (1,059,544) (437,670) (1,037,229) (428,766) Net gainfrominvestmentsecurities noerltdwt netetatvte 21295 17745 22577 (1,720,084) (2,255,757) (1,727,485) (2,142,985) Income relatedwithinvestmentactivities ngvrmn euiis 6609 1209 2,1 (143,924) 626,019 (132,069) 626,019 (1,838,238) 1,517,939 (1,701,874) 1,401,575 ongovernmentsecurities Net (gain)/lossonmarkedtomarketvaluationdealingsecurities e gi)ls nmre omre auto Net (gain)/lossonmarkedtomarketvaluation odilajsmn naqiiin - 696 24,676 6,956 - - Goodwill adjustmentonacquisition eaiegowl rsdo qusto - (3,7) - (131,071) - - Negative goodwillarisedonaqcuisition qiyajsmn fAscaecmais - 229 (5,334) 2,229 - - Equity adjustmentofAssociatecompanies hr fpoto soit opne 1 21 - (0,1) (212,898) (208,715) - - 201 15 Share ofprofitAssociatecompanies rfi rmsl fAscaecmais - - (91,045) - - - Profit fromsaleofAssociatecompanies rfi necag eauto 15275 2956 15823 (277,474) (1,518,263) (279,536) (1,562,725) Profit onexchangerevaluation iied eevdfo usdais&Ascae 2801 2279 - - (222,719) (278,091) Dividends receivedfromSubsidiaries&Associates oinltxcei nitrs ngvrmn euiis 65 0 7295 6960 8423 (685,027) (814,273) (659,630) (792,935) 203 16.5 Notional taxcreditoninterestgovernmentsecurities neetpyet nfiacn ciiis 1,0,9 88066 17122 9,285,915 11,731,212 8,850,666 11,100,898 Interest paymentsonfinancingactivities cre neetpybeo prtn ciiis 31727 7026 ,4,4 (776,295) 3,048,642 (720,246) 3,107,237 Accrued interestpayableonoperatingactivities cre neetrcial noeaigatvte 19008 14578 (,5,7) (1,277,913) (1,957,272) (1,415,728) (1,900,068) Accrued interestreceivableonoperatingactivities Add/(Less): rfi eoetxto 1,4,6 1,5,6 1,5,0 11,075,485 15,851,208 10,052,569 15,545,765 Profit beforetaxation operating assetsandliabilities eoclaino prtn rftbfr hne n Reconciliation ofoperatingprofitbeforechangesin oeI Note Notes tothecashflowstatement I

oe aeN R 0 R 0 s'00 Rs'000 Rs'000 Rs'000 Rs'000 PageNo Note o h eredd3s eebr 21 21 21 2010 2011 2010 2011 For theyearended31stDecember Cash FlowStatement

(1,893,873) (191,301) Bank Group The significantaccountingpoliciesonpages180to195andnotes196266formanintegralpartoftheseFinancial Comparatives intheCashflowstatementhavebeenamendedduetoreclassification. 3,1,4 5,8,0 3,0,9 61,528,243 37,601,195 56,783,601 33,215,640 lcmnswt n on oohrbns 2 24 1,4,2 4,7,9 1,1,8 47,773,386 18,811,887 42,679,798 14,544,729 214 22 Placements withandloanstootherbanks ahadsottr ud 1 25 1,7,1 1,0,0 1,8,0 13,754,857 18,789,308 14,103,803 18,670,911 205 18 Cash andshorttermfunds

oe aeN R 0 R 0 s'00 Rs'000 Rs'000 Rs'000 Rs'000 PageNo Note o h eredd3s eebr 21 21 21 2010 2011 2010 2011 For theyearended31stDecember

Analysis ofcashandequivalents oeI I Note III MBSL InsuranceCompanyLimited MBSL SavingsBankLimited (c) NetcasheffectoninvestmentinotherSubsidiaries&Associates Cash outﬂowonacquisition Goodwill onacquisition Net identiﬁableassets&liabilities Trade &otherpayable Property, plant&equipment Net identifiableassets&liabilitiesin: was acquiredbyPropertyDevelopmentPLCasaSubsidiary) (On 3rdDecember2010KoladeniyaHydropower(Private)Limited Koladeniya Hydropower(Private)Limited (b) NetcasheffectonacquisitionofSubsidiaries:

Bank Group Group Statements. (187,186) (137,186) Rs '000 (50,000) (23,625) (24,676) 4,655 (3,604) 1,051 2010

BANK OF CEYLON ANNUAL REPORT 2011 179 BANK OF CEYLON ANNUAL REPORT 2011 180 Subsidiaries Bank PRINCIPAL ACTIVITIES 1.1 CORPORATE INFORMATION 1. Significant AccountingPolicies The principalactivitiesoftheBank’s Subsidiariesareasfollows: business. activities duringtheyearotherthanenteringintobancassurance There havebeennosignificantchangesinthenatureofprincipal and otherfinancialservices. credit cardfacilities,off-shorebanking,foreigncurrencyoperations corporate financing,dealingingovernmentsecurities,pawnbroking, lease financing,investmentbanking,Islamicbancassurance, banking, personaldevelopmentfinancing,mortgage The principalactivitiesoftheBankduringyearwerecommercial No.1.1 oftheBoardmeetingheldon16thMarch2012. were authorisedforissueon16thMarch2012intermsofMinute The FinancialStatementsfortheyearended31stDecember2011 The Bankdoesnothaveanidentifiableparentofitsown. Associate companies. (together referredtoasthe“Group”)andGroup’s interestsinits 31st December2011comprisetheBank(“Parent”),itsSubsidiaries The ConsolidatedFinancialStatementspreparedfortheyearended (2010 -8,204). The staffstrengthoftheBankasat31stDecember2011was8,115 Exchange. The debenturesissuedbytheBankarelistedonColomboStock Square”, No.1,BankofCeylonMawatha,Colombo01,SriLanka. office oftheBankissituatedatCeylonHeadOffice,“BOC Banking ActNo.30of1988andamendmentsthereto.Theregistered Ordinance No.53of1938.Itisalicensedcommercialbankunderthe duly incorporatedon1stAugust1939undertheBankofCeylon Bank ofCeylonisaGovernmentcorporationdomiciledinSriLanka, Services (Private)Limited BOC Management&Support PLC Merchant BankofSriLanka PrincipalActivities Maintain, manage,developand Property DevelopmentPLC Name ofCompany Provides managementservices secretarial services capital marketactivitiesand finance, corporateadvisoryservices, Leasing andhirepurchase,trade Building Office Head Ceylon of sustain theutilityandvalueofBank Associates The principalactivitiesofBank’s Associatesareasfollows. activities ofsubsidiariesduringtheyear. There havebeennosignificantchangesinthenatureofprincipal BLSvnsBn iie Providesfinancialservicesincluding MBSL SavingsBankLimited Providesfinancialservicesincluding Bank ofCeylon(UK)Limited (Private) Limited Koladeniya Hydropower Limited MBSL InsuranceCompany (Private) Ltd Ceybank HolidayHomes Limited Ceylease FinancialServices Limited Merchant CreditofSriLanka Limited Hotels Colombo(1963) Engageintravelrelatedservices BOC Travels (Private)Limited PrincipalActivities Limited & Management(Private) BOC PropertyDevelopment Name ofCompany Solutions (Private)Limited Transnational Lanka Records Limited Mireka CapitalLand(Private) Limited Lanka Securities(Private) Financial CompanyLimited Southern Development PrincipalActivities Limited Ceybank AssetManagement Name ofCompany Renting propertiesandrealestates estate developmentprojects infrastructure facilitiestoreal developments andproviding real estateproperties, Purchasing, hiringandacquiring placements Equity trading,debttradingand Granting loanfacilities and otherprivateportfolios Management ofUnitTrust Funds pawning etc. financing, hirepurchase term andmortgageloans,lease accepting deposits,granting investments accepting depositsanddealingin Hydropower generation and GeneralInsurance Underwriting ofallclassesLife Homes andGuestHouses Operating ofPilgrimsRests,Holiday pawning estate developmentsandsales purchase, loanfacilitiesandreal Granting leasefacilities,hire services estate developmentsandrelated and othercreditfacilities,real lease facilities,hirepurchase,loans Acceptance ofdeposits,granting Provides hotelservices Ceybank HouseinKandy Merchant Tower inColombo03and Renting ofofficespaceBoC . ESTIMATES ANDMANAGEMENTJUDGEMENTS 3.3 STATEMENT OFCOMPLIANCE 3.2 BASISOFPREPARATION 3.1 SUMMARY OFSIGNIFICANTACCOUNTINGPOLICIES 3. DIRECTORS’RESPONSIBILITYFORFINANCIALSTATEMENTS 2. believed tobereasonable underthecircumstances. are basedonhistoricalexperienceand variousotherfactorsthatare income andexpenses.Theestimates andassociatedassumptions application ofpoliciesandreported amounts ofassetsandliabilities, to makejudgments,estimatesandassumptions thataffectthe The preparationofFinancialStatementsrequiresManagement financial position,performanceandcashflows. Statements oftheBankanditsSubsidiariespresentfairly by theListingRulesofColomboStockExchange.TheFinancial Standards (IFRSs)andprovideappropriatedisclosuresasrequired United KingdomandprovisionsofInternationalFinancialReporting 2000) authorisedbytheFinancialServicesAuthority(FSA)of Part IVoftheFinancialServicesandMarketsAct2000(FSMA 1988, InsuranceIndustryActNo.43of2000, Leasing ActNo.56of2000,FinanceCompanies78 above, arecompliedwithCompaniesActNo.07of2007,Finance thereto. FinancialStatementsofSubsidiaries,inadditiontothe Ordinance andBankingActNo.30of1988amendments Sri LankaandcomplywiththerequirementsofBankCeylon (SLASs) laiddownbyTheInstituteofCharteredAccountants prepared inaccordancewiththeSriLankaAccountingStandards The FinancialStatementsoftheBankanditsSubsidiariesare Financial Statements. No adjustmenthasbeenmadeforinflationaryfactorsaffectingthe in SriLankanRupeeshavebeenroundedtothenearestthousand. previous year. Exceptasindicated,theFinancialStatementspresented Standards, whichhavebeenappliedconsistentlywiththatofthe cost conventionexceptotherwisestatedasrequiredbytheabove Chartered AccountantsofSriLankaandonthebasishistorical in conformitywithAccountingStandardsissuedbyTheInstituteof of ChangesinEquity, AccountingPoliciesandtheNotesareprepared Balance Sheet,IncomeStatement,CashFlowStatement The FinancialStatementsoftheBankandGroupencompassing Sri LankaAccountingStandards. with theBankingActNo.30of1988anditsamendmentsthereto provisions oftheBankCeylonOrdinanceanditsamendmentsread presentation oftheFinancialStatementsBankinterms The BoardofDirectorsisresponsibleforthepreparationand activities oftheaboveassociatesduringyearunderreview. There havebeennosignificantchangesinthenatureofprincipal . MATERIALITY ANDAGGREGATION 3.4 ImpairmentofOtherAssets ImpairmentlossesonLoansandAdvances DefinedBenefitPlans of FinancialStatements’. Sri LankaAccountingStandardNo.03 (Revised2005)on‘Presentation presented separatelyunlesstheyare immaterialaspermittedbythe Financial Statements.Itemsofadissimilar natureorfunctionare Each materialclassofsimilaritemsispresentedseparatelyinthe derived fromaparticularasset. order toarriveatthepresentvalueoffuturecashflows,whichcanbe estimate ofexpectedfuturecashflows,suitablediscountratesin impairment. Thisassessmentrequiresthemanagementtomakean so. Ifanyindicationexistsassetsshouldbevaluedtoassessthe frequently, ifevents orchangesincircumstancesnecessitatetodo for anassetoracashgeneratingunitateachreportingdatemore The Groupassesseswhetherthereareanyindicatorsofimpairment and netrealisablevalueofcollaterals. industry andtechnologicalobsolescence,borrowers’financialsituation a numberoffactorsincludinganyadversemovementincountryrisk, of theseamountsandsuchestimationsarebasedonassumptions The judgementsbythemanagementarerequiredinestimation impairment isrequiredagainstexposures. in existence,whichrequiretoassesswhetherafurtherprovisionfor at eachreportingdateormorefrequently, ifeventsorchangesare Bank ofSriLanka,theGroupreviewsitsloansandadvancesportfolio Financial StatementsofBanks’andDirectivesissuedbytheCentral Standard No.23on‘RevenueRecognitionandDisclosuresinthe advances basedontheparametersgiveninSriLankaAccounting In additiontotheprovisionsmadeforpossiblelossesonloansand reporting dateduetouncertainty. and futurepensionincreases.Allassumptionsarereviewedateach attrition rate,futuresalaryincreases,costoflivingallowances assumptions aboutdiscountrates,expectedrateonplannedassets, are determinedbyusingactuarialvaluations.Itinvolvesmaking The costsofdefinedbenefitplan,gratuityandpensionobligation assumptions arediscussedbelow. Key itemswhichinvolvethesejudgements,estimatesand affects futureperiodstoo. which theestimatesarerevisedand/orinfutureperiodsifrevision Revisions toaccountingestimatesarerecognisedintheperiod The estimatesandassumptionsarereviewedonanongoingbasis.

BANK OF CEYLON ANNUAL REPORT 2011 181 BANK OF CEYLON ANNUAL REPORT 2011 182 3.5.3 Consolidation Adjustments 3.5.2 Foreign Operations ForeignCurrencyTransactions 3.5.1 FunctionalandPresentationCurrency FOREIGNCURRENCYTRANSLATION 3.5 Significant AccountingPolicies translation ofnetinvestments inforeignentitiesaretaken toequity. On consolidation,foreignexchange differences arisingfromthe Forwardexchangecontractsarevaluedat theforwardmarketrates • Whenaforeignoperationisdisposed,the deferredcumulative • Resultingexchangedifferencesarerecognised intheforeign • IncomeandexpensesintheStatementaretranslatedat • Assetsandliabilitiesaretranslatedattheexchangerateruling • Lankan RupeesaretranslatedintoSriasfollows: and BankofCeylon(UK)LimitedwhosefunctionalcurrencyisnotSri The resultsandfinancialpositionofthebranchesinIndia,Maldives at theexchangeraterulingdatefairvaluewasdetermined. fair valueinforeigncurrenciesaretranslatedintoSriLankanRupees initial transaction.Non-monetaryassetsandliabilitiesmeasuredat currency aretranslatedusingtheexchangerateatdateof Non-monetary assetsandliabilitiesmeasuredatcostinaforeign exchange differencesareaccountedforintheIncomeStatement. the BalanceSheetdate.Theresultinggainsandlossesfromforeign are translatedintoSriLankanRupeesattheexchangerateruling Monetary assetsandliabilitiesdenominatedinforeigncurrencies ruling atthedateoftransaction. Transactions inforeigncurrenciesaremeasuredattheexchangerate Rupees, whichistheBank’s functionalandpresentationcurrency. The ConsolidatedFinancialStatementsarepresentedinSriLankan gains andlossesaredealtwiththrough theIncomeStatement. ruling onthedateofBalanceSheet.Resultingnetunrealised as partofthegainorlossondisposal. particular foreignoperationisrecognisedintheIncomeStatement translation gainorlossrecognisedinequityrelatingtothat equity. currency translationreserve,whichisaseparatecomponentof applied fortranslation. of overseasbranches,themonthlyaverageexchangeratesare date ofthetransactions,andincaseincomeexpenses an averageexchangerateapproximatingtheratesat the BalanceSheetdate. 3.6.2 Associates Subsidiaries 3.6.1 BASISOFCONSOLIDATION 3.6 Standard No.22on ‘AccountingforInvestments’. for theinvestmentinaccordancewith theSriLankaAccounting ceases tohavesignificantinfluence over anAssociateandaccounts Group discontinuestheuseofEquity Methodfromthedaythatit incurred obligationsormadepayments onbehalfoftheAssociate.The receivables, theGroupdoesnotrecognise furtherlosses,unlessithas or exceedsitsinterestintheAssociate,includinganyunsecured acquisition. WheretheGroup’s shareoflossesinanAssociateequals assets oftheAssociate,lessanyimpairmentinvalueafterdate amount isincreasedordecreasedtorecognisetheGroup’s shareofnet and subsequentlyaccountedusingtheEquityMethod.Thecarrying The Group’s investmentsinAssociatesareinitiallyrecognisedatcost voting rights. holds ashareholdingofbetweenandincluding20%50%the over financialandoperationaldecisions,butnotcontrol,generally Associates areentitiesinwhichtheGrouphassignificantinfluence interest. Statements. Separatedisclosureismadeinrespectofminority A listingoftheBank’s SubsidiariesisgiveninNote29totheFinancial (UK) Limited,whichisincorporatedintheUnitedKingdom. Bank havebeenincorporatedinSriLankaexceptforofCeylon cash dividendsortorepayloansandadvances.AllSubsidiariesofthe on theabilityofSubsidiariestotransferfundsParentinform the Group’s accountingpolicies.Therearenosignificantrestrictions Subsidiaries havebeenchangedwherevernecessarytocomplywith financial yearendof31stDecember. Theaccountingpoliciesofthe The ConsolidatedFinancialStatementsarepreparedtocommon of disposal. is transferredtotheBankandarenolongerconsolidatedfromdate Subsidiaries areconsolidatedfromthedateonwhicheffectivecontrol the Bankhascontroloverfinancialandoperatingpolicies. indirectly, hasaninterestofmorethanonehalfthevotingrightsor Subsidiaries arethosecompaniesinwhichtheBank,directlyor Associates’. Accounting StandardNo.27(Revised2005)on‘Investmentsin and SeparateFinancialStatements’intermsoftheSriLanka Sri LankaAccountingStandardNo.26(Revised2005)on‘Consolidated Financial StatementsoftheBank,itsSubsidiariesinterms The Group’s Financial Statementscompriseconsolidationofthe Banking UnitandtheforeignoperationsthatareintegraltoBank. Financial StatementsoftheDomesticBankingUnit,Off-shore The Bank’s Financial Statementscomprisetheconsolidationof 3.7.1 Current Taxation 3.7 TAXATION Transactions EliminatedonConsolidation 3.6.4 BusinessCombinationsandGoodwill 3.6.3 the relevanttaxregimes. as adjustedfortaxationpurposesin accordancewiththeprovisionsof overseas operationsismadeonthe basis ofthenetprofitforyear of 2006andtheamendmentsthereto. Provisionfortaxationonthe accordance withtheprovisionsof InlandRevenueActNo.10 of thenetprofitforyearasadjusted fortaxationpurposesin Provision fortaxationonSriLankanoperationsismadethebasis recognised directlyinequity, inwhichcaseitisrecognisedequity. the IncomeStatementexcepttoextentthatitrelatesitems effect from1stApril2011).Provisionfortaxationisrecognisedin Responsibility Levy. (SocialResponsibilityLevywasabolishedwith Provision fortaxationcomprisescurrentanddeferredtaxSocial the Associates. eliminated onconsolidationtotheextentofGroup’s interestsin from transactionsbetweentheGroupanditsAssociatesarealso eliminated onconsolidation.Unrealisedgainsandlossesresulting All intra-grouptransactions,balances,incomeandexpensesare Statement intheyearofdisposal. cumulative translationdifferencesisrecognisedintheIncome the differencebetweensellingpriceandnetassetsplus When Subsidiaries/Associates/otherbusinessunitsaresold, acquisition. and isrecogniseddirectlyintheIncomeStatementyearof assets acquired,thedifferenceisidentifiedasdiscountonacquisition cost ofacquisitionislessthanthefairvaluesidentifiablenet goodwill whichiswritten-offinfulltheyearofacquisition.If fair valuesoftheidentifiablenetassetsacquired,isrecognisedas business atfairvalue.Anyexcessofthecostacquisitionover involves recognisingidentifiableassetsandliabilitiesoftheacquired Standard No.25(Revised2004)on‘BusinessCombinations’.This of AccountingaspertherequirementsSriLanka Business combinationsareaccountedforusingthePurchaseMethod Statements. A listoftheBank’s AssociatesisshowninNote28totheFinancial end ofthefinancialyearGroup. Associates preparedatdatesnotmorethanthreemonthspriortothe latest auditedaccountsorunauditedmanagementofthe loans andadvances.TheresultsoftheAssociatesaretakenfrom transfer fundstoParentintheformofcashdividendsorrepay There arenosignificantrestrictionsontheabilityofAssociatesto .. Value AddedTax (VAT) onFinancialServices 3.7.3 DeferredTaxation 3.7.2 prescribed rates. employees, whichisadjustedforthe depreciationcomputedon the accountingprofitbeforeincome tax andemolumentsof The baseforValue AddedTax computationisarrivedbyaggregating the sametaxableentityandtaxationauthority. assets againstcurrenttaxliabilitiesandthedeferredtaxesrelateto are setoffifalegallyenforceablerightexiststocurrenttax equity arealsorecognisedinequity. Deferredtaxassetsandliabilities Current taxanddeferredrelatingtoitemsrecogniseddirectlyin enacted orsubstantiallyattheBalanceSheetdate. liabilities aresettled,basedontaxratesandlawsthathavebeen are expectedtoapplyintheyearwhenassetsrealisedor Deferred taxassetsandliabilitiesaremeasuredattheratethat sufficient taxableprofitwouldbeavailable. be subsequentlyreversedtotheextentthatitbecomesprobable all ofthatdeferredtaxassetstobeutilised.Anysuchreductionshould sufficient taxableprofitwillbeavailabletoallowthebenefitofpartor Sheet dateandreducedtotheextentthatitisnolongerprobable The carryingamountofdeferredtaxassetisreviewedateachBalance Theinitialrecognitionofanasset/liabilityotherthaninabusiness • Negativegoodwill,whichwastreatedasdeferredincomeunder • Deferredtaxassetsarerecognisedforalldeductibletemporary Liabilitiesarisingfromtheinitialrecognitionofanasset/liability • Liabilitiesarisingfromgoodwillforwhichamortisationisnot • differences, except; Deferred taxliabilitiesarerecognisedforalltaxabletemporary liabilities andtheircarryingamountsintheFinancialStatements. temporary differencesarisingbetweenthetaxbasesofassetsand Deferred taxisprovidedinfull,usingtheliabilitymethod,on accounting ortaxableprofit. combination which,atthetimeoftransaction,doesnotaffect business combinations. temporary differencescanbeutilised,except; that taxableprofitwillbeavailableagainst,whichthedeductible differences, unusedtaxlossestotheextentthatitisprobable transaction, doesnotaffecteithertheaccountingortaxableprofit. other thaninbusinesscombinationswhich,atthetimeof deductible fortaxpurposes.

BANK OF CEYLON ANNUAL REPORT 2011 183 BANK OF CEYLON ANNUAL REPORT 2011 184 .. InvestmentFundAccount (IFA) 3.7.7 WithholdingTax onDividends 3.7.6 SocialResponsibilityLevy(SRL) 3.7.5 EconomicServiceCharge(ESC) 3.7.4 Significant AccountingPolicies i 5%oftheprofitsbeforetaxcalculated forpaymentofincometax ii. 8%oftheprofitscalculated forthepaymentofValue AddedTax i. following fundstoIFA andbuildapermanentfundintheBank. taxes arepaidafter1stJanuary2011theBankshouldtransfer and operateanIFA witheffectfrom1stJanuary2011.Asandwhen the businessofbankingorfinancialservices,isrequiredtoestablish the operationsofInvestmentFundAccount,anyentityengagedin According totheguidelinesissuedbyCentralBankofSriLankaon adjustment. preparing theConsolidatedFinancialStatementsasaconsolidation withholding taxdeductedatsourceisaddedtotheexpensein available forsetoffagainstthetaxliabilityofBank.Thus, Associate Companiesattractsa10%deductionatsourceandisnot Dividend distributedoutoftaxableprofittheSubsidiariesand and Associates Withholding TaxondividendsdistributedbytheSubsidiaries to itssingleshareholder, theGovernmentofSriLanka. No WithholdingTax ispaidbytheBanksincedistributesdividend Withholding TaxondividendsdistributedbytheBank Schedule oftheAct.TheSRLhasbeenabolishedfrom1stApril2011. of 1.5%onalltaxesandlevieschargeableasspecifiedintheFirst amended bytheFinanceActNo.15of2011,SRLispayableatrate In termsoftheprovisionsFinanceActNo.052005,as years. forward andsetoffagainsttheincometaxpayableinsubsequentfive from theincometaxliability. Anyunclaimedbalancecanbecarried turnover (maximumlimitofRs.30millionperquarter)andisdeductible of 2006andamendmentsthereto,ESCispayableat1%onliable In termsoftheprovisionsEconomicServiceChargeActNo.13 Charge ActNo.13of2006. Finance ActNo.11of2004andnowgovernedbyEconomicService ESC wasinitiallyimplementedundertheprovisionsofPartI Added Tax ActNo.14of2002andamendmentsthereto. 12% (20%in2010)Value AddedTax asperSection25(a)oftheValue During theyear, theBank’s totalvalueadditionwassubjectedtoa Act fortheselfassessment paymentoftax. purposes ondatesspecifiedinSection 113oftheInlandRevenue payment ofVAT. (VAT) onfinancialservicesdatesasspecifiedintheVAT Actfor .. InvestmentsinAssociates 4.3.2 InvestmentsinSubsidiaries 4.3.1 4.3 INVESTMENTS SECURITIESPURCHASEDUNDERRE-SALEAGREEMENTS 4.2 InvestmentsthatareheldtoMaturity 4.1.2 Investmentsthatareheldfortrading 4.1.1 GOVERNMENTOFSRILANKATREASURY BILLS,BONDSAND 4.1 ASSETSANDBASISOFVALUATION 4 Accounting Standard No.27(Revised2005)‘Investment inAssociates’. the Group’s FinancialStatementsinaccordance with theSriLanka in theBank’s FinancialStatementsandunderthe EquityMethodin Investments inAssociatesareaccounted forundertheCostMethod cost, lessimpairmentlossesifany. investments inSubsidiariesarestatedtheBank’s BalanceSheetat ‘Consolidated andSeparateFinancialStatements’.Accordingly, with theSriLankaAccountingStandardNo.26(Revised2005)on of accountingintheBank’s FinancialStatementsinaccordance Investments inSubsidiariesareaccountedforundertheCostMethod REPO agreement. price istreatedasinterestincomeandaccruedevenlyoverthelifeof The differencebetweenpurchasepriceandpre-determinedre-sale as loansandadvancestocustomersorotherbanks. interest accruedthereon.Theamountlentisshownasanasseteither collateralised lendingandrecordedattheconsiderationpaid Securities purchasedunderre-saleagreementsaretreatedas (REVERSE REPOS) pattern reflectingaconstantperiodicrateofreturn. received/premia paidaretakentotheIncomeStatementbasedona Bills purchasedandthediscount/premiumaccruedthereon.Discounts and isabletoholdmaturityarereflectedatthevalueofBonds/ Investments inTreasury BillsandTreasury BondsthattheBankintends are dealtwiththroughtheIncomeStatement. in theBalanceSheet.Gainsandlossesonmarkedtomarketvaluation at costandsubsequentlymarkedtomarketcarriedthatvalue the purposeofshort-termselling(heldfortrading)initiallyrecognised Investments inTreasury BillsandTreasury Bondsthatareacquiredfor OTHER SECURITIES the aforesaidguidelines. The utilisationoffundsismadeintermstheinstructionsgiven under generalreservesoftheBank. appropriations ofprofitaftertaxandmaintainedasaseparateitem The fundsthatarebeingtransferredtotheIFA aretreatedas 4.4.2 Measurement BasisofRecognition 4.4.1 4.4 INVESTMENT PROPERTIES Non-CurrentAssetsHeldforSale 4.3.5 4.3.4 Investment Securities 4.3.3 Dealing Securities losses. is carriedatitscost, lessaccumulateddepreciationand impairment Statements. Accordingly, afterrecognitionasanasset, theproperty Investment propertyisaccountedfor underCostModelintheFinancial ordinary courseofbusiness. are associatedwiththeinvestmentpropertybutnotforsalein capital appreciationorbothandthefutureeconomicbenefitsthat Investmentpropertyisthatheldtoearnrentalsorfor for investmentproperties. Standard No.40(Revised2005)on‘InvestmentProperty’,inaccounting The GroupappliestherequirementsofSriLankaAccounting Operations’. (Revised 2006)of‘Non-currentAssetsHeldforSaleandDiscontinued less coststosell,aspertheSriLankaAccountingStandardsNo.38 are measuredatthelowerofcarryingamountandfairvalue sale ofsuchassetsandwhereishighlyprobable.These condition, subjecttoonlythetermsthatareusualandcustomaryfor are assetswhichavailableforimmediatesaleintheirpresent through asalestransactionratherthancontinuingtohold.These date. TheBankintendstorecoverthevalueoftheseassets,principally These areassetsclassifiedasheldforsaleattheBalanceSheet temporary. there isconsideredtobediminutioninvalue,whichotherthan in marketvaluesofthesesecuritiesarenottakenintoaccount,unless Accounting StandardNo.22on‘AccountingforInvestments’.Changes Such securitiesarerecordedatcostinaccordancewithSriLanka or longtermwiththepositiveintentandabilitytoholduntilmaturity. These areacquiredandheldforyieldorcapitalgrowthinthemedium market valuationaredealtwiththeIncomeStatement. at marketvalueintheBalanceSheet.Anygains/lossesonmarkto measured atcostandsubsequentlymarkedtomarketcarried of resaleoverashortperiodtime.Suchsecuritiesareinitially These aremarketablesecuritiesacquiredandheldwiththeintention share ofnetassetstheAssociates,lessanyimpairment. carrying amountisadjustedforpost-acquisitionchangesintheBank’s investments inAssociatesareinitiallyaccountedforatcostandthe at cost,lessimpairmentlosses,ifany. UndertheEquityMethod, In theBank’s BalanceSheet,investmentsinAssociatesarestated 4.6.1 (a) Non-Performing Loans NON-PERFORMINGLOANSAND PROVISION FORLOAN 4.6 CreditCardReceivable 4.5.3 4.5.2 Finance Leases LoansandAdvances 4.5.1 LOANSANDADVANCES, FINANCELEASESANDCREDITCARD 4.5 4.4.4 Derecognition 4.4.3 Depreciation Sri Lanka. Commercial BanksinSriLanka’issued bytheCentralBankof and Advances,IncomeRecognition ProvisioningforLicensed of 2009on‘AmendmentstoDirections onClassificationofLoans Recognition andProvisioning’,asamendedbytheDirectionNo.06 dated 08May2008on‘ClassificationofLoansandAdvances,Income are classifiedasnon-performingperDirectionNo.03of2008 Loans andadvanceswhichareinarrearsofduecapitaland/orinterest LOSSES customers attheamountsexpectedtoberecovered. Amounts receivableoncreditcardsareincludedinadvancesto recovery. received, unearnedleaseincomeandprovisionforrentalsdoubtfulof Lease receivablesarestatedintheBalanceSheetnetofinitialrentals specific periodareaccountedforasfinanceleases. and rewardsassociatedwithownershipotherthanlegaltitlefora Assets leasedtocustomers,whichtransfersubstantiallyalltherisks accrued torevenue. provisions forloanlossesandnetofinterestinsuspensewhichisnot borrowers. LoansandadvancesarestatedintheBalanceSheetnetof All loansandadvancesarerecognisedwhencashisadvancedto RECEIVABLE recognised asincomeorexpenseintheIncomeStatement. net disposalproceedsandthecarryingamountofassetis The gain/lossondisposaliscalculatedasthedifferencebetween when thereisachangeinuse. are expected.Transfers aremadetoandfrominvestmentpropertyonly permanently withdrawnfromusesincenofutureeconomicbenefits Investment propertiesarederecognisedwhentheydisposedof,or disposal. life oftheclassassetfromdatepurchaseupto Depreciation isprovidedonastraight-linebasisovertheestimated

BANK OF CEYLON ANNUAL REPORT 2011 185 BANK OF CEYLON ANNUAL REPORT 2011 186 .. () ProvisionforNon-PerformingLoansandAdvances (a) 4.6.2 ProvisionforLoans,AdvancesandFinanceLeases 4.6.2 4.6.1 (b) Foreclosed Properties Significant AccountingPolicies the provisioningfornon-performingadvances. counted asthevalueofsecurity(whichisgivenbelow)incalculating which theForcedSaleValue (FSV)ofimmovablepropertycanbe Rule’ imposedbytheCentralBankofSriLankai.e,extentupto In addition,thevalueofsecurityisdeterminedon‘HairCut to theIncomeStatement. related provisionforimpairments.Subsequentrecoveriesarecredited When aloanisdeemeduncollectable,itwritten-offagainstthe depending ontheriskassociatedwithsuchloans. minimum percentagesspecifiedabove,onacase-by-casebasis Additional provisionshavealsobeenmadeoverandabovethe Accordingly, specificprovisionshavebeenmadeasfollows. directions issuedbytheCentralBankofSriLanka. and DisclosuresintheFinancialStatementsofBanks’ with SriLankaAccountingStandardNo.23on‘RevenueRecognition basis ofacontinuousreviewallloansandadvancesinaccordance Provision fornon-performingloansandadvancesaremadeonthe properties aretakenintoaccountindeterminingoperatingprofits Subsequent gainsandlossesonthedisposalofforeclosed Statement. Foreclosedpropertiesarenotsubjecttodepreciation. outstanding isrecognisedasaprovisionforloanlossesintheIncome the marketvalueofforeclosedpropertiesandrelatedloan market valueonanindividualpropertybasis.Theshortfallbetween non-performing advancesandaccountedforatthelowerofcostor or partialsettlementofdebts.Thesepropertiesareclassifiedas Foreclosed propertiesrepresentthatareacquiredinfull 8mnh n vrLs 100% 50% 20% - Loss Doubtful 18 monthsandover Substandard 12 to18months Specialmention 6 to12months Provisionmadenetof 3 to6months Classification Period Outstanding realisable valueofthe security .. () ProvisionforLeaseRentalsReceivableinArrears (b) 4.6.2 specific provisionismadeasfollows. When therentalisinarrearsoveraconsecutiveperiodof90days, Category B - Identifiedatthetimeoflossassets. Category B- Category A- Identifiedatthetimeofterminationleasecontract. oeta 8mnh 0Nil 40 60 75 More than48months but lessthan48months More than36months but lessthan36months More than24months but lessthan24months More than12months Less than12months For advancesinthelosscategory doubtful category For advancesinthesubstandardand tm%ofFSVimmovable Item 100%ofcapitaloutstanding netofupfrontrentalsand 100% B Provision - 100%ofcapitaloutstandingleaseassetsminus Loss A Specialmention Category Provision Over 180days Classification 90 –180days Period ofOutstanding cash securityobtained,ifany. rentals andcashsecurityobtained,ifany. straight linebasisonacquisitionpricenetofupfront vehicles and20%onmachineryequipmentthe calculated byusingdepreciationrateof25%onmotor or intheabsenceofsuchvaluationnetbookvalue value obtainedbasedonanexternalvaluationreport considered asthenet property thatcanbe Freehold Property value ofsecurity 030 40 40 50 50 60 60 75 Leasehold Property 4.6.2 (c)ProvisionforCreditCardReceivable 471 BasisofRecognition 4.7.1 PROPERTY, PLANTANDEQUIPMENT 4.7 Writing-off LoansandAdvances 4.6.3 4.6.2 (e)ProvisionforRegularAdvances 4.6.2 (d)ProvisionforPawning receivable, specificprovisionismadeasfollows: When therequiredminimumpaymentisinarrearsoncreditcard and thecostof assetcanbereliablymeasured. economic benefits associatedwiththeassetswillflow totheGroup Property, plantandequipmentisrecognisedifit probablethatfuture and areexpectedtobeusedmorethan oneyear. provision ofservices,forrentaltoothers orforadministrativepurposes in accountingforitsownassetswhichareheldandusedthe Standard No.18(Revised2005)on‘Property, PlantandEquipment’ The GroupappliestherequirementsofSriLankaAccounting sufficient topaybacktheentireobligation. the borrowercannolongerpayorproceedsfromcollateralisnot determines thattheloanisuncollectible.Thisdecisionmadewhen Loan iswritten-off(netofanyrelatedloanlossprovisions),whenit December 2011(0.9%asat31st2010). total performingandspecialmentionedloansadvancesasat31st Accordingly, theBankhasreducedgeneralprovisionto0.5%on gold orGovernmentsecurities. net ofinterestinsuspenseandadvancessecuredbycashdeposits, advances andtotaloutstandingofspecialmentionedcreditfacilities general provisionof0.5%totaloutstandingperformingloansand quarter commencingfrom4th2010andbanksshallmaintain Sri Lanka’,generalprovisionisreducedattherateof0.1%per Recognition andProvisioningforLicensedCommercialBanksin to DirectiononClassificationofLoansandAdvances,Income According totheBankingActDirectionNo.03of2010,‘Amendments receivables, leaserentalreceivablesandpawning. to absorballlossesinherentinitsloanportfolioincludingcreditcard on totalperformingandoverdueloansadvancesforcreditlosses Apart fromspecificprovisions,theBankalsocarriesgeneralprovision unsold articlesateveryauction. A 100%specificprovisionismadeforthetotalamountadvanced Period Outstanding Classification Provision % Provision Classification Period Outstanding vr8mnh os100 50 25 - Loss Doubtful Substandard Over 8months Specialmention 6 -8months 4 -6months 3 -4months 4.7.6 Restoration Costs 4.7.5 Subsequent Costs 4.7.4 Revaluation Model CostModel 4.7.3 4.7.2 Measurement charged toIncomeStatementasan expense. Equipment inordertorestoreormaintain futureeconomicbenefitsis The costincurredonrepairsormaintenance ofProperty, Plantand will flowtotheGroupandcostcanbereliablymeasured. probable thatthefutureeconomicbenefitsembodiedwithincost The costsarerecognisedinthecarryingamountofanassetifitis retained earnings. is disposedoff,anyrevaluationsurpluswillbetransferreddirectlyto the capitalreserveinrespectofthatasset.Whenarevaluedasset revaluation reservetotheextentofanycreditbalanceexistingin expense intheIncomeStatementordebiteddirectlytoequityunder in value.Anydecreasethecarryingamountisrecognisedasan is recognisedasincometotheextentofpreviouswritten-down debited totheIncomeStatement.Inthiscircumstance,increase previous revaluationdecreaserelatingtothesameasset,whichwas credited directlytoequity, undercapitalreserveorusedtoreversea On revaluationofanasset,anyincreaseinthecarryingamountis do notdiffermateriallyfromthefairvaluesatBalanceSheetdate. seven yearsonarolloverbasistoensurethatthecarryingamounts losses. FreeholdlandandbuildingsoftheBankarerevaluedevery accumulated depreciationandsubsequentimpairment being theirfairvalueatthedateofrevaluation,lessanysubsequent and buildings.Suchpropertiesarecarriedatarevaluedamount, Revaluation Modelisappliedfortheentireclassoffreeholdland impairment losses. thereon, lessaccumulateddepreciationandany cost ofpurchaseorconstructiontogetherwithanyincidentalexpenses The GroupappliesCostModeltoplantandequipmentrecordsat computer equipment. functionality oftherelatedequipmentiscapitalisedaspart which theyarelocated.Purchasedsoftwarethatisintegraltothe of dismantlingandremovingtheitemsrestoringsiteon the assettoaworkingconditionforitsintendeduseandcosts and directlabour, anyothercostsdirectlyattributabletobringing The costofselfconstructedassetsincludesthematerials together withanyincidentalexpensesthereon. attributable totheacquisitionofassetorconstructionvaluation as anassetisinitiallymeasuredatitscostofpurchasedirectly An itemofProperty, PlantandEquipmentthatqualifiesforrecognition

BANK OF CEYLON ANNUAL REPORT 2011 187 BANK OF CEYLON ANNUAL REPORT 2011 188 4.8 LEASEHOLD PROPERTY 4.7.10 Borrowing Costs 4.7.9 Capital Work-In-Progress 4.7.8 Depreciation 4.7.7 Derecognition Significant AccountingPolicies Lanka AccountingStandardNo.19(Revised 2005)on‘Leases’. Leasehold propertiesarerecordedat carryingvalueintermsoftheSri to preparethequalifyingassetforitsintendedusearecompleted. borrowing costsceaseswhensubstantiallyalltheactivitiesnecessary Accounting StandardNo.20on‘BorrowingCosts’.Capitalisationof as partofthecostassetinaccordancewithSriLanka construction orproductionofaqualifyingassethavebeencapitalised Borrowing coststhataredirectlyattributabletotheacquisition, plant andmachinerysystemdevelopment,awaitingcapitalisation. capital naturedirectlyincurredintheconstructionofbuildings,major Capital work-in-progressisstatedatcost.Theseareexpensesofa reviewed ateachBalanceSheetdatetochangeestimates. The asset’s residualvalue,usefullifeandmethodofdepreciationare estimated usefullives. The depreciationonassetsisdeterminedusingthefollowing on pro-ratabasis. Provisioning fordepreciationofProperty, PlantandEquipmentismade assets. appropriate totheestimatedusefullivesofdifferenttypes The Groupprovidesdepreciationonstraight-linebasisovertheperiods of thereplacedpartisderecognised. item ofProperty, PlantandEquipment,theremainingcarryingamount When replacementcostsarerecognisedinthecarryingamountofan Statement intheyearitemisderecognised. of anitemProperty, PlantandEquipmentisincludedintheIncome expected fromitsuse.Thegainorlossarisingthederecognition derecognised ondisposalorwhennofutureeconomicbenefitsare The carryingamountofanitemProperty, PlantandEquipmentis oo eilsOver04years Over05years Over08years Over08years Over40years Over50years Motor Vehicles Computer Equipment Furniture &Fittings Office Equipment Freehold Refurbishment Freehold Building 4.9.5 Derecognition Amortisation 4.9.4 SubsequentExpenditure 4.9.3 Software 4.9.2 Measurement BasisofRecognition 4.9.1 4.9 INTANGIBLE ASSETS value isimpaired. generate economicbenefitsorcircumstances indicatethatthecarrying Intangible assetsarederecognisedwhen itrevealsthattheywillnot future benefits. they arenolongerprobableofbeingrecoveredfromtheexpected recognised asexpensesintheIncomeStatementtoextentthat for impairmentwheneverthereisanindicationand The unamortisedbalancesofsoftwarewithfinitelivesarereviewed estimate ofitsusefuleconomiclifewhicheverislower. from thedateapplicationsoftwareisavailableforuseorbest line methodovertheestimatedusefullifeof05yearscommencing Intangible assetsexceptforgoodwillareamortisedusingthestraight- improvement andaddedtotheoriginalcostofsoftware. original specificationsandlivessuchcostisrecognisedascapital and extendstheeconomicbenefitsofcomputersoftwarebeyondtheir Expenditure incurredonsoftwareiscapitalisedonlywhenitenhances incurred incustomisingthesoftwareforitsintendeduse. duties/levies andalsootherdirectlyattributableexpenditurethatare The initialcostscompriselicensefeespaidatthetimeofpurchase, at itscost,lessaccumulatedamortisationandanyimpairmentlosses. operation softwaresystemofcomputers.Intangibleassetsarecarried licensed foruseoftheGroup,otherthansoftwareappliedto Software representsthevalueofcomputerapplicationsoftware entity andthecostofassetscanbemeasuredreliably. economic benefitsthatareattributabletotheassetwillflow An intangibleassetisrecognisedifitprobablethatthefuture assets. Standard No.37on‘IntangibleAssets’inaccountingforintangible The GroupappliestherequirementsofSriLankaAccounting properties. is lower. Subsequentrevaluationsarenotcarriedoutforleasehold remaining leasetermorusefullifeofleaseholdproperty, whichever The carryingvalueofleaseholdpropertiesareamortisedoverthe . DEPOSITSFROMCUSTOMERS 5.1 LIABILITIESANDPROVISIONS 5 IMPAIRMENT OFASSETS 4.10 Statement. Interest paid/payableonthesedeposits ischargedtotheIncome deposits. TheyarestatedintheBalance Sheetatamountspayable. savings deposits,term7dayscalldepositsandcertificateof Deposits fromcustomersincludenon-interestbearingdeposits, reversal istreatedasanincreaseinrevaluationsurplus. unless theassetiscarriedatrevaluedamount,inwhichcase, to suchrecoverableamountandrecognisedintheIncomeStatement losses wererecognised.Thecarryingamountoftheassetisincreased determine theasset’s recoverableamountsincethelastimpairment reversed onlyiftherehasbeenachangeintheestimatesusedto recognised impairmentlossesotherthaninrespectofgoodwillare Group makesanestimateoftherecoverableamount.Previously no longerexistormayhavedecreased.Ifsuchindicationexists,the is anyindicationthatpreviouslyrecognisedimpairmentlossesmay An assessmentismadeateachreportingdateastowhetherthere amount oftheotherassetsinunit. allocated tothecash-generatingunitandthen,reducecarrying units areallocatedfirsttoreducethecarryingamountofanygoodwill assets. Impairmentlossesrecognisedinrespectofcash-generating assessments ofthetime-valuemoneyandrisksspecificto present valueusingapre-taxdiscountratethatreflectscurrentmarket value inuse,theestimatedfuturecashflowsarediscountedtotheir asset orcash-generatingunit,lesscoststosell.Indeterminingthe price andvalueinuse.Thenetsellingisthefairofan The recoverableamountofanassetisthehigheritsnetselling previous revaluation. the impairmentisalsorecognisedinequityuptoamountofany revalued wheretherevaluationwastakentoequity. Inthiscase, impaired assetorportfolioofassets,exceptforpropertypreviously in thoseexpensecategoriesconsistentwiththefunctionof recoverable amountbymeansofachargetotheIncomeStatement, particular assetorportfolioofassetsisreducedtotheestimated impairment. Ifanysuchevidenceexists,thecarryingamountofa reporting datetodeterminewhetherthereisobjectiveevidenceof The carryingamountsoftheGroup’s assetsarereviewedateach Statement. the carryingamountofassetsandarerecognisedinIncome measured asthedifferencebetweennetdisposalproceedsand Gains orlossesarisingfromderecognitionofanintangibleassetsare . SECURITIESSOLDUNDERRE-PURCHASE AGREEMENTS 5.3 5.2 BORROWED FUNDS DepositInsuranceScheme 5.1.1 Securities soldunderre-purchaseagreements(REPOS)aretreated (REPOS) these borrowingsischargedtotheIncomeStatement. in theBalanceSheetatamountspayable.Interestpaid/payableon and othertermborrowingsfromfinancialinstitutions.Theyarestated Borrowed fundsincludecallmoneyborrowings,refinanceborrowings period of15daysfromtheendrespectivequarter. eligible depositsasattheendofquartertobepayablewithina other LicensedCommercialBankscalculatedonthetotalamountof premium of0.125%perannumoneligibledepositliabilitiesforall as attheendofimmediatelyprecedingfinancialyearanda capital adequacyratioof14%orabove(aspertheauditedaccounts) quarterly) ontotalamountofeligibledepositsiftheBankmaintainsa Banks arerequiredtopayapremiumof0.10%perannum(payable Depositliabilitiesfallingwithinthemeaningofabandonedproperty • Depositliabilitiesheldascollateralagainstanyaccommodation • Depositliabilitiestoshareholders,directors,keymanagement • DepositliabilitiestoGovernmentofSriLanka • Depositliabilitiestomemberinstitutions • and savingsdepositliabilitiesexcludethefollowing. 1st October2010.Depositstobeinsuredshallincludedemand,time under Sections32Ato32EoftheMonetaryLawActwitheffectfrom Sri LankaDepositInsuranceSchemeRegulationsNo.1of2010issued Deposit InsuranceSchemeoperatedbytheMonetaryBoardintermsof Commercial Banksarerequiredtoinsuretheirdepositliabilitiesinthe of DepositLiabilities’issuedon27September2010allLicensed In termsoftheBankingActDirectionNo.052010‘Insurance and classifiedunderdebtsecurities in issue. Statements andthecounter-party liabilityisaccountedforasa and interestaccruedthereon.These areretainedintheFinancial as collateralisedborrowingsandstated attheconsiderationreceived Central BankofSriLanka Finance CompaniesActfundsofwhichhavebeentransferredto in termsoftheBankingActanddormantdeposits granted Commercial Banks Direction No.11of2007onCorporateGovernanceforLicensed personnel andotherrelatedpartiesasdefinedinBankingAct

BANK OF CEYLON ANNUAL REPORT 2011 189 BANK OF CEYLON ANNUAL REPORT 2011 190 .. BankofCeylonWidows'/Widowers’ andOrphans'Pension 5.6.2 BankofCeylonPensionTrust Fund 5.6.1 DEFINEDBENEFITPLANS 5.6 5.5 OTHER LIABILITIES 5.4 DEBENTURES Significant AccountingPolicies who hascontributedtothefundfor five continuousyearsdieswhilein towards thebeneficiariesofemployees ariseswhenanemployee monthly contribute8%oftheirgross salary. TheBank's liability Widowers’ andOrphans'PensionFund’ towhichtheBank'semployees The Bankisliabletopaybeneficiariesofthe‘BankCeylonWidows'/ Fund The SubsidiariesdonotoperatePensionFunds. independetly administered. The PensionTrust FundisapprovedbytheGovernmentand is years. The fundisactuariallyvaluedbyaqualifiedactuaryonceinthree the formulationofacontributorypensionschemeisfinalised. the Bankcontributes5%.Thisarrangementistentativelypendinguntil contribute 20%oftheirgrosssalarytoaPensionFundinwhichevent Employees whojoinedtheBankonandafter1stJanuary1996may salary foremployeeswhojoinedtheBankpriorto1stJanuary1996. on theadviceofaqualifiedactuary, currentlyat56.76%ofgross Contributions tothePensionTrust Fundaremademonthly, based allowances. computed asapercentageofthelastdrawnsalaryexcludingcertain on medicalgrounds,beforereachingretirementage.Thepensionis retirement onreachingtheageorafter55years minimum oftenyearscontinuousservicewiththeBank,attheir until deathtothepermanentemployeeswhohavecompleteda defined retirementbenefitplan,operatedforthepaymentofpensions The ‘BankofCeylonPensionTrust Fund’isafunded,non-contributory, provisions. Theseliabilitiesarerecordedatthecashvaluetobepaid. Other liabilitiescompriseofinterest,fees,expensespayableandother expected tobepayableattheBalanceSheetdate. placements. ThesearerecordedintheBalanceSheetatamounts funding requirements,fromthepublicissuesandthroughprivate These representthefundsborrowedbyGroupforlong-term period. treated asinterestexpenseandaccruedevenlyoverthelifeofREPO The differencebetweensaleandpre-determinedre-purchasepriceis .. BankofCeylonProvident Fund 5.7.1 DEFINEDCONTRIBUTIONPLANS 5.7 ProvisionforGratuity 5.6.3 independently administered. 8%. TheBank'sProvidentFundisan approvedFund,whichis monthly grosssalaryexcludingovertimewhileemployeescontribute Provident Fund’towhichtheBankcontributes12%ofemployees’ All employeesoftheBankaremembers‘BankCeylon expense intheIncomeStatementasincurred. Contributions todefinedcontributionplansarerecognisedasan The GratuityLiabilitiesarenotexternallyfunded. Income Statement. method recommendedinSLAS16andrecognisedthatprovisionthe post-employment benefitobligations,basedontheactuarialvaluation ‘Employee Benefits’,theBankanditsSubsidiarieshavecalculated In termsoftheSriLankaAccountingStandardNo.16(Revised2006)on 1996, astheyarenotcoveredbythepensionschemeofBank. service forallemployeeswhojoinedtheBankonorafter1stJanuary Financial Statementsforretirementgratuitiesfromthefirstyearof each yearofcontinuousservice.Aprovisionisbeingmadeinthese allowances applicabletothelastmonthoffinancialyear, for the basicorconsolidatedwagesalary, costoflivingandallother the PaymentofGratuityActNo.121983,atrateone-half than byretirementareeligibletoreceiveaterminalgratuityunder in force.However, employeeswhoseservicesareterminatedother as theBankhasitsownnon-contributoryretirementbenefitscheme of 1983,toemployeeswhojoinedtheBankprior1stJanuary1996 retirement gratuitypayableunderthePaymentofGratuityActNo.12 Provision hasnotbeenmadeintheFinancialStatementsfor the Governmentandisindependentlyadministered. The Widows’/Widowers’andOrphans'PensionFundisapprovedby recommended bytheActuary. contributes asumofRs.456millionperannumtomeetthedeficitas with theActuary, Trustees andBeneficiaries.Currently, theBank years. FundingforanydeficitwillbemetbytheBankinconsultation The fundisactuariallyvaluedbyaqualifiedactuaryonceinthree is basedonthelastdrawnsalaryexcludingcertainallowances. The pensiontobeneficiariesofanemployeewhodieswhileinservice pay amonthlyWidows'andOrphans'Pensiontohis/herbeneficiaries. service oronthedeathofapensionerwhereBankwillbeliableto 6.1.2 Lease Income InterestIncomefromLoansandAdvances 6.1.1 REVENUERECOGNITION–BANKANDNON-INSURANCE 6.1 6 INCOME STATEMENT PROVISIONSFORLIABILITIES 5.8 Employees’Trust Fund 5.7.3 Employees’ProvidentFund(EPF) 5.7.2 cash basis. in arrearsformore than 90days.Thereafter, suchincomeisrecognised on the lease.Interestsonfinanceleases cease tobeaccruedwhentheyare the leaseisexecuted,inproportionto the remainingreceivablebalanceof taken intorevenueoverthetermof lease,fromthemonthinwhich over thecostofleasedassetsconstitutes unearnedincome,whichis receivable duringtheyear. Theexcesstotheaggregaterentalreceivable income istheinterestcomponentofleaserentalsallfinanceleases Accounting StandardNo.19(Revised2005)on‘Leases’.Accordingly, lease Lease incomeisaccountedforintermsoftheprovisionsSriLanka transferred tointerestinsuspense. loans andadvancesisalsoeliminatedfromtheinterestincome addition, interestaccrueduptothreemonthsonsuchnon-performing is creditedtointerestinsuspenseaccountonmemorandumbasis.In cash basis.Interestfallingdueonnon-performingloansandadvances income fromnon-performingloansandadvancesisaccountedforon of principalorinterestisinarrearsformorethan90days.Interest on anaccrualbasis.Interestceasestobeaccruedwhentherecovery Accordingly, interestincomefromloansandadvancesisrecognised Recognition andDisclosuresintheFinancialStatementsofBanks’. provisions oftheSriLankaAccountingStandardNo.23on‘Revenue Interest onloansandadvancesisaccountedforintermsofthe BUSINESS Assets’. Standard No.36on‘Provisions,ContingentLiabilitiesand settle theobligations,inaccordancewithSriLankaAccounting is probablethatanoutflowofeconomicbenefitswillberequiredto a legalorconstructiveobligationasresultofpastevent,andit A provisionisrecognisedintheBalanceSheetwhenGrouphas income asandwhenincurred. Employees’ Trust FundActNo.46of1980.Thecostischargedto employee’s monthly grosssalaryexcludingovertime,intermsofthe the Employees’Trust FundtowhichBank/Groupcontributes3%of All employeesoftheBankanditsSubsidiariesaremembers income asandwhentheliabilityarises. Fund ActNo.15of1958asamended.Therelevantcostischargedto to Employees’ProvidentFund,intermsofthe Development PLC)and8%respectivelyonsalaryofeachemployee The Groupandtheiremployeescontribute12%(15%byProperty .. GrossWritten Premiums 6.2.1 GENERAL INSURANCEBUSINESS 6.2 6.1.11 Operating Expenses 6.1.10 Interest Expenses 6.1.9 Rental Income GainsorLossesArisingfromInvestmentSecurities 6.1.8 Profit/LossfromSaleofProperty, PlantandEquipment 6.1.7 6.1.6 Dividend Income IncomeonDiscountingofBillsExchange 6.1.5 CommissionandFeeIncome 6.1.4 InterestIncomefromOtherSources 6.1.3 and isearnedprimarilyonapro-rata basisoverthetermofrelated policy. Uponinceptionofthecontract,premiumis recorded aswritten Premium isgenerallyrecognisedas written uponinceptionofthe Income Statementtotheperiodwhichtheyrelate. All theexpensespayablearerecognisedonaccrualbasisin Interest expensesarerecognisedonanaccrualbasis. Rental incomeisrecognisedonanaccrualbasis. accounted foronthedatewhichtransactiontakesplace. financial instruments,includingTreasury Billssoldpriortomaturity, are Gains orlossesarisingfromthesaleofequityshares,units,and other income. recognised intheperiodwhichsaleoccursandisclassifiedas Profit/loss arisingfromsaleofProperty, PlantandEquipmentis established. Dividend incomeisrecognisedwhentherighttoreceiveapayment payment undertheparticularinstrumenthasbeeneffected. when thebillisreceivedandeitherissuedorendorsed, Income ontheendorsementofBillsExchangeisrecognisedonly recognised asrevenueatthetimeofservicesareprovided. and feesforforeigndomesticpaymenttariff.Suchincomeis customers forguaranteesandotherservicesprovidedbytheGroup, Commission andfeeincomemainlycomprisefeesreceivablefrom bearing securitiesisrecognisedonanaccrualbasis. basis overtheperiodtomaturity. Incomefromallotherinterest- discounts onpurchaseandamortisedtoincomeastraight-line of SriLankaisrecognisedonatimeproportionatebasisaspremia/ Interest incomefromsecuritiesissuedbyGovernmentorCentralBank

BANK OF CEYLON ANNUAL REPORT 2011 191 BANK OF CEYLON ANNUAL REPORT 2011 192 6.2.7 Reinsurance Receivable 6.2.6 Premiums Receivable DeferredAcquisitionExpenses 6.2.5 6.2.4 Unexpired Risk 6.2.3 Unearned Premium 6.2.2 Reinsurance Premium Significant AccountingPolicies A reinsuranceassetisimpairedifthere isobjectiveevidence,asa amount accordinglyandrecognises a lossintheStatementofIncome. If areinsuranceassetisimpaired,the Companyreducesthecarrying unless arighttooffsetexists. reinsured policy. ReinsuranceisrecordedgrossintheBalanceSheet, a mannerconsistentwiththeclaimliabilityassociated expenses. Amountsrecoverablefromreinsuresareestimatedin reinsurance companiesforpaidandunpaidlosseslossadjustment Reinsurance assetsincludethebalancesduefrombothinsuranceand recovered over60daysarecancelled. Insurance BoardofSriLanka(IBSL),allpoliciesissuedandnot According tothePremiumPaymentWarranty (PPW)rulingbythe Industry ActNo.43of2000. the InsuranceBoardofSriLankaunderRegulation calculated onthe1/24thbasisinaccordancewithrulesmadeby treated inthesamemannerwithdeferredacquisitioncostsanditis related writtenpremiumisearned.ReinsuranceCommissionalso of business,aredeferredandamortisedovertheperiodinwhich expenses, whichvarywithandaredirectlyrelatedtotheproduction Acquisition expenses,representscommissionsandotherunderwriting related expensesonthebusinessinforceasatreportingdate. required overandaboveunearnedpremiumstomeetfutureclaims Provision ismadewhereappropriatefortheestimatedamount 2000. of SriLankaundertheRegulationInsuranceIndustryActNo.43 1/24th basisinaccordancewiththerulesmadebyInsuranceBoard related tosubsequentperiods.Unearnedpremiumiscalculatedonthe reinsurance premiumwritteninthecurrentyearrespectofrisks Unearned premiumistheportionofgrossand accordance withthepatternofreinsuranceservicesreceived. period astheGrossWrittenPremiumtowhichitrelatesorin Reinsurance premiumexpenseisaccountedforinthesameaccounting protection provided. over theperiodofriskinproportiontoamountinsurance risk differssignificantlyfromthecontractperiod,premiumisearned policy coverage.However, forthosecontractswhichtheperiodof .. Benefits,LossesandExpenses 6.3.3 6.3.2 Reinsurance Premium GrossWritten Premiums 6.3.1 LIFEINSURANCEBUSINESS 6.3 6.2.8 Claims and surrendersareaccountedforonly atthetimeofsettlement. Claims payableincludesdirectcosts ofsettlement.Interimpayments Surrenders, maturitiesandannuitypayments arerecordedwhendue. Death claimsarerecordedonthebasis ofnotificationsreceived. recoveries arecreditedtomatchtherelevantgrossclaims. Onward reinsurancepremiumisrecognisedwhenpayable,Reinsurance expected benefitpayments. relationship totheinsurancein-forceor, forannuities, theamountof with anyexcessprofitdeferredandrecogniseinincomeaconstant premium contracts,isrecordedasincomewhenreceived profits overtheestimatedlifeofpolicies.Moreover, forsingle Benefits andexpensesareprovidedagainstsuchrevenuetorecognise recognised asrevenuewhencashisreceivedfromthepolicyholder. participating contractsandannuitypolicieswithlifecontingencies,are Premiums fromtraditionallifeinsurancecontracts,including in thebondagreementswithpolicyholders. and claimsexpensesonthosebondshavebeenspecificallymentioned the advance,bidandperformancebondsduringfinancialperiod In additiontothenormalinsurancepolicies,Companyhasissued estimates madearereviewedregularly. the FinancialStatementsforthatperiod.Themethodsusedand adjustments totheamountsprovided.Sucharereflectedin as aresultofsubsequentinformationandevents.Thismayin basis ofinformationcurrentlyavailable,theultimateliabilitywillvary Directors considerthattheprovisionforclaimsisfairlystatedon Actuarial valuationsareperformedonanannualbasis.Whilethe costs usingstatistics,basedonpastexperienceandtrends. changes intheultimatecostofsettlingclaims,IBNRsandsettlement are assessedbyreviewofindividualclaimfilesandestimating direct andindirectcostsofsettlingthoseclaims.Claimsoutstanding claims IncurredButNotReported(IBNR)andtheanticipated respect ofdirectandinwardsreinsurancebusiness.Theliabilitycovers Claims expenseandaliabilityforoutstandingclaimsarerecognisedin the reinsurer. measurable impactontheamountthatCompanywillreceivefrom to itunderthetermsoftheircontract,andeventhasareliably reinsurance asset,thattheCompanymaynotreceiveamountsdue result ofaneventthatoccurredaftertheinitialrecognition 7.1.1 Ijarah 7.1 ASSETS ISLAMICBANKINGPOLICIES 7 ActuarialValuation forLong-Term InsuranceProvision 6.3.4 unearned Ijarahincome. Balance SheetattheaggretateofIjarah rentalreceivablenetof The amountreceivableunderIjaratransactionsarerecordedinthe transferred tothecustomeronfullsettlementofagreedrentals. specific periodatanagreedleaserental.Theownershipoftheassetis (lessor). Thecustomer(lessee)hastherighttouseassetfora for theBank.InIjarahassetremainsinownershipofBank client andleasesittotheatapricethatincludesfairreturn where theBankpurchasesanassetorequipmentatrequestofa Ijarah isShari’ah-compliantfinancialstructureforassetfinancing, Wakala Istisma(AgencyarrangementinFundManagement) • • Ijara (Leasing) MurabahatothepurchaseOrder(CostplusSale) • with standards. represented bythefollowinginstrumentsthatarealsomodifiedinline Asset &liabilitiesoftheIslamicBankingBalanceSheetareatpresent audit procedure. and dedicatedteam.OversightisprovidedbytheSSBwitharoutine network while,itiscentrallymonitoredatHeadOfficewithatrained Shari’ah compliantproductsareofferedthroughtheislandwide accounting environment. the harmonisedoperationsunderexistingregulatory, auditand This expertadviceisapartofgovernancerequirementtoensure formed toadviseandensurethecompliancewithIslamicprinciples. consisting ofrenownedShari’ahScholarsthecountryhasbeen Muslim theologians.AnindependentShari’ahSupervisoryBoard(SSB) committee ofAllCeylonJamiyathulUlama(ACJU)–theapexbody was formedinlinewiththeStandardssetoutbyBankingAdvisory and itssubsequence(Amendment)ActNo.2of2005.Aseparateunit with theBankofCeylonOrdinanceandBankingActNo.301988 at BankofCeylonobservingShari’ahprinciplesfurtherinaccordance Islamic BankingoperationsundertheBrandofAN-NOORisconducted is basedonassumptionsrecommendedbytheConsultantActuary. business. Theactuarialvaluationtakesintoaccountallliabilitiesand Actuary followinghisannualinvestigationofthelifeinsurance Company attheyearendonrecommendationsofConsultant The Directorsagreetothelong-terminsuranceprovisionfor SEGMENTAL REPORTING 9 COMMITMENTSANDCONTINGENCIES 8 7.2.2 Mudaraba An-noorCurrentAccounts 7.2.1 7.2 LIABILITIES 7.1.3 Wakala 7.1.2 Bai Murabaha in respectoftheGroup’s business. Accounting StandardNo.28(Revised 2000)on‘SegmentReporting’, Segmental informationispresented inaccordancewithSriLanka Balance Sheetbutaredisclosed,unlesstheyremote. reliably measured.Contingentliabilitiesarenotrecognisedinthe where thetransferofeconomicbenefitisnotprobableorcannotbe will beconfirmedonlybyuncertainfutureeventsorpresentobligation Contingent liabilitiesarethepossibleobligationswhoseexistence disclosures. Bank isalsoliableseverallyorotherwiseincludedwithappropriate capital commitmentsofaSubsidiaryoranAssociateforwhichthe of allknownliabilities.TheBank’s shareofanycontingenciesand All discerniblerisksareaccountedforindeterminingtheamount has tobebornebytheinvestingpartner. mutual consentofeachother. However, incaseoflosstheentire entitled tobeagreeduponrightatthebeginningofcontracton The definedproportionoftheactualprofittowhicheachpartneris and theresponsibilityofmanagementonotherpartner(Bank). Under Mudaraba,aninvestmentismadebyonepartner(depositor) Auditing OrganisationforIslamicFinancialInstitutions(AAOIFI). which isinlinewiththeShari’ahStandardsofAccountingand Profit sharingdepositsaremobilisedundertheprincipleofMudaraba, where theBankacceptsdepositstobepaidondemand. An-noor currentaccountsarebasedonShari’ahconceptof‘qard’ capital requirementofcustomerstoearncommissionincome. against acertainfee.ThisproductallowstheBanktofinanceworking to performacertaintaskonhisbehalfagreedtermsandconditions Wakala isacontractofagencyinwhichonepersonappointsanagent sheet attheaggregateofBaiMurabahanetunearnedprofit. Amounts receivableunderBaiMurabahaarerecordedinthebalance installments, orasalumpsumpayment. an agreedprofitfortheBank)thatcanbemadethroughaseriesof and agreeswiththeprospectivebuyeruponasaleprice(including where theBankbuysanassetoracommoditywithfreeandcleartitle Bai MurabahaisanacceptableformofcreditsaleunderShari’ah,

BANK OF CEYLON ANNUAL REPORT 2011 193 BANK OF CEYLON ANNUAL REPORT 2011 194 3 NEWACCOUNTINGSTANDARDS ISSUEDBUTNOTEFFECTIVE 13 EVENTSAFTERTHEBALANCESHEETDATE 12 11 COMPARATIVE FIGURES CASHFLOWSTATEMENT 10 Significant AccountingPolicies December 2011.Further, theBank carriedoutanimpactassessment These Standardshavenotbeenapplied fortheyearended31st respectively. Standards Boardandtheywillbeprefixed asSLFRSorLKAS, Accounting Standards(IASs)formulated byInternationalAccounting International FinancialReportingStandards(IFRS)and Accordingly, Sri LankaAccountingStandardswillbebasedon is substantiallydifferenttothepreviousStandards. January 2012.TheapplicationoftheseFinancialReportingStandards Standards thatwillapplyforfinancialperiodsbeginningonorafter1st Accountants ofSriLankahasadoptedanewsetFinancialReporting International FinancialReportingStandards,TheInstituteofChartered Following theconvergenceofSriLankaAccountingStandardswith AS AT THEBALANCESHEET DATE Date’. Standard No.12(Revised2005)on‘EventsAftertheBalanceSheet been madeintheFinancialStatementsasperSriLankaAccounting have beenconsideredandappropriateadjustments/disclosures Where necessary, allthematerialeventsafterBalanceSheetdate reclassified tofacilitatecomparison. Where necessary, amountsshownforthepreviousyearhavebeen acquisition. liquid investmentswithmaturitylessthan90daysfromthedateof cash, amountsduefromotherbanksandshort-termhighly- No. 09on‘CashFlowStatement’.Cashandcashequivalentscomprise Method’ inaccordancewiththeSriLankaAccountingStandard The CashFlowStatementhasbeenpreparedbyusingthe‘Direct segment. Otheritemsarereportedasunallocated. which aredirectlyattributableorcanbereasonablyallocatedtoa Measurement ofsegmentresults,assetsandliabilitiesincludeitems foreign subsidiary. off-shore bankingunits(branches),divisionand of othereconomicenvironments.Thesesegmentscomprisedomestic, economic environmentwhererisksandreturnsaredifferentfromthose Geographical segmentsprovideproductsorserviceswithinaparticular property, insuranceandIslamicbanking. segments comprisebanking,leasing,treasuryandinvestment, returns aredifferentfromthoseofotherbusinesssegments.These Business segmentsprovideproductsandserviceswhoserisks LKAS32FinancialInstruments:Presentation • be depreciatedseparately. with acostthatissignificantinrelationtothetotalofitemshall lives wheretheeachpartofanitemProperty, PlantandEquipment According tothestandardassetsshouldbedepreciatedovertheiruseful • SLFRS 1 First timeAdoptionofSriLankaAccountingStandards SLFRS1 • Thisstandard requirestheGrouptomeasureanitemofproperty, LKAS16Property, PlantandEquipment • Thisstandard requirestopresentalltransactionsofequity LKAS1PresentationofFinancialStatements • AccordingtothestandardGroupisrequiredprepareand to accountingpoliciesfrom2012onwards. The followingillustratethekeyimpactareaswheretherearechanges effective forfinancialperiodsfrom1stJanuary2012. The GroupandtheBankwilladoptnewsetofLKASSLFRS process ofquantifyingtheimpactassessment. December 2011whichwillbedetailedonpage267.TheGroupisinthe potential impactontheFinancialStatementsforyearended31st on implicationsoftheabovesaidAccountingStandardstoassess instruments. recognissing financialassets, liabilitiesandequity The abovestandardswillleadtochange currentmethodof SLFRS7FinancialInstruments: Disclosure LKAS39FinancialInstruments: RecognitionandMeasurement of anacquiredasset. constructed assetisalsodeterminedusingthesameprinciples accordance withLKAS23(BorrowingCosts).Thecostofaself- over theperiodofcreditunlesssuchinterestiscapitalisedin cash priceequivalentandtotalpaymentisrecognisedasinterest deffered beyondnormalcreditterms,thedifferencebetween its cashpriceequivalentattherecognitiondate.Ifpaymentis plant andequipmentthatqualifiesforrecognitionasanassetat income). (a separateincomestatementandofcomprehensive single statementofcomprehensiveincomeorintwostatements and expensesrecognisedinaperiodshouldbepresented nature inthestatementofchangesequity. Allitemsofincome December 2012. should complywitheachnewSLFRSeffectivefrom31st opening newSLFRSandthereafter. Thoseaccountingpolicies statements byapplyingthesameaccountingpoliciesinits transition tonewSLFRS.TheGroupwillprepareitsfinancial present anopeningSLFRsFinancialStatementsatthedateof ThisstandardrequirestheGrouptocapitaliseborrowingcosts LKAS23BorrowingCosts • Thisstandard requirestheGrouptomeasureitsrevenueat LKAS18Revenue • ) Available forsalefinancialassets–measuredatfairvaluewith d) Loansandreceivables–measuredatamortisedcostusingthe c) Heldtomaturityinvestments–measuredatamortisedcost b) Fairvaluethroughprofitorloss–measuredatfairwiththe a) are measuredatfairvalue. liabilities atamortisedcostexceptforcertainfinancialwhich After initialrecognition,LKAS39requirestomeasureallfinancial financial assetsisimpaired. there isanyobjectiveevidencethatafinancialassetorgroupof An entityshallassessattheendofeachreportingperiodwhether be classifiedintofourcategories. For thepurposeofmeasuringLKAS39requiresfinancialassetsto should initiallyberecognisedatfairvalue. According tothestandardsfinancialassetsandliabilities are recognisedasexpense. which differsfromthepresentpolicywhereallborrowingcosts production ofaqualifyingassetaspartthecostthatasset, that aredirectlyattributabletotheacquisition,constructionor Statements. is requiredtoapplysuchcriteriainpreparationofFinancial further stressesonrecognitioncriteriaforrevenueandGroup fair valueoftheconsiderationreceivedorreceivable.Standard equity the gainsorlossesinfairvaluetakentostatementofchanges effective interestmethod using theeffectiveinterestmethod gains orlossesinfairvaluetakentoincomestatement

BANK OF CEYLON ANNUAL REPORT 2011 195 BANK OF CEYLON ANNUAL REPORT 2011 196 tes 6,1 3,8 1107 45,734 70,166 101,027 104,595 238,066 34,081 69,454 202,042 312,467 60,413 103,323 96,287 238,066 312,467 125,697 29,780 Others Fees Creditcards Brokeringservices Feeandcommission expenses 5.

tes 7,0 6,7 3490 271,171 324,990 118,684 60,576 16,987 93,802 71,501 77,857 1,677,237 117,067 418,291 16,987 2,017,342 84,278 443,671 1,672,744 77,857 412,169 2,014,380 3,983,843 422,241 4,549,766 3,733,185 4,471,409 Others Brokering services Custodial services Personal banking Travel &remmittences Trade &otherrelatedactivities Feeandcommissionincome 4. ennebroig 8,1 2094 8,1 280,914 3,071,549 2,020,549 3,821,293 286,614 3,105,472 2,953,869 280,914 1,611,157 3,778,814 2,483,062 286,614 4,193,817 4,804,447 4,285,640 4,839,021 Otherborrowed funds Reﬁnance borrowings Debentures Securitiessoldunderre-purchaseagreements 3. Interest expenses

o h eredd3s eebr 01 00 01 2010 2011 2010 2011 For theyearended31stDecember oenetScrte 768 7,5 8,2 172,658 306,591 87,628 694,183 7,151,380 172,658 2,081,942 282,908 10,670,047 1,536,935 2,924,124 87,628 7,144,581 553,392 2,023,752 724,731 10,633,463 1,510,508 1,893,923 1,025,640 1,080,622 24,593,280 2,001,628 1,502,191 1,025,640 28,736,183 1,001,487 1,825,130 24,023,337 13,288,145 1,025,640 1,906,627 28,032,221 14,157,899 1,428,929 1,025,640 990,515 13,143,034 13,996,323 1,905,116 GovernmentSecurities GovernmentofSriLankaRestructuringBonds Shorttermfunds Securitiespurchasedunderre-saleagreements Treasury bills,bonds&othereligiblebills Pawning Trade finance Leasing Loans&advances Billsofexchange utmravne Customeradvances 2. Interest income te noe 12432 ,1,3 18835 1,492,244 1,848,375 1,117,138 1,284,352 32,494 11,755 1,394,539 874,687 33,355 120,804 1,367,953 11,755 26,775 859,401 120,804 28,616 Recoveryofnon-performingadvances[Note13] IncomefromIslamicbankingoperations[Note8.1] Otherincome &equipmentincludingforeclosedproperties rfi/ls)o aeo rpry ln 257,910 418,461 452,969 1,747,564 468,998 408,686 53,051,981 712,625 6,486,213 63,728,274 1,746,285 50,843,042 7,507,428 3,508,297 60,744,962 6,012,728 (1,258,757) 7,141,666 3,105,791 (1,270,543) Profit/(loss)onsaleofproperty, plant Netgains/(loss)frominvestmentinsecurities[Note7] Dividendincome[Note6] Foreignexchangeprofit Feeandcommissionincome[Note4] Interestincome[Note2] 1. Income

o h eredd3s eebr 01 00 01 2010 2011 2010 2011 For theyearended31stDecember Notes totheFinancialStatements Netinterestincomeearnedfromthesecondarymarkettransactionsintreasurybillsandbondshasbeengrossed upby utmrdpst 48117 20840 53590 22,447,222 25,365,940 22,068,470 24,841,197 Customer deposits rdtt h neeticm.Mr eal r ie nNt 65 credit totheinterestincome.MoredetailsaregiveninNote16.5. 3,2,0 3,0,5 3,8,6 32,014,051 37,383,766 31,200,050 36,228,708 6,4,6 5,4,4 6,2,7 53,051,981 63,728,274 50,843,042 60,744,962 7,6,6 6,6,6 7,5,9 66,653,894 75,054,699 63,362,866 71,368,168 71166 ,1,2 75748 6,486,213 7,507,428 6,012,728 7,141,666 R 0 s'00 R 0 Rs'000 Rs'000 Rs'000 Rs'000 R 0 s'00 R 0 Rs'000 Rs'000 Rs'000 Rs'000 5593 6,9 6436 556,008 614,376 467,298 505,983

Bank Group Bank Group adding thenotionaltax

oaint prvdcaiis 550 ,3 - 6,430 153,794 149,586 - 112,934 59,076 5,500 108,916 99,944 54,873 96,270 Donation toapprovedcharities Professional &legalfees Amortisation ofintangibleassets[Note33] mriaino eshl ad[Nt 2 ,0 226 ,6 3,653 2,962 2,296 1,605 Amortisation ofleaseholdland[Note32] uios eueain 1,1 2,6 3,9 35,835 3,074 95,952 32,999 3,285 503,017 20,467 95,952 - 12,613 501,322 889,616 - 949,631 784,993 815,088 Depreciation oninvestmentproperties[Note27] Depreciation onproperty, plant&equipment[Note31] Depositinsurance premium* Auditors' remuneration ietr'eouet ,5 150 205 12,604 22,045 1,570 2,750 Directors' emoluments prtn xessicuetefloig Operating expensesincludethefollowings: 9 Operating expenses

6,4 665 405 6,645 64,045 6,645 (5,110) 64,045 (56,759) (5,110) 11,755 (56,759) 120,804 11,755 120,804 Proﬁtpaidtoinvestors IncomefromIslamicbankingoperations NetoperatingincomefromIslamicbanking 8.1 13703 ,5,5 19575 1,531,383 1,945,775 1,150,558 1,377,013 1,492,244 1,848,375 1,117,138 1,284,352 6,645 64,045 6,645 64,045 32,494 33,355 26,775 28,616 NetoperatingincomefromIslamicbanking[Note8.1] Otherincome Proﬁt/(loss)onsaleofproperty, plant&equipmentincludingforeclosedproperties . te prtn noe Otheroperatingincome 8. (,7,4) 31571 12877 3,508,297 (1,258,757) 3,105,791 (1,270,543) rauybls&bns 4876 ,3,2 4760 1,059,544 437,670 1,037,229 428,766 -Treasury bills&bonds etscrte ,5 - 971 - 9,751 - 9,751 -Debtsecurities hrs 3854 3,2 4770 466,592 437,780 234,620 318,534 -Shares aia an/lse)o aeo euiishl o rdn Capitalgains/(losses)onsaleofsecuritiesheldfortrading rauybls&bns (2,1) 1208 6609 143,923 (626,019) 132,068 (626,019) -Treasury bills&bonds hrs (,0,7) ,0,7 (,1,3) 1,838,238 (1,517,939) 1,701,874 (1,401,575) -Shares an/lse)o akdt aktvlaino euiishl o rdn Gains/(losses)onmarkedtomarketvaluationsecuritiesheldfortrading . e an/ls)fo neteti euiis Netgains/(loss)frominvestmentinsecurities 7. 7265 6,9 4299 257,910 452,969 468,998 712,625 rfrnesae 5 - 855 - 73,574 98,448 105,222 855 207,330 64,339 98,448 - 86,786 207,330 Preferenceshares Unittrustfunds -Quoted nutd 940 ,5 940 11,048 73,985 9,460 130,957 8,652 73,985 9,460 130,957 Dealingsecuritiesheldfortrading -Unquoted -Quoted nutd 2,7 2,7 - - - 20,676 26,274 Investmentsecurities -Unquoted nutd 3,0 1,6 - - - - - 12,666 189,377 31,003 220,815 -Unquoted -Quoted Associates Subsidiaries 6. Dividend income

o h eredd3s eebr 01 00 01 2010 2011 2010 2011 For theyearended31stDecember * As pertheBankingAct DirectionNo5of2010,theBankisrequiredtomakeapayment0.1%or0.125%eligibledepos * effect from1stOctober2010. on theCapitalAdequacyRatio(CAR) oftheimmediateproceedingauditedﬁnancialstatements,payablequarterly on"DepositIns R 0 s'00 R 0 Rs'000 Rs'000 Rs'000 Rs'000

Bank Group it liabilitiesdepending urance Scheme"with

BANK OF CEYLON ANNUAL REPORT 2011 197 BANK OF CEYLON ANNUAL REPORT 2011 198 sa 1tDcme 01 2010 - 2011 1,589,788 Presentvalue ofunfundedobligation As at31stDecember TheassetsofthesetwoplansareheldindependentlytheBank’s assetsandadministered byBoardsofTrustees/Managers, rep The Bank hasapensionschemeestablishedunderanIndustrialAward whichissolelyfundedbytheBank.TherealsoaWidow 11.1 (a) ThebenefitisavailabletoallpermanentemployeeswhohavejoinedtheBankprior to1stJanuary1996. Thevaluationhasbeendoneusingthe“ProjectedUnitCreditMethod”,whichis recommendedintheSriLankaAccountingStandar AnactuarialvaluationofthePensionFundasat31stDecember2011wascarried outbyM/sPiyalSGoonetillekeandAssociates Bank of CeylonPensionTrustFund 11.1 bythemembersandactuarialValuations arecarriedoutatleastonceinthreeyears,aspertherulesgoverningthesefunds. BothFundsaresubjecttoannualauditsindependenttheauditofBank,by afirm/sofCharteredAccountantsappointed rsn au ffne biain 4,2,3 41,981,000 46,525,530 Presentvalue offundedobligation oa rsn au folgtos 4,1,1 41,981,000 48,115,318 Total presentvalueofobligations es: arvleo lnast 4,2,3) (43,907,940) (46,525,530) Less:Fair valueofplanassets 112,983 456,000 139,624 456,000 80,023 456,000 71,817 456,000 Provisionforterminalgratuity andOrphans'PensionFund rsn au fntolgtos 15978 (1,926,940) 1,589,788 Presentvalue ofnetobligations 1,730,096 1,608,447 1,730,096 1,608,447 BankofCeylonWidows'/Widowers' BankofCeylonPensionTrust Fund es:Urcgie cura gi)ls (,1,7) - (3,818,678) Less:Unrecognised actuarial(gain)/loss Employers'contributiontodefinedbenefitplans iblt/srls o endbnfi biain 22880 (1,926,940) (2,228,890) Liability/(surplus)fordefined benefitobligations Staffretirement benefits 11

h ubro esn mlydb h aka t3s eebr 01ws815(00:824 Thenumberofpersonsemployedbythebankasat31stDecember, 2011was8,115(2010:8,204)

te esne xess 5449 2,0 7473 663,988 143,469 744,713 149,428 582,875 525,806 130,486 609,181 564,449 130,364 526,179 526,079 Otherpersonnelexpenses Employees'Trust Fund Employees'ProvidentFund tf mlmns 70825 ,6,0 76876 7,341,451 7,658,726 6,861,601 7,008,265 Employers'contributiontodeﬁnedplans Staffemoluments 0P ronle pne 10 Personnel expenses

o h eredd3s eebr 01 00 01 2010 2011 2010 2011 For theyearended31stDecember Notes totheFinancialStatements pension schemeestablishedbythemembers.Boththesefundshavebeenclosedtonewentrantsasfrom1stJanuary1996 “Employee Beneﬁts”. management andtheemployees,asprovidedinTrust Deed/RulesoftherespectiveFunds. Terslso h cura auto ftePninTutFn ssmaie sflos TheresultsoftheactuarialvaluationPensionTrust Fundissummarisedasfollows: 21624 ,6,1 22401 2,299,079 2,204,071 2,266,119 2,136,264 82917 ,4,7 91208 8,731,783 9,162,048 8,044,072 8,229,157 R 0 s'00 R 0 Rs'000 Rs'000 Rs'000 Rs'000 s'00 Rs'000 Rs '000

Bank Group . s’/Widowers’ &Orphans’ resenting the d No16(Revised2006) sa 1tDcme 01 2010 2011 13,588,916 7,137,023 BondsandsecuritiesissuedbytheGovernmentofSriLanka 11.1. (b)Planassetsconsistofthefollowing As at31stDecember eetrsise ycroae 78650 14,395,460 17,846,580 Debenturesissuedbycorporates neteti qiysae ,3,3 4,708,274 4,833,735 Investmentinequityshares ie eois 1,6,0 8,450,000 13,260,000 Fixeddeposits te netet ,7,6 478,598 1,472,168 Otherinvestments te eevbe 20588 2,286,692 2,095,888 Otherreceivable es:Ohrpybe (1,6) - (119,865) Less:Otherpayable aac ttebgnigo h er 4,8,0 38,377,130 41,981,000 Balanceatthebeginningofyear 11.1. (c)Movementinthepresentvalueofdefinedbenefitobligations cura gi)ls ,3,7 2,634,830 3,532,578 Actuarial(gain)/loss eetpi ytepa 28774 (3,439,000) (2,847,714) Benefitpaidbytheplan urn evc ot 7818 570,330 718,128 Currentservicecost neetcs ,3,2 3,837,710 4,731,327 Interestcost aac tteedo h er 4,1,1 41,981,000 48,115,319 Balanceattheendofyear 11 d oeeti h arvleo lnast 39,843,170 43,907,940 Fairvalueofplanassetsatthebeginningyear 11.1. (d)Movementinthefairvalueofplanassets otiuinpi nopa ,0,4 1,730,096 1,608,447 Contributionpaidintoplan eet adb h ln (,4,1) (3,439,000) (2,847,714) Benefitspaidbytheplan cura an(os npa ses (6,0) 1,789,808 (363,302) Actuarialgain/(loss)onplanassets xetdrtr npa ses 42019 3,983,866 4,220,159 Expectedreturnonplanassets arvleo lnast tteedo h er 4,2,3 43,907,940 46,525,530 Fairvalueofplanassetsattheendyear aeo icutn 1.%pa 10.0%p.a 10.0%p.a Nil 6.5%p.a 7.0%p.a Nil 6.0%p.a 6.5%p.a Rateofdiscounting Increaseinpensionpayment(Basic) IncreaseinfutureCostofLivingAllowance(COLA) Futuresalaryincrease 11.1. (e)Actuarialassumptions aeo euno lnast 1.%pa 10.0%p.a 10.0%p.a Rateofreturnonplanassets sa 1tDcme 01 2010 - 2011 548,728 0.4%p.a Nil Presentvalue ofunfundedobligation As at31stDecember 11.2 (a)ThereslutsoftheacturialvaluationW/W&Opension fundissummarisedasfollows. Thevaluationhasbeendoneusingthe“ProjectedUnitCreditMethod”,whichis recommendedintheSriLankaAccountingStandar AnactuarialvaluationofthePensionFundasat31stDecember2011wascarried outbyM/sPiyalSGoonetillekeandAssociates Bank of CeylonWidows'/Widowers'andOrphans'PensionFund 11.2 Attritionrate rsn au ffne biain 1,6,8 10,138,000 11,565,283 Presentvalue offundedobligation oa rsn au folgtos 1,1,1 10,138,000 12,114,011 Total presentvalueofobligations es: arvleo lnast 1,6,8) (10,346,890) (11,565,283) Less:Fair valueofplanassets rsn au fntolgtos 5878 (208,890) 548,728 Presentvalue ofnetobligations es:Urcgie cura gi)ls (,4,9) - (1,248,497) Less:Unrecognisedactuarial (gain)/loss iblt/srls o endbnfi biain 6979 (208,890) (699,769) Liability/(surplus)fordefined benefitobligations “Employee Benefits”. 4,2,2 43,907,940 46,525,529 s'00 Rs'000 Rs '000 s'00 Rs'000 Rs '000

. d No16(Revised2006)

BANK OF CEYLON ANNUAL REPORT 2011 199 BANK OF CEYLON ANNUAL REPORT 2011 200 sa 1tDcme 01 2010 2011 803,921 803,921 BondsandsecuritiesissuedbytheGovernmentofSriLanka 11.2 (b)Planassetsconsistofthefollowing As at31stDecember Notes totheFinancialStatements eetrsise ycroae ,3,6 4,037,160 2,837,160 Debenturesissuedbycorporates ie eois 65800 3,307,000 6,538,000 Fixeddeposits te netet 8,6 1,763,188 885,762 Otherinvestments te eevbe 5065 502,534 570,675 Otherreceivable es:Ohrpybe (025 (66,913) (70,235) Less:Otherpayable 11.2 (c)Movementinthepresentvalueofdefinedbenefitobligations cura gi)ls ,8,4 33,590 1,188,241 Actuarial(gain)/loss eetpi ytepa 4759 (363,140) (407,549) Benefitpaidbytheplan neetcs ,1,9 951,600 - 1,119,793 75,526 Interestcost Currentservicecost aac tteedo h er 1,1,1 10,138,000 12,114,011 Balanceattheendofyear 11.2 (d)Movementinthefairvalueofplanassets otiuinpi nopa 1,5 225,830 217,952 Contributionpaidintoplan pca otiuinpi ytebn 5,0 456,000 456,000 Specialcontributionpaidbythebank eet adb h ln (0,4) (363,140) (407,549) Benefitspaidbytheplan cura an(os npa ses (026 89,680 (60,256) Actuarialgain/(loss)onplanassets xetdrtr npa ses 10226 903,500 1,012,246 Expectedreturnonplanassets arvleo lnast tteedo h er 1,6,8 10,346,890 11,565,283 Fairvalueofplanassetsattheendyear aeo icutn 1.%pa 10.0%p.a 10.0%p.a 6.5%p.a 7.0%p.a 6.0%p.a Nil 6.5%p.a Nil Rateofdiscounting Increaseinwidows'/widowers'andorphans'pensionpayment(Basic) IncreaseinfutureCostofLivingAllowance(COLA) Futuresalaryincrease 11.2 (e)Actuarialassumptions aeo euno lnast 1.%pa 10.0%p.a 10.0%p.a Rateofreturnonplanassets Atiinr t Nil 1.0%&0.4%p.a Provisionismadetomeet the Bank’s obligationtopayGratuityintermsofthePaymentActNo121983,all GratuityFund 11.3 Attrition rate Theresults oftheactuarialvaluationGratuityFundindicatesthatRs.248.29Millionasat31stDecember2011.(2010R Thevaluation hasbeendoneusingthe“ProjectedUnitCreditMethod”,whichisrecommendedinSriLankaAccountingStandar Anactuarial valuationoftheGratuityFundasat31stDecember2011wascarriedoutbyM/sPiyalSGoonetilleke,afirmpro Theprincipal actuarialassumptionsusedinthevaluationwereasfollows: aac ttebgnigo h er 1,3,0 9,515,950 10,138,000 Balance atthebeginningofyear arvleo lnast ttebgnigo h er 1,4,9 9,035,020 10,346,890 Fair valueofplanassetsatthebeginningyear “Employee Benefits”. pension. after 1stJanuary1996.ProvisionalsoincludesthosewhohavejoinedtheBankpriorto1996andleavewit provision madebytheBankisadequatetomeetitsgratuityobligations in full. 1,6,8 10,346,890 11,565,283 s'00 Rs'000 Rs '000

those employeeswhohavejoined s.186.89 Million).The fessional actuaries. d No16(Revised2006) hout beingentitledtoa

rnntoa ak eod ouin Piae iie ,2 5,123 8,427 - - Transnational LankaRecordsSolutions(Private)Limited otenDvlpetFnnilCmayLmtd - - 107 (495) 1,087 - - Southern DevelopmentFinancialCompanyLimited BLSvnsBn iie (10,440) - - - MBSLSavings BankLimited ieaCptlLn Piae iie - - 6,9 75,773 66,293 - - MirekaCapital Land(Private)Limited ak euiis(rvt)Lmtd - - 8,1 116,606 85,011 - - LankaSecurities (Private)Limited ebn se aaeetLmtd - - 4,9 26,331 47,897 - - Ceybank AssetManagementLimited 5 hr fpoi fAscaecmaisbfr a ShareofprofitAssociatecompaniesbeforetax 15

rvso hrefrteya 160 ------(1,670) 817,130 Provisionchargefortheyear Reversalduringtheyear Reversalofprovisionforfallinvalueinvestmentrelatedcompanies 14 eoeyo on rte f npeiu er 105 086 631 97,452 1,725,997 564,528 96,381 523,859 1,559,894 70,866 (372,935) 433,619 1,297,087 488,016 81,095 778,306 (420,714) 1,297,087 778,306 Reversalofprovisionsduetorecoverynonperformingadvances Recoveryofloanswrittenoffinpreviousyears Recoveryofnonperformingadvances 13. Total provisionforloanlosses Totalgeneralprovisionforloanlosses - esn aiiis (561 148 924 22,794 19,274 (1,438) (25,671) leasingfacilities - - il fecag 359 140 359 3,121 (3,569) (1,470) (3,559) billsofexchange - eea rvso rvre)poie - eua dacs (9,8) 4094 3860 497,944 (388,640) 490,924 (391,484) regularadvances Generalprovision(reversed)/provided- -frcoe rpris 2,5 572 039 5,712 1,202,138 (15,538) 148,712 937,463 20,359 1,239 220,359 1,071,878 5,712 32,684 (13,628) 854,333 167,116 20,359 1,622 Totalspecificprovisionforloanlosses -foreclosedproperties -leasingfacilities bills ofexchange Specificprovision- 6526 ,4,1 6556 1,063,252 695,506 1,047,110 665,236 18,806 (38,193) 12,016 13,569 18,806 (38,193) 12,016 13,569 10.0%p.a 10.0%p.a 6.0%p.a 6.5%p.a -creditcardreceivable -pawningadvances Provisionforloanlosses 12. Increaseingratuitypayment(Basic) IncreaseinfutureCostofLivingAllowance(COLA) 13()Atailasmtos 2009 2010 11.3 (a)Actuarialassumptions As at31stDecember aeo icutn 1.%pa 10.0%p.a 10.0%p.a Rateofdiscounting o h eredd3s eebr 01 00 01 2010 2011 1.0%&0.4% Nil 2010 2011 For theyearended31stDecember Attritionrate pcfi rvso -lasadavne 3,5 10647 6,2 1,082,639 669,921 1,066,497 639,651 6.5%p.a 7.0%p.a loans andadvances Specific provision- Future grosssalaryincrease

R 0 s'00 R 0 Rs'000 Rs'000 Rs'000 Rs'000 8540 - - - 815,460 8941 ,6,5 8467 1,394,539 874,687 1,367,953 859,401 s'00 Rs'000 Rs '000 - - 2875 212,898 208,715 - -

Bank Group

BANK OF CEYLON ANNUAL REPORT 2011 201 BANK OF CEYLON ANNUAL REPORT 2011 202

eerdtx(eesd/hre Nt 82 2,7 4,3 4359 49,393 433,579 48,134 426,077 Deferredtax(released)/charged[Note38.2]

rnntoa ak eod ouin Piae iie 3 795 139 - - Transnational LankaRecordsSolutions(Private)Limited ieaCptlLn Piae iie ,7 2,236 6,274 - - MirekaCapitalLand(Private)Limited ak euiis(rvt)Lmtd - - 2,4 42,353 24,041 - - LankaSecurities(Private)Limited ebn se aaeetLmtd - - 1,3 12,297 15,531 - - CeybankAssetManagementLimited Shareofincometaxonprofit 63A scaec mais 16.3 Associate companies

rpryDvlpetPC - - 1373 167,361 133,743 - - PropertyDevelopmentPLC ecatCei fSiLnaLmtd - - 2,2 27,648 27,429 - - MerchantCreditofSriLankaLimited ecatBn fSiLnaPC - - 6,9 105,640 69,099 - - MerchantBankofSriLankaPLC BLIsrneCmayLmtd - - 325 5,516 3,255 - - MBSLInsuranceCompanyLimited oesClmo(93 iie 160 8,382 11,610 - - HotelsColombo(1963)Limited ako eln(K iie 775 - 17,795 - - BankofCeylon(UK)Limited O rvl Piae iie ,5 4,711 4,452 - - BOCTravels (Private)Limited O rpryDvlpet&Mngmn Piae iie ,0 13,006 5,807 - - BOCPropertyDevelopment&Management(Private)Limited O aaeet&SpotSrie Piae iie 1 64 51 - - BOCManagement&SupportServices(Private)Limited ebn oia oe Piae iie 5 877 255 - - CeybankHolidayHomes(Private)Limited elaeFnnilSrie iie ,0 5,431 9,603 - - CeyleaseFinancialServicesLimited Incometaxonprofitof: 62S biir opne 16.2 Subsidiary companies

noetxo rfiso h rnhi hna 673 679 673 86,779 103,373 66,743 220,441 40,043 86,779 103,373 (488,542) 66,743 220,441 (37,413) (491,331) (Over)/underprovisionfortaxationinrespectofprioryears IncometaxonprofitsofthebranchinChennai IncometaxonprofitsofthebranchinMale'

noetxo rfiso f-hr prtoso B 422 74,252 - 74,252 - Incometaxonprofitsofoff-shoreoperationsOBD noetxo rfiso nsoeoeain fOD - 9626 946,236 - - 946,236 - 708,387 - 708,387 Incometaxonprofitsofon-shoreoperationsOBD Incometaxonprofitsofon-shore&off-shoreoperationsOBD noetxo rfi fdmsi prtoso h ak 30463 ,6,9 30463 2,465,896 3,094,653 2,465,896 3,094,653 Incometaxonprofitofdomesticoperationsthebank

16.1 Bank

h rau ficm a xes sa olw: Thebreakupofincometaxexpenseisasfollows: 6 noetxepne - - - Income taxexpense 16

o h eredd3s eebr 01 00 01 2010 2011 2010 2011 For theyearended31stDecember Notes totheFinancialStatements Overseas branchoperations Off-shore BankingDivision(OBD) Domestic operations

40490 ,8,5 43435 4,162,289 4,364,345 3,687,257 4,024,970 35883 ,3,2 36162 3,716,579 3,601,682 3,639,123 3,598,893 R 0 s'00 R 0 Rs'000 Rs'000 Rs'000 Rs'000 - - 4,8 57,681 45,985 - - - - 2309 338,636 283,099 - -

Bank Group te ciiis 80 3.% 35.0% 15.0% 35.0% - 28.0% 28.0% 12.0% 28.0% 35.0% 26.5% - 28.0% 35.0% 15.0% 15.0% 35.0% 28.0% 15.0% 12.0% 28.0% Notionaltaxcreditforwithholding onGovernmentsecuritiessecondarymarkettransactions 16.5 (Asperthe agreementwithBoardofInvestment(BOI),KoladeniyaHydropower(Private)Limitedisexemptedfromtaxationforye 13Koladeniya Hydropower(Private)Limited 12MBSL SavingsBankLimited 11Bank of Ceylon(UK)Limited 10MBSL InsuranceCompanyLimited -Otheractivities -Hotelbusiness 9Ceybank HolidayHomes(Private)Limited 8Ceylease FinancialServicesLimited 7Merchant CreditofSriLankaLimited 6Hotels Colombo (1963)Limited 5BOCTravels (Private)Limited O rpryDvlpet&Mngmn Piae iie 00 3.% 35.0% 10.0% 4BOCPropertyDevelopment&Management(Private)Limited rpryDvlpetPC 2.% 50 35.0% 35.0% 28.0% 28.0% 15.0% 12.0% 3BOCManagement&SupportServices(Private)Limited 2MerchantBankofSriLankaPLC 1PropertyDevelopmentPLC Subsidiaries 21 21 2010 2011

noetxepnerpre nteicm ttmn ,2,7 36727 ,6,4 4,162,289 4,364,345 3,687,257 4,024,970 16.4 (a) Incometaxexpensereportedintheincomestatement IncometaxrateswhichwereapplicableforSubsidiariesin2010&2011are as follows: efrdtx(eesl/hre 4607 814 3,7 49,393 433,579 55,656 57,681 48,134 - 45,985 426,077 - 40,043 4,349,499 51,523 3,624,540 (488,541) - - 3,461,232 (37,413) 2,792,164 (4,398,874) (491,331) (4,228,194) (3,544,769) (3,341,938) Defferedtax(reversal)/charge (Over)/Underprovisionoftaxesinrespectprioryears Socialresponsibilitylevyat1.5%ofincometax ShareofincometaxexpensesAssociates Tax effectofnondeductibleexpenses Tax effectofdeductibleexpensesandexempt income

46998 ,0,5 49696 4,008,891 4,976,976 300,341 3,708,550 4,639,998 336,978 - - Subsidiaries[Note16.4(a)]

hna 4.% 00 673 679 673 86,779 66,743 86,779 66,743 40.0% 40.0% Chennai oeg rnhoeain 103,373 220,441 103,373 220,441 25.0% 25.0% Male Foreignbranchoperations f hr akn prtoso h 74,252 - 74,252 - 20.0% - off-shorebankingdivisionofthebank Off-shorebankingoperationsofthe n-soebnigoeain fte 946,236 - 946,236 - 35.0% - off-shorebankingdivisionofthebank On-shorebankingoperationsofthe f hr akn iiino h ak 80 - 7837 - 7837 - 708,387 - 708,387 - 28.0% off-shorebankingdivisionofthebank On-shore&off-shorebankingoperationsofthe a feta h tttr noetxrts 11,075,485 15,851,208 2,497,910 10,052,569 3,644,427 15,545,765 2,497,910 3,644,427 35.0% 28.0% Domesticoperationsofthebank Taxeffectatthestatutoryincometaxrates Accountingproﬁtbeforetax

2011 2010 Rs' 000 Rs' 000 Rs' 000 Rs' 000 o h eredd3s eebr a ae 01 00 01 2010 2011 2010 2011 Taxrate For theyearended31stDecember Reconciliationofaccountingprofitandincometaxexpenseisasfollows: 16.4 notional taxcreditamountedtosum ofRs.792,934,530/-(2010:Rs.659,630,077)fortheBankandRs.814,273,472/- (2010:Rs.68 & thegrouponsecondarymarket transationsinGovernmentsecuritiesfortheyearhasbeengrossedup intheﬁnancialstate provided suchinterestincomeform a partofstatutoryincomethecompanyforthatyearassessment.Accordingly, the net secondary markettransactionsinGovernment securitieswouldbeentitledtoanotionaltaxcredit[Beingone ninth(1/9)ofthe In termsoftheSection137Inland RevenueActNo.10of2006andtheammendmentthereto,acompany whichderivesintere

Bank Group netinterestincome], income earnedbythebank r 00&21) ars 2010&2011) 5,026,871) fortheGroup. ments andtheresulting st incomefromthe

BANK OF CEYLON ANNUAL REPORT 2011 203 BANK OF CEYLON ANNUAL REPORT 2011 204 iied e hr R. 6.8 1.8 6.8 619.28 769.28 619.28 769.28 Undertheagreementbetween theBankandGovernmentofSriLanka,onre-capitalisinggrantingautonomy totheBank 17.3 (a)Dividends Dividends pershare(Rs.) AccordinglyasumofRs.3,846 millionhasbeen declaredbytheBankforGovernmentofSriLanka (shareholder)as dividends Allprofitsafterdeductionof provisionfortaxation,loanlossesandanysuchportionreserves,ifany, as egtdaeaenme fodnr hrsi su ,0,0 50000 ,0,0 5,000,000 3,096,410 5,000,000 3,846,410 1,352.06 5,000,000 3,096,410 2,272.54 5,000,000 3,846,410 1,273.06 2,304.16 Weighted averagenumber ofordinarysharesinissue Total profitdistributedtoshareholdersduringtheyear Dividends pershare 17.3 Dilutedearningspershare(Rs.) egtdaeaenme fodnr hrsatrajstgfrdlto ,0,0 50000 ,0,0 5,000,000 5,000,000 5,000,000 5,000,000 DividendsPerShareiscalculatedbydividingthetotalprofitdistributedtoshareholders (thenumerator)bytheweightedaver Weighted averagenumberofordinarysharesafteradjusitngfordilution o h eredd3s eebr 01 00 01 2010 2011 2010 2011 For theyearended31stDecember egtdaeaenme fodnr hrsudroto urgteya - - - 5,000,000 - 5,000,000 5,000,000 5,000,000 Weighted averagenumberofordinarysharesunderoptionduirngtheyear Weighted averagenumberofordinarysharesoutstandingduringtheyear egtdaeaenme fodnr hrsi su ,0,0 50000 ,0,0 5,000,000 5,000,000 6,760,310 5,000,000 11,362,720 5,000,000 6,365,312 11,520,795 Weighted averagenumberofordinarysharesinissue Profitattributabletoordinaryshareholdersoftheparent

o h eredd3s eebr 01 00 01 2010 2011 2010 2011 1,352.06 2,272.54 1,273.06 2,304.16 For theyearended31stDecember Dilutedearningspershareiscalculatedbydividingtheprofitorlossattributable toordinaryshareholdersoftheparentent Diluted earningspershare 17.2 Basicearningspershare(Rs.) h aet 15075 ,6,1 1,6,2 6,760,310 11,362,720 6,365,312 11,520,795 5,000,000 5,000,000 5,000,000 5,000,000 Weighted averagenumberofordinarysharesinissue theparent rfi trbtbet riaysaeodr f Profitattributabletoordinaryshareholdersof 71 Earningspershare 17.1 Earnings pershare(EPS)&Dividends(DPS) 17 Notes totheFinancialStatements

AspertheSriLankaAccountingStandardNo34(Revised2005)"EarningPerShare",Basicearningsshareiscalculatedbyd o h eredd3s eebr 01 00 01 2010 2011 2010 2011 For theyearended31stDecember (2010 :Rs3,096million). will beissuedasdividendstotheGovernment attheendofeachyear. Government reservestheoptionofallowingBanktoretainanylevel ofproﬁtaftertax. nise(h eoiao)drn h er in issue(thedenominator)duringtheyear. shares (thedenominator). weighted averagenumberofordinarysharesoutstandingduringtheyearafteradjustingforallpotentialdilutedavera during theyear. attributable toordinaryshareholdersoftheparententity(thenumerator)byweightedaveragenumbersharesin

R 0 s'00 R 0 Rs'000 Rs'000 Rs'000 Rs'000 R 0 s'00 R 0 Rs'000 Rs'000 Rs'000 Rs'000 R 0 s'00 R 0 Rs'000 Rs'000 Rs'000 Rs'000

Bank Group the Governmentshalldetermine, ity (thenumerator)bythe age numberofordinaryshares issue(thedenominator) ividing theproﬁtorloss ge numberofordinary for theyear2011. of Ceylon,the Thedetailsofthetreasurybills&bondsthathavebeenpledgedassecurityforliabilitiesatyearendaredisclosedin rauyblso con fIvsmn udAcut(oe4.) 14851 ,0,6 - 1,501,161 17,631,354 - 8,450,723 17,631,354 8,450,723 1,498,511 Treasury billsonaccountofInvestmentFundAccount(Note43.1) Treasury bills,bonds&othereligiblebillsheldtomaturity an(os nmre omre auto 2396 202 2396 62,012 (253,916) 28,717,342 49,659,833 62,012 27,747,659 28,655,330 48,814,367 49,913,749 (253,916) 27,685,647 49,068,283 Netteasury bills&bondsheldfortrading Gain/(loss)onmarkedtomarketvaluation Grosstreasurybills&bondsheldfortrading 19.1 Thereisnoreserverequirementforforeigncurrencydepositliabilitiesmaintained bydomesticbranchesandthedepositliabi eev ako ni Nt 92 9,9 3369 9,9 393,699 294,597 2,567,677 393,699 2,422,255 22,933,090 294,597 2,567,677 27,710,603 22,933,090 2,422,255 27,710,603 MaldivesMonetaryAuthority[Note19.3] ReserveBankofIndia[Note19.2] CentralBankofSriLanka[Note19.1] Treasury bills,bondsandothereligiblebills maturing withintheperiodoflessthantwelvemonthshavebeenclassiﬁedasfo Treasurybills,bondsandothereligiblebills 20 19.3 19.2 sa 1tDcme 21 21 21 2010 2011 2010 2011 As at31stDecember 9 aacswt eta ak Balances withCentralBanks 19

aacswt te ak ,2,0 53423 ,8,4 4,960,389 6,885,444 715,208 5,344,223 906,220 8,079,260 6,827,204 715,208 10,997,644 8,044,372 882,005 10,961,702 Balanceswithotherbanks Coins,notesheldinforeigncurrency Coins,notesheldinlocalcurrency 8 ahadsottr ud Cash andshorttermfunds 18

sa 1tDcme 21 21 21 2010 2011 2010 2011 As at31stDecember ak ue eoi iblte. Lanka Rupeedepositliabilities. Sri Lanka.TheminimumcashreserverequiredtobemaintainedattheCentralBankofLankaas31stDecember2011was8.0 In termsoftheprovisionsSection93MonetaryLawActNo581949,Bankisrequiredtomaintainacashreserve iiini r ak 21 i) Division inSriLanka(2010:Nil). overseas branchesarelocated. Treasury bills,bondsandothereligiblebillsaredebtsecuritiesissuedbytheGovernmentofSriLankarespectiveGov deposit withMMA(2010:50%).Inadditionareserveof25%ontheliability25%)shouldalsobemaintainedwit Regulations issuedbyMaldivesMonetaryAuthority(MMA),requiresthat50%ofminimumrequiredcapitalthebranchinMaldive 6.0%) withtheReserveBankofIndia,beingminimumcashreserverequirement,asat31stDecember2011onitsdemandandte Section 42(1)oftheReserveBankIndia(RBI)Actof,1934,requiresthatbranchinChennaitomaintainacashreserve

3,2,5 2,9,6 3,2,5 25,894,466 30,427,455 25,894,466 30,427,455 1,7,1 1,0,0 1,8,0 13,754,857 18,789,308 14,103,803 18,670,911 87361 53903 96177 46,348,696 59,611,717 45,379,013 58,763,601 R 0 s'00 R 0 Rs'000 Rs'000 Rs'000 Rs'000 R 0 s'00 R 0 Rs'000 Rs'000 Rs'000 Rs'000

Bank Group Bank Group Note No:46 of 6.0%(31stDecember2010: lw llows : lity oftheOff-shoreBanking ernment authoritieswherethe withtheCentralBankof h theMMA. 0% (2010:7.00%)ofSri rm depositsliabilities, s bemaintainedina

BANK OF CEYLON ANNUAL REPORT 2011 205 BANK OF CEYLON ANNUAL REPORT 2011 206

1471 27,500 114,731 T akr L 3,0 3.0 064 - - - 20,644 38.40 537,600 MTDWalkers PLC oob okadPC 3400 3.0 407 0,0 250 27,500 275.00 100,000 94,087 238.80 394,000 Colombo DockyardPLC Construction & Engineering

1059 60,008 130,589 akmCyo L 190 6.0 344 - - - 13,494 260.00 51,900 LankemCeylon PLC acr L 7,0 150 2,9 1440 6.0 27,701 168.50 164,400 27,296 155.00 176,100 Haycarb PLC I odnsPC-NnVtn 4,0 7.0 088 030 99 3,027 99.90 30,300 10,888 77.00 141,400 CICHoldings PLC-NonVoting I odnsPC-Vtn 0,0 115 6,1 2810 4.0 29,280 140.70 208,100 66,911 111.50 600,100 CICHoldings PLC-Voting hmnxPC 1000 2.0 200 - - - 12,000 120.00 100,000 Chemanex PLC Chemical & Pharmaceuticals

3946 253,254 349,436 h inBeeyCyo L 8,0 100 5,8 5170 8.0 98,418 185.10 531,700 55,081 190.00 289,900 TheLionBreweryCeylonPLC ak ikFos(W)PC 7660 0.0 678 - - - 76,748 107.10 716,600 LankaMilkFoods(CWE)PLC V od L 000 87 74 - - - 774 38.70 20,000 HVA FoodsPLC itleisCmayo r ak L 0,0 171 4,4 4570 7.0 72,174 177.90 405,700 45,145 147.10 306,900 DistilleriesCompanyofSriLankaPLC ooLnaPC - - - 6,0 6.0 4,502 64.40 69,900 - - - CocoLankaPLC agls(eln L 0,0 230 1439 0,0 154 78,160 195.40 400,000 164,349 203.00 809,600 Cargills(Ceylon)PLC arh am L 490 1.0 ,3 - - - - - 7,339 210.30 34,900 BairahaFarmsPLC Beverage Food & Tobacco

9784 1,008,713 937,884 alblFnnePC 3510 33 1,4 - - - - - 14,943 43.30 345,100 Vallibel FinancePLC h iac opn L 0,0 4.0 ,5 - - - - - 4,050 40.50 100,000 TheFinanceCompanyPLC otoi iac L 5,0 4.0 ,9 - - - - - 6,897 44.90 153,600 SoftlogicFinancePLC otoi aia iie 600 48 331 - - - 3,341 34.80 96,000 SoftlogicCapitalLimited M esn L 0,0 19 90 - - - 950 1.90 500,000 SMBLeasingPLC apt akPC 5211 9.0 0,1 6980 7.0 171,243 271.90 629,800 105,719 195.00 542,151 SampathBankPLC epesFnnePC 20 57 7 - - - 7 35.70 200 People'sFinancePLC a saBnigCroainPC 13000 54 3,2 - - - - - 33,020 25.40 1,300,000 PanAsiaBankingCorporationPLC ain rs akPC 2560 70 1,7 9350 34 79,522 83.40 953,500 16,279 57.00 285,600 NationsTrust BankPLC BFnnePC 2,0 186 347 840 6.0 10,057 261.90 38,400 3,437 138.60 24,800 LBFinancePLC ak etrsPC 4,0 3.0 ,6 - - - - - 1,769 38.20 46,300 LankaVentures PLC ak rxLaigCmayPC 10390 33 9,8 3680 2.0 44,321 127.80 346,800 90,289 83.30 1,083,900 LankaOrixLeasingCompanyPLC ak rxFnnePC 2,0 81 12 - - - 162 8.10 20,000 LankaOrixFinancePLC N suac L 1,0 5.0 330 - - - 23,340 56.90 410,200 HNBAssurancePLC atnNtoa akPC-NnVtn ,8,5 8.0 884 3,0 246 94,402 214.60 439,900 98,804 83.20 1,187,550 HattonNationalBankPLC-NonVoting atnNtoa akPC-Vtn ,0,5 113 1191 ,3,0 399 412,537 399.90 1,031,600 181,991 151.30 1,202,850 HattonNationalBankPLC-Voting FCBn 10500 1.0 1,1 8000 0.0 160,160 200.20 800,000 119,110 112.90 1,055,000 DFCCBank omrilBn fCyo L o oig 4,9 7.0 ,0 1930 6.0 32,287 162.00 199,300 3,203 74.50 42,998 CommercialBankofCeylonPLC-NonVoting omrilBn fCyo L oig 18294 0.0 8,9 1,0 299 4,184 259.90 16,100 180,293 100.00 1,802,934 CommercialBankofCeylonPLC-Voting hlwFnneLmtd 9780 24 2,2 - - - - - 22,127 22.40 987,800 ChilawFinanceLimited eta iac opn L 3,8 230 2,5 - - - - - 28,153 203.00 138,683 CentralFinanceCompanyPLC Bank Finance & Insurance

itdeut euiis hrs R. s'0 sae R. Rs'000 Rs. shares Rs'000 Rs. shares Listedequitysecurities ordinary oo akt Mre N f akt Market 2010 Market Noof Market Market Noof 2011 As at31stDecember 21 Dealing Notes totheFinancialStatements securities price per share price pershare value ordinary Bank price pershare value - 2,065 - CHuePC - - - 1270 13 2,065 11.30 182,700 - - - PCHousePLC

4898 254,022 418,918 rn saHtl L 7,0 7.0 797 - - - 37,937 79.50 477,200 Trans AsiaHotelsPLC h ihhueHtlPC 1000 35 530 0,0 6.0 6,300 63.00 100,000 5,350 53.50 100,000 TheLighthouse HotelPLC h otesRsrsPC 14110 30 3,0 - - - - - 33,605 23.00 1,461,100 TheFortress ResortsPLC agrn ec oesPC 5,0 8.0 ,5 - - - - - 4,050 81.00 50,000 Tangerine BeachHotelsPLC a ak oesPC 4740 90 1,4 5000 17 39,435 71.70 550,000 17,449 39.00 447,400 Taj LankaHotelsPLC aaiaRsrsPC 5,0 1.0 0 - - - - - 505 10.10 50,000 Marawila ResortsPLC onKel oesPC - - - 8060 00 16,012 20.00 800,600 - - - JohnKeells HotelsPLC oe evcs(eln L 7,0 2.0 14,971 26.00 575,800 - - - HotelServices (Ceylon)PLC dnHtlLnaPC 6960 80 2,6 3230 76 22,596 57.60 392,300 23,165 38.00 609,600 EdenHotel LankaPLC irsLiuePC 1000 01 500 - - - 5,010 50.10 100,000 CitrusLeisurePLC sa oes&Poete L ,3,0 7.0 7,5 5270 9.0 97,524 194.00 502,700 170,555 76.40 2,232,400 AsianHotels&PropertiesPLC my esr L 0,0 8.0 ,1 - - - - - 8,313 81.50 102,000 AmayaLeisurePLC iknSec oe odnsPC 16560 95 1299 4,0 157 57,184 105.70 541,000 112,979 69.50 1,625,600 AitkenSpenceHotelHoldingsPLC

207 13,983 2,057 h ak optlCroainPC 250 21 10 - - - 130 52.10 2,500 TheLankaHospitalCorporationPLC aaoaHsiasPC 1070 .0 1 31980 .0 11,543 3.70 3,119,800 510 3.90 130,700 NawalokaHospitalsPLC elnHsiasPC(udn) 8.0 6 0.0 1 102.00 6 1 85.00 6 CeylonHospitalsPLC(Durdans) sr ugclHsia L 7,0 79 146 7,0 87 1,559 8.70 179,200 1,416 7.90 179,200 AsiriSurgicalHospitalPLC sr optlHlig L 0,0 88 880 8.80 100,000 - - - AsiriHospitalHoldingsPLC

636 - 6,376 DLPC 1740 23 636 - - - 6,376 32.30 197,400 ODELPLC Footware&Textiles

3988 584,469 369,868 alblOePC 12540 38 3,1 - - - - - 30,117 23.80 1,265,400 Vallibel OnePLC h oob otLn uligCmayPC 1110 90 494 - - - 4,954 49.00 101,100 TheColomboFortLand&BuildingCompanyPLC usieHlig L 2,0 2.0 817 - - - 18,177 29.00 626,800 SunshineHoldingsPLC otoi odnsPC 5530 80 985 - - - 9,815 18.00 545,300 SoftlogicHoldingsPLC ihr irsadCmayPC 48230 .0 341 ,3,0 1.0 91,716 10.50 8,734,900 43,491 9.00 4,832,300 RichardPierisandCompanyPLC onKel odnsPC 1010 7.0 729 ,8,3 284 322,342 298.40 1,080,235 27,249 170.20 160,100 JohnKeellsHoldingsPLC ea odnsPC 2960 30 757 000 45 1,335 44.50 30,000 7,577 33.00 229,600 HemasHoldingsPLC aly L 5,0 350 54,199 345.00 157,100 - - - HayleysPLC reLnaCptlHlig L 0,0 31 60 - - - 620 3.10 200,000 FreeLankaCapitalHoldingsPLC odnsPC 1497 7.0 132 1,0 127 56,637 182.70 310,000 31,312 179.00 174,927 CTHoldingsPLC asn ubrac L 450 4.0 329 320 1.0 22,170 513.20 43,200 13,259 541.20 24,500 CarsonsCumberbatchPLC iknSec L ,2,0 104 1327 1,0 199 36,070 169.90 212,300 183,297 120.40 1,522,400 AitkenSpencePLC Diversified Holdings

(Contd.)

price per share price pershare value ordinary Bank price pershare value

BANK OF CEYLON ANNUAL REPORT 2011 207 BANK OF CEYLON ANNUAL REPORT 2011 208

610 - 6,180 h ui aa L ,0 1000 610 - - - 6,180 1,030.00 6,000 TheBukit DarahPLC O lP ls Oil Palms

6,7 9,735 69,979 ntdMtr ak L 890 4.0 ,1 - - - - - 4,219 146.00 28,900 UnitedMotors LankaPLC ahs oosPC 1,0 200 410 - - - 4,160 260.00 16,000 Sathosa Motors PLC isl&MtrEgneigPC 3,5 1321 4,3 1,0 935 9,735 973.50 10,000 47,339 1,302.10 36,356 Diesel& MotorEngineeringPLC ooilMtr L 560 0.0 421 - - - 14,261 400.60 35,600 Colonial Motors PLC Motors 7490 697,453 784,900 oy eetCmay(ak)PC-NnVtn 5,0 3.0 982 - - - 19,892 30.50 652,200 Tokyo CementCompany(Lanka)PLC-NonVoting oy eetCmay(ak)PC-Vtn 2,7 4.0 ,3 7 5.0 4 55.00 75 5,336 44.00 121,275 Tokyo CementCompany(Lanka)PLC-Voting etrdJre ak L 9,0 1.0 ,1 - - - - - 9,115 10.20 893,600 Textured JerseyLankaPLC iraCbe L ,0 42 1 4640 .0 1,876 4.30 436,400 10 4.20 2,400 SierraCablesPLC oa eaisLnaPC 2900 4.0 669 0,0 349 122,875 304.90 403,000 36,649 141.50 259,000 RoyalCeramicsLankaPLC ihr irsEprsPC 1,0 2.0 7 - - - - - 275 27.50 10,000 RichardPierisExportsPLC iaa ls elnPC 22860 .0 800 ,0,0 78 7,800 7.80 1,000,000 18,080 7.90 2,288,600 PiramalGlassCeylonPLC retGret L 4,0 3.0 081 - - - 10,851 31.10 348,900 OrientGarmentsPLC ak alie L 6,4 9.0 514 890 3.0 5,403 138.90 38,900 15,124 94.50 160,040 LankaWalltiles PLC ak lotlsPC 9320 03 7,4 2000 3.0 28,203 134.30 210,000 78,148 80.30 973,200 LankaFloortilesPLC ak eai L 350 50 288 - - - 2,848 85.00 33,500 LankaCeramicPLC ak eetPC 95389 98 1979 ,8,0 2.0 268,347 28.00 9,583,809 189,759 19.80 9,583,809 LankaCementPLC eaiTrsPC 5250 85 2,2 5,0 4.0 2,465 49.30 50,000 22,426 38.50 582,500 KelaniTyres PLC aly xot L 4,0 3.0 ,3 - - - - - 5,231 36.00 145,300 HayleysExportsPLC ipdPout L ,9,0 165 1761 8,0 197 105,623 119.70 882,400 137,641 106.50 1,292,400 DippedProductsPLC hvo urcnsLnaPC 12220 7.0 1,7 7820 5.0 122,528 159.50 768,200 216,274 170.00 1,272,200 ChevronLubricantsLankaPLC elnGanEeaosPC 7,0 155 755 - - - 7,575 105.50 71,800 CeylonGrainElevatorsPLC CEPitn akgn L 7,0 2.0 ,2 - - - - - 5,724 20.70 276,500 ACMEPrinting&PackagingPLC C alsPC 1,0 7.0 ,1 3990 51 32,329 85.10 379,900 1,110 74.00 15,000 ACLCablesPLC bn lcrcl L 490 9.0 ,3 - - - - - 2,832 190.10 14,900 AbansElectricalsPLC Manufacturing 420 - 4,200 vresRat Cyo)PC 3000 40 420 - - - 4,200 14.00 300,000 OverseasRealty(Ceylon)PLC

8,7 - 83,874 euaHlig L 673 39 415 - - - 4,135 53.90 76,723 RenukaHoldingsPLC niomna eore netet L 4,0 4.0 ,2 - - - - - 9,624 40.10 240,000 EnvironmentalResourcesInvestmentsPLC elnIvsmn L 4,0 100 4,2 - - - - - 48,620 110.00 442,000 CeylonInvestmentPLC elnGada netetTutPC 6,0 250 1,0 - - - - - 17,009 255.00 66,700 CeylonGuardianInvestmentTrust PLC so odnsPC 2,0 102 446 - - - 4,486 160.20 28,000 AscotHoldingsPLC

(Contd.)

price per share price pershare value ordinary Bank price pershare value ersnstealtetpieo h hrs *Represents theallotmentpriceofshares oa eln euiis ,7,0 3,232,348 3,573,900 Total dealingsecurities

5,4 176,780 52,345 eln&FrinTae L 3,0 94 783 - - - 7,803 9.40 830,100 Ceylon&ForeignTrades PLC rw opn L 8,0 248 4,4 7600 4.0 176,780 246.90 716,000 44,542 234.80 189,700 Brown&CompanyPLC T aig Trading

3,9 10,562 37,598 r ak eeo L 1,0 4.0 022 1,0 4.0 10,486 49.00 214,000 10,272 48.00 214,000 SriLankaTelecom PLC ilgAit L ,0,0 78 2,2 640 19 76 11.90 6,400 27,326 7.80 3,503,300 DialogAxiataPLC T lcmuiain Telecommunications

1,8 - 15,989 utr opn iie 710 9.0 599 - - - 15,989 590.00 27,100 Hunters&CompanyLimited Stores & Supplies 1933 79,247 119,323 alblPwrEahaPC 8000 .0 ,0 - - - - - 6,800 8.00 850,000 Vallibel PowerErathnaPLC aainPwrPC 10920 .0 ,2 7,0 30 238 3.00 * 79,200 4,426 4.30 1,029,200 PanasianPowerPLC agsGsPC-NnVtn ,1,0 2.0 385 5,0 1.0 6,482 18.50 350,400 73,885 23.00 3,212,400 LaugfsGasPLC-NonVoting agsGsPC-Vtn ,0 3.0 3 ,3,0 2.0 31,927 25.90 1,232,700 53 38.00 1,400 LaugfsGasPLC-Voting ak O L 3,0 1.0 ,1 2330 89 4,409 18.90 233,300 4,316 18.50 233,300 LankaIOCPLC ea oe L ,1,0 2.0 983 ,2,0 2.0 36,191 29.50 1,226,800 29,843 26.70 1,117,700 HemasPowerPLC Power & Energy

6,5 54,557 69,653 aaaaPattosPC 3010 42 491 - - - - 4,971 14.20 350,100 Watawala PlantationsPLC auuuaPattosPC 8,0 6.0 ,0 6,0 191 7,908 119.10 66,400 5,200 65.00 80,000 NamunukulaPlantationsPLC oaaaPattosPC 6,0 6.0 ,4 940 1.0 1,099 116.90 9,400 4,147 64.30 64,500 KotagalaPlantationsPLC eal lnain L 060 0.0 ,1 1730 6.0 18,979 161.80 117,300 5,313 105.00 50,600 KegallePlantationsPLC aaat lnain L 3,0 2.0 749 0,0 2.0 5,600 28.00 200,000 27,479 29.50 931,500 KahawattePlantationsPLC oaaPattosPC 5300 78 1,9 3000 64 14,196 36.40 390,000 19,391 37.80 513,000 HoranaPlantationsPLC liiaPattosPC 70 40 1 - - - - - 17 24.00 700 ElpitiyaPlantationsPLC aagd lnain L 000 88 84 0,0 5.0 5,918 57.40 103,100 864 28.80 30,000 BalangodaPlantationsPLC glwtePattosPC 4,0 4.0 ,7 1,0 6.0 857 63.00 13,600 2,271 49.80 45,600 AgalawattePlantationsPLC P attos Plantations

price per share price pershare value ordinary Bank price pershare value

BANK OF CEYLON ANNUAL REPORT 2011 209 BANK OF CEYLON ANNUAL REPORT 2011 210

3963 322,445 389,663 he ceFrsPC 720 0.0 4 - - - - - 747 103.80 7,200 ThreeAcreFarmsPLC h inBeeyCyo L 0,0 100 7,6 6470 8.0 124,887 185.10 674,700 77,368 190.00 407,200 TheLionBreweryCeylonPLC agmWymaSlen L 750 .0 190 4.00 47,500 - - - RaigamWayamba SalternsPLC ak ikFos(W)PC 7660 0.0 678 193 1.0 9,255 113.00 81,903 76,748 107.10 716,600 LankaMilkFoods(CWE)PLC oml odnsPC - - - 2820 32 9,858 43.20 228,200 - - - KotmaleHoldingsPLC V od L 000 87 74 - - - 774 38.70 20,000 HVA FoodsPLC itleisCmayo r ak L 8,0 171 5,6 5550 7.0 95,265 177.90 535,500 57,060 147.10 387,900 Distilleries CompanyofSriLankaPLC ooLnaPC 350 37 18 505 44 4,830 64.40 75,005 188 53.70 3,500 CocoLanka PLC agls(eln L 0,0 230 1439 0,0 154 78,160 195.40 400,000 164,349 203.00 809,600 Cargills(Ceylon) PLC arh am L 910 1.0 249 - - - 12,429 210.30 59,100 BairahaFarms PLC Beverage Food & Tobacco

10116 1,111,727 1,071,156 alblFnnePC 3510 33 1,4 - - - - - 14,943 43.30 345,100 Vallibel FinancePLC no ako oob L 4,0 1.0 ,4 - - - - - 2,841 19.00 149,500 UnionBank ofColomboPLC h iac opn L 0,0 4.0 ,5 - - - - - 4,050 40.50 100,000 TheFinance CompanyPLC otoi iac L 5,0 4.0 ,9 - - - - - 6,897 44.90 153,600 Softlogic FinancePLC otoi aia iie 600 48 331 - - - 3,341 34.80 96,000 Softlogic CapitalLimited M esn L hr arns(1) ,4,0 07 98 ,0,0 06 960 0.60 1,600,000 938 0.70 1,340,000 SMBLeasingPLC-ShareWarrants (016)* M esn L hr arns(1) ,9,0 07 138 ,0,0 08 1,600 0.80 2,000,000 1,328 0.70 1,897,600 SMBLeasingPLC-ShareWarrants (015)* M esn L o oig - - - 16000 .0 1,600 1.00 1,600,000 - - - SMBLeasingPLC-NonVoting M esn L oig 5000 .0 5 8,0 19 165 1.90 86,800 950 1.90 500,000 SMBLeasingPLC-Voting igrFnne(ak)PC 70 70 1 260 50 39 15.00 2,600 19 27.00 700 SingerFinance(Lanka)PLC elnBn L o oig 9,0 3.0 ,4 4,0 4.0 2,043 49.00 41,700 2,849 30.80 92,500 SeylanBankPLC-NonVoting elnBn L oig 2256 76 1,7 1850 78 11,589 97.80 118,500 19,777 67.60 292,566 SeylanBankPLC-Voting apt akPC 5711 9.0 0,4 6980 7.0 171,243 271.90 629,800 108,644 195.00 557,151 SampathBankPLC epesMrhn L 250 57 67 ,0 2.0 182 29.40 6,200 667 15.70 42,500 People'sMerchantPLC epesLaigCmayPC 2500 60 370 - - - 3,760 16.00 235,000 People'sLeasingCompanyPLC epesFnnePC 20 57 7 - - - 7 35.70 200 People'sFinancePLC a saBnigCroainPC 13006 54 3,2 283 20 147 52.00 2,833 33,022 25.40 1,300,066 PanAsiaBankingCorporationPLC ain rs akPC-NnVtn 000 76 1,152 57.60 20,000 - - - NationsTrust BankPLC-NonVoting ain rs akPC-Vtn 4,0 5.0 979 ,2,0 8.0 85,568 83.40 1,026,000 19,779 57.00 347,000 NationsTrust BankPLC-Voting ainlDvlpetBn L 5,0 181 2,2 1,0 395 5,103 349.50 14,600 20,729 138.10 150,100 NationalDevelopmentBankPLC ad netet n iac iie 750 23 38 - - - 338 12.30 27,500 NandaInvestmentsandFinanceLimited ecatBn fSiLnaPC - - - 1,0 4.0 779 45.80 17,000 - - - MerchantBankofSriLankaPLC BFnnePC 2,0 186 347 840 6.0 10,057 261.90 38,400 3,437 138.60 24,800 LBFinancePLC ak etrsPC 6670 82 2,3 - - - - - 26,232 38.20 686,700 LankaVentures PLC ak rxLaigCmayPC 11890 33 9,3 3680 2.0 45,599 127.80 356,800 96,536 83.30 1,158,900 LankaOrixLeasingCompanyPLC ak rxFnnePC 2,0 81 12 - - - 162 8.10 20,000 LankaOrixFinancePLC aahkh nuac opn L 1,0 1.0 ,8 8510 60 12,882 16.00 805,100 7,782 15.00 518,800 JanashakshiInsuranceCompanyPLC N suac L 3,6 5.0 469 - - - 24,619 56.90 432,666 HNBAssurancePLC atnNtoa akPC-NnVtn ,1,0 8.0 0,0 5430 1.0 112,515 214.60 524,300 109,300 83.20 1,313,700 HattonNationalBankPLC-NonVoting atnNtoa akPC-Vtn ,0,5 113 1191 ,3,0 399 414,736 399.90 1,037,100 181,991 151.30 1,202,850 HattonNationalBankPLC-Voting is aia odnsPC 2,0 1.0 4 7000 90 14,440 19.00 760,000 448 16.10 27,800 FirstCapitalHoldingsPLC FCBn 11590 1.0 3,0 8180 0.0 172,532 200.20 861,800 130,501 112.90 1,155,900 DFCCBank omrilBn fCyo L o oig 1454 45 1,0 1930 6.0 32,287 162.00 199,300 13,002 74.50 174,524 CommercialBankofCeylonPLC-NonVoting omrilBn fCyo L oig 18754 0.0 8,5 3,0 299 7,901 259.90 30,400 181,753 100.00 1,817,534 CommercialBankofCeylonPLC-Voting hlwFnneLmtd 9110 24 2,0 - - - - - 22,201 22.40 991,100 ChilawFinanceLimited elnoIsrnePC - - - 1,0 310 5,448 381.00 14,300 - - - CeylincoInsurancePLC eta iac opn L 3,8 230 2,5 - - - - - 28,153 203.00 138,683 CentralFinanceCompanyPLC saCptlPC 110 44 7 1,0 4.0 573 47.00 12,200 71 64.40 1,100 AsiaCapitalPLC mn aau L 690 .0 9 9,0 30 587 3.00 195,800 89 2.40 36,900 AmanaTakaful PLC BankFinance&Insurance

itdeut euiis hrs R. s'0 sae R. Rs'000 Rs. shares Rs'000 Rs. shares Listedequitysecurities ordinary oo akt Mre N f akt Market 2010 Market Noof Market Market Noof 2011 As at31stDecember 21 Dealing securities Notes totheFinancialStatements conversion,bu t theyhavenotbeenconverted intosharesasat31stDecember 2011. Merchant BankofSriLankaPLC&Credit ofSriLankaLimitedhavepaidforSMBLeasingPLCwarrents(SEMB. W0015&S * (Contd.)

price per share price pershare value ordinary Group price pershare EMB. W0016) value

987 26,067 9,857 h ak optlCroainPC 250 21 10 - - - 130 52.10 2,500 TheLanka HospitalCorporationPLC aaoaHsiasPC 21070 .0 ,1 55980 .0 20,682 3.70 5,589,800 8,310 3.90 2,130,700 Nawaloka HospitalsPLC elnHsiasPC(udn) 6 50 1 120 1 102.00 6 1 85.00 6 CeylonHospitals PLC(Durdans) sr ugclHsia L 7,0 79 146 1,0 87 1,906 8.70 219,100 1,416 7.90 179,200 AsiriSurgical HospitalPLC sr optlHlig L 9,0 88 3,478 8.80 395,200 - - - AsiriHospital HoldingsPLC H at ae Health Care

875 19,165 8,715 DLPC 2740 23 702 - - - 7,022 32.30 217,400 ODELPLC aly G ntigMlsPC - - - 6,0 3.0 2,099 32.00 65,600 - - - Hayleys MGT KnittingMillsPLC elnLahrPout L 700 96 163 8,0 9.0 17,066 92.60 184,300 1,693 99.60 17,000 CeylonLeatherProductsPLC Footware & Textiles

4369 671,051 433,659 alblOePC 15640 38 3,6 - - - - - 36,566 23.80 1,536,400 Vallibel OnePLC h oob otLn uligCmayPC 1400 90 956 - - - 9,506 49.00 194,000 TheColomboFortLand&BuildingCompanyPLC usieHlig L 2,0 2.0 817 - - - 18,177 29.00 626,800 SunshineHoldingsPLC otoi odnsPC 5530 80 985 - - - 9,815 18.00 545,300 SoftlogicHoldingsPLC ihr ersadCmayPC 49360 .0 452 05910 05 111,185 10.50 10,589,100 44,582 9.00 4,953,600 RichardPeirisandCompanyPLC onKel odnsPC 2681 7.0 540 ,8,4 284 383,398 298.40 1,284,847 45,410 170.20 266,801 JohnKeellsHoldingsPLC ea odnsPC 5430 30 1,8 3,0 4.0 1,509 44.50 33,900 19,282 33.00 584,300 HemasHoldingsPLC aly L 5,0 350 54,199 345.00 157,100 - - - HayleysPLC reLnaCptlHlig L ,9,0 31 437 - - - 4,337 3.10 1,399,100 FreeLankaCapitalHoldingsPLC xoLnaHlig L 0,0 90 90 - - - 900 9.00 100,000 ExpoLankaHoldingsPLC odnsPC 1497 7.0 482 4,0 127 62,520 182.70 342,200 34,892 179.00 194,927 CTHoldingsPLC asn ubrac L 450 4.0 329 320 1.0 22,170 513.20 43,200 13,259 541.20 24,500 CarsonsCumberbatchPLC rwsIvsmnsPC 30180 .0 292 - - - 12,902 4.20 3,071,800 BrownsInvestmentsPLC iknSec L ,2,0 104 1401 1,0 199 36,070 169.90 212,300 184,031 120.40 1,528,500 AitkenSpencePLC Diversified Holdings 1628 31,185 116,278 T akr L 3,0 3.0 064 - - - 20,644 38.40 537,600 MTDWalkers PLC akmDvlpet L ,0 1.0 0 - - - 90 16.40 5,500 LankemDevelopmentsPLC oob okadPC 4010 3.0 554 1,0 250 31,185 275.00 113,400 95,544 238.80 400,100 ColomboDockyardPLC

1610 72,509 136,160 akmCyo L 190 6.0 344 - - - 13,494 260.00 51,900 LankemCeylonPLC acr L 0,0 150 3,7 1460 6.0 32,790 168.50 194,600 31,977 155.00 206,300 HaycarbPLC I odnsPC-NnVtn 5,0 7.0 168 990 99 3,986 99.90 39,900 11,658 77.00 151,400 CICHoldingsPLC-NonVoting I odnsPC-Vtn 0,0 115 6,1 2310 4.0 35,611 140.70 253,100 66,911 111.50 600,100 CICHoldingsPLC-Voting hmnxPC 1100 2.0 210 ,0 123 122 122.30 1,000 12,120 120.00 101,000 ChemanexPLC Chemical&Pharmaceuticals

price per share price pershare value ordinary Group price pershare value

BANK OF CEYLON ANNUAL REPORT 2011 211 BANK OF CEYLON ANNUAL REPORT 2011 212

2,4 13,435 25,747 okAcd odnsPC - - - 4,0 2.0 1,104 24.10 45,800 - - - York ArcadeHoldingsPLC ocwo netetPC 6,0 2.0 ,2 2,0 2.0 708 28.30 25,000 1,325 21.20 62,500 Touchwood InvestmentPLC elnDvlpet L 0,0 1.0 1,680 16.80 100,000 - - - SeylanDevelopments PLC vresRat Cyo)PC 11520 40 1,7 4350 53 6,174 15.30 403,500 16,173 14.00 1,155,200 Overseas Realty(Ceylon)PLC nal odnsPC 870 27 62 - - - 632 72.70 8,700 On'allyHoldings PLC qiyToPC - - - 1,0 2.0 442 24.30 18,200 - - - EquityTwo PLC qiyOePC 3,0 5.0 ,7 4,0 5.0 2,274 56.00 40,600 1,573 50.90 30,900 EquityOne PLC atWs rprisPC 1,0 2.0 2 120 29 15 12.90 1,200 320 25.20 12,700 EastWest PropertiesPLC adDvlpetPC 810 89 24 - - - 234 28.90 8,100 CTLand DevelopmentPLC oob ad&DvlpetCmayPC 1000 49 540 350 94 1,038 19.40 53,500 5,490 54.90 100,000 Colombo Land&DevelopmentCompanyPLC Land & Property

1372 3,007 113,712 euaHlig L 0,8 5.0 710 - - - 27,160 53.90 503,888 RenukaHoldingsPLC niomna eore netet L 8,0 4.0 520 500 59 3,007 85.90 35,000 15,290 40.10 381,300 EnvironmentalResourcesInvestmentsPLC elnIvsmn L 4,0 100 4,2 - - - - - 48,620 110.00 442,000 CeylonInvestmentPLC elnGada netetTutPC 7,0 250 1,5 - - - - - 18,156 255.00 71,200 CeylonGuardianInvestmentTrust PLC so odnsPC 2,0 102 446 - - - 4,486 160.20 28,000 AscotHoldingsPLC I vsmn rs Investment Trust

- 7,817 - CHuePC - - - 6580 13 7,524 11.30 665,800 - - - PCHousePLC -hneln L 330 20 293 22.00 13,300 - - - E-ChannellingPLC Information Technology 4689 403,429 496,899 rn saHtl L 7,0 7.0 797 - - - 37,937 79.50 477,200 Trans AsiaHotelsPLC h ihhueHtlPC 1490 35 562 0,0 6.0 6,590 63.00 104,600 5,612 53.50 104,900 TheLighthouseHotelPLC h otesRsrsPC 14110 30 3,0 1370 06 2,548 20.60 123,700 33,605 23.00 1,461,100 TheFortressResortsPLC agrn ec oesPC 5,0 8.0 ,5 - - - - - 4,050 81.00 50,000 Tangerine BeachHotelsPLC a ak oesPC 4740 90 1,4 5000 17 39,435 71.70 550,000 17,449 39.00 447,400 Taj LankaHotelsPLC amGre oesPC 230 3.0 3 - - - - - 533 231.80 2,300 PalmGardenHotelsPLC aaiaRsrsPC 5,5 1.0 0 1,0 1.0 167 14.80 11,300 506 10.10 50,050 MarawilaResortsPLC aaeiRahHtl L ,0 3.0 284 35.00 8,100 - - - MahaweliReachHotelsPLC onKel oesPC 2990 35 364 ,8,3 2.0 41,745 20.00 2,087,233 3,644 13.50 269,900 JohnKeellsHotelsPLC oe iiiaPC 180 40 13 - - - 133 74.00 1,800 HotelSigiriyaPLC oe evcs(eln L ,8,5 2.0 449 ,0,5 2.0 93,677 26.00 3,602,950 54,409 20.30 2,680,250 HotelServices(Ceylon)PLC aaaiHtl Lna L 0,0 3.0 7,486 35.80 209,100 - - - GaladariHotels(Lanka)PLC dnHtlLnaPC 7070 80 2,4 6810 76 39,634 57.60 688,100 28,147 38.00 740,700 EdenHotelLankaPLC opi oesPC - - - 2,0 6.0 1,395 61.20 22,800 - - - DolphinHotelsPLC irsLiuePC 1000 01 500 - - - 5,010 50.10 100,000 CitrusLeisurePLC elnHtl oprto L 510 65 2,011 36.50 55,100 - - - CeylonHotelsCorporationPLC sa oes&Poete L ,8,0 7.0 8,3 5160 9.0 110,890 194.00 571,600 182,237 76.40 2,385,300 AsianHotels&PropertiesPLC my esr L 1,1 8.0 ,7 424 10 383 91.00 4,214 9,675 81.50 118,714 AmayaLeisurePLC iknSec oe odnsPC 16960 95 1392 4,0 157 57,184 105.70 541,000 113,952 69.50 1,639,600 AitkenSpenceHotelHoldingsPLC Hotels & Travels

price per share price pershare value ordinary Group price pershare value 7,9 57,437 70,998 aaaaPattosPC 3010 42 491 - - - 4,971 14.20 350,100 Watawala PlantationsPLC auuuaPattosPC 8,0 6.0 ,0 6,0 191 7,908 119.10 66,400 5,200 65.00 80,000 NamunukulaPlantationsPLC akly lnain L ,0 2.0 0 ,0 2.0 111 27.80 4,000 80 20.00 4,000 MaskeliyaPlantationsPLC oaaaPattosPC 6,0 6.0 ,4 2,0 169 2,537 116.90 21,700 4,147 64.30 64,500 KotagalaPlantationsPLC eal lnain L 060 0.0 ,1 1790 6.0 19,076 161.80 117,900 5,313 105.00 50,600 KegallePlantationsPLC aaat lnain L 3,0 2.0 749 0,0 2.0 5,600 28.00 200,002 27,479 29.50 931,500 KahawattePlantationsPLC oaaPattosPC 5460 78 1,3 3000 64 14,196 36.40 390,000 19,830 37.80 524,600 HoranaPlantations PLC liiaPattosPC 70 40 1 - - - - - 17 24.00 700 ElpitiyaPlantations PLC aagd lnain L 280 88 151 2,0 5.0 7,152 57.40 124,600 1,521 28.80 52,800 Balangoda PlantationsPLC glwtePattosPC 4,0 4.0 ,4 1,0 6.0 857 63.00 13,600 2,440 49.80 49,000 Agalawatte PlantationsPLC P attos Plantations

610 6,180 h ui aa L ,0 1000 610 - - - 6,180 1,030.00 6,000 TheBukit DarahPLC O lP ls Oil Palms 7,3 9,735 77,133

ntdMtr ak L 890 4.0 ,7 - - - - - 5,679 146.00 38,900 UnitedMotorsLankaPLC ahs oosPC 3,0 200 984 - - - 9,854 260.00 37,900 SathosaMotorsPLC isl&MtrEgneigPC 3,5 1321 4,3 1,0 935 9,735 973.50 10,000 47,339 1,302.10 36,356 Diesel&MotorEngineeringPLC ooilMtr L 560 0.0 421 - - - 14,261 400.60 35,600 ColonialMotorsPLC M tr Motors

8421 744,631 824,201 oy eetCmay(ak)PC-NnVtn 0,0 3.0 149 ,0 4.0 302 40.30 7,500 21,429 30.50 702,600 Tokyo CementCompany(Lanka)PLC-NonVoting oy eetCmay(ak)PC-Vtn 2,7 4.0 ,8 635 50 348 55.00 6,325 5,583 44.00 126,875 Tokyo CementCompany(Lanka)PLC-Voting etrdJre ak L 5,0 1.0 ,3 - - - - - 9,735 10.20 954,400 Textured JerseyLankaPLC iraCbe L 240 .0 8 4640 .0 1,876 4.30 436,400 388 4.20 92,400 SierraCablesPLC oa eaisLnaPC 2900 4.0 804 0,0 349 122,875 304.90 403,000 38,064 141.50 269,000 RoyalCeramicsLankaPLC ihr irsEprsPC 1,0 2.0 7 - - - - - 275 27.50 10,000 RichardPierisExportsPLC rncr L 500 69 93 - - - 923 36.90 25,000 PrintcarePLC iaa ls elnPC 33490 .0 662 ,0,0 78 9,360 7.80 1,200,000 26,662 7.90 3,374,900 PiramalGlassCeylonPLC ewtaSgrIdsre L 840 35 167 080 74 844 27.40 30,800 1,607 23.50 68,400 PelwattaSugarIndustriesPLC retGret L 5,0 3.0 106 - - - 11,006 31.10 353,900 OrientGarmentsPLC aaaaBteisPC 130 18 1 - - - - - 15 11.80 1,300 LaxapanaBatteriesPLC ak alie L 6,4 9.0 514 090 3.0 5,681 138.90 40,900 15,124 94.50 160,040 LankaWalltiles PLC ak lotlsPC 9320 03 7,4 2240 3.0 28,525 134.30 212,400 78,148 80.30 973,200 LankaFloortilesPLC ak eei L 350 50 288 - - - 2,848 85.00 33,500 LankaCeremicPLC ak eetPC 96429 98 1095 ,4,0 2.0 270,038 28.00 9,644,209 190,955 19.80 9,644,209 LankaCementPLC eaiTrsPC 5250 85 2,2 5,0 4.0 2,465 49.30 50,000 22,426 38.50 582,500 KelaniTyres PLC aly xot L 4,0 3.0 ,1 6,0 4.0 2,567 41.00 62,600 5,317 36.00 147,700 HayleysExportsPLC ipdPout L ,9,0 165 1761 8,0 197 105,623 119.70 882,400 137,641 106.50 1,292,400 DippedProductsPLC hvo urcnsLnaPC 12220 7.0 1,7 7820 5.0 122,528 159.50 768,200 216,274 170.00 1,272,200 ChevronLubricantsLankaPLC elnGanEeaosPC 7,0 155 755 - - - 7,575 105.50 71,800 CeylonGrainElevatorsPLC eta nutisPC 2010 43 2,4 4170 00 38,853 90.00 431,700 20,240 84.30 240,100 CentralIndustriesPLC oaaGaht ak L 210 90 42 - - - 472 39.00 12,100 BogalaGraphiteLankaPLC CEPitn akgn L 7,0 2.0 ,2 - - - - - 5,724 20.70 276,500 ACMEPrinting&PackagingPLC C alsPC 1,0 7.0 ,3 3480 51 32,746 85.10 384,800 1,132 74.00 15,300 ACLCablesPLC bn lcrcl L 440 9.0 ,3 - - - - - 4,638 190.10 24,400 AbansElectricalsPLC Manufacturing

(Contd.)

price per share price pershare value ordinary Group price pershare value

BANK OF CEYLON ANNUAL REPORT 2011 213 BANK OF CEYLON ANNUAL REPORT 2011 214

rauybnso con fIvsmn udAcut(F) - - 9,5 - 51,749,203 33,404,939 92,250 51,296,744 32,093,496 - - Treasury bondsonaccountofInvestmentFundAccount(IFA) Treasury bondsheldtomaturity 3 rauybnsmtrn fe n er Treasurybondsmaturingafteroneyear 23

oeg urny 1,3,5 3,7,4 1,1,1 39,271,130 16,913,312 34,177,542 12,836,154 -Foreigncurrency B nsa ra Banks abroad oeg urny 17855 ,0,5 17855 8,502,256 1,708,575 8,502,256 1,708,575 -Foreigncurrency oa urny - - 1000 - 190,000 - - -Localcurrency ak nSiLna Banksin SriLanka Placementswithandloanstootherbanks 22

sa 1tDcme 21 21 21 2010 2011 2010 2011 As at31stDecember ersnstealtetpieo h hrs *Representstheallotmentpriceofshares oa eln euiis 40881 3,805,443 4,028,861 Total dealingsecurities

6,0 202,471 69,301 esAr L 3,0 27 378 2.70 139,900 - - - Tess AgroPLC .W akePC 3,0 8.0 ,6 30 51 26 85.10 300 2,962 89.50 33,100 C.W. MackiePLC eln&FrinTae L ,7,0 94 1,7 1000 .0 770 7.70 100,000 19,473 9.40 2,071,600 Ceylon&ForeignTrades PLC rws&CmayPC 1960 3.0 686 1,0 269 201,297 246.90 815,300 46,866 234.80 199,600 Browns&CompanyPLC T aig Trading

3,5 13,015 37,856 r ak eeo L 1,0 4.0 022 3,0 4.0 11,706 49.00 238,900 10,272 48.00 214,000 SriLankaTelecom PLC ilgAit L ,3,0 78 2,8 1000 19 1,309 11.90 110,000 27,584 7.80 3,536,400 DialogAxiataPLC T lcmuiain Telecommunications 1,8 - 15,989 utr opn iie 710 9.0 599 - - - 15,989 590.00 27,100 Hunters&CompanyLimited Stores & Supplies

48 - 488 aeHuePitr n ulsesPC 360 3.0 8 - - - - - 488 135.50 3,600 LakeHousePrintersandPublishersPLC S rie Services

1489 96,317 124,869 alblPwrEahaPC 8000 .0 ,0 - - - - - 6,800 8.00 850,000 Vallibel PowerErathnaPLC aainPwrPC 10920 .0 ,2 19500 .0* 5,955 3.00 * 1,985,000 4,426 4.30 1,029,200 PanasianPowerPLC agsGsPC-NnVtn ,1,0 2.0 385 8,0 1.0 10,865 18.50 587,300 73,885 23.00 3,212,400 LaugfsGasPLC-NonVoting agsGsPC-Vtn 240 80 351 ,0,0 2.0 36,408 25.90 1,405,700 3,511 38.00 92,400 LaugfsGasPLC-Voting ak O L 3,0 1.0 ,1 3160 89 6,456 18.90 341,600 4,316 18.50 233,300 LankaIOCPLC ea oe L ,9,0 2.0 191 ,4,0 2.0 36,633 29.50 1,241,800 31,931 26.70 1,195,900 HemasPowerPLC Power & Energy

price per share price pershare 3,9,9 5,9,4 3,9,8 51,749,203 33,497,189 51,296,744 32,093,496 1,4,2 4,7,9 1,1,8 47,773,386 18,811,887 42,679,798 14,544,729 R 0 s'00 R 0 Rs'000 Rs'000 Rs'000 Rs'000 value ordinary Group

Bank Group price pershare value aac sa 1tDcme 6,7 7,1 1164 79,517 161,674 79,517 161,674 Balanceasat31stDecember mutrvre uigteya 4106 (481,056) - 548,125 12,448 79,517 (481,056) 82,157 548,125 - 12,448 79,517 82,157 Amountreversedduringtheyear Interestsuspendedduringtheyear Balanceasat1stJanuary aac sa 1tDcme 4,8 1428 5,5 158,223 155,102 154,654 3,121 158,223 144,248 145,718 (3,569) 140,689 144,248 (1,470) (3,559) 24.1(d) Movementininterestsuspenseofbillsexchange Balanceasat31stDecember Amountprovided/(reversed)duringtheyear Balanceasat1stJanuary dutet/rnfr 227 979 227 19,709 (2,207) - 168,534 164,473 19,709 (3,093) 156,452 (2,207) 152,774 - (3,093) 24.1(c) Movementingeneralprovisionforbillsofexchange Balanceasat31stDecember Adjustments/transfers Adjustmentsforexchangeratevariance aac sa s aur 1642 5,7 1854 164,363 (15,538) 168,534 150,371 1,239 156,452 (13,628) 1,622 Amountprovided/(reversed)duringtheyear Balanceasat1stJanuary 41b oeeti pcfcpoiinfrblso xhne 24.1(b) Movementinspecificprovisionforbillsofexchange o ae hn3mnh 48888 53717 54090 15,920,399 15,450,980 15,307,197 95,129 14,818,848 1,938,236 88,706 1,938,010 Laterthan3monthsandnotlater12 Notlaterthan3months 24.1(a) Analysisofnetbillsexchange neeti upne[oe2. d] (6,7) (957 1164 (79,517) (161,674) (79,517) (161,674) (158,223) (168,534) (154,654) (164,473) (144,248) (156,452) (140,689) (152,774) Interestinsuspense[Note24.1(d)] Generalprovisionforbillsofexchange[Note24.1(c)] Speciﬁcprovisionforbillsofexchange[Note24.1(b)]

motbls 1,8,5 98261 24364 9,852,601 5,923,519 12,483,654 4,728,341 9,852,601 5,923,519 12,483,654 4,728,341 Importbills Local Exportbills bills 41 Billsofexchange 24.1

4 on n dacst utmr Loans andadvancestocustomers 24

sa 1tDcme 21 21 21 2010 2011 2010 2011 As at31stDecember Net billsofexchange

1,5,5 1,9,0 1,8,1 16,015,528 17,389,216 15,395,903 16,756,858

1,5,5 1,9,0 1,8,1 16,015,528 17,389,216 15,395,903 16,756,858 1,1,9 1,7,2 1,7,1 16,421,802 17,870,017 15,776,120 17,211,995 R 0 s'00 R 0 Rs'000 Rs'000 Rs'000 Rs'000 - - 6802 645,682 658,022 - -

Bank Group

BANK OF CEYLON ANNUAL REPORT 2011 215 BANK OF CEYLON ANNUAL REPORT 2011 216 aac sa 1tDcme 18531 ,0,6 18492 2,232,972 1,844,922 2,204,669 1,805,321 Balanceasat31stDecember dutet/rnfr 0 ,5 30 8,454 30 - 497,944 (388,640) 490,924 (391,484) Adjustments/transfers Amountsprovided/(reversed) duringtheyear

dutet o xhnert aine (,6) (,3) (,6) (6,131) 1,741,129 (7,864) 2,232,972 1,719,846 (6,131) 2,204,669 (7,864) Adjustmentsforexchangeratevariance Balanceasat1stJanuary aac sa 1tDcme 64548 ,3,8 65200 6,589,140 6,542,000 6,539,181 6,445,408 24.2 (c)Movementingeneralprovisionforloans&advances Balanceasat31stDecember dutet/rnfr 435 2722 067 (257,242) 60,647 (1,279,896) (257,242) (755,980) 44,365 (1,279,222) (502,599) (755,980) (68,753) 1,063,252 (502,599) 695,506 (68,753) 1,047,110 665,236 Adjustments/transfers Amountsreversedduetoloanswrittenoff Amountsrecovered Amountsprovidedduringtheyear[Note12] dutet o xhnert aine 2,5 (439 140 (64,329) 7,629,954 6,589,140 21,440 7,595,463 (64,329) 6,539,181 21,359 Adjustments forexchangeratevariance Balanceasat1stJanuary 42()Mvmn nseii rvso o on dacs 24.2 (b)Movementinspecificprovisionforloans&advances

524865 5,9,1 567471 355,265,395 516,734,711 353,097,916 512,438,685 56,534,910 69,264,670 56,523,051 68,947,828 220,391,054 353,098,668 219,528,496 351,576,459 78,339,431 94,371,373 77,046,369 91,914,398 Laterthan5years Laterthan1yearandnotlater5years Notlaterthan1year 24.2(a) Analysisofnetloansandadvances

neeti upne[oe2. d] (,4,5) (,5,3) (,6,1) (8,164,806) (268,173) (8,166,110) (290,392) (8,156,736) (8,149,554) (268,173) (2,232,972) (290,392) (6,589,140) (1,844,922) (6,542,000) (2,204,669) (6,539,181) (1,805,321) (6,445,408) Provisionforforeclosedproperties[Note24.2(f)] Interestinsuspense[Note24.2(d)] Generalprovisionforloans&advances[Note24.2(c)] Speciﬁcprovisionforloans&advances[Note24.2(b)] oa on dacs 591930 7,6,7 535815 372,520,486 533,578,135 370,266,675 529,129,360 Total loans&advances

182982 0,7,9 189291 103,088,310 148,912,901 102,972,393 148,269,802 448,309 457,958 448,309 457,958 Foreclosedproperties[Note24.2(e)] tf on ,2 434 ,3 9,549 7,833 4,334 9,369,752 5,976,977 3,623 87,283,723 13,856,142 6,885,191 127,705,777 9,369,752 5,899,030 87,250,968 13,856,142 127,305,879 6,646,200 Staffloans Trust receipts Term loans Overdrafts oeg urnylasadavne Foreigncurrencyloansandadvances

308958 6,9,8 346524 269,432,176 384,665,234 267,294,282 380,859,558 16,544,211 8,785,954 18,265,586 365,845 12,204,217 16,465,422 11,048,840 65,418,200 166,113,749 15,605,521 18,096,607 8,785,954 440,779 68,153,424 271,151,084 11,917,213 164,341,648 65,418,200 11,048,840 15,430,188 267,689,720 365,845 68,153,424 440,779 Foreclosedproperties[Note24.2(e)] Loansunderschemes Staffloans Trust receipts Term loans Overdrafts r ak ue on n dacs SriLankarupeeloansandadvances 42 Loansandadvances 24.2

sa 1tDcme 21 21 21 2010 2011 2010 2011 As at31stDecember Loans andadvancestocustomers 24 Notes totheFinancialStatements Net loansandadvances

524865 5,9,1 567471 355,265,395 516,734,711 353,097,916 512,438,685 (Contd.) 21685 ,1,1 22518 1,734,998 2,225,108 1,713,715 2,196,805 65050 ,3,3 66050 7,565,625 6,610,580 7,531,134 6,560,540 R 0 s'00 R 0 Rs'000 Rs'000 Rs'000 Rs'000

Bank Group e es etl eevbe 1,6,5 23785 72734 6,743,744 17,237,374 2,387,835 11,169,650 Netleaserentalsreceivable A nsses 536 536 - (5,336) - (96,104) (5,336) (1,689,220) (4,352,324) (101,629) (566,315) (61,430) (2,827,984) (38,252) (72,836) (203,729) (77,430) (342,334) (25,826) (84,589) (16,767) (188,155) VAT onsuspense Interestinsuspense[Note24.3(f)] Generalprovisionforleaserentalsreceivable[Note24.3(e)] Speciﬁcprovisionforleaserentalsreceivable[Note24.3(d)] Unearnedincome rpi etl 3,3) (629 7,3) (44,007) (78,339) (26,229) (35,339) 8,849,640 22,194,766 3,152,224 14,281,483 Prepaidrentals Grossleaserentalsreceivable 43()Laernasrcial n ofv er 24.3 (b)Leaserentalsreceivable-onetofiveyears e es etl eevbe 32493 ,3,3 74223 4,560,906 7,452,293 1,837,935 3,224,973 Netlease rentalsreceivable A nsses 145 145 - (1,475) - (158,581) (1,475) (98,361) (29,009) (16,401) VAT onsuspense Interestinsuspense[Note24.3(f)] nandicm 9040 3697 24577 (1,463,102) (2,475,727) (366,977) (990,430) (63,320) (362,524) (100,416) (216,193) (21,019) (143,562) (4,781) (89,055) Generalprovisionforleaserentalsreceivable[Note24.3(e)] Speciﬁcprovisionforleaserentalsreceivable[Note24.3(d)] Unearnedincome rpi etl 1,6) (640 4,9) (68,454) (47,298) (16,480) (11,860) 6,676,887 10,391,763 2,414,982 4,338,975 Prepaidrentals Grossleaserentalsreceivable 24.3 (a)Leaserentalsreceivable-withinoneyear 43 Laernasrcial 268,173 290,392 268,173 290,392 Lease rentalsreceivable 24.3 Balanceasat31stDecember dutet/rnfr 63 3,1 (5) 232,010 (653) 232,010 (653) Adjustments/transfers dutet o xhnert aine 497 ,8 - 4,987 - 4,987 Adjustmentsforexchangeratevariance mutrvre uigteya 244 235 244 (2,345) 5,712 32,796 (2,474) 20,359 268,173 (2,345) 32,796 5,712 (2,474) 268,173 20,359 Amountreversedduringtheyear Amountprovidedduringtheyear Balanceasat1stJanuary 42()Mvmn npoiinfrfrcoe rpris 24.2 (f)Movementinprovisionforforeclosedproperties aac sa 1tDcme 9,3 8414 9,3 814,154 898,737 814,154 898,737 Balanceasat31stDecember dutet/rnfr 0 10 - 10 Adjustments/transfers ipsl uigteya 3,5) (119 3,5) (61,109) (1,817) 431,204 (35,050) 445,876 109,974 9,649 (61,109) 814,154 431,204 (1,817) (35,050) 445,876 109,974 814,154 9,649 Adjustmentsforexchangeratevariance Disposalsduringtheyear Additionsduringtheyear Balanceasat1stJanuary 42()Mvmn nfrcoe rpris 24.2 (e)Movementinforeclosedproperties aac sa 1tDcme ,4,5 81676 ,6,1 8,164,806 8,166,110 8,156,736 8,149,554 Balanceasat31stDecember dutet/rnfr 1,9 285 111,295 2,895 111,295 - (86,729) 7,776,751 (811,727) (707,514) 1,175,216 8,164,806 (412,706) (82,972) 1,118,629 7,766,138 (809,899) (707,280) 1,172,174 8,156,736 (412,706) 1,112,804 Adjustments/transfers Amountreversedduetoloanswrittenoff Amountreversedduringtheyear Interestsuspendedduringtheyear Balanceasat1stJanuary 42()Mvmn nitrs nsses flas&avne 24.2 (d)Movementininterestsuspenseofloans&advances

sa 1tDcme 21 21 21 2010 2011 2010 2011 As at31stDecember Loans andadvancestocustomers 24 (Contd.)

1,4,4 31595 21647 8,805,633 22,116,427 3,125,995 14,246,144 43715 ,9,0 1,4,6 6,608,433 10,344,465 2,398,502 4,327,115 R 0 s'00 R 0 Rs'000 Rs'000 Rs'000 Rs'000

Bank Group

BANK OF CEYLON ANNUAL REPORT 2011 217 BANK OF CEYLON ANNUAL REPORT 2011 218 aac sa 1tDcme 19763 ,9,3 21757 2,527,820 2,177,517 2,396,231 1,967,653 Balanceasat31stDecember dutet/rnfr 0 046 30 30,496 30 - 523,859 (372,935) 488,016 (420,714) Adjustments/transfers Amountprovidedduringthe year[Note12]

dutet o xhnert aine (,6) (,3) (,6) (6,131) 2,010,062 (7,864) 2,527,820 1,914,316 (6,131) 2,396,231 (7,864) Adjustments forexchangeratevariance Balance as at1stJanuary andlease rentalsreceivable-Summary 45 oeeti eea rvso o il fecag,las&avne, Movementingeneralprovisionforbillsofexchange,loans&advances, 24.5 dutet/rnfr 4,6) (858 4,5) (68,004) (40,159) 7,592,100 (1,323,673) 7,562,423 (58,508) (778,306) 7,191,956 1,202,138 (1,297,087) (49,668) (642,636) 7,172,815 937,463 (778,306) (172,009) 1,071,878 (502,599) 854,333 (68,753) Balance as at31stDecember Amount provided duringtheyear[Note12] Adjustments/transfers Amount reversed duetoloanswrittenoff Amounts recovered dutet o xhnert aine 2,5 (439 334 (64,329) 8,488,604 7,592,100 23,334 8,042,601 (64,329) 7,191,956 23,253 Adjustmentsforexchangeratevariance Balanceasat1stJanuary foreclosedpropertiesandleaserentalsreceivable-Summary 44 oeeti pcfcpoiinfrblso xhne on dacs Movement inspecificprovisionforbillsofexchange,loans&advances, 24.4 aac sa 1tDcme 463 049 9,9 254,685 199,990 (127,858) 90,439 (72,815) 54,653 (104,201) (35,786) Balanceasat31stDecember Amountreversedduringtheyear neetssedddrn h er - - 1,6 170,753 12,263 - - Interestsuspendedduringtheyear dutet/rnfr ,5 (126,422) 5,857 - 338,212 254,685 - 194,640 90,439 Adjustments/transfers Balanceasat1stJanuary 24.3 (f)Movementininterestsuspenseforleaserentalsreceivable aac sa 1tDcme 163 734 7,4 136,625 177,941 47,314 21,643 Balanceasat31stDecember dutet/rnfr 202 - 22,042 - 113,831 - 136,625 22,794 48,752 19,274 47,314 (1,438) (25,671) Adjustments/transfers Amountprovided/(reversed)duringtheyear Balanceasat1stJanuary 24.3 (e)Movementingeneralprovisionforleaserentalsreceivable aac sa 1tDcme 8,4 2810 6,5 566,253 565,558 228,150 148,712 284,241 220,359 32,684 167,116 Balanceasat31stDecember Amountprovidedduringtheyear[Note12] mutrcvrd (982 1,2) (982 (41,432) (62,481) (140,037) (19,852) (97,946) 661,491 (103,256) (15,520) (52,985) 2,224 - 566,253 (19,852) (91,173) 61,827 263,971 - 228,150 1,995 61,827 Amountreversedduetoloanswrittenoff Adjustments/transfers Amountrecovered Balanceasat1stJanuary 24.3 (d)Movementinspecificprovisionforleaserentalsreceivable Netleaserentalsreceivable A nsses 2) - (9 - (29) - (29) VAT onsuspense eea rvso o es etl eevbe[oe2. e] (5 49 9) (469) (95) (469) (95) Generalprovisionforleaserentalsreceivable[Note24.3(e)] nandicm 3,3) (6,6) (613 (167,872) (36,133) (167,868) - (36,133) (7,031) - (7,031) Speciﬁcprovisionforleaserentalsreceivable[Note24.3(d)] Unearnedincome

rpi etl 1 6) () (63) (1) (63) (1) 170,628 105,116 170,395 105,116 Prepaidrentals Grossleaserentalsreceivable 43()Laernasrcial fe ieyas 24.3 (c)Leaserentalsreceivable-afterfiveyears

sa 1tDcme 21 21 21 2010 2011 2010 2011 As at31stDecember Loans andadvancestocustomers 24 Notes totheFinancialStatements (Contd.)

23837 ,0,8 25996 2,003,931 2,519,956 1,908,185 2,388,367 72529 ,7,7 76544 8,424,275 7,615,434 7,978,272 7,215,209 R 0 s'00 R 0 Rs'000 Rs'000 Rs'000 Rs'000 1515 7,3 1515 170,565 105,115 170,332 105,115

Bank Group NonPerformingLoans&Advances 24.7 Bn Group 8,499,008 Bank 8,527,774 8,326,692 8,365,881 Balanceasat31stDecember sa 1tDcme 21 21 21 2010 (15,127) 2011 8,752 (811,727) 111,295 (412,706) 2010 - (809,899) (695,643) (412,706) 8,663,088 (780,329) 1,358,417 8,499,008 2011 (668,229) 1,213,049 8,508,903 (743,066) 1,184,622 8,326,692 1,194,961 As at31stDecember Adjustments/transfers Amountwrittenoff Amountreversedduringtheyear Interestsuspendedduringtheyear Balanceasat1stJanuary s00% s00% s00% Rs'000% Rs'000% Rs'000% Rs'000% foreclosedpropertiesandleaserentalsreceivable-Summary 46 oeeti neeti upnefrblso xhne on dacs Movementininterestsuspenseforbillsofexchange,loans&advances, 24.6 il fecag 6,5 2401 0,5 423,826 503,158 284,071 266,959 Billsofexchange on dacs 98997 09964 05411 11,473,931 10,514,101 10,969,634 2010 9,899,907 2011 2010 2011 Loans&advances As at31stDecember Loans andadvancestocustomers 24 oelsdpoete 9,3 8415 9,3 814,155 898,737 814,155 898,737 Foreclosedproperties es etl eevbe 3077 7,7 8992 989,169 829,992 570,673 350,727 Leaserentalsreceivable

d neetrcial nnnpromn dacs 82699 ,1,0 ,9,6 8,231,672 8,296,865 8,217,903 8,256,989 Add:Interestreceivableonnonperformingadvances

es:Itrs nsses o Less:Interestinsuspensefor il fecag 6,7 7,1 1164 79,517 161,674 79,517 161,674 Billsofexchange on dacs 81954 ,5,3 81610 8,164,806 8,166,110 8,156,736 8,149,554 Loans&advances es etl eevbe 5,5 9,3 1990 254,685 199,990 90,439 54,653 Leaserentalsreceivable

Netnonperformingloans&advances

es:Seicpoiinfrla ossfr Less:Speciﬁcprovisionforloanlosses il fecag 5,7 1642 6,7 168,534 164,473 156,452 152,774 Billsofexchange on dacs 64548 ,3,8 65200 6,589,140 6,542,000 6,539,181 6,445,408 Loans& advances oelsdpoete 9,9 2813 9,9 268,173 290,392 268,173 290,392 Foreclosed properties es etl eevbe 2421 2,5 5558 566,253 565,558 228,150 284,241 Leaserentals receivable

loans& advances

oe: sapretg fttlgoslas&avne Nto neeti upne *Note:- Asapercentageoftotalgrossloans&advances(Netinterestinsuspense) Thereduction inthevalueofsecuritycorrespondswithreductionnonperformingcategory. The bank'snetexposureonnonperformingloans&advancesasatbalancesheetdate,beforeadjustingforthevalueofsecuriti Non performingloans&advances Non performingloans&advances rs o efriglas&avne Gross nonperformingloans&advances Total interestinsuspense Total specificprovisionfor Net exposure tR.,2 ilo 21 s837mlin. at Rs.7,820million(2010:Rs.8,377million). The bank'snetexposureonnonperformingadvancesofRs.4,135million asat31stDecember2011(2010:Rs.5,338million)isco 41463 .5 53778 .0 49266 .7 58165 1.49* 5,841,645 0.87* 4,952,656 1.40* 5,337,788 0.75* 4,134,623

83581 ,2,9 85774 8,499,008 8,527,774 8,326,692 8,365,881 71285 .0 71196 .8 75243 .3 75210 1.93* 7,592,100 1.33* 7,562,423 1.88* 7,191,956 1.30* 7,172,815

1,1,3 20* 26853 .1 1,4,8 22* 37101 3.49* 13,701,081 2.24* 12,745,988 3.31* 12,638,533 2.07* 11,416,330 (Contd.) 1,0,3 1,2,4 1,1,7 13,433,745 12,515,079 12,529,744 11,307,438 96339 08646 2,4,5 21,932,753 21,042,853 20,856,436 19,673,319

R 0 s'00 R 0 Rs'000 Rs'000 Rs'000 Rs'000

Bank Group es areasfollows: vered bysecuritiesvalued

BANK OF CEYLON ANNUAL REPORT 2011 219 BANK OF CEYLON ANNUAL REPORT 2011 220 oelsdpoete 9,3 . 1,5 02 9,3 . 1,5 0.2 814,155 0.2 898,730 0.2 814,154 0.2 898,730 Foreclosedproperties rs on dacs 527241 100 323972 0. 586531 100 327777 100.0 392,707,717 100.0 568,615,361 100.0 382,309,772 100.0 552,792,461 Grossloans&advances oenet&SE' 161134 3. 3,3,0 3. 161134 3. 3,3,0 35.1 137,833,000 32.7 186,141,374 36.1 137,833,000 33.7 186,141,374 Government&SOEs' osmto n tes 6,8,9 93 9,2,9 2. 160582 2. 58557 24.5 95,885,557 29.2 166,015,862 25.0 95,420,599 29.3 11.2 43,967,683 162,687,299 11.9 67,503,090 11.3 43,345,196 11.9 65,568,395 Consumptionandothers Housing,construction&property development oes rvl n evcs 2,3,7 . 90866 . 2,5,3 . 17725 5.5 21,787,255 4.5 25,555,936 5.0 19,088,626 3.9 21,331,976 Hotels,travelsandservices auatrn 31294 42 1,3,0 30 58678 45 1,3,4 3.1 12,136,544 4.5 25,836,798 3.0 11,532,404 4.2 23,152,924 Manufacturing 14630 1,3,3 1,4,8 13,701,081 12,745,988 12,638,533 11,416,330 24.8 Credit Concentration giutr n seis 12703 20 1,0,6 30 22351 22 1,2,5 3.0 11,628,857 2.2 12,293,531 3.0 11,305,962 2.0 11,207,043 Agriculture andfisheries 24.8 (a)CreditConcentration-Geographicsectorriskconcentration akn,fiac n nuac 08582 20 46787 . 1,6,8 . ,7,7 1.4 5,579,079 1.9 11,067,288 1.2 100.0 Group 392,707,717 4,657,807 100.0 2.0 568,615,361 100.0 10,835,822 382,309,772 100.0 552,792,461 Banking, financeandinsurance Bank 2.4 7,941,9932.0 2,244,907 8,964,9921.5 7,826,076 2.1 1.5 2.0 8,321,892 2,705,968 2.4 2,244,907 2.0 Overseas operations 2,705,968 195,5392.3 239,374 3.1 Offshorebanking 195,539 2.2 239,374 3.0 Overseas operations sa 1tDcme 21 21 21 2010 2011 23.9 93,744,290 24.4 138,629,049 24.5 2010 93,744,288 25.1 138,629,049 2011 24.8 (b)CreditConcentration-Economicsectorriskconcentration Offshorebanking As at31stDecember Bn Group % Rs'000 % Bank Rs'000 % Rs'000 % Rs'000 24.7 (b)Analysisofgeographicsectornonperformingadvances sa 1tDcme 21 21 21 2010 2011 7.0 27,680,809 5.1 2010 28,874,486 6.1 23,367,576 4.8 26,754,014 2011 % Rs'000 % Wholesale andretailtrade 2010 Rs'000 % As at31stDecember 2011 Rs'000 % Rs'000 2010 56.5% 13,433,745 12,515,079 60.4% 12,529,744 2011 11,307,438 57.4% 63.4% Asat31stDecember Specificprovisiontonetnonperformingloans&advances Netnonperformingloans&advances Provisioncover-Net s'0 % s'0 % s'0 % s'0 % Rs'000 % Rs'000 % Rs'000 % Rs'000 74.1 291,021,434 74.1 421,021,320 73.4 280,739,408 73.4 405,841,520 Domesticbanking 55.4% 13,701,081 12,745,988 59.3% 12,638,533 11,416,330 56.9% 62.8% Specificprovisiontononperformingloans&advances Nonperformingloans&advances Provisioncover-Gross 24.7 (a)

xot n mot 42484 80 3,4,4 91 44826 78 3,9,7 9.0 35,394,778 7.8 44,428,266 9.1 34,944,448 8.0 44,214,884 Exportsand imports 2010 2011 2010 2011 As at31stDecember Loansand advancestocustomers 24 Notes totheFinancialStatements egahcsco ikcnetainwti h utmrla otoi eea olw: Geographic sectorriskconcentrationwithinthecustomerloanportfoliowereasfollows:

cnmcsco ikcnetainwti h utmrla otoi eea olw: 3.9 11,216,800 2.3 Economic sectorriskconcentrationwithinthecustomerloanportfoliowereasfollows: 9,844,481 3.6 10,154,252 2.1 8,514,823 Domestic banking

pcfi rvso ,7,1 71196 ,6,2 7,592,100 7,562,423 7,191,956 7,172,815 Specific provision pcfi rvso ,7,1 71196 ,6,2 7,592,100 7,562,423 7,191,956 7,172,815 Specific provision (Contd.)

Bank Group R 0 s'00 R 0 Rs'000 Rs'000 Rs'000 Rs'000 Bank Group 40.93 o eteeto on 37700 ,6,0 2 24.03.2023 12 24.03.2023 12 3,767,000 3,767,000 4,780,000 4,780,000 Forsettlement ofloans Forrecapitalisationpurposes 24.03.1993 24.03.1993 Date issued Description 5 oeneto r ak etutrn od GovernmentofSriLankaRestructuringBonds 25

sa 1tDcme 21 21 Rt Dateof Rate 2010 2011 As at31stDecember il fecag Nt 41()() 9,6 3070 1,2 326,757 702,878 319,127 743,499 9,090,285 300,700 8,677,314 275,464 9,012,023 293,463 305,884 8,541,121 Leaserentalsreceivable[Note24.3(d),(e)] Loansandadvances[Note24.2(b),(c),(f)] Billsofexchange[Note24.1(b),(c)] Totalprovisionforloanlosses-Summary 24.11

il fecag Nt 41() 6,7 7,1 1164 79,517 254,685 199,990 161,674 8,164,806 90,439 8,166,110 79,517 8,156,736 54,653 161,674 8,149,554 Leaserentalsreceivable[Note24.3(f)] Loansandadvances[Note24.2(d)] Billsofexchange[Note24.1(d)] oa rvso o onlse 2.1 91048 95817 97990 (10,119,920) (9,739,940) (9,588,187) (9,140,468) Totalprovisionforinterestinsuspense-Summary 24.10 Total provisionforloanlosses[24.11] oa rvso o neeti upne[41] (,6,8) (,2,9) (,2,7) (8,499,008) (8,527,774) (8,326,692) (8,365,881) Total provisionforinterestinsuspense[24.10] 511832 9,3,6 571315 401,206,725 577,143,135 390,636,464 561,158,342 16,421,802 17,870,017 372,520,486 533,578,135 12,264,437 15,776,120 370,266,675 25,694,983 17,211,995 529,129,360 4,593,669 14,816,987 Leaserentalsreceivable[Note24.3(a),(b),(c)] Loansandadvances[Note24.2] Billsofexchange[Note24.1] 24.9

sa 1tDcme 21 21 21 2010 2011 2010 2011 As at31stDecember Loans andadvancestocustomers 24 Total Total Netbillsofexchangeloans&advances,leaserentalsreceivable Total grossbillsofexchangeloans&advances,leaserentalsreceivable Gross billsofexchange,loans&advances,leaserentalsreceivable-Summary

(Contd.)

536193 7,2,8 588541 382,587,797 558,875,421 372,721,585 543,651,993 527241 8,0,7 586531 392,707,717 568,615,361 382,309,772 552,792,461 85700 8,547,000 8,547,000 91048 ,8,8 97990 10,119,920 9,739,940 9,588,187 9,140,468 83581 ,2,9 85774 8,499,008 8,527,774 8,326,692 8,365,881 R 0 s'00 % maturity % Rs'000 Rs'000 R 0 s'00 R 0 Rs'000 Rs'000 Rs'000 Rs'000

Bank Group Bank/Group

BANK OF CEYLON ANNUAL REPORT 2011 221 BANK OF CEYLON ANNUAL REPORT 2011 222 33833 ,8,1 33851 3,388,581 3,388,581 3,388,313 3,388,313 rvso o iiuini au 668 - (,4) - (6,648) - (6,648) Provision fordiminutioninvalue 33491 ,8,1 33529 3,388,581 3,395,229 3,388,313 3,394,961 r aknArie 21551 ,5,5 32040 21551 ,5,5 3,250,450 3,250,450 12,115,571 3,250,450 3,250,450 12,115,571 SriLankan Airlines eedbCcntPout iie 750 7 - 3,0 35 - 375 37,500 - 375 37,500 Serendib CoconutProductsLimited rdsiaSnadaaBn ,1,4 7,0 7,0 74848 200 72,000 72,000 7,418,448 72,000 72,000 7,418,448 Pradeshiya SanwardhanaBank apkEprsLmtd 3000 ,5 - 3000 ,5 - 4,355 300,000 - 4,355 300,000 Magpek Exports Limited ak iaca evcsBra iie 2,0 220 ,5 2500 ,5 2,250 2,250 225,000 2,250 2,250 225,000 LankaFinancial ServicesBureauLimited ak la Piae iie ,0,0 2,0 2,0 21000 100 21,000 21,000 2,100,000 21,000 21,000 2,100,000 LankaClear (Private)Limited ad etl nutisLmtd 1170 ,1 - 1170 ,1 - 1,918 191,790 - 1,918 191,790 KandyTextile IndustriesLimited ic aig ak iie 6,0 65 2 6,0 65 625 625 62,500 625 625 62,500 FitchRatings LankaLimited rdtIfrainBra 4,0 4,8 4,8 4,0 4,5 42,256 42,256 47,400 41,988 41,988 47,100 CreditInformation Bureau Unlistedequityshares 26.(b) hrs R 00 s'0 hrs s'0 Rs'000 Rs'000 shares Rs'000 Rs'000 shares riay netet auto riay ivsmn valuation investment ordinary valuation investment ordinary oo oto Drcos oo Cs f Directors' 2010 Costof Noof Directors' Costof Noof 2011 Asat31stDecember 13307 ,9,8 11682 4,132,246 1,146,862 2,192,481 1,353,027 epesLaigCmayPC 1,5,0 2615 8,5 - - - - - 183,258 206,165 11,453,600 People'sLeasingCompanyPLC elnBn L 30000 5,0 8880 30000 5,0 1,271,400 455,000 13,000,000 878,800 455,000 13,000,000 SeylanBankPLC ainlDvlpetBn L ,8,3 6182 ,3,2 81558 9,6 2,860,846 691,862 8,185,538 1,130,423 691,862 8,185,538 NationalDevelopmentBankPLC Listedequityshares 26.(a) hrs R 00 s'0 hrs s'0 Rs'000 Rs'000 shares Rs'000 Rs'000 shares riay netet au riay ivsmn value investment ordinary value investment ordinary oo oto Mre oo Cs f Market Costof 2010 Noof Market Costof Noof 2011 As at31stDecember

Government securities rs etﬁae Nt 6() 1774 9,8 1774 197,784 197,784 197,784 197,784 3,398,625 3,413,281 3,388,581 3,388,313 Trust certiﬁcates[Note26(d)] Unlistedequityshares[Note26(b)] Equity 26 Investment shares securities

sa 1tDcme 21 21 21 2010 2011 2010 2011 As at31stDecember Notes totheFinancialStatements qiys ae Equity shares r ak eeomn od 2 e] 55698 28050 55698 72,820,570 75,526,988 72,820,570 75,526,988 Other investments Units inunittrusts Sri Lankadevelopmentbonds[26(e)] itddbnue Nt 6() 7,6 3,4 8385 35,973 863,845 35,240 1,386,793 978,266 1,566,317 1,146,862 1,353,027 Bonds Listed debentures[Note26(c)] Debt securities Listed equityshares[Note26(a)] [oe2 h] - - 1388 221,023 143,838 - - [Note26(h)] [oe2 f] ,1,0 13914 ,2,4 1,312,314 1,521,144 1,309,174 1,513,004 [Note26(f)]

[oe2 g] 6,8 17525 6,8 1,745,285 363,585 1,745,285 363,585 [Note26(g)] 33097 06346 35672 81,118,367 83,596,782 80,643,496 83,320,967 R 0 s'00 R 0 Rs'000 Rs'000 Rs'000 Rs'000

Bank Bank Bank Group 1774 9,8 1774 197,784 197,784 197,784 197,784 omrilLaigCmayLmtd 9,8 1774 9,8 197,784 197,784 197,784 197,784 CommercialLeasingCompanyLimited. 26.(d) Trust certificates 9826 7,6 3,4 35,240 35,240 978,266 978,266 [Fixed rate of11.00%Rs.100/-eachmaturingOctober2015] ra eeomn uhrt ,5,0 5826 3,6 3240 520 35,240 35,240 352,400 538,266 538,266 5,352,400 UrbanDevelopmentAuthority Fxdrt f1.5 s10-ec auigDcme 04 [Fixedrateof11.55%Rs.100/- eachmaturingDecember2014] epesLaigCmayPC 10000 0,0 1000 - - - 100,000 100,000 1,000,000 People'sLeasingCompanyPLC Fxdrt f1.0 s10-ec auigNvme 04 [Fixedrateof11.60%Rs.100/- eachmaturingNovember2014] ecatBn fSiLnaPC 14000 4,0 1000 - - - 140,000 140,000 1,400,000 MerchantBankofSriLankaPLC [Fixedrateof11.70%Rs.100/-eachmaturingAugust2015] ak rxLaigCmayPC 10000 0,0 1000 - - - 100,000 100,000 1,000,000 LankaOrixLeasingCompanyPLC Fxdrt f1.0 s100-ec auigDcme 06 [Fixedrateof12.30%Rs.1,000/-eachmaturingDecember2016] BFnnePC 1000 0,0 1000 - - - 100,000 100,000 100,000 LBFinancePLC 26.(c) Listed debentures Rs Rs '000 Rs '000 Rs '000 '000 eetrsivsmn au eetrsivsmn value value debentures investment debenturesinvestment oo Cs f akt oo Cs f Market Costof 2010 Noof Market Costof Noof 2011 As at31stDecember Debt securities 26 Investment securities

(Contd.) Bank

BANK OF CEYLON ANNUAL REPORT 2011 223 BANK OF CEYLON ANNUAL REPORT 2011 224 6mnh IO ls40bsspit] 72,895,543 72,820,570 78,465,485 75,526,988 [6months LIBORplus450basispoints] r ak eeomn od 01 - - 5755 560,055 557,525 - - 2011 SriLankaDevelopmentBonds r ak eeomn od 01 - - 5755 560,898 557,525 - - 2011 SriLankaDevelopmentBonds r ak eeomn od 01 - - 16255 1,677,992 1,672,575 - - 2011 SriLankaDevelopmentBonds r ak eeomn od 01 - - 5755 559,331 557,525 - - 2011 SriLankaDevelopmentBonds r ak eeomn od 02 5955 7,8 5755 555,199 557,525 574,580 569,525 2012 SriLankaDevelopmentBonds r ak eeomn od 02 5955 ,3,1 5755 562,079 557,525 1,139,116 569,525 2012 SriLankaDevelopmentBonds r ak eeomn od 03 4,4,6 4,5,8 4,8,9 44,333,132 44,386,795 45,752,287 45,342,163 2013 SriLankaDevelopmentBonds r ak eeomn od 03 2,1,7 2,1,6 2,4,7 21,846,865 21,743,475 22,411,269 22,211,475 2013 SriLankaDevelopmentBonds r ak eeomn od 03 11900 ,4,5 11500 1,120,297 1,115,050 1,149,051 1,139,050 2013 SriLankaDevelopmentBonds r ak eeomn od 03 11900 ,4,7 11500 1,119,695 1,115,050 1,149,170 1,139,050 2013 SriLankaDevelopmentBonds r ak eeomn od 04 28765 ,7,3 - - - 2,872,631 2,847,625 2014 SriLankaDevelopmentBonds r ak eeomn od - - 3,417,381 1,708,575 2014 SriLankaDevelopmentBonds SriLankaDevelopmentBonds (US $ bonds) R'00 s 0 R'00 Rs'000 Rs'000 Rs'000 Rs'000 au value value auiy investment maturity ero Costof Yearof sa 1tDcme 21 21 2010 2011 As at31stDecember 26.(e) Bonds 26 Investment securities Notes totheFinancialStatements 6mnh IO ls50bsspit] [6 monthsLIBORplus500basispoints] 6mnh IO ls50bsspit] [6 monthsLIBORplus540basispoints] 6mnh IO ls50bsspit] [6 monthsLIBORplus550basispoints] 6mnh IO ls30bsspit] [6 monthsLIBORplus350basispoints] 6mnh IO ls45bsspit] [6 monthsLIBORplus425basispoints] 6mnh IO ls30bsspit] [6 monthsLIBORplus370basispoints] 6mnh IO ls35bsspit] [6 monthsLIBORplus395basispoints] 6mnh IO ls35bsspit] [6 monthsLIBORplus395basispoints] 6mnh IO ls35bsspit] [6 monthsLIBORplus395basispoints] 6mnh IO ls35bsspit] [6 monthsLIBORplus365basispoints] 6mnh IO ls35bsspit] [6 monthsLIBORplus365basispoints] (Contd.) realisable Net Bank investment oto Net Cost of realisable

15637 ,0,2 ,8,9 4,832,619 1,386,793 3,303,722 1,566,317 h ak optlCroainPC 2,2,0 2320 ,1,4 2,2,0 2320 676,129 213,290 21,329,000 1,111,241 213,290 21,329,000 TheLankaHospitalCorporationPLC elnBn L 30000 5,0 8880 30000 5,0 1,271,400 455,000 13,000,000 878,800 455,000 13,000,000 SeylanBankPLC epesLaigCmayPC 1,5,0 2615 8,5 - - - - 183,258 206,165 11,453,600 People'sLeasingCompanyPLC ainlDvlpetBn L ,8,3 6182 ,3,2 82058 0,0 2,873,078 704,909 8,220,538 1,130,423 691,862 8,185,538 NationalDevelopmentBankPLC FCBn - 6,0 1,9 12,012 13,594 60,000 - - - DFCCBank Listedequityshares 26.(a) sharesRs '000 Rs shares Rs '000 '000 Rs '000 riay ivsmn au odnr netet value investment ordinary value investment ordinary As at 31st December 2011 2010 2011 As at31stDecember oo Cs f akt oo Cs f Market Costof Noof Market 1,745,285 1,745,285 Costof 363,585 Noof 363,585 neteti oenetscrte 6,8 3355 ,4,8 1,745,285 1,745,285 363,585 363,585 InvestmentinGovernmentsecurities 26.(g) Government securities Rs '000 Rs '000 Rs '000 Rs' 000 investment valuationinvestment valuation sa 1tDcme 21 2010 2011 Asat31stDecember

15304 ,8,2 13914 4,605,072 1,309,174 3,688,027 1,513,004 ebn ueu itEgdFn 00000 0,0 1360 00000 0,0 100,500 100,000 10,000,000 103,600 100,000 10,000,000 CeybankSurekumGiltEdgedFund ebn etr rwhFn ,7,5 1066 4,8 74759 571 534,413 95,741 7,447,569 447,085 110,696 7,673,959 CeybankCenturyGrowthFund ebn ntTut 9,6,4 13238 ,3,4 9,3,4 11343 3,970,159 1,113,433 94,437,649 3,137,342 1,302,308 99,063,544 CeybankUnitTrust Unitsinunittrusts 26.(f) Rs Rs '000 Rs '000 Rs' '000 000 nt netet vlain unitsinvestment valuation unitsinvestment valuation oo oto Mngrs oo oto Manager's Costof Noof Manager's Costof Noof sa 1tDcme 21 2010 2011 As at31stDecember 26 Investment securities (Contd.)

oto Mngrs oto Manager's Costof Manager's Costof Group Bank Bank

BANK OF CEYLON ANNUAL REPORT 2011 225 BANK OF CEYLON ANNUAL REPORT 2011 226 1774 9,8 1774 197,784 197,784 197,784 197,784 omrilLaigCmayLmtd 9,8 1774 9,8 197,784 197,784 197,784 197,784 CommercialLeasingCompany Limited. 26.(d) Trust certificates

8385 6,0 593 35,930 35,973 863,806 863,845 Fxdrt f1.0 s10-ec auigJl 01 - 150 5 150 154 1,500 - - - [Fixedrateof13.50%Rs.100/- eachmaturingJuly2011] Fxdrt f1.5 s10-ec auigMy21] 340 6 30 ,0 34 340 364 3,400 340 364 3,400 [Fixedrate of16.75%Rs.100/-eachmaturingMay2012] Fxdrt f1.%R.0/ ahauigOtbr21] [Fixedrateof16.20%Rs.100/-eachmaturingDecemebr2012] [Fixedrate of11.0%Rs.100/-eachmaturingOctober2015] Seylan Bank PLC ra eeomn uhrt ,5,0 5826 3,6 3240 520 35,240 35,240 352,400 538,266 538,266 5,352,400 UrbanDevelopment Authority Fxdrt f1.5 s10-ec auigDcme 04 [Fixedrateof11.55%Rs.100/-eachmaturingDecember2014] epesLaigCmayPC 10000 0,0 1000 - - - - 100,000 100,000 1,000,000 People's LeasingCompanyPLC Fxdrt f1.0 s10-ec auigDcme 04 [Fixedrateof11.30%Rs.100/-eachmaturingDecember2014] epesLaigCmayPC 2000 000 000 - - - - 20,000 20,000 200,000 People's LeasingCompanyPLC [Fixedrate of11.70%Rs.100/-eachmaturingAugust2015] ak rxLaigCmayPC 10000 0,0 1500 - - - - 105,000 105,000 1,050,000 LankaOrixLeasingCompanyPLC Fxdrt f1.0 s100-ec auigDcme 06 [Fixedrateof12.30%Rs.1,000/- eachmaturingDecember2016] B iac L 0,0 1000 0,0 - - - - 100,000 100,000 100,000 LBFinancePLC 26.(c) Listed debentures Rs Rs '000 Rs '000 Rs '000 '000 eetrsivsmn au eetrsivsmn value value debentures investment debenturesinvestment As at 31st December 2011 2010 2011 As at31stDecember Debt securities oo Cs f akt oo Cs f Market Costof Noof Market Costof Noof 34321 ,1,8 33865 3,398,625 3,398,625 - 3,413,281 3,413,281 (11,648) - (14,780) Provisionfordiminutioninvalue 34801 ,1,8 34023 3,398,625 3,410,273 3,413,281 3,428,061 r aknArie 21551 ,5,5 32040 21551 ,5,5 3,250,450 3,250,450 12,115,571 3,250,450 3,250,450 12,115,571 SriLankanAirlines eedbCcntPout iie 750 7 - 750 7 - 375 37,500 - 375 37,500 SerendibCoconutProductsLimited a ihl iie 000 0 ------500 50,000 SanMicheleLimited rdsiaSnadaaBn ,1,4 7,0 7,0 74848 200 72,000 72,000 7,418,448 72,000 72,000 7,418,448 PradeshiyaSanwardhanaBank apkEpr iie a3000 ,5 - 0,0 435 - 4,355 300,000 - 4,355 a300,000 MagpekExportLimited EACnanr iie ,0,0 1,0 500 ,0,0 1,0 5,000 10,000 1,000,000 5,000 10,000 1,000,000 MEGAContainersLimited ak iaca evcsBra iie 2,0 220 ,5 2500 ,5 2,250 2,250 225,000 2,250 2,250 225,000 LankaFinancialServicesBureauLimited ak la Piae iie ,0,0 2,0 2,0 21000 100 21,000 21,000 2,100,000 21,000 21,000 2,100,000 LankaClear(Private)Limited ad etl nutisLmtd 1170 ,1 - 9,9 198 - 1,918 191,790 - 1,918 191,790 KandyTextileIndustriesLimited ic aig ak iie 6,0 65 2 6,0 65 625 625 62,500 625 625 62,500 FitchRatingsLankaLimited iac n urne opn iie ,0,6 1,4 1,1 - - - - 14,914 17,546 2,506,562 FinanceandGuaranteeCompanyLimited rdtIfrainBra 4,0 4,4 4,4 4,0 4,0 42,300 42,300 47,600 42,042 42,042 47,400 CreditInformationBureau elnoIvsmn opn iie 0,0 500 ,0 5000 ,0 5,000 5,000 500,000 5,000 5,000 500,000 CeylincoInvestmentCompanyLimited Unlistedequityshares 26.(b) sharesRs '000 Rs shares Rs '000 '000 Rs '000 riay ivsmn auto odnr netet valuation investment ordinary valuation investment ordinary As at 31st December 2011 2010 2011 Asat31stDecember 26 Investment securities Notes totheFinancialStatements oo Cs f ietr' oo Cs f Directors' Costof Noof Directors' Costof Noof (Contd.)

,0 25 0 200 1 200 215 2,000 200 215 2,000 Group Group 6mnh IO ls40bsspit] 72,895,543 72,820,570 78,465,485 75,526,988 [6months LIBORplus450basispoints] r ak eeomn od 01 - 5755 560,055 557,525 - - 2011 SriLanka DevelopmentBonds 6mnh IO ls50bsspit] [6months LIBORplus500basispoints] r ak eeomn od 01 - 5755 560,898 557,525 - - 2011 SriLanka DevelopmentBonds 6mnh IO ls50bsspit] [6months LIBORplus540basispoints] r ak eeomn od 01 - 16255 1,677,992 1,672,575 - - 2011 SriLanka DevelopmentBonds 6mnh IO ls50bsspit] [6monthsLIBORplus550basispoints] r ak eeomn od 01 - 5755 559,331 557,525 - - 2011 SriLankaDevelopmentBonds 6mnh IO ls30bsspit] [6monthsLIBORplus350basispoints] r ak eeomn od 02 5955 7,8 5755 555,199 557,525 574,580 569,525 2012 SriLankaDevelopmentBonds 6mnh IO ls45bsspit] [6monthsLIBORplus425basispoints] r ak eeomn od 02 5955 ,3,1 5755 562,079 557,525 1,139,116 569,525 2012 SriLankaDevelopmentBonds 6mnh IO ls30bsspit] [6monthsLIBORplus370basispoints] r ak eeomn od 03 4,4,6 4,5,8 4,8,9 44,333,132 44,386,795 45,752,287 45,342,163 2013 SriLankaDevelopmentBonds 6mnh IO ls35bsspit] [6monthsLIBORplus395basispoints] r ak eeomn od 03 2,1,7 2,1,6 2,4,7 21,846,865 21,743,475 22,411,269 22,211,475 2013 SriLankaDevelopmentBonds 6mnh IO ls35bsspit] [6monthsLIBORplus395basispoints] r ak eeomn od 03 11900 ,4,5 11500 1,120,297 1,115,050 1,149,051 1,139,050 2013 SriLankaDevelopmentBonds 6mnh IO ls35bsspit] [6monthsLIBORplus395basispoints] r ak eeomn od 03 11900 ,4,7 11500 1,119,695 1,115,050 1,149,170 1,139,050 2013 SriLankaDevelopmentBonds 6mnh IO ls35bsspit] - - 2,872,631 2,847,625 2014 [6monthsLIBORplus365basispoints] SriLankaDevelopmentBonds 6mnh IO ls35bsspit] - - 3,417,381 1,708,575 2014 [6monthsLIBORplus365basispoints] SriLankaDevelopmentBonds (US$bonds) R'00 s 0 R'00 Rs'000 Rs'000 Rs'000 Rs'000 mtrt ivsmn au netet value investment value investment maturity Ya f Cs f elsbe oto realisable Costof realisable Costof Yearof Net Net sa 1tDcme 21 21 2010 2011 As at31stDecember 26.(e) Bonds 26 Investment securities Sri Lanka Development Bonds

(Contd.) Group

BANK OF CEYLON ANNUAL REPORT 2011 227 BANK OF CEYLON ANNUAL REPORT 2011 228 Noinvestmentpropertiesheld bytheBankbothcurrentyearaswellforpreviousyear. e netetpoete - - 1584 386,867 165,874 - - Netinvestmentproperties aac sa 1tDcme - - 876 7,908 8,716 - - Balanceasat31stDecember eesdo ipsl 247 (350) (2,477) - - Releasedondisposal rnfr/dutet ------Transfers/adjustments hrefrteya - - 325 3,074 3,285 - - Chargefor theyear

aac sa 1tDcme - - 1450 394,775 174,590 - - Balance as at31stDecember ipsl uigteya 2515 (4,798) (235,185) - - Disposals duringtheyear rnfr/dutet - - - - Transfers/adjustments diin uigteya - - 1,0 2,659 15,000 - - Additions duringtheyear Cost neteti te ak 388 388 8 58 58 43,838 220,965 220,965 43,838 100,000 100,000 Investmentinotherbanks Investmentincommercialpapers 26.(h) Other investments sa 1tDcme 21 21 21 2010 2011 2010 221,023 221,023 143,838 2011 143,838 Rs '000 Rs '000 Rs '000 Rs '000 As at31stDecember 27 Investment properties investment valuationinvestment valuation sa 1tDcme 21 2010 2011 As at31stDecember 3355 6,8 17525 1,745,285 1,745,285 363,585 363,585 neteti oenetscrte 6,8 3355 ,4,8 1,745,285 1,745,285 363,585 363,585 InvestmentinGovernmentsecurities 26.(g) Government securities s'0 R 00 s'0 Rs'000 Rs'000 Rs'000 Rs'000 investment valuationinvestment valuation sa 1tDcme 21 2010 2011 As at31stDecember 15114 ,9,3 13234 4,618,950 1,312,314 3,695,235 1,521,144 aa ciyVleFn 280 ,4 228 280 ,4 2,952 3,140 32,800 2,208 3,140 32,800 NamalAcuityValueFund is aia se aaeetLmtd 5,0 500 ,0 - - - - 5,000 5,000 50,000 FirstCapitalAssetManagementLimited ebn ueu itEgdFn 00000 0,0 1360 00000 0,0 100,500 100,000 10,000,000 103,600 100,000 10,000,000 CeybankSurekumGiltEdgedFund ebn etr rwhFn ,7,5 1066 4,8 74759 571 545,339 95,741 7,477,569 447,085 110,696 7,673,959 CeybankCenturyGrowthFund ebn ntTut 9,6,4 13238 ,3,4 9,3,4 11343 3,970,159 1,113,433 94,437,649 3,137,342 1,302,308 99,063,544 CeybankUnitTrust Unitsinunittrusts 26.(f) Rs Rs '000 Rs '000 Rs '000 '000 nt netet vlain unitsinvestment valuation unitsinvestment valuation oo oto Mngrs oo oto Manager's Costof Noof Manager's Costof Noof sa 1tDcme 21 2010 2011 As at31stDecember 26 Investment securities Notes totheFinancialStatements aac sa s aur - ,0 5,184 7,908 - - Balance asat1stJanuary Less :Accumulateddepreciation aac sa s aur 9,7 396,914 394,775 - - Balance asat1stJanuary

(Contd.)

Cost of Manager's Cost of Manager's oto Drcos Cs f Directors' Costof Directors' Cost of R 00 R 00 s'0 Rs'000 Rs'000 Rs'000 Rs'000 Group Group Group Bank Group Note : Thefairvalueoftheinvestmentpropertiesasat31stDecember2011wasbasedonmarket valuationscarriedoutbyMrDN * * ProfessionalvaluationhasbeencarriedoutbyMrAGGunarathna[BScEstateManagement&Valuation, FIV(SriLanka)],in ** Total o48 oaaaRa,Ahrgry. ** - A0-17p ,0 - 200 ,1 2,610 Professional valuationhasbeencarriedoutbyMrUGNihalSomachandra,[BSc(Sepcial),EMV(SriLanka)],AssociateMem *** 2,000 - 2,000 - 0A-0R-21.75p **** No498,HomagamaRoad,Athurugiriya. ** ProfessionalvaluationhasbeencarriedoutbyMrVMSJayasiri[BSc(Hons),DiplomainValution (SriLanka), AIV(Sri **** uueaaDsrc. * ,3 A1-05 245 055 300 139 21,319 13,000 10,555 2,445 5,936 1A-1R-00.5p *** KurunegalaDistrict. Dewanedi Alankare,inAngamuKoraleof hathpattuwa, ahhnpty,Brlsaua * 487 2-R43p 564 436 1,0 2905 1,0 229,075 110,000 229,075 110,000 44,396 65,604 44,877 2A-1R-4.35p ** Raththanapitiya,Boralesgamuwa. No.50/21,OldKesbewaRoad, o29 no lc,Clmo0 * 1,5 5.0 - - - - 2515 225,344 235,185 - - - - 50.00p 10,456 * No299,UnionPlace,Colombo02 Rukgahakottunuwa, Gehenuwala, Mirissawelawatta hena; Thekkawatta Kumbuththukuliya watte, No 102 & 104, Dam Street, No 43,45,49,51 & 53, No 116,116/1,118,120, o351 ot od itkte * 286 90p ,5 170 ,8 528 ,8 5,298 4,688 5,298 4,688 1,730 2,958 19.01p 2,896 * No385/1,KotteRoad,Pittakotte. No 300/8, Thalawathugoda Road, Lot No. 2 & 3, algm,Eblpty. 66p ,5 - 170 300 ,5 13,000 1,750 13,000 1,750 - 1,750 16.61p - * Pallegama,Embilipitiya. No.64&66,NonagamaRoad, (qf) s'0 R 00 s'0 R 00 s'0 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 (sq.ft) Land Building Total uligEtn value Carrying value Building Extent sa 1tDcme 01 2010 2011 Cost/Carrying amount Fair Cost/ As at31stDecember Fair Investmentpropertiesheldbythegroup 27.1 27 Investment properties ep * - 3.3 248 ,1 80 ,1 890 2,418 890 2,418 - 2,418 38.33p - * Meepe abdny * - A0-80 12 6 60 6 600 162 600 162 - 162 - 1A-0R-28.0p * Dambadeniya agdny od utlm * - 20 60 0 340 0 3,400 600 3,400 600 - 600 2.0A - * BangadeniyaRoad,Puttalam. oob 2 * 795 R1.p 790 ,8 2,5 5,2 2,5 56,029 22,959 56,029 22,959 4,989 17,970 1R-10.7p 7,925 * Colombo12. e lotMwta oob 1 .0 990 ,5 7,0 990 35,000 9,950 75,000 9,950 - 9,950 7.50p - * NewOlcottMawatha,Colombo11. s rs tet oob 1 * - 1.5 129 ,4 129 ,4 1,249 1,249 1,249 1,249 - 1,249 12.35p - * 1stCrossStreet,Colombo01. aiea ot. ,7 1.5 245 ,3 510 477 ,0 5,012 5,100 14,727 5,100 2,635 2,465 16.15p 2,478 * Madiwela,Kotte. fMtuewt. 04p 1 - 74 ,0 74 1,000 714 1,000 714 - 714 20.40p - * ofMuttuweowita. 1025 435 7,9 4417 9,7 575,897 394,775 424,197 174,590 64,305 110,285 Group. Thedirectorshavereviewedvaluesoftheinvestmentpropertiesasat31stDecember2011andconcludedthatthereweren [RICS (UK),DIVAIS(SL)]andMrHAWPerera[BScEstateManagement&Valuation (Special)]whoareindependentvaluersnotco ai fMre prah(ietCmaio ehd n2r 4hJl 09 basis ofMarketApproach(DirectComparisonMethod)on23rd&24thJuly 2009. aur,icroae auro h ai fMre prah(ietCmaio ehd,o 0hArl21. Valuers, incorporatedvalueronthebasisofMarketApproach(Direct ComparisonMethod),on10thApril2011. on thebasisofMarketApproach(DirectComparisonMethod)7thJuly 2011.

(Contd.) Lanka)], incorporatedvaluer corporated valueron ber ofInstitute hammika Baranage maret o impairment. nnected withthe

BANK OF CEYLON ANNUAL REPORT 2011 229 BANK OF CEYLON ANNUAL REPORT 2011 230 R.00 R 00 R.00 R 00 R.00 s'0 s’0 Rs'000 Rs.’000 Rs'000 Rs.’000 Rs'000 Rs.’000 % Rs'000 Rs.’000 % aia auto cptl vlain vlain valuation valuation valuation capital valuation capital ttd Drcos ttd Drcos Drcos Directors' Directors' Directors' stated Directors' stated neeti vle itrs n au/ au vle Vle value/ Value value/ Value value/ interestin value/ interestin sa 1tDcme 01 00 01 2010 2011 2010 Equity Market EquityMarket CostMarket CostMarket Group's 2011 Group's As at31stDecember *MBSLSavingsBankLimited hasbeenconvertedintoaSubsidiarycompany. 8 netet nAscaecmais 28.1 Unquoted Investments inAssociatecompanies 28 Notes totheFinancialStatements aac sa 1tDcme 6,8 8798 ,8,7 1,284,564 1,282,677 867,988 867,988 Balanceasat31stDecember ebn se aaeetLmtd 4.6 108 108 33 3,4 108 8,1 8,1 6,5 61,558 61,558 89,418 89,418 31,048 31,048 43.36 31,048 31,048 43.36 CeybankAssetManagementLimited (1,240,002 ordinary shares) te dutet 220 5,334 (2,230) - - Otheradjustments (Incorporated in Sri Lanka) ovrino soit noaSbiir 1183 - (111,803) - - ConversionofAssociateinto aSubsidiary* ak euiis(rvt)Lmtd 4.2 190 190 09 4,4 4,4 1730 8,5 1167 171,607 171,607 187,350 187,350 41,940 41,940 40.92 41,940 41,940 40.92 LankaSecurities(Private)Limited (3,495,000 Ordinary shares) Dividends (75,000,000 (Incorporated ordinary (Incorporated in shares) in Sri Sri Lanka) Lanka) hr ftx - - (327 (55,384) (43,297) - - Shareof tax BLSvnsBn iie - - 4.8 1,0 111,803 111,803 - - - - 49.08 - 905,937 - 963,129 963,129 750,000 750,000 40.00 - 750,000 750,000 40.00 MirekaCapitalLand(Private)Limited (Incorporated MBSLSavingsBankLimited in Sri Lanka) hr fpot(os eoetx - - 2875 212,898 208,715 - - Shareof proﬁt/(loss)beforetax otenDvlpetFnnil 4.7 500 16 2,0 ,7 4 82 3 53 53 842 842 1,670 25,000 41.67 - 25,000 41.67 SouthernDevelopmentFinancial Company Limited nrae(erae nivsmn 80,364 - 1,084,065 - 1,284,564 867,988 - 867,988 Increase/(decrease) ininvestment Balance as at1stJanuary MovementininvestmentsAssociatecompanies 28.2 (2,500,001 ordinary shares)

(Incorporated in Sri Lanka) sa 1tDcme Bn Group Bank As at31stDecember e netet nAscaecmais 8298 4,8 8468 844,658 1,282,677 1,282,677 1,284,563 844,658 1,284,56 842,988 842,988 33,605 33,605 41,938 NetinvestmentsinAssociatecompanies 41,938 20,000 20,000 24.69 20,000 20,000 24.69 TransnationalLankaRecordsSolutions (Private) Limited rvso o iiuini au 2,0) 2,3) ------(23,330) - (25,000) Provisionfordiminutioninvalue (2,000,000 ordinary shares) oa netet nAscaecmais 6,8 8298 6,8 844,658 1,282,677 1,282,677 1,284,563 867,988 1,284 842,988 867,988 Total investmentsinAssociatecompanies (IncorporatedinSriLanka)

R 00 R 00 s'0 Rs'000 Rs'000 Rs'000 Rs'000 2011 2010 - - (322 (42,713) (53,272) - -

Bank Group Cost Equity value 905,937 ,563 3 sa 1tDcme 21 2010 2011 As at31stDecember Thegroup'sinterestinthesummarisedfinancialinformationofAssociatesareasfollows: 28.4 oa ses 28598 3,914,506 2,835,998 Total assets aac sa 1tDcme 500 330 - - 23,330 25,000 Balanceasat31stDecember oa iblte ,5,0 2,619,263 1,555,903 Total liabilities mutpoie uigteya ,7 ------23,330 23,330 1,670 Amountprovidedduringtheyear Balanceasat1stJanuary Movementinprovisionfordiminutionvalue 28.3 For theyearended31stDecember aac sa 1tDcme 62066 ,9,2 - - - 6,096,224 6,240,686 (527,919) (715,828) Balance as at31stDecember Total operatingexpense te dutet 4,6 ------44,462 - 2,087,235 100,000 - 5,279,094 6,240,686 212,898 208,715 Otheradjustments Increase/(decrease) ininvestment Movement ininvestmentsSubsidiarycompanies 29.1 2010 NetinvestmentsinSubsidiarycompanies 2011 2010 2011 Profitbeforetaxation As at31stDecember Investments inAssociatecompanies 28 rvso o iiuini au Nt 94 8710 - - - - - (817,130) - - - - (55,384) 3,233,519 2,862,705 6,096,224 3,377,981 2,862,705 (43,296) 6,240,686 Provisionfordiminutioninvalue[Note29.4] Total investmentsinSubsidiarycompanies[Note 29.1] Investmentsinunquotedcompanies[Note29.3] Investmentsinquotedcompanies[Note29.2] InvestmentsinSubsidiarycompanies 29 Provisionfortaxation rftatrtxto 6,1 157,514 165,419 Profitaftertaxation sa 1tDcme 21 21 21 2010 2011 2010 2011 As at31stDecember oa prtn noe 9453 740,817 924,543 Total operatingincome aac sa s aur 60624 ,0,8 - - - 4,008,989 6,096,224 Balance asat1stJanuary (Contd.) R 00 R 00 s'0 Rs'000 Rs'000 Rs'000 Rs'000 R 00 R 00 s'0 Rs'000 Rs'000 Rs'000 Rs'000 Rs.’000

Bank Group Bank Group

BANK OF CEYLON ANNUAL REPORT 2011 231 BANK OF CEYLON ANNUAL REPORT 2011 232 aac sa 1tDcme 1,3 ------817,130 - - 817,130 817,130 (817,130) Balanceasat31stDecember Amountreversedduringthe year Balanceasat1stJanuary 94 Movementinprovisionfordiminution invalue 29.4 netet nuqoe usdaycmais ,7,8 33791 ,3,1 3,233,519 3,233,519 3,377,981 3,377,981 Investments inunquotedSubsidiarycompanies (Incorporated inSriLanka)

ecatCei fSiLnaLmtd 57 207 207 8.9 2,4 22,047 22,047 85.79 22,047 22,047 85.79 Merchant CreditofSriLankaLimited Inaddition totheaboveSubsidiaries,CeybankHolidayHomes(Private)Limited,MBSLInsuranceCompanySavingsB sa 1tDcme 21 21 21 2010 2011 2010 2011 As at31stDecember oesClmo(93 iie 9.9 1077 0,3 99 3 737 737 99.99 100,737 100,737 99.99 HotelsColombo(1963)Limited (incorporatedinSriLanka) elaeFnnilSrie iie 5.0 1000 1,0 50 1,0 110,000 110,000 55.00 110,000 110,000 55.00 CeyleaseFinancialServicesLimited ako eln(K iie 100 ,3,9 21167 100 ,8,3 2,087,235 2,087,235 100.00 2,131,697 2,131,697 100.00 BankofCeylon(UK)Limited O rvl Piae iie 100 ,0 250 100 ,0 2,500 2,500 100.00 2,500 2,500 100.00 BOCTravels(Private)Limited BOCPropertyDevelopment netet nqoe usdaycmais 28275 ,6,4 28275 7,227,387 2,862,705 7,066,249 2,862,705 BOCManagement&Support 29.3 Unquoted InvestmentsinquotedSubsidiarycompanies (IncorporatedinSriLanka) (97,392,136Ordinaryshares) ecatBn fSiLnaPC 7.4 21265 ,5,2 21 ,2,3 4,460,560 2,122,635 72.14 3,856,729 2,122,635 72.14 MerchantBankofSriLankaPLC 6,8,5 riaysae) (61,485,050Ordinaryshares) rpryDvlpetPC 31 4,7 32950 9.6 7000 2,766,827 740,070 93.16 3,209,520 740,070 93.16 PropertyDevelopmentPLC 29.2 Quoted R 00 s'0 % s'0 Rs'000 Rs'000 % Rs'000 Rs'000 % sae aia value stated capital neeti ietr' neeti Directors' interestin Directors' interestin sa 1tDcme 01 2010 MarketValue/ Cost Group's MarketValue/ Cost Group's 2011 As at31stDecember Investments inSubsidiarycompanies 29 Notes totheFinancialStatements (4,900,018 Ordinaryshares) (Incorporated inSriLanka) (10,073,667 Ordinaryshares) Koladeniya Hydropower(Private)LimitedareindirectSubsidiairesofthe Bank. (11,000,000 Ordinaryshares) (Incorporated intheUnitedKingdom) (12,119,611 Ordinaryshares) (Incorporated inSriLanka) (250,004 Ordinaryshares) (Incorporated inSriLanka) (100,999,998 Ordinaryshares) aaeet(rvt)Lmtd 0.0 10000 ,1,0 0.0 10000 1,010,000 1,010,000 100.00 1,010,000 1,010,000 100.00 & Management(Private)Limited (Incorporated inSriLanka) (100,000 Ordinaryshares) evcs(rvt)Lmtd 0.0 100 ,0 0.0 100 1,000 1,000 100.00 1,000 1,000 100.00 Services (Private)Limited (Incorporated inSriLanka) (Contd.)

R 00 R 00 s'0 Rs'000 Rs'000 Rs'000 Rs'000 Bank Group Bank ttdcptl stated capital ank Limitedand value vehicles progress s'0 R 00 s'0 R 00 s'0 R 00 s'0 R 00 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000

*Transfers/adjustmentsconsistmainlyoftransfers fromfreeholdpropertytoleasehold

sa 1tDcme - 7,9 4071 ,7,8 3099 250 61594 5,927,135 - 6,175,904 32,560 390,969 5,275,989 400,791 75,595 - Asat31st December rnfr/dutet 229 ,2 - - - - (7 - (47) - - - - 2,222 (2,269) - Transfers/adjustments * rnfrt ako eln(K iie - (137,996) ------Transfer to BankofCeylon(UK)Limited xhnert dutet 1,0) (8) - - (183 (907) (11,883) - - (283) (11,600) - - - Exchange rateadjustments ipsl uigteya 2709 1,8) - - (4,0) (144,343) (243,802) - - (16,783) (227,019) - - Disposals duringtheyear nast eauto (1,8) - - - - - (1,8) - (310,587) - - - - - (310,587) - onassetsrevaluation Transfer of accumulated depreciation rnfrt qimn - (072 504 576 ------45,746 (5,034) (40,712) - Transfer to equipment hrefrteya 325 997 0,9 9,2 1,9 - 8508 784,993 815,088 - 12,596 94,024 605,296 39,957 63,215 - Chargefor theyear sa s aur - 3598 6,4 48356 1,1 1,6 - ,2,3 5,425,388 - 5,927,135 19,964 314,011 4,863,566 363,646 365,948 - Asat1st January Accumulated depreciation - - - - sa 1tDcme 52128 22415 8,8 74126 4,9 5,7 220,380 16,694,830 11,471,724 50,377 640,299 7,411,206 887,185 5,261,258 2,224,125 Asat31stDecember rnfr/dutet ,8 (773 013 34 1) - (,2) (1,683) (3,825) - (11) - (364) 10,123 (17,753) 4,180 Transfers/adjustments se eauto (1,8) - - - - - (1,8) - (310,587) - - - - - (310,587) - assetrevaluation Transferofaccumulateddepreciationon rnfrt qimn 4,2) (,2) 4,5 ------49,552 (5,626) (43,926) - Transfertoequipment rnfrt ako eln(K iie (508,914) ------TransfertoBankofCeylon(UK)Limited xhnert dutet 1,5) (1) - - (457 (908) (14,567) - - (615) (13,952) - - - Exchangerateadjustments ipsl uigteya 2770 1,6) - - (4,5) (146,414) (246,859) - - (19,069) (227,790) - - - Disposalsduringtheyear aiaiain 2,4 7,4 - - - (9,9) - (127,278) - - 4,714,179 (193,692) ------72,447 121,245 - - 3,605,707 1,108,472 Revaluationsurplus Capitalisations 1 Property, plantandequipment 31 custos 5,4 1,6 654 3,4 8,6 - 1431 ,8,6 1,170,780 1,084,765 184,391 - 84,861 737,746 6,554 12,767 5,942,280 58,446 9,297,614 5,790,263 102,994 1,236,611 410,819 8,778,503 107,902 1,427,793 389,388 1,236,611 102,994 338,357 1,427,793 Acquisitions 107,902 312,973 10,620,946 12,667,051 10,238,043 Additions 12,222,387 during the year Otherassets Localchequespurchased Foreignchequespurchased Consumablestockinhand Accruedinterestandotherreceivables 30 Other assets

sa 1tDcme 01 2010 2011 229,681 11,471,724 11,086,141 50,388 2010 575,122 6,866,014 803,687 1,592,925 1,353,907 2011 2010 Asat1stJanuary 2011 31.1 Bank Cost or As at31stDecember valuation As at31stDecember reod reodLaeodEupet oo eshl Cptl oa Total Total Capital MotorLeasehold FreeholdLeasehold Equipment Freehold Net bookvalueasat31stDecember2010 Net bookvalueasat31stDecember2011 land building building vehicles motor work in 15295 8,5 4001 ,0,4 2111 044 2,8 5,544,589 229,681 30,424 261,111 2,002,448 440,041 987,959 1,592,925 52128 21850 8,9 21527 4,3 1,1 2030 1,1,2 220,380 10,518,926 17,817 249,330 2,135,217 486,394 5,261,258 2,148,530 2,4,5 1,0,6 2,8,4 18,313,650 23,889,748 17,706,268 22,849,558 R 00 R 00 s'0 Rs'000 Rs'000 Rs'000 Rs'000 Bank Group

BANK OF CEYLON ANNUAL REPORT 2011 233 BANK OF CEYLON ANNUAL REPORT 2011 234

8,1 3,8 1850 ,9 117,204 1,296 118,500 32,181 86,319 hka od aaed,Nlid ThikkamRoad,Karaveddy, Nelliady elaiBac 4.4 - 1,0 - 1,0 - 16,000 - 16,000 - 16,000 - 42.74 NelliadiBranch 2 almniRa,GadBza,Mna 52,PallimunaiRoad,Grand Bazaar,Mannar anrBac - 570 ,7 690 250 6 12,038 462 12,500 6,930 5,570 5,720 - MannarBranch 56, Stanley Road, Jaffna afaBac 142 ,7 6,4 1,9 7,4 50 77,700 540 78,240 13,491 64,749 9,775 164.27 JaffnaBranch 7,46,Hsia od,Jfn 476,476A,HospitalRoad, Jaffna afaAe fie - 730 170 170 9 11,466 294 11,760 11,760 - 7,300 - JaffnaArea Office Northern Province

7,4 5,7 1490 ,1 132,407 2,513 134,920 54,975 79,945 Main Street, Valachchenai aahhniBac 4.4 631 993 207 200 0 31,598 402 32,000 12,047 19,953 6,391 47.34 Valachchenai Branch 4 ne abu od rnoae 24,Inner HarbourRoad,Trincomalee rnoae rnh 00 ,3 3,5 1,7 5,2 104 49,076 1,044 50,120 15,670 34,450 9,432 90.00 Trincomalee Branch Main Street, Pottuvil otvlBac 1.0 496 ,2 1,7 1,0 37 18,643 357 19,000 14,278 4,722 4,976 10.70 PottuvilBranch 8 atclaRa,Mtr 38,Batticaloa Road,Mutur uu rnh 02 ,2 161 ,8 280 3 2,562 238 2,800 1,189 1,611 2,226 40.27 MuturBranch Covington Road, Batticaloa atclaBac 6.0 817 929 171 100 7 30,528 472 31,000 11,791 19,209 8,137 65.00 BatticaloaBranch Eastern Province

8983 4,3 9930 ,3 984,142 5,238 989,380 149,537 839,843 Talawakelle Estate Plantation aaael tf ures 6.0 488 ,4 1,5 1,0 21 18,719 281 19,000 11,253 7,747 4,898 160.00 TalawakelleStaffQuarters 32,9 atnRa,Tlwkle 23,25,29,HattonRoad,Talawakelle aaael rnh 53 ,4 1,5 606 850 0 18,198 302 18,500 6,046 12,454 5,045 25.30 TalawakelleBranch 2 ilSre,Nwr ly 12,HillStreet,NuwaraEliya uaaEiaPoet 2.4 300 872 ,8 6,0 9 62,405 95 62,500 3,788 58,712 3,070 27.54 NuwaraEliyaProperty 41,Hl tet uaaEia 14,19,HillStreet,NuwaraEliya uaaEiaSafQatr 5.9 506 378 ,2 4,0 62 39,378 622 40,000 6,222 33,778 5,086 53.69 NuwaraEliyaStaffQuarters 3 asnSre,Nwr ly 43,LawsonStreet,NuwaraEliya uaaEiaBac 135 365 0,6 4,3 3038 ,0 349,391 1,007 350,398 40,531 309,867 13,645 133.50 NuwaraEliyaBranch ,GmoaRa,Nwlpty 6,GampolaRoad,Nawalapitiya aaaiiaBac 1.0 637 300 200 500 0 24,400 600 25,000 12,000 13,000 6,317 15.00 NawalapitiyaBranch 6 po od akly 66,UpcotRoad,Maskeliya akly rnh 20 ,0 2,5 1,4 3,0 29 34,741 259 35,000 10,341 24,659 6,402 42.05 MaskeliyaBranch 22, Dalada Veediya, Kandy ad n iyBac 4.1 907 8,7 1,3 2000 1 199,287 713 200,000 17,830 182,170 9,017 42.81 Kandy2ndCityBranch H to Hatton atnSafQatr 4.0 550 392 108 500 7 44,724 276 45,000 11,038 33,962 5,560 40.00 HattonStaffQuarters 6 iclrRa,Hto 46,CircularRoad,Hatton atnBac 8.5 874 667 333 0,0 33 99,667 333 100,000 13,333 86,667 8,784 85.65 HattonBranch 44, Kadugannawa Road, Gampola apl rnh 7.0 920 486 116 592 5 85,432 550 85,982 11,146 74,836 9,270 175.00 GampolaBranch 93,DloaRa,Glh 59/37,DeltotaRoad,Galaha aaaBac 1.0 630 ,9 609 ,0 20 7,800 200 8,000 6,009 1,991 6,340 15.00 GalahaBranch C nrlP oic Central Province s’0 s’0 s’0 Rs.’000 Rs.’000 fln ofbuilding ofland Prhs (qaefe) eauto rvlain au dpeito value depreciation value revaluation revaluation (Squarefeet) (Perches) aeo rmss xet Bidn Cs/ ot Ttl cuuae Netbook Accumulated Total Cost/ Cost/ Building Extent Nameofpremises 11() eal ffehl ad&bidnshl yteBn sa 1tDcme 01 31.1 (a) Detailsoffreeholdland&buildingsheldbytheBankasat31stDecember2011 Property, plantandequipment 31 Notes totheFinancialStatements (Contd.)

7,9 3,2 2407 ,4 212,671 1,346 214,017 34,626 179,391 58,MainStreet,Ratnapura anpr rnh 16 800 800 28,000 - 28,000 - 28,000 - 31.69 RatnapuraBranch ,Dampl aah,Rtaua 6,DharmapalaMawatha,Ratnapura anpr rnh 0.0 903 900 207 107 8 60,537 480 61,017 12,017 49,000 9,013 100.00 RatnapuraBranch 1,ClmoRa,Kgle 110,ColomboRoad,Kegalle eal rnh 113 803 020 970 0,0 71 99,269 731 100,000 19,750 80,250 18,023 131.38 KegalleBranch 2Mi tet eiwt 62MainStreet,Dehiowita eiwt rnh 86 ,8 348 ,0 500 8 4,962 38 5,000 1,502 3,498 2,088 38.60 DehiowitaBranch 3,Mi tet aagd 137,MainStreet,Balangoda aagd rnh 45 ,5 1,4 137 000 7 19,903 97 20,000 1,357 18,643 3,556 14.50 BalangodaBranch Sabaragamuwa Province

4,9 1946 0,9 566 496,678 5,616 502,294 159,496 342,798 139,NegomboRoad,Narammala aaml rnh 1.0 590 847 ,6 4,0 38 44,672 328 45,000 6,563 38,437 5,970 117.50 NarammalaBranch o6 oob od auakly No66,ColomboRoad,Madurankuliya auakly rnh 7.0 560 320 385 705 5 46,371 654 47,025 33,825 13,200 5,650 279.00 MadurankuliyaBranch 10, Station Road, Madampe aap rnh 11 ,6 1,9 1,0 2,0 23 22,237 263 22,500 10,506 11,994 6,565 61.10 MadampeBranch 34, Colombo Road, Kurunegala uueaaBza rnh 30 ,1 1255 000 4,5 69 141,896 659 142,555 40,000 102,555 8,915 53.00 KurunegalaBazaarBranch Commercial Complex, Kurunegala uueaaBac 510 303 303 ,3 21,730 1,333 23,063 23,063 - 15,100 - KurunegalaBranch 18, Mihindu mawatha, Kurunegala G' ures&CifMngrsQatr AGM'sQuarters&ChiefManager's 2,Klypty aap od umlsry 146,612 690 147,302 20,900 126,402 17,210 225.00 KurunegalaProvinceOffice, 227,Kuliyapitiya-MadampeRoad,Dummalasuriya umlsry rnh 18 ,5 740 ,4 1,0 18 14,812 188 15,000 7,540 7,460 5,353 41.80 DummalasuriyaBranch aauuEmn ersMwta hlw RadaguruEdmundPeirisMawatha,Chilaw hlwBac 4.0 360 870 209 079 9 50,382 397 50,779 12,029 38,750 3,640 43.50 ChilawBranch 4 iilaRa,Aaw 64,GiriullaRoad,Alawwa lwaBac 3.0 735 ,0 500 ,7 114 7,966 1,104 9,070 5,070 4,000 7,305 31.80 AlawwaBranch North Western Province s’0 s’0 s’0 Rs.’000 Rs.’000 fln ofbuilding ofland Prhs (qaefe) eauto rvlain au dpeito value depreciation value revaluation revaluation (Squarefeet) (Perches) aeo rmss xet Bidn Cs/ ot Ttl cuuae Netbook Accumulated Total Cost/ Cost/ Building Extent Nameofpremises Property, plantandequipment 31 (Contd.)

BANK OF CEYLON ANNUAL REPORT 2011 235 BANK OF CEYLON ANNUAL REPORT 2011 236 14142 7,7 24612 636 2,389,756 26,366 2,416,122 974,670 1,441,452 1/3 a okSre,Clmo1 212/63,GasWorkStreet,Colombo 11 ethBac 2.9 2,3 1798 202 0,0 81 199,119 881 200,000 22,022 177,978 24,530 28.29 PettahBranch 1,RjpkeBoda,Ngmo 118,RajapakseBroadway, Negombo eob rnh 9.5 1,5 1398 462 3,5 87 137,783 867 138,650 34,662 103,988 16,754 97.25 NegomboBranch 6,Rgm od aaah 469,RagamaRoad,Kadawatha aaah rnh 88 ,8 2,2 1,3 3,5 31 36,099 351 36,450 14,030 22,420 6,181 28.86 KadawathaBranch 9 eob od aea 19,NegomboRoad,Ja-ela aEaBac 4.4 800 852 648 500 1 74,590 410 75,000 16,408 58,592 8,090 40.64 JaElaBranch 170, Colombo Road, Gampaha aph rnh 40 846 846 58,446 - 58,446 - 58,446 - 34.06 Gampaha Branch 703,Sirimavo BandaranaikeMawatha,Grandpass rn asBac 2.2 625 200 056 256 ,3 20,644 1,932 22,576 10,576 12,000 6,295 20.12 GrandPass Branch York sreet, Colombo 01 oob GadOina oe 118 3,0 6038 3,7 14000 842 1,381,508 18,492 1,400,000 739,672 660,328 232,801 181.85 Colombo 1-GrandOrientalHotel 1 rso tet oob 41,Bristol Street,Colombo1 oob iyOfc 95 492 1,0 8,0 3000 ,2 297,775 2,225 300,000 89,000 211,000 24,952 39.50 Colombo 1-CityOffice 1 aitrd iv aah,Brla 71,Danister deSilvaMawatha,Borella oel rnh 26 915 3,0 4,0 1500 ,0 183,792 1,208 185,000 48,300 136,700 19,195 42.62 BorellaBranch 8,6 6,3 1852 ,6 146,340 2,162 148,502 66,934 81,568

oaaaaSafQatr 200 ,4 1 40 5 31 87 371 458 440 18 3,042 230.00 MonaragalaStaffQuarters 0,WlaaaRa,Mnrgl 401,WellawayaRoad,Moneragala oaaaaBac aae' ures 01 ,3 3,0 3,0 6,0 80 63,150 850 64,000 34,000 30,000 9,033 90.10 MonaragalaBranch&Manager'sQuarters 0 tto od auae 20,StationRoad,Haputale auaeBac - 475 857 ,2 2,0 23 23,641 263 23,904 5,327 18,577 4,775 - HaputaleBranch 9 ,BdlaRa,Bnaaea 198B,BadullaRoad,Bandarawela adrwl rnh .2 771 793 717 510 2 34,712 428 35,140 17,167 17,973 7,731 9.52 BandarawelaBranch Bank Road, Badulla aul rvneOfc 187 ,4 1,0 1,0 2,0 20 24,750 250 25,000 10,000 15,000 9,048 118.75 BadullaProvinceOffice 2994 0,0 3888 ,3 343,749 5,139 348,888 108,904 239,984

eiaaBac 9.0 850 685 415 100 5 30,646 354 31,000 14,165 16,835 8,500 97.50 WeligamaBranch o 4/4,SaSre,Tnal No.145/147,SeaStreet,Tangalle agleBac 2.5 - 1,0 - 1,0 - 12,500 - 12,500 - 12,500 - 21.05 TangalleBranch Gunawardena Mawatha, Matara aaaBza rnh 92 300 300 43,000 - 43,000 - 43,000 - 49.25 MataraBazaarBranch 1 uaaug aah,Mtr 11,KumaratungaMawatha,Matara aaaBac 145 354 720 270 000 3 59,361 639 60,000 12,780 47,220 13,514 104.50 MataraBranch Ahangama Road, Imaduwa mdw rnh 35 ,0 1,3 262 550 3 15,417 83 15,500 2,662 12,838 2,300 83.50 ImaduwaBranch Beliatta Road, Hakmana amn rnh 67 ,5 522 ,6 920 1 9,137 113 9,250 3,968 5,282 3,250 36.70 HakmanaBranch 2, Gamini Road, Galle al rnh 15 250 990 561 561 5 64,845 756 65,601 15,661 49,940 12,570 31.50 GalleBranch ,LgtHueSre,Fr,Gle 2,LightHouseStreet,Fort,Galle al rvneOfc 3.3 1,6 400 ,6 1,6 204 11,786 2,074 13,860 9,860 4,000 13,060 32.63 GalleProvinceOffice 1Wnuup od maatt 11WanduruppaRoad,Ambalantota maatt rnh 80 ,4 839 011 850 5 18,247 253 18,500 10,131 8,369 6,041 38.00 AmbalantotaBranch 274, Main Street, Ambalangoda maagd rnh 80 000 967 967 6 78,810 867 79,677 39,677 40,000 - 58.00 AmbalangodaBranch Southern Province s’0 s’0 s’0 Rs.’000 Rs.’000 Rs.’000 fln ofbuilding ofland (Perches) (Square feet) revaluation value revaluation depreciation value aeo rmss xet Bidn Cs/ ot Ttl cuuae Netbook Accumulated Total Cost/ Cost/ Building Extent Nameofpremises Property, plantandequipment 31 Notes totheFinancialStatements Western ProvinceNorth 0,WlaaaRa,Mnrgl 401, WellawayaRoad,Moneragala Uva Province 3 anSre,Wlgm 239 MainStreet,Weligama (Contd.)

791 436 0,4 306 99,241 3,006 102,247 44,316 57,931 16,HillStreet, NuwaraEliya uaaEiaHldyHm 8.6 338 016 ,8 3,0 12 36,828 172 37,000 6,884 30,116 3,388 185.06 Nuwara Eliya HolidayHome Lindula idl ig oia oe ,1 120 ,5 500 5 4,850 150 5,000 3,750 1,250 3,412 - LindulaRidge HolidayHome Haputale auaeWoln uglw ,0 810 ,8 1,0 14 11,806 194 12,000 3,880 8,120 3,005 - Haputale WoodlandBungalow Dickoya iky pe/oe lnanBnao ,0 400 400 800 6 27,040 960 28,000 24,000 4,000 7,807 - Dickoya Upper/lower GlencarnBungalow Bandarawela 5,Srn alyRa,Bdla 957 1,290 2,247 2,202 45 3,028 115.00 Bandarawela HolidayHome 153,Spring ValleyRoad,Badulla aul ena uglw&Poet 2.5 450 440 ,0 1,0 20 17,760 240 18,000 3,600 14,400 4,580 222.25 BadullaFernham Bungalow&Property HolidayHomes&Rests 8212 8,1 12078 692 1,183,796 16,922 1,200,718 388,616 812,102 elwteBac 12 578 8,0 4,0 2500 ,1 223,987 1,013 225,000 40,500 184,500 15,798 51.25 WellawatteBranch 557A, Galle Road, Wadduwa adw rnh 90 ,7 - 319 3,179 - 3,179 - 3,179 - 29.00 WadduwaBranch o4 ue rd rnh uataMwta No.4,SuperGradeBranch,SusanthaMawatha, Panadura aauaBac 8.0 640 847 153 000 6 59,538 462 60,000 11,553 48,447 6,490 80.00 PanaduraBranch 7,HglvlRa,Nggd, 174,HighlevelRoad,Nugegoda, ueoaBac 05 818 500 499 2,1 725 122,674 7,245 129,919 34,919 95,000 38,108 30.50 NugegodaBranch No72, Agalawatte Road, Matugama auaaBac 95 ,8 1,9 369 400 7 13,722 278 14,000 3,609 10,391 2,883 9.50 MatugamaBranch No.88, Highlevel Road, Maharagama aaaaaBac 8.0 4,4 1134 212 5,1 278 250,778 2,738 253,516 82,152 171,364 45,245 80.00 MaharagamaBranch 1,GleRa,Kltr ot,Kltr 218,GalleRoad,KalutaraSouth, auaaBac 4.6 985 829 171 000 7 69,529 471 70,000 11,771 58,229 9,885 40.86 KalutaraBranch 108, Old Road, Kalutara auaaAe fie 25 ,6 1,8 97 120 2 11,129 121 11,250 967 10,283 3,060 22.50 KalutaraAreaOffice 707, Galle Road, Moratuwa dm rnh 11 ,5 5,3 1,6 7,0 32 69,648 352 70,000 14,062 55,938 7,550 61.12 IdamaBranch 87, Anguruwathota Road, Horana oaaBac 7.0 808 248 ,2 6,0 35 60,397 305 60,702 8,224 52,478 8,078 70.00 HoranaBranch 207, Galle Road, Dehiwela eiaaBac 2.0 1,1 7,2 2,8 1000 2 99,278 722 100,000 28,880 71,120 12,715 22.00 DehiwalaBranch No.165A, Galle Road, Beruwala euaaBac 2.0 548 813 ,2 3,0 26 37,754 246 38,000 9,827 28,173 5,418 21.50 BeruwalaBranch o1,UiyPaaBd. al od o4 No.10,UnityPlazaBldg.,GalleRoad,Co.4 ablpty rnh - 776 1,0 1000 ,5 107,250 2,750 110,000 110,000 - 7,776 - BambalapitiyaBranch 6,GleRa,Auhaa 267,GalleRoad,Aluthgama WesternProvinceSouth s’0 s’0 s’0 Rs.’000 Rs.’000 fln ofbuilding ofland Prhs (qaefe) eauto rvlain au dpeito value depreciation value revaluation revaluation (Squarefeet) (Perches) aeo rmss xet Bidn Cs/ ot Ttl cuuae NetBook Accumulated Total Cost/ Cost/ Building Extent NameofPremises Property, plantandequipment 31 4,GleRa,Clmo0 149, GalleRoad,Colombo06 ltgm rnh 66 300 212 512 1 54,933 219 55,152 32,152 23,000 - 36.60 Aluthgama Branch (Contd.)

BANK OF CEYLON ANNUAL REPORT 2011 237 BANK OF CEYLON ANNUAL REPORT 2011 238 vehicles progress Total Total s'0 R 00 s'0 R 00 s'0 R 00 s'0 R 00 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000

rnfr/dutet oss anyo rnfr rmfehl rpryt eshl rpry *Transfers/adjustmentsconsist mainlyoftransfersfromfreeholdpropertytoleasehold

sa 1tDcme - ,8,1 4070 ,4,4 4126 250 79830 7,541,299 - 7,988,310 32,560 431,206 5,743,342 400,790 - 1,380,412 Asat31stDecember rnfr/dutet ,3 222 784 ,7 - - 9,9 (140,338) 94,890 - - 6,677 77,854 2,222 8,137 - Transfers/adjustments* xhnert dutet 1 - (,8) (8) - - (,5) (906) (5,456) - - (283) (5,284) - 111 - Exchange rateadjustments ipsl uigteya 1,7) - (3,5) (699 2147 (153,622) (281,467) - - (26,939) (237,256) - (17,272) - Disposals duringtheyear nast eauto (1,8) - - - - - (1,8) - (310,587) - - - - - (310,587) - onassetsrevaluation Transfer of accumulated depreciation rnfrt qimn 4,1) (,3) 4,4 ------45,746 (5,034) (40,712) - Transfer to equipment hrefrteya 3,9 3,5 6454 1,0 1,9 - 9961 889,616 949,631 - 12,596 111,001 654,584 39,957 131,493 - Chargefor theyear sa s aur 16922 6,4 52768 4,5 1,6 - ,4,9 6,946,549 - 7,541,299 19,964 340,750 5,207,698 363,645 - 1,609,242 Asat1st January sa 1tDcme 52129 51721 8,8 80838 2,1 5,7 578,618 20,709,772 14,911,607 50,377 726,713 8,048,378 887,186 5,271,219 5,147,281 Asat31st December

rnfr/dutet 411 891 011 1,4 1,0 (1 3,6 (53,616) 138,464 - (11) 10,705 112,449 10,121 (8,941) 14,141 Transfers/adjustments 7,409,788 75,595 7,485,383 2,224,125 5,261,258 Totalfreeholdlandandbuilding nast eauto (1,8) - - - - - (1,8) - (310,587) - - - - - (310,587) - 1,303,804 5,991 1,309,795 209,870 1,099,925 onassetsrevaluation Transfer of accumulated depreciation No.88,HighlevelRoad,Maharagama 8S.McalsRa,Cllb 3 23,311 - 23,311 243,980 - 2,504 246,484 23,311 75,120 171,364 36,775 57.00 105.10 Maharagama-CentralTrainingInstitute 28St.Michael'sRoad,Cololmbo03 Kollupitiya-WalkersSonsLimited 8,BankofCeylonMw,Colombo1 9,TBJyhMwta oob 112,125 2,875 115,000 115,000 - 6,935 - WorldTradeCentre 497,TBJayahMawatha,Colombo 75,AnandaKumaraswamyMawatha,Colombo7 rnfrt qimn - (396 566 952 - - - - - 49,552 (5,626) (43,926) - Transfertoequipment 319,763 237 604,625 375 320,000 4,750 605,000 315,250 15,000 7,450 590,000 79.80 22,337 151.00 ColomboDarlyRoadStoresBrownsBuilding, GeneralManager'sBungalow Others xhnert dutet ,2 - (364 65 596 (908) (5,986) - - (615) (13,694) - 8,323 - Exchangerateadjustments ipsl uigteya 1,4) (4,5) (008 2970 (158,757) (299,760) - - (40,058) (240,158) (19,544) - Disposalsduringtheyear Rs.’000 Rs.’000 Rs.’000 aiaiain 2,4 7,4 - - - (9,9) - (127,277) - (193,692) - 4,714,179 ------72,447 121,245 - 3,605,707 1,108,472 Revaluationsurplus Capitalisations ofbuilding ofland custos 5,4 3,1 654 0,3 1774 3,3 15185 1,233,559 1,561,855 538,538 - 117,764 807,034 6,554 33,519 58,446 Acquisitions Additions during the year (Perches) (Square feet) revaluation Value revaluation depreciation value sa 1tDcme 01 2010 2011 233,772 14,911,607 14,018,606 50,388 638,917 7,333,195 803,690 1,592,925 4,258,720 Asat1stJanuary Costor valuation 31.2 Group NetBook Accumulated Total As at31stDecember Cost/ Cost/ Building Extent NameofPremises Property, plantandequipment 31 Notes totheFinancialStatements reod reodLaeodEupet oo eshl Capital MotorLeasehold FreeholdLeasehold Equipment Freehold Net bookvalueasat31stDecember 2010 Net bookvalueasat31stDecember 2011 cuuae ercain Accumulated depreciation land building building vehicles motor work in

(Contd.) 15295 26948 4,4 21547 9,6 3,2 2372 7,370,308 233,772 30,424 298,167 2,125,497 440,045 1,592,925 2,649,478 52129 37689 8,9 23506 9,0 1,1 5868 1,2,6 578,618 12,721,462 17,817 295,507 2,305,036 486,396 5,271,219 3,766,869

9091 3297 6,9 7844 3181 396,593 (361,891) 758,484 567,994 (382,947) 950,941 ulig 8933 3297 5,6 7532 3181 343,411 (361,891) 705,302 456,366 (382,947) 839,313 Building ad 1168 1,2 5,8 - 53,182 - 53,182 111,628 - 111,628 Land 9807 3206 5,6 7550 3117 384,413 (361,167) 745,580 555,961 (382,076) 938,037 ulig 8630 3206 5,9 7239 3117 341,192 (361,167) 702,359 454,294 (382,076) 836,370 Building ad 1167 0,6 4,2 - 43,221 - 43,221 101,667 - 101,667 Land

s 0 R'00 s 0 R'00 s 0 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 ak dpeito vle dpeito value depreciation value depreciation Bank hr een eprrl depoet,patadeupeta tteblnesetdt. Thecarrying valueoftherevaluationpropertiesthatwouldhavebeenrecognisedinFinancialStatements,iftheywerecar 31.9 Freehold properties Property, plant&equipmentretiredfromactiveuse 31.8 Therewerenotemporarilyidleproperty,plantandequipmentasatthebalance sheet date. Temporarily idleproperty,plant&equipment 31.7 sa 1tDcme 01 2010 Net book CostAccumulated Net book CostAccumulated 2011 As at31stDecember eshl ulig 7,4 5,6 7,4 56,764 78,443 103,055 429,420 56,764 1,177,650 110,424 510,915 461,800 1,465,876 1,209,123 78,443 96,250 427,588 495,911 1,786,339 1,177,284 509,083 357,531 1,458,630 98,364 1,209,123 1,763,791 401,716 Machines,plant&machinery Leaseholdbuilding Equipment,furniture,&ﬁttings Computersoftware Computerequipment Motorvehicles

sa 1tDcme 21 21 21 2010 2011 2010 2011 As at31stDecember Theinitialcostoffullydepreciatedproperty,plant&equipmentattheendyear 2011,whicharestillinuseasfollo Fullydepreciated property,plant&equipment 31.6 Therewerenocompensationreceived/receivablefromthirdpartiesforitemsof property, plantandequipmentwhcihwereimpair Compensationfromthirdpartiesforitemsofproperty,plantandequipment 31.5 Property,plantandequipmentpledgedassecurityforliabilities 31.4 h muto omtet o h custo fpoet,patadeupeti ie nteNt o 412() Titlerestrictiononproperty,plantandequipment 31.3 Theamountofcommitmentsfortheacquisitionproperty,plantandequipmentisgiveninNoteNo.44.1.2(a). Capitalworkinprogresswhichisaccountedforonthebasisofvaluecertifiedincludesmobilisationadvancesand Thedetailedclassificationofthe"equipment"isgiveninNoteNo.31.11(a)&(b) 31.2 (a) Property, plantandequipment 31 Group Rvsd20)“o-urn seshl o aeaddsotne prtos (Revised 2006)“Non-currentassetsheldforsaleanddiscontinuedoperations” The bankheldnoproperty,plantandequipmentretiredfromactiveusewhichwerenotclassifiedasforsaleinaccord depreciation isasfollows: No freeholdproperty,plantandequipmenthavebeenpledgedassecurityforanyliability. There werenorestrictionsthatexistedinthetitleofproperty,plantandequipmentBankGroupasatB

(Contd.)

,6,2 35407 ,9,5 3,694,565 4,191,155 3,574,047 4,060,520 R 00 R 00 s'0 Rs'000 Rs'000 Rs'000 Rs'000 Bank Group ws : alance Sheetdate. other constructionexpenses ried atcostlessaccumulated ance withSLAS38 ed, lossorgivenup.

BANK OF CEYLON ANNUAL REPORT 2011 239 BANK OF CEYLON ANNUAL REPORT 2011 240

1748 3,9 2130 922 1,2 60,268 119,520 59,252 211,300 5,386 3,751 338,798 10,506 6,563 127,498 5,120 2,812 7,941 32,937 11,994 38,437 4,053 5,500 SNWijepala DCSosa Narammala Branch Madampe Branch uuaaa2dCt rnh CSs ,7 4,0 31,223 40,000 8,777 - - - DCSosa Kurunagala 2ndCityBranch uuaaaBac D oa - - - 357 ,4 (1,384) 2,143 3,527 - - - DCSosa Kurunagala Branch uuaaaPoic fie CSs ,9 332 (588) 3,302 3,966 3,511 7,262 3,890 7,141 11,250 - 7,540 23,063 15,153 7,284 15,801 4,029 8,012 - 24,750 47,555 3,960 81,402 38,750 102,555 - 7,460 126,402 55,000 14,000 45,000 3,500 DCSosa DCSosa DCSosa Kurunagala ProvinceOffice DCSosa DCSosa Kurunagala CM'sQurt's Kurunagala AGM'sQurt's Dummalasooriya Branch ChilawBranch NorthWestern Province

1,8 8,1 7,3 300 211 29,151 32,181 3,030 - 70,333 86,319 - 15,986 - 314 16,000 15,686 MAKumarakulasingam NelliadiBranch anrBac IeFcoy SSvknhn 15 ,7 535 6 690 6,662 6,930 268 5,385 5,570 185 SSivakanthan MannarBranch(IceFactory) afaBac M uaauaigm 15 479 464 ,3 1,9 11,553 13,491 1,938 64,634 64,749 115 MAKumarakulasingam JaffnaBranch afaAe fie - - - 84 170 10,936 11,760 824 - - - JaffnaAreaOffice Norhern Province

256 995 739 219 485 22,676 54,855 32,179 77,369 79,945 2,576 aahhn rnh iaata 8 1,5 1,6 459 207 7,498 12,047 4,549 19,668 19,953 285 SSivakanthan ValachcheniBranch uu rnh iaata ,6 161 5 25 ,8 984 (8,721) 12,612 1,189 15,550 14,278 205 2,938 22,999 3,722 351 34,435 34,450 4,722 1,611 15 1,000 1,260 SSivakanthan SSivakanthan SSivakanthan TrincomaleeBranch PottuvilBranch MuturBranch atclaBac SSvknhn 1 1,0 1,9 148 171 10,303 11,791 1,488 19,193 19,209 16 SSivakanthan BatticoloaBranch Eastern Province

1546 3,4 6437 946 4,5 58,741 148,157 89,416 684,387 (4,483) 839,843 3,788 (1,456) 5,612 155,456 4,207 7,623 28,134 6,046 8,271 931 11,253 6,453 6,222 5,155 10,341 40,133 5,641 7,502 51,697 378 12,000 13,333 2,015 11,038 2,718 11,999 58,712 5,747 9,954 11,069 6,880 17,830 5,883 25,778 22,659 224,867 7,015 7,747 12,454 9,934 17,452 81,667 33,778 29,962 309,867 24,659 2,500 2,000 147,670 13,000 86,667 8,000 85,000 33,962 2,000 KTDTissera 182,170 SarathGFernando 3,066 SarathGFernando 5,000 4,000 NuwaraEliyaProperty 34,500 KTDTissera ThalawakaleStaffQurt's KTDTissera SarathGFernando KTDTissera ThalawakeleBranch NuwaraEliyaStaffQurt's KTDTissera NuwaraEliyaBranch KTDTissera AGGunarathna NawalapitiyaBranch MaskeliyaBranch Kandy2ndCityBranch HattonStaffQurt's HattonBranch aaaBac Srt enno 150 ,9 41 ,1 609 1,495 4,692 6,009 10,164 4,514 5,472 491 73,961 74,836 1,991 875 1,500 SarathGFernando SarathGFernando GampolaBranch GalahaBranch Central Province

s 0 R'00 s 0 R'00 s 0 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 fln fln ulig bidns ofbuildings buildings buildings ofland ofland ad mut (os vleo muto (loss) amountof valueof /(Loss) amount land aeo rmss Vle Cs f eaud upu Witndw Rvle Surplus/ Revalued Writtendown Surplus Revalued Costof Valuer Nameofpremises Bank'sfreeholdland&buildingswererevaluedbyprofessionallyqualifiedindependentvaluersasat31December2010basedon Revaluationoffreeholdproperties 31.10 Property, plantandequipment 31 Notes totheFinancialStatements auakly rnh CSs 4 1,0 1,5 - - - - - 12,755 13,200 445 DCSosa Madurankuliya Branch or fteCnrlBn fSiLna h eal ftervlaini ie eo Board oftheCentralBankSriLanka.Thedetailsrevaluationisgivenbelow: existing useandtherevaluationsurplusofRs.4,714millionwasrecognisedinFinancialStatementsyear2011withp (Contd.)

ermission oftheMonetary anopenmarketvalueof

1797 1,2 6596 1,6 3083 200,881 320,843 - 119,962 605,996 - 7,053 713,923 382 107,927 - 11,553 5,916 19,266 (932) 3,609 72,886 (4,648) 4,500 (1,474) 40,500 11,771 19,565 82,152 3,227 14,062 967 (742) 44,447 21,234 5,855 7,522 12,458 23,000 9,266 18,710 5,891 48,447 163,990 1,899 9,827 41,229 8,996 28,880 3,435 47,938 159,926 10,391 184,500 4,000 58,229 5,783 10,569 46,478 16,422 171,364 55,938 20,510 4,500 SNWijepala 17,000 1,854 10,283 52,478 11,438 68,895 8,000 PBKalugalagedara SNWijepala AGGunarathna 4,500 6,000 71,120 28,173 AluthgamaBranch SNWijepala SNWijepala WellawatteBranch PMBEdmund PanaduraBranch 2,225 26,319 GJSumanasena MatugamaBranch AGGunarathna MaharagamaBranch PBKalugalagedara Kalutara Branch PMBFernando Kalutara AreaOffice IdamaBranch HoranaBranch Dehiwala Branch Beruwala Branch ablpty rnh BKlglgdr 924 1,0 90,716 110,000 19,284 - - - PBKalugalagedara Bambalapitiya Branch Western ProvinceSouth

7483 ,7,0 6615 9,4 9402 567,043 964,092 397,049 11,783 666,185 (1,679) 48,300 1,371,008 7,276 22,022 704,823 22,798 36,517 4,691 16,406 23,701 34,662 106,700 14,030 9,130 49,529 149,538 136,700 11,864 9,339 44,436 177,978 89,000 30,000 472,645 48,988 12,420 28,440 58,594 39,471 739,672 103,988 SNWijepala 22,420 14,158 267,027 111,000 55,000 SNWijepala 193,103 10,000 211,000 DHWDissanayake SNWijepala 660,328 100,000 DHWDissanayake BorellaS.G PettahBranch 467,225 NegomboBranch KadawathaBranch PBKalugalagedara KTDTissera JaElaBranch Colombo1-G.O.H(Y.S.B) Colombo1-CityOffice WesternProvinceNorth

1,9 8,5 6,5 2,5 6,5 42,598 65,450 22,852 64,252 81,550 17,298 oaaaaBac K eah 4 3,0 2,5 924 400 24,786 2,590 34,000 10,188 4,423 5,034 9,214 17,027 1,833 10,000 29,955 6,839 15,824 4,966 30,000 10,473 18,577 8,000 45 17,973 2,753 15,000 7,500 7,000 KBHerath SNWijepala KTDTissera MonaragalaBranch KTDTissera HaputaleBranch BandarawelaBranch BadullaUvaPro.Office Uva Province

7,8 2594 6,0 2,4 5,6 31,920 58,766 - 26,846 - - 163,001 - 235,984 - - - 72,983 - - (634) 12,500 27,834 28,961 13,134 40,000 43,000 12,166 14,039 AGGunarathna AGGunarathna SNWijepala TangalleBranch MataraBazaarBranch AmbalangodaBranch mdw rnh JSmnsn ,0 1,3 988 ,0 262 58 10,478 2,423 14,165 12,780 2,662 3,687 10,357 2,604 16,004 26,220 9,838 16,835 47,220 12,838 831 21,000 3,000 GAGunawardena AGGunarathna GJSumanasena WeligamaBranch MataraBranch ImaduwaBranch amn rnh JSmnsn 6 522 ,1 221 ,6 1,747 7,899 3,968 15,060 9,315 7,161 2,221 10,131 43,640 5,019 816 49,940 5,282 6,119 6,300 263 8,369 SNWijepala 2,250 GJSumanasena GAGunawardena HakmanaBranch GalleBranch AmbalantotaBranch Southern Province 5,3 1931 2,5 2,9 3,0 7,114 34,609 27,495 - 121,952 5,081 - 179,391 2,473 (1,031) 591 12,000 57,439 1,502 19,750 - 6,919 1,357 17,277 2,533 29,000 766 17,561 63,250 1,998 49,000 28,000 10,143 80,250 20,000 3,498 10,439 18,643 17,000 1,500 8,500 KBHerath AGGunarathna SNWijepala AGGunarathna AGGunarathna RatnapuraCityBranch RatnapuraBranch KegalleBranch DehiowitaBranch BalangodaBranch Sabaragamuwa Province

s 0 R'00 s 0 R'00 s 0 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 fln fln ulig bidns ofbuildings buildings buildings ofland ofland ad mut (os vleo muto (loss) amountof valueof /(loss) amount land aeo rmss Vle Cs f eaud upu Witndw Rvle Surplus/ Revalued Writtendown Surplus Revalued Costof Valuer Nameofpremises Property, plantandequipment 31 (Contd.)

BANK OF CEYLON ANNUAL REPORT 2011 241 BANK OF CEYLON ANNUAL REPORT 2011 242

Netbook valueasatDecember2011

aac sa 1tDcme ,3,2 11355 ,1,5 52599 4,863,566 5,275,989 1,019,357 1,123,505 3,133,127 Balance as at31stDecember xhnert dutet 844 273 43 1,0) (968) (11,600) (453) (2,723) (8,424) Exchange rateadjustments rnfrt fieeupet - - 4,4 4,4 - 45,746 45,746 - - Transfer to officeequipment rnfrt ako eln(K iie (74,575) - - - - Transfer to BankofCeylon(UK)Limited ipsl uigteya 1027 3,7) (442 2709 (118,980) (227,019) (44,412) (32,370) (150,237) Disposals duringtheyear hrefrteya 2,7 1485 1,8 6526 631,771 605,296 115,486 164,835 324,975 Chargefor theyear aac sa s aur ,6,1 9373 0,9 48356 4,426,318 4,863,566 902,990 993,763 2,966,813 Balance as at1stJanuary Accumulated depreciation

aac sa 1tDcme ,8,8 19126 ,9,7 74126 6,866,014 7,411,206 1,593,771 1,931,246 3,886,189 Balanceasat31stDecember xhnert dutet 1,5) (,2) (,7) (392 (984) (13,952) (1,573) (2,122) (10,257) Exchangerateadjustments dutet/rnfr 30 1) - (6) (1,683) (364) - (14) (350) Adjustments/transfers rnfrt fieeupet - - 4,5 4,5 - 49,552 49,552 - - Transfertoofficeequipment rnfrt ako eln(K iie (76,097) - - - - TransfertoBankofCeylon(UK)Limited ipsl uigteya 1038 3,4) (440 2770 (120,461) (227,790) (44,440) (33,042) (150,308) Disposalsduringtheyear diin uigteya 5,6 2421 6,8 7776 645,393 737,746 161,386 224,291 352,069 Additionsduringtheyear aac sa s aur ,9,3 17213 ,2,4 68604 6,419,846 6,866,014 1,428,846 1,742,133 3,695,035 Balanceasat1stJanuary Cost 11 a ak 31.11 (a) Bank s 0 s 0 s 0 s 0 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 ftig fittings 11 Eupet qimn eupet equipment & equipment Equipment 31.11 optr Friue fie oa Total Total Office Furniture Computer sa 1tDcme 01 2010 2011 941,9852,050,4571,108,472 1,455,5545,061,2613,605,707 As at31stDecember Grand Total 1847 ,7,1 8817 4,5 2980 62,815 209,870 147,055 888,177 1,076,614 188,437

ol rd eteClmo1 PTMhde 0,3 1500 5,561 115,000 109,439 - - - PPTMohideen WorldTradeCentreColombo1 oob al d rwsBd BHaah 9,9 5000 9,0 448 500 10,582 15,000 4,418 493,001 590,000 96,999 KBHearath ColomboDarlyRd.BrownsBldg oob MsBnao BKlglgdr 000 1,5 2520 ,2 470 (2,079) 4,750 6,829 235,250 315,250 80,000 PBKalugalagedara Colombo7-GM'sBangalow Others

511 786 275 689 214 25,265 42,114 16,849 52,755 57,886 5,131 uaaEiaHldyHm T isr 0 3,1 2,1 152 ,8 5,322 1,199 2,036 6,884 3,750 3,880 1,562 2,551 1,844 29,916 122 30,116 6,267 1,250 200 8,120 1,128 1,853 KTDTissera NuwaraEliyaHolidayHome KTDTissera LindulaRidgeHolidayHome SNWijepala HaputaleWoodlandBungalow ioy oe lnanBn. KDTsea 32 ,2 107 ,5 851 6,021 8,571 2,550 1,077 1,429 352 KTDTissera DicokyaLowerGlencarnBung. aul ena ug KDTsea 101 440 339 ,3 360 (1,536) 12,223 3,600 15,429 5,136 3,206 13,329 2,044 14,400 2,571 1,071 527 KTDTissera KTDTissera DickoyaUpperGlencarnBung. BadullaFernhamBung. HolidayHomes&Rests

s 0 R'00 s 0 R'00 s 0 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 fln fln ulig ulig ofbuilding buildings building ofland ofland ad mut (os vleo mut (loss) amount valueof /(loss) amount land aeo rmss Vle Cs f eaud upu Witndw Rvle Surplus/ Revalued Writtendown Surplus Revalued Costof Valuer Nameofpremises Property, plantandequipment 31 Notes totheFinancialStatements Net bookvalueasatDecember2010 aaaaaCTI SNWjpl 148 7,6 1996 639 510 48,751 75,120 26,369 159,926 171,364 11,438 SNWijepala Maharagama C.T.I

(Contd.) 7822 4,7 2,5 2,002,448 525,856 748,370 728,222 7302 0,4 5444 2,135,217 574,414 807,741 753,062

Leaseholdlandrepresents theleaseholdinterestinlandsheldforownuse.Thevalueofbuildingssituated leaseho e okvle 7,7 7,1 1736 119,978 117,376 77,515 76,270 Netbook value

aac sa 1tDcme 434 264 941 36,434 39,441 12,664 14,314 Balance as at31stDecember dutet/rnfr 5 5 - 45 - 45 Adjustments/Transfers mriaindrn h er 165 ,9 292 3,653 2,962 2,296 1,605 Amortisation duringtheyear aac sa s aur 264 038 644 32,781 36,434 10,368 12,664 Balance as at1stJanuary A cmltda otsto Accumulated amortisation

aac sa 1tDcme 054 019 5,1 156,412 156,817 90,179 90,584 Balance as at31stDecember dutet/rnfr 5 5 - 45 - 45 Adjustments/Transfers diin uigteya 6 1,2 30 16,521 360 16,521 360 Additions duringtheyear aac sa s aur 019 368 5,1 139,891 156,412 73,658 90,179 Balanceasat1stJanuary Cost 32 Leasehold land

sa 1tDcme 21 21 21 2010 2011 2010 2011 As at31stDecember e okvlea tDcme 00 7249 2,1 5858 2,125,497 538,598 824,410 762,489 NetbookvalueasatDecember2010 e okvlea tDcme 01 8889 1,1 5486 2,305,036 584,886 911,311 808,839 NetbookvalueasatDecember2011

aac sa 1tDcme 33792 13686 10854 57332 5,207,698 5,743,342 1,068,534 1,326,876 3,347,932 Balanceasat31stDecember dutet/rnfr 739 574 629 784 (75,344) 77,854 16,259 (5,714) 67,309 Adjustments/Transfers rnfrfo qimn ofehl ulig - - - - (380,955) - - - - Transferfromequipmenttofreeholdbuilding rnfrt fieeupet - - 4,4 4,4 - 45,746 45,746 - - Transfertoofficeequipment xhnert dutet 293 227 14 524 (967) (5,284) (114) (2,227) (2,943) Exchangerateadjustments ipsl uigteya 1608 3,6) (548 2726 (119,019) (237,256) (45,438) (35,760) (156,058) Disposalsduringtheyear hrefrteya 3145 8,6 1226 5,8 665,175 654,584 122,226 180,863 351,495 Chargefortheyear aac sa s aur 30819 ,8,1 9985 ,0,9 5,118,808 5,207,698 929,855 1,189,714 3,088,129 Balanceasat1stJanuary Accumulated depreciation

aac sa 1tDcme 41671 ,3,8 16340 ,4,7 7,333,195 8,048,378 1,653,420 2,238,187 4,156,771 Balanceasat31stDecember dutet/rnfr 481 ,8 923 1,4 (66,725) 112,449 9,223 8,385 94,841 Adjustments/Transfers oki rgescptlsd - - - - 20,285 - - - - Workinprogresscapitalised rnfrfo qimn ofehl ulig - - - - (386,190) - - - - Transferfromequipmenttofreeholdbuilding rnfrt fieeupet - - 4,5 4,5 - 49,552 49,552 - - Transfertoofficeequipment xhnert dutet 1,3) (,8) (,7) (364 (984) (13,694) (1,573) (1,982) (10,139) Exchangerateadjustments ipsl uigteya 1769 3,3) (582 2018 (120,502) (240,158) (45,842) (36,637) (157,679) Disposalsduringtheyear diin uigteya 7,3 2427 7,0 8704 683,067 807,034 173,607 254,297 379,130 Additionsduringtheyear aac sa s aur 38068 ,1,2 14843 ,3,9 7,204,244 7,333,195 1,468,453 2,014,124 3,850,618 Balanceasat1stJanuary 31.11 (b)Group Cost s 0 s 0 s 0 s 0 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 ftig fittings qimn eupet equipment & equipment optr Friue fie oa Total Total Office Furniture Computer sa 1tDcme 01 2010 2011 As at31stDecember Property, plantandequipment 31 under property,plant&equipment.Theinterestonleaseholdlandisstated atcostlessaccumulatedamortisation.

(Contd.) R 00 R 00 s'0 Rs'000 Rs'000 Rs'000 Rs'000

Bank Group ld landisshownseperately

BANK OF CEYLON ANNUAL REPORT 2011 243 BANK OF CEYLON ANNUAL REPORT 2011 244 Note:Thematurityanalysis ofdepositsisgiveninNoteNo.48 oa eois 587452 2,3,9 571854 529,318,700 597,138,584 1,304,709 524,232,697 588,764,572 2,731,609 2,538,817 1,065,756 525,475,174 2,331,884 592,075,091 1,871,709 520,628,124 2,538,817 584,560,979 2,331,884 Totaldeposits Depositsfromothercustomers Deposits fromfinancecompanies Deposits frombanks Customer-wiseanalysisofdeposits 34.1 oa eois 587452 2,3,9 571854 529,318,700 597,138,584 524,232,697 588,764,572 Totaldeposits

192221 6,1,6 124396 169,030,416 162,483,966 1,183,048 166,417,262 159,242,231 975,385 87,504,950 1,183,048 86,762,222 975,385 86,281,233 85,005,626 Otherdeposits Timedeposits aig eoiswt sai akn ,4 - ,4 - 55,141,632 5,643 50,976,963 54,866,267 - 25,200,786 50,654,713 23,763,753 24,086,714 22,600,864 5,643 Savings deposits withIslamicbanking Savings deposits Currentaccount deposits oeg urnydpst Foreigncurrencydeposits

495231 5,1,3 446468 360,288,284 434,654,618 357,815,435 1,886,367 429,522,341 1,579,321 1,886,224 1,579,132 Otherdeposits etfctso eoi ,5 2,3 460 28,539 4,650 28,539 157,867,930 204,114,102 155,226,772 4,650 134,914,569 199,125,108 320,325 161,545,566 134,914,655 657,981 160,960,763 65,143,847 66,611,106 126,707 320,325 65,312,213 141,892 657,981 67,052,815 126,707 141,892 Certificatesofdeposit Timedeposits SavingsdepositswithIslamicbanking Savingsdeposits CurrentaccountdepositswithIslamicbanking Currentaccountdeposits oa urnydpst Localcurrencydeposits 34 Deposits

sa 1tDcme 21 21 21 2010 2011 2010 170,404 2011 412,910 163,826 342,839 As at31stDecember Intangibleassetsrepresentthevalueofcomputerapplicationsoftwaresystems and subsequentmodificationsincludingcostsdi Netbookvalue aac sa 1tDcme ,4,0 13478 ,8,9 1,390,303 1,483,393 1,354,788 1,444,204 Balanceasat31stDecember dutet/rnfr 866 - - - Adjustments/Transfers ipsl uigteya 684 114 684 (1,104) (6,854) (1,104) (6,854) Disposalsduringtheyear mriaindrn h er 9,7 5,7 9,4 59,076 99,944 1,331,465 54,873 1,390,303 1,301,019 96,270 1,354,788 Amortisationduringtheyear Balanceasat1stJanuary A cmltda otsto Accumulated amortisation aac sa 1tDcme ,8,4 15864 ,9,0 1,560,707 1,896,303 1,518,614 1,787,043 Balanceasat31stDecember dutet/rnfr 1,668 - - - Adjustments/Transfers ipsl uigteya 684 114 684 (1,104) (6,854) 109,473 342,450 (1,104) 1,450,670 107,887 1,560,707 (6,854) 275,283 1,411,831 1,518,614 Disposalsduringtheyear Additionsduringtheyear Balanceasat1stJanuary Cost 33 Intangible assets

sa 1tDcme 21 21 21 2010 2011 2010 2011 As at31stDecember Notes totheFinancialStatements customising foritsintendeduse,andarecarriedatcostlessaccumulatedamortisationanyimpairmentlosses. R 00 R 00 s'0 Rs'000 Rs'000 Rs'000 Rs'000 R 00 R 00 s'0 Rs'000 Rs'000 Rs'000 Rs'000

Bank Group Bank Group rectly attributablein sa 1tDcme 01 2010 66,365 2011 105,978 Insuranceprovision-life[37.1(a)] As at31stDecember Theinsuranceprovision-lifebalancerepresentsthefundofMBSLInsurance CompanyLimitedwhichcarriesoutlifeandn Insurance provision-life 37.1 37 Insurance Thesecuritiessoldunderre-purchaseagreementsaredebtissuedby the Bankforshorttermfundingpurposes.Thei provision oa 0,8 66,937 106,682 Total LongterminsurancecontractliabilitiesincludedintheLifeInsuranceFund,resulted primarilyfromtraditionalnonparticip 52,968,787 48,559,119 53,522,487 48,724,319 Securitiessoldunderre-purchaseagreements Securitiessoldunderre-purchaseagreements 36 a Itrs ae htvr ypoutada eurdb euain sudb h nuac or fSiLna (a) Interest ratesthatvarybyproductandas requiredbyregulationsissuedtheInsuranceBoardofSriLanka; Theinsurance provisionhasbeenestablishedbaseduponthefollowing:

b Mortality ratesbasedonpublishedmortalitytablesadjustedforactualexperienceasrequiredbyregulationsissued byt (b) ae hn5yas 17971 0,4 17971 403,641 1,769,731 403,641 45,880,019 1,769,731 64,955,372 41,852,436 60,091,146 11,148,355 33,055,702 10,189,076 31,813,166 Laterthan5years Laterthan1yearandnotlater5years Notlaterthan1year Maturityofborrowings 35.1 c Surrenderratesbaseduponactualexperiencebygeographic areaandmodifiedtoallowforvariationsinpolicyform. (c) aac sa 1tDcme 1598 66,365 41,336 2010 105,978 66,365 2011 Balance as at31stDecember Balanceasat1stJanuary As at31stDecember 37.1(a) Movementininsuranceprovision -life Furtherthe actuaryhasestimatedthatthesolvencymarginrequiredunderregulationofInsuranceIndustryActNo4320

Thevaluation oftheinsuranceprovision-lifebusinessasat31stDecember2011wasmadebyMr.RKahakachchiA

eiac orwns 55839 ,1,7 55839 5,914,175 5,568,349 5,914,175 5,568,349 43,743,914 65,192,099 43,743,353 65,146,721 6,826,345 24,135,552 2,787,625 18,458,973 Refinanceborrowings Termborrowingsfrombanks&otherinstitutionsinSriLanka Termborrowingsfrombanksabroad 35 Borrowed funds

sa 1tDcme 21 21 21 2010 2011 2010 2011 As at31stDecember eanucamdt h aac he ae remain unclaimedtotheBalanceSheetdate. This balanceindicatestheliabilityonaccountofpolicyholderswhichhasbeenactuariallyvaluedandclaims/benefitsduetol securities variedfrom5.8%to9.5%duringtheyear.(2010:6.0%11.0%) nlie eeis 74 572 704 Unclaimed benefits Short durationcontractliabilitiesareprimarilyaccidentandhealthinsuranceproducts. nrae(erae uigteya 963 25,029 39,613 Increase/(decrease) duringtheyear Rs.3,200,000/-).This solvencymarginismaintainedinthelongterminsurance fund. life insurancebusinesses. year amountstoRs.105,978,000/-(2010:66,365,000/-)intheopinionof consultantactuary,thereserveisadequatetocovert Consultants (Private)LimitedforandonbehalfofMBSLInsuranceCompany Limited.Inaccordencewiththeconsultantactuary's almnybroig 45000 48485 947,581 4,884,805 - 4,500,000 Call moneyborrowings

4,2,1 5,2,8 4,5,1 52,968,787 48,559,119 53,522,487 48,724,319 9,7,4 5,4,5 9,8,0 57,432,015 99,780,805 52,445,153 93,674,043 9,7,4 5,4,5 9,8,0 57,432,015 99,780,805 52,445,153 93,674,043 R 00 R 00 s'0 Rs'000 Rs'000 Rs'000 Rs'000 s 0 Rs'000 Rs' 000 s 0 Rs' 000 Rs' 000

Group Bank Group he InsuranceBoardofSriLankaand;

ating lifeinsuranceproducts. ife policyholders,which he liabilitiespertainingtothe nlf nuac uies on lifeinsurancebusiness. 00 asRs.4,787,000/-(2010: nterest rateforsuch report, thereservefor ctuarial &Management

BANK OF CEYLON ANNUAL REPORT 2011 245 BANK OF CEYLON ANNUAL REPORT 2011 246 Thereservefornetunearnedpremiumindicatestheamountof(netreinsurance)whichisattributabletopolicieswr Insuranceprovision-nonlife 37.2 37 Insurance provision Notes totheFinancialStatements sa 1tDcme 21 2010 2011 188,504 293,141 Reservefornetunearnedpremiums[Note37.2(b)] As at31stDecember Thisreserveincludesaforclaimsincurredbutnotreported(IBNR). Thereserveforgrossoutstandingclaimsreferstoamountofwhichremainunclaimedasat31stDecember2011. Thereservefornetdeferredacquisitioncostreferstothecommissionadjustment(netofreinsurance)linkedaboveres eev o e eerdaqiiincs Nt 72() 1,9) (11,717) (14,596) Reservefornetdeferredacquisitioncost[Note37.2(c)] oa 2,5 252,773 328,251 75,986 49,706 Total Reserveforgrossoutstandingclaims[Note37.2(d)] 37.2 (a)Movementininsuranceprovision-nonlife aac sa 1tDcme 3821 252,773 328,251 Balanceasat31stDecember 37.2 (b)Movementinthereservefornetunearnedpremiums

aac sa 1tDcme 2311 188,504 293,141 Balanceasat31stDecember 37.2 (c)Movementinthereservefornetdeferredacquisitioncost aac sa 1tDcme (456 (11,717) (14,596) Balanceasat31stDecember nrae(erae uigteya 2,4) 34,463 (23,045) Increase/(decrease) duringtheyear 37.2 (d)Movementinthereserveforgrossoutstandingclaims oa rs usadn lis 4,0 75,986 11,044 5,111 49,706 5,933 7,809 11,044 64,942 (3,235) 41,897 Directors areoftheopinionthattotalfutureclaimsandrelatedexpenseswillnotexceedunearnedpremiumpre Totalgross outstandingclaims Balance as at31stDecember Increase/(decrease) duringtheyear Balance as at1stJanuary IBNR& IBNER claimsreserve Balance as at31stDecember IBNR&IBNERreserveshave beenactuariallycomputedbyMr.NKParikhofM/SAPandithConsultants&Actuaries. Thevaluati TheIncurredButNotReported claimreserve(IBNR)andIncurredButNotEnoughReported(IBNER)are determinedb The generalinsuranceprovisionrepresentsnonlifecarriedoutbyMBSLInsuranceCompanyLimited. 2011, butcoveringperiodafter31stDecemebr2011. aac sa s aur 5,7 181,569 252,773 Balance asat1stJanuary nrae(erae uigteya 548 71,204 75,478 Increase/(decrease) duringtheyear aac sa s aur 8,0 157,059 188,504 Balance asat1stJanuary nrae(erae uigteya 0,3 31,445 104,637 Increase/(decrease) duringtheyear aac sa s aur 1,1) (11,080) (11,717) Balance asat1stJanuary nrae(erae uigteya 289 (637) (2,879) Increase/(decrease) duringtheyear aac sa s aur 492 30,479 64,942 Balance asat1stJanuary tionally acceptedactuarialmethods, andisperformedonannualbasis. risks. currently available.However,itisinherent tothenatureofbusinesswrittenthatultimateliabilitymay varyasare (Contd.) s 0 Rs'000 Rs' 000

Group sult ofsubsequentdevelopments. erve. mium relatedtounexpired itten asat31stDecember ased oninformation on isbasedinterna- aac sa 1tDcme 1,6 3686 1,0 484,730 615,809 346,886 416,362 Balanceasat31stDecember

amn aedrn h er (,4) (,5) (297 (8,163) (12,997) (5,757) (2,341) Paymentmadeduringtheyear rvso aedrn h er 7,1 8,2 1964 112,983 139,624 80,023 71,817 Provisionmadeduringthe year Provisionforgratuity 39.1 te iblte ,9,8 19284 ,8,0 2,527,821 5,082,509 1,912,844 484,730 4,093,181 615,809 346,886 416,362 Otherliabilities Provision forgratuity[Note39.1] ae hn1 ots 1,2 2,8 1,2 23,180 13,724 23,180 13,724 Laterthan12months ihn1 ots 946 685 ,5 16,805 9,456 16,805 9,456 Within12months hqe eto laig 4069 6,7 4069 769,471 490,629 769,471 11,037,435 1,558,308 490,629 14,296,368 1,626,018 10,630,898 1,558,308 13,952,570 1,626,018 Cheques sentonclearing Payable to employees&suppliers Accrued interest payable Lease 39 Other liabilities creditors

sa 1tDcme 21 21 21 2010 2011 2010 2011 As at31stDecember e eerdtxlaiiy 11702 5,8 11651 489,525 1,146,511 457,587 1,107,072 Netdeferredtaxliability

1577 1,7 (,9) 2,6 3387 2,8 2,8 2,045 23,987 329,887 353,877 24,766 (3,094) 118,872 115,777 nsdtxlse 8,9 1976 ,7 (24,559) 1,675 179,716 181,394 - - - - Unusedtaxlosses eie eei ln 1,7 1882 304 476 7,8 1011 232 26,604 22,312 150,171 172,483 24,766 (3,094) 118,872 115,777 Definedbenefitplans Deferred tax assets on : 12289 7,5 (2,8) (290 ,0,8 8942 4756 (51,438) (457,566) 819,412 1,500,388 (72,900) (422,983) 576,459 1,222,849 eauto upu nfehl ulig 2,0 - - - 2348 - - - 223,408 - - - 223,408 Revaluationsurplusonfreeholdbuildings 9941 7,5 (2,8) (290 ,7,8 1,1 (5,6) (51,438) (457,566) 819,412 1,276,980 (72,900) (422,983) 576,459 999,441 esdast 9,5 2734 4151 7,0) 9107 9,3 (1,5) (41,926) (513,257) 397,830 911,087 (72,103) (451,571) 247,384 698,954 Leasedassets w ses 3047 2,7 2,8 (9) 3583 2,8 5,9 (9,512) 55,691 421,582 365,893 (797) 28,588 329,075 300,487 Ownassets Reconciliation ofnetdeferredtaxliability Accelerated 38.2 depreciation for tax purposes : s 0 R'00 s 0 R'00 s 0 R'00 s 0 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 Bn Group IncomeStatement BalanceSheet IncomeStatement Bank BalanceSheet 20112010 aac sa 1tDcme 39387 11702 ,0,9 4757 ,8,6 ,4,1 13866 489,525 1,398,636 4,385,760 1,146,511 457,587 1,307,391 3,953,827 1,107,072 Balanceasat31stDecember mutoiiaigrvrigdrn h er 18851 2,7 1755 814 ,8,3 4359 4,1 49,393 141,117 433,579 2,189,239 48,134 137,525 426,077 1,848,551 Amountoriginating/reversingduringtheyear eerdtxefc nrvlainsrls Deferredtaxeffectonrevaluationsurplus npoet 9,8 2348 9,8 2347 - - 223,407 797,885 - - 223,408 797,885 onproperty

Summaryofnetdeferredtaxliability 38.1 s 0 R'00 s 0 R'00 s 0 R'00 s 0 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 dfeec efc dfeec efc dfeec efc dfeec effect difference effect difference effect difference effect difference sa 1tDcme 01 00 01 2010 Group 2011 2010 Bank TemporaryTax 2011 Temporary Tax Temporary Tax Tax Temporary As at31stDecember 38 Deferred tax liabilities dutettases - - 442 - 4,452 - - Adjustment/transfers aac sa s aur 4,8 2260 8,3 379,910 484,730 272,620 346,886 Balance asat1stJanuary eerdicm a nicm/xes 4607 4,3) (3,7) (49,393) (433,579) (48,134) (426,077) Deferred incometaxonincome/expense Deferred taxliabilitieson: aac sa s aur ,0,9 4757 ,6,6 4943 ,9,3 4955 ,5,1 440,132 1,257,519 489,525 1,398,636 409,453 1,169,866 457,587 1,307,391 Balance asat1stJanuary 2,0,4 1,5,9 2,3,1 16,417,750 22,134,513 15,258,392 20,601,940 R 00 R 00 s'0 Rs'000 Rs'000 Rs'000 Rs'000 Bank Group

BANK OF CEYLON ANNUAL REPORT 2011 247 BANK OF CEYLON ANNUAL REPORT 2011 248 aac sa 1tDcme 13582 87638 25659 39,434,565 42,526,549 38,706,348 41,365,832 *Interestpayableonzero coupon debentureshasbeencapitalisedtothevalueofdebentures. Balanceasat31stDecember xhnert dutet 5,7 (596 186 (65,926) 51,876 (65,926) 51,876 Exchangerateadjustment ne opn dutet - - (4,0) (696) (140,000) - - Intercompanyadjustment neetcptlsd* 5,0 4,4 5,0 48,848 57,608 (1,744,160) (2,877,500) 48,848 (1,000,000) 22,083,113 (2,450,000) 57,608 6,000,000 19,113,386 21,678,813 39,434,565 5,000,000 18,044,613 38,706,348 Interestcapitalised* Redemptions Issuedduring theyear Balance as at1stJanuary 40.1 (c)Movementintotaldebentures-Summary

sa 1tDcme 21 21 21 2010 2011 2010 2011 26,118,113 25,350,613 25,378,813 24,178,813 As at31stDecember * Interestpayableonzerocoupondebentureshasbeencapitalisedtothe valueofdebentures. Balance as at31stDecember ne opn dutet - - (4,0) - (744,160) (140,000) (1,627,500) - - - (1,200,000) Intercompanyadjustment Redemptions suddrn h er - 1,7,1 10000 17,088,113 1,000,000 16,678,813 - Issuedduringtheyear 40.1 (b)Movementinseniordebentures

aac sa 1tDcme 71709 33755 71596 13,316,452 17,175,936 13,327,535 17,187,019 Balanceasat31stDecember xhnert dutet 5,7 (596 186 (65,926) 51,876 (65,926) 51,876 Exchangerateadjustment ne opn dutet - - - (696) - - - Intercompanyadjustment neetcptlsd* 5,0 4,4 5,0 48,848 57,608 (1,000,000) (1,250,000) 48,848 4,995,000 (1,000,000) (1,250,000) 5,000,000 57,608 5,000,000 5,000,000 39,434,565 42,526,549 38,706,348 41,365,832 Interestcapitalised* Redemptions Issuedduringtheyear 40.1 (a)Movementinsubordinatedebentures Themovement indebenturesissuedwasasfollows: 40.1 Totaldebentures o S ,0 ah(rvt lcmn) 2,410,180 2,462,056 2,410,180 2,462,056 ofUS$1,000each(privateplacement) Unsecured,subordinated,redeemabledebentures o s10ec piaepaeet ofRs.100each(privateplacement) eue eembedbnue - - 1500 200,000 125,000 - - Secured,redeemabledebentures o s10ec piaepaeet 1,550,000 300,000 1,550,000 300,000 ofRs.100each(privateplacement) Unsecured,subordinatedredeemabledebentures o s10ec piaepaeet ofRs.100each(privateplacement) Unlisted debentures o s10ec pbi su) ofRs.100each(publicissue) eue eembedbnue - - 8000 - 860,000 - - Secured,redeemabledebentures o s10ec pbi su) 9,356,272 14,413,880 9,367,355 14,424,963 ofRs.100each(publicissue) Unsecured,subordinated,redeemabledebentures 40 Debentures

sa 1tDcme 21 21 21 2010 2011 2010 2011 As at31stDecember Notes totheFinancialStatements aac sa s aur 53883 ,0,0 2,1,1 9,774,160 26,118,113 8,700,000 25,378,813 Balance asat1stJanuary aac sa s aur 33755 ,4,1 33642 9,339,226 13,316,452 9,344,613 13,327,535 Balance asat1stJanuary neue eembedbnue 41883 53883 43563 25,918,113 24,365,613 25,378,813 24,178,813 Unsecured redeemabledebentures Listed debentures

R 00 R 00 s'0 Rs'000 Rs'000 Rs'000 Rs'000 R 00 R 00 s'0 Rs'000 Rs'000 Rs'000 Rs'000

Bank Group Bank Group oa eetrs 4,6,3 3,0,4 4,2,4 39,434,565 42,526,549 38,706,348 41,365,832 13,316,452 39,434,565 17,175,936 42,526,549 13,327,535 38,706,348 17,187,019 41,365,832 Totaldebentures Subordinateddebentures Debentures -Summary 40.3 Totaldebentures neue,rdeal eetrs 1,5,0 2,5,0 1,5,0 20,950,000 19,750,000 4,451,313 20,950,000 19,750,000 4,428,813 4,428,813 461,990 4,428,813 2,573,110 473,073 2,584,193 Unsecured,redeemabledebentures Floatinginterestrate Unsecured,redeemabledebentures Unsecured,subordinated,redeemabledebentures Fixedinterestrate DebenturesissuedtorelatedentitiesoftheBank/Group

eue,rdeal eetrs - - 1500 200,000 125,040 - - Secured,redeemabledebentures neue,rdeal eetrs - - 680 336,800 6,800 - - 9,896,149 9,795,009 9,896,149 9,795,009 Unsecured,redeemabledebentures Unsecured,subordinated,redeemabledebentures Floatinginterestrate

eue,rdeal eetrs - - 8990 - 859,960 - - Secured,redeemabledebentures neue,rdeal eetrs - - 1000 180,000 180,000 - - 1,296,323 3,145,827 1,296,323 3,145,827 Unsecured,redeemabledebentures Unsecured,subordinated,redeemabledebentures Fixedinterestrate Customer-wiseanalysisofdebentures 40.2

sa 1tDcme 21 21 21 2010 2011 2010 2011 As at31stDecember 40 Debentures eirdbnue 41883 53883 53063 26,118,113 25,350,613 25,378,813 24,178,813 Senior debentures neue,sbriae,rdeal eetrs 16190 ,6,9 16190 1,661,990 1,661,990 1,661,990 1,661,990 Unsecured, subordinated,redeemabledebentures Debentures issuedtothirdparties (Contd.)

2,2,9 2,1,7 2,1,1 27,525,293 28,413,913 27,513,876 28,424,996 1,4,3 1,9,7 1,1,3 11,909,272 14,112,636 11,192,472 12,940,836 R 00 R 00 s'0 Rs'000 Rs'000 Rs'000 Rs'000

Bank Group

BANK OF CEYLON ANNUAL REPORT 2011 249 BANK OF CEYLON ANNUAL REPORT 2011 250 rdeal eetrs a Anal 0.221 0.221 10 1.0 ,0,4 - 39010 - 3,900,140 - 3,900,140 11.00 11.00 08.12.2016 08.12.2011 Annually (a) redeemabledebentures Unsecured, subordinated, rdeal eetrs a A auiy 41.08 41.03 - - 1.1 76 3033 2,7 3033 322,775 380,383 322,775 1,069,670 380,383 1,074,670 1,074,670 17.61 11.50 17.61 11.50 - 11.50 11.50 28.06.2015 - 28.06.2010 24.11.2013 24.11.2008 Annually (a) Atmaturity (a) redeemabledebentures redeemabledebentures Unsecured, subordinated, Unsecured, subordinated, 1 otsT ae(rs) 11,522,280 12,874,720 12,874,720 11,522,280 1,200,000 - 6,362,865 11,160,373 1,200,000 1,000,000 6,171,448 - 1,000,000 10,131,496 1,000,000 12.30 1,500,000 1,500,000 1,500,000 8.60 10.39 10.98 10.52 - 8.44 8.14 10.39 8.19 12.03.2012 8.39 12.03.2007 - 10.01.2012 10.01.2007 17.11.2011 Annually 17.11.2006 (c) (12monthsTBrate(Gross) Annually Unsecured,redeemable,debentures 250,000 (c) (12monthsTBrate(Gross) - Annually Unsecured,redeemable,debentures (c) (12monthsTBrate(Gross)) Unsecured,redeemable,debentures 250,000 75basispoints) - (6monthsTBrate(Gross)plus 10.56 - 22,500 - - 2,300 10.43 - - - 31.12.2011 31.12.2003 - 2,300 Semiannually (b) 15.25 - 10.50 redeemabledebentures 15.25 - Floatinginterestrate 10.50 08.12.2016 29.09.2011 08.12.2011 05.05.2010 Semiannually (a) Atmaturity Unsecured,redeemabledebentures redeemabledebentures Unsecured, subordinated, rdeal eetrs a Anal 2.120 2.121 90 1.0 90 1.0 4,9 3510 3,0 339,1 339,107 345,190 345,190 19.00 19.00 19.00 19.00 24.11.2013 24.11.2008 Annually (a) redeemabledebentures Fixedinterestrate Unsecured, subordinated, rdeal eetrs a/b Sm nuly 81.01 81.06 02 1.6 - 10750 ,9,6 - 1,097,560 - 1,097,560 - 10.26 3,925,330 - 3,925,330 3,925,330 11.54 300,000 300,000 1,000,000 - 10.26 3 8.98 3,699,390 300,000 3,699,390 08.12.2016 3,699,390 8.95 300,000 10.46 08.12.2011 1,000,000 12.87 9.05 Semiannually - 10.26 (a)/(b) 9.95 28.06.2015 8.95 28.06.2010 10.49 9.13 Semiannually 11.88 - (a)/(b) 9.06 - 24.11.2013 redeemabledebentures 15.08.2013 24.11.2008 15.08.2008 75basispoints) 268,080 Semiannually 8.94 Unsecured, (a)/(b) (6monthsTBrate(Gross)plus - - redeemabledebentures subordinated, Annually 75basispoints) 27.10.2011 Unsecured, - (c) (6monthsTBrate(Gross)plus 27.10.2006 redeemabledebentures subordinated, Semiannually 100basispoints) - Unsecured, (c) (12monthsTBrate(Gross)plus redeemabledebentures subordinated, 11.80 - 75basispoints) Unsecured, (12monthsTBrate(Gross)plus redeemabledebentures subordinated, 11.80 16.11.2015 150basispoints) 16.11.2011 Unsecured, (6monthsTBrate(Gross)plus Semiannually subordinated, Secured,redeemabledebentures eue,rdeal eetrs eianal 1.121 1.121 16 - 1.0 9,8 - 591,880 - - 100 80,0 100,000 80,000 - - - 1,42 1,428,813 - 1,428,813 11.60 11.00 - - 11.00 2,00 2,000,000 11.00 1,00 2,000,000 1,000,000 13.42 13.20 11.00 11.60 1,000,000 13.42 13.42 17.09.2015 16.11.2014 13.20 13.20 13.42 13.00 13.20 13.20 17.09.2010 16.11.2011 13.00 13.00 13.20 13.20 Semiannually 31.08.2013 14.07.2015 13.00 13.20 31.07.2013 01.07.2015 31.08.2010 14.07.2010 Annually 31.07.2010 01.07.2010 Semiannually Semiannually Secured,redeemabledebentures Annually Unsecured,redeemabledebentures Annually Unsecured,redeemabledebentures Unsecured,redeemabledebentures Unsecured,redeemabledebentures Unsecured,redeemabledebentures % % s 0 R'00 s 0 Rs'000 Rs'000 Rs'000 Rs'000 % % % % Amountasat31December Effective Coupon annual rate Maturity rate Issue date date Interest Notes payable 40.4 Typeofdebentures 40 Debentures Notes totheFinancialStatements 0121 0121 21 21 21 2010 2011 2010 2011 2011 2010 frequency Unsecured, subordinated, A -SriLankarupeedebentures (Contd.)

Bank Group

,1 1,428,813 8,813 2,000,000 0,000 1,000,000 0,000 1,000,000 1,500,000 1,069,670 3,925,330 ,699,390 ,000 07 00 % % s 0 R'00 s 0 Rs'000 Rs'000 Rs'000 Rs'000 % % % % Amountasat31December Effective Coupon annual rate Maturity rate Issue date date Interest Notes payable 0121 0121 21 21 21 2010 2011 2010 2011 2011 2010 frequency Floatinginterestrate neue,rdeal eetrs b Sm nuly 51.09 51.01 - 03 1.3 - - - 330,000 - - - 12.53 500, 1,500,000 1,500,000 - 500,000 1,500,000 12.94 500,000 500,0 500,000 500,000 9.20 10.39 500,000 - 12.94 11.02 500,000 9.20 8.61 11.01 05.12.2011 1,500,000 11.02 01.04.2013 1,500,000 8.70 05.12.2009 1,500,000 8.61 01.04.2008 11.02 Semiannually 8.69 01.04.2013 8.70 (b) 8.77 01.04.2008 Unsecured,redeemabledebentures Annually 8.69 50basispoints) 01.11.2012 (c) (12monthsTBrate(Gross)plus 8.77 01.11.2007 Unsecured,redeemable,debentures Annually 50basispoints) 01.11.2012 (c) (12monthsTBrate(Gross)plus 01.11.2007 Unsecured,redeemable,debentures Annually 50basispoints) (c) (12monthsTBrate(Gross)plus Unsecured,redeemable,debentures Annually 50basispoints) (c) (12monthsTBrate(Gross)plus Unsecured,redeemable,debentures 50basispoints) (12monthsTBrate(Gross)plus 40.4 Typesofdebentures 40 Debentures eue,rdeal eetrs c Anal 1.121 1.121 - 12 - 12 50,000 - - - 11.20 - 11.20 5,300,000 5,300,000 5,300,000 - 6,800 11.50 1,750,000 10.70 1,750,000 6,800 1,750,000 10.01.2011 11.50 11.50 - 10.01.2010 5,200,000 9.56 5,200,000 10.70 5,200,000 11.50 03.08.2015 11.50 Annually - 03.08.2010 10.70 9.56 (c) 11.50 03.08.2015 9.56 03.08.2010 Annually Secured,redeemabledebentures 12.32 150basispoints) 03.08.2015 (c) 11.64 (12monthsTBrate(Gross)plus 03.08.2010 Unsecured,redeemabledebentures Annually 11.64 150basispoints) (c) 11.64 (12monthsTBrate(Gross)plus 31.03.2013 Unsecured,redeemable,debentures Annually 150basispoints) 31.03.2010 (c) (12monthsTBrate(Gross)plus Semiannually Unsecured,redeemable,debentures 150basispoints) (c) (12monthsTBrate(Gross)plus Unsecured,redeemabledebentures 200basispoints) (6monthsTBrate(Gross)plus 72000 72000 17,381,840 17,250,000 17,786,800 17,250,000 25,000 - - - 160basispoints) (6monthsTBrate(Gross)plus 11.83 - 11.20 - 10.07.2011 10.01.2010 Semiannually (c) Secured,redeemabledebentures 150basispoints) (12monthsTBrate(Gross)plus eue,rdeal eetrs b Sm nuly 61.01 61.04 .6 - .6 - - - 4 - 40 - 25,000 - 25,000 - 25,000 25,000 - - 25,000 - 25,000 9.76 - 25,000 - - 25,000 11.83 - 25,000 9.76 11.20 - 25,000 16.11.2014 11.83 11.20 - 16.11.2011 11.20 - 11.20 Semiannually 10.01.2014 11.83 11.20 10.01.2010 (b) 11.20 - 11.20 Semiannually 10.07.2013 11.83 11.20 Secured,redeemabledebentures 10.01.2010 (c) 11.20 11.20 150basispoints) Semiannually (12monthsTBrate(Gross)plus 10.01.2013 11.83 11.20 Secured,redeemabledebentures 10.01.2010 (c) 11.20 11.20 150basispoints) Semiannually (12monthsTBrate(Gross)plus 10.07.2012 11.20 Secured,redeemabledebentures 10.01.2010 (c) 11.20 150basispoints) Semiannually (12monthsTBrate(Gross)plus 10.01.2012 Secured,redeemabledebentures 10.01.2010 (c) 150basispoints) Semiannually (12monthsTBrate(Gross)plus Secured,redeemabledebentures (c) 150basispoints) (12monthsTBrate(Gross)plus Secured,redeemabledebentures 150basispoints) (12monthsTBrate(Gross)plus A -SriLankarupeedebentures neue,rdeal,dbnue () nuly 31.07 31.02 .2 .9 .5 17 ,0,0 10000 ,0,0 1,000,000 1,000,000 1,000,000 11.73 8.45 8.39 8.62 03.10.2012 03.10.2007 Annually (c) Unsecured, redeemable,debentures (Contd.)

(Contd.)

(Contd.) Bank Group

BANK OF CEYLON ANNUAL REPORT 2011 251 1,750,000 5,200,000 1,500,000 5,300,000 1,500,000 1,000,000 000 00 % % s 0 R'00 s 0 Rs'000 Rs'000 Rs'000 Rs'000 % % % % Amountasat31stDecember Effective Coupon annual rate Maturity rate Issue date date Interest Notes payable 0121 0121 21 21 21 2010 2011 2010 2011 2011 2010 frequency BANK OF CEYLON ANNUAL REPORT 2011 252 24206 ,1,8 24206 2,410,180 2,462,056 2,410,180 2,462,056 2,383, 2,434,719 2,383,419 2,434,719 3.49 3.61 3.46 3.58 10.10.2013 10.10.2008 Semiannually (d) (6monthsLIBORPlus300basispoints) redeemabledebentures Floatinginterestrate rdeal eetrs eianal 1.020 1.021 55 55 55 55 737 671 737 26,761 27,337 26,761 27,337 5.50 5.58 5.50 5.50 10.10.2013 10.10.2008 Semiannually redeemabledebentures Unsecured, subordinated, aac sa 1tDcme ,0,0 27750 ,0,0 2,777,500 127,500 2,650,000 3,008,000 230,500 2,777,500 2,777,500 5,000,000 2,650,000 127,500 3,008,000 5,000,000 2,777,500 5,000,000 230,500 5,000,000 Thepermanentreservefund ismaintainedasrequiredbytheBankofCeylonOrdinance(Chapter397)whereby must,out Balanceasat31stDecember Amount transferred duringtheyear Balance as at1stJanuary Permanentreservefund 42 5,000,000 ordinaryshares Thebalanceinthepermanent reservefundwill beusedonlyforthepurposesspecifiedinSection 20(2)oftheBanking Ac Inordertomeettherequirement, anamount ofRs.230.5millionwastransferredtothereserveduring theyear(2010 :Rs.127. aac sa 1tDcme 50,000,000 50,000,000 50,000,000 50,000,000 Balance as at31stDecember 5,000,000 ordinaryshares 50,000,000 ordinaryshares 41 Stated capital

(d) 6 monthsLondonInterBankOfferedRate(LIBOR)forUSDollarsplus3%perannum. (c) Weighted average12monthsTreasuryBillinterestratebeforededucting10%withholding taxattheprimaryquotatio Weighted average6monthsTreasuryBillinterestratebeforededucting10%withholdingtaxattheprimary quotations asan (b) sa 1tDcme 21 21 21 2010 2011 2010 2011 Asat31stDecember a DebenturesthatarelistedintheColomboStockExchange.SomeofthesehavebeentradedExchangeduri (a) Notes : 40.4 Typesofdebentures 40 Debentures Notes totheFinancialStatements Total Debentures Unsecured, subordinated, Fixed interestrate B -UnitedStatedollardebentures Act No.30of1988untilthereserve is equaltothepaidupcapital. the issuedandpaidupcapitalthereafter, anappropriateamountdeterminedat2%perannuminterms of Section20(1)and(2 tion butbeforeanydividendisdeclared, transfertoareservesumequivalentnotlessthan20%ofsuch profituntillthe aac sa s aur ,0,0 50000 ,0,0 5,000,000 5,000,000 5,000,000 5,000,000 Balance asat1stJanuary Issued andfullypaid Authorised 0821 Hgetpie-R.0.0 oetpie-R.0.0 attascinpie-R.0.0 of SriLanka,attheproceedingweekinterestresettingdate. of SriLanka,attheproceedingweekinterestresettingdate. 2010/2015 -(HighestpriceRs.100.00,lowestRs.90.50,lasttransactionRs.95.00) 2008/2013 -(HighestpriceRs.100.10,lowestRs.100.00,lasttransactionRs.100.00)

(Contd.)

4,6,3 3,0,4 42,526,549 38,706,348 39,434,565 41,365,832

(Contd.)

R 00 R 00 s'0 Rs'000 Rs'000 Rs'000 Rs'000

Bank Group ns asannouncedbytheCentralBank reserveisequivalentto50%of nounced bytheCentralBank 5 million). t No.30of1988. ng theyear2011. ) oftheBanking of netprofitaftertaxa- Bank Group 419 14851 1,595,102 1,498,511 46,394 2,650 24,547 - - - 130,442 110,004 23,000 121,704 130,442 110,004 128,260 7.50% - 7.00% 121,704 331,285 8.50% 7.10% 116,278 128,260 6.90% 147,038 7years 331,285 6.85% 91days 15,854 116,278 126,530 7years 92days 6.90% 2,741 147,038 91days 8.92% 122,162 6.90% 126,530 7.00% 92days 15,854 146,213 6.90% 182days 122,162 2,741 (Rs.’000) 7years&6months 6.95% 182days 15.08.2018 8.15% 73days 09.03.2012 146,213 01.05.2019 8.15% 24.02.2012 102days 01.05.2019 7.50% 27.01.2012 105days rate 7.50% 20.01.2012 86days 17.02.2012 84days 17.02.2012 91days 27.02.2012 91days 06.02.2012 Investment value 30.12.2011 23.03.2012 16.03.2012 2011.09.28/LKB01518H150 24.02.2012 Interest 2011.12.21/LKB01019E016 date 24.02.2012 - 2011.10.17/LKB01019E016 2011.12.09/134502 Period 2011.11.24/44753 2011.10.28/41885 2011.10.20/40157 1,570,276 - 2011.08.19/32484 - 2011.08.19/32176 2011.11.15/43825 Maturity 2011.09.26/37401 2011.09.16/36518 1,570,276 2011.12.28/49667 1,484,073 2011.12.23/49536 - 2011.11.25/47018 2011.11.25/45245 1,484,073 Purchasingdate/Referenceno: As at31stDecember 43.1.2.(b) Investmentsontreasurybills/bonds 43.1.2.(a) Loansgranted Utilisation offundsasat31stDecember2011wasfollows: 43.1.2 Balanceasat31stDecember Amounttransferredfromincomestatement aac sa s aur ------Balanceasat1stJanuary 311Mvmn nivsmn udacut Movement ininvestmentfundaccount 43.1.1

sa 1tDcme 21 21 21 2010 2011 2010 2011 As at31stDecember AspertheguidelinesissuedbyCentralBankofSriLanka,anyentityengagedinbusinessbankingorfinancialserv InvestmentFundAccount(IFA) 43.1

rersre[oe4.] 1907 6,6 3664 366,644 - 366,644 565,745 169,067 776,683 178,692 430,347 1,570,276 169,067 857,304 4,666,054 - 570,545 776,683 125,299 440,004 857,304 4,612,661 1,484,073 Primarydealerspecialriskreserve[Note43.3] Exchangetranslationreserve[Note43.5] Freereserve[Note43.4] Investmentfundaccount[Note43.1.1] Revaluationreserve[Note43.2] 43 Other reserves

sa 1tDcme 21 21 21 2010 2011 2010 2011 As at31stDecember InvestmentsontreasurybillsandbondsmadebytheBankGroupareasfollows: The BankhasnotgrantedanyloansfromIFAduringtheyear2011. Bank ofSriLanka. savings (5.0%ofincometaxand8.0%valueaddedtax),istransferedtotheIFAutilisationsuchfundsmadeasper and operateanInvestmentFundAccountwitheffectfrom1stJanuary2011.Accordingly,aswhenthetaxesarepaidafter1s te eevs[oe4.] - - 2893 137,793 218,903 - - Other reserves[Note43.6]

75319 ,4,9 81958 2,025,557 8,109,528 1,641,594 7,563,109 R 00 R 00 s'0 Rs'000 Rs'000 Rs'000 Rs'000 R 00 R 00 s'0 Rs'000 Rs'000 Rs'000 Rs'000 Bank Group Bank Group ices isrequiredtoestablish theguidelinesofCentral t January2011,thetax Bank Group 2011

BANK OF CEYLON ANNUAL REPORT 2011 253 BANK OF CEYLON ANNUAL REPORT 2011 254

aac sa 1tDcme - 2893 137,793 218,903 - - Balanceasat31stDecember mut rnfre uigteya - 8,1 - 81,110 - - Amounttransferredduring theyear aac sa s aur 1773 137,793 137,793 - - Balanceasat1stJanuary Otherreserves 43 .6

sa 1tDcme 21 21 21 2010 2011 2010 2011 As at31stDecember Thisrepresents theexchangedifferencearisingfromtranslatinginvestmentsmadeincapitalofforeignbranches,andalso fLno rnhit usday - (956 (39,566) 565,745 - 430,347 570,545 (39,566) 440,004 - Balance as at31stDecember ofLondonbranchintoaSubsidiary duteto ovrin 606,163 565,745 (852) 606,163 570,545 (135,398) 3,948 (130,541) Adjustment onconversion Currency translationdifferenceduringtheyear Balance as at1stJanuary Exchange translationreserve 43.5 aac sa 1tDcme 6,6 1907 6,4 366,644 366,644 366,644 366,644 169,067 169,067 169,067 169,067 Freereservehasbeencreatedforunforeseeableriskandfuturelosses Balanceasat31stDecember Balanceasat1stJanuary 43.4 Free reserve

sa 1tDcme 21 21 21 2010 2011 2010 2011 776,683 528,470 248,213 857,304 776,683 80,621 776,683 528,470 857,304 248,213 776,683 80,621 As at31stDecember AccordingtoadirectionissuedbytheCentralBankofSriLanka,primarydealers arerequiredtotransfer25%oftheirprofit Balanceasat31stDecember Amounttransferredduringtheyear Balanceasat1stJanuary Primary dealerspecialriskreserve 43.3

sa 1tDcme 21 21 21 2010 2011 2010 2011 As at31stDecember Accordingtotheregulatorydirectives,Bankcanaccountforrevaluationsurpluseverysevenyearsfromwhich50%will Therevaluationreserverepresentsthesurplusesarisingonoffreeholdpropertieswhicharestillinusefor

aac sa 1tDcme ,1,6 1529 ,6,5 178,692 4,666,054 125,299 - 4,612,661 - 4,710,770 - (223,408) - 4,710,770 (223,408) Balanceasat31stDecember Deferredtaxeffectonrevaluationsurplusfreeholdbuildings Netsurplusonrevaluationsoffreeholdproperties 43.2 Revaluation reserve

sa 1tDcme 21 21 21 2010 2011 2010 2011 Asat31stDecember 43 Other reserves Notes totheFinancialStatements issued bytheCentral BankofSriLankaunderSection No. 46oftheFinanceCompaniesAct No.23of1991. of SriLankaunder SectionNo.34oftheFinanceLeasing ActNo.56of2000andMerchant CreditofSriLankaLimitedinterms o Other reservesrepresentthereserve fundsmaintainedbyMerchantBankofSriLankaPLCintermsDirection No.05of2006is ments inforeignbranchesaredisposed,theexchangegainorlosswillbe recognisedintheIncomeStatement. from translationoftheresultsoverseasbranchesforthisyear averageratetotheexchangerulingatyea risk reserveinordertostrengthencapitalbaseforfurtherdevelopmentoftheGovernmentsecuritiesmarket. aia nteTe Icptlbs ntecmuaino ikWihe aia dqayRto capital intheTierIIbasecomputationofRiskWeightedCapitalAdequacyRatio. aac sa s aur 2,9 1529 7,9 178,692 178,692 125,299 125,299 Balance asat1stJanuary

(Contd.) R 00 R 00 s'0 Rs'000 Rs'000 Rs'000 Rs'000 R 00 R 00 s'0 Rs'000 Rs'000 Rs'000 Rs'000 R 00 R 00 s'0 Rs'000 Rs'000 Rs'000 Rs'000 R 00 R 00 s'0 Rs'000 Rs'000 Rs'000 Rs'000

Bank Group Bank Group Bank Group Bank Group banking operations. aftertaxannuallytoaspecial r end.Ifandwhentheinvest- exchangedifferencesarising beusedassupplementary f DirectionNo.01 of 2003 sued bytheCentralBank 340904 2,6,3 347746 224,942,115 314,747,426 223,164,930 314,009,014 47,876,977 71,194,312 4,048,990 47,666,313 70,916,410 3,145,921 3,988,739 46,722,050 72,188,498 3,145,921 46,722,050 72,188,498 126,048,237 167,745,989 124,677,407 167,646,665 Guarantees Forwardexchangecontracts Billsforcollection Acceptances&documentary credits

Inthenormal courseofbusiness,theBankundertakescommitmentsandincurscontingentliabilitieswithlegalrecoursetoits Contingencies 44 .2 sa 1tDcme 21 21 21 2010 2011 2010 2011 As at31stDecember Thesecommitments arequantifiedbelow: ae hn1ya n o ae hn5yas 1,2 2,8 1,2 23,180 13,724 23,180 13,724 Laterthan 1yearandnotlaterthan5years o ae hn1ya ,5 1,0 946 16,805 9,456 16,805 9,456 Notlater than1year

sa 1tDcme 21 21 21 2010 2011 2010 2011 As at31stDecember 44.1.2 (b)Financingleasecommitments

ae hn5yas 1,8 1,3 1,8 10,834 11,983 637,889 10,834 767,681 11,983 637,889 842,246 767,681 519,001 842,246 519,001 Laterthan5years Laterthan1yearandnotlater5years Notlaterthan1year

sa 1tDcme 21 21 21 2010 2011 2010 2011 As at31stDecember 44.1.2 (a)Operatingleasecommitments prvdadcnrce o 1236 6,6 1636 333,866 1,460,019 2,018,658 166,386 1,339,019 269,866 1,925,116 102,386 44.1.2 Lease commitments Totalcapitalcommitments Approvedandcontractedfor 44.1.1 (b)Capitalcommitmentsinrelationtointangibleassets prvdadntcnrce o 3700 8,3 3700 286,433 839,720 387,000 1,465,272 286,433 782,720 387,000 1,435,730 Approvedandnotcontractedfor Approvedandcontractedfor

sa 1tDcme 21 21 21 2010 2011 2010 2011 As at31stDecember CapitalexpenditureapprovedbytheDirectorsforwhichnoprovisionhasbeenmadeinFinancialStatements,amountsto: 44.1.1 (a)Capitalcommitmentsinrelationtoproperty,plant&equipment 44.1.1 Capital commitments 41C mimns 44.1 Commitments &Contingencies 44 Commitments te omtet 1,2 1041 7,0 245,861 472,706 110,421 111,520 Other commitments material lossesareanticipatedasaresultofthesetransactions. interest orfeesandcarrieselementsofcreditriskinexcessthoseamounts recognisedasassetsandliabilitiesintheBal the financialandinvestmentneedsofclients,toconducttradingactivities, andtomanageitsownexposurerisk.Thesefin Future minimumleasepaymentsundernon-cancellablefinancingleaseswheretheBankislesseeareasfollows; Future minimumleasepaymentsundernon-cancellableoperatingleaseswheretheBankislesseeareasfollows;

12865 ,9,6 12865 1,490,969 1,298,665 1,490,969 1,298,665 18270 ,6,5 18222 1,126,153 1,852,272 1,069,153 1,822,730 R 00 R 00 s'0 Rs'000 Rs'000 Rs'000 Rs'000 R 00 R 00 s'0 Rs'000 Rs'000 Rs'000 Rs'000 R 00 R 00 s'0 Rs'000 Rs'000 Rs'000 Rs'000 R 00 R 00 s'0 Rs'000 Rs'000 Rs'000 Rs'000 2,8 3,8 2,8 39,985 23,180 39,985 23,180

Bank Group Bank Group Bank Group Bank Group ance Sheet.Howeverno ancing instrumentsgenerate customerstoaccommodate

BANK OF CEYLON ANNUAL REPORT 2011 255 BANK OF CEYLON ANNUAL REPORT 2011 256 Nomaterial eventshaveoccurredsincetheBalanceSheetdatewhichwouldrequireadjustmentsto,ordisclosurein,Financ Eventsoccurringafterthebalancesheetdate 47

es/ieprhs etl eevbe ,8,9 651,236 1,382,592 - 7,055,313 51,302,618 42,583,150 11,013,601 - 51,302,618 7,055,313 42,583,150 11,013,601 Lease/hire purchaserentalsreceivable Treasury bondsheldbytheBank Treasury billsheldbytheBank Secured by ;

eiac upss - - 13252 383,329 1,382,592 - - Refinance purposes rs etfcts - - - 237,135 - - - Trustcertificates eetrs 30,772 - - - 52,968,787 48,559,119 53,522,487 48,724,319 Debentures Securitiessoldunderre-purchaseagreements

sa 1tDcme 21 21 21 2010 2011 2010 2011 As at31stDecember

Grantingfacilitiestocustomersbeingitsmainbusinesssometimesleadsdisputes, whichendupinlitigationasanultimat Thesecuritiessoldunderre-purchaseagreementanddebenturesaredebt issuedbytheBankandGroupdetail Assetspledgedassecurity 46 Whengrantingfacilities,thelegaldepartmentplaysapivotalroleinensuringcorrect andcompletedocumentationwithoutlea TheLegaldepartmenthasstretcheditswingstopursuelitigationundermorespeedy debtrecoverylegislationandhavebeenqu 45 Litigation

Theunutilisedvalueofirrevocablecommitmentswhichcannotbewithdrawnatthediscretionbank,withoutriskincur Commitments ondirect&indirectadvances 44.2.1 Contingencies 44 .2 Commitments &Contingencies 44 Notes totheFinancialStatements sa 1tDcme 21 21 21 2010 2011 2010 2011 As at31stDecember akadteGop oscr hs iblte r ie eo. Bank andtheGroup,tosecurethoseliabilitiesaregivenbelow. defaulters accelerating recoveryofbaddebtsintheBank. many adecreeintheBank'sfavour.MostrecoveryactionsfiledbyBankendupsettlementprocessandtherebylitigation execution torecoveritsdues.Actionsrelatinghumanrightsandlabourtribunalsariseduenonfulfillmentof repayment ofloanshasbecomethemostprominentcauseactionandcasesagainstBankarisefrominitiatingvariousr usual courseofbusiness.Weareproudtosaythatthesedisputesmuchlowerwhentakingintoconsiderationtheindustryav Bank ofCeylonbeingamajorfinancialinstitutioninSriLankawithanenormouscustomerbaseandlargestaffnaturallyenco omtet o ntlsdfclte 48193 35887 51220 33,568,009 35,172,260 33,548,887 34,871,993 Commitments forunutilisedfacilities expenses areasfollows: (Contd.) (Contd.) 5,9,5 5,5,3 5,7,4 59,009,167 54,979,343 58,357,931 53,596,751 3,7,9 3,4,8 51220 33,568,009 35,172,260 33,548,887 34,871,993 87439 35247 99171 53,620,023 49,941,711 53,522,487 48,724,319 R 00 R 00 s'0 Rs'000 Rs'000 Rs'000 Rs'000 R 00 R 00 s'0 Rs'000 Rs'000 Rs'000 Rs'000

Bank Group Bank Group privilegesofeitherparty. e resolution.Defaultof ving allowancesforwillful ring significantpenaltiesor unters afewdisputesinthe hashelpedimmenselyin ial Statements. ite successfulinachieving s ofassetspledgedbythe erage. emedies suchasparate

e iudt a 00 (7,6,2) (47480 1,4,5 2,1,7 57,421,638 24,313,271 113,143,654 (24,714,840) (170,163,723) Netliquiditygap-2010 e iudt a 01 (5,3,5) (77028 1,1,4 2,6,9 59,107,036 20,964,596 113,315,847 (37,750,228) (155,637,251) Netliquiditygap-2011

Total liabilities

136913 142 165 ,1 4,8,1 155,361,641 41,686,510 2,911 11,605 11,492 113,649,123 hrhles ud 01307 40,163,077 40,163,077 - - - - Shareholders' funds te iblte ,0,0 1,9 1,0 291 1,6 6,649,370 416,361 2,911 11,605 11,492 6,207,001 Otherliabilities urttxlaiiis 11944 1,139,464 - - - - 1,139,464 Currettax liabilities efrdtxlaiiis - - - - 11702 1,107,072 1,107,072 - - - - Deffered taxliabilities cre neetpybe 1,5,7 - - - - 13,952,570 - - - - 13,952,570 Accrued interest payable eois 9,5,8 - - - - 92,350,088 - - - - 92,350,088 Deposits Non interest bearing liabilities 341768 3,9,7 3,4,2 5,7,4 25791 680,178,678 2,587,931 51,771,845 31,445,224 230,196,070 364,177,608 eetrs 25000 ,0,0 91709 66883 41,365,832 26,678,813 9,187,019 3,000,000 2,500,000 Debentures euiissl ne eprhs gemns 3,3,8 85354 ,0,0 - - 48,724,319 - - 5,500,000 8,593,534 34,630,785 Securities soldunderre-purchaseagreements orwdfns 2,0,9 3,8,5 1,7,5 2,3,1 17971 93,674,043 1,769,731 21,535,711 10,277,455 35,983,053 24,108,093 Borrowedfunds eois 329870 8,1,8 64070 ,5,2 8820 496,414,484 818,200 3,557,321 6,480,750 182,619,483 302,938,730 Deposits Interestbearingliabilities

Total assets 6,8,4 1,7,8 3512 8,8 2,1,3 99,797,878 24,318,339 184,288 335,122 10,571,288 64,388,841 te ses 94308 ,3,8 16 4 - 10,627,171 - 445 196 1,133,482 9,493,048 Otherassets nagbeast 4,3 342,839 342,839 - - - - Intangibleassets eshl ad - - - - 7,7 76,270 76,270 - - - - Leaseholdland rpry ln n qimn 05896 10,518,926 10,518,926 - - - - Property,plantandequipment netet nrltdcmais - - - - 70364 7,083,674 7,083,674 - - - - Investmentsinrelatedcompanies netetscrte ,5,4 6,254,345 6,254,345 - - - - Investmentsecurities cre neet&ohr 22237 12,222,387 - - - - 12,222,387 Accruedinterest&others eln euiis 35390 3,573,900 - - - - 3,573,900 Dealingsecurities aacswt eta ak 04855 ,3,0 3496 8,4 4,8 30,427,455 42,285 183,843 334,926 9,437,806 20,428,595 BalanceswithCentralBanks ahadsottr ud 86091 18,670,911 18,670,911 Cashandshorttermfunds Noninterestearningassets 278069 8,8,4 144754 25504 90318 735,742,441 79,063,138 72,555,064 144,437,554 181,886,046 257,800,639 oeneto r ak etutrn od ,4,0 8,547,000 8,547,000 - - - - GovernmentofSriLankaRestructuringBonds es etl eevbe 11077 ,4,9 44745 ,4,4 6,2 14,456,450 61,827 6,742,245 4,427,405 2,044,196 1,180,777 Leaserentalsreceivable on n dacs 242460 4,7,3 4,4,8 5,7,1 6,4,2 512,438,685 68,947,828 50,773,118 41,141,280 147,371,839 204,204,620 Loansandadvances il fecag 48888 ,3,1 - - - 16,756,858 - - - 1,938,010 14,818,848 Billsofexchange netetscrte ,0,3 7,2,2 7827 77,066,622 - 738,267 74,825,722 1,502,633 - Investmentsecurities rauybnsmtrn fe n er - - 1,0,7 1,2,3 12319 32,093,496 1,263,189 11,528,632 19,301,675 - - Treasurybondsmaturingafteroneyear lcmnswt n on oohrbns 1,4,2 37381 14,544,729 - - - 3,703,801 10,840,928 Placementswithandloanstootherbanks euiisprhsdudrr-aeareet 7,0 5000 1,075,000 - - - 500,000 575,000 Securitiespurchasedunderre-saleagreements rauybls od te lgbebls 2,8,6 2,2,6 47142 ,7,0 2324 58,763,601 243,294 2,772,802 4,741,472 24,825,567 26,180,466 Treasurybills,bonds&othereligiblebills Interestearningassets Rs.’000 ots ots yas er years years years months 3months pt 2 3-5 vr5 Total Over5 3-5 1-3 3-12 Upto TheanalysisoftotalassetsandliabilitiestheBankintorelevantmaturitygroupingsbasedonremainingperiodasat 48.1 Bank Maturities ofassets&liabilities 48 contractual maturitydateisgiveninthetablebelow: 321940 9,5,3 147266 27932 0,8,7 835,540,319 103,381,477 72,739,352 144,772,676 192,457,334 322,189,480 478671 3,0,6 3,5,2 5,7,5 4,7,4 835,540,319 44,274,441 51,774,756 31,456,829 230,207,562 477,826,731 31st December2011intothe

BANK OF CEYLON ANNUAL REPORT 2011 257 BANK OF CEYLON ANNUAL REPORT 2011 258 e iudt a 00 (6,1,3) (60005 1,6,5 2,6,5 50,112,686 26,962,752 113,767,158 (26,030,065) (164,812,531) Netliquiditygap-2010 e iudt a 01 (5,9,1) (89222 1,9,8 2,8,9 53,187,702 23,381,997 116,897,386 (38,972,272) (154,494,813) Netliquiditygap-2011

oa iblte 8,6,2 258857 42496 22059 79422 856,392,516 47,944,242 52,290,509 34,264,916 235,828,527 486,064,322 Totalliabilities

155925 4,3 4327 ,0 4,9,7 161,458,727 45,194,173 7,803 443,297 244,239 115,569,215 hrhles ud - - - 4,8,1 43,382,316 43,382,316 - - - - Shareholders'funds te iblte ,8,1 8,1 9,4 783 5,6 7,838,145 558,664 7,803 97,644 86,818 7,087,216 Otherliabilities urn a iblte ,4,4 4,3 - - - 1,289,186 - - - 48,737 1,240,449 Currenttax liabilities eerdtxlaiiis - 11651 1,146,511 1,146,511 - - - - Deferred taxliabilities cre neetadepniue 1,7,8 1864 742 14,296,368 - - 17,402 108,684 14,170,282 Accrued interest andexpenditure nuac rvso o ie - - 3821 328,251 - - 328,251 - - Insurance provision-nonLife nuac rvso ie - - - - 1662 106,682 106,682 - - - - Insurance provision-life Noninterest bearingliabilities

304517 3,8,8 3,2,1 5,8,0 27009 694,933,789 2,750,069 52,282,706 33,821,619 235,584,288 370,495,107

euiissl ne eprhs gemns 3,6,8 85354 ,0,0 - - 48,559,119 - - 5,500,000 8,593,534 34,465,585 Securities soldunderre-purchaseagreements orwdfns 2,7,7 3,7,9 1,8,1 2,7,9 17971 99,780,805 1,769,731 21,672,191 11,383,511 38,175,795 26,779,577 Borrowed funds Interestbearingliabilities oa ses 315959 9,5,5 111232 56256 0,3,4 856,392,516 101,131,944 75,672,506 151,162,302 196,856,255 331,569,509 Totalassets

6,1,6 1,8,2 4884 9,5 2,7,5 98,480,251 21,178,756 193,151 408,854 11,287,229 65,412,261 te ses 96328 ,7,4 2,7 687 ,2 11,222,697 7,320 6,827 29,677 1,575,645 9,603,228 Otherassets nagbeast ,6 - - 4111 412,910 411,141 - - 1,769 - Intangibleassets eshl ad - - - - 1736 117,376 117,376 - - - - Leaseholdland rpry ln n qimn 15 ,3 241 27745 12,721,462 12,717,445 2,471 1,438 105 3 Property,plantandequipment netet nrltdcmais - - - - 12267 1,282,677 1,282,677 - - - - Investmentsinrelatedcompanies netetpoete 1,2 - - 4,5 165,874 47,653 - - 118,221 - Investmentproperties netetscrte 0,0 1,3 1 65921 6,644,580 6,529,231 10 15,339 100,000 - Investmentsecurities cre neet&ohr 25947 466 ,7 - 2,2 12,667,051 23,628 - 9,370 44,616 12,589,437 Accruedinterest&others eln euiis 40160 ,6 1,0 - - 4,028,861 - - 18,104 9,067 4,001,690 Dealingsecurities aacswt eta ak 04855 ,3,0 3496 8,4 4,8 30,427,455 42,285 183,843 334,926 9,437,806 20,428,595 BalanceswithCentralBanks Noninterestearningassets

261728 8,6,2 107348 54935 99318 757,912,265 79,953,188 75,479,355 150,753,448 185,569,026 266,157,248 oeneto r ak etutrn od ,4,0 8,547,000 8,547,000 - - - - GovernmentofSriLankaRestructuringBonds es etl eevbe 39787 ,4,8 92063 ,8,5 6,2 24,751,494 61,827 7,986,752 9,250,623 3,544,485 3,907,807 Leaserentalsreceivable on n dacs 248710 4,0,5 4,7,3 5,9,4 6,6,7 516,734,711 69,264,670 51,792,841 42,578,532 148,201,558 204,897,110 Loansandadvances il fecag 54090 ,3,3 - - - 17,389,216 - - - 1,938,236 15,450,980 Billsofexchange netetscrte ,0,1 7,0,2 7327 76,952,202 - 743,267 74,705,722 1,503,213 - Investmentsecurities rauybnsmtrn fe n er - - 1,7,9 1,8,9 18637 33,497,189 1,836,397 12,183,693 19,477,099 - - Treasurybondsmaturingafteroneyear lcmnswt n on oohrbns 1,8,8 50856 18,811,887 - - - 5,028,506 13,783,381 Placementswithandloanstootherbanks euiisprhsdudrr-aeareet ,1,5 5460 1,616,849 - - - 504,690 1,112,159 Securitiespurchasedunderre-saleagreements rauybls od te lgbebls 2,0,1 2,4,3 47142 ,7,0 2324 59,611,717 243,294 2,772,802 4,741,472 24,848,338 27,005,811 Treasurybills,bonds&othereligiblebills Interestearningassets Rs.’000 ots ots yas er years years years months 3months pt 2 3-5 vr5 Total Over5 3-5 1-3 3-12 Upto Theanalysisoftotalassetsandliabilitiesthegroupintorelevantmaturitygroupingsbasedonremainingperiodasat 48.2 Group Maturities ofassets&liabilities 48 Notes totheFinancialStatements eois 9,7,6 - - - - 93,071,268 - - - - 93,071,268 Deposits eetrs 25500 ,2,0 1,3,5 2,4,9 - 42,526,549 - 26,941,893 10,034,656 3,025,000 2,525,000 Debentures eois 367495 8,8,5 69342 ,6,2 9038 504,067,316 980,338 3,668,622 6,903,452 185,789,959 306,724,945 Deposits ahadsottr ud 87938 18,789,308 - - - - 18,789,308 Cash andshorttermfunds contractual maturitydateisgiveninthetablebelow: (Contd.) 31stDecember2011intothe 49.2.2 Transactions, arrangementsandagreementsinvolvingKeyManagement Personnel(KMPs),theirCloseFamilyMembers(CFMs)a 49.2.2 Otherentities arethoseentitieswheretheKMPsand/ortheirCFMsholddirectorshipshavinganinterestinentity te ogtr eet - - 19,848 - 22,059 88,761 - 19,848 98,421 22,059 86,231 92,848 Otherlong-term benefits Postemployment benefits Short-term employmentbenefits

In2011,theBankenteredintotransactionswithpartieswhoaredefinedas related partiesinSriLankaAccountingStandar Relatedpartydisclosures 49 o h eredd3s eebr 01 00 01 2010 2011 2010 2011 Fortheyearended31stDecember Compensation toKeyManagementPersonnel 49.2.1 TheBankdoesnothaveanidentifiableparentofitsown. Parent andtheultimatecontrollingparty 49.1 Liquidityrequirementstosupportcallsunderguaranteesandstandbylettersofcreditareconsiderablylessthanthe amount 5 Thematuritiesofassetsandliabilitiestheabilitytoreplace,atanacceptablecost,interestbearingas t 4 Thematchingandcontrolledmismatchingofthematuritiesinterestratesassetsliabilitiesisfundamental tothe 3 Billsofexchange,loansandadvancesleaserentalsreceivablesareshownnetinterestinsuspenseprovision forb 2 Demand&savingsdepositshavebeencategorisedasupto3monthsmaturitygroup.Howeveramajorpartofthese depositsrepr 1 Notes: Maturities ofassets&liabilities 48 her financialneeds. children under18yearsofageanddependantsKMPs.Dependantisdefined asanyonewhodependsontherespectiveKMPformore CFMs aredefinedasfamilymemberswhomaybeexpectedtoinfluence, orbeinfluencedby, thatindividualintheirdealingswitht related entities Total Bank hasinvested. influence overtheentity, theentitiesinwhichBankhascontributedtowardscapitalwithasignificantshareholdingand fteBn aebe lsie sKP fteBn. of theBankhavebeenclassifiedasKMPsBank. responsibility forplanning,directingandcontrollingtheactivitiesofBank.Accordingly, theBoardofDirectors,members As pertheSriLankaAccountingStandardNo.30(Revised2005)-on"RelatedPartyDisclosures",KMPsincludethosewhoare staff atconcessionaryrates. of businessonanarm'slengthbasisatcommercialrates,exceptforthetransactionsthatKMPshaveavailedunderschemesunif acceptance andplacements,off-balancesheettransactionsprovisionofotherbankingfinancialservicesthatarecarried Key ManagementPersonnel(KMPs),CloseFamilyMembers(CFMs)ofKMPsandotherrelatedentities.Thosetransactionsincludelen on "RelatedPartyDisclosures".i.e.significantinvestor, Subsidiaries&Associatecompanies,postemploymentbenefitplansfor credit doesnotnecessarilyrepresentfuturecashrequirements,sincemanyofthesecommitmentswillexpireorterminatewithou the Bankdoesnotgenerallyexpectthirdpartytodrawfundsunderagreement.Thetotaloutstandingcontractualamount assessing theliquidityofBankanditsexposuretochangesininterestratesexchangerates. potentially enhancesprofitability, butalsoincreasestheriskoflosses. It isunusualforBanksevertobecompletelymatchedsincebusinesstransactedoftenofuncertaintermsanddifferentty with longertermmaturity. 1497 0,7 1040 108,609 120,480 106,079 114,907

(Contd.) R 00 R 00 s'0 Rs'000 Rs'000 Rs'000 Rs'000 (ettd (Restated) (Restated) Bank Group hey mature,areimportantfactorsin oftheCorporateManagement management oftheBank. of thecommitmentbecause ad anddoubtfuldebts. that givesitssigniﬁcant pes. Anunmatchedposition theUnitTrusts wherethe d No.30(Revised2005) the Bank'semployees, outintheordinarycourse of commitmentstoextend ormly applicabletoallthe t beingfunded. esent coreretaildeposits havingauthorityand he entity, i.e.spouse, ding activities, than50%ofhisor nd other

BANK OF CEYLON ANNUAL REPORT 2011 259 BANK OF CEYLON ANNUAL REPORT 2011 260 The grouprelatedpartiesincludetheSubsidiaries&Associatecompaniesof Bank. Transactionswithgrouprelatedparties 49.3 *Transactions withtheentitiesdescribedunder49.2.2excludingSubsidiariesandAssociatecompaniesofBank wheretheKM regulatory capital

6,6 5,9 6,6 5,9 57340 5,987,617 5,763,410 56,093 61,661 56,093 61,661 nrw aiiis 6,6 5,9 6,6 5,9 48359 5,427,111 4,823,589 56,093 61,661 56,093 61,661 Undrawn facilities urnes - - - - 4,2 20,793 49,328 - - - - Guarantees etr fcei 9,9 539,713 890,493 - - - - Lettersofcredit 922()OfBlneSetIes 49.2.2 (c)Off-BalanceSheetItems 1300 882 1,7 9,9 81500 8,234,881 8,165,010 98,892 113,070 98,892 113,070 te iblte 55,084 - - - - - Otherliabilities eetrs 4,5 3,1 4,5 3,1 - - - 39,715 40,553 39,715 40,553 Debentures euiissl ne eprhs gemns - - - - 3308 1,692,557 323,008 - - - - Securitiessoldunderre-purchaseagreements eois 7,1 5,7 7,1 5,7 78202 6,487,240 7,842,002 59,177 72,517 59,177 72,517 Deposits

6,1 6,7 6,1 6,7 1,1,4 11,155,765 18,419,340 64,770 64,415 64,770 64,415 I vsmns - 4,828,692 4,697,130 Investments rdtcrs 482 ,0 482 ,0 - - - 2,700 4,852 2,700 4,852 Creditcards vrrfs 378 ,0 378 ,0 26887 883,232 2,618,827 8,700 3,738 8,700 3,738 Overdrafts on 585 330 585 330 09181 5,575,403 10,971,821 53,370 55,825 53,370 55,825 Loans

Rs.’000 Bn Gop Bank/Group Group (Restated) (Restated) Bank 49.2.2 (b)BalanceSheetItems amnsmd ssoni oe4.. 1,0 1609 2,8 1869 - - 108,609 120,480 106,079 114,907 As 20112010 PaymentsmadeasshowninNote49.2.1 at 31st December xes nurd 0,2 160,289 102,028 Expenseincurred te noe - - - - 2757 109,228 217,587 - - - - Otherincome neetpi ,3 163 ,3 163 251 15,773 82,511 1,693 4,036 1,693 4,036 Interestpaid neetere ,2 352 ,2 352 ,9,5 96,801 2,091,651 3,502 5,421 3,502 5,421 Interestearned Rs.’000 Bn Gop Bank/Group *Transactionswith Group (Restated) TransactionswithKMPs&CFMs (Restated) Bank 49.2.2 (a)IncomeStatementItems Related partydisclosures 49 Notes totheFinancialStatements o h eredd3s eebr 01 00 01 00 01 2010 2011 2010 2011 2010 2011 For theyearended31stDecember Net accommodationasa%oftheBank's Net accommodation iblte Liabilities ses Assets other entities 0.1% 0.1% 45.2% 40.5% 3,2 4,1 2,7,5 13,686,752 20,079,456 48,411 39,727 (Contd.)

Ps holddirectorships.

nrw aiiis 12225 ,3,4 1817 170,457 178,177 1,835,348 1,222,285 Undrawnfacilities urnes 5,0 5,0 126 - 1,256 53,000 55,800 Guarantees etr fcei ,2 8,1 - - - 86,815 7,926 Lettersofcredit 49.3.1 (c)Off-BalanceSheetItems

te iblte 6,2 2825 - - 248,225 266,521 Otherliabilities eetrs 1,8 1,8 - - - 44,470 11,083 15,438 11,083 4,027,486 1,796,509 375,200 49,400 553,700 290,200 Debentures Securitiessoldunderre-purchaseagreements Deposits

te eevbe 2172 5,4 ------256,447 14,327,518 - 261,722 6,982,936 140,000 Otherreceivable Placements Investmentsindebts vrrfs 4,9 2,3 - 4,500 - 2,531,163 2,585,644 26,831 368,336 46,392 1,025,320 Overdrafts Loans

sa 1tDcme 21 21 21 2010 2011 - 2010 22,547 - 28,283 2011 224,440 525,335 286,725 569,653 As at31stDecember 49.3.1 (b)BalanceSheetItems Expensesincurred Otherincome neetpi 032 0,9 1,6 9,489 12,168 109,791 90,312 Interestpaid

o h eredd3s eebr 01 00 01 2010 2011 2010 2011 For theyearended31stDecember ThePropertyDevelopmentPLCisasubsidiaryoftheBankandmaintainsmanagesCeylon,HeadOfﬁcebuildingat The BankcarriesoutfollowingmaintransactionswithitsSubsidiaries&Associatecompanies. Transactions withSubsidiariesandAssociatecompaniesoftheBank 49.3.1 Related partydisclosures 49 TheBOCPropertyDevelopment&Management(Private)Limited,awhollyownedsubsidiaryoftheBank,maintainsandmanagestwo Theaggregateamountofincome&expensesarisingfromtheirtransactionsduringtheyearandduetor TheCeybankHolidayHomes(Private)Limited,anindirectlyfullyownedSubsidiaryoftheBank,managesholidaybungalowsf MerchantBankofSriLankaPLC,aSubsidiarytheprovidescertainmanagementservices. 931()Icm ttmn tm 49.3.1 (a)IncomeStatementItems Net accommodation asa%oftheBank'sregulatory capital Net accommodation Liabilities Assets neetere 2,5 1928 0,6 122,977 106,061 119,218 124,651 Interest earned Bank ofCeylonMawatha,Colombo01. staff. 03 andKandywhereabranchoftheBankalsoprincipalplacebusinesstwoSubsidiariesarelocated. and totalcontractsumofoff-balancesheettransactionsattheyearendaresummerisedbelow.

24669 ,3,4 10858 1,075,448 1,098,588 2,339,247 2,456,639 (Contd.) 5.5%6.9%2.5% 3.2% 12601 ,7,6 1943 170,457 179,433 1,975,163 1,286,011 23433 ,4,9 6,3 419,670 64,838 4,840,494 2,364,313 84630 49912 ,8,4 2,535,663 2,585,644 14,979,132 8,456,370 R.00 R.00 R.00 Rs.’000 Rs.’000 Rs.’000 Rs.’000 R.00 R.00 R.00 Rs.’000 Rs.’000 Rs.’000 Rs.’000 usdaycmais Associatecompanies Subsidiary companies usdaycmais Associatecompanies Subsidiary companies fteBn oftheBank of theBank fteBn oftheBank of theBank

(ettd (Restated) (Restated) (ettd (Restated) (Restated) or thewelfareofBank elevant relatedparties "BOC Square",No.01, buildings inColombo

BANK OF CEYLON ANNUAL REPORT 2011 261 BANK OF CEYLON ANNUAL REPORT 2011 262

nrw aiiis 12225 ,3,4 1817 170,457 178,177 1,835,348 1,222,285 Undrawn facilities urnes 5,0 5,0 126 - 1,256 53,000 55,800 Guarantees etr fcei ,2 8,1 - - - 86,815 7,926 Lettersof credit 49.3.2 (c)Off-BalanceSheetItems

te iblte 9,8 2608 52,887 - 256,088 291,981 Otherliabilities eetrs 1,8 1,8 - - - 44,470 11,083 15,438 11,083 4,027,486 1,796,509 375,200 49,400 553,700 290,200 Debentures Securitiessoldunderre-purchaseagreements Deposits Liabilities

lcmns 69296 1,2,1 ------21,486 317,197 - 14,327,518 265,696 6,982,936 140,000 Otherreceivable Placements Investmentsindebts vrrfs 4,9 2,3 - 4,500 - 2,531,163 2,585,644 26,831 368,336 46,392 1,025,320 Overdrafts Loans Assets

sa 1tDcme 21 21 21 2010 2011 2010 2011 As at31stDecember 49.3.2 (b)BalanceSheetItems xessicre 3,6 5302 7 27,646 33,982 372 32,234 308,408 593,092 353,457 639,964 Expensesincurred Otherincome neetpi 551 0,9 1,6 9,489 12,168 109,791 95,521 Interestpaid

o h eredd3s eebr 21 21 21 2010 2011 2010 2011 For theyearended31stDecember 49.3.2 (a)IncomeStatementItems Transactions withSubsidiariesandAssociatecompaniesoftheGroup 49.3.2 Related partydisclosures 49 Notes totheFinancialStatements Net accommodationasa%oftheBank'sregulatorycapital Net accommodation neetere 2,5 1928 1,7 122,977 111,270 119,218 124,651 Interest earned Associate companiesarealsoincludedinthesectionbelow. In additiontothetransactionsbetweenBankanditsSubsidiaries&Associatecompanies,whichtookplacebetw 24660 ,3,4 10858 1,075,448 1,098,588 2,339,247 2,456,640 (Contd.) 5.5%6.9%2.5%3.2% 12601 ,7,6 1943 170,457 179,433 1,975,163 1,286,011 23973 ,4,5 6,3 472,557 64,838 4,848,357 2,389,773 84034 50982 ,0,3 2,535,663 2,607,130 15,039,882 8,460,344 R.00 R.00 R.00 Rs.’000 Rs.’000 Rs.’000 Rs.’000 R.00 R.00 R.00 Rs.’000 Rs.’000 Rs.’000 Rs.’000 usdaycmais Associatecompanies Subsidiary companies usdaycmais Associatecompanies Subsidiary companies fteBn oftheBank of theBank fteBn oftheBank of theBank

(ettd (Restated) (Restated)

(ettd (Restated) (Restated) een theSubsidiaries& iied o h er(s’0) 38640 ,9,1 3,096,410 3,846,410 5,000,000 5,000,000 Thisnote hasbeenpreparedbasedonthepolicyRelatedpartytransactionswhichwasrevisedinAugust2011tocomplywith Dividends fortheyear(Rs.’000) No.ofordinary sharesheldattheyearend 49.4.(d) OtherTransactions

urnes 1,2,3 85081 8,560,881 10,024,935 12,982,848 5,378,459 8,559,988 17,791,533 Guarantees Bills&acceptances Lettersofcredit 49.4.(c) Off-BalanceSheetItems

eetrs - - 3,1,5 28,461,433 30,712,553 - - Debentures euiissl ne eprhs gemns - - 5000 3,716,000 540,000 - - Securitiessoldunderre-purchaseagreements Liabilities

164224 3,2,4 - - - - 137,622,043 146,452,234 - 85,297,670 88,313,048 Investmentinbonds Assets

sa 1tDcme 21 21 21 2010 2011 2010 2011 As at31stDecember 49.4.(b) BalanceSheetItems otiuin ae - - 25056 2,712,272 - 2,590,526 5,100,960 - 5,565,716 - 177,441 - 499,249 7,212,750 7,668,478 Contributionsmade Interestpaid Interestearned

o h eredd3s eebr 01 00 01 2010 2011 2010 2011 For theyearended31stDecember

49.4.(a) IncomeStatementItems TransactionswiththesignificantinvestorhavinginfluenceoverBankandalsopostemploymentbe 49.4 Related partydisclosures 49 Accountants ofSriLanka.Accordinglytheﬁgurescorrespondingperiod ofthepreviousyearwerealsorevisedforbetter the CodeofBestpracticeonCorporateGovernanceissuedjointlyby SecuritiesandExchangeCommissionofSriLankathe the BankofCeylonOrdinanceNo.531938,BankingActdirectionNo.11 of2007onCorporateGovernanceissuedbytheCentral Net accommodationasa%oftheBank'sregulatorycapital Net accommodation eois 3,2,7 2,2,8 2,5,9 17,608,184 28,352,698 24,429,780 36,921,274 Deposits on dacs 5,3,8 5,2,7 - - - 52,324,373 58,139,186 Loans &advances

178860 5,4,3 159,544,231 177,828,690

(Contd.) 400.2% 472.4% 3,7,5 2,2,8 26,922,188 36,376,456 3,2,7 2,2,8 5,0,5 49,785,617 59,605,251 24,429,780 36,921,274 R.00 R.00 R.00 Rs.’000 Rs.’000 Rs.’000 Rs.’000 R.00 R.00 R.00 Rs.’000 Rs.’000 Rs.’000 Rs.’000 infcn netr Postemployment Significant investor infcn netr Postemployment Significant investor

(Restated)

(Restated) benefit plans benefit plans comparison. the requirementsof InstituteofChartered Bank ofSriLankaand nefit plans.

BANK OF CEYLON ANNUAL REPORT 2011 263 BANK OF CEYLON ANNUAL REPORT 2011 264 U alctda st Unallocated assets Investment in associates emn ses 575251 7,0,6 2,5,3 1,6,8 287884 312,496,190 218,798,804 11,460,688 25,555,433 377,302,766 567,512,521 Segmentassets Profit attributable to equity holders/parent M nrt neet Minority interest te ,1,3 19746 815 3,2 (1,3) 3,623,016 (815,538) 130,829 98,145 1,927,456 1,712,537 Other Income tax expense aia xedtr 17671 11721 2,4) (279 - - - (22,759) (28,240) (1,187,231) (1,726,761) Capitalexpenditure omsin ,3,5 62515 865 0,5 - - - 109,559 48,655 6,275,185 7,234,551 Commissions Income from Associates ahflw rmfiacn ciiis 2,6,3 65885 - - 42064 25,542,219 4,250,624 - - 6,548,845 22,067,034 Cashflows fromfinancingactivities es noe - - 29543 ,7,3 - - - 2,077,832 2,915,453 - - Leaseincome Profit from operations ahflw rmivsigatvte* 27855 (56,889,575) 42,768,515 - - - - Cashflows frominvestingactivities* xhne (5,2) (5,4) - - 19061 670,008 1,900,691 - - (251,547) (153,127) Exchange U alctde pne Unallocated expenses ahflw rmoeaigatvte 185872 3,7,4) 2974 2301 51901 50,736,916 25,129,041 317,433,546 222,126,997 (283,071) 7,875,741 (269,744) 23,410,355 375,139,034 (35,075,648) 565,995,207 (108,548,732) Cashflows fromoperatingactivities Segment liabilities Profit on - Islamic banking R 0 R 0 R 0 R 0 R 0 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 akn Laig Treasury&investment 17,713,343 19,260,911 Leasing 62,345 58,329 33,146,661 41,335,633 Banking Interest Revenuefromexternalcustomers: Notes totheFinancialStatements Total revenue *Excludingcapitalexpenditure Businesssegmentsprovideproductsandserviceswhoserisksreturnsaredifferentfromotherwhichrepresentsban Primarysegmentinformation-Businesssegments(Group) 50.1 SegmentalinformationispresentedinrespectofGroupbusinessdistinguishingthecomponentthatengagedd Financial reportingbysegment 50 Unallocated liabilities

20112010 Segment result investment, property, insurance,Islamicbankingandothernonactivities. or operationswithinaparticulareconomicenvironmentwhichissubjecttoriskandreturnsthataredifferentfromthoseofot Total liabilities Total assets 575251 7,0,6 2,5,3 1,6,8 287884 312,496,190 218,798,804 11,460,688 25,555,433 377,302,766 567,512,521 5,2,9 4,9,5 31052 ,8,6 2,4,6 22,006,367 20,346,064 2,380,565 3,120,582 41,097,755 50,129,594 1,3,9 91542 ,0,9 12036 ,2,5 7,738,205 7,228,856 1,260,376 1,402,790 9,145,412 13,437,191 559527 7,3,3 2,1,5 78571 2,2,9 317,433,546 222,126,997 7,875,741 23,410,355 375,139,034 565,995,207

her segments. ifferent businesssegments king, leasing,treasury& 18739 ,1,6 3643 2,1 26366 5,6 13491 ,8,6 863256 730,065,076 856,392,516 1,181,262 1,314,911 453,269 2,633,626 226,116 396,403 1,711,562 1,867,399 18739 ,1,6 3643 2,1 26366 5,6 13491 ,8,6 880907 704,831,853 818,079,097 1,181,262 1,314,911 453,269 2,633,626 226,116 396,403 1,711,562 1,867,399 (2,4) (,0) (962 549 257 1,2) (,0,6) (1,232,276) (1,904,669) (13,021) (2,597) - - (5,459) (19,622) (3,806) (127,449) R 0 R 0 R 0 R 0 R 0 R 0 R 0 R 0 R 0 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 4402 9,8 5858 3,3 25889 5,9 9840 1,0 861258 702,642,137 816,142,538 913,606 978,450 452,194 2,578,849 433,235 588,598 394,781 464,082 5676 4,3 1216 065 477 ,7 1948 0,6 2,3,5 18,759,917 22,931,954 107,460 109,468 1,075 54,777 60,655 162,116 446,734 536,756 6754 2,3 2204 2,4 1084 175 8,0 4922 50469 66,653,894 75,054,699 409,272 388,007 11,755 120,804 127,147 262,064 621,033 687,584 6220 0,0 2,0 865 4 3 3365 0,3 20143 6,697,239 2,071,433 401,234 383,605 30 141 8,665 20,303 606,009 672,240 4402 9,8 5858 3,3 25889 5,9 9840 1,0 830020 698,803,579 813,010,200 913,606 978,450 452,194 2,578,849 433,235 588,598 394,781 464,082 (504 7,6) 3570 7,9 2377 825 72424 48966 9,4,4) 10,769,210 (90,449,146) (4,879,666) (7,294,214) 78,245 263,787 272,399 335,790 (79,965) (65,074) 1,7 1,1 1842 905 372 ,2 10 8 75748 6,486,213 7,507,428 283 170 1,420 13,702 89,055 198,472 10,711 11,878 346 ,1 4,8 2,2 - - 422 ,5 6,0,6 50,963,844 60,705,860 7,755 4,232 - - 29,427 43,289 4,313 3,466 01 0021 0021 0021 21 21 2010 20102011 2011 2010 2010 2011 2010 - - - - 861 ,1 - - 29414 2,081,942 2,924,124 - - 4,110 8,671 ------17754 418,461 1,747,564 ------2100 0,4 ,9 (6,5) 1,7,0 (56822 49,476,563 (25,658,252) 17,377,605 (960,950) 7,894 100,544 - 201,000 ------4,6,1 (56,889,575) 42,768,515 ------98,290 - 6,195 - 98,290 6,195 rpry nuac Ilmcbnig Ohrnnbnig Total Othernonbanking/ Islamicbanking Insurance Property

3,3,4 23,948,660 37,030,742 ,8,7 1,284,563 1,282,677 13270 6,760,310 11,362,720 (124,143) (152,886) (4,364,345) (4,162,289) 208,715 212,898 15,642,493 10,862,587 (7,289,461) (7,897,330)

unallocated (,3,3) (3,838,558) (3,132,338)

BANK OF CEYLON ANNUAL REPORT 2011 265 BANK OF CEYLON ANNUAL REPORT 2011 266 f-hr akn iiin 83364 17 ,4,1 1. 83364 11 ,4,1 9.8 100.0 6,549,119 730,065,076 87.6 100.0 58,337,681 856,392,516 11.1 100.0 8,323,684 86.2 714,954,293 64,685,453 10.3 100.0 835,540,319 87.5 6,549,119 55,441,933 11.7 85.9 8,323,684 61,323,537 Off-shoreBankingDivision DomesticBankingUnit 7,6,6 100 33286 0. 7,5,9 100 66384 100.0 66,653,894 100.0 75,054,699 100.0 2.6 63,362,866 1,767,094 100.0 71,368,168 2.7 2,045,562 2.2 1,371,814 2.4 1,720,947 Off-shoreBankingUnits Islamicbanking operationsthathadbeenreportedunderinterestincome,expensesandfeecommissionincomearen (b) oetcBnigUi 24126 99 ,1,0 6. 1,9,9 8. 78763 70.9 7,857,643 80.7 12,796,393 67.9 6,819,905 79.9 12,421,266 DomesticBankingUnit

f-hr akn iiin 21498 41 ,4,7 2. 21498 38 ,4,7 22.1 2,447,179 13.8 2,184,988 24.3 2,447,179 14.1 2,184,988 5.3 39,043,787 3.0 25,357,598 2.3 16,236,664 Off-shoreBankingDivision 1.5 12,186,027 Off-shoreBankingUnits neetepne (12510 3,0,5) (,1) (20911 3,1,5) (5,110) (32,014,051) (32,019,161) (5,110) (31,200,050) (31,205,160) Interestexpense

te prtn noe 11393 ,5,5 (,4) 15478 ,3,8 (6,645) 1,531,383 1,524,738 (6,645) 1,150,558 1,143,913 Otheroperating income 1,4,6 100 00259 0. 1,5,0 100 10545 100.0 11,075,485 100.0 15,851,208 100.0 10,052,569 100.0 15,545,765 Bn Group 29.0 211,371,532 2010 Bank 14.6 2011 124,939,715 29.6 2010 211,371,532 2011 15.0 124,939,715 Off-shoreBankingDivision Thesesegmentscomprisedomesticoperations,Off-shoreBankingDivisions,andUnits(Branches). Secondarysegmentinformation-Geographicalsegments 50.2 Financial reportingbysegment 50 Notes totheFinancialStatements e n omsinicm ,1,7 60278 ,5 64763 ,8,1 1,450 6,486,213 6,487,663 1,450 6,012,728 6,014,178 Feeand commission income ProfitsAfterTax s’0 R.00% s’0 Rs.’000% Rs.’000% Rs.’000% Rs.’000% neeticm 08337 08302 035 30226 30191 10,305 53,051,981 53,062,286 10,305 50,843,042 50,853,347 Interestincome f-hr akn iiin 16427 40 ,2,9 2. 16427 40 ,2,9 20.6 1,426,691 14.0 1,614,237 22.4 1,426,691 14.0 1,614,237 Off-shoreBankingDivision oetcBnigUi 9,1,7 8. 473607 81 0,9,0 8. 496977 65.7 479,649,757 82.4 706,095,203 68.1 487,346,097 83.5 698,414,577 DomesticBankingUnit s 00 s 00 s 00 s 00 s 00 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000

1() sdslsd elsiid dutet sdslsd elsiid Adjustment Reclassified Asdisclosed Adjustment Reclassified Asdisclosed 51 (a) 1,2,9 100 ,6,1 100 14683 0. 69316 100.0 6,913,196 100.0 11,486,863 100.0 6,365,312 100.0 11,520,795 51 Comparative Information Gross Income Share ofprofitAssociatecompanieswhichwasincludedunderincome isnowtakenout. other operatingincome.(pleaserefernoteNo.8(1)) Profit BeforeTax f-hr akn nt 3,1 60 8,8 78 6,2 55 7,6 7.0 770,663 5.5 869,827 7.8 785,485 6.0 939,511 Off-shore BankingUnits economic environments. Geographical segmentsprovideproductsorserviceswithinaparticulareconomicenvironmentwhereriskandreturnsaredifferen oetcBnigUi ,3,5 8. 43328 82 ,7,5 8. 49594 71.0 4,905,994 80.8 9,279,253 68.2 4,343,288 80.2 9,234,655 Domestic BankingUnit Assets f-hr akn nt 7,0 58 9,3 94 9,7 52 8,1 8.4 580,511 5.2 593,373 9.4 595,333 5.8 671,903 Off-shore BankingUnits provide The followingfiguresapplicabletoyear2010havebeenreclassifiedinthe2011FinancialStatementsmaintaincomparability a better presentation. (Contd.) Bank Group ofFinancialStatementsto t fromthoseofother ow reclassifiedunder The followingtableshowsthestatesofourpreparationstowardsthesestandards. standards theknowledgeenhancementofstaffandchangestooperationalinstructionsadjustthesenewaccountingrule record keepingandmodificationstocreditappraisalmethodologiescapturenewinformationrequirements.Inorderforsucces assets andliabilitiesdeviatingfromthepresentruledbasedassessments.Thesestandardsrequiresignificantadjustmentstot include LKAS32&39(financialinstrumentspresentation,recognitionandmeasurements)whichrequireprinciplebasedobjective The InstituteofCharteredAccountantsSriLankahasalreadyissuednewsetaccountingstandardsthatareeffectivefrom Moving towardsInternationalFinancialReportingStandards IFRS complaintreporting. Sourcing oftechnologythatsupportthecore-businesssystemstogenerate statement fortheyearending31stDecember2011. Perform impactassessmentbyconvertingbalancesheet&income oodnt h usdaisadmntrterpa fcneso.Awarenessprogramsforsubsidiarieswerearrangedwithoutsid Co-ordinate thesubsidiariesandmonitortheirplanofconversion. business isrequiredtocarryout. Develop animplementationmanualsettingoutthedetailactionsthateach division andoffercomprehensivetraining. Form aspecialtaskteamcomprisingrepresentativesfromallbusiness- SLFRS/LKAS PerformagapanalysistoidentifysignificantdifferencesbetweenSLAS new accountingstandards. engagement ofaprofessionalfirmtoassisttheBankinconversions Create awarenesstotheboard&keymanagementpersonneland tp Status Steps solution inIFRSconversion. The Bankiscurrentlyunderdiscussionwithvendorswhoprovidetechnology balances oftheyear2012. The Bankisintheprocessofestimatingadjustmentsreceivedtoopening personnel. Implementation manualhasbeendeveloped. house andoff-siteprogrammesincludingoverseastraining. finance, risk,treasury,investmentandinternalaudittrainedthemwithin- Appointed representativefromallbusinessunitsandotherrelateddivisionsof carried outwiththeassistanceofanoutsideaccountingfirm. Detailed assessmentofaccountingdifferencesapplicabletoLKAS32and39were Directors andCorporateManagementrelatingtonewaccountingstandards. The Bankarrangedinhouseaswelloff-siteawarenessprogramforBoardof he internalprocessofaccounting, 1st January2012.Amongstthem sful compliancewiththese evaluationofthefairvalue s arevitalateachlevel. e resource

BANK OF CEYLON ANNUAL REPORT 2011 267 Adequacy Capital

BANK OF CEYLON ANNUAL REPORT 2011 268 Total capitalbase Total eligiblesupplementarycapital(TIERIIcapital) Deductions Approved subordinatedtermdebt General provisions Revaluation reserve(asapprovedbyCentralBankofSriLanka) TIER II:Supplementarycapital Total eligiblecorecapital Deductions ioiyitrss(ossetwt h bv aia osiuns - - - Minority interests(consistentwiththeabovecapitalconstituents) General andotherreserves Published retainedprofits Permanent reservefund Paid-up ordinaryshares TIER I:CoreCapital BASEL III Approach (TSA)forcalculatingcapitalchargeoperationalrisk. operational risk.TheBankisintheprocessofimplementationStandardised measurement approachformarketriskandbasicindicator As aninitialstepBanksapplyStandardisedapproachforcreditrisk, capital requirement,SupervisoryreviewprocessandMarketDiscipline. (commonly referredtoasBaselII),whichstructuredthreepillars,Minimum International ConvergenceofCapitalMeasurementandStandards The BaselCommitteeonBankingSupervisionpublishedaframeworkforthe BASEL II Rs.14,119 million(2010-Rs.10,206 million). (2010 -Rs.30,172million).Tier IIcapitalasat31st December 2011oftheBankwasRs.11,926million(2010-Rs.8,444million) Tier Icapitalasat31stDecember2011oftheBank wasRs.32,511million(2010-Rs.25,334million)andfortheGroup Rs.3 Capital isthecoremeasureofaBank’s financial strengthfromtheregulators’pointofview. Tier IandTier IICapitalofthe Bank deficiencies infinancialregulationrevealedbytheglobalcrisis. The thirdoftheBaselAccordswasdevelopedinaresponseto during economicandmarketstresssituations. whilst maintainingthefinancialstabilityandbank’s capabilitytoabsorblosses The objectiveoftheCapitalAdequacyRatioistoprotectdepositors, associated risksandtheliquidityshocksofitsbusiness. The levelofcapitaladequacyratiodepictsthebank'sabilitytowithstand for potentiallosses,whichprotectthebank'sdepositorsorotherlenders. bank's riskisthesimplestformulation,asacapital"cushion" issued bytheCentralBankofSriLanka.Bank'scapitalwithrespectto business asagainsttheregulatorycapital,perBaselIIguidelines weighted assetsofcredit,marketandoperationalaspectsthebanking Capital AdequacyRatio(CAR)measurestherelationshipbetweenrisk sa 1tDcme 21 21 21 2010 2011 2010 2011 As at31stDecember Capital Adequacy

(TIERIcapital)

Computation ofCapital the MoneraryBoard. of Tier ICARandminimumof10%Tier IplusTier IICARasdeterminedby Tier IICAR(Total capitalratio).Banksarerequiredtomaintainminimum of5% to maintaintwoCARs,namedTier ICAR(Corecapitalratio)andTier Iplus on theconsolidatedbasis.TherearetwoTiers ofCapitalwhichrequiredbanks in SriLankaarerequiredtocomputeCapitaladequacyonthesolobasisand According totheCapitaladequacynormsallcommercialBanksincorporated common equityimproveslossabsorbency. the amountofcommontangibleequityheldasminimumregulatorycapital significant changesinbankregulatorycapitalrequirements.Itwouldincrease Basel IIIintroducesnewregulatoryrequirementsonbankliquidityandmakes stresses ofamagnitudeassociatedwiththerecentfinancialcrisis. lower thelikelihoodandseverityoffuturecrises,enablebankstowithstand- The newstandardswillmarkedlyreducebanks'incentivetotakeexcessiverisks, down inperiodsofstress. requirement, measurestopromotethebuildupofcapitalthatcanbedrawn coverage, theintroductionofaleverageratioasbackstoptorisk-based The BaselIIIFrameworksetsouthigherandbetter-quality capital,betterrisk 2010 Seoulsummit. on BankingSupervisionandendorsedbytheG20LeadersattheirNovember adequacy andliquidityagreeduponbythemembersofBaselCommittee Therefore BASELIIIisanewglobalregulatorystandardonbankcapital sMlinR.ilo Rs.Million Rs.Million Rs.Million 44,437 11,926 10,348 32,511 24,592 (2,696) (3,039) 1,968 2,306 2,950 3,008 5,000 33,778 8,444 8,494 2,396 63 25,334 1,516 18,713 2,778 5,000 (2,509) (2,673) Bank Group 3,443 andfortheGroupwas 51,989 10,348 7,870 million 37,870 14,119 25,884 1,968 2,306 1,381 3,008 5,000 (503) (846) 40,378 10,206 8,494 2,396 63 30,172 1,065 1,847 20,393 2,778 5,000 (747) (911) CreditRisk-TheStandardisedApproach Computationofriskweightedassets oa xoueTotal exposure te ses100 Other assets rpry ln qimn 100 Property, plant & equipment Government Securities Exposures collateralisedbycash,gold& ahies0-20 Cash items o-efrigAst NA)50-150 Non-Performing Assets(NPAs) lisscrdb eieta rpry50-100 Claims securedbyresidentialproperty ealcam 75-100 Retail claims liso oprts20-150 Claims oncorporates liso nnilisiuin 20-150 Claims onfinancialinstitutions liso ak 20-150 Claims onbanks liso ulcSco niis(Ss 20-150 Claims onPublicSectorEntities(PSEs) Central Banks Claims onforeignsovereignsandtheir optto frs-egtdast Bn Group CentralBankofSriLanka Claims onGovernmentofSriLankaand Assets Bank Risk As at31stDecember Computation ofrisk-weightedassets weight weight factor 0-150 0 0 On Balance OnBalance equivalent equivalent Balance Balance & credit & credit 1,3 322,218 913,338 6,5 - 268,750 6,1 - 268,914 assets assets assets 02540,215 40,215 05510,595 10,595 7321,100 17,342 67320,423 26,763 91584,998 99,105 34792,418 93,487 85014,859 28,590 40344,033 44,033 Sheet Sheet Sheet of Off of Off ,5 6,104 4,353 ,0 4,078 7,300 ,9 3,395 3,891 Rs. Million 2011 Weighted Weighted Assets Risk Risk Rs. Million On Balance On Balance equivalent equivalent 0,1 198,284 803,717 2,0 - 226,901 Balance Balance 305,283 - - 305,283 & credit & credit 71627,116 27,116 305857 13,045 10414,536 21,024 86248,967 58,672 39773,506 73,937 75612,938 57,536 assets assets assets Sheet Sheet Sheet of Off of Off ,2 5,622 5,622 ,4 6,477 5,447 ,8 1,267 1,585 ,4 6,897 7,448 0 101 101 2010 s ilo Rs.Million Rs. Million weighted weighted assets Risk Risk On Balance On Balance equivalent equivalent Balance Balance & credit & credit 3,1 344,583 938,615 6,5 - 268,750 1,9 111,225 112,294 7,0 - 271,708 assets assets assets 13341,363 41,363 30513,005 13,005 7401,100 17,460 67320,423 26,763 91584,998 99,105 85014,859 28,590 40344,033 44,033 Sheet Sheet Sheet of Off of Off ,5 6,104 4,353 ,0 4,078 7,300 ,9 3,395 3,891 2011 weighted weighted Rs. Million assets Risk Risk On Balance On Balance equivalent equivalent Rs. Million 822,374 215,867 215,867 822,374 2,0 - 226,901 Balance Balance 306,705 - - 306,705 & credit & credit 81128,131 28,131 266857 12,696 21,024 14,536 14,536 21,024 58,672 48,967 48,967 58,672 83,537 83,106 83,106 83,537 62,630 18,031 18,031 62,630 assets assets Sheet Sheet of Off of Off 7,497 7,497 7,497 7,497 5,447 6,477 6,477 5,447 1,585 1,267 1,267 1,585 7,448 6,897 6,897 7,448 101 101 101 101 2010 weighted weighted assets s ilo Rs.Million Rs. Million Risk Risk

BANK OF CEYLON ANNUAL REPORT 2011 269 BANK OF CEYLON ANNUAL REPORT 2011 270 Capital Adequacy The riskweightedassetsincreditincreasedby63%comparedto2010,largelydrivenincreaseexposurescorporate to computebanks’regulatorycapitalforcreditrisk. The creditriskismeasuredusingstandardisedapproachanditreliesonratingsofborrowersassignedby“externalcred Rs.17 billionduringtheyear2011,inlinewithincreasedforeignexchange position. interest rateinstruments,equitiesinthetradingbook,andforeignexchange positionincludinggoldposition.Marketriskinc Market riskistheoflossesarisingfromundesirablemarketmovements. Thissubjectstotheriskspertainingadversem oa f aac he xoue35188,6 3,2 15935188,6 3,2 91,549 234,820 81,568 335,138 91,549 234,820 81,568 335,138 Total offBalanceSheetexposure oeg xhnecnrcs057,8 ,4 672947,8 ,4 672934 46,722 1,444 72,188 934 46,722 1,444 72,188 0-5 Foreign exchangecontracts Total riskweightedassetsformarket over oneyear maturity upto1year&of Commitments withanoriginal Total capitalchargeformarketrisk any time can beunconditionallycancelledat maturity ofuptooneyearorwhich Other commitmentswithanoriginal Foreignexchange&gold trade-related contingencies Short-term self-liquidating Equity rnato-eae otnece 01,8 ,9 2,8 483 1,8 ,9 2,8 64,843 129,686 8,490 16,980 64,843 129,686 8,490 16,980 50 Transaction-related contingencies sa 1tDcme 2011 Group Bank Interestraterisk Capital chargefor As at31stDecember Market Risk-TheStandardisedMeasurementApproach ietcei usiue 0 3403,9 3482,3 3403,9 34823,438 23,438 33,490 33,490 23,438 23,438 33,490 33,490 100 Credit Direct creditsubstitutes OffBalanceSheetexposure As at31stDecember 05 ,4 ,2 ,4 ,2 - - 2,622 9,047 - - 2,622 9,047 20-50 017683,2 16923417683,2 1692,334 11,669 35,522 177,608 2,334 11,669 35,522 177,608 20 585-2,0 585-2,0 - 23,305 - 25,825 - 23,305 - 25,825 0 conversion factor % 2011 akGroup Bank sesCredit Assets equivalent 2010 17,046,420 1,704,642 574,250 662,494 467,898 Rs.’000

sesCredit Assets 12,778,820 582,919 692,669 1,277,882 2,294 Rs.’000 2010 2011 equivalent

reased byRs.4.3billion(33.4%)to ovements inthemarketpricesof it assessmentinstitutions”(ECAIs) , retailandpublicsectorentities. 17,046,420 1,704,642 Rs.’000 574,250 662,494 467,898 2011

sesCredit Assets 2010

12,778,820 582,919 692,669 1,277,882 2,294 Rs.’000 equivalent 2010 sesCredit Assets equivalent performance overpreviousyear. Operational riskincreasedbyRs.7.6billionor21.65%toRs.42.5duringtheyear, duetothechangeingrossincome le in theprocessofintroducingstandardisedapproachforoperationalrisk. basic indicatorApproachtheBankmaintainscapitalforoperationalriskat15%onaveragepositiveincomeofthreeimm Operational riskisdeﬁnedasthelossesresultingfrominadequateorfailedinternalprocesses,people,systemsanyotheri Operational Risk-TheBasicIndicatorApproach aia dqayrto11.64% Capital adequacyratio oecptlrto8.52% Core capitalratio oa aia ae44,437 Total capitalbase Total eligiblesupplementarycapital(TIERIIcapital) Total eligiblecorecapital(TIER1capital) u oa 381,719 Sub Total Total riskweightedassetsforoperational Total riskweightedassetsformarket Total riskweightedassetsforcredit oa ikwihe sesTotal risk-weightedassets optto frto Computation ofratios sa 1tDcme 2011 2011 As at31stDecember Total riskweightedassetsforoperational Total capitalchargeforoperationalrisk-(15%) Average grossincome Total grossincomeofthreeconsecutiveyears Capital chargeforoperationalrisk As at31stDecember 42,455,478 28,303,652 Rs. Million 84,910,955 4,245,548 322,218 Rs.’000 11,926 32,511 42,455 17,046 akGroup Bank akGroup Bank

34,900,442 23,266,961 3,490,044 Rs. Million 69,800,884 245,963 198,284 25,334 8,444 13.73% 10.30% Rs.’000 33,778 34,900 12,779 2010 2010

vel. Thegrowthreﬂectsthestrong nternal orexternalevents.Under ediately precedingyears.Bankis Rs. Million 45,359,610 30,239,740 4,535,961 90,719,220 406,989 344,583 12.77% Rs.’000 51,989 14,119 37,870 45,360 17,046 9.31% 2011 2011

37,076,927 24,717,951 3,707,693 Rs. Million 74,153,854 265,723 215,867 40,378 30,172 37,077 15.20% 11.35% Rs.’000 10,206 12,779 2010 2010

BANK OF CEYLON ANNUAL REPORT 2011 271 Information Investor

BANK OF CEYLON ANNUAL REPORT 2011 272 Investor Information ueN. eurmn Pro Datesubmitted 29/02/2012 Quarter4ended31stDecember2011 Period 14/11/2011 12/08/11 Quarter3ended30thSeptember2011 Quarter2ended30thJune2011 12/05/11 monthsattheendoffourthquarter respectivequarterendsfortheﬁrstthreequartersandwithintwo bytheBoardofDirectorstobesubmittedCSEwithin45daysfrom Quarter1ended31stMarch2011 TheInterimFinancialStatementspreparedonquarterlybasis,approved 2005wouldnotbemandatory 7.4 a(i) the4thquarterintermsofcirculardated30thSeptember Requirement Rule No. Stock Exchange,aresummarisedbelow: Compliance totheListingRulesoncontentsofAnnualReport,whichwereapplicableBankforyearended31stDecembe h eurmn opbihteFnnilSaeet o therequirementtopublishFinancialStatementsfor (Audited) withinthreemonthsfromtheendofﬁnancialyear, 21st February2006 20/0/4101 fteBn ulse t uie iaca ttmns ure ne 1tDcme 01 29/03/2012 Quarter4ended 31stDecember2011 IftheBankpublishesitsAudited FinancialStatements 02/04/003/0401/001

nls,SnaaadTmlnwppr ure ne 0hSpebr21 22/11/2011&27/11/2011 Quarter3ended30thSeptember 2011 English,SinhalaandTamil newspaper 0hSpebr20 fo h n fec ure,a es nei n Qatr2edd3t ue21 18/08/2011 Quarter2ended30thJune2011 fromtheendofeachquarter, atleastonceinan 30th September2005 20/0/4101 h ulcto hudb aewti w ots ure ne 1tMrh21 26/05/2011&27/05/2011 Quarter1ended31stMarch2011 Thepublicationshouldbemade withintwomonths 02/04/003/0401/001 Tamil&Englishnewspapers iclrN. eurmn Pro DatepublishedinSinhala, 6monthsTBrate(Gross)plus75basispoints Period 6monthsTBrate(Gross)plus75basispoints Zerocoupon,redeemableatRs.225/-each Semiannually 11% 6monthsTBrate(Gross)plus75basispoints 11.5% Semiannually B Atmaturity B Semiannually 19% Requirement Annually C Annually Circular No. B Bank ofSriLanka,aresummarisedbelow: A Compliance tothedirectionsonInterimFinancialStatements,whichwereapplicableBankforyearended31stDecembe Interestrate(perannum) A C Annually Interestpayablefrequency December 2011/2016series A Type June 2010/2015series Semi November 2008/2013series (par valueRs.100/-) debentures withatenureof5years Unsecured, Subordinated,redeemable The BankhasissuedthefollowingdebtsecuritieswhicharelistedonColomboStockExchange(CSE) annually 10.5% r 2011enforcedbytheCentral r 2011enforcedbytheColombo equitysecuritiesandpercentageoftheirtotalholdings sae aia 252 284 stated capital InvesterInformation Adistributionscheduleofthenumberholdersineachclass 7.6 (x) . i) Nme fsae ersnigteett' ttdcptl NoteNo.41totheFinancialStatementson Numberofsharesrepresenting theentity'sstatedcapital 7.6 (ix) . vi eal fmtra susprann oepoesad Nomaterialissuesoccuredduringtheyearunderreview NoteNo.31totheFinancialStatem Extents,locations,valuationsandthenumberofbuildingsentity'sland 7.6 (viii) Detailsofmaterialissuespertainingtoemployeesand 7.6 (vii) . v) Ifrainprann omtra oeeal ikfcoso h niy ikMngmn 56 RiskManagement Informationpertaining tomaterialforeseeableriskfactorsoftheentity sharesoftheentityatbeginningandendeach financial year 7.6 (vi) . v ttmn fec ietrshligadCifEeuieOfie’ odn n Notapplicable Astatementofeach director'sholdingandChiefExecutiveOfficer’s Holdingin 7.6 (v) . i) Tepbi odn ecnae Notapplicable Thepublicholdingpercentage 7.6 (iv) netrIfrain 294 180 InvestorInformation, SignificantAccountingPolicies, TheGovernment ofSriLankaistheso The namesandthenumberofsharesheldby20largestholdersvoting& 7.6 (iii) h eradaycagsteen h tt fAfiso h ako eln 160 theStateofAffairsBankCeylon, theyearandanychanges therein h tt fAfiso h ako eln 160 theStateofAffairsBankCeylon, AnnualReportoftheBoardDirectorson Principalactivitiesof theentityanditsSubsidiariesduring 7.6 (ii) . i Nmso esn h uigtefiaca erwr ietr fteett; AnnualReportoftheBoardDirectorson NamesofpersonswhoduringthefinancialyearwereDirectorsentity; 7.6 (i) ueN. icouerqieet eeec/omns PageNo. beforethedeadline AnnualReportfortheyear2011willbesubmitted Reference/comments Disclosurerequirement Rule No. rmtecoueo nnilya 31stDecember2011wassubmittedon28thMarch2012. fromtheclosureof financialyear . Ana eott esbitdt S ihnfiemnh h uie iaca ttmnsfrteya ne TheAuditedFinancialStatementsfortheyear ended AnnualReporttobesubmittedCSEwithinfivemonths 7.5 a . i) tt hte h iaca ttmnsaeadtdo o Compliedwith Statewhether theFinancialStatementsareauditedornot 7.4 b(iv) . ii B indb w ietr Compliedwith BesignedbytwoDirectors 7.4 b(iii) . i) icoeteadtoa oe n aisa e itn ue Compliedwith DisclosetheadditionalnotesandratiosasperListingRules 7.4 b(ii) . i Cml ihSA 5addsls ru n aksprtl Compliedwith ComplywithSLAS35anddiscloseGroupBankseparately 7.4 b(i) ueN. eurmn Compliance Requirement Rule No. odnsadivsmn rpris rpry ln n qimn 233 property, plantandequipment holdings andinvestmentproperties; industrial relationsoftheentity o-oigsae n h ecnaeo uhsae ed shareholderoftheBankCeylon. non-voting sharesandthepercentageofsuchheld ents on le

BANK OF CEYLON ANNUAL REPORT 2011 273 BANK OF CEYLON ANNUAL REPORT 2011 274 Investor Information assetsoftheentity asperAuditedFinancialStatements,whicheverislower; . xi eae at rnatoseceig1%o h qiyo %o h oa netrIfrain 287 Investor Information Relatedpartytransactionsexceeding10%oftheequityor5%total 7.6 (xvi) ue .03 .05cad71.. fScin7o h ue sincetheBankComplieswithDirectionlaiddown Rules7.10.3,7.10.5.c and7.10.6.cofSection7theRules . x) Dslsrsprann oCroaeGvrac rcie ntrso xmtdudrScin71 fLsigRls 65 ExemptedunderSection7.10ofListingRules DisclosurespertainingtoCorporateGovernancepracticesintermsof stockoptionscheme; 7.6 (xv) . xv nomto nepc fec mlyesaeonrhpo Notapplicable Informationinrespectofeachemployeeshareownershipor 7.6 (xiv) ihsiseadpiaepaeet Dbnue 248 Debentures rightsissueandprivate placement; . xi) Drn h erteett a asdfnsete hog ulcise NoteNo.40totheFinancialStatements Duringtheyearentityhasraisedfundseitherthroughapublicissue, 7.6 (xiii) aktvleo h ad ftevledfessbtnilyfo h okvle rpry ln n qimn 233 property, plantandequipment marketvalueofthe land,ifthevaluedifferssubstantiallyfrombook . xi infiatcagsi h niyso t usdais xdast n h NoteNo.31 totheFinancialStatements Significantchangesintheentity'soritssubsidiaries'fixedassetsand 7.6 (xii) oeN.0t h iaca ttmns nDbnue 248 NoteNo.40totheFinancialStatementsonDebentures 55 ManagementDiscussion&Analysis 3.Anychangesin creditrating nerig e hr n iied e hr. 204 283 onearningspershareanddividendsshare. InvesterInformation 2.Marketinformationonlisteddebentures oenetscrte,db/qiyrto neetcvradlqi se ai NoteNo.17totheFinancialStatements governmentsecurities,debt/equityratio,interestcoverandliquidassetratio .Dvdn e hr,ntast au e hr,itrs aeo oprbe Ivso nomto 279 InvestorInformation 1.Dividendpershare,netassetsvalueinterestrateofcomparable Ratiosandmarketpriceinformation: 7.6 (xi) ueN. icouerqieet eeec/omns PageNo. Reference/comments Disclosurerequirement Rule No. intheBankingActDirectionNo.11of2007on Corporate Governance on on investors, bankersandotherinterested partiesoftheFinancialStatementsBank. The IncomeStatementgivenonthis pagedoesnotformpartoftheAuditedFinancialStatementsanditissolely fortheconveni Exchange rateof1US$wasRs.113.9050 asat31stDecember2011.(Rs.111.50502010) Dividend pershare(US$) Diluted earningspershare(US$) Basic earningspershare(US$) Profit fortheyear Minority interest qiyhle fteprn 1113 5,8 974 60,630 99,754 57,084 101,143 Equity holderoftheparent Attributable to: Profit fortheyear noetxepne 3,3) 3,6) 3,1) (37,328) (38,316) (33,068) (35,336) Income taxexpense Profit beforetaxation hr fpoto soit opne eoetx - ,3 1,909 1,832 - - Share ofprofitassociatecompaniesbeforetax Operating profit au de a nfiaca evcs 2,8) 3,8) 2,6) (37,011) (22,561) (35,884) (22,086) Value addedtaxonfinancialservices Operating profitbeforeVAT eeslo rvso o ali au fivsmnsi eae opne 719 - - - - - 7,159 Reversal ofprovisionforfallinvalueinvestmentsrelatedcompanies eoeyo o efrigavne 755 1,6 ,7 12,507 7,679 12,268 7,545 Recovery ofnonperformingadvances rvso o onlse (,0) 1,8) 496 (15,479) (4,956) (13,989) (3,807) Provision forloanlosses Operating profitbeforeprovisions

te prtn xess 3,9) 2,8) 3,6) (32,109) (34,769) (26,082) (30,499) Other operatingexpenses rmss qimn n salsmn xess 2,4) 2,3) 2,2) (24,680) (25,429) (25,633) (26,844) Premises, equipmentandestablishmentexpenses tf eieetbnﬁs 1,5) 2,2) 1,5) (20,619) (19,350) (20,323) (18,755) Staff retirementbeneﬁts esne xess 7,4)(211 (80,436)(78,308) (72,246)(72,141) Personnel Operating expenses expenses Operating income

te prtn noe 209 1,1 1,8 13,734 17,082 10,318 12,089 Other operatingincome e an/ls)fo neteti euiis 1,5) 783 1,5) 31,463 (11,051) 27,853 (11,154) Net gains/(loss)frominvestmentinsecurities iiedicm 626 426 397 2,313 3,977 4,206 6,256 Dividend income oeg xhnepot 531 365 1,4 3,753 15,342 3,665 15,331 Foreign exchangeproﬁt Net feeandcommissionincome e n omsinepne (,4) 411 (,9) (4,986) (5,394) (4,191) (4,442) Fee andcommissionexpenses e n omsinicm 6,9 393 590 58,170 65,910 53,923 62,698 Fee andcommissionincome Net interestincome neete pne 3801 2989 (328,201)(287,109) (318,061)(279,809) Interest expense neeticm 5325 4591 5946 475,781 559,486 455,971 533,295 Interest income Income

Income StatementinUS$ o h eredd3s eebr 01 21 01 2010 2011 2010 2011 For theyearended31stDecember

3,7 9,5 3,2 97,420 137,329 90,152 136,479 0,4 5,8 0,4 62,001 100,844 57,084 101,143 0,4 704 1085 62,001 100,845 57,084 101,143 9,1 7,3 1,5 293,119 317,151 271,936 296,012 1,3 7,6 3,8 188,672 231,285 176,162 215,234 3,7 012 3,6 99,329 139,161 90,152 136,479 6 7 6 7 5,6 2,3 5,9 134,431 159,890 126,036 158,565 0 1 0 12 20 11 20 826 4,3 056 53,184 60,516 49,732 58,256 4,6 2,5 1717 137,403 157,167 127,757 147,668 S 00 S 00 S 00 US$'000 US$'000 US$'000 US$ '000 1834 1419 (159,984)(155,716) (148,344) (144,179) 2,5 6,5 5,2 597,766 658,924 568,251 626,559 22,522 46,042 25,35051,263 0 1 0 12 20 11 20 ,9 1,371 1,090 - -

Bank Group ence oftheshareholders,

BANK OF CEYLON ANNUAL REPORT 2011 275 BANK OF CEYLON ANNUAL REPORT 2011 276

akr n te neetdpriso h iaca ttmnso h ak bankers andother interestedpartiesoftheFinancialStatements oftheBank. The BalanceSheetgivenonthispage doesnotformpartoftheAuditedFinancialStatementsanditissolely fortheconvenienc Exchange rateof1US$wasRs.113.9050 asat31stDecember2011.(Rs.111.50502010) omtet n otnece 27672 20139 27325 2,017,328 2,763,245 2,001,389 2,756,762 Commitments andcontingencies Total liabilitiesand equity Total equity Minority interest Total equityattributabletotheparent te eevs 639 472 7,9 18,166 71,196 14,722 66,399 Other reserves eandpot 2589 1780 2723 182,889 227,243 167,820 215,899 Retained proﬁts emnn eev ud 648 2,0 648 24,909 26,408 24,909 26,408 Permanent reservefund ttdcptl 386 4,4 386 44,841 43,896 44,841 43,896 Stated capital SHAREHOLDERS' EQUITY Total liabilities eetrs 6,6 4,2 7,5 353,657 373,351 347,127 363,161 Debentures te iblte 1081 1680 1434 147,238 194,324 136,840 180,871 Other liabilities eerdtxlaiiy ,1 ,0 006 4,390 10,066 4,104 9,719 Deferred taxliability a aal 1,0 978 138 21,726 11,318 19,728 10,004 Tax payable nuac rvso o ie ,8 2,267 2,882 - - Insurance provision-nonLife nuac rvso ie - 97 600 937 - - Insurance provision-life euiissl ne eprhs gemns 2,6 8,0 4632 475,035 426,312 480,001 427,763 Securities soldunderre-purchaseagreements orwdfns 2,8 7,3 7,0 515,062 876,000 470,339 822,387 Borrowed funds eois 51899 47148 52246 4,747,040 5,242,426 4,701,428 5,168,909 Deposits LIABILITIES FINANCED BY; Total assets nagbeast 300 149 365 1,528 3,625 1,469 3,010 Intangible assets eshl ad 7 9 ,3 1,076 1,030 695 670 Leasehold land rpry ln n qimn 9,4 975 1,8 66,098 111,685 49,725 92,348 Property, plantandequipment te ses 0,0 5,9 0,3 164,241 209,734 158,795 200,602 Other assets netet nSbiir opne 5,8 734 - - - 47,344 54,789 Investments inSubsidiarycompanies netet nAscaecmais ,0 ,7 121 11,520 11,261 7,575 7,401 Investments inAssociatecompanies netetpoete - - 146 3,470 1,456 - - Investment properties netetscrte 7145 7328 3,1 727,486 733,917 723,228 731,495 Investment securities oeneto r ak etutrn od 7,3 661 7,3 76,651 75,036 76,651 75,036 Government ofSriLankaRestructuringBonds

es etl eevbe-atrfieyas 53 1 4 20 543 18 543 Leaserentalsreceivable-afterfiveyears es etl eevbe-oet v er 9,6 145 1131 60,479 151,331 21,415 98,061 Leaserentalsreceivable-onetofiveyears es etl eevbe-wti n er 833 643 546 40,903 65,426 16,483 28,313 Leaserentalsreceivable-withinoneyear on dacs ,9,2 ,6,5 ,3,4 3,186,094 4,536,541 3,166,655 4,498,825 Loans&advances il fecag 1713 1804 1264 143,631 152,664 138,074 147,113 Billsofexchange Loans &advancestocustomers rauybnsmtrn fe n er 8,5 6,4 2400 464,098 294,080 460,040 281,757 Treasury bondsmaturingafteroneyear lcmn ihadlast te ak 1762 3271 6,5 428,442 165,154 382,761 127,692 Placement withandloanstootherbanks eln euiis 136 2,8 530 34,128 35,370 28,988 31,376 Dealing securities euiisprhsdudrr-aeareet 948 3622 1,9 366,262 14,195 366,262 9,438 Securities purchasedunderre-saleagreements rauybls od n te lgbebls 1,0 0,6 2,4 415,665 523,346 406,968 515,900 Treasury bills,bondsandothereligiblebills aacswt eta ak 2710 2227 2710 232,227 267,130 232,227 267,130 Balances withCentralBanks ahadsottr ud 1397 1646 1496 123,356 164,956 126,486 163,917 Cash andshorttermfunds ASSETS Balance SheetinUS$ sa 1tDcme 01 21 01 2010 2011 2010 2011 As at31stDecember Investor Information

,3,1 ,1,5 75840 6,547,375 7,518,480 6,411,859 7,335,416 5,0 5,9 8,6 280,360 380,864 252,292 352,602 ,8,1 ,5,6 ,3,1 6,267,015 7,137,616 6,159,567 6,982,814 ,3,1 ,1,5 75840 6,547,375 7,518,480 6,411,859 7,335,416 5,0 5,9 6,4 270,805 368,743 252,292 352,602 S 0 U$'00 S 0 US$'000 US$'000 US$'000 US$ '000 ,7,5 ,4,4 ,0,0 3,431,127 4,906,505 3,342,645 4,772,855 - 12,121 9,555

Bank Group e oftheshareholders,investors, Summary oftheIncomeStatement es noetxepne ,1 8 ,6 81434 5 ,5 2 ,2 4,162 1,726 828 11,075 3,973 1,053 3,029 555 2,663 4,364 1,410 15,851 891 5,119 1,269 4,149 988 3,134 3,449 1,216 Less: Incometaxexpense Profit beforetaxation rfi fe aain ,3 ,4 ,8 428 147 5 ,1 ,0 ,4 6,913 2,247 2,201 1,610 855 11,487 4,228 2,880 2,146 2,233 Profit aftertaxation For thequarterended uuaiepota ftepotatrtx1 86 0 1 5 6 0 - 100 100 33 67 32 35 23 12 12 - 100 100 37 63 25 38 19 19 19 Cumulative profitasa%oftheaftertax Quarterly profitasa%oftheaftertax rvso o a obfldbs 5 5 25 1 6 55 60 47 3 1,726 34 13,596 467 21,038 3,658 17,920 4,901 6,467 3,652 650 4,432 5,408 3,882 575 4,940 4,488 2,404 4,223 4,099 12,529 565 26,345 20,097 3,992 116 7,972 5,959 3,893 6,307 5,111 2,098 295 6,254 4,739 2,546 (5) 5,812 4,288 159 Provision forbad&doubtfuldebts Non-interest expenses Less: Non-interest income Net interestincome Group rvso o a obfldbs 2 4) 8 7 3 53 66 41 (1 1,559 (41) 441 12,513 3,341 16,543 606 19,642 4,364 6,062 3,184 553 4,063 5,041 3,632 4,211 4,624 434 2,356 3,905 3,915 12,654 74 18,674 24,516 4,610 5,579 7,388 3,795 281 5,861 4,771 1,876 (46) 5,850 4,345 2,373 5,417 3,979 125 Provisionforbad&doubtfuldebts Non-interestexpenses Less: Non interestincome Net-interest income Bank rfi rmoeain eoetxs ,1 ,1 ,9 589 822 ,5 ,8 ,6 ,9 14.988 5,190 4,161 3,684 1,953 18,212 5,889 4,794 3,618 3,911 Profit fromoperationsbeforetaxes rfi rmoeain eoetxs ,8 ,2 ,0 635 802 ,1 ,3 ,2 ,8 14,053 5,080 3,721 3,439 1,813 18,062 6,345 4,604 3,427 3,686 Profit fromoperationsbeforetaxes es au de a nfiaca evcsLess: Value addedtaxonfinancialservices es au de a nfiaca evcsLess: Value addedtaxonfinancialservices rfi rmoeain eoecroaetx ,0 ,6 ,0 ,7 1,4 136 254 305 38710,862 3,897 3,035 2,594 1,336 15,642 5,070 4,104 3,069 3,400 Add: shareofprofit Profit fromoperationsbeforecorporatetax es noetxepne 116 93 111 9 ,2 47 97 68 ,9 3,687 1,595 698 10,052 3,826 937 2,635 457 2,377 4,025 1,214 15,546 795 5,536 1,191 3,929 923 2,888 3,193 1,116 Less: Incometaxexpense Profit beforetaxation uuaiepota ftepotatrtx1 55 0 1 5 6 0 - 100 100 35 65 6,365 30 2,231 35 23 1,937 12 1,440 12 757 - 100 11,521 4,741 100 41 2,738 1,965 59 24 2,077 35 17 18 18 Cumulative profitasa%oftheaftertax Quarterly profitasa%oftheaftertax Profit aftertaxation Associate companies 10.13.61 00.13.21 31.12.11 31.12.11 30.09.11 30.06.11 31.03.11 Quarter Quarter 1st 1st 1 4 9 80250 1 ,9 ,2 ,9 4,126 1,293 1,126 1,090 617 2,570 820 690 549 511 9 3 7 89256 9 ,6 ,8 ,5 4,001 1,254 1,086 1,062 599 2,516 809 675 539 493 4 5 4 4 0 7 9 () 6 213 76 (6) 69 74 209 49 46 65 49 Quarter Quarter 2nd 2nd Quarter 2011 3rd 3rd Quarter 4th 4th Total 10.03.61 00.03.21 31.12.10 31.12.10 30.09.10 30.06.10 31.03.10 Quarter 1st Quarter 2nd Quarter 2010 3rd Quarter 4th Rs. Million Total

BANK OF CEYLON ANNUAL REPORT 2011 277 BANK OF CEYLON ANNUAL REPORT 2011 278 Investor Information Summary oftheBalanceSheet sa 10.13.61 00.131.12.11 30.09.11 30.06.11 31.03.11 at As e on dacs 4369 43634638 5,7 3027 3907 3758 382,588 327,588 339,037 300,257 558,875 456,318 423,683 403,619 Net loans&advances Group netet 3,4 4,9 2,1 9,8 8,6 6,4 0,8 233,693 205,887 168,842 182,660 192,182 221,714 246,190 236,349 Investments ret,pat&eupet7878148451,3 736 759 785 7,490 7,885 7,569 7,336 12,839 8,435 8,194 7,837 Prperty, plant&equipment te ses 551 9,0 1,1 9,9 6,7 131 9,7 106,294 94,179 91,321 63,579 92,497 111,919 92,901 95,551 Other assets eois 2,0 4,3 6,1 5719 0,2 3,8 5,2 529,319 456,020 434,889 407,727 597,139 569,211 544,138 526,505 Deposits orwns 5,9 6,6 7,5 1086 942 1485 1002 149,835 130,032 124,855 99,422 190,866 170,856 169,965 158,999 Borrowings te iblte 2,6 449 2,2 2,0 2,7 922 2,3 19,650 20,234 19,232 20,472 25,006 23,329 24,409 26,869 Other Liabilities hrhles ud 3,8 246 3,9 4,8 2,1 773 2,5 31,261 29,253 27,793 26,211 43,382 34,990 32,456 30,983 Shareholders' Funds e on Avne 3338 4276 4407 4,5 2232 3052 3822 372,722 318,212 330,582 292,342 543,652 444,057 412,716 393,398 Net Loans&Advances Bank netet 3,9 4,6 2,2 1448 8,1 7,0 0,1 236,063 208,719 171,508 185,417 194,458 223,923 248,765 238,993 Investments rpry ln qimn 580 617 631 055 ,9 ,8 ,9 5,622 5,991 5,682 5,892 10,595 6,351 6,137 5,890 Property, plant&equipment te ses 571 8,3 0,0 8,3 6,4 923 8,1 100,547 88,718 79,253 62,444 86,835 104,806 86,639 85,791 Other Assets eois 2,6 3,7 6,6 5875 0,1 3,9 5,8 524,233 452,587 430,690 406,515 588,765 562,865 538,471 521,167 Deposits orwns 5,1 6,3 6,7 1374 700 1374 1437 144,674 124,337 113,764 97,020 183,764 163,876 164,139 150,015 Borrowings te iblte 2,8 265 2,4 2,4 1,8 761 1,1 17,915 18,611 17,651 19,080 22,848 20,944 22,645 25,181 Other Liabilities hrhles ud 2,0 2,0 3,5 0132,8 2,2 2,0 28,132 26,105 24,920 23,480 40,163 31,452 29,002 27,709 Shareholders' Funds 7336 7098 7836 8633 5,3 0,6 3,3 730,065 635,539 606,769 553,832 856,393 798,386 770,968 743,356 7336 7098 7836 8633 5,3 0,6 3,3 730,065 635,539 606,769 553,832 856,393 798,386 770,968 743,356 7402 7427 7917 8550 4,9 8,2 2,4 714,954 621,640 587,025 546,095 835,540 779,137 754,257 724,072 Quarter Quarter 2,7 5,5 7,3 3,4 4,9 8,2 2,4 714,954 621,640 587,025 546,095 835,540 779,137 754,257 724,072 1st 1st Quarter Quarter 2nd 2nd 2011 Quarter 3rd 3rd Quarter 4th 4th 10.03.61 00.031.12.10 30.09.10 30.06.10 31.03.10 Quarter 1st Quarter 2nd 2010 Quarter 3rd Rs. Million Quarter 4th sa 10.13.61 00.131.12.11 30.09.11 30.06.11 31.03.11 at As Financial Measures neetMri % 31 .2 32 .2 30 .8 32 3.29 3.28 3.18 3.07 3.32 3.21 3.22 3.16 Interest Margin(%) Profitability Group euno ses(eoetx % 18 .5 18 .0 10 .1 16 1.73 1.60 1.41 1.02 2.00 1.87 1.75 1.87 Return onassets(beforetax)(%) euno qiy(fe a)() 87 74 92 07 32 84 19 24.35 21.91 18.46 13.20 30.78 29.22 27.49 28.70 Return onequity(aftertax)(%) annsprsae(s) ,4.0 1696 ,0.7 2225 6.9 1254 ,1.9 1,352.06 1,215.09 1,255.46 664.69 2,272.54 1,904.97 1,699.63 1,749.00 Earnings pershare(Rs.) Investor information e sesvleprsae(s) ,7.7 6263 ,7.3 8403 ,4.3 5352 ,4.6 6,039.20 5,646.36 5,365.27 5,049.13 8,400.33 6,773.73 6,266.37 5,976.17 Net assetsvaluepershare(Rs.) ir1() 03 00 .5 93 18 09 05 11.35 10.58 10.93 11.88 9.31 8.95 10.05 10.39 Tier 1(%) Capital AdequacyRatios oa Te +Te ) % 1.1 1.0 1.6 1.7 1.3 1.3 1.7 15.20 15.57 15.83 13.83 12.77 11.56 13.10 13.91 Total (Tier1+Tier2)(%) e o-efrigastrto .9 31 .8 22 .7 26 .6 1.55 2.56 2.61 2.97 2.24 2.98 3.19 3.49 Net non-performingassetratio Assets quality rs o-efrigastrto .8 14 .9 09 .3 49 .5 3.49 4.95 4.96 5.63 0.91 1.39 1.45 1.68 Gross non-performingassetratio (Net ofinterestinsuspense&provision) neetMri % 30 .7 30 .6 .930 .23.14 3.12 3.04 2.89 3.16 3.06 3.07 3.01 Interest Margin(%) Proﬁtability Bank suspense) in interest of (Net euno ses(eoetx % 17 .6 17 .1 .912 .31.60 1.43 1.28 0.89 2.01 1.79 1.66 1.77 Return onassets(beforetax)(%) euno qiy(fe a)() 97 83 03 37 1.81.22.924.01 21.59 17.62 12.48 33.74 30.34 28.30 29.76 Return onequity(aftertax)(%) neetcvr(ie) .4 21 .4 23 15 .719 2.1 1.94 1.87 1.59 2.37 2.24 2.13 2.24 Interest cover(times) Investor information annsprsae(s) ,6.0 1522 ,0.1 2341 639 1121 ,0.8 1,273.06 1,101.08 1,152.12 603.94 2,304.16 1,808.01 1,572.22 1,661.60 Earnings pershare(Rs.) e sesvleprsae(s) ,4.7 5804 ,9.8 8026 ,9.6 4940 ,2.1 5,626.37 5,221.11 4,984.09 4,696.06 8,032.62 6,290.48 5,800.41 5,541.77 Net assetsvaluepershare(Rs.) ir1() .7 90 .7 85 09 02 .9 10.30 9.59 10.20 10.95 8.52 8.07 9.08 9.47 Tier 1(%) Capital AdequacyRatios oa Te +Te ) % 1.2 1.2 1.1 1.4 1.3 1.2 1.7 13.73 14.27 14.92 13.83 11.64 10.31 11.72 12.62 Total (Tier 1+Tier 2)(%) rs o-efrigastrto() .7 29 .8 20 .8 27 .9 1.42 2.39 2.79 2.78 2.06 2.78 2.98 3.27 Gross non-performingassetratio(%) Assets quality e o-efrigastrto() .0 13 .3 07 .9 56 .3 3.30 4.73 5.65 5.39 0.77 1.23 1.30 1.50 Net non-performingassetratio(%) (Net ofinterestinsuspense&provision) oetcbnigui % 35 48 32 33 45 11 58 28.65 25.87 21.13 24.55 23.36 23.21 24.88 23.57 Domesticbankingunit(%) Statutory liquidassetratios Regulatory Liquidity (Net ofinterestinsuspense) f-hr akn nt() 5.5 5.4 4.9 2.9 4.0 5.6 4.2 74.17 44.52 55.46 41.40 24.39 43.59 52.44 50.65 Off-shorebankingunit(%) Quarter Quarter 1st 1st Quarter Quarter 2nd 2nd 2011 Quarter 3rd 3rd Quarter 4th 4th 10.03.61 00.031.12.10 30.09.10 30.06.10 31.03.10 Quarter 1st Quarter 2nd

2010 Quarter 3rd Quarter 4th

BANK OF CEYLON ANNUAL REPORT 2011 279 BANK OF CEYLON ANNUAL REPORT 2011 280 Information onDebenturesissuedbytheBank Investor Information redeemable debentures Unsecured, subordinated, redeemable debentures Unsecured, subordinated, Fixed interestrate debentures A -SriLankarupee redeemable debentures Unsecured, subordinated, redeemable debentures Unsecured, subordinated, redeemable debentures Unsecured, subordinated, redeemable debentures Unsecured, subordinated, rate Floating interest debentures Unsecured, redeemable debentures Unsecured, redeemable debentures Unsecured, redeemable redeemable debentures Unsecured, subordinated, plus 150basispoints) (6 monthsTB(Gross)rate points) rate plus100basis (12 monthsTB(Gross) redeemable debentures Unsecured, subordinated, rate plus75basispoints) (12 monthsTB(Gross) Description Note Interest Interest Note Description a At maturity 24.11.2008 24.11.2013 - - 17.61 17.61 10.25 380,383 322,775 322,775 380,383 345,190 10.25 345,190 17.61 10.25 17.61 19.00 - 19.00 - 19.00 19.00 24.11.2013 24.11.2008 24.11.2013 24.11.2008 Atmaturity a Annually a a Annually 08.12.2011 08.12.2016 11.00 - 11.00 - 11.40 3,900,140 - - 3,900,140 11.40 1,074,670 1,074,670 - 11.05 11.00 11.50 - 11.50 11.50 11.00 08.12.2016 11.50 08.12.2011 28.06.2015 28.06.2010 Annually a Annually a a Semi annually 08.12.2011 08.12.2016 10.50 - 10.50 - 11.40 2,300 - - 2,300 11.40 - 10.50 - 10.50 08.12.2016 08.12.2011 Semiannually a b Semi annually 31.12.2003 31.12.2011 - 10.43 - 10.56 - - 250,000 250,000 - - 10.56 - 10.43 - 31.12.2011 31.12.2003 Semiannually b c Semi annually 27.10.2006 27.10.2011 - 8.94 - 11.88 - - 1,000,000 1,000,000 - - 11.88 - 8.94 - 27.10.2011 27.10.2006 Semiannually c c Annually 15.08.2008 15.08.2013 9.06 10.49 9.95 12.87 10.25 300,000 300,000 300,000 300,000 10.25 12.87 9.95 10.49 9.06 15.08.2013 15.08.2008 Annually c Annually 17.09.2010 17.09.2015 11.00 11.00 11.00 11.00 11.05 1,428,813 1,428,813 1,428,813 1,428,813 2,000,000 11.05 2,000,000 1,000,000 11.05 1,000,000 11.00 11.05 13.20 11.00 13.20 11.00 13.20 13.20 11.00 13.20 17.09.2015 13.20 13.20 17.09.2010 14.07.2015 13.20 14.07.2010 Annually 01.07.2015 01.07.2010 Annually Annually frequency payable payable Issue Issue date Maturity Maturity date 0121 0121 012010 2011 2010 2011 2010 2011 Coupon rate Effective annual rate Interest Interest Effectiveannualrate Coupon rate s 0 Rs'000 Rs'000 % % % % % Government Government comparable comparable security rate of rate of 1,3,9 6,171,448 10,131,496 as at31stDecember Amount Amount redeemable debentures Unsecured, subordinated, plus 75basispoints) (6 monthsTBrate(Gross) redeemable debentures Unsecured, subordinated, plus 75basispoints) (6 monthsTBrate(Gross) redeemable debentures Unsecured, subordinated, debentures Unsecured, redeemable, plus 75basispoints) (6 monthsTB(Gross)rate rate plus50basispoints) (12 monthsTB(Gross) debentures Unsecured, redeemable, rate plus50basispoints) (12 monthsTB(Gross) debentures Unsecured, redeemable, rate plus50basispoints) (12 monthsTB(Gross) debentures Unsecured, redeemable, rate plus50basispoints) (12 monthsTB(Gross) debentures Unsecured, redeemable, rate) (12 monthsTB(Gross) debentures Unsecured, redeemable, rate) (12 monthsTB(Gross) debentures Unsecured, redeemable, rate) (12 monthsTB(Gross) Description Note Interest Interest Note Description a/b Semi annually 08.12.2011 08.12.2016 10.26 - 10.26 - 11.40 1,097,560 - - 1,097,560 11.40 - 3,925,330 3,925,330 11.05 10.26 3,699,390 3,699,390 - 11.54 10.25 8.98 10.26 10.46 08.12.2016 8.95 08.12.2011 Semiannually 9.05 10.26 a/b 8.95 28.06.2015 28.06.2010 Semiannually 9.13 a/b 24.11.2013 24.11.2008 Semiannually a/b c Annually 17.11.2006 17.11.2011 - 8.19 - 10.98 - - 1,200,000 1,200,000 - - 10.98 - 8.19 - 17.11.2011 17.11.2006 Annually c c Annually 01.04.2008 01.04.2013 8.61 11.02 9.20 12.94 10.25 500,000 500,000 500,000 500,000 10.25 500,000 500,000 12.94 10.10 9.20 1,500,000 1,500,000 11.01 11.02 10.10 8.70 1,000,000 8.61 1,000,000 11.02 8.69 01.04.2013 10.10 01.04.2008 8.70 8.77 1,000,000 Annually 1,000,000 11.73 8.69 01.11.2012 c 01.11.2007 10.10 8.45 8.77 1,500,000 Annually 1,500,000 12.30 8.39 01.11.2012 c 01.11.2007 10.10 8.60 8.62 Annually 10.39 03.10.2012 10.52 c 03.10.2007 8.44 8.14 Annually 12.03.2012 10.39 c 12.03.2007 8.39 Annually 10.01.2012 c 10.01.2007 Annually c frequency payable payable Issue Issue date Maturity Maturity date 0121 0121 012010 2011 2010 2011 2010 2011 Coupon rate Effective annual rate Interest Interest Effectiveannualrate Coupon rate s 0 Rs'000 Rs'000 % % % % % Government Government comparable comparable security rate of rate of as at31stDecember Amount Amount

BANK OF CEYLON ANNUAL REPORT 2011 281 BANK OF CEYLON ANNUAL REPORT 2011 282 Investor Information 2010/2015-(HighestPriceRs.100.00, LowestPrice-Rs.90.50,LastTransaction Price -Rs.95.00) 2008/2013-(HighestPriceRs.100.10,LowestRs.100.00, LastTransaction Price-Rs.100.00) DebenturesthatarelistedintheColomboStockExchange. SomeofthesehavebeentradedintheColomboStockExchangedur a) Notes Total Debenture 300 basispoints) (6 monthsLIBORPlus redeemable debentures Unsecured, subordinated, rate Floating interest redeemable debentures Unsecured, subordinated, Fixed interestrate debentures United Statesdollar points) rate plus150basis (12 monthsTB(Gross) debentures Unsecured, redeemable, points) rate plus150basis (12 monthsTB(Gross) debentures Unsecured, redeemable, points) rate plus150basis (12 monthsTB(Gross) debentures Unsecured, redeemable, rate plus50basispoints) (12 monthsTB(Gross) debentures Unsecured, redeemable, ) 6 months LondonInterBankOfferedRate(LIBOR) forUSDollarsplus3% per annum d) atthe precedingweekoftheinterestresettingdate. Weighted average12monthsTreasury Billinterest ratebeforededucting10%withholdingtaxattheprimaryquotationsasan c) ) Weighted average6 monthsTreasury Billinterestratebeforededucting 10%withholdingtaxattheprimaryquotationsasann b) preceding week of the interest resetting date. preceding weekoftheinterestresetting date. Description Note Interest Interest Note Description d Semi annually 10.10.2008 10.10.2013 3.58 3.46 3.61 3.49 4.25 2,434,719 2,383,419 2,383,419 2,434,719 4.25 3.49 3.61 3.46 3.58 10.10.2013 10.10.2008 Semiannually d c Annually 03.08.2010 03.08.2015 9.56 11.50 10.70 11.50 11.05 5,300,000 5,300,000 5,300,000 5,300,000 11.05 1,750,000 11.50 1,750,000 11.05 10.70 11.50 5,200,000 11.50 5,200,000 9.56 11.05 10.70 03.08.2015 1,500,000 03.08.2010 11.50 1,500,000 11.50 10.25 Annually 9.56 10.70 c 03.08.2015 12.94 03.08.2010 11.50 9.20 Annually 9.56 c 03.08.2015 11.02 03.08.2010 8.61 Annually 01.04.2013 c 01.04.2008 Annually c Semi annually 10.10.2008 10.10.2013 5.50 5.50 5.58 5.50 4.25 27,337 26,761 26,761 27,337 4.25 5.50 5.58 5.50 5.50 10.10.2013 10.10.2008 Semi annually frequency payable payable Issue Issue date Maturity Maturity date 0121 0121 012010 2011 2010 2011 2010 2011 Coupon rate Effective annual rate Interest Interest Effectiveannualrate Coupon rate s 0 Rs'000 Rs'000 % % % % % nounced by the Central Bank of Sri Lanka, nounced bytheCentralBankofSriLanka, ounced by the Central Bank of Sri Lanka, at the ounced bytheCentralBankofSriLanka, atthe ing theyear2011. Government Government comparable comparable security rate of rate of 8722030,124,720 28,772,280 1358238,706,348 41,365,832 as at31stDecember ,6,5 2,410,180 2,462,056 Amount Amount Market ValueofListedDebentures neue,Sbriae,Rdeal,5yas ie ae(90) Highest Unsecured,Subordinated,Redeemable,5years,fixedrate(19.0%) (Rs.) BoC Debenture2008/2013, Lowest (Rs.) Lasttransaction(Rs.) er,fotn ae(6mnh Brt Gos ls7 ai ons) Highest 5years,floatingrate(06monthsTB(Gross)plus75basispoints) (Rs.) Unsecured, Subordinated,Redeemable, Lowest (Rs.) Lasttransaction (Rs.) neue,Sbriae,Rdeal,5yas eocuo Highest (Rs.) Unsecured, Subordinated,Redeemable,5years,zerocoupon Lowest (Rs.) Lasttransaction (Rs.) neue,Sbriae,Rdeal,5yas ie ae(15) Highest Unsecured,Subordinated,Redeemable,5years,fixedrate(11.5%) (Rs.) BoC Debenture2010/2015, Lowest (Rs.) Lasttransaction (Rs.) er,fotn ae(6mnh Brt Gos ls7 ai ons) Highest 5years,floatingrate(06monthsTB(Gross)plus75basispoints) (Rs.) Unsecured, Subordinated,Redeemable, Lowest (Rs.) Lasttransaction (Rs.) neue,Sbriae,Rdeal,5yas ie ae(10) Highest Unsecured,Subordinated,Redeemable,5years,fixedrate(11.0%) (Rs.) BoC Debenture2011/2016, Lowest (Rs.) Lasttransaction(Rs.) er,fotn ae(6mnh Brt Gos ls7 ai ons) Highest 5years,floating rate(06monthsTB(Gross)plus75basispoints) (Rs.) Unsecured, Subordinated,Redeemable, Lowest (Rs.) Lasttransaction(Rs.) neue,Sbriae,Rdeal,5yas ie ae(05) Highest (Rs.) Unsecured, Subordinated,Redeemable,5years,fixedrate(10.5%) Lowest (Rs.) Lasttransaction(Rs.)

1Dc21 31-Dec-2010 31-Dec-2011 01-Jan-2011 01-Jan-2010 o rdd NotTraded Not Traded o rdd NotTraded Not Traded o rdd NotTraded Not Traded o rdd 135.11 Not Traded o rdd 134.15 Not Traded o rdd 134.15 Not Traded o rdd NotTraded Not Traded o rdd NotTraded Not Traded o rdd NotTraded Not Traded o rdd N/A Not Traded o rdd N/A Not Traded o rdd N/A Not Traded o rdd N/A Not Traded o rdd N/A Not Traded o rdd N/A Not Traded o rdd N/A Not Traded o rdd N/A Not Traded o rdd N/A Not Traded 101 107.00 100.10 100 107.00 100.00 100 107.00 100.00 100 NotTraded 100.00 9.0 NotTraded 90.50 9.0 NotTraded 95.00 Rs. to

BANK OF CEYLON ANNUAL REPORT 2011 283 BANK OF CEYLON ANNUAL REPORT 2011 284 neetyeda tdt fls rd oe 5years,fixedrate(19.0%) BoCDebenture2008/2013, Interest yieldasatdateoflasttradedone Yield oflasttradedone Investor Information o f Hlig o f Holding No.of 2010 % Holding OrdinaryShares % No.of 2011 OrdinaryShares Shareholder As at31stDecember Share Information er,fotn ae(6mnh Brt Gos ls7 ai ons) NtTae NotTraded NotTraded 5years,floatingrate(06monthsTB(Gross)plus75basispoints) oeneto r ak 50000 0 50000 100 5,000,000 100 5,000,000 Government ofSriLanka 5years,zerocoupon er,fotn ae(6mnh Brt Gos ls7 ai ons) o rdd NotTraded NotTraded 5years, floatingrate(06monthsTB(Gross)plus75basispoints) 5years,fixedrate(11.5%) er,fxdrt 1.% o rdd N/A NotTraded 5years, fixedrate(11.0%) er,fotn ae(6mnh Brt Gos ls7 ai ons) NtTae N/A NotTraded 5years, floatingrate(06monthsTB(Gross)plus75basispoints) er,fxdrt 1.% o rdd N/A NotTraded 5years, fixedrate(10.5%) 5years, fixedrate(19.0%) BoCDebenture2008/2013, Yield tomaturityoflasttradedone er,fotn ae(6mnh Brt Gos ls7 ai ons) NtTae NotTraded NotTraded 5years, floatingrate(06monthsTB(Gross)plus75basispoints) 5years, zerocoupon er,fotn ae(6mnh Brt Gos ls7 ai ons) NtTae NotTraded NotTraded 5years, floatingrate(06monthsTB(Gross)plus75basispoints) 5years, fixedrate(11.5%) er,fxdrt 1.% o rdd N/A NotTraded 5years, fixedrate(11.0%) er,fotn ae(6mnh Brt Gos ls7 ai ons) NtTae N/A NotTraded 5years, floatingrate(06monthsTB(Gross)plus75basispoints) er,fxdrt 1.% o rdd N/A NotTraded 5years, fixedrate(10.5%) BoC Debenture2010/2015, BoC Debenture2011/2016, BoC Debenture2010/2015, BoC Debenture2011/2016,

31-Dec-2011 31-Dec-2010 o rdd 13.13 Not Traded o rdd 15.57 Not Traded 1.0 17.76 19.00 1.0 16.36 19.00 12.11 Not Traded 13.33 Not Traded % %

Ten Year -Bank StatisticalSummary Total liabilities eetrs 1,2 960 ,0 730 ,5 910 798 805 876 41,366 38,706 18,045 17,988 9,150 3,850 7,350 6,800 9,600 11,225 Debentures te iblte 235 122 ,5 846 174 332 451 879 528 20,602 15,258 18,789 14,531 13,302 11,714 8,436 9,152 11,242 12,355 Other liabilities eerdtxlaiiy - - - - 0 49 5 1,107 458 409 506 ------Deferred taxliability a aal 0 6 17 6 2 85 ,7 10 ,0 1,139 2,200 190 1,079 885 727 76 137 62 402 Tax payable orwdfns 2,1 1,0 2,7 5,8 8,0 8,5 1110 732 0,6 142,398 105,967 67,302 111,100 84,658 81,106 54,686 28,778 17,908 21,510 Borrowed funds eoisfo utmr 7,4 1726 0,8 2282 6,9 3886 1,7 4867 2,3 588,765 524,233 408,607 316,070 308,856 262,990 232,822 206,184 187,256 170,544 Deposits fromcustomers Liabilities Total assets nagbeast 6 40 9 23 1 14 343 164 111 233 399 420 467 Intangible assets rpry ln n qimn ,9 434 ,4 479 ,4 492 ,1 574 ,2 10,595 5,622 5,724 5,018 4,982 5,145 4,769 4,947 4,344 3,192 Property, plant andequipment eerdtxast - 74 3 6 ------60 236 704 - - - Deferred taxassets te ses 1,3 1,4 1,9 1,3 1,2 1,0 1,0 1,8 1,0 22,850 17,706 19,184 17,304 16,901 11,928 12,833 12,498 17,746 19,532 Other assets neteti usdaisadAscae ,3 408 ,8 425 ,1 360 ,0 407 ,2 7,084 6,124 4,037 3,603 3,650 3,711 4,225 4,984 4,008 2,831 Investment inSubsidiariesandAssociates netetpoete 5 110 ,5 126 ,8 59 - - - - 559 1,088 1,236 1,150 1,150 754 Investment properties netetscrte 653 027 ,9 277 ,8 232 961 585 063 83,321 80,643 75,845 69,681 2,362 2,380 2,787 6,493 10,227 16,593 Investment securities oeneto r ak etutrn od 783 783 783 783 ,4 857 ,4 857 ,4 8,546 8,547 8,547 8,547 8,547 8,547 17,883 17,883 17,883 17,883 Government ofSriLankaRestructuringBonds es etl eevbe 26 0 59 3 191 ,7 589 ,0 428 14,457 4,228 4,209 5,849 5,877 1,991 936 579 406 276 Lease rentalsreceivable il fecag on n dacs 1525 1,8 1106 6,6 2291 7,1 2526 6,5 368,494 260,857 265,256 278,619 222,971 165,668 131,096 114,287 115,255 Bills ofexchange&loansandadvances rauybnsmtrn fe n er 1,5 1,5 1,3 982 423 737 884 690 127 32,093 51,297 46,910 38,834 27,337 24,263 9,882 15,334 16,554 10,955 Treasury bondsmaturingafteroneyear lcmnswt n on oohrbns 1,9 2,1 2,6 3,5 2,3 1,2 1,0 4,6 4,8 14,5 42,680 45,867 16,403 19,722 23,735 36,851 27,362 26,412 13,494 Placements withandloanstootherbanks eln euiis 53 ,1 57 4 ,8 314 4 188 ,3 3,574 3,232 1,828 144 3,184 1,180 54 507 1,411 503 Dealing securities rauybls od n te lgbebls 1,3 1,3 2,0 4,6 4,0 3,0 2,0 3,5 86,219 35,350 27,707 39,205 45,808 41,366 25,502 13,837 13,134 Treasury bills,bondsandothereligiblebills aacswt eta ak ,9 794 240 393 716 723 569 623 584 30,427 25,894 16,263 15,629 17,253 17,106 13,933 12,480 7,944 9,198 Balances withCentralBanks ahadsottr ud ,7 419 ,8 617 ,9 924 018 359 414 18,671 14,104 13,509 10,168 9,244 7,790 6,127 5,584 4,179 4,275 Cash andshorttermfunds Assets sa 1tD cme 2002200320042005200620072008200920102011 As at 31st December Profit aftertaxation noetxepne (1) (6) (9) (,2) (,1) (,7) (,7) (,2) (,8) (4,025) (3,688) (1,124) (1,670) (1,675) (1,510) (1,225) (590) (168) (219) Income taxexpense Profit beforetaxation au de a nfiaca evcs - (3) (7) (1) (,6) (,7) (,7) (,9) (,0) (2,515) (4,001) (2,995) (2,073) (1,873) (1,767) (916) (872) (638) - Value addedtaxonfinancialservices Operating profitbeforeVAT rvso o onlse n ali au f (434) (1,560) (1,802) (2,375) (1,210) (1,369) (1,659) (2,886) (3,012) (2,941) investments&dealingsecurities Provision forloanlossesandfallinvalueof te prtn xess (,0) (,7) (,2) (040 1,7) (315 1,1) (610 1,4) (17,403) (16,544) (16,190) (14,514) (13,105) (12,174) (10,400) (9,127) (8,676) (7,406) Other operatingexpenses neetepne 1,9) (,3) (,5) (121 1,4) (943 3,8) (827 3,0) (36,229) (31,200) (38,267) (35,989) (29,453) (15,744) (11,231) (8,256) (8,438) (12,794) Interest expenses te noe 334 ,1 530 ,1 617 ,9 761 ,1 1,0 9,636 12,106 8,818 7,611 6,695 6,107 5,716 5,310 4,817 3,384 Other income neeticm 028 700 669 055 683 226 964 307 083 60,745 50,843 53,077 49,684 42,286 26,823 20,595 16,609 17,040 20,258 Interest income Operating results oeg xhnepot 77 0 171 ,1 221 ,7 287 ,6 49 1,746 409 1,567 2,887 1,178 2,261 1,015 1,781 707 737 Foreign exchangeprofit Net interestincome Income For the year 2002200320042005200620072008200920102011 ended 31st December

2,7 2,0 2,5 2,2 3,9 5,5 6,8 6,6 6,6 71,368 63,363 63,461 60,182 50,159 35,192 27,324 23,957 22,805 24,578

2785 4,8 2639 1,2 3829 3,0 4436 3,4 7494 835,540 714,954 538,241 484,376 437,901 378,299 319,721 266,399 240,388 227,875 2606 2,6 2101 0,7 3037 1,5 4124 1,4 6682 795,377 686,822 513,342 461,274 416,851 360,387 303,370 251,051 226,068 216,036

744 ,0 833 ,6 1,7 1,3 1,9 1,1 1,4 24,516 19,643 14,810 13,695 12,833 11,079 9,364 8,353 8,602 7,464 128 ,0 259 ,2 417 ,1 521 ,0 1,5 15,546 10,053 4,208 5,231 4,518 4,137 3,120 2,559 1,800 1,238 109 ,3 199 ,9 267 ,4 351 ,8 635 11,521 6,365 3,084 3,561 2,843 2,627 1,895 1,969 1,632 1,019 128 ,3 341 ,3 594 ,9 734 ,0 1,5 18,061 14,054 7,203 7,304 6,391 5,904 4,036 3,431 2,438 1,238 529,195 59,839 Rs.Million 45

BANK OF CEYLON ANNUAL REPORT 2011 285 BANK OF CEYLON ANNUAL REPORT 2011 286 rprypat&eupet (2) (1) (1) (2) (1) (4) (4) (,4) (,6) (1,360) (1,168) (1,446) (647) (544) (912) (927) (911) (519) (322) property plant&equipment Capital expenditureonpurchaseof aho rmfiacn ciiis (,7) (,0) 700 539 176 ,2 3,3 (514 654 24,075 46,554 (45,144) 34,433 8,120 21,746 25,309 7,070 (5,901) (5,175) Cashflow fromfinancingactivities aho rmivsigatvte 9 128 ,7 (,1) (,9) 304 6,9) (075 5,1) 42,335 (59,418) (20,775) (67,091) 3,034 (8,998) (6,315) 5,575 1,238 197 Cashflow frominvestingactivities aho rmoeaigatvte 636 817 ,7 (,6) (420 1,1) 3,6 1015 1,7 (89,978) 10,271 100,115 30,262 (13,713) (24,200) (8,961) 1,374 18,187 16,396 Cashflow fromoperatingactivities oo eoios(n00 ,8 524 ,9 572 ,4 693 ,9 840 ,2 10,179 9,321 8,440 7,494 6,993 6,248 5,782 5,491 5,274 5,089 No ofdepositors(in000) oo dacs(n00 9 101 ,1 125 ,4 187 ,3 201 ,6 2,837 2,261 2,011 1,839 1,867 1,541 1,285 1,218 1,061 796 No ofadvances(in000) oo Ts 7 8 14 0 10 0 21 2 32 404 352 329 251 203 190 104 104 85 79 No ofATMs oo rnhs 27 9 30 0 35 0 39 1 39 318 309 310 309 307 305 304 300 299 297 No ofbranches oo mlye ,6 897 ,1 881 ,6 823 ,1 758 ,0 8,115 8,204 7,538 7,912 8,253 8,363 8,891 8,718 8,927 9,268 No ofemployees Other information ott noerto() 6.1 87 6.6 26 89 74 6.4 83 5.3 50.85 53.73 68.33 64.24 67.48 68.93 72.63 61.76 68.77 66.21 Cost toincomeratio(%) iudt ai % 41 2.4 38 2.7 2.9 2.0 42 2.3 86 23.36 28.65 21.13 24.21 21.20 22.19 26.87 23.82 25.34 34.19 Liquidity ratio(%) otnetlaiiis() 42 51 49 42 .4 38 36 32 30 3.62 3.09 3.28 3.69 3.82 3.84 4.26 4.95 5.19 4.24 contingentliabilities(%) Capital funds to liabilities including irI+Te I 24 1.1 24 31 1.0 14 1.8 41 1.3 11.64 13.73 14.16 15.88 11.40 12.30 13.18 12.44 13.11 12.44 -Tier I+Tier II irI 16 1.1 23 26 1.0 13 1.9 12 1.0 8.52 10.30 11.22 11.29 11.38 11.90 12.67 12.33 12.11 11.64 -Tier I Capital adequacy ratio (%) noegot % (34) 72) .5 1.5 2.0 4.3 99 54 (.6 12.63 (0.16) 5.45 19.98 42.53 28.80 14.05 5.05 (7.21) (13.49) Income growth(%) fe a 88 1.8 1.8 1.6 53 1.9 61 1.5 40 33.74 24.01 12.85 16.13 14.59 15.33 11.96 13.28 12.48 8.83 -aftertax Return on average shareholders' funds (%) euno vrg ses() 05 07 .1 .6 .9 .1 .3 .2 .0 2.01 1.60 0.82 1.13 1.11 1.19 1.06 1.01 0.77 0.53 Return onaverageassets(%) Ratios Commitments andcontingencies Total equityandliabilities Total shareholders'equity eevs 66 ,5 229 6 119 ,7 112 ,2 162 7,563 1,642 1,429 1,182 1,374 1,159 961 2,209 2,158 636 Reserves eandpot ,7 807 ,3 945 028 211 435 580 873 24,592 18,713 15,820 14,335 12,161 10,298 9,475 9,034 8,097 7,173 Retained profits emnn eev ud 140 ,6 155 ,1 245 ,1 255 ,5 277 3,008 2,777 2,650 2,585 2,515 2,455 1,915 1,505 1,465 1,430 Permanent reservefund ttdcptl 260 ,0 260 ,0 400 ,0 500 ,0 500 5,000 5,000 5,000 5,000 5,000 4,000 4,000 2,600 2,600 2,600 Stated capital Shareholders' equity Ten Year -Bank StatisticalSummary sa 3s eebr 2002200320042005200620072008200920102011 As at31st December

2785 4,8 2639 1,2 3829 3,0 4436 3,4 7494 835,540 714,954 538,241 484,376 437,901 378,299 319,721 266,399 240,388 227,875 6,9 5,8 5,4 8,8 1552 3,1 1483 4,4 2315 314,009 223,165 246,245 164,813 134,713 105,502 80,187 58,841 50,087 62,996 1,3 1,2 1,4 1,5 1,1 2,5 2,0 2,9 2,3 40,163 28,132 24,899 23,102 21,050 17,912 16,351 15,348 14,320 11,839 Rs.Million

mentioned above. However, thetransactionswitheachentityhavenotbeenexceededlimits Sri LankanAirlinesandLankaPortsAuthorityasotherrelatedentities. This ismainlyduetotheinclusionoftwoStateOwnedEnterprisesnamely, transactions withalltheotherentitieshavebeenexceeded10%ofequity. **As pertheNoteno.49–“RelatedPartyDisclosures”,totalof transactions aregivenintheNoteno.49.4toFinancialStatements. and theoutstandingbalancesasatBalanceSheetdateduringyear Most ofthesetransactionsareconsideredasrecurrentnature DepositsmadebytheGovernmentDepartmentswithBank. 5. Extendingoftradefinancecreditandotherrelatedservicestofacilitate 4. InvestmentinSriLankaDevelopmentBondsandRestructuring 3. ForeigncurrencyloansgrantedtotheGovernmentofSriLanka 2. OverdraftfacilitygrantedtotheDeputySecretaryTreasury 1. transactions include; given inSection7.6(xvi)oftheListingRulesColomboStockExchange.These the aggregatemonetaryvalueofthesetransactionsexceededthreshold carries outtransactionswiththeBank,inordinarycourseofbusinessand The GovernmentofSriLanka,whoholds100%shareholdinginBankCeylon, engaged withtheGovernmentofSriLanka. given inNoteno.49totheFinancialStatements,exceptfortransactions of thetotalassetsBank,whicheverislower,withrelatedparties The Bankdidnotcarryoutanytransactionsexceeding10%oftheequityor5% of theequityor5%totalassetsBank Colombo StockExchangeonrelatedpartytransactionsexceeding10% Disclosure intermsofsection7.6(xvi)thelistingrules import transactionsoftheGovernmentSriLanka. issued bytheGovernmentofSriLanka.

BANK OF CEYLON ANNUAL REPORT 2011 287 Products

BANK OF CEYLON ANNUAL REPORT 2011 288 Products &Services Loans facilitiesat special interestrate Free insurancecover Higher interestrate Special savingsaccountforfemale Kantha RanGinum scholarships forhighereducation Accounts forthefirstbaby Gold coingiftedontheweddingandaRanKekulu Free lifeinsurancecover 18 &25yearsofage Youth SavingsAccountforyoungstersbetween 18+ Youth Savings VISA ElectronCard could beoperatedbythemselves Unique savingsschemeidealforteenagerswhich 14+ Teen Savings Many morebenefits behalf ofguardian Special freeinsurancecoverforchildandon Scholarships forgrade5scholarshipwinners Higher interestrate years Childrens' SavingsAccountforminorsbelow18 Ran Kekulu SMS &Internetbankingfacility POS servicesviaDebitCard, Visa ElectronCard General purposesavingsaccount Normal SavingsAccount Saving Accounts BoC CreditCard of Rs.100,000 Visa ElectronDebitCardwitha withdrawallimit Personalised chequebooks Professionals' Currentaccount Prestige CurrentAccount banking Convenient financialoperationsthroughonline Current accountsforgeneral&businesspurposes Normal CurrentAccount Current Accounts DEPOSITS LOCAL CURRENCY

Long terminvestment productwithhigherinterestrate BoC Smart Saver Other Deposits future. Most convenientinvestmentopportunity forstable For seniorcitizensof55yearsand above Senior CitizensFixedDeposits Interest paidupfront Ideal short-terminvestment Savings Certificates Convenient short-terminvestmentforabetterreturn 7 DayCallDeposits future Most convenientinvestmentopportunityforastable General purposefixeddepositsaccount Normal FixedDeposits Maturity Deposits savings habits Support thefishingcommunitytoimprovetheir Special accountforfishingcommunity Dheevara Thenpathu Higher interestrate Encourage savingshabitsforthelowincomegroup Special accountforSamurdhibeneficiaries Samurdhi Savings VISA ElectronCard Higher interestrate Account forwarheroeswhoserveinarmedforces Ranaviru RanGinum Inculcate savingshabitsamongfarmercommunity Account forFarmers Ran GoviThenpathu Special PurposeAccounts Prioritised services Higher interestrate Account forSeniorCitizensabove55years Senior CitizensSavings

Lankan Rupees&transactconveniently foreign currencytoopenupaccountsinSri A greateropportunityforthosewhoearnin companies for nonresidentSriLankans,foreignnationals& Rupee Current/Saving/FixedDepositaccounts Non ResidentRupeeAccount generators foranyoneover18years Flexible pensionplanforseasonalincome BoC Vishrama over 18yearsofage Fixed pensionplanforregularincomeearners BoC Infinity interest rate. Investment planof2to3yearswithhigher BoC SmartInvestor coverage Loan/Overdraft facilities range ofbenefitssuch asfreeLifeinsurance origin. Saveinforeigncurrency&enjoy awider working abroad&foreignnationals of SriLankan Foreign currencyaccountsforSriLankans Deposits NRFC SavingsandFixed DEPOSITS FOREIGN CURRENCY companies inSriLanka. in governmentsecurities&equitycapitalof A greaterinvestmentopportunitytoinvest Sri Lankans. investors, foreigncitizens&nonresident Investment accountforforeigninstitutional (SIA) Securities InvestmentAccount disbursements arepermitted via RANSI.Outwardremittances&otherlocal Invest incapitalmarketsecurities&realassets resident SriLankansover18yearsofage Rupee accountspeciallydesignedfornon (RANSI) Resident SriLankanInvestors Rupee AccountforNon- & & Outward remittances arepermitted. Sri Lankans. investors, foreigncitizens&nonresident Deposit Accountsforforeigninstitutional Deposit Account(SFIDA) Special ForeignInvestment businessmen withmorebenefitsaddedon Specially designedtocatertheexport Firms, Individuals). For exportersofgoods&services(Company, Account (EFC) Exporters ForeignCurrency Sri Lankatemporarilyorpermanently. Deposit AccountsforNonNationalsresidingin Account Foreign CurrencyCurrent currencies. resident inSriLanka,whoearnforeign Accounts forprofessionalserviceproviders (FCAPS) Professional ServiceProviders Foreign CurrencyAccountfor by controllerofImmigration&Emigration For reductionindualcitizenshipfeeasrequired citizenship. Sri Lankanslivingabroad&wouldapplyfordual Fixed depositaccountforEx-SriLankans/ Currency FixedDeposits Dual CitizenshipForeign residents inSriLanka Saving opportunityinforeigncurrencyfor currencies. nationals &nonwhoearninforeign Foreign currencyaccountforresidentSriLankan Deposits RFC SavingsandFixed secure thechild'sfuture. abroad. Buildupsavingsinforeigncurrencyto below 18yearsofagewhoseparentsemployed Minor foreigncurrencyaccountforchildren Ran KekuluForeignCurrency Services relaxation ofexchangeregulations. Opportunity toinvestinbulk&enjoythe requirements Pre-shipment financingforexportbusiness For customersengagedinexportbusiness Overdrafts Export PackingCredit account holders. Ideal meanofshorttermfinancingforcurrent Permanent Overdrafts Overdraft Facilities ADVANCES foreign currency. Opportunity forresidentinvestorstoinvestin investors. Foreign currencysavingsaccountsforresident (OIA) Outword InvestmentAccount Extended featurestosuitbusinessrequirements For merchantsinthegem&jewelleryindustry. currency account Gem &Jewellery-Foreign currency Secure theretiredlifewithsavingsinforeign years ofage. Deposit accountsforforeignnationalsabove55 Senior FIDA housing needsofcustomers Special HousingLoan Schemeformeetthe Rannivasa Housing Loans Current accountholders. Suit tomeeturgentcashrequirements for Temporary Overdrafts holders. against goldpawnedforbank’s currentaccount Convenient solutionforurgentcashrequirements Bank CustomerhavingaCurrentAccount Ran SurekumOverdrafts rates or condominiumapartmentsatreducedinterest improvements/additions foreitherhouseproperty apartments constructionofahouse,house Funding forpurchaseofalandhouseor servants Special HousingloanschemeforGovernment Scheme Government HousingLoan renovation, purchaseactivities Financial solutionforallhouseconstruction, holders. Special HousingloanschemeforNRFCaccount BoC Sarani enterprises Financial assistancetocommencesmall µ (SED) Small EnterpriseDevelopment enterprises Financial assistancetocommencesmallµ Special schemeforwomenentrepreneurs Kantha RanDiriya commodities etc. seeds &plantmaterialpurchaseofagricultural Financial assistancefortheproductionof small farmers. Provision oftheworkingcapitalrequirement Scheme (NCRCS) New ComprehensiveRuralCredit Development Lending jewellery offermorepersonalisedservice. Granting short-termperiodloanagainstgoldand Ransurekum NayaSeva construction, renovation&purchaseactivities. financial needswithrelationtohouse General housingloanschemeforallyour who wishtobuildupahouseoftheirown. Open schemeforanyoneover18yearsofage BoC HousingLoanScheme

BANK OF CEYLON ANNUAL REPORT 2011 289 BANK OF CEYLON ANNUAL REPORT 2011 290 employment projects Support forthecommencementofself Training Institute the educationfromarecognisedVocational Financial facilitiesfortheyouthwhocomplete Initiative LoanScheme(SEPI) Self EmploymentPromotion village level small scaleactivitiesofthegroupsat Provide loanfacilitiesfortheincomegenerating Community DevelopmentLoanScheme Bhagya members & anyincomegeneratingactivitywithfamily Encourage themforselfemployment,Horticulture special emphasis Provide creditfacilitiestoruralsectorwith Earning People Credit SchemeforLowIncome people inSriLanka employment opportunitiesforthedistressed The ProsperityLoanSchemetocreateself Self EmploymentPromotionLoanScheme Saubagya focus oneconomic&socialdevelopment Provide capitalrequirementsatalowerrate to low-incomegeneratingfamilies Grant ineconomicallyunderdevelopedareas& Scheme Microfinance ProjectCredit Poverty Alleviation based enterprises generating microenterprise,speciallyhome Support tocommenceorimproveanyincome enterprise the skill&experiencetocommenceaviable Financial assistanceforindividualswhohave Scheme Sookshama (Micro)Credit Products &Services Fishing Industry Facilities grantedforthedevelopmentof members ®isteredcompanies Financial assistanceforindividuals,Group Diyawara Diriya generating projects. Speed loanschemeforwomentofinanceincome Siriliya SaviyaCreditScheme stores equipment etc.&constructionofsmallpaddy Facilities forthepurchaseofagriculture Financial assistanceforfarmers Govi ShakthiCreditScheme among thegroup. business development.Inculcatebankinghabits Training &Advisoryservicesarealsoprovidedfor are grantedtothegroupatalowerinterestrate. Groups areformatedinruralareas&facilities income groups. uplifting livingstandardofnonbankinglow These facilitiesaregrantedwiththeaimof Revolving FundCreditScheme Estate SectorSelf-Employment among small&mediumscaleentrepreneurs Provide creditfacilitiestocaterthecapitalneeds Companies Designed forIndividuals,Jointventures& Scheme Provincial DevelopmentCredit living businesses &therebyimprovethestandardof Provide financetolowincomegeneratingsmall below thepovertyline business community&forthosewhoareliving Targeted atlowincomegeneratingsmall Programme(SPEnDP) Entrepreneurship Development Small HolderPlantation production &enhanceproductivity Reduced interestratesfocusonincreasecoconut Coconut DevelopmentLoanScheme Kapruka fisheries &Aquacultureprojects Financial assistancetosupportorupgradeinland liability companiesintheindustry For smallproprietorships,partnerships,limited Scheme (ARDQIP) Improvement ProjectCredit Development Quality Aquatic Resources harvest handling&processingactivities Financial supporttoincreaseproduction &post- Crop sector Funding forthecommercialisationofPerennial Revolving FundCreditScheme Development Project Second PerennialCrops improve agrobasedindustries Granted atreducedratesassisttocommence& agricultural sector Granted tomilkproducers&allparitiesinthe Loan Scheme Agro LivestockDevelopment vehicles &developmentoftealands Financial assistanceforpurchasingoftransport registered companiesintheindustry Granted toindividuals,groupofindividualsor Scheme (TDPRFCS) Revolving FundsCredit Tea DevelopmentProject commercialised agribusiness Credit lineforthedevelopmentof business ®isteredcompanies Facilities grantedtoindividualbusiness,group Viskam sector shareineconomicdevelopment business processes&therebyenhancing private domestic SMEs'toadoptnewtechnologies& Provide short&longtermfinancialsupportfor medium enterprises Finance schemefacilitiesgrantedforsmall& Development loans Small &MediumEnterprises TTAS under E-FriendsII III Scheme (TTAS) underSMILE Technical Transfer Assistance (SME) Small &MediumEnterprises Council Members Motor Vehicles forProvincial of MotorVehicle Loan SchemeforImportation Motor Vehicle LoanScheme Purchase ofBicycle Credit Schemeforthe loan scheme Three wheelautorickshaws cycles Motor cycleloanschemetopurchaseTVS Government Motor CyclesforEmployeesof harvest &marketing Granted atreducedratestostoretheirpaddy small scalepaddycollectors Provide creditfacilitiesforfarmers&villagelevel Purchasing Credit schemeforPaddy Hypothecation Loans Pledge Loans Issuance ofLCs Credit Facilities-Importers Technology (SLIIT) Lanka InstituteofInformation The AcademicStaffofSri market. engaged asTraders ofFOSE of SelfEmployees,whoare The membersoftheFederation pilgrimage andholidaytours scheme forBoCcustomers Special PersonalLoan Departments, Corporations,StatutoryBodiesetc. Permanent employeesofGovernment Government Employees Surveyors, Engineersetc. Professionals intheJudicialservice,Doctors, Professionals Special loanschemesfor University Students Special LoanSchemeforthe Bankers ofSriLanka for StudentsofInstitute Educational loanscheme e-mail andInternet Purchase ofcomputerandaccessoriesincluding Scheme BoC PersonalComputerLoan educational loanscheme BoC comprehensive Education Advisory Services Obtaining StatusReports Forward ExchangeContracts Handling ofDutyRebates Collection ofBills DA) Purchasing ofExportBills(DP/ Negotiation ofLCBills Adding Confirmations Letters ofCredit Loans Packing CreditOverdrafts/ Credit Facilities-Exporters Bridging Loans Foreign CurrencyLoans Handling ofCollectionBills Shipping Guarantee Series ofLoans Trust ReceiptLoans Shipping Guarantee (Customer DutyBonds) Customs DutyGuarantee (Retention MoneyBond) Retention MoneyGuarantee Advance PaymentGuarantee (Performance Bond) Performance Guarantee Bid Guarantee(BidBond) Credit PurchaseGuarantee Letters ofGuarantee Other CreditFacilities

BANK OF CEYLON ANNUAL REPORT 2011 291 BANK OF CEYLON ANNUAL REPORT 2011 292 An-noor Children’s Savings(‘Afthal’) An-noor OrdinarySavings BoC An-noorCurrentAccount Deposits Banking) (Shari’ah Compliant PRODUCTS ISLAMIC BANKING Visa ElectronDebitCard Fixed Deposit Credit cardagainst Flexi Card-FlexibilityUnmatched Master CreditCard Card) Visa PlatinumSmartCard(BoC Black Visa CreditCard-International CREDIT CARDS entrepreneurs for Samurdhi Leasing scheme of selfemployees members offederation Leasing schemefor Schemes forvehicles Special Leasing guarantor. facilities evenwithouta ability toobtainleasing Flexible services, BoC LeasingScheme Lease Financing Products &Services Issuing andEnd-cashingForeignDrafts Inward RemittanceService Xpress Money remit, CoinStar, Telemoney) Inward RemittanceService(MoneyGram,Ez e-Cash RTGS FundTransfer Mail Transfers Telegraphic Transfers SLIPS SWIFT Funds Trasfering facility Inter-Branch MoneyTransfers Funds Transfer Traveller’s Cheques Bureau deExchange Foreign Currency SLT DirectDebit Cheque Encashment ATM Services Cash Services SPECIAL SERVICES An-noor NRFCAthfalAccount(Children) BoC ForeignCurrencySavings An-noor NRFCSavingsAccount Foreign Currency Ijara (Leasing)US$based An-noor Leasing(‘Ijarah’) Leasing An-noor Trade Finance Local Murabaha(PledgeFacilities) An-noor ‘Wakala’ Term Loan(‘Murabaha’) Loans School SavingsUnits Ran KekuluSansada e-Channelling Desk Trade InformationandHelp Consultancy Small Entrepreneur Money &BankingMuseum Ran KekuluGiftVouchers Left Handers’ChequeBook Insurance Desk Safe CustodyVault Gold Shop VALUE-ADDED SERVICES Encashment Facilities - JETLineDirectPayments - Lakehouseadvertisements - ShareTrading - Customs Payment Facilitieswith services viaInternet - payingutilitybillsandother InternetBanking of balancesetc.viaSMS. - payingutilitybillsandinquiry SMS Banking(PayMate) OTHER SERVICES Group Structure ASSOCIATES Limited Financial Company Southern Development (Private) Limited Records Solutions Transnational Lanka BoC indirectownership BoC directownership (Private) Limited Lanka Securities Limited Management Ceybank Asset Limited Land (Private) Mireka Capital 40.92% 43.36% 24.69% 41.67% 29% 40% 20.92% Bank ofCeylon 20% 100% 100% 100% 100% 99.99% 55% 93.16% 72.14% (Private) Limited BOC PropertyDevelopment Ceylease Financial Merchant Bankof & SupportServices Development PLC Bank ofCeylon Hotels Colombo BOC Management Services Limited (1963) Limited BOC Travels (UK) Limited (Private) Limited Sri LankaPLC 68.03% 78.02% Property 51% (Private) Limited & Management 14.28% 94.59% Homes(Private)Limited Ceybank Holiday Sri LankaLimited Merchant Creditof (Private) Limited Koladeniya Hydropower Company Limited MBSL Insurance Bank Limited MBSL Savings 42.86% 42.86% 49% 36.79% 85.79% 56.28% 49.08%

100% 88.12% SUBSIDIARIES

BANK OF CEYLON ANNUAL REPORT 2011 293 Associ Subsid

BANK OF CEYLON ANNUAL REPORT 2011 294 e-mail : [email protected] Fax : 011 2544329 011 Tel : 011 Colombo 01 011 Bank ofCeylonMawatha, 2448549 2544328 "BOC Square",No.01, 2326922 BoC HeadOfficeBuilding, 19th Floor, Property DevelopmentPLC Subsidiary companies e-mail : [email protected] Fax : 011 Tel : 2544329 Bank ofCeylonMawatha,Colombo01 011 011 "BOC Square",No.01, BoC HeadOfficeBuilding, 2388229 2544328 19th Floor, Management (Private)Limited BOC PropertyDevelopment& Tel : Bank ofCeylonMawatha,Colombo01 011 "BOC Square",No.01, BoC HeadOfficeBuilding, 2446790 25th Floor, (Private) Limited BOC Management&SupportServices Website : www.mbslbank.com e-mail : [email protected] Fax : 011 Tel : 2565666 Colombo 03 011 011 No. 28,St.Michael'sRoad, BoC MerchantTower, 4711711 2565636 Sri LankaPLC Merchant Bankof Subsidiaries &Associates * Asat31.12.2011 Principal activities Bank's Bank's Principal activities and CeybankHouseinKandy. Merchant Tower inColombo03 Renting ofofficespaceBoC Ms.WANalani(Chairman) 100% Provides managementservices activities andsecretarialservices advisory services,capitalmarket trade financing,corporate Leasing andhirepurchase, out totheBankofCeylon. which theCompanyhasrented of CeylonHeadquartersBuilding, Maintain andmanagetheBank 21%Mr. MRShah(Chairman) 72.14% 31%Dr. GaminiWickramasinghe 93.16% interest 0%Ms.WANalani(Chairman) 100% Directors* Highlights 2011 2011 Highlights Directors* Siriwardane Siriwardane Ms. JanakiSenanayake Sri LankaPLC Merchant Bankof Secretaries : Ms. LSdeWijeyeratne Mr. KDharmasiri Sri Lanka PLC Sri LankaPLC Merchant Bankof Secretaries : Ms. WANalani) (Alternate Directorto Mr. KDharmasiri Mr. PJJayasinghe Ms. SHRanawaka Ms. MarinaPillips Secretary : Mr. MSParamananda Mr. PGRupasinghe Mr. ABLdeSilva Mr. LakshmanPerera Dr. RWTMRanjithBandara Ms. WANalani Mr. VKanagasabapathy Sri Lanka PLC Sri LankaPLC Merchant Bankof Secretaries : Mr. SEdeSilva Mr. LNdeSilvaWijeyeratne Dr. MSPerera Mr. BMAmarasekera Mr. PALionel (Chairman) EPS (Rs) Profit aftertax Profit beforetax Total liabilities Total assets Stated capital EPS (Rs) Profit aftertax Profit beforetax Total liabilities Total assets Stated capital EPS (Rs) Profit aftertax Profit beforetax Total liabilities Total assets Stated capital EPS (Rs) Profit aftertax Profit beforetax Total liabilities Total assets Stated capital

1,032.1 1,032.1 1,010.0 9,936.0 1,607.0 2,409.2 2,409.2 7,093.2 Rs. Mn

332.4 308.1 308.1 660.0 443.4 415.3 415.3 367.0 90.5 90.5 4.67 4.67 82.7 82.7 28.3

0.1 0.1 0.4 0.4 0.4 8.5 1.0 2.5 2.5 0.4 0.4 0.8

1,010.0 1,010.0 7,182.6 7,182.6 1,607.0 2,256.3 2,256.3 4,503.4 4,503.4 Rs. Mn

a 951.5 951.5 449.7 449.7 252.9 252.9 660.0 660.0 650.7 650.7 404.0 404.0 390.2 32.6 32.6 2010 2010 58.6 58.6 38.3 0.0 0.0 0.4 0.4 0.4 8.4 1.0 3.3 3.3 3.8 3.8 0.5 0.5 1.0

i a i aries & aries & tes est www.boctravels.com Website : e-mail : [email protected] Fax : Tel011 : Colombo 08 011 2688175 Baseline Road, 2688154-8 BoC SuperGradeBranchBuilding, 1st Floor, BOC Travels (Private)Limited est www.mcsl.lk Website : e-mail : 0112301500-3 [email protected] : Fax : Tel011 Colombo 03 4627850 No. 28,St.Michael'sRoad, 11th Floor, BoCMerchantTower, Sri LankaLimited Merchant Creditof www.grandoriental.com Website : e-mail : [email protected] Fax : 011 Tel : 2447640 011 Colombo 01 011 No.02, York Street, 2320391-3 Hotels Colombo(1963)Limited 2320320 * Asat31.12.2011 Principal activities Bank's Bank's Principal activities abroad. or residentsofSriLankatravelling tourists visitingSriLanka agent andprovidefacilitiesto agent, touroperator, generalsales Carring onthebusinessoftravel rvdshtlsrie 99%Mr. RohanJayasinghe 99.99% Provides hotelservices services. developments andrelated credit facilities,realestate hire purchase,loansandother granting leasefacilities, Acceptance ofdeposits, 57%MrABLdeSilva(Chairman) 85.79% interest 0%Mr. ChandrasirideSilva 100% Directors* Highlights 2011 2011 Highlights Directors* Sri Lanka PLC Sri LankaPLC Merchant Bankof Secretaries : Ms. WANalani) (Alternate Directorto Mr. KDharmasiri Mr. CWijayatilake Mr. DNLFernando Ms. DeepaWanniaratchi Ms. WANalani Ms. NaliniAbeywardene (Chairman) Sri Lanka PLC Sri LankaPLC Merchant Bankof Secretaries : Ms. WANalani) (Alternate Directorto Mr. KDharmasiri Mr. JCRatwatte Mr. CDKWalisundara Mr. MPRKumara Ms. WKIKularatne Mr. MKNandasiri Ms. WANalani Mr. ChandrasirideSilva Ms. NaliniAbeywardene (Chairman) Sri Lanka PLC Sri LankaPLC Merchant Bankof Secretaries : Ms. CKJayaratne Mr. MRShah Dr. STdeSilva Dr. RWTMRanjithBandara Mr. HMABWeerasekara Mr. RajuSivaraman EPS (Rs) Profit aftertax Profit beforetax Total liabilities Total assets Stated capital EPS (Rs) Profit aftertax Profit beforetax Total liabilities Total assets Stated capital EPS (Rs) Profit aftertax Profit beforetax Total liabilities Total assets Stated capital 5,979.9 5,979.9 5,385.7 5,385.7 Rs. Mn 213.6 213.6 100.8 104.1 104.1 137.3 100.0 100.0 120.4 120.4 149.7 149.7 33.0 33.0 33.3 26.0 26.0 12.0 12.0 40.7 40.7 74.1 30.0 30.0 45.8 2.5 2.5 4,503.1 4,503.1 4,009.3 4,009.3 Rs. Mn 116.5 116.5 199.9 199.9 100.8 111.9 111.9 100.0 139.1 139.1 72.9 72.9 18.2 40.7 40.7 37.0 11.0 11.0 2010 2010 22.1 22.1 46.5 40.0 40.0 65.5 2.5 2.5

BANK OF CEYLON ANNUAL REPORT 2011 295 BANK OF CEYLON ANNUAL REPORT 2011 296 Website : www.mbslinsurance.lk e-mail : [email protected] Fax : Tel : 011 Colombo 03. 011 2574499 Galle Road, No. 388, 2574500 Company Limited MBSL Insurance 0112204103-4 e-mail : [email protected] Fax : 011 Tel : 2447845 Colombo 01 011 Bank ofCeylonMawatha, "BOC Square",No.01, 2447845 BoC HeadofficeBuilding, 12th Floor, (Private) Limited Ceybank HolidayHomes Website : www.ceylease.lk e-mail : [email protected] Fax : 011 011 4710359 Tel : 011 2681851 Colombo 08 011 011 Elvitigala Mawatha, 4710350 No. 182,PlatinumTower, 2681850, 2358000 Services Limited Ceylease Financial Subsidiaries &Associates * Asat31.12.2011 Insurance. General InsuranceandLife Underwriting ofallclasses Principal activities Bank's Bank's Principal activities Houses. Holiday HomesandGuest Operating ofPilgrims,Rests, pawning. estate developmentandsale purchase, loanfacilities,andreal Granting leasefacilities,hire 62%Mr. MRShah(Chairman) 56.28% 50%Mr. RajuSivaraman(Chairman) 55.00% interest 0%Dr. GaminiWickramasinghe 100% Sri Lanka PLC Sri LankaPLC Merchant Bankof Secretaries : Mr. SGSenerath Mr. PSKLGajanayake Dr. RWTMRanjithBandara Mr. APGKarunathilake Mr. PGRupasinghe Mr. LakshmanPerera Directors* Highlights 2011 2011 Highlights Directors* Siriwardane Siriwardane Ms. JanakiSenanayake Secretary : Ms. WANalani) (Alternate Directorto Mr. KDharmasiri Mr. WGAriyaratne Ms. KADPemadasa Mr. PALionel Mr. DMGunasekara Mr CSamarasinghe Ms. WANalani (Chairman) Limited Varners International(Private) Secretaries : Mr. KishanJayasekara) (AlternativeDirectorto Mr. MAslamOmar Mr. BMDChamindaPrabhath Mr. KishanJayasekara Mr. BPremalal Mr. SLiyanwala Ms. KADFernando Mr. WAAsokaRupasinghe EPS (Rs) Profit aftertax Profit beforetax Total liabilities Total assets Stated capital EPS (Rs) Profit aftertax Profit beforetax Total liabilities Total assets Stated capital EPS (Rs) Profit aftertax Profit beforetax Total liabilities Total assets Stated capital 24,756.33 24,756.33 1,003.6 1,003.6 1,578.8 1,578.8 1,338.4 1,338.4 Rs. Mn 779.5 779.5 200.0 200.0 608.2 608.2 38.7 38.7 17.3 17.3 54.2 54.2 13.4 13.4 0.0 0.0 3.9 1.9 1.9 1.7 1.7 7.2 7.2 2.0 2.0 - 16,169.7 16,169.7 1,534.5 1,534.5 1,321.8 1,321.8 Rs. Mn 632.4 632.4 528.5 200.0 200.0 492.0 492.0 14.6 14.6 15.7 15.7 2010 2010 10.0 10.0 12.3 12.3 18.3 18.3 0.0 0.0 4.5 1.1 0.8 0.8 2.0 2.0 - Website : www.mbslsavingsbank.com [email protected] e-mail : Fax : Tel : 011 Colombo 03. 011 2374044 No.02, DealPlace, MBSL SavingsBankLimited 2374000 e-mail : [email protected] Fax : Tel : 0112544329 Colombo 01 011 Bank ofCeylonMawatha, "BOC Square",No.01, 2544328 19th Floor, BoCHeadOfficeBuilding, Limited Koladeniya Hydropower(Private) a : +442073775430 : e-mail : +442073771888 : [email protected] Fax Tel United Kingdom London EC2M4WD No.01, DevonshireSquare, Bank ofCeylon(UK)Limited * Asat31.12.2011 Principal activities Bank's Bank's Principal activities financing, pawningandetc…. lease financing,hirepurchase term andmortgageloans, Accepting deposits,granting yrpwrgnrto 81%Dr. GaminiWickramasinghe 88.12% Hydropower generation dealing ininvestments including deposittakingand Provides financialservices 90%Mr. MRShah(Chairman) 49.08% interest 0%Dr. GaminiWickramasinghe 100% Directors* Highlights 2011 2011 Highlights Directors* Mr. AVCFernando Secretary : Cap. NBalasingam) (Alternate Directorto Mr. KDAFernando Capt. NBalasingam Dr. STdeSilva Mr. MSParamananda Mr. PGRupasinghe Dr. RWTMRanjithBandara Mr. BRSTEdirisinghe Dr. TSenthilverl Mr. APGKarunathilake (Private) Limited M/S EmEnEs(Assignments) Secretaries : Mr. UJJayatissa Mr. MWVSuranga Mr. SunilEdeSilva Dr. MSPerera (Chairman) Mr. DSMuthukudarachchi Secretary : Mr. REngland Mr. WDRSwanney Mr. DSMuthukudaarachchi Mr. KBSBandara Ms. WANalani (Chairman) EPS (Rs) EPS (Rs) Profit aftertax Profit beforetax Total liabilities Total assets Stated capital EPS (Rs) Profit aftertax Profit beforetax Total liabilities Total assets Stated capital EPS (Rs) Profit aftertax Profit beforetax Total liabilities Total assets Stated capital 13,180.5 13,180.5 11,129.2 2,708.6 2,708.6 2,087.2 2,087.2 2,544.1 2,544.1 Rs. Mn 728.7 728.7 260.6 260.6 (49.1) (78.5) (69.7) 263.1 263.1 (49.1) (1.4) (1.4) - - - - 22,824.1 22,824.1 20,734.4 20,734.4 2,449.6 2,449.6 2,087.2 2,087.2 2,235.9 2,235.9 Rs. Mn 728.7 728.7 (20.9) (20.9) (1.2) 2010 2010 (1.2) 1.5 1.5 3.1 4.1 4.1 2.4 2.4 5.3 5.3 - - -

BANK OF CEYLON ANNUAL REPORT 2011 297 BANK OF CEYLON ANNUAL REPORT 2011 298 * Asat31.12.2011 Website : www.lsl.lk 0112554942 e-mail : [email protected] Fax : 011 Tel : 4706767 Colombo 04 011 Galle Road, No.228/2, 4706757 Lanka Securities(Private)Limited Tel : Matara 041 Pamburana, No. 18,Bandarawatta, 2221618 Company Limited Southern DevelopmentFinancial e-mail : [email protected] Fax : Tel : 011 Colombo 01 011 2448404 York Street, 3rd Floor, BoCBuilding, 7602000-2 Limited Ceybank AssetManagement Associate companies Subsidiaries &Associates placements. Equity trading,debttradingand Mr. APSRGunasekara 41.67% Granting loanfacilities & otherprivateportfolios. Management ofunittrustfunds Principal activities Bank's Bank's Principal activities 09%Ms.ATaseer (Chairperson) 40.92% Mr. KLHewage(Chairman) 43.36% interest MSL Galle(Private)Limited Secretaries : Mr. DKNPiyasoma Mr. RRanathunga (Chairman) Sri Lanka PLC Sri LankaPLC Merchant Bankof Secretaries : Mr. FarooqBinHabib) (Alternate to Mr. SANZaidi Mr. MEshanul-Haq) (Alternate to Mr. HURehman Mr. MRShah Mr. KUDGamage Mr. FarooqBinHabib Mr. KDharmasiri Mr. APGKarunathilake Mr. MEshanul-Haq Services (Private)Limited Carsons Management Secretaries : Mr. AMdeAlwis) (Alternate Directorto Mr. UDLiyanagamage Mr. MSelvanathan) (Alternate Directorto Mr. DCRGunawardena Ms. WANalani) (Alternate Directorto Mr. KDharmasiri Mr. AMdeAlwis Mr. MSPRPerera Shri. BBabuRao Mr. DMGunasekara Ms. WANalani Mr. CSathkumara Mr. MSelvanathan Directors* Highlights 2011 2011 Highlights Directors* EPS (Rs) Profit aftertax Profit beforetax Total liabilities Total assets Stated capital EPS (Rs) Profit aftertax Profit beforetax Total liabilities Total assets Stated capital EPS (Rs) Profit aftertax Profit beforetax Total liabilities Total assets Stated capital Rs. Mn 154.7 154.7 711.4 279.6 277.4 207.8 207.8 253.5 110.5 110.5 71.45 38.9 38.9 60.0 37.6 37.6 75.3 75.3 36.9 36.9 2.6 2.6 8.9 8.9 2.0 2.6 2.6 - Rs. Mn 186.1 186.1 705.9 279.6 246.3 285.0 285.0 286.5 104.3 37.9 37.9 60.0 10.7 10.7 28.9 37.6 (1.1) 2010 2010 38.4 38.4 53.1 53.1 (1.1) 0.8 0.8 - * Asat31.12.2011 Website : www.havelockcity.com e-mail : 0112505100 [email protected] Fax : 011 2449303 Tel : 011 Colombo 06 011 No. 324,HavelockRoad, 2346333 Mireka CapitalLand(Private)Limited 2596793 Website : www.transnational-grp.com e-mail : [email protected] Fax : 011 Tel : 4514588 Colombo 05 011 011 Narahenpita, Kirimandala Mawatha, 2369007 2369001-4 No. 160/16, Solutions (Private)Limited Transnational LankaRecords Principal activities Bank's Bank's Principal activities etn rpris&ra tt 46%Mr. CSamarasinghe 24.69% Renting properties&realstate estate developmentprojects. infrastructure facilitiestoreal developments andproviding properties, realestate acquiring realestate Purchasing, hiringand interest 00 Mr. SPTao (Chairman) 40.0% Directors* Highlights 2011 2011 Highlights Directors* (Private) Limited P WCorporateSecretarial Secretaries : Mr. SJJebarathnam) (Alternative Directorto Mr. THCEdeSilva Mr. DKWLiew) (Alternative Directorto Mr. MSSaleem Mr. SJJebarathnam Mr. HKWGunasinghe Mr. DKWLiew Mr. MHCassim Mr. LRWatawala (Chairman) Wegodapola Ms. JayangaKumuduKumari Secretary : Mr. WPRHFonseka) (Alternate Directorto Mr. TMutugala Wickramasinghe) Gamini Dr. (Alternate Directorto Ms. BCDWijekulasuriya (Alternate toMr. SPTao) Mr. EPOng Ms. MTOng Mr. HSJayawardene Mr. LRdeLanerolle Mr. AMdeSJayaratne Mr. WPRHFonseka Dr. GaminiWickramasinghe Mr. HZCassim EPS (Rs) Profit aftertax Profit beforetax Total liabilities Total assets Stated capital EPS (Rs) Profit aftertax Profit beforetax Total liabilities Total assets Stated capital 5,911.4 5,911.4 1,875.0 3,503.6 3,503.6 Rs. Mn 177.1 177.1 150.1 165.7 165.7 81.0 81.0 0.80 33.9 33.9 33.9 33.9 0.4 0.4 7.2 5,555.9 5,555.9 1,875.0 3,298.1 3,298.1 Rs. Mn 176.8 176.8 163.9 163.9 182.4 182.4 0.94 0.94 17.9 17.9 81.0 2010 2010 20.7 20.7 27.8 0.2 0.2

BANK OF CEYLON ANNUAL REPORT 2011 299 B Corres

BANK OF CEYLON ANNUAL REPORT 2011 300 orsodn ak yCuty BanksbyCountry Correspondent 6 BahrainIslamicBank 26. ArabBankingCorporation 25. Albaraka IslamicBank 24. BAHRAIN Salzburger Landes- 23. 22. Raiffeisenlandesbank RaiffeisenZentraleBankOsterreich 21. OsterreichischeVolksbanken AG 20. 19. Oberbank AG ErsteGroupBankAG 18. ErsteBankDerOesterreichischen 17. BksBankAG 16. BawagPSKBank 15. BankAustriaCreditanstaltAG 14. 13. Allgemeine Sparkasse AUSTRIA Westpec BankingCorporation 12. NationalAustraliaBankLimited 11. HSBCBankAustraliaLimited 10. CommonwealthBankofAustralia 9. Australia&NewZealandBanking 8. AUSTRALIA 7. Ardshininvestment Bank ARMENIA 6. Banco BancoFinansurSA Credicoop 5. BancoMacriBansudSA 4. ARGENTINA BanqueExterieureD’Algerie 3. ALGERIA 2. Raiffeisen Bank ALBANIA AfghanistanBankDA 1. AFGHANISTAN Hypothekenbank AG Oberosterreich Aktiengesellschaft AG Sparkassen AG Oberosterreich Group Limited Cooperativo Limited anks 1 KBCBankNV 51. INGBelgiumSA/NV(Formerly 50. FortisBankNV/SA 49. DeutscheBankSA/NV 48. ByblosBankEuropeSA 47. BancaMontePaschi,Belgio 46. AntwerpseDiamantBankNV 45. BELGIUM 44. Belvnesheconombank BelarusBank(Formerly 43. BELARUS 42. Uttara Bank ThePremierBankLimited 41. SonaliBank 40. PubaliBankLimited 39. PrimeBankLimited 38. 37. Janata Bank BasicBankLimited(Banladesh 36. BangladeshKrishiBank 35. 34. Agrani Bank BANGLADESH 5 BancoFIBRASA 55. BancoABCBrasilSA 54. BRAZIL BarclaysBank ofBotswana 53. BOTSWANA BankofBermudaLimited 52. BERMUDA 3 TheArabInternationalCompany 33. NationalBankofBahrain 32. HSBCBankMiddleEast 31. HabibBankLimited 30. GulfInternationalBank 29. BMIBankBSC(C) 28. BBK(FormerlyBankofBahrain& 27. Bank BrusselsLambert) Minskcomplex Bank) Bank Limited) Small Industries&Commerce Limited Kuwait BSC) 64. Raiffeisenbank (Bulgaria) EAD Raiffeisenbank(Bulgaria)EAD 64. UnitedBulgarianBankAD 63. UnicreditBulbankAD(Formerly 62. 61. Texim Bank MunicipalBankPLC 60. 59. Investbank PLC CentralCooperativeBank 58. BULGERIA 85. Evergrowing Bank ChinaEverbrightBank 84. ChinaConstruction Bank 83. ChinaDevelopment Bank 82. Changshu RuralCommercialBank 81. BankofShaoxingCompany 80. BankofNanjing 79. BankofJiujiangCompanyLimited 78. BankofJiangsu 77. BankofHangzhouCompany 76. BankofCommunications 75. BankofChina 74. BankofChangsha 73. CHINA 72. Corpbanca CHILE Toronto DominionBank 71. RoyalBankofCanada 70. HSBCBankCanada(Formerly 69. CanadianImperialBankof 68. BankofNovaScotia 67. BankofMontreal 66. CANADA AcledaBankPLC 65. CAMBODIA 7 BancoIndusvalSA 57. BancoIndustrielECommercialSA 56. by Country Bulbank AD) Corporation Corporation Limited Limited Credit Lyonnais Canada) Commerce (Bicbanco)

92. WSBC Bank (Wall Street Banking WSBCBank(Wall StreetBanking 92. COOK ISLANDS 91. Banco Popular COLOMBIA 0. Danmarks NationalBank 107. ALS SkiernBank 106. DENMARK UnicreditBankCzech RepublicAS 105. 104. Raiffeisen Bank KomercniBankaAS 103. GeMoneyBankAS 102. CeskoslovenskaObchodniBanka 101. CeskaSporitelnaAS 100. CZECH REPUBLIC NationalBankofGreece 99. MarﬁnPopularBankPublic 98. HellenicBankPublicCompany 97. BankofCyprusPublicCompany 96. AlphaBankCyprusLimited 95. CYPRUS BancoNationalDeCuba(Vol 6) 94. CUBA ZagrebackaBankaDD 93. CROATIA 90. Zhejiang Xiaoshan Rural ZhejiangXiaoshanRural 90. ZhejiangNanxunRural 89. XianCityCommercialBank 88. OCBCBank(China)Limited 87. ExportImportBankofChina 86. Corporation Limited) AS (Cyprus) Limited Limited (LaikiBank) Popular BankPublicCompany Company Limited(FormerlyCyprus Limited Limited Cooperative Bank Cooperative Bank Company Limited

p p on 137. OKO Osuuspankkien Keskuspankki OKO OsuuspankkienKeskuspankki 137. NordeaBankFinland PLC 136. AktiaBankPLC 135. FINLAND (Colonial NationalBank) NationalBankofFijiLimited 134. FIJI CommercialBankofEthiopia 133. ETHIOPIA 132. SEB Pank ESTONIA CreditAgricoleIndosuez(Egypt) 131. SuezCanalBankSAE 130. NationalBankofEgypt 129. 128. Mohandes Bank FaisalIslamicBankofEgyptSAE 127. EgyptianSaudiFinanceBank 126. CommercialInternationalBank 125. CentralBankofEgypt 124. BanqueMISRSAE 123. BanqueDuCarieSAE 122. BankofAlexandria 121. ArabInternationalBank 120. ABCEgypt(ArabBanking 119. EGYPT BancaInternationalProdubanco 118. ECUADOR 117. Vestjysk Bank SydbankAS 116. 115. Sparebank Vest SpareNordBank 114. 113. Skjern Bank 112. Rinkjobing Landbobank NordjyskeBankAS 111. NordeaBankDenmarkAS 110. JyskeBankAS 109. DanskeBankAS 108. OYJ SAE (NowCalyonBankEgypt) (Egypt) SAE Corporation) 6. BHFBankAktiengeselschaft 169. BerlinerVolksbank EG 168. 167. Berenberg Bank 166. Bayerische Landesbank BayerischeHypo-UndVereinsbank 165. BankhausNeelmeyerAG 164. BankhausCarlfPlump&Company 163. BadenWuttenbergische BankAG 162. GERMANY BankofGeorgia 161. GEORGIA VTBBank(France)SA(Formerly 160. UnionDeBanquesArabesET 159. 158. Societe Generale Natixis(FormerlyNatexisBanque 157. HSBCPrivateBankFranceSA 156. 155. Credit Lyonnais CreditIndustrialETCommercial 154. CreditIndustrialDel’Quest 153. CreditDuNord 152. 151. Credit Cooperatif 150. Credit Agricole 149. Calyon 148. BNP Paribas 147. Banque SBA 146. Banque Palatine BanqueFederativeDuCredit 145. 144. Banque D’escompte BanqueDeNeuflize, 143. 142. Banque BIA BankofIndia(ParisBranch) 141. AlKhalijiFranceSA 140. FRANCE 3. SampoBankPLC 139. PohjolaBankPLC 138. AG Europe DuNordeurobank) Banque CommercialePourL’ Francaises (UBAF) Populaires) (CIC) Mutuel Schlumberger, Mallet,Demachy d 203. Marfin Egnatia Bank SA (Formerly MarfinEgnatiaBankSA(Formerly 203. EFGEurobankErgasias SA 202. 201. Aspis Bank 200. Alpha Bank GREECE GhanaCommercialBankLimited 199. GHANA 8. LRPLandesbankRheinlandPFALZ 185. LandesbankHessenThuringen 184. LandesbankBerlinAG(Mergerof 183. 182. Landesbank Baden-Wurttemberg 181. Kreissparkasse Goppingen INGBHF-BankAG 180. HSBCTrinkaus &BurkhardtKGA 179. FrankfurterVolksbank EG 178. DZBankAG 177. DVBBankAG 176. DeutschePostbankAG 175. 174. Deutsche Bundesbank DeutscheBankAG 173. CommerzbankAG(Frankfurt- 172. CommerzbankAG(Dusseldorf- 171. 170. Bremer Landesbank 198. Westlb AG StandardCharteredBank 197. 196. Stadtsparkasse Wuppertal 195. Stadtsparkasse Monchengladbach SparkassePforzheimCALW 194. 193. Sparkasse Herford 192. Sparkasse Essen (Stadtsparkasse SparkasseEssen(Stadtsparkasse 192. 191. Sparkasse Duren 190. Sparkasse Bielefeld OldenburgischeLandesbankAG 189. 188. NRW Bank 187. Nordeutsche Landesbank 186. Nassauische Sparkasse ent ent Egnatia BankSA) Girozentrale Landesbank BerlinAG) Bankgesel-Lschaft BerlinAG& Germany) Germany) (Frankfurt-Germany) Essen) Girozentrale Union de Banques Arabes Et UniondeBanquesArabesEt UBAFHongKongLimited(UBAF) 219. WingHangBankLimited 218. ShanghiCommercialBankLimited 217. Oversea-ChineseBanking 216. NanYang CommercialBank 215. IndustrialandCommercialBankof 214. Hongkong&ShanghaiBanking 213. HangSengBankLimited 212. DBSBank(HongKong)Limited 211. DAHSingBankLimited 210. ChongHingBankLimited 209. ChiyuBankingCorporationLimited 208. 207. Cathay Bank BankofEastAsiaLimited 206. HONG KONG 228. GLITNIR BANKI HF (Formerly GLITNIRBANKIHF(Formerly 228. ICELAND UnicreditBankHungaryZRT 227. RaiffeisenBankZRT 226. MagyarNemzetiBank 225. KereskedelmiEsHitelbank(Kand 224. ERSTBankHungaryNYRT 223. Central-EuropeanInt’lBank 222. CooperativesCompanyLimited BudapestCreditDevelopment 221. 220.. Bank ofHungarianSavings HUNGARY 205. Piraeus Bank 0. NationalBankofGreece 204. Francaises Corporation Limited China (Asia)Limited Corporation Limited) (Formerly LiuChongHingBank Islandbanki FBALimited) H BankNyrt) Limited (CICBank) Bank RT

BANK OF CEYLON ANNUAL REPORT 2011 301 BANK OF CEYLON ANNUAL REPORT 2011 302 orsodn ak yCuty BanksbyCountry Correspondent 272. Rasheed Bank 271. Raﬁdain Bank CentralBankofIraq 270. IRAQ PTBankNegaraIndonesiaTBK 266. PTBankMandiri(Persero) 265. PTBankEksporIndonesia 264. PTBankCentralAsiaTBK 263. PTBankBukopin 262. 261. Bank Mega BankArthaGraha 260. PTBankPanIndonesiaTBK(Panin 259. INDONESIA UnitedBankofIndia 258. UnionBankofIndia 257. 256. UCO Bank TheBankofRajastanLimited 255. Tamilnad MercantileBankLimited 254. 253. Syndicate Bank StateBankofTravancore 252. StateBankofHyderabad 251. StateBankofIndia 250. Saraswat-CooperativeBank 249. PunjabNationalBank 248. Punjab&SindBankLimited 247. KarurVysya Bank 246. Jammu&KashmirBankLimited 245. IndusindBankLimited 244. IndianOverseasBank 243. 242. Indian Bank IDBIBankLimited 241. ICICIBankLimited 240. 239. HDFC Bank DevelopmentCreditBankLimited 238. 237. Corporation Bank CentralBankofIndia 236. 235. Canara Bank BankofMaharashtra 234. BankofIndia(Mumbai) 233. BankofBaroda 232. 231. Axis Bank 230. Andhra Bank 229. Allahabad Bank INDIA 6. PTBankRakyatIndonesia 269. PTBankRabobankInternational 268. PTBankPermataTBK 267. Bank) Limited 307. Banco Di Sicilia Banco DiSicilia 307. BancoDiSardegnaSPA 306. BancoDiDesioEDella Brianza 305. BancoCarim-Cassa DiRisparmio 304. BancaValsabbina SCPA 303. BancaUbaeSPA 302. BancaToscana SPA 301. BancaRegionaleEuropeaSPA 300. BancaPopolareDiVicenza Scparl 299. (IncludingCreitoBergamasco BancaPopolareDiVerona E 298. BancaPopolareDiSondrio 297. BancaPopolareDiRavennaSPA 296. BancaPopolareDiMilano 295. BancaPopolareDellEmilia 294. BancaPopolare-Volksbank 293. BancaNazionalDelLavoroSPA 292 BancaMonteDeiPaschiDiSiena 291. BancaEtruriaSocCoop 290. BancaDiRoma 289. BancaDiImolaSPA 288. BancaDiCividaleSPA 287. BancaDiCreditoCooperativo 286. BancaDelleMarcheSPA 285. BancaCarigeSPA 284. BancaAntonvenetaSPA 283. BancaAgricolaMantovanaSPA 282. ITALY UnionBankofIsraelLimited 281. MizrahiTefahot BankLimited 280. MercantileDiscountBankLimited 279. IsraelDiscountBank 278. FirstInternationalBankofIsrael 277. BankofPalestine 276. BankLeumiLeIsraelBM 275. BankHapoalimBM 274. ISRAEL AlliedIrishBankPLC 273. IRELAND SPA Di RiminiSPA Novara Spa)Verona Spa,Banca Popolaredi Novara SCRL Romagna (Banca PopolareDellAltoAdige) (Merged IntoBNPParibas) Alba Limited 342. Mizuho Bank Limited MizuhoBankLimited 342. MitsubishTrust &Banking 341. MinatoBankLimited (Formerly 340. KYOTOShinkinBank 339. KIYOBankLimited 338. KinkiOsakaBankLimited 337. HorurikuBankLimited 336. 335. Higashi-Nippon Bank GunmaBankLimited 334. ChuoMitsuiTrust AndBanking 333. ChukyoBankLimited 332. ChibaKogyoBankLimited 331. BankofYokohama Limited 330. BankofTokyo-Mitsubishi UFJ 329. BankofKYOTO 328. BankofKOCHILimilted 327. AWA BankLimited 326. Australia&NewZealandBanking 325. AozoraBankLimited 324. 77BankLimited 323. JAPAN NationalCommercialBankof 322. JAMAICA 2. UnipolBancaSPA 321. UnicreditoItalianoSPA 320. 319 Ugf Banca IntesaSanpaoloSpa(Formerly 318. HipoAlpe-Adria-BankSPA 317. DeutscheBankSPA 316. 315. Credito Valtellinese CassaDiRisparmioSan 314. CassaDiRisparmioPratoSPA 313. CassaDiRisparmioCarrara 312. CassaDiRisparmioBolzano 311. CassaDiRisparmioAscoli 310. 309. Cariparma SPA 308. Bipop-Carires Company Company Midori BankLimited) Compnay Limited Limited Group Limited Jamaica Limited Banca IntesaSPA) Miniato SPA (Cariprato) SPA SPA Piceno SPA 379. Jordan Commercial Bank JordanCommercialBank 379. JordanAhliBankPLCw.e.f. 378. IslamicInternationalBankLimited 377. Investbank(FormelyJordan 376. HousingBankForTrade &Finance 375. CairoAmmanBank 374. BankofJordanPLC 373. BankAudiSal-Saradar 372. BankALEthihad(Namechange 371. ArabJordanInvestmentBank 370. ArabBankPLC 369. JORDAN 6. Yamanashi ChuoBankLimited 368. Yamaguchi BankLimited 367. Yamagata BankLimited 366. Towa BankLimited 365. Tomato BankLimited 364. Tokyo Tomin BankLimited 363. Tokushima BankLimited 362. TheYokohama ShinkinBank 361. TheShizuokaBankLimited 360. TheShikokuBankLimited 359. TheHokkaidoBankLimited 358. TheAshikagaBankLimited 357. TheAsahiShinkinBank 356. 355. Sumitomo Mitsui Banking SumitomoMitsuiBanking 355. SugamoShinkinBank 354. StandardCharteredBank 353. ShinseiBankLimited(Formerly 352. ShinkinCentralBanko 351. ShigaBankLimited 350. SetoShinkinBank 349. SaitamaResonaBankLimited 348. ResonaBankLimited 347. OsakaCityShinkingBank 346. OkazakiShinkimBank 345. NishiNipponCityBankLimited 344. MizuhoCorporateBankLimited 343. (Formerly JordanGulfBank) National Bank) 12/11/2006 (FormerlyJordan Bank) Investment &FinanceBank(JIF Group Ethihad w.e.f. 21.09.2011) Invetment, NewNameBankAL - UnionBankforSavings& Corporation Long Term CreditBankofJapan) 8. JSCBankCentercredit 382. 1. Bank BemoSAL 411. BankAudiSal- Saradar 410. BLCBankSAL 409. AudiSaradarPrivate BankSAL 408. ArabBankPLC(Lebanon Branches 407. ArabAfricanInternationalBank 406. AlAhliInternationalBankSAL 405. LEBANON 404. Seb Banka 403. Rietumu Bank 402. Parex Bank LATVIA AsiaUniversalBank 401. KYRGYZSTAN NationalBankofKuwaitSAK 400. KuwaitInternationalBank 399. 398. Gulf Bank CommercialBankofKuwaitSAK 397. BurganBankSAK 396. BankofKuwait&TheMiddleEast 395. KUWAIT 394. Woori Bank TheKwagjuBankLimited 393. 392. Pusan Bank 391. Kyongnam Bank KoreaExchangeBank 390. KoreaDevelopmentBank 389. 388. Kookmin Bank HanaBank(Mergerof 387. ForeignTrade BankofThe 386. CitibankKoreaInc(Formerly 385. KOREA KenyaCommercialBankLimited 384. BarclaysBankofKenyaLimited 383. KENYA KAZAKSTAN JordanKuwaitBank 381. JordanDubaiIslamicBank 380. Group Centre) Beirut & SeoulBank) Korea Democratic People’s Bankof Koram Bank)

443. Malayan Banking Berhad (May Malayan BankingBerhad(May 443. EonBankBerhad 442. CIMBBankBerhad(Formerly 441. BankIslamMalaysia Berhad 440. AmbankBerhad(FormerlyArab- 439. AllianceBankMalaysia,Berhad 438. MALAYSIA NationalBankofMalawi 437. MALAWI BanqueCentraleDeMadagascar 436. BankofAfrica-Madagascar 435. MADAGASCAR BancoWeng HangSA 434. MACAU UKIOBankAS 433. 432. SEB Bank ABBankasSnoras 431. ABBankasHansa 430. LITHUANIA 429. Wahda Bank UmmaBankSAL 428. NationalCommercialBankSAL 427. 426. Gumhoria Bank LIBYA 425. Societe Nouvelle De La Banque SocieteNouvelleDeLaBanque 425. NearEastCommercialBankSAL 424. 423. Meab Bank SocieteGeneraleBanqueAuliban 422. JamalTrust BankSAL 421. 420. IBL Bank 419. Fransbank SAL CreditLibanaisSAL 418. ByblosBankSAL 417. BLOMBankSAL 416. BLCBankSAL(FormerlyBanque 415. BBACSAL(FormerlyBankofBeirut 414. BanqueLibanoFrancaise 413. BankofBeirutSAL 412. Bank) Bank) Berhad) Bumiputra CommerceBank Malaysian Bank-Berhad) De SyrieEtDuLibanSAL SAL Libanaise PourLeCommerceSAL) & TheArabCountriesSAL) MAURITIUS HSBCBankMaltaPLC 454. FIMBankPLCLimited 453. BankofValleta 452. MALTA HabibBankLimited 451. BankofMaldivesPLC 450. MALDIVES 6. Nepal BankLimited 468. HimalanyanBankLimited 467. NEPAL BankWindhoekLimited 466. NAMIBIA MyawaddyBankLimited 465. MyanmarForeignTrade Bank 464. MYANMAR CreditDuMarcoSA 463. MOROCCO Trade &DevelopmentBankof 462. MONGOLIA BancoInternationalDe 461. MOZAMBIQUE HSBCMexicoSA 460. BBVA BancomerSA 459. BancoSantanderMexicanoSPA 458. BancoNacionalDeMexicoSA 457. MEXICO TheMauritiusCommercialBank 456. StateBankofMauritiusLimited 455. 449. United Overseas Bank (Malaysia) UnitedOverseasBank(Malaysia) 449. RoyalBankofScotland 448. RHDBankBerhad 447. PublicBankBerhad 446. Oversea-ChineseBanking 445. OCBC(Malaysia)Berhad 444. Mongolia Mocambique SARL Limited Berhad Corporation (KualaLumpur) 482. Westpec Banking Corporation Westpec BankingCorporation 482. BankofNewZealand 481. ASBInternationalBank 480. ANZBankNationalLimited 479. NEW ZEALAND TheEconomyBankNV 478. SNSBankNV 477. 476. Rabobank Nederland LanSchotBankiersNVFVan 475. INGBankNV 474. HollandscheBank-UnieNV 473. FVan LanschotBankiersNV 472. ABNAmbroBank 471. NETHERLANDS 0. Habib BankLimited 504. Faysal BankLimited 503. DawoodIslamicBank Limited 502. BankofPanjab 501. BankofKhyber 500. BankAlHabibLimited 499. 498. Atlas Bank AskaribankLimited(Formerly 497. AlliedBankofPakistan 496. PAKISTAN OmanInternationalBank 495. OmanArabBankSAOC 494. NationalBankofOmanSAOG 493. BankSoharSAOG 492. 491. Bankmuscat SAOG BankDhofarSAOG 490. OMAN SparebankenNordNorge 489. 488. Sparebanken More 487. Sparebanken Hedmark NordeaBankNorgeAS 486. DNBNorBankASA(FormerlyDen 485. NORWAY UnionBankofNigeriaPLC 484. FirstBankofNigeriaPLC 483. NIGERIA 470. Standared Chartered Bank Nepal StandaredCharteredBankNepal 470. NepalCreditandCommercial 469. Askari CommercialBankLimited) Norske BankNA) Limited Bank

BANK OF CEYLON ANNUAL REPORT 2011 303 BANK OF CEYLON ANNUAL REPORT 2011 304 orsodn ak yCuty BanksbyCountry Correspondent 3. Qatar IslamicBankSAQ 534. QatarInternationalIslamic Bank 533. 532. Doha Bank 531. Barwa Bank QATAR MillenniumBCP(ForemerlyBanco 530. 529. Finibanco SA BNP-BancoPortuguesDe 528. BancoEspiritoSantoSA 527. BancoBPISA 526. PORTUGAL RaiffeisenBankPolskaSA 525. KREDYTBankSA 524. BankMillenniumSA 523. BankHandlowyWarszawa SA 522. BankGospodarstwaKrajowego 521. 520. Bank BGZ POLAND PhilippineNationalBank 519. MetropolitianBank&Trust 518. PHILIPPINES BancoDeCreditoDelPeru 517. PERU BancoAmambaySA 516. PARAGUAY Westpac BankPNGLimited 515. PAPUA NEWGUINEA ArabIslamicBank 514. AUTONOMOUS PALESTINIAN UnitedBankLimited 513. StandaredCharteredBank 512. SoneriBankLimited 511. NationalBankofPakistan 510. 509. Mybank Limited MeezanBankLimited 508. MCBBankLimited(Formerely 507. 506. KASB Bank HabibMetropolitianBankLimited 505. Commercial PortuguesSA) Negocios SA Company (Pakistan) Limited Muslim CommercialBank) 561. Royal Bank of Scotland RoyalBankofScotland 561. 6. SaudiHollandiBank 560. SaudiBritishBank 559. SambaFinancialGroup 558. 557. Riyad Bank NationalCommercialBankLimited 556. BanqueSaudiFransi 555. BankAlJazira 554. BankAlBilad 553. ArabNationalBank 552. AlRajhiBank(Formerly 551. SAUDI ARABIA 550. Vneshtconombank Trans CreditBank 549. 548. SBERBANK 547. ROS Bank Nomos-Bank(NovayaMoskva) 546. MDBank 545. JSCVTBBank(FormerlyFor 544. InternationalMoscowBank 543. 542. BIN Bank BankofMoscow 541. 540. Bank Jugra (FormerlyBankForForeign BankForDevelopment&Foreign 539. RUSSIA 538. 537. Banca Transilvania BancaCommercialaRomanaSA 536. BancaComercialaCarpatica 535. ROMANIA 564. Seychelles International SEYCHELLES NationalBankofSerbia 563. SERBIA &MONTENEGRO BancaIntesaADBeograd 562. SERBIA Scotland Corporation) Rajhi Banking&Investment Foreign Trade (Vneshtorgbank) Economic AffairsofTheUSSR) Economic Affairs BRD -GroupeSocieteGeneraleSA Mercantile Banking(NOUVOBNQ)

577. VTB Bank Europe PLC (Formerly VTBBankEuropePLC(Formerly 577. UnitedOverseasBankLimited 576. UnionDeBanquesArabesET 575. UCOBank 574. TheBankofEastAsiaLimited 573. StandardCharteredBank 572. SkandinaviskaEnskildaBanken 571. Oversea-ChineseBanking 570. 569. Indian Bank FarEasternBankLimited 568. DexiaBanqueInternationaleA 567. DBSBankLimited 566. BankofIndia(Singapore) 565. SINGAPORE 594. Standard Bank of South Africa StandardBankofSouth Africa 594. NedcorBankLimited (NED Bank) 593. FirstrandBankLimited 592. ABSABankLimited 591. SOUTH AFRICA Commercial&SavingsBankof 590. SOMALIA NationalBankofSolomonIslands 589. SOLOMON ISLANDS Nova LjubljanskaBankaDD 586. Nova KreditnaBankaMariborDD 585. SLOVENIA VseobecnaUverovaBankAS 584. UnicreditBankSlovakiaAS 583. Tarta BankAS 582. SlovenskaSporitelnaAS 581. PostovaBankAS 580. CeskoslovenskaObchodniBanka 579 SLOVAKIA 578. ABN Amro SINGAPORE/MALAYSIA 588. Abanka Vipa DD 588. 587. Gorenjska Banka Ljubljana Moscow NarodnyBankLimited) Francaises (UBAF) AB Corporation Limited Luxembourge Limited Somalia AS SUDAN 606. Caja Madrid CajaDeAhorrosyPensiones 605. Caixa’dEstalvisDeCatalunya 604. BancoSantanderCentralHispano 603. BancoPastorSA 602. BancoIntercontinentialEspanol 601. BancoGuipuzcoanoSA 600. BancoDeValencia 599. BancoDeSabadell 598. BancoDeEuropaSA 597. BancoBilbaoVizcaya Argentaria 596. SPAIN 2. CommercialBankSyria 627. BankAudiSyria 626. SYRIA 625. Zurcher Kantonalbank UBSAG(UnionBankof 624. LuzernerKantonalBank 623. HabibBankAGZurich 622. FaisalPrivateBank(Switzerland) 621. 620. Credit Sussie CreditAgricole(Sussie)SA 619. 618. BSI SA BNPParibas(Suisse)SA 617. BanqueDeCommerceEt 616. BanqueCantonaleVandoise 615. BanqueCantonaleDeGeneve 614. SWITZERLAND 613. Swed Bank SvenskaHandelsbankenAG(Publ) 612. SkandinaviskaEnskildaBanken 611. SEBMerchantBanking 610. NordeaBankAB(Publ) 609. SWEDEN NationalBankofSudan 608. BankofKhartoum 607. 595. The Standard Chartered Bank of TheStandardCharteredBankof 595. Barcelona La Caixa Barcelona LaCaixa (Bankinter) Switzerland) SA Placements AB (Publ) South Africa,Johannesburg 5. EuroTekfen AS 657. AsyaKatilimBankasi AS(Formerly 656. ArabTurkish Bank 655. 654. Anadolu Bank AKBankTAS 653. TURKEY SocieteTunisienne DeBanque 652. BanqueNationaleAgricole 651. 650. Attijari Bank TUNISIA UnitedOverseasBank(Thai)Public 649. StandardCharteredBank(Thai) 648. SiamCommercialBankPCL 647. SiamCityBankPublicCompany 646. KrungThaiBankPublicCompany 645. KasikornabankPublicCompany 644. ExportImportBankofThailand 643. BankofAyudhya PublicCompany 642. BangkokBankPublicCompany 641. THAILAND NBCLimited(NationalBankof 640. TANZANIA UnionBankofTaiwan 639. Taiwan CooperativeBank 638. Taipei FubonCommercialBank 637. ShinKongBank 636. ShanghiCommercial&Savings 635. MegaInternationalCommercial 634. HuaNanCommercialBank 633. FirstCommercialBank 632. E-SunCommercialBankLimited 631. ChinfonCommercialBank 630. ChinaTrust CommercialBank 629. BankofTaiwan 628. TAIWAN Asya FinansKurumuAS) Company Limited Public CompanyLimited Limited Limited Bank) Limited (FormerlyThaiFarmers Limited Limited Commerce) Bank Limited Bank 690. Ukreximbank (State Export-Import Ukreximbank(StateExport-Import 690. 689. Prominvest Bank PJSC“Alfa-Bank’ 688. OTPBank-PublicJointStock 687. FirstUkraininanInternational 686. 685. Calyon Bank UKRAINE BarclaysBankofUgandaLimited 684. UGANDA UnitedArabBank 683. UnionNationalBank 682. NoorIslamicBank 681. NationalBankofFujirah 680. NationalBankofAbuDhabi 679. MiddleEastBankPJSC 678. 677. Mashreqbank PSC FirstGulfBank 676. EmiratesNBDPJSC 675. DubaiIslamicBankPLC 674. CommercialBankofDubaiPSC 673. CommercialBankInternational 672. ArabBankForInvestment& 671. AbuDhabiIslamicBank 670. AbuDhabiCommercialBank 669. UNITED ARABEMIRATES 6. Yapi Ve KrediBankasiAS 668. Turkland Bank-T 667. Turkiye Vakiﬂar BankasiTAO 666. Turkiye IsBankasiAS 665. Turkiye GarantiBankasiAS 664. Turkiye FinanceKatilinuBankasi 663. Turk EconomiBankasi 662. Tekstil BankasiAS 661. OyakBankAs(INGAS) 660. KuvoytTurk KatilimBankasiAS 659. KocbankAS(MergedIntoYapi Ve 658. Bank ofUkrain) Company Bank-PJSC PLC Foreign Trade AS Name ChangedOn07.07.2007 Kredi Bankasi) 0. StandardCharteredBank 703. StandardBankPLC 702. RoyalBankofScotlandPLC 701. NationalWestminster BankPLC 700. LloydsTSBBankPLC 699. InvestecBank(UK)Limited 698. HSBCBankPLC 697. HabibsonsBankLimited 696. HabibBankAgZurich 695. 2. NorthernTrust Company 727. NationalPennBank 726. NationalCityBankof Indiana 725. M&TBank(FormerlyAllﬁrst 724. LaSalleBankMidwest 723. JPMorganChaseBank 722. IsraelDiscountBankofNewYork 721. HuntingtonNationalBank 720. HiberniaNationalBank 719. HSBCBankUSA 718. HabibAmericanBank 717. FrenchAmericanBanking 716. FirstHawiianBank 715. DeutscheBankTrust Company 714. CommerceBankNA 713. 712. Cobank ACB 711. Citibank NA BrownBrothersHarriman& 710. BranchBanking&Trust Company 709. 704. The Banco De La Republic Oriental TheBancoDeLaRepublicOriental 704. URUGUAY GulfInternationalBank(Uk) 694. ClydesdaleBankPLC 693. BarclaysBankPLC 692. AIBGroup(FormerlyAlliedIrish 691. UNITED KINGDOM 0. BankofTampa 708. BankofAmericaNA 707. BancoDelPichinchaCA 706. AmericanExpressBankLimited 705. AMERICA UNITED STATES OF Limited Bank) Corporation Americas Company Del Uruguay Bank) 741. Bank For Investment & BankForInvestment& 741. BankForForeignTrade ofVietnam 740. VIETNAM 748 Barclays Bank of Zimbabwe BarclaysBankofZimbabwe 748 ZIMBABWE BarclaysBankofZambiaLimited 747. ZAMBIA Yemen KuwaitBank 746. Yemen CommercialBank 745. Yemen BankForReconstruction& 744. NationalBankofYemen 743. InternationalBankofYemen YSC 742. YEMEN 3. Wells FargoBankNA(Wachovia 739. USBankNA 738. UnionBankofCaliforniaNA 737. UMBBankNA 736. TheBankofNewyorkMellon 735. SunTrust BankLimited 734. StateStreetBank&Trust Co 733. StandardCharteredBank 732. 731. Sovereign Bank SiliconValley Bank 730. SanDiegoNationalBank 729. PNCBankNA 728. Development ofVietnam Limited Development Fargo) Bank NAMergedWithWells Mellon Bank21.07.08) (Bank ofNewYork MergedWith

BANK OF CEYLON ANNUAL REPORT 2011 305 Companies Exc

BANK OF CEYLON ANNUAL REPORT 2011 306 Exchange CompaniesbyCountry 0 AlMullaInternationalExchange 20. KUWAIT ShiftFinancialServicesLimited 19. AlawanehExchangeCompany 18. AlSamhouriExchangeCompany 17. JORDAN 16. Valutrans SPA ITALY Tifco Logistics&Trade Limited 15. ISRAEL LotusForexLimited 14. HONG KONG InternationalExpressRemittance 13. GREECE DelmaExchangeCanada 12. CANADA BexMoney-BahrainExpress 6. BahrainFinancingCompany 5. BAHRIAN SerendibPtyLtdRs.A/CNZ 4. SerendibFinancialServices 3. Kapruka(Pty)Limited 2. CeylonExchange(Pty)Limited 1. AUSTRALIA 1 AlMuzainiExchangeCompany 21. Company WLL International Money Transfer Exchange(Formerly Bahrain KSC (Closed) Mediation Company NationalFinance&Exchange 9. 8. Ezremit Limited 7. Dalil Exchange Express Exchange) 11. Zenj Exchange Company WLL ZenjExchangeCompanyWLL 11. 10. Zenj Exchange Company WLL (Turbo Cash) 4 Oman&UAEExchange Centre 44. Company MustafaSultanExchange 43. LLC 42. Musandam Exchange ModernExchangeCompany LLC 41. MajanExchangeLLC 40. 39. Hamdan Exchange GulfOverseasExchange CoLLC 38. AsiaExpressExchange 37. OMAN MerchantradeAsiaSDNBHD 36. MALAYSIA ServicesExchangeCompany 35. LEBANON 6 OmanUnitedExchangeCompany 46. OmanInternationalExchangeLLC 45. Company LLC Partners-SECO) (Imad Al 7 Prhta aj xhne PurshottamKanjiExchange 47. LLC 3 Ct nentoa xhne CityInternationalExchange 23. BahrainExchangeCompanyWLL 22. Company LLC 24. Dollarco Exchange Company DollarcoExchangeCompany 24. Company WLL 5 EtemadcoExchangeCompany 25. Limited 6 ItrainlFnnilLn InternationalFinancialLine 26. WLL 7 Kwi sa nentoa KuwaitAsianInternational 27. Company 8 KuwaitBahrainInternational ExchangeCompany WLL 28. 9 Kwi ni nentoa KuwaitIndiaInternational 29. Exchange Company 1 Ntoa oe xhne NationalMoneyExchange 31. NationalExchangeCompanyWLL 30. Exchange Company 4 UAEExchangeCentreWLL 34. SecurityExchangeCompanyWLL 33. OmanExchangeCompanyLimited 32. Company WLL h Hariri Trading Company& ange 7 AlRazoukiInternational Exchange 67. AlMonaExchangeCompanyLLC 66. AlFardanExchange 65. AlAnsariExchangeEST 64. AlAhaliaMoneyExchangeBureau 63. 5 HbbQtrItrainl HabibQatarInternational 55. GulfExchangeCompany 54. EasternExchangeEST 53. ArabianExchangeCompanyWLL 52. AlZamanExchangeWLL 51. AlSaddExchange 50. AlFardanExchangeCompanyWLL 49. AlDarForExchangeWorks 48. QATAR UNITED ARABEMIRATES MotherhouseGMBH 62. SWITZERLAND HBZInternationalExchange 60. SINGAPORE 8 A otmn nentoa AlRostamaniInternational 68. Company LLC 7 NationalExchangeCompanyWLL 57. 56. Islamic Exchange Exchange Limited 61. Mustafa Foreign Exchange MustafaForeignExchange Company(Singapore) PvtLimited 61. Exchange(FormerlyThomasCook (FormerlyAlShaibei Exchange 3 Eiae ni nentoa EmiratesIndiaInternational 73. DubaiExchangeCentre LLC 72. 71. Delma Exchange AsiaExchangeCentre 70. AlRostamaniExchangeCompany) 69. Alukkas Exchange 59. Union Exchange Trust ExchangeCompanyLimited 58. Company) 8 National ExchangeCompany 78. LuluInternationalExchangeLLC 77. LariExchangeEstablishment 76. HadiExpressExchange 75. HabibExchangeCompanyLLC 74. Exchange Company by Country

8 CurrencyExchangeCorporation 88. Coinstar 87. AnExpressLimited 86. 3RTelecom Limited 85. UNITED KINDOM 2 Trans-Fast RemittanceLLC 92. AMERICA UNITED STATES OF 91. Moneygram 91. Moneygram IntlGlobalCurrenciesLimited 90. GlobalExchangeLimited (FastCash) 89. 84. Zareen Exchange XpressMoneyServicesLimited 83. Wall StreetExchangeCentre 82. UAEExchangeCentre 81. RedhaAl-AnsariExchangeEST 80. OrientExchangeCompanyLLC 79.

T G Banking Banking Financial/ Glossary ofFinancial/BankingTermsGlossary assumptions. the effectsofchangesinactuarial and whathasactuallyoccurred the previousactuarialassumptions the effectsofdifferencesbetween Actuarial gainsandlossescomprise LOSSES ACTUARIAL GAINS& benefits. cost ofprovidingpost-employment that willdeterminetheultimate demographic andfinancialvariables compatible bestestimatesofthe An entity’s unbiasedandmutually ACTUARIAL ASSUMPTIONS equivalent. or paymentofrelatedcashits occur, withoutwaitingforthereceipt transactions andothereventsasthey To recognisetheeffectsof ACCRUAL BASIS presenting FinancialStatements. adopted byanentityinpreparingand conventions, rulesandpractices The specificprinciples,bases, ACCOUNTING POLICIES shares). investments inequity(ie.ordinary all financialinvestmentsexceptfor and investmentexposureincluding Off-Balance Sheetcommitments Credit exposureincludingOn& ACCOMMODATION A erms erms l ossary o ossary leave overacertainperiodoftime. A measureofhowmanyemployees ATTRITION RATE and financialpolicies. significant influenceoveritsoperating participating interestandexercisesa in whichaholdingcompanyhas A companyotherthanaSubsidiary ASSOCIATE COMPANY terrorism). drugs, organisedcrimes,fraudand an illegaloriginsuchastradingof the ownershipofmoneythathas is anactivitywhichaimstodisguise money laundering.(Moneylaundering regulations designedtoprevent A setofprocedures,lawsor (AML) ANTI-MONEY LAUNDERING have thesamemeaning. instead of‘depreciation’.Bothterms term ‘amortisation’isgenerallyused an intangibleassetorgoodwill,the over itsusefullife.Inthecaseof depreciable amountofanasset The systematicallocationofthe AMORTISATION and otherrelevantcostsvalues. liability, actuarialvalueofitsassets, its normalcost,actuarialaccrued Fund valuedeterminedbycomputing ACTUARIAL VALUATION rendered. attributable totheservicealready plan toexistingandpastemployees, payments byaretirementbenefit The presentvalueoftheexpected BENEFITS OF PROMISEDRETIREMENT ACTUARIAL PRESENTVALUE interchangeably. exchange anddraftsareoftenused person (thepayee).Thetermsbillsof of moneytotheorderathird (the drawee)topayaspecifiedsum drawer) directinganotherperson order addressedbyoneperson(the A signed,writtenunconditional BILLS OFEXCHANGE change inyieldsecurities. spreads betweeninterestratesorto point. Oftenusedinquotationsof One-hundredth ofonepercentage BASIS POINTS B defined undertheBankingActNo.30 fund setasideforspecificpurposes the Bankandpermanentreserve revaluation ofpropertiesownedby revaluation reservesarisingfrom Capital reservesconsistof CAPITAL RESERVES Bank ofSriLanka. suit localrequirementsbytheCentral Settlements (BIS)andasmodifiedto by theBankforInternational based capitalstandardsdeveloped defined undertheframeworkofrisk- assets supportedbycapital,as The percentageoftherisk-adjusted (CAR) CAPITAL ADEQUACYRATIO C borrowing offunds. by anentityinconnectionwiththe Interest andothercostsincurred BORROWING COSTS

speciﬁed periodoftime. The year-over-year growthrateovera GROWTH RATE (CAGR) COMPOUND ANNUAL value. an insigniﬁcantriskofchangeintheir convertible tocash,subjectonly Investments/assets thatarereadily CASH EQUIVALENTS income. Operating expensescomparedtonet COST/INCOME RATIO of anorganisation. strategic directionsandperformance used todetermineandcontrolthe The relationshipamongstakeholders CORPORATE GOVERNANCE located. which thecorrespondentbankis of theotherbankinregion variety ofbankingservicesonbehalf bank willgenerallyprovideawide another bank.Thecorrespondent A bankthatactsasanagentfor CORRESPONDENT BANK particular eventoccurs. can onlybeanticipatedtoariseifa date caneithernotbemeasuredor Liabilities thatatBalanceSheet CONTINGENT LIABILITIES presented asthoseofasingleentity. The FinancialStatementsofaGroup STATEMENTS CONSOLIDATED FINANCIAL Monetary Board. impaired withouttheapprovalof of 1988andshallnotbereducedor f

BANK OF CEYLON ANNUAL REPORT 2011 307 BANK OF CEYLON ANNUAL REPORT 2011 308 Glossary ofFinancial/BankingTermsGlossary years ofservice. employees’ remunerationand/or to aformulausuallybasedon benefits aredeterminedbyreference amounts tobepaidasretirement Retirement benefitplansunderwhich DEFINED BENEFITPLANS other thanthecurrentfinancialyear. payable/receivable inafinancialyear Statements thatwillbecome Sum setasidefortaxintheFinancial DEFERRED TAXATION shareholder’s equity. borrowings +debentures)dividedby Long-term borrowings(refinance DEBT EQUITYRATIO short-term. the intentionofresellingthemin Securities acquiredandheldwith DEALING SECURITIES D out byanindependentratingagency. likelihood ofnotdefaulting,carried ability torepayitsobligationsorthe An evaluationofacorporate’s CREDIT RATINGS the borroweroracounterparty. the principalorinterestboth),by of aloanorotherlinecredit(either The riskoflossduetonon-payment CREDIT RISK to includesovereignrisk. particular country, sometimestaken lending toborrowerswithina The creditriskassociatedwith COUNTRY RISK E international trade. for thepurposeoffacilitating Such undertakingsareestablished under specifictermsandconditions. the bankuptoastipulatedamount (e.g., anexporter)todrawdraftson importer), authorisingathirdparty behalf ofitscustomers(typicallyan Written undertakingsbyabankon CREDIT (L/Cs) DOCUMENTARY LETTERSOF issue duringtheyear. average numberofordinarysharesin to shareholdersbytheweighted dividing thetotalprofitdistributed Dividend pershareiscalculatedby DIVIDEND PERSHARE variable orfinancialinstrument. an underlyingcommodity, currency which hasastrongrelationshipwith A financialinstrument,thepriceof DERIVATIVES its usefullife. depreciable amountofanassetover The systematicallocationofthe DEPRECIATION during thatperiod. average numberofsharesinissue of acompanydividedbyweighted attributable toordinaryshareholders Net profitsearnedduringaperiod EARNINGS PERSHARE(EPS) authorised forissue. when theFinancialStatementsare the BalanceSheetdateand unfavourable, thatoccurbetween are thoseevents,bothfavourableand Events aftertheBalanceSheetdate BALANCE SHEETDATE EVENTS AFTERTHE operations oftheinvested. investor’s share oftheresults The IncomeStatementreflectsthe share ofnetassetstheinvested. acquisition changeintheinvestor’s and adjustedthereafterforthepost- investment isinitiallyrecordedatcost A methodofaccountingwherebythe EQUITY METHOD may noteventuallybetransferred. rewards ofownership.Title mayor Leases whichtransferrisksand FINANCE LEASE parties inanarm’s lengthtransaction. between knowledgeable,willing be exchangedoraliabilitysettled The amountforwhichanassetcould FAIR VALUE F tool. banking servicesasapromotional Bank’s representativesprovide An overseaslocationwherethe HOUSE EXCHANGE COMPANY/ value oftheinvestment. Return asapercentageofmarket EFFECTIVE ANNUALRATE currencies. also arisesfromtradinginforeign date. Foreignexchangeincome or onthepreviousBalanceSheet from thoseratesinforceatinception date atprevailingrateswhichdiffer Lankan RupeesontheBalanceSheet currencies aretranslatedintoSri liabilities denominatedinforeign The gainrecordedwhenassetsor INCOME FOREIGN EXCHANGE the earliestopportunity. held withtheintentionofre-saleat settlement ofdebts,whichwillbe Properties acquiredinfullorpartial FORECLOSED PROPERTIES capital andborrowingsoftheentity. the sizeandcompositionofequity Activities thatresultinchanges FINANCING ACTIVITIES inflation, givesGDP inrealterms. a year. Nominal GDP, adjusted for during aspecifiedperiod,usually produced domesticallyinaneconomy The valueofallgoodsandservices PRODUCT (GDP) GROSS DOMESTIC potential creditrisk. mention loansandadvances,forthe total performingadvancesandspecial A provisionmadeasapercentageon GENERAL PROVISIONS G today. a futuredateatrateagreedupon exchange onecurrencyforanotherat Agreements betweentwopartiesto CONTRACTS FORWARD EXCHANGE of averageinterest earningassets. Net interestincomeasapercentage INTEREST MARGIN assets. The interestdueonnonperforming INTEREST INSUSPENSE or foradministrativepurposes. goods orservices,forrentaltoothers, use intheproductionorsupplyof without physicalsubstanceheldfor An identifiablenon-monetaryasset INTANGIBLE ASSET declines belowcarryingamount. This occurswhenrecoverableamount IMPAIRMENT I value receivedorpaid. Recording transactionsattheactual CONVENTION HISTORICAL COST H bid andperformancebonds. non-financial undertakingssuchas Certain otherguaranteesrepresent financial obligationstothirdparties. customer isunabletoperformits payments intheeventthatits assurances thatabankwillmake Primarily representirrevocable GUARANTEES A parentandallitssubsidiaries. GROUP set-off. and withoutexercisinganyrightof of anydeductionsorwithholdings Payments madeinfullamount,free GROSS-UP than shareholders’ funds. percentage oftotal liabilitiesother Liquid assetsexpressedasa LIQUID ASSETSRATIO Bills. banks, BillsofExchange,Treasury readily, suchas depositswithother form thatcanbeconvertedtocash Assets thatareheldincashora LIQUID ASSETS L critical successfactorsofacompany. agreed beforehandthatreflectsthe KPIs arequantifiablemeasurements, INDICATORS (KPI) KEY PERFORMANCE entity, directlyorindirectly. and controllingtheactivitiesof responsibility forplanning,directing Those personshavingauthorityand PERSONNEL KEY MANAGEMENT K usually heldtomaturity. yield orcapitalgrowthpurposesand Securities acquiredandheldfor INVESTMENT SECURITIES course ofbusiness. and notforsaleoruseintheordinary or forcapitalappreciationboth Property thatisheldtoearnrentals INVESTMENT PROPERTIES interest bearingliabilities. average interestrateincurredon on interestearningassetsandthe the averageinterestrateearned Represents thedifferencebetween INTEREST SPREAD users ofFinancialStatements. influence theeconomicdecisionsof or misstatementofwhichcould transaction oraneventtheomission The relativesignificanceofa MATERIALITY changes inmarketfactors. investment willchangedueto The riskthatthevalueofan MARKET RISK market value. marketable securitiestotheircurrent The practiceofperiodicallyrevaluing MARK TOMARKET M make thesale. the estimatedcostsnecessaryto estimated costsofcompletionand ordinary courseofbusiness,lessthe The estimatedsellingpriceinthe NET REALISABLEVALUE funds andinterbankborrowings. liabilities suchasdeposits,refinance and securitieswhatitpayson Bank earnsonassetssuchasloans The differencebetweenwhatthe NET INTERESTINCOME N that population,perunittime. some population,scaledtothesizeof A measureofthenumberdeathsin MORTALITY RATE Subsidiaries, bytheParent. owned, directlyorindirectlythrough to equityintereststhatarenot net assetsofaSubsidiaryattributable That portionoftheprofitorlossand MINORITY INTEREST 90 daysinarrears. as non-performingwhenapaymentis days pastdue.Allloansareclassified cash basiswhenapaymentis90 Loans areautomaticallyplacedon collectability ofprincipalorinterest. is reasonabledoubtregardingthe the opinionofmanagement,there when cashisreceived)because,in interest incomeisonlyrecognised A loanplacedoncashbasis(i.e., ADVANCES (NPA) NON-PERFORMING financing activities. activities thatarenotinvestingor activities ofanentityandother The principalrevenue-producing OPERATING ACTIVITIES commitments. which giverisetocontingenciesand or liabilitiesintheBalanceSheetbut Transactions notrecognisedasassets TRANSACTIONS OFF-BALANCE SHEET O account. bank, thedepositiscalledanostro correspondent bank.Attheother usually butnotnecessarilyaforeign maintained withanotherbank, A foreigncurrencycurrentaccount NOSTRO ACCOUNT suspense) advances portfolio(netofinterestin interest insuspense)dividedbytotal Total non-performingadvances(netof NPA RATIO

BANK OF CEYLON ANNUAL REPORT 2011 309 BANK OF CEYLON ANNUAL REPORT 2011 310 obligation. unit separatelytobuildupthefinal entitlement andmeasureseach rise toanadditionalunitofbenefit sees eachperiodofserviceasgiving An actuarialvaluationmethodthat METHOD PROJECTED UNITCREDIT development ofcapitalmarket. strengthen capitalbasefurtherwith Reserve maintainedinorderto RISK RESERVE PRIMARY DEALERSPECIAL (EPS). divided byitsearningspershare The currentmarketpriceofashare (P/E RATIO) PRICE EARNINGSRATIO benefit fund. Assets heldbyalong-termemployee EMPLOYEE BENEFITPLAN) PLAN ASSETS(OFAN has oneormoreSubsidiaries. A parentcompanyisanentitythat PARENT COMPANY P from externalevents. processes, peopleandsystems,or inadequate orfailedinternal The riskoflossresultingfrom OPERATIONAL RISK ofFinancial/BankingTermsGlossary understated. and liabilitiesorexpensesarenot assets orincomearenotoverstated conditions ofuncertaintysuchthat making theestimatesrequiredunder the exerciseofjudgmentneededin Inclusion ofadegreecautionin PRUDENCE non-performing loansandadvances. before discountingforprovisionson non-performing loansandadvances expressed asapercentageofnet Total provisionsforloanlosses PROVISION COVER realisable values. (primarily loans)toestimated the bookvalueofspecificassets provisions areestablishedtoreduce allowance forloanlosses.Specific A chargetoincomeaddedthe LOSSES PROVISION FORLOAN more thanoneperiod. (b) areexpectedtobeusedduring and purposes; rental toothers,orforadministrative or supplyofgoodsservices,for (a) areheldforuseintheproduction Tangible assetsthat: EQUIPMENT PROPERTY, PLANT& insurer. one ormoreinsurancetoanother assumed byaprimaryinsurerunder Transfer ofallorpart oftherisk REINSURANCE Repayment ofprincipalmonies. REDEMPTION R ASSETS (ROAA) RETURN ONAVERAGE a setprice. the intentionofbuyingthembackat money forfundingpurposes),with securities soldtocreditors(wholend Repurchase agreementsrelatingto REPOs directly orindirectly. in financialandoperatingdecisions, other orexercisesignificantinfluence Two partieswhereonecontrolsthe RELATED PARTIES instruments isalsorecognised, risk inherentinOff-BalanceSheet among alltypesofassets.The reflect acomparableriskperrupee risk-weighting factorsinorderto lower riskassetsisdiscountedusing capital ratios.Thefaceamountof Used inthecalculationofrisk-based RISK-ADJUSTED ASSETS on aspecificfuturedate. agreement toresellatagivenprice The purchaseofsecuritiesunderan REVERSE REPOS distribution andinvestment. Reserves setasideforfuture REVENUE RESERVES shareholders’ equity. percentage ofaverageordinary dividends, ifany, expressedasa Net income,lesspreferredshare EQUITY (ROAE) RETURN ONAVERAGE industry performancecomparison. of profitabilityandasabasisintra- Used alongwithROAE,asameasure percentage ofaveragetotalassets. Net incomeexpressedasa SEGMENT REPORTING S relevant risk-weightingfactors. Sheet assetsmultipliedbythe credit equivalentofOff-Balance On BalanceSheetassetsandthe RISK-WEIGHTED ASSETS claims andrightsof theshareholders. statutes, butinpriority toandover any preferentialclaimsunder secured andunsecuredcreditors rank afteralltheclaimsof shall intheeventofwindingup, The claimsofthedebentureholders SUBORDINATE DEBENTURE as theyfalldue. term tomeetfinancialcommitments The availabilityofcashoverthelong SOLVENCY jointly controlledoverthosepolicies. investee butisnotcontrolledor operating policydecisionsofan to participateinthefinancialand Significant influenceisthepower SIGNIFICANT INFLUENCE plus capitalandrevenuereserves. and fully-paidordinarysharecapital Shareholders’ fundsconsistofissued SHAREHOLDERS’ EQUITY banking. property, insuranceandIslamic operations, treasuryandinvestments, as bankingoperations,leasing from businesssegmentssuch contribution totherevenuederived Segment reportingindicatesthe weighting factors. and thenbyapplyingappropriaterisk Balance Sheet(orcredit)equivalents first byadjustingnotionalvaluesto debentures. and approvedsubordinated provisions, hybridcapitalinstruments revaluation reserves,general Consists ofthesumtotal TIER IICAPITAL goodwill. general andotherreserves,less fund, publishedretainedprofits, share premium,statutoryreserve non-redeemable preferenceshares, ordinary shares,non-cumulative, Consists ofthesumtotalpaid-up TIER ICAPITAL T much toasingleborrower. diversification bynotlendingtoo the participatngbankstomaintain Government. Syndicatedloansallow to alargemultinationalfirmor A largeloanbyagroupofbanks SYNDICATED LOAN swaps. swaps, currencyswapsandcredit date. Swapsincludeinterestrate to becompletedataspecifiedfuture Carried outonanagreed-uponprice and thesalebacktosameparty. with thepurchaseexecutedatonce of foreignexchangeorsecurities, The simultaneouspurchaseandsale SWAPS composition ofitsBoardDirectors. some sharesinitandcontrolsthe value ofitsequitycapitalorholds holds morethan50%ofthenominal company iftheParentCompany A companyisaSubsidiaryofanother SUBSIDIARY COMPANY bank (comparewithnostroaccount). maintained withabankbyanother A localcurrencycurrentaccount VOSTRO ACCOUNT retained forexpansionandgrowth. to Governmentbywayoftaxesand employees, theprovidersofcapital, value addedisallocatedamongthe cost ofprovidingsuchservices.The providing bankingservices,lessthe Value addedisthewealthcreatedby VALUE ADDED V specific asset. interest notbeingsecuredbyany Repayment oftheprincipaland UNSECURED deed. securities underthetermsofatrust An undertakingformedtoinvestin UNIT TRUST U The sumofTier IandTier IIcapital. TOTAL CAPITAL

BANK OF CEYLON ANNUAL REPORT 2011 311 Corpora

BANK OF CEYLON ANNUAL REPORT 2011 312 Email : Fax : Tel : Colombo 1,SriLanka. ''BOC Square'',No.1,BankofCeylonMawatha, 21st Floor, BankofCeylonHeadOffice banking” facilitator forinternet&mobile “Management ofATM cardoperations, Electronic BankingUnit [email protected] Email : Fax : Tel : Colombo 1,SriLanka. "BOC Square",No.1,BankofCeylonMawatha, 3rd Floor, BankofCeylonHeadOffice Facilities” Guarantees &documentationofCredit “Issuing ofLocal&International Credit Support Corporate Offices 2205600,2205620,2205680” [email protected] Email : Fax : Tel : Echelon Square,Colombo1,SriLanka. Level -1,West Tower, World Trade Centre payment gatewayfacility“ using pointofsalesmachines&internet Cards. Franchising&servicingmerchants “Issuing &managingVISAMasterCredit BoC CardCentre [email protected] +94112447569 +94112542162,2204650-61 [email protected] +94112446820 +94112541943 [email protected]/ [email protected]/[email protected]/ +94112325099,2325092,2395807 +94112445799,2325088,2395806,

Email : Fax : Tel : Colombo 1,SriLanka. "BOC Square",No.1,BankofCeylonMawatha, 9th Floor, BankofCeylonHeadOfﬁce, Financial Relationships” “Gateway toGlobalBanking& Correspondent BankingDepartment

Email : Fax : Tel : Colombo 1,SriLanka. "BOC Square",No.1,BankofCeylonMawatha, Ground Floor, BankofCeylonHeadOffice Nation” “Supplier ofpreciousGoldtothe Gold Shop Email : Fax : Tel : Colombo 1,SriLanka "BOC Square",No.1,BankofCeylonMawatha, 7th Floor, BankofCeylonHeadOffice, Exchange relatedServices” “Providing MoneyMarketandForeign Treasury Division [email protected]/[email protected] +94112445791 +94112445791 [email protected] +94112345420 +94112345420 [email protected], [email protected] +94112445788 +94112445785-7,2386862 t t e Offices Email : Fax : Tel : Colombo 1,SriLanka. "BOC Square",No.1,BankofCeylonMawatha, 9th Floor, BankofCeylonHeadOffice, community” “Service providerformigrantemployee Trade Promotion : : : Email Fax Tel 21, FlowerRoad,Colombo7. “Dedicated CentreforPrivateBanking” Premier BankingCentre : : : Email Fax Tel Colombo 1,SriLanka "BOC Square",No.1,BankofCeylonMawatha, 8th Floor, BankofCeylonHeadOffice, Remittances toSriLanka” “Facilitator inprocessingInward Inward Remittances [email protected] +94112346841 +94112447831,2203870 +94112694280 +94112694282-86 +94112344845 +94112445792,2541933,5742978 [email protected] [email protected] mi : Email Fax : Tel : Colombo 1,SriLanka. "BOC Square",No.1,BankofCeylonMawatha, 25th Floor, BankofCeylonHeadOffice, Products andservices” “Brand houseforallIslamicBanking Islamic BankingUnit a : Email : Fax Tel : Colombo 1,SriLanka. "BOC Square",No.1,BankofCeylonMawatha, 2nd Floor, BankofCeylonHeadOffice, Advisory Services” “Providing Trade FinanceFacilities& Trade Services : : : Email Fax Tel Colombo 1,SriLanka "BOC Square",No.1,BankofCeylonMawatha, 7th Floor, BankofCeylonHeadOffice, Securities” “Retail buying&sellingofGovernment Primary DealerUnit +94112445811 +94112205036 agmtradefi[email protected] +94112542170 +94112448207 +94112448830 [email protected] [email protected] [email protected] +94 112394310,2203310

BANK OF CEYLON ANNUAL REPORT 2011 313 As at31stDecember2011 points BoC se

BANK OF CEYLON ANNUAL REPORT 2011 314 Location ofabove are givenonpagefrom316to335 oprt rnhs61 231 59 149 131 106 12 73 21 76 92 80 70 72 44 72 13 103 26 12 22 38 26 19 20 24 29 39 6 22 26 36 Overseas Branches 19 43 Premier BankingCenter 42 35 38 12 Corporate Branches 30 Western Province-South Western Province-North 25 18 35 Uva Province Southern Province 17 31 Sabaragamuwa Province 34 North Western Province Northern Province NO.OFEXTENSION North CentralProvince NO.OFBRANCHES Eastern Province Central Province PROVINCE 1 4 0 970 404 248 318

2024 1012 OFFICES

O FAM TOTAL SERVICE NO. OFATMs POINTS rv rv ice ice 92 NORTH WESTERN 72 73 NORTH CENTRAL SABARAGAMUWA 313 WESTERN 106 NORTHERN SOUTHERN 76 EASTERN 72 59 UVA CENTRAL 103

BANK OF CEYLON ANNUAL REPORT 2011 315 BANK OF CEYLON ANNUAL REPORT 2011 316 BoC Service Points BoC Service CENTRAL PROVINCE 4 aaat 6-218 o14bcl 35A,MatalapitiyaRoad,Yelakkaraya, Yatawatte. 4/110,KandyRoad,Wattegama. [email protected] RatnayakeBuilding,Walapane [email protected] 066-2221084 44,46,MahiyanganaRoad,Udadumbara [email protected] 081-2475838 17/2,WilamunaBuilding,CircularRoad, [email protected] 052-2279238 Yatawatta [email protected] 2B,KandyRoad,Talatuoya. 081-2402317 Wattegama 144 081-2376820 Walapane 72,MainStreet,Rattota. [email protected] 340 3,DimbulkumburaRoad,Rikillagaskada Udadumbara [email protected] 743 081-2404334 437,439,NuwaraEliyaRoad,Pussellawa [email protected] 606 Teldeniya 45,UpperBazaar, Pundaluoya. 066-2255280 [email protected] Talawakelle 081-2365314 781 [email protected] Talatuoya 081-2478664 531 19,19/1,AkurambodaRoad,Pallepola Rikillagaskada 051-2233205 650 Rattota [email protected] 35,351/1,RagalaRoad,Padiyapelella 167 Pussellawa 639 Pundaluoya 168,MataleRoad,Naula. 066-2247272 [email protected] 337 Pilimatalawa [email protected] 425 052-3536628 Peradeniya 587 66,UpcotRoad,Maskeliya Pallepola 066-2246280 588 Padiyapelella 35A2,Wattegama Road,Madawala [email protected] 640 161/A,MadawalaRoad,Katugastota [email protected] 492 Nawalapitiya 052-2277280 [email protected] 22,DaladaVeediya, Kandy Naula 081-2470484 598 Matale [email protected] 081-2499398 092 Maskeliya 068 Madawala 081-2234292 506 Katugastota 581 Kandy2ndCity 59/37,DeltotaRoad,Galaha 666 649 [email protected] 237,RambukkanaRoad,Galagedara 081-2467213 [email protected] Gelioya Gampola 081-2461214 524 Galewela 575 Galaha 432 Galagedara 101 Digana 615 273 2 NuwaraEliya 029 31/1/1,33,MainStreet,Kandapola. 46,CircularRoad,Hatton [email protected] [email protected] 052-2229636 051-2222214 Kandy Kandapola 002 Hatton 633 040 6 [email protected],MataleRoad,Alawathugoda [email protected] 066-2242327 Dambulla Alawathugoda 576 768 Branch Code aeo rnhTlpoeEMi drs PostalAddress E-MailAddress Telephone Name ofBranch z z z z z 8-301 o54bcl 430/B, Gampola Road,Karamada,Gelioya. [email protected] 081-2310214 z z z z [email protected],Gampola Road,Nawalapitiya. [email protected] 054-2222233 5-289 o51bcl 29,HattonRoad,Talawakelle. [email protected] 052-2258892 246/2,ColomboRoad,Pilimatalawa. 1151,SirimavoBandaranayakeMawatha,Peradeniya. [email protected] [email protected] 081-5674566 43,LawsonStreet,NuwaraEliya 081-4475283 [email protected] 5/2,Trincomalee Street,Matale 052-2224047 [email protected] 066-2222262 88,DaladaVeediya, Kandy [email protected] 081-2223697 79,KadugannawaRoad,Gampola 168,Kurunegala-DambullaRoad,Galewela [email protected] [email protected] 081-2350108 2,NewTown, Digana,Rajawella. 066-2289262 438/BKandyRoad,Dambulla [email protected] [email protected] 081-2376928 066-2285270 Karalliyadde,Teldeniya. Holiday BankingServices z CENTRAL PROVINCE Agarapathana iiia0628201,AirPortRoad, Kimbissa 066-2286270 Sigiriya 29,Meeruppa, Marassana. 081-2405105 KachcheriBuilding,Kandy 081-2224214 Marassana Kandy Kachcheri KandyIndustrialPark,Pallekelle 081-5672445 197,MataleRoad,Akurana 081-2301477 BOI Pallekele Akurana nvriyo eaeia012942UniversityofPeradeniya,Peradeniya 081-2392422 University ofPeradeniya KachcheriBuilding,Matale 066-2222024 KandyTeaching Hospital,Kandy 081-2233335 Matale Kachcheri Kandy Teaching Hospital 135/1/B,Bokkawala. 081-2461056 38/3,AlawathugodaRoad,Ankumbura 066-2240399 Bokkawala Ankumbura pot01230577,MainStreet, Upcott 051-2235095 Upcott 67/68A,Meepilimana,NuwaraEliya 052-2234410 Meepilimana Kotagala 572,MainStreet,Danture 081-2575228 Danture Bogawanthalawa igmw 6-200 80/2/1,Hettipola NewTown ,Wilgamuwa 066-2250002 Wilgamuwa 19,Teldeniya Road,Menikhinna 081-2376911 Menikhinna 1/1,Imbuldeniya,Handessa 081-2315171 Daulagala uaaEiaKccei022270KachcheriBuilding,NuwaraEliya 052-2222770 Nuwara EliyaKachcheri DedicatedEconomicCentre,Dambulla 066-2285217 Dedicated EconomicCentre,Dambulla aaahaa062255409,Matale Road,Palapathwala 066-2225505 Palapathwala DiganaVillage, Digana 081-2375851 Digana Village eaeiaBtnclGre 8-366 Peradeniya BotanicalGarden 081-2386463 Peradeniya BotanicalGarden 23A,NawalapitiyaRoad,Gampola 081-2354214 Gampola City ojpty 8-311 15,MedawalaRoad,Poojapaitya 081-2301718 Poojapitiya 29B,ColomboRoad,Ginigathhene 051-2242310 Ginigathhene Ragala 25,KandyRoad,Hatharaliyadda 081-2464187 Hatharaliyadda Kandy CityCenter Saturday xeso fc eehn Postal Address Telephone Extension Office { Sunday { Saturday &Sunday 5-256 1/19,Ragala,Halgranoya 052-2265660 184-186,Wooten Bazaar, Kotagala 051-2223206 PremisesNo19,Level1,DaladaVeediya, Kandy 081-2205110 30,BridwellBazaar,Bogawanthalawa 052-2267599 23,MainStreet,Agarapathana 051-2230133 atgm rnh 1 1 1 1 Wattegama Branch 1 Udadumbara Branch Trendy Ware Adikarigama 1 1 Thalatuoya Branch Talawakelle Branch 1 Sigiriya ExtensionOffice Rikillagaskada Branch 1 Extension Office University ofPeradeniya 1 Pussellewa Branch Pilimatalawa Branch Extension Office 1 1 Peradeniya BotanicalGardens Peradeniya Branch 1 Pallekelle ExtensionOffice 1 Nuwara EliyaBranch 2 Extension Office Nuwara EliyaKachcheri 1 Nawalapitiya Branch Naula Branch 1 1 Matale Branch Maskeliya Branch 2 Madawala CityBranch Katugastota Branch 3 Kandy SecondCityBranch 1 Extension Office Kandy Teaching Hospital Office 1 Kandy CityCentreExtension 1 Kandy Branch 1 1 Hatton Branch Ginigathhena ExtensionOffice 1 1 Gelioya Branch Gampola Branch Galewela Branch 1 Galagedara Branch Digana Branch 1 Dambulla Dedicated EconomicCentre, Dambulla Branch Alawathugoda Branch TsNo. ATMs 39 1 1 1 1 1 1

BANK OF CEYLON ANNUAL REPORT 2011 317 BANK OF CEYLON ANNUAL REPORT 2011 318 BoC Service Points BoC Service EASTERN PROVINCE Code Branch EASTERN PROVINCE 2 [email protected],Valachchenai [email protected] 24,InnerHarbourRoad,Trincomalee MainStreet,Pottuvil [email protected] 065-2257007 38,BatticaloaRoad,Mutur [email protected] 026-2223084 Valachchenai [email protected] 063-2248021 Trincomalee City 40,40b,40c,FowzyMawatha,Kattankudy-1 91,AgrabodhiMawatha,Kantale 626 026-2238327 Trincomalee 624 Sammanthurai [email protected] [email protected] 006 Pottuvil MainStreet,Kaluwanchikudy 440 Nintavur 065-2246613 026-2234230 318 Mutur [email protected] 591 Kinniya 118 Kattankudy 065-2250012 735 Kantale 648 Kaluwanchikudy 623 611 Addalaichchenai oaol 6-624 KandyRoad, Gonagolla 063-3632943 Gonagolla KachcheriBuilding,Ampara 063-2224150 Ampara Kachcheri 0 igrn 6-203 o59bcl JeyalankaBuilding,HinguranaJunction, Trincomalee Road,Chenkalady [email protected] CovingtonRoad,Batticaloa 115A,D.S.SenanayakaStreet,Ampara [email protected] 063-2240037 [email protected] [email protected] ASRMBuilding,Akkaraipattu 065-2240492 065-2227410 Kalmunai 063-2222137 [email protected] Hingurana 510 Chenkalady 067-2277235 509 Batticaloa 630 Ampara 012 Akkaraipattu 021 590 ald 6-276 180A,NewKalmunai Road,Kallady 065-2227962 Kallady Co-operative Building,KalmunaiRoad,Arayampathy 065-2247939 Arayampathy alr072241MainStreet,Periyakallar-1 067-2225421 Kallar 5,StationRoad,Batticaloa 065-2227032 Batticaloa Extension Office aaiaau0524301,BadullaRoad,Karadiyanaru 065-2241330 Karadiyanaru KachcheriBuilding,Batticaloa 065-2257708 Batticaloa Kachcheri aiiu07224420,MainStreet ,Karitivu 067-2225484 Karitivu 61,KinniyaRoad,Chinabay 026-2242327 Chinabay (4thMilePost) ia 6-614 MainStreet,Kiran 065-3651142 Kiran Vantharumulai, Batticaloa 065-2240490 Eastern University okdihli052296MainStreet,Ward No10,Kokkaddichcholai 065-2227916 Kokkaddicholai Eravur aaaa 6-277 450,BarRoad, Mamanagam,Batticaloa 065-2227973 Mamanagam auhmni072253MainStreet,Periyanilawanai, Maruthamunai 067-2220503 Maruthamunai olptaa06242096thJunction, GalmetiyawaSouth,Mollipothana 026-2246220 Mollipothana oaea062285ProvincialCouncil Building,Morawewa 026-2225825 Morawewa iaei062320Ward No2,Main Street,Nilaveli 026-2232290 Nilaveli daaai052511MainStreet, Mawadichchenai,Oddamavadi 065-2258111 Oddamavadi lvl072537GrandMosqueRoad, Oluvil-3 067-2255397 Oluvil xeso fc eehn PostalAddress Telephone Extension Office z aeo rnhTlpoeEMi drs PostalAddress E-MailAddress Telephone Name ofBranch z z z z z z 6-211 DivisionalSecretariat Building,Eravur 065-2241012 MainStreet,Addalaichchenai 067-2279303 2-238 o64bcl 9,MainStreet,Trincomalee [email protected] 49/1C,AmparaRoad,Sammanthurai 026-2223880 [email protected] 75,MainStreet,Nintavur 067-2260898 [email protected] 27,27/1,27/2,29,LatheefVidhanayar Road,Kinniya 067-3696117 [email protected] 026-2236270 78,KitddankiRoad,Kalmunai [email protected] 067-2229774 aahhniBac 1 Valachchenai Branch 1 1 Trincomalee 1 1 Sri LankaAirForceChinaBay- Trincomalee CityBranch 1 1 Trincomalee Branch 1 1 Sammanthurai Branch Pothuvil Branch 1 Sri LankaNavy, 1 Trincomalee Nintavur Branch 1 Mutur Branch Kinniya Branch 1 Kattankudy Branch 1 Kantale Branch Kalmunai Branch 1 Kaluwanchikudy Branch 1 1 Hingurana Branch Office Eastern UniversityExtension 1 Chenkalady Branch Batticaloa Branch Ampara Branch Akkaraipattu Branch TsNo. ATMs 20 1 1 z Holiday BankingServices EASTERN PROVINCE owta03241810,PolwagaJanapadaya,Polwatta,Ampara 063-2242128 Polwatta hmaaaa 2-284 AgrarianServiceBuilding,KandyRoad,Thampalakamam 026-2248043 Thampalakamam uuue063651MainRoad,Ward No.3,Pulumude. 026-3266531 Pulumude hpu 2-208 MainRoad,Thoppur 026-2240989 Thoppur anhmrtu07224815MainStreet,Sainthamarathu11 067-2220478 Sainthamarathu rnoae ahhr 2-226 KachcheriBuilding,Trincomalee 026-2222465 Trincomalee Kachcheri euuaa062500AgrarianServiceBuilding,Serunuwara 026-2251010 Serunuwara hn 6-200 JayanthiBuilding, KandyRoad,Uhana 063-2250001 Uhana Thambiluvil puei062227AgrarianService Center,LoveLaneUppuveli 026-2226227 Uppuveli auaiu053652CentralMarketBuilding,Vavunativu 065-3063522 Vavunativu aaa 6-288 Trincomalee Road,KandaladyVakarai 065-2258181 Vakarai elvl 6-211 100B,MainStreet,Vellavely 065-2251113 Vellavely 1 anw [email protected],Galnewa [email protected] NewTown, Galkiriyagama 68/5,KanthiCityBuilding,Eppawala 025-3855484 [email protected] DenzilKobbekaduwaMawatha,Galenbindunuwewa [email protected] 025-3853065 NewTown, LankaBankuMawatha,Bakamoona Dehiattakandiya [email protected] Hingurakgoda 025-2249999 [email protected] [email protected] Galnewa 025-2258280 601 Galkiriyagama 027-2250287 066-2256680 514 Galenbindunuwewa MarketComplex,Anuradhapura 653 Aralaganwila MaithripalaSenanayakeMawatha,Anuradhapura Eppawala NewTown, Anuradhapura 122 Dehiattakandiya [email protected] [email protected] [email protected] 692 [email protected] Bakamoona 686 025-2225932 Aralaganwila027-3279257 025-4580974 025-2223685 652 AnuradhapuraNewTown 599 AnuradhapuraCity 098 Anuradhapura 551 022 Code Branch NORTH CENTRALPROVINCE 3 iitl [email protected] Road,Mihintale [email protected] 025-2266503 36,JaffnaRoad,Medawachchiya Kekirawa-DambullaRoad,Madatugama Meegalewa Medirigiriya [email protected] [email protected] [email protected] HorowpothanaRoad,Kebithigollawa Mihintale [email protected] 025-2245683 025-2264283 Meegalewa025-3855054 [email protected] Trincomalee Road,Kahatagasdigiliya 335 Medirigiriya027-2248337 22ndMilePost,Jayanthipura 728 Medawachchiya KekirawaRoad,Ipalogama [email protected] 025-2298680 641 Madatugama [email protected] 162 [email protected] AnuradhapuraRoad,Horowpothana 025-2247480 Kekirawa 654 027-2222266 Kebithigollawa 025-2264279 [email protected] 676 Kahatagasdigiliya 621 Kaduruwela 025-2278416 622 Jayanthipura 502 Ipalogama 600 Horowpothana 236 217 Saturday xeso fc eehn PostalAddress Telephone Extension Office z aeo rnhTlpoeEMi drs PostalAddress E-MailAddress Telephone Name ofBranch Sunday z z 6-250 MainStreet,Thambiluvil2 067-2265309 2-246 o66bcl 3,HabaranaRoad,Kekirawa [email protected] 626,MainStreet,Kaduruwela 025-2264162 [email protected] 027-2225025 St.MichealBldg.MainStreet, Hingurakgoda [email protected] 027-2247642

BANK OF CEYLON ANNUAL REPORT 2011 319 BANK OF CEYLON ANNUAL REPORT 2011 320 BoC Service Points BoC Service hlw 2-259 Anuradhapura Road, 025-2275090 Thalawa eaaiia 2-276 63,Sevanapitiya 027-3277263 Sevanapitiya aaaaua052603Ranajayapura, 025-2262003 Ranajayapura aiaJnto 2-263 157,RajinaJunction, 025-2276538 Rajina Junction aagny 0527585thMilePost, 025-2276558 Rajanganaya aaia052501Bandaranayake 025-2253011 Padaviya inry 2-253 Polonnaruwa-Habarana Minneriya 027-2245333 aaaa 6-204 Trincomalee Road, 066-2270048 Habarana Anuradhapura General Hospital, aaua072260Galamuna, Galamuna 027-2226650 oaaaaa057085RajamahaVihara 025-7200895 Doramadalawa nrdauaKccei052212KachcheriBuilding, 025-2222142 Anuradhapura Kachcheri 5 iapn [email protected], Tirappane [email protected] NandanaBuilding,Sewagama RajanganayaRoad,Thambuttegama JaffnaRoad,Rambewa NORTH CENTRALPROVINCE 025-3853087 [email protected] [email protected] [email protected] MannarRoad,Pemaduwa 027-2222585 025-2276280 025-2266555 [email protected] Tirappane 286,266/1,NewTown, Polonnaruwa. Thambuttegama MainStreet,Nochchiyagama 025-2223307 PadaviParakramapura [email protected] 157 Sewagama [email protected] 655 Rambewa [email protected] 027-2223009 183 PolonnaruwaNewTown 025-2257880 782 025-2254018 Pemaduwa 083 PadaviParakramapura 152 Nochchiyagama 127 656 Code Branch NORTH CENTRALPROVINCE xeso fc eehn PostalAddress Telephone Extension Office aeo rnhTlpoeEMi drs PostalAddress E-MailAddress Telephone Name ofBranch 2-780 GeneralHospital, 025-3778400 Thalawa Ipalogama Thambuttegama Rajanganaya Mawatha, Padaviya Road ,Minneriya Habarana Anuradhapura Pansalgodalla Mihintale Doramadalawa, Mawatha, Anuradhapura auueaBac 2 1 1 1 1 Kahatagasdigiliya Branch Kaduruwela Branch Horowpothana Branch 1 Hingurakgoda Branch Galnewa Branch 1 1 Galenbindunuwewa Branch 1 Doramadalawa ExtensionOffice Dehiattakandiya Branch Bakamoona Branch 1 2 Extension Office Anuradhapura GeneralHospital Anuradhapura CityBranch Anuradhapura Branch Anuradhapura Sri Lanka,AirForce Hingurakgoda Sri LankaAirForce, TsNo. ATMs 1 1 1 abteaaBac 1 1 1 Tambuttegama Branch 1 1 Ranajayapura ExtensionOffice Rajarata University Polonnaruwa NewTown 1 1 Polonnaruwa Hospital 1 Padavi ParakramapuraBranch Nochchiyagama Branch 1 Branch New Town Anuradhapura 1 Mihintale Branch 1 Medirigiriya Branch Medawachchiya Branch Dehiattakandiya Maliban Textiles (Pvt.)Ltd, Kekirawa Branch TsNo. ATMs 29 1 1 Holiday BankingServices z oui 013375K.K.SRoad,Kokuvil 021-3737765 Kokuvil oiaa 2-777 KandyRoad,Jaffna 021-3737070 Kodikamam at rnh013127MainStreet,Kayts 021-3214227 Kayts Branch atay013310KandyRoad,Jaffna 021-3737100 Kaithady afaMi tet012254StMartynBishopsHouse, 021-2224564 Jaffna MainStreet afaKccei012288KachcheriBuilding,Jaffna 021-2228808 Jaffna Kachcheri Chankanai afaBsSad012200400,HospitalRoadJaffna 021-2221010 Jaffna BusStand Welfare Centre Ananthakumarasamy laaa 2-222 MainStreet,Illavalai. 021-3202328 Illavalai Centre Anandakulam Welfare ef 2-251 Delft 021-3205614 Delft lvdy013028AlaveddyCenter, Alaveddy 021-3202218 Alaveddy 7 Atchuvely 778 Code Branch NORTHERN PROVINCE NORTHERN PROVINCE 1 [email protected],Mullaitivu [email protected] MainRoadMallawi,Mankulam Vavuniya 024-3245730 [email protected] Thirunelvely 044 PointPedro 024-3248037 761 Nelliady 028 PostOfficeView, Karainagar Mullaitivu 638 Mannar [email protected] 511 Mankulam 046 Manipay 021-3212381 574 Kopay 281 Kilinochchi 787 Kayts 093 Karainagar 063 Kankasanthurai 749 Jaffna2nd 605 Jaffna 500 Chunnakam 005 Chavakachcheri 053 501 Saturday only xeso fc eehn PostalAddress Telephone Extension Office z aeo rnhTlpoeEMi drs PostalAddress E-MailAddress Telephone Name ofBranch z z z z z z z z z z z z z z z 2-283 Zone01,MenikFarm,Wanni 024-3248036 2-235 Anandakulam,Adampan 023-3233751 2-201 MainStreet,Chankanai 021-2250015 2-225 o04bcl 75,StationRoad,Vavuniya 531,PalalyRoad,Thirunelvely [email protected] 155/10,MainStreet,PointPedro [email protected] ThikkamRoad,Karaveddy, Nelliady 024-2222358 [email protected] 021-2223948 [email protected] 52,PallimunaiRoad,GrandBazaar, Mannar 021-2263570 021-2264815 [email protected] 174,JaffnaRoad,Manipay ManipayRoad,Kopay 023-2251001 [email protected] KaradipokkuJunction,A9Road,Kilinochchi [email protected] Vangalavadi Junction,Velanai 021-2255188 [email protected] 021-2230084 [email protected] 51,K.K.SRoad,Kankasanthurai 021-2280002 56,StanleyRoad,Jaffna 021-3215215 [email protected] 476,476A,HospitalRoad,Jaffna [email protected] 146,KKSRoad,Chunnakam 021-3212716 [email protected] VMKBuilding,KandyRoad,Chavakachcheri 021-2222598 [email protected] CentralCollegeView, RosaVeethy, Atchuvely 021-2224018 [email protected] 021-3214228 [email protected] 021-3214229 021-3215237 Main Street,Jaffna duudn043465MankulamRoad,Oddusuddan 024-3248665 Oddusuddan euuen 2-253 APCBuilding,Nedurnkerny 024-3245731 Nedurukerny aaa 2-231 UyilankulamRoad, 023-3233515 Nanatan antv 2-220 Thambalagamuwa, 021-3202107 Nainativu uukn• 2-289 ChilawaturaRoad,Murunkan 023-3238095 Murunkan • ulywl 2-253 Ward No3,Mullaitivu 024-3245730 Mulliyawali anrKcceiKachcheriBuilding, Wanni NachchikudaJunction, 024-3248039 Mulankavil Mannar Kachcheri alw 2-283 MainStreet,Mallawi 024-3248038 Mallawi ah 2-207 Periyapandivirichchan, Madhu 023-2280079 Madhu NORTHERN PROVINCE xeso fc eehn PostalAddress Telephone Extension Office Moddakkadai ,Nantan Thambalagamuwa Road,Pudukudiruppu, MPCS Building,Kandy Mankulam Road,Mulliyawalli Mulankavil

BANK OF CEYLON ANNUAL REPORT 2011 321 BANK OF CEYLON ANNUAL REPORT 2011 322 BoC Service Points BoC Service 9 Alawwa 498 Code Branch NORTH WESTERNPROVINCE 7 oegn [email protected],Kobeigana [email protected] 037-2293101 Kobeigana Kalpitiya 46,48,KurunegalaRoad,Dankotuwa 172 Ibbagamuwa [email protected] 589 Hiripitiya 770 Hettipola 031-2258180 569 Giriulla 570 Galgamuwa 553 Dummalasuriya 549 Dankotuwa 580 Chilaw 497 Bingiriya 020 Anamaduwa 554 548 ihaau043404268,MiddleClassScheme, 024-3248004 Vishvamadu auiaCt 2-263 BazaarStreet,Vavuniya 024-2226631 Vavuniya City auiaKccei042266KachcheriBuilding,Vavuniya 024-2222626 Vavuniya Kachcheri avtiua 2-248 NoD,Yale Road,Valvettiturai 021-2264883 Valvettiturai rmia 2-209 PalalyRoad,Urumpirai 021-2230899 Urumpirai hrmrkny013021AkkarayanRoad, 021-3208281 Thirumurikandy hlianrPe 032805ThalaimannarPier, 023-2281085 Thalaimannar Pier uhklm043404SasthriKolankulam,Vavuniya 024-3248034 Puthukulam (Thalikkulam) Poovarasakulam ongr 2-220 Vadiyady Junction,Poonagari 021-3202303 Poonagari eai 6-231 ChurchRoad,Pesali 060-2233511 Pesali aata 2-280 A9Road,ParanthanJunction, 024-3248003 Paranthan aa 2-222 A9Road,Pallai 021-3202125 Palai NORTHERN PROVINCE xeso fc eehn PostalAddress Telephone Extension Office aeo rnhTlpoeEMi drs PostalAddress E-MailAddress Telephone Name ofBranch z z z z z z 2-280 MannarRoad 024-3248002 3-283 o48bcl 64,GiriullaRoad,Alawwa [email protected] 037-2278032 3-200 o59bcl 90,MainStreet,Kalpitiya 110,DambullaKurunegala Road,Ibbagamuwa [email protected] KumbukgeteRoad,Hiripitiya [email protected] 45,47,KurunegalaRoad, Hettipola 032-2260702 [email protected] MarketComplex,Giriulla 037-2259970 [email protected] 67,69,AnuradhapuraRoad, Galgamuwa 037-2264080 [email protected] 227,KuliyapitiyaMadampe Road,Dummalasuriya 037-2291080 [email protected] 037-2288080 [email protected] RadaguruEdmundPeirisMawatha, Chilaw 037-2253080 35A,ChilawRoad,Bingiriya 032-2240690 [email protected] 27,27/1&31,Kurunegala Road,Anamaduwa [email protected] 032-2222335 [email protected] 032-2246107 032-2263280 Visuvamadu. New Punnaineeravi, Thirumurikandy. Thalaimannar ,Poovarasakulam, Vavuniya Paranthan auiaBac 2 1 1 Office Vavuniya- KachcheriExtension 1 Vavuniya Branch 1 Point PedroBranch 1 1 Nelliady Branch Mulliyawali ExtensionOffice Mannar Branch 1 1 Mankulam Branch Manipay Branch 1 Mallawi ExtensionOffice 1 Kilinochchi Branch 1 Jaffna SecondCityBranch Office Jaffna MainStreet,Extension 1 1 Jaffna Hospital 1 Jaffna Campus-Thirunelvely 1 Jaffna Branch Chunnakam Branch Chavakachcheri Branch 1 Atchuvely Branch Centre 1 Ananthakumarasamy Welfare Air Force,Vavuniya Adampan ExtensionOffice TsNo. ATMs 22 1 1 1 Kochchikade iieiaa01249060,NegomboRoad, 031-2249960 Kirimetiyana aueia012450ChilawRoad, Katuneriya 031-2245500 Katuneriya Makandura Rambawewa Road,Katupotha 037-2247471 Katupotha ubkee072660BankofCeylon,Kumbukgete 037-2264680 Kumbukgete 70,KurunegalaRoad, 037-2266144 Dambadeniya uueaaKccei072276KachcheriBuilding,Kurunegala 037-2229726 Kurunegala Kachcheri 55,57,PuttalamRoad, 032-2259050 Anavilundawa Ambanpola NORTH WESTERNPROVINCE Kuliyapitiya 052 Code Branch NORTH WESTERNPROVINCE 0 [email protected],Welpalla 197,ChilawRoad,Wennappuwa [email protected] [email protected] 84,KurunegalaRoad,Ridigama 031-2299512 031-2255280 [email protected] MadagallaRoad,Polpithigama. 96,ColomboRoad,Pothuhera Wennappuwa 037-2252080 Welpalla [email protected] 64,KegalleRoad,Polgahawela [email protected] 508 Wariyapola 104 037-2273103 [email protected] Waikkal 037-2237619 379 Ridigama 558 037-2243280 Puttalam 532 Polpithigama 048 Pothuhera 783 Polgahawela 664 Pannala 526 Norochcholai 546 10,StationRoad,Madampe Nikaweratiya 779 Nattandiya [email protected] 547 Narammala 050 Melsiripura 032-2247680 534 Mawathagama 555 Maho 257 Madurankuliya 564 Madampe 565 KurunegalaCity 544 Kurunegala 513 009 xeso fc eehn PostalAddress Telephone Extension Office z z aeo rnhTlpoeEMi drs PostalAddress E-MailAddress Telephone Name ofBranch z z z z z z 3-249 AnuradapuraRoad,Ambanpola 037-2254099 3-280 BandaranayakaMawatha, 031-2298303 23, ChilawRoad,Kochchikade 031-2277353 z 3-274 o39bcl 1,ChilawRoad,Wariyapola Thopputhota,Waikkal [email protected] [email protected] 53,KurunegalaRoad,Puttalam 037-2267348 031-2277280 [email protected] 032-2265255 PublicGroundRoad,Pannala KalpitiyaRoad,Norochcholai [email protected] PuttalamRoad,Nikaweratiya [email protected] KuliyapitiyaRoad,Nattandiya 037-2245071 [email protected] 139,NegomboRoad,Narammala 032-2268555 [email protected] 254,DambullaRoad,Melsiripura 037-2260922 [email protected] KandyRoad,Mawathagama 032-2254280 [email protected] 145,NikaweratiyaRoad,Maho 037-2248771 [email protected] 66,ColomboRoad,Madurankuliya 037-2250088 [email protected] 037-2299259 [email protected] 34,ColomboRoad,Kurunegala 037-2275280 CommercialComplex,Kurunegala 032-2268003 [email protected] 70,MadampeRoad,Kuliyapitiya [email protected] 037-2231472 [email protected] 037-2233880 037-2281280 Kirimatiyana, Lunuwila Dambadeniya Anavilundawa Makandura Holiday BankingServices z Thoduwawa utlmKccei022631KachcheriBuilding,Puttalam 032-2265351 Puttalam Kachcheri erpkn 3-272 Bowatte,Weerapokuna Road, 032-3297720 Weerapokuna aaaaeia072905KandyRoad,Paragahadeniya 037-2296085 Paragahadeniya elw 3-259 SovisBuilding, HiripitiyaRoad, 037-2235499 Wellawa aaia022620DeshaniMotorsBuilding, 032-2269210 Palaviya aab nvriy072840Wayamba University, 037-2284480 Wayamba University Udappuwa aaia02256527/1,Chilaw Road, Marawila 032-2252675 Marawila NORTH WESTERNPROVINCE Saturday xeso fc eehn PostalAddress Telephone Extension Office z z Sunday 3-287 47,MainStreet,Udappuwa 032-2258675 ChurchRoad,Thoduwawa 032-2256330 Weerapokuna Wellawa Colombo Road,Palaviya Kuliyapitiya

BANK OF CEYLON ANNUAL REPORT 2011 323 BANK OF CEYLON ANNUAL REPORT 2011 324 BoC Service Points BoC Service 6 rnyk 3-281 o56bcl 480,Dippitiya,Arnayake [email protected] 035-2258016 Avissawella Aranayake 530 566 Code Branch SABARAGAMUWA PROVINCE 7 aiatt 3-218 o47bcl 93,GinigathhenaRoad,Yatiyantota 89A,MainStreet,Warakapola [email protected] [email protected] 036-2271280 58,MainStreet,Ratnapura 035-2267258 8A,DiyasunnathaMawatha,Rambukkana [email protected] 57,MainStreet,Pelmadulla [email protected] 045-2222710 Yatiyantota Warakapola [email protected] 035-2265280 477 43,MainStreet,Mawanella Ruwanwella 562 RatnapuraCity 045-2274380 [email protected] 585 110,ColomboRoad,Kegalle Ratnapura 681/5,MainStreet,Kegalle 684 Rambukkana 035-2246280 53C,53C1/1,1/2,Ratnapura Road,Manana,Kalawana [email protected] [email protected] 031 Rakwana 746,MainStreet,Kahawatte 582 Pelmadulla [email protected] 035-2230600 035-2222550 594 Nivitigala [email protected] 683 86,MawanellaRoad,Hemmathagama 045-2255280 168/1,MainStreet,Godakawela. Mawanella 597 545,NewTown, Embilipitiya Kuruwita 045-2270180 [email protected] [email protected] 559 KegalleCity [email protected] 325 Kegalle 4,DehiowitaRoad,Deraniyagala 035-2257280 045-2240080 62,MainStreet,Dehiowita 536 Kalawana 047-2230980 027 [email protected] Kahawatta [email protected] 38,KalawanaRoad,Ayagama 645 Hemmathagama 036-2249280 507 [email protected] 036-2222580 Godakawela 772 Embilipitiya 786 045-2250080 Eheliyagoda 535 Deraniyagala 057 Dehiowita 642 Balangoda 634 Ayagama 688 401 apty rnh 1 1 1 1 1 Katupotha ExtensionOffice Kalpitiya Branch 1 Hiripitiya Branch Hettipola Branch 1 1 1 Giriulla Branch 1 Galgamuwa Branch Dummalasuriya Branch Dankotuwa Branch 1 1 Chilaw Branch 1 Bingiriya Branch Badagamuwa Tourist Center Anamaduwa Branch Alawwa Branch NORTH WESTERNPROVINCE TsNo. ATMs aeo rnhTlpoeEMi drs PostalAddress E-MailAddress Telephone Name ofBranch z z z 3-280 o55bcl PublicTrade Complex,Ruwanwella [email protected] 6,DharmapalaMawatha, Ratnapura 036-2268005 [email protected] 51,MainStreet,Rakwana 045-2222100 [email protected] 72,KalawanaRoad,Nivitigala 045-2246280 [email protected] 60,RatnapuraRoad,Kuruwita 045-2279280 [email protected] 045-2262581 46,MainStreet,Eheliyagoda [email protected] 137,MainStreet,Balangoda 036-2259571 [email protected] 47,DharmapalaMawatha,Avissawella 045-2288390 [email protected] 036-2222099 esrpr rnh 1 1 1 1 Melsiripura Branch 1 Mawathagama Branch 1 Marawila ExtensionOffice Madurankuliya Branch 2 Madampe Branch 1 1 Kurunegala Kachcheri Kurunegala CityBranch 1 Kurunegala BaseHospital 2 1 Kurunegala Branch Kumbukgete ExtensionOffice Kuliyapitiya Hospital Kuliyapitiya Branch NORTH WESTERNPROVINCE TsNo. ATMs enpuaBac 1 1 1 1 Wennappuwa Branch 1 1 Wayamba University Wariyapola Branch 1 Puttalam Branch 1 Polgahawela Branch 1 1 Pannala Branch 1 Norochcholai Branch Nikaweratiya Branch Nattandiya Branch Narammala Branch Maho Branch NORTH WESTERNPROVINCE TsNo. ATMs 38 Holiday BankingServices z eal optl052275BaseHospitalPremises, 035-2222765 Kegalle Hospital eal ahhr 3-217 KachcheriBuilding,Kegalle 035-2231574 Kegalle Kachcheri aaia 4-225 PalawelaRoad,Udakarawita 045-2222454 Karawita aaael 3-288 133/7,Avissawella Road, 036-2268780 Karawanella dnoa0526007A,Idangoda,Kiriella 045-2265080 Idangoda oaadny 3-672 BasnagodaRoad, 036-5677923 Gonagaldeniya Ratnapura General Hospital, aiaua052800Avissawella Road, 035-2282050 Galigamuwa naa002561NewTown, Endana,Gabbela, 060-2450661 Endana miiiia07269115,MoraketiyaRoad, 047-2261981 Embilipitiya uahouiia06243676,KegalleRoad, 036-2247356 Bulathkohupitiya SABARAGAMUWA PROVINCE emdlaBac 1 1 1 1 Pelmadulla Branch Nivithigala Branch 1 Mawanella Branch 1 Kuruwita Branch Office 1 Kegalle HospitalExtension Kegalle Branch 1 1 Kalawana Branch 1 1 Kahawatte Branch 1 Idangoda ExtensionOffice Embilipitiya Branch 2 Eheliyagoda Branch Balangoda Branch Ayagama Branch Avissawella Branch Saturday xeso fc eehn PostalAddress Telephone Extension Office TsNo. ATMs Sunday 4-236 GeneralHospital,Ratnapura 045-2223561 1 Kegalle Karawanella Gonagaldeniya Galigamuwa junction Kahawatta Embilipitiya Bulathkohupitiya aiatt rnh1 1 Yatiyantota Branch Warakapola Branch Office 1 Seethawakapura Extension 1 Sabaragamuwa University Council ExtensionOffice Sabaragamuwa Provincial Ruwanwella Branch 1 1 Office 1 Ratnapura HospitalExtension 1 Ratnapura CityBranch Ratnapura Branch Rambukkana Branch Rakwana Branch TsNo. ATMs Weli-oya eieoa052210299/2,Weligepola 045-2227180 Weligepola dwlw 4-228 24/4,UdawalawaJunction, 047-2232180 Udawalawa Complex Seethawakapura BOI anpr ahhr 4-225 KachcheriBuilding,Ratnapura 045-2222454 Ratnapura Kachcheri Provincial Council Sabaragamuwa Orphange Pinnawala Elephant University Sabaragamuwa oiaubr 3-294 110,KegalleRoad, 035-2289240 Kotiyakumbura oon 4-208 HospitalJunction,Kolonna 045-2260280 Kolonna Kitulgala SABARAGAMUWA PROVINCE 26 1 1 1 xeso fc eehn PostalAddress Telephone Extension Office z 3-225 BOISriLankaOfficeComplex, 036-2232656 4-261 Pro.CouncilNewBuilding, 045-2226116 3-249 ElephantOrphange,Pinnawala 035-2264294 4-209 SabaragamuwaUniversity, 045-2280093 3-274 81,HattonRoad,Kithulgala 036-2287747 4-630 GunarathnaBuilding,Welioya 045-3603304 Kolambageara Avissawella New Town, Ratnapura Pambahinna, Balangoda Kotiyakumbura

BANK OF CEYLON ANNUAL REPORT 2011 325 BANK OF CEYLON ANNUAL REPORT 2011 326 BoC Service Points BoC Service 2 [email protected],Deniyaya. Tourist Village, Bentota [email protected] NewShoppingComplex,1stFloor, No06,Beliatta [email protected] [email protected] 041-2273870 034-2271796 SAbeywickramaBuilding,Baddegama 047-2243274 [email protected] Devinuwara 11,Wanduruppa Road,Ambalantota Aluthmawatha, HungamaRoad,Angunakolapelessa Deniyaya 64,MataraRoad,Akuressa 274,MainStreet,Ambalangoda 091-2292280 504 [email protected] Bentota [email protected] [email protected] 60,GalleRoad,Ahungalla 528 [email protected] [email protected] Beliatta 047-2223280 102 Batapola091-2260405 047-2229120 [email protected] Batapola 539 041-4922380 091-2256307 Baddegama 522 091-2264107 Angunakolapelessa 525 Ambalantota 774 Ambalangoda 537 Akuressa 047 Ahungalla 613 754 Code Branch SOUTHERN PROVINCE 5 eiaa 4-208 o50bcl 239,MainStreet,Weligama MainStreet,Weeraketiya [email protected] [email protected] 041-2250280 Tawalama 047-2246280 145/147,SeaStreet,Tangalle 70,MainStreet,Tissamaharamaya Yakkalamulla [email protected] Elpitiya,MapalagamaRoad, Talgaswela [email protected] [email protected] Weligama 578 Weeraketiya 091-3783030 [email protected] 047-2240280 550 047-2237280 RuhunuCampusBranch,Wellamadama, Matara KadihingalaRoad,Neluwa Walasmulla 139 Urubokka 091-2296480 [email protected] PanamuraRoad,Middeniya [email protected] 517 Tissamaharamaya 298 GunawardenaMawatha,Matara Tawalama [email protected] 041-2232880 091-3783014 538 Tangalle GalleRoad,Koggala [email protected] 250 Talgaswela 047-2247280 [email protected] 056 315,Tissamaharama Road,Kataragama Ruhunu Campus 041-2222218 596 Pitigala AhangamaRoad,Imaduwa 091-2283380 [email protected] 693 Neluwa 223,GalleRoad,Hikkaduwa 610 [email protected] Middeniya 047-2235280 667 33,Tower MataraCity HillRoad,Hambantota [email protected] 518 091-2286030 Matara 2,LightHouseStreet,Fort,Galle [email protected] 614 Koggala 091-2277813 024 Kataragama [email protected] 047-2220180 750 Kamburupitiya 616 091-2234214 Imaduwa 529 HakmanaRoad,Deiyandara. Hikkaduwa 135 Hambantota [email protected] 609 Hakmana 085 GalleCity 041-2268598 691 Galle 089 Elpitiya 003 Dickwella 619 Deiyandara 592 784 aeo rnhTlpoeEMi drs PostalAddress E-MailAddress Telephone Name ofBranch z z z z z z z 9-268 o58bcl Yakkalamulla [email protected] 70,BeliattaRoad,Walasmulla 091-2286080 MainStreet,Urubokka [email protected] [email protected] 047-2245280 041-2272280 39,NorthPitigalaRoad, [email protected] 091-2291205 11,KumaratungaMawatha,Matara [email protected] SchoolLane,Kamburupitiya 041-2229280 [email protected] 041-2292213 BeliattaRoad,Hakmana 2,GaminiRoad,Galle [email protected] [email protected] JanadhipathiMawatha,Elpitiya 041-2286280 28&28/1,BeliattaRoad,Dickwella 091-2234478 [email protected] [email protected] Tangalle Road,Devinuwara 091-4387524 041-2255280 [email protected] 041-2226280 z Holiday BankingServices Suriyawewa agm 9-279 MangalaFoodCityBuilding, 091-2267791 Rajgama an 4-278 165/1,Tissa Road,Ranna 047-2227280 Ranna iaedr 012801DeniyayaRoad,Pitabeddara 041-2281081 Pitabeddara oaaa012870WijayaBuilding,Morawaka 041-2282700 Morawaka aaaKccei012263KachcheriBuilding,Matara 041-2222673 Matara Kachcheri aibd 4-204 BankofCeylon,Malimbada 041-2240447 Malimbada aadr 012675SamarasingheBuilding, 041-2268785 Makandura aaead 9-922 SanasaMandiriya,Maha- 091-3932627 Maha-edanda uuavhr 4-610 NewTown, Lunugamvehera 047-3621007 Lunugamvehera Katuwana uael 4-271 116B,EastKudawella, 041-2257514 Kudawella 161A,HirimburaCrossRoad, 091-2227090 Karapitiya Barawakumbuka agm 4-479 904,GalleRoad, Madiha, 041-3497192 Walgama Uragasmanhandiya JayabimaBuilding, 041-2271070 Kosmodara Administrative Complex Hambantota ltwl 9-040 AluthwalaJunction, 091-3094700 Aluthwala aaiia073233SithamagallaRoad, 047-3623303 H.A.L.ABuilding, Watte 091-2285015 Warapitiya Udugama SarathBuilding,Kekanadura 041-2265061 Kekanadura KachcheriBuilding,Galle 091-2234514 Galle Kachcheri hnaa01289771/1,GalleRoad,Ahangama 091-2283977 Ahangama SOUTHERN PROVINCE Saturday xeso fc eehn PostalAddress Telephone Extension Office z z z Sunday 4-268 AdministrativeComplex, 047-2256180 9-246 1251/1,MainStreet, 091-2264865 27/1,MainStreet, 047-2288280 UrubokkaRoad,Katuwana 047-3621005 NewRoad,Barawakumbuka 047-3621008 Galle Road,Rajgama. Makandura edanda, Karandeniya Nakulugamuwa Galle Matara Kosmodara, Kotapola Hambantota Aluthwala Rammala ,Warapitiya Kade, Udugama Junction, Kekanadura Uragasmanhandiya Suriyawewa aklmlaBac 1 1 1 1 1 Walgama ExtensionOffice 1 Yakkalamulla Branch Weligama Branch Weeraketiya Branch 1 1 1 1 Walasmulla Branch Uragasmanhandiya ExtensionOffice Urubokka Branch 1 1 Thissamaharama Branch 1 1 Thalgaswala Branch Tangalle Branch 1 Ruhunu CampusBranch 1 Ranna ExtensionOffice Pitigala Branch 1 1 1 Neluwa Branch Middeniya MASHoldings Middeniya Branch Matara GeneralHospital 1 1 Matara CityBranch 1 Matara Branch 1 1 Makandura ExtensionOffice Maha EdandaExtensionOffice 1 1 1 Kudawella ExtensionOffice 1 Koggala Branch Kataragama Branch 1 1 Karapitiya ExtensionOffice 1 2 Kamburupitiya Branch Imaduwa Branch 1 Hikkaduwa Branch 1 Hambantota Branch Hakmana Branch 1 1 Galle CityBranch 1 Galle Branch 1 Elpitiya Branch 1 Dickwella Branch Devinuwara Branch 1 Deniyaya Branch 1 Deiyandara Branch 1 1 Bentota Branch Beliatte Branch Baddegama Branch Ambalantota Branch Ambalangoda Branch Akuressa Branch TsNo. ATMs 44

BANK OF CEYLON ANNUAL REPORT 2011 327 BANK OF CEYLON ANNUAL REPORT 2011 328 BoC Service Points BoC Service 4 Badalkumbura 540 Code Branch UVA PROVINCE 3 elwy 5-248 o44bcl Tissamaharama Road,Wellawaya [email protected] 055-2274480 Lunuatugama,Walahamulla, UvaParanagama 6,Tissa Road,Thanamalwila [email protected] [email protected] MonaragalaRoad,Siyambalanduwa MainStreet,Padiyatalawa [email protected] 057-3577000 047-2234080 401,Wellawaya Road,Moneragala Wellawaya [email protected] Welimada 055-3555360 [email protected] 434 MoneragalaRoad,Medagama RatnayakeComplex,Meegahakiwula Uva-Paranagama 063-2246003 730 Thanamalwila [email protected] 055-2276180 [email protected] PadmasiriBldg,UdapussellawaRoad,Lunuwatta 343 Siyambalanduwa 149,MainStreet,Lunugala 322 Passara [email protected] 055-2266580 15,Wellawaya Road,Koslanda 055-2245707 416 [email protected] 45,BandarawelaRoad,Hali-ela. Padiyatalawa 503 [email protected] Moneragala 057-2232742 [email protected] 055-2263980 348 Meegahakiwula 082 057-2257780 25,ColomboRoad,Haldumulla Medagama 055-2295080 384 Mahiyangana NewTown, [email protected] Girandurukotte 238 21,NuwaraEliyaRoad,Ettampitiya Lunuwatta 542 23,MoneragalaRoad,Buttala Lunugala [email protected] 057-3576821 [email protected] 647 Koslanda [email protected] 577 Hali-ela 027-2254380 055-2294080 629 Haputale 055-2273980 785 Haldumulla 035 Girandurukotte 463 Ettampitiya 669 Diyatalawa 476 Buttala 260 Bibile 560 Bandarawela 579 Balleketuwa 515 Badulla 320 011 aaaa052510NewTown, Hasalaka 055-2257180 Hasalaka Bogahakumbura tiiea053915Ethiliwewajunction, 055-3594115 Ethiliwewa aul ahhr 5-257 KachcheriBuilding,Badulla 055-2225475 Badulla Kachcheri Dambagalla la 5-289 Wellawaya Road,Ella 057-2228899 Ella aul iyOfie 5-298 1,BandarawelaRoad, 055-2229580 Badulla CityOffice UVA PROVINCE xeso fc eehn PostalAddress Telephone Extension Office z aeo rnhTlpoeEMi drs PostalAddress E-MailAddress Telephone Name ofBranch z z z 5-259 Makulla Town, Dambagalla 055-2275092 AmbewelaRoad, 057-2280088 5-258 o70bcl 12,12A,HemapalaMunidasaMawatha,Welimada [email protected] 055-2245180 382,MainStreet,Passara [email protected] 055-2288280 7,NewTown, BadullaRoad,Mahiyangana [email protected] 055-2257280 20,StationRoad,Haputale [email protected] 057-2268080 28,ChandrasiriBuilding,MainStreet,Diyatalawa [email protected] 41,MahiyanganaRoad,Bibile 198B,BadullaRoad,Bandarawela 057-2229092 [email protected] 36,PassaraRoad,Balleketuwa [email protected] BankRoad,Badulla 055-2265480 [email protected] No92,BadullaRoad,Badalkumbura 057-2230014 [email protected] 055-2285160 [email protected] 055-2222129 055-2250279 Ethiliwewa Badulla Bogahakumbura Industries Complex Pelawatta Sugar oaaaaKcceiKachcheriBuilding, Moneragala Town Monaragala Kachcheri kapty 5-229 Weeragashandiya, 055-2272395 Okkampitiya eptpl 5-204 Timber Corp.Junction, 057-2280043 Keppetipola UVA PROVINCE xeso fc eehn PostalAddress Telephone Extension Office { z 5-592 Pellawatta SugarInd. 055-3559825 94/2,KumaradolaRoad, 055-2277270 Okkampitiya Monaragala N'Eliya Road,Keppetipola Complex, Pelawatta Monaragala Holiday BankingServices z 3 [email protected],Biyagama [email protected] 113,MinuwangodaRoad,Andiambalama 011-2488770 [email protected] 011-2265565 Borella Biyagama 038 Andiambalama 732 494 Code Branch WESTERN PROVINCENORTH 7 adn 1-229 o71bcl 41/B-1/1NegomboRoad,Kandana 436,BaselineRoad,Averiwatta, KatunayakeIPZ [email protected] [email protected] 011-2232398 430/11,NewTown Complex,KandyRoad,Kadawatha. 011-2259583 30,St.SebastianHill,Hulftsdorp [email protected] Kiribathgoda [email protected] KatunayakeIPZ 85,York 011-2922195 Street,Colombo1 543 Kandana 011-2320374 658 34,NegomboRoad,Divulapitiya [email protected] Kadawatha2ndCity 771 Kadawatha 45,37,KolonnawaRoad,Dematagoda 41,BristolStreet,Colombo1 [email protected] 011-2449646 780 Ja-Ela [email protected] 059 Hulftsdorp [email protected] 031-4921640 039 Grandpass 011-2698588 032 845,SuperMarketComplex,BorellaCity 011-2438455 Gampaha 628 FifthCity [email protected] 045 Divulapitiya 060 Dematagoda 011-2685140 433 CityOffice 561 CentralSuperMarket 001 CentralBusStand 672 BorellaCity 573 668 4 iuagd 1-251 o55bcl 19,DivulapitiyaRoadMinuwangoda 94,S.MahindaHimiMawatha, Colombo10 94,MainStreet,Colombo11 [email protected] [email protected] 142,SirJamesPeirisMawatha, Colombo2. [email protected] D.R.WijewardenaMawatha, Colombo1 011-2295214 011-2696550 [email protected] 182,GeorgeRDeSilvaMawatha, Kotahena 011-2329631 [email protected] 430A,IDHRoad,Kolonnawa [email protected] 011-2314207 Mirigama 21,RadawanaRoad,Kirindiwela Minuwangoda 011-5863723 [email protected] 088 011-2448632 Maradana [email protected] 545 MainStreet 011-2572265 041 LakeView 033-2267280 026 LakeHouse 612 Kotahena 636 Kolonnawa 663 Kirindiwela 595 571 utl rnh1 1 2 1 Buttala Branch 1 Bibile Branch 1 Bandarawela Branch Badulla Hospital, Badulla Branch Badalkumbura Branch -Diyatalawa Sri LankaAirForceCamp UVA PROVINCE Saturday TsNo. ATMs aeo rnhTlpoeEMi drs PostalAddress E-MailAddress Telephone Name ofBranch z z Sunday z z z z z z z { 1 Saturday &Sunday 1-908 o09bcl 469,RagamaRoad,Kadawatha 19,NegomboRoad,Ja-Ela [email protected] [email protected] 703,SirimavoBandaranaikeMawatha,Grandpass 011-2920687 16,RestHouseRoad,Gampaha 011-5342311 [email protected] [email protected] 011-2448202 033-2234403 2ndFloor,CentralSuperMarket,Colombo11. CentralBusStand,Colombo11. [email protected] [email protected] 71,DanisterdeSilvaMawatha,Borella 011-2357573 011-2326761 [email protected] 011-4612617 3-264 o08bcl 12,AmaratungaMawatha, Mirigama [email protected] 033-2276844 201,KandyRoad,Kiribathgoda [email protected] 011-2911304 asr rnh1 1 1 1 1 Passara Branch Padiyatalawa Branch 1 Monaragala Branch 1 Mahiyangana Branch 1 Haputale Branch Girandurukotte Branch Ella ExtensionOffice Diyatalawa Branch UVA PROVINCE TsNo. ATMs elwy rnh1 1 1 Wellawaya Branch 1 Welimada Branch Thanamalwila Branch Siyambalanduwa Branch Complex ExtensionOffice Pelawatta SugarIndustries UVA PROVINCE TsNo. ATMs 21 1

BANK OF CEYLON ANNUAL REPORT 2011 329 BANK OF CEYLON ANNUAL REPORT 2011 330 BoC Service Points BoC Service 6 aaept 1-381 o72bcl 540,ThimbirigasyayaRoad,Narahenpita [email protected] 011-2368514 Negombo Narahenpita 018 762 Code Branch WESTERN PROVINCENORTH 8 eagd 3-277 o62bcl 203A,NegomboRoad,Veyangoda 429,1/1,NegomboRoad,Seeduwa [email protected] [email protected] 35/26,36/26KadawathaRoad,Ragama 40/1,43,Kospitiyana,Pugoda 033-2287279 [email protected] 011-2252019 Yakkala [email protected] Welisara 011-2960291 769 Wattala 011-2404821 42,NegomboRoad,Peliyagoda 527 Veyangoda 505 SuperMarketComplex,Nittambuwa Seeduwa [email protected] 682 RegentStreet 111,MainStreet,Negombo [email protected] 421 Ragama 011-2930397 627 [email protected] Pugoda 033-2287280 764 765 031-2222156 Personal Peliyagoda 681 Nittambuwa 042 NegomboCity 675 572 neaul 1-974 117,GongithotaRoad, 011-2937240 Enderamulla eahnia012270370,Westerciten 031-2228730 Demanhandiya egd 1-427 351/H/5,New Kandy Road, 011-2402970 Delgoda Lanka (Pvt)Ltd. Courtaulds Clothing eta optl012956114,4thFloor, NorrisCanal 011-2690546 Central Hospital ag fc 1-214 AirCargoBuilding,Sri 011-2251943 Cargo Office oiia0124122,BopitiyaJunction 011-2243172 Bopitiya Collection Centre BOI Katunayake-Cash Center BOI CashCollection WESTERN PROVINCENORTH xeso fc eehn PostalAddress Telephone Extension Office aeo rnhTlpoeEMi drs PostalAddress E-MailAddress Telephone Name ofBranch z ~ z z z 1-251 487,NegomboRoad, 011-2295214 1-222 ExportProcessingRoad, 011-2252523 1-487 BOI,No.14,Baron 011-2448875 3-239 o79bcl 46,KandyRoad,Yakkala 540/2,NegomboRoad,Welisara [email protected] 520,NegomboRoad,Wattala [email protected] 033-2233591 [email protected] 011-2958485 NationalHospital,Colombo8 011-2932280 [email protected] 011-2690506 BankofCeylonHeadOffice,"BOCSqure" [email protected] 011-2446821 118,RajapakseBroadway, Negombo [email protected] 031-2224711 Enderamulla ,Wattala Demanhandiya Farm ,DivulapitiyaRd, Delgoda Katuwellegama Road, Colombo10 Katunayaka Lankan AirLines,BOI Pamunugama Katunayake Colombo 1 Jayathilake Mawatha, No. 1,BankofCeylonMawatha,Colombo01 eieia 3-254 342,NewKandyRoad, 033-2255444 Weliweriya adlgm 1-297 275,NationalHousing 011-2289977 Raddolugama eiaoa012302R.M.U.9,Central Fish 011-2934042 Peliyagoda Center Narahenpita Economic awl 3-272 DivulapitiyaRoad, Naiwala 033-2297720 Naiwala aoa012641177/1,Makola South , 011-2964401 Makola aaa012233305/J/1,Mirigama 031-2228353 Katana ohtw e on01545319,Welikada Road, 011-5344593 Gothatuwa NewTown aeul 3-248 378C,KadawathaRoad, 033-2264888 Ganemulla aph ahhr 3-206 KachcheriBuildingGampaha 033-2220868 Gampaha Kachcheri WESTERN PROVINCENORTH xeso fc eehn PostalAddress Telephone Extension Office

1-392 DedicatedEconomicCen. 011-2369622 Weliweriya Scheme ,Raddolugama Market Complex,Peliyagoda Narahenpita Makola Road,Mahahunupitiya Gothatuwa Ganemulla Holiday BankingServices z Code Branch WESTERN PROVINCESOUTH 6 [email protected],HighlevelRoad,Homagama 133/8,MainStreet,Hanwella, [email protected] [email protected] 011-2855059 207,GalleRoad,Dehiwela 036-2253520 [email protected] Horana 011-2738514 Homagama 231,MainStreet,Battaramulla, 054 Hanwella 568 [email protected] Dodangoda 741 DhargaTown 011-2862575 293 Dehiwala 563 Bulathsinhala 051 Beruwala 673 Battaramulla 058 Bandaragama 679 Bambalapitiya 665 Athurugiriya 037 Aluthgama 757 680 5 Agalawatta 657 auaaaArPr 1 1 1 1 2 Katunayaka AirPort Kandana Branch Kadawatha CityBranch 1 1 Kadawatha Branch 1 Ja-Ela Branch IPZ KatunayakeBranch 2 Hulftsdorp Branch 1 Grandpass Branch 1 1 Gothatuwa ExtensionOffice Ganemulla ExtensionOffice 2 Gampaha Branch Divulapitiya Branch 2 Extension Office 1 Courtaulds ClothingGarments 2 City OfficeBranch 1 Castle Hospital,Borella Borella Branch 1 Bopitiya ExtensionOffice Biyagama Branch Andiambalama Branch Malwana Agio Tobacco Co.,BEPZ, WESTERN PROVINCENORTH Saturday TsNo. ATMs aeo rnhTlpoeEMi drs PostalAddress E-MailAddress Telephone Name ofBranch Sunday z z z z z z z { 1 1 Saturday &Sunday 3-218 o04bcl 87,AnguruwathotaRoad, Horana [email protected] 16,Thudugala,MatugamaRoad,Dodangoda 034-2261280 298,MainStreet,Dharga Town [email protected] [email protected] 40,HoranaRoad,Athura, Bulathsinhala 034-2281628 165A,GalleRoad,Beruwala 034-2275247 [email protected] [email protected] JanadhipathiMawatha,Bandaragama 034-4912984 20,UnityPlazaBldg.,GalleRoad,Colombo4 034-2279899 [email protected] 70/20,MalabeRoad,Athurugiriya [email protected] 267,GalleRoad,Aluthgama 038-2290280 [email protected] 5,KalutaraRoad,Agalawatta 011-2598390 [email protected] 011-2560599 [email protected] 034-2271413 034-2243980 rsdnilSceait1 3 Presidential Secretariat 1 1 Kolonnawa 2 Petrolium Corporation, 2 Personal Branch Peliyagoda Branch 1 Nittambuwa Branch Negombo City 1 2 Negombo Branch 1 Narahenpita EconomicCenter 1 Mirigama Branch Minuwangoda Branch 1 Maradana Branch Main StreetBranch 1 Kapugoda 1 Linea AquaGarments, 1 Lake View Branch 1 Lake HouseBranch 1 Lady RidgewayHospital 2 Kotahena Branch Kolonnawa Branch Kirindiwela Branch Kiribathgoda Branch WESTERN PROVINCENORTH TsNo. ATMs Night Banking 1 2 ~ akl rnh 1 1 2 1 Yakkala Branch 1 World Trade Centre, Colombo1 Welisara Branch Wattala Branch 1 Veyangoda Branch Sapugaskanda Trelleborg Garments, 1 The CentralHospital Sri LankaNavyCamp-Welisara Katunayake 1 1 Sri LankaAirForceCamp, Sri LankaAirForceCamp,Ekala Road, BagageOffice,Peliyagoda 1 SL PortsAuthority, NewNuge 1 1 Seeduwa Branch 1 Regent StreetDoctor'sQuarters 1 Regent StreetBranch Rathdolugama ExtensionOffice Ragama Branch Pugoda Branch WESTERN PROVINCENORTH 365 DaysBanking TsNo. ATMs 70 1 1 1

BANK OF CEYLON ANNUAL REPORT 2011 331 BANK OF CEYLON ANNUAL REPORT 2011 332 BoC Service Points BoC Service Code Branch WESTERN PROVINCESOUTH 7 iah 1-561 o75bcl 133C,Vajira Road,Colombo4 [email protected] 278,AccessTower, Colombo2. 011-2556215 [email protected] No.34,"SambuddathwaJayanthiMandiraya", 608,NawalaRoad,Rajagiriya 011-2302470 Wellawatta [email protected] 58,MoratuwaRoad,Piliyandala [email protected] Wadduwa 18A,NewParliamentRoad,Pelawatte, Battaramulla 023 Visakha [email protected] 011-2587345 SriLankaParliament,Jayawardenapura, Kotte 584 011-5368641 UnionPlace [email protected] 775 011-2614165 [email protected] 043 011-2785550 Thimbirigasyaya Ratmalana 011-2777310 512 Rajagiriya 689 Piliyandala 286,GalleRoad,MountLavinia 746 Pelawatta 248,GalleRoad,Colombo4 736 Parliament [email protected] 690 PanaduraCity [email protected] 644 011-2721059 Panadura 607 011-2504627 Padukka 264/5A&B,HighlevelRoad,Kottawa,Pannipitiya 007 Nugegoda 678 [email protected] MountLavinia 409,GalleRoad,Colombo3 28,St.MichaelRoad,Colombo 3 049 Moratuwa 011-2783313 766 Milagiriya [email protected] [email protected] 061 Matugama 593 Malabe 011-2565380 011-4795035 556 Maharagama 763 Kottawa 055 KollupitiyaCity 773 Kollupitiya 670 Katubedda 034 Kalutara 030 Kaduwela 016 608 2 yePr 1-678 o51bcl 500,TBJayaMawatha,Hyde Park,Colombo10 30A,IndependenceAvenue, Colombo7 [email protected] [email protected] 011-2687281 011-2678073 Ingiriya IndependenceSquare 604 HydePark 453 521 auaia042492 36/1,AgalawatteRoad, 034-2244952 Baduraliya .... rmss012980BMICHPremises, 011-2696820 B.M.I.C.H Premises Isurupaya Administrative Complex, WESTERN PROVINCESOUTH xeso fc eehn PostalAddress Telephone Extension Office aeo rnhTlpoeEMi drs PostalAddress E-MailAddress Telephone Name ofBranch z z z z z z z z z z z z 1-757 MinistryofEducation, 011-2785875 1-543 o03bcl 149/2,GalleRoad,Colombo 6 557A,GalleRoad,Wadduwa [email protected] [email protected] 011-2584232 038-2284304 452,GalleRoad,Ratmalana [email protected] 011-2738030 21,JayathilakeMawatha,Panadura 4,SusanthaMawatha,Panadura [email protected] 45,HanwellaRoad,Padukka [email protected] 174,HighlevelRoad,Nugegoda, 038-2243324 [email protected] 038-2232214 [email protected] 707,GalleRoad,Moratuwa 011-3175401 011-2812091 [email protected] 72,AgalawatteRoad,Matugama 410/1,AthurugiriyaRoad,Malabe 011-2645127 [email protected] 88,HighlevelRoad,Maharagama [email protected] 034-2243590 [email protected] 011-2760753 011-2850339 605,GalleRoad,Moratuwa 218,GalleRoad,KalutaraSouth, [email protected] SeevaliMahal,Avissawella Road,Kaduwela [email protected] 20,RathnapuraRoad,Ingiriya 011-2625438 [email protected] 034-2222214 [email protected] 011-2571253 034-2269580 Baduraliya Colombo 7 Bauddhaloka Mawatha, Battaramulla Isurupaya, Pelawatte, oaagmw 1-587 8,ColomboRoad, 011-2518478 Boralasgamuwa obwl 3-292 Temple Road,Mankada, 034-2289824 Bombuwala oyie(v)Ld 3-250 Bodyline(Pvt)Ltd., 034-4285500 Bodyline (Pvt)Ltd. WESTERN PROVINCESOUTH Thummulla Junction,Colombo5 xeso fc eehn PostalAddress Telephone Extension Office Boralasgamuwa Bombuwala Horana Ratnapura Road,Gurugoda, Holiday BankingServices z otre or 1-844 356,Dr.Colvin RDeSilva 011-4824841 Lotteries Board (Pvt) Ltd Lanka HospitalCorp. iuaoe01218488,HighlevelRoad, 011-2513874 Kirulapone eewte 3-283 29,GalleRoad,Keselwatte, 038-2298330 Keselwatte ebw 1-621 229/D/2,Bandaragama 011-2602517 Kesbewa auuud 3-216 915,GalleRoad, 034-2221364 Katukurunda aued aps012531KatubeddaCampus 011-2650301 Katubedda Campus auaaKccei042226KachcheriBranch,Divisional 034-2222286 Kalutara Kachcheri Emigration Office Immigration & euaaBac 1 Office 1 Body LineGarmentsExtension 1 Bombuwala ExtensionOffice 1 BMICH 1 2 Beruwala Branch Battaramulla Branch Bandaragama Branch Bambalapitiya Branch 1 1 1 R WijewardenaMawatha. Ballys EntertainmentCentre,D 1 Baduraliya ExtensionOffice Athurugiriya Branch Aluthgama Branch Agalawatte Branch oaoa042550643,ColomboRoad, 034-2257550 Gonapola WESTERN PROVINCESOUTH WESTERN PROVINCESOUTH Saturday xeso fc eehn PostalAddress Telephone Extension Office TsNo. ATMs Sunday 1-622 LankaHospitalPremises, 011-2632028 1-016 45,AnandaRajakaruna 011-3071267 1 1 Night Banking Colombo 2 Mawatha, UnionPlace, Narahenpita. No.578, ElvitigalaMawatha, Kirulapona, Panadura Road, Kesbewa South. Katukurunda, Kalutara Mawatha., Moratuwa Premises, Bandaranayake Secretariat, Kalutara Mawatha, Colombo10. Palannaruwa. Gonapola awlaBac 1 Kahathuduwa 1 Hydramani Garments- 1 Hanwella Branch 1 Ratmalana 1 German Technical College, Dodangoda Branch Dharga Town Branch Dehiwala Zoo Dehiwala Branch 1 Town Hall 1 Colombo MunicipalCouncil, CECB, BauddhalokaMawatha Bulathsinhala Branch Office Boralesgamuwa Extension WESTERN PROVINCESOUTH TsNo. ATMs 1 1 1 1 ieaa012053705,Highlevel Road, 011-2803553 Wijerama hlwtuoa 1-752 215/2,PannipitiyaRoad, 011-2775027 Thalawathugoda Hospital Sri Jayawardenapura rwsh adry 1-616 SrawasthiMandiriya, 011-2681366 Srawasthi Mandiraya ehiiaa012667SethsiripayaComplex, 011-2863637 Sethsiripaya iaKte 1-801 130C,Pagoda Road, 011-2820311 Pita Kotte Education National Instituteof oauul 1-627 242,DeZoysaRoad, 011-2652178 Moratumulla Dev. Centre Meegoda Economic atgd 1-729 No.193/20,OppositeBus 011-2782399 Mattegoda WESTERN PROVINCESOUTH xeso fc eehn PostalAddress Telephone Extension Office eewteEtninOfie 1 1 1 Keselwatte Extension Office Kesbewa ExtensionOffice Office 1 Katubedda-University Extension Katubedda Branch 1 1 Office Kalutara- KachcheriExtension Kalutara Branch 1 Kalubowila, Hospital 2 Kaduwela Branch 1 Isurupaya 1 2 Independence SquareBranch Ingiriya Branch Horana Branch Homagama Branch WESTERN PROVINCESOUTH TsNo. ATMs 1-793 SriJayawardenapura 011-2779136 1-610 21,HighlevelRoad, 011-7601601 1-818 35,PadukkaRoad,Library 011-2831589 Gangodawila, Nugegoda. Thalawathugoda Nugegoda Hospital, Thalapathpitiya, Colombo 7 Battaramulla Nugegoda Maharagama Moratumulla, Moratuwa Bldg., Meegoda Stand, Mattegoda 1 1

BANK OF CEYLON ANNUAL REPORT 2011 333 BANK OF CEYLON ANNUAL REPORT 2011 334 BoC Service Points BoC Service iaiiaBac 1 1 1 1 Moratumulla ExtensionOffice Milagiriya Branch 1 2 Matugama Branch Mattegoda ExtensionOffice 1 Malabe Branch 1 1 Maharagama Branch Maharagama, CancerHospital Lanka HospitalsCorpn.PLC 1 1 Kottawa Branch Ratmalana Kotalawala DefenceAcadamy, Kollupitiya CityBranch 1 Kollupitiya Branch Kirulapone ExtensionOffice 6 oprt 1-352 CYKXamrbcl BankofCeylonHeadOffice,“BOCSquare”, [email protected] BCEYLKLX 011-2345428 Corporate 660 Code Branch WESTERN PROVINCESOUTH - SLPAHunters Permit Office - SLPA Canal Yard Revenue Jawatta Inland - SLPA Board ofInvestment 2 oprt n 1-348 grcobcl BankofCeylonHeadOffice,“BOCSquare”, [email protected] 011-2394584 Corporate2nd 822 1 erpltn012249bcbbcl 10,York Street,Colombo1 [email protected] 011-2329419 Metropolitan 618 0 eth012954bcbbcl 212/63,GasWork Street,Colombo 11 [email protected] 011-2393544 Pettah 004 4 arbn 1-426 o77bcl 10,York Street,Colombo1 [email protected] 011-2422267 Taprobane 747 2 OffShore 726 xeso fc eehn Postal Address Telephone Extension Office Banking Unit TsNo. ATMs Name of Branch 1-434 SecurityDivision, SriLankaPorts 011-2483542 SriLankaPortsAuthority,Canal 011-2483526 InlandRevenueDept,No.80, 011-5657162 SirBaronJayathilakaMawatha, 011-2448875 1-386 CYKX11amfsobcl BankofCeylonHeadOffice,No.01,“BOCSquare”, [email protected] BCEYLKLX 131 011-2338765 eehn WF OEEMi drs PostalAddress E-MailAddress SWIFTCODE Telephone 1 Authority ,Colombo1. Yard, Colombo1. Jawatte Road,Colombo5. Colombo 1. LI aae1 1 1 1 SLIIT Malabe Sintesi Garments,Ranala 1 1 1 Ratmalana Branch Rajagiriya Branch 1 1 Pitakotte ExtensionOffice 1 Piliyandala Branch Parliament Branch 3 Panadura CityBranch Panadura Branch 1 1 Padukka Branch Place Alexandra Odel, 1 Nugegoda Branch Branch Lavinia Mount Moratuwa Branch WESTERN PROVINCESOUTH TsNo. ATMs ethKccei0123485 KachcheriBuilding,Pettah Lines Ltd. 011-2434478-50 Ceylon Shipping Pettah Kachcheri Authority SriLanka Ports Ware House Foreign Employment Sri LankaBureauof xeso fc eehn Postal Address Telephone Extension Office No. 01,BankofCeylonMawatha,Colombo01 No. 01,BankofCeylonMawatha,Colombo01 No. 01,BankofCeylonMawatha,Colombo01 elwtaBac 2 1 1 1 1 Wijerama ExtensionOffice Wellawatta Branch Water Board,Ratmalana Wadduwa Branch 1 1 Vishaka Branch Branch Place Union 1 Timbirigasyaya Branch Talawathugoda ExtensionOffice Extension Office Sri JayawardenapuraHospital Office Srawasthi MandirayaExtension WESTERN PROVINCESOUTH 1-456 450,DRWijewardena 011-2445268 Warehouse, NewNugeRoad, 011-2942620 234,DenzilKobbekaduwa 011-2864147 TsNo. ATMs Mawatha, Colombo 10 Peliyagoda Battaramulla Mawatha, Koswatta, 80 1 1 5 hna 009144-26423501 Chennai 758 OVERSEAS BRANCHES Code Branch 3 ae00960-3323045 Male 632 ae2 Male Ltd. Trico Maritime(Pvt) 011-2917729- Laksiriseva (Pvt)Ltd. Suvasiripaya Health Ministry Department Inland Revenue Unit (LongRoom) Customs Imports xeso fc eehn PostalAddress Telephone Extension Office Name of Branch TsNo. ATMs 1-607 50,KCyrilCPereraMawatha, 011-4610977 ext730 MinistryofHealth,385, 011-2681361 InlandRevenueBuilding,Sir 011-2337367 SriLankaCustoms,Chaitya 011-2436663 009144-26420972 00960-3323046 eehn WF OEEMi drs PostalAddress E-MailAddress SWIFTCODE Telephone Colombo 13 66, NewNugeRoad,Peliyagoda Mawatha, Colombo10 Baddegama Wimalawansa Mawatha, Colombo2 Chittampalam AGardiner Road, Colombo1 CYNMcyakvn.o No.1090,PoonamalleeHighRoad,Chennai600084,India. [email protected] BCEYIN5M CYVVbml@hvhntntm “Aage”,12,Boduthakurufaanu,Magu,Henveiru, [email protected] BCEYMVMV CORPORATE BRANCHES ethBac 2 1 1 1 1 1 Health MinistrySuvasiripaya Sri LankaPortsAuthority, JayaTerminal 1 Pettah Branch 1 Pensions Department-Maligawatte Mobile BankingUnit 1 MGM Club,GalleRoad,Bambalapitiya Metropolitan Branch Sri LankaBureauofForeignEmployment 1 Ceylon DockyardLtd 1 Bellagio Club,DuplicationRoad,Colombo3 Sri LankaAirForceHeadQuarters,Colombo2 Male. 20094,RepublicofMaldives TsNo. ATMs 12

BANK OF CEYLON ANNUAL REPORT 2011 335 Notes Corporate Information

NAME OF THE INSTITUTION ACCOUNTING YEAR END COMPLIANCE OFFICER Bank of Ceylon 31st December Mr. M L J Fernando (Assistant General Manager - Risk Management & Compliance) LEGAL FORM TAX PAYER IDENTIFICATION NUMBER (TIN) Tel : + 94 11 2321169 A banking corporation domiciled in Sri Lanka, duly 409000070 Facsimile : + 94 11 2439546 incorporated on 1st August 1939 under the Bank E-mail : [email protected] of Ceylon Ordinance No. 53 of 1938 and a licensed VAT REGISTRATION NUMBER commercial bank under the Banking Act No. 30 of 1988. 409000070 – 7000 AUDITOR The Auditor General REGISTERED OFFICE SVAT REGISTRATION NUMBER The Auditor General’s Department "BOC Square", No.01 SVAT002898 Independence Square Bank of Ceylon Mawatha Colombo 07, Sri Lanka Colombo 01, Sri Lanka STOCK EXCHANGE LISTING Tel : + 94 11 2691151 Tel : +94 11 2203333 (Hotline) The Unsecured, Subordinated Redeemable Debentures Facsimile : + 94 11 2697451 +94 11 2446790-811 (22 lines) of November 2008/November 2013 series with fixed, E-mail : [email protected] +94 11 2338741-47 (7 lines) floating and zero coupon interest rates and June 2010/ +94 11 2445815-20 (6 lines) June 2015 series and December 2011/December 2016 (Appointed in terms of the provisions of +94 11 2544340-44 (5 lines) series with fixed & floating interest rates of the Bank are Article 154 of the Constitution of the +94 11 2544333-37 (5 lines) listed on the Colombo Stock Exchange. Democratic Socialist Republic of Sri Lanka) Facsimile : +94 11 2449401 Bank Code : 7010 CREDIT RATINGS REGISTRARS TO THE DEBENTURE ISSUES Telex : 21331 BOCST CE National Long-term rating : 2010/2015 Series & 2011/2016 Series SWIFT Code : BCEYLKLX 'AA+(lka)' Outlook Stable Bank of Ceylon Investment Banking Division E-mail : [email protected] Subordinated debentures : 23rd Floor, Bank of Ceylon Head Office Website : www.boc.lk 'AA(lka)' "BOC Square", No. 01 CALL CENTRE Both by Bank of Ceylon Mawatha Tel : +94 11 2204444 (16 lines) Fitch Ratings Lanka Limited Colombo 01, Sri Lanka Facsimile : +94 11 2320864 Level 15-04, East Tower, World Trade Centre Tel : +94 11 2542167, Colombo 01, Sri Lanka +94 11 2448348 24 HOUR SERVICE CENTRE Tel : +94 11 2541900 +94 11 2446790 - 811 (22 lines) Travel Counter, Ground Floor Facsimile : +94 11 2541903 Facsimile : +94 11 2346842 Bank of Ceylon Head Office Website : www.fitchratings.lk E-mail : [email protected] "BOC Square", No. 01, Bank of Ceylon Mawatha 2008/2013 Series Colombo 01, Sri Lanka LAWYERS Merchant Bank of Sri Lanka PLC Tel : +94 11 2203044/45 Mr. K Gamage Jinadasa Level 18, Bank of Ceylon Merchant Tower Chief Legal Officer of Bank of Ceylon and his assistants No.28, St.Michael's Road Colombo 03, Sri Lanka Tel : +94 11 2445813 Tel : +94 11 4711766, +94 11 4711711 Facsimile : +94 11 2321167 Facsimile : +94 11 4711704 E-mail : [email protected] E-mail : [email protected]

BOARD OF DIRECTORS AUDIT COMMITTEE NOMINATION AND CORPORATE GOVERNANCE Dr. Gamini Wickramasinghe (Chairman) Mr. V Kanagasabapathy (Chairman) COMMITTEE Mr. S R Attygalle (Alternate Director to Mr.S R Attygalle) Mr. Raju Sivaraman (Chairman) Mr. Raju Sivaraman Mr. Raju Sivaraman Mr. S R Attygalle Ms. Nalini Abeywardene Mr. K L Hewage Mr. K L Hewage Mr. Chandrasiri de Silva Mr. V Kanagasabapathy Mr. K L Hewage HUMAN RESOURCES AND REMUNERATION (Alternate Director to Mr.S R Attygalle) Mr. V Kanagasabapathy COMMITTEE (Alternate Director to Mr.S R Attygalle) Ms. Nalini Abeywardene (Chairperson) INTEGRATED RISK MANAGEMENT COMMITTEE Mr. Raju Sivaraman Mr. V Kanagasabapathy (Chairman) SECRETARY TO THE BOARD Mr. Chandrasiri de Silva (Alternate Director to Mr.S R Attygalle) Ms. Janaki Senanayake Siriwardane Mr. K L Hewage Mr. Raju Sivaraman Mr. K L Hewage

CLARIFICATIONS ON THE REPORT, PLEASE CONTACT The Deputy General Manager (Finance & Planning) 10th Floor, Bank of Ceylon Head Ofﬁce, "BOC Square", No. 01, Bank of Ceylon Mawatha, Colombo 01, Sri Lanka Tel : +94 11 2432680, +94 11 2386854 Facsimile : +94 11 2448203 E-mail : [email protected] Bank of Ceylon “BOC Square”, No.01, Bank of Ceylon Mawatha Colombo 01, Sri Lanka.