Notes to the Consolidated Financial Statements - Seylan Bank

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296 North Bound > Seylan Bank Annual Report 2011 Notes to the Consolidated Financial Statements (i) Income tax on profits has been computed at the rate of 28% on the taxable income arising from Banking activities. (ii) The Group companies have computed taxation based on the applicable rates for such companies. 13.2 Reconciliation of Accounting Profit and Taxable Income BANK GROUP 2011 2010 2011 2010 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Profit Before Tax 1,572,407 1,997,634 1,560,047 1,954,498 Less: Profit from Leasing Business 6,141 152,265 6,141 152,265 Profit on Banking Activities 1,566,266 1,845,369 1,553,906 1,802,233 Add: Disallowable Expenses 2,496,623 3,146,040 2,675,744 3,258,421 Less: Allowable Expenses 1,631,276 2,157,564 1,850,876 2,255,687 Exempt/Allowable Income 285,897 580,393 285,897 580,537 Add: Tax Losses from Subsidiary – – 52,839 84,513 Business Income 2,145,716 2,253,452 2,145,716 2,308,943 Income from Other Sources – – 8,528 33 Statutory Income 2,145,716 2,253,452 2,154,244 2,308,976 Less: Tax Loss Set-Off – – 2,985 11 Assessable Income 2,145,716 2,253,452 2,151,259 2,308,965 Taxable Income from Banking Activities 2,145,716 2,253,452 2,151,259 2,308,965 Taxable Income from Leasing Business – 203,270 – 203,270 Total Taxable Income 2,145,716 2,456,722 2,151,259 2,512,235 Taxable Income BANK GROUP 2011 2010 2011 2010 Tax Taxable Tax Taxable Tax Taxable Expense Income Expense Income Expense Income Tax Expense Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Bank - Domestic Banking Unit and On-Shore Profits 2,139,716 599,120 2,435,855 852,549 2,145,259 600,673 2,491,368 871,979 Off-Shore Profits 6,000 1,680 20,867 4,173 6,000 1,680 20,867 4,173 Social Responsibility Levy (SRL) – – – 12,851 – – – 13,142 2,145,716 600,800 2,456,722 869,573 2,151,259 602,353 2,512,235 889,294 Up to 2010 Domestic Banking Operations and On-Shore Profits of FCBU was taxed at the rate of 35% and Off-Shore Profits of FCBU was taxed at the rate of 20%. From 2011 onwards all Banking Operations are taxed at the rate of 28% and Social Responsibility Levy was abolished. 13.3 Tax Losses Brought Forward BANK GROUP 2011 2010 2011 2010 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Tax Losses Brought Forward – – 777,827 693,325 Tax Losses Incurred during the Year 522,903* – 575,742 84,513 Tax Losses Utilized during the Year – – 2,985 11 Tax Losses Carried Forward 522,903 – 1,350,584 777,827 * Tax losses of the Bank pertaining to Leasing Business
North Bound > Seylan Bank Annual Report 2011 297 13.4 Reconciliation of Effective Tax Rate 2011 Bank Group % Rs. ’000 % Rs. ’000 Profit before Income Tax 1,572,407 1,560,047 Less: Profit from Leasing Business 6,141 6,141 Profit on Banking Activities 1,566,266 1,553,906 Income Tax Using the Domestic Tax Rate 28 438,554 28 435,094 Disallowable Expenses 44 699,054 48 749,208 Allowable Expenses (29) (456,757) (33) (518,245) Exempt/Allowable Income (5) (80,051) (5) (80,051) Tax Losses from Subsidiary – – 1 14,795 Income from Other Sources – – – 2,388 Tax Losses Set Off – – – (836) Other Temporary Differences 4 59,593 4 59,593 Over-Provided in Prior Years (6) (90,638) (6) (90,638) Total Income Tax Expenses (Note 13.1) 36 569,755 37 571,308 14. Basic Earnings Per Share Basic Earnings per Share has been calculated by dividing profit after taxation, minority interest and preference dividends by the weighted average number of ordinary shares in issue (both voting and non-voting) during the year ended 31st December. Weighted Average Number of Shares has been calculated as per SLAS 34 considering the theoretical ex-rights value per share and the adjustment factor applicable for Rights Issue. Comparatives have been restated accordingly. BANK GROUP 2011 2010 2011 2010 (Restated) (Restated) Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Net Profit Attributable to Shareholders of the Bank 1,002,652 1,228,981 1,005,798 1,207,233 Preference Dividends (Note 15.2) – (3,560) – (3,560) Net Profit after Preference Dividends 1,002,652 1,225,421 1,005,798 1,203,673 Weighted Average Number of Ordinary Shares ('000) 305,377 266,174 305,377 266,174 Basic Earnings per Share (Rs.) 3.28 4.60 3.29 4.52
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Notes to the Consolidated Financial Statements - Seylan Bank

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