Notes to the Consolidated Financial Statements - Seylan Bank

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316 North Bound > Seylan Bank Annual Report 2011 Notes to the Consolidated Financial Statements 27.2 Investment Properties (Group) - 2011 GROUP Cost/ Valuation Market Value Address Extent Date of Valuation Rs. ’000 Rs. ’000 Kahapola, Piliyandala 20A 1R 39.5P 04.01.2012 114,429 140,000 97, Station Road, Kandana 1A 1R 9.84P 06.01.2012 139,319 123,200 Seylan Towers - West Tower* 90, Galle Road, Colombo 3 111,191 Sq.Ft 29.12.2009 1,023,967 1,502,061 257, Union Place, Colombo 2** 0A 1R 12.27P 28.12.2008 204,535 250,255 1,482,250 * The rent income from the Seylan Towers-West Tower for the year 2011 is Rs. 55.7 Mn. (2010 Rs. 53.4 Mn.). * The Seylan Towers (West Tower) was valued by A.Y Daniel & Son, Incorporated Valuer and having recent experience in the location and category of the investment property being valued. He has used capitalisation method in valuation, assuming, a. The prospect of ascending land values and expected improvements in economic conditions. b. Depreciation and obsolescence. c. The steep and continuing construction cost escalation. d. The acceptance and proliferation of the phenomenon of high rise buildings. e. The difference in the value impacting phenomena of Capital cost and Capital value. f. The corpus being in full occupation with stabilisation. g. The ranking norms of maintenance and repair. h. The steep slump in the national interest rates. ** The Property at No. 257, Union Place was valued by Mr. G.J. Sumanasena, Incorporated Valuer and having recent experience in the location and category of the investment property being valued. He has used open market method in valuation. The open market value is intended to mean the best price at which an interest in a property might reasonably be expected to be sold in the Private Treaty as the date of valuation, assuming, a. The property is prime and most suitable for high rise development b. Located in a prime commercial area. BANK GROUP 2011 2010 2011 2010 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 28. Deferred TaxAtion Balance Brought Forward 269,562 442,711 269,562 442,858 (Charge)/Reversal for the Year (Note 13) (59,593) (174,776) (59,593) (175,424) Transfer from Seylan Asset Management Limited – (501) – – Transfer from Revaluation Reserve (Note 40.2) 1,875 2,128 1,787 2,128 Transfer to Minority Interest – – (81) – Balance Carried Forward (Note 28.1 & 28.2) 211,844 269,562 211,675 269,562
North Bound > Seylan Bank Annual Report 2011 317 28.1 Analysis of Deferred Assets and Liabilities Deferred Tax - Liability 2011 - BANK 2010 - BANK Temporary Tax Difference Rs. ‘000 Rs. ‘000 Temporary Difference Rs. ‘000 Tax Rs. ‘000 Property, Plant & Equipment 996,434 279,001 1,030,744 360,760 Lease Rentals 1,103,000 308,840 590,651 206,728 Revaluation Gain B/F 32,863 9,202 32,863 11,502 Deferred Tax - Assets 2,132,297 597,043 1,654,258 578,990 Defined Benefit Obligation* – – 888 311 Unclaimed Bad Debt Provision - Specific 2,174,281 608,799 2,174,377 761,032 Bad Debt Provision - General** 54,546 15,273 112,020 39,207 Tax Losses from Leasing Business 522,903 146,413 – – Impact on Devaluation 131,069 36,699 131,069 45,874 Gain on Revaluation 6,080 1,703 6,080 2,128 2,888,879 808,887 2,424,434 848,552 Net Deferred Tax Assets/Liabilities - (Note 28.1.1) 756,582 211,844 770,176 269,562 28.1.1 Movement in Temporary Differences Deferred Tax - Liability 2011 - BANK 2010 - BANK Recognised Recognised Balance as at 1st January in Profit or Loss Recognised in Reserves Balance as at 31st December Balance as at 1st January in Profit or Loss Recognised in Reserves Balance as at 31st December Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Property, Plant & Equipment 1,030,744 (34,310) – 996,434 1,060,002 (29,258) – 1,030,744 Lease Rentals 590,651 512,349 – 1,103,000 242,702 347,949 – 590,651 Revaluation Gain B/F 32,863 – – 32,863 32,863 – – 32,863 1,654,258 478,039 – 2,132,297 1,335,567 318,691 – 1,654,258 Deferred Tax - Assets Defined Benefit Obligation* 888 (888) – – – 888 – 888 Unclaimed Bad Debt Provision - Specific 2,174,377 (96) – 2,174,281 2,451,368 (276,991) – 2,174,377 Bad Debt Provision - General** 112,020 (57,474) – 54,546 149,087 (37,067) – 112,020 Tax Losses from Leasing Business – 522,903 – 522,903 – – – – Impact on Devaluation 131,069 – – 131,069 – 131,069 – 131,069 Gain on Revaluation 6,080 – – 6,080 – – 6,080 6,080 2,424,434 464,445 – 2,888,879 2,600,455 (182,101) 6,080 2,424,434 Net Deferred Tax Assets/Liabilities 770,176 (13,594) – 756,582 1,264,888 (500,792) 6,080 770,176
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Notes to the Consolidated Financial Statements - Seylan Bank

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