Notes to the Consolidated Financial Statements - Seylan Bank

North Bound > Seylan Bank Annual Report 2011
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* Defined Benefit Obligation (Gratuity Provision)
The Bank has a separate Gratuity Trust Fund which was approved by the Commissioner General of Inland Revenue. As per the
approval, Bank could transfer Gratuity Provision of 62.5% of the last month’s salary of the year and deduct from the tax computation.
Therefore, temporary differences have not arisen.
** General Provision
Recognition of deferred tax assets arising from General Provision at Balance Sheet date was limited to non-performing ratio of the
temporary difference. In management’s view the Bank’s NPA Ratio as at Balance Sheet date is an indicator of deferred tax assets
which could be recovered in the future periods.
The Bank has recognised deferred tax assets on the General Provision of Rs. 54,545,624/- (Amount not recognised -
Rs. 327,694,208/-).
Seylan Developments PLC
No provision has been made in respect of deferred taxation as the Company has incurred tax losses and the
temporary differences are not expected to reverse due to the effect of tax losses and it is not probable that
future taxable profits will be available against which the Company can utilise the benefits therefrom. The
amount of taxable temporary differences and the resultant tax effects are as follows:
2011 2010
Rs. ‘000 Rs. ‘000
Unrecognised Deferred Tax Assets
Tax Losses Carried Forward 827,681 777,827
Total Taxable Temporary Difference 827,681 777,827
Unrecognised Deferred Tax Assets 231,751 272,239
Unrecognised Deferred Tax Liability
Property, Plant & Equipment and Investment Property (433,164) (362,290)
Total Taxable Temporary Difference (433,164) (362,290)
Unrecognised Deferred Tax Liability (121,286) (126,801)
Unrecognised Deferred Tax Assets 110,465 145,438