Notes to the Consolidated Financial Statements - Seylan Bank

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330 North Bound > Seylan Bank Annual Report 2011 Notes to the Consolidated Financial Statements BANK GROUP 2011 2010 2011 2010 (Reclassified) (Reclassified) Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 37. Other Liabilities Accrued Expenses and Interest Payable 4,413,687 4,134,829 4,434,418 4,183,474 Margin Accounts 734,230 820,571 734,230 820,571 Deposit Funding Accounts 1,383,296 1,786,834 1,383,296 1,786,834 Dividend Payable 23,535 22,398 29,528 23,044 Provision for Defined Benefit Obligations (Net) (Note 37.1) (60,092) (44,508) (60,318) (48,824) Sundry Creditors 303,386 340,570 303,386 340,570 Value Added Tax and Other Statutory Payables 120,888 255,724 120,888 255,724 Cheques & Drafts Payable 567,459 536,201 567,459 536,201 Others 847,049 2,015,889 897,459 2,081,624 8,333,438 9,868,508 8,410,346 9,979,218 37.1 Defined Benefit Obligations The Bank pays half a month’s salary (last drawn) for each completed year of service as gratuity for employees who have worked for more than 5 years at the time of retirement/resignation. BANK GROUP 2011 2010 2011 2010 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 37.1.1 The Amount Recognised in the Balance Sheet Present Value of Defined Benefit Obligations (Note 37.1.3) 834,075 708,494 844,177 717,844 Fair Value of Plan Assets (Note 37.1.4) (704,537) (713,180) (714,865) (726,846) Unrecognised Actuarial Gain or (Loss) (Note 37.1.5) (189,630) (43,367) (189,630) (43,367) Unrecognised Past Service Gain Non-Vested (Note 37.1.6) – 3,545 – 3,545 Provision for Defined Benefit Obligations (60,092) (44,508) (60,318) (48,824) 37.1.2 Plan Assets Consist the Following Balance with Banks 40,378 31,859 46,369 37,511 Investment in Treasury Bills and Bonds 664,159 681,321 668,496 689,335 704,537 713,180 714,865 726,846 Plan Assets are held by an approved external gratuity fund. 37.1.3 Movement in the Present Value of Defined Benefit Obligations Liability for Defined Benefit Obligations as at 1st January 708,494 663,119 717,844 693,568 Current Service Cost 62,551 54,853 63,512 55,804 Interest Cost 74,392 72,943 75,141 76,118 Unrecognised Actuarial (Gains)/Losses 188,232 (4,714) 190,511 (20,336) Payments Made (Including Benefits Paid by the Plan) (199,594) (77,707) (202,831) (85,725) Adjustment on Deconsolidation/Amalgamation – – – (1,585) Liability for Defined Benefit Obligations as at 31st December 834,075 708,494 844,177 717,844
North Bound > Seylan Bank Annual Report 2011 331 BANK GROUP 2011 2010 2011 2010 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 37.1.4 Movement in Plan Assets Fair Value of Plan Assets as at 1st January 713,180 595,920 726,846 611,977 Expected Return on Plan Assets 64,331 93,540 65,394 94,568 Contribution Paid into Plan 84,651 108,965 84,651 108,967 Benefits Paid by the Plan (199,594) (77,707) (202,831) (85,725) Unrecognised Actuarial Gain/(Loss) on Plan Assets 41,969 (7,538) 40,805 (2,941) Fair Value of Plan Assets at 31st December 704,537 713,180 714,865 726,846 37.1.5 Unrecognised Actuarial (Gain) or Loss Balance as at 1st January 43,367 37,966 43,367 37,966 Actuarial (Gain)/Loss for Year - Obligation 188,232 (4,714) 188,232 (20,336) Actuarial (Gain)/Loss for Year - Plan Assets (41,969) 7,538 (41,969) 7,538 Actuarial Gain/(Loss) Immediately Recognised – 2,577 – 18,199 Balance as at 31st December 189,630 43,367 189,630 43,367 37.1.6 Unrecognised Past Service Cost Non-Vested Benefits Balance as at 1st January 3,545 7,089 3,545 7,089 Amount Recognised in the Income Statement (3,545) (3,544) (3,545) (3,544) Balance as at 31st December – 3,545 – 3,545 * The Past Service Cost on Non-Vested Benefits is recognised on a straight-line basis over 3 years. 37.1.7 Amount Recognised in the Income Statement Current Service Cost 62,551 54,853 63,512 55,838 Interest Cost 74,392 72,943 75,141 76,160 Expected Return on Plan Assets (64,331) (93,540) (65,394) (94,568) Actuarial (Gain)/Loss Immediately Recognised – (2,577) 3,443 (23,571) Past Service Cost/(Gain) Non-Vested Benefits (3,545) (3,544) (3,545) (3,544) Provision for Staff Retirement Benefit (Note 10) 69,067 28,135 73,157 10,315 BANK 2011 2010 37.1.8 Actuarial Assumptions - Bank Normal Retirement Age 55 years 55 years Rate of Discount 10.0% 10.5% Salary Increase 3%,15% (including 5% increment) and thereafter 5%, 5%, 15% (including 5% increment) per annum Next increment due on 1st January 2012) 7%, 8%, 8% and thereafter 7.5% per annum. (Next increment due on 1st January 2011)
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Notes to the Consolidated Financial Statements - Seylan Bank

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