Notes to the Consolidated Financial Statements - Seylan Bank

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334 North Bound > Seylan Bank Annual Report 2011 Notes to the Consolidated Financial Statements BANK GROUP 2011 2010 2011 2010 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 40.2 Movement in Revaluation Reserve Balance as at 01st January 460,123 125,238 818,777 483,892 Transferred to/from Revaluation Reserve – 332,757 313 332,757 Transferred from/(to) Deferred Tax (Refer Note 28) 1,875 2,128 1,787 2,128 Balance as at 31st December 461,998 460,123 820,877 818,777 In addition to the Bank’s Revaluation Reserve, Group includes the surplus on revaluation of fixed assets of Seylan Developments PLC. BANK GROUP 2011 2010 2011 2010 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 40.3 Movement in General Reserve Balance as at 01st January 33,787 33,787 33,787 33,787 Balance as at 31st December 33,787 33,787 33,787 33,787 Consist of Rs. 25 Mn. transferred in 1995 to General Reserve, Rs. 2.7 Mn. transferred from Bad Debts Reserve and Rs. 6 Mn. transferred from Contingency Reserve in 2002 to General Reserve. BANK GROUP 2011 2010 2011 2010 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 40.4 Movement in Capital Redemption Reserve Fund Balance as at 01st January – – 255,213 255,213 Less: Transferred to Capital Reserve – – (255,213) – Balance as at 31st December – – – 255,213 Capital Redemption Reserve Fund was created at the time of redeeming the preference shares of Seylan Developments PLC and same was transferred to Capital Reserve in 2011. BANK GROUP 2011 2010 2011 2010 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 40.5 Movement in Special Risk Reserve Balance as at 01st January 79,769 – 79,769 42,595 Add: Transferred during the Year 18,972 32,038 18,972 37,174 Less : Adjustment due to Amalgamation of Seylan Bank Asset Management – 47,731 – – Balance as at 31st December 98,741 79,769 98,741 79,769 According to the Circular Ref. No. 08/24/002/005/003 issued by the Central Bank of Sri Lanka, Primary Dealer Unit is required to appropriate 25% of the net profit after tax for the year towards the Special Risk Reserve Fund.
North Bound > Seylan Bank Annual Report 2011 335 BANK GROUP 2011 2010 2011 2010 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 40.6 Movement in Investment Fund Reserve Balance as at 01st January – – – – Add: Transferred during the Year 272,986 – 272,986 – Balance as at 31st December 272,986 – 272,986 – As per the Value Added Tax (Amendment) Act No. 09 of 2011 and Inland Revenue Amendment Act No. 22 of 2011, Bank transfers 8% on Value Addition attributable to Financial Services and 5% of taxable profits, from retained profits to Investment Fund Reserve with effect from 01st January 2011. Transfers during the Year 8% on the Value Addition Attributable to Financial Services 217,160 5% of Taxable Profits 55,826 272,986 The respective funds have been invested in Long-Term Government Securities with a maturity period more than 7 years in full. Details of Government Securities are as follows: Maturity Value (Rs.) Date of Maturity Rate of Interest Treasury Bond 200,000,000 01.08.2020 6.20% Treasury Bond 150,000,000 15.08.2018 7.50% 41. Commitments and Contingencies In the normal course of business, the Bank makes various commitments and incurs certain contingent liabilities with legal recourse to its customers. No material losses are anticipated as a result of these transactions. BANK GROUP 2011 2010 2011 2010 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 41.1 Commitments Undrawn Credit Lines 14,675,341 11,966,858 14,675,341 11,966,858 Capital Commitments (Note 43.1) 23,985 21,892 35,204 21,892 14,699,326 11,988,750 14,710,545 11,988,750 41.2 Contingencies Acceptances 4,440,085 4,066,223 4,440,085 4,066,223 Stand by Letters of Credit 359,770 25,565 359,770 25,565 Guarantees 7,629,741 8,262,274 7,629,741 8,329,274 Documentary Credit 6,039,245 3,952,136 6,039,245 3,952,136 Bills for Collection 3,152,133 1,919,301 3,152,133 1,919,301 Forward Exchange Contracts (Net) (73,084) (17,171) (73,084) (17,171) 21,547,890 18,208,328 21,547,890 18,275,328 Total Commitments & Contingencies 36,247,216 30,197,078 36,258,435 30,264,078
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Notes to the Consolidated Financial Statements - Seylan Bank

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