Notes to the Consolidated Financial Statements - Seylan Bank

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338 North Bound > Seylan Bank Annual Report 2011 Notes to the Consolidated Financial Statements 3. There have been 6 cases DTR 003/2010, DTR 004/2010, DTR 006/2010, DTR 007/2010, DTR 008/2010 and DTR 009/2010 filed by former employees of Seylan Bank PLC against the Bank, share owning trust companies Sotse (Private) Limited, Seyshop (Private) Limited, Seyfest (Private) Limited, Esots (Private) Limited, Seybest (Private) Limited and Sesot (Private) Limited of the Bank and other defendants in the District Court of Colombo. The cases relate to the respective trust properties owned by these trust companies. Plaintiffs had obtained enjoining orders restraining the Bank from receiving the proceeds of the sale of the respective trust properties and restraining the trustees from selling their shares of Seylan Bank PLC. Plaintiffs also sought interim injunctions to the same effect to be effective till the conclusion of this case. The Bank filed objections to the grant of interim injunctions and the order of the District Court of Colombo (as to whether the interim injunctions will be issued or not) is due on 17th February 2012. The Seylan Bank Employees' Union has also applied to be added as a party to these cases. The Bank objected to such intervention. Consequently the District Court upheld the objections of the Bank and dismissed the application for intervention. Thereupon Seylan Bank Employees' Union filed six appeals WP/HCCA/COL 131/2011 to WP/HCCA/COL 136/2011 before the Colombo Civil Appeal High Court against the said orders of dismissal. These appeals are to be heard before the Colombo Civil Appeal High Court on 27th February 2012. Based on the available information and current status of the above cases, the Bank is not in a position to quantify the potential financial impact if any, as at the Balance Sheet date. Further, based on legal advice the Bank does not expect the outcome of any action to have a material effect on the financial position of the Bank. There are no pending litigations against Seylan Developments PLC. 42.2 Tax Assessments Against the Bank 1. Assessment No. VATFS/BFSU/2009/130 for VAT on Financial Services for 2007, Commissioner General of Inland Revenue issued the determination with an additional liability of Rs. 118,733,184/-. Bank made a notification to the Tax Appeals Commission indicating the disagreement on the assessment and currently awaiting their response. 2. Assessment No. VATFS/BFSU/2010/263 for VAT on Financial Services for 2008, amounts to Rs. 174,148,569/-. Bank is not in agreement with the settlement option at the unit level and the Bank requested to refer the matter for Commissioner General Hearing. The Appeal Branch has communicated that they have referred the same to the CGIR. 3. Assessment No. 6129284, for income tax year of assessment 2007/08, amounts to Rs. 316, 456,174/- and penalty of Rs. 113,539,923/-. Bank made the Appeal and the Hearing of CGIR was held. Bank awaits Commissioner General's Determination.
North Bound > Seylan Bank Annual Report 2011 339 43. CAPITAL COMMITMENTS Capital expenditure approved by the Board of Directors for which provision has not been made in these accounts amounted to approximately: BANK GROUP 2011 Rs. Mn. 2010 Rs. Mn. 2011 Rs. Mn. 2010 Rs. Mn. 43.1 Approved and Contracted for 23.985 21.892 35.204 21.892 43.2 Approved but not Contracted for 3.555 – 3.555 – 44. Events occurring after the balance sheet date • The Board of Directors of the Bank recommends a final ordinary dividend of Rs. 1.00 per share for the year 2011 and to be approved at the Annual General Meeting. • The Board of Directors has resolved to redeem the entirety of the 3,390,100 preference shares of the Bank at a consideration of Rs. 12.50 per share on 13th February 2012. This amounts to a reduction of Rs. 33,901,000/- from the stated capital of the Company. • No circumstances have arisen since the Balance Sheet date which would require adjustments to or disclosure in the Financial Statements other than those disclosed above. 45. RELATED PARTY TRANSACTIONS 45.1 According to Sri Lanka Accounting Standard 30 (Revised 2005) Related Party Disclosures, key management personnel are those having authority and responsibility for planning, directing and controlling the activities of the entity. Accordingly, the Board of Directors, General Manager/Chief Executive Officer (GM/ CEO), key employees of the Bank holding Directorships in subsidiary companies and their immediate family members have been classified as key management personnel (KMP) of the Bank. Immediate family members are defined as spouse or dependent. Dependent is defined as any one who depends on the respective Director for more than 50% of his/her financial needs. As the Bank is the Ultimate Parent of its subsidiary mentioned in Note 46 and the Board of Directors of the Bank has the authority and responsibility for planning, directing and controlling the activities of the Group, the Directors of the Bank and their immediate family members have been identified as the KMP of the Group. Therefore, officers who are only Directors of the subsidiary and not of the Bank have also been classified as KMP of that respective subsidiary only.
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Notes to the Consolidated Financial Statements - Seylan Bank

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