Annual Report 2008 - Seylan Bank

BEATING STRONGER!

BEATING STRONGER!
CORPORATE PHILOSOPHY
Vision
Be the most Caring &
Trusted Bank
Mission
Be the Best Bank in
Customer Service
2 SEYLAN BANK .

CONTENTS
2 Corporate Philosophy
4 Financial Highlights
Executive Reviews
8 - 9 Chairman’s Statement
10 - 13 General Manager’s Review
14 - 15 Board of Directors
16 - 17 Senior Management Team
Management Discussion and Analysis
20 Private Banking Unit (PBU)
20 International Operations
21 Consumer Finance Unit and Pawning
22 Information Technology
22 Treasury Operations
23 - 27 Products & Services Offered
Sustainability Reporting
30 - 31 Corporate Social Responsibility
32 - 33 Our Human Capital
34 - 41 Corporate Governance
42 - 43 Risk Management
44 Financial Calendar
Financial Reports
46 - 58 Annual Report of the Board of Directors on
the affairs of the Company
59 Directors’ Responsibility for Financial
Reporting
60 Audit Committee Report
61 - 63 Auditors’ Report
64 Income Statement
65 Balance Sheet
66 Statement of Changes in Equity
67 Cash Flow Statement
68 - 130 Notes to the Accounts
131 Ten Year Summary
132 Value Added Statement
133 - 136 Investors’ Information
137 Summary of Performance Indicators
138 - 141 Branch Network
142 - 143 Country Profile & Economic Indicators
144 - 145 Highlights of the year
146 - 147 History and Milestones
148 Geographical Analysis
151 Glossary
Notice of Meeting (Enclosed)
Form of Proxy (Enclosed)
. SEYLAN BANK 3

BEATING STRONGER!
Financial Highlights
Bank
Group
2008 2007 Change 2008 2007 Change
% %
During the year
(LKR'000)
Income 25,246,209 21,079,885 19.76 26,883,252 22,808,262 17.87
Net Profit Before Income Tax 155,241 1,439,069 (89.21) (71,820) 1,669,664 (104.30)
Income Tax on Profits - 515,880 (100.00) 21,354 535,142 (96.01)
Net Profit After Taxation and Minority Interest 155,241 923,189 (83.18) 166,492 1,020,686 (83.69)
Revenue to Government 243,056 1,099,913 (77.90) 266,976 1,127,220 (76.32)
Gross Dividend (Note 1) 6,780 255,901 (97.35) 6,780 255,901 (97.35)
At the Year End
Shareholders' Funds 7,020,011 7,036,235 (0.23) 8,237,215 8,244,774 (0.09)
Retained Profit 3,420,791 3,374,839 1.36 4,003,787 3,949,125 1.38
Deposits from Customers 107,938,801 111,299,612 (3.02) 109,505,449 112,436,861 (2.61)
Loans & Advances (Excluding Bills & Leases) 97,691,569 89,017,069 9.74 99,118,833 89,976,544 10.16
Total Assets 154,046,245 143,500,353 7.35 164,210,437 155,954,968 5.29
Information per Ordinary Share
Earnings (LKR) 0.90 5.50 (83.64) 0.97 6.08 (84.05)
Dividends (LKR) (Note 1) - 1.50 (100.00) - 1.50 (100.00)
Net Asset Value (LKR) 41.80 41.90 (0.24) 49.09 49.13 (0.08)
Market Value (LKR)- Voting Shares 28.50 32.00 (10.94)
- Non Voting Shares 6.00 8.00 (25.00)
Statutory/Other Ratios (%)
Core Capital 5.74 7.49 (23.36) 7.27 8.92 (18.50)
Total Capital 8.06 10.98 (26.59) 9.83 12.72 (22.72)
Liquidity 20.23 21.72 (6.86)
Price Earnings Ratio -Voting (Times) 31.67 5.82 444.16
Dividend Cover (Times) 22.90 3.61 534.35
Capital Funds to Liabilities &
Commitment & Contingent Liabilities 4.04 4.36 (7.34)
Note 1: Dividends for year 2008 are accounted for as per the Accounting Standard SLAS 12 (Revised).
4 SEYLAN BANK .

Rs. Mn.
30,000
Turnover
Rs. Mn.
2,500
Net Profit Before Tax and After Tax
25,000
2,000
20,000
15,000
10,000
1,500
1,000
5,000
500
0
2004 2006 2007 2008
2005
0
2004 2006 2007 2008
2005
Net profit before Vat & Corp Tax
Net profit before Vat & Corp Tax
Net profit after Vat & Corp. Tax
Income vs Cost
Rs. Mn.
12,000
10,000
8,000
6,000
4,000
2,000
0
2004 2006 2007 2008
2005
Operational Expenses
Total Net Income
Return on Average Assets & Equity
% %
30
25
20
15
10
5
0
2004 2006 2007 2008
2005
ROE
ROAA
Yield, Cost & Spread
%
20
17
14
11
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0.0
Rs. Mn.
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
%
75
70
65
60
55
50
Rs. Mn.
120,000
100,000
80,000
60,000
2004 2006 2007 2008
2005
Other Income
Foreign Exchange Income Fee & Commission Income
Investment Income
Others
Cost to Income Ratio
2004 2006 2007 2008
2005
Cost to Income Ratio (%)
Deposits & Advances
8
5
Rs. Mn.
2004 2006 2007 2008
2005
Average Interest Yield
Average Interest Cost
Spread
Assets
40,000
20,000
0
2004 2006 2007 2008
2005
Deposits
Advances
Shareholder Value
EPS Rs.
Share Price Rs.
200,000
10
40
150,000
8
32
100,000
6
4
24
16
50,000
2
8
0
2004 2006 2007 2008
2005
0
2004 2006 2007 2008
2005
0
Total Assets
Net profit before Vat & Corp Tax
Net profit after Vat & Corp. Tax
. SEYLAN BANK 5

6 SEYLAN BANK .

Executive Reviews
. SEYLAN BANK 7

BEATING STRONGER!
Dear Shareholder
It’s my pleasant task to welcome you to
the Annual General Meeting of Seylan
Bank and the presentation of the
Annual Review and Statement of
Account for the year ending December
31st 2008.
As you are now well aware, 2008
ended on a turbulent course for Seylan
Bank, with the Central Bank
discontinuing the services of the then
Board of Directors and appointing a
new Board in order to ensure financial
stability. This also served as a measure
of instilling confidence among the
Bank’s customers and also within the
Seylan Team, which was a crucial facet
for its continuity at that point of time. By
introducing largest state owned bank in
the country Bank of Ceylon into this
equation to provide management
support, the Central Bank afforded
Seylan Bank more advantages in its
journey of getting back to normalcy.
Being tasked with leading the new
Board comprising very eminent
professionals, it must be reiterated that
these individuals are all distinguished
personalities in their own fields of
expertise with collective experience that
stands in good stead to take the Bank
forward. The new Board comprises
Nihal Jayamanne PC and former
President of Bar Association of
Sri Lanka, Chartered Accountant and
Attorney-at-Law Naomal Goonewardena,
Lalith Withana also a Chartered
Accountant and eminent professional,
highly experienced banker and former
CEO of Pan Asia Bank R Nadarajah and
Rear Admiral Ananda Pieirs.
As Chairman, I also possess a wealth of
experience collated from my decades at
NSB and also as the president of the
Association of Professional Bankers.
I think the entire Board together will
undoubtedly be able to give Seylan the
fillip it requires to get back on track and
makes my task of leadership that much
easier.
While we did see an unprecedented
withdrawal phenomenon initially, for
8 SEYLAN BANK .
which I’m glad to state that the Bank
did exceptionally well, honouring all
requests, the run on withdrawals
proved to be temporary. With the
processes and decisions implemented
without delay, the Bank began to
quickly get back on track within a
couple of weeks.
However it must be remembered, that
what we faced and experienced is not
an isolated incident when one observes
the global financial crises and the
subsequent recession that developed
economies have plunged into. What is
important is that we must charter a
course of action to regain the
confidence that the Bank lost in those
few days, gain customer loyalty and
build on market share, which also
eroded somewhat in that time. But the
underlying factor is that risk
management and corporate
governance must take precedence over
all else, displaying to our stakeholders
that we are on the right track and that
the new measures will ensure financial
stability and soundness in the future.
Financial stability remains the
foundation for any financial institution
and for Seylan, it’s no different. Hence,
our priority at this time is to manage
risk, guiding the Bank to overcome
stress and win the full confidence of our
depositors. My Board and I are fully
committed to harness the existing
resources the bank has and hone them
to achieve our objectives. I have
personally seen a dynamic team spirit,
leadership skills and professionalism
emerging strongly from the Seylan
Team during the challenging period. In
my experience it is these very qualities
that enabled me to transform NSB from
a conventional state owned banking
culture to a modernized state of the art
one, increasing profits manifold and
obtaining the highest Fitch Rating for
four consecutive years. Given these
positives, I see our future journey that
much easier, one where opportunities
and strengths, far outweigh the
challenges and threats.
The Board and I are determined that all
transactions at the Bank are carried out
in the most transparent manner,
observing all approved practices and
procedures. This commitment covers
the entirety of the bank’s procurement
process for material and services. We
have already ensured that the Bank
does not enter into contracts with any
parties with an interest in Seylan, and
every contract is reviewed by the
members of the Board for their bona
fides in terms of pricing, quality and
performance.
With the role of the Board clearly
defined to ensure a smooth
transformation process, I have utmost
confidence that the Bank can emerge
stronger and greater. Simply looking at
our financials for 2008 proves that
despite the challenges, the Bank has
got what it takes, exampled by the
noteworthy Rs.155 million which has
been posted by Seylan in after tax
profit. But at this decisive juncture,
there are a number of critical issues that
must be addressed in the short term.
Credit quality, loan recoveries, cost
management, investments and off
balance sheet items require the most
urgent focus.
We are already moving into a
conservative banking paradigm in order
to improve credit quality, while in the
medium term, we will focus on
organizational transformation and
continuous process improvement
imbued into a Strategic Plan, a vital tool
for the future progress of the Bank.
The transformation process will include
working very closely with the Seylan
Team and preparing them for the new
environment, identifying critical issues,
establishing a new vision, mission and
goals and initiating a culture and
processes that will drive continuous
improvement.
E Narangoda
Chairman

Chairman’s Statement
Mr Eastman Narangoda
Chairman
. SEYLAN BANK 9

CEO’s Review of Operations
Mr Ajita Pasqual
General Manager/CEO
10 SEYLAN BANK .

The year ended on a note of turbulence
but not one in which we didn’t weather
the storm. With appreciation to the
timely intervention of the Central Bank,
your bank today stands stable and
strong in the light of the unprecedented
challenges it faced during this year,
especially in the latter part of 2008.
There are many questions however that
continue to pervade the minds of our
stakeholders and before I elaborate on
the status of our operations during the
course of the year, I would like to
assuage some of the doubts and reply
to the burning questions that may come
to mind.
The difficulties we faced in the latter of
2008 was not due to the deficiencies of
Seylan nor mismanagement on the part
of the Bank’s management but rather
due to a Group company failing to
honour its commitments. As that
company held a 23% stake of the Bank
by virtue of it coming under the Group’s
umbrella, the natural phenomenon was
for depositors to lose confidence in the
Bank and begin unprecedented
withdrawals.
However, it must be noted that Seylan
Bank is an independent entity
monitored and regulated by the Central
Bank and the Monetary Board. We
have always practiced and adhered to
the stringent guidelines that govern us
and hence, have always had a firm
foundation to build upon. At no time
during the spate of withdrawals, did the
Bank not honour or disappoint
customers. No matter how large the
withdrawal, we honoured every single
request and ensured that sufficient
funds were always available at the
Bank, reiterating the trust our
customers placed in Seylan Bank. To
this end, I must also thank our fellow
bankers within the industry, who gave
us their fullest support.
With the Central Bank intervening and
appointing a highly eminent Board of
Directors headed by an experienced
banker as chairman, the Bank was
given the freedom and support to
operate as normal and ensure the Bank
remained stable and positive in its
outlook. This also helped in keeping our
team motivated and our customers, the
majority of whom were extremely cooperative
in our times of crisis and in
fact, rose to the occasion by being
some of the ‘best friends’ the Bank
could ever count on. Thus began a
period of consolidation and going back
to our fundamentals built on the
foundation of the Bank being here for
the long haul. We also need to make
special mention of our committed &
loyal staff who gave their best in difficult
and testing times.
Given below is a synopsis of our
operations for 2008, the details of
which you will find in the next few
pages of this annual report.
Overview of the Bank’s
performance
Despite the challenges of the year, your
Bank posted positive results, even
though we did have to grapple with
high interest rates and inflation, a
general ‘wait and see’ sentiment and a
more concerted military push to end the
war, which took its toll on the overall
performance of the economy. Profit
before taxation stands at Rs.398,297
Mn., a decrease of 80.31% per cent
over last year’s Rs.2,023,102 Mn., while
net profit decreased by 83.18% per
cent, from Rs.923.189 Mn. in 2007 to
Rs.155.241Mn. this year. The high
taxation regime continues to dog us,
standing at nearly 50 per cent overall
and the introduction of the additional
provisions requirement of 0.1% of the
performing portfolio being classified for
provisioning which saw immense
pressure on maintaining our bottom
line. The high interest rates and high
inflation also saw a fallback on
repayments by customers with
disposable income levels decreasing.
While retail banking continued to see
tough times, our NPL too saw a quick
slide upwards to 8.48% from 7.84% the
year before, with more diligence and
astute risk management required in loan
disbursement and concentration and
emphasis on recovery being required
Group turnover increased by 17.87 per
cent, with our advances portfolio
increasing by 9.74 percent due to a
concerted effort deployed in growing
our deposit base. Growth in fee based
income increased by 22.99% over last
year’s Rs.1,465,027 Mn. to
Rs.1,801,827 Mn. this year. The return
on average assets was 0.10 to reach as
against 0.67 recorded in 2007. Return
on Average Equity stands at 2.22% at
end 2008 while Earnings Per share saw
a decrease to Rs.0.90 per share
comparable to Rs.5.50 last year. The
. SEYLAN BANK 11

CEO’s Review of Operations contd.
cost to income ratio also showed an
upward trend from 66.31% to 73.67%
this year.
Summary of operational details
International Operations
We could not move away from the
global financial crisis which took its toll
on economies around the world with a
credit crunch, liquidity crisis, a
weakening dollar and major economies
plunging into recession, resulting in a
decrease in pace for international trade.
However, having always practiced
prudent management tactics over the
years, Seylan performed admirably in
trying times, notching a growth in Trade
Finance and a YOY growth of 32% in
overall profits.
Treasury Operations
Despite the global financial crisis
creating immense volatility during the
year, it is certainly impressive that our
Treasury Profit Center increased its
profit margins by 47.08% over that of
last year, to achieve a net profit of
Rs.1,031 million. All income avenues
increased including exchange income
showcased at Rs.441.27 million,
interest income on loans and advances
at Rs.290.4 million and on treasury bills
and bonds at Rs.2,960 million, and a
special mention is due to our highly
competent treasury team.
Consumer Finance
Our highly successful pawning services
which were launched in 1997, saw an
expansion of channels from 71 last year
to 103 this year, with growth
contributing 10% to the bottom line of
our operations. Our new pawning
product, ‘Gold in Cash Out’ proved to
be one of the larger contributing
avenues to this growth.
However, the leasing industry did not
display any buoyancy this year due to
high interest rates and high cost of
vehicles. Similarly the change in VAT
structure making leasing less attractive,
However, this sluggish period was
utilized to further strengthen customer
relationships and work on innovative
products to be introduced into the
market in 2009.
Private Banking
A similar recipe was continued in private
banking where the strength of
relationships remained the key to its
existence. The team, headed by a
dedicated relationship manager have
worked extremely hard over the years in
ensuring that the private banking
customer portfolio continued to grow,
even in challenging times and have
been rewarded with substantial growth
in this high net worth clientele portfolio.
This will be a focused growth area in
year 2009
Information Technology
IT remains the fundamental driver in
creating a conducive environment for
our continuance into the future, with our
‘Anytime Anywhere’ banking which has
proved to be the ultimate success
factor in our growth paradigm. Our
sophisticated delivery channels which
encompass the Core Banking Solution
now have real time linkages to over 115
branches and convenience centers
around the country, supporting our
innovative IT oriented products that
make banking with Seylan convenient
and hassle free.
It is also pertinent to note that Seylan
has the first trilingual website for a
commercial bank in Sri Lanka, which
was launched in October this year,
marking yet another pioneering
milestone in the Bank’s IT innovations
over the years.
Our team – the best there is
This year has been the ultimate Litmus
test for our team and it is now
historically recorded that they have
proven their mettle unequivocally. Thank
you to our team whose supportive,
dynamic and never say die attitude
helped this Bank to work its way out of
the rubble and re-emerge as a strong
and strident force in the banking
industry.
This was one year where we fully
comprehended the crucial role played
by good Human Resources
Management and Development. While
congratulating our HR department for
being a proactive force in the Bank’s
success, the training and development
programmes initiated and conducted
have been timely and productive. While
IT processes were infused to make HR
management easier including a transfer
tracking system that allows the team to
request for transfers online, the Bank
also launched a ‘Career Development
12 SEYLAN BANK .

Plan’ to critically evaluate training needs
and map competencies in lieu of
succession planning and a Gap
Analysis to ascertain training needs.
My congratulations also to the quiz
teams who proved their prowess within
the industry, notching first place in the
Trade Finance Quiz, Future Waves Brain
Teasers and Wisdom 2008 Quiz in the
Banking Sector. And to our ladies
Netball & Basketball teams, our table
tennis team, who all ended up as
mercantile champions.
The future
Our short and medium course of action
is to ensure stability and gain the
confidence of those customers who
may have had or still have doubts.
While withdrawals did take on an
unprecedented turn for the rise in the
last part of 2008, we also saw a
marked return of customers to our fold,
signaling a return of confidence as well.
Once the initial doubts were assuaged,
customers began coming back to the
bank and availing themselves of our
products and services, which was a
sign that the strong relationships we
had built our Bank on, was serving us in
good stead.
We have built an unsullied reputation
within the industry in the last twenty
years and to our customers, I would like
to state that we are here for the long
run, as a stable and sound financial
institution providing a consistent and
quality service than ever before. We
have always espoused our tenet of
being a bank with a heart and this is not
going to change. Do place your trust in
us and rest assured, with the backing of
the Central Bank and our highly erudite
Board as well as a dynamic team, you
will not be disappointed. We will
emerge from this challenge bigger,
better and more strident, building a new
foundation and with the ability to meet
greater challenges.
While thanking my team for being the
best there is and having seen the way
you worked through one of the most
difficult times in banking history, I’m
absolutely confident that no challenge is
too difficult or overwhelming for you.
You will continue to be the backbone to
our future.
My heartfelt appreciation to the
Chairman and Board of Directors for the
leadership, guidance and support
extended to me during this very crucial
period of the Bank’s existence. I have
no doubt of this banks drive for greater
achievements will be met with
resounding success in years to come.
Mr Ajita Pasqual
General Manager / Chief Executive
. SEYLAN BANK 13

BEATING STRONGER!
The Board of Directors
Mr Eastman Narangoda
Chairman
BA (Econ), FIB, FIMS (UK), FITD
(SL), Dip. in Advanced Bank
Management (Stockholm)
Mr Eastman Narangoda has
vast experience in the
Sri Lankan Banking Sector, and
most recently spearheaded
National Savings Bank as its
General Manager/CEO for over five years. During his
tenure, NSB was awarded AAA rating by Fitch Ratings for
four consecutive years.
Mr Narangoda is a former President of the Association of
Professional Bankers of Sri Lanka and has held the
positions of Director/Vice Chairman of Financial
Ombudsman (Sri Lanka) Ltd, Director of NSB Fund
Management Co, Asha Central Hospital Ltd, and
Mercantile Leasing Ltd. He was also appointed as the
Commissioner of the Presidential Commission on Failed
Finance Companies. He is currently a Director of Wealth
Trust Corporation [Pvt] Ltd.
Mr Narangoda was appointed to the Board on 30th
December 2008.
Mr R Nadarajah
Executive Director
BSc (Hons), MBA, FCIB (London)
Mr Ramanathan Nadarajah
brings with him 40 years of
banking experience in both
state and private sector banks.
He served as Managing
Director/General Manager/CEO
of Pan Asia Bank for six years,
and previously served at Bank of Ceylon in various
capacities including as a Deputy General Manager. He
was the inaugural President of the Primary Dealers
Association and has been a Past President of the
Association of Professional Bankers of Sri Lanka.
Mr Nadarajah was appointed to the Board of Seylan Bank
PLC on 8th January 2009.
Mr Nihal Jayamanne PC
Director
Mr Nihal Jayamanne PC is an
eminent lawyer and holds key
offices in the fields of law,
including as Member of the
Law Commission of
Sri Lanka, Member of the
National Police Commission of
Sri Lanka, Member of the
Advisory Council of Jurists of the Asia Pacific Forum for
the Advancement of Human Rights, Chairman, Law
College Foundation and Member of the Board of Trustees
of the Judicial Insfrastructure Maintenance Trust. He was
also the President of the Bar Association of Sri Lanka and
a former Vice President of SAARCLAW.
Mr Jayamanne PC is on the Boards of Sri Lankan Airlines
Ltd and Sri Lankan Catering (Pvt) Ltd. He was also a
former Commissioner of the Telecom Regulatory
Commission of Sri Lanka and a Former member of the
Council of Legal Education.
Mr Jayamanne was appointed to the Board of Seylan
Bank PLC on 30th December 2008.
Mr Lalith Withana
Director
{MBA, BA (Hons), FCMA, FCA}
Mr Lalith Withana counts over
20 years in management
positions within the corporate
sector of which more than 12
years have been at senior levels
in banking, trade and
manufacturing, with experience
at organizations such as Brandix, M/s Ernst & Young,
Amro Bank, IBM and Carson Cumberbatch PLC.
He currently holds the position of Executive Vice
President at Brandix Lanka Ltd and has also been the
CEO of Brandix Casualware Ltd, Brandix Lightsew Ltd
and CEO-Procurement of Brandix Apparels Ltd. He also
serves on the Boards of Ceylease Financial Services Ltd
14 SEYLAN BANK .

and Dankotuwa Porcelain PLC while he has previously
been on the Boards of Bank of Ceylon, Merchant Bank
of Sri Lanka and has been a Commissioner of the
Telecommunication Regulatory Commission.
Mr Withana was appointed to the Board of Seylan Bank
PLC on 30th December 2008.
Mr Naomal
Goonewardena
Director
{Attorney-at-Law, ACA,
ACMA, CFA, MBA (Sri J)}
Mr Naomal Goonewardena is
a lawyer and functions as
Partner of the Law Firm, M/s
Nithya Partners since 1997.
Prior to joining M/s Nithya
Partners, he was a State Counsel in the Attorney
General’s Department from 1987 to 1991 and a Senior
Tax Manager at M/s Ernst & Young, Chartered
Accountants from 1993 to 1996.
Mr Goonewardena has extensive experience in areas of
financial law, including takeovers and mergers, taxation,
derivatives, securitizations and restructuring and has
been providing legal advice to banks and financial
institutions in the aforesaid areas and in other areas
such as corporate governance related issues.
Mr Goonewardena was appointed to the Board of
Seylan Bank PLC on 30th December 2008.
Rear Admiral (Retd.)
B A J G Peiris
{RSP, VSV, USP, ndc, psc,
DISS}
Rear Admiral (Retd.) Ananda
Peiris is a decorated officer of
the Sri Lanka Navy counting a
service record of over 34 years.
His naval experience includes
serving as the Area
Commander - Eastern Naval Command, Western Naval
Command and Southern Naval Command. He was also
twice appointed the Deputy Area Commander of
Northern Naval Command and Squadron Commander
Fast Attack Craft and has taken part in almost all major
operations in the North and East. He had also been the
Director - Naval Administration & Welfare, Director -
Naval Personnel & Training and Director General
(Services), Sri Lanka Navy. He retired from the regular
naval service on 29th January 2009 and has since been
mobilized to the regular naval reserve. He is currently
attached to the Civil Defence Department of the Ministry
of Defence.
Rear Admiral (Retd.) Ananda Peiris was granted the
accolades of Rana Sura Padakkama (RSP), Vishishta
Sewa Vibhushanaya (VSV), and Uttama Seva
Padakkama (USP) for his service to the nation, while he
was also awarded several medals during his tenure of
service in the Navy including Sri Lanka Navy 50th
Anniversary Medal (2001), Sri Lanka Armed Services
Long Service Medal, President’s Inauguration Medal
(1978), North East Operation Medal and Purna Bumi
Padakkama.
Rear Admiral Peiris was appointed to the Board of
Seylan Bank PLC with effect from 8th January 2009.
. SEYLAN BANK 15

BEATING STRONGER!
Senior Management Committee
Mr Ajita Pasqual,
BSc - Econ & Business Administration
General Manager / Chief Executive
Mr P T Sirisena
BCom (Hons), M.A. (Econ.)
Head of Compliance
Mr J G Shirley De Silva
Senior DGM - International & Development
Banking
Mrs L Seneviratne
AFA (UK)
Senior DGM - Region 1
Mr C Kotigala
Attorney-at-Law & Notary Public
Senior DGM - Legal
Mr Ajantha Madurapperuma
CFA (USA), FCMA (UK), MBA (Sri J'pura),
FIB (IBSL)
Senior DGM - Corporate & Foreign
Currency Banking
Mr Tissa Nanayakkara
AIB (Sri Lanka) (P I)
Senior DGM - Seylan Card Centre
Mr Samuel J Jebaratnam
FIB, PGEDBM, MBA
DGM - Bancassurance & Co-ordinator to
General Manager/CEO
Mr S H Indrapala de Silva
AIB (Sri Lanka), FIPFM (UK), FICIA (Canada)
DGM - Agricultural Banking & Grameen
Credit
Mr Kithsiri Perera
B.Com (Special) (Sri J’pura),
AIB (Sri Lanka)
DGM - Operations/ Administrative Services
Mr V Kulendra Seyone
DGM - Business Development
Mr Sarath Dias-Bandaranayake
FIB, AIB, Dip. In Mgt., NDTD, FCPM
DGM - Audit & Inspection
Mr K D W Rohana
AIB (Sri Lanka), Dip. In Business & Fin.
Adm. (ICASL)
DGM - Region IV
Dr P Niranjan PhD (North West - NY), MBA
(IIU.EU), FSSM (UK), FBMA (UK), FACOM (UK),
FICIA (Canada),FPMA (UK), FCBA(SL),
MCPM(SL), AIB (SL), MAAT (SL), AIPFM (UK),
Dip.In Business Mgt (India) DGM - Region III
Mr Ranjith X Fonseka
Asso. Dip. In Information Technology (Aus)
DGM - e-Commerce & IT Inernational
Mr S Palihawadana
BSc
DGM / Chief Dealer
Mr R N Divulwewa
Post Grad. Ex. Dip. In Bank Mgt.
DGM - Region VI
Ms Shalini M S Perera
ACIB (UK), MBA (Sri J'pura)
DGM - Corporate & Foreign Currency
Banking
Mr Chitral de Silva
Ex. Dip in Business Administration
(University of Colombo)
DGM - Development Banking
Mr A R M Hannan
M.Sc. in IT (Keele)
DGM - Information and Communication
Technology
16 SEYLAN BANK .

Mr Ravi Dissanayake
AIB (Sri Lanka) - (PI)
AGM - Personal Assistant to GM/CEO
Mr Cyril Gamage
AGM - Private Banking
Mr Hiran Amarasinghe
B.A (Hons) UK, FCCA (UK)
AGM - Treasury
Ms Rohini Weerakkody
AIB (Sri Lanka), Dip. In Bank Mgt. (IBSL),
MBA (Huddersfield)
AGM - Operations
Mr T J Pathirage
MBA (Sri J’pura), B.Com, CISSP (USA),
CISA (USA), CISM (USA), CCSE (USA), AIB,
ISO 27001/BS7799, Lead Auditor (IRCA)
AGM - Information Systems Audit
Mr Shafeek Samad
MBA
AGM - International
Mr Lalantha Kulatunga
AGM - Region V
Mr Nandalal R Ranasinghe
Diploma in Bank Management
AGM - Treasury & International Audit
Mr Delvin Pereira
MBA (University of Western Sydney)
AGM - - Region VII / SME Unit
Mr Christie Nanayakkara
AIB, MBA (University of Western Sydney)
AGM - Corporate Banking
Mr A A Emmanuel
B.Sc, Dip. In Business Admn.
AGM - Region VIII
Mr Kamal Deshapriya
ACMI (UK), DIP MASS COM (Sri J’pura)
AGM - Sales
Mrs Damayanthi Tillekeratne
AGM - International / Exports
Mr M K Prematilleke
Diploma in Bank Management (IBSL), Dip
in Banking (P 1), Post Graduate Diploma
AGM - Debt Restructuring Unit / Legal
Mr Sirilal Amarasinghe
National Diploma in Technology
(Mechanical Engineering), AIB (PI)
AGM - Development Banking
Mr Neomal Suraweera
AIB (London) (PI)
AGM - Region I
Mrs Deeshani P Gooneratne
MBA, MIPM, CIM (Final Stage)
AGM - Human Resources
Mrs Gillian Edwards
AIB (PI), Post Graduate Diploma in Bank
Management, MBA (University of Southern
Queensland, Australia)
AGM - Region IX
Mrs Yasanthi Udurawana
AGM - Consumer Finance Unit
Mr Rohan Fernando
Diploma in Credit Management (IBSL)
AGM
Mr M S M Saleem
Diploma in Bank Management (Sri Lanka),
AIB (London)
AGM - Audit & Inspection
Mr M Sumith Fernando
AIB (Sri Lanka), Diploma in Business
Management (ICFAI University - India)
AGM - Range II
Mr K Shanaka C Perera
MBA (Sri J'Pura), AIB (SL), PG EX.Dip.Bank
Management (IBSL)
AGM - Chief Dealer (Global Treasury)
. SEYLAN BANK 17

18 SEYLAN BANK .

Management
Discussion & Analysis
. SEYLAN BANK 19

BEATING STRONGER!
Private Banking Unit (PBU)
Our customer portfolio, has thus achieved a
substantial growth in high net worth clientele
We continued our ethos of building and
nurturing relationships which is the
essential tenet of private banking.
Our customer portfolio, has thus
achieved a substantial growth in high
net worth clientele. Our focused
approach and value additions together
with the ability to cross sell and
leverage the strengths we have within
the bank have been significant
advantages in growing this portfolio.
Customer service remains our focus in
the next year and we will strive to
ensure that our skills and knowledge
base continue to improve given the
intense competition in this sphere.
The dedicated relationship manager
and the open door policy of ensuring
that the bank’s hierarchy is accessible
to any customer who requires advice or
consultation remain the norm. The
simple yet effective service already
implemented will continue to be built
upon and we firmly believe that we can
continue to grow and meet the required
targets for the next year
Further, our office will move to
R A De Mel Mawatha Colombo 3. This
newly acquired purpose built location
features all modern amenities in
addition to ample parking space.
International Operations
Our next objective in process improvement is to
achieve a paperless operational status, a goal which
is nearing fruition.
Global financial markets experienced
significant volatility in the year 2008.
The Credit crunch, liquidity crisis and a
weakening dollar have sent major
economies into a recession, resulting in
an inevitable slowdown of international
trade. The dire economic conditions
have also impacted developing nations
such as Sri Lanka.
Within this context, our trade services
portfolio performed admirably,
exceeding targets and budgetary
forecasts. There was significant growth
in the import portfolio but the Export
portfolio recorded a slight drop, an
industry norm during the past year.
Nevertheless we managed to achieve a
year-on-year growth of 32% in overall
profits.
We are accruing the benefits of
centralizing trade services operations
while staff across the network of branch
offices focus on identifying and catering
to individual customer requirements, the
centralized unit at the head office
streamlines these services through the
constructive deployment of information
technology.
We are proud to note that we continue
to posses one of the most
technologically advanced trade services
software solutions in the country and
hope to capitalize on this competitive
advantage. Our next objective in
process improvement is to achieve a
paperless operational status, a goal,
which is nearing fruition. We also take
pride in announcing the receipt of the
prestigious ISO 9001:2000 certification
for operational excellence.
20 SEYLAN BANK .

Consumer Finance Unit and Pawning
The bank also focused on improving the standard of
service by attuning staff to client needs.
Leasing
The Leasing Industry experienced a
sluggish growth this year and was
adversely affected by prevailing high
interest rates and the high cost of
vehicles.
However, strategic partnerships with a
number of vehicle dealers, and service
efficiency offset these negatives, and
yielded customer benefits.
The automation of leasing processes
has delivered a number of positives to
customers and the bank in terms of
effective services, prompt approvals
and monitoring efficiency.
Hadha Medura Housing Loans
Hadha Medura, the “Quick Housing
Loan” was launched in the year 2008.
The public response was overwhelming
with over 2000 applications received
during the first 2 months. Hadha
Medura Housing Loans are disbursed
within 10 days of receipt of a completed
set of documents.
Hadha Medura Loan Savings
Scheme
This product will be launched in the
year 2009. Customers depositing a
fixed sum in a Hadh Medura Loan
Savings Account will be entitled to a
loan following six months of continuous
deposits.
Education Loans
The bank plans to introduce an
Education Loan in 2009 specially
designed for full-time and part-time
students following a degree or diploma
at any recognized institution.
Stock Brokering
This year was not conducive for
business growth given the negative
market. We instead focused on
servicing and retaining the existing
customer base.
Pawning
The Bank commenced pawning service
in 1997 and expanded its channels
from 71 in 2007 to 103 in 2008.
The year’s primary objectives of
increasing the number of channels to
100 and a growth of 200% were
accomplished with the portfolio
contributing 10% to the bottom line.
The bank also focused on improving
the standard of service by attuning staff
to client needs. Another initiative of the
bank was to change client perception of
pawning by addressing advantages
including convenience, flexibility and
low interest rates by promoting the
bank’s USP “Gold in Cash Out”
During the year 2009 the bank hopes to
double the portfolio through existing
and enhanced channels. Staff training
will also continue in the banks efforts to
deliver superior services.
. SEYLAN BANK 21

BEATING STRONGER!
Information Technology
Our customer portfolio, has thus achieved a
substantial growth in high net worth clientele
Underpinned by solid infrastructure,
Seylan Bank’s IT platform ensures that
all core services are delivered through a
fully-automated system. Infused with a
banking culture of “Any Time,
Anywhere” Seylan boasts delivery
channels that are on par with global
banking services. Thus, all our IT
innovations consistently focus on the
provision of sophisticated delivery
channels through our core banking
platform.
Over 113 branches and convenience
centers, are linked by a single
automated network. Customers enjoy
superior customer care and efficient
banking services via the expedience of
ATMs, Tele-Banking, Internet Banking,
POS, Credit cards and our pioneering
Mobile vehicle concept, which takes our
services to far flung areas in the
country.
As part of its IT oriented banking
services, Seylan’s Business
Development Officers are equipped with
Personal Digital Assistants (PDAs) to
process transactions from a customer’s
home; this is in keeping with the Bank’s
objective of achieving banking in all
parts of the island. An extensive
transaction menu is facilitated through
these PDAs including balance inquiries,
cash deposits and withdrawals.
Treasury Operations
The local inter bank market too retained similar levels
of volatility as seen during the last couple of years.
The international financial markets
remained volatile during the year due to
the effects of the sub-prime crisis
setting in. The local inter bank market
too retained similar levels of volatility as
seen during the last couple of years.
Asian markets faced liquidity
constraints with money market limits
being restricted. During the latter part of
the year the bank faced an
unprecedented withdrawal of deposits,
which was prudently managed by the
treasury.
Despite adverse conditions the treasury
profit centre increased gains with
prudent management of its portfolio,
achieving a net profit of LKR 1,031
million - an increase of 21.21% over the
budgeted figure and an increase of
47.08% over the previous year. During
the year the treasury made an
exchange income of LKR 441.27
million, interest income on loans and
advances of LKR 290.40 million,
interest income on placements with
other banks of LKR 122.55 million and
interest income on treasury bills and
bonds of LKR 2,960 million.
22 SEYLAN BANK .

Products & Services Offered
SEYLAN TIKIRI
Encouraging and rewarding the habit of
saving, Seylan Bank’s Tikiri Saving’s
Account for children is at the forefront
with its innovative promotions and
leading value additions.
The Bank conducted the very
successful “Tikiri Trip to Hong Kong”
promotion in 2007 taking 25 lucky kids
and a parent each to Disneyland.
A similar group was taken on an
exciting trip to Singapore in December
2008 and another 50 kids along with
their families enjoyed a day at “Leisure
World”, Hanwella.
SEYLAN MERIT REWARDS
The Seylan Merit Rewards scheme
pioneered the concept of reward for
savings, introducing gifts and grants to
commemorate special occasions and
milestones. Seylan Merit Rewards
assists personal, current and savings
account holders with grants for surgery,
bereavements, accidental or natural
disasters, marriage,
professional/academic/sporting
achievements, child births, 60th
birthdays, golden wedding
anniversaries. Encouraging the savings
habit among the people of Sri Lanka,
Seylan Merit Rewards extends the
benefits to immediate family members
as well. Over 23,000 account holders
have been rewarded thus far (without a
draw).
SEYLAN 2 IN 1
One of the newest and most innovative
services within our portfolio, Seylan 2 in
1 is an Automated Investment Manager,
which converts funds in current
accounts into savings balances,
enabling customers, who are also
eligible for Seylan Merit Rewards to
earn interest overnight. The interest
earned is calculated daily and credited
to the savings account on a weekly
basis. This is the first such product in
Sri Lanka with a monthly statement
replacing the traditional passbook
Customers are also given the
opportunity to pay all standing orders,
loan recoveries and bank charges
through the savings account.
SEYLAN 5 STAR DEPOSITS
This is the Fixed Deposit product in our
portfolio. Interest is earned monthly,
annually or at maturity on the
completion of five years with a minimum
investment of Rs.100,000/-. In addition
to the interest earned, 0.1% of the
deposit value is awarded monthly in
form of a utility voucher for the first year.
Utility vouchers can be used to pay
water, electricity, SLT, Lanka Bell, Dialog
or Mobitel bills.
SEYLAN PIYASA
2008 proved to be a challenging year
due to the spiraling interest rate regime
we had to contend with, which forced
us to increase our rates in tandem with
market rates. However, given the caring
stance we espouse and realising that
housing is a primary need for all citizens
of this country, Seylan Piyasa continued
to assist customers to obtain their own
home. The housing loan portfolio
increased by 800 Mio. in 2008.
Our value additions in obtaining loans
include online applications and enabling
customers to make calculations via our
website. Our services were also made
more accessible through the dedicated
Piyasa Center re-located to Colombo 5.
SEYLAN VISA CREDIT CARD
The Seylan Visa Credit Card offers
cardholders a variety of exclusive
benefits, including reimbursement of
surgical and wedding reception bills
and school fees via the Bank’s grant
scheme. With no stamp duty or fuel
surcharge, the Seylan Visa Credit Card
is convenient and assures ease of
payment. Purchases from designated
outlets are repaid in interest free
installments, while cardholders are also
provided with free travel and medical
insurance cover.
. SEYLAN BANK 23

BEATING STRONGER!
Products & Services Offered
SEYLAN VISA DEBIT CARD
With the Seylan Visa Debit Card
customers are assured convenient
access to their money from anywhere in
the world. Available at all Seylan
branches, with no debit tax or fuel
surcharge, the Visa Debit Card from
Seylan is the most secure means of
carrying cash. Customers can withdraw
from any VISA accredited ATM and
make purchases at visa merchant
outlets.
SEYLAN VISA TRAVELLERS’ CARD
An alternative to Traveller’s Cheques,
the Traveller’s Card is the safest means
of carrying foreign currency when
travelling. As a Visa accredited card, the
Traveler’s Card accesses over
one million ATMs at no cost, and over
12 million merchant outlets worldwide.
SMS alerts are generated each time the
card is used, and a US $ 50,000 travel
insurance is offered free of charge for
30 days, regardless of the frequency of
travel. Customers are also provided a
web pin to view card transactions – and
to block the card in case of loss/theft.
An additional card is issued to
customers, which can be used in case
of loss/theft of the original card.
SEYLAN VISA PRE – PAID RUPEE
CARD
The VISA Pre-Paid card is available at
any Seylan Branch for a minimum of
Rs.500/-. Subscribers are not required
to maintain an account with the Bank.
The Pre-Paid Rupee Card pays for
purchases directly and withdraws
money at VISA ATMs locally. .
COOL CASH
Launched in January 2006, Cool Cash
is a youth savings account targeting the
18-29 demographic. Account holders
enjoy a variety of exclusive benefits,
including a 1% premium on interest,
cash rewards on birthdays and a
branded Cool Cash debit card to
purchase goods and services. . To
encourage saving among youth the
minimum balance maintained in the
account was brought down from LKR
25,000/- for a period of 12 months
preceding his/her birthday to LKR
5,000/- for any 8 calendar months
preceding his/her birthday.
SEYLAN SHAKTHI
A four year fixed deposit with interest
earned monthly, annually or at maturity,
Seylan Shakthi requires a minimum
Rs100,000 investment. In addition to
interest earned, 0.1% of the deposit
value, awarded in the form of monthly
utility vouchers during the 1st year,
maybe used to pay electricity, water,
SLT, Lanka Bell, Dialog or Mobitel bills.
SEYLAN HARASARA
Specially designed for senior citizens
over the age of 50, Seylan Harasara
covers Fixed Deposits, Current and
Savings Accounts. Harasara Account
holders are entitled to free membership
at Ceylinco Swift Care and are issued a
“Harasara Identity card” free of charge.
When placing a Fixed Deposit, senior
citizens enjoy an enhanced interest rate
of 1.5% p.a. Account holders between
the age of 50 and 65 years with a Fixed
Deposit in excess of Rs.100,000/- for
an investment period of 1 year or
above, are entitled to a critical
insurance cover for 20 illnesses.
Maintaining Rs.10,000/- in a current
account or Rs.20,000/- in a savings
account for a continuous period of 6
calendar months, entitles account
holders to Merit Rewards benefits,
including a wrist-watch on turning 60.
Account holders over the age 70, who
maintain Rs.10,000/- in a current
account or Rs.20,000/- in a savings
account for a continuous period of
24 SEYLAN BANK .

12 calendar months are reimbursed the
cost incurred on miscellaneous medical
expenses . A one year subscriptionfor
Reader’s Digest magazines, local news
papers, etc on a one-off basis with a
maximum limit of Rs.5,000/- is also
available to senior citizens meeting this
criteria.
CEYLINCO SEYLAN GOLD HEART
Ceylinco Seylan Gold Heart is an
account, which invests and trades in
24 karat gold. Launched on 09th May
2008, the account is available for
individual, joint or corporate ownership
(proprietorships or partnership accounts
are opened under individual/ joint
names), with parent/guardian able to
open an account on behalf of minors.
Non nationals opening an account
should prove remittances are received
from banking channels abroad.
The minimum transaction amount for
gold investment and trading is 5 grams,
and in multiples of 1 gram thereafter.
When the price of gold appreciates,
clients are able to resell the gold held in
the account to the bank for capital gain
with bank acting as the counterparty.
Clients can borrow up to 85% against
the gold balance in the account and
request for physical gold or retain as
pure gold in the gold account.
The bank sets the buying and selling
prices according to the Global Gold
Market daily between 9.00 AM and
4.00 PM. Variance between the buying
and selling price is Rs.40 per gram.
No custodial fee is charged and there is
no risk of losing the gold or the need to
have safe deposit lockers or insure
physical gold, if kept at home.
Now clients can trade in gold online via
our website, https://goldheart.seylan.lk.
Physical gold bars are available in
denominations of 5 grams, 10 grams,
20 grams, 50 grams and 10 Tola bars
of 3.746 ounces (116.6gm) or multiple
of each denomination
SEYLAN IHALIN IHALATA
Seylan Ihalin Ihalata is a step – up
savings deposit scheme, which offers a
high rate of interest depending on the
deposit balance of the account.
• A minimum deposit of Rs.5,000 /-
to open an account
• Applicable rate of interest
• From Rs.5,000/- to Rs.50,000/-
12.5% p.a.
• From Rs.50,001/- and above
14.0% p.a.
• Unlimited withdrawals
• Free International Debit card
• Free internet & SMS banking
facilities
• 90 per cent of the account balance
can be obtained as an over the
counter loan
• Maintain a minimum balance of
Rs.20,000/- for a continuous period
of 6 months and be eligible for
Seylan Merit Rewards benefits.
• 24 hour access to the account
through the island wide ATM
network.
THILINA SAYURA FOR NRFC &
RFC ACCOUNT HOLDERS
Thilina Sayura is a loyalty scheme for
Non Resident Foreign Currency (NRFC)
and Resident Foreign Currency (RFC)
account holders. A minimum balance of
USD 500 or its equivalent in any other
currency for a period of 6 calendar
months immediately preceding the date
of event should be maintained in order
for account holders and immediate
family members to qualify.
. SEYLAN BANK 25

BEATING STRONGER!
Products & Services Offered
Type of Grants and rewards
• A reward of up to Rs.25,000/- when
buying or building a new house.
• A wedding gift Rs.5,000/-.
• Rs.50,000/- for an international
achievement in sports, drama,
music or art.
• Rewards of Rs.25,000/- and
Rs.50,000/- for children’s
educational achievements at the
year 5 scholarship, A/L and O/L
exams.
• The actual cost of a one way ticket
for emergency travel to Sri Lanka .
• Reimbursement of surgical
expenditure of up to Rs.100,000/-
depending on the balance.
• A grant of Rs.25,000/- in times of
bereavement
• A reward of Rs.10,000/- for a births.
• Reimbursement of up to Rs.5,000/-
of Sri Lanka Foreign Employment
Bureau registration fee Up to
Rs.50,000/- grants for school
admission.
• Cover for lost baggage of up to
Rs.50,000/-.
• Special holiday packages for two at
Hotel Ceysands, Bentota, Sri Lanka
for maintaining a balance of USD
5,000/- or equivalent for six months.
Other benefits offered to Seylan
NRFC Account holders:
If a minimum balance of USD 500 or
equivalent is maintained in an NRFC
account for a period of six calendar
months, the account qualifies for:
• A complimentary Tikiri account with
a deposit of Rs.500/-.
• A Rupee loan facility of 200% of the
account balance for income
generating purposes, upon the
return of the account holder to Sri
Lanka for permanent residency.
• A life insurance cover of up to Rs.1
million.
• NRFC Cash Card - This is a unique
facility offered only by Seylan Bank.
This card allows a nominated
member the family to withdraw a
fixed sum of money monthly, in Sri
Lankan Rupees, with an upper limit
applicable as an aggregate for a
month.
SEYLAN RAJINA
Seylan Rajina is the total financial
solution for women, which offers
savings accounts, fixed deposits, free
credit and debit cards and loans with
special interest rates.
• Internet Banking
Launched in 2000, Seylan Bank’s
Internet Banking service provides
account / credit card holders the
opportunity to carry out a variety of
banking functions at their convenience
including fund transfers and utility bill
payments at the click of a button. The
Seylan Internet Banking service can be
accessed on www.eseylan.com
• SMS Banking
Launched in early 2004, Seylan
pioneered this service via all mobile
phone operators in the country. This
service covers all current and savings
account holders of Seylan bank,
subscribing to any digital cellular
network within Sri Lanka and provides a
host of banking functions such as
account balance inquiries, fund
transfers, utility bill payments, SMS
alerts and mobile phone reloads.
26 SEYLAN BANK .

• Seylan Phone Banking
Launched in 1998, Seylan Phone
Banking or ‘Seylaphone’ has become a
widely used tool for account holders to
carry out their basic banking functions
using fixed line touch phones or mobile
phones. This facility is provided free of
charge and lets account holders use it
in their preferred language.
• Internet Payment Gateway
Launched in April 2004, this service
provides vendors the opportunity to
display and market their products /
services online. Payments can also be
made for goods or services through the
Seylan Payment Gateway using a VISA
credit card or by debiting a Savings or
Current account. Over the last few
years, Seylan Bank PLC has offered
Internet Payment Gateway solutions to
a number of local and international
clients.
• Seylan Bank Web Site
The Seylan website is the Bank’s
window to the entire world. This site
was first launched in 2001 and relaunched
in October 2008 in all three
languages – Sinhala, English and Tamil.
This is the first trilingual website by a
commercial bank in Sri Lanka.
. SEYLAN BANK 27

28 SEYLAN BANK .

Sustainability Reporting
. SEYLAN BANK 29

BEATING STRONGER!
Corporate Social Responsibility
Seylan Bank sponsored the Avurudhu Ulela organized by the
Raddolugama Mithuru Sangamaya and Raddolugama Police for the 3rd
consecutive year. Winners of Avurudhu Kumari contest with the prizes.
Seylan Bank was the main contributor for the 2008 Botale Maha Perahera
in March 2008. Manager, Warakapola Branch, Mr. Niyoka Tissera handing
over the sponsorship cheque to the Chief incumbent of Botale Rajamaha
Viharaya, Ven. Kadigamuwe Pemananda Thero in the presence of
Manager, Media and Advertising, Mr. Thusitha Vitharana, Seylan Bank.
Seylan Bank, traditionally has blended
itself with the fabric of the society in
which it operates island-wide.
Using its unique culture, the Bank
reaches out to the underprivileged with
socially recognized needs in order to
live up to the spirit of its pay-off line.
In order to foster the need for religious,
cultural and ethical mores, the bank
made a significant contribution to the
“Navam Maha perahera” in the month
of February, the “Botale Maha
Perahera” in the month of March, the
“Poson Udanaya” organized by
“Athugalpura Buddhist Association” and
Kuliyapitiya Poson Udanaya in June.
Having established itself as a pioneer in
inculcating the savings habit among
school children island-wide, Seylan
Bank took a further step in donating
250 personal computers to an equal
number of schools attended by
underprivileged students, introducing
computer education, inclusive of the
school curriculum packages in all three
languages.
Continuing its endeavours towards the
education of children, the bank
sponsored a series of island-wide “Year
5 Scholarship seminars”, organized by
“Tharunyata hetak”.
260 school children in the border
villages of Vakarai and Seruwavila were
the beneficiaries of school bags
supplied by the Bank. “Tikiri” also
provided 1000 school bags to the
Annual Christmas party organized by
the Hon. Speaker of Parliament for
lesser privileged children.
This effort has been in addition to the
several sponsorships undertaken by the
Bank for events of educational, cultural
and ethical values organized by the 83
Student Savings Centers in which it
maintains a permanent presence.
Traditionally, the Avurudu Season sees
Seylan Bank Branches involved in
festivities organized island-wide and as
an example, Raddolugama Branch
sponsored “Seylan Avurudu Ulela”
30 SEYLAN BANK .

Seylan Bank made a significant contribution for the customary Nawam
Maha Perahara in February 2008. The picture shows Assistant General
Manager – Sales, Mr Kamal Deshapriya, Seylan Bank handing over the
sponsorship cheque to the chief incumbent of the Gangaramaya Viharaya,
Ven. Galaboda Siri Gnanissara Nayaka Maha Thero.
Seylan Bank sponsored the Kuliyapitiya Poson Udanaya held on 19th June
2008 and the the picture shows the Manager Kuliyapitiya Branch, Mr.
Philip Ramanayaka handing over the sponsorship cheque to the Chief
incumbent of the Kuliyapitiya Rajamaha Viharaya, Ven. Nikawaratiya
Mangala Thero.
organized by the Raddolugama Mithuru
Sangamaya and Raddolugama Police
Station at Raddolulgama grounds for
the third consecutive year.
The congenital hearing impairment of
Miss Sashini Imashi an otherwise
cheerful child required a cochlear
implant, 50% of the cost of equipment
and surgery having being sponsored by
the Seylan Bank.
In an era when organizations worldwide
are striving for social and
environmental acceptance, Seylan Bank
has maintained sustainable Corporate
Social Responsibility initiatives.
Seylan Bank part sponsored the cost of equipment and surgery for the
cochlear implant of Ms. Sashini Imashi to correct her hearing disability.
. SEYLAN BANK 31

BEATING STRONGER!
Human Resources
GRADE ANALYSIS OF STAFF
1600
1400
1200
1000
800
Management, Chief &
Senior Managers
Managers &
Asst. Managers
Executive I &
Executive II
600
400
200
BKA I - III
Others
0
0
275
550
825
1100
1375
1650
1925
2200
Treasury Department Dealers: Winners of inter-Branch/Departmental quiz
Seylan team winners of trade finance quiz
• In appreciation of the loyal service
rendered, staff members who have
been with the Bank since its very
inception and who completed 20
years of service were recognized at
the Long Service Awards Ceremony
held on the 9 June 2008.
Employees completing 10 years of
service were also honoured at the
event.
• In order to expedite staff loans an
automated Loan Application to be
introduced during the year 2009,
enabling staff members to apply for
loans on-line in the future.
• We have opened up a web site for
the purpose of updating staff leave
in order to minimize the related
paper work.
• A Transfer tracking system is being
designed at present to allow staff
members to request for transfers
online. This will enable the short
listing of staff with the required
experience, skills and competencies
to expedite transfers, while
minimizing manual work.
• An employee’s “Career
Development Plan” was introduced
to critically evaluate the training
needs/competency mapping and
Succession Planning for key
positions.
32 SEYLAN BANK .

STAFF TRAINING PROGRAMMES - 2008
NO OF PARTICIPANTS IN
TRANINING PROGRAMMES -2008
In-house Training Program
Local
In-house Training Program
Local
Foreign
Foreign
Seylan team champions of quiz competition (Future Waves Brain Teaser)
HR Staff visits Souther Region Branches
Staff Training
Gap Analysis was carried out in order to
ascertain the training needs of each
staff member. Personality development,
Attitude building and Customer service
were identified as the areas required by
majority of our staff members and our
Skills Development Centre to conduct
specific training programmes in these
areas.
Our Skills Development Centre
conducts weekend courses on Credits
and International taking into
consideration the practical aspects
related to such areas. These courses
provide staff with practical training to
handle routine situations.
The Annual Inter-Branch/Departmental
Quiz competition was successfully held
on 16 August, 2008 at the Ceylon
Continental Hotel, Colombo.
The Skills Development Centre also
coordinates participation of our quiz
teams in several quiz competitions.
Reflecting the staff’s profusion of
knowledge, our teams managed to
secure winning positions at the
following quiz competitions.
Trade Finance Quiz
- Winners
Future Waves Brain Teaser
- Champions
Wisdom 2008 Quiz
- Best Team among the
Banking Sector
. SEYLAN BANK 33

BEATING STRONGER!
Corporate Governance
On 29th December 2008, the Board of
Directors of Seylan Bank PLC was reconstituted
in terms of Section 30 (9) of
the Monetary Law Act No. 58 of 1949.
As a result, the effectiveness and extent
of compliance with corporate
governance practices in the Bank are
being reviewed by the present Board.
Board sub-committees in existence
until 29th December 2008 have also
with the re-constitution of the Board,
been dissolved and new Board subcommittees
formed under the
leadership and guidance of the new
Board.
For the information of our stakeholders,
we therefore outline in brief the
corporate governance practices
adopted by the previous Board and the
corporate governance rules which the
Bank under the new management has
commenced compliance from 30th
December 2008.
Applicability of Corporate Governance
Rules
The corporate governance practices
which the Bank was required to
conform to stemmed from
• the Banking Act Direction No. 11 of
2007 (Corporate Governance for
Licensed Commercial Banks of Sri
Lanka) issued by the Monetary
Board of the Central Bank of Sri
Lanka including subsequent
amendments;
• the Colombo Stock Exchange rules
on Corporate Governance
(applicable on a voluntary basis for
listed entities until 1st April 2008
and for banks until 31st December
2008) and mandatory thereafter.
• the Code of Best Practice of
Corporate Governance jointly issued
by the Securities & Exchange
Commission of Sri Lanka (SEC) and
the Institute of Chartered
Accountants of Sri Lanka (ICASL).
In the 2007 Annual Report published,
the Bank reported that, legal action had
been filed by the Bank challenging the
provisions of the Mandatory Code of
Corporate Governance promulgated by
the Central Bank of Sri Lanka. The
Bank also noted in its Report that since
certain provisions of the said Code
overlap corporate governance
requirements set out in the Listing Rules
of the Colombo Stock Exchange, the
outcome of the above litigation will
determine the composition of the Board
of Directors of the Bank and the extent
of compliance with the aforesaid Code
and the Corporate Governance rules of
the Colombo Stock Exchange.
The litigation came to a conclusion in
July 2008 with the issuance of an order
by the Supreme Court delivered on 8th
July 2008 directing several
amendments to be made to provisions
in the Banking Act Direction No.11 of
2007 and Direction No. 1 of 2008.
Amendments to the Code were
thereupon issued by the Monetary
Board through Banking Act Direction
No.5 of 2008 dated 15th August 2008.
The present Board notes that the Bank
under the management of the previous
Board was not fully compliant with the
practices laid down in the Corporate
Governance Code and its provisions
embodied in Direction No. 11 of 2007
as amended, during 2008. Compliance
with the provisions of the Code hitherto
not adhered to, has commenced from
2009 under the auspices of the new
Board.
The Corporate Governance rules issued
by the Colombo Stock Exchange (CSE)
becomes mandatory to all listed
companies from the financial year
commencing 1st April 2008 and for
licensed commercial banks which are
listed entities, from the financial year
commencing 1st January, 2009.
Therefore compliance upto end 2008 of
the CSE rules by the Bank was only on
a voluntary basis.
Nevertheless, the Bank had
commenced compliance with the above
regulatory requirements pertaining to
corporate governance practices during
2008 and the extent of Corporate
Governance practices in operation at
the Bank during 2008 and revised
practices adopted thereafter by the
newly appointed Board of the Bank, are
outlined below:
Board of Directors
The Board is overall responsible and
accountable for the management of the
affairs of the Bank through the manner
in which the bank conducts business
and maintains prudent risk
management measures and for the
safety and soundness of the bank.
34 SEYLAN BANK PLC .

The Board was headed by the Founder
Chairman and comprised of twelve
directors (for the major part of 2008)
with relevant experience and expertise
in the areas of Banking, Finance,
Management and law.
The Board was accountable to the
shareholders for the Bank’s overall
performance and their responsibilities
included:
• Formulation of business policies and
ensuring effective implementation of
same.
• The appointment of the CEO and
succession planning of the
corporate management
• Reviewing internal control, risk
management and audit systems
• Approval of credit facilities
exceeding the delegated limits of
the executive Credit Committee
• Ensuring internal and external
information flows and appropriate
financial reporting
• Approving annual budgets and
corporate plan and approving
annual and interim financial
statements.
• Ensuring adherence to legal and
ethical standards.
Measures taken in 2009
The responsibilities of the newly
appointed Board include: -
• Enhancing the Bank’s image;
• Re-organisation of the Bank;
• Providing strategic direction by
formulating and implementing of
new Strategic Plan for the Bank;
• Strengthening internal systems of
control, risk management and audit
systems;
• Implementation of sound credit
policies and ensuring high credit
quality;
• Adopting corporate governance
best practices;
• Rationalization of administrative and
personal expenses.
• Re-visiting Human Resources and
Procurement policies.
Composition of the Board
The Board comprised of Founder
Chairman and twelve directors during
most part of 2008. However, several
changes took place in the Board during
2008, details of which are disclosed in
pages 48-49 in the Annual Report of
the State of Affairs of the Company.
On 29th December 2008, the Board of
Directors of Seylan Bank was reconstituted
under the provisions of
Section 30 (9) of the Monetary Law Act
No. 58 of 1949 and management
powers over Seylan Bank PLC were
vested in the Bank of Ceylon by the
Central Bank of Sri Lanka. Four new
directors were thereafter appointed on
30th December 2008 comprising of
M/s E Narangoda (Chairman), Nihal
Jayamanne PC, P Lalith P Withana and
F Naomal Goonewardena. On 8th
January 2009, two more directors were
appointed to the Board i.e.,
Mr R Nadarajah and Rear Admiral
(Retd.) B Ananda J G Peiris. The new
Board comprises of two executive
directors viz. M/s E Narangoda
(Chairman) and R Nadarajah, the
remaining four being independent nonexecutive
directors.
All directors have forwarded to the
Bank Supervision Dept. of the Central
Bank signed affidavits and declarations
confirming their ‘fit and proper’ status
to hold office as directors as required by
Section 42 of the Banking Act (as
amended) and as per Clause 2(3) (i) of
the Banking Act Direction No. 11 of
2007.
This procedure was not followed by the
previous Board in view of litigation
instituted by the directors challenging
the provisions of Section 42 of the
Banking Act (as amended).
Independent Directors
As stated earlier, the Corporate
Governance rules issued by the
Colombo Stock Exchange (CSE)
becomes mandatory for compliance for
licensed commercial banks from the
financial year commencing 1st January,
2009. With the exception of the
appointment of Prof. Lalith Samarakoon
as an independent non-executive
director, the previous Board’s
compliance with the CSE rules
pertaining to independent directors, in
2008 was partial.
The present Board of the Bank
comprises of 4 independent nonexecutive
directors, conforming to the
. SEYLAN BANK PLC 35

BEATING STRONGER!
Corporate Governance
minimum number of non-executive and
independent directors required both as
per the CSE rules and the CBSL Code
on Corporate Governance. All nonexecutive
directors have signed
declarations confirming their nonexecutive
/independent status in
compliance with the CSE Rules.
Board Meetings
The Board met regularly during 2008
and has convened special board
meetings whenever necessary.
Adequate time was allocated to matters
of the Board and the Bank. The Board
met ten times during the year and the
attendance at these meetings are given
below:
Three Board sub-committees
functioned under the previous Board
viz. Audit Committee, Integrated Risk
Management Committee and the Credit
Committee. Adequate time was
allocated for the convening of these
meetings viz. the Audit and Risk
Management meetings being held
quarterly and the Credit Committee, as
and when deemed necessary.
Name Meetings Attendance Excused
Dr J L B Kotelawala 10 10 -
Dr S P C Kotelawala 10 09 01
Mr R Renganathan (resigned on 29/9/08) 08 08 -
Mr A M Pasqual 10 10 -
Mr A D Jegasothy (resigned on 19/9/08) 08 05 03
Mr S K M Perera (resigned on 19/12/08) 10 09 01
Ms M Sabaratnam (resigned on 22/9/08) 08 08 -
Dr P R Anthonis (retired on 1/02/08) 02 02 -
Mr S C O de Livera (retired w.e.f. 01/02/08) 02 02 -
Mr K A S Jayatissa 10 08 02
Mr P T Sirisena 10 10 -
Mr J G S de Silva 10 08 02
Mr C Kotigala (appointed on 01/02/08) 08 08 -
Mrs L Seneviratne (appointed on 01/02/08) 08 08 -
Mr A Madurapperuma (appointed. on 19/09/08) 02 01 01
Prof. P L P Samarakoon (appointed. on 23/09/08) 02 01 01
The new Board which was appointed
on 30th December 2008 have
dedicated sufficient time for board
meetings. Their first board meeting was
held on 5th January 2009 and todate,
10 board meetings have been held.
Circular Resolutions are also adopted
by the Board from time to time on
matters of routine importance. Subcommittee
meetings are also attended
by the Board members. The Board subcommittees
set up in 2009 include:
• Audit Committee
• Nominations Committee
• Remuneration Committee
• Integrated Risk Management
Committee
• Credit Committee
The Chief Manager – Company
Secretariat acts as the Secretary to
these sub-committees formed in 2009.
Audit Committee
The Audit Committee that functioned in
2008 directly reported to the Board of
Directors. The Deputy General Manager
Internal Audit acted as the Secretary to
the Audit Committee and submitted
Quarterly Compliance Reports to the
Committee for review. The external
auditors also attended these meetings
and therefore had direct access to the
Audit Committee to report on any
matters independently to the Board.
The CEO and members from Senior
Management also attended Audit
Committee meetings by invitation as
and when required. The report of the
Audit Committee in respect of 2008
issued by the present Chairman of the
Audit Committee (appointed by the new
Board on 12th January 2009) is given
on page 61 of the Annual Report.
Under the new Board, the Audit
Committee comprises three
independent non-executive directors
36 SEYLAN BANK PLC .

with the Executive Director, General
Manager/CEO and DGM Internal Audit
being co-opted to the meeting. The
Audit committee has met thrice from
January 2009 todate.
Integrated Risk Management
Committee
As a part of good governance and also
Basel II compliance, an Integrated Risk
Management Committee functioned in
2008 headed by the director
overlooking compliance and comprising
of the then Director/General Manager
and 4 members of the Senior
Management. The Committee’s
responsibilities included formulating
strategies and policies for managing
risks and establishing adequate
systems of control to ensure that overall
risks remain within acceptable levels. It
was also responsible for establishing
risk management units in key areas viz.
credit, operational and trading;
development of in-house skills for
effective risk management, ensuring
that the risk management units employ
sound techniques to limit and manage
different types of risk. The committee
reported to the Board of Directors. A
detailed report on Risk Management is
given on pages 42-43 of the Annual
Report.
Under the new Board, the Risk
Management Committee comprises
two independent non-executive
directors with the Executive Director,
General Manager/CEO and other key
management personnel supervising risk
areas co-opted to the meeting.
Credit Committee
The authority over the function of credit
administration has been delegated to
the levels of management, from the
CEO down to the level of Branch
Managers with limits being stipulated in
accordance with the level of authority. In
2008, the Credit Committee of the
Board of Directors comprised of three
Executive Directors and approved
facilities in excess of the General
Manager/CEO’s delegated authority
limits and within its own limits. Facilities
approved by the Committee are also
submitted to the Board for review.
Facilities exceeding Credit Committee’s
limits are referred to the Board of
Directors for approval.
The Credit Committee appointed in
2009 under the new Board functions
with two executive directors with the
General Manager/CEO co-opted to the
meeting. Facilities exceeding the Credit
Committee’s limits are referred to the
Board for approval with the
recommendations of the Credit
Committee.
Other Sub-Committees
Remuneration Committee
The Remuneration committee was
formed in mid 2008 but did not
function.
Under the new Board, a Remuneration
Committee was appointed in January
2009 comprising of three non-executive
directors. Their mandate is to determine
the remuneration policies relating to
directors, the chief executive officer and
the key management personnel (KMPs)
of the Bank; set goals and targets for
the said directors, the CEO and KMPs
and evaluate their performance against
these targets periodically to determine
the basis of revising remuneration and
other benefits paid.
Nominations Committee
The Nominations Committee was
formed only in 2009 under the new
Board and comprises of three
independent non-executive directors.
The Chairman, the Executive Director of
the Bank and the Chief Executive
Officer are co-opted to this meeting.
The Committee makes
recommendations to the Board on the
selection, appointment of new directors
and key management personnel,
determine the qualifications, experience
and competencies required by such
personnel to hold office, determine their
succession planning, recommend
election of directors and review the
composition and structure of the Board
of Directors having due regard to the
balance of skills required to be
maintained on the Board.
Company Secretary
The Board has access to the advice
and services of the Company Secretary
to ensure that board procedures and all
applicable rules and regulations are
followed. The Company Secretary is
responsible for compliance with the
provisions of the Companies Act, rules
of the Colombo Stock Exchange and
Banking Act provisions relating to
shareholders and provisions of the
Securities & Exchange Commission
. SEYLAN BANK PLC 37

BEATING STRONGER!
Corporate Governance
Act. Minutes of Board meetings are also
maintained by her in sufficient detail to
enable a proper assessment to be
made of the depth of deliberations at
the meetings.
Chairman and Chief Executive
Officer – Division of
Responsibilities
As an essential feature of corporate
governance, the functions of the CEO
should be separated from those of the
Chairman. In 2008, the CEO’s functions
were carried out by the
Director/General Manager of the Bank
who held a Board position until 29th
December 2008.
Upon the Board being re-constituted,
the GM/CEO continued in this position
and a clear division of responsibilities
has been maintained between the
Chairman and the Chief Executive
Officer.
The CEO heads the senior
management team of the Bank and is
directly responsible to the Board of
Directors. His main functions and
responsibilities included the overall
management and operations of the
Bank. He also heads the Bank’s
Treasury Committee and the ALCO. The
Treasury Committee monitors the
current market conditions and liquidity
position while ALCO does the Assets
and Liability Management process.
Under the new Management, the CEO
also chairs the Internal Credit
Committee, which approves credit
facilities above his delegated credit
authority limits upto a limit specified by
the Board. This Committee has not met
in 2009 to date.
Availability of financial acumen
and knowledge
The previous Board upto 29th
December 2008, had several members
with financial knowledge and
experience.
The new Board appointed to the Bank
with effect from 30th December 2008
has two independent non-executive
directors one of whom is a Fellow of the
Chartered Institute of Management
Accountants (FCMA), U.K., and Fellow
of the Institute of Chartered
Accountants of Sri Lanka (FCA). The
second director is a Chartered Financial
Analyst, Associate member of the
Institute of Chartered Accountants of
Sri Lanka (ACA) and Associate member
of the Chartered Institute of
Management Accountants (ACMA),
U.K.
Supply of information
The Bank has in place a structured
management information system in
place to provide the Board all relevant
information and data required to take
decisions. Management Accounts and
other regional and departmental
performance reports are submitted to
the Board well in advance of each
meeting. Other adhoc reports called for
are also provided as and when
required. Members of Senior
Management are also invited to attend
Board meetings to provide clarifications
on matters coming within their purview,
as and when required.
Appraisal of Board performance
and composition
The former Board did not have a
mechanism for evaluation of directors
and did not have a Nomination
Committee.
The present Board has commenced
compliance with this corporate
governance rule by the establishment of
a Nomination Committee comprising
two independent non-executive
directors whose responsibilities include
inter alia assessing the effectiveness of
the Board’s performance and make
recommendations for the appointment
and removal of directors.
Presence of a strong nonexecutive
element on the Board
During and upto end 2008, the previous
Board did not give sufficient weightage
to the board’s composition into
executive and non-executive directors.
However, under the new Board, four of
the Directors currently holding office are
independent non-executive directors.
Re-election of Directors
As per the Articles of Association of the
Company, except for the Managing
Director, 1/4th of the directors longest
in office are required to retire by rotation
at every annual general meeting of the
Company. Such directors are eligible for
re-election with the Board’s
recommendation and approval of
shareholders. In addition, any director
appointed during the year to fill casual
vacancies or by way of addition to the
Board are also due to retire at the
annual general meeting immediately
38 SEYLAN BANK PLC .

following their appointment and with the
recommendation of the Board are
eligible for re-election.
Disclosure of Information in
respect of Directors
Names and a brief resume of new
directors appointed to the Board from
time to time are informed to the
shareholders by means of an
announcement to the Colombo Stock
Exchange disseminated to the stock
market. Annually, a profile of the
directors is published in the Annual
Report for the information of the
shareholders and other stakeholders.
Directors’ Remuneration
Remuneration of Directors and key
management personnel are disclosed in
Notes 6 & 41 of the Audited Accounts.
Relations with shareholders and
Constructive use of AGMs
The Board encourages the active
participation of the shareholders at its
Annual/Extraordinary General Meetings.
The Board which includes the
respective heads of the Audit, Credit
and Integrated Risk Management
Committees are present at the AGMs to
respond to any queries from the
shareholders. Shareholders are free to
communicate with the Bank and their
requirements and queries are promptly
addressed. Suggestions made by them
are implemented whenever possible. As
per the requirements under the
Companies Act No. 7 of 2007, a
minimum of 15 clear working days’
notice should be given to shareholders
of the annual general meeting of the
Bank.
Major transactions
During the year, there were no major
transactions entered into by the
company falling within the definition of
Section 185 of the Companies Act No.
7 of 2007 which materially affected the
asset base of the company.
However transactions which the Board
considers as having materially impacted
the Bank’s profitability are disclosed in
Notes 19 (Loans & Advances), 41
(Related Party Transactions) and 42
(Other Related Party Transactions).
Accountability and Audit
Financial Reporting and Corporate Disclosure
Policy
The Bank has made balanced and fair
assessment of its financial position for
the year ended 31st December 2008
through the Audited Accounts
contained in the Annual Report of 2008.
Over the years, the Bank has
continuously published its Quarterly
Financial Statements supplemented
with the necessary explanatory notes
and observations for the information of
its shareholders and other stakeholders.
Strict adherence is made to all
accounting formats and other
procedures laid down by regulatory
authorities such as the Colombo Stock
Exchange and the Central Bank in the
disclosure and submission of such
information. Financial statements are
prepared in accordance with the Sri
Lanka Accounting Standards. Any other
financial and non-financial information,
which are price sensitive or warrant the
shareholders’ and stakeholders’
attention and consideration, are
promptly disclosed to the public.
Directors’ Responsibility for
Financial Reporting
A statement of Directors’ responsibility
for Financial Reporting is given on page
60 of the Annual Report.
Internal Control Systems
The establishment of an effective
internal control system is a prerequisite
to conduct banking business in an
orderly manner, safeguard its assets
and secure as far as practicable the
accuracy and reliability of records.
The two major internal control systems
prevalent in the Bank include the
internal audit and information system
audit.
Through an effective Internal Audit
mechanism, the risks associated with
business decisions taken to improve
productivity through enhanced
customer services are closely
monitored, assessed and wherever
deemed necessary, tools employed to
manage risks are introduced and
existing systems further strengthened.
The process of identifying and
evaluating and effectively managing
risks associated with business
processes and their supporting
functions is reviewed by the Board on a
quarterly basis through the Audit
Committee.
. SEYLAN BANK PLC 39

BEATING STRONGER!
Corporate Governance
The Information Systems Audit (ISA)
Department plays a key role in the
Bank’s internal control system and IT
Governance structure. ISA provides
Information System Governance,
Assurance and Risk Management
services to the Bank ensuring that the
Corporate IS assets are safeguarded
and banking services are delivered in an
efficient, reliable and effective manner
whilst protecting stakeholders’ interest.
With the new mandate of Audit
Committee, ISA department is engaged
in implementing IT Governance and
Information Security management
programs that are in compliance with
the industry standards such as Control
Objectives for Information and Related
Technologies (COBIT), ISO 27001 and
Generally Accepted Good Practice
(GAGP). Recently the Business
Continuity Management plans have
been prepared for the Bank as guided
by the Central Bank and required
structures and processes are in place
to recover and resume its critical
banking functions in a disaster situation.
Compliance
The Bank’s Compliance Department is
responsible for ensuring the Bank’s
compliance with banking regulations
and the compliance requirements under
specific statutes namely, the Prevention
of Money Laundering Act, No. 5 of
2006, the Convention on the
Suppression of Terrorist Financing Act,
No. 25 of 2005 and the Financial
Transactions Reporting Act, No. 6 of
2006. During the year, the bank has
initiated action to fully implement the
additional requirements in terms of
Central Bank's regulations on Know
Your Customer (KYC) and Customer
Due Diligence (CDD). Internal guidelines
were formulated and circulated on KYC
and CDD. Further, external training and
periodic extensive internal training
programmes have been organized to
educate the staff.
Monthly, quarterly and half yearly
compliance reports are forwarded to
the Central Bank confirming the Bank’s
compliance with the regulations under
the Banking Act No. 30 of 1988 and the
subsequent amendments.The Board is
apprised of the status of compliance by
the Bank on a regular basis whilst a
detailed compliance report is submitted
on a quarterly basis.
Conflict of Interest
Directors’ interests in contracts both
direct or indirect of the previous Board
have been disclosed and declared at
the meetings of the Directors during the
year and are disclosed on pages 52-59
and 106-126 of the Annual Report and
also entered in the Interest Register.
Corporate Social Responsibility
Synonymous with being the Bank with
a heart, Seylan Bank continues to
engage in CSR activities touching the
lives of a multitude of Sri Lankans. The
Bank, through its CSR projects, strives
to create a positive impact with its
stakeholders and build sustainable
relationships. The Bank’s culture,
attitude, product differentiation and
customer care all stem from its desire to
fulfill its obligations to the society it
serves and enrich the lives of the Sri
Lankan people.
40 SEYLAN BANK PLC .

Colombo Stock Exchange Corporate Governance Report
Rule Compliance Report Status
6.1 Non-Executive directors should be at least 1/3rd of Partially
the total number of Directors. Prior to ceasing to complied
function as Directors, the previous Board did not have
the requisite number of non-executive directors.
2009 Status
Under the new Board appointed commencing from
30th December 2008, M/s P L P Withana,
N Jayamanne PC, F N Goonewardena and
Rear Admiral (Retd.) B A J G Peiris are Non-executive
Directors of the Company.
complied
6.2 Independent Directors should be at least 1/3rd of the Partially
total number of Directors - under the previous Board, complied
only Prof. P L P Samarakoon was the independent
(Non-executive) Director on the Board.
2009 Status
Under the new Board appointed commencing from
30th December 2008, M/s P L P Withana,
N Jayamanne PC, F N Goonewardena and
Rear Admiral (Retd.) B A J G Peiris are independent
Non-executive Directors of the Company.
Signed and dated declarations have been provided by
the Directors confirming their independent non-executive
status in compliance with the CSE Rules.
Complied
6.5 Remuneration Committee – Remuneration Committee Not
was established in 2008 but did not comprise of the complied
requisite number of Non-executive Directors as
required by the Colombo Stock Exchange Rules.
The Committee did not meet during 2008.
Rule Compliance Report Status
2009 Status
Under the new Board, a Remuneration Committee has
been formed comprising of two Non-executive
Directors M/s N Jayamanne PC, P L P Withana with
M/s E Narangoda and R Nadarajah being
co-opted to the meeting. The Committee is chaired by
an independent Non-executive director. The
Remuneration Committee does not comprise of the
minimum of three non-executive directors as required
by the CSE Rules due to the low composition of the
Board of Directors of the Bank. However, the
composition of the Committee will be rectified to
conform to the CSE rule during the course of 2009.
Partially
complied
6.6 Audit Committee – The Audit Committee though Partially
continued to be in operation during 2008, due to the complied
Board changes effected during 2008 did not comprise
of the required minimum of Non-executive directors as
required by the Colombo Stock Exchange Rules
throughout the year. The Committee held four
meetings during the year.
2009 Status
Under the new Board, an Audit Committee has been
formed comprising of three independent Non-executive
Directors, M/s P L P Withana, F N Goonewardena and
N Jayamanne PC with Executive Director,
Complied
Mr R Nadarajah and General Manager/CEO being
co-opted to the meeting. The Committee is chaired by
Mr P L P Withana, an independent Non-executive
director. Three meetings have been held by the
Committee for 2009 todate.
The Colombo Stock Exchange rules on Corporate Governance became mandatory for all listed entities from the financial year commencing 1st April 2008.
The Bank expects to be fully compliant with the rules of Corporate Governance from the financial year commencing 1st January 2009.
. SEYLAN BANK PLC 41

BEATING STRONGER!
Risk Management
Bank has implemented a risk
management framework in order to
identify, measure, mitigate and control
the various risks falling within market,
credit and operational risks. Under this
framework two main committees were
formulated reporting on matters
pertaining to risk management to the
Board of Directors.
The Integrated Risk Management
Committee (IRMC) was formed in order
to ensure that there is sufficient board
oversight to risk management. This has
made the IRMC as the apex risk
management committee in the bank,
while the Asset & Liability Management
Committee (ALCO) deals with matters
pertaining to mismatches in the maturity
ladder, liquidity & interest rate risk
management.
The Integrated Risk
Management Committee (IRMC)
Integrated Risk Management
Committee (IRMC) is vested with the
responsibility of formulating strategies
and policies for managing risks and
establishing adequate systems and
controls to ensure that overall risks
remain within acceptable levels. The
IRMC was revamped by the new board
whilst emphasizing the importance of
risk management. Committee was
headed by Mr. Naomal Goonewardena
– Director and comprises the following
Directors.
• Mr. L. Withana - Director
• Mr. R. Nadarajah – Executive Director
During 2007, a sub-committee was
formulated in order to strategize a
Business Continuity Plan (BCP) which
comes within the purview of the IRMC.
Main responsibility of the BCP is to
identify Key Risk Indicators (KRIs) and
risk drivers that could result in business
disruption. Some of the areas that the
BCP focuses are disaster recovery in
the area of IT which is already been
looked into exhaustively. A panel of
specialists were teamed together to
carry out tests by simulating
contingency events and to identify the
impact of same.
Asset & Liability Committee
(ALCO)
The Asset & Liability Committee
oversees the development with regard
to interest rate risks and liquidity risks
arising out of mismatches. The bank
has in place specialized software to
generate ALM reports which in turn are
tabled at the ALCO meeting. As
mentioned previously, the ALCO
reviews the maturity ladder, and takes
steps to manage and mitigate interest
rate and liquidity risks.
Treasury Committee
Treasury Committee meets on a daily
basis in order to review market
conditions and make decisions on
product pricing to harness increased
profitability. The Treasury Committee is
headed by the CEO/General Manager.
Risk Management Unit
In July 2007 SEYLAN set up its
independent Risk Management Unit
(RMU) in order to further strengthen its
risk management framework. Key
functions of this unit was the
implementation of Basel II regulatory
requirements set by the Central Bank of
Sri Lanka and also to cater to the wide
variety of businesses which require the
Bank to identify, measure, aggregate
and manage their risks effectively and
to allocate capital. Hence, the formation
of the RMU enabled the Bank to
achieve both conformance and
performance monitoring in the area of
risk management.
Risk management issues are reported
to the Board through the DGM in
charge of the department. This
structure has enabled the bank to have
a risk management unit with Board
oversight as required under the
supervisory pillar.
Basel II Implementation
With the required software in place, the
Bank will be in a position to be
effectively compliant with Basel II where
the capital charge for Credit Risk,
Operational Risk and Market Risk will
be automatically computed. The staff of
the user departments / branches have
been provided with training on the use
of the software and as well as the
concepts pertaining to risk
management and Basel II.
Compliance Department
Compliance Department was
formulated to take necessary steps to
manage and mitigate risks by adhering
to acts and regulations laid down by
Government of Sri Lanka (Prevention of
Money Laundering Act and the
42 SEYLAN BANK .

Financial Transactions Reporting Act
(FTRA)) and CBSL. Compliance
Department frequently converse with
Central Bank of Sri Lanka and forwards
necessary reports monthly, quarterly
and annually. This helps the bank to
mitigate operational risks that may arise
out of compliance, legal and reputation
risks.
Internal Controls
The Bank has formulated a dedicated
Internal Audit Division to analyze
business processes, procedures and
activities with the goal of highlighting
any problems and recommend
solutions for such deviations. At the
same time, the Information Systems
Audit Division was also formulated to
monitor the bank’s IT governance and
information security management
programs. Both these divisions are
directly reporting to the Audit
Committee.
. SEYLAN BANK 43

Financial Calendar 2008/2009
1. UNAUDITED QUARTERLY FINANCIAL STATEMENTS:
1.1 1st Quarter – 31st MARCH 2008
• Issued to Colombo Stock Exchange – 28th May 2008
• Published in newspapers – 29th May 2008
1.2 2nd Quarter – 30th JUNE 2008
• Issued to Colombo Stock Exchange – 19th August 2008
• Published in newspapers – 20th August 2008
1.3 3rd Quarter – 30th SEPTEMBER 2008
• Issued to Colombo Stock Exchange – 11th November 2008
• Published in newspapers – 14th November 2008
1.4 4th Quarter – 31st DECEMBER 2008
• Issued to Colombo Stock Exchange – 27th February 2009
• Published in newspapers – 06th March 2009
2. AUDITED FINANCIAL ACCOUNTS AND ANNUAL REPORT –
Year ended 31st DECEMBER 2008
• Issued to the Colombo Stock Exchange - June 2009
• Circulated to Shareholders & Debenture holders – June 2009
3. 22nd ANNUAL GENERAL MEETING – 29th June 2009
44 SEYLAN BANK .

Financial Report
. SEYLAN BANK 45

BEATING STRONGER!
Annual Report of the Board on the State
of Affairs of the Company
The Board of Directors of Seylan Bank
PLC was re-constituted on 30th
December 2008 in terms of the
Monetary Law Act No. 58 of 1949 as
amended.
The Annual Report of the Board on the
state of affairs of the Company is
presented hereto by the newly
appointed Board of Seylan Bank which
took office on 30th December 2008
and through subsequent appointments
on 8th January 2009.
In compliance with the provisions of the
Companies Act No. 7 of 2007, the
Directors present hereto their Report on
the state of affairs of the Company for
the year ended 31st December, 2008.
The Report also provides information as
required by the Listing rules of the
Colombo Stock Exchange, best
accounting practices and other
disclosures deemed relevant to the
stakeholders of the Company.
Wherever applicable, changes made by
the new Board in areas dealt with in this
Report and to Board sub-committees
have also been reported. The Report
was approved by the Directors on May
29, 2009.
General
Seylan Bank PLC was incorporated on
28th August 1987 as a public limited
liability company under the Companies
Act No. 17 of 1982 and obtained a
listing for its Ordinary voting shares on
the Colombo Stock Exchange on 5th
January 1989. It is an approved
licensed commercial bank under the
Banking Act No. 30 of 1988.The Bank
was re-registered under the Companies
Act No. 7 of 2007 on 30th May 2007.
Principal Activity
The principal activity of the Bank is
commercial banking and provision of
related financial services such as
accepting of deposits, personal
banking, trade financing, off-shore
banking, resident and non-resident
foreign currency operations, travel
related services, corporate and retail
credit, pawn broking, project financing,
lease financing, rural credit, issuing of
local and international credit cards,
telebanking facilities, SMS and internet
banking, internet payment gateway and
dealing in government securities etc.
Review of Operations
A review of the operations during the
financial year 2008 and the
performance of the Bank are given in
the Chairman’s Statement appearing on
pages 8-9 and in the General
Manager/Chief Executive’s report on
pages 10-13 of the Annual Report.
Both reports form an integral part of this
report.
Subsidiaries and
Sub-subsidiaries
The Bank’s subsidiaries and
sub-subsidiaries and their principal
activities are given below:
Subsidiaries
Seylan Merchant Bank PLC
- Merchant Banking.
Ceylinco Seylan Developments PLC
- Property Development
Seylan Bank Asset Management Ltd
- Dealing in Government Securities.
Sub-subsidiaries
SMB Money Brokers (Pvt) Ltd
- Money Market Activities
SMB Real Estate Ltd
- Real Estate and Property
Development.
Seylan Merchant Leasing PLC
- Leasing
SMB Securities (Pvt) Ltd
- Equity & Debt Trading activities
Branch Network
As at 31st December 2008, the Bank
had 92 branches and 22 extension
offices totaling to 114 in operation, a list
of which is given on pages 138-141 of
the Annual Report. The Bank also has
83 student savings centers as at end
2008.
New Product Development
Seylan Gold Heart
Seylan Gold Heart is an investment
account introduced by Seylan Bank
PLC for customers to invest and trade
in 24 karat pure gold. Clients can also
trade in gold online via our website,
https://goldheart.seylan.lk.
Seylan Hadha Medura
Seylan Bank launched a novel housing
loan scheme branded “Hadha Medura”
for those who are employed, self
employed or for non resident Sri
Lankans for purchase or construction of
a house, purchase of land or to
renovate, extend or complete an
existing house. The unique feature of
the product is that the loan will be
46 SEYLAN BANK PLC .

disbursed within 10 days from the date
of submission of all the relevant
documents by the client.
Seylan Ihalin Ihalata
A high interest savings account was
launched in 2008 in order to cater to
the changing market needs. This is a
step-up savings deposit scheme which
offers a higher rate of interest for higher
balances.
Future Developments
An overview of the future plans and
developments of the Bank are also
indicated in the Chairman’s Message on
pages 8-9 and in the General
Manager/Chief Executive Officer’s
Review on pages 10-13 of the Annual
Report.
Financial Statements
The audited financial statements of the
Bank and the Group for the financial
year ended 31st December 2008 are
given on pages 64-129 and form an
integral part of the Annual Report of the
Board.
Auditors’ Report
The Auditors of the Company M/s
KPMG Ford Rhodes Thornton & Co.,
Chartered Accountants have carried out
the audit of the consolidated financial
statements for the financial year ended
31st December 2008 and their report
on the financial statements is given on
page 62-63 of the Annual Report.
Significant Accounting Policies
The significant accounting policies
adopted in preparation of the financial
statements are given on pages 68-76 of
the Annual Report.
Financial Results
Income
The income of the Bank as at 31st
December 2008 was
Rs.25,246,209,205/-
(Rs.21,079,884,904/- in 2007) whilst
the income of the Group was
Rs.26,883,250,418/-
(Rs.22,808,262,305/- in 2007).
Profit
A summary of the consolidated financial
results of the operations of the
Company during the year ended 31st
December 2008 is given below:
Donations
During the year, the Company made
donations amounting to
Rs.128,865,170/- (Donations made in
2007 amounted to Rs.56,407,813/-).
Taxation
Provision for taxation has been
computed at the rates given in Note 8
to the financial statements.
Capital Expenditure
The total capital expenditure incurred
on the acquisition of property, plant and
equipment during the year amounted to
Rs.1,456,574,882/- details of which are
given in Note 26 to the Accounts.
Property, Plant and Equipment
The details of the property, plant and
equipment are given in Note 26 to the
Accounts.
Reserves
Total reserves (including Statutory
Reserve Fund) of the Group as at 31st
December 2008 amounted to Rs.
5,694,795,484/- (Rs.5,702,353,950/- in
Rs.’000
2008 2007
Profit/(Loss) before taxation (71,820) 1,669,664
Less: Taxation 21,354 535,142
Profit/(Loss) after taxation (93,174) 1,134,522
Attributable to Minority Interest 259,666 (113,836)
Net profit attributable to Shareholders 166,492 1,020,686
Retained profit brought forward after dividend 3,693,225 2,905,074
Profit available for appropriation 3,859,717 3,925,766
Adjustments/Transfer to Reserve Fund (11,459) (45,366)
Other Transfers/Adjustments 155,529 68,731
Balance carried forward 4,003,787 3,949,125
2007) details of which are given in
Notes 36-37 to the Accounts.
. SEYLAN BANK PLC 47

BEATING STRONGER!
Annual Report of the Board on the State of Affairs of the Company
Stated Capital
The Stated Capital of the Bank as at
31st December 2008 was
Rs.2,542,420,326/- comprising of
43,560,000 ordinary (voting) shares,
3,390,100 non-redeemable, noncumulative,
non-convertible and nonvoting
Preference shares and
123,560,000 non-voting ordinary
shares and share premium of
Rs.837,319,324/-.
Shareholdings
As at 31st December 2008, there were
7,832 and 5,662 registered ordinary
(voting) and ordinary (non-voting)
shareholders and 967 non-redeemable,
non-cumulative, non- convertible and
non-voting Preference shareholders
respectively of the Bank. An analysis of
the distribution of the listed ordinary
voting and non-voting shareholders are
given on page 134 of the Annual report.
The twenty largest Ordinary Voting and
Non-voting shareholders of the Bank
are also given on pages 132-133 of the
Annual Report.
Debt Capital
The Bank had issued debentures (both
listed and unlisted) to the value of
Rs.4,687,465,000/- as at 31st
December 2008 (Rs.5,484,350,000/- in
2007) inclusive of advance received on
account of debentures amounting to
Rs.630,565,000/- (pending allotment)
The Bank had the following listed debt
as at 31st December 2008 details of
which are given on pages 135 of the
Annual Report:
Type
No. of Debentures
of Rs.100/- each
Unsecured Subordinated
Redeemable Five Year
Debentures - 2006/2011 12,573,150
-do - - 2007/2012 7,494,000
-do - - 2007/2012 (Issue 2) 5,592,850
Debentures issued in 2008
In August 2008 the Bank concluded a
private placement of Unsecured
Subordinated Redeemable five-year
Debentures from which Tier II capital of
Rs.72.55 Mn. was raised for capital
adequacy purposes.
In December 2008 the Bank
commenced a public quoted issue of
Rs.1.0 Bn Unsecured Subordinated
Redeemable five-year Debentures
issued at Rs.100/- each in four
tranches, in order to meet capital
adequacy requirements. The Issue
concluded on 2nd January 2009 and
was listed on the Colombo Stock
Exchange on 10th February 2009. Total
amount allotted amounted to
Rs.630,565,000/-.
Investors’ Information
Information including earnings,
profitability, dividend, net assets and
market value per share is given under
Financial Highlights appearing on page
4 of the Annual Report. Information
pertaining to share prices (both voting
and non-voting) and debenture prices is
given on pages 134-135 of the Annual
Report.
Directorate
On 30th December 2008, the Board of
Directors of Seylan Bank PLC was reconstituted
in terms of Section 30 (9) of
the Monetary Law Act No. 58 of 1949
as amended.
The changes that took place in the
previous Board in 2008 (including
appointments/ resignations during the
year) and particulars of the new
directors who held office as at 31st
December 2008 are given on the next
page.
Accordingly as at the balance sheet
date, the new directors who held office
together with their executive, nonexecutive
and independent status are
also described on the next page.
Two more directors viz. Mr R Nadarajah
and Rear Admiral (Retd.) B A J G Peiris
were appointed to the Board with effect
from 8th January 2009 as an Executive
Director and as an independent Non -
executive Director respectively.
The profiles of the new Board together
with those of the two additional
directors appointed in January 2009 are
given on pages 14-15 of the Annual
Report.
All non-executive directors have signed
declarations confirming their
independent/non-executive status in
compliance with the Colombo Stock
Exchange rules of Corporate
Governance.
48 SEYLAN BANK PLC .

Previous Board : (upto 29/12/08)
Name of the Director
Change during year
Dr J L B Kotelawala (Chairman/MD) *
Mr R Renganathan (Deputy Chairman/CFO) Resigned w.e.f. 29/9/08
Mr A M Pasqual – Director/General Manager/CEO*
Mr K A S Jayatissa *
Mr J G S De Silva *
Mr C Kotigala * Appointed w.e.f. 1/2/08
Mrs L Seneviratne * Appointed w.e.f. 1/2/08
Mr A Madurapperuma * Appointed w.e.f. 19/9/08
Mr S C O de Livera Resigned w.e.f. 1/2/08
Dr P R Anthonis Resigned w.e.f. 1/2/08
Mrs S P C Kotelawala (Chairperson) *
Mr A D Jegasothy Resigned w.e.f. 19/9/08
Ms M Sabaratnam Resigned w.e.f. 22/9/08
Mr S K M Perera Resigned w.e.f. 19/12/08
Mr P T Sirisena*
Prof. L Samarakoon * Appointed w.e.f 23/9/08
* (note) – the directors marked (*) ceased to hold office with effect from 29th
December 2008 in terms of the Monetary Law provisions aforementioned.
Credit Committee
Members : Dr J L B Kotelawala
(Chairman) and Mr P T Sirisena
(appointed w.e.f. 1/9/08)
Integrated Risk Management Committee
Members : M/s P T Sirisena (Chairman),
A M Pasqual & Mrs L Seneviratne.
With the re-constitution of the Seylan
Bank Board, all former sub-committees
of the board also stood dissolved. The
new sub-committees comprising of
current Board members which were
appointed in January 2009 are
described in the next page.
Directors’ direct and indirect
holdings of securities
Details of Directors’ direct and indirect
holdings of securities in the Bank as at
31st December 2008 are given on the
next page.
Directors as at 31st December 2008
Name of Director
Mr E Narangoda (Chairman) - Appointed on 30/12/08
Mr Nihal Jayamanne PC - Appointed on 30/12/08
Mr P Lalith P Withana - Appointed on 30/12/08
Mr F N Goonewardena - Appointed on 30/12/08
Status
Executive
Independent Non-Executive
Independent Non-Executive
Independent Non-Executive
Directors Interest in Contracts
The Directors of the Company have no
direct or indirect interest in any contract
or proposed contract of the Company,
except those specified in Note 41 to the
Audited Accounts which have been
disclosed and declared at meetings of
the Directors.
Signed affidavits and declarations have
also been provided by the new
Directors to the Bank Supervision Dept
of the Central Bank in terms of Section
42 of the Banking Act (as amended)
and as per Direction 2(3) (i) of the
Banking Act Direction No. 11 of 2007
confirming their ‘fit and proper’ status
to hold office as directors of the Bank.
Board Sub-Committees
The following Board sub-committees
were functional upto 29th December
2008:
Audit Committee
Members : Mr P T Sirisena (Chairman),
Prof. S M L P Samarakoon (appointed
w.e.f. 9/10/08) & Mr J G S De Silva
(appointed w.e.f. 9/10/08)
Directors’ Interest Register
Disclosures required to be made in
terms of Section 192 of the Companies
Act No. 7 of 2007 have been duly made
by the directors at board meetings and
recorded in the Interest Register.
Related party transactions arising out of
these disclosures made are given in
Notes 41 (‘Related Party Transactions’)
. SEYLAN BANK PLC 49

BEATING STRONGER!
Annual Report of the Board on the State of Affairs of the Company
and 42 (‘Other Related Party
Transactions’) in the Audited Accounts.
All other changes to Directors’ interest
in contracts both direct and indirect
during the accounting period which
were entered in the Interest Register are
given on pages 52-59 as an annexure
to this Report.
Sub-committee
Audit Committee
Remuneration Committee
Nominations Committee
Integrated Risk Management
Committee
Credit Committee
Corporate Governance
The Bank places due emphasis and
importance on the need to have in place
practices and procedures to conform to
corporate governance rules laid down in
both the Banking Act Direction No. 11
of 2007 (Corporate Governance for
Licensed Commercial Banks of Sri
Lanka) issued by the Monetary Board of
Newly appointed Members
Directors’ direct and indirect holdings of securities
M/s P L P Withana (Chairman),
F N Goonewardena and N Jayamanne PC
(appointed w.e.f. 24/2/09)
The report of the Audit Committee is given on
page 61 of the Annual Report.
N Jayamanne PC (Chairman), P L P Withana,
E Narangoda and R Nadarajah.
Rear Admiral (Retd.) B A J G Peiris (Chairman),
N Jayamanne PC and F N Goonewardena.
F N Goonewardena (Chairman), P L P Withana
& R Nadarajah.
M/s E Narangoda (Chairman) and R Nadarajah.
31.12.2008 31.12.2007 Shares/debentures
Mr E Narangoda 10,050 N/A Ordinary Voting Shares
Mr N M Jayamanne PC - N/A
90,100 N/A Ordinary Non-Voting Shares
Mr P L P Withana 242 N/A Ordinary Voting Shares
Mr F N Goonewardena - N/A
the Central Bank of Sri Lanka including
subsequent amendments and the Code
of Best Practice of Corporate
Governance jointly issued by the
Securities & Exchange Commission of
Sri Lanka (SEC) and the Institute of
Chartered Accountants of Sri Lanka
(ICASL) in 2008.
The Colombo Stock Exchange (CSE)
rules on Corporate Governance
became mandatory for compliance by
all listed companies from the financial
year commencing 1st April 2008.
Therefore the Bank will become fully
compliant with the CSE rules
commencing from 1st January 2009
onwards.
An overview of the practices adopted
by the Bank under the previous board
and changes effected by the new Board
are described in the Corporate
Governance report appearing on pages
34-41 of the Annual Report.
Going Concern
The Directors are satisfied that the Bank
has adequate resources to continue its
operations in the foreseeable future.
The financial statements of the Bank
have accordingly been prepared on a
going concern basis.
Directors’ Responsibility for
Financial Reporting
The Directors are responsible for the
preparation of the financial statements
of the Bank to reflect a true and fair
view of its state of affairs. The Directors
are of the view that these financial
50 SEYLAN BANK PLC .

statements have been prepared in
conformity with the Sri Lanka
Accounting Standards, the Companies
Act No. 7 of 2007 and the Banking Act
No. 30 of 1988 as amended. The
Directors are accordingly satisfied that
the financial statements presented
herein give a true and fair view of the
state of affairs of the Bank and the
group as at 31st December 2008 and
the profit for the year then ended.
Statutory Payments
The Directors are satisfied that to the
best of their knowledge and belief, all
statutory payments due to the
government and to the employees of
the Bank have been made upto date.
Employees Share Owning
Scheme
The Bank has in place several
employee share owning trusts
established with the objective of
providing an additional benefit to the
employees at the time of their
retirement/resignation in terms of the
trust deeds. The trusts have acquired
shares of the Bank from time to time as
and when formed. All shares held by
the trusts have been purchased at the
market price/s prevailing at the time.
Post Balance Sheet Events
No events have occurred after the
balance sheet date which would require
adjustments to or disclosure in the
Accounts, other than those given in
Note 40 to the Accounts.
Auditors
The Bank’s Auditors during the period
under review were M/s KPMG Ford,
Rhodes,Thornton & Co., Chartered
Accountants. A sum of Rs.4,000,000/-
(2007 - Rs.3,000,000/-) is payable to
the Auditors as Audit Service fees for
the year under review, Rs.1,420,000/-
(2007 – Rs.1,625,000/-) as Audit
related fees and Rs.535,000/- (2007 -
Nil) as Non-Audit fees. Consolidated
Audit fees payable to the Auditors for
the year under review amount to
Rs.5,196,000/- (2007-Rs.3,945,000/-)
as Audit Service fees; Rs.1,640,000/-
(2007-Rs.1,755,000/-) as Audit related
fees and Rs.607,500/-
(2007-Rs.433,160/-) as Non-Audit fees.
Based on the declaration made by
M/s KPMG Ford Rhodes Thornton &
Co, and as far as the directors are
aware, the Auditors do not have any
relationship with or interest in the
Company or any of its subsidiaries
other than disclosed in this paragraph.
The retiring Auditors, M/s KPMG Ford,
Rhodes,Thornton & Co., have signified
their willingness to continue in office
and a resolution to re-appoint them as
Auditors and authorising the Directors
to fix their remuneration will be
proposed at the Annual General
Meeting.
Notice of Meeting
Notice of Meeting relating to the Twenty
Second Annual General Meeting of the
Bank is included in the Annual Report.
BY ORDER OF THE BOARD
E Narangoda R Nadarajah (Mrs) C Gunawardana
Chairman Executive Director Company Secretary
29th May 2009
. SEYLAN BANK PLC 51

BEATING STRONGER!
Annual Report of the Board on the State of Affairs of the Company
Changes to Interest Register - 2008
Details of Directors' direct and indirect interest in contracts, directors' direct/indirect
shareholdings, accommodation granted to directors, remuneration paid to directors
and related party transactions are given in Notes 6, 41 & 42 of the Audited Accounts
and in the Annual Report of the Board.
In addition all other changes made during the accounting period and entered in the
Interest Register pursuant to Section 192(2) of the Companies Act No. 7 of 2007 are
given below:
DR J L B KOTELAWALA
(Ceased to be Director w.e.f. 29/12/2008)
Appointments during the year
Ceylinco Cisco Electronic Security Solutions (Pvt) Ltd
Ceylinco Commodity Exchange (Pvt) Ltd
Ceylinco Golden Properties Holdings Ltd
Ceylinco Grameen Homes (Pvt) Ltd
Ceylinco Information Systems (Pvt) Ltd
CTV Academy of Media Studies (Pvt) Ltd
F & G Realtors International (Pvt) Ltd
Middleway Printing (Pvt) Ltd
S & L Natural Gems & Jewellery (Pvt) Ltd
S & L New Products (Pvt) Ltd
Sicille Suzanne Limited
TFC Agro Development & Bio-Tech (Pvt) Ltd
TFC Computer Services (Pvt) Ltd
The Blue Black & Blue (Pvt) Ltd
Resignations during the year
A E C Edu Group (Pvt) Ltd
A F L Developments Ltd
A N C Education Holdings Ltd
Asia 400 (Pvt) Ltd
Asian Foliage Ltd
Asian Leasing Corporation Ltd
52 SEYLAN BANK PLC .

CDB Esop Trust Fund (Pvt) Ltd
Ceycom Global Communication Ltd
Ceyenergy Electronic Co. (Pvt) Ltd
Ceyfco Property Co. (Pvt) Ltd
CeyHydro Developers (Pvt) Ltd
Ceylec Ltd
Ceylinco Sembcorp Freight (Pvt) Ltd
Ceylinco Stockbrokers (Pvt) Ltd
Ceylinco Asset Management (Pvt) Ltd
Ceylinco Banyan Villas (Pvt) Ltd
Ceylinco Bio-Tech Ltd
Ceylinco Cellular Company (Pvt) Ltd
Ceylinco Cisco Cash Management & Transit Co. (Pvt) Ltd
Ceylinco Commodities & Tea Exports Ltd
Ceylinco Condominiums Ltd
Ceylinco Consolidated International Property
Development (Pvt) Ltd
Ceylinco Construction Co. Ltd
Ceylinco Consultancy & Allied Services (Pvt) Ltd
Ceylinco Consumer Electronics Ltd
Ceylinco Corporate Finance (Pvt) Ltd
Ceylinco Diamond Trading (Pvt) Ltd
Ceylinco Distributors (Pvt) Ltd
Ceylinco Education Group (Pvt) Ltd
Ceylinco Foliage Exports (Pvt) Ltd
Ceylinco Gemcorp International Ltd
Ceylinco Grameen Agricultural Credit Ltd
Ceylinco Grameen Automobiles (Pvt) Ltd
Ceylinco Grameen Healthcare (Pvt) Ltd
Ceylinco Grameen Shop House (Pvt) Ltd
Ceylinco Homes Ltd
Ceylinco Hospital Services Ltd
Ceylinco Hospitals Ltd
Ceylinco Housing & Property Fund Ltd
Ceylinco Housing Corporation Ltd
Ceylinco Housing Development Corporation (Pvt) Ltd
Ceylinco IFA Training Services (Pvt) Ltd
Ceylinco Industrial Property Developments (Pvt) Ltd
Ceylinco International Property Developers (Pvt) Ltd
Ceylinco International Trading Co. Ltd
Ceylinco Investcorp (Pvt) Ltd
Ceylinco IT Solutions (Pvt) Ltd
Ceylinco Lifestyle Residencies Co. Ltd
Ceylinco Lionair (Pvt) Ltd
Ceylinco Maini (Pvt) Ltd
Ceylinco Medical Services (Pvt) Ltd
Ceylinco Micro Credit & Renewable Energy
Development Co. (Pvt) Ltd
Ceylinco Midigama Fruit Farms Ltd
Ceylinco Midigama Trading Co. Ltd
Ceylinco Multi Crop Exporters (Pvt) Ltd
Ceylinco Pensions (Pvt) Ltd
Ceylinco PLC Software (Pvt) Ltd
Ceylinco Professional Development Co. (Pvt) Ltd
Ceylinco Project Management Services Ltd
Ceylinco Property Fund Co. Ltd
Ceylinco Prosperity (Pvt) Ltd
Ceylinco Securities Shareownership Trust Company (Pvt) Ltd
Ceylinco Selna Ltd
Ceylinco Seraka Ltd
Ceylinco Serendib Cinnamon (Pvt) Ltd
Ceylinco Shriram Asset Management Co. (Pvt) Ltd
Ceylinco Sussex Business School (Pvt) Ltd
Ceylinco Sussex Computer Academy Ltd
Ceylinco Sussex Educational Publishers (Pvt) Ltd
Ceylinco Sussex Teacher Training College Ltd
Ceylinco Sussex Vocational Training School (Pvt) Ltd
Ceylinco Technology Infrastructure (Pvt) Ltd
. SEYLAN BANK PLC 53

BEATING STRONGER!
Annual Report of the Board on the State of Affairs of the Company
Ceylinco Treasuries Ltd
Ceylinco Tuta Healthcare (Pvt) Ltd
Ceylinco Villa Housing Development Ltd
Ceylinco Vocational Training (Pvt) Ltd
Ceypower Cascade (Pvt) Ltd
Ceywin Telemedical Services (Pvt) Ltd
Cisco Information Security Services (Pvt) Ltd
CLC Asset Management (Pvt) Ltd
CNT International Ltd
CSF Money Broking Company (Pvt) Ltd
CT & FC Portfolio Management (Pvt) Ltd
CT & FC Secretarial Services (Pvt) Ltd
CVT Global (Pvt) Ltd
Enspire Technologies (Pvt) Ltd
F & G Markom (Pvt) Ltd
Golden Energy Co. Ltd
Golden Key Agrokem Co. Ltd
Golden Key Call Centre Ltd
Golden Key Consumer Durables Ltd
Golden Key Consumer Products Ltd
Golden Key Designer Homes Ltd
Golden Key Eye Hospital Ltd
Golden Key Holdings Ltd
Golden Key International Trading Co. Ltd
Golden Key Management Services Ltd
Golden Key Minerals Ltd
Golden Key Motor Co. Ltd
Golden Key Real Estate Agency Ltd
Golden Key Reproductive Health Ltd
Golden Key Tea Factory Ltd
Golden Key Travels (Pvt) Ltd
Green Agro Lanka (Pvt) Ltd
Heenganga Viduliya (Pvt) Ltd
IC & CS Software Solutions (Pvt) Ltd
ICBT Infotec (Pvt) Ltd
Impression Creative Solutions Ltd
Key Ratings Ltd
Openarc Global Solutions Ltd
San Michele Ltd
San Michele Resorts Ltd
Selna Residencies Ltd
Serene Resorts Ltd
SMB Money Brokers (Pvt) Ltd
SMB Securities (Pvt) Ltd
St Nicholas Education Services Ltd
The Golden Key Institute of Information Technology Ltd
The Golden Key Trading Co. Ltd
Tropical Foliage Ltd
Wayamba Capital Market (Pvt) Ltd
MRS S P C KOTELAWALA
(ceased to be Director w.e.f. 29/12/2008)
Appointments during the year
Ceylinco Cisco Electronic Security Solutions (Pvt) Ltd
Ceylinco Commodity Exchange (Pvt) Ltd
Ceylinco Golden Properties Holdings Ltd
Ceylinco Grameen Homes (Pvt) Ltd
Ceylinco Information Systems (Pvt) Ltd
CTV Academy of Media Studies (Pvt) Ltd
F & G Realtors International (Pvt) Ltd
Middleway Printing (Pvt) Ltd
S & L Natural Gems & Jewellery (Pvt) Ltd
S & L New Products (Pvt) Ltd
Sicille Suzanne Limited
TFC Agro Development & Bio-Tech (Pvt) Ltd
TFC Computer Services (Pvt) Ltd
The Blue Black & Blue (Pvt) Ltd
54 SEYLAN BANK PLC .

Resignations during the year
A E C Edu Group (Pvt) Ltd
A F L Developments Ltd
A N C Education Holdings Ltd
Asia 400 (Pvt) Ltd
Asian Foliage Ltd
Asian Leasing Corporation Ltd
CDB Esop Trust Fund (Pvt) Ltd
Ceycom Global Communication Ltd
Ceyenergy Electronic Co. (Pvt) Ltd
Ceyfco Property Co. (Pvt) Ltd
CeyHydro Developers (Pvt) Ltd
Ceylec Ltd
Ceylinco Sembcorp Freight (Pvt) Ltd
Ceylinco Stockbrokers (Pvt) Ltd
Ceylinco Banyan Villas (Pvt) Ltd
Ceylinco Bio-Tech Ltd
Ceylinco Cellure Company (Pvt) Ltd
Ceylinco Children Education Foundation Ltd
Ceylinco Cisco Cash Management & Transit Co. (Pvt) Ltd
Ceylinco Cisco Technology & Consultancy (Pvt) Ltd
Ceylinco Commodities & Tea Exports Ltd
Ceylinco Condominiums Ltd
Ceylinco Consolidated International Property Development
(Pvt) Ltd
Ceylinco Construction Co. Ltd
Ceylinco Consultancy & Allied Services (Pvt) Ltd
Ceylinco Consumer Electronics Ltd
Ceylinco Corporate Finance (Pvt) Ltd
Ceylinco Diamond Trading (Pvt) Ltd
Ceylinco Distributors (Pvt) Ltd
Ceylinco Education Group (Pvt) Ltd
Ceylinco Foliage Exports (Pvt) Ltd
Ceylinco Gemcorp International Ltd
Ceylinco Grameen Agricultural Credit Ltd
Ceylinco Grameen Credit Co. Ltd
Ceylinco Grameen Healthcare (Pvt) Ltd
Ceylinco Grameen Shop House (Pvt) Ltd
Ceylinco Homes Ltd
Ceylinco Hospital Services Ltd
Ceylinco Hospitals Ltd
Ceylinco Housing Corporation Ltd
Ceylinco Housing Development Corporation (Pvt) Ltd
Ceylinco Housing Property Fund Ltd
Ceylinco IFA Training Services (Pvt) Ltd
Ceylinco Industrial Property Developments (Pvt) Ltd
Ceylinco International Property Developers (Pvt) Ltd
Ceylinco International Trading Co. Ltd
Ceylinco Investcorp (Pvt) Ltd
Ceylinco IT Solutions (Pvt) Ltd
Ceylinco Lifestyle Residencies Co. Ltd
Ceylinco Lionair (Pvt) Ltd
Ceylinco Maini (Pvt) Ltd
Ceylinco Medical Services (Pvt) Ltd
Ceylinco Micro Credit & Renewable Energy
Development Co. (Pvt) Ltd
Ceylinco Midigama Fruit Farms Ltd
Ceylinco Midigama Trading Co. Ltd
Ceylinco Multi Crop Exporters (Pvt) Ltd
Ceylinco Pensions (Pvt) Ltd
Ceylinco PLC Software (Pvt) Ltd
Ceylinco Professional Development Co. (Pvt) Ltd
Ceylinco Project Management Services Ltd
Ceylinco Property Fund Co. Ltd
Ceylinco Prosperity (Pvt) Ltd
Ceylinco Securities Shareownership Trust Company (Pvt) Ltd
Ceylinco Seraka Ltd
Ceylinco Serendib Cinnamon (Pvt) Ltd
. SEYLAN BANK PLC 55

BEATING STRONGER!
Annual Report of the Board on the State of Affairs of the Company
Ceylinco Seylan Developments Ltd
Ceylinco Shriram Asset Management Co. (Pvt) Ltd
Ceylinco Sisila Medura (Pvt) Ltd
Ceylinco Sussex Business School (Pvt) Ltd
Ceylinco Sussex Computer Academy Ltd
Ceylinco Sussex Educational Publishers (Pvt) Ltd
Ceylinco Sussex Teacher Training College Ltd
Ceylinco Sussex Vocational Training School (Pvt) Ltd
Ceylinco Technology Infrastructure (Pvt) Ltd
Ceylinco Towers Ltd
Ceylinco Treasuries Ltd
Ceylinco Tuta Healthcare (Pvt) Ltd
Ceylinco Villa Housing Development Ltd
Ceylinco Vocational Training (Pvt) Ltd
Ceypower Cascade (Pvt) Ltd
Ceywin Telemedical Services (Pvt) Ltd
Cisco Information Security Services (Pvt) Ltd
CLC Asset Management (Pvt) Ltd
CNT International Ltd
CSF Money Broking Company (Pvt) Ltd
CT & FC Portfolio Management (Pvt) Ltd
CT & FC Secretarial Services (Pvt) Ltd
CTV Network (Pvt) Ltd
CVT Global (Pvt) Ltd
Enspire Technologies (Pvt) Ltd
F & G Consultancy Services (Pvt) Ltd
F & G Housing (Pvt) Ltd
F & G Markom (Pvt) Ltd
Golden Energy Co. Ltd
Golden Key Agrokem Co. Ltd
Golden Key Call Centre Ltd
Golden Key Consumer Durables Ltd
Golden Key Consumer Products Ltd
Golden Key Designer Homes Ltd
Golden Key Eye Hospital Ltd
Golden Key Holdings Ltd
Golden Key Management Services Ltd
Golden Key Minerals Ltd
Golden Key Motor Co. Ltd
Golden Key Real Estate Agency Ltd
Golden Key Reproductive Health Ltd
Golden Key Tea Factory Ltd
Golden Key Travels (Pvt) Ltd
Green Agro Lanka (Pvt) Ltd
Heenganga Viduliya (Pvt) Ltd
IC & CS Software Solutions (Pvt) Ltd
ICBT Infotec (Pvt) Ltd
Impression Creative Solutions Ltd
Key Ratings Ltd
Middleway Ltd
San Michele Ltd
San Michele Resorts Ltd
Selna Residencies Ltd
Serene Resorts Ltd
Sima Lanka Ltd
Singapore International Gem Exchange (Pvt) Ltd
SMB Esos (Pvt) Ltd
SMB Kenanga Investment Corporation Ltd
SMB Money Brokers (Pvt) Ltd
SMB Securities (Pvt) Ltd
St Nicholas Education Services Ltd
TFC Agro (Pvt) Ltd
TFC Residencies Ltd
The Finance Portfolio Management Co. Ltd
The Golden Key Institute of Information Technology Ltd
The Golden Key Trading Co. Ltd
The Magnum Fund Ltd
Tropical Foliage Ltd
Wayamba Capital Market (Pvt) Ltd
56 SEYLAN BANK PLC .

MR R RENGANATHAN
(Resigned w.e.f. 29/09/2008)
Resignations recorded upto 29.09.08
Ceylinco Hospital Services Ltd
Ceylinco Industrial Property Development (Pvt) Ltd
Ceylinco PLC Technologies (Pvt) Ltd
CISCO Information Security Services (Pvt) Ltd
International College of Business Technology Ltd
MR P T SIRISENA
(Ceased to be Director w.e.f. 29/12/2008)
Appointments during the year
Seylan Agricultural Credit Co. Ltd
MR C KOTIGALA
(appointed w.e.f. 01/02/2008 and ceased to be
Director w.e.f. 29/12/2008)
MR A M PASQUAL
(Ceased to be Director w.e.f. 29/12/2008)
Other Positions held
Company
Position
Institute of Bankers of Sri Lanka Governing member
Lanka Clear (Pvt) Ltd
Director
(Director w.e.f. 15/06/07)
Resignations during the year
Lanka Clear (Pvt) Ltd
MR S K M PERERA
(Resigned w.e.f. 19/12/2008)
Appointments during the year
Ceylinco Commodity Exchange Ltd
MR K A S JAYATISSA
(Ceased to be Director w.e.f. 29/12/2008)
Appointments during the year
Ceylinco Commodity Exchange (Pvt) Ltd
Ceylinco Golden Properties Holdings Ltd
CTV Academy of Media Studies (Pvt) Ltd
F & G Realtors International (Pvt) Ltd
TFC Computer Services (Pvt) Ltd
Resignations during the year
Sansen Holdings (Pvt) Ltd
Other Directorships / positions held as at Date of Appointment not
disclosed in Note 41 & 42 to the Accounts:
Company
Position
Ceylinco Consolidated International
Property Developers (Pvt) Ltd
Director
Ceylinco Housing Development
Corporation Ltd
Director
Ceylinco Property Fund Co. Ltd
Director
L K Global Opportunities (Pvt) Ltd Director
Seylan Credit Card Co. Ltd
Director
Seylan Exim Co. Ltd
Director
Appointments during the year
Ceylinco Brand Association (Pvt) Ltd
Ceylinco Holdings Trustees (Pvt) Ltd
Ceylinco Lexcon Holdings (Pvt) Ltd
MRS L SENEVIRATNE
(Appointed w.e.f. 01/02/2008 and ceased to be
Director w.e.f. 29/12/2008)
Other Directorships / positions held as at Date of Appointment not
disclosed in Note 41 & 42 to the Accounts
. SEYLAN BANK PLC 57

BEATING STRONGER!
Annual Report of the Board on the State of Affairs of the Company
Company
Position
Credit Information Bureau (CRIB) Director
MR M A D A I MADURAPPERUMA
(Appointed w.e.f. 19/09/2008 and ceased to be Director w.e.f.
29/12/2008)
Other Directorships / positions held as at Date of Appointment not
disclosed in Note 41 & 42 to the Accounts
Company
Position
Ceylinco Commercial Property Developers Ltd Director
Ceylinco Industrial Property
Developments (Pvt) Ltd
Director
Ceylinco International Property Developers (Pvt) Ltd Director
Ceylinco Investment & Realty Ltd
Director
Ceylinco PLC Technology (Pvt) Ltd
Director
Ceylinco Property Fund Co. Ltd
Director
Ceylinco Reit Ltd
Director
Ceylinco Seylan Developments PLC
Director
Lanka Electronic Payment Systems (Pvt) Ltd Director
Middleway Printing (Pvt) Ltd
Director
Seylan Bank Asset Management Ltd
Director
Seylan Exim Co. (Pvt) Ltd
Director
Resignations during the year
Ceylinco Commercial Property Developers Ltd
Ceylinco Industrial Property Developments (Pvt) Ltd
Ceylinco International Property Developers (Pvt) Ltd
Ceylinco Investment & Realty Ltd
Ceylinco PLC Technology (Pvt) Ltd
Ceylinco Property Fund Co. Ltd
Ceylinco Reit Ltd
Lanka Electronic Payment Systems (Pvt) Ltd
Middleway Printing (Pvt) Ltd
PROF S M L P SAMARAKOON
(Appointed w.e.f. 23/09/2008 and ceased to be Director w.e.f.
29/12/2008)
Other Directorships / positions held as at Date of Appointment not
disclosed in Note 41 & 42 to the Accounts: Nil
Appointments during the year
The Finance Co. PLC
MR E NARANGODA
(Appointed w.e.f. 30/12/2008)
Other Directorships / positions Held
Company
Presidential Commission on Failed
Finance Companies
Wealth Trust Corporation (Pvt) Ltd
MR P L P WITHANA
(Appointed w.e.f. 30/12/2008)
Other Directorships / Positions Held
Company
Brandix Lanka Ltd
Ceylease Financial Services Ltd
Dankotuwa Porcelain PLC
Position
Commissioner
Director
Position
Executive Vice President
Director
Director
58 SEYLAN BANK PLC .

MR N M JAYAMANNE PC
(Appointed w.e.f. 30/12/2008)
Other Directorships / Positions Held
MR F N GOONEWARDENA
Appointed w.e.f. 30/12/2008)
Other Directorships / Positions Held
Company/Institution
Advisory Council of Jurists of the
Asia Pacific Forum for the Advancement
of Human Rights
Board of Trustees of the
Judicial Infrastructure Maintenance Trust
Law College Foundation
Law Commission of Sri Lanka
National Police Commission of Sri Lanka
SAARCLAW
Sri Lankan Airlines Ltd
Sri Lankan Catering (Pvt) Ltd
Position
Member
Member
Chairman
Member
Member
Vice President
Director
Director
Company
Position
Nithya Partners (Law Firm)
Partner
N Corporate Services (Pvt) Ltd
Director
Serendib Capital (Pvt) Ltd
Director
Note : M/s Dr P R Anthonis, M/s S C O de Livera,
A D Jegasothy and Ms M Sabaratnam resigned from the
Board during the year. There were no changes made to the
Interests Register in respect of the said directors.
There were no changes made to the interest register in respect
of Mr J G S De Silva who ceased to be a director w.e.f.
29/12/08.
. SEYLAN BANK PLC 59

BEATING STRONGER!
Directors’ Responsibility for Financial
Reporting
The Board of Directors was reconstituted on the 30th of
December 2008 in terms of the Monetary Law Act No. 58 of
1949.
In terms of the provisions of the Companies Act No. 7 of 2007,
the Directors are responsible for ensuring that the Bank
maintains proper books of account of all its transactions so as
to
(i) enable the financial position of the Company to be
determined with reasonable accuracy at any time,
(ii) enable the directors to prepare financial statements in
accordance with the Act; and to
(iii) enable the Financial Statements of a Company to be
readily and properly audited.
In terms of Sections 150 (1), 151 (1), 152 (1) and 153 (1) of the
Companies Act, the Directors are required to ensure that
Financial Statements are prepared that give a true and fair view
of the state of affairs of the Company and the Group and the
profit or loss for the year ended on the balance sheet date.
According to the information made available to the present
Board, the previous Directors have taken reasonable steps to
ensure that proper books of account have been maintained
and have also taken reasonable steps to ensure as far as
practicable the accuracy and reliability of accounting records.
The financial reporting system has also been reviewed by the
Board through the management accounts submitted at Board
meetings and by the Audit Committee.
The financial statements of the Bank and the Group give a true
and fair view of the state of affairs of the Bank and its
subsidiaries and the profit/loss for the year ended 31st
December 2008. The financial statements of the Bank and the
Group have been certified by the Bank’s Chief Manager –
Finance, the person responsible for their preparation; and
signed by two Directors, the Chief Executive Officer and the
Company Secretary of the Bank on 29th May 2009.
The Bank’s Financial Statements for the year ended 31st
December 2008 and presented in this Report are consistent
with the underlying books of account of the Bank and are in
conformity with the Sri Lanka Accounting Standards,
Companies Act No. 7 of 2007, Sri Lanka Accounting and
Auditing Standards Act No. 15 of 1995, the Banking Act No.
30 of 1988 (as amended) and the Listing Rules of the Colombo
Stock Exchange.
The Directors also confirm that in preparing the financial
statements for the year ended 31st December 2008 published
in pages 64-129 of this Report, appropriate accounting
policies have been selected and applied on a consistent basis
with material departures (if any) disclosed in the Financial
Statements and the rationale for same provided.
To the best of the knowledge and belief of the Directors the
Bank’s Auditors, M/s KPMG Ford Rhodes Thornton & Co.
carry out reviews and sample checks on the effectiveness of
the systems of internal control, as they consider appropriate
and necessary in providing their opinion on the Financial
Statements. M/s KPMG Ford Rhodes Thornton & Co. have
examined the Financial Statements made available together
with all other financial records, minutes of shareholders’ and
Directors’ meetings and related information and have
expressed their opinion which appears on page 62-62 of the
Annual Report.
The Directors confirm that to the best of their knowledge and
belief, all statutory payments due and payable to all statutory
and regulatory authorities as at the balance sheet date, have
been paid by the Bank and its subsidiaries or where relevant
provided for.
The Directors are of the view that they have discharged their
obligations as set out in this statement.
By order of the Board of Directors
(Mrs) Charuni Gunawardana
Company Secretary
29th May 2009
60 SEYLAN BANK PLC .

Audit Committee Report
The Board of Directors was reconstituted on the 30th of
December 2008 in terms of the Monetary Law Act No. 58 of
1949.
Based on the minutes of the Audit Committee meetings made
available to us the Audit Committee under the previous Board
conducted four meetings during the year under review. Three
of the meetings were held when the Committee comprised of
three Directors of the Bank and the fourth meeting was held
with the addition of an independent Non-executive director
(with effect from September 2008). The Deputy General
Manager, Audit & Inspection has functioned as the Secretary to
the Committee during the year under review whilst the
Assistant General Manager Information Systems Audit has
reported on activities relating to Information Systems of the
Bank.
Based on the minutes of the Audit Committee meetings made
available to us the External Auditors have attended three of the
Audit Committee Meetings during 2008. Further, the
Director/General Manager/CEO or his representative has
participated in Audit Committee Meetings for the purpose of
clarifying matters raised by the Committee. According to the
minutes, from time to time, as and when requirements arise,
Heads of Ranges, Finance, Compliance, Human Resource
Management and other Divisions have been instructed to be
present at the meetings in order to obtain various clarifications.
The perusal of the minutes further indicate that the Committee
has reviewed the progress of Audits and Inspections carried
out by the Internal Audit & Information Systems Audit
Departments of the Bank as against the Audit Plan approved
by the Committee for the year at every meeting. The
Committee has also made recommendations from time to time
to strengthen procedures and internal control systems with a
view to managing Operational Risk of the Bank.
Based on the minutes, a summary of all the above activities,
highlighting any matters of importance has been submitted to
the Board of Directors on a quarterly basis.
The current Audit Committee was appointed on 12th January
2009 (upon the reconstitution of the Board) and comprises of
three non-executive directors two of whom were appointed on
12th January and the 3rd director on 24th February 2009. The
current Audit Committee, has recommended to the Board of
Directors that M/s KPMG Ford Rhodes, Thornton & Company,
Chartered Accountants be appointed as Auditors for the
financial year ending 31st December 2009, subject to the
approval of the Shareholders at the next Annual General
Meeting.
Lalith Withana
Chairman - Audit Committee
29th May 2009
. SEYLAN BANK PLC 61

INDEPENDENT AUDITOR’S REPORT
TO THE SHAREHOLDERS OF SEYLAN BANK PLC
Report on the Financial Statements
We have audited the accompanying financial statements of
Seylan Bank PLC, the consolidated financial statements of the
Company and its subsidiaries as at December 31, 2008 which
comprise the balance sheet as at December 31, 2008, and the
income statement, statement of changes in equity and cash
flow statement for the year then ended, and a summary of
significant accounting policies and other explanatory notes as
set out on pages 64 to 129.
Management’s Responsibility for the Financial
Statements
Management is responsible for the preparation and fair
presentation of these financial statements in accordance with
Sri Lanka Accounting Standards. This responsibility includes:
designing, implementing and maintaining internal control
relevant to the preparation and fair presentation of financial
statements that are free from material misstatement, whether
due to fraud or error; selecting and applying appropriate
accounting policies; and making accounting estimates that are
reasonable in the circumstances.
Scope of Audit and Basis of Opinion
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in
accordance with Sri Lanka Auditing Standards. Those
standards require that we plan and perform the audit to obtain
reasonable assurance whether the financial statements are free
from material misstatement.
An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by
management, as well as evaluating the overall financial
statement presentation.
We have obtained all the information and explanations which
to the best of our knowledge and belief were necessary for the
purposes of our audit except for the matters mentioned in our
opinion paragraph. We therefore believe that our audit provides
a reasonable basis for our opinion.
Opinion-Company
1. We have not received confirmations for significant related
party balances as at 31 December 2008 and for the related
party transactions for the year then ended. Consequently
we have not obtained comfort on the completeness of the
said related party disclosures reflected in note 42 to the
financial statements.
2. The net exposure to the bank on loans and advances given
to related parties as at the balance sheet date after
allowing for approved securities was Rs.373,080,521. We
are unable to assess the financial standing and operational
performance of the respective related parties. Thus we
could not satisfy ourselves on the extent of recoverability of
these loans and advances due to inadequate information.
In our opinion, except for the effects of such adjustments, if
any, as might have been determined to be necessary due to
the matters stated above, the financial statements give a true
and fair view of the Company’s state of affairs as at December
31, 2008 and its profit and cash flows for the year then ended
in accordance with Sri Lanka Accounting Standards.
Without further qualifying our opinion we draw attention to
Note 40 to the financial statements on the Grameen loans
where reference is made to the fact that a sum of Rs.2.535.Bn
was in arrears for a period of 3 to 6 months subsequent to the
balance sheet date.
62 SEYLAN BANK PLC .

Opinion-Group
1. We have not received confirmations for significant related
party balances as at 31 December 2008 and for the related
party transactions for the year then ended. Consequently
we have not obtained comfort on the completeness of the
said related party disclosures reflected in note 42 to the
financial statements.
2. The net exposure to the bank on loans and advances given
to related parties as at the balance sheet date after
allowing for approved securities was Rs.373,080,521. We
are unable to assess the financial standing and operational
performance of the respective related parties. Thus we
could not satisfy ourselves on the extent of recoverability of
these loans and advances due to inadequate information.
3. The consolidated financial statements have been prepared
based on unaudited financial statements as audited
financial statements are not available for its subsidiaries
Seylan Merchant Bank PLC, SMB Money Brokers (Pvt) Ltd,
Seylan Merchant Leasing Limited, SMB Real Estate
Limited, SMB Securities (Pvt) Limited, Ceylinco Seylan
Development PLC and its associate SMB Kenanga
Investment Corporation Limited. We are unable to assess
the extent of the impact of the unresolved issues in the
subsidiaries audited by us and Ceylinco Seylan
Development PLC which is not audited by us and for which
no returns have been received. These may result in
significant adjustments to these unaudited financial
statements which cannot be quantified as at the date of
this report.
In our opinion, except for the effects of such adjustments, if
any, as might have been determined to be necessary due to
the matters stated above, consolidated financial statements
give a true and fair view of the state of affairs as at December
31, 2008 and the profit and cash flows for the year then
ended, in accordance with Sri Lanka Accounting Standards, of
the Company and its subsidiaries dealt with thereby, so far as
concerns the members of the Company.
Without further qualifying our opinion we draw attention to
Note 40 to the financial statements on Grameen loans where
reference is made to the fact that a sum of Rs.2.535Bn was in
arrears for a period of 3 to 6 months subsequent to the
balance sheet date
Report on Other Legal and Regulatory
Requirements
The Bank’s capital adequacy ratio as at 30 September 2008
and 31 December 2008 was 9.12% and 8.06% respectively,
which is below the 10% minimum requirement stipulated by
the Central Bank of Sri Lanka
As per the return filed by the Bank with the Central Bank of Sri
Lanka as at 31 December 2008, the Bank had exceeded the
single borrower limit by Rs.180,189,000 which resulted in
violation of the relevant direction issued by the Central Bank of
Sri Lanka
Except as mentioned above
The company’s financial statements also comply with the
requirements of Sections 151(2) of the Companies Act No. 07
of 2007.
These Financial Statements present the information required
by the Banking Act No 30 of 1988.
Chartered Accountants
29 May 2009
Colombo.
. SEYLAN BANK PLC 63

BEATING STRONGER!
Income Statement
For The Year Ended 31st December Bank Bank Group Group
2008 2007 2008 2007
Note Rs.'000 Rs.'000 Rs.'000 Rs.'000
Income 2 25,246,209 21,079,885 26,883,252 22,808,262
Interest Income 3 21,572,430 17,806,815 23,063,351 19,061,484
Interest Expenses 4 14,361,452 11,022,689 15,825,210 12,077,944
Net Interest Income 7,210,978 6,784,126 7,238,141 6,983,540
Other Income 5 3,673,779 3,273,070 3,819,901 3,746,778
10,884,757 10,057,196 11,058,042 10,730,318
Less: Operating Expenses 6
Personnel Costs 3,274,335 2,801,723 3,473,901 2,959,430
Premises, Equipment & Establishment Expenses 1,505,226 1,252,689 1,553,785 1,312,087
Fee and Commission Expenses 52,089 43,156 63,434 51,327
Provision for Staff Retirement Benefit - Note 33.a.4 131,379 415,036 144,242 427,225
Other Overhead Expenses 2,940,998 2,740,455 3,106,344 2,902,852
Diminution / (Appreciation) in Value of Investments 40,684 (7) 168,379 9,270
Impairment Loss - Note 23.a. 301,280 - 314,285 -
Provision for Doubtful Receivables 16,338 - 43,430 -
8,262,329 7,253,052 8,867,800 7,662,191
Profit on Ordinary Activities before
Loan loss Provision, Tax & Associate Company Profit 2,622,428 2,804,144 2,190,242 3,068,127
Less : Loan Losses & Provisions 7 2,467,187 1,365,075 2,263,895 1,398,870
Profit on Ordinary Activities before Tax & Associate Company profit 155,241 1,439,069 (73,653) 1,669,257
Share of Associate Company Profits after tax - - 1,833 407
Profit on Ordinary Activities before Tax 155,241 1,439,069 (71,820) 1,669,664
Less: Tax on Profits on Ordinary Activities 8 - 515,880 21,354 535,142
Profit on Ordinary Activities After Tax 155,241 923,189 (93,174) 1,134,522
Attributable to Minority Interest - - (259,666) 113,836
Net Profit Attributable to Shareholders of the Bank 155,241 923,189 166,492 1,020,686
Basic Earnings Per Share (Rs.) 9 0.90 5.50 0.97 6.08
The Significant Accounting Policies and notes to the Financial Statements which appear on pages 68 to 129 form an integral part of these Financial
Statements.
64 SEYLAN BANK .

Balance Sheet
As At 31st December Bank Bank Group Group
Note 2008 2007 2008 2007
Rs.'000 Rs.'000 Rs.'000 Rs.'000
Reclassified
Reclassified
Assets
Cash and Short Term Funds 11 5,491,795 2,853,324 5,519,163 2,878,887
Balance with Central Bank of Sri Lanka 12 6,857,039 7,915,660 6,857,153 7,915,741
Treasury Bills and Bonds Eligible for Rediscounting With Central Bank
within One Year 13 13,176,451 11,113,286 14,877,846 15,511,396
Treasury Bills and Bonds Eligible for Rediscounting With Central Bank
after One Year 14 11,660,853 11,273,746 13,489,399 12,183,121
Government and other Securities held for dealing purpose 15 184,917 150 184,917 282
Placements with and loans to other Banks, Finance Companies & Other 16 - 1,129,923 119,660 1,186,405
Investment Securities / Investments in Projects 17 476,954 1,221,218 1,144,730 1,952,849
Securities purchased under Resale Agreements 664,934 454,648 855,055 1,192,922
Bills of Exchange 18 1,484,746 1,967,091 1,484,746 1,967,091
Loans and Advances 19 97,691,569 89,017,069 99,118,833 89,976,544
Lease Rentals Receivable Not Later Than One Year 20 2,287,473 2,816,480 3,020,711 3,632,268
Lease Rentals Receivable Later Than One Year And
not later than Five Years 21 2,686,524 3,847,427 4,014,648 5,585,106
Lease Rentals Receivable Later Than Five Years 22 3,813 3,310 9,927 14,806
Investments in Subsidiary Companies 23 948,529 1,093,407 - -
Investments in Associate Companies - - 53,294 49,950
Investment Properties 24 520,812 149,394 1,938,878 1,607,633
Group Balances Receivable 25 623,180 411,629 - -
Property, Plant & Equipment 26 4,142,241 3,690,014 5,616,966 5,179,324
Other Assets 27 4,944,560 4,542,577 5,671,344 5,080,463
Intangible Assets 28 - - 25,410 26,848
Income Taxation 108,273 - 108,273 -
Deferred Tax Assets 32.a 91,582 - 99,484 13,332
Total Assets 154,046,245 143,500,353 164,210,437 155,954,968
Liabilities
Deposits 29 107,938,801 111,299,612 109,505,449 112,436,861
Borrowings 30 7,105,018 6,169,776 8,982,178 8,386,673
Securities sold under Re-purchase Agreements 14,516,393 3,121,654 19,097,470 8,888,114
Group Balances Payable 31 1,523,992 497,663 - -
Income Taxation - 472,306 25,343 541,082
Provision for Deferred Taxation 32.b - 41,948 - 41,948
Other Liabilities 33 11,254,565 9,376,809 12,034,897 9,897,074
Advance Received on Debenture Issue 34.a 630,565 - 630,565 -
Debentures 34.b 4,056,900 5,484,350 4,254,847 5,806,547
Total Liabilities 147,026,234 136,464,118 154,530,749 145,998,299
Equity
Stated Capital 35 2,542,420 2,542,420 2,542,420 2,542,420
Statutory Reserve Fund 36 479,754 468,250 486,120 474,661
Reserves 37 3,997,837 4,025,565 5,208,675 5,227,693
7,020,011 7,036,235 8,237,215 8,244,774
Minority Interest - - 1,442,473 1,711,895
Total Equity 7,020,011 7,036,235 9,679,688 9,956,669
Total Liabilities & Equity 154,046,245 143,500,353 164,210,437 155,954,968
Commitments & Contingencies 38 26,778,515 24,335,965 26,812,572 24,344,830
The Significant Accounting Policies and notes to the Financial Statements which appear on pages 68 to 129 form an integral part of these Financial Statements.
It is certified that the Financial Statements have been prepared in compliance with the requirements of the Companies Act No. 7 of 2007.
Prasantha De Silva
Chief Manager Finance
A. Pasqual
General Manager/Chief Executive
Approved and signed on behalf of the Board
Eastman Narangoda R. Nadarajah Mrs. C Gunawardana
Chairman Executive Director Company Secretary
29th May 2009
Colombo
. SEYLAN BANK PLC 65

BEATING STRONGER!
Statement Of Changes In Equity
For the year ended 31st December 2008 - Bank Stated Capital Rs'000.
Share Share Reserve Retained Revaluation Other
Capital Premium Fund Profits Reserve Reserves Total
As at 01.01.2007 1,705,101 837,319 422,091 2,681,112 270,847 451,808 6,368,278
Net Profit Attributable to the
Shareholders of the Bank 923,189 923,189
Dividends - Note 10 (255,232) (255,232)
Transfers from / to Retained Profits 46,159 25,770 (71,929) -
Other Transfers -
As at 31.12.2007 1,705,101 837,319 468,250 3,374,839 198,918 451,808 7,036,235
As at 01.01.2008 1,705,101 837,319 468,250 3,374,839 198,918 451,808 7,036,235
Effect of change in accounting policy due to
adoption of SLAS 16 (Revised 2006)
- Note 33.a.5 74,849 74,849
Adjustment to Reserve Fund** 3,742 (3,742) -
Revised Balance as at 01.01.2008 1,705,101 837,319 471,992 3,445,946 198,918 451,808 7,111,084
Net Profit Attributable to the
Shareholders of the Bank 155,241 155,241
Dividends - Note 10 (255,900) (255,900)
Transfers from / to Retained Profits 7,762 75,504 (83,266) -
Other Transfers 9,586 9,586
As at 31.12.2008 1,705,101 837,319 479,754 3,420,791 125,238 451,808 7,020,011
**5% of the adjustment to the opening balance of the Retained Profits (as at 01.01.2008) has been transferred to Reserve Fund in order to comply with the section 20(1) & (2) of
the Banking Act. No. 30 of 1988.
For the year ended 31st December 2008 - Group Stated Capital Rs'000
Stated Share Reserve Retained Revaluation Other Minority Total
Capital Premium Fund Profits Reserve Reserves Total Interest Equity
As at 01.01.2007 1,705,101 837,319 429,295 3,160,306 636,171 714,326 7,482,518 1,620,448 9,102,966
Net Profit Attributable to the
Shareholders of the Bank 1,020,686 1,020,686 113,836 1,134,522
Dividends - Note 10 (255,232) (255,232) (18,122) (273,354)
Transfers from / to Retained Profits 45,366 24,901 (71,929) (1,662) 1,662 -
Increase / decrease in Share Premium - (131) (131)
Other Transfers (1,536) - (1,536) (5,798) (7,334)
As at 31.12.2007 1,705,101 837,319 474,661 3,949,125 564,242 714,326 8,244,774 1,711,895 9,956,669
As at 01.01.2008 1,705,101 837,319 474,661 3,949,125 564,242 714,326 8,244,774 1,711,895 9,956,669
Effect of change in accounting policy due
to adoption of SLAS 16 (Revised 2006)
- Note 33.a.5 - - - 74,892 - - 74,892 74,892
Adjustment to Reserve Fund** - - 3,742 (3,742) - - - -
Revised Balance as at 01.01.2008 1,705,101 837,319 478,403 4,020,275 564,242 714,326 8,319,666 1,711,895 10,031,561
Net Profit Attributable to the
Shareholders of the Bank 166,492 166,492 (259,666) (93,174)
Dividends - Note 10 - - - (255,900) - - (255,900) - (255,900)
Transfers from / to Retained Profits - - 7,762 75,504 (83,266) - - - -
Other Transfers - - (45) (2,584) 9,586 - 6,957 (9,756) (2,799)
As at 31.12.2008 1,705,101 837,319 486,120 4,003,787 490,562 714,326 8,237,215 1,442,473 9,679,688
**5% of the adjustment to the opening balance of the Retained Profits (as at 01.01.2008) has been transferred to Reserve Fund in order to comply with the section 20(1) & (2) of
the Banking Act. No. 30 of 1988.
66 SEYLAN BANK PLC .

Cash Flow Statement
Bank Bank Group Group
For the year ended 31st December 2008 2007 2008 2007
Rs.'000 Rs.'000 Rs.'000 Rs.'000
Cash flows from operating activities
Interest Received 20,872,930 16,586,353 22,363,851 17,747,989
Fees and commission receipt 1,737,414 1,465,027 1,978,760 1,712,499
Interest payments (14,361,452) (11,022,689) (15,825,210) (12,077,944)
Exchange income 670,731 603,824 670,731 603,824
Receipt from other operating activities 647,194 804,674 647,194 804,674
Cash payments to employees and suppliers (6,974,626) (6,053,627) (7,334,570) (6,381,959)
Payments on other operating activities (52,089) (43,156) (63,434) (51,327)
Operating profit before changes in operating assets 2,540,102 2,340,406 2,437,322 2,357,756
Balance with Central Bank 1,058,621 (1,002,436) 1,058,588 (1,002,403)
(Increase)/Decrease in operating assets :
Funds advanced to customers (7,025,231) (5,469,039) (7,670,200) (4,897,812)
Increase/(Decrease) in operating liabilities :
Deposits from customers (3,012,171) 11,989,846 (2,582,772) 13,127,095
Negotiable Certificates of Deposit (348,640) (769,043) (348,640) (769,043)
Cash (used in)/generated from Operations (6,787,319) 7,089,734 (7,105,702) 8,815,593
Income taxes paid (467,427) (1,050,169) (506,589) (1,093,400)
Gratuity Paid (136,704) (60,123) (139,802) (62,149)
Net cash (used in) / generated from operating activities (7,391,450) 5,979,442 (7,752,093) 7,660,044
Cash flows from investing activities
Investment in Subsidiary & Associate Company Shares / Debentures (201,250) (44,848) - (49,000)
Proceeds from sale of Subsidiary investment 44,848 - - -
Dividends received 223,295 21,418 7,715 5,102
Treasury Bonds maturing after one year (387,107) 325,204 (1,306,278) 1,611,509
Proceeds from sale of Dealing Securities - - 132 12
Purchase of Non Dealing Securities/Investments in Projects (2,250) (1,072,727) (332,946) (1,114,272)
Proceeds from sale of Non Dealing Securities/Investments in Projects 782,727 10,000 944,159 17,035
Purchase of Property, Plant and Equipment (1,456,575) (1,293,942) (1,498,617) (1,332,288)
Proceeds from sale of property, plant and equipment 396,531 446,577 401,329 460,947
Proceeds from sale of Investment property 137,500 149,740 151,400 163,413
Purchase of investment property (371,418) - (371,418) (15,000)
Net cash (used in) / generated from investing activities (833,699) (1,458,578) (2,004,524) (252,542)
Cash flows from financing activities
Issue of Debentures 72,550 1,408,685 64,900 1,681,244
Advance received on Debenture issue 630,565 - 630,565 -
Redemption of Debentures (1,395,010) (706,970) (1,511,609) (1,205,720)
Increase in Share Capital & Share Premium - - - -
Securities sold under Repurchase Agreement 11,394,739 (1,182,744) 10,209,354 1,360,896
Net increase / (decrease) in other borrowings 2,694,458 1,894,650 2,305,041 497,547
Dividends paid (254,924) (254,258) (267,468) (273,091)
Share / Debenture Issue Expenses (5,307) (45,037) (5,307) (46,243)
Net cash from financing activities 13,137,071 1,114,326 11,425,476 2,014,633
Net increase in cash and cash equivalents 4,911,922 5,635,190 1,668,859 9,422,135
Cash and cash equivalents at beginning of the period 14,421,258 8,786,068 19,583,205 10,161,070
Cash and cash equivalents at end of the period 19,333,180 14,421,258 21,252,064 19,583,205
Reconciliation of Cash and Cash Equivalents
Cash and Short Term Funds 5,491,795 2,853,324 5,519,163 2,878,887
Treasury Bills/Bonds maturing less than one year 13,176,451 11,113,286 14,877,846 15,511,396
Securities Purchased under Resale Agreement 664,934 454,648 855,055 1,192,922
19,333,180 14,421,258 21,252,064 19,583,205
. SEYLAN BANK PLC 67

BEATING STRONGER!
Notes to the Accounts
1. SIGNIFICANT ACCOUNTING POLICIES
1.1 GENERAL
Seylan Bank PLC is a public quoted company incorporated on
August 28, 1987 and domiciled in Sri Lanka. The Consolidated
Financial Statements of the Bank for the year ended December
31, 2008 comprise the Bank (parent company) and its
Subsidiaries (together referred to as the Group).
The Financial Statements were authorised for issue on 29th
May 2009.
1.1.1 Principal Activities of the Bank
The principal activities of the Bank are banking and related
activities such as accepting deposits, personal banking, trade
financing, off-shore banking, resident and non-resident foreign
currency operations, travel related services, corporate and retail
credit, project financing, lease financing, rural credit, issuing of
local and international credit cards, telebanking facilities,
Internet banking, dealing in Government Securities, etc.
1.1.2 Accounting Convention
The financial statements are presented in Sri Lanka rupees,
rounded to the nearest thousand. The Balance Sheet, Income
Statement, Statement of Cash Flow and the Statement of
Changes in Equity are prepared in conformity with generally
accepted accounting principles and the Sri Lanka Accounting
Standards (SLAS) laid down by the Institute of Chartered
Accountants of Sri Lanka (ICASL) applied consistently on a
historical cost/modified historic cost basis, with no adjustments
being made for inflationary factors affecting the financial
statements except that certain land and buildings, dealing
securities and investment properties are stated at valuation.
Where appropriate the policies are explained in the succeeding
notes.
The preperation and presentation of the financial statements
are in compliance with the requirements of the Companies Act
No. 7 of 2007 and Banking Act No. 30 of 1988 and
amendments thereto.
All values presented in the financial statements are in Sri
Lankan Rupees Thousands (Rs.‘000s) unless otherwise
indicated. Figures in brackets indicate deductions.
1.1.3 Foreign Currency Translation (SLAS 21)
(a) Transactions in foreign currencies in Domestic Banking Unit are
translated to Sri Lankan Rupees at the middle rate of exchange
ruling at the date of the transaction. Monetary items
denominated in foreign currencies at the Balance Sheet date
are translated to Sri Lankan Rupees at the middle rate of
exchange ruling at that date. Foreign exchange differences
arising on the settlement or reporting of the Bank’s monetary
items at rates different from those which were initially recorded
are dealt in the Income Statement.
(b) Non monetary assets & liabilities denominated in foreign
currency that are stated at historic cost at the balance sheet
date are translated to Sri Lankan rupees at the foreign
exchange rates ruling at that date.
Forward exchange contracts are valued at the forward market
rates ruling on the date of the Balance Sheet. Unrealised gains
and losses are dealt with through the Income Statement.
(c) FCBU balances have been converted at closing rate for all
monetary items and historic rate for non monetary items.
Income Statement of the FCBU has been converted at the
monthly average rate. Any difference is absorbed to income
statement.
1.1.4 Taxation
Provision for taxation is made on the basis of the profit for the
year as adjusted for taxation purposes in accordance with the
provisions of the Inland Revenue Act No.10 of 2006 and
amendments thereto.
1.1.5 Deferred Taxation
Seylan Bank PLC
Deferred tax is provided using the balance sheet liability
method providing for temporary differences between the
carrying amounts of the assets & liabilities for financial reporting
purposes and the amount used for taxation purposes.
Deferred tax assets including those related to temporary tax
effects of income tax losses and credits available to be carried
forward are recognized only to the extent that it is probable that
future taxable profits will be available against which the asset
can be utilized. Deferred tax assets are reviewed at each
68 SEYLAN BANK PLC .

eporting date and are revalued to the extent that it is no longer
probable that the related tax benefit will be realized.
Seylan Merchant Bank PLC
Deferred tax assets and liabilities are recognised for all
temporary differences. Deferred tax assets are recognised for
all deductible temporary differences, carrying forward of
unused tax credit and tax losses, to the extent that it is
probable that taxable profit will be available against which the
deductible temporary differences, and the carrying forward of
unused tax credits and unused tax losses can be utilised.
The carrying amount of deferred tax assets is reviewed at each
Balance Sheets date and reduced to the extent that it is no
longer probable that sufficient taxable profit will be available to
allow all or part of the deferred tax assets to be utilised.
Unrecognized deferred tax assets are reassessed at each
Balance Sheet date and are recognised to the extent that it has
become probable that future taxable profit will allow the
deferred tax assets to be recovered.
Deferred tax assets and liabilities are measured at tax rates that
are expected to apply to the year when the asset is realised or
liability is settled, based on the tax rates and tax laws that have
been enacted or substantively enacted as at the Balance Sheet
date.
Deferred tax assets and deferred tax liabilities are offset, if a
legally enforceable right exists to set off current tax assets
against current liabilities and deferred taxes relate to the same
taxable entity and the same taxation authority.
Ceylinco Seylan Developments PLC
Deferred taxation is provided on the liability method. The tax
effect of all timing differences which occur as a result of items
being allowed for income tax purposes in a period different
from that when they are recognized in the Financial Statements
are included as a provision for deferred taxation at current rates
of taxation.
Deferred taxation is provided on the liability method in respect of:
a) Tax excess of depreciation allowances over historical cost
depreciation.
b) Other material timing differences is so far as a liability
reasonably expected to crystallize.
Since the company enjoys 7 years tax holiday from the year of
assessment 2003/2004, certain timing differences will not
reverse for a considerable period.
The company has a brought forward tax loss of
Rs.712,835,674/=.
Considering the above tax effect of such timing differences
have been excluded from the tax expenses for the period under
review and periods preceding it.
Seylan Bank Asset Management Ltd
Deferred tax is provided using the Balance Sheet liability
method on temporary differences at the Balance Sheet
between the tax bases of assets and liabilities and their
carrying amounts for financial reporting purposes.
Deferred tax assets and liabilities are recognized for all
temporary differences. Deferred tax assets are recognized for
all deductible temporary differences, carry-forward of unused
tax credits and unused tax losses, to the extent that it is
probable that taxable profit will be available against which the
deductible temporary differences, and the carry-forward of
unused tax credits and unused tax losses can be utilized.
The carrying amount of deferred tax assets is reviewed at each
balance sheet date and reduced to the extent that it is no
longer probable that sufficient taxable profit will be available to
allow all or part of the deferred tax asset to be utilized.
Unrecognized deferred tax assets are reassessed at each
balance sheet date and are recognized to the extent that it has
become probable that future taxable profit will allow the
deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at tax rates that
are expected to apply to the year when the asset is realized or
liability is settled, based on the tax rates and tax laws that have
been enacted or substantively enacted at the Balance Sheet
date.
Income tax relating to items recognized directly in equity is
recognized in equity. Deferred tax assets and deferred tax
liabilities are offset, if a legally enforceable right exists to set off
. SEYLAN BANK PLC 69

BEATING STRONGER!
Notes to the Accounts
current tax assets against current tax liabilities and the deferred
taxes relate to the same taxable entity and the same taxation
authority.
1.1.6 VAT on Financial Services
The base for the computation of VAT on Financial Services is
the accounting profit before income tax is adjusted for the
emoluments of employees and subsequent economic
depreciation computed on prescribed rates.
1.1.7 Events After the Balance Sheet Date
All material post balance sheet events have been disclosed in
Note 40 to the Financial Statements.
1.2. GROUP CONSOLIDATION POLICY
(a)
Subsidiaries / Associates
The Group Financial Statements comprise a consolidation of
the financial statements of the company and its subsidiaries
incorporated in Sri Lanka, Seylan Bank Asset Management Ltd
(100%), Seylan Merchant Bank PLC (42.88%) including non
voting shares and an indirect holding, and Ceylinco Seylan
Developments PLC (51.01%) with an indirect holding. The
Financial Statements of Seylan Merchant Bank PLC comprise a
consolidation of the company and its subsidiaries SMB Money
Brokers (Pvt) Ltd., Seylan Merchant Leasing Ltd., SMB Real
Estate Ltd. and SMB Securities (Pvt) Ltd
Subsidiary Companies
Seylan Bank Asset
Management Ltd.
Ceylinco Seylan Developments PLC
Seylan Merchant Bank PLC
Sub Subsidiaries
SMB Money Brokers (Pvt) Ltd.
Seylan Merchant Leasing Ltd.
SMB Real Estate Ltd.
SMB Securities (Pvt) Ltd.
Nature of Business
Primary Dealer
Property Developers
Financial Services
Nature of Business
Money Brokers
Leasing
Real Estate
Stock Brokering
Associate Company of Seylan Merchant Bank PLC
SMB Kenanga Investment
Corporation Ltd.
Investment Banking.
(b)
(c)
(d)
(e)
The total profit/loss of the subsidiaries are included in the
Consolidated Income Statement, and the proportion of the
Profit or Loss after taxation applicable to outside Shareholders
is shown under the heading "Minority Interest” (SLAS 26). All
assets and liabilities of the company and its subsidiaries are
included in the Group Balance Sheet. The interest of the
outside shareholders in the net assets of the Group is stated
separately in the Consolidated Balance Sheet within Equity
under the heading “Minority Interest”.
Inter- Group Transactions
Inter-group balances and inter-group transactions and resulting
unrealised profits are eliminated in full in the consolidated
financial statements.
Profit and Loss
In arriving at the profit attributable to the Shareholders of
Seylan Bank Ltd, the total profits or losses of the subsidiaries
are included in the Consolidated Income Statement after
eliminating inter-group transactions and the portion of the profit
or loss after taxation applicable to non group Shareholders.
Assets and Liabilities
All Assets and Liabilities of the company and its subsidiaries are
included in the Consolidated Balance Sheet. The proportionate
interest of the non group Shareholders in the net assets
employed is stated separately in the consolidated balance
sheet under the heading “Minority Interest”.
Non Uniformal Accounting Policies
The impact of non uniformal accounting policies adopted by
subsidiaries has been adjusted in the consolidated accounts
for 2008 which amounted to Rs.286,783/- in total.
SMB Kenanga Investment Corporation Ltd.
Profit / loss of the Associate Company has been recorded
under the equity method of accounting. The carrying value of
investment in the Consolidated Balance Sheet is hereby
increases or decreases to recognize the Group share of
retained profits and losses of the associate company since the
date of acquisition.
70 SEYLAN BANK PLC .

1.3 ASSETS AND BASIS OF THEIR VALUATION
1.3.1 (a) Treasury Bills and Bonds
Seylan Bank PLC
The Bank has changed its Accounting Policy on Reporting
Securities Portfolio to fall in line with the directions made by the
Monetary Board of the Central Bank of Sri Lanka under S 46 (1)
of the Banking Act No. 30 of 1988 amended by the Banking
(Amendment) Act No. 33 of 1995 and Act No. 2 of 2005.
Accordingly, the Bank has adopted a policy of marking to
market its “Trading Portfolio” of Government Securities from
June 2006 on a prospective basis.
Securities purchased under Re-sale Agreements are advances
collateralised by purchase of treasury bills and treasury bonds
from the public subject to a commitment to re-sell them at a
predetermined price. Such securities remain on the Balance
Sheet of the Bank and the asset is recorded in respect of the
consideration paid and interest accrued thereon.
Seylan Bank Asset Management Ltd
In line with the regulations of the Central Bank of Sri Lanka
(CBSL), Seylan Bank Asset Management Limited changed it’s
accounting policy on reporting securities portfolio commencing
from June 2003. Accordingly, the Trading Portfolio is being
marked to market based on the weighted average rates
circulated by CBSL and gains or losses recognised in the Profit
& Loss Account.
(b) Advances to Customers
Advances to customers are stated in the Balance Sheet net of
provisions for possible loan losses and also net of interest
which is not accrued to revenue. Bank’s policy is to zerowise
interest in suspense of non performing loans and advances
after 12 months.
(c) Specific Provision for loan losses and leases:
Provisions for possible loan losses are made on the basis of
continuous review of all advances to customers, in accordance
with the applicable Accounting Standard and the requirement
as given by the Central Bank of Sri Lanka based on an aged
classification of advances as follows.
Period Classification Provision
Outstanding
6-12 Months Sub – Standard 20%
12-18 Months Doubtful 50%
18 Months and over Loss 100%
Required
Net of Realisable
Value of Securities
As per the “Hair Cut Rule”of the Central Bank of Sri Lanka, the
extent up to which securities can be discounted for
provisioning purposes is 75% at the time of first provisioning for
non performing loans between 6-30 months, 60% for nonperforming
loans between 31-42 months, 50% for those
between 43-54 months and 40% for those over 55 months. It
will be at the discretion of the management for cases over 4
years in the loss category.
Bank makes a general provision of 1/10th of 1% on a quarterly
basis commencing from 4th quarter ended 31.12.2006 (as per
direction issued on 21st November 2006) of total performing
loans & advances and overdue loans & advances that have not
been classified as substandard, doubtful or loss for provisioning
purposes in terms of the directions issued on 22nd August
1997 under the Section 46A of Banking Act on suspension of
interest on non performing advances and classification of bad &
doubtful debts for provision purposes.
1.3.2 Investments (SLAS 22)
(a)
(b)
(c)
Investments in Subsidiaries
Investments in Subsidiaries are stated at cost in the Bank’s
Financial Statements in accordance with the Sri Lanka
Accounting Standard No. 26 on Consolidated Financial
Statements and Accounting for Investments in Subsidiaries.
Investments in Associates
Investments in Associates are accounted under the Equity
Method in Consolidated Financial Statements accordance with
the Sri Lanka Accounting Standard No. 27 on Accounting for
Investments in Associates
Dealing Securities
These are marketable securities acquired and held with the
intention to resale over a short period of time. Such securities
are recorded at market values, adjustments for changes in
market values is accounted for in the income statement.
. SEYLAN BANK PLC 71

BEATING STRONGER!
Notes to the Accounts
(d)
(e)
Seylan Merchant Bank PLC
The quoted ordinary shares classified as Dealing Securities
were recorded at the lower of cost or market value on an
aggregate portfolio basis.
Unquoted investments are stated at cost.
Investment Securities
These are acquired and held for yield or capital growth in the
medium /long term. Such securities are recorded at cost.
Changes in market values of these securities are not taken into
account unless there is a considerable permanent diminution in
value.
Investment Properties
Investments in poperties that are not occupied substantially for
use by or in the operations of the Bank are classified as
Investment Properties. Investment Properties of the company
are stated based on cost model.
Investment property is recognized if it is probable that future
economic benefits that are associated with the investment
property will flow to the Bank and cost of the investment
property can be reliably measured.
(b)
(c)
accumulated depreciation which is provided for on the basis
specified in (b) below.
Capital work-in progress is stated at cost. It included expenses
of a capital nature directly incurred in the construction of
buildings awaiting capitalization.
Depreciation is provided at the rates indicated below on
straight-line basis over the period appropriate to the estimated
lives of the different types of assets.
Seylan Bank PLC
Assets purchased prior to 01st January 99 have been
depreciated over the remaining useful life based on the revised
depreciation rates. Assets purchased after 01st January 99
have been depreciated based on revised rates.
Previous
Revised
Life Period Rate Life Period Rate
Freehold Building 25 Yrs 4.0% 40 Yrs 2.5%
Motor Vehicles 3 Yrs 33 1/3 % 5 Yrs 20%
Computer Equipment 5 Yrs 20% 6 Yrs 16.67%
Office Equipment,
Furniture & Fittings
& Leased Assets 3-10 Yrs 33 1/3% -10 % 3 - 10 Yrs33 1/3%-10 %
An investment property is measured initially at its cost. The cost
of a purchased investment property comprises of its purchase
price and any directly attributable expenditure.
Assets are depreciated from the month of purchase / available
for use to the month of disposal. Depreciation is not provided
for freehold land.
(f)
The Bank applies the cost model for investment properties in
accordance with Sri Lanka Accounting Standard 40, -
“Investment Property” (revised 2005). Accordingly, land
classified as investment properties are stated at cost.
Other Investments
Where the Group interest in equity is less than 20% and or in
companies where the Bank does not exercise significant
influence and/ or control over the financial and operating
policies, investments are valued at cost.
1.3.3 Property, Plant and Equipment
(a) Property, Plant and Equipment are recorded at cost of
purchase or valuation together with any incidental expenses
thereon. The assets are stated at cost or valuation less
Seylan Merchant Bank PLC
Motor Vehicles 20% per annum
Computers 20% per annum
Office Equipment, Furniture & Fittings 20% per annum
Leased Assets 20% per annum
Depreciation of an asset begins when it is available for use and
ceases at the earlier of the date that the asset is classified as
held for sale and the date that the asset is derecognized.
Leased assets are depreciated over the shorter of the leased
term and their useful lives. Depreciation is not provided for
freehold land.
Seylan Bank Asset Management Ltd
Building Improvements 20% per annum
Motor Vehicles 20% per annum
72 SEYLAN BANK PLC .

Computer Software & Hardware 20% per annum
Office Equipment, Furniture & Fittings 20% per annum
Depreciation of an asset begins when it is available for use and
ceases at the earlier of the date that the asset is classified as
held for sale and the date that the asset is derecognized.
Ceylinco Seylan Developments PLC
Property, Plant and Equipment are recorded at cost of
purchase or valuation together with any incidental expenses
thereon. The Assets are stated at cost or valuation less
accumulated depreciation which is provided for on the basis
specified below.
The Property at No.90 Galle Road, Colombo 03, which
includes the Leasehold Land, Buildings and Equipment, and
comprises of two towers namely East and West were revalued
on open market effective value basis. The surplus arising on the
revaluation was transferred to Capital Reserve account.
The value pertaining to the East tower is apportioned on a
square feet area basis and is stated at valuation less
accumulated depreciation under Property, Plant & Equipment.
Freehold Land, Antiques & Ornamental paintings are not
depreciated. Leasehold land & buildings are depreciated over
the remaining unexpired lease period. The depreciation of other
assets is provided on the straight line method at varying rates
per annum based on their useful lives as follows:-
(d)
(e)
(f)
Accounting software 20% 05
General Plant & Equipment 5% 20
Depreciation of an asset begins when it is available for use
whereas depreciation of an asset ceases at the earlier of the
date that the asset is classified as held for sale and the date
that the asset is derecognized.
The Bank applies the revaluation model for the entire class of
Freehold Land & Building. Such properties are carried at
revalued amounts being its fair value at the date of revaluation
less any subsequent depreciation and subsequent
accumulated impairment losses.
The cost of replacing part of an item of Property, Plant and
Equipment is recognized in the carrying amount of the item if it
is probable that the future economic benefits embodied within
that part will flow to the Bank and its cost can be reliably
measured. The costs of day to day servicing of Property, Plant
and Equipment are charged to the income statement.
Impairment of Property, Plant and Equipment
Seylan Bank PLC., Seylan Bank Asset Management Ltd &
Seylan Merchant Bank PLC
Carrying amounts of the assets are reviewed at each reporting
date to determine whether there is any indication of
Impairment. If such indication exists, and where the carrying
values exceed the estimated recoverable amount, the assets
are written down to their recoverable amount. Impairment
losses are recognized in the Income Statement.
Depreciation Useful
Rate Life (Years)
Leasehold Land 1.23% 81
Building 1.23% 81
Furniture & Fittings 10% 10
Equipment 20% 05
Interior Decor 50% 02
Motor Cars 20% 05
Motor Cycle 25% 04
Tools 33.33% 03
Cutlery & Crockery 50% 02
Equipment-West tower 50% 02
Furniture-west tower 33.33% 03
Interior-west tower 33.33% 03
Maintenance Management Software 20% 05
Ceylinco Seylan Developments PLC
The carrying values of property plant & equipment are reviewed
for impairment annually or when events or changes in
circumstances indicate the carrying value may not be
recoverable. If any such indications exist, and where the
carrying values exceed the estimated recoverable amount, the
assets are written down to their recoverable amount.
Impairment losses are recognized in the income statement
unless it reverses a previous revaluation surplus for the same
assets.
1.3.5 Stocks
Bank’s policy for the stock accounting is weighted average
method.
. SEYLAN BANK PLC 73

BEATING STRONGER!
Notes to the Accounts
1.4 LIABILITIES AND PROVISIONS
1.4.1 Deposits from Customers
Deposits include non interest bearing deposits, saving
deposits, term deposits, deposits redeemable at call and
certificates of deposit. They are brought to account at the
gross value of the outstanding balance. Interest paid is charged
to the income statement.
1.4.2 Borrowings
Borrowings include refinance borrowings, call money
borrowings vostro balances and borrowings from financial
institutions. They are brought to account at the gross value of
the outstanding balance.
1.4.3 Retirement Benefits
Defind Benefit Obligation
Seylan Bank PLC
Adoption of SLAS 16 (Revised)
Sri Lanka Accounting Standard 16 (Revised 2006) Employee
Benefits, applies to Financial Statements covering annual
periods beginning on or after 1st July 2007 was adopted by
the Bank with effect from 1st January 2008.
The company measures the present value of the defined
benefit obligation every year using projected unit credits
method defined by the Actuary.
Following assumption and data were used in evaluating the
defined benefit obligation by the Actuarial Valuer:
1. Interest rate 12%
2. Rate of increase in salary 10%
3. Retirement age 55yrs
Recognition of unrecognised Actuarial Gains and Losses
Actuarial gains/losses are recognized based on the application
of the corridor method over the average estimated life of the
work force (10.40 years).
In respect of actuarial gains and losses that arise in calculating
the Bank’s obligation in respect of a plan, to the extent that any
cumulative unrecognized actuarial gain or loss exceeds 10
percent of the greater of the present value of the defined
benefit obligation and the fair value of plan assets, that portion
is recognized in profit or loss over the expected average
remaining working lives of the employees participating in the
plan. Otherwise, the actuarial gain or loss is not recognized.
Transitional Provision
On first adoption of the standard the Bank has determined its
transitional liability for defined benefit obligation which is less
than the liability recognized by the bank, under previous
accounting policy and the difference was adjusted in the
opening balance of the retained earnings. (refer note 33.a.5)
Defined benefit obligations are partly funded by the Bank to a
separate Gratuity Trust fund, which is an approved investment
for tax purposes. The Bank makes annual contributions to the
fund not exceeding a total sum equivalent to the half a month
salary of each and every employee as depicted in the last
month of the accounting year together with an additional 25%
of the total thereof.
Short-Term Benefit
Short-term employee benefits are measured on an
undiscounted basis and are expensed as the related service is
provided.
A provision is recognized for the amount expected to be paid
under short term compensated absences if the Bank has a
present legal or constructive obligation to pay as a result of
past services provided by the employees and the obligation
can be estimated reliably.
Seylan Merchant Bank PLC
Full provision has been made in the accounts for defined
benefit obligation from the first year of service of employees in
compliance with Sri Lanka Accounting Standard No. 16 –
“Employee Benefits”.
However, according to the Payment of Gratuity Act No. 12 of
1983, the obligation for retirement benefit to an employee
arises only on completion of five years of continued service.
The Bank has not carried out an actuarial valuation on the
liability or externally funded. This amount is classified under
liabilities in the Balance Sheet.
74 SEYLAN BANK PLC .

Seylan Bank Asset Management Ltd.
The Company measures the present value of the promised
retirement benefit of Gratuity which is a defined benefit plan
with the advise of an actuary every year using the Projected
Unit Credited method. The key assumptions used by the
Actuary included the following.
1. Rate of interest 12 %
2. Rate of Salary Increase 7.5 %
3. Retirement Age 55 years
4. The company will continue as a going concern
However, according to the payment of Gratuity Act No. 12 of
1983, the obligation for retirement benefit to an employee
arises only on completion of five years of continued service with
the company.
The actuarial present value of the accrued benefit as at
31st December 2008 is Rs.1,311,756.
Ceylinco Seylan Developments PLC
A full provision has been made in the account of retiring gratuity
from the first year of service of employees in conformity with
Sri Lanka Accounting standards No. 16 - Employee Benefits.
However, according to the payment of Gratuity Act No. 12 of
1983, the obligation for retirement benefit arises only on
completion of five years of continued service. Retirement
benefit obligation provisions are partly funded to a separate
Gratuity Trust Fund.
The Actuarial valuation was conducted by Ms Actuarial &
Management Consultants (Pvt.) Ltd. for Seylan Bank PLC &
Seylan Bank Asset Management Ltd.
Seylan Bank Employee Provident Fund (EPF)
The Bank and employees contribute to the approved private
Provident Fund. The total amount recognised as an expense for
the current year is Rs.235.05 Mn. (Rs.192.30 Mn. in 2007)
Employee Trust Fund (ETF)
The total amount recognised as an expense to the Bank for
contribution to ETF for current year is Rs.58.72 Mn. (Rs.48.10
Mn. in 2007)
1.4.4 Commitments and Contingencies
All discernible risks are accounted for in determining the
amount of Other Liabilities.
1.5. INCOME STATEMENT
1.5.1 Revenue Recognition
Interest Income : Interest receivable is recognised on an accrual
basis. Interest ceases to be taken into revenue when the
recovery of interest or principal is in arrears for over three (3)
months. [Six (6) months in the case of Seylan Merchant Bank
PLC] Thereafter interest on advances is accounted for on a
cash basis.
Interest on non-performing debts is credited to the “Interest in
Suspense” account which is netted in the Balance Sheet
against the relevant balance.
1.5.2. Accounting for Lease Income
Finance Leases:
Assets Leased to customers which transfer substantially all the
risks and rewards associated with ownership other than the
legal title are classified as finance leases. Amount receivable
under finance leases are included under “Lease Rental
Receivable”. Leasing balances are stated in the Balance Sheet
after deduction of initial rentals received.
The excess of aggregate rentals receivable over the cost of the
leased assets constitutes the total unearned income. The
unearned income is taken into revenue over the term of the
lease, commencing from the month in which the lease is
executed in proportion to the remaining receivable balance of
the lease.
1.5.3 Accounting for Operating Lease income
Seylan Merchant Bank PLC rental income is recognized as
revenue on a straight line basis over the term of lease. However
no accrued rental income is recognized where any portion of
capital or interest is in arrears for six months or more. In such
cases interest income is accounted for on a cash basis.
1.5.4 Fee and commission Income
All fee and commission income have been recorded on cash
basis.
. SEYLAN BANK PLC 75

BEATING STRONGER!
Notes to the Accounts
1.5.5 Real Estate Income
Seylan Merchant Bank PLC recognized income when the
properties are sold and buyers has taken the possession of
such properties. For this purpose properties are deemed to be
sold once 25% of the outright sales price has been received.
1.5.6 Profit or Loss on sale of Property Plant and Equipment /
Investments
Gains or losses of a revenue nature on the disposal of property
plant and equipment and share portfolio are accounted for in
the Income Statement.
1.5.7 Dividend Income
Dividend Income is recognised in the period in which it is
declared.
1.5.8 Interest Expenses
Interest payable is recognised on an accrual basis. Other
expenses have been recognised in the accounts as they are
incurred in the period to which they relate. As per the Allowed
Alternative treatment any borrowing cost is expensed in the
income statement in the period in which they are incurred.
1.6 Segment Reporting
A segment is a distinguishable component of the group that is
engaged in providing services within a particular economic
environment which is subject to risk and rewards that are
different from those of other segments.
In accordance with the Sri Lanka Accounting Standard No. 28
on Segment Reporting, segment information is presented in
respect of the Group. The segments comprise of banking,
leasing, dealing and property / investment.
1.7 Cash Flow
The Cash Flow has been prepared using the Direct Method of
preparing cash flows in accordance with the Sri Lanka
Accounting Standard 9, “Cash Flow Statements”. Cash & cash
equivalents comprise short term highly liquid investments that
are readily convertible to known amounts of cash and are
subject to an insignificant risk of changes in value. The cash &
cash equivalents include cash in hand, balances with banks,
placements with banks, money at call and short notice and
money market funds.
1.8 Intangible Assets - Seylan Merchant Bank PLC
Intangible assets comprise of the initial acquisition cost of the
license fee at the inception for stock brokering license.
The cost is amortised using the straight line basis at the rate of
20% per annum commencing from the date of acquisition. The
amortised amount is based on the best estimate of its useful
life, such that the cost is amortised fully at the end of the useful
life. The amortisation cost is recognized as an expense in the
Income Statement.
1.9 Comparative Figures
Where necessary, amounts shown for the previous year have
been reclassified to correspond to current year to facilitate
comparison.
1.10 Directors’ Responsibility Statement
Please refer page 59 for the statement of the Directors’
responsibility.
Inter-segment transactions are based on fair market prices.
76 SEYLAN BANK PLC .

Bank Bank Group Group
2008 2007 2008 2007
Rs.'000 Rs.'000 Rs.'000 Rs.'000
2 Income
Gross Income 25,246,209 21,079,885 26,883,252 22,808,262
25,246,209 21,079,885 26,883,252 22,808,262
Income of the Company resulted mainly from the business of Banking and related activities.
3 Interest Income
Customer Advances 17,898,073 15,418,267 18,407,074 16,009,576
Treasury Bills, Bonds & Placements with Other banks 3,546,335 2,179,457 4,467,251 2,766,558
Interest Income on Debentures 24,967 35,699 1,317 14,310
Other Interest Income 103,055 173,392 187,709 271,040
21,572,430 17,806,815 23,063,351 19,061,484
4 Interest Expenses
Customer Deposits 12,415,244 9,206,231 12,668,635 9,198,828
Borrowings & Refinance 704,166 717,836 1,065,857 1,165,727
Treasury Bills & Bonds Repurchased 498,838 449,083 1,290,211 984,642
Interest Expenses Debentures 743,204 649,539 773,413 699,966
Other Interest Expenses - - 27,094 28,781
14,361,452 11,022,689 15,825,210 12,077,944
Bank Bank Group Group
2008 2007 2008 2007
Rs.'000 Rs.'000 Rs.'000 Rs.'000
Reclassified
Reclassified
5 Other Income
Net Foreign Exchange Gain 670,731 603,824 670,731 603,824
Dividend Income from Dealing Securities - Quoted 3,968 15 4,972 1,154
Dividend Income from Investment Securities - Quoted 127 2,594 127 2,594
- Unquoted 2,588 1,345 2,616 1,354
Dividend Income from Investments in Associates/Subsidiaries 216,612 17,464 - -
Capital Gains/(Losses) from Government Securities (21,916) 7,359 (20,640) 7.556
Gain on Mark to Market Valuation on Treasury Bills And Bonds 1,555 4,791 12,109 15.053
Gain on transfer Of Investments to Trading Portfolio 197,248 - 197,248 -
Fee & Commission Income including Other Gains 1,801,827 1,465,027 1,875,749 1,497,956
Profit on Sale of Property, Plant & Equipment 100,080 310,405 102,796 316,178
Profit on Sale of Investment Property 53,765 55,572 56,476 58,563
Profit on Sale of Investment Securities - - 5,933 146
Gains on sale of Dealing Securities - - 17,750 19,407
Revaluation gain on Investment Property - - 79,414 203,776
Bad Debts Written Back & Recovered 647,194 804,674 647,194 804,674
Others - - 167,426 214,543
3,673,779 3,273,070 3,819,901 3,746,778
. SEYLAN BANK PLC 77

BEATING STRONGER!
Notes to the Accounts
Bank Bank Group Group
2008 2007 2008 2007
Rs.'000 Rs.'000 Rs.'000 Rs.'000
6 Operating Expenses
Operating Expenses includes the following :-
Directors' emoluments (6.a) 74,675 57,744 108,884 86,349
Auditors' remuneration - Audit 4,317 3,902 6,363 5,413
- Other Audit 1,727 1,434 1,727 1,538
- Non Audit 197 - 331 659
Depreciation 707,897 602,786 761,421 652,749
Donations 128,865 56,408 134,446 62,950
Expenses on Litigation 109,958 77,830 114,118 80,860
Issue Expenses On Debentures 5,307 45,037 5,307 46,243
6.a Directors Emoluments (Rs.)
Bank 2008
Rs.’000
Name of the Director Emoluments Terminal Benefits paid
J L B Kotelawala** 17,953 -
A D Jegasothy (Resigned w.e.f. 19/09/2008) 1,232 8,351
R Renganathan (Resigned w.e.f. 29/09/2008) 9,953 26,565
S K M Perera (Resigned w.e.f. 19/12/2008) 4,186 -
M Sabaratnam (Resigned w.e.f. 22/09/2008) 3,347 9,901
A M Pasqual** 11,985 -
S P C Kotelawala** 2,415 -
K A S Jayatissa** 1,610 -
P T Sirisena** 2,684 -
J G S de Silva** 6,338 -
L Seneviratne (Appointed w.e.f. 01/02/2008)** 6,443 -
C Kotigala (Appointed w.e.f. 01/02/2008)** 4,958 -
A Madurapperuma (Appointed w.e.f. 19/09/2008)** 1,571 -
L Samarakoon (Appointed w.e.f. 22/09/2008)°** - -
E Narangoda (Appointed w.e.f. 30/12/2008) - -
N Jayamanne (Appointed w.e.f. 30/12/2008)° - -
P L Withana (Appointed w.e.f. 30/12/2008)° - -
F N Goonewardena (Appointed w.e.f. 30/12/2008)° - -
74,675 44,817
°Independent Non Executive Directors
**Ceased to hold office w.e.f from 29/12/2008
Bank Bank Group Group
2008 2007 2008 2007
Rs.'000 Rs.'000 Rs.'000 Rs.'000
7 Loan Losses and Provisions
Provision for Bad & Doubtful Debts - Specific 2,006,427 1,037,628 1,779,365 1,049,114
Provision for Bad & Doubtful Debts - General 379,149 303,448 379,149 303,448
Direct Write Off 81,611 23,999 105,381 46,308
2,467,187 1,365,075 2,263,895 1,398,870
78 SEYLAN BANK PLC .

Bank Bank Group Group
2008 2007 2008 2007
Rs.'000 Rs.'000 Rs.'000 Rs.'000
8 Taxation
8.a Charges to Taxation is as follows.
Taxation based on profits for the year 233,877 808,410 250,722 829,401
Reversal from Deferred Tax - Note 32.a, 32.b (185,266) (299,333) (179,836) (304,418)
Withholding Tax on Dividend - - - 3,356
(Over) / Under provision of taxes in previous years (48,611) 6,803 (49,532) 6,803
- 515,880 21,354 535,142
(i)
(ii)
(iii)
Income tax on profits has been computed at the rate of 35% on the taxable income arising from the domestic operations and On-Shore Banking
operations of FCBU and 20% on the taxable income from off-shore banking operations of the Foreign Currency Banking Unit together with SRL.
According to the Section 137 of the Inland Revenue Act No. 10 of 2006, any person who derives income from the secondary market transactions in
government securities is entitled to a notional tax credit in relation to the tax payable by such person. Notional tax credit would be determined by
grossing up of the income from the secondary market transactions to an amount equal to 1/9 of same and credit to be afforded for a like sum.
Accordingly Bank has accounted for Rs.251,033,272/= as notional tax credit for the year 2008. (Rs.90,104,340/= for 2007)
The Group companies have computed taxation based on the applicable rates for respetive companies.
8.b Reconciliation of Accounting Profit and Taxable Income
Bank Bank Group Group
2008 2007 2008 2007
Rs.'000 Rs.'000 Rs.'000 Rs.'000
Profit as per the Income Statement 155,241 1,439,069 (71,820) 1,669,664
Add : Disallowable Expenses 6,588,872 5,274,914 6,890,419 6,368,448
Less : Allowable Expenses 4,967,938 3,465,848 4,973,374 4,609,605
Exempt/Allowable Income 1,133,755 948,119 1,140,261 951,526
Aggregate Leasing Losses 16,843 - 16,843 -
Statutory Income 659,263 2,300,016 721,807 2,476,981
Tax Losses set off 14,829 11,749
Assessable/Taxable Income 659,263 706,978 2,465,232
Bank - Domestic Banking
Unit & On Shore Profits 657,153 230,003 2,269,353 794,273 704,868 246,703 2,434,568 814,205
Off Shore Profits - 20% 2,110 422 30,663 6,133 2,110 422 30,663 6,133
Social Responsibility Levy (SRL) - 3,452 - 8,004 - 3,597 - 8,063
659,263 233,877 2,300,016 808,410 706,978 250,722 2,465,232 829,401
9 Basic Earnings Per Share
Basic Earnings Per Share has been calculated by dividing profit after taxation, minority interest and preference dividends by the weighted average
number of ordinary shares in issue (Both Voting and Non Voting) during the year ended 31st December.
Bank Bank Group Group
2008 2007 2008 2007
Rs.'000 Rs.'000 Rs.'000 Rs.'000
Net Profit attributable to Shareholders of the Bank 155,241 923,189 166,492 1,020,686
Preference Dividends (5,185) (3,857) (5,185) (3,857)
150,056 919,332 161,307 1,016,829
Weighted Average Number of Ordinary Shares 167,120 167,120 167,120 167,120
Basic Earnings Per Share (Rs.) 0.90 5.50 0.97 6.08
. SEYLAN BANK PLC 79

BEATING STRONGER!
Notes to the Accounts
10 Dividends
Proposed Dividends for 2007 & 2006 were accounted for in terms of Sri Lanka Accounting Standards 12 - Events after the Balance Sheet date
(revised) in 2008 & 2007 respectively.
Bank Bank Group Group
2008 2007 2008 2007
Rs.'000 Rs.'000 Rs.'000 Rs.'000
Ordinary Share Dividends (10.a) 250,679 251,367 250,679 251,367
Preference Share Dividends (10.b) 5,221 3,865 5,221 3,865
255,900 255,232 255,900 255,232
10.a Ordinary Share Dividend
Net Dividend 227,184 227,403 227,184 227,403
Tax deducted at source 23,495 23,964 23,495 23,964
Gross Dividend 250,679 251,367 250,679 251,367
10.b Preference Share Dividend
Net Dividend 5,221 3,865 5,221 3,865
Gross Dividend 5,221 3,865 5,221 3,865
11 Cash and Short term Funds
Cash in hand 3,896,892 2,405,817 3,902,233 2,415,150
Cash at Bank - - 22,027 16,230
Balances with Banks 1,594,903 447,507 1,594,903 447,507
5,491,795 2,853,324 5,519,163 2,878,887
12 Balance with Central Bank of Sri Lanka
A Cash balance is required to be maintained with the Central Bank of Sri Lanka under the Sec. (93) of the Monetary Law Act.
The minimum cash reserve requirement as at 31.12.2008 was 7.75 % of rupee deposit liabilities.
13 Treasury Bills and Bonds Eligible For Rediscounting with the Central Bank - within one year
Treasury Bills 23,412 5,900,230 382,607 6,081,960
Treasury Bills under Repos' - - - 3,151,664
Treasury Bonds - 1,632,791 1,201,477 1,701,228
Treasury Bonds under Repos' 5,276,939 1,734,915 5,417,662 2,731,194
Sri Lanka Development Bonds - (US Dollar) 7,876,100 1,845,350 7,876,100 1,845,350
13,176,451 11,113,286 14,877,846 15,511,396
80 SEYLAN BANK PLC .

Bank Bank Group Group
2008 2007 2008 2007
Rs.'000 Rs.'000 Rs.'000 Rs.'000
14 Treasury Bills and Bonds Eligible For Rediscounting with the Central Bank - After One Year
Treasury Bills under Repos' - - 12,689 -
Treasury Bonds 433,212 2,280,204 2,249,069 2,493,786
Treasury Bonds under Repos' 11,227,641 2,274,297 11,227,641 2,970,090
Sri Lanka Development Bonds - (US Dollar) - 6,719,245 - 6,719,245
11,660,853 11,273,746 13,489,399 12,183,121
15 Government And Other Securities Held For Dealing Purposes
Quoted (note 15.a) 184,917 150 184,917 282
Total 184,917 150 184,917 282
15 .a Quoted (Analysis of Group)
Held by Seylan Bank PLC at Market Value (refer note 15.a.1) 184,917 150 184,917 150
Held by Seylan Merchant Bank PLC at Cost (refer note 15.a.2) - 132
184,917 150 184,917 282
15.a. 1 Quoted 2008 2007
Seylan Bank PLC No.of Cost / Market No.of Cost Market
Ordinary Revaluation Value Ordinary Value
Shares Rs.'000 Rs.'000 Shares Rs.'000 Rs.'000
Vallibel Power Erathna PLC 75,000 200 248 75,000 200 150
Arpico Finance Company PLC * 60,651 3,639 1,820
Ceylinco Insurance PLC * 933,055 205,272 174,481
The Finance Company PLC * 110,160 6,197 3,002
Blue Diamonds Jewellery World Wide PLC * 3,815,243 10,301 5,341
Ceylinco Finance PLC * 2,700 41 25
225,650 184,917 200 150
*During the year Seylan Bank PLC transfered investmetns in shares in investment portfolio to dealing portfolio by recognising a gain of
Rs.197 Mn. and accounted in accordance with SLAS 22, Accounting for Investments.
15.a. 2 Quoted 2008 2007
Seylan Merchant Bank PLC No.of Cost / Market No.of Cost Market
Ordinary Revaluation Value Ordinary Value
Shares Rs.'000 Rs.'000 Shares Rs.'000 Rs.'000
Pugoda Textile Mills Ltd. 7,500 253 - 7,500 253 -
Magpek Exports Ltd. 125,000 5,000 - 125,000 5,000 -
Nawaloka Hospitals Ltd. - - - 100,000 532 230
Diminution in Value (5,253) (5,653)
- - 132 230
. SEYLAN BANK PLC 81

BEATING STRONGER!
Notes to the Accounts
16 Placements with and Loans to Other Banks, Finance Companies & Other
Bank Bank Group Group
2008 2007 2008 2007
Rs.'000 Rs.'000 Rs.'000 Rs.'000
Banks - 1,129,923 118,662 1,184,112
Finance Companies - - - 1,293
Others - - 998 1,000
- 1,129,923 119,660 1,186,405
Bank Bank Group Group
2008 2007 2008 2007
Rs.'000 Rs.'000 Rs.'000 Rs.'000
Reclassified
17. Investment Securities/Investment in Project
Quoted (note 17.a) 64,414 28,201 68,705 67,555
Unquoted (note 17.b) 412,540 1,193,017 1,076,025 1,885,294
Total 476,954 1,221,218 1,144,730 1,952,849
17.a Quoted
Held by Seylan Bank PLC (refer note 17.a.1) 64,414 28,201 64,414 28,201
Held by Seylan Merchant Bank PLC (refer note 17.a.2) 15 33,196
Held by Ceylinco Seylan Developments PLC (refer note 17.a.3) 2,394 2,394
Held by Seylan Bank Asset Management Ltd. (refer note 17.a.4) 1,882 3,764
Total 64,414 28,201 68,705 67,555
17.b Unquoted
Held by Seylan Bank PLC (refer note 17.b.1) 412,540 1,193,017 412,540 1,193,017
Held by Seylan Merchant Bank PLC (refer note 17.b.2) 114,942 74,342
Held by Ceylinco Seylan Developments PLC (refer note 17.b.3) 548,543 549,149
Held by Seylan Bank Asset Management Ltd (refer note 17.b.4) - 68,786
Total 412,540 1,193,017 1,076,025 1,885,294
82 SEYLAN BANK PLC .

2008 2007
No.of Ord. Cost Market Value No.of Ord. Cost Market Value
Shares Rs.'000 Rs.'000 Shares Rs.'000 Rs.'000
17.a.
1 Quoted
Arpico Finance Company PLC* 60,651 4,356 4,822
Ceylinco Insurance PLC* 933,055 11,399 172,615
The Finance Company PLC* 110,160 1,606 6,665
Blue Diamonds Jewellery World Wide PLC* 3,815,243 10,818 10,683
Ceylinco Finance PLC* 2,700 22 45
Visa Inc.** 13,328 64,414 78,993
64,414 78,993 28,201 194,830
*During the year Seylan Bank PLC transferred its investments in shares (investment securities) to dealing portfolio by recognising a gain of Rs.197 Mn.
and accounted in accordance with SLAS 22, Accounting for Investments.
**During the year Seylan Bank PLC received Shares from VISA Inc. at zero cost and recorded same based on the market value on the date of
transaction.
2008 2007
No.of Ord. Cost Director's No.of Ord. Cost Director's
Shares valuation Shares valuation
Rs.'000 Rs.'000 Rs.'000 Rs.'000
17.b.
1 Unquoted
Credit Information Bureau of Sri Lanka* 2,900 290 5,627 2,900 290 3,588
Transnational Lanka Records Solutions (Pvt) Ltd. 1,000,000 10,000 13,787 1,000,000 10,000 12,164
Lanka Clear (Pvt) Ltd* 1,000,000 10,000 28,638 1,000,000 10,000 20,373
Lanka Financial Services Bureau Limited* 225,000 2,250 1,767
Debentures
Singer Sri Lanka Ltd (12.50%) 75,000 75,000
(750,000 Debentures of Rs.100/= each)
Hatton National Bank PLC - (10%) 25,000 25,000
(250,000 Debentures of Rs.100/= each)
Commercial Paper
Lanka Orix Leasing Company PLC 390,000 390,000 1,072,727 1,072,727
412,540 439,819 1,193,017 1,208,852
* The valuation is based on Net assets per share basis as per the Audited Financial Statements of these Companies as at following dates:
Credit Information Bureau of Sri Lanka - 31st December 2008.
Transnational Lanka Records Solutions (Pvt) Ltd. - 30th June 2008
Lanka Clear (Pvt) Ltd - 31st March 2008
Lanka Financial Services Bureau Limited - 31st March 2008
. SEYLAN BANK PLC 83

BEATING STRONGER!
Notes to the Accounts
Seylan Merchant Bank PLC
17.a.2 Quoted
2008 2007
No.of Ord. Cost Market Value No.of Ord. Cost Market Value
Shares Rs.'000 Rs.'000 Shares Rs.'000 Rs.'000
The Finance Company PLC 108,997 5,652 2,970 108,997 5,652 6,594
Ceylinco Insurance PLC - - - 81,400 14,831 15,059
Blue Diamonds Jewellery World Wide PLC 3,180,280 47,818 4,452 3,180,280 47,818 8,905
Metal Recyclers Colombo Ltd 69 3 - 69 3 -
Lanka Indian Oil Co. Ltd - - - 40,400 2,131 869
Royal Ceramics Lanka PLC - - - 41,000 2,013 1,312
Ceylon Glass Co. Ltd - - - 265,000 1,012 530
Grain Elevators Co Ltd - - - 38,700 958 503
Kotmale Holding Ltd 1,000 16 10 15,000 236 165
Galadari Hotel Ltd - - - 15,400 280 146
Reefcomber Hotel Co. Ltd - - - 107,700 242 97
Ruhunu Hotels Ltd - - - 10,000 213 68
Sierra Cables Ltd 5,400 16 7 5,400 16 9
Dialog Telecom PLC 9,000 256 43 9,000 256 180
Commercial Bank PLC - - 585 450
(50,000 Preference Shares of Rs.10 /= each)
Diminution in value (53,746) - (43,050) -
15 7,482 33,196 34,887
17.b.2 Unquoted
2008 2007
No.of Ord. Cost No.of Ord. Cost
Shares Rs.'000 Shares Rs.'000
Ceylinco Sports Complex Ltd. 300,000 3,000 300,000 3,000
Ceylinco Express (Pvt) Ltd. 37,050 371 37,050 371
Ceylinco Savings Bank Ltd 1,189,600 11,896 1,189,600 11,896
Ceywins Telemedical services (Pvt) Ltd 500,000 5,000 500,000 5,000
Ceylinco Freight International (Pvt) Ltd 68,000 680 68,000 680
Openarc Global Solutions (Pvt) Ltd 45,000 450 45,000 450
Ceylinco Investment & Reality (Pvt) Ltd 100,000 1,000 100,000 1,000
South Asian Travels Ltd 30,000 300 30,000 300
Ceylinco Coloured Stones (Pvt) Ltd 500,000 5,000 500,000 5,000
Seraka Invesment Ltd 48,645 48,645
(5,655,900 Non Cumulative,
Non Redeemable Preference shares)
Debentures
Ceylinco Automobiles Ltd 40,600
Diminution in value (2,000) (2,000)
TOTAL 114,942 74,342
84 SEYLAN BANK PLC .

Ceylinco Seylan Developments PLC
2008 2007
No.of Ord. Cost Market Value No.of Ord. Cost Market Value
Shares Rs.'000 Rs.'000 Shares Rs.'000 Rs.'000
17.a. 3 Quoted
Ceylinco Finance PLC 200,000 2,000 1,850 200,000 2,000 3,300
Associated Property Developers Ltd. 100 1 6 100 1 7
C T Land Developers Ltd. 100 1 1 100 1 2
Ceylinco Housing & Real Estate Co Ltd. 250 2 3 250 2 8
Colombo Fort Land & Building Company Ltd. 100 1 - 100 1 -
Overseas Reality Ceylon Ltd. 100 - 1 100 - 1
Kelsey Developments Ltd. 100 1 1 100 1 2
Associated Property Development Ltd. 100 2 6 100 2 3
Colombo Land & Development Company Ltd. 1,250 - 1 1,250 - 2
East West Company Ltd. 100 1 - 100 1 1
Equity One Ltd. 100 1 1 100 1 2
O'nally Holdings Ltd. 100 1 2 100 1 3
York Arcade Holdings Ltd. 100 - 1 100 - 1
Blue Diamonds Jewellery Worldwide PLC 170,000 383 238 170,000 383 476
2,394 2,111 2,394 3,808
2008 2007
No.of Ord. Cost No.of Ord. Cost
Shares Rs.'000 Shares Rs.'000
Reclassified
17.b.3 Unquoted
Ceylinco Venture Capital Co Ltd . 95,000 950 95,000 950
Ceylinco Sports Complex Ltd. 220,000 2,200 220,000 2,200
Ceycom Global Communications Ltd. 40,500 405 40,500 405
Asian Finance Ltd. 75,000 750 75,000 750
Ceylinco Savings Bank Ltd. 25,000 250 25,000 250
Ceylinco - Cisco Security Corporation (Pvt) Ltd. 10,000 100 10,000 100
Ceylinco International Property Developers (Pvt) Ltd. 50,000 500 50,000 500
Ceyenergy Electronics Co. (Pvt) Ltd. 15,000 150 15,000 150
Ceylinco Swift Care (Pvt) Ltd. 75,000 750 75,000 750
Independent Financial News & Views (Pvt) Ltd. 4,900 49 4,900 49
Ceylinco International Realty (Pvt) Ltd. 200,000 2,000 200,000 2,000
e.Ceylinco. Com (Pvt) Ltd. 60,000 600 60,000 600
International Consultancy &
Corporate Services (Pvt) Ltd. 5,000 50 2,500 25
Ceylinco PLC Technology (Pvt) Ltd 177,500 1,775 177,500 1,775
Ceylinco Investments & Realty (Pvt) Ltd 4,000,000 40,000
Ceylinco Sitar (Pvt) Ltd 60,000 600
Ceylinco Seraka Investments Ltd 510,000 5,100
Diminution in Value (19,299) (2,470)
36,930 8,034
Project Investment 511,613 541,115
548,543 549,149
. SEYLAN BANK PLC 85

BEATING STRONGER!
Notes to the Accounts
Seylan Bank Asset Management Ltd
2008 2007
No.of Ord. Cost Market Value No.of Ord. Cost Market Value
Shares Rs.'000 Rs.'000 Shares Rs.'000 Rs.'000
17.a.4 Quoted
Blue Diamond Jewellery Worldwide PLC 1,344,200 10,725 3,764 1,344,200 10,725 3,764
Diminution in Value (8,843) (6,961)
1,882 3,764 3,764 3,764
2008 2007
No.of Ord. Cost No.of Ord. Cost
Shares Rs.'000 Shares Rs.'000
17.b.4 Unquoted
Ceylinco Venture Capital Co. Ltd. 500,000 5,000 500,000 5,000
Ceylinco Foliage Exports (Pvt) Ltd. 850,000 8,500 850,000 8,500
Ceylinco - CISCO Ranaviru Services (Pvt) Ltd. 50,000 500 50,000 500
Ceylinco Niranjan Invention (Pvt) Ltd. 33,249 350 33,249 350
Ceylinco Travels & Tours Ltd. 100,000 1,000 100,000 1,000
Ceylinco Tourist Hotels Ltd. - Hotel Ceysands 33,000 3,500 33,000 3,500
Ceylinco Development Bank Ltd. 725,000 7,250 700,000 7,000
Ceylinco Vocational Training (Pvt) Ltd. 148,200 1,482 148,200 1,482
The Finance & Guarantee Co Ltd 300,000 3,000 300,000 3,000
Ceylinco Employees Sports Complex (Pvt) Ltd 200,000 2,000 200,000 2,000
Ceylinco Lexcon Services (Pvt) Ltd 77,847 778 77,847 778
Ceylinco Automobiles Ltd 500,000 5,000 500,000 5,000
Tropical Foliage Ltd 150,000 1,500 150,000 1,500
Ceylinco Bio Tech Ltd 150,000 1,500 150,000 1,500
Economic Resurgence Association (Pvt) Ltd 1,000,000 10,000 1,000,000 10,000
Ceylinco Seylan Housing &
Commercial Properties Ltd 20,000 200 20,000 200
Ceylinco Building Society Ltd 10,000 5,000 10,000 5,000
Ceylinco Aruna Accessories (Pvt) Ltd 25,000 250 25,000 250
The Sitar (Pvt) Ltd 380,000 6,000 380,000 3,800
Independent Financial News & Views (Pvt) Ltd 100,000 1,000 100,000 1,000
Ceylinco Coloured Stones (Pvt) Ltd 100,000 10,000 100,000 10,000
Ceylinco Freight International (Pvt) Ltd 400,000 4,000 400,000 4,000
Ceylinco Hotels Ltd 475,000 4,750 475,000 4,750
Ceylinco Cellular Company (Pvt) Ltd 100,000 1,000 100,000 1,000
South Asian Travels Ltd 500,000 5,000 500,000 5,000
Ceylinco Packaging Company Ltd 500,000 5,000 500,000 5,000
Ceylinco Cisco Cash Management &
Transit Company (Pvt) Ltd 50,000 500 500,000 500
Ceylinco Consolidated International
Property Development (Pvt) Ltd 700,000 7,000
Middleway Printing (Pvt) Ltd 1,375,000 13,750
Ceylinco Design & Project
Management (Pvt) Ltd 200,000 2,000
Diminution in Value (116,810) (24,324)
Debentures
Ceylinco Vocational Training (Pvt) Ltd 988 988
(8,000 Debentures of Rs.100/= each)
Ceylinco Savings Bank Ltd 1,500 1,500
(15,000 Debentures of Rs.100/= each)
Diminution in Value (2,488) (988)
- 68,786
86 SEYLAN BANK PLC .

Bank Bank Group Group
2008 2007 2008 2007
Rs.'000 Rs.'000 Rs.'000 Rs.'000
18 Bills of Exchange
Export Bills 1,090,162 1,511,320 1,090,162 1,511,320
Import Bills 147,370 184,471 147,370 184,471
Local Bills 250,496 272,408 250,496 272,408
1,488,028 1,968,199 1,488,028 1,968,199
Less : Provision for Bad & Doubtful Debts (Note 19.c) (3,282) (1,108) (3,282) (1,108)
Interest in Suspense (Note 19.c) - - - -
1,484,746 1,967,091 1,484,746 1,967,091
19 Loans and Advances
Overdrafts 31,321,305 28,688,151 31,321,305 28,688,151
Trust Receipt Loans 4,665,117 4,490,310 4,665,117 4,490,310
Staff Loans 3,665,637 2,641,602 3,677,272 2,648,805
Refinance Loans 1,594,264 1,678,877 1,594,264 1,678,877
Other Loans 66,232,287 59,546,870 67,455,148 60,596,946
107,478,610 97,045,810 108,713,106 98,103,089
Less : Loan loss Provision (Note 19.c) (6,334,184) (4,800,752) (6,119,915) (4,825,312)
Interest in Suspense (Note 19.c) (3,452,857) (3,227,989) (3,474,358) (3,301,233)
97,691,569 89,017,069 99,118,833 89,976,544
19.a Movement in Loan Loss Provision
Bank Bank Group Group
2008 2007 2008 2007
Rs.'000 Rs.'000 Rs.'000 Rs.'000
Specific General Specific General Specific General Specific General
Balance brought forward 4,594,758 377,468 4,484,545 74,020 4,715,255 377,468 4,596,566 74,020
Additional Provision made 2,006,427 379,149 1,037,628 303,448 1,779,365 379,149 1,049,114 303,448
Reversal of Provision for write off (248,936) - (217,784) - (248,936) - (220,794) -
Recoveries made during the year (588,268) - (720,473) - (588,268) - (720,473) -
Exchange Rate variance on foreign
currency Provisions 39,668 - 10,842 - 39,668 - 10,842 -
5,803,649 756,617 4,594,758 377,468 5,697,084 756,617 4,715,255 377,468
.
. SEYLAN BANK PLC 87

BEATING STRONGER!
Notes to the Accounts
19.b Movement in Interest in Suspense
Bank Bank Group Group
2008 2007 2008 2007
Rs.'000 Rs.'000 Rs.'000 Rs.'000
Balance brought forward 3,302,165 2,724,668 3,433,765 2,845,993
Interest Suspended during the year 2,172,347 2,023,777 2,160,771 2,085,667
Interest recovered during the year (1,485,534) (1,063,846) (1,526,842) (1,115,461)
Reversal of Interest for write off / Write down (471,493) (383,761) (471,493) (383,761)
Exchange Rate variance on foreign currency Provisions 5,209 1,327 5,209 1,327
3,522,694 3,302,165 3,601,410 3,433,765
Bank Bank Group Group
2008 2007 2008 2007
Rs.'000 Rs.'000 Rs.'000 Rs.'000
Loan Loss Interest in Loan Loss Interest in Loan Loss Interest in Loan Loss Interest in
Provision Suspense Provision Suspense Provision Suspense Provision Suspense
19.c Analysis of Provision for Loan Losses and Interest in Suspense
Bills of Exchange 3,282 - 1,108 - 3,282 - 1,108 -
Loans and Advances 6,334,184 3,452,857 4,800,752 3,227,989 6,119,915 3,474,358 4,825,312 3,301,233
Lease Rental Receivable 222,800 69,837 170,366 74,176 330,504 127,052 266,303 132,532
6,560,266 3,522,694 4,972,226 3,302,165 6,453,701 3,601,410 5,092,723 3,433,765
Bank Bank Group Group
2008 2007 2008 2007
Rs.'000 Rs.'000 Rs.'000 Rs.'000
19.d.1 Non performing assets included in the Bills of Exchange,Loans and advances,
Lease Rentals receivable on which interest is not being accrued are as follows:
Total Non Performing Advances Excluding Former BCCI Advances 15,948,696 12,983,954 16,445,842 13,347,852
Former BCCI Advances 44,229 59,199 44,229 59,199
15,992,925 13,043,153 16,490,071 13,407,051
88 SEYLAN BANK PLC .

Bank
Bank
31.12.08 31.12.07
Advances Advances Change
Rs.'000 % Rs.'000 % %
Total Gross Loans and Advances including Bills of Exchange,
Lease Rentals Receivable and Group Balance Receivable 114,765,175 ** 106,187,541 ** 8.08
Interest In Suspense (3,522,694) (3,302,165) 6.68
Total Loans and Advances including Bills of Exchange,
Lease Rentals Receivable and Group Balance Receivable
(Net of interest in suspense) 111,242,481 ** 102,885,375 ** 8.12
Non performing Advances (Gross) 19,515,620 17.00 16,345,318 15.39 19.23
Non performing Advances ***
(Net of Interest in Suspense) 15,992,925 14.38 13,043,153 12.68 22.40
Less : Provision for Bad & Doubtful Debts (6,560,266) (4,972,226) 31.94
Net Non Performing Advances 9,432,659 8.48 8,070,927 7.84 16.53
** As a percentage of total loans and advances as at 31st December.
Rs.9,432,659 Mn. net non performing advances is covered by tangible securities valued at approximately Rs.18,531.302 Mn.
*** Non Performimg Advances (with BCCI) 2008 2007
Rs.'000
Rs.'000
Bills of Exchange 53,069 41,858
Loans & Advances 15,271,102 12,274,799
Lease Rentals Receivable 662,754 726,496
Total 15,992,925 13,043,153
19.d 2 As per the direction issued by Central Bank of Sri Lanka on 31.12.2004 the Non Performing Ratio Net of Interest In Suspense after inclusion of
Investment Properties is as follows (with BCCI):
2008 2007
% %
Non Performing Ratio before adjustment for Investment Properties 14.38 12.68
Non Performing Ratio after adjustment 14.78 12.86
. SEYLAN BANK PLC 89

BEATING STRONGER!
Notes to the Accounts
19.e Balance outstanding on advances granted to Employee share Owning Trust Companies,
Amount Outstanding Amount Outstanding
Name of Trust as at 31.12.2008 as at 31.12.2007
Rs.'000
Rs.'000
Seybest (Pvt) Ltd. 32,896 32,896
Sesot (Pvt) Ltd. - 5,301
Sotse (Pvt) Ltd. 30,530 30,530
Esot (Pvt) Ltd. 33,462 33,462
Seyshop (Pvt) Ltd. 32,932 32,932
19.f Concentration of Credit Risk
Sector wise analysis of bank's credit portfolio given below reflects the bank's exposure to credit risk in the various sectors of the economy.
Bank Bank Group Group
2008 % 2007 % 2008 % 2007 %
Rs.'000 Rs.'000 Rs.'000 Rs.'000
Food, beverages and tobacco 3,515,077 3.27 3,191,771 3.29 3,515,077 3.24 3,212,387 3.28
Agriculture, agro business and fisheries 4,202,230 3.91 4,650,060 4.79 4,202,230 3.88 4,772,682 4.87
Textiles and wearing apparel 7,212,904 6.71 6,542,493 6.74 7,212,904 6.63 6,587,287 6.71
Wood and paper products 958,051 0.89 1,164,700 1.20 958,051 0.88 1,198,262 1.22
Rubber and leather products 1,417,015 1.32 1,136,857 1.17 1,417,015 1.30 1,180,861 1.20
Metals, chemicals and engineering 3,193,956 2.97 2,705,538 2.79 3,193,956 2.94 2,792,482 2.85
Hotels 2,099,516 1.95 2,028,900 2.09 2,099,516 1.93 2,048,433 2.09
Services 10,271,850 9.56 7,137,750 7.36 10,271,850 9.45 7,537,507 7.68
Others 74,608,011 69.42 68,487,741 70.57 75,842,507 69.75 68,773,188 70.10
107,478,610 100.00 97,045,810 100.00 108,713,106 100.00 98,103,089 100.00
Bank Bank Group Group
2008 2007 2008 2007
Rs.'000 Rs.'000 Rs.'000 Rs.'000
20 Lease Rentals Receivable Within One Year
From the Balance Sheet date 3,377,886 4,006,834 4,590,662 5,380,187
Less: Unearned Income (797,776) (945,812) (1,112,395) (1,349,084)
2,580,110 3,061,022 3,478,267 4,031,103
Less: Loan Loss provision (Note 19.c) (222,800) (170,366) (330,504) (266,303)
Interest in Suspense (Note 19.c) (69,837) (74,176) (127,052) (132,532)
2,287,473 2,816,480 3,020,711 3,632,268
90 SEYLAN BANK PLC .

Bank Bank Group Group
2008 2007 2008 2007
Rs.'000 Rs.'000 Rs.'000 Rs.'000
21 Lease Rentals Receivable Later Than One Year and not later
than Five Years From the Balance Sheet date (note 21.a) 3,257,487 4,608,007 4,901,802 6,741,578
Less: Unearned Income (570,963) (760,580) (887,154) (1,156,472)
2,686,524 3,847,427 4,014,648 5,585,106
21.a Lease Rentals Receivable 3,382,025 4,748,595 5,026,340 6,914,935
Less : Deposit of Rentals (124,538) (140,588) (124,538) (173,357)
3,257,487 4,608,007 4,901,802 6,741,578
22 Lease Rentals Receivable Later Than Five Years
From the Balance Sheet date (22.a) 4,029 3,523 11,106 16,787
Less: Unearned Income (216) (213) (1,179) (1,981)
3,813 3,310 9,927 14,806
22.a Lease Rentals Receivable 4,029 3,523 11,106 16,787
4,029 3,523 11,106 16,787
23 Investments In Associates And Subsidiaries - Bank
23.a
Principal Number % Holding Cost Market Number % Holding Cost Market
Activity of Shares as at Value of Shares as at Value
31.12.2008 31.12.2008 31.12.2007 31.12.2007
Rs.000' Rs.000' Rs.000' Rs.000'
Ordinary Shares
Seylan Merchant Bank PLC Merchant Banking 23,071,066 42.88 260,919 69,213 23,071,066 42.88 260,919 161,497
Ceylinco Seylan
Developments PLC Property Development 37,203,584 51.01 358,916 148,814 37,203,584 51.01 358,916 334,832
Seylan Bank Asset
Management Ltd Primary Dealers 19,750,000 100.00 501,250 14,000,000 100.00 300,000
Debentures
Seylan Merchant Bank PLC
(50 Mn.-14%, 60 Mn.-
12.75%,18.724 Mn.-16%) - 100.00 128,724 - 100.00 173,572
Less : Loss on Impairment
Seylan Merchant Bank PLC Shares (172,556)
Seylan Merchant Bank PLC Debentures (128,724)
948,529 1,093,407
Bank has charged Rs.301,280,000/- as the impairment loss of shares and debentures invested in Seylan Merchant Bank PLC as a
prudential measure.
. SEYLAN BANK PLC 91

BEATING STRONGER!
Notes to the Accounts
23.b The holding in Ceylinco Seylan Developments PLC is as follows:
Total number of Shares of % Cost as at % Cost as at
Ceylinco Seylan Holding 31.12.2008 Holding 31.12.2007
Developments PLC Rs.000’ Rs.000’
Ordinary Shares
Direct Holding:
37,203,584 Ordinary shares 73,982,430 50.29 358,916 50.29 358,916
Indirect Holding:
Shares held through Seylan Merchant Bank PLC
1,243,343 Ordinary shares 73,982,430 0.72 5,696 0.72 5,696
51.01 364,612 51.01 364,612
23.c The holding in Seylan Merchant Bank PLC is as follows:
Total number of Shares of % Cost as at % Cost as at
Seylan Merchant Holding 31.12.2008 Holding 31.12.2007
Bank PLC Rs.000' Rs.000'
Ordinary Shares
Direct Holding- Voting
23,071,066 Ordinary shares 445,031,200 51.84 260,919 51.84 260,919
Direct Holding- Non Voting 100,000,000 - - - -
Total Direct Holding 545,031,200 42.33 260,919 42.33 260,919
Indirect Holding:
Shares held through Seylan Bank Asset Management Ltd.
3,000,000 Non Voting Ordinary shares 100,000,000 0.55 3,000 0.55 3,000
42.88 263,919 42.88 263,919
Bank Bank Group Group
2008 2007 2008 2007
Rs.'000 Rs.'000 Rs.'000 Rs.'000
24 Investment Properties
Balance as at 01st January 149,394 175,326 1,607,633 1,425,470
Add : Additions during the year 371,418 - 371,418 15,000
Transferred from Property, Plant & Equipment - - 346 -
Revaluation during the year - - 105,465 203,776
Less :Transferred to Property, Plant & Equipment - - - -
Disposals during the year - (7,932) (11,189) (18,613)
Set Off against Bad Debts Provision made - (18,000) - (18,000)
Impairment Loss (134,795) -
Balance as at 31st December 520,812 149,394 1,938,878 1,607,633
Bank has accounted its Investment Properties at cost and revalues these Properties periodically on a systematic basis for disclosure purpose.
92 SEYLAN BANK PLC .

24.a Investment Properties (Bank) - 2008
Bank
Bank
Cost/ Market Value/
Valuation
Directors
Valuation
Date of Valuation Rs.'000 Rs.'000
ADDRESS
Kohalwila Road,Gonawala,Gampaha 26/08/2008 6,166 10,900
Walpolawatte, Kudawaskaduwa, Wadduwa 06/04/2009 28,799 28,800
Kahapola, Piliyandala 10/04/2009 114,429 137,319
97,Station Road,Kandana 27/10/2008 139,319 150,850
161,Galle Road,Wellawatta 03/11/2005 232,099 268,000
520,812 595,669
Directors are confident on the valuation carried out on above dates and the values have not been significantly changed as at Balance Sheet
Date.
24.b Investment Properties (Group) - 2008
ADDRESS
Kohalwila Road,Gonawala,Gampaha. 6,166 10,900
Walpolawatte, Kudawaskaduwa, Wadduwa 28,799 28,800
Kahapola, Piliyandala 114,429 137,119
97,Station Road,Kandana 139,319 150,850
161,Galle Road,Wellawatta 232,099 268,000
Halpe Village, Katana 647 855
Dorakumbura, Kurunegala 669 443
Nugegoda,Kotte 15,000 15,030
Ceylinco Seylan Towers (West Tower), 90, Galle Road, Colombo 3 1,151,494 1,226,544
No.257, Union Place, Colombo 2 250,256 204,189
1,938,878 2,042,730
Bank Bank Group Group
2008 2007 2008 2007
Rs.'000 Rs.'000 Rs.'000 Rs.'000
25 Group Balances Receivable
Name of Company
Seylan Merchant Bank PLC 342,314 299,939 - -
Ceylinco Seylan Developments PLC 280,866 111,689 - -
Seylan Bank Asset Management Ltd. - 1 - -
TOTAL 623,180 411,629 - -
. SEYLAN BANK PLC 93

BEATING STRONGER!
Notes to the Accounts
26 Property, Plant and Equipment
B a n k Free Hold Lease Hold Free Hold Lease Hold Computer Machine / Furniture / Motor Leased Capital Work 31.12.2008 31.12.2007
Land Land Building Building Equipment Equipment Fittings Vehicles Assets in Progress Total Total
Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000
Cost / Valuation
Balance as at 01st January 493,668 22,603 1,026,374 43,377 3,994,841 1,020,932 842,871 481,817 58,295 2,661 7,987,439 6,929,992
Additions for the Year - - 15,340 167 1,085,153 144,660 111,849 99,406 - - 1,456,575 1,293,942
Disposals (101,730) - (99,647) - (99,778) (11,563) (6,181) (146,684) (126) - (465,709) (236,495)
Transfers - - 4,800 - (3,622) 3,875 (2,038) (88) (266) (2,661) - -
As at 31st December 391,938 22,603 946,867 43,544 4,976,594 1,157,904 946,501 434,451 57,903 - 8,978,305 7,987,439
Accumulated Depreciation
Balance as at 01st January - - 77,077 1,291 2,477,968 816,540 661,091 205,163 58,295 - 4,297,425 3,794,962
Charge for the year - - 24,306 692 457,519 88,340 52,056 84,966 18 - 707,897 602,786
Disposals - - (4,261) - (88,497) (11,364) (5,435) (59,575) (126) - (169,258) (100,323)
Transfers - - (259) - (1,546) 1,307 856 (30) (328) - - -
As at 31st December - - 96,863 1,983 2,845,444 894,823 708,568 230,524 57,859 - 4,836,064 4,297,425
Net book value as at 31.12.2008 391,938 22,603 850,004 41,561 2,131,150 263,081 237,933 203,927 44 - 4,142,241
Net book value as at 31.12.2007 493,668 22,603 949,297 42,086 1,516,873 204,392 181,780 276,654 - 2,661 3,690,014
26 Property, Plant and Equipment
Group Free Hold Lease Hold Free Hold Lease Hold Computer Machine / Furniture / Motor Leased Capital Work 31.12.2008 31.12.2007
Land Land Building Building Equipment Equipment Fittings Vehicles Assets in Progress Total Total
Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000
Cost / Valuation
Balance as at 01st January 493,994 663,152 1,776,140 43,377 4,093,129 1,137,566 880,320 503,102 75,045 2,662 9,668,487 8,588,939
Additions for the Year - - 15,340 167 1,102,055 146,607 116,636 117,023 789 - 1,498,617 1,332,288
Disposals (101,730) - (99,647) - (99,778) (11,977) (7,304) (152,322) (126) - (472,884) (252,740)
Transfers - - 4,454 - (2,626) 2,881 (2,038) (1,630) 601 (2,662) (1,020)
As at 31st December 392,264 663,152 1,696,287 43,544 5,092,780 1,275,077 987,614 466,173 76,309 - 10,693,200 9,668,487
Accumulated Depreciation
Balance as at 01st January - 23,652 104,654 1,291 2,538,799 855,086 682,777 223,751 59,153 - 4,489,163 3,944,384
Charge for the year - 7,884 33,768 692 470,085 99,091 57,235 89,097 3,569 - 761,421 652,749
Disposals - - (4,260) - (88,497) (11,651) (5,781) (64,035) (126) - (174,350) (107,970)
Transfers - - (259) - (1,546) 1,307 857 (1,573) 1,214 - - -
As at 31st December - 31,536 133,903 1,983 2,918,841 943,833 735,088 247,240 63,810 - 5,076,234 4,489,163
Net book value as at 31.12.2008 392,264 631,616 1,562,384 41,561 2,173,939 331,244 252,526 218,933 12,499 - 5,616,966
Net book value as at 31.12.2007 493,994 639,500 1,671,486 42,086 1,554,330 282,480 197,543 279,351 15,892 2,662 5,179,324
94 SEYLAN BANK PLC .

26.a Freehold / Leasehold Land & Buildings - Bank
Address Extent Cost/ Accumulated Net Book Value
Valuation Depreciation as at 31/12/2008
Free Hold Rs.'000 Rs.'000 Rs.'000
Mt. Lavinia
198, Galle Road, Ratmalana 26.30 P 23,908 2,959 20,948
Badulla
10, Cocowatte Rd, Badulla 1R 6.40P 62,590 777 61,813
Kochchikade
66, 66 1/1, 68 2/1, Chilaw Rd 8.0 P 5,228 778 4,450
Avissawella
71, Ratnapura Rd, Avissawela 19.13P 9,574 1,738 7,836
Grandpass
401&401/20,Prince of Wales
Avenue, Colombo 14 1R 6.0P 44,372 188 44,184
Hingurakkoda
13&14, Airport Road,Hingurakkoda 0.0196H 12,000 506 11,494
Bandarawela
240,Badulla Road, Bandarawela 27.01P 36,898 855 36,044
Sarikkamulla
97, Galle Road, Sarikkamulla 11.56 P 4,059 1,068 2,991
Tissamaharama
547, Debarawewa, Tissamaharama 0.091H 11,193 322 10,871
Raddolugama
171, National Housing Scheme,
Raddolugama 12.80 P 11,500 329 11,171
Nuwara Eliya
Lot G, Park Road, Nuwara Eliya 19.08 P 6,365 1,536 4,829
Maradagahamula
150, Divulapitiya Road, 35.0 P 7,569 1,077 6,492
Maradagahamula
Anuradhapura
23-A1, Anuradhapura 43.65 P 3,500 581 2,919
Embilipitiya
New Town Road, Embilipitiya 22.1P 27,295 634 26,661
. SEYLAN BANK PLC 95

BEATING STRONGER!
Notes to the Accounts
Address Extent Cost/ Accumulated Net Book Value
Valuation Depreciation as at 31/12/2008
Free Hold Rs.'000 Rs.'000 Rs.'000
Nugegoda
211, High Level Rd, Nugegoda 23.57P 36,061 2,003 34,058
Nawalapitiya
77/1,79,Dolosbage Rd, Nawalapitiya 10.52P 5,719 376 5,343
Rathnapura
6 Good shed Road, Ratnapura 9.31P 24,552 857 23,695
Embilipitiya
Pettigala Road, Embilipitiya 32.9P 5,500 - 5,500
Private Banking
No 2,Deal Place,Colombo 03. 19.0P 191,079 64 191,015
Gampola
44,Kandy Road,Gampola 13.5P 15,599 825 14,774
Head Office
90,Galle Road,Colombo 04. (Level -1,2,13,14) 31,704 794,244 79,391 714,853
Square Feet
1,338,805 96,863 1,241,942
Lease Hold
Nuwera Eliya
12, Lawson Street, Nuwera Eliya 20.28P 66,147 1,983 64,164
Grand Total 1,404,952 98,846 1,306,106
1 The Bank carried out a revaluation of its Freehold land by a professionally qualified external valuer in the year 2001 . Freehold land amounting to
Rs.29,482,901/= has been stated at a revalued amount of Rs.107,200,000/=, Where the revaluation reserve of Rs.32,217,099 /= relates to
revaluation made in 1993 & the balance of Rs.45,500,000 /= relates to the year 2001.The appreciation of land value has been accounted in the
Revaluation Reserve.
2 Bank has revalued its freehold land & buildings not valued for last 7 years through professionally qualified independent valuers in the year 2006. The
revaluation was carried out by taking into account the observable prices in active market or recent market transactions on an arm's length basis. The
revaluation surplus, amounting to Rs.214.21 Mn. has been credited to the Revaluation Reserve Account .
3 The Revaluation reserve was created through the revaluation of Property, Plant & Equipment. The Revaluation Reserve was reduced in 2007 & 2008
for the transfer of revaluation reserve to equity on the properties sold amounting to Rs.71,929,097/- & Rs.83,265,794 respectively.
96 SEYLAN BANK PLC .

Bank Bank Group Group
2008 2007 2008 2007
Rs.'000 Rs.'000 Rs.'000 Rs.'000
Reclassified
Reclassified
27 Other Assets
Deposits & Prepayments 455,423 368,360 493,121 454,407
Interest Receivable 989,650 723,497 1,324,195 852,320
Clearing House Balance 969,160 1,956,668 969,160 1,956,668
Other Assets 2,530,327 1,494,052 2,884,868 1,817,068
4,944,560 4,542,577 5,671,344 5,080,463
Investments in projects disclosed under other assets have been reclassified with investment securities/investments in projects (Note 17.b.3).
Due from Gratuity Trust Fund disclosed under other assets have been reclassified with other liabilities (Note 33.a).
28 Intangible Assets
Deferred Expenses / Others 25,410 26,848
- - 25,410 26,848
29 Deposits
Demand Deposits 8,923,196 11,574,359 8,923,196 11,574,359
Savings Deposits 32,268,436 34,791,903 32,353,558 34,832,102
Time Deposits 63,761,398 61,598,939 65,242,924 62,695,989
Certificates of Deposits 2,985,771 3,334,411 2,985,771 3,334,411
107,938,801 111,299,612 109,505,449 112,436,861
29.a Due within one year 97,432,331 101,864,073 98,998,979 102,775,233
Due after one year 10,506,470 9,435,539 10,506,470 9,661,628
107,938,801 111,299,612 109,505,449 112,436,861
29.b Deposits from
Non Bank Customers 106,964,791 109,122,124 108,531,439 110,259,373
Banks 715,988 519,864 715,988 519,864
Finance Companies 258,022 1,657,624 258,022 1,657,624
107,938,801 111,299,612 109,505,449 112,436,861
. SEYLAN BANK PLC 97

BEATING STRONGER!
Notes to the Accounts
Bank Bank Group Group
2008 2007 2008 2007
Rs.'000 Rs.'000 Rs.'000 Rs.'000
30 Borrowings
Call Money Borrowings 4,449,105 4,429,603 4,449,105 4,518,602
Refinance Borrowings 1,249,916 1,429,686 1,255,092 1,436,826
Other Borrowings 1,405,997 310,487 3,277,981 2,431,245
7,105,018 6,169,776 8,982,178 8,386,673
30.a Due Within one year 5,825,584 4,712,043 7,191,626 4,771,501
1 - 5 years - - 367,368 2,070,160
After Five years 1,279,434 1,457,733 1,423,184 1,545,012
7,105,018 6,169,776 8,982,178 8,386,673
30.b Assets pledged as Security
The Bank has not pledged any of its assets to secure the liabilities as at 31st December 2008
Bank Bank Group Group
2008 2007 2008 2007
Rs.'000 Rs.'000 Rs.'000 Rs.'000
31 Group Balances Payable
Name of Company
Seylan Merchant Bank PLC 92,804 91,261 - -
Ceylinco Seylan Developments PLC 2,706 4,110 - -
Seylan Bank Asset Management Ltd 1,428,482 402,292 - -
1,523,992 497,663 - -
32.a.
Deferred Tax Assets
Balance brought forward - - 13,332 8,730
Transferred From Deferred Tax Liability (93,684) - (93,684) -
Charge / Reversal for the year - Note 8 185,266 - 179,836 4,602
Balance carried forward 91,582 - 99,484 13,332
Analysis of Deffered tax Asset - Bank 2008 2008 2007 2007
Temporary Tax Temporary Tax
Difference
Difference
Rs.'000 Rs.'000 Rs.'000 Rs.'000
Property, Plant & Equipment 1,083,333 379,167 - -
Lease Rentals 289,417 101,296 - -
Defined Benefit Obligation (614,318) (215,011) - -
Unclaimed Bad Debt Provision - Specific (874,778) (306,172) - -
Bad Debt Provision - General (128,474) (44,966) - -
Tax losses carried forward (16,843) (5,896) - -
(261,663) (91,582) - -
98 SEYLAN BANK PLC .

Analysis of Deferred tax asset - Group 2008 2008 2007 2007
Temporary Tax Temporary Tax
Difference
Difference
Rs.'000 Rs.'000 Rs.'000 Rs.'000
Property,Plant & Equipment 1,060,756 371,265 (4,234) (1,482)
Lease Rentals 289,417 101,296 1,618 566
Defined Benefit Obligation (614,318) (215,011) - -
Unclaimed Bad Debt Provision - Specific (874,778) (306,172) - -
Bad Debt Provision - General ** (128,474) (44,966) - -
Tax losses carried forward (16,843) (5,896) 40,707 14,247
284,240 99,484 38,091 13,332
32.b. Deferred Tax Liability Bank Bank Group Group
2008 2007 2008 2007
Rs.'000 Rs.'000 Rs.'000 Rs.'000
Balance brought forward 41,948 341,281 41,948 341,764
Effect of Change due to adoption of SLAS 16 - Note 33 a.5 51,736 - 51,736 -
Balance Restated as at 01.01.08 93,684 341,281 93,684 341,281
Charge/ Reversal for the year - Note 8 - (299,333) - (299,816)
Transferred to Deferred Tax Assets - Note 32 a (93,684) - (93,684) -
Balance carried forward - 41,948 - 41,948
32.c Analysis of Deferred tax Liability - Bank & Group 2008 2008 2007 2007
Temporary Tax Temporary Tax
Difference
Difference
Rs.'000 Rs.'000 Rs.'000 Rs.'000
Property,Plant & Equipment - - 916,706 320,847
Revaluation - - 32,862 11,502
Leasing - - 182,810 63,984
Defined Benefit Obligation - - (635,060) (222,271)
B & D Provision - - (377,468) (132,114)
- - 119,850 41,948
Deferred Tax Liablity Charged Directly to Equity
Deffered Tax effect arising on reversal of provision for defined benefit obligation due to change in accounting policy amounting to Rs.51.736 Mn.has
been directly charged to the opening balance of the retained earnings.
**General Provision
Recognition of Defered tax assets arising from general provision at Balance Sheet date was limited to Non performing ratio of the temporay
difference. In managements view the Banks NPA Ratio as at Balance Sheet date is an indicator of deferred tax assets which could be recovered in
the future periods in respect of the deductable temporary differences arising from the General Provision.
. SEYLAN BANK PLC 99

BEATING STRONGER!
Notes to the Accounts
Bank Bank Group Group
2008 2007 2008 2007
Rs.'000 Rs.'000 Rs.'000 Rs.'000
Reclassified
Reclassified
33 Other Liabilities
Accrued Expenses & Interest Payable 4,347,620 3,553,267 4,480,499 3,828,342
Deposit Funding Accounts 988,225 1,990,444 988,225 1,990,444
Dividend Payable 16,393 15,416 24,802 16,111
Provision for Defined Benefit Obligations (Net) - 33.a 526,172 855,259 563,567 882,932
Un-Redeemed Debentures 104,990 - 104,990 -
Others 5,271,165 2,962,423 5,872,814 3,179,244
11,254,565 9,376,809 12,034,897 9,897,074
33.a Provision for Defined Benefit Obligations (Net)
Present Value of Defined Benefit Obligations - 33.a.1 1,258,285 1,276,474 1,295,680 1,304,147
Plan Assets - 33.a.2 (542,563) (421,215) (542,563) (421,215)
Unrecognized Actuarial Gain or (Loss) - 33.a.3 (189,550) - (189,550) -
Provision for Defined Benefit Obligations 526,172 855,259 563,567 882,932
33.a.1 Movement in the Present Value of Defined Benefit Obligations
Balance as at 1st January 1,276,474 855,716 1,304,147 874,018
Effect of change in accounting policy due to adoption of SLAS 16
(revised 2006)** (Note 33.a.5) (236,734) - (236,777) -
Revised balance as at 01st January 1,039,740 855,716 1,067,370 874,018
Current Service Cost 98,791 - 98,999 -
Interest Cost 124,769 - 124,958 -
Provision made during the year * - 415,036 12,335 427,225
Transferred from Gratuity Trust Fund - 65,845 - 65,845
Unrecognized Actuarial (Gain) / Loss 131,689 - 131,820 -
Transferred to Gratuity Trust Fund - - - (792)
Payments made (including benefits paid by the Plan) in 2008 (136,704) (60,123) (139,802) (62,149)
Balance as at 31st December 1,258,285 1,276,474 1,295,680 1,304,147
* Provision made as per previous policy.
Bank Bank Group Group
2008 2007 2008 2007
Rs.'000 Rs.'000 Rs.'000 Rs.'000
33.a.2 Movement in Plan Assets
Balance as at 1st January 421,215 - 421,215
Effect of change in accounting policy due to adoption of SLAS 16
(Revised 2006)** (Note 33.a.5) 88,917 - 88,917
Revised balance as at 01st January 510,132 510,132
Expected return on Plan Assets 92,181 92,181
Contribution paid into Plan 134,816 - 134,816
Benefits paid by the Plan (136,705) - (136,705)
Unrecognized Actuarial Gain / (Loss) on Plan Assets (57,861) - (57,861) -
Balance as at 31st December 542,563 421,215 542,563 421,215
100 SEYLAN BANK PLC .

Bank Bank Group Group
2008 2007 2008 2007
Rs.'000 Rs.'000 Rs.'000 Rs.'000
33.a.3 Unrecognized Actuarial (Gain) or Loss
Balance as at 1st January - - - -
Actuarial (Gain) / Loss for year - Obligation 131,689 - 131,689
Actuarial (Gain) / Loss for year - Plan Assets 57,861 - 57,861
Balance as at 31st December 189,550 - 189,550
33.a.4 Amount Recognized in the Income Statement
Current Service Cost 98,791 - 98,999 -
Interest Cost 124,769 - 124,958 -
Expected return on Plan Assets (92,181) - (92,181) -
Actuarial (Gains) / Losses recognised in the income statement - 131
Provision made during the year as per previous policy - 12,335
131,379 - 144,242
Bank
Group
Effect on
Effect on
Retained Earnings
Retained Earnings
01.01.2008 01.01.2008
Rs.000
Rs.000
33.a.5 First time adoption of SLAS 16(Revised) - Defined Benefit Obligation
Decrease in defined benefit obligation (Note 33.a.1) ** 236,734 236,777
Increase in fair value of plan assets (Note 33.a.2) ** 88,917 88,917
Increase in deferred tax liability (Note 32.b) ** (51,736) (51,736)
Increase in leave encashment liability (199,066) (199,066)
74,849 74,892
** The Bank could not carried out an actuarial valuation of retirement benefit obligations for periods prior to 31st December 2007. Therefore, the
Bank was unable to apply the change in accounting policy retrospectively for the earliest period presented which is 01 January 2007. Due to the
limitation of the retrospective application, the Bank determined the cumulative effect of change in accounting policy and accordingly applied to the
carrying amount of the assets & liabilities as at the beginning of the current period and made the corresponding adjustment to the opening balance of
the retained earnings.
Note 33.a.1 & Note 33.a.2
The transitional liability as at 1st January 2008 is less than that would have been recognized as at 1st January 2008 under the Bank’s previous
accounting policy and the value of the plan asset is more than that would have been recognized as at 1st January 2008 under the previous
accounting policy and therefore the Bank recognized the net decrease of defined benefit obligation amounting to Rs.236.73 Mn. and plan assets
amounting to Rs.88.91 Mn. in the opening balance of the retained earnings
Note 32.b
Deferred tax effect arising on reversal of net of provision for defined benefit obligation due to change in accounting policy amounting to Rs.51.73 Mn.
has been directly charged to the opening balance of the retained earnings.
. SEYLAN BANK PLC 101

BEATING STRONGER!
Notes to the Accounts
34.a Advance Received on Debenture Issue
This balance consists of advances received for debentures (2008-2013 public issue) which was alloted after the Balance Sheet date.
34.b Debentures
Bank Group
Year of Issue Redemption Private / Public Rate Amount Amount
Period Issue Outstanding Outstanding
Annual Monthly Floating Floating as at as at
31/12/2008 31/12/2008
(Annual) (03 Months) Rs.'000 Rs.'000
2004 2004-2009 Private Issue 12.50% 11.75% - - 457,100 457,100
2005 2005-2010 Private Issue 14.50% - - - 699,000 699,000
2006 2006-2011 Public Issue 13.50% 13.00% 15.00% - 1,257,315 1,257,315
2006 2006-2011 Private Issue 15.00% 14.00% 17.00% - 162,250 162,250
2007 2007-2012 Public Issue - I 16.75% 15.75% 19.00% - 749,400 745,400
2007 2007-2012 Public Issue - II 18.00% 17.00% 19.77% 19.72% 559,285 556,285
2007 2007-2012 Private Issue 19.50% - - - 100,000 100,000
2008 2008-2013 Private Issue 20.00% 18.50% 22.50% - 72,550 64,900
Seylan Merchant Bank PLC - 221,594
4,056,900 4,254,847
Bank Bank Group Group
2008 2007 2008 2007
Rs.'000 Rs.'000 Rs.'000 Rs.'000
35 Stated Capital
Ordinary Shares - Voting (35.a) 435,600 435,600 435,600 435,600
Ordinary Shares - Non Voting (35. b) 1,235,600 1,235,600 1,235,600 1,235,600
Preference Shares - Non Redeemable, Non Cumulative, 33,901 33,901 33,901 33,901
Non Convertible and Non - Voting (35.c)
Share Premium (35.d) 837,319 837,319 837,319 837,319
2,542,420 2,542,420 2,542,420 2,542,420
35.a Ordinary Shares - Voting
Balance as at January 435,600 435,600 435,600 435,600
43,560,000 Ordinary Shares - Voting 435,600 435,600 435,600 435,600
35.b Ordinary Shares - Non Voting
Balance as at January 1,235,600 1,235,600 1,235,600 1,235,600
123,560,000 Ordinary Shares - Non Voting 1,235,600 1,235,600 1,235,600 1,235,600
102 SEYLAN BANK PLC .

35.c Preference Shares
Bank Bank Group Group
2008 2007 2008 2007
Rs.'000 Rs.'000 Rs.'000 Rs.'000
Balance as at January 33,901 33,901 33,901 33,901
3,390,100 Preference Shares 33,901 33,901 33,901 33,901
35.d Movement in Share Premium
Balance as at 1st January 837,319 837,319 837,319 837,319
Balance as at 31st December 837,319 837,319 837,319 837,319
36 Statutory Reserve Fund
Balance as at 01st January 468,250 422,091 474,661 429,295
Add : Transferred during the year* 7,762 46,159 7,762 45,366
Adjustments during the year** 3,742 - 3,697 -
Balance as at 31st December 479,754 468,250 486,120 474,661
*5% of Net Profit After Tax
**Refer changes in equity note
Statutory Reserve Fund represents the statutory requirement in terms of the section 20 (1) & (2) of the Banking Act No. 30 of 1988.
37 Reserves
Capital Reserve (37.a) 418,021 418,021 418,021 418,021
Revaluation Reserve (37.b) 125,238 198,918 490,562 564,242
General Reserve (37.c) 33,787 33,787 33,787 33,787
Capital Redemption Reserve Fund (37.d) - - 258,997 258,997
Reserve on Script Issue* - - 3,521 3,521
Retained profits 3,420,791 3,374,839 4,003,787 3,949,125
3,997,837 4,025,565 5,208,675 5,227,693
* The reserve on script issue was created during the year 2004 by Seylan Merchant Leasing Ltd. with the intention to issue bonus shares to raise the
Share Capital.
37.a Movement in Capital Reserve
Balance as at 1st January 418,021 418,021 418,021 418,021
Balance as at 31st December 418,021 418,021 418,021 418,021
Consists of the Debenture Redemption Reserve Fund of Rs.400 Mn. transferred to Capital Reserve in 2004.
Debenture Redemption Reserve Fund was created for the redemption of five year Debentures amounting to Rs.400 Mn. issued in November, 1999.
Balance consisting of Rs.18 Mn. transferred to Capital Reserve in 1991.
. SEYLAN BANK PLC 103

BEATING STRONGER!
Notes to the Accounts
37.b Movement in Revaluation Reserve
Bank Bank Group Group
2008 2007 2008 2007
Rs.'000 Rs.'000 Rs.'000 Rs.'000
Balance as at 1st January 198,918 270,847 564,242 636,171
Transferred to/ from Revaluation Reserve (73,680) (71,929) (73,680) (71,929)
Balance as at 31st December 125,238 198,918 490,562 564,242
Bank - Details of Revaluation Reserve is given in note 26.a 1 to 3 to the Financial Statements.Rs. 9.5 Mn. was adjusted to Revaluation Reserve
during 2008.
Group - Other than Bank,Revaluation Reserve includes the surplus on revaluation of fixed assets of Ceylinco Seylan Developments PLC.
37.c Movement in General Reserve
Balance as at 1st 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 & Rs.6 Mn. transferred from
Contingency Reserve in 2002 to General Reserve.
37.d Movement in Capital Redemption Reserve Fund
Balance as at 1st January - - 258,997 258,997
Balance as at 31st December - - 258,997 258,997
Capital Redemption Reserve Fund was created at the time of redeeming the preference shares of Ceylinco Seylan Developments PLC.
38 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.
38.a Commitments
Undrawn Credit Lines 8,847,811 5,720,730 8,847,811 5,720,730
Capital Commitments 143,252 276,024 143,252 276,024
8,991,063 5,996,754 8,991,063 5,996,754
38.b Contingencies
Acceptances 3,544,212 3,962,480 3,544,212 3,962,480
Stand by Letters of Credit 559,581 241,938 559,581 241,938
Guarantees 8,005,123 8,609,486 8,039,180 8,618,351
Documentary Credit 1,983,522 3,845,032 1,983,522 3,845,032
Bills for Collection 3,353,715 1,625,544 3,353,715 1,625,544
Forward exchange Contracts (Net) 341,299 54,731 341,299 54,731
17,787,452 18,339,211 17,821,509 18,348,076
Total Commitments and Contingencies 26,778,515 24,335,965 26,812,572 24,344,830
104 SEYLAN BANK PLC .

38.c Cases against the Bank
1. Bank filed case bearing No. 128/2001(1) in Commercial High Court of Colombo against constituent claiming dues with interest. Judgment received in
favour of the bank. Constituent appealed and filed action against the bank in Commercial High Court Case No. 14/98 (1) claiming damages that bank
has rejected further facilities in wrongful manner, judgement received on 9/3/2005 against the bank and both the parties appealed against the
judgment. Both the Appeals not yet listed.
2. Labour Tribunal Applications have been filed by employees of the bank who had been terminated under LT Case Nos;
(a) Colombo Case No 1/377/97 - Order stayed until final judgment of HC Ampara matter
3. Action No. 18399/MR in D C Colombo has been filed by a constituent of BCCI claiming the proceeds of a dollar draft deposited in his rupee account
which has been seized by the liquidator of BCCI. Judgment delivered against the bank. Appealed under Case Nos CA (Rev) 1788/04 fixed for inquiry
on 24/9/2009 Bank appealed in Case No. CA 1791/04 refused.
4. Case No. 137/99 (1) in Commercial High Court of Colombo filed against the bank by joint deposit holders claiming that bank has no right to utilize the
dividends of deposit held under lien. Judgment delivered in favour of the bank. Plaintiff appealed against judgment.
5. D C Colombo Case No. 15958/M a Company has filed a case, that the Bank has honoured a guarantee wrongfully and claiming the same. Judgment
given in favour of the company for Rs.200,000- and we have filed an appeal which is to be listed. Writ issued pending appeal subject to the bank
tendering a bank Guarantee in favour of the Plaintiff.
6. Legal action instituted by a constituent in D C Chilaw under Case No. 312/M in respect of payment of cheques. Judgment was given against the
bank to pay Rs.73,000- to plaintiff.
7. Commercial High Court Case No. 157/2007/MR Elk Farm (Pvt) Limited claiming that we have honoured a 3rd party cheque which is allegedly forged
by the customer and credited to his account. Trial on 22/6/2009.
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, the Bank, confirms that there is no case which is not disclosed above which would have a material impact on the financial
position of the bank.
39 Capital Commitments
Capital expenditure approved by the Board of Directors for which provision has not been made in these accounts amounted to approximately -
Bank Bank Group Group
2008 2007 2008 2007
Rs. Mn. Rs. Mn. Rs. Mn. Rs. Mn.
Approved and Contracted for 143.25 276.02 143.25 276.02
Approved but not Contracted for 140.54 370.65 140.54 370.65
40 Post Balance Sheet Events
Subsequent to the date of the Balance Sheet, no circumstances have been arisen which would require adjustments to or disclosure in the financial
statements, except for what is given below.
Directors have recommended a Preference dividend of Rs.2.00 per share for the year ended December 31, 2008. (Preference dividend of Rs.1.54
per share in 2007), which will be declared at the next Annual General Meeting.
. SEYLAN BANK PLC 105

BEATING STRONGER!
Notes to the Accounts
40 Post Balance Sheet Events Contd.
In accordance with Sri Lanka Accounting Standard No 12-(Revised) Events After the Balance Sheet date, this proposed final dividend has not been
recognized as a liability as at December 31, 2008.
The following Directors were appointed to the Board with effect from 8 th January 2009.
Mr.Ramanathan Nadarajah
Rear Admiral Ananda Peiris.
The Bank's public quoted unsecured subordinated redeemable five year debenture issue concluded on 02.01.2009 and debentures amounting to a
total sum of Rs.630,565,000/-was allotted on 12.01.2009.
Central Bank of Sri Lanka (CBSL) has called for Expression of Interest from prospective investors to invest in 1/3 of the share capital of the Bank in
the order of approximately Rs.5.7Bn. CBSL is evaluating the two bids received and with new capital coming capital adequacy and liquidity of the
bank will improve.
The Board of Directors of Seylan Bank PLC approved to discontinue the fast cash operations through "Ceylinco Express Remmitance Services (Pvt.)
Ltd, w.e.f. February 2009.
Other loans (vide note 19) include loans to customers of Rs.3.027 Bn. under Grameen scheme. Disbursement and recoveries of the loans are effected
through Ceylinco Grameen Credit Co. Ltd, Ceylinco Grameen Agricultural Credit Co. Ltd, and Ceylinco Grameen Auto Mobile (Pvt) Ltd, related
companies of the Bank. Subsequent to the Balance Sheet date the Bank has been recovering only Rs.100 Mn. per month, short of the repayment
amounts due under original arrangement with the customers. As a result, loans totaling to Rs.2.535 Bn. have been reclassified as special mention
category in accordance with Central Bank direction that is, 3 to 6 months in arrears, of the total outstanding of Rs.2.569 Bn. as at 26th May 2009.
41 Related Party Transactions
a. Key Management Personnel
According to Sri Lanka Accounting Standard 30 (Revised 2005) “Related Party Transaction, Key Management Personnel are those having authority
and responsibility for planning, directing and controlling the activities of the entity. Accordingly Founder Chairman/Managing Director (Deshamanya
Dr Lalith Kotelawala), Deputy Chairman/CEO (Mr Renganathan) General Manager/Chief Executive Office (A M Pasqual) and the Senior DGMs
(Ms L Seneviratne, Mr J G S De Silva, Mr Chandrasiri Kotigala, Mr Ajantha Madurapperuma, and Mr Tissa Nanayakkara) have been classified as Key
Management Personnel of the bank.
b. Transaction with Key Management Personnel (KMP)
Credit Facility Limit Outstanding Security
Rs. Mn. Rs. Mn.
Mrs L.Seneviratne Employee Provident Fund Loans 6.000 4.639 Employee Provident Fund Rs.8.866 Mn.
Overdraft 1.250 1.073 Cash Deposits Rs.1.250 Mn.
Computer Loan 0.085 0.032 Mortgage over the Computer Rs.0.085 Mn.
Staff Housing Loans 1.848 1.583
}
Immovable Property held on a Free hold.
Piyasa Housing Loans 1.700 Not Yet granted FSV 1.150 Mn. & Market value 1.175 Mn.
Term Loan 0.450 0.407 Cash Deposits Rs.506.657 Mn.
Mr C.Kotigala Employee Provident Fund Loan 4.457 4.414 Employee Provident Fund Rs.4.952 Mn.FSV
8.0 Mn. & Market Value 8.8 Mn.
Staff Housing Loan 5.320 4.409 Immovable Property held on a Free hold.
Mr.J G.S.De Silva Overdraft 1.000 0.933 Cash Deposits 2.228Mn. (EUR 14.395.30)
Employee Provident Fund Loan 5.000 5.000 Employee Provident Fund Rs.12.740 Mn.
Mr A.Madurapperuma Employee Provident Fund Loans 6.300 5.492 Employee Provident Fund Rs.6.361 Mn.
Computer Loan 0.07 0.017 Mortgage over the Computer.Rs.0.0699 Mn.
Mr A.M.Pasqual Overdraft 1.000 Nil Cash Deposits
Employee Provident Fund Loan 5.900 5.831 Employee Provident Fund Rs.7.4 Mn.
Term Loan 3.558 3.269 Cash Deposits
Housing loans 14.000 6.311 Immovable Property held on a Free hold. &
cash Deposits.(FSV 7 Mn. & Market value 7.5 Mn.)
Value of total cash deposit 10.728 Mn.)
106 SEYLAN BANK PLC .

c. Accommodation Granted to Directors & KMP for Credit Cards
Name of Director Credit Card Limit (Rs.) Security Type
Deshamanya Dr.Lalith Kotelawala 13,500,000 a)
Lady Dr. S.P.C Kotelawala 13,500,000 a)
Mr.R.Renganathan 950,000 b) *
Mr.A.D.Jegasothy 1,000,000 c) *
Mrs.M.Sabaratnam 1,000,000 d) *
Mr.S.K.M.Perera 500,000
Mr.K.A.S.Jayatissa 2,500,000 f) *
Mr. A. M Pasqual 1,100,000 e)
Mr A.Madurapperuma 500,000
Dr L Samarakoon 500,000
Mr C.Kotigala 500,000
Mr.J G.S.De Silva 500,000
Mrs L.Seneviratne 500,000
Mr. P.T.Sirisena 500,000
Mr.N.M.Jayamanne 500,000
*Details as at 31st August 2008.
a) Rs.0.5 Mn. clean and the balance was secured on cash deposits amounting to Rs.6.0 Mn. & GBP 56,000.
b) Rs.05 Mn. clean and the balance was secured on cash deposits amounting to Rs.0.521 Mn.
c) Rs.05 Mn. clean and the balance was secured on cash deposits amounting to Rs.0.556 Mn.
d) Rs.05 Mn. clean and the balance was secured on cash deposits amounting to Rs.1 Mn.
e) Rs.0.5 Mn. clean and the balance was secured on cash deposits amounting to Rs.1.6 Mn.
f) Rs.0.5 Mn. clean and the balance was secured on cash deposits amounting to Rs..6.0 Mn.
d. Compensation to Key Management Personnel Rs.(Mn.)
Short Term Employee Benefits 66.83
Terminal Benefits (paid) 26.56
e. All the other interest of each Director, direct or indirect in financial and other arrangements are disclosed under Note 42, related party transactions.
. SEYLAN BANK PLC 107

BEATING STRONGER!
Notes to the Accounts
42 Other Related Party Transactions
The Bank had the following financial dealings during the year 2008 with companies which are considered related parties. The parties given below are considered related mainly due to significant influence
arising as a result of common Directorships and through shareholdings. These companies,names of the Directors and the nature of transactions entered into are listed below
Party/Parties Name of Director Relationship Aggregate Amount of Accommodation Service Obtained/Other Transactions
Accommodated Outstanding as at 31.12.2008
Nature of Interest in Nature of Service Amount Amount
Accommodation Suspense Bad & Doubtful Payable/Receivable Paid/Received
Non Provision Debt Provision
Limit Funded Funded for the year for the year
Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn./(USD) Rs.Mn. Rs.Mn.
Subsidiary Companies
Ceylinco Seylan Deshamanya Chairman Overdraft 20.000 29.307 Rent 111.771
Developments PLC Dr.Lalith Kotelawala Reimbursement of Work Orders 0.342
Mr.M.A.D.A.I. Director Guarantee 10.245 Reimbursement of Electricity 59.885
Madurapperuma Term Loan 162.396 162.396 Reimbursement of Water 1.800
182.396 191.703 10.245 - - Reimbursement of Rates 3.412
Reimbursement of Insurance 13.530
Others 1.316
Primary Mortgage Bond for Rs.17.6Mn. over - 192.056
condominium units 3&4 Ceylinco Towers
Secondary Mortgage Bond for Rs.9.40 Mn.over
condominium units 3 & 4 Ceylinco Towers.
Primary Mortgage Bond for Rs.21.0 Mn. over condominium unit 8
Ceylinco Towers. Market Value 32.7 Mn .
Forced Sale Value for Rs.28.0 Mn.
Interest Income/Service
Primary Mortgage Bond for Rs.150.0 Mn. Charges Recovered 4.873 15.790
Deposit made for Rent & Security Rs.84 Mn. 4.873 15.790
Seylan Merchant Deshamanya Chairman
Bank PLC
Dr.Lalith Kotelawala
Mrs.L.Seneviratne Director Overdraft 57.000 55.574 11.576 238.984 Other Reimbursement Expenses 0.290
Treasury Loan 197.848 206.498 - 0.290
Short Term Loan 50.000 50.000
304.848 312.072 - 11.576 238.984 Interest Income/Service
Treasury Loan outstanding includes interest amounting to Rs. 8.650 Mn.
Temporary Excess Charges Recovered 11.218 67.910
Temporary Overdraft Facility. 11.218 67.910
Lien over rupee fixed deposit Rs.58.0 Mn. belongs to
SMB Kenanga Int.Co. Ltd
Mortgage for Rs.2,402,000/- over shares of Blue Diamond
Jewellary Market Value Rs.6,725,600
Seylan Bank PLC has invested in Rs.128.724 Mn. in Debentures.
Special Power of Attorney over performing leases for Rs.205 Mn.
Net Risk Exposure Rs.382.218 Mn.
Seylan Bank Mr. A.M.Pasqual Director Interest Expenses 4.834 20.822
Asset Management Mr.M.A.D.A.I. Director 4.834 20.822
Ltd Madurapperuma Interest Income /
Reverse Repo with Bank for Rs.1,397.304 Mn. Service Charges Recovered 6.705
6.705
Other Companies
Ceylinco Insurance PLC Deshamanya
Dr.Lalith Kotelawala Chairman Overdraft 77.750 51.844 Insurance Premium 81.249
Lady Dr. S.P.C.
Kotelawala Deputy Guarantee 6.179 Rent 52.041
Chairperson 77.750 51.844 6.179 - - Other Reimbursement Expenses 0.739
Lien over Rupee Fixed Deposits for Rs.54.0Mn. and Treasury Bonds Rs.40.0 Mn. - 134.029
108 SEYLAN BANK PLC .

Party/Parties Name of Director Relationship Aggregate Amount of Accommodation Service Obtained/Other Transactions
Accommodated Outstanding as at 31.12.2008
Nature of Interest in Nature of Service Amount Amount
Accommodation Suspense Bad & Doubtful Payable/Receivable Paid/Received
Non Provision Debt Provision
Limit Funded Funded for the year for the year
Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn./(USD) Rs.Mn. Rs.Mn.
Company's Investment in Seylan Bank debentures amount to Rs.193.0 Mn. Interest Income/Service
Compay Purchased property from Seylan Bank PLC Charges Recovered 1.530
amounting to Rs.239.050 Mn. 1.530
Ceylinco Finance PLC Deshamanya
Dr.Lalith Kotelawala Chairman Overdraft 0.031 Professional Fees & Registrars Fees
O/A Debentures Issue 0.032
0.031 0.032
Temporary Excess Interest Income/Service Charges Recovered 6.300
Net risk Exposure Rs.0.031 Mn. 6.300
Blue Diamonds Deshamanya Chairman Overdraft 226.000 200.620
Jewellery Worldwide PLC Dr.Lalith Kotelawala Term loan 226.000 80.929
Gurantees 0.015
452.000 281.549 0.015 -
Stock of Jewelllery worth of USD 2.033 Mn.
Gurantees margin 0.865 Mn.
Cumilative Bad and Doubtful Debt provision USD 2.481 Mn. as at year end
Net Risk Exposure Rs.281.564 Mn.
The Finance
Deshamanya
Company PLC Dr.Lalith Kotelawala Chairman Overdraft 110.950 245.204 Transfer of Funds for Loan settlement 0.521
Mr. K.A.S.Jayatissa Director Leasing 139.296 139.296 0.521
Prof S M L P
Samarakoon Director Piyasa W'Niwasa 126.001 126.001
Term Loan 291.560 291.560
667.807 802.061 - - Interest Income/Service Charges Recovered 75.906
Company's Investment in Seylan Bank debentures amount to Rs.5.0 Mn. Management Fee Recovered 0.690
Primary Mortgage bond for Rs.45.0 Mn. & Primary 76.596
Mortgage Bond for Rs.42.50 Mn.
Primary Mortgage bond for Rs.69.6 Mn. & Primary
Mortgage Bond for Rs.50.0 Mn.
Absolute ownership over the vehicles
Primary Mortgage bond for Rs.42.25 Mn. & Secondary Mortgage Bond for
Rs.20.6 Mn. Fixed Deposit Rs.2.693 Mn.
Temporary Mortgage Bond for Rs.8.4 Mn. Primary Mortgage Bond for
Rs.50 Mn.Lien over fixed deposit Rs.2.522 Mn.
Primary Mortgage Bond for Rs.20.25 Mn. & Primary
Mortgage Bond for Rs.90.0 Mn.
Primary Mortgage Bond for Rs.56.25 Mn. Primary
Mortgage Bond for Rs.68.25 Mn.
Net Risk Exposure Rs.96.086 Mn.
Ceylinco CISCO Security Deshamanya Cash Transport 0.040
Corporation (Pvt.) Ltd. Dr.Lalith Kotelawala Chairman Overdraft 77.000 65.606 Security services 1.212 137.346
Short term Loan 2.991 2.991 Installation & servicing charges 0.013
Consultancy Fees 1.509
Traveling & Transport 0.160
79.991 68.597 - - 1.212 139.068
. SEYLAN BANK PLC 109

BEATING STRONGER!
Notes to the Accounts
Party/Parties Name of Director Relationship Aggregate Amount of Accommodation Service Obtained/Other Transactions
Accommodated Outstanding as at 31.12.2007
Nature of Interest in Nature of Service Amount Amount
Accommodation Suspense Bad & Doubtful Payable/Receivable Paid/Received
Non Provision Debt Provision
Limit Funded Funded for the year for the year
Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn./(USD) Rs.Mn. Rs.Mn.
110 SEYLAN BANK PLC .
Company's Investment in Seylan Bank debentures amount to Rs.0.10 Mn. Interest Income/Service
Temporary Excess Charges Recovered 0.775
Deposit for Rs.48.0 Mn. 0.775
Assignment over security guard salary of Rs.15.0 Mn.
Net Risk Exposure Rs.20.597 Mn.
Ceylinco Ltd.
Deshamanya
Dr.Lalith Kotelawala Chairman Overdraft 10.000 10.077 Rent 6.307
Lady Dr. S.P.C. Deputy
Kotelawala Chairperson Term Loan 5.230 5.230 Group Expenses 2.322
Guarantees 0.214 Electricity 2.820
15.230 15.307 0.214 Water 0.075
Insurance 0.487
Mortgage over 1,587,398 shares. MV-276,207,252 Maintenance & Up Keep Premises 0.086
Guarantee margin 0.241 Mn. Repairs & Maintenance 0.052
Telephone 0.001
Registered Office Expenses 0.080
Service Charges 4.068
16.298
Interest Income/Service
Charges Recovered 4.576
Net Risk Exposure Rs.15.307 Mn. 4.576
Ceylinco PLC
Mr.M.A.D.A.I.
Technology (Pvt) Ltd. Madurapperuma Director Term Loan 1.803 1.803 Loyalty Card Commission 3.285
1.803 1.803 - - - 3.285
Rupee Fixed deposit for Rs.5.0 Mn.
Interest Income/Service
Rupee Fixed deposit for Rs.4.877 Mn. Charges Recovered 0.435
0.435
Independent Financial Deshamanya Press advertising in Aratuwa 3.227
News & Views (Pvt) Ltd. Dr.Lalith Kotelawala Chairman Overdraft 1.552 1.040 newspapers & subscription
Lady Dr. S.P.C. Director Leasing 1.232 1.232 for Aratuwa.
Kotelawala
2.784 2.272 - - - 3.227
Rupee Fixed Deposits for Rs.1.250 Mn.
Interest Income/Service
Lease over Rupee Fixed Deposits Rs.1.80 Mn.
Charges Recovered
Net Risk Exposure Rs.1.232 Mn. 0.208
0.208
Ceylinco Tax & Financial Mr.K.A.S.Jayatissa Deputy Consultancy Payments 0.075 5.050
Consultants (Pvt) Ltd. Chairman 0.075 5.050
Ceylinco Hotels Ltd. Deshamanya
Dr.Lalith Kotelawala Chairman Leasing 3.565 3.565 Providing Meals & Refreshments 24.715
Lady Dr. S.P.C. Deputy
Kotelawala Chairperson Other Reimbursement Expenses 0.162
3.565 3.565 - 24.877
Absolute ownership over the vehicle.
Interest Income/
Net Risk Exposure Rs.3.565 Mn. Service Charges Recovered 0.793
0.793
Ceylinco Travels & Deshamanya
Tours Ltd. Dr.Lalith Kotelawala Chairman Air Ticket & Visa Fees 14.576
Lady Dr. S.P.C. Deputy Training & Other Expenses 2.634
Kotelawala Chairperson 17.210

Party/Parties Name of Director Relationship Aggregate Amount of Accommodation Service Obtained/Other Transactions
Accommodated Outstanding as at 31.12.2008
Nature of Interest in Nature of Service Amount Amount
Accommodation Suspense Bad & Doubtful Payable/Receivable Paid/Received
Non Provision Debt Provision
Limit Funded Funded for the year for the year
Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn./(USD) Rs.Mn. Rs.Mn.
Ceylinco
Deshamanya
Consolidated (Pvt) Ltd. Dr.Lalith Kotelawala Chairman Overdraft 0.320 Director's Pension Scheme 1.723
Lady Dr. S.P.C. Deputy
Kotelawala Chairperson Advertising Charges 5.500
Mr.K.A.S.Jayatissa Director Group Expenses 30.594
- 0.320 Donations 64.090
Temporary Excess Other Expenses 2.604
104.511
Net Risk Exposure Rs.0.320 Mn.
Ceylinco Industries Deshamanya Furniture & Office Equipment
(Pvt) Ltd. Dr.Lalith Kotelawala Chairman & Other Expenses 5.244
5.244
Interest Income /
Service Charges Recovered 0.016
0.016
Ceylinco Computer Deshamanya
Forms (Pvt) Ltd. Dr.Lalith Kotelawala Chairman Letter of Credit 40.000 13.829 Printing Charges 1.843
Overdraft 7.500 6.857 Computer Stationery 6.914
Stationery Purchased 7.281
47.500 6.857 13.829 - - 16.038
Mortgage over Printing Machinary for Rs.2.0Mn.,Lien over Interest Income /
FD Rs.5.0 Mn. Assign Over sales for Rs.6.0Mn. Service Charges Recovered 3.691
Net Risk Exposure Rs.14.35 Mn. 3.691
Ceylinco Printing & Deshamanya Chairman Overdraft 0.500 Printing Charges 30.002
Stationery (Pvt) Ltd. Dr.Lalith Kotelawala Advertising Charges 0.234
Stationery Expenses 0.657
Complementary Items 0.008
0.500 - - - - Computer Stationary 0.113
Lien over Saving balance Rs.555,555/- 31.014
Asian Finance Ltd. Deshamanya Interest Income/Service
Dr.Lalith Kotelawala Chairman Overdraft 30.000 Charges Recovered 0.088
30.000 - - - - 0.088
Primary Mortgage Bond over immovable property for 65% of the forced
sale value maximum Rs.30.0 Mn.
Ceylinco Packaging Deshamanya
Company Ltd. Dr.Lalith Kotelawala Chairman Overdraft 10.000 9.686 Interest Income/Service Charges Recovered 3.002
Leasing 4.166 4.166 3.002
14.166 13.852 - - -
Pledge over 440,000 shares of Ceylinco Insurance PLC
Absolute ownership of 1 due cutting machine Letter of
Credit Margin Rs.2.483 Mn.
Net Risk Exposure Rs.13.852 Mn.
Ceylinco Investments Mr.K.A.S.Jayatissa Director Shot Term Loan 39.842 39.842 Rent 0.185
& Reality (Pvt) Ltd. 0.185
Interest Income/Service Charges Recovered 1.229
39.842 39.842 - - - 1.229
Primary Mortgage for RS 15.0. Primary Mortgage Bond for Rs.20.0 Mn.
Secondary Mortgage Bond for Rs.5.0 Mn.
Net Risk Exposure Rs.13.592 Mn.
. SEYLAN BANK PLC 111

BEATING STRONGER!
Notes to the Accounts
Party/Parties Name of Director Relationship Aggregate Amount of Accommodation Service Obtained/Other Transactions
Accommodated Outstanding as at 31.12.2008
Nature of Interest in Nature of Service Amount Amount
Accommodation Suspense Bad & Doubtful
}
Payable/Receivable Paid/Received
Non Provision Debt Provision
Limit Funded Funded for the year for the year
Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn./(USD) Rs.Mn. Rs.Mn.
Sesot (Pvt) Ltd Deshamanya Interest Income/Service
Dr.Lalith Kotelawala Chairman Charges Recovered
Lady Dr. S.P.C.
Kotelawala Director Charges Recovered 0.094
Mr.A.M.Pasqual Director 0.094
Rs.51.854 Mn. Payable to Seylan Bank PLC.
Dividend received from Seylan Bank PLC amounted to Rs.2.961Mn.
Seyshop (Pvt) Ltd Mr.J.G.S.De.Silva Director Term Loan 54.375 32.932 Interest Income/Service Charges Recovered 1.317
54.375 32.932 - - 1.317
Rs.14.224 Mn. Payable to Seylan Bnak PLC.
Dividend received from Seylan Bank PLC amounted to Rs.2.961Mn.
Seybest (Pvt) Ltd Mr. R. Renganathan Director Term Loan 54.510 32.897 Interest Income/Service Charges Recovered 1.316
54.510 32.897 - - 1.316
Rs.14.224 Mn. Payable to Seylan Bnak PLC.
Dividend received from Seylan Bank PLC amounted to Rs.2.961Mn.
Credit facilities have been allowed at preferential rates
of interest since these facilities were utilized to
purchase shares which are allotted to the employees
in proportion to their gratuity.
Sotse (Pvt) Ltd Mr.A.M.Pasqual Director Term Loan 38.550 30.531
Mr.K.A.S.Jayatissa Director . Interest Income/Service Charges Recovered 1.221
Mrs.L.Seneviratne Director 38.550 30.531 - - 1.221
Rs.8.026 Mn. Payable to Seylan Bank PLC.
Dividend received from Seylan Bank PLC amounted to Rs.1.363Mn.
Esots (Pvt) Ltd Mr.K.A.S.Jayatissa Director Term Loan 53.860 33.462 Interest Income/Service Charges Recovered 1.338
Mr.M.A.D.A.I.
Madurapperuma Director 53.860 33.462 - 1.338
Rs.13.222 Mn. Payable to Seylan Bank PLC.
Dividend received from Seylan Bank PLC amounted to Rs.2.937Mn.
Seyfest (Pvt)Ltd Mr.P.T.Sirisena Director Repo with Bank for Rs.5.625 Mn.
Rs.23.252 Mn. Payable to Seylan Bank PLC.
Dividend received from Seylan Bank PLC amounted to Rs.2.961Mn.
CTV Creations (Pvt) Ltd Deshamanya Chairman Advertising Expenses 38.593
Dr.Lalith Kotelawala Business Promotion 1.438
Mr. K.A.S. Jayatissa Director 40.031
Ceylinco Freight Deshamanya
International (Pvt) Ltd Dr.Lalith Kotelawala Chairman Overdraft 4.500 4.498
Lady Dr. S.P.C. Deputy
Kotelawala Chairperson Guarantees 2.000 1.300
6.500 4.498 1.300 -
Lien over Rupee Fixed Deposits for Rs.2.018,437.80.
Lien over Fixed Deposit for Rs.3,552,450/-.
112 SEYLAN BANK PLC .

Party/Parties Name of Director Relationship Aggregate Amount of Accommodation Service Obtained/Other Transactions
Accommodated Outstanding as at 31.12.2008
Nature of Interest in Nature of Service Amount Amount
Accommodation Suspense Bad & Doubtful Payable/Receivable Paid/Received
Non Provision Debt Provision
Limit Funded Funded for the year for the year
Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn./(USD) Rs.Mn. Rs.Mn.
Ceylinco International Deshamanya
Realty (Pvt) Ltd Dr.Lalith Kotelawala Chairman Overdraft 17.959 17.959 7.674 10.285 Interest Income/Service
Charges Recovered 1.955
17.959 17.959 7.674 10.285 1.955
Temporary Excess
F&G Management Deshamanya
Services (Pvt) Ltd Dr.Lalith Kotelawala Chairman Overdraft 1.620 1.588 Interest Income/Service
Mr K.A.S.Jayatissa Director Charges Recovered 0.344
1.620 1.588 0.344
Lien over Themas Ranpatha Deposits for Rs.1.8 Mn.
Ceylinco Capital Deshamanya
Investment Co (Pvt) Ltd Dr.Lalith Kotelawala Chairman Short Term Loan 85.085 85.085 Interest Income/Service
Charges Recovered 2.932
85.085 85.085 - 2.932
Temporary Overdraft facility.
Primary Mortgage Bond for Rs.25.0 Mn.
Primary Mortgage Bond for Rs.35.0 Mn.
Net Risk Exposure Rs.13.835 Mn.
Society - Love Deshamanya
and Understanding Dr.Lalith Kotelawala Chairman Leasing 4.263 4.263 Group Expenses 2.910
(SOLO U) Mr K.A.S.Jayatissa Director Donation 1.590
4.263 4.263 - 4.500
Absolute ownership over the vehicle. Interest Income /
Service Charge recovered 1.298
1.298
Net Risk Exposure Rs.4.263 Mn.
Ceylinco Group Mr K.A.S.Jayatissa Director Leasing 0.244 0.244 Library Books 3.310
Libraries Ltd 0.244 0.244 3.310
Absolute ownership over the Motor vehicle. Interest Income /Service Charge recovered 0.099
Net Risk Exposure Rs.0.244 Mn. 0.099
Ceylinco CISCO Mr K.A.S.Jayatissa Director Salary Expenses 0.200
Ranaviru Services 0.200
(Pvt) Ltd
South Asian Travels Ltd Deshamanya
Dr.Lalith Kotelawala Chairman Overdraft 15.000 10.876
Lady Dr. S.P.C. Deputy
Kotelawala Chairperson Term Loan 15.340 15.340 Interest Income/ 9.449
Guarantees 0.072 Service Charges Recovered
30.340 26.216 0.072 9.449
Assignment over book debits for Rs.29.718 Mn.
Seylan Merchant Deshamanya
Leasing PLC Dr.Lalith Kotelawala Chairman Overdraft 30.000 26.820 Interest Expenses 1.418 22.803
30.000 26.820 1.418 22.803
Lien over Fixed Deposits 21.6Mn. Management Fee Recovered 0.690
Company's Investment in Seylan Bank Interest Income/Service Charges Recovered 1.791
debentures amount to Rs.8.65 Mn. 2.481
. SEYLAN BANK PLC 113

BEATING STRONGER!
Notes to the Accounts
Party/Parties Name of Director Relationship Aggregate Amount of Accommodation Service Obtained/Other Transactions
Accommodated Outstanding as at 31.12.2008
Nature of Interest in Nature of Service Amount Amount
Accommodation Suspense Bad & Doubtful Payable/Receivable Paid/Received
Non Provision Debt Provision
Limit Funded Funded for the year for the year
Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn./(USD) Rs.Mn. Rs.Mn.
Ceylinco Healthcare Deshamanya
Services Ltd Dr.Lalith Kotelawala Chairman Medical Expenses 0.980
0.980
Service Charges Recovered 0.056
0.056
Ceylinco Tomei Ltd Deshamanya
Dr.Lalith Kotelawala Chairman Purchase of Jewellery For Cool Cash Draw 0.390
Lady Dr.
Deputy
S.P.C. Kotelawala Chairperson 0.390
Ceylinco Renewables Deshamanya
(Pvt) Ltd Dr.Lalith Kotelawala Chairman Furniture & Office Equipment 0.145
Mr K.A.S.Jayatissa Director 0.145
Ceylinco ERA (Pvt) Ltd Mr K.A.S.Jayatissa Director Leasing 0.767 0.767 Group Expenses 1.540
(E.R.A) Mr J.G.S.De Silva Director Term Loan 13.187 13.187 1.540
13.954 13.954 - Interest Income/Service Charges Recovered 2.125
LAF & OFL 2.125
Absolute ownership over the vehicles.
Net Risk Exposure Rs.13.954 Mn.
Ceylinco Lexcon Mr.C.Kotigala Deputy Overdraft 3.000 2.428 Legal Fees 3.020
Services (Pvt) Ltd chairman 3.000 2.428 - 3.020
Temporary Facility Interest Income/ 0.167
Net Risk Exposure Rs.2.428 Mn. Service Charges Recovered 0.167
The Finance & Deshamanya
Guarantee Company Dr.Lalith Kotelawala Chairman Overdraft 13.983 13.983 Transfer of Funds for Loan Settlement 2.175
Ltd Mr K.A.S.Jayatissa Director 13.983 13.983 - - - 2.175
Company's Investment in Seylan Bank debentures amount to Rs.1.910 Mn. Interest Income/Service Charges Recovered 1.548
Temporary Overdraft Facility. 1.548
Ceylinco Building Mr.K.A.S.Jayatissa Director Term Loan 36.299 36.299 Interest Income/ 8.175
Society Ltd Leasing 2.154 2.154 Service Charges Recovered 8.175
38.453 38.453
MBD(1)-18.6Mn,MBD(1)s for Rs.11.4 Mn, MBD(1) for Rs.15.0 Mn
MV 60.0Mn,FSV-55.0Mn, Ins Value-22.0Mn
Absolute ownership over the vehicle.
The Sitar (Pvt) Ltd Deshamanya
Dr.Lalith Kotelawala Chairman Overdraft 2.500 2.040 Sponsorships 0.240
Lady Dr. S.P.C. Kotelawala Deputy ChairmanLeasing 1.151 1.151 0.240
3.651 3.191
Lien overRepo Rs.1.0Mn.
Absolute ownership over the motor vehicle & restaurant equipment.
Seylan Credit
Deshamanya
Card Co Ltd Dr.Lalith Kotelawala Chairman Leasing 3.652 3.652 Management Fees 52.935
Lady Dr. 52.935
S.P.C. Kotelawala Director
Mr.C.Kotigala Director 3.652 3.652
Mr A.M.Pasqual Director
Company's Investment in Seylan Bank debentures amount to Rs.10 Mn Interest Income/Service 3.512 1.359
Absolute ownership over motor vehicles.
Charges Recovered
3.512 1.359
114 SEYLAN BANK PLC .

Party/Parties Name of Director Relationship Aggregate Amount of Accommodation Service Obtained/Other Transactions
Accommodated Outstanding as at 31.12.2007
Nature of Interest in Nature of Service Amount Amount
Accommodation Suspense Bad & Doubtful Payable/Receivable Paid/Received
Non Provision Debt Provision
Limit Funded Funded for the year for the year
Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn./(USD) Rs.Mn. Rs.Mn.
Ceylinco Leasing Mr K.A.S.Jayatissa. Director Overdraft 8.716 8.716 Lease Rental 29.081
Corporation Ltd 8.716 8.716 29.081
Temporary Overdraft Facilty Interest Income/Service 0.009
Charges Recovered 0.009
Net Risk Exposure Rs.8.716 Mn.
Company purchased vehicles from Seylan Bank PLC amounting to Rs.82.150 Mn.
Ceylinco Digital Mr.K.A.S.Jayatissa Deputy Computer Hardware 0.146
House (Pvt) Ltd Chairman 0.146
Ceylinco Toll Integrated Deshamanya Transport Charges 1.108
Logistics (Pvt) Ltd. Dr.Lalith Kotelawala Chairman Training Expenses 0.093
1.201
Ceylinco Sussex Mr K.A.S.Jayatissa. Deputy Term Loan 89.502 89.502 Sponsorships 0.154
Educational Chairman 89.502 89.502 0.154
Services Ltd Primary Mortgage Bond 40.0 Mn. - Term Loan 1,2,3
Primary Mortgage 50.0Mn. Interest Income/Service Charges Recovered 8.774
Primary Mortgage Bond 15.0 Mn.,SMB 2.25 Mn. 8.774
International Consultancy Mr.P.T.Sirisena Director Telephone Expenses 0.150
and Corporate Services Mr.C.Kotigala Director 0.150
(Pvt) Ltd
Ceyhomes Credit Deshamanya
& Investments Ltd Dr.Lalith Kotelawala Chairman Overdraft 0.968 Legal Fees 0.245
Lady Dr.
S.P.C. Kotelawala Director - 0.968 - 0.245
Temporary excess
Interest Income/Service
Charges Recovered 0.007
0.007
Net Risk Exposure Rs.0.968 Mn.
Fingara International Deshamanya
Cricket Academy Dr.Lalith Kotelawala Chairman Sundry Expenses 0.804
(Pvt) Ltd Mr K.A.S.Jayatissa Director 0.804
Ceylinco Ornamental Deshamanya
Fish Aquarium (Pvt) Ltd Dr.Lalith Kotelawala Chairman Sundry Expenses 0.502
Mr K.A.S.Jayatissa Deputy 0.502
Chairman
F&G Real Estate Co Ltd Deshamanya
Interest income/
Dr.Lalith Kotelawala Chairman Overdraft 10.000 9.114 Service charges recoverd 0.561
Mr.K.A.S.Jayatissa Director 0.561
10.000 9.114 -
Company's Investment in Seylan Bank debentures amount to Rs.1.660 Mn.
Temporary Overdraft Facility
Ceylinco Global Profit Mr K.A.S.Jayatissa Deputy Interest Income /
Sharing Investment Chairman Service Charge Recoverd 0.048
Corp Ltd 0.048
. SEYLAN BANK PLC 115

BEATING STRONGER!
Notes to the Accounts
Party/Parties Name of Director Relationship Aggregate Amount of Accommodation Service Obtained/Other Transactions
Accommodated Outstanding as at 31.12.2008
Nature of Interest in Nature of Service Amount Amount
Accommodation Suspense Bad & Doubtful Payable/Receivable Paid/Received
Non Provision Debt Provision
Limit Funded Funded for the year for the year
Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn./(USD) Rs.Mn. Rs.Mn.
Ceylinco Finance Mr.K.A.S.Jayatissa Director
& Infrastructure Ltd Mr A.M.Pasqual Director Overdraft 1.254 0.769 0.486
1.254 - 0.769 0.486
Temporary Excess
Ceylinco Development Mr.K.A.S.Jayatissa Director Overdraft 260.000 192.526 Interest income /
Bank Ltd Service Charges Recovered 2.544
260.000 192.526 - 2.544
Lien over Rupee Fixed Deposits Rs.134.762Mn.
Company's Investment in Seylan Bank debentures amount to Rs.26 Mn.
Seylan Bank PLC is acting as trustee for CDB on Securitization of part of
their lease portfilio since 5th December 2008 at a monthly fee of Rs.25,000/-.
Ceylinco Housing & Deshamanya
Real Estate Co Ltd Dr.Lalith Kotelawala Chairman
Overdraft 15.267 15.267 Interest Income/Service Charges Recovered 2.157
15.267 15.267 - - - 2.157
Temporary Overdraft facility.
Net Risk Exposure Rs.15.267 Mn.
Finance & Guarantee Deshamanya
Property Developers Dr.Lalith Kotelawala Chairman Overdraft 41.633 42.799 Interest income /
(Pvt) Ltd Short term Loan 15.000 15.000 Service Charges Recovered 1.153
56.633 57.799 - - - 1.153
Primary Mortgage Bond for Rs.45.0Mn.Over property Market Value Rs.65.0Mn. Forsed sale value Rs.60.0Mn. Insurance 17.5Mn.
Primary Mortgage Bond for Rs.20.0Mn.
Company's Investment in Seylan Bank debentures amount to Rs.1.660 Mn.
Temporary Overdraft facility.
Net Risk Exposure Rs.12.779 Mn.
Ceywin Grains (Pvt) Ltd Mr.K.A.S.Jayatissa Director Overdraft 1.427 0.046 1.427
- 1.427 - 0.046 1.427
Temporary Excess
Ceylinco Universal Ltd Deshamanya Chairman Medical Expenses 0.616
Dr.Lalith Kotelawala
Lady Dr. S.P.C. Deputy Chairperson 0.616
Service Charge Recovered 0.006
0.006
Ceylinco Homes Mr K.A.S.Jayatissa Director Term Loan 3,667.928 3,667.928 Interest income / 362.591
International (Lotus) Short Term Loan 275.117 275.117 Service Charges Recovered
Tower Ltd Guarantees 4.850
3,947.895 3,943.045 - 362.591
Additional mortgage for Rs.600.00 Mn.Additional Mortgage for Rs.200.00 Mn.
Additional Mortgage for Rs.550.0 Mn.
Primary Mortgage Bond for Rs.9.20 Mn.
Cash deposits of USD 6.8Mn & GBP 5.1Mn.
116 SEYLAN BANK PLC .

Party/Parties Name of Director Relationship Aggregate Amount of Accommodation Service Obtained/Other Transactions
Accommodated Outstanding as at 31.12.2008
Nature of Interest in Nature of Service Amount Amount
Accommodation Suspense Bad & Doubtful Payable/Receivable Paid/Received
Non Provision Debt Provision
Limit Funded Funded for the year for the year
Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn./(USD) Rs.Mn. Rs.Mn.
Ceylinco Shriram CapitalDeshamanya
Management Services Dr.Lalith Kotelawala Chairman Overdraft 0.233
(Pvt) Ltd 0.233 -
Temporary Excess
Net Risk Exposure Rs.0.233 Mn.
Ceylinco Coloured Deshamanya
Stones (Pvt) Ltd Dr.Lalith Kotelawala Chairman Complementaty items 0.772
Lady Dr. S.P.C. Director 0.772
Kotelawala
Ceylinco Tourist Deshamanya
Hotels Ltd Dr.Lalith Kotelawala Chairman Other Expenses 0.011
Lady Dr.
S.P.C. Kotelawala Deputy Chairperson 0.011
Seylan Exim
Deshamanya
Company Ltd Dr.Lalith Kotelawala Chairman Furniture & Office Equipment 27.064
Lady Dr. Sundry Expenses 0.144
S.P.C. Kotelawala Director 27.208
Mr Ajita Pasqual Director
Mr K.A.S..Jayatissa Director
MR P.T.Sirisena Director
Mr.J.G.S.De.Silva Director
Mr C.Kotigala Director
Mr M.A.D.A.I.
Madurapperuma Director
TFC Imports & Exports Deshamanya
Company (Pvt) Ltd Dr.Lalith Kotelawala Chairman Furniture & Office Equipment 0.487
Mr K.A.S.Jayatissa Director 0.487
Ceylinco Leisure Deshamanya
Properties Ltd Dr.Lalith Kotelawala Chairman Overdraft 0.064
Mr K.A.S.Jayatissa Director
Mr A.M.Pasqual Director - 0.064 - - -
Temporary Excess
Net Risk Exposure Rs.0.064 Mn.
Sarana International Deshamanya
(Pvt)Ltd Dr.Lalith Kotelawala Chairman Short Term Loan 99.545 99.545 Donation 38.825
Mr K.A.S.Jayatissa Director Group Expenses 0.240
99.545 99.545 39.065
Interest Income/Service Charges Recovered 14.944
Primary Mortgage Bond for Rs.39.0 Mn &
Secondary Mortgage Bond Rs.61.0 Mn.
Net Risk Exposure Rs.6.545 Mn. 14.944
Ceylinco Design & MR.C.Kotigala Director Purchase of Furnitures 12.388
Project Management Mr.P.T.Sirisena Director 12.388
Co (Pvt) Ltd
. SEYLAN BANK PLC 117

BEATING STRONGER!
Notes to the Accounts
Party/Parties Name of Director Relationship Aggregate Amount of Accommodation Service Obtained/Other Transactions
Accommodated Outstanding as at 31.12.2008
Nature of Interest in Nature of Service Amount Amount
Accommodation Suspense Bad & Doubtful Payable/Receivable Paid/Received
Non Provision Debt Provision
Limit Funded Funded for the year for the year
Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn./(USD) Rs.Mn. Rs.Mn.
TFC Tank Presavation Deshamanya Chairman Overdraft - 0.001
Company (Pvt) Ltd. Dr.Lalith Kotelawala
Mr K.A.S.Jayatissa Director 0.001 -
Temporary Excess
Net Risk Exposure Rs.0.001 Mn.
Ceylinco Seylan Deshamanya
Gold Circle (PVT) LTD Dr.Lalith Kotelawala Chairman Other Expenses 0.057
Lady Dr. 0.057
S.P.C. Kotelawala Director
Mr K.A.S.Jayatissa Director
Mr C Kotigala Director
Mr A M Pasqual Director
Blue Diamond Ltd Deshamanya Interest Income /
Dr.Lalith Kotelawala Chairman Service Charges Recovered 0.003
Lady Dr.
S.P.C. Kotelawala Director 0.003
Ceylinco Consolidated Deshamanya Chairman
Holdings (PVT) Ltd Dr.Lalith Kotelawala Interest Income /
Mr K.A.S.Jayatissa Director Service Charges Recovered 0.028
Mr C Kotigala Director 0.028
Ceylinco International Deshamanya Interest Income /
Developers Ltd Dr.Lalith Kotelawala Chairman Service Charges Recovered 0.002
Lady Dr.
S.P.C. Kotelawala Director
Mr C Kotigala Director 0.002
Ceylinco Investment Deshamanya
Company Ltd Dr.Lalith Kotelawala Chairman Foreign Affairs Expenses 3.500
Lady Dr.
S.P.C. Kotelawala Director Group Expenses 3.250
Advertising Expenses 50.250
Donation 1.675
Legal Fees 1.500
60.175
Interest Income /
Service Charges Recovered 0.006
0.006
Seylan Star (Pvt) Ltd Deshamanya
Dr.Lalith Kotelawala Chairman Overdraft 2.025 1.574 Advertising Charges 0.135
Lady Dr.
S.P.C. Kotelawala Director 2.025 1.574 - - - 0.135
Lien over Rupee Fixed Deposit Rs.2.25Mn
118 SEYLAN BANK PLC .

Party/Parties Name of Director Relationship Aggregate Amount of Accommodation Service Obtained/Other Transactions
Accommodated Outstanding as at 31.12.2007
Nature of Interest in Nature of Service Amount Amount
Accommodation Suspense Bad & Doubtful Payable/Receivable Paid/Received
Non Provision Debt Provision
Limit Funded Funded for the year for the year
Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn./(USD) Rs.Mn. Rs.Mn.
TFC Homes (Pvt) Ltd. Deshamanya
Dr.Lalith Kotelawala Chairman
Mr.K.A.S.Jayatissa Director Leasing 9.666 9.666 Interest Income/Service Charges Recovered 7.788
Term Loan 46.670 46.670
Overdraft 38.000 36.851
94.336 93.187 - 7.788
Primary Mortgage Bond 50Mio
Absolute Ownership over the vehicle
Lien over FCBU Account balance USD 262,358/- GBP 33,147/-
Net Risk Exposure Rs.9.666 Mn.
Fingara Town & Deshamanya
Country Club Ltd Dr.Lalith Kotelawala Chairman Overdraft 10.000 9.582 Other Sundry Expenses 0.219
Mr K.A.S.Jayatissa Director Training expenses 0.262
10.000 9.582 - 0.481
Temporary Overdraft Facility
Net Risk Exposure Rs.9.582 Mn.
Ceylinco Seylan Housing Mr A M Pasqual Director
& Commercial Term Loan 35.839 35.839
Properties LTD Overdraft 3.326 3.326
39.165 39.165 -
Secured by property Mortgage totalling to Rs.50.0Mn
Temporary Overdraft Facility
Ceylinco Takaful Ltd Deshamanya
Dr.Lalith Kotelawala Chairman Insurance Premium 1.320
Mr K.A.S.Jayatissa Deputy Chairman
Mr P.T.Sirisena Director 1.320
The Finance
Deshamanya
Property fund Co Dr.Lalith Kotelawala Chairman Overdraft - 2.014
Mr K.A.S.Jayatissa Director Leasing 0.283 0.283 Advertising Charges 17.550
0.283 2.297 - 17.550
Absolute Ownership over the vehicle
Net Risk Exposure Rs.2.297 Mn.
Seylan Bank Employees Trustees of the Company
Provident Fund Interest Expenses 53.031 95.734
53.031 95.734
Investment in Seylan Bank PLC Debenture amounted to Rs.300 Mn.
The Golden Key Credit Deshamanya
Card Company Ltd. Dr.Lalith Kotelawala Chairman Overdraft 435.000 859.560 19.618 352.442 Registered Office Expenses 0.060
Lady Dr. S.P.C.
Kotelawala Director Guarantees 25.000 25.000
Mr. S.K.M. Perera Deputy Chairman
460.000 859.560 25.000 19,618 352,442 0.060
Primary Mortgage for Rs.15.0 Mn.Lauries Place,Colombo-04.
Secondary Mortgage for Rs.25.0 Mn. Primary Mortgage Bond
Interest Income/
Rs.697.5Mn over property at Kirimandala Mawatha Market Service Charges Recovered 0.003
Value 599.0Mn& Forced Sale Value 560.Mn 0.003
Company's Investment in Seylan Bank debentures amount to Rs.7 Mn.
Additional Mortgage Bond Rs.57.5Mn
. SEYLAN BANK PLC 119

BEATING STRONGER!
Notes to the Accounts
Party/Parties Name of Director Relationship Aggregate Amount of Accommodation Service Obtained/Other Transactions
Accommodated Outstanding as at 31.12.2007
Nature of Interest in Nature of Service Amount Amount
Accommodation Suspense Bad & Doubtful Payable/Receivable Paid/Received
Non Provision Debt Provision
Limit Funded Funded for the year for the year
Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn./(USD) Rs.Mn. Rs.Mn.
American Education Deshamanya Interest Income /
Centre Ltd. Dr.Lalith Kotelawala Chairman Leasing 4.079 4.079 Service Charges Recovered 0.814
Lady Dr. S.P.C.
Kotelawala Director Overdraft 0.204
Mr K.A.S.Jayatissa Director 4.079 4.283 - - - 0.814
Absolute ownership over the vehicle Rs.4.8 Mn
Risk Exposure Rs.4.283 Mn.
Ceylinco Worldwide Deshamanya
Trading (Pvt) Ltd. Dr.Lalith Kotelawala Chairman Overdraft 1.000 1.238
Lady Dr. S.P.C.
Kotelawala Director Leasing 0.493 0.493
1.493 1.731 - - -
Lien over MLN30 Deposits for Rs.859,694/-
Net Risk Exposure Rs.0.871 Mn.
Ceylinco Real Estate Deshamanya
Developers Ltd Dr.Lalith Kotelawala Chairman Overdraft 0.001
Lady Dr.
S.P.C. Kotelawala Director Term Loan 68.489 68.489
Leasing
68.489 68.490 - - -
Primary Mortgage Bond for 90.0mio over property FSV Rs70.0Mio
Ceylinco
Deshamanya
Pharmaceuticals Ltd Dr.Lalith Kotelawala Chairman Term loan 5.000 3.876
Lady Dr.
S.P.C. Kotelawala Director Letter of Credit 50.000 32.790
Mr S K M Perera Director
55.000 3.876 32.790 - -
Corporate Gurantee Rs.50Mn from TFC Mortgage over manufacturing machinery Rs.15 Mn.
Net Risk Exposure Rs.36.666 Mn.
Ceylinco
Deshamanya
Developers Ltd Dr.Lalith Kotelawala Chairman Overdraft 5.000 6.093 Sponsorship Expenses 0.142
Lady Dr. S.P.C.
Kotelawala
Director
5.000 6.093 - 0.142
Interest Income/Service Charges Recovered 1.550
Letter of credit margin for Rs.0.101Mn
Lien over Fixed Deposits amounting to Rupees 11.70 Mn 1.550
Lien over Foreign Currency Banking Unit funds for GBP 14,988
Ceylinco Internet Deshamanya
Services Ltd Dr.Lalith Kotelawala Chairman Guarantees 3.303
Lady Dr. S.P.C.
Kotelawala
Director
Mr.S.K.M.Perera Deputy - - 3.303 - -
Chairman Margin for Guarantee amounting Rs.3.489Mn.
120 SEYLAN BANK PLC .

Party/Parties Name of Director Relationship Aggregate Amount of Accommodation Service Obtained/Other Transactions
Accommodated Outstanding as at 31.12.2008
Nature of Interest in Nature of Service Amount Amount
Accommodation Suspense Bad & Doubtful Payable/Receivable Paid/Received
Non Provision Debt Provision
Limit Funded Funded for the year for the year
Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn./(USD) Rs.Mn. Rs.Mn.
Ceylinco Express Deshamanya Guarantee 0.350
(Pvt)Ltd Dr.Lalith Kotelawala Chairman Overdraft 4.500 3.880 Courier Charges 0.009 9.586
Lady Dr.
S.P.C. Kotelawala Director Term Loan 0.290 0.290
5.140 4.170 - - - 0.009 9.586
Company's Investment in Seylan Bank debentures amount to Rs.0.10 Mn.
Margin on guarantee Rs.0.385 Mn.Fixed Deposits for Rs.4.314Mn
Ceylinco Land Deshamanya
Exchange (Pvt) Ltd. Dr.Lalith Kotelawala Chairman Overdraft 31.000 27.156 Interest Income/Service Charges Recovered 5.300
Lady Dr. S.P.C. Director
Kotelawala 31.000 27.156 - - - 5.300
Lien over Fixed Deposits for Rs.17.7 Mn.
International
Deshamanya
College of Business Dr.Lalith Kotelawala Chairman Overdraft 3.340 4.025
Technology Ltd Lady Dr. S.P.C.
Kotelawala Director 3.340 4.025 - - -
Lien over Rupee Fixed Deposits for Rs.1.647 Mn.
Ceylinco Housing Ltd Deshamanya
Dr.Lalith Kotelawala Chairman
Lady Dr. S.P.C.
Kotelawala Director Overdraft 1.500 0.925 Interest Income/Service Charges Recovered 4.290
1.500 0.925 4.290
Lien over Themas Ran path Deposits for Rs.5.9 Mn.
SMB Real Estate Ltd Deshamanya
Dr.Lalith Kotelawala Chairman Overdraft 1.350 0.860 Interest Expenses 0.293
Lady Dr. S.P.C.
Kotelawala
Director
1.350 0.860 - 0.293
Interest Income/Service Charges Recovered 0.124
Lien Over Rupee Fixed Deposit's Rs.1.5 Mn. 0.124
Ceylinco Financial Deshamanya
Consultancy (Pvt) Ltd Dr.Lalith Kotelawala Chairman Overdraft 0.500 0.461
Lady Dr. S.P.C.
Kotelawala Director 0.500 0.461
Lien over Rupee Fixed Deposit Rs.581,843/30
e.Ceylinco.Com.(Pvt) Ltd Deshamanya
Dr.Lalith Kotelawala Chairman Overdraft 0.315 0.233 Sponsorships 0.183
Lady Dr. S.P.C. Printing Charges 0.051
Kotelawala
Director
0.315 0.233 - - - 0.234
Lien over Rupee Fixed Deposits Rs.350,000/-
. SEYLAN BANK PLC 121

BEATING STRONGER!
Notes to the Accounts
Party/Parties Name of Director Relationship Aggregate Amount of Accommodation Service Obtained/Other Transactions
Accommodated Outstanding as at 31.12.2008
Nature of Interest in Nature of Service Amount Amount
Accommodation Suspense Bad & Doubtful Payable/Receivable Paid/Received
Non Provision Debt Provision
Limit Funded Funded for the year for the year
Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn./(USD) Rs.Mn. Rs.Mn.
Ceylinco Savings Deshamanya
Bank Ltd Dr.Lalith Kotelawala Chairman Overdraft 5.000 0.236 Insurance 4.941
Lady Dr. S.P.C.
Kotelawala Director Advertising Charges 0.010
Mr.C.Kotigala Director 5.000 0.236 4.951
Lien over Rupee Fixed Deposits Rs.6.0Mn.
Celinco Investments Deshamanya
Corporation Ltd Dr.Lalith Kotelawala Chairman Term Loan 8.263 8.263
Lady Dr. S.P.C.
Kotelawala
Director
8.263 8.263
Short term loan for 90Days
Ceylinco Modern Deshamanya
Montessori Dr.Lalith Kotelawala Chairman Overdraft 0.900 1.023
International (Pvt) Ltd. Lady Dr. S.P.C.
Kotelawala
Director
0.900 1.023 - - -
Lien over Rupee Fixed Deposit Rs.1Mn.
Ceylinco Selna Ltd Deshamanya
Dr.Lalith Kotelawala Chairman Term Loan 0.036
Lady Dr. S.P.C.
Kotelawala Director - 0.036
Temporary Excess
Net Risk Exposure Rs.0.036 Mn.
Ceylinco Shriram Deshamanya
Securities Ltd Dr.Lalith Kotelawala Chairman Overdraft 3.840
Lady Dr. S.P.C.
Kotelawala
Director
3.840
Temporary excess
Net Risk Exposure Rs.3.840 Mn.
Ceylinco Shriram Deshamanya Interest Income /
Securities Holdings Ltd Dr.Lalith Kotelawala Chairman Service Charge Recovered 0.006
Lady Dr. S.P.C. Kotelawala Director 0.006
Ceylinco Capital Deshamanya
Market Ltd Dr.Lalith Kotelawala Chairman Overdraft 0.348
Lady Dr. S.P.C.
Kotelawala Director - 0.348 -
Temporary Excess
Net Risk Exposure Rs.0.348 Mn.
Ceylinco
Deshamanya
Automobiles LTD Dr.Lalith Kotelawala Chairman Overdraft 0.038 Interest Income/Service Charges Recovered 0.026
Lady Dr. S.P.C.
Kotelawala
Director
- 0.038 - 0.026
Temporary Excess
Net Risk Exposure Rs.0.038 Mn.
122 SEYLAN BANK PLC .

Party/Parties Name of Director Relationship Aggregate Amount of Accommodation Service Obtained/Other Transactions
Accommodated Outstanding as at 31.12.2008
Nature of Interest in Nature of Service Amount Amount
Accommodation Suspense Bad & Doubtful Payable/Receivable Paid/Received
Non Provision Debt Provision
Limit Funded Funded for the year for the year
Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn./(USD) Rs.Mn. Rs.Mn.
Ceylinco Niranjan Deshamanya
Invention (Pvt) Ltd Dr.Lalith Kotelawala Chairman Overdraft 0.006 Interest Income/Service 0.003
Lady Dr. S.P.C. Director Charges Recovered
Kotelawala
Deputy
Mr.S.K.M.Perera Chairman - 0.006 - - - 0.003
Temporary Excess
Net Risk Exposure Rs.0.006 Mn.
Ceylinco Exhibition and Deshamanya
Conventions (Pvt) Ltd Dr.Lalith Kotelawala Chairman Sponsorship Expenses 0.208
Lady Dr. S.P.C.
Kotelawala Director Overdraft 0.010
0.010 0.208
Temporary excess
Net Risk Exposure Rs.0.010 Mn.
Ceylinco Grameen Deshamanya
Credit Ltd. Dr.Lalith Kotelawala Chairman Interest Margin 105.002
Lady Dr. Complementaty items 0.978
S.P.C. Kotelawala Director
105.980
Key Research & Deshamanya
Information Ltd. Dr.Lalith Kotelawala Chairman Consultancy Fees 2.681
Lady Dr. S.P.C.
Kotelawala Director Advertising Charges 0.075
Mr. S.K.M. Perera Deputy Professional Fees 0.059
Chairman Other Expenses 0.100
2.915
Ceylinco SwiftCare Deshamanya
(Pvt) Ltd. Dr.Lalith Kotelawala Chairman
Lady Dr. S.P.C. Medical Expenses 2.807
Kotelawala Director Direct Medical Expenses 0.175
Membership Fees 0.280
3.262
Golden Key International Deshamanya
Trading Co Ltd. Dr.Lalith Kotelawala Chairman Tikiri Gifts Purchased 4.015
Lady Dr. S.P.C.
Kotelawala
Director
Mr.S.K.M.Perera. Deputy Chairman 4.015
The Golden Key Institute Deshamanya
of Computer Dr.Lalith Kotelawala Chairman Training Expenses 0.159
Technology Ltd Lady Dr. S.P.C.
Kotelawala
Director
Mr S.K.M.Perera Deputy Chairman 0.159
. SEYLAN BANK PLC 123

BEATING STRONGER!
Notes to the Accounts
Party/Parties Name of Director Relationship Aggregate Amount of Accommodation Service Obtained/Other Transactions
Accommodated Outstanding as at 31.12.2008
Nature of Interest in Nature of Service Amount Amount
Accommodation Suspense Bad & Doubtful Payable/Receivable Paid/Received
Non Provision Debt Provision
Limit Funded Funded for the year for the year
Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn./(USD) Rs.Mn. Rs.Mn.
Ceylinco Express Deshamanya
Remmitancs (Pvt) Ltd Dr.Lalith Kotelawala Chairman
(Ceylinco Consolidated Lady Dr. S.P.C. Deputy
Overseas (Pvt) Ltd) Kotelawala chairperson Advertising Charges 200.198
Training Expenses 4.400
204.598
Ceylinco Cisco Security Deshamanya
Transport & Allied Dr.Lalith Kotelawala Chairman Cash Transport Expenses 0.201 45.062
(PVT) LTD Lady Dr. S.P.C. Cash Sorting Charges 2.109
Services Kotelawala Director Other Expenses 7.796
Mr.M.A.D.A.I.
Madurapperuma Director
0.201 54.967
Ceylinco Cisco Deshamanya
Technology & Dr.Lalith Kotelawala Chairman Installation & Other Charges 9.359
Consultancy (Pvt) Ltd Lady Dr. S.P.C. Security Expenses 0.022 5.513
Kotelawala Director Other Expenses 0.149
0.022 15.021
Ceylinco Grameen Deshamanya
Consultancy Services Dr.Lalith Kotelawala Chairman Legal Fees 0.118
Lady Dr. S.P.C. Consultancy Fees 0.041
Kotelawala
Director
0.159
Ceylinco Micro Deshamanya
Technologies Ltd Dr.Lalith Kotelawala Chairman Computer Related Expenses 0.063
Lady Dr. S.P.C.
Kotelawala
Director
Mr S.K.M.Perera Deputy
Chairman 0.063
Ceylinco Networking Deshamanya
Technologies Ltd. Dr.Lalith Kotelawala Chairman Maintenance & Up Keep Premises 1.035
Lady Dr. S.P.C. Computer Software 50.484
Kotelawala Director Computer Related 19.946
Mr. S.K.M. Perera Deputy
Chairman
71.465
The Golden key Card Deshamanya
Technologies Ltd. Dr.Lalith Kotelawala Chairman Printing of ID's 0.183
Lady Dr. S.P.C. 0.183
Kotelawala
Director
Mr. S.K.M. Perera Deputy
Chairman
124 SEYLAN BANK PLC .

Party/Parties Name of Director Relationship Aggregate Amount of Accommodation Service Obtained/Other Transactions
Accommodated Outstanding as at 31.12.2008
Nature of Interest in Nature of Service Amount Amount
Accommodation Suspense Bad & Doubtful Payable/Receivable Paid/Received
Non Provision Debt Provision
Limit Funded Funded for the year for the year
Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn./(USD) Rs.Mn. Rs.Mn.
Golden Key
Deshamanya
Communication (Pvt) Ltd. Dr.Lalith Kotelawala Chairman Computer Software 52.151
Lady Dr. S.P.C.
Kotelawala
Director
Mr S.K.M.Perera Deputy
Chairman 52.151
Golden Key Software Deshamanya
Solutions Ltd. Dr.Lalith Kotelawala Chairman Computer Software 10.013
Lady Dr. S.P.C. Computer Related Expenses 3.175
Kotelawala Director Service Agreement & Other Expenses 1.766
Mr. S.K.M. Perera Deputy
Chairman
14.954
Ceylinco Grameen Deshamanya
Automobiles (Pvt) Ltd Dr.Lalith Kotelawala Chairman Insurance 0.007
Lady Dr. S.P.C. Furniture & Office Equipment 0.003
Kotelawala Director Travelling & Transport Charges 0.089
Vehicle Maintenance 0.039
Repairs and Maintenance 0.058
0.196
Hire Drive (Pvt) Ltd Deshamanya
Dr.Lalith Kotelawala Chairman
Lady Dr. S.P.C.
Kotelawala Director Travelling & Transport charges 0.064
0.064
Lanka Ecom
Deshamanya
Technologies Ltd Dr.Lalith Kotelawala Chairman Donations 2.000
Lady Dr. S.P.C.
Kotelawala
Director
Mr S.K.M.Perera Deputy
Chairman 2.000
Lumen
Deshamanya
Technologies Ltd Dr.Lalith Kotelawala Chairman Computer Software 0.075
Lady Dr. S.P.C. Furniture & Office Equipment 3.392
Kotelawala Director Repairs & Maintenance 0.120
Mr S.K.M.Perera Deputy Chairman Stationery Purchased 0.297
3.884
The Golden Key Deshamanya
Company Ltd. Dr.Lalith Kotelawala Chairman Computer Software / Hardware Purchases 53.199
Lady Dr. S.P.C. Computer Related Expenses 175.835
Kotelawala Director Donations 0.761
Mr. S.K.M. Perera Deputy Chairman
229.795
. SEYLAN BANK PLC 125

BEATING STRONGER!
Notes to the Accounts
Party/Parties Name of Director Relationship Aggregate Amount of Accommodation Service Obtained/Other Transactions
Accommodated Outstanding as at 31.12.2008
Nature of Interest in Nature of Service Amount Amount
Accommodation Suspense Bad & Doubtful Payable/Receivable Paid/Received
Non Provision Debt Provision
Limit Funded Funded for the year for the year
Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn. Rs.Mn./(USD) Rs.Mn. Rs.Mn.
Ceylinco Cisco Cash Deshamanya
Management & Dr.Lalith Kotelawala Chairman Cash transit Charges 11.288
Transit Company Lady Dr. S.P.C.
(Pvt) Ltd. Kotelawala Director 11.288
C A S Recoveries Mr K.A.S Jayatissa Director Seizing Charges 0.379
& Custodial 0.379
Services (Pvt) Ltd
Ceylinco International Deshamanya Interest Income /
Trading Company Ltd. Dr.Lalith Kotelawala Chairman Service Charges Recovered 0.087
Lady Dr. S.P.C.
Kotelawala Director 0.087
Ceylinco Villa Housing Deshamanya Interest Income /
Development Ltd Dr.Lalith Kotelawala Chairman Service Charge Recovered 0.004
Lady Dr. S.P.C.
Kotelawala Director 0.004
SMB Money Brokers Deshamanya
(PVT) Ltd Dr.Lalith Kotelawala Chairman Interest Income/Service Charges Recovered 0.022
Lady Dr. S.P.C.
Kotelawala Director 0.022
SMB Securities Deshamanya
(PVT) Ltd Dr.Lalith Kotelawala Chairman Interest Income/Service Charges Recovered 0.012
Lady Dr. S.P.C.
Kotelawala Director 0.012
Deposits with Bank by Companies with in Ceylinco Group amounted to Rs.1,415.167 Mn as at 31st December 2008
Group Expenses, Advertising Expenses & Donations for the year 2008 have been effected on the instructions/approval of the Former Chairman. Board of Directors’ covering approval has not been
obtained for these group expenses.
The net exposure to the Bank on loans & advances given to related parties as at 31 December 2008 was Rs.373 Mn. The present Board of Directors has regularly reviewed the net exposure of the
lendings to the related companies.
126 SEYLAN BANK PLC .

43. Maturity Analysis
Bank
43 (a) An analysis of the total assets employed as at 31 st December 2008 based on the remaining period at the Balance Sheet date to the respective contractual
maturity dates is given below.
Up to 3 3 to 12 1 to 3 3 to 5 More Than Total as at
Months Months Years Years 5 Years 31.12.2008
Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000
Interest Earning Assets
Bills of Exchange 1,261,766 163,520 59,460 1,484,746
Loans & Advances 31,547,545 27,817,571 18,491,250 7,209,726 12,625,477 97,691,569
Lease Receivable 788,234 1,499,239 2,196,210 490,314 3,813 4,977,810
Balances with Banks 1,594,903 1,594,903
Short Term Funds -
Investments in Debentures - - - - - -
Treasury Bills/Bonds 6,063,951 7,112,500 10,197,453 1,463,400 24,837,304
Securities purchased under -
Resale Agreement 664,934 664,934
41,921,333 36,592,830 30,944,373 9,163,440 12,629,290 131,251,266
Non Interest Earning Assets
Cash In Hand 3,896,892 3,896,892
Balances with CBSL 6,857,039 6,857,039
Investments 184,917 390,000 - - 1,035,483 1,610,400
Investment Property 520,812 520,812
Group Balances Receivable 460,784 13,396 149,000 623,180
Property,Plant & Equipment 4,142,241 4,142,241
Income Taxation 108,273 108,273
Deferred Tax Asstes 91,582 91,582
Other Assets 4,944,560 4,944,560
17,064,859 390,000 - 13,396 5,326,724 22,794,979
Total Assets 58,986,192 36,982,830 30,944,373 9,176,836 17,956,014 154,046,245
43 (b) An analysis of the total Liabilities as at 31st December 2008 based on the remaining period at the Balance Sheet date to the respective contractual maturity
dates is given below.
Interest Bearing Liabilities
Deposits 68,360,559 20,148,946 2,048,440 2,482,660 5,975,000 99,015,605
Securities sold under re-purchase agreements 14,215,403 300,990 14,516,393
Borrowings 5,825,584 1,279,434 7,105,018
Debentures 457,100 2,118,565 1,481,235 4,056,900
Advance Received on Debenture Issue 630,565 630,565
88,401,546 20,907,036 4,167,005 4,594,460 7,254,434 125,324,481
Non Interest Bearing Liabilities
Deposits 8,435,776 487,050 370 8,923,196
Other liabilities 11,238,172 11,238,172
Dividend Payable 16,393 16,393
Group Balances Payable 1,522,029 1,963 1,523,992
Equity 7,020,011 7,010,425
21,212,370 489,013 370 - 7,020,011 28,721,764
Total Liabilities 109,613,916 21,396,049 4,167,375 4,594,460 14,274,445 154,046,245
Notes :
"Up to 3 months" Interest Bearing Liabilities includes the Bank's Savings Deposits base of Rs.32.27 Bn.
"More than 5 years" Interest Bearing Liabilities reflect the Bank's Tikiri Deposit Base of Rs.5.97 Bn.
Shareholders' funds (Equity) are classified into the "more than 5 years" category since no contractual date of maturity can be identified.
. SEYLAN BANK PLC 127

BEATING STRONGER!
Notes to the Accounts
43 Maturity Analysis
Group
43 (c) An analysis of the total assets employed as at 31 st December 2008 based on the remaining period at the Balance Sheet
date to the respective contractual maturity dates is given below.
Up to 3 3 to 12 1 to 3 3 to 5 More Than Total as at
Months Months Years Years 5 Years 31.12.2008
Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000
Interest Earning Assets
Bills of Exchange 1,261,766 163,520 59,460 - - 1,484,746
Loans & Advances 31,778,314 27,817,571 18,492,246 7,210,369 13,820,333 99,118,833
Lease Receivable 788,234 2,232,477 3,524,334 490,314 9,927 7,045,286
Balances with Banks 1,594,903 - - - - 1,594,903
Short Term Funds 119,660 - - - - 119,660
Investments in Debentures - - - - 40,600 40,600
Treasury Bills/Bonds 6,401,259 8,476,587 11,830,294 1,659,105 - 28,367,245
Securities purchased under - - - - - -
Resale Agreement 854,432 623 - - - 855,055
42,798,568 38,690,778 33,906,334 9,359,788 13,870,860 138,626,328
Non Interest Earning Assets
Cash In Hand 3,924,260 - - - - 3,924,260
Balances with CBSL 6,857,153 - - - - 6,857,153
Investments 194,715 419,213 511,614 - 216,799 1,342,341
Investment Property 520,813 - - - 1,418,065 1,938,878
Group Balances Receivable - - - - - -
Property,Plant & Equipment - - 69,931 10,771 5,536,264 5,616,966
Income Taxation 108,273 - - - - 108,273
Deferred Tax Asstes 98,951 533 - - - 99,484
Other Assets 5,560,315 105,614 30,825 - - 5,696,754
17,264,480 525,360 612,370 10,771 7,171,128 25,584,109
Total Assets 60,063,048 39,216,138 34,518,704 9,370,559 21,041,988 164,210,437
43 (d) An analysis of the total Liabilities as at 31st December 2008 based on the remaining period at the Balance Sheet date to the respective contractual maturity
dates is given below.
Interest Bearing Liabilities
Deposits 69,927,207 20,148,946 2,048,440 2,482,660 5,975,000 100,582,253
Securities sold under re-purchase agreements 17,766,924 1,329,595 951 - - 19,097,470
Borrowings 7,069,469 122,157 217,368 150,000 1,423,184 8,982,178
Debentures 197,947 457,100 2,118,565 1,481,235 - 4,254,847
Advance Received on Debenture Issue - - - 630,565 - 630,565
94,961,548 22,057,798 4,385,324 4,744,460 7,398,184 133,547,314
Non Interest Bearing Liabilities
Deposits 8,435,776 487,050 370 - - 8,923,196
Other liabilities 11,766,567 163,511 - 80,017 - 12,010,095
Deferred Taxation - - - - - -
Tax Payable 6,892 18,451 - - - 25,343
Dividend Payable 24,802 - - - - 24,802
Group Balances Payable - - - - - -
Equity - - - - 8,237,215 8,237,215
Minority Interest - - - - 1,442,472 1,442,472
20,234,037 669,012 370 80,017 9,679,688 30,663,124
Total Liabilities 115,195,585 22,726,810 4,385,694 4,824,477 17,077,872 164,210,437
Notes : Assets of Seylan Merchant Bank
Items which the Maturity dates are not available was classified under " More than 5 Years "
Liabilities of Seylan Merchant Bank
Items which the Maturity dates are not available was classified under " Up to 3 Months
Equity was classified under "More than 5 Years"
128 SEYLAN BANK PLC .

44 SEGMENT REPORTING-GROUP
Banking Leasing Treasury Property/Investments Eliminations/Unallocated Consolidated
2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007
Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000
Revenue
Interest 19,772,065 16,016,633 - - 2,949,374 2,307,479 16,325 44,230 (348,491) 49,508 22,389,273 18,417,850
Exchange 187,647 135,418 - - 443,754 463,037 - - 39,330 5,369 670,731 603,824
Lease Income/Brokering - - 674,078 643,634 - - - - - - 674,078 643,634
Commissions & Fee Income 1,687,137 1,329,206 28,704 30,306 8,369 210,994 16,411 - 135,128 (72,550) 1,875,749 1,497,956
Other 1,349,692 1,105,919 55,058 105,579 228,470 74,868 3,431 477,080 (363,230) (118,448) 1,273,421 1,644,998
Total Revenue from External
Customers 22,996,541 18,587,176 757,840 779,519 3,629,967 3,056,378 36,167 521,310 (537,263) (136,121) 26,883,252 22,808,262
Total Revenue 22,996,541 18,587,176 757,840 779,519 3,629,967 3,056,378 36,167 521,310 (537,263) (136,121) 26,883,252 22,808,262
Segment result 2,093,485 3,480,605 (23,729) 150,264 798,716 662,413 (6,109) 4,653 (2,408,089) (2,619,001) 454,274 1,678,934
Depreciation charge for the Year 263,094 216,437 13,325 8,951 5,225 12,843 31,874 32,888 447,903 381,630 761,421 652,749
Unallocated Income/Expenses 526,094 9,270
Profit from Operations (71,820) 1,669,664
Income tax expense (21,354) (535,142)
Profit After Income tax (93,174) 1,134,522
Minority Interest (259,666) (113,836)
Net Profit for the year 166,492 1,020,686
OTHER INFORMATION
Segment assets 122,910,854 127,510,850 3,607,235 3,587,094 28,923,050 18,060,368 4,057,601 4,132,805 9,787,931 7,153,014 169,286,671 160,444,131
Segement Amortisations (1,724,236) (1,555,165) (77,548) (59,267) (105,226) (90,292) (127,030) (97,663) (3,042,194) (2,686,776) (5,076,234) (4,489,163)
Total Assets 121,186,618 125,955,685 3,529,687 3,527,827 28,817,824 17,970,076 3,930,571 4,035,142 6,745,737 4,466,238 164,210,437 155,954,968
Segment liabilities 121,616,985 123,400,915 3,218,265 3,527,827 27,143,693 17,492,665 1,636,220 1,308,436 915,586 268,456 154,530,749 145,998,299
Shareholders Funds 8,237,215 8,244,774 8,237,215 8,244,774
Minority Interest 1,442,473 1,711,895 1,442,473 1,711,895
Total liabilities 121,616,985 123,400,915 3,218,265 3,527,827 27,143,693 17,492,665 1,636,220 1,308,436 10,595,274 10,225,125 164,210,437 155,954,968
Cash flows from
Operating activities (6,481,848) 7,513,437 30,606 357,164 853,870 770,970 131,534 58,557 (2,286,255) (1,040,084) (7,752,093) 7,660,044
Cash flows from - - - -
Investing activities (1,524,166) 2,346,526 (33,743) 91,466 311,009 (2,083,307) (198,756) (126,356) (558,868) (480,871) (2,004,524) (252,542)
Cash flows from
Financing activities 5,940 (104,543) 18,922 (282,125) 12,327,973 (46,053) 92,152 19,548 (1,019,511) 2,427,806 11,425,476 2,014,633
Capital Expenditure (1,456,009) (567,506) (20,818) (8,007) (1,770) (2,321) (3,413) (20,012) (16,607) (734,442) (1,498,617) (1,332,288)
. SEYLAN BANK PLC 129

BEATING STRONGER!
Ten Year Summary
Ten Year Summary of Financial Statements
(Rs.000)
Year Ended 31st December 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999
Reclassified Restated Restated Restated
Trading Results
Gross Income 25,246,209 21,079,885 17,183,481 13,090,715 10,072,376 9,973,644 8,988,278 8,475,059 6,745,575 5,823,794
Profit Before Income Tax 155,241 1,439,069 1,606,882 1,061,033 478,291 705,953 677,989 278,435 256,536 181,532
Taxation - 515,880 718,814 373,200 69,648 114,539 10,021 5,928 10,932 9,729
Profit after Taxation 155,241 923,189 888,068 687,833 408,643 591,414 667,968 272,507 245,604 171,803
Dividends Proposed (Ordinary) - Rs.1.50 Rs.1.50 20% 16% 15% 15% 12.5% 12% 10%
Per Share Per Share
Balance Sheet
ASSETS
Cash & Short Term Funds 30,994,033 26,824,927 21,833,056 17,322,763 12,080,206 15,669,097 11,673,027 10,634,811 10,582,643 10,846,407
Statutory Deposit with
Central Bank of Sri Lanka 6,857,039 7,915,660 6,913,224 5,908,292 5,050,665 3,951,940 3,866,450 3,351,904 3,617,909 3,197,215
Investments (Including
Investment Properties) 1,182,683 1,370,762 333,960 333,755 649,117 1,076,728 1,201,947 1,075,990 658,291 451,192
Bills of Exchange 1,484,746 1,967,091 1,827,824 2,154,916 2,210,842 1,745,701 1,652,786 1,502,995 2,009,411 787,115
Loans, Advances & Leases 102,669,379 95,684,286 91,431,102 79,314,465 60,613,807 49,903,047 42,998,354 37,254,770 33,408,337 27,294,611
143,187,880 133,762,726 122,339,166 105,034,191 80,604,637 72,346,513 61,392,564 53,820,470 50,276,591 42,576,540
Investment in Subsidiary 948,529 1,093,407 1,048,559 1,029,656 1,095,231 1,435,231 1,444,275 1,444,275 1,441,011 1,000,644
Other Assets
(Including Income Taxation) 5,767,595 4,954,206 3,783,353 4,648,548 3,698,682 4,285,255 2,961,309 3,090,017 1,691,530 1,677,526
Property, Plant & Equipment 4,142,241 3,690,014 3,135,030 2,896,049 2,785,092 1,984,070 1,980,472 1,947,968 2,518,481 2,058,093
154,046,245 143,500,353 130,306,108 113,608,444 88,183,642 80,051,069 67,778,620 60,302,730 55,927,613 47,312,803
LIABILITIES
Deposits from Customers 107,938,801 111,299,612 100,078,809 85,833,954 68,301,154 59,362,955 52,431,165 47,859,511 41,695,054 37,079,882
Borrowings & Debentures 26,308,876 14,775,780 13,167,204 13,037,404 6,648,055 8,606,998 6,355,156 4,400,760 6,947,041 4,523,237
Other Liabilities 12,762,164 9,901,004 9,860,078 9,998,624 9,296,381 7,838,625 6,106,586 5,796,800 5,291,888 3,906,187
Taxation - 472,306 817,297 105,420 (187,856) (145,304) (46,339) (55,800) (32,156) (19,885)
Dividends 16,393 15,416 14,442 6,763 21,716 22,396 85,006 63,426 55,588 46,516
147,026,234 136,464,118 123,937,830 108,982,165 84,079,450 75,685,670 64,931,574 58,064,697 53,957,415 45,535,937
EQUITY
Stated Capital - Share Capital 1,705,101 1,705,101 1,705,101 869,501 869,501 869,501 469,501 446,141 435,600 435,600
- Share Premium 837,319 837,319 837,319 674,922 696,235 713,399 183,167 194,485 202,144 202,144
Reserve Fund 479,754 468,250 422,091 377,688 343,296 303,146 289,158 275,799 270,349 265,437
Reserves 3,997,837 4,025,565 3,403,767 2,704,168 2,195,160 2,479,353 1,905,220 1,321,608 1,062,105 873,685
7,020,011 7,036,235 6,368,278 4,626,279 4,104,192 4,365,399 2,847,046 2,238,033 1,970,198 1,776,866
TOTAL LIABILITIES &
EQUITY 154,046,245 143,500,353 130,306,108 113,608,444 88,183,642 80,051,069 67,778,620 60,302,730 55,927,613 47,312,803
Commitments and
Contingencies 26,778,515 24,335,965 22,924,450 22,942,795 20,983,027 17,743,062 13,206,586 10,083,442 10,274,265 8,266,319
130 SEYLAN BANK PLC .

Value Added Statement
Value added is the wealth the Bank has been able to create by providing clients with a quality, value added service.
2008 2007
Rs.'000 % Rs.'000 %
Value added
Income earned by providing banking services 24,599,015 20,275,211
Cost of services (18,193,869) (13,853,118)
Value added by banking services 6,405,146 6,422,093
Non-banking income 647,194 804,674
Provision for bad debts (2,467,187) (1,365,075)
4,585,153 5,861,692
Value allocated
To employees
Salaries, wages and other benefits 3,361,212 73.31 3,173,560 54.14
To providers of Capital
Dividends to shareholders 255,900 5,58 255,232 4.35
To Government
Income tax - 515,880
Stamp Duty 65,053 50,201
VAT 38,022 2,294
VAT on Profits 243,055 584,033
Debit Tax 14,673 360,803 7.87 9,749 1,162,157 19.83
To Expansion and growth
Surplus/(Deficit) (100,659) (2.20) 667,957 11.40
Depreciation 707,897 607,238 15.44 602,786 1,270,743 10.28
4,585,153 100.00 5,861,692 100.00
. SEYLAN BANK PLC 131

BEATING STRONGER!
Investor Information
Twenty Largest Shareholders as at 31st December 2008
2008 2007
Ordinary Voting Shares No. of Shares % No. of Shares %
1. Dollar Distribution (Pvt) Ltd 2,178,000 5.00 2,178,000 5.00
2. Dr T Senthilverl 2,178,000 5.00 2,178,000 5.00
3. Seyfest (Private) Limited 2,177,996 5.00 2,177,996 5.00
4. Seyshop (Private) Limited 2,177,900 5.00 2,177,900 5.00
5. Seybest (Private) Limited 2,177,900 5.00 2,177,900 5.00
6. Sesot (Private) Limited 2,177,900 5.00 2,177,900 5.00
7. Esots (Private) Limited 2,160,857 4.96 2,160,857 4.96
8. Ceylinco Finance PLC 2,140,226 4.91 2,140,226 4.91
9. Ceylinco Insurance PLC 1,756,460 4.03 1,756,460 4.03
10. Ceylinco Limited 1,680,896 3.86 1,680,896 3.86
11. National Savings Bank 1,510,900 3.47 1,510,900 3.47
12. The Finance Company PLC 1,473,223 3.38 1,473,223 3.38
13. Ceylinco Developers Ltd 1,394,400 3.20 1,394,400 3.20
14. Softlogic Holdings (Pvt) Ltd 1,200,100 2.76 1,200,000 2.76
15. Sotse (Pvt) Ltd 1,002,331 2.30 1,002,331 2.30
16. Lanka Milk Foods (CWE) Limited 769,380 1.77 769,380 1.77
17. Global Recruitment (Private) Ltd 585,900 1.34 394,500 0.91
18. Mr R K Seenivasagam 538,800 1.24 538,800 1.24
19. Dr J L B Kotelawala 529,525 1.22 529,525 1.22
20. Mr S K Sivakumar 498,700 1.14 498,700 1.14
Sub Total 30,309,394 69.58 30,117,894 69.15
Balance Shares held by other voting shareholders 13,250,606 30.42 13,442,106 30.85
(7,812 shareholders) (7,942 shareholders)
Total Voting shares 43,560,000 100.00 43,560,000 100.00
132 SEYLAN BANK PLC .

Investor Information
2008 2007
Ordinary Non-Voting Shares No. of Shares % No. of Shares %
1. Dr T Senthilverl 28,623,400 23.17 10,441,400 8.45
2. Pershing LLC S/A Averbach Grauson & Co 10,119,200 8.19 - -
3. Elgin Investments Limited 6,000,800 4.86 6,000,800 4.86
4. Mr S V Somasunderam 5,591,900 4.52 9,468,800 7.66
5. National Savings Bank 4,540,900 3.67 4,540,900 3.67
6. Mr T D R Karunaratne 4,000,000 3.24 4,000,000 3.24
7. Ceylinco Finance PLC 3,994,910 3.23 3,994,910 3.23
8. Ceylinco Insurance PLC A/C No. 1 (Life Fund) 3,283,962 2.66 3,283,962 2.66
9. Akbar Brothers Ltd A/c No.1 2,609,900 2.11 2,634,900 2.13
10. Bank of Ceylon A/c Ceybank Unit Trust 1,839,500 1.49 1,839,500 1.49
11. Ceylinco Insurance PLC 1,756,460 1.42 1,756,460 1.42
12. Mr H L Rikhye 1,642,900 1.33 1,642,900 1.33
13. Mr N R Somaiya 1,248,500 1.01 1,248,500 1.01
14. Belmont Agents Limited 1,200,000 0.97 1,000,000 0.81
15. Employees’ Trust Fund Board 1,099,400 0.89 1,099,400 0.89
16. Sinhaputhra Finance Ltd 1,083,000 0.88 1,083,000 0.88
17. Spice of Life (Private) Ltd 780,400 0.63 750,400 0.61
18. Lanka Milk Foods (CWE) Ltd 769,380 0.62 769,380 0.62
19. Sanasa Development Bank Ltd 613,400 0.50 613,400 0.50
20. Asian Alliance Insurance PLC A/C 02 (Life Fund) 606,800 0.49 - -
Sub Total 81,404,712 65.88 56,168,612 45.46
Balance Shares held by other Non-voting shareholders 42,155,288 34.12 67,391,388 54.54
(5,642 shareholders) (5,858 shareholders)
Total Non-voting shares 123,560,000 100.00 123,560,000 100.00
. SEYLAN BANK PLC 133

BEATING STRONGER!
Investor Information
Analysis of the Distribution of Shareholders as at 31st December 2008
ORDINARY (VOTING) SHARES
ORDINARY (NON-VOTING) SHARES
Range of Shareholding No. of No. of (%) of No. of No. of (%) of
Shareholders Shares Shareholding Shareholders Shares Shareholding
1 – 1,000 6,288 1,550,442 3.56 2,770 1,295,216 1.05
1,001 – 5,000 1,191 2,578,079 5.92 1,718 4,720,219 3.82
5,001 – 10,000 149 1,078,876 2.48 482 3,723,636 3.01
10,001 – 50,000 142 2,790,004 6.40 514 11,421,205 9.24
50,001 – 100,000 26 1,861,338 4.27 86 6,299,233 5.10
100,001 – 500,000 18 4,476,467 10.28 70 13,521,879 10.95
500,001 – 1,000,000 3 1,837,705 4.22 6 3,943,880 3.19
1,000,001 - & Above 15 27,387,089 62.87 16 78,634,732 63.64
TOTAL 7,832 43,560,000 100.00 5,662 123,560,000 100.00
Resident/Non Resident
Resident 7752 43,296,365 99.39 5609 102,457,980 82.92
Non-Resident 80 263,635 0.61 53 21,102,020 17.08
Individuals/Institutions
Individuals 7577 12,713,352 29.19 5466 73,615,072 59.58
Companies 255 30,846,648 70.81 196 49,944,928 40.42
Ordinary Shares (Quoted)
Voting (SEYB-N)
Non-Voting (SEYB-X)
2008 2007 2008 2007
No. of shares issued 43,560,000 43,560,000 123,560,000 123,560,000
Dividends (Rs.per share) - 1.50 - 1.50
Share prices
Highest (Rs.) 34.00 42.00 10.00 10.50
Lowest (Rs.) 15.75 25.00 04.90 07.75
Last traded (Rs.) 28.50 32.00 06.00 08.00
Percentage of Public Holdings 99.96 % 75.28 % 99.89 % 92.34%
134 SEYLAN BANK PLC .

Debentures (Quoted)
Debentures 2006/2011
(Listed on CSE in July 2006)
(SEYB D86, D87 & D88) Monthly Interest Annual Interest Floating
(13%) (13.5%) rate of interest
payable annually
2008 2007 2008 2007 2008 2007
No. of Debentures issued 7,646,400 4,620,800 305,950
Debenture Prices
Highest (Rs.) 74.00 99.91 75.69 80.00 Not 80.00
Lowest (Rs.) 74.00 71.00 75.69 80.00 traded 80.00
Last traded (Rs.) 74.00 71.00 75.69 80.00 in 2008 80.00
Debentures 2007/2012 – Issue 1
(Listed on CSE in June 2007)
(SEYB D118, D119 & D120) Monthly Interest Annual Interest Floating
(15.75%) (16.75%) rate of interest
payable annually
2008 2007 2008 2007 2008 2007
No. of Debentures issued 2,916,200 4,275,450 302,350
Debenture Prices
Highest (Rs.) 74.14 100.00 84.00 100.00 82.44 Not
Lowest (Rs.) 74.14 100.00 84.00 95.99 82.44 traded
Last traded (Rs.) 74.14 100.00 84.00 100.00 82.44 in 2007
Debentures 2007/2012 – Issue 2
(Listed on CSE in January 2008)
(SEYB D127, D129 & D130)
Monthly Interest Annual Interest Floating Floating
(17%) (18%) rate of interest rate of interest
payable quarterly
payable annually
2008 2007 2008 2007 2008 2007 2008 2007
No. of Debentures
issued 2,089,550 2,962,400 433,350 107,550
Debenture Prices
Highest (Rs.) 99.47 Not 85.00 Not Not traded Not traded
Lowest (Rs.) 99.47 traded 85.00 traded during the during the
Last traded (Rs.) 99.47 in 2007 85.00 in 2007 years 2007 years 2007
& 2008 & 2008
. SEYLAN BANK PLC 135

BEATING STRONGER!
Investor Information
Current Previous**
Period Comparative
Period
31.12.2008 31.12.2007
Interest rate of comparable Government security 18.64% 17.63%
Debt / Equity ratio 0.68 0.79
Interest Cover 1.21 3.22
Quick asset ratio 0.73 0.74
Interest Yield as at date of last trade
2003/2008 Issue
Annual Interest * * *
Monthly Interest * * *
Floating Interest * * *
2006/2011 Issue
Annual Interest (29/09/2008) / (24/08/2007) 17.84% 16.88%
Monthly Interest (03/10/2008) / (19/10/2007) 18.65% 19.44%
Floating Interest * / (24/08/2007) * 18.75%
2007/2012 Issue I
Annual Interest (17/09/2008) / (06/12/2007) 19.94% 16.75%
Monthly Interest (29/09/2008) / (06/12/2007) 22.84% 16.94%
Floating Interest (08/10/2008) / * 23.05% *
2007/2012 Issue II
Annual Interest (14/08/2008) / * 21.18% *
Monthly Interest (02/12/2008) / * 18.49% *
Floating Interest * * *
Yield to maturity of trade done on
2003/2008 Issue
Annual Interest * * *
Monthly Interest * * *
Floating Interest * * *
2006/2011 Issue
Annual Interest (29/09/2008) / (24/08/2007) 26.82% 21.56%
Monthly Interest (03/10/2008) / (19/10/2007) 26.52% 25.21%
Floating Interest * / (24/08/2007) * 23.31%
2007/2012 Issue I
Annual Interest (17/09/2008) / (06/12/2007) 23.53% 16.64%
Monthly Interest (29/09/2008) / (06/12/2007) 27.06% 15.75%
Floating Interest (08/10/2008) / * 26.90% *
2007/2012 Issue II
Annual Interest (14/08/2008) / * 23.79% *
Monthly Interest (02/12/2008) / * 17.19% *
Floating Interest * * *
* No trading during the period
** Comparative period - Immediate preceding financial year
136 SEYLAN BANK PLC .

Summary of Performance Indicators
Measure 2008 2007 2006 2005 2004
Reclassified Restated
SIZE
Assets Growth % 7.35 10.13 14.70 28.83 10.16
Contingent / (Total Assets+Contingent) % 10.35 11.33 12.29 14.36 19.22
Interest Earning Assets / Total Assets % 84.17 84.75 86.06 84.27 81.70
Cash & Reserves/Total Assets % 8.02 7.50 7.57 7.89 8.97
Risk Weighted Assets Growth % 23.00 5.37 19.04 22.22 12.62
PROFITABILITY
Return on Average Assets % 0.10 0.67 0.73 0.68 0.49
Return on Average Equity % 2.22 13.84 16.25 15.76 9.65
Net Profit / (Total Assets +Commitment & Contingencies) % 0.09 0.55 0.58 0.52 0.37
Net Interest Margin (NII / Avg Int Earn. Assets) % 5.74 5.80 5.90 6.28 5.70
Net Interest Income / Total Income % 28.56 32.18 35.67 40.22 38.88
Cost to Income Ratio % 73.67 66.31 59.08 56.76 62.01
Average Interest Yield % 17.07 15.06 13.56 12.56 11.37
Average Interest Cost % 11.06 9.21 7.54 6.07 5.45
Interest Rate Spread % 6.01 5.85 6.02 6.50 5.93
Int Yield on Customer Advances % 17.43 16.48 14.55 13.50 12.28
Int Cost on Customer Deposits % 11.33 8.71 7.07 5.78 5.04
Spread on Customer Deposits & Advances % 6.11 7.77 7.48 7.72 7.24
Profit Handout (Note 1) % 4.37 27.72 28.74 49.02 32.72
Growth Rate of Equity % (0.23) 10.49 37.65 12.72 (5.98)
Earnings per Share LKR 0.90 5.50 6.69 8.20 4.85
Ordinary Dividends per Share (Note 1) LKR - 1.50 1.50 2.00 1.60
ASSET QUALITY
Loss Provisions LKR Mn. 6,560.27 4,972.23 4,558.57 4,266.81 4,430.70
Provision Recoveries LKR Mn. 588.27 720.47 873.84 599.95 195.46
Provisions/(Loans+Bills+Leases) % 5.74 4.69 4.53 4.85 6.36
NPL with Interest in Suspense LKR Mn. 19,515.62 16,345.32 13,950.66 13,501.64 13,059.00
NPL with Interest in Suspense / Gross Loans % 17.00 15.39 13.85 15.34 18.74
Interest In Suspense on Advances LKR Mn. 3,522.69 3,302.17 2,724.67 2,290.63 2,439.11
NPL excluding IIS LKR Mn. 15,992.93 13,043.15 11,225.99 11,211.00 10,619.89
NPL excluding IIS / Gross Loans % 14.38 12.68 11.45 12.74 15.24
Int In Suspense / Gross Loans % 3.07 3.11 2.70 2.60 3.50
Net Assets Value per Share LKR 41.80 41.90 37.90 55.36 49.12
CAPITAL ADEQUECY
Leverage on Share Capital Times 20.94 19.45 19.46 23.56 20.49
Leverage on Capital Funds(Including Debentures) Times 12.16 10.46 10.69 12.31 11.04
Percentage Earnings Retained (Note 1) % 95.63 72.28 71.26 50.98 67.28
Equity / (Deposits, Borrowings & Securities
Sold Under Re-Purchase Agreement) % 5.39 5.81 5.84 4.87 5.72
Equity / Total Assets % 4.54 4.88 4.86 4.07 4.65
Equity / (Loans+Bills+Leases) % 6.71 7.17 6.79 5.68 6.53
LIQUIDITY & FUNDING
(Loans+Bills+Leases) / (Deposits, Borrowings & Securities
Sold Under Re-Purchase Agreement) % 80.39 80.98 85.98 85.79 87.59
Customer Deposits/ (Deposits,Borrowings & Debentures) % 80.78 88.28 88.37 86.81 91.13
Liquid Assets / Total Assets % 24.69 24.21 22.06 20.40 19.68
Liquid Assets / (Deposits, Borrowings & Securities
Sold Under Re-Purchase Agreement) % 29.36 28.81 26.50 24.40 24.19
Net Lending or (Borrowings) in Call Money Market LKR Mn. (4,449.11) (4,429.60) (2,537.97) (3,320.61) (858.51)
OTHER DATA
Number of Banking Centres 114 114 116 116 112
Number of Staff Members 3,923 3,871 3,934 3,700 3,280
Profits per Staff LKR ‘000 39.57 238 226 186 117
Number of Ordinary Shares - Voting ‘000 43,560 43,560 43,560 43,560 43,560
- Non Voting ‘000 123,560 123,560 123,560 40,000 40,000
Share Prices as at 31st December - Voting LKR 28.50 32.00 35.00 36.75 30.00
- Non Voting LKR 6.00 8.00 9.75 16.25 16.50
Note 1: Dividends for year 2008 are accounted for as per the Accounting Standard SLAS 12 (Revised).
. SEYLAN BANK PLC 137

BEATING STRONGER!
Branch Network
Ambalangoda
Ampara
Anuradhapura
Attidiya
Awissawella
Badulla
Balangoda
Bandaragama
Bandarawela
Batticaloa
Beliatta
Bogawanthalawa
Boralesgamuwa
Borella
Ceylinco House
Chilaw
Cinnamon Gardens
Colombo South
Dehiattakandiya
Dehiwela
Embilipitiya
First City Office
Free Trade Zone
Galle
Gampaha
Gampola
Ganemulla
Grandpass
Hambantota
Hatton
Havelock Town
Hingurakgoda
Homagama
Horana
Ja-ela
Jaffna
Kadawatha
Kalubowila
Kalutara
Kandy
Kattankudy
Katuneriya
Kegalle
Kekirawa
Kiribathgoda
Kochchikade
Koggala
Kollupitiya
Kottawa
Kuliyapitiya
Kurunegala
Maharagama
Malabe
Manampitiya
Maradagahamula
Maradana
Matale
Matara
Mathugama
Mawanella
Meegoda
Millennium
Mirigama
Moratuwa
Mount Lavinia
Nawala
Nawalapitiya
Negombo
Nittambuwa
Nugegoda
Nuwara Eliya
Old Moor Street
Panadura
Pelmadulla
Pettah
Polonnaruwa
Puttlam
Raddolugama
Ratnapura
Ruwanwella
Sarikkamulla
Savings & Travel
Soysapura
Thalawakele
Tissamaharamaya
Trincomalee
Vavuniya
Warakapola
Wattala
Welimada
Weliveriya
Yakkala
EXTENSION OFFICES
Baduraliya
Beruwala
Dambulla
Hasalaka
Ingiriya
Katugastota
Kirindiwela
Kirulapone
Kotagala
Kotahena
Kotikawatte
Kotiyakumbura
Mawathagama
Mawela
Minuwangoda
Pallekele
Piliyandala
Ranpokunagama
Samanthurai
Veyangoda
Wijerama
Yatiyantota
138 SEYLAN BANK .

Ambalangoda - AMB
No. 24 A, Galle Road,
Ambalangoda
0912258010-11, 0912258710
0912258010(f)
Anuradhapura - ANP
No.250, Main Street,
Anuradhapura
02522-24649, 2236372
025-2224547, 2236370
0252223116(f)
Attidiya - ATD
No.214, Main Road,
Attidiya, Dehiwela
2738453, 2729696, 4203565
2722967(f)
Awissawella - AWL
No. 71, Ratnapura Road,
Awissawella
0362222007, 2232265
0365673333 - Direct
0362222009(f)
Ampara - AMP
Regal Cinema Complex,
No.129, D S Senanayake
Street, Ampara
063-22-24897, 063-22-24898
063-22-24899
Balangoda - BAL
No.123, Barnes Ratwatte
Mawatha, Balangoda
0452287107, 0452287007
06522245871, 0452287344(f)
Batticaloa - BCL
No. 06, Lloyds Avenue,
Batticaloa
0652224419, 0652224587
0652224353(f)
Bandaragama - BDG
No.17A, Horana Road,
Bandaragama
0382290706, 0382290460
0382291125(f)
Badulla - BDL
No. 10, Cocowatta Road,
Badulla
0554499524, 0552222073,
0552223773, 0552223414
0552222884(f)
Bandarawela - BDW
No. 240, Badulla Road,
Bandarawela
0572223144, 0572231085
0572222964(f)
Bogawanthalawa - BGW
No.79, Main Street,
Bogawanthalawa
0522267576, 0522267578(f)
Borella - BLA
No. 1119, Maradana Road,
Borella
2678189 - 193, 2681194(f)
Beliatta - BLT
No. 50, Walasmulla Road,
Beliatta
0472251478, 0472243461
0472243441, 0472243619(f)
Boralesgamuwa - BOR
No. 24, Kesbewa Road,
Boralesgamuwa
2518867, 2517550
2509823 - 2517548-9 509526(f)
Cinnamon Gardens - CGD
No. 4, Baptist Chapel Road,
Colombo 07
2683726, 2694966, 2697552,
2695214, 5340347, 2683725(f)
Chilaw - CHW
No. 46, Kurunegala Road,
Chilaw
0322222121, 2223455,
2223499, 4860550
0322223279(f)
Colombo South - CLS
No. 30 Galle Road,
Colombo 06
2593405-7, 2594856, 4510594,
2510524, 2593406(f)
Ceylinco House - CHB
No. 69 Janadhipathi Mawatha,
Colombo 01
4714655, 2714651, 2445840-3,
2447990(f)
Dehiwela - DEH
No. 166D, Galle Road, Dehiwela
2727844, 2738843, 2726395,
4201756, 2739128(f)
Dehiattakandiya - DKY
No. 83/84 Main Street,
Dehiattakandiya
0272250268, 2250034-5
0272250034(f)
Embilipitiya - EMB
53, New Town Road,
Embilipitiya
0472230340 – 2, 0472261187
0472230342(f)
First City Office - FCO
No. 33, Sir Baron Jayathilake
Mawatha, Colombo 01
2437901-7, 2329525
4725005-9, 2439834 &
2329509(f)
Free Trade Zone - FTZ
Unit No. 3 Plaza Complex, KIPZ,
Katunayake
2252566-7, 2252567(f)
Gampaha - GAM
No. 1J, Bauddhaloka Mawatha,
Gampaha 0332222618,
2226511 2227525, 2222656
0332222934(f)
Galle - GLE
No. 34, 1st Cross Street, Talbot
Town, Galle
0912234642 (DataLine)
091-2234542, 091-2232242
091-2223514, 0912234542(f)
Gampola - GMP
No. 44 Kandy Road, Gampola
0812352740-2, 4485435
0812352740(f)
Ganemulla - GNM
No.187/1, Kirindiwitta Road,
Ganemulla
0332260230, 2260738
0332260737(f)
Grandpass - GNP
No. 401,Prince of Wales
Avenue, Colombo 14
2331726, 2451061, 4610175
2347774(f)
Hambantota - HBT
No. 32 & 34 Wilmot Street,
Hambantota
0472220507, 2220518
0472220519(f)
Hatton - HTN
No. 42, Dunbar Road,
Hatton
051222234, 2222347
0512222682(f)
Homagama - HMG
No. 94B, High Level Road,
Homagama
4442022, 4442021, 2855065
2855066(f)
Hingurakgoda - HNG
No. 13 & 14 Airport Road,
Hingurakgoda
0272246242, 0272246087
0272246043(f)
Horana - HOR
No. 49 Panadura Road, Horana
0342261176, 0342261018
0342262963, 0342263518(f)
Havelock Town - HVL
No. 164,166 Havelock Road,
Colombo 05
2596550-3, 2596549 &
2597498(f)
Ja-ela - JLA
No.74, Negombo Road,
Ja-ela
2237421, 5558373, 2237416(f)
. SEYLAN BANK 139

BEATING STRONGER!
Branch Network
Jaffna - JFN
No. 560- 562,
Hospital Road, Jaffna
0212223755, 0212223047(f)
Kalubowila - KAL
No. 32, S De S Jayasinghe
Mawatha, Kalubowila
4202648, 4201550, 5557567
2822870 (f)
Kiribathgoda - KBG
No. 52 Kandy Road,
Kiribathgoda
2912378, 2910581, 4936902,
4696450, 2912379 (f)
Kochchikade - KCH
66. Chilaw Road, Kochchikade
0312277580, 0312277661
0312277341(f)
Kadawatha - KDW
No. 28B Ganemulla Road,
Kadawatha
2925594 –5, 4816821,
2925596(f)
Kandy - KDY
No. 65 Kings Street, Kandy
08122233484, 22232767
08122232322(f)
Kegalle - KEG
No. 143, Colombo Road,
Kegalle
0352222007, 2223537 - 8
0352222006(f)
Koggala - KGG
No.9, Export Processing Zone,
Koggala, Habaraduwa
0912283389 - 90
0912283389(f)
Kurunegala - KGL
No. 54, Colombo Road,
Kurunegala
0372223581- 2, 0372224276 - 8
0372224277(f)
Kekirawa - KKW
No. 6, Yakalla Road, Kekirawa
0252264590 -1 0252264592(f)
Kalutara - KLT
No.338 Main Street, Kalutara
0342223175, 0342225035,
0342225037, 0342223033(f)
Kottawa - KOT
No. 34, Nawsiri Building,
High Level Road, Kottawa
2842682 - 3, 4304784,
2851292(f)
Kollupitiya - KPY
No. 428 R A De Mel Mawatha,
Colombo 03
2576911, 2576911 - 3
2565172, 2564084
2577913(f), 2576914(f)
Katuneriya - KTN
No. 99/1,
Colombo-Chilaw Road,
Katuneriya
0312256939, 2257764
0312255209(f)
Kattankudy - KKY
No.230, Main Street,
Kattankudy
0652246625, 0652247456
0652246696 (f)
Kuliyapitiya - KUL
No. 137, Hettipola Road,
Kuliyapitiya
0374696450, 0372281510
0372281450, 0374696450 (f)
Maradagahamula - MDG
No. 150, Divulapitiya Road,
Maradagahamula
0312246377, 2246096
0312246378(f)
Maradana - MDN
No. 250, Sri Sangaraja Mawatha,
Colombo 10
2334184 - 5, 2473773
2473280 (f)
Maharagama - MHG
No. 201, High Level Road,
Maharagama
2850648, 2850629
2841997 - 8, 2850649 (f)
Malabe - MLB
No. 821 A, Kaduwela Road,
Malabe
4404323, 2560403, 2561415
2561414(f)
Mount Lavinia - MLV
No. 198 Galle Road, Ratmalana
2731266 - 7, 2 723272
4213189, 2213194 2723271(f)
Moratuwa - MOR
No. 509, Galle Road,
Rawathawatta, Moratuwa
2647900 - 2, 2642953 - 4
2645430, 4211244 2647901(f)
Manampitiya - MNP
Main Street, Manampitiya
0272226585, 0272224455 (f)
Mawanella - MWN
No. 21 Court Road, Mawanella
0352246007, 2246988
0352246989(f)
Matara - MTB
No. 45 Anagarika Dharmapala
Road, Matara
0412221181 - 2, 0412222393
0412223064(f)
Mathugama - MTG
No 6, Aluthgama Road,
Mathugama
0342247544 –5 0342247091(f)
Matale - MTL
No. 166 - 168, Trincomalee
Street, Matale
0662223241 - 2, 0662232934
0662232935 - 6, 4460123
0662223215 & 0662232935(f)
Mirigama - MRG
No. 42, Danowita Road,
Mirigama
0332273000 - 3 0332273000(f)
Millennium - MLN
No. 90 Galle Road, Colombo 03
2456135, 2456103, 2456110
2456144, 2456109, 2452502
2452506(f)
Meegoda - MEG
Meegoda Economic Centre
Meegoda
2456135, 2456103, 2456110
2456144, 2456109, 2452502
2830820, 2452506(f)
Negombo - NEG
No. 141, Rajapakse Broadway,
Negambo
0312224336 - 7, 0312224302
0312224334, 0312224335(f)
Nawalapitiya - NLP
No.77, 77/1, Dolosbage Road,
Nawalapitiya
0542222018, 0542222056 - 7
0542222018(f)
Nugegoda - NUG
No.211, High Level Road,
Nugegoda
2811180 - 1, 2829054
2811182(f)
Nuwara Eliya - NLY
No.48, Park Road, Nuwara Eliya
0522223026, 2223593
0522234338, 0522223002(f)
Nawala - NWL
No.48A, Narahenpita Road,
Nawala
4547397, 4547855, 2807329
2807331, 2806727, 4547411
2807330, 2805779 (f)
Nittambuwa - NIT
No. 195/1, Colombo Road,
Nittambuwa
0332296650
Old Moor Street - OMS
No. 315 – 317, Old Moor Street,
Colombo 12
2421483, 5354658, 2331774 (f)
Pettah - PET
No. 96, Main Street,
Colombo 11
2337823 –6, 2441471,
4715982, 2718341, 4716455,
2337826(f)
140 SEYLAN BANK .

Panadura - PND
No. 401, Galle Road, Panadura
0382233172-4,
0382238355, 0382235304(f)
Polonnaruwa - POL
Lake View Building, Lake View
Junction, Polonnaruwa
0272223168, 2224590
0272223169(f)
Puttlam - PTL
No. 56, Kangani Kulam Street,
Puttlam
0322265580, 2265194
0322265469(f)
Pelmadulla - PEL
No. 17 Galwatta Road,
Pelmadulla.
0452275037, 0452275527 (f)
Raddolugama - RDL
171, National Housing Scheme,
Raddolugama
2292778, 2292251 - 2
2292372(f)
Ratnapura - RNP
No. 6 Goodshed Road,
Ratnapura
0452223111, 2223730
0452231730, 0452222111(f)
Ruwanwella - RWN
No.52, Main Street, Ruwanwella
0362267445/7(f)
Sarikkamulla - SKL
No. 97 Galle Road,
Sarikkamulla, Panadura
0382235264 - 5, 0382233082(f)
Savings & Travel - STB
No. 202 – 204, Main Street,
Colombo 11
4718344 - 5, 2345797 2347138 (f)
Soysapura - SYS
No. 164/2, Soysapura,
Moratuwa
2622756, 5524673 2612003(f)
Tissamaharamaya - TSA
No. 547, Debarawewa,
Tissamaharama
0472237161 - 2
0472237458 - 9 0472237163(f)
Thalawakele - TLK
No.08, Kotmale Road,
Thalawakele
0522258635, 0522258638/9(f)
Trincomalee - TCO
No. 289, 289/1, Central Road,
Trincomalee
0262227701 & 2(f)
Vavuniya - VNY
No. 45, 2nd Cross Street,
Vavuniya
0242222633 - 4, 2220077
0242222933(f)
Warakapola - WKP
No. 192, Main Street,
Warakapola
0352267628 - 9 0352267123(f)
Wattala - WTL
No. 276, Negombo Road,
Wattala
2933589 - 90, 2931603(f)
Welimada - WLM
No. 107, Nuwaraeliya Road,
Welimada
0572245617, 0572245350 (f)
0572245395
Weliveriya - WLW
Seylan Bank Ltd, Weliweriya
Branch, New Kandy Road,
Weliveriya
0332255021, 0332255291
0332255355(f)
Yakkala - YKL
No. 104, Kandy Road, Yakkala
0332222492, 0332226378
0332233526, 0332233527(f)
EXTENSION OFFICES
Baduraliya - BDR
No. 92, Ratnapura Road,
Baduraliya
0342246733
Beruwala - BRW
No.82, Galle Road,Beruwala
0342279887, 0342279888 (f)
Dambulla - DBL
No. 601, Anuradhapura Road,
Dambulla
0662283022-3
Hasalaka - HSK
No.95, 96,
Co-operative Society Building
Kandy Road, Hasalaka
055 2258324, 055 2258325(f)
Ingiriya - ING
No. 23, Central Building
Padukka Road, Ingiriya
0342269754, 0342269900
Katugastota - KTU
No.444, Katugastota Road
Kandy
081-2212870
Kirindiwela - KRW
No. 89, Gampaha Road,
Kirindiwela
0334923886
Kirulapone - KRP
No.280, High Level Road,
Colombo 06
0112829054, 011-2768432 (f)
Kotagala - KTG
190, Wootton Bazaar, Kotagala
051-2222797(f), 051-2222844
Kotahena - KTH
No.310/2, George R De Silva
Mawatha, Colombo 13
0112399660, 0112393033(f)
Kotikawatte - KTW
No. 260/A, I.D.H. Road
Kotikawatta
0112418863
Kotiyakumbura - KTK
No. 5, Main Street, Kotiyakumbura
0352289035, 0352289067(f)
Maswela - (MWL)
No.53, Mawela, Maswela
0814927683
Mawathagama - MWG
No. 56, Kurunegala Road,
Mawathagama
0372298666-7
Minuwangoda - MNG
No.40, Cargills Building,
Colombo Road, Minuwangoda
0112299004-5
Pallekele - PLK
BOI, Pallekele
0812423135
Piliyandala - PLY
No.85/1, Horana Road,
Piliyandala
0112604982
Ranpokunagama - RPK
No.1, Maduwegedara
Nittambuwa
0332282241-2
Samanthurai - SMT
No.113, Hijra Junction
1st Street, Samanthurai
067-2261284, 067-2261285(f)
Veyangoda - VNG
No. 177 Main Street, Veyangoda
0332295050 –1
Wijerama - WJR
525, High Level Road, Wijerama
Junction, Gangodawila, Nugegoda
011-4301878
Yatiyantota - YTN
No.51/1/2, Ginigathhena Rd
Yatiyantota
0362267480, 0362267481(f)
. SEYLAN BANK 141

Country Profile & Economic Indicators
Country : The Democratic Socialist
Republic of Sri Lanka
Capital : Sri Jayawardenapura, Kotte
Comercial Capital : Colombo
Population : 20.21 Mn a
Population Density : 322
Land Area : 62,705 Sq. m (Excluding Inland
Water)
Per capita Income : US$ 2,014
Human Development Index : 0.743
Literacy Ratio (2006) : 90.8%
Life expectancy (2006) : Male : 68.2 Years
Female :75.8 Years
Dependency Ratio(2003) : 49.3
Poverty Headcount ratio (2007) : 15.2
Availability of Electricity : 83.0 (Per 100 Households)
Telephone Density per 100 : 71.87 (Including Cellular Phone)
Internet & E-mail Subscribers : 11.6 (per 1000 persons)
Economic Indicators 2008 b 2007 2006
GDP (Rs.Bn) 4,411 3,579 2,939
Per Capita GDP US$ 2,014 1,634 1,421
GDP Growth Rate % 6.0 6.8 7.7
CCPI (2002 = 100) 199.9 163.1 140.8
National Saving (% of GDP) 18.2 23.3 22.3
National Investment (% of GDP) 27.5 27.9 28.0
Government Debt (% of GDP) 81.1 85.8 87.8
Government Debt (Foreign % of GDP) 32.8 37.1 37.5
Sectoral Composition of the Economy
(as % GDP) 2008 b 2007 2006
Agri. Forestry and Fishing 12.1 11.9 12.3
Industry 28.4 28.5 28.2
Services 59.5 59.6 59.5
Government Finance
(as % of GDP) 2008 b 2007 2006
Revenue 14.9 15.8 16.3
Expenditure & lending minus repayments 22.6 23.5 23.5
Overall Deficit -7.7 -7.7 -8.0
Labour Force & Employment 2008 b 2007 2006
Labour Force (’000) 7,569 7,489 7,599
Participation rate % 50.2 49.8 51.2
Unemployment rate % 5.2 6.0 6.5
Employed Persons by Sectors %
Agriculture 32.7 31.3 32.2
Industry 26.3 26.6 26.6
Services and Other 41.0 42.1 41.2
External Trade 2008 b 2007 2006
EExport (US$ Mn) 8,137 7,640 6,883
Import (US$ Mn) 14,008 11,296 10,254
Trade balance (US$ Mn) -5,871 -3,656 -3,371
Exchange Rates Annual Average
US$ 108.33 110.62 103.96
Euro 159.32 151.63 130.63
GBP 200.73 221.46 191.53
Indian Rupee 2.52 2.69 2.30
Monetary Aggregate
(point to point % change) 2008 2007 2006
Reserve Money 1.5 10.2 21.2
Narrow Money (M1) 4.0 2.7 12.6
Broad Money (M2b) 8.5 16.6 17.8
Money Multiplier for M2b 5.67 5.31 5.02
Velocity of (M2b) 3.01 2.73 2.65
Banking Industry 2008 b 2007 2006
Total No of Com. Banks 22 23 23
No of Com. Bank Branches &
other outlets 4733 4331 3537
ATMs (per 100,000 persons) 8.4 7.1 5.6
Credit Card Issued
(per 100,000 persons) 4538 4447 4080
Banking Density (bank branches
per 100,000 persons) 10.2 9.7 7.6
Commercial Banks 2008 b 2007 2006
Total Assets (Rs.Bn.) 2,276.1 2,098.2 1,786.9
Deposits (Rs.Bn.) 1,562.7 1,456.7 1,236
Net Loans & Advances (Rs.Bn.) 1,455.8 1,370.2 1,151.1
Interest Rates on Deposits & Lending 2008 2007 2006
Commercial Banks
Savings Deposits 3.00-16.50 3.00-16.50 3.00-10.50
One Year Fixed Deposits 8.50-20.50 8.50-20.00 8.50-20.00
Average Weighted
Deposits Rate (AWDR) 11.63 10.31 7.6
Average Weighted Fixed
Deposits Rate (AWFDR) 16.89 15.49 11.50
Average Weighted Prime
Lending Rate (AWPR) 18.50 17.95 15.19
Average Weighted
Lending Rate (AWLR) 20.17 18.08 16.56
Share Market Indices 2008 2007 2006
AAll Share Price Index (1985=100) 1,503.0 2,541.0 2,722.4
Milanka Price Index (1998=1000) 1,631.3 3,291.9 3,711.8
Market Price Earning Ratio (a) 5.4 11.6 14
Market Capitalization (Rs.Bn.) (a) 489 821 835
• b Provisional
• Source: Central Bank of Sri Lanka
142 SEYLAN BANK .

SECTORAL CLASSIFICATION
OF GDP
SECTORAL COMPOSITION OF
THE ECONOMY 2008 (as% GDP)
MONEY SUPPLY
60
1600
48
36
24
Agri, Livestock &
Forestry
Industry
1200
800
12
Services
400
0
Agriculture Industrial Services
2006 2007 2008
0
Narrow
Money M1
Broad
Money M2
Consolidated
Broad Money M3
2006 2007 2008
SAVING & LENDING RATE OF
COMMERCIAL BANKS
POLICY INTEREST RATE OF
THE CENTRAL BANK
SHARE MARKET INDICATORS
Share Market Capitalisation Rs.Bn.
20
16
4000
1000
16
14
3200
800
12
12
2400
600
8
1600
400
4
10
800
200
0
2006
2007 2008
AWDR AWFDR
AWPR AWLR
8
2006
Dec.
Repo Rate
Bank Rate
2007
Dec.
2008
Dec.
Reserve Repo Rate
0
2006
2007 2008
ASPI
MPI
Market Capitalisation
0
EXTERNAL VALUE OF
SRI LANKA RUPEES
EXTERNAL TRADE
US $ Mn
Rate LKR/US$
% Change
120
115
110
105
100
95
90
85
80
75
70
2006
2007 2008
7
6
5
4
3
2
1
0
-1
-2
-3
2006
2007
2008
-6000 -3000 0 3000 6000 9000 12000 15000
Exchange Rate
Depreciation
Import
Export
Trade Balance
. SEYLAN BANK 143

BEATING STRONGER!
Highlights of the year
1 2
3 4
5 6
1. Seylan Bank Badminton team
became champions in both A & B
division Men’s and Women’s
categories in mercantile inter –firm
badminton tournament 2008
2. Seylan Bank was awarded a
certificate of recognition by the
institute of charted accountants at
the annual reports awards 2008
3. Seylan RFC & NRFC account
holders who obtained Debit Cards
were entitled to a Draw and 3 lucky
winners were given 1 air ticket each
to any destination.
4. Seylan bank Net ball team became
champions of all island president’s
trophy organized by Net ball
federation
5. Seylan Bank hockey team emerged
“ A division champions in the 32nd
annual 7 A side tournament
144 SEYLAN BANK .

7 7
8 7
8 8
organized by mercantile hockey
association
6. Seylan card center together with
charted financial accountants (CFA)
Sri Lanka extended affinity credit
cards and easy payment to all CFA
students
7. Seylan Bank sports club organized
Seylan “SUHADA SENA” an event
which gave Seylan staff an
opportunity to prove their talents
beyond banking.
8. In appreciation of the loyal service
rendered staff members who
completed more than 20 years of
service were recognized at the long
service awards ceremony. Staff
completing 10 years of service were
also honoured
. SEYLAN BANK 145

BEATING STRONGER!
History and Milestones
In 1986, Founder Chairman Deshamanya
Dr Lalith Kotelawala began a mission to fulfill a
long felt need for a truly Sri Lankan commercial
bank. From its inception, the Bank has focused on
customer service and now offers a variety of
convenient banking services. The total number of
service centres have now risen to over one
hundred thereby playing a lead role in the financial
sector of Sri Lanka.
The Bank has been in the forefront in marketing
several technology based products and services.
Seylan Bank’s social responsibility and its
commitment has grown significantly. The Bank
participated in several welfare projects and
programmes such as promotion of sports,
celebration of festivities and also plays a lead role
in community service projects.
1988
The license to commence banking
business was issued by the Central
Bank of Sri Lanka on 18th March
1988. The soft opening was
conducted by Chairman
Deshamanya Dr Lalith Kotelawala on
24th March 1988 introducing
Saturday Banking from the very
inception.
1992
Sri Lankan Branch of the Bank of
Credit and Commerce International
(BCCI) was taken over, and
recommenced its operations as the
Chatham Street branch of Seylan
Bank.
Seylan Bank recorded history as the
first bank to introduce an indigenous
credit card - Seylan Card.
Two subsidiaries, namely, Seylan
Merchant Bank Ltd. and Ceylinco
Seylan Developments Ltd. were
incorporated.
1993
The Bank obtained the agency for
USA based ’Western Union’ money
transfer system which facilitates
transfer of money between countries
within minutes.
1994
Commencement of the bank’s first
overseas operation occurred with
the takeover of Hadi Express
Exchange in Dubai and subsequently
linked up with the Saudi American
Bank in order to provide ’Speed
Cash’ service to customers, which
was another money transfer system
to assist Sri Lankans working in the
Middle East.
Obtained membership in SWIFT
(Society for Worldwide Interbank
Financial Tele-communications), to
relay documentary credits, customer
instructions and bank transfers etc.
1995
Linked with Visa International
Network, to issue Visa Classic and
Visa Gold Credit Cards, launched
ATM card namely ’SMART’ (Seylan
Multi Action Rapid Teller) and
introduced Seylaphone service.
1996
Commenced the second overseas
operation as Sri Lanka Express
Exchange in Oman.
1997
Introduced the ’Profit Centre
Concept’ in 1997 enhancing the
autonomy of branches.
Marking its 10th Anniversary, Seylan
Bank moved into its new
Headquarters Building namely
Ceylinco Seylan Towers, situated in
Kollupitiya and opening of the
Millennium Branch.
1999
The Bank introduced a PC based
system for budgeting and
performance assessment. The first
awards ceremony under this system
was also held this year.
2000
The Y2K issue was successfully
handled.
2001
The Chatham Street Branch moved
into ’Ceylinco House’ and was
renamed as the ’Ceylinco House
Branch’.
This year also saw the introduction
of Visa Electron Card, Visa Affinity
Cards to old boys of St. Joseph’s,
St. Peter’s and St. Benedicts.
The Rewards Plus Scheme was
replaced with the ’Merit Rewards’
Scheme.
The Bank’s ’Govisarupatha’ won the
prestigious Asian Banking Award
under the category for the best
product coming under the microcredit
project.
2002
The dawn of peace in 2002, enabled
the Bank to establish branches in
Jaffna and Trincomalee, and also the
establishment of three convenient
banking centres in Piliyandala,
Dambulla and Veyangoda.
The Bank won the best Business
Expansion Award at Western Union
Middle East and South Asia Regional
Conference held in Goa.
Western Union won an award for the
‘Service Brand of the Year’ at Brand
Excellence 2002.
146 SEYLAN BANK .

The Bank’s logo underwent a
change in order to reflect the
flexibility of the institution and to
denote its greater orientation to
customer expectations.
2003
The Bank recorded the highest
profits in its entire history.
Business Today Magazine positions
the Bank as the number 3 corporate
in Sri Lanka, and LMD Magazine
ranks the bank at number 4.
The balanced scorecard system has
advanced with the introduction of
balanced scorecard based
budgeting.
The formation of a specialised
Development Banking Unit to serve
the SME sector of the country and
facilitate poverty alleviation.
Mrs Rohini Nanayakkara relinquishes
her duties as GM/CEO, with Mr Ajita
Pasqual named as her successor
from 2004.
2004
Mr Ajita Pasqual assumed duties as
DIR / GM / CEO of the Bank
Bank became the largest issuer of
VISA cards in Sri Lanka.
Bank was among the award winners
of “National Business Excellence
Awards 2004” organised by the
National Chamber of Commerce of
Sri Lanka.
“Merit Reward” won the Silver Award
for “Service Brand of the Year” at
SLIM awards 2004.
Bank won the “International –
Diaspora Initiatives Award”, awarded
by Western Union International.
Founder Chairman Deshamanya
Dr Lalith Kotelawala was nominated
as the “most socially responsible
Sri Lankan” by LMD’s readership.
Some employees of the bank and a
large number of customers became
victims of the devastating Tsunami
which occurred on the 26th of
December, Seylan Bank was actively
involved in the nation’s re-building
programs.
2005
Passed Rs.1 Bn. milestone in
profitability before corporate tax.
LMD, together with Sting
Consultants adjudged Seylan as
among the top 20 brands in the
country
Ceylinco Group (Where Seylan is one
of the largest stake holders) was
rated as one of the three “Most
Respected Sri Lankan Entities” by
the LMD.
The role of the “Business Process
Re-engineering (BPR)” exercise was
completed in August 2005
Successfully obtained the ISO
9001:2000 certified for HR & SDC.
2006
Reached Rs.100 Bn. milestone in
Customer Deposit base as at
December 2006
Bank tied up with Ceylinco Fast
Cash (One of the Ceylinco group
companies) and with some of the
leading money transfer providers in
the world in order to facilitate cost
effective, secured & convenient
service to the private inward
remittance senders.
2007
The bank introduced the concept of
“Palm Top Banking” for the first time
in Sri Lanka
“Seylan Rajina” a product specially
designed to assist women was
launched to provide a total financial
solution to all Sri Lankan women
International/FCBU Divisions were
awarded with ISO 9001:2000.
The bank organized a trip to
Disneyland for winning Tikiri kids
along with their parents
2008
First bank in Sri Lanka to launch their
corporate website in all three official
languages.
The Asian Banker’s award was
received for the bank Automation &
Networking for the “Palm Top
Banking” module.
Banks “TEF module” was awarded
silver medals from British computer
society (BCS) and f Sri Lanka
Chapter of International Systems
Audit & Control Association.
On 29th December 2008 Monetary
Board determined under section
30(1) of the Monetary Law Act No 58
of 1949 to discontinue the services
of all directors of the bank and
request Bank of Ceylon to appoint
new directors to stabilize the banks
functions. Subsequently new
directors and Mr Eastman
Narangoda respected veteran
banker was appointed as the
chairman of the bank.
. SEYLAN BANK 147

BEATING STRONGER!
Geographical Analysis
Deposits & Advances
As at 31st December 2008
Province No of Deposits % Advances %
Branches Rs.Mn. Including
Leasing
Rs.Mn.
Western 47 71,263 66.0 82,129 80.0
Southern 7 5,946 5.5 3,301 3.2
Uva 3 2,030 1.9 968 0.9
North Central 5 2,366 2.2 1,532 1.5
North Western 8 6,801 6.3 3,709 3.7
Eastern 5 3,654 3.4 1,794 1.7
Northern 2 2,316 2.1 941 0.9
Sabaragamuwa 9 6,536 6.1 3,704 3.6
Central 8 7,027 6.5 4,591 4.5
Total 94 107,939 100.0 102,669 100.0
Commitments & Contingencies
As at 31st December 2008
Province No of Acceptances Stand by Guarantees Documentary Bills Forward Rs.Mn.
Branches Letter of Credit Credit For Exchange Total
Collection Contracts
Western 47 3,354 556 5,799 1,857 3,241 341 15,148
Southern 7 12 4 310 8 17 - 351
Uva 3 - - 186 1 - - 187
North Central 5 2 - 299 3 - - 304
North Western 8 65 - 412 26 50 - 553
Eastern 5 - - 239 - - - 239
Northern 2 - - 119 - - - 119
Sabaragamuwa 9 15 - 302 31 15 - 363
Central 8 96 - 339 58 31 - 524
COMMITMENTS 8,991
Total 94 3,544 560 8,005 1,984 3,354 341 26,779
148 SEYLAN BANK .

Glossary
Capital Adequacy Ratio
Core Capital : The amount of Core Capital
that should be maintained as a percentage
of Risk Weighted Assets
Total Capital : The amount of Core &
Supplementary Capital as a percentage of
Risk Weighted Assets
Equity Growth Rate
The percentage increase in total equity over
the year under review
Equity
Total of Shareholders’ funds; share capital +
statutory reserves + other reserves
Non Performing Loans
Loans which are not activated for 3 months
or more
Price Earning Ratio
Market price of the Bank’s share as number
of times of the earnings per share
Core Capital (Tier I)
The sum of Paid-Up Ordinary Shares, Non-
Cumulative and Non-redeemable Preference
Shares, Share Premium, Statutory Reserve
Fund, Published Profits and Minority Interest
less Goodwill
Supplementary Capital (Tier II)
The sum of Revaluation Reserve, General
Provisions, Hybrid Capital Instruments and
Approved subordinated Term Debts
Core Retail Deposits
Total of Demand and Savings Deposits
Dividend Cover
The Net Profit after tax of the bank as
number of times of the gross dividend
Effectiveness
Doing the Right Thing. Refers to the quality
of output. Mostly measured in Net Interest
Income per unit of Assets
Efficiency
Doing Things Right. Refers to the ratio of
output to input. Mostly measured in Cost to
Income ratio
Equity Earning Rate
Profit After Tax and Dividends as a percentage
of Equity at the beginning of the year
GDP (Gross Domestic Product)
The value of all goods and services
produced domestically by an economy
during a specified period, usually an year.
GDP, adjusted for inflation, gives GDP in real
terms
Interest Earning Assets
Assets, which earn interest – the total of
Advances, Bills, Leases, Government Bills &
Bonds, Call Money and Placements with
other institutions
Interest In Suspense
Interest Income of Non Performing Loans;
these are accrued but not considered as
profits
Interest Rate Spread
The difference between the effective interest
yield and the effective interest cost of the
bank
Leverage
Liabilities as number of times of Equity
Liquid Assets
Cash, Bills, Short Term Funds, Balance with
Central Bank & Dealing Securities
Net Profit Rate
Profit after tax as a percentage of turnover
Profit Handout
Dividends as a percentage of Profit After Tax
Provisions for Bad & Doubtful Debts
Provisions made for possible loan losses
according to the period of non-performance
and the exposure over the collateral
REPOs
Repurchase Agreements; The securities sold
to creditors (who lend money for funding
purposes), with the intention of buying them
back at a set price
Return on Avg. Assets (ROAA)
Profit after tax as a percentage of Average
Assets
Return on Equity (ROE)
Profit after tax as a percentage of Average
Equity
Risk Weighted Assets
The assets and off balance sheet items
weighted according to the risk involved as
stipulated by the Central Bank
Statutory Reserve Fund
Capital reserve created as per the provisions
of Banking Act No. 30 of 1988.
. SEYLAN BANK 149

BEATING STRONGER!
Notes
150 SEYLAN BANK PLC .

Notes
. SEYLAN BANK PLC 151

BEATING STRONGER!
Notes
152 SEYLAN BANK PLC .