ZCrDs7BWNaXNnR6RetZcgvpZnYAy__Seylan-Bank-PLC-Annual-Report-2019

Seylan Bank PLC Annual Report 2019 249 Statement of Financial Annexes Position in US Dollars As at 31 December 2019 Bank Change 2019 Group Change USD ’000 % USD ’000 % Assets 2018 2018 Cash and cash equivalents USD ’000 USD ’000 Balances with Central Bank of Sri Lanka Placements with banks and finance companies 64,822 68,991 (6.04) 64,822 68,991 (6.04) Derivative financial instruments 79,708 101,357 (21.36) 79,708 101,357 (21.36) Financial assets recognised through profit or loss 100.00 100.00 – Measured at fair value 6,468 – (91.92) 6,468 – (91.92) – Designated at fair value 743 9,201 743 9,201 Financial assets at amortised cost – Loans and advances 39,239 26,987 45.40 39,276 27,015 45.39 – Debt and other instruments – – – – – – Financial assets measured at fair value through other comprehensive income 2,090,734 1,793,594 16.57 2,090,734 1,793,594 16.57 Investment in subsidiary 149,056 162,379 (8.20) 149,056 162,379 (8.20) Group balances receivable Property, plant and equipment 306,458 322,473 (4.97) 306,756 322,741 (4.95) Leasehold rights 6,359 6,330 0.46 – – – Right-of-use assets 221 223 (0.90) – – – Investment properties 16.81 Intangible assets 23,969 20,519 (4.74) 39,076 34,881 12.03 Deferred tax assets 201 211 100.00 3,102 3,138 (1.15) Other assets – 9,194 – 100.00 Total assets 24,573 – – 4,703 4,637 1.42 – 5.92 3,348 3,161 5.92 Liabilities 3,161 (100.00) – 547 (100.00) Due to banks 3,348 1,483 11.36 11.26 Derivative financial instruments – 45,138 11.09 50,485 45,375 10.49 Financial liabilities at amortised cost 2,562,047 2,847,471 2,577,017 – Due to depositors 50,265 – Due to debt securities holders 2,846,164 – Due to other borrowers Group balances payable 158,598 144,740 9.57 158,598 144,740 9.57 Debt securities issued 1,229 797 54.20 1,229 797 54.20 Current tax liabilities Deferred tax liabilities 2,209,103 1,961,921 12.60 2,209,103 1,961,921 12.60 Lease liabilities 46,449 115,745 (59.87) 46,449 115,745 (59.87) Other liabilities 129 176 (26.70) 129 176 (26.70) Total liabilities 1,108 1,162 – – 89,599 (4.65) 89,599 – Equity 109,542 6,636 22.26 109,542 6,505 22.26 Stated capital 2,896 – (56.36) 2,705 – (58.42) Statutory reserve fund 3,998 – 100.00 5,222 – 100.00 Retained earnings 51,368 100.00 8,311 51,973 100.00 Other reserves 23,989 (16.08) (16.23) Total equity attributable to equity holders of the Bank 43,107 2,372,144 43,538 2,371,456 Non-controlling interest 2,600,148 9.61 2,584,826 9.00 Total equity Total equity and liabilities 93,962 65,985 42.40 93,962 65,985 42.40 Commitments and contingencies 10,766 9,706 10.92 10,766 9,706 10.92 Net assets value per share (USD) 125,817 15.82 129,515 15.60 15,471 108,635 177.41 21,431 112,040 92.12 246,016 5,577 29.55 255,674 11,155 28.55 – 189,903 – 6,971 198,886 4.43 246,016 – 29.55 262,645 6,675 27.77 2,846,164 11.09 2,847,471 10.49 827,714 189,903 16.31 827,946 205,561 16.32 2,562,047 (5.77) 2,577,017 (5.56) 0.49 0.51 711,619 711,779 0.52 0.54 Exchange rate of USD 1 was LKR 181.40 as at 31 December 2019 (LKR 182.25 as at 31 December 2018). The statement of financial position given on this page is solely for the convenience of the Shareholders, Bankers, Investors, Customers and Other Users of Financial Statements and does not form a part of the Audited Financial Statements.

250 Seylan Bank PLC Annual Report 2019 Annexes Investor Information Twenty largest ordinary voting shareholders as at 31 December 2019 2019 Comparative holdings of the top 20 holders in 2018 Number of shares % Number of % held shares 15.00 1. Sri Lanka Insurance Corporation Ltd. [includes General Fund and Life Fund] 37,721,674 13.87 27,615,598 15.00 2. Brown & Company PLC A/C No. 1 34,892,388 25,544,310 13.87 3. Employees’ Provident Fund 24,789,462 9.86 18,148,076 4. LOLC Investments Ltd. 24,019,936 9.55 17,584,715 9.86 5. National Development Bank PLC A/C No. 02 21,941,094 8.72 16,062,819 9.55 6. Mr R S Captain 15,424,909 6.13 11,305,272 8.72 7. Bank of Ceylon No. 1 Account 14,145,629 5.62 13,807,800 6.14 8. Seylan Bank PLC A/C No. 04 – Employees’ Gratuity Trust Fund 12,684,300 5.04 7.50 9. Employees’ Trust Fund Board 2.13 10. Mr S E Captain 5,347,520 2.02 3,914,857 2.13 11. People’s Leasing & Finance PLC/Don and Don Holdings (Pvt) Ltd. 5,084,105 1.78 3,722,015 2.02 12. Ms L A Captain 4,476,431 1.06 13. SISIL Investment Holdings (Pvt) Ltd. 2,653,526 1.04 2,590,415 1.41 14. NDB Capital Holdings Limited A/C No. 02 2,616,186 1.01 15. AIA Insurance Lanka Ltd. A/C No. 07 2,547,149 0.93 1,693,458 0.92 16. Mr M J Fernando 2,340,357 0.49 897,969 0.49 17. Mr R R Leon 1,226,585 0.47 871,210 0.47 18. Mr K R B Fernando 1,190,033 0.43 0.58 19. Ambeon Holdings PLC 1,088,123 0.35 1,062,137 1.18 20. Sampath Bank PLC/Capital Trust Holdings Ltd. 0.30 2,175,175 887,051 85.83 Total shares held by the top 20 holders 755,195 Balance shares held by other 10,021 ordinary voting shareholders – 215,831,653 as at 31 December 2019 Total ordinary voting shares issued by the Bank 35,646,219 14.17 184,104,010 Total ordinary voting shareholders 251,477,872 100.00 9,030 10,041 Notes: Brown & Company PLC and LOLC Investments Limited collectively hold 23.42% of the issued capital of the Bank. This joint shareholding limit has been approved by the Central Bank of Sri Lanka vide their letter dated 14 September 2011 subject to the following: i. The joint holding of Brown & Company PLC A/C and LOLC Investments Ltd. to be reduced from 23.42% to 15% level within a period of 15 years from 13 October 2009. ii. Shareholding of Brown & Company PLC A/C No.1 to be reduced from 13.87% to 9.55% within five years from 16 June 2011 which deadline was further extended up to 31 March 2019 by the Central Bank of Sri Lanka. The shareholder has informed that they are in discussion with the Central Bank of Sri Lanka and upon finalisation will be informing their proposal in this regard.

Seylan Bank PLC Annual Report 2019 251 Annexes Investor Information Twenty largest ordinary (non-voting) shareholders as at 31 December 2019 2019 Comparative holdings of the top 20 holders in 2018 Number of shares held % Number of % shares 111,429,583 44.19 1. LOLC Holdings PLC 13,449,364 5.33 79,955,209 43.93 2. Employees’ Provident Fund 5,911,428 2.34 9,707,547 5.33 3. People’s Leasing & Finance PLC/Don and Don Holdings (Pvt) Ltd. 5,415,210 2.15 4. Akbar Brothers (Pvt) Ltd. A/C No. 1 4,657,021 1.85 3,782,747 2.08 5. Deutsche Bank AG as Trustee for JB Vantage Value Equity Fund 4,282,391 1.70 3,361,368 1.85 6. Mr E Thavagnanasooriyam & Mr E Thavagnasundaram 4,273,884 1.70 2,489,991 1.37 7. Pershing LLC S/A Averbach Grauson & Co. 4,011,506 1.59 3,277,769 1.80 8. Employees’ Trust Fund Board 3,420,424 1.36 2,895,445 1.59 9. People’s Leasing & Finance PLC/Mrs P Thavarajah 3,187,073 1.26 10. First Capital Limited 3,011,739 1.19 3,484,169 1.91 11. J B Cocoshell (Pvt) Ltd. 2,800,825 1.11 2,021,594 1.11 12. Merrill J Fernando & Sons (Pvt) Limited 2,223,116 0.88 1,604,612 0.88 13. Mr R R Leon 2,201,808 0.87 1,584,901 0.87 14. LOLC Technology Services Limited 1,972,634 0.78 1,898,423 1.04 15. Mr N Balasingam 1,475,758 0.59 0.14 16. GF Capital Global Ltd. 1,344,449 0.53 260,227 0.37 17. Mr D N N Lokuge 1,296,789 0.51 681,690 0.57 18. Mr R Gautam 1,268,314 0.50 1,029,488 0.50 19. Mr M J Fernando 1,193,309 0.47 915,451 20. Amaliya Private Limited 178,826,625 70.92 Total shares held by the top 20 holders Balance shares held by other 7,764 ordinary non-voting shareholders – 73,319,289 29.08 181,995,082 as at 31 December 2019 252,145,914 100.00 6,728 Total ordinary non-voting shares issued by the Bank Total ordinary non-voting shareholders 7,784 Shareholdings of Directors as at 31 December 2019 Directors’ shareholding including the shareholding of the Director/Chief Executive Officer, Mr K P Ariyaratne, are given on page 117 of the Annual Report.

252 Seylan Bank PLC Annual Report 2019 Annexes Investor Information Voting (SEYB-N) 2018 Non-Voting (SEYB-X) 2018 2019 2019 Ordinary shares (Quoted) 251,477,872 184,104,010 252,145,914 181,995,082 Number of shares issued Proposed: 1.00 Paid: 0.50 Proposed: 1.00 Paid: 0.50 Dividend (LKR per share) Cash (LKR) Proposed: 1.00 Paid: 2.00 Proposed: 1.00 Paid: 2.00 Scrip (LKR) Share prices 79.90 94.80 45.90 59.00 Highest (LKR) 47.00 64.10 27.10 37.00 Lowest (LKR) 52.50 78.00 33.80 44.50 Last traded (LKR) Compliance with minimum public holding requirement Period Option under which Float adjusted Public No. of Public the Bank is compliant market capitalisation Holding Percentage shareholders As at 31 December 2018 As at 31 December 2019 Option 2 LKR 7.797 Bn. 54.30% 9,011 Option 3 LKR 7.240 Bn. 54.84% 10,021 Analysis of the distribution of shareholders as at 31 December 2019 Ordinary (voting) shares Ordinary (non-voting) shares Range of shareholding Number of Number of Percentage Number of Number of Percentage shareholders shares of shareholding shareholders shares of shareholding 1 – 1,000 1,001 – 10,000 % % 10,001 – 100,000 100,001 – 1,000,000 7,194 1,570,905 0.625 3,674 1,063,789 0.422 1,000,001 and above 2,356 6,572,985 2.614 3,130 10,829,538 4.295 Total 8,993,912 3.576 22,808,678 9.046 411 20,150,663 8.013 832 30,873,747 12.244 Resident/non-resident 62 214,189,407 85.172 121 186,570,162 73.993 Resident 18 251,477,872 100.000 252,145,914 100.000 Non-resident 27 10,041 7,784 Individuals/Institutions Individuals 9,897 247,322,574 98.35 7710 237,382,224 94.14 Companies/Institutions 144 4,155,298 1.65 74 14,763,690 5.86 9,667 46,858,766 18.63 7410 64,241,146 25.48 374 204,619,106 81.37 374 187,904,768 74.52

Seylan Bank PLC Annual Report 2019 253 Annexes Investor Information Debentures 2014 Listed on CSE in December 2014 (SEYB D313, D314, Type A Type B Type C Type D Type E D315, D316, D317) 4-year debentures 5-year debentures 5-year debentures 6-year debentures 6-year debentures (8.0% p.a.) semi-annual (8.35% p.a.) semi-annual (8.60% p.a.) annual (8.60% p.a.) semi-annual (8.75% p.a.) annual Number of debentures issued 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 Debenture prices Highest (LKR) 4,622,800 300 18,665,200 25,055,200 3,005,200 Lowest (LKR) Last traded (LKR) Redeemed on Not traded in Not traded in Not traded in 85.00 Not traded 23 December 2018 2018 and 2019 2018 and 2019 2018 and 2019 85.00 in 2018 85.00 Debentures 2016 Type A Type B Type C 5-year debentures 5-year debentures [6 month T-Bill 7-year debentures Listed on CSE in July 2016 (13.0% p.a.) semi-annual (gross) + 1.5% p.a.] semi-annual (13.75% p.a.) semi-annual (SEYB D391, D392, D393) 2019 2018 2019 2018 2018 2017 Number of debentures issued 17,103,200 174,000 32,722,800 Debenture prices Highest (LKR) 100.00 100.00 Not traded in 102.60 106.20 Lowest (LKR) 100.00 100.00 2018 and 2019 96.00 90.00 Last traded (LKR) 100.00 100.00 90.00 100.00 Debentures 2018 Type A Type B Type C 5-year debentures 7-year debentures 10-year debentures Listed on CSE in April 2018 (12.85% p.a.) semi-annual (13.20% p.a.) semi-annual (13.50% p.a.) semi-annual (SEYB D432, D433, D434) 2019 2018 2019 2018 2019 2018 Number of debentures issued 39,100,000 7,150,000 16,090,000 Debenture prices Highest (LKR) 99.81 100.06 100.00 Not traded in 105.00 Not traded in Lowest (LKR) 99.81 100.06 99.00 2018 100.00 2018 Last traded (LKR) 99.81 100.06 100.00 100.00 Debentures 2019 Type A Type B 5-year debentures 5-year debentures Listed on CSE in December 2019 (15.00% p.a.) Annual (14.50% p.a.) semi-annual (SEYB D458, D459) 2019 2018 2019 2018 Number of debentures issued 37,734,000 12,266,000 Debenture prices Highest (LKR) 107.49 Not 100.73 Not Lowest (LKR) 106.49 applicable 100.72 applicable Last traded (LKR) 107.49 100.72

254 Seylan Bank PLC Annual Report 2019 Annexes Seylan Bank PLC – Debentures Debt (debentures)/equity ratio (times) 2019 2018 Debt (debentures plus long-term debt)/equity ratio (times) Interest cover (times) 0.45 0.47 Quick asset ratio (times) 0.67 0.85 3.11 3.64 2014 Issue 0.74 0.74 Interest yield as at date of last trade * * 4 year fixed semi annual – 8.00% p.a. (Debenture matured and redeemed on 22 December 2018) * * * * 5 year fixed semi annual – 8.35% p.a. (Debenture matured and redeemed on 22 December 2019) 10.29% * * 5 year fixed annual – 8.60% p.a. (Debenture matured and redeemed on 22 December 2019) * * * 6 year fixed semi annual – 8.60% p.a. * * 20.88% * 6 year fixed annual – 8.75% p.a. (4 June 2019)/* * 8.36% * Yield to maturity of trade done on 13.42% 10.42% 4 year fixed semi annual – 8.00% p.a. (Debenture matured and redeemed on 22 December 2018) * 11.19% 5 year fixed semi annual – 8.35% p.a. (Debenture matured and redeemed on 22 December 2019) 14.22% 13.42% * 5 year fixed annual – 8.60% p.a. (Debenture matured and redeemed on 22 December 2019) 12.98% * 15.28% 6 year fixed semi annual – 8.60% p.a. 13.73% 12.98% 6 year fixed annual – 8.75% p.a. (4 June 2019)/* * 8.58% Interest rate of comparable Government Security 9.39% 16.98% 4 years (Debenture matured and redeemed on 22 December 2018) 5 years (Debenture matured and redeemed on 22 December 2019) 13.29% 11.36% 6 years 13.64% 11.61% 13.96% 2016 Issue 13.25% Interest yield as at date of last trade 12.90% * 5 year fixed semi annual – 13.00% p.a. (5 December 2019)/(17 October 2018) 13.19% * 5 year floating semi annual – six months treasury bill rate + 1.5% 13.49% 7 year fixed semi annual – 13.75% p.a. (24 September 2019)/(24 December 2018) 12.83% 9.42% * Yield to maturity of trade done on 9.88% * 5 year fixed semi annual – 13.00% p.a. (05 December 2019)/(17 October 2018) 10.12% 5 year floating semi annual – six months treasury bill rate + 1.5% 11.72% 7 year fixed semi annual – 13.75% p.a. (24 September 2019)/(24 December 2018) 13.95% 11.81% 14.92% 11.92% Interest rate of comparable Government Security 5 years 12.65% 7 years 14.28% 2018 Issue 9.69% Interest yield as at date of last trade 5 year fixed semi annual – 12.85% p.a. (11 June 2019)/(09 April 2018) 7 year fixed semi annual – 13.20% p.a. (22 October 2019)/* 10 year fixed semi annual – 13.50% p.a. (17 December 2019)/* Yield to maturity of trade done on 5 year fixed semi annual – 12.85% p.a. (11 June 2019)/(09 April 2018) 7 year fixed semi annual – 13.20% p.a. (22 October 2019)/* 10 Year fixed semi annual – 13.50% p.a. (17 December 2019)/* Interest rate of comparable Government Security 5 years 7 years 10 years 2019 Issue (Debenture allotted on 18 April 2019) Interest yield as at date of last trade 5 year fixed annual – 15.00% p.a. (16 October 2019) 5 year fixed semi annual – 14.50% p.a. (17 May 2019) Yield to maturity of trade done on 5 year fixed annual – 15.00% p.a. (16 October 2019) 5 year fixed semi annual – 14.50% p.a. (17 May 2019) Interest rate of comparable Government Security – 5 years * No trading during the period.

Seylan Bank PLC Annual Report 2019 255 Branch and ATM Network Annexes Province-wise distribution North Western Off-site ATMs Malabe Northern North Central Mirissa Bowatte Arugambay Mount Lavinia Chankanai Anuradhapura Chilaw Bambalapitiya Negombo Chavakachcheri Aralaganwila Dankotuwa Batticaloa Pinnawala Chunnakam Eppawala Dummalasuriya Borella Ragama Jaffna Hingurakgoda Giriulla Bloomfield Reid Rajagiriya Kilinochchi Kaduruwela Hettipola Ella Sapugaskanda Manipay Kekirawa Katuneriya General Hospital Sethsiripaya Mannar Manampitiya Kuliyapitiya Colombo Shangrila Mullaitivu Medawachchiya Kurunegala Hikkaduwa Unawatuna Nelliady Nochchiyagama Kalpitiya Horana Trincomalee Vavuniya Galenbindunuwewa Mawathagama Katunayaka Padaviya Narammala Kuruvita Head Office (Mobile) Pannala Mahiyanganaya Puttalam Makumbura Eastern Rideegama Udappu ATMs Akkaraipattu Wariyapola Ampara Wennappuwa Batticaloa Chenkalady 10 Dehiattakandiya Kalavanchikudy Western 11 Kalmunai Kantale Aluthgama 18 12 Kattankudy Attidiya 7 Pothuvil Athurugiriya Millennium Branch 15 Sammanthurai Avissawella 75 Trincomalee Baduraliya Minuwangoda Bambalapitiya Mirigama 12 Central Bandaragama Moratumulla Battaramulla Moratuwa 13 Bogawantalawa Beruwala Mount Lavinia Dambulla Boralesgamuwa Mutwal Sabaragamuwa Southern Gampola Borella Nawala Hasalaka Cinnamon Gardens Negombo Balangoda Akuressa Hatton Colombo Fort Branch Nittambuwa Eheliygoda Ambalangoda Kandy Colombo Gold Centre Nugegoda Embilipitiya Ambalantota Katugastota Dam Street Old Moor Street Godakawela Beliatta Matale Dehiwala Panadura Kegalle Galle Nawalapitiya Gampaha Pettah Kotiyakumbura Hambantota Nuwara Eliya Ganemulla Piliyandala Mawanella Hikkaduwa Pallekele Godagama Pitakotte Pelmadulla Kamburupitiya Peradeniya Gothatuwa Raddolugama Ratnapura Karapitiya Pilimathalawa Grandpass Ranpokunagama Ruwanwella Koggala Pussellawa Havelock Town Sarikkamulla Warakapola Matara Thalawakele Homagama Soysapura Yatiyantota Matara Bazzar Horana Veyangoda Tissamaharama Uva Ingiriya Wadduwa Ja-ela Wattala Badulla Kadawatha Weliweriya Bandarawela Kalubowila Wellawatte Mahiyanganaya Kalutara Wijerama Monaragala Kandana Yakkala Siyambalanduwa Katunayake Foreign Employment Welimada Kelaniya Bureau (EBC) Katharagama Kiribathgoda Union Place Kirindiwela Padukka Please log on to www.seylan.lk for branch addresses and contact numbers Kirulapone Kollupitiya Kotahena Kottawa Kochchikade Maharagama Malabe Marandagahamulla Maradana Matugama Meegoda

256 Seylan Bank PLC Annual Report 2019 Annexes Geographical Analysis Deposits, loans and advances Number of Deposits % Loans and advances % banking centres LKR Mn. LKR Mn. As at 31 December 2019 72.4 77.5 75 290,273 4.3 302,066 5.3 Province 13 17,244 1.3 20,548 0.7 5,052 2.1 2,825 1.4 Western 7 8,470 5.0 5,393 3.7 Southern 11 20,062 2.7 14,608 2.4 Uva 18 10,790 2.7 9,487 1.7 North-Central 12 10,846 4.1 6,458 3.4 North-Western 10 16,496 5.4 13,199 3.9 Eastern 12 21,498 15,407 Northern 15 100.0 100.0 Sabaragamuwa 173 400,731 389,991 Central 173 400,731 (10,732) Total expected credit loss allowance for 379,259* loans and advances Total *Loans and advances net of expected credit loss allowance. Commitments and contingencies As at 31 December 2019 Province Number of Acceptances Standby letters Guarantees Documentary Bills for Forward exchange Total banking LKR Mn. of credit LKR Mn. credit collection contracts (net) Western centres LKR Mn. LKR Mn. LKR Mn. Southern LKR Mn. LKR Mn. Uva (312) 59,745 North-Central 75 9,946 522 35,811 10,709 3,069 – 1,588 North-Western 13 12 – 1,409 49 118 – 294 Eastern – 285 9 – – 1,670 Northern 7– – 1,647 5 18 – 1,928 Sabaragamuwa 11 – – 1,303 55 – 449 Central 18 161 – 441 409 2 – 701 Contingencies 12 – – 661 6 – – 835 10 5 – 624 14 – 1,852 Commitments – 12 66 – 1,065 35 291 Undrawn credit lines and 15 204 131 (312) 69,062 capital commitments 173 10,394 522 43,246 292 3,567 Total 11,645 173 10,394 522 43,246 11,645 3,567 81,085 (312) 150,147

Seylan Bank PLC Annual Report 2019 257 GRI Content Index Annexes GRI standard/disclosure Page No. Report commentary title GRI 102: General Disclosures 2016 2 About Seylan Organisational profile 2, 44-45 Business lines, product portfolio 102-1 Name of the organisation Registered office and head office 102-2 Activities, brands, products and services 272 Presence and scale of operation, our geographical 102-3 Location of headquarters 3, 43 presence 102-4 Location of operations Legal form Presence and scale of operation, product portfolio 102-5 Ownership and legal form 272 102-6 Markets served 3, Presence and scale of operation, financial highlights Staff strength 2019 102-7 Scale of the organisation 44-45 Value creation model, trusted partners 102-8 Information on employees and other workers 3, 4 102-9 Supply chain 51 Support functions ESG framework results in higher value creation 102-10 Significant changes to the organisation and its supply chain 12-13, SLBA SBI 102-11 Precautionary Principle or approach 61-63 Memberships in industry associations 102-12 External initiatives 102-13 Membership of associations 2 Letter from the Chairman Strategy 71 102-14 Statement from senior decision-maker 72 Value creation model, how we create value, why we Ethics and integrity 61 create value, what creates value 102-16 Values, principles, standards, and norms of behaviour 6-7 Corporate governance report 12-16 Stakeholder engagement Non-discrimination, freedom of association and Governance 85-87 collective bargaining 102-18 Governance structure Stakeholder engagement 17-20 Stakeholder engagement Stakeholder engagement 59 Stakeholder engagement 102-40 List of stakeholder groups 102-41 Collective bargaining agreements Group company Content of the report, limitations and boundary, 102-42 Identifying and selecting stakeholders 17-20 materiality 102-43 Approach to stakeholder engagement 17-20 Materiality 102-44 Key topics and concerns raised 17-20 Comparative information Comparative information Reporting practice 3 Content of the report 102-45 Entities included in the consolidated financial statements 1,20 Comparative information 102-46 Defining report content and topic boundaries Content of the report Feedback may be directed to 102-47 List of material topics 20 Sustainability reporting framework 102-48 Restatements of information 1 GRI Content Index 102-49 Changes in reporting 1 Independent assurance, Sustainability assurance report 102-50 Reporting period 1 102-51 Date of most recent report 1 102-52 Reporting cycle 1 102-53 Contact point for questions regarding the report 1 102-54 Claims of reporting in accordance with the GRI Standards 1 102-55 GRI content index 102-56 External assurance 257-259 1, 36-37

258 Seylan Bank PLC Annual Report 2019 Annexes GRI Content Index GRI standard/disclosure Page No. Report commentary title GRI 200: Economic Financial Value Creation Economic value addition GRI 201: Economic performance 2016 26-35 Note number 43 Loans under refinance scheme and 201-1 Direct economic value generated and distributed 40 Loans under subsidy scheme Sustainability Performance Indicators 201-3 Defined benefit plan obligations and other retirement plans 226-227 Sustainability Performance Indicators 201-4 Financial assistance received from Government 65-66 Sustainability Performance Indicators GRI 202: Market presence 2016 74-75 Responsible Corporate Citizenship 74 Sponsorships as a bridge of relationships 202-1 Ratios of standard entry level wage by gender compared to Loans under refinance scheme and local minimum wage 74 Loans under interest subsidy scheme The supply chain management and procurement policy 202-2 Proportion of senior management hired from the local 64-69 Locally-based vicinity when selecting suppliers community 69 Training for being complaint, our responsible role as a corporate citizen GRI 203: Indirect economic impacts 2016 65-66 Our responsible role as a corporate citizen Training for being compliant 203-1 Infrastructure investments and services supported Our responsible role as a corporate citizen 203-2 Significant indirect economic impacts Our responsible role as a corporate citizen GRI 204: Procurement practices 2016 63 Environmental stewardship, 204-1 Proportion of spending on local suppliers 63 sustainability performance indicators GRI 205: Anti-corruption 2016 68-69 Energy conservation Energy conservation, sustainability performance 205-1 Operations assessed for risks related to corruption 69 indicators 205-2 Communication and training about anti-corruption 68 Sustainability performance indicators Water conservation policies and procedures 69 Water conservation GRI 206: Anti-competitive behaviour 2016 69 Waste management, e-waste management 206-1 Legal actions for anti-competitive behaviour, anti-trust, Waste management, e-waste management 70-73, Our responsible role as a corporate citizen and monopoly practices 75 Our responsible role as a corporate citizen GRI 300: Environmental 72 Motivated employees Staff strength 2019 GRI 302: Energy 2016 72, 75 Recruitments, employee turnover 302-1 Energy consumption within the organisation Employee benefits 302-4 Reduction of energy consumption 75 Employees who obtained parental leave and 73 returned to work GRI 303: Water 2016 73 Human rights 303-1 Water withdrawal by source 73 Minimum notice period 73 Occupational health and safety GRI 306: Effluents and waste 2016 69 Employee benefits, occupational health and safety, 306-2 Waste by type and disposal method 69 Initiatives to improve staff well-being 50-60 GRI 307: Environmental compliance 2016 51-54 307-1 Non-compliance with environmental laws and regulations 52-53 53-54 GRI 400: Social GRI 401: Employment 2016 54 401-1 New employee hires and employee turnover 401-2 Benefits provided to full-time employees that are not provided to temporary or part-time employees 401-3 Parental leave GRI 402: Labour/Management relations 2016 59-60 402-1 Minimum notice periods regarding operational changes 60 GRI 403: Occupational health and safety 2016 58-60 403-1 Workers representation in formal joint management-worker 53, 58, health and safety committees 60

Seylan Bank PLC Annual Report 2019 259 Annexes GRI Content Index GRI standard/disclosure Page No. Report commentary title 403-4 Health and safety topics covered in formal agreements 59 Non-discrimination, freedom of association with trade unions and collective bargaining 57-58 GRI 404: Training and education 2016 58 Training and education 404-1 Average hours of training per year per employee 57 Average training hours by employee category 404-2 Programmes for upgrading employee skills and Training and education 55 transition assistance programmes Employee composition by gender, diversity and inclusion GRI 405: Diversity and equal opportunity 2016 Employee analysis by grade, age and gender, Employee composition by gender, Workforce by 405-1 Diversity of governance bodies and employees 51, province and gender, Workforce based on the 55-56, ethnic group, board’s composition Remuneration based on gender 89 Non-discrimination, freedom of association 405-2 Ratio of basic salary and remuneration of women to men 56 and collective bargaining GRI 406: Non-discrimination 2016 59 Non-discrimination freedom of association and collective bargaining 406-1 Incidents of discrimination and corrective actions taken 59 Non-discrimination freedom of association GRI 407: Freedom of association and collective bargaining 2016 59 and collective bargaining Non-discrimination freedom of association and 407-1 Operations and suppliers in which the right to freedom of 59, 63 collective bargaining, the supply chain management association and collective bargaining may be at risk and procurement policy GRI 408: Child labour 2016 59 Child labour, forced or compulsory labour, indigenous peoples’ rights and assessments 408-1 Operations and suppliers at significant risk for 63 The supply chain management and procurement policy incidents of child labour 59 Child labour, forced or compulsory labour, indigenous GRI 409: Forced or compulsory labour 2016 peoples’ rights and assessments Child labour, forced or compulsory labour, indigenous 409-1 Operations and suppliers at significant risk for incidents 59 peoples’ rights and assessments of forced or compulsory labour 59-60 Security training GRI 410: Security practices 2016 59-60 Security training 410-1 Security personnel trained and human rights policies 64-69 Responsible corporate citizenship or procedures 67 Reviving libraries in schools as stores of wealth, financial inclusivity, touching grass roots through GRI 413: Local communities 2016 village adoption concept, nurturing victims to rebuild 413-1 Operations with local community engagement, impact Customer health and safety assessments, and development programmes Customer health and safety, zero incidents GRI 416: Customer health and safety 46 Zero incidents 46 416-1 Assessment of the health and safety impacts of product and Products/service labelling and service categories 46 marketing communication Products/service labelling and 416-2 Incidents of non-compliance concerning the health and 46 marketing communication safety impacts of product and services Customer privacy GRI 417: Marketing and labelling 2016 Customer privacy, zero incidents 417-3 Incidents of non-compliance concerning marketing 46 Our responsible role as a corporate citizen communications Our responsible role as a corporate citizen 46 GRI 418: Customer privacy 2016 46 418-1 Substantiated complaints concerning breaches of 69 customer privacy and losses of customer data 69 GRI 419: Socio-economic compliance 2016 419-1 Non-compliance with laws and regulations in the social and economic area

260 Seylan Bank PLC Annual Report 2019 Annexes Alphabetical Index Accounting Policies Page No. Interest Yield on Debentures/ Page No. Auditors’ Report on Internal Control Yield to Maturity of Debentures Auditors’ Report 164 Investment in Subsidiary 254 Awards Recognition 111 Leasehold Rights 212 Balances with Central Bank 152 Lease Rental Receivables 218 Board Audit Committee Report Loans and Advances 206 Board Human Resources and Remuneration 41 Market Prices of Shares 205 Committee Report 202 Maturity Analysis Board Integrated Risk Management 104 Net Assets Value Per Share 4 Committee Report Notes to the Financial Statements 240 Board Nomination Committee Report 105 Notice of Annual General Meeting 157 Board of Directors Operating Expenses 164 Capital Adequacy Computation 107 Other Assets 268 Capital Commitments 106 Other Liabilities 195 Cases Against the Bank Other Reserves 223 Cash and Cash Equivalents 76 Our Value Creation Story 226 Commitments and Contingencies 140 Personnel Expenses 231 Corporate Governance 236 Price Earnings Ratio Corporate Information 234 Property, Plant and Equipment 23 Correspondent Banks 202 Provision for Gratuity 195 Cost Income Ratio 233 (Defined Benefit Obligations) Customer Deposits Related Party Disclosures 4 Deferred Tax 84 Report of the Board of Directors 213 Derivative Financial Instruments 270 Report of the Related Party Transactions Directors’ Statement on Internal Control Review Committee 226 Distribution and Composition of Shareholders 62 Return on Average Assets 237 Dividend Cover 247 Return on Average Equity 112 Dividend Per Share 224 Risk Management Donations 221 Right-of-use assets 108 Due to Other Borrowers 203 Senior Management Team 247 Earnings Per Share 109 Stated Capital 247 Economic Value Addition 252 Statement of Cash Flows 123 Effective Tax Rate Statement of Changes in Equity 218 Events after the Reporting Date 4 Statement of Profit or Loss and Other Expected Credit Loss/Impairment Allowance 4 Comprehensive Income 80 Financial Calendar 114 Statement of Directors’ Responsibility for 230 Financial Highlights 225 Financial Reporting 162 Financial Assets Measured at FVTPL 198 Statement of Financial Position 158 Financial Assets Measured at FVOCI 40 Statutory Liquid Assets Ratio Financial Value Creation 198 Statutory Reserve Fund 156 Form of Proxy 236 Segment Reporting General Reserve 207 Total Equity 150 GRI Content Index 149 Twenty Largest Shareholders 157 Income Statement 4 US Dollar Financial Statements Income Tax Expense 204 4 Intangible Assets 209 231 Interest Expense 26 242 Interest Income Enclosed 157 232 250 259 248 155 196 221 192 192

Seylan Bank PLC Annual Report 2019 261 Glossary Annexes A Capital gain (capital profit) rate), that has an initial net investment Exposure at default (EAD) The gain on the disposal of an asset smaller than would be required for The amount that a bank is exposed to Acceptances calculated by deducting the cost of the other instruments that have a similar at the time of default of its borrower. The signature on a Bill of Exchange asset from the proceeds received on response to the variable, and that will indicates that the person on whom it is its disposal. be settled at a future date. F drawn accepts the conditions of the bill. In other words, a Bill of Exchange Capital reserves Dividend cover Fair value that has been accepted. Capital reserves consist of revaluation Profit after tax divided by gross Fair value is the amount for which an reserves arising from revaluation of dividends. This ratio measures asset could be exchanged between Accrual basis properties owned by the Bank and the number of times dividend a knowledgeable, willing buyer and Recognition of the effects of reserve fund set aside for specific is covered by the current year’s a knowledgeable, willing seller in an transactions and other events when purposes defined under the Banking distributable profits. arm’s length transaction. they occur without waiting for receipt Act No. 30 of 1988 and shall not or payment of cash or its equivalents. be reduced or impaired without the Dividend yield Fair value through profit or approval of the Monetary Board. Dividend earned per share as a loss (FVTPL) Actuarial gain/loss percentage of its market value. A financial asset/liability acquired Gain or loss arising from the difference Cash equivalents incurred principally for the purpose between estimates and actual Short-term highly liquid investments Documentary credits (L/Cs) of selling or repurchasing it in the experience in an entity’s pension plan. those are readily convertible to known Written undertakings by a bank on near term, part of a portfolio of amounts of cash and which subject behalf of its customers, authorising identified financial instruments that Amortised cost of a financial asset to an insignificant risk of changes a third party to draw on the Bank are managed together and for which or financial liability in value. up to a stipulated amount under there is evidence of a recent actual The amount at which the financial specific terms and conditions. pattern of short-term profit-taking, or a asset or financial liability is measured Contingencies Such undertakings are established derivative (except for a derivative that at initial recognition minus the A condition or situation, the ultimate for the purpose of facilitating is a financial guarantee contract). principal repayments, plus or minus outcome of which, gain or loss, will international trade. the cumulative amortisation using be confirmed only on the occurrence Fair value through other effective interest method of any or non-occurrence of one or more E comprehensive income (FVOCI) difference between that initial amount uncertain future events. Financial assets are classified and and the maturity amount and, for Earnings per share (EPS) measured at fair value through other financial assets, adjusted for any Cost to income ratio The profit attributable to each ordinary comprehensive income if they are held loss allowance. Operating expenses as a percentage share in the Bank, based on the in a business model whose objective is of total operating income. profit for the period after tax and achieved by both collecting contractual Accounting policies after deducting minority interest and cash flows and selling financial assets. The specific principles, bases, Cost method preference share dividends. conventions, rules, and practices A method of accounting whereby the Finance lease adopted by an entity in preparing and investment is recorded at cost. The Economic value added (EVA) A lease in which the lessee acquires presenting Financial Statements. Income Statement reflects income A measure of productivity which all the financial benefits and risks from the investment only to the extent takes into consideration cost of total attaching to ownership of whatever is B that the investor receives distributions invested equity. being leased. from accumulated net profits of the Basel III investee arising subsequent to the Effective interest rate (EIR) Foreign exchange contract The Basel Committee on Banking date of acquisition. Rate that exactly discounts Agreement between two parties to Supervision (BCBS) issued the estimated future cash payments or exchange one currency for another Basel III rules text, which presents Cost-push inflation receipts through the expected life at a future date at a rate agreed the details of strengthened global A continuous increase in average of the financial instruments or when upon today. regulatory standards on bank capital price levels due to an increase in appropriate, a shorter period to the net adequacy and liquidity. production costs. carrying amount of the financial asset Foreign exchange income or financial liability. The realised gain recorded when Bills of collection Credit ratings assets or liabilities denominated in A Bill of Exchange drawn by an An evaluation of a corporate ability to Effective tax rate foreign currencies are translated into exporter usually at a term, on an repay its obligations or the likelihood Provision for taxation excluding Sri Lankan Rupees on the reporting importer overseas and brought by the of not defaulting, carried out by an deferred tax divided by the profit date at prevailing rates which differ exporter to his bank with a request to independent rating agency. before taxation. from those rates in force at inception collect the proceeds. or on the previous reporting date. D Equity method Foreign exchange income also arises C The equity method is a method of from trading in foreign currencies. Deferred tax accounting whereby the investment Capital adequacy Sum set aside in the Financial is initially recognised at cost and Financial instrument The percentage of risk-adjusted assets Statements that may become adjusted thereafter for the post- A financial instrument is any contract supported by capital as defined under payable/receivable in a financial acquisition changes in the investor’s that gives rise to both a financial asset the framework of risk-based capital year other than the current financial share of net assets of the investee. The in one entity and a financial liability or standards developed by the Bank for year. It arises because of temporary profit or loss of the investor includes equity instrument in another entity. International Settlement (BIS) and as differences between tax rules and the investor’s share of the profit or loss modified to suit local requirements by accounting conventions. of the investee. the Central Bank of Sri Lanka. Derivatives Expected credit loss (ECL) A derivative is a financial instrument The weighted average of credit losses or other contract, the value of with the respective risks of a default which changes in response to some occurring as the weights. underlying variable (e.g., an interest

262 Seylan Bank PLC Annual Report 2019 Annexes Glossary GK Net stable funding ratio (NSFR) R Measures the amount of long-term, Gross dividend Key Management Personnel (KMP) stable sources of funding employed by Related parties The portion of profits distributed Key Management Personnel are a bank relative to the liquidity profiles Parties where one party has to the shareholders including the those persons having authority and of the assets funded and the potential ability to control the other party or tax withheld. responsibility for planning, directing for contingent calls on funding exercise significant influence over and controlling the activities of the liquidity arising from off-balance sheet the other party in making financial Group entity, directly or indirectly, including commitments and obligations. and operating decisions, directly A group is a parent and all any Director (whether executive or or indirectly. its subsidiaries. otherwise) of that entity. Non-controlling interest (NCI) Non-Controlling Interest is the equity Related party transaction (RPT) Guarantees L in a subsidiary not attributable directly RPT is a transfer of resources, services A promise made by a third party or indirectly to a parent. or obligations between a reporting (guarantor), who is not a party to Lifetime expected credit losses entity and a related party, regardless a contract between two others, The expected credit losses that Non-performing advances (NPA) whether a price is charged. that the guarantor will be liable result from all possible default events All loans are classified as non- if the guarantee fails to fulfil the over the expected life of a financial performing when a payment is 90 days Repurchase agreement contractual obligations. instrument. in arrears. Contract to sell and subsequently repurchase securities at a specified H Liquid assets Non-performing advances cover date and price. Assets that are held in cash or in (NPA Cover) Hedging a form that can be converted to cash Cumulative loan loss provision as a Return on average assets (ROA) A strategy under which transactions readily, such as deposits with other percentage of total non-performing Net income expressed as a percentage are effected with the aim of providing banks, Bills of Exchange and Treasury advances (net of interest in suspense). of average total assets, used along cover against the risk of unfavourable Bills and Bonds. with ROE, as a measure of profitability price movements (interest rate, foreign NPA ratio (Net of IIS) and as a basis of intra-industry exchange rate, commodity prices, etc.). Liquidity coverage ratio (LCR) Total non-performing advances performance comparison. Refers to highly liquid assets held by (net of interest in suspense) High quality liquid assets (HQLA) Banks to meet short-term obligations. divided by total advances portfolio Return on equity (ROE) Assets that are unencumbered, liquid The ratio represents a generic stress (net of interest in suspense). Net income, less preferred share in markets during a time of stress scenario that aims to anticipate dividends if any, expressed as a and, ideally, be Central Bank eligible. market-wide shocks. O percentage of average ordinary These include, for example, cash shareholders’ equity. and claims on Central Governments Loss given default (LGD) Off-balance sheet transactions and Central Banks. The percentage of an exposure that Transactions that are not recognised Revenue reserves a lender expects to not recover in the as assets or liabilities in the Reserves set aside for future I event of default. Statement of Financial Position but distribution and investment. which give rise to contingencies and Impairment Lease liabilities commitments. Reverse repurchase agreement This occurs when recoverable Present value of contractual Transaction involving the purchase of amount of an asset is less than lease payments. Open credit exposure ratio securities by a bank or a dealer and its carrying amount. Total net non-performing loans and resale back to the seller at a future M advances expressed as a percentage date at a specified price. Impairment allowance of equity. Impairment allowance is a provision Market capitalisation Risk-weighted assets held as a result of a charge against The value of a company obtained P Used in the calculation of risk-based profit for the incurred loss. An by multiplying the number of capital ratios. The face amount of impairment allowance may either be issued shares by its market Parent lower risk assets is discounted using identified or unidentified as individual value as at a date. A parent is an entity that has one or risk weighting factors in order to reflect (specific) or collective (portfolio). more subsidiaries. a comparable risk per Rupee among Materiality all types of assets. The risk inherent in Intangible asset The relative significance of a Past due off-balance sheet instruments is also An identifiable non-monetary asset transaction or an event, the omission A financial asset is past due when recognised, first by adjusting notional without physical substance held or misstatement of which could counterparty has failed to make a values to Statement of Financial for use in the production/supply of influence the decisions of users of payment when that payment was Position (or credit) equivalents and goods/services or for rental to others Financial Statements. contractually due. then by applying appropriate risk or for administrative purposes. weighting factors. Price-earnings ratio (P/E Ratio) Interest cover N The current market price of the share Right-of-use asset is divided by the earnings per share An asset that represents a lessee’s A ratio showing the number of times Net asset value per share of the Bank. right to use an underlying asset for interest charges is covered by earnings Shareholders’ funds divided by the the lease term. before interest and tax. number of ordinary shares in issue. Probability of default (PD) The likelihood of a default over a S Interest spread Net interest income (NII) particular time horizon. It provides The difference between the amount a an estimate of the probability that a Securities sold under repurchase This represents the difference between Bank earns on assets such as loans borrower will be unable to meet its agreement (REPO) the average interest rate earned and and securities and what it pays on debt obligations. This relates to Treasury Bills and Bonds the average interest rate paid on liabilities such as deposits refinance sold subject to a commitment to funds. funds and inter-bank borrowings. Provision cover repurchase them at a predetermined Total provisions for loan losses price on a specified future date. Investment properties Net interest margin (NIM) expressed as a percentage of net Securities purchased under resale The margin is expected as net interest non-performing loans and advances agreement (reverse REPO). These are Investment property is property income divided by average interest before discounting for provisions on loans collateralised by the purchase (land or a building – or part of a earning assets. non-performing loans and advances. of Treasury Bills and/or guaranteed building – or both) held (by the owner commercial papers from the or by the lessee under a finance counterparty to which the loans are lease) to earn rentals or for capital granted. The sale by the counterparty appreciation or both, rather than for is subject to a commitment by the use or sale.

Seylan Bank PLC Annual Report 2019 263 Annexes Glossary Bank to sell back the underlying U debt securities to the borrower at a predetermined price on a specific Undrawn credit lines future date. Credit facilities approved but not yet utilised by the clients as at the Segmental analysis reporting date. Analysis of financial information by segments of an enterprise specifically, V the different industries and the different geographical areas in which Value added it operates. Wealth created by providing banking and other services less the cost of Shareholders’ funds/equity providing such services. The value Total of issued and fully paid added is allocated among the share capital and capital and employees, the providers of capital, revenue reserves. to Government by way of taxes and retained for expansion and growth. Statutory reserve fund A capital reserve created as per the Y provisions of the Banking Act No. 30 of 1988. Yield to maturity Discount rate at which the present Subsidiary company value of future payments would equal A subsidiary is an enterprise that the security’s current price. is controlled by another enterprise (known as the parent). 12-month expected credit loss The portion of lifetime expected credit T losses that represent the expected credit losses that result from default Tier 1 capital (common equity Tier events on a financial instrument that 1 – CET 1) are possible within the 12 months Common Equity Tier 1 (CET 1) is after the reporting date. a component of Tier 1 capital that consists mostly of Stated Capital. It is a capital measure that was introduced as a precautionary measure to protect the economy from a financial crisis. Tier 1 capital (additional Tier 1 capital – AT I) Additional Tier 1 Capital (AT I) is a component of Tier 1 Capital that comprises securities that are subordinated to most subordinated debt, which have no maturity, and their dividends can be cancelled at any time. Tier 2 capital Capital representing revaluation reserves, general provisions and other capital instruments, which combine certain characteristics of equity and debt such as hybrid capital instruments and subordinated term debts. Total capital Capital base is summation of the core capital (Tier 1) and the supplementary capital (Tier 2).

264 Seylan Bank PLC Annual Report 2019 Annexes iNdm;s;=udf.a mKsúvh ys;j;a md¾Yjlrejks\" kshdukh yd wëCIKh bÈß .uk iudf,dapkhg ,la jk fuu jir ;=<§ iEu úgl§u fuka nexl=fõ l%shdj,Ska yd bÈßfha§o jHdmdßl wNsfhda. Woa.; jk meje;s ÿIalr fjf<|fmd< ;;a;aj ine`È kS;s yd fr.=,dis ish,a,gu ksis ´kEu wjia:djl kfjda;amdokd;aul úi÷ï hgf;a;a m%YxikSh ld¾hidOkhla mj;ajd f,i wkql+,;dj oelaùug wm lghq;= lr fidhd hdu wms ksrka;rfhka lrkafkuq' .ekSug fi,dka nexl=j iu;a ù we;' we;' tlS lrKd iïnkaOfhka nexl=fõ wjodkï l<ukdlrKh lr.ekSfï§ ld¾hidOkh ksrka;rfhka ksÍCIKh nexl=fõ Wmdhud¾.sl ie,iqu wmf.a úpCIKYS,S jk w;ru .kqfokqlrejkaf.a lrñka wmf.a m%;sm;a;s yd l%ufõo wkd.; ÈYdk;sh fjkqfjka moku imhhs' uQ,H wjYH;djkag iydh oelaùu Wfoid hdj;ald, lsÍug wmf.a wOHCI uKav, mokï uQ<O¾u wdY%s;j iúu;aNdjhlao wjia:d yUd hdug nexl=j lghq;= lf<ah' Wm lñgq mshjr .kshs' Y%S ,xld uy nexl=j fufyhqï wdY%s;j kuHYS,S;ajhlao mj;ajd fuys m%;sM,hla jYfhka Okd;aul iu. wmf.a in|;djka iúu;a\" wLKav yd .ekSug wmf.a nexl=jg yels ù we;' j¾Okhla jd¾;d lsÍug nexl=j iu;a úêu;a f,i mj;ajd .ekSug wmg yels úh' fuu idOlh bÈß jirj,§ wmg we;s jQ w;ru uq¨ j;alï jákdlu remsh,a b,lal idCId;a lr.ekSug wjYH iQodkul ì,shk 500 miqlr hdug yels úh' fi,dka äðg,a keUqrej wm r|jhs' flfia fj;;a\" 2018 wjika ld¾;=j ;=< mdßfNda.slhkaf.a myiqj fukau wmf.a iq¿ yd uOH mßudK jHjidh wxYh olakg ,enqKq wúksYaÑ; foaYmd,ksl ksIamdok yd fiajdjka m%fhdackhg .ekSu flfrys wjOdkh fhduq lrñka wmf.a mßirh yd bka wk;=rej Woa.; jQ mdial= by< hdug fya;= jQ f;dr;=re ;dCIKh Wmdhud¾.sl ie,eiau l%shd;aul lsÍu ;=< bßod m%ydr ud,dfjys m%;sM,hla f,i yd ine¢ fiajd wjldYhka Ndú; lsÍu ie,lsh hq;= m%.;shla wm úiska oekgu;a 2019 jir w;sYhskau wNsfhda.d;aul jeäÈhqKq lsÍu w;skao wm bÈß mshjr w;alr .ksñka ;sfí' fulS jHdmdrhka jirla njg m;a úh' jif¾ m<uq udi /ila ;nd ;sfí' wmf.a .kqfokqlrejka rfgys wd¾Ól j¾Okh Wfoid w;sYhskau lsysmh ;=< il%Sh iajNdjhla .;a jHdmdßl fj; jvd fyd¢ka fiajd iemhSu Wfoid jeo.;a jk nj wmf.a úYajdih jk w;r l%shdldrlï fkdue;s ùfuka fmkS hkafka kj ;dlaIKhka taldnoaO lr.ekSfï tlS jHdmdr i|yd wu;r iydhla wjYH jdKscuh .kqfokq WodiSk ;;a;ajhl m%h;akhka b;du iS>% f,i mj;ajd .ekSug nj;a wmg yeÕS hhs' meje;s njhs' tys n,mEu l¾udka;h mqrdjg yels ù we;' ;dCIKsl kd,sld ixj¾Okh n,meje;ajqKq w;r jHdmdßl wjia:d b;du lsÍu Wfoid wm úiska idCId;a lr.kakd wm wdh;kfha oekgu;a mj;sk iSñ; ;;a;ajhl mej;sK' ,o id¾:l;ajh wmf.a äðg,a .kqfokq ;sridr;djg ndOd fkdjk whqßka úpCIK lghq;= wdY%s; j¾Okfhka ukdj fmkS hhs' l<ukdldrK ;SrK .kakd w;ru tlS wmf.a ld¾hidOkh úfYaIfhkau\" nexl= l¾udka;h ;=< Woa.; jHdmdßl wxY fj; wmf.a iydh ,nd §ug jk fjkialïj,g wkql+,j m%.ukh wms mshjr .kafkuq' iuia;hla f,i .;al, meje;s fjñka ish fiajd yd ksmehqï ,nd fok wjia:d m%udKh iSud lrkakg n,mE fi,dka nexl=jg fuh Woafhda.Su;a mshjrls' ia;=;s lsÍï wNsfhda.d;aul wd¾Ól mßirh uOHfha jqjo nexl=j ish m%Odk;u uQ,H o¾Yl wmf.a m%cdj yd mßirh 2019 jif¾§ b,lal ch .ekSu i|yd wdY%s;j .; jQ jirg idfmaCIj uOHia: nexl=j fufhùu fjkqfjka kka whqßka jirla jd¾;d lr ;sfí' id¾:l f,i yd mdßißl yd iudchSh n,mEu lghq;= l< wOHCI$m%Odk úOdhl ks,OdÍ wê odhl;ajhlska hq;=j Khlr yd ysñlï l<ukdlrKh lr.ekSfï§ wjYH lms, wdßhr;ak uy;d we;=¿ nexl= ksl=;= isÿ lsÍu ksid remsh,a ì,shk 9'3 l fufyhqï rduqj ìys lsÍug jeo.;a mdßißl l<ukdldÍ;ajh yd ld¾h uKav,h fj; wu;r m%d.aOkhla W;amdokh flreKq w;r yd iudc l<ukdlrK moaO;sh jeäÈhqKq wOHCI uKav,h fjkqfjka uf.a ia;+;sh nexl=fõ m%d.aOk m%udKd;au;dj ;jÿrg;a lr.ekSu fjkqfjka wms ksrka;rfhka msßkuk w;ru Tjqka ish¨u fokdg iúu;a lsÍug th fya;= úh' wdfhdaclhka lem ù isákafkuq' j.lSïiy.; uQ,H iqN m;ñ' tfukau\" nexl=j fjkqfjka iy fldgia ysñhka wmf.a nexl=j flfrys fufyhqïj, ksr; ùug wm ,nd§ olajk ,o wLKav lemùu yd odhl;ajh ;nd we;s úYajdih ikd: flfrk we;s m%;s{dj wmf.a mdßißl yd iudc fjkqfjka wOHCI uKav,fha idudðlhka ldrKhla f,io fuh i|yka l< yel' l<ukdlrK m%;sm;a;s ;=< i`oyka fõ' ish¨u fokd fj; ia;+;sjka; fjñ' fmr jir yd iei£fï§ nexl=j 2019 —fi,dka meyeir˜ mqia;ld, jHdmD;sh ,nd ÿka ksrka;r iyfhda.h yd jif¾§ 15] l j¾Okhla iksgqyka lrñka hgf;a 200 jk mqia;ld,h újD; mdCIsl;ajh fjkqfjka wmf.a ish¨u remsh,a ì,shk 3'7 l nÿ miq ,dNhla lsÍu;a iu.ska tlS jHdmD;sfha iqúfYaIS .kqfokqldrNj;=ka\" fldgia ysñhka yd jd¾;d lrk ,§' wm fuu jir ;=< lghq;= ikaêia:dkhla i,l=Kq lsÍugo wmg yels md¾Yjlrejka fj;o udf.a yDohx.u lr we;af;a wdodhï W;amdokh j¾Okh úh' fuu jHdmD;sh yryd Èjhsk mqrdjgu ia;+;sh ysñ úh hq;=h' 2020 jif¾§ kj lr.kakd w;ru wmf.a úhoï yd msßjeh isiqka úYd, ixLHdjla fjkqfjka fiajh cjhlska bÈßhg hdug .uka wrUd iSudlr .ekSugo lghq;= lrñks' lsÍug wmg yels jQ w;r mqia;ld, 250 la we;s wmg Tn iEu fokdu wm nexl=fõ olajd jHdma; ùfï bÈß b,lalh yuqfõ fufyhqï flfrys ;nk úYajdih wñ, fuu iudf,daÑ; jir ;=<§ wmf.a Kh fuh wmg we;s m%Odk;u fufyjrla f,i Yla;shls' yd w;a;sldrï l<U wdY%s;j 16] l i,ld wms lghq;= lrkafkuq' i;=gqodhl j¾Okhla fmkakqï lr we;s tfiau\" wm fj; iEu wjia:djl§u w;r iuia; Kh yd w;a;sldrï ióm wkql+,;dj u.fmkaùï yd iyfhda.h ,nd §u ksÍCIKhg ,la ùu fya;=fjka t;rï iïnkaOfhka wmf.a kshduk wêldÍka iqNjd§ fkdjQ wd¾Ól mßirhla ;=< jqjo nexl=fõ ia:djr uQ,H moku ksid fj;o ia;+;sjka; fjñ' wl%sh Kh wkqmd;slh my; nei ;sfí' fufyhqï flfrys mSvkhla t,a, ùug ;jo wmf.a fkdmiqniakd W;aidyh iy bv fkd;nd ish¨u kshduk ne£ï Tn ish¨u fokd fj; udf.a iqNdYsxik .kqfokqlrejkag imhk ,o fiajdj ys bgq lrñka lghq;= lsÍug wmg yelshdj msßkuñ' .=Kd;aul nj fya;=fjka ;ekam;= 12] l ,eìK' ndi,a III wjYH;d iy Y%S','.s'm% 9 ys j¾Okhla fmkakqï lrhs' oelafjk ydkslrK m%;smdok ne£ï ví,sõ tï wd¾ tia vhia ;jÿrg;a iudf,dapkh flfrkq we;' iNdm;s 2020 fmnrjdß 21

Seylan Bank PLC Annual Report 2019 265 Annexes jiytupd; fbjk; kjpg;Gf;Fupa gq;fhsu;fSf;F> eltbf;iffis Kd;ndLj;J jPu;Tfis njhlu;e;Jk; toq;Ftjw;F tUfpNwhk;. vkJ gzpg;ghsu; ehk; cWjpG+z;Ls;Nshk;. kjpg;gha;T nra;ag;gl;l epjpahz;by; rigapd; Jizf; FOf;fs; ,J rthyhd nghUshjhu R+o;epiyfSf;F njhlu;ghd nfhs;iffs; kw;Wk; tq;fpapd; %Nyhghaj; jpl;lkhdJ vkJ kj;jpapYk; nryhd; tq;fpahdJ nray;Kiwfs; mKy;gLj;jg;gLtij vjpu;fhy ,yf;Ffspd; mbg;gilapy; rpwe;j epjpapay; ngWNgw;wpid Nkw;ghu;it nra;J tUfpd;wd. kj;jpa fl;likf;fg;gl;Ls;sJ. vkJ ntspg;gLj;jpAs;sJ. epjp ,lu;fisj; tq;fpAldhd njhlu;Gfs; toik tq;fpahdJ mjd; mbg;gil tpahghur; jpwk;gl vjpu;nfhz;ljd; thapyhf> NghyNt rPuhfg; Ngzg;gLfpd;wd. nraw;ghLfis cWjpg;ghl;Lld; tq;fpahdJ thbf;ifahsu;fspd; Kd;ndLj;J tUfpwJ. ,jd; epjpj; Njitfisg; G+u;j;jp nra;a nryhd; b[pl;ly; Gul;rp fhuzkhf> vjpu;tUk; Mz;LfspYk; Kbe;Js;sJ. ,jd; %ykhf> nryhd; jfty;njhopy;El;gk; kw;Wk; mjDld; vkJ tpahghu ,yf;Ffis tq;fpahdJ Neu;kiwahd tsu;r;rpiag; njhlu;Gila gy;NtW jsq;fisg; miltjw;fhd rhj;jpaf;$W epyTfpwJ. gjpTnra;Js;sJld;> tq;fpapd; nkhj;j gad;gLj;Jtjpy; Vw;gl;Ls;s nrhj;Jf;fspd; ngWkjp &gh 500 Kd;Ndw;wkhdJ> thbf;ifahsu;fs; Fwpg;ghf> rpwpa kw;Wk; eLj;jusT gpy;ypad; Mf mjpfupj;Js;sJ. vkJ Nritfis mjpfk; njhopy;fis ikakhff; nfhz;l gad;gLj;Jtjw;F toptFj;Js;sJ. vkJ %Nyhghaj; jpl;lj;jpid vdpDk;> 2018 epjpahz;bd; Gj;jhf;fkhd jPu;Tfis mKy;gLj;Jtjpy; ehk; fzprkhdsT ,Wjpf;fhyhz;by; ,lk;ngw;w murpay; mwpKfg;gLj;Jk; vkJ gazkhdJ> Kd;Ndw;wj;jpidf; fhz;gpj;J rhrd neUf;fb kw;Wk; capu;j;j thbf;ifahsu;fspd; Nguhjutpd; tUfpNwhk;. vkJ toikahd tpahghu QhapW jhf;Fjy;fisj; njhlu;e;J kj;jpapy; njhlu;e;Jk; Kd;Ndhf;fpr; eltbf;iffspd; xUgFjpahf> ehl;by; epytpa mrhjhuz R+oyhdJ nry;fpd;wJ. gd;Kfg;gLj;jg;gl;l ehl;bd; nghUshjhuj;jpw;F msg;gupa 2019 epjpahz;L rthy; epiwe;jjhf jsq;fspy; Nkw;nfhs;sg;gLk; gq;fspg;gpid toq;Fk; rpwpa kw;Wk; mikaf; fhuzkhapw;W. Mz;bd; Kjw; b[pl;ly; nfhLf;fy; thq;fy;fspyhd eLj;jusT njhopy;KidNthUf;F gFjpapy; tpahghu eltbf;iffspy; tsu;r;rpahdJ ,jw;Fr; rpwe;j njhlu;e;Jk; cjtp tUfpd;Nwhk;. fhzg;gl;l ke;j epiy fhuzkhf rhd;whf mikfpd;wJ. ,jd; tpahghuf; nfhLf;fy; thq;fy;fspy; %yk;> epjpj;Jiwapy; Vw;gl;L me;jtifapy;> epWtdj;jpd; njhle;J fzprkhdsT tPo;r;rp Vw;gl;lJ. tUk; khw;wq;fSf;F ntw;wpfukhf ,aq;Fk; vz;zf;fUtpid ghjpf;fhj ,e;epiyikahdJ epjpj;JiwapYk; Kfq;nfhLg;gjw;nfd nryhd; tifapy; Nkw;$wpa JiwapdUf;Fj; vjpu;kiwahd jhf;fj;jpid tq;fpahdJ jdJ epjpr; Nritfis njhlu;e;Jk; vkJ Mjutpid toq;f Vw;gLj;jpaJ. gd;Kfg;gLj;jp tUfpd;wik vjpu;ghu;f;fpd;Nwhk;. Gydhfpd;wJ. vkJ nrayhw;Wif ghuhl;Ljy; tpahghu eltbf;iffSf;F rthyhd vkJ r%fk; kw;Wk; R+oy; 2019 Mk; Mz;by; tq;fpapd; nghUshjhu R+oy; epytpa NghJk; r%f kw;Wk; Rw;Wr; R+oy; Ngz;jF tpahghu ,yf;Ffis miltjw;F tq;fpapd; fle;j epjpahz;Lf;fhd jd;ik fUjp> R+oy; ghJfhg;G kw;Wk; mu;g;gzpg;Gld; cioj;j vkJ epjpapay; Fwpfhl;bfs; kpjkhd r%fg; nghWg;ghz;ik njhlu;ghd gzpg;ghsu; kw;Wk; gpujk epiwNtw;W tsu;r;rpia ntspg;gLj;jpapUe;jd. Kiwikfis mKy;gLj;Jtjw;F ehk; cj;jpNahfj;juhd jpU fgpy Fwpg;ghf> ntw;wpfukhf ,lk;ngw;w cWjpG+z;Ls;Nshk;. vkJ r%f kw;Wk; Mupauj;d> tq;fpapd; Kfhikj;Jtk; fld; gj;jpuq;fs; kw;Wk; cupik R+oypay; Nkyhz;ik njhlu;ghd kw;Wk; Copau;fSf;F gzpg;ghsu; gq;F toq;fy; thapyhf &gh 9.3 nfhs;ifahdJ> nghWg;G tha;e;j rigapd; rhu;ghf vdJ ed;wpiaj; gpy;ypad; jpul;lg;gl;ljd; %yk; Kiwapy; R+oy; ghJfhg;G kw;Wk; njuptpj;Jf; nfhs;s tpUk;GfpNwd;. tq;fpapd; %yjdj; jpwd; nkd;NkYk; r%fg; nghWg;ghz;ikj; jpl;lq;fSf;Fg; cq;fsJ gq;fspg;Gf;F vdJ tYtile;jJ. ,J tq;fpapd; kPJ gq;fspg;Gr; nra;Ak; toptiffisj; ghuhl;Lfs;. mj;NjhL> cWjpg;ghl;Lld; KjyPl;lhsu;fs; kw;Wk; gq;Fjhuu;fs; njspthff; Fwpg;gpLfpwJ. nrayhw;wp tUk; gzpg;ghsu; rigapd; nfhz;Ls;s ek;gpf;iff;Fr; rpwe;j midj;J cWg;gpdu;fSf;Fk; vdJ vLj;Jf;fhl;lhf mike;jJ. vkJ ~nryhd; g`ru| Ehyfj; ed;wpfs; cupj;jhfl;Lk;. jpl;lj;jpd; fPo; mjd; 200 MtJ 2019 epjpahz;by; tupf;Fg; gpd;duhd EhyfkhdJ mz;ikapy; ntw;wpfu- vkJ thbf;ifahsu;fs;> gq;Fjhuu;fs; ,yhgkhf &gh 3.7 gpy;ypad; khfj; jpwe;J itf;fg;gl;lJ. ,e;j kw;Wk; midj;J gq;fhsu;fspdJk; gjpTnra;ag;gl;lJld;> fle;j nraw;wpl;lj;jpd; thapyhf ehnlq;fpYk; ,iltplhj MjuTf;F vdJ cskhu;e;j epjpahz;Lld; xg;gpLifapy; ,J Mapuf;fzf;fhd ghlrhiy ed;wpiaj; njuptpj;Jf; nfhs;fpNwd;. 15% mjpfupg;gpidf; fhz;gpf;fpd;wJ. khztu;fs; gadile;Js;sJld;> tq;fpapd; tpahghu eltbf;iffspd; tUthapid mjpfupf;Fk; mNjNtis 250 Ehyfq;fisj; jpwf;Fk; vkJ kPJ ePq;fs; nfhz;Ls;s mghukhd nrytpdq;fisf; fl;Lg;gLj;Jtjd; ,yf;fpid Nehf;fp cWjpg;ghl;Lld; ek;gpf;ifNa vjpu;tUk; 2020 %yNk ,J rhj;jpakhapw;W. gazpj;J tUfpd;Nwhk;. epjpahz;by; Gj;Jzu;r;rpAld; vkJ gazj;ij Kd;ndLg;gjw;fhd vkJ fld;fs; kw;Wk; Kw;gzq;fs; ,zf;fg;ghl;Lj; jd;ik mbj;jskhf mikfpd;wJ. 16% mjpfupg;gpidg; gjpTnra;jJld;> tq;fpapd; mbg;gilahd epjpapay; rthyhd nghUshjhu R+oypd; Nfhl;ghLfs; rl;l uPjpahd flg;ghLfis mj;NjhL> tpahghuj;jpd; midj;J kj;jpapYk; Njwpa nraw;glhfld;fs; rpukkpd;wp vjpu;nfhs;tjw;F eltbf;iffspYk; Jizahf ,Uf;Fk; kw;Wk; Kw;gzq;fs; tpfpjkhdJ cjTfpd;wd. Basel III cldhd epjpf; fl;Lg;ghl;lhsu;fSf;Fk; vdJ Fiwtile;jikahdJ fld; ,zf;fg;ghl;Lj; jd;ik kw;Wk; ed;wpiaj; njuptpj;Jf; nfhs;s toq;fy; nray;Kiwapyhd SLFRS 9 ngWkhd Fiwg;G xJf;f tpUk;GfpNwd;. tpidj;jpwid ntspg;gLj;JfpwJ. kjpg;gPl;L ruj;Jf;fis mKy;gLj;JtJ vkJ Nrkpg;G itg;Gfs; 12% ,dhy; njhlu;ghd flg;ghLfs; njhlu;e;Jk; cq;fs; midtUf;Fk; vdJ mjpfupj;jikahdJ tq;fpapd; kjpg;gha;Tf;F cl;gLfpd;wd. tho;j;Jfs; cupj;jhfl;Lk;. Nkk;gl;l thbf;ifahsu; Nritapidg; giwrhw;Wfpd;wJ. vjpu;fhyk; njhlu;ghd Kd;Ndhl;lk; lgps;A+ vk; Mu; v]; la]; rthy; kpFe;j nghUshjhu jiytu; xOq;FgLj;jy; kw;Wk; Nkw;ghu;it R+o;epiyfspd; NghJk; cs;ehl;L kw;Wk; ru;tNjr thbf;ifahsu;fSf;F Gj;jhf;fkhd 21 ngg;utup 2020 epjpr;rl;lq;fs; kw;Wk; fl;Lg;ghLfSf;F mika ehk; tq;fpapd; tpahghu

266 Seylan Bank PLC Annual Report 2019 Annexes Circular to Shareholders (Company Registration No. PQ9) The total amount of the dividend that is proposed to be so declared is rupees Registered Office: Seylan Towers, one billion seven million two hundred and forty seven thousand five hundred and No. 90, Galle Road, Colombo 3. seventy two only (LKR 1,007,247,572.00). The dividend to be satisfied in the following manner: Dear Shareholder/s Method of satisfaction Total amount (LKR) First and final dividend for the year By way of a payment in cash 503,623,786.00 ended 31 December 2019 to be By the allotment and issue of new ordinary shares 503,623,786.00 satisfied partly by the payment of Total 1,007,247,572.00 cash and partly by the allotment and issue of new ordinary shares. The Board of Directors is confident that new ordinary (non-voting) shares will the Company will be able to satisfy the be issued. Accordingly, the ordinary Recommendation of a “Solvency Test” set out in Section 57 (voting) shares in issue will increase first and final dividend of the Companies Act No. 07 of 2007 from 251,477,872 to 256,716,994 The Board of Directors of Seylan Bank immediately after the payment of such and the ordinary (non-voting) shares in PLC (“the Company”) is pleased to inform dividends and have signed a Certificate issue will increase from 252,145,914 the shareholders of the Company that of Solvency in terms of Section 56 (3). to 260,305,975. The ordinary (voting) a first and final dividend of Rupees two The Bank also obtained a Certificate of shares and ordinary (non-voting) shares (LKR 2.00) on each ordinary (voting) Solvency from its Auditors, Messrs KPMG, to be so issued shall not be eligible for share and ordinary (non-voting) share Chartered Accountants. the cash dividend to be declared which is recommended by the Board for the is referred to above. financial year ended 31 December 2019. Issue of new ordinary shares to The dividend is subject to due declaration entitled shareholders The above mentioned share ratio is and approval by the shareholders at based on a value of rupees forty-eight the Company’s Annual General Meeting In view of the aforementioned proposal, (LKR 48.00) per ordinary (voting) share (“AGM”) to be held on Monday, the Company intends to allot and and rupees thirty and cents ninety 30 March 2020. issue new ordinary (voting) and new (LKR 30.90) per ordinary (non-voting) ordinary (non-voting) shares to those share respectively, being the closing The dividend so declared will be satisfied: shareholders who are registered in the prices of the respective shares as at the Company’s share register as well as those end of trading on 20 February 2020. The (i) Partly by way of payment in cash for shareholders whose names appear on Board is satisfied that the consideration a value of Rupee One (LKR 1.00) the Central Depository System (Pvt) Ltd. for which the new shares are to be issued for each ordinary (voting) share and (“CDS”) as at the end of trading on the is fair and reasonable to the Company ordinary (non-voting) share held; and date on which the requisite resolution of and to the existing shareholders of the shareholders declaring the dividend is respective class of shares. (ii) partly by the allotment and issue of duly passed. Accordingly, the shares to be ordinary (voting) share/s and ordinary allotted would be as follows: The new ordinary (voting) shares and (non-voting) share/s for a value ordinary (non-voting) shares to be so of Rupee One (LKR 1.00) for each (a) One new fully paid ordinary (voting) issued, shall, immediately consequent ordinary (voting) share and ordinary share for every 48.0000030539 to due allotment thereof to the entitled (non-voting) share held. existing ordinary (voting) shares held shareholders, rank equal and pari passu by the entitled shareholders; and in all respects with the existing issued Such dividend will be paid out of the and fully paid ordinary (voting) shares profit of the Company for the year ended (b) One new fully paid ordinary and ordinary (non-voting) shares of the 31 December 2019 which said profit (non-voting) share for every Company, respectively. Consequent to the has been recorded under “retained 30.9000035661 existing ordinary allotment and issue of such new shares, earnings” in the Company’s Statement (non-voting) shares held by the the stated capital of the Company will of Financial Position as at 31 December entitled shareholders. increase from LKR 17,044,722,726.90 2019. The Company made a profit of to LKR 17,548,346,512.90. Any LKR 3,680 Mn., as reflected in the Audited Consequently, a maximum of five million difference in the stated capital arising Financial Statements for the year ended two hundred and thirty nine thousand due to the rounding-off of the number of 31 December 2019. one hundred and twenty two (5,239,122) shares to be issued will be considered new ordinary (voting) shares and a together with the residual share fractions. maximum of eight million one hundred and sixty thousand sixty one (8,160,061)

Seylan Bank PLC Annual Report 2019 267 Annexes Circular to Shareholders Fractions arising on allotment the Shareholders’ Register maintained Statement of compliance and issue of new shares by the Company will not be aggregated. The Board of Directors hereby confirms However, if a shareholder holds shares that the allotment and issue of the new The residual share fractions arising from with multiple stockbrokers the shares ordinary (voting) shares and ordinary the aforementioned issue and allotment held with such stockbrokers will be (non-voting) shares is in compliance of new ordinary (voting) shares and aggregated for calculation purposes, with the Articles of Association of the ordinary (non-voting) shares will be and the shares arising as a result of the Company, the Listing Rules of the aggregated and the ordinary (voting) proposed allotment and issue of new Colombo Stock Exchange and the shares and ordinary (non-voting) shares shares will be uploaded proportionately provisions of the Companies arising consequent to such aggregation to the respective CDS accounts held with Act No. 07 of 2007. will be allotted to a trustee to be each broker. nominated and appointed by the Board The Board of Directors emphasises of Directors. The trustee so nominated Allotment of new shares to that the aforementioned allotment and and appointed will hold the said shares shareholders who do not hold issue of new ordinary (voting) shares in trust and dispose such shares on CDS accounts and Ordinary (non-voting) shares is in the trading floor of the Colombo Stock part satisfaction of the first and final Exchange (“CSE”) within a reasonable In view of the Direction issued by the dividend for the year ended 31 December period of time. The sales proceeds arising Securities and Exchange Commission 2019 and shall be dependent on and therefrom shall be distributed to a charity of Sri Lanka and Circular No. 13/2010 subject to the shareholders passing the or charities as shall be determined and issued by the CDS pertaining to the resolution declaring the said dividend. approved by the Board of Directors. dematerialisation of listed securities, shareholders who hold shares in Annual General Meeting Fractional entitlement referred to scrip form (i.e. in the form of a share The Annual Report of the Company and herein shall mean the fractions after certificate) as per the Shareholders’ the Notice of the AGM scheduled to applying the respective formula for the Register maintained by the Company, be held on Monday, 30 March 2020 issue and allotment of the new shares setting out in item 2 thereof, the as indicated below: relevant resolution to be passed by the shareholders in relation to the declaration Ordinary Number of ordinary (voting) shares held by a shareholder as of the stated dividend are circulated with (voting) shares this Circular to Shareholders. at end of trading on the AGM date Shareholders who are unable to attend the 48.0000030539 X1 meeting in person are entitled to appoint a proxy to attend and speak and also Ordinary Number of ordinary (non-voting) shares held by a X1 vote on their behalf, depending on their (non-voting) shares shareholder as at end of trading on the AGM date voting rights. A shareholder who wishes to appoint a proxy, should complete and 30.9000035661 return the enclosed Form of Proxy (in accordance with instructions specified Listing on the Colombo will not be issued share certificates for therein) addressed to the Registered Office Stock Exchange the new shares allotted in their favour. of the Company not less than forty-eight Such shareholders are requested to open (48) hours before the time scheduled for Pursuant to an application made by the an account with the CDS and to deposit the holding of the AGM. Company to the CSE, the CSE has granted the share certificates in their possession approval in principle for the listing of the in the CDS, prior to the date of the AGM, Yours faithfully, new Ordinary (voting) and Ordinary to enable the Company to directly deposit (non-voting) shares on the official list of the new shares into such CDS account of By Order of the Board of Directors the CSE upon allotment. the shareholder. of Seylan Bank PLC Allotment of new shares As regards the new ordinary (voting) Mrs N N Najumudeen share and/or ordinary (non-voting) share Company Secretary In the event that the shareholders entitlements of those shareholders who pass the requisite resolution declaring fail or were unable to open an account 2 March 2020 the aforementioned dividend and its with the CDS prior to the date of the satisfaction partly by way of the allotment AGM, the Company will register in the Note: Please contact the Company Secretariat and issue of new ordinary (voting) shares respective shareholder’s account in on +94 11 245 6582,+94 11 245 6589 and ordinary (non-voting) shares, the the Share Register maintained by the or +94 11 245 6551 for any clarification/ accounts of the shareholders whose Company, the share entitlements allotted. information. shares are deposited in the CDS would If such shareholders open CDS accounts be directly uploaded with the new shares after the AGM and inform the Company (to the extent each shareholder has Secretary in writing of the CDS account become entitled thereto) within seven number, the Company will take steps to market days from and excluding the date directly upload the new share entitlements on which the resolution is passed. to the respective CDS accounts within five market days. In calculating the number of shares held by a shareholder as at the entitlement date, the shareholding of such shareholder as appearing in the CDS and

268 Seylan Bank PLC Annual Report 2019 Annexes Notice of Meeting NOTICE IS HEREBY GIVEN THAT the THAT the shareholders entitled shall 4. To re-elect as a Director, Thirty Third Annual General Meeting of be those who are duly registered in Mr A S Wijesinha who retires at the Seylan Bank PLC (“the Bank” or the Company’s Shareholders’ Register Annual General Meeting in terms of “the Company”) will be held on Monday, as well as those shareholders whose Article 82 of the Articles of Association 30 March 2020 at 10.00a.m. at the names appear on the Central Depository of the Company. Mr A S Wijesinha is Grand Ballroom of Galadari Hotel, Systems (Pvt) Ltd. as at the end of an Independent Director of the Bank No. 64, Lotus Road, Colombo 01 for the trading on the date of the Annual and was appointed to the Board on following purposes: General Meeting; 1 December 2016. His profile and other directorships held are published 1. To receive and consider the Annual THAT the total number of new ordinary on pages 78 and 121 respectively in Report of the Board of Directors on (voting) shares to be issued would be the Annual Report. the State of Affairs of the Company a maximum of five million two hundred and the Audited Financial Statements and thirty nine thousand one hundred 5. To re-elect as a Director, for the year ended 31 December and twenty two (5,239,122) and the total Mrs S K Salgado, Independent 2019 together with the Report of the number of ordinary (non-voting) shares Director, who retires at the Annual Auditors thereon. to be issued would be a maximum of General Meeting in terms of Article eight million one hundred and sixty 82 of the Articles of Association 2. To declare a first and final Dividend for thousand sixty one only (8,160,061); of the Company. Mrs S K Salgado the financial year ended 31 December is an Independent Director of the 2019 as recommended by the Board THAT the shares issued consequent to the Bank appointed to the Board on of Directors which said declaration allotment referred to above be listed on 1 December 2016. Her profile and is further explained in the Circular to the CSE; other directorships held are published Shareholders dated 2 March 2020 on pages 79 and 121 respectively in accompanying this Notice, and for this THAT the residual share fractions arising the Annual Report. purpose to consider and if thought fit from the aforementioned issue and to pass the following resolution as an allotment of new ordinary (voting) shares 6. To re-appoint M/s KPMG, Chartered Ordinary resolution: and ordinary (non-voting) shares will be Accountants as the Auditors of the aggregated and allotted to a trustee who Company for the ensuing year and to “THAT a first and final Dividend of a total will dispose such shares on the trading authorise the Board of Directors to sum of Rupees one billion seven million floor of the CSE and the sales proceeds determine their remuneration. two hundred and forty seven thousand arising therefrom shall be distributed five hundred and seventy two only to a charity or charities as shall be 7. To authorise the Board of Directors to (LKR 1,007,247,572.00) which determined and approved by the Board determine donations for 2020. constitutes a dividend of Rupees two of Directors; (LKR 2.00) per share be distributed 8. To consider any other business of to the holders of ordinary (voting) and THAT the new ordinary (voting) shares which due notice has been given. ordinary (non-voting) shares as follows: and ordinary (non-voting) shares to be so allotted and issued shall not be By Order of the Board of Directors of (i) A sum of Rupee one (LKR 1.00) to eligible for the payment of the cash Seylan Bank PLC, be declared in cash on each ordinary dividend declared hereby.” (voting) and ordinary (non-voting) Mrs N N Najumudeen share; and The residual share fractions referred to Company Secretary in the above resolution shall mean the (ii) A sum of Rupee one (LKR 1.00) to fractions after applying the respective Colombo be declared by way of the allotment formula for the issue and allotment of the of new ordinary (voting) shares new shares as indicated in the Circular 2 March 2020 in the ratio of one new fully paid dated 2 March 2020. ordinary (voting) share for every Please refer instructions regarding 48.0000030539 existing ordinary 3. To re-elect as a Director, attendance at the meeting, on the (voting) shares held and one new Mr W D K Jayawardena, who retires reverse hereof: fully paid ordinary (non-voting) share by rotation at the Annual General for every 30.9000035661 existing Meeting in terms of Article 82 of the ordinary (non-voting) shares; Articles of Association of the Company. Mr W D K Jayawardena is the Deputy THAT such dividend be paid out of the Chairman and a Non-Executive profit of the Company for the year ended Director of the Bank appointed to the 31 December 2019 which said profit has Board on 1 August 2013. His profile, been recorded under “retained earnings” Board subcommittee memberships of the Company’s Statement of Financial and other directorships held are Position as at 31 December 2019; published on pages 77 and 120 respectively in the Annual Report.

Seylan Bank PLC Annual Report 2019 269 Instructions regarding attendance Annexes Notice of Meeting at the meeting. Notes (a) An ordinary (voting) shareholder who is entitled to attend, speak and vote at the meeting is entitled to appoint a proxy to attend, speak and vote on his/her behalf. (b) An ordinary (non-voting) shareholder who is entitled only to attend and speak at the meeting is entitled to appoint a proxy holder to attend and speak on his/her behalf. (c) A proxy holder need not be a shareholder of the Company. A Form of Proxy is enclosed for this purpose. (d) The completed Form of Proxy should be deposited at the Office of the Company Secretary at Level 15, Seylan Towers, No. 90, Galle Road, Colombo 03 not less than 48 hours before the time appointed for the holding of the Annual General Meeting. Only registered proxy holders will be permitted to attend the Annual General Meeting. (e) Shareholders/proxy holders are requested to bring with them their National Identity Cards or any other form of valid identification (e.g. passport, driving licence) when attending the Annual General Meeting.

270 Seylan Bank PLC Annual Report 2019 Corporate Information Name of Company Board of Directors Subsidiary Seylan Bank PLC Mr W M R S Dias Chairman/Non-Executive Director Seylan Developments PLC Company registration number (Company Registration Number PQ 151) PQ 9 Mr W D Kapila Jayawardena Level 15, Seylan Towers Deputy Chairman/Non-Executive Director No. 90, Galle Road, Registered Office and Colombo 03, Sri Lanka Head Office Ms M Coralie Pietersz Seylan Towers Independent Director/Senior Director For any clarifications on No. 90, Galle Road, this Report, please contact: Colombo 03, Sri Lanka Mr Kapila P Ariyaratne Phone : +94 11 245 6000 Director/Chief Executive Officer The Chief Financial Officer Fax : +94 11 245 6456 Seylan Bank PLC Swift : SEYBLKLX Mr P L S Kumar Perera “Seylan Towers” email : [email protected] Independent Director No. 90, Galle Road Website : www.seylan.lk Colombo 03, Sri Lanka Mr S Viran Corea Legal form Non-Executive Director email : [email protected] A public limited liability company incorporated in Sri Lanka on Mr Anushka S Wijesinha Phone : +94 11 245 6371, 28 August 1987 under the Companies Independent Director : +94 11 245 6367 Act No. 17 of 1982 and re-registered under the Companies Act No. 07 Mrs Sandya K Salgado Fax : +94 11 245 2612 of 2007 on 30 May 2007. Commenced Independent Director business operations as a Licensed Commercial Bank regulated under Mr D M D Krishan Thilakaratne the Banking Act No. 30 of 1988 Non-Executive Director (as amended) on 24 March 1988. Company was listed in the Colombo Mr D R Abeysuriya Stock Exchange on 5 January 1989. Independent Director Colombo Stock Exchange listing Mr R D Tissera The Bank’s ordinary voting shares, Non-Executive Director (Alternate ordinary non-voting shares and the Director to Mr W D K Jayawardena) rated, unsecured, redeemable debentures issued in the years 2014, 2016, 2018 Company Secretary and 2019 were listed on the Colombo (Mrs) N N Najumudeen Stock Exchange. ACIS (UK), ACCS (SL) Accounting year end Auditors 31 December Messrs KPMG, Chartered Accountants Credit rating The Bank has been assigned a A-(lka) National long-term rating by Fitch Ratings Lanka Limited.

Seylan Bank PLC Annual Report 2019 Form of Proxy I/We*……………..……………………………………………………………………………...……............................................................................…… of …………………………………..…………….……...….…………………………….........................…… being a shareholder/s of Seylan Bank PLC hereby appoint Mr/Mrs/Miss*………………………………………………………….……………………………………………………..…..…...................... (N I C No. ..……………........................……) of ……………..……………..……………………………….………..….………..........… or failing him/her Mr Wadugamudalige Marius Ravindra Srilal Dias of Colombo 5, whom failing, Mr Waduthanthri Darshan Kapila Jayawardena of Battaramulla, whom failing, Ms Miriam Coralie Pietersz of Battaramulla, whom failing, Mr Kapila Prasanna Ariyaratne of Colombo 3, whom failing, Mr Paththayame Lekamalage Sisira Kumar Perera of Seeduwa, whom failing, Mr Srikumaradas Viran Corea of Dehiwela, whom failing, Mr Anushka Sheran Wijesinha of Colombo 5, whom failing, Mrs Sandya Kumari Salgado of Panadura, whom failing, Mr Don Manuwelge Don Krishan Thilakaratne of Battaramulla, whom failing, Mr Darshan Ravindra Abeysuriya of Rajagiriya as my/our* Proxy to represent me/us* and to vote on my/our* behalf at the Thirty Third Annual General Meeting of the Company to be held on Monday, 30 March 2020 at 10.00am and at any adjournment thereof. The preferences in the following table to be marked by ordinary voting shareholder/s only. I/We* the undersigned hereby authorise my/our* Proxy to vote for me/us* and on my/our* behalf in accordance with the preferences as indicated below (please mark your preference with an “X”): For Against 1. To receive and consider the Annual Report of the Board of Directors on the state of affairs of the Company and the Audited Financial Statements for the year ended 31 December 2019 together with the Report of the Auditors thereon. 2. To declare a first and final ordinary dividend for the financial year ended 31 December 2019 as recommended by the Board of Directors and to consider and if thought fit to pass the resolution set out in the Notice of Meeting. 3. To re-elect as a Director, Mr W D K Jayawardena, who retires by rotation in terms of Article 82 of the Articles of Association of the Company. 4. To re-elect as a Director, Mr A S Wijesinha, who retires by rotation in terms of Article 82 of the Articles of Association of the Company. 5. To re-elect as a Director, Mrs S K Salgado who retires by rotation in terms of Article 82 of the Articles of Association of the Company. 6. To re-appoint Messrs KPMG, Chartered Accountants as the Auditors of the Company for the financial year 2020 and to authorise the Directors to determine their remuneration for the said financial year. 7. To authorise the Board of Directors to determine donations that may be made by the Bank during the year, 2020. (*Please delete the inappropriate words) Signed this ……………....…………................................................................................…. day of ……....………....………..............…. 2020. ……………....…………..............… ……………....…………..............…...... Signature/s of Shareholder/s Shareholder/s’ NIC/Co. Reg. No. Notes and instructions as to the completion of the Form of Proxy are noted on the reverse hereof.

Form of Proxy Seylan Bank PLC Annual Report 2019 Instructions for the completion of Form of Proxy 1. In terms of Article 63 of the Articles 2. The full name and address of the of Association of the Company the shareholder should be filled in legibly instrument appointing a proxy shall on the Form of Proxy together with be in writing and the National Identity Card Number/ Passport/Company Registration a) in the case of shareholder who is Number (as applicable). an individual, be under the hand of the shareholder or his or her Ordinary voting shareholders shall attorney; or indicate with an ‘X’ in the space provided as to how the proxy is to b) if the shareholder is a company or vote on each Resolution. If no a corporation, be either under its indication is given, the proxy shall common seal or under the hand exercise his/her discretion and vote of an officer or attorney authorised as he/she thinks fit. by the such organisation in that behalf in accordance with 3. The completed Form of Proxy should its Articles of Association or be deposited at the Registered Office Constitution. of Seylan Bank PLC at Seylan Towers, No. 90, Galle Road, Colombo 3 In terms of Article 69, a company or (Attention: The Company Secretary, corporation being a shareholder of Level 15, Seylan Towers) not later than the Company may appoint any of its 48 hours before the time appointed officers or any other person to be its for the holding of the meeting. representative or proxy at any meeting or meetings of the Company and any 4. If the Form of Proxy has been signed person so appointed shall be entitled by an attorney, a copy of the Power of to be present and vote and exercise Attorney certified by a notary should all other powers in regard to any such accompany the completed Form of meeting on behalf of the Company Proxy for registration, if such Power or corporation which he or she of Attorney has not already been represents as if he or she is a member registered with the Company. holding the shares of such company or corporation. 5. If there is any doubt as to how the vote is to be exercised, by reason of (The Company may, but shall not be the manner in which the Form of Proxy bound to require evidence of the has been completed, no vote will be authority of any such attorney or recorded by the Form of Proxy. representative officer).

Seylan Bank PLC Annual Report 2019 Investor Feedback Form We welcome your comments and queries. In order to respond to your queries, please complete the following form and return to – The Company Secretary Seylan Bank PLC Seylan Towers No. 90, Galle Road Colombo 03 Name (Mr/Mrs/Ms/Other) : National Identity Card Number : Permanent Mailing Address : Contact Telephone : Email : Occupation/Profession : Queries/Comments ............................................. ............................................. Signature of Shareholder Date



Produced by Smart Media (Pvt) Limited, a carbon neutral company that offsets its direct and indirect GHG emissions through verified sources.

This paradox in airline jargon truly describes the year gone by for Seylan Bank. In a year of challenge for the Bank and the industry, the saying illustrates the premise of opportunity that lies within challenge. The Bank dug deep, propelled by the strength of its core values and ethos to remain strong and resilient for the years ahead. Seylan Bank PLC Seylan Towers, No. 90, Galle Road, Colombo 03, Sri Lanka. T: +94 11 245 6000 F: +94 11 245 6456 E: [email protected] W: www.seylan.lk SWIFT: SEYBLKLX