Sampath Bank | Annual Report 2013

16.2.1 Weighted Average Number of Ordinary Shares for Diluted EPS Group 2012 2013Weighted average number of ordinary shares used for Basic EPSWeighted average number of potential ordinary shares outstanding under ESOP 167,738,569 166,912,785 2010 effective from 30 June 2011 195,866 330,799Weighted average number of potential ordinary shares that would have been (78,413) (146,940) issued at average market priceWeighted average number of potential ordinary shares that would have been issued 117,453 183,859 167,856,022 167,096,644 for no consideration under ESOP 2010Weighted average number of ordinary shares adjusted for the effect of dilution17 DIVIDEND PAID AND PROPOSED Gross 2013 Net Gross 2012 Net Dividend Dividend Dividend DividendFinal dividend paid for the years Dividend Dividend 2012 & 2011 respectively Rs 000 Tax Rs 000 Rs 000 Tax Rs 000Out of dividend received - free of tax Rs 000 Rs 000Out of normal profitsScrip / cash dividend paid 120,554 - 120,554 44,039 - 44,039 1,833,542 183,229 1,650,313 1,382,945 138,294 1,244,651Final dividend proposed for the years 1,954,096 183,229 1,770,867 1,426,984 138,294 1,288,690 2013 & 2012 respectively 131,838 - 131,838 120,554 - 120,554Out of dividend received - free of tax 1,210,463 121,046 1,089,417 1,832,286 183,229 1,649,057Out of current year’s profits 1,342,301 121,046 1,221,255 1,952,840 183,229 1,769,611Scrip / cash dividend payable / paidDividend per Ordinary Share (Rs) 8.00 7.28 12.00 10.87The Board of Directors of the Bank has recommended the payment of a final cash dividend of Rs 8.00 per share for the year ended 31st Annual Report 2013 Sampath Bank PLCDecember 2013, a distribution of approximately Rs 1,342.3 Mn.The total proposed dividend amount is subject to changes in number of shares in issue due to changes in ESOP 2010.In accordance with Sri Lanka Accounting Standard - LKAS 10 (Events after the Reporting Period), above proposed final dividend has not beenrecognized as a liability as at the year end.18 ANALYSIS OF FINANCIAL INSTRUMENTS BY MEASUREMENT BASISFinancial instruments are measured on an ongoing basis either at fair value or at amortised cost. The summary of Significant AccountingPolicies describes how each category of financial instruments is measured and how income and expenses, including fair value gains andlosses, are recognized. The following table analyses the carrying amounts of the financial instruments by category as defined in Sri LankaAccounting Standard - LKAS 39 (Financial Instruments: Recognition & Measurement) under headings of the Statement of Financial Position. 249

NOTES TO THE FINANCIAL STATEMENTS18 ANALYSIS OF FINANCIAL INSTRUMENTS BY MEASUREMENT BASIS CONTD.18.1 Analysis of Financial Instruments by Measurement Basis - BankAs at 31st December 2013 Held for Amortised Held to Available Trading Cost Maturity for Sale Rs 000 Rs 000 Total Rs 000 Rs 000 Rs 000Financial Assets - 8,302,576 - - 8,302,576Cash & cash equivalents - 15,766,967 - - 15,766,967Balances with Central Bank of Sri Lanka - - -Placements with banks - 1,791,329 - - 1,791,329Reverse re-purchase agreements 230,517 18,043,918 - - 18,043,918Derivative financial instruments 46,974,516 - -Financial investments held for trading 3,496,141 - - - 230,517Financial assets held for trading pledged as collaterals - 46,974,516Loans & receivables from banks - - - -Loans & receivables from other customers - 638,244 - - 3,496,141Other loans & advances - 259,401,578 - 2,393,118 638,244Financial investments available for sale - 12,150,588 1,845,903 -Financial investments held to maturity - - - - 259,401,578Other assets 50,701,174 - 1,845,903 2,393,118 12,150,588Total Financial Assets 1,751,374 2,393,118 317,846,574 1,845,903 1,751,374 372,786,769Financial Liabilities - 2,211,281 2,211,281Due to banks 638,724 - 638,724Derivative financial instrumentsSecurities sold under re-purchase agreements - 3,389,684 3,389,684Due to other customers - 300,549,350 300,549,350Debt issued & other borrowed funds -Unclaimed dividend - 38,862,331 38,862,331Other liabilities - 54,981 54,981Total Financial Liabilities 638,724 64,701 64,701 345,132,328 345,771,05218.2 Analysis of Financial Instruments by Measurement Basis - BankAs at 31st December 2012 Held for Amortised Held to Available Trading Cost Maturity for Sale Rs 000 Rs 000 Total Rs 000 Rs 000 Rs 000Financial Assets - 10,432,135 - - 10,432,135Cash & cash equivalents - 17,200,792 - - 17,200,792Balances with Central Bank of Sri Lanka - - - 8,788,127Placements with banks - 8,788,127 - - 3,300,817Reverse repurchase agreements 279,022 3,300,817 - - 279,022Derivative financial instruments 35,181,084 - - 35,181,084Financial investments held for trading 2,856,321 - - - 2,856,321Financial assets held for trading pledged as collaterals -Loans & receivables from banks - - 816,119Loans & receivables from other customers - 816,119 - - 208,184,369Other loans & advances - 208,184,369 - - 10,515,756Financial investments available for sale - 10,515,756 - 1,923,624 1,923,624Financial investments held to maturity - - ---Other assets 38,316,427 - - - 1,399,091Total Financial Assets 1,399,091 - 1,923,624 300,877,257 260,637,206250

As at 31st December 2012 Held for Amortised Held to Available Total Trading Cost Maturity for Sale Rs 000Financial Liabilities Rs 000 Rs 000Due to banks Rs 000 Rs 000Derivative financial instrumentsSecurities sold under re-purchase agreements - 624,784 624,784Due to other customers 381,838 - 381,838Debt issued & other borrowed funds 2,757,117Unclaimed dividend - 2,757,117 243,330,990Other liabilities - 243,330,990 28,825,029Total Financial Liabilities - - 28,825,029 49,185 - 49,185 71,448 381,838 71,448 276,040,391 275,658,55318.3 Analysis of Financial Instruments by Measurement Basis - GroupAs at 31st December 2013 Held for Amortised Held to Available Trading Cost Maturity for Sale Rs 000 Rs 000 Total Rs 000 Rs 000 Rs 000Financial Assets - 8,340,838 - - 8,340,838Cash in hand - 15,766,967 - - 15,766,967Balances with Central Bank of Sri Lanka - - -Placements with Banks - 1,791,329 - - 1,791,329Reverse re-purchase agreements 230,517 18,043,918 - - 18,043,918Derivative financial instruments 46,974,516 - -Financial investments held for trading 3,496,141 - - - 230,517Financial assets held for trading pledged as collaterals - - - 46,974,516Loans & receivables from banks - - - -Loans & receivables from other customers - 638,244 - - 3,496,141Other loans & advances - 265,909,593 - 2,393,174 638,244Financial investments available for sale - 12,150,588 1,845,903 -Financial investments held to maturity - - - - 265,909,593Other assets 50,701,174 - 1,845,903 2,393,174 12,150,588Total Financial Assets 2,222,016 2,393,174 324,863,493 1,845,903 2,222,016 379,803,744Financial Liabilities - 2,250,372 2,250,372 Annual Report 2013 Sampath Bank PLCDue to banks 638,724 - 638,724Derivative financial instrumentsSecurities sold under re-purchase agreements - 3,055,257 3,055,257Due to other customers - 300,381,786 300,381,786Debt issued & other borrowed funds -Unclaimed dividend - 44,748,530 44,748,530Other liabilities - 54,981 54,981Total Financial Liabilities 638,724 64,701 64,701 350,555,627 351,194,351 251

NOTES TO THE FINANCIAL STATEMENTS18 ANALYSIS OF FINANCIAL INSTRUMENTS BY MEASUREMENT BASIS CONTD.18.4 Analysis of Financial Instruments by Measurement Basis - GroupAs at 31st December 2012 Held for Amortised Held to Available Trading Cost Maturity for Sale Rs 000 Rs 000 Total Rs 000 Rs 000 Rs 000Financial Assets - 10,442,259 - - 10,442,259Cash in hand - 17,200,792 - - 17,200,792Balances with Central Bank of Sri Lanka - - -Placements with Banks - 8,788,127 - - 8,788,127Reverse re-purchase agreements 279,022 3,300,373 - - 3,300,373Derivative financial instruments 35,181,084 - -Financial investments held for trading 2,856,321 - - - 279,022Financial assets held for trading pledged as collaterals - 35,181,084Loans & receivables from banks - - - -Loans & advances to customers - 816,119 - - 2,856,321Loans & receivables from other customers - 212,480,041 - 1,923,680 816,119Financial investments available for sale - 10,224,474 9,765 - - - - - 212,480,041Financial investments held to maturity 38,316,427 9,765 1,923,680 10,224,474Other assets - 1,923,680 1,858,276 265,110,461 9,765 1,858,276 305,360,333Financial Liabilities - 668,198 668,198 381,838 - 381,838Due to banks 2,751,332Derivative financial instruments - 2,751,332 243,088,236Securities sold under re-purchase agreements - 243,088,236 32,218,014Due to other customers -Debt issued & other borrowed funds - 32,218,014 49,185Unclaimed dividend - 49,185 71,448Other liabilities 381,838 71,448 279,228,251 278,846,41319 CASH AND CASH EQUIVALENTS Bank GroupAs at 31st December 2013 2012 2013 2012 Rs 000 Rs 000 Rs 000 Rs 000Local currency in handForeign currency in hand 4,731,387 4,483,580 4,740,751 4,483,791Balances with local banks 2,257,858 1,089,882 2,257,858 1,089,882Balances with foreign banksMoney at call & short notice 112,777 71,025 141,675 80,937 1,200,554 1,774,914 1,200,554 1,774,915 3,012,734 3,012,734 - 10,432,135 - 10,442,259 8,302,576 8,340,83820 BALANCES WITH CENTRAL BANK OF SRI LANKA Bank GroupAs at 31st December 2013 2012 2013 2012 Rs 000 Rs 000 Rs 000 Rs 000Statutory Reserve Requirement 15,766,967 17,200,792 15,766,967 17,200,792 15,766,967 17,200,792 15,766,967 17,200,792As required by the provisions of Section 93 of the Monetary Law Act, a cash balance is maintained with the Central Bank of Sri Lanka. Asat 31st December 2013, the minimum cash reserve requirement was 6% (2012 : 8%) of the Rupee deposit liabilities. There is no reserverequirement for foreign currency deposit liabilities of the Domestic Banking Unit (DBU) & the deposit liabilities of the Foreign CurrencyBanking Unit (FCBU).252

21 PLACEMENTS WITH BANKS Bank 2012 Group 2012As at 31st December Rs 000 Rs 000 2013 2013Placements - in Sri Lanka Rs 000 Rs 000Placements - out side Sri Lanka - - - - 1,791,329 8,788,127 1,791,329 8,788,127 1,791,329 8,788,127 1,791,329 8,788,12722 DERIVATIVE FINANCIAL INSTRUMENTSBank & GroupThe table below shows the fair values of derivative financial instruments, recorded as assets or liabilities, together with their notional amounts.The notional amounts indicate the volume of transactions outstanding at the year end and are indicative of neither the market risk nor thecredit risk.As at 31st December 2013 2012 Assets Liabilities Notional Assets Liabilities Notional Rs 000 Rs 000 Amount Rs 000 Rs 000 Amount Rs 000 Rs 000Forward foreign exchange contracts - Sales 59,749 7,880 23,699,656 40,712 28,441 20,393,065 4,218 30,576 13,393,481 10,498 37,096 8,291,383 - Purchases 202,985 39,083 4,266,290 164,397 1,060 6,381,962 24,827 277,218Currency SWAPs - Sales 2,153 599,208 16,346,588 279,022 381,838 15,540,650 638,724 59,821,687 48,491,388 - Purchases 230,517Hedge AccountingThe Bank has raised USD 100 Mn on 28th March 2013 through foreign borrowings for a period of one year, against which a SWAParrangement has been entered into with the Central Bank of Sri Lanka for the same value with same maturity on 28th March 2014.As per Sri Lanka Accounting Standard - LKAS 39 (Financial Instruments: Recognition & Measurement) the Bank has identified this particulartransaction as a ‘ Cash Flow Hedge’ after documenting the hedge relationship.The objective of the hedge is to reduce the variability of the cash flows of a foreign currency denominated above mentioned borrowing (onlythe capital portion) attributable to changes in LKR / USD exchange rate.The brief description of the hedge is given below.Details Description of the HedgeHedge instrument SWAP contract Annual Report 2013 Sampath Bank PLC Counterparty - Central Bank of Sri Lanka Notional amount - USD 100 MnHedge item 1 year USD denominated borrowing - USD 100 Mn Capital is repayable in full on 28th March 2014The periods when the cash flows are expected to occur 28th March 2014The amount recognised in Other Comprehensive Incomeduring the year Rs 168 Mn charged to the Retained earningsFair Value of the Hedge item as at 31st December 2013 Rs 13,075 MnFair Value of the Hedge instrument as at 31st December 2013 Rs 13,157 MnAny forecast transaction for which hedge accounting hadpreviously been used but which is no longer expected to occur NoneThe amount that was reclassified from equity to profit orloss as a reclassification adjustment None 253

NOTES TO THE FINANCIAL STATEMENTS22 DERIVATIVE FINANCIAL INSTRUMENTS CONTD. Less than one yearThe expected impact to the Income Statement on the Hedge is as follows: Rs MnForecast receivable cash flow 13,157Forecast payable cash flow 13,720 (563)23 FINANCIAL ASSETS HELD FOR TRADING Bank GroupAs at 31st December 2013 2012 2013 2012Government of Sri Lanka - Treasury Bills (Note 23.1) Rs 000 Rs 000 Rs 000 Rs 000Quoted equities (Note 23.2) 45,962,143 34,182,709 45,962,143 34,182,709 1,012,373 998,375 1,012,373 998,375 46,974,516 35,181,084 46,974,516 35,181,08423.1 Government of Sri Lanka - Treasury BillsBank & GroupThis represents the financial assets (Treasury Bills) at fair value through profit or loss which are held for trading purposes. The cumulativechange in fair value of the assets attributed to changes in market risk amounts to a gain of Rs 332.4 Mn (2012: loss of Rs 46.6 Mn) andmovement for the current year is a gain of Rs 379.1Mn (2012: gain of Rs 94.8 Mn).The change in fair value of the Treasury Bills - Trading attributable to changes in market risk have been calculated by determining the changesin interest rate spread implicit in the fair value of the Treasury Bills.As at 31st December Cost 2013 Cost 2012 Rs 000 Rs 000Amortised cost Market Value Market Value Rs 000 Rs 000Gain / (loss) from marked to market valuation as at 01st January 45,629,746 45,962,143 34,229,365 34,182,709Movement during the year (46,656) - (141,457) -Gain / (loss) from marked to market valuation 379,053 - 94,801 - as at 31st December 332,397 - (46,656) -Market value 45,962,143 45,962,143 34,182,709 34,182,709254

23.2 Quoted Equities No of 2013 Market No of 2012 MarketBank & Group Ordinary Value Ordinary Value Cost of Cost ofAs at 31st December Shares Investment Rs 000 Shares Investment Rs 000Name of the company Rs 000 Rs 000Banks, finance & insuranceNations Trust Bank PLC - - - 110,000 4,173 6,160Commercial Bank of Ceylon PLC 809,182 78,426 97,425 795,857 78,426 81,973Pan Asia Banking Corporation PLC 1,380,532 10,932 21,398 1,380,532 10,932 26,230Merchant Bank of Sri Lanka PLC 207,600Hatton National Bank PLC - - - 175,646 3,354 4,131NDB Bank PLC 175,646 35,822 25,820 600,000 35,822 25,996DFCC Bank PLC 600,000 107,943 96,300 107,943 82,740Union Bank of Colombo PLC 39,000People’s Leasing & Finance PLC 39,000 7,559 5,031 26,347,027 7,559 4,403 26,347,027 276,176 437,361 276,176 363,589Diversified holdings 5,901,600 106,229Hemas Holdings PLC 5,000,000 90,000 67,000 630,614 77,901Aitken Spence PLC 606,858 750,335 673,123John Keells Holdings PLCJohn Keells Holdings Warrant 2022 - - - 647,000 16,252 17,469John Keells Holdings Warrant 2023 270,000 54,512 27,621 270,000 54,512 32,400Softlogic Holdings PLC 677,694 117,156 154,040 587,335 101,344 129,155Vallibel One PLC 30,120 - 2,410 - - -Hotel & travel 30,120 - 2,846 - - -Asian Hotels & Properties PLC 3,594,000 104,226 30,190 3,594,000 104,226 39,175 245,600 6,140 4,052 245,600 6,140 4,445Manufacturing 282,034 221,159 282,474 222,644Royal Ceramics PLC - - - 618,000 14,291 46,906Land & propertyC T Land Development PLC -- 14,291 46,906Total 483,200 10,237 40,879 483,200 10,237 47,837 10,237 40,879 10,237 47,837Gain / (loss) from marked to market valuation as at 1st January - - - 325,000 4,853 7,865 Annual Report 2013 Sampath Bank PLCMovement during the year -- 4,853 7,865Gain / (loss) from marked to market 899,129 1,012,373 942,469 998,375 valuation as at 31st DecemberMarket value 55,906 215,480 57,338 (159,574) 113,244 55,906 1,012,373 998,375 255

NOTES TO THE FINANCIAL STATEMENTS24 FINANCIAL ASSETS HELD FOR TRADING PLEDGED AS COLLATERALSBank & GroupAs at 31st December 2013 2012 Cost Market Value Cost Market Value Rs 000 Rs 000 Rs 000 Rs 000Amortised cost 3,496,439 3,496,141 2,695,970 2,856,321Add / (less):Provision for appreciation / (diminution) in market value b/f 160,351 - 23,555 -Provision for diminution in market value write back / (made) (160,649) - 136,796 - during the year (298) - 160,351 -Provision for appreciation / (diminution) in market value c/d 3,496,141 2,856,321 2,856,321Market value 3,496,14125 LOANS AND RECEIVABLES TO BANKS Bank GroupAs at 31st December 2013 2012 2013 2012Loans & receivables Rs 000 Rs 000 Rs 000 Rs 000Less: Impairment (Note 25.1) 638,244 828,617 638,244 828,617 638,244 828,617 638,244 828,617 (12,498) (12,498) - 816,119 - 816,119 638,244 638,24425.1 Impairment on Loans and Receivables to BanksThe movement of impairment losses on loan and receivables to banks is as follows:At 1st January 2012 Bank GroupCharge for the year (Note 12) Rs 000 Rs 000RecoveriesAmounts written off 8,679 8,679Interest accrued 3,819 3,819At 31st December 2012 - -At 1st January 2013 - -Charge / (Reversal) for the year (Note 12) - -Recoveries 12,498 12,498Amounts written offInterest accrued 12,498 12,498At 31st December 2013 (12,498) (12,498) - - - - - - - -256

26 LOANS AND RECEIVABLES TO OTHER CUSTOMERS Bank GroupAs at 31st December 2013 2012 2013 2012 Rs 000 Rs 000 Rs 000 Rs 000Gross loans & receivables 271,090,006 216,586,855 277,751,627 220,994,262Less: Staff loan fair value adjustment (1,708,351) (1,403,533) (1,708,351) (1,403,533)Less: Individual impairment (Note 26.2.1) 269,381,655 215,183,322 276,043,276 219,590,729 Collective impairment (Note 26.2.2) (3,152,348) (2,827,992) (3,192,766) (2,910,042) (6,827,729) (4,170,961) (6,940,917) (4,200,646)Total impairment (Note 26.3) (9,980,077) (6,998,953) (7,110,688)Net loans & receivables (10,133,683) 259,401,578 208,184,369 265,909,593 212,480,04126.1 At Amortised Cost: Bank GroupAs at 31st December 2013 2012 2013 2012 Rs 000 Rs 000 Rs 000 Rs 000Bills of exchangeLeasing (Note 26.4) 2,813,713 2,687,435 2,813,713 2,687,435Housing 5,642,001 5,548,059 9,635,040 8,875,501Export loans 12,157,134 10,351,619 12,157,134 10,351,619Import loans 12,119,106 8,239,867 12,119,106 8,239,867Refinance 40,519,111 23,347,064 40,519,111 23,347,064Term loans 6,720,581 5,106,974 6,720,581 5,106,974Hire purchases (Note 26.5) 80,245,523 61,698,407 79,159,974 60,647,493Loans against Investment Fund Account (IFA) 3,507,098 2,184,420Overdraft 79,591 - 2,388,121 1,384,096Staff loans 2,357,512 1,360,762 44,296,436 34,794,291Pawning 44,415,284 34,871,166 4,888,092 4,076,050Credit card 4,888,092 4,076,050 53,884,048 54,946,225Others 53,469,185 54,946,225 5,520,208 4,246,627 5,520,208 4,246,627Less: Staff loan fair value adjustment (Note 34.2) 142,965 106,600 142,965 106,600 277,751,627 220,994,262Less: Provision for impairment losses (Note 26.2) 271,090,006 216,586,855 (1,708,351) (1,403,533) (1,708,351) (1,403,533) 276,043,276 219,590,729 269,381,655 215,183,322 (10,133,683) 265,909,593 (7,110,688) (9,980,077) (6,998,953) 212,480,041 259,401,578 208,184,36926.2 Movement in Provision for Impairment Losses Bank Group Annual Report 2013 Sampath Bank PLC26.2.1 Individually significant customer loan impairment 2013 2012 2013 2012Opening Balance as at 01 st January Rs 000 Rs 000 Rs 000 Rs 000Charge / (reversal) to Income StatementWrite-off during the year 2,827,992 2,764,531 2,910,042 2,831,229Provision Reversal 798,313 729,201 775,282 744,555Interest accrued on impaired loans and receivables (42,762) (104,814) (61,651) (104,814)Other movements (558,584) (782,731) (557,383) (782,731)Closing balance as at 31st December (75,776) (78,716) (76,689) (78,717)Gross amount of loans individually determined to be impaired, 203,165 300,521 203,165 300,520 before deducting the individually assessed impairment provision 3,152,348 2,827,992 3,192,766 2,910,042 4,187,089 4,153,004 4,244,392 4,506,738 257

NOTES TO THE FINANCIAL STATEMENTS26 LOANS AND RECEIVABLES TO OTHER CUSTOMERS CONTD. Bank Group26.2.2 Collective loan impairment 2012 2013 2012 2013 Rs 000 Rs 000 Rs 000 Rs 000Opening Balance as at 01 st January 4,170,961 4,767,076 4,200,646 4,811,431Charge / (reversal) to Income Statement 2,937,097 (596,115) 3,020,581 (611,206)Write-off during the year (283,372) (283,372)Provision Reversal - -Other adjustment - - - 564Closing balance as at 31st December 3,043 - 3,062 (143) 6,827,729 4,170,961 6,940,917 4,200,64626.3 Movement in Provision for Impairment Losses - ProductwiseBank Lease & Loans & Pawning 2013 2012 Rs 000 Total Total Hire Purchases Receivables Rs 000 Rs 000 Rs 000 Rs 000Balance as at 1st January 126,563 6,872,390 - 6,998,953 7,531,607Provision for the Year (35,764) 262,053 3,509,121 3,735,410 133,087Amounts Written-off (46,172) (279,961) (326,133) (104,813)Provision reversals - (558,584) (558,584) (782,731)Other adjustment - 206,208 - 300,520Interest accrued on impaired loans & receivables - (75,777) - 206,208 (78,717)Balance as at 31st December - - (75,777) 90,799 6,660,118 3,229,160 9,980,077 6,998,953Group Lease & Loans & Pawning 2013 2012 Rs 000 Total TotalBalance as at 1st January Hire Purchases ReceivablesProvision for the Year Rs 000 Rs 000Amounts written-off Rs 000 Rs 000Provision reversalsOther adjustment 238,298 6,872,390 - 7,110,688 7,642,660Interest accrued on impaired loans & receivables 22,580 262,053 3,511,230 3,795,863 133,349Balance as at 31st December (18,889) (46,173) (279,960) (345,022) (104,813) 1,201 (558,584) (557,383) (782,167) 19 206,208 - 300,376 (913) (75,777) - 206,227 (78,717) - (76,690) 242,296 6,660,117 3,231,270 10,133,683 7,110,688258

26.4 Lease Rentals Receivables Bank GroupAs at 31st December 2013 2012 2013 2012 Rs 000 Rs 000 Rs 000 Rs 000Total lease rentals receivableUnearned lease income 7,086,666 7,004,034 12,021,745 11,291,887Gross lease receivable (1,444,665) (1,455,975) (2,386,705) (2,416,386)Impairment allowance for lease receivable - Collective 5,642,001 5,548,059 9,635,040 8,875,501Net lease receivableGross lease receivable with in one year (Note 26.4.1) (90,696) (126,563) (208,279) (209,261)Gross lease receivable after one year (Note 26.4.2) 5,551,305 5,421,496 9,426,761 8,666,24026.4.1 Gross Lease Receivable within one year 2,097,805 1,197,034 4,288,800 2,687,558 3,544,196 4,351,025 5,346,240 6,187,943As at 31st December 5,642,001 5,548,059 9,635,040 8,875,501Total lease receivable within one year from reporting date Bank GroupUnearned lease incomeImpairment allowance for lease receivable 2013 2012 2013 2012 Rs 000 Rs 000 Rs 000 Rs 00026.4.2 Gross Lease Receivable after one year 2,803,779 1,851,059 5,475,006 3,799,962As at 31st December (705,974) (654,025) (1,186,206) (1,112,404) 2,097,805 1,197,034 4,288,800 2,687,558Total lease receivable after one year from reporting dateUnearned lease income (47,642) (55,228) (121,719) (113,152)Impairment allowance for lease receivable 2,050,163 1,141,806 4,167,081 2,574,40626.5 Hire Purchase Receivables Bank GroupAs at 31st December 2013 2012 2013 2012 Rs 000 Rs 000 Rs 000 Rs 000Total hire purchase rentals receivableUnearned hire purchase income 4,282,887 5,152,975 6,546,739 7,491,925Gross hire purchase receivable (738,691) (801,950) (1,200,499) (1,303,982)Impairment allowance for hire purchase receivable 3,544,196 4,351,025 5,346,240 6,187,943Net hire purchase receivableGross hire purchase receivable with in one year (Note 26.5.1) (43,054) (71,335) (86,560) (96,109)Gross hire purchase receivable after one year (Note 26.5.2) 3,501,142 4,279,690 5,259,680 6,091,834 Bank Group 2013 2012 2013 2012 Annual Report 2013 Sampath Bank PLC Rs 000 Rs 000 Rs 000 Rs 000 107,786 - 4,857,055 3,062,881 (28,195) - (1,349,957) (878,461) 79,591 - 3,507,098 2,184,420 (103) (34,017) (29,038) 79,488 3,473,081 2,155,382 20,852 - 1,235,335 716,451 58,739 - 2,271,762 1,467,969 79,591 - 3,507,098 2,184,420 259

NOTES TO THE FINANCIAL STATEMENTS26 LOANS AND RECEIVABLES TO OTHER CUSTOMERS CONTD.26.5.1 Gross Hire Purchase Receivable with in One year Bank GroupAs at 31st December 2013 2012 2013 2012 Rs 000 Rs 000 Rs 000 Rs 000Total hire purchase receivable with in one year from reporting date 32,679 - 1,913,732 1,119,736Unearned hire purchase income (11,827) - (678,397) (403,285) 20,852 - 1,235,335 716,451Impairment allowance for hire purchase receivable - (103) - (12,179) (12,453) 20,749 1,223,156 703,99826.5.2 Gross Hire Purchase Receivable after One year Bank GroupAs at 31st December 2013 2012 2013 2012Total hire purchase receivable after one year from reporting date Rs 000 Rs 000 Rs 000 Rs 000Unearned hire purchase incomeImpairment allowance for hire purchase receivable 75,107 - 2,943,323 1,943,145 (16,368) - (671,560) (475,176) 58,739 - 2,271,763 1,467,969 - - - (21,838) (16,585) 58,739 2,249,925 1,451,38426.6 Loans and Receivables to other Customers - Currencywise Bank GroupAs at 31st December 2013 2012 2013 2012 Rs 000 Rs 000 Rs 000 Rs 000Sri Lanka Rupee 238,953,922 193,515,273 245,615,543 197,922,680United States Dollar 30,500,343 22,082,724 30,500,343 22,082,724Euro 1,000,016 377,301 1,000,016 377,301Great Britain Pounds 633,885 609,367 633,885 609,367Japanese Yen 747 297 747 297Australian Dollar 408 1,829 408 1,829Canadian Dollar 553 64 553 64Swiss Franc 132 - 132 - 271,090,006 216,586,855 277,751,627 220,994,262260

26.7 Loans and Receivables to Other Customers - By Product Bank 2012 Group 2012As at 31st December Rs 000 Rs 000 2013 2013 Rs 000 Rs 000By Product - LKR 42,348,587 32,712,731 42,229,740 32,635,857Overdrafts 67,076,406 52,458,371 65,990,856 51,407,456Term loansLease rentals receivable 5,642,001 5,548,059 9,635,040 8,875,501Hire purchase rentals receivable 79,591 - 3,507,098 2,184,420Credit cards 5,520,208 4,246,627Pawning 5,520,208 4,246,627 53,884,048 54,946,225Export loans 53,469,185 54,946,225Housing loans 348,964 396,077Loans against Investment Fund Account (IFA) 348,964 396,077 12,036,829 10,297,447Import loans 12,036,829 10,297,447Refinance loans 2,388,121 1,384,096Bills of exchange 2,357,512 1,360,762 38,100,920 21,741,008Staff loans 38,100,920 21,741,008Others 6,720,581 5,106,974Sub total 6,720,581 5,106,974 338,417 518,342 338,417 518,342 4,888,092 4,076,050 4,888,092 4,076,050 26,629 106,600 26,629 106,600 245,615,543 197,922,680 238,953,922 193,515,273By Product - Foreign Currency 2,066,696 2,158,435 2,066,696 2,158,435Overdrafts 13,169,117 9,240,036 13,169,117 9,240,036Term loans 11,770,142 7,843,790 11,770,142 7,843,790Export loansHousing loans 120,305 54,172 120,305 54,172Import loans 2,418,191 1,606,056 2,418,191 1,606,056Bills of exchange 2,475,296 2,169,093 2,475,296 2,169,093OthersSub total 116,337 - 116,337 -Total 32,136,084 23,071,582 32,136,084 23,071,582 271,090,006 216,586,855 277,751,627 220,994,26226.8 Loans and Receivables to Other Customers - Industrywise Bank GroupAs at 31st December 2013 2012 2013 2012 Rs 000 Rs 000 Rs 000 Rs 000Agriculture & Fishing 34,447,250 23,211,854 35,042,331 23,756,523 Annual Report 2013 Sampath Bank PLCManufacturing 35,648,616 28,146,897 35,648,616 28,146,897Tourism 13,476,931 13,476,931Transport 7,132,717 7,132,718Construction 3,924,506 2,617,179 4,140,536 2,752,208Traders 26,401,964 20,710,856 26,608,580 20,888,013Banks, Financial and Business Services 59,381,313 40,352,210 62,158,426 42,325,045Government 17,851,608 11,271,224 16,175,023 11,271,224InfrastructureOther Services 201,229 47,061 201,229 47,061Consumers 8,291,865 6,613,877 8,291,865 6,613,877 7,343,645 6,474,852 11,288,506 9,045,289 64,121,079 70,008,128 64,719,584 69,015,407 271,090,006 216,586,855 277,751,627 220,994,262 261

NOTES TO THE FINANCIAL STATEMENTS26 LOANS AND RECEIVABLES TO OTHER CUSTOMERS CONTD.26.8 Investment Fund Account (IFA)As per CBSL direction, the Bank is required to transfer the following amounts to the Investment Fund Account with effect from 1st January 2011.1 8% of the profits calculated for the payment of Value Added Tax (VAT) on financial services on dates as specified in the VAT Act for payment of VAT.2 5% of the profit before tax calculated for payment of income Tax purpose on dates specified in section 113 of the Inland Revenue Act.As at 31st December 2013 2012 Bank Subsidiary Group Bank Subsidiary Group Rs 000 Company Rs 000 Rs 000 Company Rs 000 Rs 000 Rs 000Utilization of Investment Fund Account (IFA) 2,439,495 58,488 2,497,983 1,530,768 30,004 1,560,772Balance available for utilizationLoans granted - Capital outstanding (2,339,260) (30,609) (2,369,869) (1,355,696) (23,334) (1,379,030) (Note No 26.8.1) (100,235) (9,399) (109,634) (175,072) (5,121) (180,193)Total investments in Government Securities - 18,480 18,480 - 1,549 1,549 (Note No 26.8.2)26.8.1 Total Loans grantedThe details of loans granted from the Investment Fund Account which were outstanding as at 31st December 2013 are as follows.As at 31st December 2013 2013 Bank Group Interest Tenure Number of Amount Interest Number of Tenure Subsidiary Number of Amount rates Years Years Amount % Loans Outstanding rates Loans Loans Outstanding Outstanding Granted % Granted Rs 000 Granted Rs 000 Rs 000Sector 12.94-14.89 5-7 11 216,897 13.82% - 17.72% 12 5 16,912 23 233,809(a) Cultivation of agriculture / plantation crops 10 13,697 5-8 99 742,342 5-7 11.44% -17.72% 10 5 13,697 101 629,406(b) Factory / mills modernisation 12.89-14.89 5 99 742,342 - -- - 1 575(c) Small & medium enterprises 12.94-19.00 5-8 13 183,433(d) Information technology & BPO 6-7 101 629,406 - -- -(e) Infrastructure development 14.89 4 64,446(f) Education 12.94-14.89 - 1 575 - -- - --(g) Housing 5-8 49 502,161(h) Construction of hotels & related purposes 14.89 13 183,433 - -- - --(i) Restructuring of loans extended for above purposes 300 2,369,869 12.94-14.89 4 64,446 - -- - -- - -- - 49 502,161 - -- - -- - -- - 278 2,339,260 22 30,60926.8.2 Investments in Government SecuritiesAs at 31st December Face Year of Cost of 2013 Year of Cost of Subsidiaries 2013 Value Bank Maturity Group(a) Treasury bonds over 5 years Maturity Investment Carrying Investment Carrying Amount(b) Treasury bills Rs 000 value / Amortised value / Total - cost 102,852 Amortised Rs 000 102,852 cost - 109,634 Rs 000 Rs 000 Rs 000 Rs 000 109,634 2014 - - 2014 - - 100,235 101,261 9,399 9,776 100,235 101,261 9,399 9,776The carrying value of the investments in treasury bills using IFA balance was classified as available for sale.262

27 OTHER LOANS AND RECEIVABLES Bank 2012 Group 2012 Rs 000 Rs 000As at 31st December 2013 2013 Rs 000 Rs 000Debentures - Quoted (Note 27.1)Preference shares (Note 27.2) 1,779,786 443,358 1,779,786 443,358Sri Lanka Development Bonds (SLDBs) - - - -Leased backed Trust Certificates (Note 27.3)Commercial papers (Note 27.4) 8,611,352 6,714,292 8,611,352 6,714,293 1,759,450 324,947 1,759,450 324,947 - 3,033,159 - 2,741,876 12,150,588 10,515,756 12,150,588 10,224,47427.1 Quoted - Debentures 2013 2012 Annual Report 2013 Sampath Bank PLCBank & Group Amortised AmortisedAs at 31st December Cost Cost Rs 000 Rs 000Vanik Incorporation Ltd(17% redeemable un-secured debentures Rs 100/- each redeemable on or before 31st August 2003) 750 750Urban Development Authority 217,870 217,870(10% fully secured redeemable debentures Rs 100/- each redeemable on 5th October 2015) 225,488 225,488Urban Development Authority 181,074(11% fully secured redeemable debentures Rs 100/- each redeemable on 5th October 2015) -Singer Sri Lanka PLC 129,886(14.5% unsecured redeemable debentures Rs 100/- each redeemable on 31st May 2015 & - 131,986 31st May 2016) -Central Finance Company PLC 244,941(14.75% unsecured redeemable debentures Rs 100/- each redeemable on 19th June 2018) -(14.25% unsecured redeemable debentures Rs 100/- each redeemable on 16th June 2016) 104,025(13.00% secured redeemable debentures Rs 100/- each redeemable on 13th December 2016) 40,934 -(13.25% secured redeemable debentures Rs 100/- each redeemable on 13th December 2017) -Housing Development Finance Corporation 503,582(15.50 % secured redeemable debentures Rs 100/- each redeemable on 28th October 2018) -(14.50 % secured redeemable debentures Rs 100/- each redeemable on 28th October 2016) 1,780,536Abans PLC (750) 444,108(14.00 % secured redeemable debentures Rs 100/- each redeemable on 24th December 2016) (750)(14.50 % secured redeemable debentures Rs 100/- each redeemable on 24th December 2018) 1,779,786(14.25 % secured redeemable debentures Rs 100/- each redeemable on 24th December 2017) 443,358Alliance Finance PLC(15.50 % secured redeemable debentures Rs 100/- each redeemable on 02nd October 2016)Senkadagala Finance PLC(17.00 % secured redeemable debentures Rs 100/- each redeemable on 27th May 2016)(17.25 % secured redeemable debentures Rs 100/- each redeemable on 27th May 2017)People’s Leasing & Finance PLC(17.00 % unsecured redeemable debentures Rs 100/- each redeemable on 28th March 2018)(16.75 % unsecured redeemable debentures Rs 100/- each redeemable on 28th March 2018)(16.50 % unsecured redeemable debentures Rs 100/- each redeemable on 28th March 2017)Less: Provision for diminution in market value 263

NOTES TO THE FINANCIAL STATEMENTS 2013 2012 Amortised Cost Amortised Cost27 OTHER LOANS AND RECEIVABLES CONTD.27.2 Un-quoted - Preference Shares Rs 000 Rs 000Bank & Group 12,604 12,604As at 31st December 12,604 12,604Texpro Industries Ltd (12,604) (12,604)(Non cumulative redeemable preference shares of - - Rs 10/- each @ 15% interest. Redeemable over a 2013 2012 period of 6 years commencing from 30th June 2003) Amortised Cost Amortised CostLess: Provision for diminution in market value Rs 000 Rs 00027.3 Leased backed Trust Certificates 70,594 -Bank & Group 568,157 324,947 871,030As at 31st December - 40,100 -Senkadagala Finance PLC 209,569 -Citizens Development Bank PLC 1,759,450 324,947People’s Leasing & Finance PLCAssociate Motor Finance Ltd 2013 2012Mercantile Investment & Finance PLC Amortised Cost Amortised Cost27.4 Commercial Papers Rs 000 Rs 000Bank - 1,557,701As at 31st December - 458,159 - 291,283People’s Leasing & Finance PLC - 726,016Hayleys Agriculture Holdings Ltd - 3,033,159Siyapatha Finance LtdHouse of Fashion Garment (Pvt) Ltd 2013 2012 Amortised Cost Amortised CostGroupAs at 31st December Rs 000 Rs 000People’s Leasing & Finance PLC - 1,557,701Hayleys Agriculture Holdings Ltd - 458,159House of Fashion Garment (Pvt) Ltd - 726,016 -264 2,741,876

28 FINANCIAL INVESTMENTS AVAILABLE FOR SALE Bank 2012 Group 2012As at 31st December Rs 000 Rs 000 2013 2013Quoted Investments Rs 000 Rs 000Government debt securities (Note 28.1)Equity securities (Note 28.2) 100,462 179,176 100,462 179,176Unquoted Investments 2,216,100 1,686,021 2,216,100 1,686,021Equity securities (Note 28.3) 76,556 58,427 76,612 58,483 2,393,118 1,923,624 2,393,174 1,923,68028.1 Government Debt SecuritiesBank & GroupAs per the ‘Guidelines dated 29th April 2011 issued by the Central Bank of Sri Lanka to Licensed Commercial Banks and LicensedSpecialised Banks on the operation of the Investment Fund Account’ the funds available in Investment Fund Account (IFA) can be invested inGovernment Treasury Bills for a maximum period of three months from the date of transfer to the fund until loans are granted. Cost 2013 Cost 2012 Rs 000 Rs 000 Market Value Market Value Rs 000 Rs 000Amortised cost 100,235 100,462 179,106 179,176Gain / (loss) from marked to market valuation 70 - 405 - as at 01st January 157 - (335) -Movement during the yearGain / (loss) from marked to market valuation 227 - 70 - 100,462 100,462 179,176 179,176 as at 31st DecemberMarket value28.2 Quoted Equity SecuritiesBank & GroupAs at 31st December No of 2013 Market No of 2012 Market Annual Report 2013 Sampath Bank PLCLankaBangla Finance Ltd (Note 28.2.1) Ordinary Cost of Value Ordinary Cost of Value Investment Investment Shares Rs 000 Shares Rs 000 Rs 000 Rs 000 1,686,021 19,734,000 272,065 2,216,100 17,940,000 236,320 1,686,021 272,065 2,216,100 236,320 265

NOTES TO THE FINANCIAL STATEMENTS28 FINANCIAL INVESTMENTS AVAILABLE FOR SALE CONTD.28.2.1 LankaBangla Finance LtdBank & GroupAs at 31st December Cost 2013 Cost 2012 Rs 000 Rs 000Balance as at 01 st January Market Value Market ValueExchange Gain/(loss) Rs 000 Rs 000Scrip dividend receivedGain/(loss) from marked to market valuation 272,065 1,686,021 236,320 1,858,787Balance as at 31st December - 6,658 - 16,061 - - - 29,087 - 159,656 494,334 (348,483) 272,065 2,216,100 236,320 1,686,02128.3 Unquoted Equity SecuritiesAs at 31st December 2013 2012 Cost of Cost of No of Investment Market No of Investment Market Ordinary Value Ordinary Value Rs 000 Rs 000 Shares Rs 000 Shares Rs 000Bank 210,000 37,930 37,930 210,000 35,317 35,317Name of the company 1,700 170 170 1,700 170 170 18 65 65 18 65 65LankaBangla Securities Ltd 625 625 625 625Credit Information Bureau 62,500 62,500S.W.I.F.T 2,000,000 20,000 20,000 2,000,000 20,000 20,000Fitch Rating Lanka Ltd 2,250 2,250 2,250 2,250Lanka Clear (Pvt) Ltd 225,000 225,000 - -Lanka Financial Services Bureau Ltd 1,241,263 15,516 15,516 -RAM Ratings Lanka Ltd 76,556 76,556 58,427 58,427Group 210,000 37,930 37,930 210,000 35,317 35,317Name of the company 1,800 226 226 1,800 226 226 18 65 65 18 65 65LankaBangla Securities Ltd 625 625 625 625Credit Information Bureau 62,500 62,500S.W.I.F.T 2,000,000 20,000 20,000 2,000,000 20,000 20,000Fitch Rating Lanka Ltd 2,250 2,250 2,250 2,250Lanka Clear (Pvt) Ltd 225,000 225,000 - -Lanka Financial Services Bureau Ltd 1,241,263 15,516 15,516 -RAM Ratings Lanka Ltd 76,612 76,612 58,483 58,483All unquoted available for sale investments are recorded at cost, since there is no market value for these investments and the Bank intends tohold them for the long term.29 FINANCIAL INVESTMENTS HELD TO MATURITY Bank GroupAs at 31st December 2013 2012 2013 2012Government securities Rs 000 Rs 000 Rs 000 Rs 000Treasury bills 1,845,903 - 1,845,903 9,765 1,845,903 - 1,845,903 9,765266

30 INVESTMENT IN SUBSIDIARIES - BANKAs at 31st December 2013 2012Unquoted Principal Activity Cost Directors’ Cost Directors’ Rs 000 Valuation Rs 000 Valuation Rs 000 Rs 000Sampath Centre Ltd Renting of Commercial Property 447,000 3,025,456 447,000 2,142,526S C Securities (Pvt) Ltd Share Broking 78,921 174,282 78,921 184,595Siyapatha Finance Ltd Leasing & Factoring 525,000 1,073,903 525,000 882,682 (formerly known as Sampath & accepting fixed & saving Leasing & Factoring Ltd) depositsSampath Information Technology Developing Software Solutions Ltd Solutions & Maintenance of Hardware 9,000 38,621 9,000 19,150 1,059,921 4,312,262 1,059,921 3,228,953The Directors’ valuation of investments in Subsidiaries has been carried out on net asset basis as at the reporting date.31 PROPERTY, PLANT AND EQUIPMENT31.1 Bank Freehold Land Leasehold Computer Office Fixtures & Motor Capital 2013 2012 Equipment Equipment Fittings Vehicles Work-in Total Total & Buildings properties & Progress Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 improvements - Rs 000 Rs 000 - -Cost / Valuation 2,719,200 994,591 2,415,052 1,625,242 - 212,722 68,614 8,035,421 7,549,627 (114,932) - - - 97 - - (114,932) -As at 1st January - - - - - - -Revaluation adjustment on accumulated depreciation 415,445 - - - - - - 415,445 -Net Revaluation surplus (8,685) 19,452 (8,685)Net impairment charge 65,770 115,332 332,998 178,204 - 955 110,427 630,904Additions & Improvements (16) (8,982) (31,713) (12,578) - - - 803,783 (90,263)Disposals during the year (229) (415,328) (172,469) 19,549 - (53,289)Written off during the year (68,155) (4,368) - (660,549) -Sub category transfers during the year (19,355) (97) - - - - - -Transfers / adjustments - - (76,307) (27,909) - - - (54,847)Transferred from capital work-in-progress - 7,746 - (120,087) (104,216) -Cost / Valuation as at 31st December 120,061 - - - 58,954 8,035,421 3,177,259 1,032,689 2,224,702 1,590,490 - 209,309 (26) 1,843 8,312,952 -Accumulated Depreciation 99,788 626,235 1,780,828 851,872 9,589 116,892 - 3,475,615 3,021,843 Annual Report 2013 Sampath Bank PLC (114,932) - - - 9,960 - - (114,932) -As at 1st January -Revaluation adjustment on accumulated depreciation 18,389 129,482 183,689 164,904 18,549 - 522,759 535,656Charge for the year (1) (5,540) (30,571) (10,978) - - (47,090) (81,774)Disposals during the year (415,328) (172,436) - (660,504)Written off during the year (229) (68,143) (4,368) - -Sub category transfers during the year (1,843) - - - - - - -Transfers / adjustments 29,340 (1,534) 58,954 2,373 (110)Accumulated depreciation as at 31st December 565 5,268 1,547,958 831,828 (31,266) 3,178,221 3,475,615Net book value as at 31st December 1,737 687,302 676,744 758,662 99,807 5,134,731 4,559,806 3,175,522 345,387 109,502There were no capitalized borrowing costs related to the acquisition of property, plant and equipment during the year.As set out in Note No 31.3, the Bank had revalued its freehold land and buildings as at 30th October 2013, by professionally qualified independentvaluers. The revaluation was carried out by taking into account the observable prices in active market or recent market transactions on arm’s lengthbasis. Accordingly, a revaluation surplus amounting to Rs 415.4 Mn had been credited to the revaluation reserve account in 2013. Net impairment lossof Rs 8.7 Mn in respect of freehold land & buildings based on the above revaluation was charged to Income Statement in 2013.The carrying amount of Bank’s revalued land and buildings, if they were carried at cost less depreciation, would be as follows: 267

NOTES TO THE FINANCIAL STATEMENTS31 PROPERTY, PLANT AND EQUIPMENT CONTD.31.1 BankAs at 31st December 2013 2012 Cost Accumulated Carrying Cost Accumulated Carrying Value Value Depreciation Depreciation Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 718,309 700,195Land 718,309 - 622,074 700,195 - 499,857Freehold Buildings 727,650 105,576 1,340,383 589,897 90,040 1,200,052Total 1,445,959 105,576 1,290,092 90,04031.2 Group Freehold Leasehold Computer Office Fixtures & Motor Work-in 2013 2012 Equipment equipment Fittings Vehicle Progress Total TotalCost / Valuation Land & Properties &as at 1st January Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000Revaluation adjustment on Building Improvements 2,520,584 1,655,418 7,918 accumulated depreciation Rs 000 Rs 000Net revaluation surplus - - -Net impairment charge 4,968,486 994,591 - - - 289,089 68,614 10,504,700 9,939,354Additions & Improvements - - -Disposals during the year (114,932) - 382,641 198,596 28,765 - - (114,932) -Written off during the year 1,379,114 - (34,913) (12,578) - - - 1,379,114 -Sub category transfers during the year - (415,328) (172,469) - - - -Transfers / adjustments (8,685) 126,816 - - 19,452 11,317 110,427 (8,685) 725,904Transferred from capital work-in-progress 72,625 (8,982) (76,307) (27,909) - (50,043) - 931,187 (105,685)Cost / Valuation As at 31st December (210,503) (68,155) - - - (4,368) - (317,019) - (97) 2,376,677 1,641,058 56,135 - - (660,549) -Accumulated Depreciation (229) - - - (54,873)As at 1st January (19,355) - 1,812,772 867,892 3,471 - (120,087) - -Revaluation adjustment on accumulated depreciation 1,044,173 - - - 245,995 58,954 (104,216) 10,504,700Charge for the year -Disposals during the year 120,061 206,288 169,748 12,135 (26)Written off during the year 6,186,582 (30,782) (12,194) - 11,609,574Sub category transfers during the year (415,328) (172,436) -Transfers / adjustments 292,401 626,235 137,556 - 3,740,327 3,248,201Accumulated depreciation as at 31st December (114,932) - - - 1,843 - - (114,932) -Net book value as at 31st December 29,340 (1,534) - - 18,389 131,261 1,602,290 851,476 25,522 - 563,343 587,859 (183,088) (5,540) 774,387 789,582 17,449 (16,448) - (248,052) (95,622) 38,686 - (660,504) (229) (68,143) (4,368) - - (1,843) - - - - - 58,954 2,373 (110) 565 5,268 (31,266) 3,282,555 3,740,328 11,263 689,081 110,996 8,327,019 6,764,372 6,175,319 355,092 134,999The Group had revalued their freehold land and buildings, by professionally qualified independent valuers. The revaluation was carried outby taking into account the observable prices in active market or recent market transactions on arm’s length basis. Accordingly a revaluationsurplus, amounting to Rs 1,379.1 Mn had been credited to the revaluation reserve account in 2013. Net impairment loss of Rs 8.7 Mn inrespect of freehold land & buildings based on the above revaluation was charged to Income Statement in 2013.There were no capitalized borrowing costs related to the acquisition of property, plant & equipment during the year.The carrying amount of Group revalued land and buildings, if they were carried at cost less depreciation, would be as follows:As at 31st December 2013 2012 Cost Accumulated Carrying Cost Accumulated Carrying Value Value Depreciation Depreciation Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000Land 853,309 - 853,309 835,195 - 835,195Freehold Buildings 1,423,142 249,091 1,174,051 1,276,621 216,168 1,060,453Total 2,276,451 249,091 2,027,360 2,111,816 216,168 1,895,648268

31.3 Details of Bank’s land and buildings stated at valuation are given below.Bank Date Of Method of Cost 2013 2010Location Valuation Valuation Rs Mn Revaluation RevaluationValuer-P B Kalugalagedara 8.11.2013 Open Market value 21.40 Rs Mn Rs MnNo 180 (part), Bodiraja Mawatha, Pettah 8.11.2013 Open Market value / Fair Value 25.50No 261, Galle Road, Ratmalana 8.11.2013 Open Market value / Fair Value 38.10 62.40 55.00No 61A, Moratuwa Road, Piliyandala 8.11.2013 Open Market value / Fair Value 38.28 43.50 41.00No 371, Old Moor St, Masangasweediya, Colombo 12 8.11.2013 Open Market value / Fair Value 81.87 87.50 76.00No 475, Elvitigala Mawatha, Narahenpita 152.00 126.00 85.00 77.70Valuer-C Wellappili 7.11.2013 Income Basis / Contractors’ Basis 70.21No 1022, Maradana Road, Borella 8.11.2013 Income Basis / Contractors’ Basis 34.42 211.00 192.57No 81 & 81 A, High Level Road, Maharagama 9.11.2013 Income Basis / Contractors’ Basis 26.80 73.00 59.38No 05, Wakwella Road, Galle 9.11.2013 Comparative Method 62.40 99.30 71.39No 312, Galle Road, Kalutara 8.11.2013 Income Basis / Contractors’ Basis 67.50 60.00No 7/5, Giriulla Road, Alawwa 9.11.2013 Comparative Method 6.50 38.00 25.40No 42, Anguruwatota Road, Horana 8.11.2013 Contractors’ Basis 18.50 31.13 20.80No 150, Colombo Road, Gampaha (Land only) 20.00 49.80 29.90Valuer-E M Wimalasena 19.10.2013 Fair Value Basis / Open Market Value 10.90 123.85 92.80“Nuwarawewakele”, Maithreepala Senanayake Mw, 161.75 161.00 Anuradhapura 37.00 11.80 6.00 4.20Valuer-G M Gamage 2.11.2013 Income Basis / Contractors’ Basis 39.15 43.00 37.00No 05, Hakmana Road, Matara 2.11.2013 Income Basis / Contractors’ Basis 15.00No 69, Main Street, Deniyaya 2.11.2013 Income Basis / Contractors’ Basis 120.00 53.90No 117, Hapugahawalawatta, Ihalagama Road, Deniyaya 19.10.2013 Income Basis / Contractors’ Basis 3.95No 25-27, Main Street, Tissamaharama 34.30 196.00 145.00 100.00 55.30Valuer-K T D Tissera 26.11.2013 Investment Basis 44.20 130.00 43.38No 256/1, Negombo Road, Wattala 173.00 323.00 107.50Valuer-Sarath Fernando 24.10.2013 Income Basis / Comparative Method 77.05 700.00 300.00No 31 & 33, Negombo Road, Kurunegala 21.11.2013 Income Basis / Comparative Method 42.00 597.00No 373 A, Galle Road, Panadura 28.10.2013 Income Basis / Comparative Method 14.35 15.60No 187, Madawala Road, Katugastota 22.11.2013 Income Basis / Comparative Method 112.30 -No 591, Galle Road, Wellawatta 24.10.2013 Income Basis / Comparative Method 102.18No 29, Cross Street, Kandy 21.11.2013 Income Basis / Comparative Method 26.20No 103, Dharmapala Mawatha, Hunupitiya, Colombo 7 24.10.2013 Comparative Method 15.94No 1/87, Victoria Range, Digana, Kandy Annual Report 2013 Sampath Bank PLC 269

NOTES TO THE FINANCIAL STATEMENTS31 PROPERTY, PLANT AND EQUIPMENT CONTD.31.4 Freehold Land and Buildings - BankLocation Land Buildings Cost / Cost / Total Accumulated 2013 As a % 2012 Extent- Sq.ft Revaluation Revaluation Value Depreciation Net Book of Total Net Book Perches of Buildings of Land Value NBV Value Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 % Rs 000 62,271 51,9431 Pettah - 5,124 - 62,400 62,400 129 210,854 2.0% 193,308 No 180, Bodiraja Mawatha, Pettah 140,250 70,750 196,641 141,492 25.5 16,345 121,795 75,000 211,000 146 119,918 6.6% 72,1152 Borella 40,000 161,683 161,047 No 1022, Maradana Road, Borella 37.4 11,206 80,000 30,598 196,795 154 72,945 6.2% 54,527 131,148 26,650 36,958 15,8893 Kurunegala 42.5 5,314 20,356 120,000 82 3.8% 11,800 No 31 & 33, Negombo Road, Kurunegala 46,350 6,000 42,354 47.7 11,141 16,644 - 161,746 63 43,456 5.1% 75,5274 Wattala 21,500 87,435 99,014 No 256/1, Negombo Road, Wattala 15.5 6,310 6,000 31,500 73,000 55 128,615 2.3% 22,0005 Matara 17.5 5,325 56,000 4,765 37,000 42 99,905 1.2% No 05, Hakmana Road, Matara 123,850 151,947 40.0 Bare Land 46,000 6,000 - 0.2%6 Maharagama 54,000 26,000 42,941 No 81 & 81 A, High Level Road, Maharagama 10.9 5,520 126,000 28,570 43,500 44 129,864 1.4% 66,2007 Deniyaya 37.5 8,037 14,430 20,640 87,500 65 99,258 2.8% No 69, Main Street, Deniyaya 63,800 60,000 172,877 41.3 Under 78,660 128,615 - 4.1%8 Deniyaya Construction 113,000 2,136 87,136 No 117, Hapugahawalawatta, Ihalagama Road, Deniyaya 85,000 3,463 70,963 27.3 6,020 67,500 21,480 100,000 95 37,956 3.1% 79,2329 Ratmalana 16,520 152,000 53 31,000 4.8% 126,323 No 261, Galle Road, Ratmalana 24.0 10,280 31,000 - 59 322,806 1.3% 228,500 94,500 43,000 136 699,888 4.1% 43,64010 Piliyandala 22.2 10,815 645,400 54,600 130,000 42 86,626 3.1% 108,052 No 61A, Moratuwa Road, Piliyandala 49,800 36,904 123 15,579 5.4% 24.1 7,811 10,100 99,300 3,175,522 2.7% 70,93911 Anuradhapura 5,500 854,112 173,000 - 2.2% 161,153 “Nuwarawewakele”, Maithreepala Senanayake Mw, 17.5 5,400 2,323,147 - 1.2% Anuradhapura 87,136 44 1.0% 77,700 21.5 7,776 70,963 - 10.2% 60,00012 Panadura 38,000 194 22.0% 24,517 No 373 A, Galle Road, Panadura 18.5 Under 31,000 112 2.7% 20,750 Construction 323,000 78 0.5% 296,11813 Old Moor Street 700,000 21 100.0% 645,901 No 371, Old Moor St, Masangasweediya, Colombo 12 30.0 Under 86,704 1,737 39,694 Construction 15,600 14,85014 Tissamaharama 3,177,259 2,687,885 No 25-27, Main Street, Tissamaharama 20.7 8,24515 Katugastota 20.8 Bare Land No 187, Madawala Road, Katugastota 25.4 15,02616 Galle No 05, Wakwella Road, Galle 119.4 5,60017 Wellawatte 25.0 4,485 No 591, Galle Road, Wellawatta 20.1 2,32018 Narahenpita No 475, Elvitigala Mawatha, Narahenpita 732.2 158,10019 Kalutara No 312, Galle Road, Kalutara20 Alawwa No 7/5, Giriulla Road, Alawwa21 Horana No 42, Anguruwatota Road, Horana22 Kandy Corporate No 29, Cross Street, Kandy23 Dharmapala Mawatha No 103, Dharmapala Mawatha, Hunupitiya, Colombo 724 Gampaha No 150, Colombo Road, Gampaha25 Victoria Range No 1/87, Victoria Range, Digana, KandyTotal31.5 (a) Leasehold Buildings-Bank Cost of Accumulated 2013 2012As at 31st December Buildings Depreciation Net Book Net Book01 - 05 years Rs 000 Rs 000 Value Value05 - 10 years Rs 000 Rs 000 515,575 360,486 517,114 326,816 155,089 123,360 1,032,689 687,302 190,298 244,996 345,387 368,356270

31.5 (b) Fully depreciated property, plant and equipment - BankA classwise analysis of the initial cost of fully depreciated property, plant and equipment of the Bank which are still in use as at reporting dateis as follows.As at 31st December 2013 2012 Rs 000 Rs 000Asset class 337,922 341,235Leasehold properties & improvements 1,526,126 1,777,921Computer equipmentOffice equipment 276,799 394,166Fixtures & fittings 6,242 -Motor vehicles 21,247 73,715 2,168,336 2,587,03731.5 (c) Temporarily idle property, plant and equipment- BankTwo lands worth of Rs 37.0 Mn were idle as at 31st December 2013 (2012: Rs 162.6 Mn). The Bank holds these lands with the intention ofconstructing branches in the near future.31.5 (d) Property, plant and equipment retired from active use - BankThere were no property, plant and equipment retired from active use as at the reporting date (2012: NIL)31.5 (e) Title restriction of property, plant and equipment-BankThere were no restrictions on the title of property, plant and equipment as at 31st December 2013.31.5 (f) Property, plant and equipment pledged as security for liabilities-BankThere were no items of property, plant and equipment pledged as securities for liabilities.31.5 (g) Compensation from third parties for items of property, plant and equipment-BankCompensation received from third parties for items of property, plant and equipment that were impaired, lost or given up is Nil. (2012 : Rs 2.8 Mn)32 INTANGIBLE ASSETS Bank 2012 Group 2012As at 31st December Rs 000 Rs 000Computer Software and Licenses (Note 32.1) 2013 2013 Rs 000 Rs 000 297,359 311,758 313,305 316,412 Annual Report 2013 Sampath Bank PLC 271

NOTES TO THE FINANCIAL STATEMENTS32 INTANGIBLE ASSETS CONTD. Bank Group32.1 Intangible Assets 2013 2012 2013 2012Cost Rs 000 Rs 000 Rs 000 Rs 000As at 1st JanuaryAdditions & improvements 988,916 700,885 1,009,191 718,987Disposals during the year 41,385 288,031 58,311 290,204Transfers / adjustments - -Cost / Valuation as at 31st December (10,853) - (10,853) - - -Accumulated amortisation 1,019,448 988,916 1,056,649 1,009,191As at 1st JanuaryCharge for the year 677,158 633,592 692,779 645,616Disposals during the year 47,270 43,566 52,904 47,163Transfers / adjustments - - - -Accumulated amortisation as at 31st December (2,339) - (2,339) -Net book value as at 31st December 722,089 677,158 743,344 692,779 297,359 311,758 313,305 316,41233 DEFERRED TAX (ASSETS) / LIABILITIES Bank Tax effect Group Tax effect Temporary difference Temporary differenceAs at 31st December 2013 2012 2013 2012 2013 2012 2013 2012 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000Deferred tax liability 1,037,973 624,784 290,632 174,940 1,037,781 662,649 290,579 185,542Depreciation of property, plant and equipment 1,106,494 873,775 309,818 244,657 1,477,494 1,137,686 413,698 318,552Depreciation of lease assets 174,657Revaluation on buildings - OCI 265,749 1,673,216 74,410 48,904 265,749 174,657 74,410 48,904 2,410,216 674,860 468,501 2,781,024 1,974,992 778,687 552,998Deferred tax asset 2,575,168 - 721,047 - 2,608,147 - 730,282 -Unclaimed impairment provisions - - - - - - - - - - - 224,098 62,747 loans & receivables 45,105 152,567 12,629 42,719 243,561 164,535 68,197 46,070Unclaimed impairment provision - investment 241,196 167,085 67,535 46,784 255,923 167,085 71,658 46,784Tax losses 627,656 76,873 175,744 21,524 627,656 76,873 175,744 21,524Defined benefit obligation - Income Statement 396,525 111,027 632,591 177,125Defined benefit obligation - OCI 24,005 1,276,691 6,721 357,474 24,005 1,342,401 6,721 375,873Others 3,513,130 983,676 3,759,292 1,052,602 (1,102,914) (308,816) (978,268) (273,915)272

33.1 Deferred Tax charge/(reversal) to Income Statement/OCIBankDeferred tax (assets) / liabilities Tax effect Income Statement OCI 2013 2012 2013 2012 2013 2012 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000Deferred tax liability 290,632 174,940 115,693 1,657 - -Depreciation of property, plant and equipment 309,818 244,657 65,161 33,320 - -Depreciation of lease assets - 25,506 -Revaluation on buildings - OCI 74,410 48,904 - 25,506 - 674,860 468,501 180,854 34,977Deferred tax asset 721,047 - 721,047 - - -Unclaimed impairment provisions - - - - - - - - - - - loans & receivables 12,629 42,719 12,629 7,866 - -Unclaimed impairment provision - investment 67,535 46,784 24,816 - 128,960 (3,434)Tax losses 175,744 21,524 3,214 - -Defined benefit obligation - Income Statement 111,027 - 11,080 128,960 (3,434)Defined benefit obligation - OCI 6,721 357,474 (14,803) 23,897 (103,454) 3,434Others 983,676 743,689 (308,816) (562,835)GroupDeferred tax (assets) / liabilities Tax effect Income Statement OCI 2013 2012 2013 2012 2013 2012 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000Deferred tax liability 290,579 185,542 105,037 6,376 - -Depreciation of property, plant and equipment 413,698 318,552 95,146 36,783 - -Depreciation of lease assets - 25,506 -Revaluation on buildings - OCI 74,410 48,904 - 25,506 - 778,687 552,998 200,183 43,159Deferred tax asset 730,282 - 730,281 - - - Annual Report 2013 Sampath Bank PLCUnclaimed impairment provisions - - - - (59,282) - - 62,747 62,747 - - loans & receivables 68,197 46,070 5,450 - -Unclaimed impairment provision - investment 71,658 46,784 25,589 7,578 128,960 (3,434)Tax losses 175,744 21,524 - - -Defined benefit obligation - Income Statement 177,125 - 128,960 (3,434)Defined benefit obligation - OCI 6,721 375,873 (14,803) 3,213 (103,454) 3,434Others 1,052,602 746,517 14,256 (273,915) (546,334) 28,903 273

NOTES TO THE FINANCIAL STATEMENTS34 OTHER ASSETS Bank GroupAs at 31st December 2013 2012 2013 2012 Rs 000 Rs 000 Rs 000 Rs 000Pre-paid expensesOther debtors (Note 34.1) 744,337 1,196,456 744,337 1,196,456Pre-paid staff cost (Note 34.2) 1,540,628 1,184,199 2,146,853 1,706,138Refundable deposits at fair value 1,708,351 1,403,533 1,708,351 1,403,533Pre-paid cost on refundable depositsFinancial guarantees (Note 34.3) 73,158 72,328 10,404 9,574 1,379 1,593 1,379 1,59334.1 Other Debtors 142,565 137,589 142,565 137,589 4,459,859As at 31st December 4,205,442 4,000,674 4,748,913Amortised cost Bank GroupImpairment:Balance as at 1st January 2013 2012 2013 2012Charge / (reversal) during the year Rs 000 Rs 000 Rs 000 Rs 000Balance as at 31st DecemberBalance net of impairment 1,540,628 1,184,199 2,212,076 1,751,51534.2 The Movement in the Pre-Paid Staff Cost - - (45,377) (30,377) - - (19,846) (15,000)Bank / Group - - (65,223) (45,377)As at 1st January 1,540,628 1,184,199 2,146,853 1,706,138Add / (Less): Adjustment for new grants & settlementsLess: charge to Personnel cost 2013 2012As at 31st December Rs 000 Rs 00034.3 Financial Guarantee 1,403,533 1,086,527The movement during the year is as follows: 461,370 473,594 (156,552) (156,588)Bank / GroupAt at 1st January 1,708,351 1,403,533Interest incomeIncome received 2013 2012At at 31st December Rs 000 Rs 000 142,565 146,489 11,871 12,275 (16,847) (16,199) 137,589 142,565274

35 DUE TO BANKS Bank 2012 Group 2012As at 31st December Rs 000 Rs 000 2013 2013Call & time deposits Rs 000 Rs 000Local & foreign bank borrowings 1,879,531 244,038 1,879,531 244,038The maturity analysis of borrowings is given in Note 48. 331,750 380,746 370,841 424,160 624,784 668,198 2,211,281 2,250,37236 DUE TO OTHER CUSTOMERS Bank 2012 Group 2012 Rs 000 Rs 000As at 31st December 2013 2013 Rs 000 Rs 000Local Currency DepositsDemand 15,391,320 13,667,508 15,363,552 13,644,907Savings 75,231,103 60,785,509 75,091,307 60,652,599Call depositsFixed deposits 1,097,400 845,834 1,097,400 845,834Certificates of deposits 172,187,451 137,446,329 172,187,451 137,359,083Margin deposits 11,055,013 9,520,143 11,055,013 9,520,146Foreign Currency Deposits 1,909,645 511,598 1,909,645 511,598DemandSavings 276,871,932 222,776,921 276,704,368 222,534,167Call depositsFixed deposits 1,706,987 1,405,312 1,706,987 1,405,312Margin deposits 7,936,362 6,462,657 7,936,362 6,462,657Total - 5,953 - 5,953 13,997,646 12,655,641 13,997,646 12,655,641 36,423 24,506 36,423 24,506 23,677,418 20,554,069 23,677,418 20,554,069 300,549,350 243,330,990 300,381,786 243,088,23637 DEBT ISSUED AND OTHER BORROWED FUNDS Bank 2012 Group 2012As at 31st December Rs 000 Rs 000 2013 2013 Rs 000 Rs 000Commercial papers - - 611,241 828,991 Annual Report 2013 Sampath Bank PLCRedeemable debentures (Note 37.1) 6,500,000 1,500,000 6,852,830 1,937,207Long term bond (Note 37.2) 1,494,001 1,368,723 1,494,001 1,368,723Call borrowings 3,924,825 3,924,825Term borrowings - 4,922,128 -Foreign currency borrowings - 3,033,650 22,322,900 5,160,437Refinance borrowings 22,322,900 18,084,125 4,620,605 18,084,125 4,838,531 44,748,530 4,838,531 4,620,605 28,825,029 32,218,014 38,862,331The Bank has not had any default of principal, interest or other breaches with regard to any liability during 2012 and 2013. 275

NOTES TO THE FINANCIAL STATEMENTS37 DEBT ISSUED AND OTHER BORROWED FUNDS CONTD. Bank Group37.1 Redeemable Debentures 2013 2012 2013 2012As at 31st December Rs 000 Rs 000 Rs 000 Rs 000Balance as at 1 st January (Note 37.1.1) 1,500,000 1,761,618 1,937,207 1,861,688Debentures issued (Note 37.1.2) 5,000,000 1,500,000 5,000,000 1,800,000Interest payableDebentures redeemed - - 60,050 37,137Interest paid - (1,750,000) (85,500) (1,750,000)Balance as at 31 st December - (58,927) 6,500,000 (11,618) 6,852,830 (11,618) 1,500,000 1,937,20737.1.1 The Debentures include 15,000,000 Unsecured Subordinated Redeemable 5-year Debentures of Rs 100/- each issued in 2012. The debentures are quoted on the Colombo Stock Exchange. Amortised costNo of Debentures Face Value 2013 2012 Allotment Date Maturity Date Rate of Interest Rs 000 Rs 000 Rs 000 10,776,800 31-Oct-17 Fixed - 16.5 % per annum payable annually 2,477,900 1,077,680 1,077,680 1,077,680 12-Oct-12 31-Oct-17 Fixed - 15.0 % per annum payable monthly 1,745,300 247,790 247,790 247,790 12-Oct-12 31-Oct-17 Floating rate is equivalent to the six months 174,530 174,530 174,530 12-Oct-12 Treasury Bill rate (gross) plus 2.0 % 15,000,000 1,500,000 1,500,000 1,500,00037.1.2 The Debentures include of 50,000,000 unsecured Subordinated Redeemable 5-year Debentures of Rs 100/- each issued in 2013. The debentures are quoted on the Colombo Stock Exchange. ValueNo of Debentures Face Value 2013 2012 Allotment Date Maturity Date Rate of Interest Rs 000 Rs 000 Rs 000 15,541,900 04-Dec-18 Fixed - 13.00 % per annum payable 34,458,100 1,554,190 1,554,190 - 04-Dec-13 04-Dec-18 semi-annually 50,000,000 Fixed - 13.40 % per annum payable 3,445,810 3,445,810 - 04-Dec-13 annually 5,000,000 5,000,00037.2 Long Term Bond Bank GroupBalance as at 1st January 2013 2012 2013 2012Interest accrued Rs 000 Rs 000 Rs 000 Rs 000Balance as at 31st December 1,368,723 1,253,949 1,368,723 1,253,949 125,278 114,774 125,278 114,774 1,494,001 1,368,723 1,494,001 1,368,723276

38 CURRENT TAX LIABILITIES Bank 2012 Group 2012 Rs 000 Rs 000As at 31st December 2013 2013 Rs 000 Rs 000Balance as at 1st JanuaryCurrent year provision 3,041,259 1,851,834 3,073,243 1,881,142Less: Payment of tax 1,623,795 2,146,260 1,697,634 2,184,158Balance as at 31st December (1,973,189) (956,835) (2,017,539) (992,057) 2,691,865 3,041,259 2,753,338 3,073,24339 OTHER PROVISIONS Bank 2012 Group 2012 Rs 000 Rs 000As at 31st December 2013 2013 Rs 000 Rs 000Provision for retiring gratuity (Note 39.1)Leave accrual plan (Note 39.2) 255,548 202,994 271,439 215,716EPF Interest Guarantee plan (Note 39.3) 127,682 96,402 127,682 96,402 43,240 43,240 57,979 57,979 441,209 342,636 457,100 355,35839.1 Provision for Retiring Gratuity 2012 Group 201239.1.1 Net Asset (Liability) Recognised in the Statement of Financial Position Rs 000 Rs 000 2013 Bank Rs 000 2013 Rs 000Balance as at 1st January 202,994 164,182 215,715 177,220Provision made during the year 63,500 51,528 66,066 50,868Benefits paid by the plan 266,494 215,710 281,781 228,088 (10,946) (12,716) (10,342) (12,372) 255,548 202,994 271,439 215,71639.1.2 Amounts Recognised in Income Statement Bank GroupService cost 2013 2012 2013 2012Net interest on the net defined benefit liability (asset) Rs 000 Rs 000 Rs 000 Rs 000Total amount recognised in Income Statement 29,853 24,389 30,794 23,729 Annual Report 2013 Sampath Bank PLC 22,329 16,418 22,329 16,418 52,182 40,807 53,123 40,14739.1.3 Amounts Recognised in OCI Bank GroupLiability (gains) losses due to changes in assumptions 2013 2012 2013 2012Liability experience (gains) losses arising during the year Rs 000 Rs 000 Rs 000 Rs 000 - (26) - (26) 11,318 10,747 12,943 10,747 11,318 10,721 12,943 10,721 277

NOTES TO THE FINANCIAL STATEMENTS39 OTHER PROVISIONS CONTD. Bank Group39.1.4 Defined Benefit Obligation Reconciliation 2013 2012 2013 2012Benefit obligation at end of prior year Rs 000 Rs 000 Rs 000 Rs 000Service costInterest cost 202,994 164,183 215,715 177,221Actual benefits paid from plan 29,853 24,388 30,794 23,728(Gain) / loss due to changes in assumptions 22,329 16,418 22,329 16,418Experience (gain) / loss (10,946) (12,716) (10,342) (12,372) 11,318 10,747 12,943 10,747 - (26) - (26) 255,548 202,994 271,439 215,716An actuarial valuation of the gratuity fund was carried out as at 31st December 2013 by Messrs Piyal S Goonetilleke & Associates, a firm ofprofessional actuaries. The valuation method used by the actuary to value the Fund is the “Projected Unit Credit Method”, recommended by SriLanka Accounting Standards-LKAS 19 (Employee Benefits).Actuarial assumptions 2013 2012Discount rate as at 31st December 11% 11%Future salary increment rate 10% 10%EPF Fund investment rate 8.75% 9.75%Guarantee investment rate 10%Mortality 9% GA 1983 Mortality TableRetirement age GA 1983 Mortality Table 55 years 55 yearsSensitivity of assumptions employed in actuarial valuationThe following table demonstrates the sensitivity to a reasonably possible change in the key assumptions employed with all other variables heldconstant in the employment benefit liability measurement.The sensitivity of the Comprehensive Income Statement and the Statement of Financial Position is the effect of the assumed changes indiscount rate and salary increment rate on the profit or loss & employment benefit obligation for the year.Increase / Increase / 2013(decrease) (Decrease) inin discount rate Salary Increment Sensitivity Effect on Comprehensive Sensitivity Effect on Employment 1% - Income Statement Increase/ (Reduction) Benefit Obligation Increase/ (Decrease) (1%) - 1% in results for the year (Rs Mn) in the Liability (Rs Mn) - (1%) - 40.6 (40.6) (48.1) 48.1 (41.5) 41.5 35.6 (35.6)Sensitivity disclosures for the defined benefit obligation for comparative period (year ended 31st December 2012) have not been presentedas the sensitivity analysis for 2012 has been done based on the previous Accounting Standard.39.2 Leave Accrual Plan 2012 Group 201239.2.1 Net Asset (Liability) Recognised in the Statement of Financial Position Rs 000 Rs 000 2013 Bank Rs 000 2013 Rs 000Balance as at 1st January 96,402 96,402 96,402 96,402Provision made during the year 31,280 - 31,280 -Balance as at 31st December 127,682 127,682 96,402 96,402278

39.3 EPF Interest Guarantee plan39.3.1 Net Asset (Liability) Recognised in the Statement of Financial Position Bank Group 2013 2012 2013 2012 Rs 000 Rs 000 Rs 000 Rs 000Present value of funded benefit obligation as at 1st January 43,240 - 43,240 -Provision made during the year 14,739 43,240 14,739 43,240Balance as at 31st December 57,979 43,240 57,979 43,24039.4 Pension Fund39.4.1 Net Asset (Liability) Recognised in the Statements of Financial Position Bank Group 2013 2012 2013 2012 Rs 000 Rs 000 Rs 000 Rs 000Fair value of plan assets as at 31st December (Note 39.4.5) 4,371,027 4,106,345 4,371,027 4,106,345Present value of funded obligations as at (3,986,426) (3,227,914) (3,986,426) (3,227,914) 31 st December (Note 39.4.4) 384,601 878,431 384,601 878,431Funded status - - - -Present value of unfunded benefit obligations 384,601 878,431 384,601 878,431Net asset (liability) recognised39.4.2 Amounts Recognised in Income Statement Bank Group 2013 2012 2013 2012 Rs 000 Rs 000 Rs 000 Rs 000Service cost 157,330 150,120 157,330 150,120Net interest on the net defined benefit liability (asset) (92,910) (62,709) (92,910) (62,709)Total amount recognised in Income Statement 64,420 87,411 64,420 87,411Note: This over payment is recognised under pre-paid expenses in “other assets” category.39.4.3 Amounts Recognised in OCI Bank GroupLiability (gains) losses due to changes in assumptions 2013 2012 2013 2012 Annual Report 2013 Sampath Bank PLCLiability experience (gains) losses arising during the year Rs 000 Rs 000 Rs 000 Rs 000Asset (gains) losses arising during the yearTotal amount recognised in OCI - (210,067) - (210,067) 308,502 194,375 308,502 194,375 120,907 120,907 429,409 (7,293) 429,409 (7,293) (22,985) (22,985) 279

NOTES TO THE FINANCIAL STATEMENTS39 OTHER PROVISIONS CONTD. Bank Group39.4.4 Defined Benefit Obligation Reconciliation 2013 2012 2013 2012Benefit obligation at end of prior year Rs 000 Rs 000 Rs 000 Rs 000Service costInterest cost 3,227,914 2,882,369 3,227,914 2,882,369Actual benefits paid from plan 157,330 150,120 157,330 150,120(Gain) loss due to changes in assumptions 355,071 288,237 355,071 288,237Experience (gain)/loss (62,391) (77,120) (62,391) (77,120) 308,502 194,375 308,502 194,375 - (210,067) - (210,067) 3,986,426 3,227,914 3,986,426 3,227,91439.4.5 Fair Value of Plan Assets Reconciliation Bank GroupFair value of plan assets at end of prior year 2013 2012 2013 2012Interest income on plan assets Rs 000 Rs 000 Rs 000 Rs 000Asset gain (loss)Actual employer contributions 4,106,345 3,551,235 4,106,345 3,551,235Actual benefits paid from plan 447,980 350,946 447,980 350,946 (120,907) 7,293 (120,907) 7,293 - 273,991 - 273,991 (62,391) (77,120) (62,391) (77,120) 4,371,027 4,106,345 4,371,027 4,106,345An actuarial valuation of the Pension Fund was carried out as at 31st December 2013 by Messrs Piyal S Goonetilleke & Associates, a firmof professional actuaries. The valuation method used by the actuary to value the Fund is the “Projected Unit Credit Actuarial Cost Method”,recommended by Sri Lanka Accounting Standard - LKAS 19 (Employee Benefits). 2013 2012Actuarial assumptions 11% 11%Discount rate as at 31st December 10% 10%Future salary increment rate 10%Annual return on assets 9% GA 1983 Mortality TableMortality GA 1983 Mortality Table Normal retirement age orRetirement age Normal retirement age or age age on valuation date, if greater on valuation date, if greaterThe plan assets are term deposits, government debt securities and debenture investments in listed companies.Average duration of the defined benefit plan obligation is 13 years at the end of the reporting period.All actuarial gains & losses occurred due to changes in financial assumptions.280

39.4.6 Sensitivity of Assumptions Employed in Actuarial ValuationThe following table demonstrates the sensitivity to a reasonably possible change in the key assumptions employed with all other variables heldconstant in the employment benefit liability measurement.The sensitivity of the Comprehensive Income Statement and the Statement of Financial Position is the effect of the assumed changes indiscount rate & salary increment rate on the profit or loss & employment benefit obligation for the year.Increase / Increase / 2013(decrease) (Decrease) in Salaryin discount Increment Sensitivity Effect on Comprehensive Income Sensitivity Effect on Employment Benefitrate Statement Increase/ (Reduction) in results Obligation Increase/ (Decrease) in the for the year (Rs Mn) Liability (Rs Mn)1% 471.3 (471.3)(1%) (570.8) 570.8 1% (291.5) 291.5 (1%) 263.3 (263.3 )Sensitivity disclosures for the defined benefit obligation for comparative period (year ended 31st December 2012) have not been presentedas the sensitivity analysis for 2012 has been done based on the previous Accounting Standard.40 OTHER LIABILITIES Bank 2012 Group 2012 Rs 000 Rs 000As at 31st December 2013 2013 Rs 000 Rs 000Provision for deposit insurance schemeFinancial guarantee liability 81,731 69,941 81,731 69,941Other payable 64,701 71,448 64,701 71,448 4,637,555 3,914,099 4,998,787 4,120,930 4,783,987 4,055,488 5,145,219 4,262,31941 STATED CAPITAL Bank Group 2013 2012 2013 2012 Rs 000 Rs 000 Rs 000 Rs 000Ordinary shares as at 1st January 3,564,172 2,743,780 3,564,172 2,743,780 Annual Report 2013 Sampath Bank PLCIssue of shares under ESOP 10,794 176,035 10,794 176,035Scrip dividend 644,357 644,357As at 31st December 885,373 885,373 4,460,339 3,564,172 4,460,339 3,564,172Number of shares as at 31st December 2013 increased to 167,787,605 from 162,736,665 as at 31st December 2012 due to effect of thescrip dividend & ESOP 2010.Rights, preferences and restrictions of classes of capitalThe holders of ordinary shares have the right to receive dividend as declared from time to time and are entitled to one vote per share at theAnnual General Meeting of the Bank. 281

NOTES TO THE FINANCIAL STATEMENTS41 STATED CAPITAL CONTD. 2013 201241.1 Employee Share Option Plan (ESOP) - 2010 Number of Number ofAs at 31st December shares sharesESOP Position 3,056,159 3,056,159 2,860,293 2,725,360Number of options availableNumber of options exercised 195,866 330,799Number of remaining options (shares) 80 80Option price (Rs) 199.83 180.10Weighted average Market price (Rs)The option exercisable period would be 3 years, from the entitlement date of 30th June 2011. In the event of options being fully exercised bythe eligible staff, the stated capital of the Bank would rise by Rs 244.5 Mn, as a result of the consideration to be paid by the staff under theESOP.No financial assistance will be provided by the Bank to the staff to purchase the share options. The remaining contractual life of share optionsis 6 months.42 COMMITMENTS AND CONTINGENCIESTo meet the financial needs of customers in the ordinary course of business, the Bank enters into various irrevocable commitments and incurscertain contingent liabilities. These consist of financial guarantees, letters of credit and other undrawn commitments to lend.Even though these obligations may not be recognised on the Statement of Financial Position, they do contain credit risk and are therefore partof the overall risk of the Bank.Letters of credit & guarantees (including standby letters of credit) commit the Bank to make payments on behalf of customers in the event of aspecific act, generally related to the import or export of goods. Guarantees and standby letters of credit carry a similar credit risk to loans.No material losses are anticipated as a result of these commitments and contingencies.42.1 Commitments and Contingencies Bank GroupAs at 31st December 2013 2012 2013 2012 Rs 000 Rs 000 Rs 000 Rs 000Commitments 37,346,053 27,340,066 37,464,520 27,543,720Commitment for unutilised facilities (direct advances) 37,346,053 27,340,066 37,464,520 27,543,720Contingent Liabilities 7,871,824 6,308,188 7,871,824 6,308,188Acceptances 12,014,404 11,310,366 12,014,404 11,310,366Documentary credit 28,333,570 21,993,951 28,333,570 21,993,951GuaranteesBills sent for collection 164,448 129,388 164,448 129,388Others 14,791 352,396 14,791 352,396 40,094,289 40,094,289Forward exchange contracts 48,399,037 28,684,448 48,399,037 28,684,448Currency SWAPs 37,093,136 19,806,940 37,093,136 19,806,940 22,728,550 88,585,677 22,728,550 88,585,677Commitment & contingencies 108,220,723 115,925,743 108,220,723 116,129,397 145,566,776 145,685,243282

42.2 Other Contingent Liabilities Annual Report 2013 Sampath Bank PLCLitigation against the BankLitigation is a common occurrence in the banking industry due to the nature of the business undertaken. The Bank has formal controls andpolicies for managing legal claims. Once professional advice has been obtained and the amount of loss reasonably estimated, the Bank makesadjustments to account for any adverse effects which the claims may have on its financial standing. At the year end, the Bank had severalunresolved legal claims.I. Before the Labour Tribunal:LT application before the Labour Tribunal in Case No LT1/ADD/20/2012, LT application in High Court pending in case No HC ALT 14/2012.II. Commercial High Court Case No HC (Civil) 11/2004(1)The above case has been filed against the Bank in the Commercial High Court by Claremont Capital Limited (a company incorporated in theBritish Virgin Islands) for the recovery of a sum of Rs 272,232,295.16 on the allegation that the Bank had wrongfully debited the said amountfrom the Bank account of Claremont Capital Limited. The said party has also claimed a sum of Rs 53,411,299.34 on account of the allegedloss suffered by them up to date of institution of the action and a sum of Rs 4,906,796.63 per month as alleged continuing losses.Claremont Capital subsequently filed a notice of appeal and the Bank filed a motion objecting to the said notice on various grounds. The orderwith regard to the motion has been reserved for the 20th of January 2012 and the action is now pending before Supreme Court.lll. Following cases are filed against the Bank in order to recover damages(a) Case No - DMR 5787/10The above case has been filed against the Bank claiming a sum of Rs 210,000/- for auctioning pawned articles by the Bank. The Plaintiff isseeking Legal interest from June 2010 until the payment of damages and legal interest from the date of Judgment until the payment of totalamount.(b) Case No - 250/12/DSPThe Plaintiff has filed a case against the Bank claiming Rs 1.0 Mn on the basis that he has tendered Omanian Rial 400/- for encashment.The equivalent rupee amount has been credited to his account. Subsequently it was realized that the Bank has encashed not actual OmanianRial but they are Omanian Baisa which is having a very lower value than Omanian Rial. Accordingly Bank has recovered the said amount andcredited only the value of the Baisa’s tendered by the customer. Bank has filed necessary papers to defend our case and it is hopeful that wewill be succeeded in this case since Bank has the currencies tendered for the encashment by the customer.(c) Case No - DMR 1904/2012The above case has been filed against the Bank claiming a sum of Rs 2,500,000/- as damages on the basis that the Bank has illegallysubmitted the Certificate of Registration of a Vehicle leased under the Lease Agreement No L/0/16/SBL/Kuli, to the spouse and the letter ofconsent given by the spouse is challenging in Courts.(d) Case No - 7058/DMRThe Plaintiff has allegedly instituted this action against the Bank claiming a sum of Rs 20,000,000/- on the basis that the Bank has increasedthe rate of interest of the housing loan that he has obtained and he suffered damages as a result of that. However the Letter of Offer confirmsthat the Bank has the right to increase the rate of interest.(e) Case No - CHC 320/2011The Plaintiff has filed a case against the Bank (1st Defendant of the case) in order to obtain an order from the Commercial High Court ofWestern Province for the cancellation of resale of the property described in the plaint.(f) Case No - 58032/MRThe Plaintiff has filed this case against the Bank as well as the CRIB, claiming Rs 100,000,000/- as damages, on the basis that his companynamely Jagath Robotics (Pvt) Ltd has been reported to the CRIB, under an irrelevant reference due to our negligence. Bank is defending theabove action and chances for the plaintiff to win this case are very low.(g) Case No - 11938/M - EmbilipitiyaThe above case has been filed against the Bank claiming damages of Rs. 1,000,000/- for the payment of Rs. 100,000/- from a SavingsAccount, to a person who has forged the Plaintiff’s signature. 283

NOTES TO THE FINANCIAL STATEMENTS42 COMMITMENTS AND CONTINGENCIES CONTD.(h) DC Colombo Case No 891/13 - Jayantha DadigamaThe Plaintiff has filed a case against the Bank claiming damages of Rs 143 Mn on the basis that the Bank has unlawfully auctioned hisproperty under the provisions of Act No 04 of 1990. The case is unfavourable to the Plaintiff, since the Bank has acted according to theprovision of law.(i) CHC Colombo Case No 29/13/MR - R J Technology SystemsThe case is filed by D L D P Roshan Jayasinghe, the proprietor of R J Technology Systems against the Bank claiming a sum of Rs 40 Mn onthe basis that the Bank illegally suspended his credit balance of Rs 299,209.43 and two cheques got returned due to that. The Bank’s positionin relation to the above is over Rs 3 Mn due to the Bank from the said customer on a charge back created through the payment gateway, whichwas utilized by the plaintiff.The Bank should be able to succeed in this action on the right of set off recognized by law relating to Banking facilities.iv. To prevent the Bank from enforcing the mortgages to recover its dues:(a) Eleven actions have been filed in Supreme Court in Case Nos SC/CHC 43/10, SC 19/10, SC 57/12, SC 94/12, SC 11/09, SC 196/11, SC 5/10, SC 14/11, 24/2008SC, SC 06/2013 and SC 253/11.(b) Five actions have been filed in Court of Appeal in Case Nos CA/REV/690/2005, CALA/320/2001, CALA/48/2006, CA/12/97(CA) and CA (writ) 401/2013(c ) Four actions have been filed in Civil Appeal in Case Nos 53/11 CALA, CALA 172/12 LA, 43/2012 Rev and 20/04 (F)(d) Seven cases have been filed against the Bank in the Commercial High Court Case Nos HC/CIVIL/124/2009, 463/11 MR, 225/12 MR, 41/12 MR, 11/12 MR, 32/12/CO and 440/2013/MR(e) Sixteen actions have been filed in District Court, Colombo by constituents in Case Nos 21508/L, 101/11 DLM, 112/11 DSP, 231/09 DSP, 03/10 DLM, 89/11 DSP, 102/11 DSP, 39/12 DSP, 173/2012 DSP, 253/12 DSP, 05/10 DLM, 212/12/DLM, 274/12 DSP, 46/2013/DSP, 21371/L and 223/2013 DSP(f) Three in DC Marawila in Case Nos 1613/L, 1070/S & 1747/L, one in DC Kurunegala in Case No 7587/L, two in DC Kandy in Case Nos 228/10 & DPA, 36599/MR, two in DC Monaragala in Case Nos 1655/SPL & 1691/SPL, one in DC Minuwangoda in Case No 12/SPL, one in DC Chilaw in Case No 4127/11/L, one in DC Kalutara in Case No 4369/SPL, two in DC Rathnapura in Case Nos 26242/P & 24208/P, two in DC Awissawella in Case Nos 26350/L & 25293/L, two in DC Matale in Case Nos 6257/L & 6048/L, one in DC Galle in Case No 16381/L, four in DC Gampha in Case Nos 1885/L, 127 MB, 4392/12/M & 2313/L, one in DC Batticaloa in Case No 5487/L/11, one in DC Elpitiya in Case No 298/12/SPL, one in DC Bandarawela in Case No 302/SPL, one in DC Mt Lavinia in Case No 7171/12/M, one in DC Polonnaruwa in Case No 14916/12/SPL, one in DC Moratuwa in Case No 259/12/DSP, one in DC Kegalle in case No 8031/SPL and one in DC Pelmadulla in Case No 3036/LLitigation against the GroupOther than the litigations disclosed above Siyapatha Finance Limited has executed a legal proceeding against the Department of Custom inthe Court of Appeal and contingency provision amounting to Rs 23 Mn has been made for any liability which may occur therein.Other than those disclosed above there is no case filed against the Group which would have material impact on the financial position of theGroup.284

42.3 Capital Expenditure approved by the Board of Directors, for which provisions have not been made in these accounts, amounted to approximately;As at 31st December Bank 2012 Group 2012 Rs 000 Rs 000 2013 2013 Rs 000 Rs 000Approved & contracted for 234,716 156,210 234,716 156,210Approved but not contracted for 492,794 66,080 492,794 66,080 727,510 727,510 222,290 222,29043 RELATED PARTY DISCLOSURESThe Bank carries out transactions in the ordinary course of business with the parties who are defined as related parties in the Sri LankaAccounting Standard - LKAS 24 (Related Party Disclosures), the details of which are reported below. The pricing applicable to suchtransactions is based on the assessment of risk and pricing model of the Bank and is comparable with what is applied to transactions betweenthe Bank and its unrelated customers.43.1 Parent and Ultimate Controlling PartyThe Bank does not have an identifiable parent of its own.43.2 Transactions with Key Managerial Personnel (KMPs)According to Sri Lanka Accounting Standard - LKAS 24 (Related Party Disclosures) Key Managerial Personnel (KMP) are those havingauthority and responsibility for planning, directing and controlling the activities of the entity. Such KMPs include the Board of Directors of theBank (including both Executive and Non Executive Directors), key employees who are holding directorship in Subsidiary companies of theBank, Corporate Management Members in the grade of Deputy General Manager and above, Group Company Secretary, Head of InternalAudit, Chief Legal Officer and Senior Manager - System Audit and their Close Family Members (CFM).Bank is the ultimate parent of its Subsidiaries. Thus the Board of Directors, Corporate Management Members in the grade of Deputy GeneralManager and above, Group Company Secretary, Head of Internal Audit, Chief Legal Officer and Senior Manager -System Audit have theauthority and responsibility for planning, directing and controlling the activities of the Group as they are directly reporting to the Board or BoardSub Committees. Accordingly, the Board of Directors, Corporate Management Members in the grade of Deputy General Manager and above,Group Company Secretary, Head of Internal Audit, Chief Legal Officer and Senior Manager - System Audit and their Close Family Members(CFM) have been identified as KMPs of the Group.Close Family Members (CFM) of the KMPs are those family members who may be expected to influence or be influenced by that KMPs in theirdealing with the entity. They may include KMPs domestic partner and children of the KMPs domestic partner and dependants of the KMPs andthe KMPs domestic partner. Annual Report 2013 Sampath Bank PLC 285

NOTES TO THE FINANCIAL STATEMENTS43 RELATED PARTY DISCLOSURES CONTD.43.2.1 Transactions with Key Managerial Personnel (KMPs)BankFor the Year Ended 31st December 2013 2012 Rs 000 Rs 000Short term employee benefits 109,486 95,431ESOP benefits 45,824 -Termination benefits -Post-employment benefits 21,227 22,006Directors’ fees & expenses 42,791 11,822Total 37,985 219,328 167,244In addition to the above, the Bank has also paid non cash benefits such as fuel and medical benefits to KMPs in line with the approved benefitplans of the Bank.43.3 Transactions, Arrangements and Agreements Involving KMPs and Their CFMs43.3.1 Loans and Advances to KMPs and their CFMs are detailed below: 2013 2012 Average Balance Closing Closing Limit Balance Limit Balance 2013 2012 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000Loans & receivables 91,916 54,741 60,044 46,107 45,981 28,99543.3.2 Credit Card Facilities to KMPs and their CFMs are detailed below: 2013 2012 Average Balance Closing Closing Limit Balance Limit Balance 2013 2012 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 13,775Credit card 20,745 5,136 2,553 3,963 2,98943.3.3 Deposits and Investments from KMPs and their CFMs are detailed below: Closing Balance Average Balance 2013 2012 2013 2012 Rs 000 Rs 000 Rs 000 Rs 000Deposits & investments 534,714 252,710 304,734 299,14143.3.4 Share Based Payments to KMPs Closing BalanceCash dividend 2013 2012 Rs 000 Rs 000 148,600 106,272286

43.3.4 Share Based Payments to KMPs Contd. Number of Shares 2013 2012Scrip dividend 4,916,007 3,682,03943.4 Transactions, Arrangements and Agreements involving Entities which are controlled and / or jointly controlled by the KMPs or their CFMs Closing Balance Average Balance 2013 2012 2013 2012 Rs 000 Rs 000 Rs 000 Rs 000Loans & receivables 3,220,515 1,331,610 2,276,062 1,225,601Documentary Credits 334,297 453,720 394,009 345,302Bills of acceptance 619,012 447,730 533,371 284,745Guarantees 20,929 25,500 23,215 29,945Commercial papers - 451,000 225,500 225,500Total 4,194,753 2,709,560 3,452,157 2,111,09343.5 Goods and Services PurchasedDuring the year, the Bank purchased goods and services from entities where KMPs have either control and / or joint control.For the year ended 31st December 2013 2012 Rs 000 Rs 000Goods & services purchased 39,426 32,30143.6 Transactions with SubsidiariesThe Bank had the following financial dealings during the year with its Subsidiary companies.31st December Nature of Facility/ 2013 2012Subsidiary company Transaction Rs 000 Rs 000Sampath Centre Ltd As at Deposits Loans & receivables 139,796 132,910 Annual Report 2013 Sampath Bank PLC Other assets 270 1,043 Other liabilities For the year ended 62,754 62,754 Income & fees received 31,920 5,964 Expenses & fees paid 85,000 61,200S C Securities (Pvt) Ltd As at 271,570 228,031 Loans & receivables Indirect facilities 45,791 47,675 Deposits 1,750 1,750 Repo borrowings 17 17 For the year ended 9,765 Income & fees received 10,638 Expenses & fees paid 15,918 Interest expenses from treasury bills 9,729 325 402 - 1,104 287

NOTES TO THE FINANCIAL STATEMENTS43 RELATED PARTY DISCLOSURES CONTD.31st December Nature of Facility/ 2013 2012Subsidiary company Transaction Rs 000 Rs 000Siyapatha Finance Ltd As at Loans and receivables Other Liabilities 1,646,318 993,633 Commercial Papers 358,410 92,588 For the year ended - Income and fees received 291,283 Expenses and fees paid 208,113 19,262 216,539Sampath Information Technology Solutions Ltd As at 20,562 Loans and receivables 71,297 Other liabilities 9,560 65,978 For the year ended 6,758 Income and fees received 9,822 Expenses and fees paid 60,216 6,358 55,82743.7 Transactions with Post Employment Benefit Plans of the BankAs at 31st December 2013 2012 Rs 000 Rs 000 Nature of Transaction 5,059,318 5,111,488Sampath Bank Employees’ Provident Fund Deposits 147,750 147,750 Debentures 2,480,892 1,739,604Sampath Bank Employees’ Pension Fund Deposits 543,000 518,768 Treasury Bills - Reverse Repo 21,282 1,136,000 Debentures 21,282 Investment in Sampath Bank Shares - 204,182 690,676 532,326 Market Value - Investment Repo288

44 SEGMENT INFORMATIONFor management purposes, the Group is organised into four operating segments based on services offered to customers as follows .The following table presents income & profit & certain asset & liability information regarding the Bank’s operating segments. Dealing/ Elimination/ Total Investment Unallocated Banking Leasing OthersFor the year ended 2013 2012 2013 2012 2013 2012 2013 2012 2013 2012 2013 2012 31st December Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000Net interest income 14,288,169 11,555,440 804,470 490,284 (2,184) (7,089) 4,280 413 - - 15,094,735 12,039,048Dividend income - - - - 164,164 156,276 - - (95,872) (79,155) 68,292 77,121Net fee & commission income -Foreign exchange profit 2,543,345 2,148,998 52,763 22,784 22,821 29,806 (183) - - - 2,618,746 2,201,588Other income 520,260 2,153,812 - - - - - - - 520,260 2,153,812 1,800,390 244,158 (181,116) (175,474) 1,908,062 1,917,002 68,544 38,826 3,702 162 250,055 2,058,187Total revenue from external customers 19,268,776 17,658,640 925,777 551,893 188,503 179,154 254,152 244,573 (276,988) (254,629) 20,360,220 18,379,631Inter segment revenue - - - - - - - - - -- -Total Operating Income 19,268,776 17,658,640 925,777 551,893 188,503 179,154 254,152 244,573 (276,988) (254,629) 20,360,220 18,379,631Impairment charges for loans & (3,454,365) (8,280) (103,002) (56,865) (16,708) (15,000) - - - - (3,574,075) (80,145) other losses 822,775 495,028 171,795 164,152 254,153 244,573 (276,988) 15,814,411 17,650,360 (254,629) 16,786,146 18,299,486Net Operating Income (38,187) (37,669) 128,177 126,077Segment result 5,309,122 8,501,633 427,512 327,218 (106,525) (87,950) 5,720,099 8,829,309Less : VAT on Financial Services (931,134) (1,176,225)Less : Income tax expenses (1,151,300) (2,213,060)Profit for the year 3,637,665 5,440,024Non controlling interestNet profit attributable to equity (2,708) (3,342) holders of the parent 3,634,957 5,436,682Segment assets 376,892,230 304,417,073 14,134,994 10,803,774 362,440 289,527 3,335,368 2,317,462 (3,421,118) (2,772,808) 391,303,914 315,055,028Unallocated assets -- - - - - - - - ---Total assets 376,892,230 304,417,073 14,134,994 10,803,774 362,440 289,527 3,335,368 2,317,462 (3,421,118) (2,772,808) 391,303,914 315,055,028Segment liabilitiesUnallocated liabilities 348,988,922 279,271,873 12,546,152 9,427,925 188,158 87,716 182,306 161,297 (2,361,197) (1,712,887) 359,544,341 287,235,924Total liabilities -- - - - - - - - ---Cash flows from operating activities 348,988,922 279,271,873 12,546,152 9,427,925 188,158 87,716 182,306 161,297 (2,361,197) (1,712,887) 359,544,341 287,235,924Cash flows from investing activitiesCash flows from financing activities 10,706,532 6,796,854 (2,492,830) (1,430,975) 3,440 (11,870) 144,844 140,911 383,050 (225,027) 8,745,036 5,269,893Capital expenditure 31,146 (97,412) (693) (630) (54,479) (83,746) (472,732) 10,434 (29,134,744) (12,080,781) (28,637,986) (11,909,427) - (105,030) (10,042) (215,324) 2,811,069 1,470,633 - 630 57,159 83,746 194,134 11,344,809 10,004,168 8,854,094 8,349,443 88,319 12,052 693 (29,711) 718 866,910 961,345 750,449 864,198 Annual Report 2013 Sampath Bank PLC 289

NOTES TO THE FINANCIAL STATEMENTS45 EVENTS AFTER THE REPORTING PERIODBankNo circumstances have arisen since the reporting date which would require adjustments to, or disclosure in the Financial Statements, otherthan those disclosed below.Directors have recommended a final dividend of Rs 8.00 per share to be paid for the financial year ended 31st December 2013, in the form ofcash dividend. Further this dividend is to be approved by the shareholders at the Annual General Meeting to be held on 31st March 2014.In accordance with Sri Lanka Accounting Standard- LKAS 10 (Events After the Reporting Period), this proposed final dividend has not beenrecognised as a liability as at 31st December 2013. As required by section 56(2) of the Companies Act No 7 of 2007, the Board of Directorshas confirmed that the Bank has satisfied the ‘Solvency Test’ in accordance with section 57 of the Companies Act No 7 of 2007, havingobtained a certificate from the auditors, prior to recommending the final dividend for the year.Under the Inland Revenue Act No 10 of 2006, a Withholding Tax of 10% has been imposed on dividend declared.GroupThe Central Bank of Sri Lanka (CBSL), requested all Finance Companies to take necessary steps to comply with the Financial SectorConsolidation Programme, which was announced consequent to the last budget proposals. Currently Siyapatha Finance Ltd is in the process ofevaluating suitable options available under this programme.46 FAIR VALUE OF FINANCIAL INSTRUMENTSFinancial Instruments Recorded at Fair ValueThe following is a description of how fair values are determined for financial instruments that are recorded at fair value using valuationtechniques. These incorporate the Bank’s estimate of assumptions that a market participant would make when valuing the instruments.Derivatives - Assets and LiabilitiesDerivative products are SWAPs, forward foreign exchange contracts and hedges, valued using a valuation technique with market-observableinputs. The most frequently applied valuation techniques include forward foreign exchange spot and forward premiums.Financial Investments – Available for SaleAvailable for sale financial assets (primarily consist of quoted equities and Government debt securities) are valued using valuation techniquesor pricing models. These assets are valued using models that use observable data. Government debt securities are valued using yield curvepublished by the Central Bank of Sri Lanka and quoted equities are valued using quoted market prices in the active market as at the reportingdate.Trading Assets and Other Assets Measured at Fair ValueTrading assets and other assets measured at fair value are the Government debt securities and quoted equities. Government debt securitiesare valued using yield curve published by the Central Bank of Sri Lanka. For quoted equities the Bank uses quoted market prices in the activemarket as at the reporting date.Determination of Fair Value and Fair Value HierarchyFor all financial instruments where fair values are determined by referring to externally quoted prices or observable pricing inputs to models,independent price determination or validation is obtained. In an inactive market, direct observation of a traded price may not be possible. Inthese circumstances, the Bank uses alternative market information to validate the financial instrument’s fair value, with greater weight given toinformation that is considered to be more relevant and reliable.Fair values are determined according to the following hierarchy:Level 1 - Quoted Market Price (unadjusted): financial instruments with quoted prices for identical instruments in active markets.Level 2 - Valuation Technique using observable inputs: financial instruments with quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in inactive markets and financial instruments valued using models where all significant inputs are observable.Level 3 - Valuation Technique with significant unobservable inputs: financial instruments valued using valuation techniques where one or more significant inputs are unobservable.290

The following table shows an analysis of financial instruments recorded at fair value by level of the fair value hierarchy: Bank GroupAs at 31st December 2013 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000Financial Assets - 166,550 - 166,550 - 166,550 - 166,550Derivative financial instruments - 63,968 - 63,968 - 63,968 - 63,968 - - 230,518 - - 230,518 Currency SWAPs 230,518 230,518 Forward foreign exchange contracts - 45,962,143 - - - 1,012,373Financial Assets Held for Trading 45,962,143 - - 45,962,143 45,962,143 -Government debt securities 1,012,373 - 1,012,373 1,012,373 - 3,496,141Quoted equities - - - 50,470,657Financial assets held for trading 3,496,141 - - 3,496,141 3,496,141 - 50,470,657 - 50,470,657 50,470,657 - 2,216,100 pledged as collaterals - - - 100,462 - - - 2,316,562Financial Investments Available for Sale 2,216,100 - - 2,216,100 2,216,100 - - 53,017,737Quoted investments 100,462 230,518 - 100,462 100,462 230,518Government debt securities - 2,316,562 2,316,562 2,316,562 - 53,017,737 52,787,219 52,787,219Financial Liabilities - 600,269 - 600,269 - 600,269 - 600,269Derivative financial instruments - 38,455 - 38,455 - 38,455 - 38,455 - - 638,724 - - 638,724 Currency SWAPs 638,724 638,724 Forward foreign exchange contracts Bank GroupAs at 31st December 2012 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000Financial Assets - 227,812 - 227,812 - 227,812 - 227,812Derivative financial instruments - 51,210 - 51,210 - 51,210 - 51,210 - 279,022 - 279,022 - - 279,022 Currency SWAPs 279,022 Forward foreign exchange contracts - 34,182,709 - - 998,375Financial Assets Held for Trading - - 2,856,321Government debt securities 34,182,709 - - 34,182,709 34,182,709 - - 38,037,405 -Quoted equities 998,375 - - 998,375 998,375 - 1,721,339 - - 179,175Financial assets held for trading - - 1,900,514 - - 40,216,941pledged as collaterals 2,856,321 - - 2,856,321 2,856,321 279,022 38,037,405 - - 38,037,405 38,037,405Financial Investments Available for Sale 1,721,339 - - 1,721,339 1,721,339 Annual Report 2013 Sampath Bank PLCQuoted investments 179,175 - - 179,175 179,175Government debt securities - - 1,900,514 1,900,514 1,900,514 279,022 - 40,216,941 39,937,919 39,937,919Financial Liabilities - 316,301 - 316,301 - 316,301 - 316,301Derivative financial instruments - 65,537 - 65,537 - 65,537 - 65,537 - 381,838 - 381,838 - - 381,838 Currency SWAPs 381,838 Forward foreign exchange contractsThere were no material transfers between Level 1 and Level 2 during 2012 and 2013. 291

NOTES TO THE FINANCIAL STATEMENTS46 FAIR VALUE OF FINANCIAL INSTRUMENTS CONTD.Fair Value of Financial Assets and Liabilities not carried at Fair ValueThe following describes the methodologies and assumptions used to determine fair values for those financial instruments which are not alreadyrecorded at fair value in the Financial Statements.Assets for which Fair Value Approximates Carrying ValueFor financial assets and liabilities that have a short term maturity it is assumed that the carrying amounts approximate their fair value. Thisassumption is also applied to demand deposits and saving deposits which do not have a specific maturity.Fixed Rate Financial InstrumentsThe fair value of fixed rate financial assets & liabilities carried at amortized cost are estimated by comparing market interest rates when theywere first recognized with current market rates for similar financial instruments. The estimated fair value of fixed interest bearing deposits isbased on discounted cash flows using prevailing money market interest rates for debts with similar credit risk and maturity. For quoted debtissued the fair values are determined based on quoted market prices. For those not issued where quoted market prices are not available,a discounted cash flow model is used based on a current interest rate yield curve appropriate for the remaining term to maturity and creditspreads. For other variable rate instruments, an adjustment is also made to reflect the change in required credit spread since the instrumentwas first recognized.Set out below is a comparison, by class, of the carrying amounts and fair values of the Bank’s financial instruments that are not carried at fairvalue in the Financial Statements. This table does not include the fair values of non financial assets and non financial liabilities. Bank GroupAs at 31st December 2013 Carrying Value Fair Value Carrying Value Fair Value Rs 000 Rs 000 Rs 000 Rs 000Financial Assets 8,302,576 8,302,576 8,340,838 8,340,838Cash & cash equivalents 15,766,967 15,766,967 15,766,967 15,766,967Balances with Central Bank of Sri LankaPlacements with Banks 1,791,329 1,791,329 1,791,329 1,791,329Reverse repurchase agreements 18,043,918 18,043,918 18,043,918 18,043,918Loans & receivables to banksLoans & receivables to other customers 638,244 638,244 638,244 638,244Other loans & receivables 259,401,578 259,383,500 265,909,593 266,213,784Financial investments held to maturityOther assets 12,150,588 12,150,588 12,150,588 12,150,588 1,845,903 1,865,610 1,845,903 1,865,610 1,751,374 1,751,374 2,222,016 2,222,016 319,692,477 319,694,106 326,709,396 327,033,294Financial Liabilities 2,211,281 2,206,666 2,250,372 2,245,757Due to banks 3,389,684 3,389,690 3,055,257 3,055,260Securities sold under re-purchase agreements 300,549,350 297,815,142 300,381,786 297,647,578Due to other customers 38,862,331 38,862,331 44,748,530 44,748,530Debt issued & other borrowed fundsUnclaimed dividend 54,981 54,981 54,981 54,981Other liabilities 64,701 64,701 64,701 64,701 345,132,328 342,393,511 350,555,627 347,816,807292

Bank GroupAs at 31st December 2012 Carrying Value Fair Value Carrying Value Fair Value Rs 000 Rs 000 Rs 000 Rs 000Financial AssetsCash & cash equivalents 10,432,135 10,432,135 10,442,259 10,442,259Balances with Central Bank of Sri Lanka 17,200,792 17,200,792 17,200,792 17,200,792Placements with BanksReverse repurchase agreements 8,788,127 8,788,127 8,788,127 8,788,127Loans & receivables to banks 3,300,817 3,300,817 3,300,373 3,300,373Loans & receivables to other customersOther loans & receivables 816,119 816,119 816,119 816,119Financial investments- held - to- maturity 208,184,369 207,886,978 212,480,041 211,958,144Other assets 10,515,756 10,515,756 10,224,474 10,224,474Financial Liabilities - - 9,765 9,765Due to banksSecurities sold under re-purchase agreements 1,399,091 1,399,091 1,858,276 1,858,276Due to other customers 260,637,206 260,339,815 265,120,226 264,598,329Debt issued & other borrowed fundsUnclaimed dividend 624,784 624,784 668,198 668,198Other liabilities 2,757,117 2,757,119 2,751,332 2,751,334 243,330,990 242,738,246 243,088,236 242,495,493Reclassification of Financial Assets 28,825,029 28,825,029 32,218,014 32,218,014There were no reclassifications during 2012 and 2013. 49,185 49,185 49,185 49,185 71,448 71,448 71,448 71,448 275,658,553 275,065,811 278,846,413 278,253,67247 RISK MANAGEMENT Annual Report 2013 Sampath Bank PLC47.1 IntroductionRisk is inherent in the Bank’s activities but is managed through a process of ongoing identification, measurement and monitoring, subject torisk limits and other controls. This process of risk management is critical to the Bank’s continuous profitability and each individual within theBank is accountable for the risk exposures relating to his or her responsibilities. The Bank is mainly exposed to; Credit Risk Liquidity risk Market risk Operational riskRisk Management FrameworkThe Board of Directors has overall responsibility for the establishment and oversight of the Bank’s risk management framework. The Boardhas delegated its authority to Board Risk Management Committee (BRMC) which is responsible for developing and monitoring Bank’s riskmanagement policies. The Committee comprises of Executive and Non Executive Directors. Meetings of BRMC are held regularly, and theBoard of Directors are duly updated of its activities.In 2012, the Board instituted an additional Committee (Treasury Committee) to increase the focus on Treasury related operations and risks.The Committee comprises of Executive and Non Executive Directors and concentrates mainly on liquidity management, Balance Sheetoptimization and new products/services. The Treasury Committee’s deliberations are informed to the BRMC and the Board of Directors.The Bank’s risk management policies are established to identify and analyse the risks faced by the Bank, to set appropriate risk limits andcontrols, and to monitor adherence to established limits. Risk management policies and systems are reviewed regularly to reflect changes inmarket conditions, products and services offered. The Bank, through its training and management standards and procedures, continuouslyupdates and maintains a disciplined and constructive control environment, in which all employees are assigned and made to understand theirrespective roles and responsibilities. 293

NOTES TO THE FINANCIAL STATEMENTS47 RISK MANAGEMENT CONTD.Integrated Risk Management UnitThe Business units (i.e. Credit Departments, Branches, Regional Offices,Treasury etc.) have primary responsibility for Risk Management. TheIntegrated Risk Management Unit, which has no responsibility for profit or volume targets, acts as the 2nd line of defense and reports to theGroup Chief Risk Officer (GCRO) who in turn directly reports to the BRMC.Assets and Liability Committee (ALCO)ALCO is chaired by the Managing Director and has representatives from Treasury Department, Credit Departments, Marketing Department,Finance Department, the Group Chief Financial Officer and the Group Chief Risk Officer. The Committee meets regularly to monitor andmanage the assets and liabilities of the Bank and also overall liquidity position to keep the Bank’s liquidity at healthy levels, whilst satisfyingregulatory requirements.Risk Measurement and ReportingThe Bank’s Risks are measured using appropriate techniques based on the type of risk and industry best practices. The Bank also carries outStress Testing to identify the effect of extreme events/worst case scenarios in most of the major type of risks and the results are reported toBoard Risk Management Committee on a periodic basis.Monitoring and controlling risks is primarily performed based on policies, limits and thresholds established by the Bank. These limits reflect thebusiness strategy and market environment of the Bank as well as the level of risk that the Bank is willing to accept (Risk Appetite).Risk MitigationAs part of its overall risk management, the Bank obtains various types of collaterals to mitigate the risk. Details such as nature of the collateralthat could be accepted, required security margin etc are clearly defined in the Credit Policy of the Bank and any deviations that requirespecific approval. However, respective approving authorities would take into account the availability of security only as the secondary source ofrepayment.47.2 Credit RiskCredit risk is the risk of financial loss to the Bank if a borrower or counterparty to a financial instrument fails to meet its contractual obligations,and arises principally from the Bank’s loans and advances to customers/other banks and investments in debt securities. In addition to the creditrisk from direct funding exposure, the Bank would also be exposed to indirect liabilities such as Letters of Credit, Guarantees etc, which wouldcarry credit risk.The Bank considers and consolidates all elements of credit risk exposure (such as individual obligor default risk, country and sectorconcentration risks) to ensure stringent Credit Risk Management.47.2.1 Impairment AssessmentThe methodology of the impairment assessment has explained in the Note No 3.3.10 under Accounting Policies.Derivative Financial InstrumentsCredit risk arising from derivative financial instruments is, at any time, limited to those with positive fair values, as recorded in the Statementof Financial Position. With gross settled derivatives, the Bank is also exposed to a settlement risk, being the risk that the Bank honors itsobligation, but the counterparty fails to deliver the counter value.47.2.2 Credit related Commitments RisksThe Bank makes available to its customers guarantees that may require that the Bank makes payments on their behalf and enters intocommitments to extend credit lines to secure their liquidity needs. Letters of Credit and Guarantees (including standby Letters of Credit)commit the Bank to make payments on behalf of customers in the event of a specific act, generally related to the import or export of goods.Such commitments expose the Bank to risks similar to loans and are mitigated by the same control processes and policies.47.2.3 Collateral and Other Credit EnhancementsThe amount and type of collateral required depends on an assessment of the credit risk of the counterparty. Guidelines are in place coveringthe acceptability and valuation of each type of collateral. The main types of collateral obtained are, as follows:294

For commercial lending: charges over real estate properties, inventory and trade receivablesFor retail lending: mortgages over residential propertiesThe Bank also obtains guarantees from parent companies for loans to their subsidiaries.Management monitors the market value of collateral and will request additional collateral in accordance with the underlying agreement.It is the Bank’s policy to dispose of repossessed properties in an orderly manner. The proceeds are used to reduce or repay the outstandingclaim. In general, the Bank does not occupy repossessed properties for Business use.The following table shows the maximum exposure to credit risk by class of financial asset. It further shows the total fair value of collateral, anysurplus collateral (the extent to which the fair value of collateral held is greater than the exposure to which it relates), and the net exposure tocredit risk.Bank - As at 31st December 2013 Maximum Net exposure to Exposure credit risk Rs 000 Rs 000Placements with Banks 1,791,329 1,791,329Reverse repurchase agreements 18,043,918 -Derivative financial instrumentsFinancial assets- held for trading 230,517 230,517Financial assets- held for trading pledged as collaterals 46,974,516 46,974,516Loans and receivables to banksLoans and receivables to other customers 3,496,141 3,496,141Other loans & receivables 638,244 250,201Financial investments- available for saleFinancial investments- held to maturity 271,090,006 121,614,860Other assets 12,150,588 1,779,786 2,393,118 2,393,118 1,845,903 1,845,903 1,751,374 1,751,374 360,405,654 182,127,745Group - As at 31st December 2013 Maximum Net exposure to Exposure credit risk Rs 000 Rs 000Placements with Banks 1,791,329 1,791,329 Annual Report 2013 Sampath Bank PLCReverse repurchase agreements 18,043,918 -Derivative financial instrumentsFinancial assets- held for trading 230,517 230,517Financial assets- held for trading pledged as collaterals 46,974,516 46,974,516Loans and receivables to banksLoans and receivables to other customers 3,496,141 3,496,141Other loans & receivables 638,244 250,201Financial investments- available for saleFinancial investments- held to maturity 277,751,627 123,035,438Other assets 12,150,588 1,779,786 2,393,174 2,393,174 1,845,903 1,845,903 2,222,016 2,222,016 367,537,973 184,019,021 295

NOTES TO THE FINANCIAL STATEMENTS47 RISK MANAGEMENT CONTD.47.2.4 Credit Quality by Class of Financial AssetsThe Bank manages the credit quality of financial assets using internal credit ratings. The tables below show the credit quality by the class ofasset for all financial assets exposed to credit risk, based on the Bank’s internal credit rating system. The amounts presented are gross ofimpairment allowances.Definition of Past DueThe Bank considers that any amounts uncollected one day or more beyond their contractual due date as ‘past due’.(a) Bank - as at 31st December 2013 Neither past due nor impaired High Standard Sub- Un Exposures Past due Individually Total grade grade standard Rated not subject but not impaired Rs 000 Rs 000 Rs 000 grade Rs 000 to ratings impaired Rs 000 Rs 000 Rs 000 Rs 000Financial Assets 8,286,719 15,857 - - - - - 8,302,576Cash & cash equivalentsBalances with Central Bank of Sri Lanka 15,766,967 - - - - - - 15,766,967Placements with banksReverse repurchase agreements 564,279 1,227,050 - - - - - 1,791,329Derivative financial instrumentsFinancial assets held for trading 18,043,918 - - - - - - 18,043,918Financial assets held for trading 217,270 - - 13,247 - - - 230,517 pledged as collateralsLoans & receivables to banks 46,470,826 462,811 - 40,879 - - - 46,974,516Loans & receivables to other customersOther loans & receivables 3,496,141 - - - - - - 3,496,141 12,376 625,868 - - - - - 638,244Financial investments available for sale 46,313,373 5,076,953 9,178,619 42,885,856 97,278,038 4,187,089 269,381,655 Quoted - Government debt securities 64,461,727 622,550 - - - - - 12,150,588 Quoted - Other equity securities 11,528,038 Unquoted - Equity securities 100,462 - - - - - - 100,462 - - - 2,216,100 - - - 2,216,100 - - - 76,556 - - - 76,556Financial investments held to maturity 1,845,903 - ---- - 1,845,903 Quoted - Government debt securities - - 1,751,374 - - 1,751,374 -- 5,076,953 11,525,401 44,637,230 97,278,038 4,187,089 382,766,846Other assetsTotal 170,794,626 49,267,509Age Analysis of past due (i.e. facilities in arrears of 1 day and above) but not impaired loans by Class of Financial Assets Past due but not impaired Less than 31 to 60 61 to 90 More than Total 30 days days days 90 daysLoans & receivables to banks - - - - -Loans & receivables to other customers 57,651,624 13,020,879 20,259,284 6,346,251 97,278,038Total 57,651,624 13,020,879 20,259,284 6,346,251 97,278,038296

(b) Bank - as at 31st December 2012 Neither past due nor impaired High Standard Sub- Un Exposures Past due Individually Total grade grade standard Rated not subject but not impaired Rs 000 Rs 000 Rs 000 grade Rs 000 to ratings impaired Rs 000 Rs 000 Rs 000 Rs 000Financial Assets 10,398,140 33,995 - - - - - 10,432,135Cash & cash equivalentsBalances with Central Bank of Sri Lanka 17,200,792 - - - - - - 17,200,792Placements with banksReverse repurchase agreements 7,624,376 1,163,751 - - - - - 8,788,127Derivative financial instrumentsFinancial assets held for trading 3,300,817 - - - - - - 3,300,817Financial assets held for trading pledged 279,022 - - - - - - 279,022 as collateralsLoans & receivables to banks 34,786,299 287,108 - 107,677 - - - 35,181,084Loans & receivables to other customersOther loans & receivables 2,856,321 - - - - - - 2,856,321 - 826,674 - - - 1,943 - 828,617Financial investments available for sale 36,007,948 7,666,734 9,686,584 55,052,825 72,385,632 4,153,004 215,183,322 Quoted - Government debt securities 30,230,595 - 1,509,123 - - 10,515,756 Quoted - Other equity securities 9,006,633 - - Unquoted - Equity securities 179,175 - - - - - - 179,175 - - - 1,686,021 - - - 1,686,021 - - - 58,428 - - - 58,428Financial investments held to maturity -- ---- -- Quoted - Government debt securities -- - - 1,399,091 - - 1,399,091 115,862,170 38,319,476 7,666,734 13,047,833 56,451,916 72,387,575 4,153,004 307,888,708Other assetsTotalAge Analysis of past due (i.e. facilities in arrears of 1 day and above) but not impaired loans by Class of Financial Assets Past due but not impaired Less than 31 to 60 61 to 90 More than Total 30 days days days 90 daysLoans and receivables to banks 1,943 - - - 1,943Loans and receivables to other customers 48,059,685 8,205,755 12,667,203 3,452,989 72,385,632Total 48,061,628 8,205,755 12,667,203 3,452,989 72,387,575 Annual Report 2013 Sampath Bank PLC 297

NOTES TO THE FINANCIAL STATEMENTS47 RISK MANAGEMENT CONTD.47.2.4 Credit Quality by Class of Financial Assets(c) Group - as at 31st December 2013 Neither past due nor impaired High Standard Sub- Un Exposures Past due Individually Total grade grade standard Rated not subject but not impaired Rs 000 Rs 000 Rs 000 grade Rs 000 to ratings impaired Rs 000 Rs 000 Rs 000 Rs 000Financial Assets 8,324,962 15,876 - - - - - 8,340,838Cash & cash equivalentsBalances with Central Bank of Sri Lanka 15,766,967 - - - - - - 15,766,967Placements with banksReverse repurchase agreements 564,279 1,227,050 - - - - - 1,791,329Derivative financial instrumentsFinancial assets held for trading 18,043,918 - - - - - - 18,043,918Financial assets held for trading pledged 217,270 - - 13,247 - - - 230,517 as collateralsLoans & receivables to banks 46,470,826 462,811 - 40,879 - - - 46,974,516Loans & receivables to other customersOther loans & receivables 3,496,141 - - - -- - 3,496,141 12,376 625,868 - - -- - 638,244 46,313,373 5,076,953 11,940,400 42,885,856 101,120,575 4,244,392 276,043,276 64,461,727 622,550 - - -- - 12,150,588 11,528,038Financial investments available for sale 100,462 - - - - - - 100,462 Quoted - Government debt securities - - - 2,216,100 - - - 2,216,100 Quoted - Other equity securities - - - 76,612 - - - 76,612 Unquoted - Equity securities 1,845,903 - ---- - 1,845,903Financial investments held to maturity - - 2,222,016 - - 2,222,016 Quoted - Government debt securities -- 5,076,953 14,287,238 45,107,872 101,120,575 4,244,392 389,937,427Other assets 170,832,869 49,267,528TotalAge Analysis of past due (i.e. facilities in arrears of 1 day and above) but not impaired loans by class of Financial Assets Past due but not impaired Less than 31 to 60 61 to 90 More than Total 30 days days days 90 daysLoans & receivables to banks - - - --Loans & receivables to other customers 59,588,720 13,871,859 20,767,332 6,892,664 101,120,575Total 59,588,720 13,871,859 20,767,332 6,892,664 101,120,575298