16.2.1 Weighted Average Number of Ordinary Shares for Diluted EPS Group 2013 2012Weighted average number of ordinary shares used for Basic EPS 167,738,569 166,912,785Weighted average number of potential ordinary shares outstanding under ESOP 2010 effective from 30 June 2011 195,866 330,799Weighted average number of potential ordinary shares that would have been issued at average market price (78,413) (146,940)Weighted average number of potential ordinary shares that would have been issued for no consideration under ESOP 2010 117,453 183,859Weighted average number of ordinary shares adjusted for the effect of dilution 167,856,022 167,096,64417 DIVIDEND PAID AND PROPOSED 2013 2012 Gross Dividend Net Gross Dividend Net Dividend Tax Dividend Dividend Tax Dividend Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000Final dividend paid for the years 2012 & 2011 respectively 120,554 - 120,554 44,039 - 44,039Out of dividend received - free of tax 1,833,542 183,229 1,650,313 1,382,945 138,294 1,244,651Out of normal profits 1,954,096 183,229 1,770,867 1,426,984 138,294 1,288,690Scrip / cash dividend paid 131,838 - 131,838 120,554 - 120,554Final dividend proposed for the years 1,089,417 1,649,057 2013 & 2012 respectively 1,210,463 121,046 1,221,255 1,832,286 183,229 1,769,611Out of dividend received - free of tax Out of current year’s profits 1,342,301 121,046 7.28 1,952,840 183,229 10.87Scrip / cash dividend payable / paid Dividend per Ordinary Share (Rs) 8.00 12.00 The 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 Total Trading Cost Maturity for Sale Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Financial AssetsCash & cash equivalents - 8,302,576 - - 8,302,576Balances with Central Bank of Sri Lanka - 15,766,967 - - 15,766,967Placements with banks - 1,791,329 - - 1,791,329Reverse re-purchase agreements - 18,043,918 - - 18,043,918Derivative financial instruments 230,517 - - - 230,517Financial investments held for trading 46,974,516 - - - 46,974,516Financial assets held for trading pledged as collaterals 3,496,141 - - - 3,496,141Loans & receivables from banks 638,244 638,244Loans & receivables from other customers - 259,401,578 - - 259,401,578Other loans & advances - 12,150,588 - - 12,150,588Financial investments available for sale - - - 2,393,118 2,393,118Financial investments held to maturity - - 1,845,903 - 1,845,903Other assets - 1,751,374 - - 1,751,374Total Financial Assets 50,701,174 317,846,574 1,845,903 2,393,118 372,786,769Financial LiabilitiesDue to banks - 2,211,281 2,211,281Derivative financial instruments 638,724 - 638,724Securities sold under re-purchase agreements - 3,389,684 3,389,684Due to other customers - 300,549,350 300,549,350Debt issued & other borrowed funds - 38,862,331 38,862,331Unclaimed dividend - 54,981 54,981Other liabilities - 64,701 64,701Total Financial Liabilities 638,724 345,132,328 345,771,05218.2 Analysis of Financial Instruments by Measurement Basis - BankAs at 31st December 2012 Held for Amortised Held to Available Total Trading Cost Maturity for Sale Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Financial AssetsCash & cash equivalents - 10,432,135 - - 10,432,135Balances with Central Bank of Sri Lanka - 17,200,792 - - 17,200,792Placements with banks - 8,788,127 - - 8,788,127Reverse repurchase agreements - 3,300,817 - - 3,300,817Derivative financial instruments 279,022 - - - 279,022Financial investments held for trading 35,181,084 - - - 35,181,084Financial assets held for trading pledged as collaterals 2,856,321 - - - 2,856,321Loans & receivables from banks 816,119 816,119Loans & receivables from other customers - 208,184,369 - - 208,184,369Other loans & advances - 10,515,756 - - 10,515,756Financial investments available for sale - - - 1,923,624 1,923,624Financial investments held to maturity - - - - -Other assets - 1,399,091 - - 1,399,091Total Financial Assets 38,316,427 260,637,206 - 1,923,624 300,877,257250
As at 31st December 2012 Held for Amortised Held to Available Total Trading Cost Maturity for Sale Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Financial LiabilitiesDue to banks - 624,784 624,784Derivative financial instruments 381,838 - 381,838Securities sold under re-purchase agreements - 2,757,117 2,757,117Due to other customers - 243,330,990 243,330,990Debt issued & other borrowed funds - 28,825,029 28,825,029Unclaimed dividend - 49,185 49,185Other liabilities - 71,448 71,448Total Financial Liabilities 381,838 275,658,553 276,040,39118.3 Analysis of Financial Instruments by Measurement Basis - GroupAs at 31st December 2013 Held for Amortised Held to Available Total Trading Cost Maturity for Sale Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Financial AssetsCash in hand - 8,340,838 - - 8,340,838Balances with Central Bank of Sri Lanka - 15,766,967 - - 15,766,967Placements with Banks - 1,791,329 - - 1,791,329Reverse re-purchase agreements - 18,043,918 - - 18,043,918Derivative financial instruments 230,517 - - - 230,517Financial investments held for trading 46,974,516 - - - 46,974,516Financial assets held for trading pledged as collaterals 3,496,141 - - - 3,496,141Loans & receivables from banks - 638,244 - 638,244Loans & receivables from other customers - 265,909,593 - - 265,909,593Other loans & advances - 12,150,588 - - 12,150,588Financial investments available for sale - - - 2,393,174 2,393,174Financial investments held to maturity - - 1,845,903 - 1,845,903Other assets - 2,222,016 - - 2,222,016Total Financial Assets 50,701,174 324,863,493 1,845,903 2,393,174 379,803,744Financial LiabilitiesDue to banks - 2,250,372 2,250,372Derivative financial instruments 638,724 - 638,724Securities sold under re-purchase agreements - 3,055,257 3,055,257Due to other customers - 300,381,786 300,381,786 Annual Report 2013 Sampath Bank PLCDebt issued & other borrowed funds - 44,748,530 44,748,530Unclaimed dividend - 54,981 54,981Other liabilities - 64,701 64,701Total Financial Liabilities 638,724 350,555,627 351,194,351 251
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 Total Trading Cost Maturity for Sale Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Financial AssetsCash in hand - 10,442,259 - - 10,442,259Balances with Central Bank of Sri Lanka - 17,200,792 - - 17,200,792Placements with Banks - 8,788,127 - - 8,788,127Reverse re-purchase agreements - 3,300,373 - - 3,300,373Derivative financial instruments 279,022 - - - 279,022Financial investments held for trading 35,181,084 - - - 35,181,084Financial assets held for trading pledged as collaterals 2,856,321 - - - 2,856,321Loans & receivables from banks 816,119 816,119Loans & advances to customers - 212,480,041 - - 212,480,041Loans & receivables from other customers - 10,224,474 - - 10,224,474Financial investments available for sale - - - 1,923,680 1,923,680Financial investments held to maturity - - 9,765 - 9,765Other assets - 1,858,276 - - 1,858,276 38,316,427 265,110,461 9,765 1,923,680 305,360,333Financial LiabilitiesDue to banks - 668,198 668,198Derivative financial instruments 381,838 - 381,838Securities sold under re-purchase agreements - 2,751,332 2,751,332Due to other customers - 243,088,236 243,088,236Debt issued & other borrowed funds - 32,218,014 32,218,014Unclaimed dividend - 49,185 49,185Other liabilities - 71,448 71,448 381,838 278,846,413 279,228,25119 CASH AND CASH EQUIVALENTS Bank Group 2013 2012 2013 2012As at 31st December Rs 000 Rs 000 Rs 000 Rs 000 4,731,387 4,483,580 4,740,751 4,483,791Local currency in hand Foreign currency in hand 2,257,858 1,089,882 2,257,858 1,089,882Balances with local banks Balances with foreign banks 112,777 71,025 141,675 80,937Money at call & short notice 1,200,554 1,774,914 1,200,554 1,774,915 - 3,012,734 - 3,012,734 8,302,576 10,432,135 8,340,838 10,442,25920 BALANCES WITH CENTRAL BANK OF SRI LANKA Bank Group 2013 2012 2013 2012As at 31st December Rs 000 Rs 000 Rs 000 Rs 000 Statutory 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 Group 2013 2012 2013 2012As at 31st December Rs 000 Rs 000 Rs 000 Rs 000 - - - -Placements - in Sri Lanka Placements - 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 Notional Notional Assets Liabilities Amount Assets Liabilities Amount Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000Forward foreign exchange contracts - Sales 59,749 7,880 23,699,656 40,712 28,441 20,393,065 - Purchases 4,218 30,576 13,393,481 10,498 37,096 8,291,383Currency SWAPs - Sales 164,397 1,060 6,381,962 202,985 39,083 4,266,290 - Purchases 2,153 599,208 16,346,588 24,827 277,218 15,540,650 230,517 638,724 59,821,687 279,022 381,838 48,491,388Hedge 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 Income during 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 had previously been used but which is no longer expected to occur NoneThe amount that was reclassified from equity to profit or loss as a reclassification adjustment None 253
NOTES TO THE FINANCIAL STATEMENTS22 DERIVATIVE FINANCIAL INSTRUMENTS CONTD.The expected impact to the Income Statement on the Hedge is as follows: Less than one year Rs MnForecast receivable cash flow 13,157Forecast payable cash flow 13,720 (563)23 FINANCIAL ASSETS HELD FOR TRADING Bank Group 2013 2012 2013 2012As at 31st December Rs 000 Rs 000 Rs 000 Rs 000 45,962,143 34,182,709 45,962,143 34,182,709Government of Sri Lanka - Treasury Bills (Note 23.1) Quoted equities (Note 23.2) 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 2013 2012 Cost Market Value Cost Market Value Rs 000 Rs 000 Rs 000 Rs 000Amortised cost 45,629,746 45,962,143 34,229,365 34,182,709Gain / (loss) from marked to market valuation as at 01st January (46,656) - (141,457) -Movement during the year 379,053 - 94,801 -Gain / (loss) from marked to market valuation 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 EquitiesBank & GroupAs at 31st December 2013 2012 No of No of Ordinary Cost of Market Ordinary Cost of Market Value Shares Investment Value Shares Investment Rs 000 Rs 000 Rs 000 Rs 000 Name of the companyBanks, 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 - - - 207,600 3,354 4,131Hatton National Bank PLC 175,646 35,822 25,820 175,646 35,822 25,996NDB Bank PLC 600,000 107,943 96,300 600,000 107,943 82,740DFCC Bank PLC 39,000 7,559 5,031 39,000 7,559 4,403Union Bank of Colombo PLC 26,347,027 276,176 437,361 26,347,027 276,176 363,589People’s Leasing & Finance PLC 5,000,000 90,000 67,000 5,901,600 106,229 77,901 606,858 750,335 630,614 673,123Diversified holdingsHemas Holdings PLC - - - 647,000 16,252 17,469Aitken Spence PLC 270,000 54,512 27,621 270,000 54,512 32,400John Keells Holdings PLC 677,694 117,156 154,040 587,335 101,344 129,155John Keells Holdings Warrant 2022 30,120 - 2,410 - - -John Keells Holdings Warrant 2023 30,120 - 2,846 - - -Softlogic Holdings PLC 3,594,000 104,226 30,190 3,594,000 104,226 39,175Vallibel One PLC 245,600 6,140 4,052 245,600 6,140 4,445 282,034 221,159 282,474 222,644Hotel & travelAsian Hotels & Properties PLC - - - 618,000 14,291 46,906 - - 14,291 46,906ManufacturingRoyal Ceramics PLC 483,200 10,237 40,879 483,200 10,237 47,837 10,237 40,879 10,237 47,837Land & property Annual Report 2013 Sampath Bank PLCC T Land Development PLC - - - 325,000 4,853 7,865 - - 4,853 7,865Total 899,129 1,012,373 942,469 998,375Gain / (loss) from marked to market valuation as at 1st January 55,906 215,480Movement during the year 57,338 (159,574)Gain / (loss) from marked to market valuation as at 31st December 113,244 55,906Market value 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) during the year (160,649) - 136,796 -Provision for appreciation / (diminution) in market value c/d Market value (298) - 160,351 - 3,496,141 3,496,141 2,856,321 2,856,32125 LOANS AND RECEIVABLES TO BANKS Bank Group 2013 2012 2013 2012As at 31st December Rs 000 Rs 000 Rs 000 Rs 000 638,244 828,617 638,244 828,617Loans & receivables 638,244 828,617 638,244 828,617Less: Impairment (Note 25.1) - (12,498) - (12,498) 638,244 816,119 638,244 816,11925.1 Impairment on Loans and Receivables to BanksThe movement of impairment losses on loan and receivables to banks is as follows: Bank Group Rs 000 Rs 000At 1st January 2012 8,679 8,679Charge for the year (Note 12) 3,819 3,819Recoveries - -Amounts written off - -Interest accrued - -At 31st December 2012 12,498 12,498At 1st January 2013 12,498 12,498Charge / (Reversal) for the year (Note 12) (12,498) (12,498)Recoveries - -Amounts written off - -Interest accrued - -At 31st December 2013 - -256
26 LOANS AND RECEIVABLES TO OTHER CUSTOMERS Bank Group 2013 2012 2013 2012As at 31st December Rs 000 Rs 000 Rs 000 Rs 000 Gross 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) Collective impairment (Note 26.2.2) 269,381,655 215,183,322 276,043,276 219,590,729Total impairment (Note 26.3) Net loans & receivables (3,152,348) (2,827,992) (3,192,766) (2,910,042) (6,827,729) (4,170,961) (6,940,917) (4,200,646) (9,980,077) (6,998,953) (10,133,683) (7,110,688) 259,401,578 208,184,369 265,909,593 212,480,04126.1 At Amortised Cost: Bank Group 2013 2012 2013 2012As at 31st December Rs 000 Rs 000 Rs 000 Rs 000 2,813,713 2,687,435 2,813,713 2,687,435Bills of exchange Leasing (Note 26.4) 5,642,001 5,548,059 9,635,040 8,875,501Housing Export loans 12,157,134 10,351,619 12,157,134 10,351,619Import loans Refinance 12,119,106 8,239,867 12,119,106 8,239,867Term loans Hire purchases (Note 26.5) 40,519,111 23,347,064 40,519,111 23,347,064Loans against Investment Fund Account (IFA) Overdraft 6,720,581 5,106,974 6,720,581 5,106,974Staff loans Pawning 80,245,523 61,698,407 79,159,974 60,647,493Credit card Others 79,591 - 3,507,098 2,184,420 Less: Staff loan fair value adjustment (Note 34.2) 2,357,512 1,360,762 2,388,121 1,384,096 Less: Provision for impairment losses (Note 26.2) 44,415,284 34,871,166 44,296,436 34,794,291 4,888,092 4,076,050 4,888,092 4,076,050 53,469,185 54,946,225 53,884,048 54,946,225 5,520,208 4,246,627 5,520,208 4,246,627 142,965 106,600 142,965 106,600 271,090,006 216,586,855 277,751,627 220,994,262 (1,708,351) (1,403,533) (1,708,351) (1,403,533) 269,381,655 215,183,322 276,043,276 219,590,729 (9,980,077) (6,998,953) (10,133,683) (7,110,688) 259,401,578 208,184,369 265,909,593 212,480,04126.2 Movement in Provision for Impairment Losses Bank Group Annual Report 2013 Sampath Bank PLC26.2.1 Individually significant customer loan impairment 2013 2012 2013 2012 Rs 000 Rs 000 Rs 000 Rs 000 2,827,992 2,764,531 2,910,042 2,831,229Opening Balance as at 01 st January Charge / (reversal) to Income Statement 798,313 729,201 775,282 744,555Write-off during the year Provision Reversal (42,762) (104,814) (61,651) (104,814)Interest accrued on impaired loans and receivables Other movements (558,584) (782,731) (557,383) (782,731)Closing balance as at 31st December Gross amount of loans individually determined to be impaired, (75,776) (78,716) (76,689) (78,717) before deducting the individually assessed impairment provision 203,165 300,521 203,165 300,520 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 2013 2012 2013 2012 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 Write-off during the year 2,937,097 (596,115) 3,020,581 (611,206)Provision Reversal Other adjustment (283,372) - (283,372) -Closing balance as at 31st December - - - 564 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 2013 2012 Lease & Loans & Pawning Total Total Rs 000 Rs 000 Rs 000 Hire Purchases Receivables Rs 000 Rs 000 Balance 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 - 206,208 300,520Interest accrued on impaired loans & receivables - (75,777) - (75,777) (78,717)Balance as at 31st December 90,799 6,660,118 3,229,160 9,980,077 6,998,953Group 2013 2012 Lease & Loans & Pawning Total Total Rs 000 Rs 000 Rs 000 Hire Purchases Receivables Rs 000 Rs 000 Balance as at 1st January 238,298 6,872,390 - 7,110,688 7,642,660Provision for the Year 22,580 262,053 3,511,230 3,795,863 133,349Amounts written-off (18,889) (46,173) (279,960) (345,022) (104,813)Provision reversals 1,201 (558,584) - (557,383) (782,167)Other adjustment 19 206,208 - 206,227 300,376Interest accrued on impaired loans & receivables (913) (75,777) - (76,690) (78,717)Balance as at 31st December 242,296 6,660,117 3,231,270 10,133,683 7,110,688258
26.4 Lease Rentals Receivables Bank Group As at 31st December 2013 2012 2013 2012 Rs 000 Rs 000 Rs 000 Rs 000Total lease rentals receivable 7,086,666 7,004,034 12,021,745 11,291,887Unearned lease income Gross lease receivable (1,444,665) (1,455,975) (2,386,705) (2,416,386)Impairment allowance for lease receivable - Collective Net lease receivable 5,642,001 5,548,059 9,635,040 8,875,501Gross 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 As at 31st December 3,544,196 4,351,025 5,346,240 6,187,943 5,642,001 5,548,059 9,635,040 8,875,501Total lease receivable within one year from reporting date Unearned lease income Bank Group Impairment 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 3,799,962 As 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 date Unearned lease income (47,642) (55,228) (121,719) (113,152) Impairment allowance for lease receivable 2,050,163 1,141,806 4,167,081 2,574,406 Bank Group26.5 Hire Purchase Receivables 2013 2012 2013 2012As at 31st December Rs 000 Rs 000 Rs 000 Rs 000 4,282,887 5,152,975 6,546,739 7,491,925Total hire purchase rentals receivable Unearned hire purchase income (738,691) (801,950) (1,200,499) (1,303,982)Gross hire purchase receivable Impairment allowance for hire purchase receivable 3,544,196 4,351,025 5,346,240 6,187,943Net hire purchase receivable (43,054) (71,335) (86,560) (96,109)Gross hire purchase receivable with in one year (Note 26.5.1) 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 (1,349,957) (878,461) (28,195) - 3,507,098 2,184,420 79,591 - (34,017) (29,038) 3,473,081 2,155,382 (103) 79,488 20,852 - 1,235,335 716,451 58,739 79,591 - 2,271,762 1,467,969 - 3,507,098 2,184,420 259
NOTES TO THE FINANCIAL STATEMENTS26 LOANS AND RECEIVABLES TO OTHER CUSTOMERS CONTD. Bank Group26.5.1 Gross Hire Purchase Receivable with in One year As 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) 20,852 - (678,397) (403,285)Impairment allowance for hire purchase receivable (103) - 1,235,335 716,451 20,749 - (12,179) (12,453) - 1,223,156 703,99826.5.2 Gross Hire Purchase Receivable after One year Bank Group 2013 2012 2013 2012As at 31st December Rs 000 Rs 000 Rs 000 Rs 000 75,107 - 2,943,323 1,943,145Total hire purchase receivable after one year from reporting date (16,368) Unearned hire purchase income 58,739 - (671,560) (475,176) Impairment allowance for hire purchase receivable - - 2,271,763 1,467,969 58,739 - (21,838) (16,585) - 2,249,925 1,451,38426.6 Loans and Receivables to other Customers - Currencywise Bank Group 2013 2012 2013 2012As at 31st December Rs 000 Rs 000 Rs 000 Rs 000 Sri 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 Group 2013 2012 2013 2012As at 31st December Rs 000 Rs 000 Rs 000 Rs 000 By Product - LKR 42,348,587 32,712,731 42,229,740 32,635,857Overdrafts Term loans 67,076,406 52,458,371 65,990,856 51,407,456Lease rentals receivable Hire purchase rentals receivable 5,642,001 5,548,059 9,635,040 8,875,501Credit cards Pawning 79,591 - 3,507,098 2,184,420Export loans Housing loans 5,520,208 4,246,627 5,520,208 4,246,627Loans against Investment Fund Account (IFA) Import loans 53,469,185 54,946,225 53,884,048 54,946,225Refinance loans Bills of exchange 348,964 396,077 348,964 396,077Staff loans Others 12,036,829 10,297,447 12,036,829 10,297,447Sub total 2,357,512 1,360,762 2,388,121 1,384,096 38,100,920 21,741,008 38,100,920 21,741,008 6,720,581 5,106,974 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 26,629 106,600 238,953,922 193,515,273 245,615,543 197,922,680By 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 loans Housing 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 2,169,093Others Sub 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 Group 2013 2012 2013 2012As at 31st December Rs 000 Rs 000 Rs 000 Rs 000 Agriculture & Fishing 34,447,250 23,211,854 35,042,331 23,756,523Manufacturing Tourism 35,648,616 28,146,897 35,648,616 28,146,897 Annual Report 2013 Sampath Bank PLCTransport Construction 13,476,931 7,132,717 13,476,931 7,132,718Traders Banks, Financial and Business Services 3,924,506 2,617,179 4,140,536 2,752,208Government Infrastructure 26,401,964 20,710,856 26,608,580 20,888,013Other Services Consumers 59,381,313 40,352,210 62,158,426 42,325,045 17,851,608 11,271,224 16,175,023 11,271,224 201,229 47,061 201,229 47,061 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 Company Company Rs 000 Rs 000 Rs 000 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 utilization Loans granted - Capital outstanding (2,339,260) (30,609) (2,369,869) (1,355,696) (23,334) (1,379,030) (Note No 26.8.1) Total investments in Government Securities (100,235) (9,399) (109,634) (175,072) (5,121) (180,193) (Note No 26.8.2) - 18,480 18,480 - 1,549 1,54926.8.1 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 Loans Outstanding rates Loans Years Amount Loans Outstanding % Granted % Granted Outstanding Granted Rs 000 Rs 000 Rs 000Sector(a) Cultivation of agriculture / plantation crops 12.94-14.89 5 - 7 11 216,897 13.82% - 17.72% 12 5 16,912 23 233,809 10 5 13,697 10 13,697 11.44% -17.72% 99 742,342 - - - 101 629,406(b) Factory / mills modernisation 12.89-14.89 5 - 8 99 742,342 - - - - - - - 1 575(c) Small & medium enterprises 12.94-19.00 5 - 7 101 629,406 - - - - 13 183,433 - - - (d) Information technology & BPO 14.89 5 1 575 - - - - 4 64,446 - - - - -(e) Infrastructure development 12.94-14.89 5 - 8 13 183,433 - - - - 49 502,161 22 30,609 - -(f) Education 14.89 6 - 7 4 64,446 - 300 2,369,869(g) Housing - - - - (h) Construction of hotels & related purposes 12.94-14.89 5 - 8 49 502,161 - (i) Restructuring of loans extended for above purposes - - - 278 2,339,260 26.8.2 Investments in Government Securities As at 31st December 2013 2013 Bank Group Face Year of Cost of Carrying Year of Cost of Subsidiaries Amount Value Maturity Investment value / Maturity Investment Carrying Total Amortised value / cost Amortised cost Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000(a) Treasury bonds over 5 years - - - - - -(b) Treasury bills 102,852 2014 100,235 101,261 2014 9,399 9,776 109,634 102,852 100,235 101,261 9,399 9,776 109,634The carrying value of the investments in treasury bills using IFA balance was classified as available for sale.262
27 OTHER LOANS AND RECEIVABLES Bank Group 2013 2012 2013 2012As at 31st December Rs 000 Rs 000 Rs 000 Rs 000 1,779,786 443,358 1,779,786 443,358Debentures - Quoted (Note 27.1) Preference shares (Note 27.2) - - - -Sri Lanka Development Bonds (SLDBs) Leased backed Trust Certificates (Note 27.3) 8,611,352 6,714,292 8,611,352 6,714,293Commercial papers (Note 27.4) 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 - DebenturesBank & GroupAs at 31st December 2013 2012 Amortised Amortised Cost Cost Rs 000 Rs 000Vanik Incorporation Ltd 750 750(17% redeemable un-secured debentures Rs 100/- each redeemable on or before 31st August 2003)Urban Development Authority 217,870 217,870(10% fully secured redeemable debentures Rs 100/- each redeemable on 5th October 2015)Urban Development Authority 225,488 225,488(11% fully secured redeemable debentures Rs 100/- each redeemable on 5th October 2015)Singer Sri Lanka PLC 181,074 -(14.5% unsecured redeemable debentures Rs 100/- each redeemable on 31st May 2015 & 31st May 2016)Central Finance Company PLC 129,886 -(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)(13.00% secured redeemable debentures Rs 100/- each redeemable on 13th December 2016)(13.25% secured redeemable debentures Rs 100/- each redeemable on 13th December 2017)Housing Development Finance Corporation 131,986 -(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)Abans PLC 244,941 -(14.00 % secured redeemable debentures Rs 100/- each redeemable on 24th December 2016)(14.50 % secured redeemable debentures Rs 100/- each redeemable on 24th December 2018) Annual Report 2013 Sampath Bank PLC(14.25 % secured redeemable debentures Rs 100/- each redeemable on 24th December 2017)Alliance Finance PLC 104,025 -(15.50 % secured redeemable debentures Rs 100/- each redeemable on 02nd October 2016)Senkadagala Finance PLC 40,934 -(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 503,582 -(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) 1,780,536 444,108Less: Provision for diminution in market value (750) (750) 1,779,786 443,358 263
NOTES TO THE FINANCIAL STATEMENTS27 OTHER LOANS AND RECEIVABLES CONTD.27.2 Un-quoted - Preference SharesBank & GroupAs at 31st December 2013 2012 Amortised Cost Amortised Cost Rs 000 Rs 000 Texpro Industries Ltd(Non cumulative redeemable preference shares of Rs 10/- each @ 15% interest. Redeemable over a period of 6 years commencing from 30th June 2003) 12,604 12,604 12,604 12,604Less: Provision for diminution in market value (12,604) (12,604) - -27.3 Leased backed Trust CertificatesBank & GroupAs at 31st December 2013 2012 Amortised Cost Amortised Cost Rs 000 Rs 000 Senkadagala Finance PLC 70,594 -Citizens Development Bank PLC 568,157 324,947People’s Leasing & Finance PLC 871,030 -Associate Motor Finance Ltd 40,100 -Mercantile Investment & Finance PLC 209,569 - 1,759,450 324,94727.4 Commercial PapersBankAs at 31st December 2013 2012 Amortised Cost Amortised Cost Rs 000 Rs 000 People’s Leasing & Finance PLC - 1,557,701Hayleys Agriculture Holdings Ltd - 458,159Siyapatha Finance Ltd - 291,283House of Fashion Garment (Pvt) Ltd - 726,016 - 3,033,159GroupAs at 31st December 2013 2012 Amortised Cost Amortised Cost Rs 000 Rs 000People’s Leasing & Finance PLC - 1,557,701Hayleys Agriculture Holdings Ltd - 458,159House of Fashion Garment (Pvt) Ltd - 726,016 - 2,741,876264
28 FINANCIAL INVESTMENTS AVAILABLE FOR SALE Bank GroupAs at 31st December 2013 2012 2013 2012 Rs 000 Rs 000 Rs 000 Rs 000Quoted Investments 100,462 179,176 100,462 179,176Government debt securities (Note 28.1) 2,216,100 1,686,021 2,216,100 1,686,021Equity securities (Note 28.2) 76,556 58,427 76,612 58,483Unquoted InvestmentsEquity securities (Note 28.3) 2,393,118 1,923,624 2,393,174 1,923,680 28.1 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. 2013 2012 Cost Market Value Cost Market Value Rs 000 Rs 000 Rs 000 Rs 000Amortised cost 100,235 100,462 179,106 179,176Gain / (loss) from marked to market valuation as at 01st January 70 - 405 -Movement during the year 157 - (335) -Gain / (loss) from marked to market valuation as at 31st December 227 - 70 -Market value 100,462 100,462 179,176 179,17628.2 Quoted Equity SecuritiesBank & GroupAs at 31st December 2013 2012 No of Cost of Market No of Cost of Market Value Ordinary Investment Value Ordinary Investment Annual Report 2013 Sampath Bank PLC Rs 000 Shares Shares Rs 000 Rs 000 Rs 000 LankaBangla Finance Ltd (Note 28.2.1) 19,734,000 272,065 2,216,100 17,940,000 236,320 1,686,021 272,065 2,216,100 236,320 1,686,021 265
NOTES TO THE FINANCIAL STATEMENTS28 FINANCIAL INVESTMENTS AVAILABLE FOR SALE CONTD.28.2.1 LankaBangla Finance LtdBank & GroupAs at 31st December 2013 2012 Cost Market Value Cost Market Value Rs 000 Rs 000 Rs 000 Rs 000Balance as at 01 st January 272,065 1,686,021 236,320 1,858,787Exchange Gain/(loss) - 6,658 - 16,061Scrip dividend received - - Gain/(loss) from marked to market valuation - 29,087 - 159,656Balance as at 31st December 494,334 (348,483) 272,065 2,216,100 236,320 1,686,02128.3 Unquoted Equity SecuritiesAs at 31st December 2013 2012 No of Cost of Market No of Cost of Market Value Ordinary Investment Value Ordinary Investment Rs 000 Shares Shares Rs 000 Rs 000 Rs 000 BankName of the companyLankaBangla Securities Ltd 210,000 37,930 37,930 210,000 35,317 35,317Credit Information Bureau 1,700 170 170 1,700 170 170S.W.I.F.T 18 65 65 18 65 65Fitch Rating Lanka Ltd 62,500 625 625 62,500 625 625Lanka Clear (Pvt) Ltd 2,000,000 20,000 20,000 2,000,000 20,000 20,000Lanka Financial Services Bureau Ltd 225,000 2,250 2,250 225,000 2,250 2,250RAM Ratings Lanka Ltd 1,241,263 15,516 15,516 - - - 76,556 76,556 58,427 58,427GroupName of the companyLankaBangla Securities Ltd 210,000 37,930 37,930 210,000 35,317 35,317Credit Information Bureau 1,800 226 226 1,800 226 226S.W.I.F.T 18 65 65 18 65 65Fitch Rating Lanka Ltd 62,500 625 625 62,500 625 625Lanka Clear (Pvt) Ltd 2,000,000 20,000 20,000 2,000,000 20,000 20,000Lanka Financial Services Bureau Ltd 225,000 2,250 2,250 225,000 2,250 2,250RAM Ratings Lanka Ltd 1,241,263 15,516 15,516 - - - 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 Group 2013 2012 2013 2012As at 31st December Rs 000 Rs 000 Rs 000 Rs 000 1,845,903 - 1,845,903 9,765Government securities 1,845,903 - 1,845,903 9,765Treasury bills 266
30 INVESTMENT IN SUBSIDIARIES - BANK As at 31st December 2013 2012Unquoted Principal Activity Cost Directors’ Cost Directors’ Valuation Valuation Rs 000 Rs 000 Rs 000 Rs 000Sampath Centre Ltd Renting of Commercial 447,000 3,025,456 447,000 2,142,526 Property S 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) deposits Sampath Information Technology Solutions Ltd Developing Software Solutions & Maintenance of Hardware 9,000 38,621 9,000 19,150 1,059,921 4,312,262 1,059,921 3,228,953 The 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 Total Total & Buildings properties & Equipment Equipment Fittings Vehicles Work-in Rs 000 Rs 000 improvements Progress Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Cost / ValuationAs at 1st January 2,719,200 994,591 2,415,052 1,625,242 - 212,722 68,614 8,035,421 7,549,627Revaluation adjustment on accumulated depreciation (114,932) - - - - - - (114,932) -Net Revaluation surplus 415,445 - - - - - - 415,445 -Net impairment charge (8,685) - - - - - - (8,685) -Additions & Improvements 65,770 115,332 332,998 178,204 97 955 110,427 803,783 630,904Disposals during the year (16) (8,982) (31,713) (12,578) - - - (53,289) (90,263)Written off during the year (229) (68,155) (415,328) (172,469) - (4,368) - (660,549) -Sub category transfers during the year (19,355) (97) - - 19,452 - - - -Transfers / adjustments - - (76,307) (27,909) - - - (104,216) (54,847)Transferred from capital work-in-progress 120,061 - - - - - (120,087) (26) -Cost / Valuation as at 31st December 3,177,259 1,032,689 2,224,702 1,590,490 19,549 209,309 58,954 8,312,952 8,035,421Accumulated DepreciationAs at 1st January 99,788 626,235 1,780,828 851,872 - 116,892 - 3,475,615 3,021,843Revaluation adjustment on accumulated depreciation (114,932) - - - - - - (114,932) - Annual Report 2013 Sampath Bank PLCCharge for the year 18,389 129,482 183,689 164,904 7,746 18,549 - 522,759 535,656Disposals during the year (1) (5,540) (30,571) (10,978) - - - (47,090) (81,774)Written off during the year (229) (68,143) (415,328) (172,436) - (4,368) - (660,504) -Sub category transfers during the year (1,843) - - - 1,843 - - - -Transfers / adjustments 565 5,268 29,340 (1,534) - (31,266) - 2,373 (110)Accumulated depreciation as at 31st December 1,737 687,302 1,547,958 831,828 9,589 99,807 - 3,178,221 3,475,615Net book value as at 31st December 3,175,522 345,387 676,744 758,662 9,960 109,502 58,954 5,134,731 4,559,806There 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 Depreciation Value Depreciation Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Land 718,309 - 718,309 700,195 - 700,195Freehold Buildings Total 727,650 105,576 622,074 589,897 90,040 499,857 1,445,959 105,576 1,340,383 1,290,092 90,040 1,200,05231.2 Group Freehold Leasehold Computer Office Fixtures & Motor Work-in 2013 2012 Equipment equipment Fittings Vehicle Progress Total Total Land & Properties & Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Building Improvements Rs 000 Rs 000 Cost / Valuationas at 1st January 4,968,486 994,591 2,520,584 1,655,418 7,918 289,089 68,614 10,504,700 9,939,354Revaluation adjustment on accumulated depreciation (114,932) - - - - - - (114,932) -Net revaluation surplus 1,379,114 - - - - - - 1,379,114 -Net impairment charge (8,685) - - - - - - (8,685) -Additions & Improvements 72,625 126,816 382,641 198,596 28,765 11,317 110,427 931,187 725,904Disposals during the year (210,503) (8,982) (34,913) (12,578) - (50,043) - (317,019) (105,685)Written off during the year (229) (68,155) (415,328) (172,469) - (4,368) - (660,549) -Sub category transfers during the year (19,355) (97) - - 19,452 - - - -Transfers / adjustments - - (76,307) (27,909) - - - (104,216) (54,873)Transferred from capital work-in-progress 120,061 - - - - - (120,087) (26) -Cost / Valuation As at 31st December 6,186,582 1,044,173 2,376,677 1,641,058 56,135 245,995 58,954 11,609,574 10,504,700Accumulated DepreciationAs at 1st January 292,401 626,235 1,812,772 867,892 3,471 137,556 - 3,740,327 3,248,201Revaluation adjustment on accumulated depreciation (114,932) - - - - - - (114,932) -Charge for the year 18,389 131,261 206,288 169,748 12,135 25,522 - 563,343 587,859Disposals during the year (183,088) (5,540) (30,782) (12,194) - (16,448) - (248,052) (95,622)Written off during the year (229) (68,143) (415,328) (172,436) - (4,368) - (660,504) -Sub category transfers during the year (1,843) - - - 1,843 - - - -Transfers / adjustments 565 5,268 29,340 (1,534) - (31,266) - 2,373 (110)Accumulated depreciation as at 31st December 11,263 689,081 1,602,290 851,476 17,449 110,996 - 3,282,555 3,740,328Net book value as at 31st December 6,175,319 355,092 774,387 789,582 38,686 134,999 58,954 8,327,019 6,764,372The 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 Depreciation Value Depreciation Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Land 853,309 - 853,309 835,195 - 835,195Freehold Buildings Total 1,423,142 249,091 1,174,051 1,276,621 216,168 1,060,453 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 2013 2010 Date Of Method of Cost Revaluation RevaluationLocation Valuation Valuation Rs Mn Rs Mn Rs MnValuer-P B Kalugalagedara 8.11.2013 Open Market value 21.40 62.40 55.00No 180 (part), Bodiraja Mawatha, Pettah 8.11.2013 Open Market value / Fair Value 25.50 43.50 41.00No 261, Galle Road, Ratmalana 8.11.2013 Open Market value / Fair Value 38.10 87.50 76.00No 61A, Moratuwa Road, Piliyandala 8.11.2013 Open Market value / Fair Value 38.28 152.00 126.00No 371, Old Moor St, Masangasweediya, Colombo 12 8.11.2013 Open Market value / Fair Value 81.87 85.00 77.70No 475, Elvitigala Mawatha, Narahenpita Valuer-C Wellappili 7.11.2013 Income Basis / Contractors’ Basis 70.21 211.00 192.57No 1022, Maradana Road, Borella 8.11.2013 Income Basis / Contractors’ Basis 34.42 73.00 59.38No 81 & 81 A, High Level Road, Maharagama 9.11.2013 Income Basis / Contractors’ Basis 26.80 99.30 71.39No 05, Wakwella Road, Galle 9.11.2013 Comparative Method 62.40 67.50 60.00No 312, Galle Road, Kalutara 8.11.2013 Income Basis / Contractors’ Basis 38.00 25.40No 7/5, Giriulla Road, Alawwa 9.11.2013 Comparative Method 6.50 31.13 20.80No 42, Anguruwatota Road, Horana 8.11.2013 Contractors’ Basis 18.50 49.80 29.90No 150, Colombo Road, Gampaha (Land only) 20.00 Valuer-E M Wimalasena 19.10.2013 Fair Value Basis / Open Market Value 10.90 123.85 92.80“Nuwarawewakele”, Maithreepala Senanayake Mw, Anuradhapura Valuer-G M Gamage 2.11.2013 Income Basis / Contractors’ Basis 39.15 161.75 161.00No 05, Hakmana Road, Matara 2.11.2013 Income Basis / Contractors’ Basis 15.00 37.00 11.80No 69, Main Street, Deniyaya 2.11.2013 Income Basis / Contractors’ Basis 6.00 4.20No 117, Hapugahawalawatta, Ihalagama Road, Deniyaya 19.10.2013 Income Basis / Contractors’ Basis 3.95 43.00 37.00No 25-27, Main Street, Tissamaharama 34.30 Valuer-K T D Tissera 26.11.2013 Investment Basis 44.20 120.00 53.90No 256/1, Negombo Road, Wattala Valuer-Sarath Fernando 24.10.2013 Income Basis / Comparative Method 77.05 196.00 145.00No 31 & 33, Negombo Road, Kurunegala 21.11.2013 Income Basis / Comparative Method 42.00 100.00 55.30No 373 A, Galle Road, Panadura 28.10.2013 Income Basis / Comparative Method 14.35 130.00 43.38No 187, Madawala Road, Katugastota 22.11.2013 Income Basis / Comparative Method 112.30 173.00 No 591, Galle Road, Wellawatta 24.10.2013 Income Basis / Comparative Method 102.18 323.00 107.50No 29, Cross Street, Kandy 21.11.2013 Income Basis / Comparative Method 26.20 700.00 300.00No 103, Dharmapala Mawatha, Hunupitiya, Colombo 7 24.10.2013 Comparative Method 15.94 597.00No 1/87, Victoria Range, Digana, Kandy 15.60 - Annual Report 2013 Sampath Bank PLC 269
NOTES TO THE FINANCIAL STATEMENTS31 PROPERTY, PLANT AND EQUIPMENT CONTD.31.4 Freehold Land and Buildings - Bank 2013 2012 Land Buildings Cost / Cost / Total Accumulated Net Book As a % Net Book Location Extent- Sq.ft Revaluation Revaluation Value Depreciation Value of Total Value Perches of Land of Buildings NBV Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 % Rs 0001 Pettah - 5,124 - 62,400 62,400 129 62,271 2.0% 51,943 No 180, Bodiraja Mawatha, Pettah2 Borella 25.5 16,345 140,250 70,750 211,000 146 210,854 6.6% 193,308 No 1022, Maradana Road, Borella3 Kurunegala 37.4 11,206 121,795 75,000 196,795 154 196,641 6.2% 141,492 No 31 & 33, Negombo Road, Kurunegala4 Wattala 42.5 5,314 80,000 40,000 120,000 82 119,918 3.8% 72,115 No 256/1, Negombo Road, Wattala5 Matara 47.7 11,141 131,148 30,598 161,746 63 161,683 5.1% 161,047 No 05, Hakmana Road, Matara6 Maharagama 15.5 6,310 46,350 26,650 73,000 55 72,945 2.3% 54,527 No 81 & 81 A, High Level Road, Maharagama7 Deniyaya 17.5 5,325 16,644 20,356 37,000 42 36,958 1.2% 15,889 No 69, Main Street, Deniyaya8 Deniyaya 40.0 Bare Land 6,000 - 6,000 - 6,000 0.2% 11,800 No 117, Hapugahawalawatta, Ihalagama Road, Deniyaya9 Ratmalana 10.9 5,520 22,000 21,500 43,500 44 43,456 1.4% 42,354 No 261, Galle Road, Ratmalana10 Piliyandala 37.5 8,037 56,000 31,500 87,500 65 87,435 2.8% 75,527 No 61A, Moratuwa Road, Piliyandala11 Anuradhapura 41.3 Under 123,850 4,765 128,615 - 128,615 4.1% 99,014 “Nuwarawewakele”, Maithreepala Senanayake Mw, Construction Anuradhapura 12 Panadura 27.3 6,020 54,000 46,000 100,000 95 99,905 3.1% 79,232 No 373 A, Galle Road, Panadura13 Old Moor Street 24.0 10,280 126,000 26,000 152,000 53 151,947 4.8% 126,323 No 371, Old Moor St, Masangasweediya, Colombo 1214 Tissamaharama 22.2 10,815 14,430 28,570 43,000 59 42,941 1.3% 43,640 No 25-27, Main Street, Tissamaharama15 Katugastota 24.1 7,811 63,800 66,200 130,000 136 129,864 4.1% 108,052 No 187, Madawala Road, Katugastota16 Galle 17.5 5,400 78,660 20,640 99,300 42 99,258 3.1% 70,939 No 05, Wakwella Road, Galle17 Wellawatte 21.5 7,776 113,000 60,000 173,000 123 172,877 5.4% 161,153 No 591, Galle Road, Wellawatta18 Narahenpita 18.5 Under 85,000 2,136 87,136 - 87,136 2.7% 77,700 No 475, Elvitigala Mawatha, Narahenpita Construction19 Kalutara 30.0 Under 67,500 3,463 70,963 - 70,963 2.2% 60,000 No 312, Galle Road, Kalutara Construction20 Alawwa 20.7 8,245 16,520 21,480 38,000 44 37,956 1.2% 24,517 No 7/5, Giriulla Road, Alawwa21 Horana 20.8 Bare Land 31,000 - 31,000 - 31,000 1.0% 20,750 No 42, Anguruwatota Road, Horana22 Kandy Corporate 25.4 15,026 228,500 94,500 323,000 194 322,806 10.2% 296,118 No 29, Cross Street, Kandy23 Dharmapala Mawatha 119.4 5,600 645,400 54,600 700,000 112 699,888 22.0% 645,901 No 103, Dharmapala Mawatha, Hunupitiya, Colombo 724 Gampaha 25.0 4,485 49,800 36,904 86,704 78 86,626 2.7% 39,694 No 150, Colombo Road, Gampaha25 Victoria Range 20.1 2,320 5,500 10,100 15,600 21 15,579 0.5% 14,850 No 1/87, Victoria Range, Digana, KandyTotal 732.2 158,100 2,323,147 854,112 3,177,259 1,737 3,175,522 100.0% 2,687,88531.5 (a) Leasehold Buildings-Bank 2013 2012As at 31st December Cost of Accumulated Net Book Net Book Buildings Depreciation Value Value Rs 000 Rs 000 Rs 000 Rs 00001 - 05 years 515,575 360,486 155,089 123,36005 - 10 years 517,114 326,816 190,298 244,996 1,032,689 687,302 345,387 368,356270
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 classLeasehold properties & improvements 337,922 341,235Computer equipment 1,526,126 1,777,921Office 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 Group As at 31st December 2013 2012 2013 2012 Rs 000 Rs 000 Rs 000 Rs 000Computer Software and Licenses (Note 32.1) 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 2012 Rs 000 Rs 000 Rs 000 Rs 000 988,916 700,885 1,009,191 718,987CostAs at 1st January 41,385 288,031 58,311 290,204Additions & improvements Disposals during the year - - - -Transfers / 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 January Charge for the year 677,158 633,592 692,779 645,616Disposals during the year Transfers / adjustments 47,270 43,566 52,904 47,163Accumulated amortisation as at 31st December Net book value as at 31st December - - - - (2,339) - (2,339) - 722,089 677,158 743,344 692,779 297,359 311,758 313,305 316,41233 DEFERRED TAX (ASSETS) / LIABILITIES Bank Group Temporary difference Tax effect Temporary difference Tax effectAs 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 liabilityDepreciation of property, plant and equipment 1,037,973 624,784 290,632 174,940 1,037,781 662,649 290,579 185,542Depreciation of lease assets 1,106,494 873,775 309,818 244,657 1,477,494 1,137,686 413,698 318,552Revaluation on buildings - OCI 265,749 174,657 74,410 48,904 265,749 174,657 74,410 48,904 2,410,216 1,673,216 674,860 468,501 2,781,024 1,974,992 778,687 552,998Deferred tax assetUnclaimed impairment provisions - loans & receivables 2,575,168 - 721,047 - 2,608,147 - 730,282 -Unclaimed impairment provision - investment - - - - - - - -Tax losses 45,105 - 12,629 - 243,561 224,098 68,197 62,747Defined benefit obligation - Income Statement 241,196 152,567 67,535 42,719 255,923 164,535 71,658 46,070Defined benefit obligation - OCI 627,656 167,085 175,744 46,784 627,656 167,085 175,744 46,784Others 24,005 76,873 6,721 21,524 24,005 76,873 6,721 21,524 3,513,130 396,525 983,676 111,027 3,759,292 632,591 1,052,602 177,125 (1,102,914) 1,276,691 (308,816) 357,474 (978,268) 1,342,401 (273,915) 375,873272
33.1 Deferred Tax charge/(reversal) to Income Statement/OCIBank Deferred 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 -Depreciation of lease assets 309,818 244,657 65,161 33,320 - -Revaluation on buildings - OCI - 74,410 48,904 - - 25,506 674,860 468,501 180,854 34,977 25,506 Deferred tax assetUnclaimed impairment provisions - loans & receivables 721,047 - 721,047 - - -Unclaimed impairment provision - investment - - - - - -Tax losses 12,629 - 12,629 - - -Defined benefit obligation - Income Statement 67,535 42,719 24,816 7,866 - -Defined benefit obligation - OCI 175,744 46,784 - - 128,960 (3,434)Others 6,721 21,524 (14,803) 3,214 - - 983,676 111,027 743,689 11,080 128,960 (3,434) (308,816) 357,474 (562,835) 23,897 (103,454) 3,434GroupDeferred 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 -Depreciation of lease assets 413,698 318,552 95,146 36,783 - -Revaluation on buildings - OCI - 74,410 48,904 - - 25,506 778,687 552,998 200,183 43,159 25,506 Deferred tax asset 730,282 - 730,281 - - -Unclaimed impairment provisions - loans & receivables - - - (59,282) - -Unclaimed impairment provision - investment Tax losses 68,197 62,747 5,450 62,747 - - Annual Report 2013 Sampath Bank PLCDefined benefit obligation - Income Statement Defined benefit obligation - OCI 71,658 46,070 25,589 7,578 - -Others 175,744 46,784 - - 128,960 (3,434) 6,721 21,524 (14,803) 3,213 - - 1,052,602 177,125 746,517 14,256 128,960 (3,434) (273,915) 375,873 (546,334) 28,903 (103,454) 3,434 273
NOTES TO THE FINANCIAL STATEMENTS34 OTHER ASSETS Bank Group 2013 2012 2013 2012As at 31st December Rs 000 Rs 000 Rs 000 Rs 000 744,337 1,196,456 744,337 1,196,456Pre-paid expenses Other debtors (Note 34.1) 1,540,628 1,184,199 2,146,853 1,706,138Pre-paid staff cost (Note 34.2) Refundable deposits at fair value 1,708,351 1,403,533 1,708,351 1,403,533Pre-paid cost on refundable deposits Financial guarantees (Note 34.3) 73,158 72,328 10,404 9,574 1,379 1,593 1,379 1,593 137,589 142,565 137,589 142,565 4,205,442 4,000,674 4,748,913 4,459,85934.1 Other Debtors Bank Group 2013 2012 2013 2012As at 31st December Rs 000 Rs 000 Rs 000 Rs 000 1,540,628 1,184,199 2,212,076 1,751,515Amortised cost Impairment: - - (45,377) (30,377)Balance as at 1st January - - (19,846) (15,000)Charge / (reversal) during the year - - (65,223) (45,377)Balance as at 31st December 1,540,628 1,184,199 2,146,853 1,706,138Balance net of impairment 34.2 The Movement in the Pre-Paid Staff Cost 2013 2012 Rs 000 Rs 000Bank / Group 1,403,533 1,086,527As at 1st January 461,370 473,594Add / (Less): Adjustment for new grants & settlements (156,552) (156,588)Less: charge to Personnel cost As at 31st December 1,708,351 1,403,53334.3 Financial GuaranteeThe movement during the year is as follows: 2013 2012 Rs 000 Rs 000Bank / GroupAt at 1st January 142,565 146,489Interest income 11,871 12,275Income received (16,847) (16,199)At at 31st December 137,589 142,565274
35 DUE TO BANKS Bank Group As at 31st December 2013 2012 2013 2012 Rs 000 Rs 000 Rs 000 Rs 000Call & time deposits 1,879,531 244,038 1,879,531 244,038Local & foreign bank borrowings 331,750 380,746 370,841 424,160The maturity analysis of borrowings is given in Note 48. 2,211,281 624,784 2,250,372 668,19836 DUE TO OTHER CUSTOMERS Bank Group 2013 2012 2013 2012As at 31st December Rs 000 Rs 000 Rs 000 Rs 000 15,391,320 13,667,508 15,363,552 13,644,907Local Currency DepositsDemand 75,231,103 60,785,509 75,091,307 60,652,599Savings Call deposits 1,097,400 845,834 1,097,400 845,834Fixed deposits Certificates 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 1,909,645 511,598Demand Savings 276,871,932 222,776,921 276,704,368 222,534,167Call deposits Fixed deposits 1,706,987 1,405,312 1,706,987 1,405,312Margin deposits 7,936,362 6,462,657 7,936,362 6,462,657 Total - 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 Group 2013 2012 2013 2012As at 31st December Rs 000 Rs 000 Rs 000 Rs 000 Commercial papers - - 611,241 828,991 Annual Report 2013 Sampath Bank PLCRedeemable debentures (Note 37.1) Long term bond (Note 37.2) 6,500,000 1,500,000 6,852,830 1,937,207Call borrowings Term borrowings 1,494,001 1,368,723 1,494,001 1,368,723Foreign currency borrowings Refinance borrowings 3,924,825 - 3,924,825 - - 3,033,650 4,922,128 5,160,437 22,322,900 18,084,125 22,322,900 18,084,125 4,620,605 4,838,531 4,620,605 4,838,531 38,862,331 28,825,029 44,748,530 32,218,014The 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 2012 Rs 000 Rs 000 Rs 000 Rs 000As at 31st December Balance 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) Interest payable 5,000,000 1,500,000 5,000,000 1,800,000Debentures redeemed Interest paid - - 60,050 37,137Balance as at 31 st December - (1,750,000) (85,500) (1,750,000) - (11,618) (58,927) (11,618) 6,500,000 1,500,000 6,852,830 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 Fixed - 16.5 % per annum payable annually 10,776,800 1,077,680 1,077,680 1,077,680 12-Oct-12 31-Oct-17 Fixed - 15.0 % per annum payable monthly Floating rate is equivalent to the six months 2,477,900 247,790 247,790 247,790 12-Oct-12 31-Oct-17 Treasury Bill rate (gross) plus 2.0 % 1,745,300 174,530 174,530 174,530 12-Oct-12 31-Oct-17 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 1,554,190 1,554,190 - 04-Dec-13 04-Dec-18 Fixed - 13.00 % per annum payable semi-annually 34,458,100 3,445,810 3,445,810 - 04-Dec-13 04-Dec-18 Fixed - 13.40 % per annum payable annually 50,000,000 5,000,000 5,000,00037.2 Long Term Bond Bank Group 2013 2012 2013 2012 Rs 000 Rs 000 Rs 000 Rs 000Balance as at 1st January 1,368,723 1,253,949 1,368,723 1,253,949Interest accrued Balance as at 31st December 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 Group 2013 2012 2013 2012As at 31st December Rs 000 Rs 000 Rs 000 Rs 000 3,041,259 1,851,834 3,073,243 1,881,142Balance as at 1st January Current year provision 1,623,795 2,146,260 1,697,634 2,184,158Less: Payment of tax Balance 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 Group 2013 2012 2013 2012As at 31st December Rs 000 Rs 000 Rs 000 Rs 000 255,548 202,994 271,439 215,716Provision for retiring gratuity (Note 39.1) Leave accrual plan (Note 39.2) 127,682 96,402 127,682 96,402EPF Interest Guarantee plan (Note 39.3) 57,979 43,240 57,979 43,240 441,209 342,636 457,100 355,35839.1 Provision for Retiring Gratuity 39.1.1 N et Asset (Liability) Recognised in the Statement of Financial Position Bank Group 2013 2012 2013 2012 Rs 000 Rs 000 Rs 000 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 Group 2013 2012 2013 2012 Rs 000 Rs 000 Rs 000 Rs 000Service cost 29,853 24,389 30,794 23,729 Annual Report 2013 Sampath Bank PLCNet interest on the net defined benefit liability (asset) Total amount recognised in Income Statement 22,329 16,418 22,329 16,418 52,182 40,807 53,123 40,14739.1.3 Amounts Recognised in OCI Bank Group 2013 2012 2013 2012 Rs 000 Rs 000 Rs 000 Rs 000Liability (gains) losses due to changes in assumptions - (26) - (26)Liability experience (gains) losses arising during the year 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 2012 Rs 000 Rs 000 Rs 000 Rs 000 202,994 164,183 215,715 177,221Benefit obligation at end of prior year Service cost 29,853 24,388 30,794 23,728Interest cost Actual benefits paid from plan 22,329 16,418 22,329 16,418(Gain) / loss due to changes in assumptions Experience (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 years 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 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 Income Statement Increase/ (Reduction) Benefit Obligation Increase/ (Decrease) in results for the year (Rs Mn) in the Liability (Rs Mn) 1% - 40.6 (40.6) (1%) - (48.1) 48.1 - 1% (41.5) 41.5 - (1%) 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 Plan39.2.1 Net Asset (Liability) Recognised in the Statement of Financial Position Bank Group 2013 2012 2013 2012 Rs 000 Rs 000 Rs 000 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 Fund 39.4.1 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 31 st December (Note 39.4.4) (3,986,426) (3,227,914) (3,986,426) (3,227,914)Funded status Present value of unfunded benefit obligations 384,601 878,431 384,601 878,431Net asset (liability) recognised - - - - 384,601 878,431 384,601 878,43139.4.2 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) Total amount recognised in Income Statement (92,910) (62,709) (92,910) (62,709) 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 Group 2013 2012 2013 2012 Annual Report 2013 Sampath Bank PLC Rs 000 Rs 000 Rs 000 Rs 000Liability (gains) losses due to changes in assumptions - (210,067) - (210,067)Liability experience (gains) losses arising during the year 308,502 194,375 308,502 194,375Asset (gains) losses arising during the year 120,907 120,907 Total amount recognised in OCI 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 2012 Rs 000 Rs 000 Rs 000 Rs 000 3,227,914 2,882,369 3,227,914 2,882,369Benefit obligation at end of prior year 157,330 150,120 157,330 150,120Service cost Interest cost 355,071 288,237 355,071 288,237Actual benefits paid from plan (Gain) loss due to changes in assumptions (62,391) (77,120) (62,391) (77,120)Experience (gain)/loss 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 F air Value of Plan Assets Reconciliation Bank Group 2013 2012 2013 2012 Rs 000 Rs 000 Rs 000 Rs 000Fair value of plan assets at end of prior year 4,106,345 3,551,235 4,106,345 3,551,235Interest income on plan assets Asset gain (loss) 447,980 350,946 447,980 350,946Actual employer contributions Actual benefits paid from plan (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 greater The 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 Salary Sensitivity Effect on Comprehensive Income Sensitivity Effect on Employment Benefitin discount Increment Statement Increase/ (Reduction) in results Obligation Increase/ (Decrease) in therate Liability (Rs Mn) for the year (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 Group 2013 2012 2013 2012As at 31st December Rs 000 Rs 000 Rs 000 Rs 000 81,731 69,941 81,731 69,941Provision for deposit insurance scheme Financial guarantee liability 64,701 71,448 64,701 71,448Other payable 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 2,743,780Issue of shares under ESOP Scrip dividend 10,794 176,035 10,794 176,035As at 31st December 885,373 644,357 885,373 644,357 4,460,339 3,564,172 4,460,339 3,564,172 Annual Report 2013 Sampath Bank PLCNumber 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.41.1 Employee Share Option Plan (ESOP) - 2010As at 31st December 2013 2012 Number of Number ofESOP Position shares sharesNumber of options available 3,056,159 3,056,159Number of options exercised 2,860,293 2,725,360Number of remaining options (shares) 195,866 330,799Option price (Rs) 80 80Weighted average Market price (Rs) 199.83 180.10The 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 Group 2013 2012 2013 2012As at 31st December Rs 000 Rs 000 Rs 000 Rs 000 Commitments 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 Documentary credit 12,014,404 11,310,366 12,014,404 11,310,366Guarantees Bills sent for collection 28,333,570 21,993,951 28,333,570 21,993,951Others 164,448 129,388 164,448 129,388Forward exchange contracts Currency SWAPs 14,791 352,396 14,791 352,396 Commitment & contingencies 48,399,037 40,094,289 48,399,037 40,094,289 37,093,136 28,684,448 37,093,136 28,684,448 22,728,550 19,806,940 22,728,550 19,806,940 108,220,723 88,585,677 108,220,723 88,585,677 145,566,776 115,925,743 145,685,243 116,129,397282
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 5787/10 The 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/DSP The 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 1904/2012 The 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/DMR The 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 320/2011 The 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/MR The 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 - Embilipitiya The 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 Dadigama The 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 Systems The 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/L Litigation 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; Bank GroupAs at 31st December 2013 2012 2013 2012 Rs 000 Rs 000 Rs 000 Rs 000Approved & contracted for 234,716 156,210 234,716 156,210Approved but not contracted for 492,794 66,080 492,794 66,080 727,510 222,290 727,510 222,29043 RELATED PARTY DISCLOSURES T he 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 Party The Bank does not have an identifiable parent of its own. 43.2 Transactions with Key Managerial Personnel (KMPs) A ccording 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)Bank For the Year Ended 31st December 2013 2012 Rs 000 Rs 000Short term employee benefits 109,486 95,431ESOP benefits 45,824 -Termination benefits - 22,006Post-employment benefits 21,227 11,822Directors’ fees & expenses 42,791 37,985Total 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 L oans and Advances to KMPs and their CFMs are detailed below: 2013 2012 Average Balance Limit Closing Limit Closing Balance 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 28,995 43.3.2 Credit Card Facilities to KMPs and their CFMs are detailed below: 2013 2012 Average Balance Limit Closing Limit Closing Balance Balance 2013 2012 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000Credit card 20,745 5,136 13,775 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 Balance 2013 2012 Rs 000 Rs 000Cash dividend 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 2013 2012Subsidiary company Nature of Facility/ Rs 000 Rs 000 Transaction Sampath Centre Ltd As at 139,796 132,910 Deposits Loans & receivables 270 1,043 Other assets Other liabilities 62,754 62,754 For the year ended Income & fees received 31,920 5,964 Annual Report 2013 Sampath Bank PLC Expenses & fees paid 85,000 61,200 271,570 228,031S C Securities (Pvt) Ltd As at 45,791 47,675 Loans & receivables Indirect facilities 1,750 1,750 Deposits Repo borrowings 17 17 For the year ended Income & fees received 10,638 9,765 Expenses & fees paid Interest expenses from treasury bills 9,729 15,918 402 325 - 1,104 287
NOTES TO THE FINANCIAL STATEMENTS43 RELATED PARTY DISCLOSURES CONTD. 31st December 2013 2012Subsidiary company Nature of Facility/ Rs 000 Rs 000 Transaction Siyapatha Finance Ltd As at 1,646,318 993,633 Loans and receivables 358,410 92,588 Other Liabilities - Commercial Papers 291,283 For the year ended 208,113 Income and fees received 19,262 216,539 Expenses and fees paid 20,562Sampath Information Technology Solutions Ltd As at 71,297 65,978 Loans and receivables 9,560 6,758 Other liabilities For the year ended 9,822 6,358 Income and fees received 60,216 55,827 Expenses and fees paid 43.7 Transactions with Post Employment Benefit Plans of the BankAs at 31st December 2013 2012 Nature of Transaction Rs 000 Rs 000Sampath Bank Employees’ Provident Fund Deposits 5,059,318 5,111,488 Debentures 147,750 147,750Sampath Bank Employees’ Pension Fund Deposits 2,480,892 1,739,604 Treasury Bills 543,000 518,768 Reverse Repo - 1,136,000 Debentures 21,282 21,282 Investment in Sampath Bank Shares - Market Value 204,182 532,326 690,676 - Investment Repo 288
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 Banking Leasing Investment Others UnallocatedFor 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 Net fee & commission income - - - - 164,164 156,276 - - (95,872) (79,155) 68,292 77,121Foreign exchange profit Other income 2,543,345 2,148,998 52,763 22,784 22,821 29,806 (183) - - - 2,618,746 2,201,588 520,260 2,153,812 - - - - - - - - 520,260 2,153,812 1,917,002 1,800,390 68,544 38,826 3,702 162 250,055 244,158 (181,116) (175,474) 2,058,187 1,908,062Total 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 Net Operating Income 15,814,411 17,650,360 822,775 495,028 171,795 164,152 254,153 244,573 (276,988) (254,629) 16,786,146 18,299,486Segment result 5,309,122 8,501,633 427,512 327,218 (38,187) (37,669) 128,177 126,077 (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 interest (2,708) (3,342)Net profit attributable to equity 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 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) 359,544,341 287,235,924Unallocated liabilities - - - - - - - - - - - -Total 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) 359,544,341 287,235,924Cash flows from operating 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 5,269,893Cash flows from investing activities Cash flows from financing activities (28,637,986) (11,909,427) 31,146 (97,412) (693) (630) (54,479) (83,746) (472,732) 10,434 (29,134,744) (12,080,781)Capital expenditure 8,854,094 8,349,443 2,811,069 1,470,633 - - (105,030) (10,042) (215,324) 194,134 11,344,809 10,004,168 750,449 864,198 88,319 12,052 693 630 57,159 83,746 (29,711) 718 866,910 961,345 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 Currency SWAPs - 230,518 - 230,518 - 230,518 - 230,518 Forward foreign exchange contracts Financial Assets Held for Trading 45,962,143 - - 45,962,143 45,962,143 - - 45,962,143Government debt securities 1,012,373 - - 1,012,373 1,012,373 - - 1,012,373Quoted equities Financial assets held for trading 3,496,141 - - 3,496,141 3,496,141 - - 3,496,141 pled ged as collaterals 50,470,657 - - 50,470,657 50,470,657 - - 50,470,657 Financial Investments Available for Sale 2,216,100 - - 2,216,100 2,216,100 - - 2,216,100Quoted investments Government debt securities 100,462 - - 100,462 100,462 - - 100,462 2,316,562 - - 2,316,562 2,316,562 - - 2,316,562 52,787,219 230,518 - 53,017,737 52,787,219 230,518 - 53,017,737Financial Liabilities - 600,269 - 600,269 - 600,269 - 600,269Derivative financial instruments - 38,455 - 38,455 - 38,455 - 38,455 Currency SWAPs - 638,724 - 638,724 - 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 Currency SWAPs - 279,022 - 279,022 - 279,022 - 279,022 Forward foreign exchange contracts Financial Assets Held for Trading 34,182,709 - - 34,182,709 34,182,709 - - 34,182,709Government debt securities 998,375 - - 998,375 998,375 - - 998,375Quoted equities Financial assets held for trading 2,856,321 - - 2,856,321 2,856,321 - - 2,856,321 pledged as collaterals 38,037,405 - - 38,037,405 38,037,405 - - 38,037,405 Financial Investments Available for Sale 1,721,339 - - 1,721,339 1,721,339 - - 1,721,339 Annual Report 2013 Sampath Bank PLCQuoted investments Government debt securities 179,175 - - 179,175 179,175 - - 179,175 1,900,514 - - 1,900,514 1,900,514 - - 1,900,514 39,937,919 279,022 - 40,216,941 39,937,919 279,022 - 40,216,941Financial Liabilities - 316,301 - 316,301 - 316,301 - 316,301Derivative financial instruments - 65,537 - 65,537 - 65,537 - 65,537 Currency SWAPs - 381,838 - 381,838 - 381,838 - 381,838 Forward foreign exchange contracts There 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 000 Financial Assets 8,302,576 8,302,576 8,340,838 8,340,838Cash & cash equivalents Balances with Central Bank of Sri Lanka 15,766,967 15,766,967 15,766,967 15,766,967Placements with Banks Reverse repurchase agreements 1,791,329 1,791,329 1,791,329 1,791,329Loans & receivables to banks Loans & receivables to other customers 18,043,918 18,043,918 18,043,918 18,043,918Other loans & receivables Financial investments held to maturity 638,244 638,244 638,244 638,244Other assets 259,401,578 259,383,500 265,909,593 266,213,784 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 Securities sold under re-purchase agreements 3,389,684 3,389,690 3,055,257 3,055,260Due to other customers Debt issued & other borrowed funds 300,549,350 297,815,142 300,381,786 297,647,578Unclaimed dividend Other liabilities 38,862,331 38,862,331 44,748,530 44,748,530 54,981 54,981 54,981 54,981 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 000 Financial AssetsCash & cash equivalents 10,432,135 10,432,135 10,442,259 10,442,259Balances with Central Bank of Sri Lanka Placements with Banks 17,200,792 17,200,792 17,200,792 17,200,792Reverse repurchase agreements Loans & receivables to banks 8,788,127 8,788,127 8,788,127 8,788,127Loans & receivables to other customers Other loans & receivables 3,300,817 3,300,817 3,300,373 3,300,373Financial investments- held - to- maturity Other assets 816,119 816,119 816,119 816,119 208,184,369 207,886,978 212,480,041 211,958,144Financial LiabilitiesDue to banks 10,515,756 10,515,756 10,224,474 10,224,474Securities sold under re-purchase agreements Due to other customers - - 9,765 9,765Debt issued & other borrowed funds Unclaimed dividend 1,399,091 1,399,091 1,858,276 1,858,276Other liabilities 260,637,206 260,339,815 265,120,226 264,598,329Reclassification of Financial Assets 624,784 624,784 668,198 668,198There were no reclassifications during 2012 and 2013. 2,757,117 2,757,119 2,751,332 2,751,334 243,330,990 242,738,246 243,088,236 242,495,493 28,825,029 28,825,029 32,218,014 32,218,014 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 receivables For 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 instruments 230,517 230,517Financial assets- held for trading 46,974,516 46,974,516Financial assets- held for trading pledged as collaterals 3,496,141 3,496,141Loans and receivables to banks 638,244 250,201Loans and receivables to other customers 271,090,006 121,614,860Other loans & receivables 12,150,588 1,779,786Financial investments- available for sale 2,393,118 2,393,118Financial investments- held to maturity 1,845,903 1,845,903Other assets 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 1,791,329Reverse repurchase agreements 18,043,918 - Annual Report 2013 Sampath Bank PLCDerivative financial instruments 230,517 230,517Financial assets- held for trading 46,974,516 46,974,516Financial assets- held for trading pledged as collaterals 3,496,141 3,496,141Loans and receivables to banks 638,244 250,201Loans and receivables to other customers 277,751,627 123,035,438Other loans & receivables 12,150,588 1,779,786Financial investments- available for sale 2,393,174 2,393,174Financial investments- held to maturity 1,845,903 1,845,903Other assets 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 grade to ratings impaired Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000Financial AssetsCash & cash equivalents 8,286,719 15,857 - - - - - 8,302,576Balances with Central Bank of Sri Lanka 15,766,967 - - - - - - 15,766,967Placements with banks 564,279 1,227,050 - - - - - 1,791,329Reverse repurchase agreements 18,043,918 - - - - - - 18,043,918Derivative financial instruments 217,270 - - 13,247 - - - 230,517Financial assets held for trading 46,470,826 462,811 - 40,879 - - - 46,974,516Financial assets held for trading pledged as collaterals 3,496,141 - - - - - - 3,496,141Loans & receivables to banks 12,376 625,868 - - - - - 638,244Loans & receivables to other customers 64,461,727 46,313,373 5,076,953 9,178,619 42,885,856 97,278,038 4,187,089 269,381,655Other loans & receivables 11,528,038 622,550 - - - - - 12,150,588Financial investments available for sale Quoted - Government debt securities 100,462 - - - - - - 100,462 Quoted - Other equity securities - - - 2,216,100 - - - 2,216,100 Unquoted - Equity securities - - - 76,556 - - - 76,556Financial investments held to maturity Quoted - Government debt securities 1,845,903 - - - - - - 1,845,903Other assets - - - - 1,751,374 - - 1,751,374Total 170,794,626 49,267,509 5,076,953 11,525,401 44,637,230 97,278,038 4,187,089 382,766,846Age 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 30 days days days 90 days TotalLoans & 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 grade to ratings impaired Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000Financial AssetsCash & cash equivalents 10,398,140 33,995 - - - - - 10,432,135Balances with Central Bank of Sri Lanka 17,200,792 - - - - - - 17,200,792Placements with banks 7,624,376 1,163,751 - - - - - 8,788,127Reverse repurchase agreements 3,300,817 - - - - - - 3,300,817Derivative financial instruments 279,022 - - - - - - 279,022Financial assets held for trading 34,786,299 287,108 - 107,677 - - - 35,181,084Financial assets held for trading pledged as collaterals 2,856,321 - - - - - - 2,856,321Loans & receivables to banks - 826,674 - - - 1,943 - 828,617Loans & receivables to other customers 30,230,595 36,007,948 7,666,734 9,686,584 55,052,825 72,385,632 4,153,004 215,183,322Other loans & receivables 9,006,633 - - 1,509,123 - - - 10,515,756Financial investments available for sale Quoted - Government debt securities 179,175 - - - - - - 179,175 Quoted - Other equity securities - - - 1,686,021 - - - 1,686,021 Unquoted - Equity securities - - - 58,428 - - - 58,428Financial investments held to maturity Quoted - Government debt securities - - - - - - - -Other assets - - - - 1,399,091 - - 1,399,091Total 115,862,170 38,319,476 7,666,734 13,047,833 56,451,916 72,387,575 4,153,004 307,888,708Age 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 30 days days days 90 days TotalLoans 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 grade to ratings impaired Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000Financial AssetsCash & cash equivalents 8,324,962 15,876 - - - - - 8,340,838Balances with Central Bank of Sri Lanka 15,766,967 - - - - - - 15,766,967Placements with banks 564,279 1,227,050 - - - - - 1,791,329Reverse repurchase agreements 18,043,918 - - - - - - 18,043,918Derivative financial instruments 217,270 - - 13,247 - - - 230,517Financial assets held for trading 46,470,826 462,811 - 40,879 - - - 46,974,516Financial assets held for trading pledged as collaterals 3,496,141 - - - - - - 3,496,141Loans & receivables to banks 12,376 625,868 - - - - - 638,244Loans & receivables to other customers 64,461,727 46,313,373 5,076,953 11,940,400 42,885,856 101,120,575 4,244,392 276,043,276Other loans & receivables 11,528,038 622,550 - - - - - 12,150,588Financial investments available for sale Quoted - Government debt securities 100,462 - - - - - - 100,462 Quoted - Other equity securities - - - 2,216,100 - - - 2,216,100 Unquoted - Equity securities - - - 76,612 - - - 76,612Financial investments held to maturity Quoted - Government debt securities 1,845,903 - - - - - - 1,845,903Other assets - - - - 2,222,016 - - 2,222,016Total 170,832,869 49,267,528 5,076,953 14,287,238 45,107,872 101,120,575 4,244,392 389,937,427Age 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 30 days days days 90 days TotalLoans & 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
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