SANASA DEVELOPMENT BANK LIMITED - sdb.lk Development Bank Limited | Introductory Document i This Introductory Document is dated May 28, 2012. Responsibility for the Content of …

INTRODUCTORY DOCUMENT

LISTING OF TWENTY FIVE MILLION ONE HUNDRED AND SEVENTY FIVE THOUSAND

THREE HUNDRED AND TWENTY TWO (25,175,322) ORDINARY VOTING SHARES

ON THE MAIN BOARD OF THE COLOMBO STOCK EXCHANGE

MANAGERS TO THE INTRODUCTION

SANASA DEVELOPMENT BANK LIMITED

SANASA Development Bank Limited | Introductory Document i

This Introductory Document is dated May 28, 2012. Responsibility for the Content of the Introductory Document This Introductory Document has been prepared from information provided by SANASA Development Bank Limited (hereinafter referred to as “SDBL” or the “Bank”) or which is publicly available. The Directors of the Bank, collectively and individually, having made all reasonable enquiries confirm to the Managers to the Introduction and the public that to the best of their knowledge and belief, the information contained herein is true and correct in all material respects and that there are no other material facts, the omission of which, would make any statement herein misleading. SDBL accepts responsibility for the information contained in this Introductory Document. While SDBL has taken reasonable care to ensure full and fair disclosure, it does not assume any responsibility for any investment decisions made by investors based on information contained herein. In making an investment decision, prospective investors must rely on their own examination and assessments of the Bank including the risks involved. No person is authorised to give any information or make any representation not contained in this Introductory Document and if given or made, any such information or representation must not be relied upon as having been authorised by the Bank. The Colombo Stock Exchange (the “CSE”) has taken reasonable care to ensure full and fair disclosure of information in this Introductory Document. However the CSE assumes no responsibility for the accuracy of the statements made, opinions expressed or reports included in this Introductory Document.

For further inquiries, please contact the Managers to the Introduction.

The delivery of this Introductory Document shall not under any circumstance constitute a representation or create any implication or suggestion, that there has been no material change in the affairs of the Bank since the date of this Introductory Document.

If you are in doubt regarding the contents of this document, you should consult your stockbroker, bank manager, lawyer or any other professional advisor.

SANASA Development Bank Limited | Introductory Document ii

TABLE OF CONTENTS

11..00 CCOORRPPOORRAATTEE IINNFFOORRMMAATTIIOONN .............................................................................................................................................................................................................................................................................................. 11

22..00 RREELLEEVVAANNTT PPAARRTTIIEESS TTOO TTHHEE IINNTTRROODDUUCCTTIIOONN .............................................................................................................................................................................................................................................. 33

33..00 AABBBBRREEVVIIAATTIIOONNSS UUSSEEDD IINN TTHHEE IINNTTRROODDUUCCTTOORRYY DDOOCCUUMMEENNTT ............................................................................................................................................................................................ 44

44..00 DDEETTAAIILLSS OOFF TTHHEE IINNTTRROODDUUCCTTIIOONN ................................................................................................................................................................................................................................................................................ 55

4.1 Listing of Shares of SANASA Development Bank ........................................................................................................... 5 4.2 Objective of Introduction............................................................................................................................................... 5 4.3 Inspection of Documents ............................................................................................................................................... 5 4.4 Declaration to the CSE and Secondary Market Trading ................................................................................................. 5 4.5 Cost of the Introduction ................................................................................................................................................ 6 4.6 Reference Price .............................................................................................................................................................. 6

55..00 FFIINNAANNCCIIAALL SSEECCTTOORR IINN SSRRII LLAANNKKAA .............................................................................................................................................................................................................................................................................. 77

5.1 Overview of the Financial System in Sri Lanka ............................................................................................................... 7 5.2 Banking Sector in Sri Lanka ............................................................................................................................................ 9 5.3 Licensed Specialised Banks ............................................................................................................................................ 9 5.4 Microfinance Sector ..................................................................................................................................................... 11

66..00 AABBOOUUTT SSAANNAASSAA MMOOVVEEMMEENNTT AANNDD SSAANNAASSAA DDEEVVEELLOOPPMMEENNTT BBAANNKK LLIIMMIITTEEDD .......................................................................................................................................... 1144

6.1 SANASA Movement ..................................................................................................................................................... 14 6.2 SANASA Development Bank Limited ............................................................................................................................ 19 6.3 Group Structure of SDBL .............................................................................................................................................. 19 6.4 Vision, Mission and Values .......................................................................................................................................... 19 6.5 Core Competencies of SDBL ......................................................................................................................................... 20 6.6 Significant Milestones and Awards .............................................................................................................................. 21 6.7 Products and Services .................................................................................................................................................. 22 6.8 Branches and Extension Offices of SDBL ...................................................................................................................... 24 6.9 Human Capital ............................................................................................................................................................. 24 6.10 Corporate Social Responsibility Activities of SDBL ....................................................................................................... 25 6.11 Future Direction, Prospects and Plans of SDBL ............................................................................................................ 26 6.12 Major Assumptions Relating to the Future Plans of SDBL ........................................................................................... 27 6.13 SDBL ‐ North East Construction Company (Private) Limited ........................................................................................ 27

77..00 CCOORRPPOORRAATTEE SSTTRRUUCCTTUURREE.................................................................................................................................................................................................................................................................................................... 2288

7.1 The Board of Directors of SDBL .................................................................................................................................... 28 7.2 Profiles of the Board of Directors ................................................................................................................................ 28 7.3 Other Directorships of Board of Directors ................................................................................................................... 31 7.4 Board of Directors of Subsidiary Company .................................................................................................................. 32 7.5 Directors’ Interest in Shares ........................................................................................................................................ 32 7.6 Directors’ Emoluments ................................................................................................................................................ 33 7.7 Directors’ Interest in Assets ......................................................................................................................................... 33 7.8 Directors’ Interest in Contracts .................................................................................................................................... 33 7.9 Statement – Board of Directors ................................................................................................................................... 33 7.10 Corporate Governance Practices ................................................................................................................................. 33 7.11 Corporate Management of SDBL ................................................................................................................................. 37 7.12 Company Secretary ...................................................................................................................................................... 39 7.13 Corporate Management’s Emoluments ....................................................................................................................... 39 7.14 Statement – CEO .......................................................................................................................................................... 39

SANASA Development Bank Limited | Introductory Document iii

88..00 OOTTHHEERR IINNFFOORRMMAATTIIOONN OONN SSDDBBLL .............................................................................................................................................................................................................................................................................. 4400

8.1 Relationship with Key Customers and Suppliers of SDBL ............................................................................................. 40 8.2 Dividend Policy ............................................................................................................................................................ 40 8.3 Details of Material Indebtedness ................................................................................................................................. 40 8.4 Working Capital ........................................................................................................................................................... 41 8.5 Litigation, Disputes and Contingent Liabilities ............................................................................................................. 41 8.6 Material Contracts ....................................................................................................................................................... 41 8.7 Details of Commissions Paid ........................................................................................................................................ 42 8.8 Details of Benefits Paid to Promoters .......................................................................................................................... 42 8.9 Management Agreement ............................................................................................................................................ 42

99..00 CCAAPPIITTAALL SSTTRRUUCCTTUURREE ................................................................................................................................................................................................................................................................................................................ 4433

9.1 An Overview of the Stated Capital ............................................................................................................................... 43 9.2 Details Pertaining to the Locked‐in Shares .................................................................................................................. 45 9.3 Shareholder Restructuring Process .............................................................................................................................. 46 9.4 Shareholders of SDBL ................................................................................................................................................... 47 9.5 Share Transactions by the Top 10 Shareholders of SDBL ............................................................................................. 48 9.6 Details of Other Changes to Stated Capital .................................................................................................................. 49 9.7 Details of Convertible Debt Securities ......................................................................................................................... 49 9.8 Details of Shares Sold Privately in Conjunction with the Introduction ........................................................................ 49 9.9 Free Transferability of Shares ...................................................................................................................................... 50 9.10 Take‐over Offers .......................................................................................................................................................... 50

1100..00 IINNVVEESSTTMMEENNTT CCOONNSSIIDDEERRAATTIIOONN AANNDD AASSSSOOCCIIAATTEEDD RRIISSKKSS .................................................................................................................................................................................................... 5511

10.1 Risks Related to the Business ....................................................................................................................................... 51 10.2 Risks Related to the Future Plans of SDBL ................................................................................................................... 53 10.3 Capital Market Related Risks ....................................................................................................................................... 54

1111..00 SSTTAATTUUTTOORRYY DDEECCLLAARRAATTIIOONN ............................................................................................................................................................................................................................................................................................ 5566

1122..00 FFIINNAANNCCIIAALL IINNFFOORRMMAATTIIOONN OOFF SSDDBBLL .................................................................................................................................................................................................................................................................. 5577

12.1 Summary Financial Statements, Key Financial Ratios and Reference Price of Shares of SDBL .................................... 57 12.2 Accountants’ Report for the inclusion in the Introductory Document ........................................................................ 60 12.3 Five Year Summary of Financial Statements ................................................................................................................ 62 12.4 Audit Report and Financial Statements as at December 31, 2011 .............................................................................. 70 12.5 Audit Report and Financial Statements as at December 31, 2010 ............................................................................ 101 12.6 Audit Report and Financial Statements as at December 31, 2009 ............................................................................ 129

AANNNNEEXX AA –– MMEEMMBBEERRSS AANNDD TTRRAADDIINNGG MMEEMMBBEERRSS OOFF TTHHEE CCSSEE ................................................................................................................................................................................................................ 115555

AANNNNEEXX BB –– SSCCHHEEDDUULLEE OOFF SSHHAARREE AALLLLOOTTMMEENNTTSS .......................................................................................................................................................................................................................................................... 115599

SANASA Development Bank Limited | Introductory Document iv

INDEX ON TABLES AND FIGURES LIST OF TABLES Table 5‐1: Summary of Total Assets of Major Financial Institutions as at December 31, 2011 .................................................................. 8 Table 5‐2: Minimum Capital Requirement for LSBs .................................................................................................................................. 10 Table 5‐3: Financial Performance Indicators of LSBs ................................................................................................................................ 11 Table 7‐1: Board of Directors of SDBL ....................................................................................................................................................... 28 Table 7‐2: Other Directorships of the Directors of SDBL .......................................................................................................................... 31 Table 7‐3: Details of Board of Directors of NECC ...................................................................................................................................... 32 Table 7‐4: Directors’ Direct Shareholding in SDBL .................................................................................................................................... 32 Table 7‐5: Share Transactions by Directors .............................................................................................................................................. 32 Table 8‐1: Distribution of 10 Largest Deposits of SDBL ............................................................................................................................. 40 Table 9‐1: Movement in Stated Capital of SDBL (January 1, 2010 – May 28, 2012) ................................................................................ 43 Table 9‐2: Issue of Shares from January 1, 2010 – December 31, 2010 ................................................................................................... 44 Table 9‐3: Issue of Shares from January 1, 2011 – December 31, 2011 ................................................................................................... 44 Table 9‐4: Details Pertaining to the Locked‐in Shares of SDBL ................................................................................................................. 45 Table 9‐5: Top 10 Shareholders of SDBL ................................................................................................................................................... 47 Table 9‐6: Details of Public Holding of SDBL ............................................................................................................................................. 47 Table 9‐7: Non‐Public Holding of SDBL ..................................................................................................................................................... 47 Table 12‐1: Summarised Income Statements of SDBL .............................................................................................................................. 57 Table 12‐2: Summarised Balance Sheets of SDBL ..................................................................................................................................... 57 Table 12‐3: Key Financial Ratios ............................................................................................................................................................... 58

LIST OF FIGURES Figure 5‐1: Institutional Framework of the Financial System ..................................................................................................................... 7 Figure 5‐2: Microfinance Borrowers and Depositors 2005 to 2010 .......................................................................................................... 13 Figure 5‐3: Distribution of Poverty Vs Distribution of MFIs ...................................................................................................................... 13

SANASA Development Bank Limited | Introductory Document 1

11..00 CCOORRPPOORRAATTEE IINNFFOORRMMAATTIIOONN

The Company SANASA Development Bank Limited

Legal Form of the Company A limited liability company incorporated in Sri Lanka on August 06, 1997, and re‐registered under the Companies Act No. 7 of 2007 on October 30, 2007

Company Registration No. PB 62

Place of Incorporation Colombo, Sri Lanka

Registered Office SANASA Development Bank Limited 12, Edmonton Road Kirulapone Colombo 06

Tel: 011 2832590‐1 Fax: 011 2514256

Company Secretary Mrs.Tamarika Kamani Kumari Rodrigo SANASA Development Bank Limited 12, Edmonton Road Kirulapone Colombo 06 Tel: 011 2832590‐1 Fax: 011 2514256

Auditors to the Company M/s. Ernst & Young Chartered Accountants 201, De Seram Place Colombo 10

Tel: 011 2463500 Fax: 011 2697369

Bankers to the Company People’s Bank 75, Sir Chittampalam A. Gardiner Mawatha Colombo 02

National Development Bank PLC 40, Navam Mawatha Colombo 02

Bank of Ceylon 1, Bank of Ceylon Mawatha Colombo 01


BOARD OF DIRECTORS OF SANASA DEVELOPMENT BANK LIMITED

Mrs. Muditha Samadani Kiriwandeniya Chairperson/Non‐Executive Director

Mr. Ananda Dharmasiri Walisinghe Non‐Executive Director

Mr. Tibbotuge Karunasena Independent Non‐Executive Director

Mr. Don Padmasiri Kumarage Non‐Executive Director

Dr. Ratnayake Mudiyanselage Karunasinghe Ratnayake Independent Non‐Executive Director

Prof. Weerakoon Mudiyaselage Abeyratne Bandara Independent Non‐Executive Director

Mr. Udaya Gamini Ramawickrama Independent Non‐Executive Director

Mr. Mahinda Vidanapathirana Independent Non‐Executive Director

Mr. Herath Mudiyanselage Gunawansha Bandara Herath Independent Non‐Executive Director


22..00 RREELLEEVVAANNTT PPAARRTTIIEESS TTOO TTHHEE IINNTTRROODDUUCCTTIIOONN

Managers to the Introduction NDB Investment Bank Limited 40, Navam Mawatha Colombo 02 Tel: 011 2300385 Fax: 011 2300393

Legal Advisors/Lawyers to the Introduction Paul Rathnayake Associates International Legal Consultants Solicitors, Attorneys‐at‐Law and Notaries Public 59, Gregory’s Road Colombo 07 Tel. 011 2697893/4 Fax 011 2688410

Auditors and Reporting Accountants to the Introduction

M/s. Ernst & Young Chartered Accountants 201, De Saram Place Colombo 10

Tel: 011 2463500 Fax: 011 2697369


33..00 AABBBBRREEVVIIAATTIIOONNSS UUSSEEDD IINN TTHHEE IINNTTRROODDUUCCTTOORRYY DDOOCCUUMMEENNTT Abbreviation Description ATM Automated Teller MachinesCAGR Compound Annual Growth RateCAR Capital Adequacy Ratio CBSL Central Bank of Sri Lanka CEO Chief Executive Officer CIM Chartered Institute of MarketingCIMA Chartered Institute of Management Accountants COMB Commercial Bank of CeylonCRB Co‐operative Rural Banks CSE Colombo Stock Exchange CSR Corporate Social ResponsibilityDTCCS District Thrift and Credit Co‐operative SocietyEPF Employees' Provident FundETF Employees' Trust Fund FIPED Financial Institutions for Private Enterprise Development FY Financial Year GLLP General Loan Loss ProvisionGoSL Government of Sri Lanka IBSL Institute of Bankers of Sri Lanka ICASL Institute of Chartered Accountants of Sri LankaIFC International Finance CorporationIIS Interest in Suspense AccountIPM Institute of Personnel ManagementIT Information Technology LCB Licensed Commercial Bank LSB Licensed Specialised Bank MFI Microfinance Institution MIX Microfinance Information ExchangeMPCS Multi Purpose Co‐operative SocietyNECC SDBL North East Construction Company (Private) LimitedNGO Non‐Governmental OrganisationNII Net Interest Income NPL Non‐Performing Loans NRFC Non‐Resident Foreign CurrencyNSB National Savings Bank PD Primary Dealer PTCCS Primary Thrift and Credit Co‐operative SocietyRFC Resident Foreign Currency ROA Return on Assets ROE Return on Equity SDBL SANASA Development Bank LimitedSEC Securities and Exchange Commission of Sri LankaSEDCO SANASA Engineering and Development Company LimitedSLC Specialised Leasing CompanySLIM Sri Lanka Institute of MarketingSLLP Specific Loan Loss ProvisionTCCS Thrift and Credit Co‐operative SocietyToR Terms of Reference


44..00 DDEETTAAIILLSS OOFF TTHHEE IINNTTRROODDUUCCTTIIOONN

4.1 Listing of Shares of SANASA Development Bank

An application has been made to the CSE for permission to deal in and for a listing of Twenty Five Million One Hundred and Seventy Five Thousand Three Hundred and Twenty Two (25,175,322) ordinary voting shares being the entirety of the issued and paid up ordinary shares represented in the stated capital of the Bank by way of an Introduction. Subsequent to the completion of the Introduction entire Twenty Five Million One Hundred and Seventy Five Thousand Three Hundred and Twenty Two (25,175,322) ordinary voting shares will be listed on the Main Board of the CSE subject to the compliance with Rule 2.1.2 of the Listing Rules of the CSE. SANASA Development Bank Limited (SDBL) has already complied with Rule 2.1.2 of the CSE Listing Rules of the CSE.

4.2 Objective of Introduction

The objective of this Introduction is to obtain a listing for the ordinary voting shares of SDBL on the CSE to comply with the regulatory requirements of the Monetary Board of the Central Bank of Sri Lanka as communicated by the Director of Bank Supervision by their letter dated January 12, 2012. Accordingly, the Bank is required to obtain a listing on the CSE by May 31, 2012.

4.3 Inspection of Documents

Articles of Association, Auditors’ Reports and Audited Financial Statements for the five (05) financial years ended December 31, 2011 (i.e. the five (05) financial years immediately preceding the date of this Introductory Document), detailed schedule of the share allotments made by SDBL during the period from April 01, 2011 to May 28, 2012 and material contracts as disclosed in Section 8.6 would be made available for inspection by the public during normal working hours at the registered office of the Bank for a period not less than fourteen (14) market days from the date the Introductory Document is made available to the members and trading members of the CSE. The Introductory Document and Articles of Association of the Bank will be available on the website of the CSE, www.cse.lk, the Bank, www.sdb.lk and the Managers to the Introduction, www.ndbib.com for a period not less than fourteen (14) market days from the date the Introductory Document is made available to members and trading members of the CSE.

4.4 Declaration to the CSE and Secondary Market Trading

The Bank will submit a declaration to the CSE on the market day immediately following the day on which the Introductory Document is made available to the member firms and trading members of the CSE. Trading of ordinary voting shares on the secondary market will commence on or before the third (3rd) market day from the receipt of the declaration by the CSE as per the CSE Listing Rules.


4.5 Cost of the Introduction

The total cost associated with the Introduction is estimated to be approximately Rs. 2.2 million. These include all expenses associated with the Introduction, inclusive of but not limited to the initial listing fees to the CSE, management/advisory fees to the Introduction, legal and accountancy fees and printing costs. Such costs will be met through internally generated funds of the Bank.

4.6 Reference Price

The reference price of a share of SDBL is Rs. 125/‐. The detailed calculation of the reference price is stated in Section 12.1.3 of the Introductory Document.


55..00 FFIINNAANNCCIIAALL SSEECCTTOORR IINN SSRRII LLAANNKKAA

5.1 Overview of the Financial System in Sri Lanka

The financial system in Sri Lanka consists of the Central Bank of Sri Lanka (CBSL), as the principal regulator, other regulatory authorities, financial institutions, markets, instruments, payment and settlement system, legal framework and regulations. The financial system carries out the vital financial intermediation function of borrowing from surplus units and lending to deficit units. The legal framework and regulators are needed to monitor and regulate the financial system. The payment and settlement system is the mechanism through which transactions in the financial system are cleared and settled. The major financial institutions include the CBSL as the apex financial institution and the regulator, Licensed Commercial Banks (LCBs), Licensed Specialised Banks (LSBs), Registered Finance Companies, Specialised Leasing Companies (SLCs), Primary Dealers (PDs), pension and provident funds, insurance companies, Co‐operative Rural Banks (CRBs), merchant banks, unit trusts and Thrift and Credit Co‐operative Societies (TCCSs) as depicted in Figure 5‐1. The major financial markets include the foreign exchange market, money market, capital market and the informal financial market whilst the financial infrastructure consist of the legal framework related to the financial system and the payment and settlement system. Figure 5‐1: Institutional Framework of the Financial System

Source: CBSL Annual Report 2011

CBSL


As the principal regulator, the CBSL is responsible for maintaining the integrity and stability of the financial system in Sri Lanka. The regulation and supervision of financial institutions is mainly governed by the Monetary Law Act No. 58 of 1949, the Banking Act No. 30 of 1988, the Exchange Control Act No. 24 of 1953, the Local Treasury Bills Ordinance No. 8 of 1923, the Registered Stocks and Securities Ordinance No. 7 of 1937, the Finance Companies Act No. 78 of 1988, the Finance Leasing Act No. 56 of 2000, the Payment and Settlement Systems Act No. 28 of 2005, the Financial Transactions Reporting Act No. 6 of 2006 and directions, circulars and other regulations issued by the CBSL from time to time. The Banking Act vests the Monetary Board of the CBSL with the power to regulate and supervise licensed banks in Sri Lanka. It also empowers CBSL for the continuous and periodic examination of all banking institutions including branches of foreign banks and government bodies that accept deposits and provide loans. The banking sector dominates the financial sector in Sri Lanka which contributes to 69.7% of the total financial sector assets. The summary of total assets of major financial institutions as at December 31, 2011 is given in Table 5‐1 below. Table 5‐1: Summary of Total Assets of Major Financial Institutions as at December 31, 2011 Financial Institution Assets

Rs. billion % Banking Sector 5,367.8 69.7

CBSL 1,123.4 14.6 LCBs 3,575.3 46.4 LSBs 669.1 8.7

Other Deposit Taking Financial Institutions 427.0 5.5

Registered Finance Companies 352.0 4.6 CRBs 67.6 0.9 TCCSs 7.4 0.1

Other Specialised Financial Institutions 340.8 4.4

SLCs 137.7 1.8 PDs 135.3 1.8 Stock Broking Companies 11.3 0.1 Unit Trusts/Unit Trust Management Companies 23.7 0.3 Market Intermediaries 31.2 0.4 Venture Capital Companies 1.5 0.0 Credit Rating Agencies 0.2 0.0

Contractual Savings Institutions 1,569.0 20.4 Insurance Companies 263.3 3.4 Employees' Provident Fund (EPF) 1,020.1 13.2 Employees' Trust Fund (ETF ) 140.6 1.8 Approved Private Provident Funds 115.1 1.5 Public Service Provident Fund 29.9 0.4

Total 7,704.6 100.0

Source: CBSL Annual Report 2011


5.2 Banking Sector in Sri Lanka

The banking sector in Sri Lanka comprises of LCBs and LSBs. Banks play a central role within the financial system, as they have the capacity to provide liquidity to the entire economy. Banks are also responsible for providing payment services, thereby facilitating all entities to carry out their financial transactions. On the other hand, banks can create vulnerabilities of systemic nature, partly due to a mismatch in maturity of assets and liabilities. Therefore, the soundness of banks is important, as it contributes towards maintaining confidence in the financial system and any failure may have the potential to impact on activities of all other financial and non‐financial entities. As per the CBSL Annual Report 2011, as at December 31, 2011, there were 24 LCBs and 9 LSBs in operation in Sri Lanka. LCBs are licensed to carry out a broad array of work including but not limited to accept demand deposits and carryout foreign exchange transactions whilst LSBs are licensed to carryout specialised banking businesses but are not authorised to accept demand deposits and carryout foreign currency transactions. As at December 31, 2011, the total number of LCB branches and other outlets were 5347 whilst the LSB branches and outlets were 775. Moreover, as at December 31, 2011, 67% of assets of the banking sector were represented by LCBs whilst 21% and 12% of the assets of the banking sector were represented by CBSL and LSBs respectively (Source: “CBSL Annual Report 2011”).

5.3 Licensed Specialised Banks

The LSB sector in Sri Lanka comprises of diverse banking institutions, which includes regional development banks, long‐term lending institutions, housing finance institutions and private savings and development banks. The list of LSBs in Sri Lanka as per the CBSL notice published on February 29, 2012 is as follows:

• DFCC Bank – provides a variety of savings schemes and lending facilities as well as carryout other specialised banking services

• Housing Development Finance Corporation Bank of Sri Lanka – mainly focuses on providing housing related financial facilities

• Lankaputhra Development Bank Limited – provides a variety of savings schemes and lending facilities with a focus on development of agricultural and industrial sectors of the rural economy

• MBSL Savings Bank Limited – provides a variety of savings schemes, lending facilities and leasing facilities

• National Savings Bank – the largest LSB in Sri Lanka, which provides a variety of savings and lending facilities

• Regional Development Bank – provides a variety of savings schemes and lending facilities including microfinance credit facilities focusing on catering to the rural community

• SANASA Development Bank Limited – provides a variety of savings schemes and lending facilities including microfinance credit facilities focusing on catering to the rural community

• Sri Lanka Savings Bank Limited – primarily concentrates on channeling government funds towards microfinancing activities through a network of partner organisations

• State Mortgage and Investment Bank – mainly focuses on providing housing related financial facilities


5.3.1 Regulatory Requirements for LSBs

The LSBs are regulated by statutory provisions as well as directives issued by CBSL from time to time. Some of the key regulatory requirements applicable for LSBs are discussed under this section. Licensing In terms of Sections 2 and 76A to 76D of the Banking Act No. 30 of 1988, the business of an LSB can only be carried under the authority of a license issued by the Monetary Board of the CBSL, with the approval of the Minister of Finance. Minimum Capital Requirement The Monetary Board of the CBSL increased the minimum capital requirement of LSBs in a staggered manner as summarised in Table 5‐2. The Monetary Board has the right to vary the minimum capital requirement and the banks are not allowed to reduce the capital without permission of the CBSL. Table 5‐2: Minimum Capital Requirement for LSBs

Minimum Capital Requirement Effective Date for Existing LSBs Effective Date for New LSBs

Rs. 2.0 billion End 2011 2010



Source: CBSL Financial System Stability Review 2010

Capital Adequacy The CBSL has adopted the Basel II capital adequacy standards for all licensed banks (LCBs and LSBs) effective from January 2008. Accordingly, in computing capital charge for capital adequacy purposes, all licensed banks are required to follow the standardised approach for credit risk, standardised measurement approach for market risk and basic indicator approach for operational risk. In terms of the Banking Act Direction No. 10 of 2007, all LSBs are required to maintain a total Capital Adequacy Ratio (CAR) of not less than 10% in relation to total risk weighted assets with core capital constituting not less than 5% in relation to total risk weighted assets. It is also decided to move to advanced approaches of Basel II from 2013, by when all licensed banks are expected to have appropriate risk models, risk management systems and data warehouses. Liquidity Currently, LSBs are required to maintain minimum average monthly liquid assets of not less than 20% of its total monthly deposit liabilities. Performance of LSBs Table 5‐3 summarises the key financial performance indicators of LSBs for last three years. The LSB sector CAR has been much above the statutory requirement throughout the period in consideration. The gross non‐performing advances ratio, which indicates the quality of assets stood at 7.9% in 2010. In terms of profitability of LSBs, Return on Assets (ROA) as well as Return on Equity (ROE) has improved year on year. Furthermore, the liquid asset ratio has increased from 71.1% to 74.3% from 2009 to 2010 and is much higher than the minimum requirement of 20% as per CBSL directives.


Table 5‐3: Financial Performance Indicators of LSBs

Ratio 2008 2009 2010

Capital Adequacy

Core Capital (Tier 1 Capital) Adequacy Ratio 25.6 23.6 24.7

Total Capital Adequacy Ratio 21.0 22.0 24.1

Assets Quality

Gross Non‐performing Advances Ratio 8.9 10.4 7.9

Net Non‐performing Advances Ratio 6.1 7.5 5.1

Provision Coverage Ratio 33.2 30.2 38.2

Profitability

ROA (after tax) 0.6 1.4 2.6

ROE 6.9 15.1 27.1

Efficiency Ratio 51.0 40.8 31.0

Interest Margin 2.9 3.4 4.2

Liquidity Indicators

Liquid Assets Ratio 61.9 71.1 74.3

Credit to Deposit Ratio 56.0 49.7 48.8

Source: CBSL Website ‐ Financial Performance Indicators for LSBs

5.4 Microfinance Sector

5.4.1 Overview

Microfinance sector plays an essential role in the economy, originated as a mechanism to cater to the financing needs of low income segment of the society. Microfinance Institutions (MFIs) provide financial services to economically active poor and micro‐enterprises for income and employment generation. These financial services include not only provision of loans but also advisory and technical services, financial literacy services as well. The main objectives of MFIs are to enhance the income generation ability of the low income segment of the society and thereby elevating poverty and improve their living condition. MFIs mainly cater to the agriculture, livestock activities and household businesses of low income segment of the society. In addition to LCBs, LSBs and registered finance companies, microfinance services in Sri Lanka are provided by Samurdhi Bank Societies, CRBs, TCCSs of SANASA network and Non‐Governmental Organisations (NGOs). Further, non‐institutional microfinance providers such as savings associations, rotating savings clubs or credit associations, funeral or death benefit societies, traders, moneylenders and input suppliers also provide microfinance services in Sri Lanka. Currently, there is no formal regulatory framework in Sri Lanka which governs microfinance operations. However most of the MFIs at present are regulated by the legal statutes through which the institutions are established. Some of the Acts directly applicable to MFIs include Pradeshiya Sanwardana Bank Act No. 41 of 2008, Co‐operative Societies Act No. 5 of 1972 and Samurdhi Authority Act No. 30 of 1995.


A formal regulatory mechanism is expected to be introduced by the Government of Sri Lanka (GoSL) through the enactment of the proposed Microfinance Act, giving much emphasis on transparency and governance. The formation of a separate authority, as Microfinance Regulatory and Supervisory Authority can be considered as a major proposition introduced by the Act. This will enable them to expand their activities in a sound and sustained manner and provide enhanced financial services to the SME sector as well as low income earning populace of the country. According to “Recent Economic Developments” report published by CBSL, the proposed Microfinance Act is expected to be enacted in 2012. Under the proposed Act, only institutions or person licensed by the CBSL will be permitted to carry on microfinance business. The following institutions are exempted from acquiring license under the draft Act:

• LCBs and LSBs within the meaning of the Banking Act No. 30 of 1988

• Registered finance companies registered under the Finance Companies Act No. 78 of 1988

• Samurdhi Banking Societies established under the guidance of the Samurdhi Authority of Sri Lanka and functions in conformity with the Samurdhi Authority of Sri Lanka Act No. 30 of 1995

• Farmers organisations formed in terms of the Agrarian Development Act No.46 of 2000 and carries on business as provided for in that Act.

5.4.2 Microfinance Operations

According to Microfinance Information Exchange (MIX), the MFIs in Sri Lanka does not offer a diverse range of products, and the product portfolios of many MFIs consist of a range of loans and savings products. LSBs such as the RDB and SDBL are permitted to mobilise deposits whilst institutions registered as co‐operative societies are also permitted to accept member deposits. Some NGO‐MFIs also accept deposits on a limited scale. Many MFIs impose compulsory savings requirements as a pre‐condition to obtaining a loan. While a few MFIs (RDB, SDBL and CRBs) require physical collateral, especially for higher value loans, virtually all rely on collateral substitutes such as guarantors and compulsory savings balances. Others retain an installment of the loan as security or charge a nominal sum which goes towards a general “loan security fund”. In addition to savings and loans, MFIs also offer pawning, leasing and micro‐insurance facilities. Pawning is offered by the RDB, SLDB, CRBs and other MFIs such as Sarvodaya Economic Enterprise Development Services. Further, micro‐insurance and leasing services are also provided by only a limited number of MFIs due to regulatory licensing requirements and high capital requirements. According to MIX, there has been a growing interest and competition among the MFIs in providing microfinance services in Sri Lanka. As depicted in Figure 5‐2, the total loans granted by MFIs in 2010 amounted to approximately Rs. 58.4 billion (USD 526.5 million), which has increased at a Compound Annual Growth Rate (CAGR) of 62% compared to 2005 and representing 1.3 million active borrowers while Rs. 54.8 billion (USD 494.1 million) deposits were recorded in the same year, which has increased at a 30% CAGR compared to 2005 and is represented by a 4.5 million depositor base. As per the survey carried out by MIX, the RDB dominates the microfinance sector representing 65% of the total deposits portfolio and 69% of the total loan portfolio for 2010. SDBL is the second largest microfinance services provider in terms of the total deposit base and loan portfolio which amounts to 22% and 23% of total microfinance sector loans and deposits respectively.


Figure 5‐2: Microfinance Borrowers and Depositors 2005 to 2010

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

0

10

20

30

40

50

60

70

2005 2006 2007 2008 2009 2010

No. of D

epositors/Bo

rrow

ers (in

tho

usand)

Dep

osits/Loans (Rs. billion)

Deposits

Gross Loan Portfolio

Number of Depositors

Number of Active Borrowers

Source: MIX Microfinance Industry Report 2010

The total number of MFI outlets is estimated to be 11,000 as at end 2010 according to the survey carried out by MIX. As per Figure 5‐3, the MFI outlets are concentrated in the rural sector whilst only 1% of the outlets are located in the estate sector although they contribute to 6% of the poverty in Sri Lanka. Furthermore, it is noteworthy that approximately 88% of the MFI outlets are located outside the Western Province. Figure 5‐3: Distribution of Poverty Vs Distribution of MFIs Distribution of Poverty by Sector

Rural 85%

Urban9%

Estate6%

Distribution of MFI Outlets by Sector

Rural 89%

Urban10%

Estate1%

Source: MIX Microfinance Industry Report 2010 and Department of Census and Statistics, Poverty Indicators: Household Income and Expenditure Survey ‐ 2009/10

There is a high potential for the microfinance industry to grow in terms of providing financial services to SME sector as well as low income earning populace of the country in the future, especially in underserved regions such as North and North Central provinces. Development of the regulatory framework for the microfinance sector will formalise the structure and create more confidence amongst the potential customers, thus enabling the sector to grow further in the future.


66..00 AABBOOUUTT SSAANNAASSAA MMOOVVEEMMEENNTT AANNDD SSAANNAASSAA DDEEVVEELLOOPPMMEENNTT

BBAANNKK LLIIMMIITTEEDD

6.1 SANASA Movement

The SANASA movement has in its heart a philosophy of cooperation and community support. It acts as an independent movement and can trace back its roots to credit societies formed over 100 years ago. During the course of this long period of time, the movement has served Sri Lankans of all ethnicities, religious sects and castes. SANASA movement encourages a bottom up style of management by empowering its grass roots members to voice their opinion and actively engage in the decision making process. The movement also tries to be transparent with a democratic style of governance established with a focus to develop its members as well as the local communities. The concept of credit societies function based on a culture of thrift. The farmers are encouraged to develop such a habit and when they have successfully done so a subsistence credit is given through the society. The credit given is considered a group concern and hence members of the social group observe the manner in which the funds are utilised. This ensures that all credit handed out is utilised in the most effective and productive manner. Another concept is to refrain from obtaining funding from outside as it is necessary to inculcate in the farmers the value of using their own resources and easing up on reliance on external parties. Farmers are encouraged to start projects within their capacity and available resources. Screening procedures are put in place to ensure credit is approved after extensive verification. Even after the funds are provided, monitoring is carried out to ensure total compliance. SANASA movement came into being through such a structure with the aim of mobilising the funds to masses, focused on poverty alleviation and livelihood development. The SANASA TCCSs are member owned societies, grouped together as a federation but coming under the purview of the Department of Co‐operative Development. Federation of Thrift and Credit Co‐operative Societies Limited acts as an umbrella organisation covering over 8000 primary societies dealing in microfinance throughout the country. Under the federation’s patronage, number of institutions in the fields of insurance, education, construction, printing and travel are established to develop communities based on a co‐operative philosophy.

6.1.1 History and Growth of the SANASA Movement

Sri Lankan agriculture based society historically enjoyed an indigenous co‐operative system from the olden days. The need for more organised co‐operative system was established with the marginalisation of the rural farmers under the colonial rule. Rural farmers faced significant hurdles and unsustainable interest rates when seeking basic credit. The microfinance movement in Sri Lanka started in 1906, with the establishment of TCCSs under the Co‐operative Societies Ordinance. The initial credit co‐operatives established in Sri Lanka fulfilled a wider role, being involved in procurement of inputs and distribution of products. This role was eventually taken over by the Multi Purpose Co‐operative Societies (MPCSs) which were initially established during the 1940s as Consumer Co‐operative Societies and renamed as MPCSs in the 1950s.


With the decline in scope of work for TCCSs, their network declined and was at a very weak position in late 1970s. There were plans to reduce the number of societies during that period. Dr. Kiriwandeniya, during the same period conducted a study in Moneragala and realised the difficulties faced by farmers to obtain basic credit due to unavailability of formal credit history. In order to address this issue Dr. Kiriwandeniya identified that the underlying concept of TCCSs can be used. He initiated a revival in the TCCSs by establishing the SANASA movement and re‐organising the TCCSs under the SANASA movement in 1978. Since its establishment in 1978, SANASA movement has grown to include 8,424 SANASA primary societies and 35 SANASA district unions. It is present in all provinces of Sri Lanka. The functionality of the movement has also expanded from providing basic credit facilities to include insurance, education and training, construction and even travel arrangements.

6.1.2 Structure of SANASA Movement

The SANASA movement is structured in a three tier basis to ensure that it is driven towards success by the members of the movement themselves. It also allows benefits gained to be delivered to members at the lowest level. Primary Level

Primary SANASA societies are at the grass roots level of SANASA and the membership comprises of people living in the localities. Management of these primary societies is elected by the members of the society and hence local communities obtain the benefit of governing their own society.

Secondary Level District societies are at the secondary level to oversee the primary level societies in that area. Management of these district societies are elected by the primary societies of the district, empowering the members of those societies in determining who will represent them at higher levels.

Apex Level The Federation of Thrift and Credit Co‐operative Societies Limited is at the apex of the SANASA movement, representing all the members of SANASA societies at the national level. Federation of Thrift and Credit Co‐operative Societies Limited governs and leads the entire movement to reach its goals of delivering a new social order based on co‐operative principles and values. Management at the top most level is elected by representatives of the district societies at the annual general meeting.


6.1.3 Population Coverage

Starting with a membership of approximately two thousand members in 1906, the TCCSs have grown significantly over the past 100 years to achieve the current direct and indirect membership of approximately 20% of Sri Lanka’s population. A majority of the membership comprises of rural and often marginalised communities in line with SANASA movement’s goal of achieving grass root level development. Even during the three decade long conflict in Sri Lanka, the movement was able to strengthen its position with people of all races, faiths and castes. SANASA movement was able to act as a beacon of unity with its core philosophy of co‐operative values and principle of one community.

6.1.4 National/International Ties of the Federation of Thrift and Credit Co‐operative Societies Limited

Federation of Thrift and Credit Co‐operative Societies Limited is tied up with international co‐operative alliances and currently an active member of following organisations.

• International Co‐operative Alliance

• Canadian Co‐operative Association

• Asian Confederation of Credit Unions SANASA movement has been selected by Rabo Bank of Netherlands and World Council of Credit Unions to carry forward their programs.

6.1.5 Activities under Federation of Thrift and Credit Co‐operative Societies Limited

• Providing guidance to co‐operative societies on policies, management and good governance.

• Representation of SANASA at international conferences.

• Conducting workshops at society level for education purposes.

• Provide opportunities and guidance for the village leaders to attend international co‐operative forums and workshops.

• Organisation of co‐operative national events and religious programs in association with the SANASA associate organisations for the benefit of SANASA community.

• Involve in national development and other programs of the state, including dengue eradication and AIDs control.

• Liaise with other local and foreign non‐profit organisations for issues of common interest.

• Ascertaining training needs of village leaders, members and staff of SANASA societies and conduct the necessary programs through SANASA Campus Limited in Paragammana, Kegalle.

• Organisation of study groups for exchange of co‐operative knowledge and microfinance practices.

• Acquire and disseminate global co‐operative information.

• Communication of SANASA society activities through the monthly SANASA News bulletin.

• Maintain statistics relating to SANASA primary societies.

• Publish the annual statistical report on SANASA movement.


6.1.6 Affiliated Entities of SANASA Movement

Affiliated entities of SANASA movement are given below.

SANASA Development Bank Limited

SDBL was intiated as a bank for the SANASA community owned by the community itself. Detailed description on SDBL is provided under Section 6.2.

SANASA Consumer and Producer Alliance Limited

SANASA Producer and Consumer Alliance Limited with the brand name Saneepa, transact business through two outlets. Its primary objective is to act as a responsible middleman and provide a fair price to the producer and ultimate consumer. It also runs an arts and crafts gallery in Nugegoda for Sri Lankan craftsmen.

SANASA Campus Limited

SANASA Campus Limited operates with the objective of educating the SANASA community on corporatism, social values, leadership and governance. It also provides training for the leaders on operational areas and staff. Currently, SANASA Campus Limited functions as a university with lecture halls, a hostel, conference halls and a cafeteria.


SANASA Engineering and Development Company Limited (SEDCO)

SEDCO, the brand name for the construction arm of SANASA, concentrates on township building and low cost housing. Its operations have expanded beyond Sri Lanka with the commencement of its operations in Maldives.

SANASA Insurance Company Limited

SANASA Insurance Company Limited provides insurance services to rural communities, functioning through branches and service centers at SANASA primary societies.

SDBL ‐ North East Construction Company Private Limited (NECC)

NECC handles residential, commercial, irrigation and road construction projects in any part of the country. The company carries out all tasks in construction projects including initial planning, consultancy services and construction.

SANASA Printers and Publishers Limited

SANASA Printers and Publishers Limited was initiated in order to provide economical printing to SANASA societies, associates and writers. Presently, due to the competitive prices offered even state institutions are among its customers. It is also successfully involved in the recycled paper industry in order to minimise wastage during production.

SANASA Travels (Private) Limited

SANASA Travels (Private) Limited operates with the aim of providing religious tour packages to members of SANASA community at an affordable price. Individuals can apply for packages through loan facilities from SDBL or SANASA societies.

SANASA Uththamavi (Guarantee) Company

SANASA Uththamavi (Guarantee) Company was specifically designed to cater to the multiple financial and social needs of women. It carries out education and training programs aimed at women.

SANASA Security Services (Private) Limited

With the growth of the SANASA movement, the need for a security service increased. SANASA Security Services (Private) Limited was established to address this requirement. It slso provides security services to external parties.


6.2 SANASA Development Bank Limited

SDBL was established in 1997 as the main credit institution for the SANASA movement. SANASA societies collectively hold a majority stake in SDBL. It is a unique financial institution when compared to other institutions in Sri Lanka due to its heritage linked to co‐operative movement with the aim of fostering sustainable economic development through the provision of credit to the rural poor. Other unique features of SDBL include provision of technical assistance programmes, entrepreneurship skill development, collective business enterprises and information technology assistance to the Community. These features have expanded SDBL’s focus from simply profits to a broader goal of overall betterment of communities. Over the past 14 years, SDBL has become an integral part of pioneering microfinance industry in the country. SDBL has been able to partner effectively with the vast network of SANASA primary societies as well as fraternal members of SANASA movement to reach the masses that remained excluded from mainstream development to improve income as well as develop sustainable livelihoods and sustainable communities.

6.3 Group Structure of SDBL

The following represents the group structure of SDBL.

6.4 Vision, Mission and Values

Vision To be the apex bank of the co‐operative sector with commercial banking status and the leading partner of national development with global focus. Mission

• SDBL will develop and maintain a permanent customer base and delight our customers by providing high quality, innovative and competitive financial products and services to ensure the highest return possible in the market on shareholders’ capital.

• Providing specialised products/services to special customers such as SANASA movement, the co‐operative sector as well as community based organisations and NGOs.

• Expand existing outreach through the available network and use of modern technology in the banking sector.

• Develop and maintain a highly competent, motivated team of employees committed to the achievement of excellence in service, leading to the realisation of the main goals of ensuring the financial viability of the bank and facilitating national development.


Values

• To foster and maintain the highest ethical standards at all levels of the Bank and its agencies in dealing with customers, stakeholders and competitors.

• To be innovative and demand driven in providing financial services.

• To be courteous and professional in all business dealings.

• To avoid discrimination on the grounds of religion, sex, ethnicity, social status and language.

• To refrain from extending financial services for unethical and illegal pursuits.

6.5 Core Competencies of SDBL

Access to an Island Wide Customer Base through SANASA Movement Over the years SANASA movement has spread to cover the entire island accounting for around 20% of the country’s population in its direct and indirect membership ranks. SANASA movement has spread to the Northern and Eastern regions in the island, opening its doors to a set of customers previously excluded from its reach. SDBL has access to this set of customers who are already familiar with the SANASA concept through its 47 branches and 41 extension branches situated island wide. More than 8,400 credit societies also function as virtual branches of SDBL attracting customers to its ranks. Extensive Experience in the Specialised Field of Micro Credit Although SDBL has only a history of about 14 years, SANASA movement has a history dating back to 1978. The TCCSs movement on which the SANASA movement is based on dates even further back to 1906, illustrating the sustainable nature of the co‐operative model. Unique concepts involved in the microfinance model are familiar to rural communities and will enable SDBL to effectively attract new customers and grow. The valuable expertise gained through the past 100 years of operation of the TCCSs has given SDBL a competitive edge in the microfinance industry. Belongs to SANASA Movement with Institutions in Complementary Fields SANASA group has in its ranks number of institutions in the fields of insurance, education, construction, printing and travel. This wide set of skills within the group itself provide SDBL the ability to carry out a number of tasks internally. For an instance, the education and training programs of SDBL are conducted in the SANASA Campus Limited. Loyal and Competent Human Capital Base The employee base of SDBL is given opportunities to develop themselves in their professional capabilities through a wide variety of internal and external training programs. Obtaining professional qualifications is highly encouraged and SDBL actively promotes staff development through education. SDBL also sends number of employees on overseas training programs to countries such as USA, India, Thailand, Israel, Canada and Korea, enriching them with valuable microfinancing experience.


6.6 Significant Milestones and Awards

1997

- SDBL started the banking operations with one branch under the leadership of

Dr. P.A. Kiriwandeniya on August 6, 1997

2004

- Branch network reached to 15

2005

- Rehabilitation projects carried out to rebuild houses and societies in tsunami

affected areas.

2006

- Launched “Lakdaru” children’s savings account

2007

- Launched SANASA 10 year development plan, “SANASA Dashaka” - Branch network increased to 36

2008

- Launched “Uththamavi” savings account - SDBL won the first place at the Business Excellence Awards conducted by the

National Chamber of Commerce of Sri Lanka in the Specialised Banking and Financial Services Sector

- Started banking operations in Eastern Province - SDBL was acknowledged as Sri Lanka's leading MFI while also being included in the

Top 50 of world's leading MFIs by Forbes Magazine, USA

2009

- Introduced “Jawaya” savings scheme for youth - Branch network increased to 53 - Started banking operations in Northern Province - SDBL Vavuniya branch won the third place in “Uthuru Wasanthaya Loan Scheme”

from the CBSL - NECC was launched - SDBL ranked third in 2009 MIX Global 100 composite ranking of MFIs by MIX

2010

- Branch network increased to 75 - SDBL ranked second in 2010 MIX Global 100 composite ranking of MFIs by MIX

2011

- Launched SDBL “Ayojana” account


6.7 Products and Services

SDBL has a wide variety of products and services catering to personal banking and financing needs as well as developmental banking needs. Most of the products are unique to SDBL, aimed specifically at its customer base of rural communities.

6.7.1 Savings Accounts

Savings accounts can be opened by members and non members with a very low opening balance. Primary aim is to give the members the ability to manage daily transactions with ease and convenience.

• Uththamavi Plus – This is a special savings account with a wide range of benefits aimed at women over 18 years.

• Upahara Senior Citizens Savings – This savings account aimed at senior citizens over 55 years provide an interest rate of 1% above the listed rate of 2 year fixed deposits.

• Lakdaru – Lakdaru children’s savings account can be opened for children below 18 years and the parent/guardian becomes entitled to an emergency accident insurance cover of Rs. one million.

• Jawaya – Jawaya is a special account designed specifically for young and enterprising Sri Lankans.

• SDB Ayojana – This is unique savings scheme where you can deposit a monthly amount at an attractive and high interest rate for a specific period of time with the objective of achieving some specific personal objective.

• Dashaka – Dashaka is a saving scheme to celebrate SDBL’s first decade of success in Sri Lanka’s banking sector.

6.7.2 Fixed Deposits

Fixed deposit account can be opened with an attractive interest rate and a minimum account balance of Rs. 10,000/‐.

6.7.3 Loans

• Diriya Instant Loan – This is an instant loan scheme designed to give Rs. 100,000/‐ within a short span of time to SANASA society members. Conditions include the ability to deposit 10% of the total amount.

• Sahana Housing Loans – This is another loan scheme exclusively offered to SANASA society members for the purpose of purchasing, constructing or repairing their houses.

• Sithumina Consumer Loans – Sithumina consumer loans offered to SANASA society members provide Rs. 100,000/‐ within 7 days for the purpose of purchasing a consumer product.

• Ran Sahana Loans – This loan scheme offered to SANASA society members provide facilities to buy gold or gold jewelry.

• Super Goods Loans – If a SANASA society member wishes to buy electrical equipment, this loan scheme can be used to obtain the necessary financing facilities.

In addition to the above, SDBL provides loans for agriculture, education, business and short term working capital needs.


6.7.4 Leasing

SDBL provides speedy and trouble free leasing facilities to purchase buses, dual purpose vehicles, motor cars, vans, heavy vehicles in the construction field, three wheelers and motorcycles as well as office equipment.

6.7.5 Pawning

Ran Sahana Pawning is a credit facility that can be obtained to meet urgent cash requirements by pawning gold or gold jewelry.

6.7.6 Microcredit

Through microcredit, small loans are extended to those in poverty, designed to spur entrepreneurship. These individuals lack collateral, steady employment and a verifiable credit history. Hence they cannot meet even the most minimal qualifications to gain access to traditional credit. Microcredit is part of microfinance, which is the provision of a wider range of financial services to the very poor.

6.7.7 Automated Teller Machines (ATM) Facilities Provided by SDBL

The Bank commenced the modernisation of the Information Technology (IT) infrastructure in 2008 with the objective of providing modern facilities to customers and improving its management efficiencies. Currently, SDBL is equipped with globally renowned technologies from leading technology providers in the relevant areas. As part of the modernisation of the IT infrastructure, SDBL has launched an ATM network in 10 branches, namely Head Office and First City Branch in Colombo, Jaffna, Karapitiya, Ambalangoda, Matara, Kurunegala, Kegalle, Anuradhapura and Polonnaruwa. Further, SDBL has partnered with Commercial Bank of Ceylon PLC (COMB) with effect from April 2012 in order to expand its ATM network. As such, apart from SDBL’s own ATMs, SDBL customers are also able to transact through over 500 ATMs operated by COMB.


6.8 Branches and Extension Offices of SDBL

6.9 Human Capital

SDBL has identified that the motivation and commitment of its team has been a key reason for its success over the past 14 years. The team has with great discipline and commitment been steadfast in aligning with the vision and mission of the Bank to ensure that the core ideals are upheld. SDBL has introduced a performance based bonus system to motivate the staff. The promotion policy of the organisation has been changed over the years to give due recognition to proven professionalism. As at March 31, 2012, SDBL employed a total of 859 highly committed individuals. The employees of the Bank are not members of any labour union and hence, the Bank has not entered into any agreement with any labour union.


6.9.1 Training Programs

Comprehensive training programs remained an important element of the endeavor to equip SDBL’s team with the levels of knowledge and skill necessary for the execution of set development goals throughout the 14 years of operation. On average around 100 training programs are conducted during a year with widespread participation by employees. The overall training schedule covers a range of subjects from banking and finance to offshore management, totaling 20 diploma, certificate and other programs. Established in 2004, SANASA Campus Limited continues to be the principal arm of the Bank dedicated for internal training. Scholarships are provided to those who complete banking examinations conducted by the Institute of Bankers of Sri Lanka (IBSL), while other professional examinations conducted by Chartered Institute of Management Accountants (CIMA), Sri Lanka Institute of Marketing (SLIM) and Chartered Institute of Marketing (CIM) are also encouraged. Employees have also participated in numerous training programs conducted by Institute of Personnel Management (IPM), Institute of Chartered Accountants of Sri Lanka (ICASL), CBSL, Association of Corporate Lawyers, Ceylon Chamber of Commerce, Bar Association of Sri Lanka, CSE, Aquinas College, Lanka Microfinance Association and other professionally recognised institutes. Facilities have also been provided to send employees for foreign training programs in USA, India, Thailand, Israel, Canada and Korea.

6.10 Corporate Social Responsibility Activities of SDBL

The philosophy at the heart of SDBL is one of social responsibility and community development. SDBL conducts all operations with these concepts at the forefront. SDBL also engages directly in Corporate Social Responsibility (CSR) initiatives, annually allocating a CSR budget, particularly in the area of children's education. SDBL gives scholarships for the primary level children in villages to upgrade their knowledge in the field of technology. SDBL’s CSR activities also extend to water sanitation projects. Numbers of projects have been initiated, particularly after the tsunami and currently these initiatives are moving from relief to rehabilitation and to the development of sustainable lifestyles. With the cessation of war in 2009, a sanitation project worth Rs. 20 million was launched in Eastern Province, 610 toilet units and 158 wells were constructed under the project. SDBL constructed 262 housing units for the benefit of tsunami victims in Eastern and Southern Provinces. SDBL carries out projects to introduce plants such as jackfruit, various vegetables, tea and commercial value timber to communities for cultivation. The project also includes educational programmes in order to educate the farmers to successfully carryout these cultivations. SDBL carried out several social integration programmes where residential workshops for youth of different communities were conducted with the hope of improving communal harmony. Youth groups were given the opportunity to visit areas they had never visited before and interact with communities of different religious, racial and educational backgrounds. SDBL’s aim through its CSR activities is to conduct programs that have a long term impact to the society at large. All the CSR initiatives SDBL has engaged in agrees with the SANASA movement’s philosophy of helping people help themselves, especially the rural poor and other marginalised sections of the population.


6.11 Future Direction, Prospects and Plans of SDBL

6.11.1 Branch Network Expansion

SDBL presently has 47 branches and 41 extension offices totalling to a network of 88 customer service points. The Bank has concentrated on network expansion in rural areas and will continue to focus on this area in view of the development activities taking place in the rural economies. As per the current strategy, SDBL intends opening up of a maximum of five branches during the next two years. The locations to set up new branches have not yet been identified and opening up of the same would primarily depend on the feasibility and obtaining of requisite approvals from CBSL. It is expected that the capital expenditure requirement per branch would be approximately Rs. 5 million whilst recurrent expenditure would be approximately Rs. 200,000 which includes staff salaries and other overheads for upkeep and operations. The Bank intends to utilise internally generated funds for this purpose. The Bank has already set up 9 regional offices to administer the diverse network and may consider further enhancing the operations of the offices in the medium term depending on the performance and financial strength of its existing business operations. At present, a regional office of SDBL consists of a regional manager and one or two additional staff members. The Bank intends to improve the operational efficiency of its current regional offices by providing more authority to the regional managers and increasing the staff strength. This would enable regional offices to reduce their dependency on the SDBL branch network and confer a better service to its customers. Any investment in this regard would be financed through internally generated funds.

6.11.2 Enhancing Technological Competencies

With the objective of building up on the existing IT infrastructure, the Bank intends to leverage on technology by extending modern facilities such as mobile banking, SMS banking, phone banking, internet banking and online transactions in the medium to long term depending on their feasibility and availability of financing. SDBL expects these improvements would enable it to effectively compete with other financial institutions and take SDBL to the 24 hour banking league.

6.11.3 Fee Based Services

SDBL has already made an application to CBSL seeking approval to operate a foreign exchange business and Non‐Resident Foreign Currency (NRFC)/Resident Foreign Currency (RFC) accounts. Approval to carry out such transactions will facilitate the mobilisation of funds from Sri Lankan expatriates, thus increasing the fee based income of SDBL. This will also allow SDBL to provide services to a sector of customers it previously did not have access to. At present, the CBSL is in the process of evaluating the application made by SDBL.

6.11.4 Enhance Social Responsible Banking Services

SDBL has a long illustrious history of empowering and uplifting the neglected communities of Sri Lanka. Social responsibility is both a core value of the Bank as well as a necessity given that a vast majority of shareholders belong to the social group that is typically targeted for CSR projects. The Bank will continue to focus on these core values and provide services aimed specifically at enhancing CSR objectives.


6.12 Major Assumptions Relating to the Future Plans of SDBL

• SDBL expects the macroeconomic environment of the country to be conducive to the banking industry due to the expectations of accelerated economic development to be realised which would in turn increase overall economic activity and demand for credit, especially in the North and East of the country.

• SDBL expects the microcredit requirement of the country to increase in the future as the macroeconomic conditions continues to improve and the development activities are spread to the rural areas of the country.

• Yield and cost structures as well as net interest income margins are assumed on the basis of this macroeconomic environment. The Bank’s plan takes into consideration Sri Lanka’s key development objectives, its priority areas as well as the investment climate and probable fiscal and monetary implications.

• SDBL expects the tax legislation applicable to the Bank at present, either to remain unchanged or to have no adverse impact.

• SDBL expects no adverse changes in the interest rate environment which may have a negative effect on the margin spreads of the Bank.

• Availability of funding to facilitate future lending at an optimum cost.

Please refer Section 10.2 of this Introductory Document for details on risks relating to the future plans of SDBL.

6.13 SDBL ‐ North East Construction Company (Private) Limited

NECC was incorporated on February 26, 2009 with two (2) promoter shares issued at Rs. 100/‐ each. NECC became a subsidiary of SDBL on January 1, 2010, subsequent to the subscription of 5000 new shares of NECC at Rs. 100/‐ each (Rs. 500,000/‐) using internally generated funds of SDBL. NECC was established with the objective of providing affordable housing solutions to low income earning populace of the country. Apart from providing affordable housing solutions, NECC also provides engineering design and construction services to public and private sector organisations as well as national and international funding agencies. In accordance with the directions issued by the Monetary Board of the CBSL in November 1997 [under Section 76 J(1) of the Banking Act, No.30 of 1988 as amended by the Banking (Amendment) Act, No.33 of 1995], LSBs are prevented from holding over 20% of shareholding in a private company for a period exceeding five years from its initial investment. As a part of reducing its stake in NECC, SDBL’s shareholding was reduced to 50% with the equity infusion of Rs. 500,000/‐ (5000 shares at Rs. 100/‐ each) by SANASA Insurance Company Limited on September 1, 2010. The shareholding of SDBL in NECC was further reduced as a result of the transfer of 2500 shares (Rs. 250,000/‐) and 500 shares (Rs. 50,000/‐) in favour of SANASA Campus Limited and employees of NECC on November 23, 2010 and January 31, 2011 respectively. Subsequent to these transfers, SDBL currently holds 20% of NECC. NECC has a stated capital of Rs. 1,000,200/‐ as at December 31, 2011. The Board of Directors of NECC is given under Section 7.4 of the Introductory Document. SDBL has no involvement in management and functions of NECC. SDBL is entitled to receive dividends declared by NECC from time to time and no other benefit is accrued as a result of its shareholding in NECC.


77..00 CCOORRPPOORRAATTEE SSTTRRUUCCTTUURREE

7.1 The Board of Directors of SDBL

The Board of Directors of SDBL is responsible for creating and delivering sustainable stakeholder value through setting up of strategies and execution policies to manage the operation of the Bank in an efficient and effective manner.

The Board of SDBL comprises of nine (9) Directors out of which six (06) are Independent Non‐Executive Directors and three (03) are Non‐Executive Directors.

Table 7‐1: Board of Directors of SDBL

Name Address

Mrs. Muditha Samadani Kiriwandeniya No. 23, the Village Mawatha, Dikhena Watta, Mattegoda

Mr. Ananda Dharmasiri Walisinghe Thoranagahipitiya, Atala

Mr. Tibbotuge Karunasena No.95/A, Mithrananda Mawatha, Kiribathgoda

Mr. Don Padmasiri Kumarage No.03, Makola South, Makola

Dr. Ratnayake Mudiyanselage Karunasinghe Ratnayake 12/44 A, 3rd Lane, Kandahenawatta, Depanama,Pannipitiya

Prof. Weerakoon Mudiyaselage Abeyratne Bandara No 45/9, Rajamahavihara Road, Nawinna, Maharagama

Mr. Udaya Gamini Ramawickrama “Sirikatha”, Meepawala, Poddala, Galle

Mr. Mahinda Vidanapathirana “Weda Nivasa”, Weliva, Morawaka

Mr. Herath Mudiyanselage Gunawansha Bandara Herath 99, Dadurunadigama, Ambakote

7.2 Profiles of the Board of Directors

Mrs. Muditha Samadani Kiriwandeniya – Chairperson

Mrs. S. Kiriwandeniya was appointed as the Chairperson of SDBL in 2011. She possesses senior management experience in the field of participatory development, gender issues management, microfinance and conflict resolution. She is also a Corporate Leader of the SANASA movement. Mrs. Kiriwandeniya has obtained her basic Degree from the University of Peradeniya in Sociology and continued the Master’s Degree in the same field at the University of Saskatchewan, Canada.


Mr. Ananda Dharmasiri Walisinghe – Non‐Executive Director

Mr. D. Walisinghe was appointed to the Board of SDBL in 2006. He has been a Director in SANASA Producers and Consumers Alliance Limited. Mr. Walisinghe has held numerous positions in the MPCS infrastructure, including those of Manager, Development Officer and Internal Auditor. Furthermore, he has held the positions of Accountant and Finance Manager in the Sri Lanka Co‐operative Marketing Federation and Textile Members’ Co‐operative Society. Mr. Walisinghe has Diplomas in Accountancy, Co‐operative Management (Republic of Russia) and Marketing Management (Sri Lanka Institute of Development Administration). Presently, he also serves as the President of the SANASA District Union ‐ Kegalle, and as the coordinator to the SDBL for the Sabaragamuwa Province. Mr. Tibbotuge Karunasena – Independent Non‐Executive Director

Mr. T. Karunasena was appointed to the Board of SDBL in 2007. He has held Directorships in Lanka Clear (Private) Limited and People’s Travels (Private) Limited. Mr. Karunasena began his career with People’s Bank and counts for over 33 years of experience in all aspects of banking. He has a B.A. (Honors) Degree in Economics from the University of Kelaniya. Mr. Don Padmasiri Kumarage – Non‐Executive Director

Mr. P. Kumarage was appointed to the Board of SDBL in 2007. He serves as the Chief Executive Officer (CEO) of People’s Leasing Company PLC, Non‐Executive Director of Lanka Ashok Leyland PLC and the Vice President of the Asian Leasing and Finance Association. Mr. Kumarage has over 32 years of experience in Banking and Finance and brings invaluable expertise and experience to the Board. He is also the Former Chairman of the Leasing Association of Sri Lanka. Mr. Kumarage has a Postgraduate Diploma in Modern Banking and is a Passed Finalist of the CIMA, UK. Dr. Ratnayake Mudiyanselage Karunasinghe Ratnayake – Independent Non‐Executive Director

Dr. K. Ratnayake was appointed as a Director of SDBL in 2009 and serves in the capacity of an Independent Non‐Executive Director. Presently, he also holds the position of Senior Adviser to the Ministry of Higher Education.

Dr. Ratnayake has served as the Executive Director of Ministry of Policy Planning and the Secretary to the Ministry of Samurdhi, Sports and Youth Affairs, the Ministry of Land and Export Agriculture and the Ministry of Finance and Planning. He has also served in National Savings Bank, People’s Bank, Nat Wealth Securities Limited and National Wealth Corporation Limited as a Director and as the Chairman of Strike Riot and Civil Commotion and Terrorism Fund. Dr. Ratnayake has a Ph.D. (London), M.Sc. (Econ) and a B.A. (Hon).


Prof. Weerakoon Mudiyaselage Abeyratne Bandara – Independent Non‐Executive Director

Prof. A. Bandara was appointed to the Board of SDBL in 2009 and serves in the capacity of an independent Non‐Executive Director. Presently, he serves as a Senior Lecturer (Grade 1) in the Department of Finance, Faculty of Management Studies and Commerce, University of Sri Jayewardenepura and as the Director General of the National Institute of Education. He was the Chairman of Pan Asia Banking Corporation PLC and held the position of the Consultant/Advisor to the Ministry of Samurdhi, Rural Development, Youth Affairs and Sports. Prof. Bandara has a Master’s Degree in Business Administration from the University of Ottawa‐Canada and a B.Sc. in Business Administration ‐ Special Degree (2nd Class Upper). He has completed the intermediate examination of the ICASL. Mr. Udaya Gamini Ramawickrama – Independent Non‐Executive Director

Mr. G. Ramawickrama was appointed to the Board of SDBL in 2010. He holds the position of a Director in Federation of Thrift and Credit Co‐operative Societies Limited and Deputy Chairman of the Meepawala Primary Thrift and Credit Co‐operative Society Limited. He is a retired government officer, and has been involved with the SANASA movement for 21 years. Mr. Mahinda Vidanapathirana – Independent Non‐Executive Director

Mr. M. Vidanapathirana was appointed as a Director of SDBL in 2010. He also serves as a Provincial Director to the National Co‐operative Council and Project Director to the Amtrad Holdings Limited. Mr. Vidanapathirana holds 32 years of experience in MPCS such as Agri Co‐operative and District Co‐operative Council as a member of the Board of Directors and as the Chairman. He has a Diploma in Journalism from the University of Colombo. Mr. Herath Mudiyanselage Gunawansha Bandara Herath – Independent Non‐Executive Director

Mr. B. Herath was appointed as a Director of SDBL in 2011. He is the Vice Chairman of Kurunegala District Co‐operative Council and also holds the position of Internal Auditor in a leading private firm in Wariyapola. Mr. Herath has a wide experience in Administration and has held the positions of Acting Assistant Director Administration in the Agricultural Development Authority and the Assistant Superintendent at Rideegama Estate. He holds 25 years of experience as the Chairman of SANASA Society of Kandapola and has also served as the Executive Director in Federation of Thrift and Credit Co‐operative Societies Limited.


7.3 Other Directorships of Board of Directors

Other directorships of the Directors of SDBL are given below.

Table 7‐2: Other Directorships of the Directors of SDBLName of Director Other Directorships Held Mrs. Muditha Samadani Kiriwandeniya Director

SANASA Uththamavi (Guarantee) Company SANASA Campus Limited

Mr. Ananda Dharmasiri Walisinghe DirectorKegalle District Thrift and Credit Union Limited Kegalle SANASA Share Holders Trust Company Limited Thoranagahapitiya Thrift and Credit Society Limited

Mr. Tibbotuge Karunasena None

Mr. Don Padmasiri Kumarage Managing DirectorPeople’s Finance PLC People’s Leasing Fleet Management Limited People’s Leasing Property Development Limited People’s Leasing Havelock Properties Limited People’s Microfinance Limited People’s Insurance Limited Director Financial Ombudsman Sri Lanka (Guarantee) Limited Non‐Executive Director Lanka Ashok Leyland PLC

Dr. Ratnayake Mudiyanselage Karunasinghe Ratnayake

DirectorSANASA Campus Limited SANASA Security Services (Private) Limited Lanka Industrial State Limited

Prof. Weerakoon Mudiyaselage Abeyratne Bandara ChairmanUnited Engineering Services (Private) Limited Director Networth Corporation Limited Networth Securities Limited

Mr. Udaya Gamini Ramawickrama DirectorFederation of Thrift and Credit Co‐operative Societies Limited Bope‐Poddala SANASA Share Holders Trust Company Limited Meepawala Thrift and Credit Co‐operative Society Limited

Mr. Mahinda Vidanapathirana ChairmanMatara District Co‐operative Council Director Morawakkorale Tea Producers Co‐operative Society Limited National Co‐operative Council Small Tea Holders Authority


Other Directorships of the Directors of SDBL Name of Director Other Directorships Held Mr. Herath Mudiyanselage Gunawansha Bandara Herath

ChairmanKandapola Thrift and Credit Co‐operative Society Limited Director Redeegama SANASA Share Holders Trust Company Limited

7.4 Board of Directors of Subsidiary Company

Board of Directors of NECC is tabulated below. Table 7‐3: Details of Board of Directors of NECC

Name of Director Designation

Dr. Podi Appuhami Kiriwandeniya Chairman

Mrs. Muditha Samadani Kiriwandeniya Director

Mr. Nimal Jayantha Bandara Mamaduwa Director

Mr. Bamunuwita Gamage Prashad Samantha Director

Mr. Kandegoda Gamage Leelanada Director

Mr. Nicholas Godfriey Raymond De Silva Director

Mr. Ranjith Gamini Kudaliyanage Director

7.5 Directors’ Interest in Shares 7.5.1 Directors’ Shareholdings in SDBL

The Directors’ direct shareholdings in the Bank as at March 28, 2012 (i.e. date of Initial Listing Application) are given below.

Table 7‐4: Directors’ Direct Shareholding in SDBL

Name of Director Number of Shares Held Percentage of Shareholding (%)

Mrs. Muditha Samadani Kiriwandeniya 1712 0.0071%

Mr. Udaya Gamini Ramawickrama 50 0.0002%

7.5.2 Share Transactions by Directors of SDBL

Share transactions effected by Directors during the one year period preceding the date of the Introductory Document are tabulated below.

Table 7‐5: Share Transactions by Directors

Name of Director Date Nature of theShare Transaction

Number of Shares

Price per Share (Rs.)

Mrs. Muditha Samadani Kiriwandeniya

February 2, 2011 Subscribed to share issue

68 100/‐

September 15, 2011 Subscribed to

share issue 71 100/‐

Other than the aforementioned, there are no other share transactions by the Directors of SDBL within the one year (01) period preceding the date of the Introductory Document.


7.6 Directors’ Emoluments

Aggregate emoluments paid in the form of salaries, bonuses and/or profit sharing payments to the Directors during the FY 2011 amounted to Rs. 6,796,088/‐.

7.7 Directors’ Interest in Assets

The Directors of SDBL have no interest in assets acquired, disposed or leased by the Bank during the two (02) years preceding the date of this Introductory Document. Furthermore, it is not proposed that the Directors will hold any interest in assets to be acquired, disposed, or leased by the Bank in the two (02) years subsequent to the listing of SDBL.

7.8 Directors’ Interest in Contracts

There are no contracts or arrangements in force as at the date of the Initial Listing Application in which the Directors of SDBL are materially interested in relation to the business of the Bank.

7.9 Statement – Board of Directors

No Director or a person nominated to become a Director of the Bank has been involved in any of the following:

• A petition under any bankruptcy laws filed against such person or any partnership in which he was a partner or any corporation of which he was an executive officer; and

• Conviction for fraud, misappropriation or breach of trust or any other similar offence which the CSE considers a disqualification

7.10 Corporate Governance Practices

SDBL governance framework encompasses a comprehensive structure that links the governance of the Bank with performance management, enabling the Bank to maintain good governance throughout the entire organisation. Board of Directors of SDBL remains highly committed and adheres to the principles and best practices of corporate governance for the benefit of its stakeholders.

In adhering to the accepted best practices of corporate governance, the office of the Chairman and CEO are kept separately to clearly segregate the balance of power and responsibility. Further, the Board encompasses with proper blend of both Non‐Executive and Independent Directors. It remains crucial that in order to continue instilling a culture of good governance and compliance, SDBL discharges its duties transparently, with accountability and in a professional manner.

Five Committees have been established to streamline this process and to ensure that all internal controls are instituted for better governance.

• Audit Committee

• Human Resources and Remuneration Committee

• Credit Committee

• Selection/Nomination Committee

• Integrated Risk Management Committee


These committees comprise Directors drawn from the SDBL Board, who are well qualified and possess extensive experience in the relevant disciplines. They form a core group to analyse and implement strategies for the Board to work on. Each committee has a Terms of Reference (ToR) which is reviewed periodically by the Board detailing clear guidelines on responsibilities. These committees meet to discuss business and operational issues and suggest appropriate recommendations. The relevant Directors are expected to be proactive in the committees to which they are appointed.

7.10.1 Audit Committee

The Audit Committee of SDBL is empowered by the Board to investigate all matters within the ToR, internal controls and ensure that shareholder and other stakeholder interests are safeguarded by the Bank. The Audit Committee consists of three Independent Non‐Executive Directors, namely Prof. Weerakoon Mudiyaselage Abeyratne Bandara, Dr. Ratnayake Mudiyanselage Karunasinghe Ratnayake and Mr. Udaya Gamini Ramawickrama. Prof. Weerakoon Mudiyaselage Abeyratne Bandara functions as the Chairman of the Audit Committee. The Deputy General Manager ‐ Credit and the Head of Internal Audit and Inspection Department attend Audit Committee meetings by invitation. The Audit Committee is responsible for the following:

• Act as an independent unit to investigate any matter related to accounting and finance arising in the Bank.

• Monitor and review the adequacy and effectiveness of the internal control systems and processes, making recommendations to improve the process when and where necessary.

• Safeguard the interests of shareholders and stakeholders.

• Ensure compliance with all statutory requirements and Bank policies.

• Evaluate the quality of internal and external auditors.

• Review and analyse internal audit reports and consider findings, recommendations and corrective action taken by the management to overcome the detected deficiencies.

• Approve audit plans in advance and provide a forum for discussion of issues and recommendations highlighted in the audit reports.

• Be the conduit to communication among the Directors, External Auditors and Management.

• Monitor and assess the independence of the External Auditor.

• Recommend appointment and re‐appointment or removal of the External Auditor according to the existing and relevant professional standards.

• Review the External Auditors’ management letter and management's response.

• Review issues relating to breach of ethics including fraud, accounting issues, employees' misconduct, corruption and regulatory violations.

• Ensure that appropriate accounting policies are adopted in the preparation of the financial reports circulated among shareholders.

• Retain consultants/advisors as and when necessary to assist the Committee in the attainment of its objectives.


• Monitor any changes in accounting practices or policies and the standard of corporate conduct in transactions with related parties.

• Review productivity of the assets of the Bank.

• Identify and suggest remedial measures to be adopted for the prevention of conflict of interest.

Further, the Bank has a strong and effective Internal Audit and Inspection Department which reports to the Committee regularly.

7.10.2 Human Resources and Remuneration Committee

The Human Resources and Remuneration Committee of SDBL consists of three Independent Non‐Executive Directors namely Mr. Tibbotuge Karunasena, Mr. Mahinda Vidanapathirana and Mr. Herath Mudiyanselage Gunawansha Bandara. Mr. Tibbotuge Karunasena functions as the Chairman of the Human Resources and Remuneration Committee. Meetings are held as and when necessary. The main objective of the remuneration policy of the Bank is to enhance the efficiency and productivity of employees and retain the motivated and competent staff. The Human Resources and Remuneration Committee is responsible for the following:

• Determine the remuneration policy (salaries, allowances and other financial payments) relating to Directors, CEO and key management personnel of the Bank.

• Approve selection of personnel in the senior manager grade and above and determine the remuneration of those officers.

• Set goals and targets for the Directors, CEO and the key management personnel.

• Evaluate the performance of the CEO and key management personnel against the set targets and goals periodically and determine the basis for revising remuneration, benefits and other payments of performance‐based incentives.

• Review staff recruitment, termination, remuneration and incentive policies.

• Ensure that the proper management plans for officers are in place.

• Approve policies and procedures relating to human resources.

• Review training and development programs of the Bank and banking college. The CEO shall be present at all meetings of the Committee, except when matters relating to the CEO are being discussed.

7.10.3 Selection/Nomination Committee

The Selection/Nomination Committee of SDBL comprises of five Directors namely, Mrs. Muditha Samadani Kiriwandeniya, Mr. Tibbotuge Karunasena, Mr. Ananda Dharmasiri Walisinghe, Dr. Ratnayake Mudiyanselage Karunasinghe Ratnayake and Mr. Don Padmasiri Kumarage. Mr. Tibbotuge Karunasena functions as the Chairman of the Selection/Nomination Committee. The CEO may attend the meetings by invitation.


The Selection/Nomination Committee is responsible for the following:

• Implement a procedure to select/appoint new Directors, CEO and key management personnel.

• Consider and recommend (or not recommend) the re‐election of current Directors, taking into account the performance and contribution made by the Director concerned towards the overall discharge of the Board’s responsibilities.

• Set the criteria such as qualifications, experience and key attributes required for eligibility to be considered for appointment or promotion to the post of CEO and the key management positions.

• Ensure that Directors, CEO and key management personnel are fit and proper persons to hold office as specified in the criteria given under Section 3(3) of Corporate Governance Direction issued by the CBSL.

• Consider and recommend from time to time, the requirements of additional/new expertise and the succession arrangements for retiring Directors and key management personnel.

• Ensure that formal, rigorous and transparent procedure for the appointment of new Directors to the Board is in place.

• Review the composition of the Board and consider and advice the Board as to adopt any changes, which may deem necessary to achieve a balance, appropriately experienced and qualified Board.

• Ensure that plans are in place for ordinary succession for appointments to the Board and other senior management personnel.

• Review the Board structure, within the guide lines given by the CBSL and make recommendation to the Board with regard to any adjustments that are deemed necessary.

• Propose names for appointment as nominated Directors to the Board.

7.10.4 Credit Committee

The Credit Committee of the Bank is responsible to undertake regular reviews of the Bank's credit policy in order to maintain a healthy credit portfolio. This involves the Committee to monitor portfolio quality, non‐performing advance ratio, recovery processes, provisioning and credit audit findings, in addition to reviewing credit approvals made under delegated authority. The Committee is empowered to approve concessions to borrowers and the rescheduling of advances in the event of repayment difficulties. If a proposed amount exceeds the limit specified by the powers vested in the management, this request is referred to the Credit Committee. The Committee is also tasked with reviewing the progress of recoveries. The Committee comprises of Mr. Tibbotuge Karunasena, Mr. Ananda Dharmasiri Walisinghe and Mr. Don Padmasiri Kumarage. Mr. Tibbotuge Karunasena functions as the Chairman of the Credit Committee. All matters pertaining to recommendations of advances and relevant subjects are placed before the full Board of Directors for ratification at monthly meetings. Where credit approval is required urgently, the Committee can call for a special meeting in order to expedite action.


7.10.5 Integrated Risk Management Committee

The Integrated Risk Management Committee comprises of three Directors of SDBL namely, Dr. Ratnayake Mudiyanselage Karunasinghe Ratnayake, Prof. Weerakoon Mudiyaselage Abeyratne Bandara and Mr. Don Padmasiri Kumarage. Mr. Don Padmasiri Kumarage functions as the Chairman of the Integrated Risk Management Committee. The Committee undertakes the following responsibilities:

• Assess all risks including credit, market, liquidity, operational and strategic risks to the Bank on a monthly basis through appropriate risk indicators and management information.

• Review the adequacy and effectiveness of all management level committees such as the Credit Committee and Asset Liability Committee to address specific risks and to manage those risks within quantitative and qualitative risk limits.

• Take prompt corrective action to mitigate the effects of specific risks and in the event such risks are beyond prudent levels, take corrective action based on the Bank's policies, regulatory and supervisory recommendations.

• Assist the Board in setting risk strategy policies, liaising with management and in the discharge of its duties, relating to corporate accountability and associated risk in terms of management assurance and reporting.

• Review and assess the nature, role, responsibility and authority of the risk management function.

• Ensure that the Bank has implemented an effective ongoing process to identify and evaluate the key risks and threats to the business.

• Take appropriate action against officers failing to identify specific risks and institute prompt corrective actions to mitigate such risks as recommended by the Committee.

7.11 Corporate Management of SDBL

Corporate Management of SDBL is enriched with extensive business insight and experience in their respective fields. Brief profiles of the Corporate Management of SDBL are provided below. Mr. Nimal Jayantha Bandara Mamaduwa – General Manager/CEO 41/31C, Epitamulla Road, Pitakotte, Kotte

Mr. N. Mamaduwa joined SDBL in 2003 and currently functions as the General Manager/CEO of SDBL. He has held the position of Chief Manager at Hatton National Bank PLC and possesses 36 years of experience in the banking sector.

Mr. Mamaduwa has a Diploma in Bank Management from IBSL and a Diploma in Credit Management from Association of Sri Lanka Institute of Credit Management. He is a Fellow Member of Chartered Management Institute (UK).


Mr. Kandegoda Gamage Leelanada – Senior Deputy General Manager

Mr. Leelanada joined SDBL in 1997. He served SDBL in the positions of Assistant General Manager, Deputy General Manager and currently serves as a Senior Deputy General Manager. Mr. Leelanada has a B.Sc in Management (2nd Class Upper) from the University of Sri Jayewardenepura and is a Licentiate of Part‐I in ICASL. He has completed the Intermediate Examination at the IBSL and a course on Private Financial Institutions for Private Enterprise Development (FIPED) at Harvard University, USA. He also holds a Diploma in Human Resource Management. Mr. Saman Abeysiridara Samarakoon – Deputy General Manager (IT)

Mr. Samarakoon was appointed as the Deputy General Manager (IT) in 2011. He has previously served as a Systems Engineer in DMS Software Engineering and as a System Software Specialist, Team Leader and Manager at IBM World Trade Corporation. Mr. Samarakoon has a B.Sc. in Computer Science and Engineering (2nd Class Upper) from the University of Moratuwa and is also a Chartered Engineer from Institute of Engineers Sri Lanka. Mr. Bamunuwita Gamage Prashad Samantha – Assistant General Manager (Finance and Fund Mobilisation)

Mr. Samantha joined SDBL in 2008 as Assistant General Manager in Finance and Fund Mobilisation. He is an Associate Member of ICASL and holds a Bachelor of Business Administration Degree from the University of Sri Jayewardenepura. Mr. Ediriwickrema Arachchige Aruna Shantha Ediriwickrema – Assistant General Manager (Credit and Development) Mr. Ediriwickrema joined SDBL in 1999 and has served in the positions of Manager and Senior Manager prior to been appointed the Assistant General Manager of Credit and Development. He has served as a Branch Manager and as an Officer at Ruhunu Development Bank. Mr. Ediriwickrema has a B.Sc. in Business Administration from the University of Sri Jayewardenepura and is an Associate Member of the IBSL. He is a Licentiate of Part‐I and Part‐II of the ICASL. Mr. Hemal Chaminda Lokugeegana – Assistant General Manager (Human Resource Management and Development)

Mr. Lokugeegana joined SDBL in 2003. He has served at Nilkamal Eswaran Plastics (Private) Limited as the Human Resource Manager. Mr. Lokugeegana has a B.B. Management (Human Resource Special) from the University of Kelaniya and a Post Graduate Diploma in Management from the University of Rajarata. He is also an Affiliated Member of IPM, Associate Member of IBSL and Licentiate of Part‐I and Part‐II and Professional Part‐I of the ICASL.


Mr. Aruna Priyashantha Vithanage – Assistant General Manager (Establishment, Branch Operations and Marketing)

Mr. Vithanage joined SDBL in 1997 and has held the posts of Executive Officer, Assistant Manager, Manager, and Senior Manager and is presently the Assistant General Manager of Establishment, Branch Operations and Marketing. He has a B.Com. (Special) from the University of Sri Jayewardenepura and has completed the Intermediate Level in the IBSL.

7.12 Company Secretary

Mrs. Tamarika Rodrigo – Company Secretary

Mrs. Rodrigo was appointed as the Secretary of SDBL in 2009. She completed her legal internship at the Company Secretary Department of the Merchant Bank of Sri Lanka and joined the Ceylon Chamber of Commerce where she held the positions of Executive Assistant, Assistant Secretary Legal and Assistant Secretary General. Prior to joining SDBL, Mrs. Rodrigo was the Assistant Company Secretary of Ceylinco Finance PLC. She is an Attorney‐at‐law from Sri Lanka Law College and counts over 16 years of experience in the field of Company Secretarial and Registrars works.

7.13 Corporate Management’s Emoluments

Total emoluments paid to the Corporate Management in the form of salaries, bonuses and/or profit sharing payments during the FY 2011 amounted to Rs. 12,421,800/‐.

7.14 Statement – CEO

The CEO of SDBL has not been involved in any of the following:

• A petition under any bankruptcy laws filed against such person or any partnership in which he was a partner or any corporation of which he was an executive officer;

• Convicted for fraud, misappropriation or breach of trust or any other similar offence which the CSE considers a disqualification.


88..00 OOTTHHEERR IINNFFOORRMMAATTIIOONN OONN SSDDBBLL

8.1 Relationship with Key Customers and Suppliers of SDBL

Customers

As at February 29, 2012, SDBL had a customer base of approximately 788,000 account holders across various demographic segments of the country. The Bank maintains a cordial relationship with all of its customers and is not dependent on any particular customer for a significant portion of its business. Furthermore, it strictly adheres to the single borrower limit guidelines set by the CBSL. Suppliers

SDBL makes use of public deposits as its main source of financing. As at February 29, 2012, the public deposits base of SDBL amounted to approximately Rs. 16.1 billion. The distribution of 10 largest deposits of SDBL is as follows.

Table 8‐1: Distribution of 10 Largest Deposits of SDBL

Amount Number of Deposits

Above Rs. 30 million 2

Rs. 20 million ‐ Rs. 30 million 6

Less than Rs. 20 million 2

Total 10

As such, SDBL has no reliance on any single depositor or group of depositors. Furthermore, given its current credit rating of ‘BB+(lka)’ with a stable outlook from Fitch Rating Lanka Limited and long and short term financial institution ratings of ‘BBB’ and ‘P3’ respectively with a stable outlook from RAM Ratings (Lanka) Limited, SDBL is capable of borrowing from banks in order to finance the growth of its lending portfolio in the event of any shortage of funds.

8.2 Dividend Policy

The declaration and payment of dividends will be based on a number of factors, including but not limited to the Bank’s earnings, cash flow position, future capital investments, overall financial conditions and any other factors which the Board of Directors may deem relevant. Details of dividends declared during the preceding financial years have been stated under 2.5 ‐ “Dividends” in the “Accountants’ Report” presented in Section 12.2 of the Introductory Document.

8.3 Details of Material Indebtedness

Details of securities sold under refinance agreements and refinance borrowings as at December 31, 2011 are disclosed under Note 18 and Note 20 of the Audited Financial Statements for the year ended December 31, 2011.


Apart from those mentioned in Note 30.1 of the Audited Financial Statements for the year ended December 31, 2011, there are no material capital commitments and guarantees outstanding as at December 31, 2011. As at December 31, 2011, there are no lease, lease purchase or hire purchase commitments of SDBL. There are no liabilities under acceptance other than of trading nature and no acceptance credit outstanding as at December 31, 2011. Apart from those mentioned in Note 34 of the Audited Financial Statements for the year ended December 31, 2011, there are no mortgages and charges on assets of SDBL as at December 31, 2011.

8.4 Working Capital

The Board is of the opinion that the working capital is sufficient for the purpose of carrying out day to day operations of the Bank.

8.5 Litigation, Disputes and Contingent Liabilities

Apart from those details given under Note 30.2 of the Audited Financial Statements for the year ended December 31, 2011, there are no other legal, arbitration or mediation proceedings against SDBL which may have or have had in the recent past affected the financial position or profitability of the Bank as at December 31, 2011. As at December 31, 2011, there are no penalties imposed by any regulatory or state authority against the Bank. Apart from those details given under Note 30.2, there are no other contingent liabilities that would affect current and future profits of the Bank as at December 31, 2011.

8.6 Material Contracts

The material contracts entered into by the Bank during the two (02) year period preceding the date of the Introductory Document are as follows.

• Refinance loan agreement entered into between the Monetary Board of the CBSL and SDBL on June 4, 2010 under the “Prosperity” special loan scheme for micro, small and medium scale enterprises.

• Agreement entered into between Rabo Bank, Netherland and SDBL on September 9, 2010 to grant a sum of Rs. 39,356,000/‐ to SDBL for the purpose of financing the Northern Province Development Programme.

• Agreement entered into between National Savings Bank (NSB) and SDBL on December 5, 2011, to provide SDBL with a loan amounting to Rs. 500 million for agricultural lending.

• Agreement entered into between NSB and SDBL on April 11, 2012 to provide SDBL with a loan amounting to Rs. 500 million for agricultural lending.


• Subscription agreement entered into between SDBL and International Finance Corporation (IFC) on April 27, 2012, for the subscription of Nine Hundred Thousand (900,000) ordinary voting shares of SDBL subject to shareholder approval and satisfaction of certain conditions specified in such agreement. These shares are to be issued to IFC prior to SDBL obtaining a listing on the CSE at a price of Rupees One Hundred and Ten (Rs. 110/‐) per share. In addition, a policy agreement has been signed on April 27, 2012 between the two parties, covering operational policy matters, which shall become effective only upon the issuance of the shares subscribed for by IFC as referred to in the aforementioned subscription agreement.

8.7 Details of Commissions Paid

No commission has been paid in the two (02) years preceding the Introduction or payable for subscribing or agreeing to subscribe or procuring or agreeing to procure subscriptions for any shares of the Bank.

8.8 Details of Benefits Paid to Promoters

No benefit has been paid or given within the two (02) years preceding the Introduction and there are no benefit intended to be paid or given to any promoter.

8.9 Management Agreement

There are no management agreements presently in force or currently being considered by SDBL.


9.0 CCAAPPIITTAALL SSTTRRUUCCTTUURREE As at the date of this Introductory Document, the stated capital of the Bank is Sri Lanka Rupees Two Billion Five Hundred and Twenty Six Million Five Hundred and Thirty Two Thousand Two Hundred (Rs. 2,526,532,200/‐).

9.1 An Overview of the Stated Capital

An overview of the movements in the stated capital of SDBL for the two (02) years ended December 31, 2011 and up to May 28, 2012 is set forth below.

There has not been any change in the stated capital of the Bank since May 28, 2012.

Table 9‐1: Movement in Stated Capital of SDBL (January 1, 2010 – May 28, 2012)

Fully Paid Ordinary Shares Funds Awaiting

Allotment Stated Capital

Number of Shares Rs. Rs. Rs.

Balance as at January 1, 2010 15,466,650

1,546,665,000

21,748,605 1,568,413,605

Funds collected awaiting allotment during the year

251,854,801 251,854,801

Issue of shares during the year @ Rs.100/‐ per share (Refer Note 1)

2,271,126 227,112,600 (227,112,600) ‐

Balance as at December 31, 2010

17,737,776 1,773,777,600 46,490,806 1,820,268,406

Balance as at January 1, 2011 17,737,776 1,773,777,600 46,490,806 1,820,268,406

Funds collected awaiting allotment during the year

‐ ‐ 607,263,794 607,263,794

Issue of shares during the year @ Rs.100/‐ per share (Refer Note 2)

6,537,546 653,754,600 (653,754,600) ‐

Balance as at December 31, 2011

24,275,322 2,427,532,200 ‐ 2,427,532,200

Issue of shares to IFC on May 28, 2012 @ Rs. 110/‐ per share

900,000 99,000,000 ‐ 99,000,000

Balance as at May 28, 2012 25,175,322 2,526,532,200 ‐ 2,526,532,200


Note 1 ‐ Issue of Shares from January 1, 2010 – December 31, 2010

Table 9‐2: Issue of Shares from January 1, 2010 – December 31, 2010

Date of Allotment Number of Fully Paid Ordinary Shares Issued

@ Rs.100/‐ each January 01, 2010 394,424January 31, 2010 264,478February 28, 2010 204,287March 31, 2010 275,185May 30, 2010 90,071June 30, 2010 7,607July 31, 2010 13,923August 31, 2010 75,171September 15, 2010 56,185September 30, 2010 56,388October 15, 2010 170,991October 31, 2010 50,440November 15, 2010 137,104November 30, 2010 81,861December 15, 2010 174,891December 29, 2010 97,031December 31, 2010 121,089 Total 2,271,126

Note 2 ‐ Issue of Shares from January 1, 2011 – December 31, 2011

Table 9‐3: Issue of Shares from January 1, 2011 – December 31, 2011

Date of Allotment Number of Fully Paid Ordinary Shares Issued

@ Rs.100/‐ each Number of Allotments

January 15, 2011 98,583 526January 31, 2011 134,721 949February 15, 2011 168,141 1,145February 30, 2011 167,656 753March 15, 2011 273,334 1,370March 31, 2011 221,783 986April 15, 2011 184,152 911April 30, 2011 358,233 1,825May 15, 2011 231,121 1,298May 31, 2011 282,635 1,564June 15, 2011 229,273 1,336June 30, 2011 393,408 2,040July 15, 2011 140,053 779July 31, 2011 244,726 993August 15, 2011 234,025 1,455August 26, 2011 140,578 593August 31, 2011 151,788 821September 15, 2011 133,450 708September 30, 2011 281,435 1,513October 15, 2011 198,292 858October 31, 2011 521,110 1,684November 15, 2011 127,049 1,007November 29, 2011 213,932 998November 30, 2011 1,408,068 3,197 Total 6,537,546 29,309


A detailed schedule of the share allotments made during the period from April 01, 2011 to May 28, 2012, including the names of shareholders, addresses, national identity card numbers/company registration numbers and the total allotments for the period, is available for inspection at the registered office of the Bank. A schedule of shareholders with aggregate allotments made over 1000 shares during the period from April 01, 2011 to May 28, 2012 is provided in Annex B. The proceeds of the above share issues have been utilised to finance the lending activities of the Bank. There had not been any share issuances by the Bank since May 28, 2012. As at the date of this Introductory Document, the Bank has no other classes of shares other than the abovementioned ordinary voting shares. There is a restriction on the ownership of voting shares in the Bank by a single shareholder (both resident and non‐resident) to a maximum of 15%, in terms of Banking Act Direction No. 2 of 2007. The Bank has not given any option to any person to subscribe for shares of the Bank.

There had not been any shares and/or debentures issued or agreed to be issued by the Bank during the two (02) preceding years as fully or partly paid up for a consideration other than cash.

9.2 Details Pertaining to the Locked‐in Shares

In terms of the directive of the Securities and Exchange Commission of Sri Lanka (SEC) made under Circular No. 01/2011 on February 7, 2011 and subsequent revision made under Circular No. 03/2011 on February 24, 2011, the shares allotted during the one (01) year period prior to the date of listing, would be subject to a “lock‐in” for a period of one (01) year from the respective dates of allotment. There had been share allotments made by SDBL during the one (01) year period prior to the date of listing via private placements. Hence, such allotted shares of SDBL would be locked‐in and would not be available for secondary market trading on the CSE upon SDBL obtaining a listing of its shares, until the expiry of the aforesaid one (01) year period from the respective dates of allotment. Details pertaining to the shares that are would be “locked‐in” consequent to the same being issued during the period from April 01, 2011 to May 28, 2012, to the identified/prospective investors through private placements are as follows. Table 9‐4: Details Pertaining to the Locked‐in Shares of SDBL

Date of Allotment Number of Shares Locked‐in

Percentage of Locked‐in Shares From the Total Shares

Issued (approx.)

Date of Un‐locking*

April 15, 2011 184,152 0.73% April 16, 2012 April 30, 2011 358,233 1.42% April 30, 2012 542,385 2.15% May 15, 2011 231,121 0.92% May 15,2012 May 31, 2011 282,635 1.12% May 31, 2012 513,756 2.04%


Details Pertaining to the Locked‐in Shares of SDBL

Date of Allotment Number of Shares Locked‐in

Percentage of Locked‐in Shares From the Total Shares

Issued (approx.)

Date of Un‐locking*

June 15, 2011 229,273 0.91% June 15, 2012 June 30, 2011 393,408 1.56% July 02, 2012 622,681 2.47% July 15, 2011 140,053 0.56% July 16, 2012 July 31, 2011 244,726 0.97% July 31, 2012 384,779 1.53% August 15, 2011 234,025 0.93% August 15, 2012 August 26, 2011 140,578 0.56% August 27, 2012 August 31, 2011 151,788 0.60% September 03, 2012 526,391 2.09% September 15, 2011 133,450 0.53% September 17, 2012 September 30, 2011 281,435 1.12% October 01, 2012 414,885 1.65% October 15, 2011 198,292 0.79% October 15, 2012 October 31, 2011 521,110 2.07% October 31, 2012 719,402 2.86% November 15, 2011 127,049 0.50% November 15, 2012 November 29, 2011 213,932 0.85% November 29, 2012 November 30, 2011 1,408,068 5.59% November 30, 2012 1,749,049 6.95% May 28, 2012 900,000 3.57% May 28, 2013 Total 6,373,328 25.32%

*Market day immediately following the last day of lock‐in.

9.3 Shareholder Restructuring Process

Subsequent to the requirement to obtain a listing on the CSE as discussed under Section 4.2 of this Introductory Document, SDBL was concerned that any significant change in the share ownership structure could lead to a disintegration of the Bank from the co‐operative movement losing its identity and the broader objective of serving the community through rural economic development. With a view to address this issue, SDBL initiated the process of restructuring the shareholding held by the co‐operative societies involving the formation of “Trust Companies” and the transfer of the shares owned by co‐operative societies to these “Trust Companies”.

The main objective of this restructure was to consolidate the shareholding of SDBL that was scattered amongst the 4000 co‐operative societies to a manageable number of identified corporate entities (i.e. about 300 in numbers) and thereby impart influence on the overall operations and direction of SDBL. As at April 30, 2012, 623 co‐operative societies have transferred 5,801,589 shares to 106 “Trust Companies” and in return have accepted to the preference shares issued by the respective “Trust Companies”.


9.4 Shareholders of SDBL

Tabulated below are the top ten (10) shareholders of SDBL as at May 28, 2012.

Table 9‐5: Top 10 Shareholders of SDBL

Name of the Shareholder Number of Shares Percentage ofShareholding (%)

SANASA Insurance Company Limited 1,050,416 4.17%

People’s Leasing Company PLC 1,000,000 3.97%

International Finance Corporation 900,000 3.57%

R.F.Chandler 717,400 2.85%

ETIMOS Lanka (Private) Limited 590,229 2.34%

Kegalle SANASA Share Holders Trust Company Limited 491,423 1.95%

Polgahawela SANASA Share Holders Trust Company Limited 314,474 1.25%

Warakapola SANASA Share Holders Trust Company Limited 308,045 1.22%

Federation of Thrift and Credit Co‐operative Societies Limited 271,467 1.08%

Wennappuwa SANASA Share Holders Trust Company Limited 199,469 0.79%

Other 63,290 shareholders 19,332,399 76.79%

Total 25,175,322 100.00%

The details of public holding of SDBL as at May 28, 2012 are as follows.

Table 9‐6: Details of Public Holding of SDBL

Number of Shares

Percentage From the Total Shares Issued

Percentage of the Shares Locked‐in as

Against the Total Shares Issued

Percentage of the Shares not Locked‐in as Against the Total

Shares Issued

Date on Which the Entire Number of

Locked‐in Shares will Cease to be Locked

25,171,597 99.9852% 22.2430% 77.7422% May 28, 2013

The following shareholdings have not been considered in the computation of the public holding of SDBL as at May 28, 2012.

Table 9‐7: Non‐Public Holding of SDBL

Name of the Shareholder Relationship with theCompany

Number of Shares

Percentage of Shareholding (%)

Mrs. Muditha Samadani Kiriwandeniya Chairperson 1,712 0.0068%Mr. Udaya Gamini Ramawickrama Independent

Non‐Executive Director 50 0.0002%

Mr. Malinda Seneviratne Spouse of Chairperson 1,063 0.0042%Mr. Nimal Jayantha Bandara Mamaduwa

General Manager/CEO 900 0.0036%

Total 3,725 0.0148%


9.5 Share Transactions by the Top 10 Shareholders of SDBL

Tabulated below are the details of share transactions by top ten (10) shareholders of SDBL during the period from April 01, 2011 to May 28, 2012.

Table 9‐8: Share Transactions by the Top 10 Shareholders of SDBLName of the Shareholder

Date Nature of Transaction Number of Shares Subscribed/ Purchased


SANASA Insurance Company Limited

31‐Oct‐11 Subscribed for share issue 250,000 100/‐

30‐Nov‐11 Subscribed for share issue 725,000 100/‐

Kegalle SANASA Share Holders Trust Company Limited

20‐Mar‐12 Purchase from Kegalle Co‐operative Urban Limited

27,052 100/‐

20‐Mar‐12 Purchase from Kegalle SANASA District Union Limited

319,681 100/‐

20‐Mar‐12 Purchase from Buluruppa PTCCS Limited

30,000 100/‐

20‐Mar‐12 Purchase from Ilwana Dandeniya PTCCS Unlimited

13,500 100/‐

20‐Mar‐12 Purchase from Akiriyagala PTCCS Limited

4,170 100/‐

20‐Mar‐12 Purchase from Minuwangamuwa PTCCS Limited

13,356 100/‐

20‐Mar‐12 Purchase from Dewela Medagama Parakum PTCCS Limited

32,000 100/‐

20‐Mar‐12 Purchase from Kehelwatta PTCCS Limited

33,605 100/‐

20‐Mar‐12 Purchase from Dewela Pallegama PTCCS Limited

18,059 100/‐

Polgahawela SANASA Share Holders Trust Company Limited

20‐Mar‐12 Purchase from Mawatta PTCCS Unlimited

11,664 100/‐

20‐Mar‐12 Purchase from Pothuhera PTCCS Unlimited

50,000 100/‐

20‐Mar‐12 Purchase from Wadakada PTCCS Unlimited

16,301 100/‐

20‐Mar‐12 Purchase from Rathmalgoda PTCCS Unlimited

11,735 100/‐

20‐Mar‐12 Purchase from Ahugoda TCCS Limited 100,000 100/‐

20‐Mar‐12 Purchase from Polgahawela DTCCS Limited

22,469 100/‐

20‐Mar‐12 Purchase from Bavilagamuwa PTCCS Unlimited

20136 100/‐

20‐Mar‐12 Purchase from Panaliya Palatha TCCS Limited

7,990 100/‐

20‐Mar‐12 Purchase from Aragoda TCCS Unlimited

24,087 100/‐

20‐Mar‐12 Purchase from Godawela TCCS Unlimited

50,092 100/‐


Share Transactions by the Top 10 Shareholders of SDBLName of the Shareholder

Date Nature of Transaction Number of Shares Subscribed/ Purchased


Warakapola SANASA Share Holders Trust Company Limited

20‐Mar‐12 Purchase from Thalgahadeniya TCCS Limited

100,000 100/‐

20‐Mar‐12 Purchase from Alawwatta TCCS Limited

63,416 100/‐

20‐Mar‐12 Purchase from Dorawaka Yaddehimulla TCCS Limited

57,592 100/‐

20‐Mar‐12 Purchase from Bopitiya TCCS Unlimited

22,029 100/‐

20‐Mar‐12 Purchase from Algama TCCS Limited 17,670 100/‐

20‐Mar‐12 Purchase from Niyadurupola PTCCS Unlimited

11,113 100/‐

20‐Mar‐12 Purchase from Marapitiya TCCS Limited

15,271 100/‐

20‐Mar‐12 Purchase from Gasnawa PTCCS Unlimited

10,030 100/‐

20‐Mar‐12 Purchase from Thabugala PTCCS Unlimited

10,924 100/‐

Wennappuwa SANASA Share Holders Trust Company Limited

20‐Mar‐12 Purchase from Marawila Weerahena TCCS Limited

84,506 100/‐

20‐Mar‐12 Purchase from Yakdessawa TCCS Limited

5,002 100/‐

20‐Mar‐12 Purchase from Keenakele Janapada Sanwardana PTCCS Unlimited

5,190 100/‐

20‐Mar‐12 Purchase from Kirimatiyana TCCS Limited

33,147 100/‐

20‐Mar‐12 Purchase from Thambarawila TCCS Limited

71,624 100/‐

International Finance Corporation

28‐May‐12 Subscribed for share issue 900,000 110/‐

There had not been any shares of the Bank either being sold or purchased by the top ten (10) shareholders since May 28, 2012.

9.6 Details of Other Changes to Stated Capital

The Bank has not carried out any redemption or repurchase of shares or any reduction of stated capital in the last two (02) years preceding the date of this Introductory Document.

9.7 Details of Convertible Debt Securities

The Bank has no outstanding convertible debt securities as at the date of this Introductory Document.

9.8 Details of Shares Sold Privately in Conjunction with the Introduction

No shares are being sold privately in conjunction with this Introduction.


9.9 Free Transferability of Shares

Other than the restriction on the transferability of the shares detailed in Table 9‐4 and the shareholding limitations placed by the Banking Act No. 30 of 1988, there are no restrictions on the transferability of the shares and shares shall be freely transferable subsequent to the shares being listed on the CSE.

9.10 Take‐over Offers

There have been no take‐over offers by third parties in respect of the Bank’s shares during the two (02) years preceding the date of this Introductory Document.

The Bank has not made any take‐over offers in respect of shares of a third party during the past two (02) years preceding this Introductory Document.


1100..00 IINNVVEESSTTMMEENNTT CCOONNSSIIDDEERRAATTIIOONN AANNDD AASSSSOOCCIIAATTEEDD RRIISSKKSS

Prior to investing in the shares of SDBL, prospective investors should pay particular attention to the potential risks faced by the Bank and its business activities that may either be within or outside the control of the Bank. It is recommended that prospective investors review the entire Introductory Document in detail and pay particular attention to the following risks (which are not exhaustive) in connection with their investment decision. If any of the considerations or uncertainties given below develops into actual events, the Bank’s business, financial conditions or results of operations and prospects could be materially and adversely affected and this may impact the market price of the shares.

10.1 Risks Related to the Business

10.1.1 Interest Rate Risk

SDBL’s profitability, along with that of other banks, is significantly linked to the volatility of interest rates. A large portion of the Bank’s profits depends on the conversion of its liabilities of deposits and borrowings into assets of loans and securities. A maturity mismatch could exist between the lending portfolio and correspondent funding that could affect the interest rate spreads due to interest rate volatility.

10.1.2 Competition with Other Banks

SDBL faces competition from other LSBs which offer similar and competitive products and services. This competition may hinder the Bank’s lending capacity and limit the growth of its deposit base which in turn will deter the growth and market share of the Bank and could adversely affect the operations and its financial condition.

10.1.3 Liquidity Risk

Liquidity risk is the risk of inability to meet the obligations as they become due. The main problem in liquidity management for a bank is that, while bills are mostly predictable, both in timing and amount, customer demands for funds are highly unpredictable. Therefore, banks should have sufficient liquid assets to meet the payment obligations arising out of its liabilities. Liquid assets can be defined as the assets that could immediately be converted to a means of payment/cash at little or no cost. Liquidity management is achieved by maintaining an optimum balance between its liquid assets and liabilities. Based on historical experience/industry benchmarks, an optimum ratio between liquid assets and liabilities could be arrived at that would ensure the solvency of the Bank. All LSBs are required to maintain a specified minimum amount of liquid assets by regulation. Being an LSB, SDBL would not mobilise funds through demand deposits, which is a major contributor to the unpredictable nature of the liabilities of a bank. In addition, SDBL has throughout its history maintained more than the required level of liquid assets specified by CBSL. Therefore, SDBL has managed the liquidity risk and is capable of managing it in the future to a greater degree.


10.1.4 Credit Risk

Credit default risk occurs when a borrower is unable to repay its loans. Eventually, after a certain period, the loan is written off. The banks are required by law to maintain an account for loan loss reserves to cover these losses. The banks reduce credit risk by screening loan applicants, requiring collateral for a loan and credit risk analysis. In order to reduce credit risk, SDBL has diversified the loan portfolios by granting loans to businesses in different industries and to borrowers in different geographical locations. In addition, as a provider of microfinance, SDBL has been lending low amounts of funds, to a larger customer base resulting in a very low exposure to individual borrowers.

10.1.5 Local Economic Conditions may Affect the Ability to Become Profitable

The prospects of SDBL depend on its ability to grow the lending portfolio and expand its depositor base. A decline in the economy may hinder the growth of the Bank. However, since the end of the long running war, consumer confidence and spending have shown significant growth and combined with the stable political conditions, the prospects for the growth of SDBL and the finance industry remain prosperous.

10.1.6 Risk on Collateral

The Bank has obtained several assets such as property as collateral for its loans. Valuations of these assets could change due to factors such as changes in tax regulations, reduction in liquidity and technological obsolescence. A decrease in the value of these assets could in turn result in the value of collateral being less than the outstanding loan. In such scenario, additional loan loss provisions would be required which in turn would increase the Bank’s risk. However, at the time of providing the loan, the Bank in most cases requires the value of collateral to be higher than the loan, reducing the risk of collateral.

10.1.7 Risk of Changes to the Credit Rating of SDBL

Credit rating of ‘BB+ (lka)’ affirmed by Fitch Ratings (Lanka) Limited and long and short term financial institution ratings of ‘BBB’ and ‘P3’ affirmed by RAM Ratings (Lanka) Limited, determine the Bank’s borrowing costs and its access to the debt capital markets amongst other factors. Any decline in these credit ratings could affect the borrowing cost of the Bank, the availability of debt capital from financial markets and the capability of raising deposits from the public.

10.1.8 Regulatory Environment

The banking industry in Sri Lanka is one of the most highly regulated sectors in the country due to the dealings with public monies and the impact it has on the economy. The CBSL governs the operation of banks in the country and does so by imposing regulations on minimum reserve requirements, provisioning for Non‐Performing Loans (NPLs), interest rates, capital adequacy ratios, capital requirements etc. Compliance with these requirements may increase the Bank’s costs and may have an adverse impact on the financial performance and the competitiveness of the Bank.


Compliance with enforced standards may prove to be a difficult task depending on the macro environmental factors and the Bank may be subject to regulatory action. This would reduce the public confidence and could amount to withdrawal of deposits and an increase in borrowing costs. The Bank monitors the developments in the regulatory environment on a continuous basis and takes every possible measure to comply with the same.

10.1.9 Loss of Key Employees

The Bank’s profitability is dependent on its key employees meeting expectations, and these employees leaving the Bank will lead to setbacks especially in the short run. The Bank however, has placed importance in seeing to the well being and satisfaction of its employees by ensuring good human resource initiatives including relevant training, attractive remuneration, welfare schemes and fringe benefits.

10.1.10 Operational Risk

Operational risks include fraud, errors by employees or third parties, failure to comply with applicable regulatory requirements and conduct of business rules, equipment failures, natural disasters or the inadequacy or failure of systems and controls, including those of the Bank and third parties. Many types of operational risk, such as the destruction of property, are covered by insurance. However, sound management, as seen at SDBL enables to mitigate operational risk.

10.1.11 Risk of Changes in Tax Legislation

The Bank’s activities and profitability are subject to tax computed in accordance with the legislation.

10.1.12 Reputational Risk

Negative public opinion can result from the actual or perceived manner in which the Bank conducts its business activities or from actual or perceived practices in the banking and financial industry. Negative public opinion, such as the ripple effect caused by the failure and instability of other banking and financial institutions may adversely affect the Bank’s ability to maintain and attract customers and, in particular, public deposits.

10.2 Risks Related to the Future Plans of SDBL

10.2.1 Branch Network Expansion

The branch network expansion of SDBL has to be approved by CBSL. SDBL’s branch expansion plans are based on the present guidelines set out by CBSL and may be adversely affected if the anticipated approvals from CBSL are either delayed or if the regulations are changed in the future. To address this, at present, SDBL has used extension offices to expand coverage rather than establishing fully fledged branches. More details of the affects of changes in the regulatory environment are discussed in Section 10.1.8.


Being a smaller bank in the market, the growth expected through the branch expansion might be negatively affected, especially in light of aggressive branch expansion plans of existing larger and more established players. More details of the competitive environment of SDBL are discussed in Section 10.1.2. SDBL’s planned growth through branch expansion is based on favourable economic conditions in those regions. However, the economic conditions in each of these regions may change in the future adversely affecting the Bank achieving this objective. More details of the risks related to economic conditions are discussed in Section 10.1.5.

10.2.2 Enhancing Technological Competencies

SDBL expects to leverage on technology to provide services through electronic channels in the future with the introduction of facilities such as mobile banking, SMS banking, phone banking, internet banking and online transactions. The implementation of these channels may increase the technology risk of the Bank. Technology risks may lead to adverse impacts such as breach of confidentiality, identity theft, interruption of services and violation of data integrity. Furthermore, there are inherent risks associated with electronic channels such as hacking and virus attacks, implementation and post implementation risk, arising due to inexperience of the staff with the systems and the time for adaptation. Any upgrade to the systems may itself have issues that affect the banking activities, increasing the operational risks. However, SDBL intends to carry out a detailed study in selecting new systems and facilities to minimise operational and technological risks. Also, SDBL has already used protective mechanisms such as firewalls and encryption to minimise the risks arising from the usage of electronic channels and would further strengthen the same in the future depending on the facilities to be implemented. In addition, the Bank expects to undertake such implementation of any facility in a manner that would minimise the implementation risks.

10.2.3 Fee Based Services

SDBL would be exposed to direct foreign exchange risk when it operates foreign exchange business and NRFC/RFC accounts. SDBL would also be affected by regulatory policy changes of CBSL with regard to NRFC/RFC accounts.

In order to reduce the exposure to foreign exchange risk, SDBL plans to establish specific foreign exchange exposure limits branch wise, in addition to an overall exposure limit to the Bank subsequent to the commencement of the said operation.

10.3 Capital Market Related Risks

10.3.1 No Prior Market Exists for the Shares of SDBL

Prior to the listing of shares of SDBL, there has been no public market for the Bank’s shares. There can be no assurance that an active trading market for the shares will develop or if developed, will be sustained, or that the market price of shares shall not decline.


10.3.2 Price Volatility in the Secondary Market

The price of the shares may fluctuate due to and not limited to the following: variations in operating results, changes in operating environment, and transitions in the regulatory front, technological advancements/obsolescence, macroeconomic factors and external events. Price of SDBL shares may follow general investor sentiment prevalent in the market at a given time. In addition, the price of shares of SDBL in the market will fluctuate as a result of share trading volumes.

10.3.3 Shares May Not be a Suitable Investment for All Investors

Each potential investor in shares must determine the suitability of that investment in light of its own circumstances. In particular, each potential investor should:

• have sufficient knowledge and experience to evaluate shares, the merits and risks of investing in shares and the information contained or incorporated by reference in this Introductory Document;

• have access to, and knowledge of, appropriate analytical tools to evaluate, in the context of its particular financial situation, an investment in shares and the impact the shares will have on its overall investment portfolio;

• have sufficient financial resources and liquidity to bear all of the risks of an investment in shares, including where the settlement currency is different from the currency in which such investor’s principal financial activities are principally denominated;

• understand thoroughly the terms of shares and be familiar with any relevant indices and financial markets; and

• be able to evaluate (either alone or with the help of a financial advisor) possible scenarios for economic, interest rate and other factors that may affect its investment and its ability to bear the applicable risks.

Sanasa Development Bank Limited | Introductory Document 56

1111..00 SSTTAATTUUTTOORRYY DDEECCLLAARRAATTIIOONN Statutory Declaration by the Directors May 28, 2012 We the undersigned, who are named in the Introductory Document as Directors of SANASA Development Bank Limited, hereby declare and confirm that we have read the provisions of the CSE Listing Rules and of the Companies Act No. 07 of 2007 and any amendments to it relating to the issue of this Introductory Document and those provisions have been complied with. This Introductory Document has been seen and approved by us and we collectively and individually accept full responsibility for the accuracy of the information given and confirm that after making all reasonable enquires and the best of our knowledge and belief, there are no other facts the omission of which would make any statement herein misleading or inaccurate. Where representations regarding the future performance of the Bank have been given in the Introductory Document, such representations have been made after due and careful enquiry of the information available to the Bank and making assumptions that are considered to be reasonable at the present point in time in the best judgment.

Name Designation Signature

Mrs. Muditha Samadani Kiriwandeniya Chairperson/ Non‐Executive Director

Sgd.

Mr. Ananda Dharmasiri Walisinghe Non‐ Executive Director Sgd.

Mr. Tibbotuge Karunasena Independent Non‐Executive Director

Sgd.

Mr. Don Padmasiri Kumarage Non‐Executive Director Sgd.

Dr. Ratnayake Mudiyanselage Karunasinghe Ratnayake Independent Non‐Executive Director

Sgd.

Prof. Weerakoon Mudiyaselage Abeyratne Bandara Independent Non‐Executive Director

Sgd.

Mr. Udaya Gamini Ramawickrama Independent Non‐Executive Director

Sgd.

Mr. Mahinda Vidanapathirana Independent Non‐Executive Director

Sgd.

Mr. Herath Mudiyanselage Gunawansha Bandara Herath Independent Non‐Executive Director

Sgd.


1122..00 FFIINNAANNCCIIAALL IINNFFOORRMMAATTIIOONN OOFF SSDDBBLL

12.1 Summary Financial Statements, Key Financial Ratios and Reference Price of Shares of SDBL

12.1.1 Summary Financials

Salient extracts of the Income Statements and the Balance Sheets of SDBL highlighting the performance for the five year period ended December 31, 2011 are presented below.

Table 12‐1: Summarised Income Statements of SDBL

All figures in Rs. million For the Year Ended December 31, 2007 2008 2009 2010 2011

Interest Income 1,207 1,983 2,660 2,941 2,941

Net Interest Income 494 774 1,194 1,718 1,740

Other Income 44 56 74 83 96

Profit Before Tax 161 303 593 848 648

Profit After Tax 54 97 208 323 345

Table 12‐2: Summarised Balance Sheets of SDBL

All figures in Rs. million

As at December 31, 2007 2008 2009 2010 2011

Loans and Advances 5,375 7,383 9,428 11,131 14,787

Other Assets 3,120 3,932 5,750 6,409 6,385

Total Assets 8,495 11,315 15,178 17,540 21,172

Deposits 6,036 8,232 10,887 12,622 15,241

Other Liabilities 1,729 2,249 2,499 2,738 2,876

Total Liabilities 7,765 10,481 13,386 15,360 18,117

Shareholders’ Funds 730 834 1,793 2,180 3,056

Total Liabilities and Shareholders’ Funds 8,495 11,315 15,178 17,540 21,172


12.1.2 Key Financial Ratios

The key financial ratios in relation to SDBL for the year ended December 31, 2011 are given below.

Table 12‐3: Key Financial Ratios

Ratio Definition December 31,

2010 December 31,

2011

Net Interest Margin (NII / Average Interest Bearing Assets) X 100 11.42% 9.80%

Non‐Interest Income to Total Income

[Non‐Interest Income / (NII + Non‐Interest Income) ] X 100 4.61% 5.24%

Net Interest Spread [(Interest Income / Average Interest Bearing Assets) – (Interest Expense / Average Interest Bearing Liabilities)] X 100

10.05% 8.65%

Net Interest Margin Percentage

(Net Interest Income/Interest Income)*100 58.42% 59.18%

Cost to Income Ratio

[Operating Cost before Provisioning / (NII + Non‐Interest Income)] X 100

49.31% 64.72%

Bank Burden Ratio [(Operating Cost before Provisions – Non‐Interest Income) / Operating Cost before Provisions] X 100

90.65% 91.90%

Gross NPL Ratio [(Gross NPLs ‐ IIS) / (Gross Loans ‐ IIS)] X 100 5.84% 4.49%

Net NPL Ratio [(Gross NPLs ‐ IIS ‐ SLLP) / (Gross Loans ‐ IIS)] X 100 4.48% 3.33%

Gross NPL Coverage [(GLLP + SLLP) / (Gross NPLs ‐ IIS)] X 100 36.17% 35.21%

Statutory Liquid Asset Ratio

(Liquid Assets / Deposits) X 100 25.60% 20.51%

Loans To Deposits (Net Loans / Customer Deposits) X 100 96.17% 106.16%

Core Capital Ratio (Core Capital / Total Risk Weighted Assets) X 100 15.61% 17.37%

Total Capital Ratio (Total Capital / Total Risk Weighted Assets) X 100 16.30% 17.77%

Return on Assets (Profit Before Tax / Average Total Assets) X 100 3.95% 2.78%

Return on Equity (Profit After Tax / Average Shareholders' Funds) X 100 16.28% 13.19%

Net Asset Value Per Share (Rs.)

Net Assets / No. of shares at the end of the period 122.92 125.87

Earnings Per Share (Rs.)

Profit After Tax / Weighted Average No. of shares for the period

19.93 17.94


12.1.3 Reference Price of Shares of SDBL

The reference price of a share of SDBL is Rs. 125/‐. An approximation of the net asset value of a share was used to determine the said reference price. The net asset value of a share of SDBL is calculated as follows. SDBL Group’s equity and earnings attributable to the equity holders of the parent have been considered in the following calculation. Net Asset Value of SDBL Group as at December 31, 2011* Rs. 3,056,689,900

Issued Number of Shares of SDBL as at December 31, 2011* 24,275,322

Net Asset Value of a SDBL Share Rs. 125.93

* As per the Audited Financial Statements of SDBL Based on the reference price, the price multiples of SDBL are as follows. Price Earnings Ratio Earnings of SDBL Group for the year ended December 31, 2011* Rs. 346,329,513 Weighted Average Number of Shares of SDBL for the year ended December 31, 2011*

19,254,194

Earnings per SDBL Share Rs. 17.99

Reference Price Rs. 125.00

Price Earnings Ratio 6.95 times

* As per the Audited Financial Statements of SDBL Price to Book Value Ratio Total Assets of SDBL Group as at December 31, 2011* Rs. 21,179,954,083Total Liabilities (including Minority Interest) of SDBL Group as at December 31, 2011*

Rs. 18,123,064,183

Book Value of Equity of SDBL Group as at December 31, 2011* Rs. 3,056,889,900

Issued Number of Shares of SDBL as at December 31, 2011* 24,275,322

Book Value of a SDBL Share Rs. 125.93

Reference Price Rs. 125.00

Price to Book Value Ratio 0.99 times

* As per the Audited Financial Statements of SDBL


12.2 Accountants’ Report for the inclusion in the Introductory Document

BW/RM/DM 19 March 2012 Private & Confidential The Board of Directors SANASA Development Bank Limited No.12, Edmonton Road Colombo 06. Dear Sirs Accountants’ Report for Inclusion in the Introductory Document of SANASA Development Bank Limited This report has been prepared for the inclusion in the Introductory Document issued in connection with the listing of ordinary voting shares of SANASA Development bank Limited via an Introduction on the Colombo Stock Exchange. We have examined the financial statements of the SANASA Development Bank Limited (the “Bank”) and the consolidated financial statements of the Bank and its subsidiary (“the Group”) and report as follows. 1. Incorporation

SANASA Development Bank Limited is a Limited Liability Company incorporated on 06 August, 1997 and domiciled in Sri Lanka. It is a registered specialised bank under the banking Act No. 30 of 1988 and amendments thereto.

2. Financial Statements

2.1 Five‐Year Summary of Audited Financial Statements

A summary of Income Statements, Balance Sheets, Statements of Changes in Equity and Cash Flow Statements of SANASA Development Bank Limited for the financial years ended 31 December 2007 to 31 December 2011, and a summary of Group Consolidated Income Statements, Balance Sheets, Statements of Changes in Equity and Cash Flow Statements of the Group for the financial years ended 31 December 2009 to 31 December 2011 based on the audited financial statements are set out in Section 12.3 of the Introductory Document.

2.2 Audit Reports

We have audited the financial statements of the Bank for the years ended 31 December 2007 to 31 December 2011 and the consolidated financial statements of the Group for the years ended 31 December 2009 to 31 December 2011 Unqualified audit opinions have been issued for the said financial years.


2.3 Audited Financial Statements for the Year Ended 31 December 2011

Our audit report on the financial statements as at 31 December 2011 and for the year then ended together with such financial statements comprising the Income Statement, Balance Sheet, Statement of Changes in Equity and Cash Flow Statement along with the accounting policies and notes thereon is given in Section 12 of the Introductory Document.

2.4 Accounting Policies The financial statements of the Bank the years ended 31 December 2007 to 31 December 2011 and the consolidated financial statements of the Group for the years ended 31 December 2009 to 31 December 2011 comply with Sri Lanka Accounting Standards. The accounting policies of the Bank and the Group are stated in detail in the financial statements of SANASA Development Bank Limited. There were no material changes in the accounting policies of the Bank, except for adoption of revised Sri Lanka Accounting Standards during the period 31 December 2007 to 31 December 2011.

2.5 Dividends The Bank has declared dividends in respect of Ordinary Voting Shares for the years ended 31 December 2007 to 31 December 2011 in the following manner.

Year Dividend Paid(Rs.)

Dividend per Share (Rs.)

2007 69,206,228/‐ 14/‐2008 93,943,080/‐ 14/‐2009 155,740,787/‐ 12/‐2010 161,273,380/‐ 10/‐2011* 121,376,610/‐ 5/‐

*The Bank has proposed final dividend for 2011 amounting Rs. 5/‐ per share to be approved at the AGM.

2.6 Events Occurring After the Balance Sheet Date

There were no significant events that occurred after the last balance sheet date. Yours faithfully


12.3 Five Year Summary of Financial Statements









12.4 Audit Report and Financial Statements as at December 31, 2011
























































































AANNNNEEXX AA –– MMEEMMBBEERRSS AANNDD TTRRAADDIINNGG MMEEMMBBEERRSS OOFF TTHHEE CCSSEE Members of the CSE

Acuity Stockbrokers (Private) Limited Level 6, Acuity House 53, Dharmapala Mawatha Colombo 03 Tel: 011 2206206 Fax: 011 2206298‐9 E‐mail: [email protected]

Asha Phillip Securities Limited Level 4, “Millennium House” 46/58, Navam Mawatha Colombo 02 Tel: 011 2429100 Fax: 011 2429199 E‐mail: [email protected]

Asia Securities (Private) Limited Level 21, West Tower World Trade Centre Echelon Square Colombo 01 Tel: 011 2423905, 011 5320000 Fax: 011 2336018 E‐mail: [email protected]

Assetline Securities (Private) Limited 282, Kaduwela Road Battaramulla Tel: 011 4700111, 011 2307366 Fax: 011 4700112 E‐mail: [email protected]

Bartleet Religare Securities (Private) Limited Level “G”, “Bartleet House” 65, Braybrooke Place Colombo 02 Tel: 011 5220200 Fax: 011 2434985 E‐mail: [email protected]

Capital TRUST Securities (Private) Limited 42, Sir Mohamed Macan Markar Mawatha Colombo 03 Tel: 011 5335225 Fax: 011 5365725 E‐mail: [email protected]

CT Smith Stockbrokers (Private) Limited 4‐14, Majestic City 10, Station Road Colombo 04 Tel: 011 2552290‐4 Fax: 011 2552289 E‐mail: [email protected]

D N H Financial (Private) Limited Level 16, West Tower World Trade Centre Colombo 01 Tel: 011 5700777 Fax: 011 5736264 E‐mail: [email protected]


J B Securities (Private) Limited 150, St. Joseph Street Colombo 14 Tel: 011 2490900, 077 2490900‐1 Fax: 011 2430070 E‐mail: [email protected]

John Keells Stockbrokers (Private) Limited 130, Glennie Street Colombo 02 Tel: 011 2326003, 011 2338066‐7 Fax: 011 2342068 E‐mail: [email protected]

Lanka Securities (Private) Limited 228/2, Galle Road Colombo 04 Tel: 011 4706757, 011 2554942 Fax: 011 4706767 E‐mail: [email protected]

Nation Lanka Equities (Private) Limited 44, Guildford Crescent Colombo 07 Tel: 011 4714300, 011 4714388‐9 Fax: 011 2387228 E‐mail: [email protected]

NDB Stockbrokers (Private) Limited 5th Floor, NDB Building 40, Navam Mawatha Colombo 02 Tel: 011 2314170‐8 Fax: 011 2314180 E‐mail: [email protected]

SC Securities (Private) Limited 2nd Floor, 55, D. R. Wijewardena Mawatha Colombo 10 Tel: 011 4711000 Fax: 011 2394405 E‐mail: [email protected]

Somerville Stockbrokers (Private) Limited

137, Vauxhall Street Colombo 02 Tel: 011 2329201‐5, 011 2332827, 011 2338292‐3 Fax: 011 2338291 E‐mail: ssb‐[email protected]


Trading Members of the CSE

Arrenga Capital (Private) Limited Level 23, East Tower World Trade Centre Colombo 01 Tel: 011 7277000‐98 Fax: 011 7277099 Email: [email protected]

Capital Alliance Securities (Private) LimitedLevel 5, "Millennium House" 46/58, Navam Mawatha Colombo 02 Tel: 011 2317777 Fax: 011 2317788 Matara Branch Tel: 041 4390610

Claridge Stockbrokers (Private) Limited 10, Gnanartha Pradeepa Mawatha Colombo 08 Tel: 011 2697974 Fax: 011 2677576 E‐mail: [email protected]

First Guardian Equities (Private) Limited 32nd Floor, East Tower World Trade Centre Colombo 01 Tel: 011 5884400 Fax: 011 5884401 E‐mail: [email protected]

Heraymila Securities Limited Level 8, South Wing Millennium House 46/58, Navam Mawatha Colombo 02 Tel: 011 2359100 Fax: 011 2305522 E‐mail: info‐[email protected]

IIFL Securities Ceylon (Private) Limited 27th Floor, East Tower World Trade Centre Colombo 01 Tel: 011 2333000 Fax: 011 2333383 E‐mail: [email protected]

LOLC Securities (Private) Limited Level 18, West Tower World Trade Centre Echelon Square Colombo 01 Tel: 011 7880880 Fax: 011 2434771 Kurunegala Branch Tel: 037 7201221

New World Securities (Private) Limited 2nd Floor, 45/2, Braybrooke Street Colombo 02 Tel: 011 2358700‐20 Fax: 011 2358701 E‐mail: [email protected]


SMB Securities (Private) Limited 47, Dharmapala Mawatha Colombo 03 Tel: 011 5232091 Fax: 011 2339292 E‐mail: [email protected] Jaffna Branch Tel: 071 8736499

SKM Lanka Holdings (Private) Limited 35/1, Alwis Place Colombo 03 Tel: 011 2344444 Fax: 011 2434198 E‐mail: [email protected] Jaffna Branch Tel: 021 2221596

Taprobane Securities (Private) Limited 2nd Floor 10, Gothami Road Colombo 08 Tel: 011 5328200 Fax: 011 5328277 E‐mail: [email protected]

TKS Securities (Private) Limited 19‐01, East Tower World Trade Centre Colombo 01 Tel: 011 7857799 Fax: 011 7857857 E‐mail: [email protected]

Richard Pieris Securities (Pvt) Limited 69, Hyde Park Corner Colombo 02 Tel: 011 7448900 Fax: 011 2675064 E‐mail: [email protected] Wattala Branch Tel: 077 3413261


AANNNNEEXX BB –– SSCCHHEEDDUULLEE OOFF SSHHAARREE AALLLLOOTTMMEENNTTSS

The schedule of shareholders with aggregate allotments made over 1000 shares during the period from April 01, 2011 to May 28, 2012 is given below.

Shareholders of SDBL with Aggregate Allotments Over 1000 Shares During the Period from April 01, 2011 to May 28, 2012

Issued at Rs. 100/‐ per share


15‐Apr‐11 30‐Apr‐11 15‐May‐11 31‐May‐11 15‐Jun‐11 30‐Jun‐11 15‐Jul‐11 31‐Jul‐11 15‐Aug‐11 26‐Aug‐11 31‐Aug‐11 15‐Sep‐11 30‐Sep‐11 15‐Oct‐11 31‐Oct‐11 15‐Nov‐11 29‐Nov‐11 30‐Nov‐11 28‐May‐12

Total Number of Shares Allotted

1 SANASA Insurance Company Limited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 250,000 ‐ ‐ 725,000 ‐ 975,000 2 International Finance Corporation ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 900,000 900,000 3 Matale District Education Worker's TCCS Limited ‐ ‐ ‐ ‐ ‐ 30,700 ‐ 19,300 ‐ 1,000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 51,000 4 Kegalle DTCCS Union Limited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 30,000 ‐ 30,000 5 Alawwattha TCCS Limited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 30,000 ‐ ‐ ‐ ‐ 30,000 6 Makandana Morenda Niungama TCCS Limited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 25,485 ‐ 25,485 7 Ukwatta TCCS Unlimited ‐ ‐ ‐ ‐ ‐ 10,000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 10,064 ‐ ‐ ‐ ‐ 20,064 8 Bope TCCS Limited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 20,000 ‐ ‐ 20,000 9 Ambagaswewa TCCS Unlimited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 20,000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 20,000 10 Kamburupitiya Nagarika TCCS Limited ‐ ‐ ‐ ‐ ‐ 2,000 ‐ 1,000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 15,968 ‐ 18,968 11 Thalgahadeniya TCCS Limited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 15,000 ‐ ‐ ‐ 2,450 ‐ 17,450 12 Marawila Weerahena TCCS Unlimited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 12,000 ‐ ‐ 12,000 13 Walalgoda TCCS Limited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,000 ‐ ‐ ‐ ‐ ‐ ‐ 10,000 ‐ ‐ 11,000 14 Pohaddaramulla TCCS Limited ‐ ‐ ‐ ‐ ‐ ‐ ‐ 700 ‐ ‐ ‐ ‐ ‐ 10,000 ‐ ‐ ‐ ‐ ‐ 10,700 15 Werahera Pallehama TCCS Limited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 10,000 ‐ 10,000 16 Professor.P.Wilson ‐ ‐ ‐ ‐ ‐ ‐ ‐ 10,000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 10,000 17 Mrs.W.I.S.De Seram. ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 10,000 ‐ ‐ ‐ ‐ ‐ ‐ 10,000 18 Dr.A.S.Welandawe ‐ ‐ ‐ ‐ ‐ ‐ 10,000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 10,000 19 Ms.H.P.Mangalika ‐ ‐ ‐ ‐ ‐ ‐ 10,000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 10,000 20 Mr.S.B.Jayasingha ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 10,000 ‐ ‐ 10,000 21 Mr.D.A.A.Dissanayaka ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 10,000 ‐ ‐ ‐ ‐ ‐ 10,000 22 Mrs.R.A.Ambawatte ‐ ‐ ‐ ‐ ‐ ‐ ‐ 10,000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 10,000 23 Mrs.L.A.Susima ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 10,000 ‐ ‐ ‐ ‐ ‐ ‐ 10,000 24 Mrs.G.P.R.Perera ‐ ‐ ‐ ‐ ‐ ‐ ‐ 10,000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 10,000 25 Mr.S.K.H.Vithana ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 10,000 ‐ ‐ ‐ ‐ 10,000 26 Mrs. W.A.N.M.De Seram. ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 10,000 ‐ ‐ ‐ ‐ ‐ ‐ 10,000 27 S.P.Kapilarathna ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 10,000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ 10,000 28 Ms. D.A.S.Weerasinghe ‐ ‐ ‐ ‐ ‐ 100 ‐ ‐ ‐ ‐ ‐ ‐ 9,900 ‐ ‐ ‐ ‐ ‐ ‐ 10,000 29 Boragodawatta TCCS Limited ‐ ‐ ‐ ‐ ‐ ‐ ‐ 10,000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 10,000 30 Pothuhara TCCS Unlimited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 10,000 ‐ 10,000 31 Godawela TCCS Unlimited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 10,000 ‐ ‐ ‐ ‐ ‐ ‐ 10,000 32 Polgahawela DTCCS Union Limited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 10,000 ‐ 10,000 33 Mr.K.K.A.Premalal ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 9,000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ 9,000 34 Pahala Karavita TCCS Limited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 8,721 ‐ 8,721 35 Mr. P.R.Senarathna ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 8,500 ‐ 8,500 36 Mr.G.M.S.B.Herath ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 8,250 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 8,250







37 Ambanpitiya Uraulla TCCS Limited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 8,000 ‐ 8,000 38 Apaladeniya TCCS Unlimited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 7,808 ‐ 7,808 39 Kithulwala TCCS Unlimited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 6,700 ‐ 7,700 40 Nawala Kosswattha TCCS Limited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 7,500 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 7,500 41 KaluketiyawattaTCCS Unlimited ‐ ‐ ‐ ‐ 1,000 ‐ ‐ 5,000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,500 ‐ ‐ 7,500 42 Pudaluoya TCCS Unlimited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 7,131 ‐ 7,131 43 Dr.R.M.A.Bowatta ‐ 7,000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 7,000 44 Mrs.S.P.C.Chandrakanthi ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 6,000 ‐ 6,000 45 Mr.L.Arambewela ‐ 5,000 1,000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 6,000 46 Mr.W.C.Gunarathna ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 4,000 ‐ ‐ 2,000 ‐ ‐ 6,000 47 Hettimulla TCCS Limited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 5,430 ‐ 5,430 48 Rathmalgoda TCCS Unlimited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,103 ‐ ‐ ‐ ‐ 4,235 ‐ 5,338 49 Delwala TCCS Unlimited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,000 ‐ ‐ 4,000 ‐ 5,000 50 Mr.L.Dahanayake ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 5,000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 5,000 51 Mr.W.A.N.Chandrasiri ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 5,000 ‐ 5,000 52 Mr.A.T.M.Jayantha Kurera ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 5,000 ‐ 5,000 53 Ms.T.A.D.A.Malkanthi ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 5,000 ‐ ‐ 5,000 54 Mrs.H.S.D.Gunasekara 1,200 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,000 ‐ ‐ ‐ 1,800 ‐ 5,000 55 Mrs.M.V.P.R.Arambewela ‐ 5,000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 5,000 56 Mrs.W.P.Swarnalatha ‐ 5,000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 5,000 57 Mr.W.L.N.Dharmasiri ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 5,000 ‐ 5,000 58 Mr.N.I.Perera ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 5,000 ‐ 5,000 59 MeegahawattaTCCS Limited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 5,000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 5,000 60 Malabe East TCCS Limited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 5,000 ‐ 5,000 61 Kandaoluwawa TCCS Limited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 5,000 ‐ ‐ ‐ ‐ ‐ ‐ 5,000 62 Hiripathwella TCCS Unlimited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 5,000 ‐ ‐ ‐ 5,000 63 Medagodalla TCCS Unlimited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 5,000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 5,000 64 Makandura Nagara TCCS Unlimited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 5,000 ‐ 5,000 65 Minuwangoda Manawa SanwardanaTCCS Limited ‐ ‐ ‐ 5,000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 5,000 66 Ihala Biyanwila No.01 TCCS Limited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 640 ‐ ‐ ‐ ‐ ‐ ‐ 4,000 ‐ 4,640 67 Madiha Godikanda TCCS Limited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 4,334 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 4,334 68 Mr.D.Kalansooriyaarachchi ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 4,000 ‐ ‐ ‐ ‐ 4,000 69 Udugama Sumangala Himi ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 4,000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 4,000 70 Mr.W.M.P.S.L.Thamel ‐ ‐ ‐ 4,000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 4,000 71 Mr.H.A.W. Priyankara ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 4,000 ‐ ‐ ‐ ‐ ‐ 4,000 72 Mr.K.R.Gunarathna ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 4,000 ‐ 4,000 73 Athurugiriya south TCCS Limited ‐ ‐ 2,000 ‐ ‐ ‐ ‐ ‐ ‐ 2,000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 4,000 74 Badalgama TCCS Limited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 4,000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ 4,000 75 Palamuree TCCS Unlimited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 4,000 ‐ 4,000 76 Dorawaka Yaddehimulla TCCS Limited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 4,000 ‐ 4,000 77 Doraweruwa TCCS Unlimited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 4,000 ‐ ‐ 4,000 78 Egodagama TCCS Unlimited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 4,000 ‐ ‐ ‐ ‐ ‐ 4,000







79 Delwagura TCCS Limited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 4,000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ 4,000 80 Thambarawila TCCS Limited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 4,000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 4,000 81 Halpandeniya TCCS Unlimited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 3,956 ‐ 3,956 82 Mr. S.P.Gamage ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 3,900 ‐ 3,900 83 Wataraka Vijaya east TCCS Unlimited ‐ ‐ ‐ ‐ 1,900 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,000 ‐ ‐ 3,900 84 Thelijjavila Kadukanna TCCS Unlimited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 3,773 ‐ 3,773 85 Mr.K.G.Leelananda ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 3,750 ‐ ‐ ‐ 3,750 86 Vijaya Katupotha TCCS Unlimited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 3,000 ‐ ‐ 750 ‐ ‐ ‐ ‐ 3,750 87 Hapugammana TCCS Limited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,500 ‐ ‐ ‐ ‐ 1,250 ‐ 3,750 88 Ganepola Kotarupe TCCS Unlimited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 3,700 ‐ ‐ 3,700 89 Mrs.I.A.Sudasingha ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 3,586 ‐ ‐ 3,586 90 Godawa TCCS Limited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 3,000 ‐ ‐ ‐ ‐ ‐ ‐ 576 ‐ 3,576 91 Mrs. R. Samanthi ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 3,500 ‐ ‐ ‐ ‐ ‐ ‐ ‐ 3,500 92 Madagalla TCCS Unlimited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,500 ‐ ‐ ‐ ‐ 1,000 ‐ 3,500 93 Buluruppa TCCS Limited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 350 ‐ 300 ‐ ‐ ‐ 2,798 ‐ ‐ 3,448 94 Mrs M.A.P.Fernando ‐ ‐ ‐ 3,400 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 3,400 95 Kirinda Nagarika TCCS Limited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 3,400 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 3,400 96 Sirimapura Pattihena TCCS Unlimited ‐ ‐ ‐ ‐ ‐ 575 1,825 ‐ ‐ ‐ 1,000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 3,400

97 Galle Gagabadapaththuwa South Tea Small Holders Co‐oprative Society Limited

‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 3,375 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 3,375

98 Mr.D.Kirinde Arachchi ‐ 3,300 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 3,300 99 Matara District Post Men's TCCS Limited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 3,200 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 3,200 100 Ms.A.S.G.I.P.Nandapala ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,500 ‐ ‐ 650 ‐ ‐ ‐ ‐ ‐ ‐ 3,150 101 Liyangaswagura TCCS Unlimited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 3,000 80 ‐ 3,080 102 Peliyagoda PattiyaTCCS Limited ‐ ‐ ‐ ‐ 3,065 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 3,065 103 Herathgama TCCS Unlimited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 3,020 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 3,020 104 Pahajjawa TCCS Unlimited ‐ ‐ 3,000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 3,000 105 Mr.H.M.T.Bandara Herath ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 3,000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ 3,000 106 Mrs.R.M.S.Rathnayake ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 3,000 ‐ ‐ ‐ ‐ 3,000 107 Yaya 6‐7 Kadurugaswewa TCCS Unlimited ‐ ‐ ‐ ‐ ‐ 1,000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,000 ‐ 3,000 108 Godigamuwa TCCS Limited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 3,000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 3,000 109 Kotuwegoda TCCS Unlimited ‐ ‐ 3,000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 3,000 110 Rambe Siriparakum TCCS Unlimited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 3,000 ‐ ‐ ‐ ‐ ‐ 3,000 111 Katupitiya TCCS Unlimited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 3,000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 3,000 112 Arthacharaya Foundation ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 3,000 ‐ ‐ 3,000 113 Gathara TCCS Unlimited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,966 ‐ 2,966 114 Udagaladeniya TCCS Unlimited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 101 ‐ ‐ 65 ‐ 35 116 2,409 200 ‐ 2,926 115 Mr.M.S.Wickramasinghe ‐ ‐ ‐ 400 ‐ ‐ ‐ 400 ‐ ‐ ‐ ‐ 1,600 ‐ 500 ‐ ‐ ‐ ‐ 2,900 116 Trincomalee Dockyard TCCS Limited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,900 ‐ 2,900 117 Mirissa Udupila TCCS Unlimited ‐ 750 1,580 ‐ ‐ ‐ ‐ 500 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,830 118 Niwatuwa TCCS Unlimited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,820 ‐ 2,820 119 Hakahinna TCCS Limited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,807 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,807







120 Mrs. H.M. Rupawathi ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,800 ‐ ‐ ‐ ‐ ‐ ‐ 2,800 121 Niyadurupola TCCS Unlimited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,800 ‐ 2,800 122 Srawastiwatta Suhada TCCS Unlimited ‐ ‐ ‐ ‐ ‐ 2,770 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,770 123 Saputantiri Kanda TCCS Unlimited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,700 ‐ ‐ ‐ 2,700 124 Thabugala TCCS Unlimited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,654 ‐ 2,654 125 Dumbara Paranagama TCCS Limited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,648 ‐ ‐ 2,648 126 Hokandara south pragathi TCCS Limited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ 645 ‐ ‐ 2,645 127 Batuwatta East TCCS Unlimited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,542 ‐ ‐ 43 ‐ 2,585 128 Waldeniya TCCS Unlimited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,526 ‐ 2,526

129 Tangalla Nagaraye Suluwelanda Wyaparika TCCS Limited

‐ ‐ 2,500 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,500

130 Mrs.M.B.Chandralatha ‐ ‐ 2,500 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,500 131 Mr.D.W.Kanaththagoda Arachchi ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,500 ‐ ‐ ‐ ‐ ‐ 2,500 132 Ms.J. Dewasurendra ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,500 ‐ ‐ ‐ ‐ ‐ 2,500 133 Iluppella Galabadahena Maithtri TCCS Limited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,500 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,500 134 Galgamuwa Giribawa TCCS Unlimited ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,500 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 992 ‐ 2,492 135 Mr.M.Jayawardana ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,400 ‐ ‐ ‐ 2,400 136 Weherahena TCCS Unlimited ‐ ‐ ‐ ‐ ‐ 2,400 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,400 137 Madelpola TCCS Unlimited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,231 ‐ ‐ 2,231 138 Yatipasgamuwa TCCS Unlimited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,171 ‐ 2,171 139 Mr M.Dharmadasa ‐ ‐ ‐ ‐ ‐ 2,150 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,150 140 Moragolla TCCS Limited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,143 ‐ 2,143 141 Godigamuwa TCCS Unlimited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,065 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,065 142 Katanwila TCCS Unlimited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,030 ‐ 2,030 143 Katuwala mulla TCCS Unlimited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,018 ‐ 2,018 144 Nedimala TCCS Limited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,000 145 Mr.M.Pararajalingam ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,000 1,000 ‐ ‐ 2,000 146 Mr.S.H.B.L.De Silva ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,000 ‐ 2,000 147 Mr.U.Wimalasena ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,000 ‐ ‐ ‐ ‐ ‐ ‐ 2,000 148 Ms.K.Ruwanpura ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,000 ‐ ‐ ‐ ‐ 2,000 149 Mrs.H.R.J.Lewangama ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,000 150 Ms.M.G.S.Rupasingha ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,000 ‐ ‐ 2,000 151 Mr.M.G.A.R.Rathnapala ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,000 ‐ ‐ ‐ 2,000 152 Mr.S.D.Nagahawatta ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,000 ‐ ‐ ‐ ‐ ‐ ‐ 2,000 153 Mrs.H.C.Damayanthi ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,000 154 Mrs.G.T.K.Chandima ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,000 ‐ ‐ ‐ ‐ 2,000 155 Mr. W.M.S. M. Fenandu. ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,000 ‐ ‐ ‐ ‐ ‐ ‐ 2,000 156 Mr.W.N.Prrassanna ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,000 157 Ms. W.L.J.Geethanjali ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,000 158 Mrs. D.N.I.Vithana ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,000 159 Mr. L.C.D. Wijewardana ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,000 ‐ ‐ ‐ ‐ ‐ 2,000 160 Mrs D.M.L Nishanthi ‐ ‐ ‐ ‐ ‐ 2,000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,000







161 Mr.B.K.C.S. Rodrigo ‐ ‐ ‐ ‐ ‐ 2,000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,000 162 Ambalanthota City Businessmen TCCS Limited ‐ ‐ 2,000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,000 163 Urala South TCCS Unlimited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,000 ‐ 2,000 164 Aluthgama BogamuwaTCCS Limited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,000 ‐ 2,000 165 Gurupokuna TCCS Unlimited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,000 166 Udaramaga TCCS Limited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,000 167 Godawela TCCS Unlimited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,000 ‐ 2,000 168 Haggamuwa TCCS Unlimited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,000 169 Atapattukanda TCCS Unlimited 2,000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,000 170 Kotapola South TCCS Unlimited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,000 ‐ ‐ ‐ 1,000 ‐ ‐ 2,000 171 Development Society ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,000 ‐ ‐ 2,000 172 Arabekama Gamunu TCCS Limited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,000 173 Gajanaggma TCCS Unlimited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,000 ‐ 2,000 174 Bomriya North TCCS Limited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 959 1,000 ‐ ‐ ‐ ‐ ‐ 1,959 175 Ginimallagaha TCCS Limited ‐ ‐ 1,900 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,900 176 Mr. A.Thanthrige ‐ 1,750 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,750 177 Dedigama TCCS Unlimited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,729 ‐ 1,729 178 Tanwatta TCCS Unlimited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,721 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,721 179 Mr.D.M.Nihal Ramanayake ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,720 ‐ ‐ ‐ ‐ 1,720 180 Henaratgoda TCCS Unlimited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,702 ‐ ‐ ‐ ‐ ‐ ‐ 1,702 181 Mr.D.L.T.K.Dharmadasa ‐ ‐ 700 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,000 ‐ ‐ ‐ ‐ ‐ 1,700 182 Kandawala TCCS Limited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,628 ‐ ‐ 1,628 183 Mr.A.K Rulak ‐ ‐ ‐ ‐ ‐ 1,600 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,600 184 Mr. H.H.Asanka Ruwan Kumara ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,600 ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,600 185 Pitiwella TCCS Unlimited ‐ ‐ 1,600 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,600 186 Hungampola TCCS Unlimited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 50 ‐ ‐ ‐ ‐ ‐ ‐ 1,500 ‐ ‐ 1,550 187 Deegalla TCCS Limited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,537 ‐ ‐ ‐ ‐ 1,537 188 Bandara BaatawalaTCCS Limited ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,500 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,500 189 Mr.T.L.Chandrasiri ‐ 1,500 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,500 190 Mrs. R H S.Wijayapala ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,500 ‐ ‐ ‐ ‐ ‐ 1,500 191 Mr. P.R.H.G. Jayasekara ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,500 ‐ 1,500 192 Mr.K.R.J.Premakumara ‐ 1,000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 500 ‐ ‐ ‐ ‐ 1,500 193 Mr.P.R.H.D.I.Shoromani ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,500 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,500 194 Mr. M.D.D.P Kumara ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,500 ‐ 1,500 195 Mr. W.P.R.P.Perera ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,500 ‐ ‐ ‐ ‐ ‐ 1,500 196 Mrs.J.P. Samarawickrama ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,500 ‐ ‐ ‐ ‐ ‐ 1,500 197 Mr.S.D.T.Udesh 1,500 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,500 198 Wabada South TCCS Limited ‐ ‐ ‐ 1,500 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,500 199 Ceylon Leather Products Limited Staff TCCS Limited ‐ ‐ ‐ ‐ 1,500 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,500 200 Othota Polpitiya TCCS Unlimited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 500 ‐ 1,000 ‐ ‐ ‐ ‐ 1,500 201 Agro Micro Finance ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,500 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,500 202 Walgama East TCCS Limited ‐ ‐ 1,500 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,500







203 Ahasliyadda TCCS Limited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,500 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,500 204 Katukurundagahalanda TCCS Limited 1,500 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,500 205 Sri Kaliyaman TCCS ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,400 ‐ ‐ ‐ ‐ 1,400 206 Bossalla TCCS Unlimited ‐ ‐ ‐ ‐ 1,373 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,373 207 Beliwatta Nawodaya TCCS Unlimited ‐ ‐ 900 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 460 ‐ ‐ 1,360 208 Mr T.M Aruna Bandara ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,350 ‐ ‐ ‐ ‐ ‐ 1,350 209 Tanna Junction Eksath TCCS Limited ‐ ‐ ‐ 1,350 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,350 210 malawanna TCCS Unlimited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,300 ‐ 1,300 211 Mr.N.M.B.Magedaragama ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,300 ‐ 1,300 212 Mrs.W.G.Anula Kamalani ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,300 ‐ 1,300 213 Mr.K.A.A.Nandasiri ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,300 ‐ ‐ ‐ 1,300 214 Mr.R.A.P.J.Ranasingha ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,300 ‐ ‐ ‐ ‐ 1,300 215 Paramulla Pamburana TCCS Unlimited ‐ ‐ ‐ ‐ ‐ 1,300 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,300 216 Pahala Maliduwa TCCS Unlimited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,266 ‐ 1,266 217 Mrs.P.P.I.M.Kumuduni fernando ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,250 ‐ ‐ ‐ ‐ 1,250 218 Mrs. P.C.G. Perera ‐ 1,250 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,250 219 Mr.H.D.J. Jayasekara ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,200 ‐ ‐ ‐ 1,200 220 Mr.R.A.Premadasa ‐ ‐ ‐ ‐ 1,200 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,200 221 Mrs.D.B.KUSUMALATHA ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,200 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,200 222 Mr.S.G.J.D.Senanayaka ‐ ‐ ‐ 1,200 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,200 223 Ms.A.P.C.Pushpalatha ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,200 ‐ ‐ 1,200 224 Mr.N.G.J.Prabath ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,200 ‐ ‐ ‐ ‐ 1,200 225 Mr. D.G.A.S. Sampath ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,200 ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,200 226 Mr.M.G.K.K Kumara ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,200 ‐ ‐ ‐ ‐ 1,200 227 Mr. C.R. Thenuwara ‐ ‐ ‐ ‐ 1,200 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,200 228 Keradewala TCCS Unlimited 600 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 600 ‐ ‐ 1,200 229 Ms.J.M.U.Damayanthi Jayasekera ‐ 1,175 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,175 230 Mrs. P.N.V. Fernando ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,125 ‐ ‐ ‐ ‐ ‐ 1,125 231 Kadapathwehera TCCS Limited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,110 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,110 232 Godaparahena Alviswatta TCCS Limited ‐ ‐ ‐ ‐ ‐ ‐ 1,100 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,110 233 Aragoda TCCS Unlimited ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,100 ‐ ‐ ‐ ‐ ‐ ‐ 1,110 234 Mr.A.P.Gamage ‐ 1,100 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,110 235 Wewagedera TCCS Unlimited ‐ ‐ ‐ ‐ 500 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 600 ‐ ‐ 1,110 236 Malaramba TCCS Unlimited ‐ 750 ‐ ‐ ‐ ‐ ‐ 350 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,110

6,800 34,575 24,180 16,850 11,738 58,595 22,925 80,950 32,465 55,017 32,441 41,300 77,679 67,975 326,998 19,466 102,505 1,005,921 900,000 2,918,380 Other Shareholders (23,176 Shareholders with Aggregate Allotments of 1000 Shares or less)

177,352 323,658 206,941 265,785 217,535 334,813 117,128 163,776 201,560 85,561 119,347 92,150 203,756 130,317 194,112 107,583 111,427 402,147 ‐ 3,454,948

Total 184,152 358,233 231,121 282,635 229,273 393,408 140,053 244,726 234,025 140,578 151,788 133,450 281,435 198,292 521,110 127,049 213,932 1,408,068 900,000 6,373,328