ANNUAL - CRB BankANNUL RRT 2017 02 ABOUT COLOMBO DISTRICT CO-OPERATIVE RURAL BANK UNION LTD Colombo...

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ANNUALColombo District Cooperative Rural Bank Union Limited

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VISION“Strong and Sustainable Credit Union in Sri Lanka”

It is our conviction to ensure our member cooperatives to be incessantly providing affordable financial services to members. To carry out its function, our members should meet their financial viability, operational efficiency, member-customer and employee satisfaction and competitive position, knowledgeable and involved board of directors and quality products and services.

MISSIONTransforming cooperatives into safe and sound financial institutions as well as effective consumer societies which are highly dynamic, democratic, member-owned and socially responsible with a primary purpose of providing high-quality and fairly priced financial services that meet or exceed members’ expectations.

TABLE OFCONTENTKey Figures 01

About Colombo District Cooperative Rural Bank Union Limited 02

Cooperative Identity 03

Cooperative Principles 04

Our Values 05

Milestones 06

Strength of Cooperative Sector 07

Our Businesses 08

Colombo District Cooperative Rural Bank 09

Cooperative Societies 14

Performance Highlights 28

Chairman’s Message 31

Chief Executive Officer’s Review 33

Board of Directors 35

Orgnizational Structure 36

Corporate Management & Staff 37

Corporate Information & Accounting Policies 39

Statement of Financial Position 49

Statement of Comprehensive Income 50

Notes to the Financial Statements 51

Statement of Changes in Equity 56

Corporate Information 57

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KEY 2017 FIGURES

NET PROFITLKR

14,843K

INVESTMENTSLKR

741,034K

INCOMELKR

40,528K

SHARE HOLDERCAPITAL

LKR

5,849K

PROPERTY PLANT AND EQUIPMENT

LKR

42,339K

TOTAL ASSETS LKR

1,496,229K

GRANTED LOANS AND ADVANCES

LKR

705,307K

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ABOUTCOLOMBO DISTRICT CO-OPERATIVE RURAL BANK UNION LTDColombo District Co Operative Rural bank, incorporated in 1994, is a financial services groupproviding a range of banking and financial services, primarily in the Sri Lanka, to personal and corporate customers. The Company operates in three segments: Commercial, Retail and Wholesale.

Its main business activities are commercial, retail and wholesale banking is also licensed to do business. The bank exists to provide superior financial services primarily to the co-operative movement and other selected customer segments through an established country-wide network within Sri Lanka in a socially responsible profitable manner.

The Bank has achieved distinguished success in co-operative banking sector particularly during the last few years because of its distinct objectives, strategic plan of action, its continuous monitoring and sharing of success with the concerned personnel. Good Corporate Governance and a committed management with the Board of Directors with keen interest in the wellbeing of the Bank have been instrumental in The Co-operative Rural Bank reaching greater heights.

Our Union is composed of 11 multi-purpose cooperative societies functioning in the district of Colombo. We act as a financial facilitator for primary cooperative societies working in line with the principles of cooperatives. In addition the Colombo District Rural Bank Union is engaged in its own business activities with the view to generate additional income for the union as well as for the primary Societies. The Union’s activities are governed by its Constitution and monitored by the Department of Cooperatives Development (Western Province).

We’ve worked towards greater banking standards and customer satisfaction for over 50 years. It is this unwavering focus that inspires banking solutions that are convenient, value-added and customer-friendly. A full range of deposit schemes, loans and services combined with personalized service and computerized efficiency. Featured herein are the entire range of products and services with key details to help you choose the solution that’s right for the customers.

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COOPERATIVE IDENTITYA cooperative (also known as co-operative, co-op, or coop) is “an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise”

Cooperatives traditionally combine social benefit interests with capitalistic propty-right interests. Cooperatives achieve a mix of social and capital purposes by democratically governing distribution questions by and between equal by not controlling members. Democratic oversight of decisions to equitably distribute assets and other benefits means capital ownership is arranged in a way for social benefit inside the organization. External societal benefit is also encouraged by incorporating the operating-principle of cooperation between co-operatives.

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COOPERATIVE PRINCIPLES1

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VOLUNTARY AND OPEN MEMBERSHIPCooperatives are voluntary organizations, open to all persons able to use their services and willing to accept the responsibil-ities of membership, without gender, social, racial, political or religious discrimination.

DEMOCRATIC MEMBER CONTROLCooperatives are democratic organizations controlled by their members, who actively participate in setting their policies and making decisions. Men and women serving as elected representatives are accountable to the membership. In primary cooperatives members have equal voting rights (one member, one vote) and co-operatives at other levels are also organized in a democratic manner.

MEMBER ECONOMIC PARTICIPATIONMembers contribute equitably to, and democratically control, the capital of their cooperative. At least part of that capital is usually the common property of the cooperative. Members usually receive limited compensation, if any, on capital subscribed as a condition of membership. Members allocate surpluses for any or all of the following purposes: developing their cooperative, possibly by setting up reserves, part of which at least would be indivisible; benefiting members in proportion to their transactions with the cooperative; and supporting other activities approved by the membership.

AUTONOMY AND INDEPENDENCECooperatives are autonomous, self-help organizations controlled by their members. If they enter into agreements with other organizations, including governments, or raise capital from external sources, they do so on terms that ensure democratic control by their members and maintain their cooperative autonomy.

EDUCATION, TRAINING AND INFORMATIONCo-operatives provide education and training for their members, elected representatives, managers, and employees so they can contribute effectively to the development of their co-operatives. They inform the general public - particularly young people and opinion leaders - about the nature and benefits of co-operation.

COOPERATION AMONG CO-OPERATIVESCooperatives serve their members most effectively and strengthen the cooperative movement by working together through local, national, regional and international structures.

CONCERN FOR COMMUNITYCooperatives work for the sustainable development of their communities through policies approved by their members.

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OUR VALUESOur members are the reason for our existence. We will strive to provide services that exceed their expectations. Our core values include;

ACCOUNTABILITY

INTEGRITY

INNOVATIVE &EFFICIENT SERVICE

COMMITMENT TO COMMUNITY.

GOOD STEWARDS OFTHE ENVIRONMENT.

SAFE WORK ENVIRONMENT

ENCOURAGE OPEN COMMUNICATION

MUTUAL RESPECT

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MILESTONESSep 1994 - Colombo District Co Operative Rural bank, incorporated on 21st Day of Sep 1994 with objectives of economic development of the member societies, collecting excess finance resources and distribute them in thrift and mutually beneficial manner as a central financial hub for cooperatives.

APRIL 1995

Established bank draft settlement credit facilities for member societies

MAY 2010

Establishing an agency business of importing and distribution of white sugar

JAN 2001

Obtaining a pawning center agency license

SEP 1995

Initiate school cooperative branch project

SEP 2012

Initiating the project of granting credit facilities for related members.

JULY 2001

Financing member societies to develop Rural Banking Network

NOV 1995

Acquired a new land and a building for the head office operations

NOV 2012

Establishing a new pawning center at Kodigas Junction and a Stationary Shop

MAY 2002

Establishing an auditing unit for rural banking activities of member societies

FEB 1998

Establishment of low budget housing scheme projects

DEC 2012

Projects of low interest credit facilities for small entrepreneurs (Demo Batta Moving Shops)

MAY2012

Commencement of a marketing service for mobile goods

MAY 2002

Establishing an employee training center and initiating training and development programs

OCT 1999

Foundation of agriculture products and other goodsexchange centers

JULY2013

Implementation of the second phase of Dimo Batta consession loan scheme

JUN 2002 Computerized all information

NOV 1999

Establishment of inter control product exchanging system

DEC2014

A project that provides ticket machines for western province private buses on concessionary interest

MAY2016

Commencement of a local and foreign tourism sector

JAN 2004

Founding agency business ofimporting and distributing photocopy papers

DEC 1999 Started agency services

NOV2014

A project that provides loans for Janadiriya self employed persons on concessionary interest

FEB2015

Conducting training workshops for officers in member societies

AUG2017

Conducting training workshops for rural bank managers in member society

SEP 2005

Opening of new pawning service center

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STRENGTH OF COOPERATIVE SECTOR

Our strength is our members. We strive to keep that strength in good shape with moral and ethical standards.

Members subscribe to the highest level of ethics and shall declare any conflict of interest, real or perceived, so that they can be a credible source of objective feedback and an articulate advocate of the project as needed.

Members will carry out all activities in a manner that will maintain the good reputation of CDCRBU and its ability to serve the public interest.

Members will ensure that the level of professional services they provide is competent and in keeping with the high level of standards set out by CDCRBU by continuing study of the profession’s developments and innovations.

Members will maintain the spirit of fairness and help eradicate all forms of deception that violate that spirit.

Members have the duty to keep in confidence the affairs of any client, colleague or organization and shall not disclose confidential information obtained in the course of professional activities.

Members shall not, in any way, exploit information obtained in the course of duties to their own advantage.

Members shall conduct their activities on a high ethical plane and in the spirit of cooperation so that others may emulate by example and thus raise the standards of conduct in cooperative development.

Members will endeavor to continuously raise the standards of the profession by conducting and sharing research developments and methodology.

Members shall treat all other members with respect and consideration due between professional colleagues.

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OUR BUSINESSES

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COOPERATIVE RURAL BANKSRural Banking is the main role and we act as a financial services group providing a range of banking and financial services, primarily in the Sri Lanka, to personal and corporate customers. The Company operates in three segments: Commercial, Retail and Wholesale. Its main business activities are commercial, corporate banking and retail banking. CRB Bank is also licensed to do business. The bank exists to provide superior financial services primarily to the co-operative movement and other selected customer segments through an established Colombo District Network in a socially responsible and profitable manner.

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COOPERATIVE RURAL BANKS WE PROVIDE

Credit facilities for settlement of bank overdraft facilities

Consumer Credit Facilities

Finance facilities for acquiring fixed assets

and vehicles

Credit facilities to settle existing credit

facilities at other financial institutions

Providing financial aids forconstruction of Rural

Bank Facilities

“Mihiri”Children savings

account (Age group - up to 5 years)

“Future Plan”(Smart Investment Plans

1-5 years)

“Sithum’’Children saving

account (Age group – 5 to 12 years)

General Savings Accounts

“Wisdom”Teen savings

account (Age group 12 to 18 years)

Capital Savings Accounts

“Diwidiri”Women’s saving

account

Granting securitized loans for pawning activities of

member societies Pawning facilities

Small and Medium Entrepreneur development programs and credit facilities for sustainable

development

WE ACCEPT PUBLIC SAVINGS WITH OUR RANGE OF SAVINGS ACCOUNT TYPES AND INVESTMENT PLANS.

FOLLOWINGS ARE SOME OF OUR SAVING ACCOUNT TYPES :

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TRAVEL AGENCYWe have established an agency service business as a travel agency in 2013. It was named as Co-op Travels and mainly provides guidance and all related services for foreign tours and travels for local customers while providing domestic tourism for foreign customers. As an agency business we have obtained a considerable market for our services and the travel agency contributed to our group’s profitability in a satisfactory manner.

TRAVEL AGENCY WE PROVIDE

INBOUND TOURISM(Tourists who come to Sri Lanka

for holidaying and traveling)

OUTBOUND TOURISM(Domestic tourists who visit foreign countries)

DOMESTIC TOURISM (Domestic tourists who

travel in Sri Lanka)

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STATIONARY AGENCYWith the establishment of agency business of importing and distributing photocopy papers in 2004, we grew ourselves to have a whole stationary solution center when it reaches 2013. Now we have established a strong client network for our products including cooperative societies, Rural Banks, Other cooperative societies and government organizations as well.

Our main stationary distribution center is located at 200A, Highlevel Road, Galawilawatta, Homagama

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COLOMBO DISTRICT COOPERATIVE RURAL BANK The bank exists to provide superior financial services primarily to the cooperative movement and other selected customer segments through an established country-wide network within Sri Lanka in a socially responsible profitable manner.

The Bank has achieved distinguished success in co-operative banking sector particularly during the last few years because of its distinct objectives, strategic plan of action, its continuous monitoring and sharing of success with the concerned personnel. Good Corporate Governance and a committedmanagement with the Board of Directors with keen interest in the well-being of the Bank have been instrumental in The Co-operative Rural Bank reaching greater heights.

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OUR MEMBERS COOPERATIVE SOCIETIES

CO-OPERATIVE SOCIETYCOLOMBO SOUTH

MULTI PURPOSE CO-OPERATIVE SOCIETYDEHIWALA - MT. LAVINIA

MULTI PURPOSE CO-OPERATIVE SOCIETY

PILIYANDALA


MAHARAGAMA


MORATUWA


HEWAGAM KORALAYA WEST - KADUWELA

MULTI PURPOSE CO-OPERATIVE SOCIETYSRI JAYAWARDANAPURA


HOMAGAMA


KOLONNAWA


BATTARAMULLA

MULTI PURPOSE CO-OPERATIVE SOCIETYHEWAGAM KORALE EAST -

HANWELLA

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CRB Bank has eleven multi-purpose co-operative societies as share holding members and they are the main customers of CRB Bank. All of those societies operate independently and they have district wide network of co-operative rural banks. We CRB Bank is the central financial hub for all of those wide network of member co-operative rural banks.

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MULTI PURPOSE CO-OPERATIVESOCIETY OF KOLONNAWA

1. Wellawatte Rural Bank2. Mulleriyawa Rural Bank3. Kotuwila Rural Bank4. Megoda Kolonnawa Rural Bank5. Orugodawatta Rural Bank6. Kolonnawa Rural Bank7. Kotikawatta Rural Bank8. Gothatuwa New Town Rural Bank9. Wellampitiya Rural Bank10. Sedawatta Rural Bank11. Gothatuwa Rural Bank12. Madinnagoda Rural Bank13. Hibutana Rural Bank14. Ranabima Rural Bank15. Methotamulla Rural Bank

MEMBER RURAL BANK

NETWORK

68EMPLOYEES

3,758 FIXED DEPOSITS ACOUNTS

59,409k FIXED ASSETS

5,290LOANS GRANTED

64,385 SAVINGS ACOUNTS

9COOP CITIES

1FILLING STATION

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MEMBER RURAL BANK NETWORK MULTI PURPOSE CO-OPERATIVESOCIETY OF HEWAGAM KORALAYA WEST

1. Kaduwela Rural Bank2. Waliwita Rural Bank3. Malabe Rural Bank4. Thalahena Rural Bank5. Hokandara Rural Bank6. Athurugiriya Rural Bank7. Boralugoda Rural Bank8. Walgama Rural Bank9. Gramodagama Rural Bank10. Yakala Rural Bank11. Korathota Rural Bank12. Dadigamuwa Rural Bank13. Walipillawa Rural Bank14. Ranala Rural Bank15. Bomiriya Rural Bank16. Nawagamuwa Rural Bank17. Arangala Rural Bank18. Oruwala Rural Bank

77EMPLOYEES


51,177kFIXED ASSETS

12,179LOANS GRANTED


-COOP CITIES

-FILLING STATION

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MULTI PURPOSE CO-OPERATIVESOCIETY OF PILIYANDALA

1. Piliyandala Rural Bank2. Bokundara Rural Bank3. Thumbowila Rural Bank4. Arawwala Rural Bank5. Madapatha Rural Bank6. Makandana Rural Bank7. Kasbawa Rural Bank8. Dalthara Rural Bank9. Sarabumi Rural Bank10. Niungama Rural Bank11. Kosgahahena Rural Bank12. Kahapola Rural Bank13. Dammpe Rural Bank

MEMBER RURAL BANK NETWORK

42EMPLOYEES


634,250kFIXED ASSETS

4,338 LOANS GRANTED


1COOP CITIES

1FILLING STATION

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MEMBER RURAL BANK NETWORK MULTI PURPOSE CO-OPERATIVESOCIETY OF SRI JAYAWARDANAPURA

1. Pitakotte Rural Bank 2. Nawala Rural Bank 3. Obesekarapura Rural Bank 4. Gangodawila Rural Bank 5. Mirihana Rural Bank 6. Rajagiriya Rural Bank 7. Kattiya junction Rural Bank 8. Nugegoda supermarket Rural Bank 9. Mirihana North Rural Bank 10. Nugegoda North Rural Bank 11. Ethul kotte Rural Bank

49EMPLOYEES


-FIXED ASSETS

3,301 LOANS GRANTED


2COOP CITIES

2FILLING STATION

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MULTI PURPOSE CO-OPERATIVESOCIETY OF BATTARAMULLA

1. Baththaramulla Rural Bank2. Koswatta Rural Bank3. Palanwatta Rural Bank4. Thalawathugoda Rural Bank5. Batapotha Rural Bank6. Kalalgoda Rural Bank7. Hokandara South Rural Bank8. Jayawadanagama Rural Bank9. Thalangama north Rural Bank10. Kalapaluwawa Rural Bank11. Kotuwegoda Rural Bank12. Walpola Rural Bank13. Pothuarawa Rural Bank


41EMPLOYEES


21,614kFIXED ASSETS

8,548 LOANS GRANTED


9COOP CITIES

1FILLING STATION

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MEMBER RURAL BANK NETWORK MULTI PURPOSE CO-OPERATIVESOCIETY OF DEHIWALA - MT. LAVINIA

1. Dehiwala Rural Bank 2. Aththidiya Rural Bank 3. Kirulapana Rural Bank 4. Rratmalana Rural Bank 5. Nugegoda Rural Bank 6. Karagampitiya Rural Bank 7. Bandaranayake Rural Bank 8. Mt. Lavinia Rural Bank 9. Woodland Rural Bank 10. Kalubowila Rural Bank 11. Ratmalana Town Rural Bank 12. Kaudana Rural Bank 13. Ratmalana Rural Bank

35EMPLOYEES

2,798FIXED DEPOSITS ACOUNTS

-FIXED ASSETS

11,387LOANS GRANTED

40,439SAVINGS ACOUNTS

12COOP CITIES

-FILLING STATION

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MULTI PURPOSE CO-OPERATIVESOCIETY OF MAHARAGAMA

1. Pannipitiya Rural Bank2. Maharagama Rural Bank3. Madiwela Rural Bank4. Pamunuwa Rural Bank5. Dambahena Rural Bank6. Thalapathpitiya Rural Bank7. Pathiragoda Rural Bank8. Polwatta Rural Bank9. Pepiliyana Rural Bank10. Bora South Rural Bank11. Dumriyapola Rural Bank12. Nawinna Rural Bank


36EMPLOYEES

3,080FIXED DEPOSITS ACOUNTS

14,836kFIXED ASSETS

8,375LOANS GRANTED

33,903SAVINGS ACOUNTS

2COOP CITIES

1FILLING STATION

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MEMBER RURAL BANK NETWORK CO-OPERATIVE SOCIETY OFCOLOMBO SOUTH

1. Bambalapitiya Rural Bank 2. Andasan Rural Bank 3. Kirulapana Rural Bank 4. Dematagoda Rural Bank 5. Borella North Rural Bank

11EMPLOYEES

249FIXED DEPOSITS ACOUNTS

4,405kFIXED ASSETS

730LOANS GRANTED


4COOP CITIES

3FILLING STATION

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MULTI PURPOSE CO-OPERATIVESOCIETY OF MORATUWA

1. Moratuwa Rural Bank2. Kadalan Rural Bank3. Koralawella North Rural Bank4. Katubedda South Rural Bank5. Angulana Rural Bank6. Koralawella South Rural Bank7. Thelawala Rural Bank8. Idibadda Rural Bank9. Uyana Rural Bank10. Lakshapathiya Rural Bank11. Molpe Rural Bank12. EgodaUyana South Rural Bank


29EMPLOYEES

-FIXED DEPOSITS ACOUNTS

5,357kFIXED ASSETS

2,667 LOANS GRANTED

-SAVINGS ACOUNTS

-COOP CITIES

-FILLING STATION

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MEMBER RURAL BANK NETWORK MULTI PURPOSE CO-OPERATIVESOCIETY OF HEWAGAM KORALE EAST

1. Hanwella Town Rural Bank2. Suduwlla Rural Bank3. Kosgama Rural Bank4. Puwakpitiya Rural Bank5. Avissawella Rural Bank6. Kudagam Rural Bank7. Mawalgam Rural Bank8. Kahahena Rural Bank9. Walikanna Rural Bank10. Waga Rural Bank11. Thummodra Rural Bank12. Niripola Rural Bank13. Mipe Rural Bank14. Padukka Rural Bank15. Udumulla Rural Bank16. Bope Rural Bank17. Kahawala Rural Bank18. Angamuwa Rural Bank19. Pitumpe Rural Bank20. Pinnawala Rural Bank21. Thunnana Rural Bank22. Aswatta Rural Bank23. Arukwatta Rural Bank24. Hanwella Rural Bank

87EMPLOYEES


26,490kFIXED ASSETS

6,415 LOANS GRANTED


3COOP CITIES

2FILLING STATION

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MULTI PURPOSE CO-OPERATIVESOCIETY OF HOMAGAMA

1. Homagam Rural Bank2. Kottawa Rural Bank3. Maththegoda Rural Bank4. Polgasowita Rural Bank5. Habarakada Rural Bank6. Meegoda Rural Bank7. Rukmale Rural Bank8. Hatharman Handiya Rural Bank9. Vidyala junction Rural Bank10. Kiriwaththuduwa Special Rural Bank11. Kiriwaththuduwa Rural Bank12. Poregedara Rural Bank13. Pitipana South Rural Bank14. Dampe Rural Bank15. Horagala East Rural Bank16. Horagala West Rural Bank17. Liyanwala Rural Bank18. Atigala Rural Bank19. Siddamulla Rural Bank20. Hiripitiaya Rural Bank21. Kahathuduwa West Rural Bank22. Kahathuduwa East Rural Bank23. Dolahena Rural Bank24. Jalthara Henpita Rural Bank25. Nawalamulla Rural Bank26. Walpita Rural Bank27. Wataraka Rural Bank


192EMPLOYEES


10,869kFIXED ASSETS

8,633 LOANS GRANTED


6COOP CITIES

1FILLING STATION

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PERFORMANCE HIGHLIGHTS We are euphoric to state that during the 2017financial year, we have seen a growth in our deposit base of approximately LKR. 1249.23 million, which is 11.69% growth year over year. We are also pleased to note that our deposit customers have continuously rated our service to be in the highest caliber due to our personalized services rendered to them. CRB Bank is determined to increase its interest rate margin while offering the best opportunity to ourmembers to grow themselves as sustainable and social impact businesses.

2013 2014 2015 2016 2017

174.

5

134.

1

126.

9

148.

4161.

5

INTEREST INCOME (LKR MILLION) 2013 2014 2015 2016 2017

1249

.23

1118

.4

1202

.4

1103

.8

1025

.5

DEPOSITES LKR (LKR MILLION)

30.12%Interest income

81.88%Equity capital

CRB Bank was able to create sustainable value to our shareholders and executed a right issue during the year of review hence the equity capital grew by 81.88% to LKR 5.84million showing the strength of the members. Statutary Reserves (16.80%) and retained earnings (25.83%) also increased by compared to previous year.

We have recorded 11.92% growth of Interest income on investments by changing the investment mix strategically and effectively.

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Apparently the client base also has grown rapidly which shows that the quality of services rendered by our expert team is of a high standards. In order to smoothly run the division and maximize the efficiency, the staff strength was increased and they are the pillars of success.

CRB Bank’s net profit was increased by 8.76% from LKR 13.6million 2016 to 14.8million 2017.

Working within a highly competitive industry environment is always challenging, but the qualified workforce at CRB Bank ensures that their performances and results are always up to standard.Our Human Resources department that mainly focuses on the people and the working culture of the organization, has always worked towards strengthening key aspects such as staff strength and productivity.

2013 2014 2015 2016 2017

5.8

3.2

3.2

3.2

4.1

SHARE CAPITAL (LKR MILLION)

2013 2014 2015 2016 2017

181.

3

134.

9

127.

7

166.

9

161.

6

TOTAL INCOME (LKR MILLION)

2013 2014 2015 2016 201714

.8

13.6

5.5

0.542.

2

NET PROFIT(LKR MILLION)

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DETAILS FOR FIVE YEARS

TYPE 2013 2014 2015 2016 2017

SHARE CAPITAL 4,098,443 3,215,943 3,215,943 3,215,943 5,849,190

STATUTARY RESERVED FUND 13,760,797 16,966,845 18,671,547 22,083,653 25,794,577

RETAINED ERNINGS 9,321,132 17,656,857 22,089,082 30,960,560 38,957,297

MEMBERS AND NON MEMBERS DEPOSITES 1,025,492,451 1,103,769,147 1,202,410,850 1,118,417,339 1,249,225,693

INTEREST INCOME 158,803,364 163,588,952 126,960,220 134,065,565 174,451,369

INTEREST EXPENCES 122,144,611 130,356,923 92,557,586 99,033,930 140,805,299

NET INTEREST INCOME 36,658,752 33,232,029 34,402,633 35,031,635 33,646,070

PROFIT BEFOR INCOME TAX 2,241,802 12,824,191 9,376,662 13,648,426 14,843,696

TOTAL INCOME 161,645,290 166,892,539 127,719,936 134,892,242 181,333,389

TOTAL EXPENCES 160,615,262 152,474,820 122,561,867 121,243,816 166,489,693

OTHER INCOME 105,306 759,716 826,677 6,882,020

51.43%INTEREST INCOME ON INVESTMENT

11.73%TOTAL DEPOSIT

732.49%OTHER INCOME

16.89%RESERVES AND RETAINEDEARNINGS

PERFORMANCE CHANGE YOY

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CHAIRMAN’S MESSAGE

WE ARE DIFFERENT! ENGAGED IN ETHICAL AND SUSTAINABLE BUSINESS WITH SOCIAL ENTERPRISE MIND!

- making sure our Values and Principles are upheld.

We create shared value by running commercially successful businesses that meet the needs of our members in an ethically and sustainable cooperative way.

We have been engaging in Banking as being the banker to our member rural banks while creating a community enrichment for a better society with retail banking, Retail shopping and with our other agency works.

The Board of Directors, Management and Staff of the bank continue the practice of providing quality services through innovative methods aiming to achieve value creation for the bank and for the community as a team. CRB Bank as a community minded bank, we focus on offering friendly

Colombo District Cooperative Rural Bank Union (CRB Bank) is not like other banks or regular businesses. We are different because our uniqueness created with our Values and Principles and the way of working for all co-ops agreed by the international co-operative movement. They provide us with an ethical code that bind all we do. Hence we run our operations, not only to make profit for a few shareholders, but to create value in lots of ways for our valued members who engaged and collectively own the business.

Our Board ensures the interests and concerns of members are represented in our boardroom. Our directors and committees have a strong focus in -

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- and efficient service to enhance the living standard of the society while creating a loyal team of members.

Serving as Chairman of the Board of Directors is an honor and continues to be an enlighteningexperience for me and the teamwork of the directorate in providing close oversight is most enjoyable. We take an active stance in steering the direction of the bank by reviewing bank operations, policies and procedures, monitoring expenses and create control mechanisms with implementation and addressing regulatory compliance matters.

On behalf of Co-operative Rural Bank of Colombo, I wish to thank all who provide their commitment and strong support to achieve organizational goals and objectives most efficiently. I specially thank Commissioner of the Co-operative Department for the help and support they provided us to overcome many challengers. I would also like to express mysincere gratitude to our valued customers, business associates and shareholders for their continuing support and confidence in us. My deepest appreciation goes out to the management and staff who help us conquer newer frontiers and achieve greater successes every day. It’s the perseverance, contribution and determination of every member of our enormous family that helps us grow from strength to strength. As we strive to achieve our dreams and goals, I look to your loyal support to scale greater heights in the future.

Thank You.

Dhammika Solaman

“ CRB Bank as a community minded bank, we focus on offering

friendly and efficient service to enhance the living standard of the society while

creating a loyal team of members.”

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CHIEF EXECUTIVE OFFICER’S REVIEW I’m pleased to say that our progress has been faster than expected. I put that down not only to the approach we are following but the determination and commitment of colleagues at every level and the affection that our members and customers hold towards the CRB Bank. All of this means in 2017 all of our businesses performed solidly, with remarkable results.

For the Colombo District Cooperative Rural Bank as a whole, our underlying profit before tax is increased from LKR 13.6Mn in 2016 to LKR 14.8Mn in 2017 and Interest income has increased by 30.12% from LKR 134Mn in 2016 to LKR 174.4Mn in 2017 Given the uncertain market conditions and downward

trends that prevailed in 2017, I am happy to report that the overall performance has been more than sat-isfactory.

The Company continued to invest in brand and capacity building for travel agency and other agency business during the year 2017 which would lead to sustainable returns in the future.

Amidst the innumerable challenges that befell the industry and CRB Bank, during the year under review remained resilient and we are proud to state that the CRB Bank’s asset base grew considerably during the year 2017 from LKR 1,330Mn 2016 to LKR 1,496 2017 far exceeding the growth rate of the financial services sector. The deposit base grew by 12%, once again reflecting the confidence placed by thedepositors in CRB Bank. CRB Bank’s reserves and retained earnings increased by 16.89% from -

“CRB BANK HAS ACHIEVED EXCELLENCE AND CONTINUE TO REMAIN

DETERMINED IN DELIVERING BUSINESS EXCELLENCE AND SUSTAINABLE VALUE TO

ALL ITS STAKEHOLDERS.”

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- LKR 77Mn -2016 to LKR 90.66Mn 2017 while total equity also raising to LKR 5.84Mn from LKR 3.2Mn 2016 by 82.5% which is a phenomenal increasing with the right issue in 2017. We have been able to gain LKR 88.3Mn interest income on investment in 2017 which is 51.46% incensement compared to previous year LKR 58.3Mn 2016. CRB Bank currently offers an enhanced range of products & services including investment solutions such as fixed deposits, savings investment plans; financial solutions in the form of Personal loans, Business SME Loans, Mortgage loans as well as working capital.

The intention of the CRB Bank is to significantly grow its credit business for Social impact businesses as the market potential, is extremely profitable and contribute to sustainable development of the economy. The CRB Bank’s move into the SME sector continued to gain momentum for a third year in relation to both the traditional and the newer products which have been extremely well received.

Several initiatives were carried out simultaneously across the operating area to enhance our value proposition to the small and medium enterprise customer in terms of faster turnaround times and wider product and services ranges to meet the growing and evolving needs of their businesses. As a community focused organization CRB Bank remain emphatic on granting assistance to those entrepreneurs who generate employment within their community and venture into industries that would create social impact on society while generating a economic value to the country.

CRB Bank stands at the onset of a new era in our journey with the increasing competition and deteriorating margins across the board, lendinginstitutes are moving from a margin driven approach to a volume driven approach to expand their presence

- and market share while sustaining the industry as a whole. Accordingly CRB Bank plans to introduce a range of innovative investment, financial & working capital solutions that are attuned to cooperatives and especially for Sri Lankan customers’ diversified needs. I continue to believe that the key to CRB Bank’s success is the “Commitment and Passion” for whatever we do. Whether it is servicing customers, delivering value to shareholders or working for the betterment of society at large CRB Bank has remained determined in delivering business excellence and sustainable value to all its stakeholders.At the conclusion of a particularly challenging year for CRB Bank, I wish to convey my deep gratitude and appreciation for the strength, resilience and commitment shown by our Team. It is their unwavering support and enduring perseverance which has empowered our journey towards achieving community enrichment. My sincere appreciation also goes out to the Management Team of CRB Bank who have been tireless in their efforts to help navigate the monumental challenges we have faced and changes we have undergone during the year. I also wish to thank the Chairman, Mr. Dammika Solamon and all other members on the Board for their wise counsel, and unstinted support at all times which has been an immense source of strength I wish to express my gratitude to the Commissioner of the Co-operative Department for their advice, guidance and continued support. We are grateful to them for their committed efforts in the interest of all our stakeholder groups. In conclusion I am thankful to all CRB Bank members and customers for their loyalty and valued patronage. While assuring you of our best services at all times, I seek your esteemed support to ensure the sustainable development and growth of CRB Bank in the years ahead.

SANATH CHANDANA

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BOARD OF DIRECTORS

RETIRED BORD OF DIRECTORSDURING THE FINANCIAL YEAR

DIRECTORMR.D. WICKRAMASINGHA

Multi Purpose Co-operative SocietyPiliyandala

DIRECTORM.R.NISHANTHA COSTHA

Multi Purpose Co-operative Society Maharagama

CHAIRMANMR. DHAMMIKA SOLAMANSri Lanka cooperative Rural Bank

Federation Ltd

DIRECTORMR.D.L. SAMARAWICKRAMA

Multi Purpose Co-operative Society HomagamaMulti Purpose Co-operative Society

Sri Jayawardanapura Cooperative Inspector

VICE CHAIRMANMRS. KUSALA THUSHARI DAMAYANTHI

Multi Purpose Co-operative Society

Hewagam Koralaya West

Name Designation Held Society Period

Mr.Vimal Edirisingha Vice Chairman Multi Purpose Co-operative Society - Homagama 19.09.2016 - 31.12.2017

Mr.R.N.Susil Premachandra Director Multi Purpose Co-operative Society – Piliyandala 27.10.2016 – 31.12.2017

Mrs.D.D.K. Iranganie Director Multi Purpose Co-operative Society – Battaramulla 30.01.2017 – 27.07.2017

Mr. U.N.P.Perera Director Multi Purpose Co-operative Society - Kolonnawa 19.09.2016 – 2017.09.28

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ORGANIZATIONAL STRUCTURE

GENERAL MEETING

BOARD OF DIRECTORS

CHIEF EXECUTIVEOFFICER

CHAIRMAN

GENERAL MANAGER

DEPUTY GENERAL MANAGE(FINANCE) INTERNAL AUDITOR

MANAGEMENT ASSISTANT

FIELD OFFICER

MANAGER (RURAL BANK)

DEPUTY GENERALMANAGER (BANK)

BANK SERVICE MANAGER

MANAGER (SPECIAL)

MANAGEMENT ASSISTANT(04)

MANAGEMENT ASSISTANTCOMPUTER

MANAGER (SALES)

SALES ASSISTANT

LABOUR

DEPUTY GENERAL MANAGER(ADMINISTRATION)

MANAGERHUMAN RECOURSES

MANAGEMENT ASSISTANT(03)


DRIVERS (04)

OFFICE ASSISTANT

SECURITY OFFICER

ACCOUNTANT

ACCOUNT ASSISTANT

MANAGEMENT ASSISTANTS(04)


CASHIER

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CORPORATE MANAGEMENT & STAFF

U.L. SANATH CHANDANACHIEF EXECUTIVE OFFICER

N.L.INDIKA LIYANAGEACCOUNTANT

K.RAMESH MADUSHANKAFIELD OFFICER

B.A.J.NADEEKA SANDAMALIMANAGEMENT ASSISTANT

E.A.I.SANDUNI EDIRISINGHAMANAGER (RURAL BANK)

R.L.KAMMALGODA MUDALIGEINTERNAL AUDITOR

M.R.C.W.GUNATHILAKAACCOUNT ASSISTANT

K.P.ERANGAFIELD OFFICER

Y.R.CHATHURANGIMANAGEMENT ASSISTANT (COMPUTER)

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D.K.D.NIRMANIMANAGEMENT ASSISTANT

M.D.VIDUKA NILMINIMANAGEMENT ASSISTANT

G.D.D.SANJEEWANICASHIER

Y.P.A.PERERAMANAGEMENT ASSISTANT

S.D.V.P.SWARNAMALIMANAGEMENT ASSISTANT

W.D.I.D.GUNAWARDANAMANAGEMENT ASSISTANT

M.H.M.PREMACHANDRAMANAGER (RETAIL SHOP)

M.JAYALATH MAPATUNADRIVER

P.A.NILANTHA PRADEEPDRIVER

W.A.T.L.PRABHATHDRIVER

G.D.MANJULA KRISHANTHALABOUR

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CORPORATE INFORMATION1.1. Domicile and Legal Form

Colombo District Co-operative Rural Bank Union is a limited liability co-operative bank union incorporated in Sri Lanka under Co-operative Act No 05 of 1972. The registered office is located at 121/3,Pinibaruwatta Road, High Level Road, Homagama.

1.2. Principal Activities and Nature of Operations.

The principal activities of the Bank Union areacceptance of deposits, grating loan facilities, pawning and engaging agency services.

1.3. Parent Entity and Ultimate Parent Entity

The Bank Union is owned by following co-operative entities.• Colombo South Co-operative Society

• Homagama Multi Purpose Co-operative Society

• Hewagam Korale (West) Multi Purpose Co-operative Society

• Kolonnawa Multi Purpose Co-operative Society

• Sri Jayawardhanapura Multi Purpose Co-operative Society

• Piliyandala Bokundara Multi Purpose Co-operative Society

• Moratuwa Multi Purpose Co-operative Society

• Maharagama Multi Purpose Co-operative Society

• Battaramulla Multi Purpose Co-operative Society

• Hewagam Korale (East) Multi Purpose Co-operative Society

• Dehiwala Galkissa Multi Purpose Co-operative Society

1.4. Date of Authorization for the issue.

The financial statement of the Bank Union for the year entered 31 December 2017 was authorized

for the issue by the board of directors on …… March 2018.

BASIS OF PROPARATION2.1. The Statement of financial position, Statement of comprehensive Income, statement of Changes in Equity and Statement of Cash Flows,together with Accounting Policies and Notes ( Financial statements), as at 31st Decem-ber 2017 and for the year then ended, have been prepared in accordance with Sri Lank Accounting Standers, laid down by the institute of Charted Accountants of Sri Lanka.

2.2. Responsibilities for the Financial StatementThe Board of Directors acknowledges the responsibility in relation to the Financial State-ments as set out in the Statement appearing in theStatement of financial position of the Annual Report.

2.3. Basis of MeasurementThe Financial Statements have been prepared on the historical cost basis.

2.4. Functional and Presentation Currency

The Financial Statements of the Bank Union are presented in Sri Lanka Rupees, Which is the Currency of the primary economic environment in which the Bank Union operates. The amounts is the financial statements have been rounded off to the nearest Rupees, except where otherwise indicated as permitted by the Sri Lanka Accounting Standard – LKAS 01 on “ Presentation of Financial Statements.”

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2.5. Presentation of the Financial Statements

The Bank Union presents its statements of financial position broadly in order of liquidity. An analysis regarding recovery or settlement within 12 months after the reporting date (current) and more than 12 months after the Reporting date (non-current) is presented in note 22.

2.6. Comparative Information

The accounting policies have been consistently applied by the Bank Union and, are consistent with those used in the previous year.

3. SIGNIFICANT ACCOUNTING JUDGEMENTS,ESTIMATES AND ASSUMPTIONS

In the process of applying the Bank Union’saccounting policies, management has made the following judgments, which have the most significant effect on the amounts recognized in the financial statements.

3.1. Judgments, Estimates and Assumptions

The key assumptions concerning the future and other key sources of estimation at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below.

Going concern The Directors have made an assessment of the Bank Union’s ability to continue as a going concern and are satisfied that it has the resources to continue inbusiness for the foreseeable future. Furthermore, Board is not aware of any material uncertainties that may cast significant doubt upon the Bank Union’s

ability to continue as a going concern and they do ability to continue as a going concern and they do not intend either to liquidate or to cease operations of the Bank Union.

Therefore, the financial statements continue to be prepared on the going concern basis impairment losses on Loans and Advances.

The Bank Union reviews their individually significant loans and advances at each statement-of-finan-cial-position date to assess whether an impairment loss should be recorded in the income statement. In particular, management’s judgment is required in the estimation of the amount and timing of future cash flows when determining the impairment loss. These estimates are based on assumptions about a number of factors and actual results may differ, resulting in future changes to the impairment allowance.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESThe significant accounting policies applied by the Bank Union in preparation of its financial statements are included below. The accounting policies set out below have been applied consistently to all periodspresented in these financial statements, unlessotherwise indicated.

4.1. Financial Assets and Financial Liabilities – ini-tial recognition and subsequent measurement

Financial assets within the scope of LKAS 39 are classified as, Loans and Advances, Financial investments held-to-maturity, Financial investments-

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available-for-sale, Financial investments held for trading and other financial assets as appropriate.

Financial liabilities within the scope of LKAS 39 are classified as Due to Bank, Due to customers, and other borrowed funds and Trade & Other Payables.

a.Date of recognition

All financial assets and liabilities are initially ecognized on the trade date, i.e., the date that the Bank Union becomes the party of the contractual provisions of the instrument. This includes regular trades, purchases or sales of financial assets that require delivery of assets within the time frame generally established by regulation or convention in the market place.

b.Initial measurement of Financial Instruments

The Classification of Financial Assets and Financial Liabilities at initial recognition depend on their purpose and characteristics and the management’s intention in acquiring them. All Financial Assets and Financial Liabilities are measured initially at their fair value plus transaction costs, except in the case of financial assets and financial liabilities recorded at fair value through profit or loss.

1. Financial assets held for trading

Financial assets held for trading are recorded in the statement of financial position at fair value. Changes in fair value are recognized in ‘Net trading income.’ Interest and dividend income or expense is recorded in ‘Net trading income’ according to the terms of the contract, or when the right to the payment has been established.

2. Held – to – maturity financial investments

Held to maturity financial investments are fixed maturities, which the Bank Union has the intention and ability to hold to maturity. Subsequent to initial recognition, held to maturity financial investments are measured at amortized cost using the Effective Interest Rate (EIR), less impairment. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees that are an integral part of the EIR. The amortization is included in‘Interest income’ in the income statement. The losses arising from impairment of such investmentsare recognized in the income statement line‘Impairment (Charges) / Reversal for loans and other losses.’

If the Bank Union were to sell or reclassify more than an insignificant amount of held to maturityinvestments before maturity (other than in certain specific circumstances), the entire category would be tainted and would have to be reclassified as available for sale. Furthermore, the Bank Union would be prohibited from classifying any financial asset as held to maturity during the following two years.

3. Financial Assets classified as Loans and Receiva-bles

Loan & advance to customers include financialassets with fixed or determinable payments that are not quoted in an active market.

After initial measurement, amounts ‘Fixed Deposits’, ‘Securities purchased under Repurchase Agreements’ and ‘Loans and advances to customers’ are subsequently measured at amortized cost using the EIR, less allowance for impairment. Amortized is calculated by taking into account any discount or premium on acquisition and fees and costs that are an integral part of the EIR. The amortization isincluded in ‘Interest income’ in the income statement.

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The losses arising from impairment are recognized in the income statement in ‘Impairment charges on loans & other losses.’

4. Available for sale financial investments

Available for sale investments include equity and debt securities. Equity investments classified as available for sale are those which are neither classified as held for trading nor designated at fair value through profit or loss. Debt securities in this category are intended to be held for an indefinite period of time and may be sold in response to needs for liquidity or in response to charges in the market conditions. The Bank Union has not designated any loans or receivable for sale. After initial measurement, available for sale financial investments are subsequently measured at fair value. Unrealized gains and losses are recognized directly in equity (Other comprehensive income) in the available for sale reserve. When the investment is disposed of, the cumulative gain or loss previously recognized in equity is recognized in the income statement in other operating income. Where the Bank Union holds more than one investment in the same security, they are deemed to be disposed of on a first-in first-out basis. Interest earned whilst holding available for sale financial investments is reported as interest income using the EIR Dividends earned whilst holding available for sale investment recognized in the income statement as other operating income when the right of the payment has been established.The losses arising from impairment of such investments are recognized in the income statement in ‘impairment losses of financial investments’ and removed from the ‘’Available for sale reserve’ 5. Day 1’ profit or loss

When the transaction price differs from the fair val-ue of other observable current market transactions in the same instrument, or based on a valuation

technique whose variables include only data from observable markets, the Bank Union immediately recognizes the difference between the transaction price and fair value (a ‘Day 1’ profit or loss) in ‘Net gain/(loss) from trading’.

6. Financial liabilities

Financial liabilities within the scope of LKAS 39 are classified as Due to customers (Deposits), Due to Banks, Debt instruments issued and other borrowed funds and trade and other payables as appropriate. The Bank Union determines the classification of its financial liabilities at initial recognition.

The Bank Union classifies financial liabilities in tofinancial liabilities at FVTPL or other financial liabilities in accordance with the substance of the contractual arrangement and the definitions offinancial liabilities.

The Bank Union recognizes financial liabilities in the Statement of financial position when the Bank Union becomes a party to the contractual provisions of the financial liability

c) Other Financial liabilities

Other financial liabilities including deposits, debt issued by the Bank Union and the otherborrowed funds are initially measured at fair value less transaction cost that are directly attributable to the acquisition and subsequently measured at amortized cost using the EIR method

Amortized cost is calculated by taking into account any discount or premium on the issue and costs that are an integral part of the EIR.

4.2 De-recognition of financial assets and Liabilities

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a) Financial asset

A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets) is derecognized when:

• The rights to receive cash flows from the asset have expired• The Bank Union has transferred its rights to receive cash

flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass–through’ arrangement; and either:

• The Bank Union has transferred substantially all the risks and rewards of the asset

• The Bank Union has neither transferred nor retained sub-stantially all the risks and rewards of the asset, but has transferred control of the asset

When the Bank Union has transferred its rights to receive cash flows from an asset or has entered into a pass–through arrangement, and has neither transferred nor retained substantially all of the risks and rewards of the asset nor transferred control of the asset, the asset is recognized to the extent of the Bank Union’s continuing involvement in the asset. In that case, the Bank Union also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Bank Union has retained.

Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Bank Union could be required to repay.

b) De-recognition of financial liabilities

A financial liability is derecognized when the obligation under the liability is discharged or

cancelled or expires. Where an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a de-recognition of the original liability and the recognition of a new liability. The difference between the carrying value of the original financial liability and the consideration paid is recognized in profit or loss.

4.2 Determination of fair value of Financial Instruments

The fair value for financial instruments traded inactive markets at the reporting date is based on their quoted market price or dealer price quotations without any deduction for transaction costs.

For all other financial instruments not traded in an active market, the fair value is determined by using appropriate valuation techniques. Valuationtechniques include the discounted cash flow method, comparison with similar instruments for which market observable prices exists, pricing models and other relevant valuation models.

4.3 Impairment of Financial Assets

The Bank Union assesses at each reporting date, whether there is any objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial

assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events that have occurred after the initial recognition of the asset (an ‘incurred loss event’) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated.

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a) Loans and advances to customers

Losses for impaired loans are recognized promptly when there is objective evidence that impairment of a loan or portfolio of loans has occurred. Impairment allowances are calculated on individual loans andfor group of loans which is done collectively. Impairment losses are recorded as charges to the income statement. The carrying amount of impaired loans on the balance sheet is reduced through the use of impairment allowance accounts. Losses expected from future events are not recognized.

Write-off of loans and advances

Loans (and the related impairment allowance Accounts) are normally written off, either partially or in full, when there is no realistic prospect of recovery. Where loans are secured, this is generally after receipt of any proceeds from the realization of security.

Reversals of impairment

If the amount of an impairment loss decreases in a subsequent period, and the decrease can be related objectively to an event occurring after the impairment was recognized, the excess is written back by reducing the loan impairment allowance account accordingly. The write-back is recognized in the income statement.

4.4 Cash and Cash Equivalents

Cash and Cash Equivalents are defined as cash in hand, balances with banks and Investments with short maturities i.e. three months or less from the date of acquisition.

For the purpose of cash flow statement, cash and cash equivalents consist of cash in hand and balance

with banks and Investments with short maturities i.e. three months or less from the date of acquisition net of outstanding bank overdrafts.

4.5 Non Financial Assets

4.5.1 Property and equipment

Property & Equipment are recognized if it is probable that future economic benefits associated with the asset will flow to the entity and the cost of the asset can be measured reliably in accordance with LKAS 16 on Property, Plant & Equipment. Initially property and equipment are measured at cost.

Recognition and measurement

Cost Model

Property and equipment is stated at cost, excluding the costs of day–to–day servicing, less accumulated depreciation and accumulated impairment in value. Such cost includes the cost of replacing part of the equipment when that cost is incurred, if the recognition criteria are met.

Subsequent Cost

These are costs that are recognized in the carrying amount of an item, if it is probable that the future economic benefits embodied within that part will flow to the Group and it can be reliably measured.

Depreciation

Depreciation is provided on a straight-line basis over the period appropriate to the estimated useful lives of different types of assets, at varying rates specified as follows;

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Category Rate (per annum)Motor Vehicles 25 %Furniture & Fittings 10 %Office Equipment 10 %Equipment 10 %Machinery 10%Building 5%

Depreciation of an asset begins when it is available for use whereas depreciation of an asset ceases at the earlier of the date that the assets is classified as held for sale and the date that the asset is derecognized.

The asset’s residual values, useful lives and methods of depreciation are reviewed, and adjusted if appropriate, at each financial year end.

De-recognition

Property and equipment is derecognized on disposal or when no future economic benefits are expected from its use. Any gain or loss arising onde-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is recognized in ‘Other operating income’ in the income statement in the year the asset is derecognized.

4.6.2 Intangible Assets

All computer software costs incurred for use by the Bank Union which are not integrally related to as-sociated hardware, and can be, clearly identifiable, reliably measured and it’s probable they will lead to future economic benefits, are included in the Bal-ance Sheet under the category Intangible Assets and carried at cost less cumulative amortization and ac-cumulated impairment losses.

Expenditure incurred on Intangible Assets is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is expensed as incurred.

Intangible assets are amortized on a straight line basis to the Income Statement from the date when the asset is available for use, over the best estimate of its useful economic life.

Computer Software 20 %

4.6.3 Impairment of non–financial assets

The Bank Union assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Bank Union estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or CGU’s fair value less costs to sell and its value in use. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre–tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs to sell, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded subsidiaries or other available fair value indicators.

For assets, an assessment is made at each reportingdate as to whether there is any indication thatpreviously recognized impairment losses may no longer exist or may have decreased. If such indication exists, the Bank Union estimates the -

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asset’s or CGU’s recoverable amount. A previouslyrecognized impairment loss is reversed only if there has been a change in the assumptions used todetermine the asset’s recoverable amount since the last impairment loss was recognized. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceeds the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years. Such reversal is recognized in the income statement.

4.7 Non-Financial Liabilities

4.7.1 Retirement Benefit Obligations

(i) Gratuity

All the employees of the Bank Union are eligible for gratuity under the Payment of Gratuity Act No. 12 of 1983.

Employees who have resigned or whose services

are terminated other than by retirement are eligible to receive the terminal gratuity under the Payment of Gratuity Act No. 12 of 1983 at the rate of half of the Gross Salary applicable to the last month of the financial year in which the employment is terminated or resigned, for each year of completed service, for those who have served in excess of 5 years. (ii) Defined contribution plan

The Bank Union also operates a defined contribution plan. The contribution payable to a defined

Contribution plan is in proportion to the services rendered to the Bank Union by the employees and is recorded as an expense under ‘Personnel expenses’. Unpaid contributions are recorded as a liability.

The Bank Union contributes to the following Schemes:

Employees’ Provident Fund

The bank and employees contribute 12% and 8% respectively of the employee’s monthly gross salary (excluding overtime) to the Provident Fund.

Employees’ Trust Fund

The Bank Union contributes 3% of the employ-ee’s monthly gross salary excluding overtime to theEmployees’ Trust Fund maintained by the Employees’ Trust Fund Board.

Employees’ Pension scheme

The bank and employees contribute 2.5% & 5% respectively the permanent employees’ gross salary excluding over time to the Western Province employees’ pension scheme the fund is maintain by the Department of Co-operative Development.

4.7.2 Taxation

The bank is exempted from income tax and withholding tax in accordance with exemption given to the co-operative entities registered under the co-operative act No 15 of 1972 in the Inland Revenue act No 24 of 2017.

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INVESTMENT INFORMATIONAccounting Policy

Investment property is property held either to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods or services or for administrative purposes.

Investment property is initially recognized at cost. Subsequent to initial recognition the investment property is stated at fair values, which reflect mar-ket conditions at the Statement of Financial Position date. Gains or losses arising from changes in fair val-ue are included in the Statement of Profit or Loss in the year in which they arise.

De recognition

Investment property is derecognized when either they have been disposed of or when the investment property is permanently withdrawn from use and no future economic benefit is expected from its dispos-al. Any gains or losses on the retirement or dispos-al of an investment property are recognized in the Statement of Profit or Loss in the year of retirement or disposal.

Fair Value of Investment Property

Investment property of the Bank Union is reflected at fair value using the income approach. When ar-

riving for the income approach it took consideration of the discounted cash flow projections based on the monthly rental amount of the property and the discount rates that reflect uncertainty in the amount and timing of cash flows.

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COLOMBO DISTRICT CO-OPERATIVE RURAL BANK UNION LTD STATEMENT OF FINANCIAL POSITION AS AT 31.12.2017

Details Notes Year 2017 Year 2016Assets Cash and cash Equivalents 11 (21,236,599) 12,999,550 Loans and Advances 12 705,306,779 660,600,679 Financial Investments - held to Maturity 13 741,034,358 591,891,154

Other Non Financial Assets 14 28,786,177 34,435,240 Property Plant and Equipment 15 42,338,519 30,732,061

Total Assets 1,496,229,234 1,330,658,684

Liabilities

Due to Customers 16 1,249,225,693 1,118,417,339

Other Financial Liabilities 17 7,440,966 11,611,217 Other Non FinancialLiabilities 18 136,429,256 112,239,287

Total Liability 1,393,095,915 1,242,267,843 Share Holders' Funds Stated Capital 19 5,849,190 3,215,943 Retained Earnings 20 38,957,297 30,960,560

Statutory Reserve 25,794,577 22,083,653

Co-operative Fund 6,140,889 4,656,520

Share Dividend Fund 482,354 2,954,841

Other Reserves 21 25,909,012 24,519,324 Total Share Holders’ Funds 103,133,319 88,390,841 Total Liabilities & Share Holders’ Funds 1,496,229,234 1,330,658,684

We certify that these Financial Statements are in compliance with the requirements of the Companies Act No of 2007

…………………………….. ……………………………......... Accountant Chief Executive Officer

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COLOMBO DISTRICT CO-OPERATIVE RURAL BANK UNION LTD STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DEC 2017

COLOMBO DISTRICT CO-OPERATIVE RURAL BANK UNION LTD NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DEC 2017

Details Notes Year 2017 Year 2016

Interest Income 6.1 174,451,369 134,065,565

Interest Expenses 6.2 140,805,299 99,033,930 Net Interest Income 33,646,070 35,031,635 Fee & Commission income 7 3,900,566 661,484 Other operating income (net ) 8 2,981,454 165,193

Net Operating Income from operations before taxation 40,528,090 35,858,312

Operating Expenses Personal Cost 9 12,421,706 10,263,333 Depreciations of Property Plant & Equipment 15.2 3,091,615 2,294,612

Other Operating Expenses 10 10,171,073 9,651,941 Profit/(loss) from operations before taxation 14,843,696 13,648,426

Profit/(loss) for the year 14,843,696 13,648,426

2017 20166 INTEREST INCOME AND EXPENCES 6.1 Interest income

Loans and Advances 86,145,063 75,750,638 Investment Income 88,306,306 58,314,927 Total interest income 174,451,369 134,065,565

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2017 20166.2 INTEREST EXPENSES

Due to Banks 2,244,408 177,097 Due to Customers 138,560,891 98,856,833 Total interest Expenses 140,805,299 99,033,930 Net interest income 33,646,070 35,031,635

2017 20167 FEE AND COMMISSION INCOME

Credit Related Fees and Commissions 3,900,566 661,484 Total Fee & Commission income 3,900,566 661,484

2017 20168 OTHER OPERATING INCOME

Dividend income 3,438,500 371,000 Net trading income from retail business (457,046) (205,807)Total Other Operating income 2,981,454 165,193

2017 201610 OTHER OPERATING EXPENSES 2017 2016

Office Administration & Establishment Expenses 6,219,963 4,549,694 Advertising & business Promotion Expenses 3,951,110 5,102,247 10,171,073 9,651,941

2017 20169 PERSONAL COST

Salaries and Bonus 8,476,972 6,835,192 Directors' Emoluments 1,580,302 992,298 Employer's Contribution to EPF 605,521 506,490 Employer's Contribution to ETF 151,380 126,263 Gratuity Charge/(reversals ) for the year 419,137 243,228 Other Staff related Expenses 1,188,394 1,559,862 12,421,706 10,263,333

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2017 201611 CASH AND CASH EQUIVALENTS

Cash in Hand 484,082 Balance with Banks (21,236,599) 12,515,468

2017 2016LOANS AND ADVANCES

12 Term Loans 330,950,537 298,858,439 Staff Loans 2,298,441 1,781,777 Personal Loans 35,820,840 50,708,861 Advance 2,735,350 2,489,850 Mortgage Loans 180,310,063 200,823,420 552,115,231 554,662,347 Interest receivable 153,191,548 105,938,332 Net Loans and Advances 705,306,779 660,600,679

2017 201613 OTHER FINANCIAL ASSETS

Deposits with Banks and Other Financial Institutions 717,686,224 571,511,124 investment in shares 23,348,134 20,380,030 741,034,358 591,891,154

2017 201614 OTHER NON FINANCIAL ASSETS

Others 28,786,177 34,435,240 28,786,177 34,435,240

NET CASH AND CASH EQUIVALENTS FOR THE PURPOSE OF THE CASH FLOW STATEMENT

Favorable Cash & Cash Equivalents / Bank Overdrafts (21,236,599) 12,999,550

Net Cash and Cash Equivalents (21,236,599) 12,999,550

COLOMBO DISTRICT CO-OPERATIVE RURAL BANK UNION LTD NOTES FOR THE ACCOUNTS STATEMENTS FOR THE YEAR ENDED 31 DEC 2017

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15 Property Plant andEquipment

15.1 Gross Carrying Amount Land and Building Motor Vehicles Office Equipment Total

Balance as at 01.01.2017 21,830,002 19,800,560 8,805,045 50,435,607

Additions/Acquisitions 12,017,936 - 2,756,389 14,774,325 Disposal - 4,805,000 - 4,805,000 Balance as at 31.12.2017 33,847,938 14,995,560 11,561,434 60,404,932

15.2 Depreciation Land and Building Motor Vehicles Office Equipment Total

Balance as at 01.01.2017 5,120,500 10,527,039 4,056,007 19,703,546

Charge for the year 335,472 1,998,252 757,891 3,091,615

Disposal - 4,728,748 - 4,728,748

Balance as at 31.12.2017 5,455,972 7,796,543 4,813,898 18,066,413 42,338,519

2017 201616 DUE TO CUSTOMERS

Fixed Deposits 1,212,796,719 1,068,830,174 Savings Deposits 36,428,974 49,587,165 1,249,225,693 1,118,417,339

2017 201617 OTHER FINANCIAL LIABILITIES

Demo Loan 4,416,280 6,933,710 Other Creditors 3,024,686 4,677,507 7,440,966 11,611,217

2017 201618 OTHER NON FINANCIAL LIABILITIES

Accrued Interest 121,536,239 97,814,057 Accrued Incentive 135,462 135,462 Creditors 1,564,579 1,610,258 Accrual & Other Payable 13,192,976 12,679,510 136,429,256 112,239,287

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2017 201619 STATED CAPITAL

Issued and Fully Paid - ordinary shares at the beginning of the year 3,215,943 3,215,943

Issued during the year 2,633,247 At the end of the year 5,849,190 3,215,943 Total Stated Capital 5,849,190 3,215,943

2017 201620 RETAINED EARNINGS

As at 1st January 30,960,560 22,089,082 Profit/ (Loss) for the Year 14,843,696 13,648,426 Transfer (to)/from Statutory Reserves Fund 6,846,959 4,776,948 As at 1st December 38,957,297 30,960,560

2017 2016 AS AT DECEMBER 31 ST

21 Other Reserves Loan Protective Fund 684,798 684,798 Deposit Protective Fund 1,031,152 1,031,867 Advertising Fund 1,194,024 1,100,453 Building Fund 3,092,060 2,998,489 Share transfer Fund 1,610,416 1,423,273 Vehicle Fund 2,115,415 2,021,843 Bad and doubtful Fund 6,200,063 6,119,660 Employee welfare Fund 366,931 273,360 Education Fund 661,181 474,038 Common welfare Fund 1,774,005 1,586,862 Member society rebate 1,934,859 1,747,716 Deposit Protected Fund - Rural Bank Union 5,244,108 5,056,965 25,909,012 24,519,324


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22 YEAR ENDED 31ST DECEMBER 2017 2016

With in 12 months

After 12 Months

Total as at 31-12-2017

Within 12 months

After 12 Months

Total as at 31-12-2016

Rs Rs Rs Rs Rs Rs

Assets

Cash and cashEquivalents (21,236,599) (21,236,599) 12,999,550 12,999,550.00

Loans and Advances 2,735,350 702,571,429 705,306,779 2,489,850 658,110,829 660,600,679.00

Financial Investments - held to Maturity 741,034,358 741,034,358 591,891,154 591,891,154.00

Other Non Financial Assets 28,786,177 28,786,177 34,435,240 34,435,240.00

Property Plant and Equipment 42,338,519 42,338,519 30,732,061 30,732,061.00

Total Assets 751,319,286 744,909,948 1,496,229,234 641,815,794 688,842,890 1,330,658,684.00

Liabilities - -

Due to Bank - -

Due to Customers 36,428,974 1,212,796,719 1,249,225,693 49,587,165 1,068,830,174 1,118,417,339.00

Other Financial Liabilities 7,440,966 7,440,966 11,611,217 11,611,217.00

Other Non Financial Liabilities 136,429,256 136,429,256 112,239,287 112,239,287.00

Total Liability 172,858,230 1,220,237,685 1,393,095,915 161,826,452 1,080,441,391 1,242,267,843.00

Share Holders' Funds - -

Stated Capital 5,849,190 5,849,190 3,215,943 3,215,943.00

Retained Earnings 38,957,297 38,957,297 30,960,560 30,960,560.00

Other Reserves 58,326,832 58,326,832 54,214,338 54,214,338.00

Total Liabilities & Share Holders’ Funds 172,858,230 1,323,371,004 1,496,229,234 161,826,452 1,168,832,232 1,330,658,684.00


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Year ended 31st December Stated Capital

Retained Earnings

Statutory Reserves

Co-operative

fund

Share dividend

Fund

Other Funds Total

Rs Rs Rs Rs Rs Rs Rs

Balance as at 1st January 2016

3,215,943

22,089,082

18,671,547

3,291,678

2,954,841

24,519,324

74,742,415

Net Profit for the year 13,648,426 13,648,426

Other comprehensive income

-

Transfer to StatutoryReserves & others

(4,776,948)

3,412,106

1,364,842 -

Balance as at 31st December 2016

3,215,943

30,960,560

22,083,653

4,656,520

2,954,841

24,519,324

88,390,841

-

Balance as at 01st January 2017

3,215,943

30,960,560

22,083,653

4,656,520

2,954,841

24,519,324

88,390,841

Net Profit for the year 14,843,696 14,843,696

Transfer to Statutory Reserves & others

2,633,247

(6,846,959)

3,710,924

1,484,369

(2,472,487)

1,389,688

(101,218)

Balance as at 31st December 2017

5,849,190

38,957,297

25,794,577

6,140,889

482,354

25,909,012

103,133,319

COLOMBO DISTRICT CO-OPERATIVE RURAL BANK UNION LTD STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DEC 2017

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CORPORATE INFORMATION Name of the entity : Colombo District Cooperative Rural Bank Union Limited

Legal Form : Colombo District Co-operative Rural Bank Union is a limited liability co-operative bank union incorporated in Sri Lanka under Co-operative Act No 05 of 1972. The registered office is located at 121/3, Pinibaruwatta Road, High Level Road, Homagama.

Registration No : CO/DS/20

Address : 121/3, Pinibaruwatta Road, Galawilawatta, Highlevel Road, HomagamaWebsite : www.crbbank.lkE-mail : [email protected] no : +94 112 857472 / +94 112 855484 / +94 112 855544Fax : +94 112 857472

Annual Report 2017 All rights reserved © Colombo District Cooperative Rural Bank Union LimitedDeveloped and designed by Attrex Inc - 0777667728 - Asanka Chandranath (Bsc. Finance(SP) USJP, PGEDBM (IBSL), CIMA-UK(PF), MBA-UOC(reading)

Colombo District Cooperative Rural Bank Union Limited

121/3, Pinibaruwatta Road, Galawilawatta, Highlevel Road, HomagamaWebsite : www.crbbank.lk | E-mail : [email protected]

Contact no : +94 112 857472 / +94 112 855484 / +94 112 855544

ANNUAL - CRB BankANNUL RRT 2017 02 ABOUT COLOMBO DISTRICT CO-OPERATIVE RURAL BANK UNION LTD Colombo...

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