A resilient performance

Capital market performance

The Colombo Stock Exchange (CSE) has 278 companies with a market capitalisation of Rs. 3,111 Bn. as at 31 March 2021. All Share Price Index (ASPI) and S&P Sri Lanka 20 Index (S&P SL 20) stood at 7,121 and 2,850 respectively.

The issued ordinary shares of Citizens Development Business Finance PLC are listed on the Main Board of the Colombo Stock Exchange.

A steady growth momentum is expected, considering the share movement trend of CDB. During the financial year, prices of ordinary voting and ordinary non-voting shares of CDB generated a capital appreciation of 133% and 160% respectively, whereas ASPI performed 55.75% YoY as of 31 March 2021. CDB.N was trading between Rs. 60.10 – Rs. 140.00 and CDB.X was trading between Rs. 38.50 – Rs. 100.00. Overall, CDB stock market capitalisation has appreciated by 53.33% YoY, where Rs. 4.75 Bn. market capitalisation in 2019/20 has grown to Rs. 7.28 Bn.

We have maintained a positive and effective communication with investors and shareholders over the period, leading to enhanced relationships and performance of the organisation. We have connected with the investors through online and offline communication, in order to ensure fair and timely disclosures, and provide relevant information.

Stock exchange listing

The unaudited Interim Financial Statements for the three quarters in the financial year 2020/21 have been submitted to the CSE within the stated 45 day period. The unaudited Interim Financial Statements for the final quarter was submitted to the CSE within the stated 60 days from the Statement of Financial Position date.

Overall share market

Market capitalisation of Rs. 3,111 Bn. reflecting an increase of 46% compared to Rs. 2,128 Bn. in the previous year.

	31 March 2021
All Share Price Index (ASPI)	7,121
S&P Sri Lanka 20 Index (S&P SL 20)	2,850
Market capitalisation (Rs. Bn.)	3,111

Financial information

Operating in a very challenging economic context in 2020/21, we recorded a resilient performance, with consistent revenue, recording a 39% YoY growth in profit after tax and a 1.22% growth in our balance sheet as at 31 March 2021. The net asset value per share increased by 22% to Rs. 201.34. Strength of our balance sheet and continued improvement in our financial position reflect our financial stability and financial strength.

Highlights

	2020/21	2019/20
Price earnings ratio (Times)	3.00	2.74
Earnings per share (Rs.)	36.64	26.32
Net assets value per share (Rs.)	201.34	165.58
Price to Book value (Times)	0.55	0.44
Return on Equity (%)	19.97	17.99
Return on Assets (%)	2.73	1.98
Earnings Yield (%)	33.31	36.50
Dividend Yield (%)	6.82	–
Dividend pay-out (%)	20.47	–
Dividend Cover (Times)	4.89	–
Net interest margin (%)	8.10	7.17
Debt/Equity Ratio (Times)	5.45	6.64
Quick Assets Ratio (Times)	0.94	0.86
Interest Cover (Times)	1.48	1.25

For further analysis of the financial performance of the company refer CFO’s analysis on pages 24 - 29.

Dividends

For the financial year ended 31 March 2021, CDB declared a cash dividend of Rs. 7.50 per share for both voting and non-voting shares of Rs. 445,868,100 and Rs. 77,577,510 respectively, which aggregated to a sum of Rs. 523,445,610.

Share price

	Voting		Non -Voting
	2020/21 Rs.	2019/20 Rs.	2020/21 Rs.	2019/20 Rs.
High	140.00	101.10	100.00	78.90
Low	60.10	65.80	38.50	43.00
Last traded	110.00	72.10	71.90	44.80

Performance of the share

Share trading information

Annual transaction information – Ordinary voting shares

	2020/21	2019/20	2018/19	2017/18	2016/17
Number of transactions	1,556	1,401	1,970	3,330	2,965
Number of shares traded	2,497,879	5,647,980	2,735,334	7,354,042	4,453,153
Value of shares traded (Rs.)	240,347,905	500,892,517	229,888,715	508,655,792	351,201,140

Annual transaction information – Ordinary non-voting shares

	2020/21	2019/20	2018/19	2017/18	2016/17
Number of transactions	3,341	1,267	789	1,261	1,200
Number of shares traded	4,322,586	1,175,929	755,533	1,172,546	1,601,961
Value of shares traded (Rs.)	306,053,238	76,157,195	55,384,111	70,699,527	116,268,214

 

Share price movement

[[QR Code View quarterly summary of voting and non-voting shares]]

Quarterly summary

Period - Voting	High Rs.	Low Rs.	Close Rs.	Trade volume	Share volume	Turnover Rs.	Days traded
2020/21 - Q1	93.00	60.10	80.00	139	1,290,775	113,606,067	29
2020/21 - Q2	92.00	74.40	91.10	217	291,601	25,308,131	40
2020/21 - Q3	94.00	78.60	89.10	282	145,308	12,516,830	53
2020/21 - Q4	140.00	88.50	110.00	918	770,195	88,916,865	51

Period – Non-voting	High Rs.	Low Rs.	Close Rs.	Trade volume	Share volume	Turnover Rs.	Days traded
2020/21 - Q1	60.00	38.50	56.40	254	72,314	3,764,721	32
2020/21 - Q2	69.00	51.50	67.50	886	766,413	46,678,384	61
2020/21 - Q3	69.90	57.00	65.00	715	531,951	33,523,271	59
2020/21 - Q4	100.00	65.00	71.90	1,486	2,951,908	222,086,848	57

Market capitalisation

As at 31 March 2021	Number of shares	Market price per share	2020/21	2019/20
Voting	59,449,080	110.00	6,539,398,800	4,286,278,668
Non-voting	10,343,668	71.90	743,709,729	463,396,326
Total			7,283,108,529	4,749,674,994

Float adjusted market capitalisation

As at 31 March 2021	Number of shares	Market price per share	Market capitalisation (Rs.)	Percentage of public holders (%)	Float adjusted market capitalisation (Rs.)
Voting	59,449,080	110.00	6,539,398,800	44.22	2,891,722,149
Non-voting	10,343,668	71.90	743,709,729	83.13	618,245,898
Total			7,283,108,529		3,509,968,047

The float adjusted market capitalisation of the Company falls under Option 4 of Rule 7.13.1 (a) of the Listing Rules of the Colombo Stock Exchange, and the Company has complied with the minimum public holding requirement applicable under the said option.

Shareholder analysis

Ordinary voting – Composition according to shareholding

	Resident			Non-resident			Total
Shareholdings	Number of shareholders	No. of shares	Percentage (%)	Number of shareholders	No. of shares	Percentage (%)	Number of shareholders	No. of shares	Percentage (%)
1 to 1,000 Shares	1,043	197,828	0.33	5	1,111	–	1,048	198,939	0.33
1,001 to 10,000 Shares	506	1,349,419	2.27	3	8,603	0.01	509	1,358,022	2.28
10,001 to 100,000 Shares	150	4,443,182	7.47	1	15,685	0.03	151	4,458,867	7.50
100,001 to1,000,000 Shares	28	5,704,345	9.60	–	–	–	28	5,704,345	9.60
Over 1,000,000 Shares	14	47,728,907	80.29	–	–	–	14	47,728,907	80.29
	1,741	59,423,681	99.96	9	25,399	0.04	1,750	59,449,080	100.00

Composition of voting shareholders

	2020/21			2019/20
Categories of shareholders	No. of shareholders	No. of shares	Holding %	No. of shareholders	No. of shares	Holding %
Individual	1,662	8,163,576	13.73	1,771	8,735,165	14.69
Institutional	88	51,285,504	86.27	101	50,713,915	85.31
	1,750	59,449,080	100.00	1,872	59,449,080	100.00

Ordinary non-voting – Composition according to shareholding

	Resident			Non-resident			Total
Shareholdings	Number of shareholders	No. of shares	Percentage (%)	Number of shareholders	No. of shares	Percentage (%)	Number of shareholders	No. of shares	Percentage (%)
1 to 1,000 Shares	1,473	188,221	1.82	4	916	0.01	1,477	189,137	1.83
1,001 to 10,000 Shares	170	627,921	6.07	1	7,046	0.07	171	634,967	6.14
10,001 to 100,000 Shares	73	2,474,221	23.92	1	39,500	0.38	74	2,513,721	24.30
100,001 to1000,000 Shares	16	3,820,081	36.93	2	216,018	2.09	18	4,036,099	39.02
Over 1,000,000 Shares	2	2,969,744	28.71	–	–	0.00	2	2,969,744	28.71
	1,734	10,080,188	97.45	8	263,480	2.55	1,742	10,343,668	100.00

Composition of non-voting shareholders

	2020/21			2019/20
Categories of shareholders	No. of shareholders	No. of shares	Holding %	No. of shareholders	No. of shares	Holding %
Individual	1,656	4,693,084	45.37	1,649	4,783,572	46.25
Institutional	86	5,650,584	54.63	87	5,560,096	53.75
	1,742	10,343,668	100.00	1,736	10,343,668	100.00

 

Information on share capital movement

Year	Details Prior to Introduction	Share Type Voting shares	Basis	No. of shares issue	No. of voting shares issues (after issue)	No. of non-voting shares issues (after issue)	New Capital raised
2010	Introduction				39,685,048
2011	Right Issue	Voting shares @ Rs. 70.00	1 for every 6 voting shares	6,614,175	46,299,223		462,992,250
	Rights Issue	Non-voting shares @ Rs. 45.00	1 for every 7 voting shares	5,669,293	46,299,223	5,669,293	255,118,185
2012	Scrip issue	Non-voting shares	1 for every 22.222224 voting shares and non-voting shares	2,336,691	46,299,223	8,005,984
2019	Right issue	Voting shares @ Rs. 77.00	1 for every 4 voting shares	11,574,805	57,874,028	8,005,984	891,259,985
	Rights issue	Non-voting shares @ Rs. 64.00	1 for every 4 non-voting shares	2,001,496	57,874,028	10,007,480	128,095,744
2019	Scrip issue	Voting shares	0.02721519 new share for every one existing voting shares issued	1,575,052	59,449,080	10,007,480
	Scrip issue	Non-voting shares	0.03359375 new share for every one existing non-voting shares issued	336,188	59,449,080	10,343,668

Note- Ordinary voting shares held under CDB ESPO Trust Fund (Pvt) Limited were distributed among its beneficiaries (entitles employees) on 2 March 2016.

Establishment of an Employee Share Option Plan (ESOP 2021)

In terms of rule 5.6.6 (b) of the listing rules of the CSE, we are pleased to inform you that the Board of Directors of Citizens Development Business Finance PLC has duly resolved to establish an ESOP on the basis outlined below.

Employee Share Option Plan (ESOP 2021)

1. The total number of options to be granted for the period commencing from 1 September 2021 to 1 September 2023 is 2,972,454 ordinary voting shares

2. The number of shares to be issued under ordinary voting shares represents 5%

3. The stated capital as at 31 March 2021 is Rs. 2,350,362,616

4. The number of shares representing the stated capital as at 31 March 2021:

• Ordinary voting shares 59,449,080
• Ordinary non-voting shares 10,343,668

The granting of options under the proposed ESOP is in compliance with the Listing Rules of the CSE and is subject to the Exchange approving, in principle, the issue and listing of shares issued pursuant to such scheme and obtaining shareholder approval, by way of a special resolution at a General Meeting.

List of 20 major shareholders based on their shareholdings as at 31 March 2021

Ordinary voting shares

.	Name	Shareholding	(%)
1.	Ceylinco Life Insurance Limited Account No.3	19,120,225	32.16
2.	Janashakthi Insurance PLC – Shareholders	3,044,855	5.12
3.	Janashakthi Insurance PLC – Non Par	2,977,453	5.01
4.	Cargills Bank Limited/Asia Management Consultancy (Private) Limited	2,444,169	4.11
5.	People's Leasing & Finance PLC/Mr W P C M Nanayakkara	2,399,957	4.04
6.	Commercial Bank of Ceylon PLC/Janashakthi Limited	2,384,787	4.01
7.	Ceylinco Insurance PLC Account No.2 (General Fund)	2,379,654	4.00
8.	Ceylinco Life Insurance Limited Account No.1	2,377,871	4.00
9.	Asia Management Consultancy (Private) Limited	2,345,816	3.95
10.	Seylan Bank PLC/Janashakthi PLC	2,241,048	3.77
11.	Citizens Development Business Finance PLC A/C 02 (CDB Employee Gratuity Fund)	2,194,152	3.69
12.	People's Leasing & Finance PLC/Mr S V Munasinghe	1,316,247	2.21
13.	People’s Leasing & Finance PLC/Mr R H Abeygoonewardena & Mrs V F Abeygoonewardena	1,301,785	2.19
14.	Seylan Bank PLC/Tennakoon Mudiyanselage Damith Prasanna Tennakoon	1,200,888	2.02
15.	Mr E Karthik	551,486	0.93
16.	People's Leasing & Finance PLC/Mrs N D Kodagoda	503,972	0.85
17.	People's Leasing & Finance PLC/Mr H K Dassanayake	349,115	0.59
18.	People's Leasing & Finance PLC/Mr I M Kotigala	327,798	0.55
19.	National Development Bank PLC/Asia Management Consultancy	325,000	0.55
20.	Janashakthi PLC Account No.1	301,588	0.51
	Subtotal of top 20 shareholders	50,087,866	84.25
		9,361,214	15.75
	Total	59,449,080	100.00

The percentage of shares held by the public as at 31 March 2021 was 44.22% (with 1,735 public shareholders).

Ordinary non-voting shares

	Name	Shareholding	(%)
1.	J B Cocoshell (Pvt) Ltd	1,588,251	15.35
2.	Deutsche Bank AG As Trustee for JB Vantage Value Equity Fund	1,381,493	13.36
3.	Mr Amarakoon Mudiyanselage Weerasinghe	635,095	6.14
4.	Mr Jafferjee Murtoza Ali	356,380	3.45
5.	Askold (Private) Limited	327,840	3.17
6.	Mr Yusuf Husseinally Abdulhussein	315,554	3.05
7.	Commercial Bank of Ceylon PLC/Andaradeniya Estate (Pvt) Ltd	286,515	2.77
8.	People's Leasing & Finance PLC /Mr H M Abdulhussein	274,402	2.65
9.	Essajee Carimjee Insurance Brokers (Pvt) Ltd	263,520	2.55
10.	Miss Rukaiya Husseinally Abdulhussein	260,653	2.52
11.	Mr Abbasally Nuruddin Esufally	217,551	2.10
12.	Avanti Manoja Moonesinghe	165,375	1.60
13.	Little Smile Organic (Pvt) Ltd	150,856	1.46
14.	Sabapathi Mudiyanselage Pradeep Lal Jayaratne	133,966	1.30
15.	People's Leasing & Finance PLC/Mr H A D U G Gunasekera	115,616	1.12
16.	Gold Investment Limited.	108,009	1.04
17.	Jafferjees Investments (Pvt) Ltd.	108,009	1.04
18.	Mukesh Abhaykumar Valabhji	108,009	1.04
19.	Commercial Bank of Ceylon PLC Account No. 4	105,390	1.02
20.	Lakdhanavi Limited	103,359	1.00
	Subtotal of top 20 share holders	7,005,843	67.73
		3,337,825	32.27
	Total	10,343,668	100.00

The percentage of shares held by the public as at 31 March 2021 was 83.13% (with 1,735 public shareholders).

Directors’ and Chief Executive Officer’s Shareholding as at 31 March 2021

Ordinary voting shares

.	Name	Shareholding
1.	Mr W P C M Nanayakkara	1,283
2.	People's Leasing & Finance PLC/Mr W P C M Nanayakkara	2,399,957
3.	Mr T M D P Tennakoon	–
4.	Assetline Leasing Company Ltd/Mr T M D P Tennakoon	170,151
5.	Seylan Bank PLC/Mr T M D P Tennakoon	1,200,888
6.	Mr S V Munasinghe	–
7.	People's Leasing & Finance PLC/Mr S V Munasinghe	1,316,247
8.	Mr R H Abeygoonewardena/Mrs V F Abeygoonewardena	5,652
9.	Peoples's Leasing & Finance PLC/Mr R H Abeygoonewardena & Mrs V F Abeygoonewardena	1,301,785
10.	Mr D A De Silva	–
11.	Dialog Finance PLC/D A De Silva	117,550
12.	Dr A Dharmasiri	–
13.	Mr S P P Amaratunge	–
14.	Mr J R A Corera	1,027
15.	People's Leasing & Finance PLC/Mr J R A Corera	21,622
16.	Mr J P Abhayaratne	–
17.	Mr E Karthik	551,486
18.	Mrs P R W Perera	–
19.	Mr S Kumarapperuma	–
20.	Mr E R S G S Hemachandra	–
	Total	7,087,648

Ordinary non-voting shares

.	Name	Shareholding
1.	Mr W P C M Nanayakkara	56
2.	Mr T M D P Tennakoon	–
3.	Seylan Bank PLC/Tennakoon Mudiyanselage Damith Prasanna Tennakoon	–
4.	Mr S V Munasinghe	–
5.	Mr R H Abeygoonewardena/Mrs V F Abeygoonewardena	99,653
6.	Peoples's Leasing & Finance PLC/Mr R H Abeygoonewardena & Mrs V F Abeygoonewardena	37,850
7.	Mr D A De Silva	–
8.	Dr A Dharmasiri	–
9.	Mr S P P Amaratunge	–
10.	Mr J R A Corera	10,335
11.	Mr J P Abhayaratne	–
12.	Mr E Karthik	–
13.	Mrs P R W Perera	–
14.	Mr S Kumarapperuma	–
15.	Mr E R S G S Hemachandra	–
16.	Mrs P N Gamage	–
	Total	147,894

Directors’ interest in debentures

Following Director has subscribed for company debentures as indicated below as at 31 March 2021.

Mr R H Abeygoonewardana Rs. 4 Mn. (31 March 2019 – Rs. 4 Mn.) Except for above there were no debentures registered in the name of other directors as at 31 March 2021.

 

Rights issue 2019/20

Rights issue of 11,574,805 new ordinary voting shares each issued at Rs. 77/- per share and 2,001,496 new ordinary non-voting shares each issued at Rs. 64/- per share

In the financial year 2019/20, Company issued a right issue one new (1) Ordinary Voting Share each for every four (4) Ordinary Voting Shares held by the shareholders by Issue of 11,574,805 new Ordinary Voting Shares, at a price of Rs. 77/- per share . Further one new (1) Ordinary Non-voting Share each for every four (4) Ordinary Non-voting Shares held by the shareholders by Issue of 2,001,496 new Ordinary Non-voting Shares, at a price of Rs. 64/- per share. Company raised total of Rs. 1,019,355,729. CSE granted the principal approval for the proposed Rights Issue on 30 April 2019. The ordinary resolution pertaining to the Right Issue was passed at the Extraordinary General Meeting held on 28 May 2019. Accordingly XR date and last date of payment and acceptance was 29 May 2019 and 19 June 2019 respectively where right issue was oversubscribed. The main objectives of the proposed Rights issue was to strengthen the Tier 1 capital while supporting to the company’s asset growth.

Right issue movement

Share type	Total number of Issued shares prior right issue	Basis	Share type	Number of shares issues	New capital raised Rs.
Voting Share	46,299,223	1 for every 4 voting shares	Voting shares at Rs. 77.00	11,574,805	891,259,985
Non-Voting Share	8,005,984	1 for every 4 voting shares	Non-Voting shares at Rs. 64.00	2,001,494	128,095,744

 

Information on listed debentures movement

Opening balance as at 01.04.2019 (Rs.)	During the year issue				During the year maturity				Closing balance as at 31.03.2020 (Rs.)
	Type	Rate	Value	Total value	Type	Rate	Value	Total value
3,927,000,000	A (Semi Annual)	13.43%	387,900,000	1,075,200,000					5,002,970,000
	B (Annual)	13.88%	687,300,3000

Opening balance as at 01.04.2020 (Rs.)	During the year issue				During the year Maturity				Closing balance as at 31.03.2021 (Rs.)
	Type	Rate	Value	Total Value	Type	Rate	Value	Total value
5,002,970,000	A (Semi Annual)	-	-	-	A	-	-	-	5,002,970,000
	B Annual)	-	-		B	-	-

 

Information on listed debentures

Debentures issue June 2016 - June 2021

Listing	Debenture description	Type	Interest payment frequency	Tenor (years)	Interest rate			Comparable Government Security Yield (%)
					Issued quantity as at 31.03.2021	Coupon Rate (per annum) (%)	Annual Effective Rate (%)
Listed Debenture (Rs. 100)	Rated Subordinated Guaranteed Redeemable Debenture	A	Semi-annually	5	9,983,700	12.75	13.16	7.14
		B	Semi-annually	5	16,300	6 Months Net T.Bill rate (net of tax plus 1.5%)**		7.14

** Type B will have a ceiling rate of 15% (AER 15.56%) and a floor of 10% (AER 10.25%)

Debenture Issue March 2018 – March 2023

Listing	Debenture Description	Type	Interest payment frequency	Tenor (years)	Interest Rate			Comparable Government Security Yield (%)
					Issued quantity as at 31.03.2021	Coupon Rate (Per Annum) (%)	Annual Effective Rate (%)
Listed Debenture (Rs. 100)	Rated Subordinated	A	Semi-annually	5	10,669,900	13.75	14.22	7.14
	Listed Unsecured	B	Annually	5	9,330,100	14.20	14.20	7.14
	Redeemable Debenture

Debentures Issue January 2019 – January 2024

Listing	Debenture Description	Type	Interest payment frequency	Tenor (years)	Interest Rate			Comparable Government Security Yield (%)
					Issued quantity as at 31.03.2021	Coupon Rate (Per Annum) (%)	Annual Effective Rate (%)
Listed Debenture (Rs. 100)	Rated Subordinated	A	Semi-annually	5	2,591,800	15.00	15.56	7.14
	Listed Unsecured	B	Annually	5	6,685,900	15.50	15.50	7.14
	Redeemable Debenture

Debentures Issue December 2019 -December 2024

Listing	Debenture Description	Type	Interest payment frequency	Tenor (years)	Interest Rate			Comparable Government Security Yield (%)
					Issued quantity as at 31.03.2021	Coupon Rate (Per Annum) (%)	Annual Effective Rate
Listed Debenture (Rs. 100)	Rated Subordinated	A	Semi-annually	5	3,879,000	13.43	13.88	7.14
	Listed Unsecured	B	Annually	5	6,873,000	13.88	13.88	7.14
	Redeemable Debenture

Market prices for the year ended 31 March 2021

Price, current yield and yield to maturity

Guaranteed listed rated unsecured redeemable debentures June 2016 – June 2021

Debenture type	Highest price Rs.	Lowest price Rs.	Last traded Rs.	Current yield (%)	Yield to maturity (%)
Type A	102.60	100.61	101.50	12.74	9.92
Type B	–	Not traded	–	–	–

Subordinated listed rated unsecured redeemable debentures March 2018 – March 2023

Debenture type	Highest price Rs.	Lowest price Rs.	Last traded Rs.	Current yield (%)	Yield to maturity (%)
Type A	–	–	Not traded	–	–
Type B	103.00	103.00	103.00	14.51	15.13

Subordinated listed rated unsecured redeemable debentures January 2019 – January 2024

Debenture type	Highest price Rs.	Lowest price Rs.	Last traded Rs.	Current yield (%)	Yield to maturity (%)
Type A	108.00	108.00	108.00	14.77	17.64
Type B	100.00	100.00	100.00	16.22	17.09

Subordinated listed rated unsecured redeemable debentures December 2019 – December 2024

Debenture type	Highest price Rs.	Lowest price Rs.	Last traded Rs.	Current yield (%)	Yield to maturity (%)
Type A	100.00	100.00	100.00	19.00	13.79
Type B	–	–	Not traded	–	–

Utilisation of funds via capital market from the rights issue

Objective as per prospectus	Amount allocated as per prospectus in Rs.	Proposed date of utilisation as per prospectus	Amount allocated from proceeds in Rs. (A)	Total proceeds %	Amount utilised in Rs. (B)	Utilisation against Allocation (B/A) %
To strengthen the Tier 1 capital of the Company in the light of the regulatory requirements introduced by the Central bank of Sri Lanka	1,019,355,729	Within the next 12 months from the date of allotment	1,019,355,729	100	1,019,355,729	100
Company’s Achievement of the Capital Adequacy Ratio (CAR) under the Finance Business Act Direction No.3 of 2018
Support the Company’s Asset Growth

 

Disclosure on utilisation of funds via capital market during 1 January 2015 – 30 March 2016

Debenture Issue June 2016

Objective number	Objective as per prospectus	Amount allocated as per prospectus in Rs.	Proposed date of utilisation as per prospectus	Amount allocated from proceeds in Rs. (A)	% of total proceeds	Amounts utilised in Rs. (B)	% of utilization against allocation (B/A)	Clarification if not fully utilised including where the funds are invested (eg: whether lent to related party/s etc.)
1	Expanding the leasing portfolio	Rs. 1 Bn.	Within the 06 months from date of cash receipt	Rs. 1 Bn.	100	Rs. 1 Bn.	100	N/A
2	Improving the Capital Adequacy of the Company’s Balance Sheet, by strengthening its Tier II Capital		With effect from the closure of issue
3	Reducing the mismatch of maturity periods between assets and liabilities		Within 12 months from date of cash receipt

Debenture Issue March 2018

Objective number	Objective as per prospectus	Amount allocated as per prospectus in Rs..	Proposed date of utilisation as per prospectus	Amount allocated from proceeds in Rs. (A)	% of total proceeds	Amounts utilised in Rs. (B)	% of utilization against allocation (B/A)	Clarification if not fully utilised including where the funds are invested (eg: whether lent to related party/s etc.)
1	Supporting the general business growth opportunities of the Company	Rs. 2 Bn.	Within the 06 months from date of cash receipt	Rs. 2 Bn.	100	Rs. 2 Bn.	100	N/A
2	Improving the Capital Adequacy of the Company’s Balance Sheet, by strengthening its Tier II Capital		With effect from the closure of issue
3	Reducing the mismatch of maturity periods between assets and liabilities		Within 12 months from date of cash receipt

Debenture Issue January 2019

Objective number	Objective as per prospectus	Amount allocated as per prospectus in Rs..	Proposed date of utilisation as per prospectus	Amount allocated from proceeds in Rs. (A)	% of total proceeds	Amounts utilised in Rs. (B)	% of utilization against allocation (B/A)	Clarification if not fully utilised including where the funds are invested (eg: whether lent to related party/s etc.)
1	Supporting the general business growth opportunities of the Company	Rs. 927,770,000	Within the 06 months from date of cash receipt	Rs. 927,770,000	100	Rs. 927,770,000	100	N/A
2	Improving the Capital Adequacy of the Company’s Balance Sheet, by strengthening its Tier II Capital		With effect from the closure of issue
3	Reducing the mismatch of maturity periods between assets and liabilities		Within 12 months from date of cash receipt

Debenture Issue December 2019

Objective number	Objective as per prospectus	Amount allocated as per prospectus in Rs.	Proposed date of utilisation as per prospectus	Amount allocated from proceeds in Rs. (A)	% of total proceeds	Amounts utilised in Rs. (B)	% of utilization against allocation (B/A)	Clarification if not fully utilised including where the funds are invested (eg: whether lent to related party/s etc.)
1	Supporting the general business growth opportunities of the Company	Rs. 1,075,200,000	Within the 06 months from date of cash receipt	Rs. 1,075,200,000	Rs. 1,075,200,000	N/A	100	N/A
2	Improving the Capital Adequacy of the Company’s Balance Sheet, by strengthening its Tier II Capital		With effect from the closure of issue
3	Reducing the mismatch of maturity periods between assets and liabilities		Within 12 months from date of cash receipt

Credit rating

ICRA Lanka Limited has assigned a credit rating of (SL) ‘BBB’+ (negative) outstanding long and short-term corporate credit ratings of the Company. Credit ratings obtained for listed, unsecured, debentures are as follows:

Instrument	Rated amount (Rs. Mn.)	Rating action
Issuer rating	N/A	[SL]BBB+ (Negative); Outstanding
Subordinated, unsecured, listed redeemable debentures programme	928	[SL]BBB (Negative); Outstanding
Subordinated unsecured listed redeemable debentures	1,075	[SL]BBB (Negative); Outstanding
Subordinated, unsecured, listed redeemable debentures programme	2,000	[SL]BBB (Negative); Outstanding
Subordinated guaranteed listed redeemable debentures	1,000	[SL]A-(SO) (Stable); Outstanding

Report on compliance with the rules on the content of the Annual Report according to section 7.6 of the Listing Rules of the Colombo Stock Exchange (Listing rules)

Colombo Stock Exchange (CSE) Listing Rules aim to boost the confidence of investors by requiring companies to publish accurate information on a timely basis to help investors to evaluate companies and make wise decisions on investing. These rules also depict governance rules, which should be adhered to by all listed companies. Level of compliance by CDB with such rules is highlighted in the following table:

Rule no.	Disclosure Requirement	Section Reference	Page Reference
7.6 (i)	Name of persons who held the positions of Directors during the financial year		95
7.6 (ii)	Principal activities of the Entity and its Subsidiaries during the year and any changes therein	Notes to the Financial Statements- Reporting Entity	144 - 248
7.6 (iii)	The names and the number of shares held by the 20 largest holders of voting and non-voting shares and the percentages of such shares held	3.7 Investors	74 - 84
7.6 (iv)	The public holding percentage	3.7 Investors	74 - 84
7.6 (v)	A statement of each Director’s and Chief Executive Officer’s shareholding and the percentage of such shares held	3.7 Investors	80
7.6 (vi)	Information pertaining to material foreseeable risk factors of the Entity	Risk Management	85 - 90
7.6 (vii)	Details of material issues pertaining to employees and industrial relations of the Entity	N/A	N/A
7.6 (viii)	Extent, locations, valuations, and the number of buildings of the Entity’s land holdings and investment properties	Notes to the Financial Statements	144 - 248
7.6 (ix)	Number of shares representing the Entity’s stated capital	3.7 Investors	74 - 84
7.6 (x)	A distribution schedule of the number of holders in each class of equity securities and the percentage of their total holdings	3.7 Investors	74 - 84
7.6 (xi)	Ratios and market price information: Equity Debt Any changes in credit rating	3.7 Investors	74 - 84
7.6 (xii)	Significant changes in the Entity’s or its subsidiaries’ fixed assets and the market value of land, if the value differs substantially from the book value	Notes to the Financial Statements	144 - 248
7.6 (xiii)	Details of funds raised through Public Issues, Rights and Private Placements during the year	3.7 Investors	74 - 84
7.6 (xiv)	Information in respect of Employee Share Option Schemes and Employee Share Purchase Schemes	3.7 Investors	74 - 84
7.6 (xv)	Disclosure pertaining to Corporate Governance Practices in terms of Rules 7.10.3, 7.10.5 c and 7.10.6 c of Section 7 of the Rules	3.7 Investors	83 - 84
7.6 (xvi)	Disclosure on Related Party Transaction exceeding 10% of the equity or 5% of the total assets whichever is lower, of the Entity as per the latest Audited Financial Statements.	Refer Notes to the Financial Statements in relation to Related Party Transactions. Further, refer page 84 for compliance with section 09.	144 - 248

Compliance Requirements on Corporate Governance Rule 7.10 of the Listing Rules

The Continuing Listing Rule Section 7.10 of the Colombo Stock Exchange (CSE) mandates companies listed on the Colombo Stock Exchange to publish a table in the Annual Report, confirming that as at the date of the Annual Report, they comply with the Corporate Governance rules. The rule addresses the following areas:

A. Non-Executive Directors,

B. Independent Directors,

C. Disclosures relating to Directors,

D. Remuneration Committee,

E. Audit Committee.

Rule Reference	Requirement	Compliance Status	Details
7.10.1 (a)	Two or one third of the Directors, whichever is higher, should be Non-Executive Directors	Compliant	For the FY 2020/21, seven of the thirteen Directors were Non-Executives (NED), which is more than the requirement of the rule.
7.10.2 (a)	Two or one third of Non-Executive Directors, whichever is higher, should be independent	Compliant	For the FY 2020/21 four out of seven Non-Executive Directors are Independent.
7.10.2 (b)	Each Non-Executive Director should submit a declaration of independence/non-independence in the prescribed format	Compliant	All Non-Executive Directors submitted the requisite declarations during the year under review.
7.10.3 (a)	Names of Independent Directors should be disclosed in the Annual Report	Compliant	Please refer Corporate Governance section on pages 91 to 105.
7.10.3 (b)	In the event a Director does not qualify as independent as per the rules on corporate governance but if the Board is of the opinion that the Director is nevertheless independent, it shall specify the basis of the determination in the Annual Report	N/A	No such determination was required to be made by the Board, as all the Independent Directors of the Company met the specified criteria.
7.10.3 (c)	A brief resume of each Director should be published in the Annual Report including the areas of expertise	Compliant	Please refer pages108 to 109 for Directors profiles.
7.10.3 (d)	A brief resume of any new Director appointed to the Board should be provided to the Exchange for dissemination to the public	Compliant	During this financial year 2020/21, one Executive Director, two Independent Non-Executive Directors and two Non-Executive Directors were appointed to the Board. Please refer page 100.
7.10.5	A listed company shall have a Remuneration Committee	Compliant	Refer the Remuneration Committee Report on page 120 for disclosure on the names of the Remuneration Committee Members and the Remuneration Policy of the Company.
7.10.5 (a)	The Remuneration Committee shall comprise a minimum of two Independent Non-Executive Directors or a majority of Independent Non-Executive Directors, whichever is higher	Compliant	Refer the Remuneration Committee Report on page 120 for disclosure on the names of the Remuneration Committee members
7.10.5 (b)	Functions of the Remuneration Committee shall be to recommend the remuneration of the Chief Executive Officer and the Executive Directors	Compliant	Refer the Remuneration Committee Report on page 120 for disclosure on the names of the Remuneration Committee Members and the Remuneration Policy of the Company.
7.10.5 (c)	The Annual Report shall set out:
	(i) The names of the Directors that comprise the Remuneration Committee	Compliant	Refer the Remuneration Committee Report on page 120 for disclosure on the names of the Remuneration Committee Members
	(ii) A statement of Remuneration Policy	Compliant	Refer the Remuneration Committee Report on page 120 for disclosure on the names of the Remuneration Committee Members and the Remuneration Policy of the Company.
	(iii) Aggregate remuneration paid to Executive and Non-Executive Directors	Compliant	Please refer pages 212 - 215 on Key Management Personnel (KMP) compensation.
7.10.6	A listed company shall have an Audit Committee	Compliant	Refer Board Audit Committee Report on pages 115 to 117.
7.10.6 (a)	The Audit Committee shall comprise a minimum of two Independent Non-Executive Directors, or a majority of Independent Non-Executive Directors, whichever is higher	Compliant	The Audit Committee comprised three Non-Executive Directors and out of those three, two Directors are Independent. Please refer page 115.
	The Chief Executive Officer and Chief Financial Officer shall attend Audit Committee meetings	Compliant	Both the Chief Executive Officer and the Chief Financial Officer attended the Audit Committee meetings by invitation.
	The Chairman or one member of the Committee should be a member of a recognised professional accounting body	Compliant	The Chairperson of the Committee is a Fellow Member of The Institute of Chartered Accountants of Sri Lanka.
7.10.6 (b)	The functions of the Audit Committee shall be as set out in Section 7.10 of the Listing Rules.	Compliant	Refer Board Audit Committee Report on pages 115 to 117.
7.10.6 (c)	The Annual Report shall set out;
	The names of the Directors who comprise the Audit Committee	Compliant	Refer Board Audit Committee Report on pages 115 to 117.
	The Audit Committee shall make a determination of the independence of the Auditors and disclose the basis for such determination	Compliant	Refer Board Audit Committee Report on pages 115 to 117.
	A report by the Audit Committee setting out the manner of compliance of the functions set out in Section 7.10 of the Listing Rules	Compliant	Refer Board Audit Committee Report on pages 115 to 117.

“Report on compliance with the rules on the content of the Annual Report in section 9.3.2 of the listing rules of the Colombo Stock Exchange (Related Party Transactions)”

With the compulsory adoption of the Code of Best Practices on Related Party Transactions (RPT) (‘the Code’) issued by the Securities and Exchange Commission of Sri Lanka since January 2016, the Related Party Transactions Review Committee (RPTR) was established with the approval of the Board of Directors of CDB to ensure strict compliance with the rules and regulations governing related party transactions for Listed Entities.

Rule no.	Disclosure Requirement	Section Reference	Page Reference
9.3.2 (a)	In the case of Non-recurrent Related Party Transactions, if aggregate value of the non-recurrent Related Party Transactions exceeds 10% of the Equity or 5% of the Total Assets, whichever is lower, of the Listed Entity according to the latest Audited Financial Statements.	Related Party Transaction Note in the Financial Statements	212 - 215
9.3.2 (b)	In the case of Recurrent Related Party Transactions, if the aggregate value of the Recurrent Related Party Transactions exceeds 10% of the Net revenue/income as per the latest Audited Financial Statements	Related Party Transaction Note in the Financial Statements	212 - 215
9.3.2 (c)	Annual Report shall contain a report compiled by the RPTR Committee including followings: Names of the Directors who are in the committee Statement with regard to Related party transactions reviewed during the financial year Number of times the committee has met during the financial year Policies and procedures adopted by the RPT Committee	BRPT Review Committee Report.	122 - 123