Citizen Develop Business Finance PLC

(CDB)
Industrial and Commercial Law Assignment

University of Vocational Technology

Ratmalana

R.M.A.C. Rajakaruna : BED/17/B1/16

M.P.I.N. Madushanka : BED/17/B1/22

R.D.C Prabodhani : BED/17/B1/20

K.S.M Nicholasius : BED/17/B1/21

K.M.V Chathurangani : BED/17/B1/18

T.M.K.P.D Thennakoon : BED/17/B1/33

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 Content

Introduction…………………………………………………………….………..03

Corporate Information…………………………………………….…………....04

Board of Directors…………………………………………………...…………..06

Policies………………………………………………………………...………….07

EPF/ ETF…………………………………………………………………...…….09
Leave of the Company…………………………………………………….……..10

Gratuity…………………………………………………………………..………10

Our Regulatory Compliance………………………………………………….…11

References…………………………………………………………………….…..11

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Introduction
Citizen Develop Business Finance PLC (CDB)

Citizen Develop Business Finance PLC (CDB) is a leading financial institute in Sri Lanka. CDB
was established on 07th September 1995.It is a financial institute which allowed by the central
bank of Sri Lanka to do the financial transactions. First CDB was called as Citizens
Development Bank which was cooperated with the CELYNCO group. But timely it went
separate from CELYNCO. Now CDB has a wide spread scope of financial services and well
spread network among the country. The purpose of CDB Finance is empowering aspirations.
The Citizens Development Business Finance PLC (CDB) is licensed Financial Company
registered under the finance Business Act No.42 of 2011. It was incorporated as a public limited
liability company on 7th September 1995 under the provisions of the Companies Act No.17 of
1982 and re-registered under the Company Registration Number PB 232 PQ. The Company is
registered the Finance Leasing Act No. 56 of 2000 and also is an approved Credit Agency
registered under the Mortgage Act No.56 of 2000.
The Ordinary Voting shares and Ordinary Non-Voting shares of the company are quoted
on the Main Board of the Colombo Stock Exchange. ICRA Lanka Limited has assigned
(SL/BBB) financial institution rating to the company. The registered office of the Company is at
No.123, Orabipasha Mawatha, Colombo 10, at which the Company’s Head Office is also
situated.
The passion and perseverance of the team of CDB has brought CDB to the forefront of
the industry and continues to be our driving force. CDB care for the well-being of their
stakeholders while empowering their aspirations, with an aim of creating a more equitable
society.
Among all non-banking financial institutions CDB is the first to transfer funds through
social networks, to enable customers to open fixed deposits online, to launch an e-commerce
automobile platform, to have core bank platform, to obtain ISO 14064-1 carbon verification
certificate, to operate Sri Lanka Interbank Payment System (SLIPS), to obtain license from
Central Bank of Sri Lanka to operate Money Exchange, to operate Visa Debit Cards and to
initiate “Green Asset Backed Securitization”.

Vision
To be the financial power house that will foster entrepreneurial innovation and
workmanship towards building up our nation’s economy to make sustained gains in living
standards of Sri Lankans.

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Corporate Information
Name of the company
Citizens Development Business Finance PLC

Legal Form
A public quoted company incorporated in Sri Lanka under the provisions of the Companies Act
No. 17 of 1982 and registered under the Companies Act No. 07 of 2007. The company is
licensed under the Finance Business Act No.42 of 2011. The Company is registered under the
Finance Leasing Act No.56 of 2000 and Consumer Credit Act No.29 of 1982.

Date of Incorporation
7th September 1995

Registration Number
PB 232 PQ

Financial Year End

31st March

Registered Address of Head Office

No. 123, Orabipasha Mawatha, Colombo 10, Sri Lanka
Tel: +94117388388
Fax: +9411242988
Email: cdb@cdb.lk
Web: www.cdb.lk

Company Secretary
S S P Corporate Services (PVT) Limited
No: 101, Inner Flower Road, Colombo 03, Sri Lanka
Tel: +94112573894, +94112576871
Fax: +94112573609
Email: sspsec@sltnet.lk

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External Auditors
KPMG
Charted Accountants
32 A, Sir Mohamed Macan Maker Mawatha, Colombo 03, Sri Lanka
Tel: +94115426426

Credit Rating
(SL)BBB

Bankers
Bank of Ceylon
Commercial Bank of Ceylon PLC
Deutsche Bank
Habib Bank Limited
Hatton National Bank PLC
National Development Bank PLC
Nations Trust Bank PLC
Pan Asia Banking Corporation PLC
People’s Bank
Sampath Bank PLC
Seylan Bank PLC

Lawyer
Nithya Partners
No. 97 A,
Galle Road,
Colombo 03,
Sri Lanka.

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Board of Directors
Chairman
D H J Gunawardena

Executive Directors
C M Nanayakkara
T M D P Tennakoon
R H Abeygoonewardena
S V Munasinghe
D A De Silva

Non-Executive Directors
P A J Jayawardena
S R Abeynayake
Prof A Dharmasiri
Prof S P P Amaratunge
Razik Mohamed

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Policies
Environmental Strategy and Green Policy
CDB’s environmental policy and guideline shape the way we work. The approach to
environmental sustainability is focused on minimizing the negative impacts by following a
stringent green policy. This includes, identifying and measuring outputs, setting targets and
forming appropriate structures, developing a comprehensive action plan, educating and creating
awareness and securing the commitment from the management and the staff members.
The environmental policy provides a consistent framework to manage environmental
initiatives across the company. CDB strongly believe that giving due consideration to
sustainability of the company.
CDB becomes the first ISO 14064-1 carbon verified financial institution in South Asia.
Aligned with the company-wide ethos of reducing its carbon footprint based on pre-determined
parameters, CDB became South Asia’s first ISO 14064-1 carbon verified financial institution, by
Sri Lanka Carbon Fund.
CDB was certified as a ‘Carbon Neutral Business Entity’ by the Sri Lanka Carbon Fund.
This partnership has resulted in knowledge sharing and support to offer customers and the
community a unique environmental offering. Adopting a responsible corporate attitude, CDB’s
commitment to sustainable business practice are ambitious. CDB’s green concept extend to the
design of the outlets which uses more natural light and energy efficient lighting and equipment.
In the future, CDB expect solar power will result in reduced consumption of fuels, contributing
to reducing GHG emissions and pollution. This would reduce operational expenses and position
CDB as a sustainable company. Works of CDB spread in different ways under the green policy.
Such as Plant a tree- Plant a life, Green Lending, E-waste recycling, Paperless operations, Paper
recycling, Rainwater harvesting, Green tie-ups, etc.

Whistle-Blowing Policy
The Committee has engaged a team of professionals to review the existing Whistle-Blowing
Policy of the Company in order to strengthen, educate and encourage members of the staff to
resort to whistle blowing if they had reasonable grounds to believe that there are wrong doings or
other improprieties. All appropriate, procedures are in place to conduct independent
investigations into incidents reported through this processor if identified through other means.
Arrangements have also been made for employees to privately violations.

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Policies and Procedures
The company has in place a comprehensive related party transaction (RPT) policy
whereby the categories of persons who shall be considered as ‘related parties’ has been
identified. This was further updated in the year 2015/2016 to be in full compliant with the rules
and regulations applicable to related party transactions as set out in the Finance Companies
(Corporate Governance) Direction No.3 of 2008(as amended) and the Listing Rules. ‘The
Company has developed a mechanism that enables to obtain, monitor and report transactions
with identified related parties.

Significant Accounting Policies

The Financial Statement of the Group represent the consolidation of the Financial
Statement of the Group represent the consolidation of the financial statements of the company
and its subsidiaries CDB Micro Finance Limited and Unisons Capital Leasing Limited.
‘Subsidiaries’ are investees controlled by the group. The group controls an investee if it is
exposed to, or has rights to, variable returns from its involvement with the investee and has the
ability to affect those returns through its power over the investee. The group reassesses whether
it has control if there are changes to one or more of the elements of control. This includes
circumstances in which protective rights held become substantive and lead to the group having
power over an investee. The financial statements of subsidiaries are included in the financial
statements from the date that control effectively ceases.
There is no significant restrictions on the ability of subsidiaries to transfer funds to CDB in
the form of cash dividend or repayment of loans and advances. CDB does not own any associate
or joint venture Company as at the reporting date.
 Transactions eliminated on consolidation
 Non-controlling interest

Personnel Expenses in Accounting Policy

Personnel expense include salaries and bonus, terminal benefit charges and other employee
related expenses. The provision for bonus is recognized when it is probable that an outflow of
resources embodying economic benefits will be required to settle the obligation and a reliable
estimate can be made on the amount of the obligation.

Depreciation of Property, Plant and Equipment

The Group provides depreciation from the date the assets are available for use up to the date of
disposal, at the following rates on a straight-line basis over the periods appropriate to the
estimated useful lives based on the pattern in which the asset’s future economic benefits are

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expected to be consumed by the Company of the different types of assets, except for which are
disclosed separately. Depreciation is determined separately for each significant component of an
item of Property, Plant and Equipment. Management reviews the assets residual value, useful life
and depreciation method at each reporting date. Depreciation of an asset ceases at the earlier of
the date that the asset is classified as held for sale or the date that the asset is derecognized.
Depreciation does not cease when the assets become idle or is retired from active use unless the
asset is fully depreciated. Companies within the Group use the same depreciation rates and
policies. Freehold buildings – 2.5% Motor vehicles – 20% Computer equipment – 20% Office
equipment – 20% Furniture and fittings – 20% Depreciation is not provided for freehold land.

WRITE-OFF POLICY
The company writes-off a loan or an investment debt/equity security balance, and any
related allowances for impairment losses, when it determines that the loan or security is
uncollectible. This determination is made after considering information such as the occurrence of
significant changes in the borrower’s financial position such that the borrower can no longer pay
the obligation, or that proceeds from collateral will not be sufficient to pay back the entire
exposure. For smaller balance standardized loans, write-off decisions generally are based on a
product-specific past due status. The Comata’s policy is to pursue timely realization of the
collateral in an orderly manner. The company generally does not use the non-cash collateral for
its own operations.

EPF/ ETF

Employees Provident Fund. (EPF)

The Employees Provident Fund (EPF) was established under the Act No. 15 of
1958 and is currently the largest Social Security Scheme in Sri Lanka. With a current asset
base of Rs.1,300 billion, the EPF is a little "Peace of Mind" for the employees of
institutions and establishments of the Private Sector, State Sponsored Corporations,
Statutory Boards and Private Business. The aim of the EPF is to assure financial stability to
the employee in the winter of life and to reward the employee for his or her role in the
economic growth of the country. According to the EPF act, the employee will contribute
monthly 8% of the salary to the EPF and the company will contribute 12%.

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Employees Trust Fund. (ETF)

The ETF Board was established under Act No-46 of 1980 and commenced operations on
st
1 of March in 1981. It was established under the Ministry of Labor and brought under the
Ministry of Finance in 1997. All public-sector employees who are not entitled to the Govt.
Pension Scheme and all private sector employees are members of this Fund while their
employers are required to remit 3% of the gross earnings of their employees to the Fund,
monthly. Hence, unlike the EPF, only the employer makes a contribution on behalf of the
employee/member and hence, it is a non-contributory benefit to the member. An ETF
contribution of 3% of the salary will be made by the company monthly.

Leave of the Company

Leave Days.
Annual Leave. 07 Days
Casual Leave. 07 Days
Short Leave. 02 time per month.
Medical Leave.14 days

Leave for Trainees

Only 02 Half days for 06 Month Training Programme

Leave For Pregnat Ladies

04 months Leave with Salary
After the delivery- 2 hours per day for 2 months (For breast-feeding)

Gratuity
A sum of money paid to an employee at the end of a period of employemenet. Gratuity is
given by the emolyer to his/her employee for the service rendered by him during the period of
employement. It is usually paid at the time of retirement but it can be paid before provided
certain conditions are met. A person is eligible to receive gratuity only if he has completed
minimum five years of service with an organisation. However , it can be paid before the
completion of five years at the death of an emloyee or if he has become disabled due to accident
or disease. Gratuity payable depends on two factors. Last drawn salary and years of service.
In CDB Finance, gratuity payable depends years of service.
Gratuity = ½ of monthly salary * service years

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Our Regulatory Compliance
Regulator Status
 Central Bank of Sri Lanka (CBSL) We complied with all the statutory requirements of
SBSL, the regulator and governing body of all the
financial institutions in Sri Lanka.

 Securities and Exchange

Commission of Sri Lanka (SEC)
We complied with the regulations of SEC and
submitted financials in timely manner. SEC is the
regulator of Colombo Stock Exchange that
formulates rules for fair trading of securities for
investor protection.

 Colombo Stock Exchange (CSE)

The CSE is a self-regulatory organisation subject to
the regulation and supervision of the SEC. We have
ensured compliance with the rules and regulations
of the CSE by timely submission of accurate
financials.

 Department of Inland Revenue

(IRD) We have a separate Tax Department to asses and
monitor our indirect and direct taxes. All our tax
obligations were discharged as required by the rules
and regulations of the IRD.

References
HR Executive – M.P.N.G. Indrajth
Voice – 0719856486
Industrial Reports – CDB Trainees Students in UoVT

CDB-Finance-PLC-Annual-Report-2017/2018

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