Integrated Report

Introduction and Overview

Annual Report of the Board of Directors

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Preamble

The Board of Directors of Commercial Bank of Ceylon PLC (the Bank) is pleased to present the 56th Annual Report, which includes the Integrated Report, the Audited Financial Statements of the Group and the Bank for the financial year ended December 31, 2024 and the Independent Auditor’s Report on the Financial Statements. This Report complies with all applicable statutory requirements. In addition to the printed version, this Report is also available in multiple digital formats, including an interactive HTML version supported by an AI-Powered Annual Report Assistant (Chatbot), an interactive PDF version and a mobile-friendly version accessible on the Bank’s official website ( www.combank.lk), to ensure greater accessibility and enhance stakeholder engagement.

Integrated reporting and strategic focus

The Bank has adopted an integrated approach to reporting, in line with the Guiding Principles and the Content Elements of the IFRS Foundation’s International <IR> Framework. This Integrated Report articulates how the Bank creates sustainable value to all its stakeholders across multiple capitals over the short, medium and long term through its robust business model. It also identifies key risks and opportunities arising from a dynamic operating environment and outlines strategic responses to them.

Through the annual strategic planning process, the Bank has developed a robust Sustainability Framework, identified strategic imperatives and executed appropriate strategies to manage risks and seize opportunities. For further details on the Bank’s Sustainability Framework, strategic imperatives and strategies, refer to the Business Model for Sustainable Value Creation and Management Discussion and Analysis section. Additional information on Governance Reports and Risk Governance and Management is available on pages 192 to 253 and 254 to 284.

Independent assurance on the Bank’s Integrated Report, Sustainability Reporting and Financial Statements was provided by Messrs KPMG, in compliance with globally accepted standards. Assurance reports can be found on pages 512 to 515. Additional details on the Bank’s sustainability strategy are available on pages 78 to 82.

Board’s responsibility

The Board of Directors assumes responsibility for the preparation and presentation of the Financial Statements of the Group and the Bank in accordance with Sections 150, 151, 152 and 153 (1) and (2) of the Companies Act No. 07 of 2007 and amendments thereto, ensuring that they present a true and fair view of the financial position and performance of the Group and the Bank.

In this respect, the Board of Directors wishes to confirm that the Financial Statements – comprising the Income Statement, Statement of Profit or Loss and Other Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity, Statement of Cash Flows and accompanying Material Accounting Policies and Notes thereto – have been prepared and presented in compliance with the Sri Lanka Accounting Standards (SLFRS/LKAS) as mandated by the Sri Lanka Accounting and Auditing Standards Act No. 15 of 1995 and amendments thereto and the Companies Act No. 07 of 2007 and amendments thereto. Detailed disclosures as required by these statutes are presented on pages 285 to 458 of this Report.

This Report also includes the required information and disclosures in compliance with the Companies Act No. 07 of 2007 and amendments thereto, the Banking Act No. 30 of 1988 and amendments thereto along with related Directions, including the Banking Act Directions No. 11 of 2007 on Corporate Governance for Licensed Commercial Banks in Sri Lanka (which was revoked with effect from January 01, 2025), the Listing Rules of the Colombo Stock Exchange (CSE) with specific reference to Section 9.14.8 (4) on Related Party Transactions and the Code of Best Practice on Corporate Governance 2023 issued by The Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka). We are also confident that the Bank will meet the requirements of the Banking Act Directions No. 05 of 2024 on Corporate Governance for Licensed Banks, which came into effect from January 01, 2025.

As confirmed by a resolution passed on February 28, 2025, the Financial Statements of the Group and the Bank for the year ended December 31, 2024, including comparative figures for 2023, were reviewed, approved and authorised for issuance by the Board of Directors. Copies of the Annual Report will be submitted to the CSE and the Sri Lanka Accounting and Auditing Standards Monitoring Board (SLAASMB). Soft copies will also be made available on the Bank’s official website.

The Independent Auditors, Messrs KPMG, who were appointed at the 55th Annual General Meeting held on March 28, 2024, have issued an unmodified audit opinion, which appears on pages 288 to 292. Disclosure of auditors’ remuneration is made in Note 21 on page 342. The auditors have confirmed their independence and indicated that they have no direct or indirect interest in any contract with the Bank or its subsidiaries and the associate, other than as auditors.

The Board, to the best of its knowledge and belief, acknowledges that all statutory payments due to the government, regulatory institutions and employees have been made on time. Following a review of the business plans and financial position of the Bank, its subsidiaries and the associate, the Board is confident that the Group has adequate resources to continue operations in the foreseeable future. Accordingly, the Financial Statements of the Group and the Bank have been prepared on a going concern basis.

In line with evolving global reporting standards, a comprehensive gap analysis is being conducted to assess the applicability of the newly issued SLFRS S1 – General Requirements for Disclosure of Sustainability-related Financial Information and SLFRS S2 – Climate-related Disclosures. This proactive initiative will enable the Bank to implement appropriate disclosures in its reporting for the financial year ending December 31, 2025.

Compliance with statutory requirements and codes on governance

The Bank’s compliance with Section 168 of the Companies Act No. 07 of 2007 and amendments thereto and other relevant statutes is outlined on pages 177 to 180. Additionally, the Bank provides a comprehensive disclosure of compliance with the following governance-related requirements in Annex 1:

Banking Act Direction No. 11 of 2007 on Corporate Governance for Licensed Commercial Banks in Sri Lanka, issued by the Central Bank of Sri Lanka (CBSL) (Annex 1.1 on pages 460 to 471).
Code of Best Practice on Corporate Governance 2023 (Code), issued by CA Sri Lanka (Annex 1.2 on pages 472 to 476).
Section 9 of the Listing Rules of the CSE (Annex 1.3 on pages 477 to 483).
Disclosure requirements prescribed by the CBSL for the preparation, presentation and publication of annual audited financial statements (Annex 1.4 on pages 484 to 490).

External Assurances obtained

To ensure the integrity and credibility of the Bank’s disclosures, independent
assurance was obtained in the following areas:

Internal controls

Assurance on the Directors’ Statement on Internal Control over financial reporting. Assured by Messrs KPMG in accordance with the Sri Lanka Standard on Assurance Engagements (SLSAE) 3050 (Revised): Assurance Engagements on Directors‘ Statement – on Internal Control

Assurance on the Audited Financial Statements. Assured by Messrs KPMG in accordance with Sri Lanka Auditing Standards.

Assurance on the Bank’s Sustainability Reporting criteria. Assured by Messrs KPMG in accordance with the Sri Lanka Standard on Assurance Engagements (SLSAE) 3000: Assurance Engagements other than Audits or Reviews of Historical Financial Information.

Assurance on the Integrated Annual Report. Assured by Messrs KPMG in accordance with the Sri Lanka Standard on Assurance Engagements (SLSAE) 3000: Assurance Engagements other than Audits or Reviews of Historical Financial Information.

Fifty-Sixth (56th) Annual General Meeting

The Bank’s Fifty-Sixth Annual General Meeting (AGM) will be held on March 28, 2025, at 2:30 p.m. at the Galadari Hotel, Grand Ballroom, No. 64, Lotus Road, Colombo 01.

Shareholders are encouraged to attend the AGM and more details can be found in the Notice of Meeting on page 531, which is signed in accordance with a resolution adopted by the Directors.

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Board’s confirmation

After carefully evaluating the matters significant to the Bank and its stakeholders, the Board of Directors affirms that due diligence has been exercised in the preparation and presentation of this Integrated Report and Financial Statements, ensuring its accuracy and integrity. In compliance with Section 168 (1) (k) of the Companies Act No. 07 of 2007, the Board of Directors hereby acknowledges the contents of this Annual Report.

Signed in accordance with a resolution of the Board of Directors.