Annual Report 2021

COLOMBO STOCK EXCHANGE
ANNUAL REPORT 2021

At CSE, our values surround the nucleus
of our being, and are the drivers of our
exceptional performance, ensuring that
value, in turn, is created for the nation,
our investors, and stakeholders both here
and abroad. Our integrity helps us run
a transparent and ethical market. Our
care extends beyond our team to the
environment around us. Our teamwork
makes us an unstoppable and determined
force. Our professionalism keeps us on the
cutting edge of trust and innovation, and
together with our passion for excellence, we
will continue to journey onward, defying the
norms as we advance with greater strides.
CONTENTS
Overview
About the Report 3 About Us 4
How we support the economy 7 Focus on Sustainability 8
Our Journey to 2021 10 Operating Environment 16
Market Performance 2021 19
Strategic Report
Chairman’s Message 26 Chief Executive Officer’s Message 29
Board of Directors 33 Management Team 39
Creating Value
Our Business Model 42 Responding to our Stakeholders 44
Our Corporate Strategy 46 Determining Material Issues 50
Sustaining Our Value Creation

Recognising and Managing Risk 53 Corporate Governance 61
Financial Review 72
Accountability
Business Line Reviews 75 Listing 75
Trading 78 Central Depositary System 84
Market Data 87 Managing our capitals 90
Reporting on Gender Diversity and Inclusivity 92
Report on Value Created for Stakeholders 96
CSE Team 96 Investors 106
Issuers 113 Country 117
Regulator 122 Members and Trading Members 124
Financial Intermediaries 127
Financial Statements
Annual Report of the Board of Directors on the Affairs of the Company 130
Directors’ Responsibility for Financial Reporting 134 Risk and Audit Committee Report 135
Independent Auditor’s Report 137 Statement of Profit or Loss and Other Comprehensive Income 139
Statement of Financial Position 140 Statement of Changes in Equity 141
Statement of Cash Flows 142 Notes to the Financial Statements 143
Supplementary Information
10 Year Summary 182 Regional Branch Offices 184
Member Firms 185 GRI Index 187
Notice of Meeting 189 Corporate Representation 192
Corporate Information Inner Back Cover
2 Overview • Annual Report 2021 • Colombo Stock Exchange

ABOUT THE REPORT
GRI 102-11, 12, 45, 46, 48, 49, 50, 51, 52, 53, 54, 55
We are pleased to present the fourth integrated Annual Report of the Colombo Stock ASSURANCE
Exchange with a comprehensive account of our value creation to stakeholders. The financial statements that form part of
this report have been audited by external
BASIS OF PREPARATION auditors, Messrs. KPMG.
Scope and Boundary
The report covers the activities of the Colombo Stock Exchange (CSE) and its fully owned PRECAUTIONARY PRINCIPLE
Subsidiary Central Depository Systems (Pvt) Ltd (CDS) for the financial period 1st January In order to protect the environment, the
2021 to 31st December 2021. There were no restatements of information nor changes CSE widely applies the precautionary
to our reporting period during the year. The date of the most recent report was 31st approach according to its capabilities.
December 2020.
STATEMENT BY THE BOARD
Reporting Principles and Frameworks Applied
Management of the Colombo Stock
Exchange have prepared and reviewed the
Statutory Standards contents of all reports and recommended
and Acts the report to the Group’s Board Audit
Committee and Board for their approval.
• Sri Lanka Financial Reporting Standards.
• Sri Lanka Auditing Standards. The Board acknowledges its responsibility
• Companies Act No 7 of 2007. to ensure that the Annual Integrated
Report provides a balanced view of its
• Securities and Exchange Commission of Sri Lanka Act, No. 19 of 2021
performance in 2021. Accordingly, the
report was unanimously approved by the
Voluntarily adopted Board on 21st March 2022 and is signed
reporting Guidelines on its behalf by:
• Integrated Reporting Framework of the International Reporting Council

(IIRC).
Mr. Dumith Fernando
• Global Reporting Initiative - GRI standards
Chairman
(Core option).
• International Organisation of Securities Commissions (IOSCO) Principles
for Financial Benchmarks.
• Sustainable Development Goals (SDGs)-The UN initiative with 17 Mr. Arjuna Herath
aspirational “Global Goals” Risk and Audit Committee Chairman
• Code of Best practice on corporate governance issued by the Institute of
Chartered Accountants of Sri Lanka.
Mr. Rajeeva Bandaranaike

Source of Chief Executive Officer
Information
FEEDBACK AND INQUIRIES
• Audited financial statements.
For any queries on the report,
• Management discussions. please contact
• Management information systems. Mr. Kusal Nissanka
• Publicly available industry information. Senior Vice President-Finance &
Administration
This annual report is also available in the following format: 4-1, West Block,
World Trade Center,
Colombo 01;
The online version of the report includes additional Tel : +94 11 2356456
information on the GICS Industry sectors which is E-mail : [email protected]
being presented for the first time this year.
Online
Colombo Stock Exchange • Annual Report 2021 • Overview 3

ABOUT US
GRI 102-1, 13, 16
The Colombo Stock Exchange is a market Institution licensed under the Securities and Exchange
Commission of Sri Lanka Act, No. 19 of 2021 as a Capital market Infrastructure Provider (CIMP). It
offers pre trade, trade and post trade services. Our products and services facilitate raising of capital
for business entities, unlocking value for business owners while creating attractive investment
opportunities for investors.
The CSE is a company limited by guarantee established in 1985 formed by 7 founding Member
Firms. We operate a fair and orderly market for the issuance and trading of securities under a
well-regulated framework.
Today the CSE has evolved to be a regionally competitive stock exchange operating with cutting
edge technology under a digitalised environment, an expanding investor base, a strong regulatory
framework and a growing base of listed companies.
Our Vision
Integrity
• To be preferred choice
for creation of wealth and S
value
LUE
A Passion
V
OUR CORE
Our Mission
• Increase the number of

active investors. Care
• Encourage issuers to
raise capital through the
CSE.
• Provide facilities to trade Teamwork
diversified products.
• Ensure balanced
regulation to maintain
market integrity and Professionalism
investor confidence.
OUR AFFILIATIONS

GRI 102-2, 6, 7
Our Products
& Services
Primary market/Listing Market Data

Provides access to capital for market paricipants Provides realtime and non-realtime data to
of different sizes and scales, through four Listing stakeholders via a number of delivery channels.
boards. • 18,304 Followers MyCSE
• 4 Listing Boards
• Rs. 5,489 Bn Market Capitalisation
Secondary market/Listing Depository Services

Facilitates investor trading by maintaining a robust Provides custodian services to investors and
and up to date automated trading platform. other value added services to corporates.
• 4 Product Offerings • 97% Equity and 100% Corporate Debt
• 2 Price Indices DEMAT accounts
• Daily Average Market Turnover of Rs. 4,888 Mn
Our Business Supporting

Divisions Divisions
• Listing • Finance &

• Corporate Affairs Administration
• Central Depository • Legal
Systems
• Research & Strategy
• Broker Supervision
• Information
• Trading Operations & Technology
Market Surveillance
• Human Resources
• Marketing
• Origination & Issuer • Enterprise Risk
Relations Management
• Advocacy & Partnerships • Internal Audit
• Post Trade Settlement • Compliance
• Regulatory Policy
675,309 296 29 157

INVESTORS ISSUERS MEMBERS / EMPLOYEES
TRADING MEMBERS

About Us
The Colombo Stock Exchange (CSE) was

formed in 1985 following the amalgamation of
two stock brokerage associations; the Share
Brokers Association (SBA) and the Colombo
Brokers Association. Although share trading
dates to 1896, the establishment of a licensed
stock market transformed the capital market
of Sri Lanka by facilitating capital raising,
price discovery and extending the investment
opportunities to foreign investors. Today, the
CSE mobilises an annual capital flow of
Rs. 1,173 Bn of which Rs. 60 Bn accounts for
foreign capital flows contributing extensively
to create a vibrant stock market for our
stakeholders.
Limited by guarantee, we are a mutual exchange

with Fifteen Members and fourteen trading
members. The activities of the exchange are
primarily driven by the 25 members who are
licensed as stockbrokers for equity and debt
and 4 Members who exclusively work in the debt
market. The policy making body of the CSE is
the Board of Directors comprising nine members
of whom five are elected by the members and
four are appointed by the Government on the
recommendation of the Securities Exchange
Commission (SEC).

HOW WE SUPPORT THE ECONOMY
GRI 201-1
Stock exchanges play a major role in shaping the economy of a country. It is a key indicator used by foreign investors as
a measure of a country’s financial condition and stability. The CSE plays a multifaceted role, enabling access to funds and
enhancing wealth creation through reliable, secure and regulated platforms and market surveillance activities, strengthening
the integrity of market operations. Collectively, the market capitalisation of the entities in the stock exchange is estimated to
contribute to over 37% of the country’s GDP.
2019 2020 2021

Value-added (Rs. Mn)
Added Statement
Economic Value
Members 23 23 3
Employees 337 414 540
Government 46 69 277
Communities 1 0 5
Re-invested in CSE 167 535 1,873
Facilitating corporates to Creating opportunities for

raise capital and unlock wealth creation
value • + 675K Investors
• + Market Capitalisation • + 664K Local investors
increased by Rs. 2,529 Bn
• + Rs. 1,173 Bn Market
turnover
Nurturing stable Ensuring strict

economic growth compliance to
• Funds raised during the regulations and
year of Rs. 124 Bn standards
• Foreign capital inflows • We were able to protect
Rs. 34 Bn stakeholder trust
Encouraging a sustainability culture with

responsible and transparent businesses
• Reviewing and recognising corporates with best
reporting practices.
• Creating awareness on sustainability through
workshops
• Hosting events

FOCUS ON SUSTAINABILITY
As a member of the Sutainable Stock Exchanges Initiative, we use our platform to influence several entities to promote
sustainable best practices while educating investors on the importance of sustainable investments. With a broad range of
economic sectors ranging from banks and diversified conglomerates, to manufacturing entities and plantation companies, we
pursue our vision for shared sustainable growth for all stakeholders. Aligning strategy with the UN Sustainable Development
Goals, our contribution to the 169 Targets of the 17 goals are summarised below.
GRI 201-1 GRI 201-1
• ASPI increased by 80% in 2021 The joint initiative with SEC to Promote sound corporate
• Rs. 124 Bn capital raised by listed digitalise all stakeholder touchpoints governance through:
companies in 2021 in the stock market, enabling end-to- • Issuance of Continued Listing
end connectivity electronically Requirements in line with
international best practices
Promoting Sustainability Reporting • Educational workshops with
through: London Stock Exchange
• Issue of Sustainability Reporting
• Review of financial reports of
Guidelines
Listed entities for compliance
• Workshops and research with GRI and necessary action in case of
• Sponsorship of Corporate deviations
Reporting Awards
• Workshops for retail investors
• Dissemination of price-sensitive
information

• Ring the bell for gender equality Digitalisation of CSE processes and • MoUs with 8 regional exchanges
• The joint publication of Women on initiatives towards a paperless office • Partner with the global sustainability
Boards of Companies Listed on • Digital Transformation of internal initiatives such as Sustainable stock
the Colombo Stock Exchange with processes of CSE exchange initiatives since 2015
International Finance Corporation a. Robotic Process automation of
• Moving towards 30% women on the backend operations
Boards voluntary target for listed b. Implementation of business
entities Intelligence dashboard for the
management of information
c. Implementation of risk
Management System for
tracking of risks of market
participants
d. Implementation of incident
management tracking system

OUR JOURNEY TO 2021
How We Operate
The CSE is a mutual exchange with fifteen members and fourteen Trading Members who are licensed by the SEC to operate as
stockbrokers . The stockbrokers are the customer touchpoints and the CSE has 25 licensed stockbrokers for equity and debt
and 4 licensed stockbrokers for debt as at the end of the year. The policy making body of the CSE is the Board of Directors,
consisting of nine members of whom five are elected by the members and four are appointed by the Government on the
recommendation of the market regulator, the Securities and Exchange Commission.
COLOMBO STOCK EXCHANGE (CSE) - SOME HIGHLIGHTS IN OUR JOURNEY
CSE branch
network
established with
Relocation of the the 1st Branch in
Stock Exchange Matara
to the World Trade
Centre (WTC)
Liberalisation
& Foreign
Investment with
tax abolishment of
100% tax.
1985 1990 1991 1995 1997 1998 2005
The Colombo
Securities
Exchange CSE introduces
(Guarantee) Ltd a new Triaxial
is incorporated Ribbon on its new
as a Guarantee Establishment of logo.
Company Central Depository
by seven (7) Systems (CDS)
subscribing Stock Automation of
Broker Companies Trading with a
and takes over the screen based
operations of the trading system
Stock Market in
Sri Lanka from the
Colombo Brokers
Association
(CSBA).
Opening of the 1st Board Office - Matara 1998
APAC delegates gather in Colombo for largest gathering of Depositories and Clearing organisations CSE Staff in 1985
Sri Lanka in 2018

Joins United
Nations
Sustainable Stock
Exchanges (SSE)
Initiative
Adopts Global
Industry Implementation
Classification of Risk Based
Standard (GICS) Capital Adequacy 7 Founding Member Firms - 1985
for classification of Requirement
Listed Companies (CAR) for Member New CSE Mobile
The CDS Firms app launched to
launches Custody CSE introduces offer investors
Services for listed a step-up fee greater access to
companies structure for Share market information
Transaction Fees. CSE Signs Mou's
Value of non with several
-voting shares was Stock Exchanges
included in market globally.
cap and index
calculations
2015 2016 2017 2018 2019 2020
CSE launches the

Empower Board
and Multi Currency
Board
CSE launches an
Advanced Diploma
in Financial
CDS celebrates 25 Markets
years in the
Sri Lankan capital CDS diversifies to
market launch Corporate
Action Services
The S&P/CSE and Registrar CSE celebrates 35
Sector and Services years in the
Industry Group
CSE launches its Sri Lankan capital
Indices jointly
first sustainability market
launched
guide: Launched the Real
CSE implements ‘Communicating Estate Investment
new Broker Sustainability: Six Trusts (REIT’s)
BackOffice recommendations
and Order for Listed CSE ASPI was
Management Companies’ classified as the
Systems best performing
CSE awarded index in the world
CDS launches ISO 9001:2015 during september
e-Connect Certification 2020
online account for Quality
management Management in Digitalisation of the
portal HR capital market
The launch of the CSE adopts

CSE Education GICS Industry
Portal Classification

Performance Highlights
2019 2020 2021
Financial Performance (Rs. Mn)
Revenue
Listing fee 104 99 124
Trading fee 260 616 1,814
Market data 26 28 31
Depository 133 262 667
Profit before tax (39) 458 1,882
Profit after tax (54) 392 1,672
Financial Position
Assets
Financial
Property, plant and equipment 500 587 497
Capital
Investments 2,491 3,100 5,815
Other assets 396 456 851
Liabilities
Long-term 159 114 316
Short-term 273 680 1,852
Accumulated fund 2,956 3,348 5,020
Number of employees (Nos) 149 145 157
Gender diversity
Male (%) 58% 58% 56%
Female (%) 42% 42% 44%
Human Training and development (Rs. Mn) 6 1 2
Capital Number of promotions (Nos) 10 20 8
Employee turnover rate (%) 11 8 8
Net book value of IT assets (Rs. Mn) 200 336 567
Capital expenditure (Rs. Mn) 23 189 324
Depreciation (Rs. Mn) 55 53 92
Digital Capital System uptime (%) 100 100 99.9
Revenue Digital Capital

Rs. Mn Rs. Mn
3,000 600
2,500 500
2,000 400
1,500 Gender Diversity 300
1,000 200
500 100
0 0
2019 2020 2021 2019 2020 2021
Listing fee Trading fee Male 88 Female 69 NBV of IT Assets Capital Expenditure
Market data Depository

GRI 301-1, 2, 3
2019 2020 2021

Diverse product portfolio (Nos)
Number of listing boards 4 4 4
Number of indices 2 2 2
Number of rule amendments/policy changes 9 9 16
Intellectual
Number of companies on the watchlist 22 29 21
Capital
Number of Investors (Nos)
Local 624,226 637,069 664,647
Foreign 10,351 10,515 10,662
New CDS accounts 10,340 17,591 37,405
Issuers
No of public listed companies 289 283 296
Number of industries 20 20 20
Social and Trading members
Relationship
Investments (Rs. Mn) 23 23 3
Capital
Regional Exchanges- Mou’s (Nos) 3 - 1
Communities (Rs. Mn)
Investments 4 - 5
Awareness programs (Nos) 345 188 408
Paper consumption (Kg) 2,125 1,380 639
Energy Consumption (KwH) 561,999 574,727 673,348
Natural
Capital
Investors Paper Consumption

Kg
2,500
2021
2,000
1,500
2020
1,000
2019 500
0
550,000 600,000 650,000 700,000 750,000 2019 2020 2021
Local Foreign New CDS accounts

Welcoming the New Entrants
This year we warmly welcome 14 new corporates, who have affirmed their commitment towards ensuring the highest standards
of transparency and corporate governance, by listing on the Colombo Stock Exchange. A listing on the CSE provides entities
opportunities for growth through increased access to funds, financial flexibility, market liquidity and recognition.
CONSUMER FINANCE INDUSTRY

• Sarvodaya Development Finance PLC
MATERIALS INDUSTRY INVESTMENT BANKING &

NEW BROKERAGE INDUSTRY
• JAT Holdings PLC
ENTRANTS
LISTED ON • Capital Alliance
• Ex-Pack Corrugated THE CSE Limited
Cartons PLC
• First Capital Treasuries PLC
OTHER INDUSTRIES
• WindForce PLC • hSenid Business Solutions
• Chrissworld PLC Limited
• Prime Lands Residencies PLC • Myland Developments Limited
• E M L Consultants PLC • Co-operative Insurance
Company Limited
• Lanka Credit and Business
Finance PLC • LOLC General Insurance PLC

Our value generation is
imperative in fostering investor
confidence.
OPERATING ENVIRONMENT
GDP Despite lockdowns and other quarantine measures imposed to contain the
% pandemic, most stock exchanges across the world played a key role in sustaining
10 the financial infrastructure of the economy by ensuring stability and continuity of
operations. The growth trend that was observed in the stock markets towards the
5 end of last year continued into the first half of 2021, with the global value of share
trading and the number of trades increasing compared to the same period last
0
2018 2019 2020 2021F2 2022F
year. Year on year market capitalisation also icreased by 34.3%, due to all regions
growing significantly, surpassing the 116 USD Bn mark for the first time. The savings
(5) accumulated by investors during the pandemic, incentives approved by governments
to stimulate the economy and an increased confidence in the recovery path
(10) contributed to the exceptional performance of the markets during the year.
World Advanced economies DOMESTIC ECONOMIC ENVIRONMENT

Emerging markets and Sri Lanka
developing economies
A Prolonged Pandemic
Economic Growth
The post pandemic global economic
%
recovery continued during the year,
16
recording a growth of 5.9%. However,
a divergence was apparent among 12
advanced economies and the low
8
income developing countries, primarily
driven by the emergence of new 4
variants, unequal access to vaccines,
extent of policy support and supply 0
2020 2021 2021 2021 2021
chain disruptions. In 2022, the (4)
Q4 Q1 Q2 Q3 Q4
International Monetary Fund forecasts
the global economy to grow at 4.9% During the first half of the year, Sri Lanka’s economy witnessed strong recovery,
and moderate to about 3.8% over the supported by unprecedented policy stimulus, debt relief for pandemic-hit sectors
medium term. Advanced economies are and businesses’ adaptation to the post-pandemic environment. However, the
showing improved prospects driven by emergence of new variants of the virus and the resultant lockdowns, dampened
policy support in the United States and the road to recovery in the second half of the year. Diminishing foreign currency
several European countries. By contrast reserves, the fall of the tourism sector and escalating debt concerns were major
the prospects of the emerging markets areas of concern to the economy. The sovereign rating of the country was
and developing economies remain downgraded to Caa2 from Caa1 during the year by Moody’s, amidst concerns
subdued. that the country would not be able to meet its debt obligations. The Central Bank
of Sri Lanka, however, remains positive, issuing a ‘six month roadmap for Ensuring
Market Capitlisation H1
Macroeconomic and Financial System Stability’ to spur economic growth and
(YOY % Change) 2021
ensure stability of the economy. The available indicators suggest that economic
Global 34.3% activity will return to normalcy despite the setback in the third quarter of the year,
America 32.8% and is projected to grow at around 4.1% in 2022.
APAC 40.4%
EMEA 28.6%
Value of Share trading

(YOY % Change)
Global 16.86%
America 9.64%
APAC 36.02%
EMEA -2.74%
Source: World Federation of Stock Exchanges

Key macro economic variables influencing both investor and issuer confidence are Rupees. Full repatriation of foreign
summarized below: exchange earnings and improved
conversion is expected to bring stability
Inflation to the Rupee.
Inflation-NCPI The trade deficit in the twelve months

% ending December 2021 widened
15 to USD 8 Bn with the increase in
expenditure on imports, compared
to USD 6 Bn in the same period in
10
2020. This was despite the increase
in earnings from merchandise exports.
5 The gross official reserves declined to
USD 3 Bn by the end of 2021 due to
the limited inflows of foreign exchange.
0
The Government and the Central
an
rch
ly
an
rch
ly
v
Ma
No
Ma
No
Se
Se
Ju
Ju
bank remain positive, anticipating the

-J
-J
Ma
Ma
20
21
external sector to improve, with the

YOY Change ‘Six-Month Road Map’ setting out
strategies to reinforce the stability of the
The inflation rate as measured by the National Consumer Price Index accelerated external sector in the near to medium
from 3.7% in January to 14% by December 2021. Inflationary pressures were term. However, the recent surge in
fuelled by supply side disruptions, the surge in commodity prices internationally global COVID-19 cases, pose renewed
and the gradual buildup of demand conditions. Although the supply side pressures challenges.
are expected to be transitory, the envisaged improvements in aggregate demand
conditions and the likely increases in global energy and other commodity prices may Money Supply and Domestic
generate further inflationary pressures in 2022, requiring preemptive policy measures Credit
to ensure the maintenance of Inflation in mid-single level digits in the medium term.
Money Supply
External Sector and Exchange Rate Rs. Mn
15,000,000
External Sector & Exchange Rate
USD Mn USD Rs.
2,500 205 10,000,000
2,000 200
5,000,000
1,500 195
1,000 190
0
Jan
Feb
Mar
Apr
May
June
July
Aug
Sep
Oct
Nov
Dec
500 185
0 180 Credit to the Credit to the

n
ne
ly
c
Oc
Ma
Ap
Public Sector Private Sector

Ma
No
De
Ja
Fe
Au
Se
Ju
Ju
Broad Money Domestic credit

Total Imports Total Exports USD/Rs
At the beginning of the year, there was
The external sector of the country experienced intense pressure during the year, a significant increase in credit to the
due to the loss of tourism earnings, slowdown in worker remittances and capital private sector, due to the prevalent
outflow from both debt and equity markets, amidst other challenges posed by the low interest rates and surplus liquidity
COVID-19 pandemic. The Sri Lanka rupee depreciated by 7.0 per cent against the levels in the market. Although this
US dollar in 2021. The Central Bank stepped in to stabilize the Rupee by continuing expansion slowed down somewhat
the existing restrictions on non-essential imports and selected foreign exchange since September when the Government
outflows. Furthermore, in November, the Central Bank issued a gazette making tightened the monetary policy, it has
it mandatory for exporters to convert foreign exchange earnings into Sri Lankan picked up recently, partly reflecting

Operating Environment
the increased credit flows to finance THE PERFORMANCE OF THE COLOMBO STOCK EXCHANGE (CSE)
imports and other needy sectors of the
economy. Meanwhile, credit obtained Movement in ASPI and S&P SL20
by the public sector from the banking
14,000
system, particularly net credit to the
government, continued to expand 12,000
during the year, amidst the impact 10,000
of the pandemic on Government 8,000
revenue and recurrent expenditure. 6,000
The growth of broad money however, 4,000
started decelerating in response to the 2,000
monetary tightening measures imposed
0
by the Central Bank.
Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec
Interest Rates ASPI S&P SL20

Interest Rates
% Despite the volatile economic environment in the country, the CSE recorded
12 unprecedented growth during the year. Increased local investor activity, triggered
by monetary and fiscal measures implemented by the Government along with the
10
initiatives taken by the CSE to navigate the pandemic, contributed to the record
8 breaking levels of performance during the year. The market turnover of the CSE
6 continued the upward trend observed in the latter part of 2020, growing by 132%.
4 Daily market turnover increased by 157% to Rs. 4,888 Mn. The All Share Price Index
(ASPI) and S& P SL20 index, maintained a good momentum during the year. Market
2
capitalisation of the CSE grew by a significant 85% and was at 5,489 Bn as at the
0 end of the year. In the year 2021, the CSE reached the highest market performance
2020 Jan
Mar
May
July
Sep
Nov
2021 Jan
Mar
May
July
Sep
Nov
in history, recording a market turnover of Rs. 1,173 Bn.
AWDR AWPR 365 Day TB
Following the tightening of the

monetary policy in August 2021, the
market interest rates which were at
an unprecedented low, stabilized at
a higher level. Most market lending
rates have adjusted upwards while
deposit rates are expected to provide
real returns to savers. However, this
increase is not expected to lead to
excessively high interest rates that were
prevalent in the pre-pandemic times.

MARKET PERFORMANCE 2021
Peer Comparison
Overall Market Performance
Turnover (Rs.)/
ASPI Share Volume (No.) Mn
13,000 25,000
12,000
20,000
11,000
10,000
15,000
9,000
10,000
8,000
7,000
5,000
6,000
5,000
4 Jan 21 4 Feb 21 4 Mar 21 4 Apr 21 4 May 21 4 Jun 21 4 Jul 21 4 Aug 21 4 Sep 21 4 Oct 21 4 Nov 21 4 Dec 21
Turnover Share Volume ASPI
Asian Frontier Markets

Five-Year Index Growth (2017-2021)
250
CSE All DSE Board KSE All VN Index
18.37% 7.37% -1.65% 22.52%
200
150
100
50
0
6
1
c1
r1
g1
c1
r1
g1
c1
r1
g1
c1
r2
g2
c2
r2
g2
c2
Ap
Ap
Ap
Ap
Ap
De
De
De
De
De
De
Au
Au
Au
Au
Au
CSE All DSE Broad KSE All VN Index

Market Performance 2021
Index Benchmark index level as at 31 December 2021
CSE
ALL

Colombo Stock Exchange - Sri Lanka
12,226.01
80.5% from 2020
DSE
Board

Dhaka Stock Exchange - Bangladesh
6,756.65
25.1% from 2020
KSE
All

Karachchi Stock Exchange - Pakistan
30,726.52
(0.2%) from 2020
VN
Index

Hichi Ming Stock Exchange - Vietnam
1,498.28
35.7% from 2020
Total Equity Market - Capital Raised (Total) in USD Million
206 -
-100%
Colombo Dhaka
Stock Stock
Exchange 79% Exchange
115 in 2020 8 in 2020
Hochi
Minh Stock
Exchange
8,750
6,733 in 2020 30%
Bursa
Malaysia 4,117
2,413 in 2020 71%
Indonesia
Stock
Exchange
4,379
377 in 2020 106%
Philippine
Stock
Exchange
3,158
1,437 in 2020 120%
8,995 6,609
-13%
The Stock
Singapore
Exchange
Exchange
of Thailand 2%
10,317 in 2020 6,501 in 2020

*- Data as of 31 Dec 2021 2021* 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009
Equity
Turnover (Rs. Mn) 1,173,157.10 396,856.52 171,099.96 200,068.80 220,591.20 176,935.40 253,251.00 340,917.10 200,467.80 213,827.20 546,255.80 570,326.80 142,462.60
Domestic (Rs. Mn) 1,112,768.80 318,191.57 108,815.89 111,378.00 117,135.20 102,544.20 166,151.50 246,796.80 128,227.60 160,543.30 486,959.40 464,733.60 99,010.80
Foreign (Rs. Mn) 60,388.30 78,664.95 62,284.07 88,690.80 103,456.00 74,391.30 87,099.50 94,120.30 72,240.20 53,283.90 59,296.40 105,593.20 43,451.80
Shares Traded (No. Mn) 59,771.69 21,348.73 9,837.37 6,000.70 8,468.30 7,195.80 9,414.70 16,721.50 9,054.20 9,691.20 24,543.70 18,489.20 4,762.70
Domestic (No. Mn) 57,904.52 19,806.69 7,081.27 4,820.80 6,528.80 5,776.20 7,693.20 14,726.20 7,861.60 8,289.60 23,151.60 16,684.50 3,784.20
Foreign (No. Mn) 1,867.17 1,542.04 2,756.10 1,179.90 1,939.50 1,419.60 1,721.50 1,995.40 1,192.60 1,401.70 1,392.10 1,804.70 978.4
Trades (No.) 8,131,208 3,081,720 1,195,193 885,657 981,977 1,056,849 1,506,790 1,982,709 1,421,303 1,857,384 4,579,352 3,355,126 1,266,299
Domestic (No.) 8,009,449 2,968,289 1,148,555 838,784 928,276 1,002,476 1,431,750 1,899,569 1,355,380 1,796,868 4,463,404 3,225,041 1,190,822
Foreign (No.) 121,759 113,431 46,638 46,873 53,701 54,373 75,040 83,140 65,923 60,516 115,948 130,085 75,477
Daily Average Turnover (Rs. Mn) 4,888.20 1,898.84 710.0 833.6 915.3 737.2 1,059.60 1,414.60 828.4 883.6 2,285.60 2,396.30 593.6
Market Capitalisation (Rs. Bn) 5,489.20 2,960.70 2,851.30 2,839.50 2,899.30 2,745.40 2,938.00 3,104.90 2,459.90 2,167.60 2,213.90 2,210.50 1,092.10
Turnover to Market Capitalisation (%) 40.00% 15.80% 6.00% 7.00% 7.80% 6.20% 8.40% 12.30% 8.70% 9.80% 24.70% 34.50% 18.00%
Market Capitalisation as a % of GDP* 36.70% 19.70% 21.50% 21.40% 24.50% 23.20% 26.80% 30.00% 25.60% 24.80% 30.70% 34.50% 22.60%
* based on latest available revised GDP, at current market prices for each year
Contribution to Total Market Turnover

Foreign Companies 4.34% 19.13% 35.39% 42.30% 45.10% 41.00% 32.80% 26.00% 34.30% 23.50% 8.30% 15.30% 26.80%
Foreign Individuals 0.82% 0.77% 1.01% 2.00% 1.80% 1.00% 1.60% 1.60% 1.80% 1.40% 2.60% 3.20% 3.70%
Total Foreign Investor Contribution 5.15% 19.90% 36.40% 44.30% 46.90% 42.00% 34.40% 27.60% 36.10% 24.90% 10.90% 18.50% 30.50%
Local Companies 37.69% 32.11% 33.66% 34.00% 28.20% 30.90% 30.40% 34.70% 30.40% 41.00% 34.50% 37.50% 33.90%
Local Individuals 57.16% 47.99% 29.93% 21.70% 24.90% 27.10% 35.20% 37.70% 33.50% 34.10% 54.60% 44.00% 35.60%
Total Local Investor Contribution 94.85% 80.10% 63.60% 55.70% 53.10% 58.00% 65.60% 72.40% 63.90% 75.10% 89.10% 81.50% 69.50%
Foreign Trading Activities

Secondary Market - Equity
Purchases (Rs.Mn) 34,087.20 53,144.40 56,395.14 77,067.10 112,284.80 74,583.00 84,414.60 104,689.80 83,607.00 72,614.20 49,776.80 92,425.50 43,057.30
Sales (Rs.Mn) 86,689.40 104,185.50 68,173.00 100,314.50 94,627.30 74,199.50 89,784.40 83,550.80 60,873.30 33,953.60 68,816.00 118,760.90 43,846.30
Net Foreign Flow (Rs.Mn) (52,602.10) (51,041.10) (11,777.87) (23,247.40) 17,657.50 383.50 (5,369.80) 21,139.00 22,733.70 38,660.60 (19,039.20) (26,335.40) (789.00)
New Listings/Issues
Equity IPOs (No.) 13 1 0 2 2 3 2 5 1 6 13 8 2
Equity Introductions (No.) 1 1 2 1 1 1 - 1 1 11 16 2 0
Debt IPOs(No.) 14 8 11 11 5 17 25 20 28 3 1 2 1
HIGHLIGHTS: MARKET PERFORMANCE
Capital Raised
Equity IPOs(Rs.Mn) 12,713.40 - - 1,953.30 960 1,822.50 329.6 2,693.80 494.4 1,739.40 19,155.70 4,347.50 681.8
Debt IPOs(Rs.Mn) 84,383.00 21,939.82 50,588.70 55,917.60 20,000.00 77,994.90 83,414.40 54,234.90 68,262.30 12,500.00 1,000.00 15,000.00 630.6
Rights Issues (Rs.Mn) 24,204.70 29,893.40 26,025.40 42,216.80 50,604 2,531.10 16,105.30 8,099.00 25,539.00 11,128.00 28,019.70 24,321.70 5,235.40
Conversion of Warrents (Rs.Mn) - - - - - 3,193.80 7,972.80 - 0.5 1,954.80 2,675.00 - -
Private Placement (Rs.Mn) 2,457.60 9,215.77 560.10 4,624.20 2,012.70 - 1,517.70 12,755.20 - 2,266.20 4,500.00 433 1,100.00
Colombo Stock Exchange • Annual Report 2021 • Overview

21
22
*- Data as of 31 Dec 2021 2021* 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009
Returns, Yields and Valuation Multiples
All Share Price Index 12,226.01 6,774.22 6,129.21 6,052.37 6369.26 6,228.26 6,894.50 7,298.95 5,912.78 5,643.00 6,074.42 6,635.87 3,385.55
Change% 80.48% 10.52% 1.27% -4.98% 2.30% -9.70% -5.50% 23.40% 4.80% -7.10% -8.50% 96.00% 125.30%
S&P SL20 4,233.25 2,638.10 2,936.96 3,135.18 3671.72 3496.44 3,625.69 4,089.14 3,263.87 3,085.33 - - -
Change% 60.47% -10.18% -6.32% -14.61% 5.00% -3.60% -11.30% 25.30% 5.80% 8.4%* - - -
Market PER (Times) 13.63 11.25 10.83 9.65 10.6 12.4 18 19.7 15.9 15.9 15.8 25.2 16.6
Price to Book Value (Times) 1.67 1.13 1.14 1.18 1.3 1.4 2 2.2 2 2.1 2 3 1.7
Dividend Yield 2.17% 2.66% 3.17% 3.10% 3.20% 2.80% 2.20% 2.10% 2.90% 2.40% 1.80% 1.20% 3.00%
* Launched on 27th June 2012
Debt Trading Statistics

Corporate Debt
Turnover (Rs. 000) 1,244,587 5,855,001 5,677,756 4,405,617 3,592,905 2,932,154 4,714,012 7,139,730 2,229,221 75,717 2,690,664 72,288 136,765
Trades (No.) 93 243 236 293 529 290 220 401 173 39 62 92 42
Debentures Traded (No.000) 11,439 54,230 55,650 44,024 35,696 28,317 42,201 56,909 19,999 740 25,861 693 1,020
Closed End Fund

Turnover (Rs. 000) 0.00 97,751.00 5,640.58 23,650.50 28,887.90 113,300.30 55,316.50 131,872.50 44,160.00 21,865.50 137,848.10 621,264.60 4,615.60
Trades (No.) 0 411 284 327 552 925 765 940 883 767 2,898 8,302 228
Overview • Annual Report 2021 • Colombo Stock Exchange

Units Traded (No.000) 0 7,695 292 350 4,123 1,976 818 1,680 640 339 1,642 8,222 87
Highlights: Market Performance
Funds Listed 1 1 1 2 2 2 2 1 1 1 1 1 1
Additional Data
Companies Listed (No.) 296 283 289 297 296 295 294 294 289 287 272 241 231
Companies Traded (No.) 280 277 265 279 279 278 278 284 278 280 264 238 231
Delistings (No.) 3 7 9 2 2 2 3 3 1 2 0 1 6
Market Days (No.) 240 209 241 240 241 240 239 241 242 242 239 238 240
YEAR IN REVIEW - 2021
The CSE issued a Surveillance

Handbook with the objective of creating
awareness among Stockbrokers on
what constitutes improper market
conduct.
First Empower Board Listing
BOI, CSE and Ceylon Chamber to

organized first-ever virtual investor
forum to attract foreign investment
The second phase of the CSE

digitalisation process was launched
at the Presidential Secretariat under
the patronage of President Gotabaya
The second phase of the CSE digitalisation process was launched at the Presidential Secretariat under the
Rajapaksa. patronage of President Gotabaya Rajapaksa.
CSE signed MoU with CHEC Port City

Colombo
Implementation of Delivery Vs. Payment

(DVP) mechanism at CSE
Capital Market Donation Drive provides

COVID-19 related medical equipment to
10 hospitals
CSE Signed MoU with CHEC Port City Colombo
CSE implemented a new OTC Platform
to conduct REPO Transactions on Debt
Securities
The CSE organised a special

ceremony to unveil the portraits of past
chairpersons of the CSE as a part of the
35th Anniversary of the CSE.
The ‘Invest Sri Lanka’ Investor Forum

organised by the SEC and CSE, in
association with the Embassy of
Sri Lanka in UAE and the Consulate
General of Sri Lanka to Dubai and
Northern Emirates was held.
The ‘Invest Sri Lanka’ Investor Forum held in Dubai and Northern Emirates.

Year In Review - 2021
Revision of the index calculation

methodology of the All Share Price
Index (ASPI) to Change its calculation
basis from full Market Capitalisation-
weighting to free float-adjusted Market
Capitalisation w.e.f. January 2022.
CSE and the Pakistan Stock Exchange

Limited (PSX) jointly announced Capital Market Donation Drive provided Bell ringing of 1st Empowering Board Company
COVID-19 related medical equipment to 10
the signing of a Memorandum of hospitals
Understanding (MoU) to formalize
collaborative efforts.
“The Colombo Stock Exchange (CSE)

has adopted the United Nations
Women’s Empowerment Principles
(WEPs) as part of its commitment to
promoting gender equality and women’s
empowerment in the workplace,
marketplace and community.” Unveiling of Portraits of Past Chairmen
Introduced Robotic Process

Automation (RPA) for CDS - e-connect
services.
Further Upgraded and strengthened

the Information Security framework with
the introduction of Security Operations
Center (SOC) as a service and a
security Information & management
system (SIEM).

We place infinite focus on
sustainability, on long term
solutions for profit, people and
the planet.
CHAIRMAN’S MESSAGE
• Enactment of the new SEC Act No.19

of 2021
• Revision of all CSE Rules to comply
with new provisions
• Extensive stakeholder engagement on
the revision of Rules
• Business continuity throughout
disruptions
• Financial stability of the CSE Group
• Continued investments in technology
• Plans for 2022
» Demutualisation of CSE
» Establishing a new entity for clearing
» Encouraging use of new trading
platforms and products
Dear Stakeholder, the first half of the year, commencing a corrected again with the 3rd wave
In 2020, we set out a new path and gradual ascent as policy rates increased of the pandemic in April 2021. There
plan for the Colombo Stock Exchange in August 2021. Economic activity was a general understanding that the
(CSE) and I am pleased to report picked up pace in the first half of 2021 pandemic would persist for a while and
that we were able to make significant supported by a strong recovery in the corporate sector worked around
progress along the journey. The first the industrial and agriculture sectors, it. Performance of the stock exchange
phase of digitalisation allowed the especially as the successful COVID-19 gathered momentum from May 2021
markets to operate even during the vaccination drive took hold in Sri Lanka. moving through a steeper trajectory.
lockdowns the recurred in 2021, Digitalisation provided open access By the end of 2021, the All Share Price
supporting greater empowerment to all Sri Lankan who could operate Index moved up 80% to 12,226 while
of investors which in turn sustained remotely. Social media followed the CSE the S&P 20 moved up 60% to 4,233
investor confidence throughout the year. closely reflecting the level of interest in both record levels to end a year. It is
the market which had a robust start for noteworthy that the growth momentum
A Great Score 2021. continued throughout the 4th wave of
We went into 2021 after the big shift the pandemic in the third quarter during
in the market. There was significant In January 2021 the market moved up which period the country recorded a
macroeconomic pressure building by 30% while recording the highest negative GDP growth of 1.5%. There
up including prospects of foreign monthly turnover in history as the CSE was unprecedented liquidity in the
currency liquidity challenges and rupee became the best performing stock market with the daily average turnover
devaluation. Foreign investors continued exchange in the world in that month. moving up 158% to an all-time record
their withdrawal from developing It got the attention of fund managers Rs. 4.9 Bn. It was a stellar year for the
markets to developed and home although we knew there would be a CSE as we were recorded the highest
markets exacerbating the pressures. correction. The aggressive market runover with record participation of
Driven by expansionary monetary momentum started correcting towards investors which increased by 143%.
policy, interest rates remained low in end February and early March and
26 Strategic Report • Annual Report 2021 • Colombo Stock Exchange

The vibrancy of the market and A Strong Financial Position the feedback received from key
attractive valuations in some key The CSE’s financial performance stakeholders with whom we engaged to
sectors whetted the interest of issuers. reflected the surge in activity levels ensure their concerns were addressed.
Accordingly, 2021 witnessed 29 with strong growth in turnover and The Trading Rules, Stockbroker Rules
new listings raising over Rs. 120 Bn profitability. Profit after tax was a record and CDS Rules are also being reviewed
capital for issuers also a new record Rs. 1.6 Bn as inevitable cost increases and revised to harmonise the with the
thereby reaffirming a core function of were well managed, supported by cost new SEC Act and global developments.
the exchange. Thirteen of the new rationalisation initiatives in previous
listings were equity IPOs which were years. Balance sheet growth was also Delivering the Future
all oversubscribed on the first day encouraging as total assets and equity There is no doubt that Sri Lanka has
demonstrating the value to companies. soared by 73% and 50% to Rs. 7.1 Bn enormous challenges ahead in steering
The high number of IPOs were and Rs. 5.0 Bn respectively. The its economy to a sustainable position.
facilitated by the streamlining of the CSE maintains a high level of liquidity Operations of the CSE are significantly
approval process working together with which has been supported by strong impacted by the macroeconomic
the Securities & Exchange Commission cashflows, supporting financial outlook as it is a key determinant of
of Sri Lanka (SEC). resilience of this economically vital investor participation. It is noteworthy
institution. that the performance of the CSE in
Shared Value 2020 and 2021 were driven by the
The value created was shared by all Strengthening Market Value increased participation of Sri Lankan
key stakeholders. In addition to the Propositions investors as foreign investors were
wealth created for investors, the capital The CSE continued to strengthen large net sellers in both 2020 and 2021
raised by issuers, and remuneration the institutional and physical market due to changes in global capital flows
and benefits to employees, the CSE infrastructure to align to global best as well as the country outlook. The
generated Rs. 8.5 Bn in revenues for practice and broaden the relevance war between Russia and Ukraine has
the government of which Rs,7 Bn was of our operations. Digitalisation was escalated rapidly and is a critical factor
direct generation. Our members and key to driving change and there were in determining the forecast for global
other market intermediaries such as significant investments over the past economic growth as supply chain risks,
investment banks also benefitted from two years to support investor and global food security, commodity price
increased fees making it a good year issuer interest, not just for the CSE risks and security concerns remain
for all stakeholders. Strong corporate but its members. Ensuring that our elevated to extreme levels. The CSE
earnings served to boost market stakeholders were in step was critical is committed to driving the changes
performance with investors benefitting and the CSE carried out a number of necessary to facilitate sustained levels
from enhanced returns. awareness programmes to ensure that of interest and activity as we move
key stakeholders shared our journey. through a period of unprecedented
Special mention must be made of the Introducing Delivery Versus Payment uncertainty in both the local and global
commitment of the team that ensured (DVP) was the major milestone in 2021 outlook with risks weighing heavily on
markets functioned throughout the year, and its roll out was accomplished the downside at the time of writing.
operating remotely during lockdown in an orderly manner. The Securities
periods. Activities necessary to uphold & Exchange Commission is a key The CSE will continue to work on
the integrity of the market were also stakeholder and their inputs have diversifying its product portfolio and
carried out continuously, sustaining been invaluable in driving the change. has a strong pipeline of projects, some
investor confidence during a critical Additionally, the cooperation of the of which will be rolled out in 2022. The
period. These factors supported members and other stockbrokers were pipeline includes mortgage-backed
sustained growth with record volumes vital to delivering the changes. securities, activation of REITS which
of transactions achieved in a challenging was launched in 2020 with tax breaks,
year. Importantly, there were no investor 2021 saw the enactment of the SEC repo trading of corporate debentures
complaints in 2021 indicating that Act No.19 of 2021 with changes that and the foreign currency listing board
changes delivered were effective and apply directly to the CSE Group and for local companies. Infrastructure
that technology was empowering others with whom we play a role in will be strengthened with a new order
investors. facilitating compliance. A major initiative management system for brokers while
stemming from this has been the CDS is working on establishing a
review of CSE Listing Rules which are Central Counter-Party (CCP) mechanism
being finalised taking into consideration for the equity market in a joint effort with
Colombo Stock Exchange • Annual Report 2021 • Strategic Report 27

Chairman’s Message
the SEC. This initiative when completed While 2021 was an exceptionally strong year, equity valuations are still below
will further reduce settlement risk of the historical peaks and there is headroom for improvement when benchmarking
CSE and also enable the introduction against peer exchanges. As fears regarding the pandemic recede, the single biggest
of new instruments that will bring better risk in the year ahead will be a rapid increase in interest rates which has potential
investment and risk management to destabilise the market momentum. High inflation, foreign exchange liquidity and
options for investors. A strong pipeline flotation of the rupee can have a significant impact on corporate performance and
of listings is also encouraging. We prudent management of these factors will be key to determining the vibrancy of the
will continue to focus on customer market in 2022.
experience and establish a strategy to
be more relevant to capital markets and Acknowledgement
investors. Promoting new accounts and I thank my fellow Board Members for their continued support by providing their
investor education will continue as part knowledge and initiative in a manner that has allowed the CSE to perform at a
of our ongoing activities. We are also record pace this year. I warmly welcome Mr. Asanga Seneviratne who rejoined the
looking at a new procedure for investor Board this year following his election by the Members.
grievances which will support operation
of fair markets and should enhance The employees of the CSE Group have been committed to ensuring that markets
investor confidence and trust in the remained open and that stakeholders were supported in realising value through their
CSE. interactions with the CSE. They’ve been ably led by the Chief Executive Rajeeva
Bandaranaike and, on behalf of the Board of Directors of the CSE, I take this
All of our medium-term plans including opportunity to thank all of them for their diligence and action in the past year.
those mentioned above in its totality will
allow us to take a quantum leap in our We are appreciative of the collaborative and proactive support of the Chairman,
stock exchange, moving from one that Mr. Viraj Dayaratne, PC, Commissioners and officials of the SEC. Their collaboration
trades a two simple products to open ranged from policy support to joint initiatives to introduce new capabilities and
up the floodgates for varied types of streamline processes for key stakeholders.
different products including products
backed by different asset classes and We also wish to thank the officials of the Central Bank of Sri Lanka for their support
derivative instruments ich are derivative lent in our product approval and marketing efforts in particular.
related which needs CCP. The new SEC
Act empowers the SEC and the CSE to In conclusion, I would like to thank all the investors, issuers and market
progress on plans for demutualisation intermediaries who together played a vital part in supporting the outstanding
of the CSE, which we hope will gain performance of the CSE in 2021.
momentum in 2022.
The CSE will continue to drive the

agenda of the Sustainable Stock Dumith Fernando
Exchanges initiative of the World Chairman
Federation of Stock Exchanges. We
have strong partnerships for ESG 21 March 2022
reporting and are working with the
SEC on green bonds and sustainability
related products. Sri Lanka’s has a good
base of socially and environmentally
responsible corporates and we are
looking to leverage this and develop
new products in line with globally
accepted ESG guidelines. We will also
continue to lead listed companies
towards sustainability as the focus on
ESG has increased significantly in the
global markets.

CHIEF EXECUTIVE OFFICER’S MESSAGE
GRI 102-14
80% ASPI
60% S&P
85%
MARKET CAPITALISATION
196% TURNOVER
4.28%
INVESTOR ACCOUNTS
Dear Stakeholders,
2021 was an exceptionally good year
for the Colombo Stock Exchange (CSE)
Importantly, valuations improved
supported by investor interest which
in turn fueled issuer interest resulting
14%
SUBSCRIBERS FOR MOBILE APP
as the momentum gathered in the latter in 13 new listings in 2021. The tax
85%
half of 2020 was sustained throughout concessions was also a key booster for
2021. new listings. A strong pipeline for listing
even after the lapse of tax concessions
We commenced the year as one of reflects the renewed interest and INVESTORS OUTSIDE
the top performing stock exchanges appetite for listing on the CSE. WESTERN PROVINCE
globally in January 2021, propelled
by record levels of retail investor Accordingly, the All Share Price Index
participation, strong corporate results
and renewed issuer interest.
The low interest rate environment was

(ASPI) moved up by as much as 80%
from 6,774 at the beginning of the year
to 12,226 at the close of the year. The
S&P Index also moved very significantly
99%
INVESTORS BELOW 40
also a key contributory factor and by 60% to 4,233 during the year as well.
124 BN
although the risk-free rate moved up
sharply by 400 bps towards the latter
part of the year.
Importantly, the market capitalisation
increased by 85% from Rs. 2,960 Bn to RS.
Rs. 5,489 Bn as increased retail investor CAPITAL RAISED
The Strong corporate earnings boosted participation and strong corporate
28
investor confidence partly attributable to earnings sustained the momentum.
the performance of the manufacturing Daily market turnover increased by
and logistic sectors as import 147% to Rs. 4.9 Bn while transaction
restrictions boosted demand. volume growth recorded an increase of NEW LISTINGS
180% to 60 Mn.

Chief Executive Officer’s Message
These movements were supported by The CSE’s Investor education drive supported the continued interest as we
4.28% growth in the number of investor conducted over 500 webinars and seminars targeted at different investor groups in
accounts to 675,309. The near tripling all three languages. The CSE was active on social media as well supporting both
of the CSE mobile app subscribers to investor interest and education.
147,757 reflects the heightened interest
in the stock market which supported Enhancing Market Infrastructure
sustained investor participation. The The CSE was able to successfully introduce the Delivery Versus Payment system in
CSE facilitated raising over Rs. 120 Bn 2021 after several unsuccessful attempts over the last 15 years.
in 2021 through debt, equity and private
placements as a result of the vibrancy of We came up with a model that was acceptable to all market participants. This
the market. was a key milestone and perhaps the most significant innovation in the last
decade, bringing CSE in line with global best practices. It paves the way for further
Facilitating a Vibrant Market developments in improving the post trade market infrastructure which will support
The Team at the CSE accommodated expansion.
the surge in the activity levels through
an extremely well coordinated effort Exceeding Targets
by stretching the available resources, Target Actual
technology and frameworks in place.
Active Investors 50,000 63,000
Leveraging technology was key and New Listings 20 29

the market digitalisation drive led by Turnover velocity 25% 40%
the SEC/CSE Digitalisation committee Market Capitalisation to GDP 30% 36%
enabled delivery of an end to end
Daily Average Turnover Rs. 4 Bn Rs. 4.9 Bn
experience for investors through a
revamped CSE Mobile app. Anyone
from any part of the country can now Delivering Performance
upload the necessary documents Building and retaining the trust of stakeholders was necessary to establish greater
and create an account by signing the investor confidence in the market. We strengthened the regulatory framework
documents digitally with a stock broker through the revision of listing and stockbroker rules and trading rules which defined
of their choice. Settlements can be expected behaviours. Communication platforms were strengthened to support
made via internet banking eliminating effective dissemination of information to investors. Enforcement was strengthened
the need to make a physical visit to a as well as market surveillance activities to support greater transparency in market
stockbroker office. activities. The Investor grievance handling processes was revamped, making it
easier for investors to come forward with their concerns.
Information is provided through a single
portal with research, investor education, Widening the investor base supported improved distribution of wealth amongst
corporate information, disclosures, Sri Lankans as they benefited from the improved performance of the corporate
online trading information and the order sector of the country. There were 63,000 active investors against a target of 50,000
book. This opened the door to attract as we added on 50,000 new accounts versus a target of 35,000 reflecting the
a new tech savvy and knowledgeable interest in stock market.
investor to the market which enabled a
meaningful broad basing of the market. We also encouraged new listings by corporates to increase the liquidity and options
It is noteworthy that the new accounts for investors. Changes in the rules to make the processes more efficient enabled
reflect interest from a younger investor us to facilitate 29 new debt and equity listings in 2021. The CSE also exceeded the
and an extension of interest beyond 25% target for turnover velocity which measures the frequency of trading indicating
the Western Province. The growth in the liquidity of the market ,achieving 40%. These reflect the value added to issuers
the number of active investors was in addition to the capital raised and the price discovery facilitated by the listings. Its
impressive with over 63,000 doing noteworthy that all IPO’s were oversubscribed on the opening day itself reflecting
at least one trade per year and over investor appetite for new listings.
42,000 doing around 4 trades per year
which is up from 25,000 in 2020. Re-rating valuations to peer market levels was a measure of overall performance
of the market with the market capitalisation to GDP and minimum average daily
turnover used as performance indicators. Expectations on both were exceeded as

market cap to GDP increased to 36% year, the CSE is in a strong financial There will be a continuing focus on
against a target of 30% and minimum position with sufficient resources to encouraging new listings on all the
average daily turnover exceeded the pursue its growth aspirations while different boards and in particular will
target Rs. 4 Bn by 21% to Rs. 4.9 Bn. maintaining a prudent financial profile. be looking to boost interest on the
multi currency board. We also hope to
Sustainable and Profitable 2022 & Beyond continue to work on promoting ESG
The Revenue of the CSE increased by Our outlook for 2022 remain cautiously practices in collaboration with the
a phenomenal 166% to Rs. 2.5 Bn optimistic despite the significant regulator and other market participants.
propelled by a vibrant market with economic challenges facing the country. In particular we have been focusing on
unprecedented levels of participation Increasing interest rates and inflationary issues such as Financial Literacy, SME
from investors and issuers. The CSE pressures are likely to dampen & Entrepreneur Empowerment and
accounted for 76% of Group revenue the surge in investor participation Gender Equality and we hope to devote
while the CDS accounted for the experienced in 2021 although the more resources and focus on these
balance 24%. Delivery of value added changing demographic of investors areas in the coming years.
services enabled the diversification in the market is expected to support
of revenue streams, supporting sustained interest from retail investors. The CSE will continue to work for the
sustainable growth. Consistently betterment of the community it operates
high levels of activity during the year Strengthening market infrastructure will in and build on the CSR initiatives last
supported optimal utilisation of existing be a priority. The changes in the new year where we led a capital market
infrastructure which was upgraded SEC Act necessitates the separation of industry level initiative to donate medical
in 2020, supporting overall cost functions between the depository and equipment to 10 hospitals during the
efficiencies despite inevitable increases clearing and Settlement. Covid 19 pandemic and provided
in depreciation, staff costs and other computer labs to Twelve needy schools
operating expenses. Significant The setting up of a Central Counterparty around the country.
improvements in internal processes (CCP) which is the next logical phase
and moving to a paperless environment of DVP will pave the way for the The CSE has been successfully
supported significant cost efficiencies. introduction of more products and help partnering international and local
As revenue growth outstripped the to diversify the revenue streams of the institutions on many fronts. We have
relatively modest increase in expenses, CSE. Work on a proposed CCP has been working with institutions such as
profit before taxation increased by already started under a SEC /CSE Joint CA Sri Lanka, CMA Sri Lanka , IFC,
312% to Rs. 1.8 Bn and Profit After Tax committee. SLID, GRI , CCC,BOI ,CFA Sri Lanka,
increased by 294% to Rs. 1.6 Bn the many local and international Universities
highest profit recorded in the history of Plans for upgrading broker Order and signed MOU’s with several regional
the Colombo Stock Exchange Group. Management Systems (OMS) are at an stock exchanges and continue to work
The CDS profits accounted for 23% of advanced stage and approval has been in close partnership with them.
Group profit with CSE accounting for obtained to offer Stock Brokers access
the greater share of 77%. to a common system. The CSE will also renew efforts to
encourage foreign investors back to
Improved profitability supported balance Additionally, the CDS Development the market with improved performance
sheet growth and improved resilience project will also provide greater although there is a need to resolve the
of the CSE Group. Total assets empowerment and convenience to foreign exchange challenges in order
increased by 73% to Rs. 7.1 Bn. account holders, listed companies to do so. We will continue to work
Growth was driven by increases in and market intermediaries, supporting to broad base the market locally and
Other Investments and Cash & Cash sustained interest by market will launch a Investor education and
Equivalents which ramped up by 341% participants. awareness campaign in partnership with
and 407% to Rs. 1.8 Bn and Rs. 3.2 Bn the SEC during the course of the year.
respectively. A 51% increas in the We will continue our digital
accumulated fund supported a 50% transformation, moving more We will also focus on expanding on the
increase in Equity to Rs. 5.0 Bn which processes to paperless while product suite in 2022. Stock Borrowing
amounted to 70% of the funding of enhancing the customer experience and Lending, regulated short selling,
the balance sheet reflecting prudent for key stakeholders through improved development of the secondary market
management of financial resources and accessibility to the market. for debt, listing on the Multi currency
financial resilience. At the close of the Board and a gold linked product are in
the pipeline.

Chief Executive Officer’s Message
We are also keen to introduce a listed Acknowledgements

REIT during the course of the year. Investor participation and issuer interest in listing and promoting liquidity were key to
We will continue to monitor benchmarks the surge in turnover in 2021 and I thank these key stakeholders for their confidence
for market growth and liquidity to in the capital markets despite multifaceted challenges.
support resilient growth of the market.
Building investor confidence will be key Clear direction and oversight of the Board was the key in delivering the right strategy
to sustaining market growth. and I wish to acknowledge and thank the Board Members for their wise counsel,
commitment and contribution to the performance in 2021 and giving sound support
We have commenced the project to to the CSE Team.
harmonise all CSE rules with the new
SEC Act No.19 of 2021 and we expect I take this opportunity thank the CSE team who worked tirelessly to deliver
to complete this in the first quarter of the outstanding results set out in this report. Their passion , commitment and
2021. Enforcement will be strengthened professionalism is a source of inspiration.
to support greater transparency in the
market which will be reinforced with the I wish to acknowledge the solid support and contribution given by the Securities and
introduction of a new grievance handling Exchange Commission and team led by the Chairman and Director General.
procedure.
Stock Broker Firms played a key role sustainaing investor interest which was key to
Organisational development will focus a vibrant market and we thank them for increasing their resources and encouraging
on maintaining operating profitability investors participate in the country’s capital markets. Investment banks , fund
and revenue diversification through managers and other market intermediaries were also key influencers in driving
expansion of the product portfolio. market growth.
Developing talent to drive performance
is a key area of focus and we will As we start 2022 with considerable challenges ahead, I am reminded that working
provide training to upskill our staff at all together we can push boundaries and clear obstacles with our collective wisdom
levels, supporting effective performance and actions. I look forward to working together with all our stakeholders to push
in a digital era. forward our ambitious capital market development plans.
FINANCIAL HIGHLIGHTS 2021

CSE Group Rajeeva Bandaranaike
Profitable Chief Executive Officer
• Revenue Rs. 2.5 Bn 166%
• PBT Rs. 1.8 Bn 312 % 21 March 2022
• PAT Rs. 1.6 Bn 294%
Resilient Growth
• Total Assets Rs. 7.1 Bn 74%
• Equity Rs. 5.0 Bn 50%

BOARD OF DIRECTORS
Mr. Dumith Fernando Mr. Ray Abeywardena

Chairman Director
Elected Non-Executive Director Elected Non-Executive Director
Appointed: 26th May 2017 Appointed: 13th June 2013
Skills & Experience Skills & Experience

Twenty six years of experience in international Investment Associated with Sri Lanka’s capital markets for over 36 years,
Banking and Equities, based in New York and Hong Kong primarily as a Stockbroker and since 2009 as an Investment
with leading global investment banks JP Morgan Chase & Co. Banker.
and Credit Suisse AG.
Member of the Chartered Institute of Marketing (UK) and
He holds a BA in Physics & Economics from Middlebury holds a Masters Degree in Business Administration from the
College in the U.S. and an MBA from Harvard Business University of Wales.
School.
Other Current Appointments
Other Current Appointments Managing Director of Acuity Partners (Pvt) Ltd.
Chairman of Asia Securities Holdings (Pvt) Ltd.
Chairman of Acuity Stockbrokers (Pvt) Ltd and Acuity
Independent Director of the listed firms Union Assurance PLC
Securities Ltd.
and Singer (Sri Lanka) PLC.
Director of Lanka Ventures PLC, Lanka Energy Fund PLC and
Member of the Financial System Stability Consultative
Guardian Acuity Asset Management Ltd (GAAM)
Committee (FSSCC) of the Central Bank of Sri Lanka and the
Economic Policy Steering Committee of the Ceylon Chamber
Previous Appointments
of Commerce.
He served as Chairman of the Colombo Stock Exchange from
2017 to 2020, Managing Director/CEO of Acuity Stockbrokers
(Pvt) Ltd from 2001 to end 2008 and is a past Chairman of the
Managing Director and Group Chief Operating Officer for
Colombo Stockbrokers Association.
Credit Suisse Asia Pacific. Worked at Credit Suisse from
2007 until 2013 and at JP Morgan from 1995 until 2007 in
roles across Investment Banking, Equities, Private Equity and
Corporate Strategy.

Board of Directors
Mr. Dilshan Wirasekara Mr. Dimuthu Abeyesekera

Director Director
Elected Non-Executive Director Elected Non-Executive Director
Appointed: 21st November 2017 Appointed: 1st February 2019
Skills & Experience Skills & Experience

Investment banker by profession with a career spanning over An experienced capital market professional counting over 32
26 years, comprising diversified expertise in financial services years in the industry. A veteran capital market professional.
including, banking, treasury and investment management,
Serves as an important resource person at CSBA.
capital market strategy and corporate finance advisory
services.
An alumnus of INSEAD having completed his Executive Director/CEO of Asha Securities Ltd, which is affiliated to
Professional Education at INSEAD Business School in Phillip Capital Singapore, a specialised financial services
Fontainebleau, France. He is also an Alumnus of AOTS, organisation managing assets worth over US$ 35 Billion with
Tokyo, Japan. a network of offices around the world.
He specialises in Asset and Liability Risk Management Director at Asha Financial Services ltd, a Specialised Margin
having secured the accolade of leading and representing Trading Company in Colombo.
two Sri Lankan companies in winning the International Bank
Asset and Liability competition organised annually by the Previous Appointments
Netherlands Development Finance Company (FMO), German Chairman of the Colombo Stockbrokers Association (CSBA).
Investment Corporation (DEG) and Proparco - a subsidiary of
Chairman at Kalamazoo Systems PLC.
the Agence Française de Development (AFD).

Director/Chief Executive Officer of First Capital Holdings PLC.
General Manager of Softlogic Capital PLC guiding investment
and trading portfolio management across subsidiaries
inclusive of the Group’s Licensed Finance Company,
Composite Insurer and Equity Brokerage.
Head of Treasury at Nations Trust Bank PLC.

Mr. Asanga Seneviratne
Director
Elected Non-Executive Director
Appointed: 23rd September 2021
Skills & Experience Previous Appointments

Mr. Asanga Seneviratne has extensive experience in Finance & Previously served on the Board of the CSE as a Director
Investments, Capital Management and the hospitality industry. during the period 2013 to 2017
Mr. Seneviratne pioneered on-line Trading in Sri Lanka through
Was a Founder/Director of Asia Capital PLC, the largest
his company Investor Access Asia (Pvt) Ltd with CDAX, the
Investment Bank to be listed on the CSE in 1994
first on-line trading system in Sri Lanka.
Managing Director, Asia Securities (Pvt) Ltd and CEO of Asia
He was instrumental in restructuring Nation Lanka Finance Capital Ltd from 2003-2010
PLC under the Central Bank program in 2011 to resurrect Chairman of NatWealth Securities,
failed licensed Finance entities. Following an illustrious
sporting career in Cricket and Rugby at School and Club level, Director of Nation Lanka Finance PLC.
Mr. Seneviratne represented Sri Lanka in both sports. Chairman of the Stock Brokers’ Association of Sri Lanka from
2005/2006
Chairman of Nation Lanka Equities (Pvt) Ltd President of the Sri Lanka Rugby Foot Ball Union from
2012 - 2018
Managing Director of Asia Fort Asset Management (Private)
Limited Vice President of Sri Lanka Cricket 2013 to 2016
Managing Director Anilana Hotels & Properties PLC Secretary General of Asia Rugby - 2013 to 2015
Managing Director Investor Access Equities (Private) Limited

Board of Directors
Mr. Arjuna Herath

Director
Appointed Non-Executive Director
Appointed: 21st February 2020
Skills & Experience Previous Appointments

A Senior Fellow Member of the Institute of Chartered A Board Member of the Sri Lanka Accounting and Auditing
Accountant of Sri Lanka and a Chartered Global Management Standards Monitoring Board.
Accountant with a Bachelor of Science degree from the
A Commissioner of the Securities and Exchange Commission
University of Colombo, a MBA from the University of
of Sri Lanka.
Strathclyde in the United Kingdom and a Master of Arts in
Financial Economics from the University of Colombo. Director Corporate Finance at Merchant Bank of Sri Lanka Ltd.
Extensive industry experience of over two decades in serving Marketing Development Manager at Ceylon Tobacco Company.
numerous clients in the Public Sector and in the Private Sector Chairman of the Professional Accountancy Organisation
and actively involved in areas of Economy, Capital Markets, Development Committee of the IFAC.
Investments, Corporate Transformation & Restructuring,
Corporate Planning, Performance Improvement, Corporate Past President of The Institute of Chartered Accountants of
Governance, Technology, Accounting, Auditing, Professional Sri Lanka.
Accountancy Organisations. Past President of the South Asian Federation of Accountants.
Other Current Appointments Board Member of the Confederation of Asia Pacific

Senior Partner and Head of Consulting, Ernst & Young, Accountants.
Sri Lanka and Maldives.

Mr. Jayantha Fernando
Director
Skills & Experience Other Current Appointments

An Attorney with over 24 years international experience in Chairman, LK Internet Domain Name Registry
Cyber Law, with expertise in Digital Payments & e-Commerce,
Co-Chair, National Certificate Authority Task Force for Digital
International trade, Cyber Security/ Cyber Crime, Intellectual
Authentication Services
Property Rights & Software licensing, E-banking & Mobile
Banking, Digitisation of capital markets, Dispute resolution Director, Sri Lanka CERT & Director/ Legal Advisor, ICTA
in ICT Projects and negotiating contracts for large digital
solutions. Previous Appointments
Pioneered drafting of Sri Lanka’s digital laws, including Chairman, Sri Lanka CERT (Computer Emergency Readiness
Electronic transactions, Digital Payments, Cybercrime as well Team)
as Data Protection and Cyber Security Legislation. Drafted the Commissioner, Securities and Exchange Commission of
Legal blueprint for the establishment of ICT Agency, Sri Lanka
Sri Lanka, Board Director, Sri Lanka Standards Institution
CERT and the use of authentication technologies at national
and sectoral level at Lanka Clear, through Central Bank. Consultant on Digital Laws, Attorney General’s Chamber,
Republic of Fiji
Led Sri Lanka’s entry to the Budapest Cybercrime
Convention and Sri Lanka’s ratification of the UN Electronic Vice Chair, Government Advisory Committee, Internet
Communications Convention (UN eCC) in 2015, both firsts Corporation for Assigned Names and Numbers (ICANN),
for South Asia. Expert for UNCITRAL, Council of Europe and California, USA
World Bank advising countries formulate Digital Laws.
Associate Chairman, ICANN Nominations Committee
Holds a specialised Masters in Law (LLM) in IT &
Telecommunications Law from the University London, which Elected Bureau Member, Council of Europe Cybercrime
was completed on a Chevening Scholarship awarded by Convention Committee (T-CY), Strasbourg, France
Government.

Board of Directors
Mr. Suren De Silva

Director
Skills & Experience

24 Years as an Attorney at law and as a legal practitioner
mainly focused on commercial, corporate and admiralty work
and advising on Project finance transactions.
Masters in Law (LLM) (University College London) (University
of London) (1997-1998). (Emphasis on regulation of financial
markets, law and practice of foreign investment in emerging
economies, privatisation).
LLB (Hons.) (University of Wales College of Cardiff)
(1993-1995).
Attorney-At-Law, Supreme Court of the Democratic Socialist
Republic of Sri Lanka (June1997) of Gray’s Inn, Barrister-At-
Law (England and Wales) (July 1996).

Counsel/Consultant Special Projects D.L & F De Saram,
Attorneys at Law
Former State Counsel - Attorney Generals Department
1999 - 2003.
Advisory capacity for projects undertaken by State Institutions,
Statutory Boards, Ministries, Government agencies,
International Organisations and overseas companies.
Advising and representing Parties in Commercial Arbitrations;
Member of the National Intellectual Property Commission in
the year 2002 to 2004.

MANAGEMENT TEAM
Mr. Rajeeva Bandaranaike Mr. Renuke Wijayawardhane Mr. Chandrakanth Jayasinghe

Chief Executive Officer Chief Regulatory Officer Chief Information Officer
Ms. Renu Ranatunge Mr. Kusal Nissanka Mr. Niroshan Wijesundere

Senior Vice President - Legal Senior Vice President - Senior Vice President - Marketing
Finance and Administration
Mr. Nishantha Hewavithana Mr. Kaushal Siriwardena Mr. Nalin Fonseka

Senior Vice President - Senior Vice President - Senior Vice President -
Research and Strategy IT Systems and Development Central Depository Systems

Management Team
Mr. Janaka Mahagedarawatta Ms. Nilupa Perera Mr. Purasisi Jinadasa

Senior Vice President - Senior Vice President - Trading Senior Vice President -
IT Infrastructure and Support Services Operations, Market Surveillance & Origination and Issuer Relations
Corporate Affairs
Ms. Kushlani Coswatte Ms. Lankesha Molligoda Ms. Vinduni Dullewe

Vice President - Internal Audit Vice President - Vice President - Listing
Regulatory Policy and Compliance
Ms. Kanishka Munasinghe Ms. Dulani Warnakulasooriya Ms. Anoja Senanayake

Vice President - Broker Supervision Vice President - Enterprise Risk Vice President - Human Resources
Management & Post Trade Settlement

Our team is a dependable and
united entity that has been an
essential cog in our machinery.
OUR BUSINESS MODEL
FINANCIAL ASSETS PEOPLE TECHNOLOGY

Used to build the stability Over 90% of our employees Robust and secure
INPUTS and resilience of the are highly skilled individuals, technological platforms to
capital market and meet with strong academic and deliver our products and
operational expenses. professional qualifications services
Sound Corporate :
Governance GH Primary Market
U
RO
Allowing investors to
TH
INTERNAL ENVIRONMENT
raise debt or equity
RS
capital through listing
TA K E H O L D E
Effective Risk
Management boards
OUR VISION
VALUE
To Create Wealth
CREATION and Value ITH S
Secondary Market
Self-Regulation
W
Providing a secure
ING
platform for investors

T
Stakeholder
C
to trade
NE
Centric Corporate N
CO
Strategy
675,309 14 Debt IPO
OUTPUTS RS. 1,173 Bn 4.3 % increase 13 Equity IPO
MARKET TURNOVER NUMBER OF INVESTORS NUMBER OF IPOs
2% RS. 124 Bn RS. 13 Bn

Dividend Yield Funds Raised Trading Commissions
IMPACT
INVESTORS ISSUERS BROKERAGES
42 Creating Value • Annual Report 2021 • Colombo Stock Exchange

RELATIONSHIPS ENVIRONMENT INTANGIBLE ASSETS
Our relationships with key Natural resources consumed in Our capacity for innovation.
stakeholders like investors, carrying out our activities. (Patents, Licenses), Tacit
issuers and stockbrokers are knowledge, Systems, and
key to maintaining the vibrancy Processes
of the stock exchange
CO Economic
Market Data Environment
NN
We help stakeholders
EC
EXTERNAL ENVIRONMENT
OUR MISSION
TIN
make informed
decisions by providing
GW
timely and reliable • Increase the number of active COVID-19

investors
I T H S TA K E H O L D
information through Impacts

digital platforms • Encourage issuers to raise
capital through the CSE
• Provide facilities to trade
Post Trade diversified products Government
• Ensure balanced regulation to Policies
ERS
Providing clearing and maintain market integrity and

settlement services for investor confidence
HR T
investors to minimise
O
UG
risks H: Technological
Changes
RS. 5,489 Bn
37 % RS. 1,672 Mn RS. 52,602 Mn
Market Capitalisation as a % of GDP
MARKET CAPITALISATION MARKET PROFIT AFTER TAX NET FOREIGN CAPITAL OUTFLOWS
RS. 334 Mn RS. 1,554 Mn RS. 7,039 Mn RS. 5 Mn

Taxes and share
Salaries Fees transaction levies Awareness programs.
EMPLOYEES REGULATOR GOVERNMENT COMMUNITY
Colombo Stock Exchange • Annual Report 2021 • Creating Value 43

Responding to Our Stakeholders GRI 102-40, 42, 43, 44
Our stakeholders are key to sustaining market activity. We continuously engage with a broad range of stakeholder groups in
order to understand and effectively respond to their concerns and expectations. This year we have adopted a stakeholder
focussed Annual Report, highlighting our commitments to create value to our stakeholders. The table below summarises the
importance of each stakeholder group, channels of engagement and the key concerns identified from the engagement process.
Investors Issuers
Our investors are an important stakeholder as

Importance their activity is directly linked to the Issuers play an integral role in injecting liquidity
performance of the market into the market
• Reliable and vibrant market place

• Competitive financing options
• Innovation
Key concerns • Attractive valuations
• Diverse listing boards
• Enhancing the listing criteria
• Timely and credible information
• Growing portfolio of investment

products and supported services
• Marketing campaigns to rebuild
investor confidence • Streamlined the listing process
Our response
• Improved market surveillance process • Amended the listing rules
• Digitalisation drive
• Streamlined the listing process
• Amended the listing rules
Across all Stakeholders Specific channels for:

Physical and virtual meetings Investors
Press releases • Investor forums
Websites Issuers
Channels of Social media • Market opening ceremonies
Engagement Media releases • Discussions
Correspondence Employees
Industry exhibitions • Welfare events
Trade fairs • Appraisals
Awareness sessions • Knowledge sharing sessions
Members/Trading Members
Members/Trading Members multi-faceted role in sustaining market activity and continuing our
operations
Importance
Stockbrokers are the main intermediaries who connect investors and issuers to carry out
transactions in the stock market
• Capacity building including financial and IT related support

• Profitable business model
Key concerns • Skills development
• Brokerage
• Robust technology
• Improved the efficiency in processes

Our response • Amendments to the rules in line with new developments
• Introduction of DvP mechanism
In addition to the above stakeholders, we also engage and collaborate globally with various regional exchanges through MoUs
and cross border training sessions.

Employees Regulator
We maintain a good relationship with our

Our employees are key players who drive our
regulator, the SEC and comply with the
performance, and we provide an attractive
relevant regulations in order to preserve the
value proposition to keep them motivated
integrity of the market
• Fair remuneration
• Opportunities for skills evelopment • Compliance with regulatory requirements
• Concern for employees safety and • Market integrity
dignity/respect • Balanced regulations
• Engagement, feedback and grievance
mechanisms
• Maintaining a robust and efficient

compliance framework to ensure
compliance with all regulatory requirements.
• Strategic management of HR processes • All regulatory Rules introduced during the
course of year have been done taking into
consideration the market dynamics and
benchmarked with other corresponding
jurisdictions and international standards.
Specific channels for: Specific channels for:

• Regulatory approvals Stockbrokers & Other Financial
• Reporting of any non Intermediaries
Refer page 52
compliance • AGM
for Report on
• Discussion of rule • Investor Sri Lanka forums
Value created
amendments Country and Community
for Stakeholders
• CSR programs
Members • Stock market sessions to educate
• Discussions students in schools and universities
Other Financial Country and

Intermediaries Community
The government acts as the ultimate policy
Financial intermediaries sustain the momentum
maker and collector of taxes and provides a
of a stock exchange by connecting investors
conducive operating framework for entities to
and issuers to carry out market transactions
conduct operations
• Investing in developing the financial

infrastructure within the country
• Commissions
• Partner socioeconomic development in
• Robust technology
country
• Improving the financial literacy
• Amendments to the rules in line with new

developments • Timely payment of regulatory dues
• Introduction of DvP mechanism • Enhancing awareness on the CSE

Our Corporate Strategy
The CSE’s corporate strategy focussed on five areas in order to become a transparent and competitive stock exchange that
creates value for all stakeholders. During the year we have reviewed our strategy and amended it to reflect both, our own
evolution and changing expectations of stakeholders. The corporate strategic focus areas and the relevant KPI’s for 2022 are
presented in the diagram below.
01. Stakeholder Economy
• Investors
• Issuers
• Stockbroker Firms
02. Fintech
• Fintech Innovation
03. Sustainability
• Regulatory Framework
• Stakeholder Grievances
• Reporting Standards for
Listed Companies
04. Innovation & Scalability
• New Products
• Infrastructure
05. High Performance Organisation
• People Management
• Profitability
06. High Performance Organisation
• Compliance
• Risk
• Audit

Our Supply Chain GRI 102-9, 10
THE ECONOMY
SAVINGS
STOCKBROKERS
TRANSPORT STOCKBROKERS MATERIAL

PROVIDERS SUPPLIERS
G WEALTH C
RTIN RE
O AT
PP I
CSE
O
SU
N
FAC
NS
A CUSTODIAN
TIO
I LI
OF WEALTH
TA
AC
IN S
T
G AN
CA R
PITA
L M ARKE TT
UTILITY
SERVICE INVESTMENT BANKS MAINTAENANCE
PROVIDERS SERVICE
ISSUERS
CAPITAL
There were no significant changes to the organisation’s size, structure, ownership, or supply chain during the year.

Pipeline of Products
NEW PRODUCTS
OTC Platform for REPO Transactions

INTRODUCED
In order to activate the corporate debt market, the CSE implemented an Over the Counter (OTC) mechanism to
carry out Repurchase (REPO) transactions on listed corporate debt securities. The new OTC Platform will create a
further regularised opportunity for Investors, Trading Members and other corporates involved in the fixed income
securities market in Sri Lanka.
Stock Borrowing & Lending (SBL) Transactions Listing & Trading of Green Bonds
The CSE intends to introduce Stock Borrowing & Given the increased interest displayed in the recent
Lending (SBL) transactions to the market in order to past in respect of green projects, the CSE is in
facilitate Regulated Short Selling. We hope that the the process of extending the listing framework to
introduction of Regulated Short Selling with an SBL specifically cater to the listing of Green Bonds.
mechanism would result in increasing liquidity at
the CSE.
PRODUCTS IN THE PIPELINE
Introduction of a Paper Gold product

The product will be an investment product based on the underlying Gold holding held by the respective Issuer
(Licensed Commercial Bank) with its Counterparty. The CSE is in the process of finalising the regulatory framework
related to the introduction of Paper Gold on the exchange.
Listing of Special Purpose Acquisition Companies (SPACs)

By implementing a listing platform to accommodate SPACs, which are blank-cheque companies, a further
innovative solution to capital raising may be provided in a regulated and structured manner. The funds raised by the
SPACs can be channeled later-on to acquire a new company. Accordingly, this process will also assist in increasing
the number of new listings at the CSE. The CSE is in the process of finalising the regulatory framework relating to
this vehicle with sufficient checks, balances and learnings from other markets being introduced under legal advice,
given the local context.

Introduction of a Multi-Currency Listing Framework for Equity by local companies
Through this initiative of the CSE, the Ministry of Finance issued new Regulations in terms of the Foreign Exchange
Act, enabling local entities to issue and list foreign currency denominated shares on the CSE. The CSE carried out
the necessary amendments to CSE & CDS Rules which were approved by the SEC.
Listing and Trading of Perpetual Bonds Mortgage-Backed Securities

It is noted that regulatory bodies such as the CBSL In an effort to introduce new solutions that would have
is guiding and encouraging entities regulated by the a perceptible economic benefit, the CSE is developing
CBSL to issue Perpetual Bonds. Given the nature a securitisation framework, particularly for mortgages
of this product, the CSE formulated a separate and is exploring the possibility of facilitating listing and
regulatory framework to accommodate the same and trading of Mortgage-backed Securities (MBS).
we are awaiting its approval by the SEC.
Introduction of a Multi-Currency Listing Framework for Debt by local companies

We are looking to offer local entities the opportunity to list debt securities denominated in foreign currency on
the CSE. The regulatory framework in this regard will be finalised shortly by the CSE, in accordance with the
Regulations issued in terms of the Foreign Exchange Act.

Determining Material Issues GRI 102-47
Material matters are matters that significantly affect the CSE’s ability to create value and achive strategic goals over the short,
medium and long term. The process used to determine our material topics is graphically prsesnted below.
Step 1
Identification of meterial Issue
Stakeholder Opportunities Group’s Long

engagement & Risks Term Appriciations
Step 2
Materiality of each matter is determined by its significance and impact to the

CSE and its stakeholders.
Step 3
These topics are continuously monitored and managed in order to ensure it

remains relevant.
4 5 1 2
6 3
Impact to Stakeholders
8 10 7 9

2021
Our Material Topics GRI Topic SDG Goals SDG Targets
Rank
1 Technology excellence 9.1, 9.4
To be on par with technological
advancements in capital markets
as it is vital in ensuring the
delivery of our products and
services to our clients.
2 Market activity GRI 201 Economic Performance 9.1, 9.2, 9.3
As an attractive avenue for
raising capital, we ensure
the quality of the market is
maintained by creating a vibrant
environment for stakeholders.
3 Market oversight and 16.3, 16.5, 16.6, 16.7
Regulation
The CSE proactively engages to
increase the quality of regulatory
activities while addressing the
gaps in the market regarding the
perception of our regulatory role.
4 Supporting socio-economic GRI 201 Economic Performance 10.2, 10.5, 10b,
progress GRI 413 Local Communities 17.1
Our activities create economic
value across diverse stakeholder
groups by channelling the
surplus wealth into productive
avenues.
5 Wealth creation for GRI 201 Economic Performance 17.1
stakeholders
A major area of concern for our
stakeholders.
6 Managing talent GRI 401 Employment 3.4
As a service organisation, GRI 404 Training & Education 5.1, 5.2, 5.5 , 5.b, 5.c
nurturing our pool of employees GRI 405 Diversity & Equal Opportunity 8.3, 8.5, 8.6
is key to our value creation
process.
7 Regulatory compliance GRI 102 General Disclosures 16.3, 16.5, 16.6, 16.7
This creates a strong foundation GRI 103 Management Approach
for our value creation process.
8 Financial literacy and Inclusivity GRI 413 Local Communities 10.2, 10.3
We balance our stakeholder
concerns and cater to a wide
market; from SME’s to large
corporates while educating the
community
9 Business growth 9.1, 9.3
Innovation is key to honing our 12.2, 12.6, 12.8, 12.a,
competitive edge and ensuring
sustainable business growth
10 Climate action GRI 301 Materials 7.2, 7.3
Managing our consumption of GRI 302 Energy 12.2, 12.4, 12.5, 12.6, 12.8
natural resource is vital in driving GRI 305 Emissions 13.1
down the adverse environmental
impacts of our operations.

The integrity that we display has
been essential in the smooth and
transparent operations for which
we are known.
Recognising and Managing Risk
Effective risk management is critical to sustainable growth of the CSE as its operations have
a significant impact on a large number of stakeholders and the economy as a whole. Robust
risk management will also enable CSE to strengthen resilience to potential negative impacts
and also seize opportunities for growth. Consequently, risk management information feed
into the strategic planning process as well as a number of other processes, enabling CSE to
recalibrate its strategy and risk mitigation plans.
RISK ENVIRONMENT
2021 was marked by the prolonged duration of the pandemic and associated business disruption, vaccinations and increased
digitalisation of businesses and business processes. Deteriorating foreign currency reserves gave rise to wide ranging import
restrictions and a further downgrading of the sovereign rating which continues to remain a key concern. Inflation also increased
significantly during the year both globally and in the country increasing pressure on wage bills and disposable income of
consumers. Interest rates increased during the year as governments raised policy interest rates around the world. Cyberthreats
escalated with increased digitalisation and higher levels of activity and sophistation of hackers. Sectors such as Tourism continue
to be impacted by the pandemic as health and safety of travel remains a key concern.
At the same time, there are also ample business opportunities open to us because of our position and role as Sri Lanka’s stock
exchange. These opportunities may arise as the result of our continuous improvement efforts over the years, or they may arise
due to other unprecedented external factors. A good example of the latter was the substantial increase in domestic participation
in our capital market in 2021 as investors were drawn to the market by a combination of factors including increased liquidity,
volatility in the market and a low interest rate environment. In either case, we strive to make the most of these opportunities
when they present themselves.
RISK GOVERNANCE
The Board of Directors have ultimate responsibility for managing risk and have set in place an appropriate risk management
structure as depicted below.
Oversight Board of Directors
Design and approve the

framework to identify
and report risk indicators Risk and Audit Chief Executive
Internal Audit
and inependantly assure Committee Officer
the adequcy of the risk
management framework
Communicate monitor and Risk Management Management

report risk indicators Function Committee
Responsibility for risk Daily risk

management at the management at the
operational level divisional level
Colombo Stock Exchange • Annual Report 2021 • Sustaining Our Value Creation 53
The Board’s responsibilities regarding risk management include:
• Setting CSE’s risk strategy and risk appetite
• Overseeing systems of risk management and internal control and compliance
• Overseeing process for identifying significant risks facing CSE
• Satisfying itself that appropriate controls, monitoring and reporting mechanisms are in place.
Management executes the Board-approved strategy and manages CSE’s operations within the Board-approved risk appetite.
Management is responsible for identifying, monitoring, mitigating and reporting on risks.
The Enterprise Risk Management team is entrusted with the management of risk, operating within the defined structure, policy
framework and resources allocated by the Board. Risk Coordinators have been appointed for each team to serve as champions
for risk management and form a vital link in the effective identification, assessment and management of risks, strengthenings the
first line of defense.
Risk Management Framework

CSE has an established enterprise risk management framework. The framework encompasses the risk governance structure
across CSE, the risk strategy and appetite, risk culture and behavior expectations, and supporting framework and processes
governing risk assessment, monitoring and reporting.
CSE’s risk management function has day-to-day responsibility for the implementation of the risk management framework.
Risk & Audit Committee

The Risk & Audit Committee receives reports in respect of, and reviews components of, CSE’s enterprise risk management
framework on a regular and ongoing basis. In FY21, this included a review of CSE’s risk appetite statement, near miss or
incident assessment, the Cyber Security Strategy.
The CSE risk Matrix categorised into four broader level risk categories and its breakdown in to specific risk as given below
Operational Risk Strategic Risk Financial Risk Compliance Risk
Business Continuity Reputation Risk Credit Risk (Settlement Failure) Legal and Compliance Risk
Information Security & Data Competition Risk Deficiencies in Policies and
Governance Risk Procedures
Talent Management Emerging Technologies
Technology availability & Cyber
Security Threat
54 Sustaining Our Value Creation • Annual Report 2021 • Colombo Stock Exchange
The table below describes CSE’s selected key risks of 2021 and how we respond to them.
Risk The risk and its impact How we are responding
Business The resilience, continuity and quality of our • We have people, processes, systems and controls in
Continuity operational processes are critical to our ability place designed to meet our operational benchmarks.
to operate. • We regularly assess how we can make improvements
to the resilience and reliability of our operational
This risk arises when failures in our people, processes.
processes, systems or controls impact on
• We regularly consider the effectiveness of our controls.
the delivery of our products or services to our
customers. • We monitor customer complaints for feedback on
where we could improve performance.
The occurrence of such a failure may result • We have project management disciplines in place to
in reduced customer service, the inability reduce the likelihood of poor project execution leading
to provide services, reduced revenues, to delays or delivery failures in strategic projects.
increased costs, fines or regulatory issues. • We have business continuity plans that are regularly
tested.
This category also captures the risk that our
• We have an incident management framework requiring
project execution is poor, which could lead
that timely attention be paid to rectifying incidents as
to a failure of our strategic projects to deliver
they occur.
expected outcomes.
• We undertake resource planning and have staff
training and retention programs.
Reputation Risk The ongoing success of CSE is highly • We aspire to be the world’s most respected financial
dependent on its reputation for trust, integrity marketplace.
and resilience in everything we do. • Understanding the importance of our reputation and
protecting it is at the center of everything we do.
Reputation risk arises in a wide variety
• CSE considers the possible reputation risk in all its
of situations. For example, where CSE is
business activities and decisions.
perceived to have not acted with integrity
or failed to deliver resiliency in its activities. • We have refreshed our company values and focus on
Any outcome that causes detriment to this trustworthy behaviors.
reputation has the potential to damage CSE’s • We have regular and open engagement with
future business prospects through reduced customers and wider stakeholders to seek feedback
business volumes, or regulatory impact or on our performance.
intervention • We have regular interaction with our regulators and
government at management, CEO and Board level to
facilitate thorough coverage of issues.
• We engage regularly with media to help generate
reporting that is fair, informed and balanced.
Credit Risk This risk arises in our licensed clearing and • As part of our regulatory framework, CSE has the
(Settlement Failure) settlement facilities when a participant fails to mechanism in place to withstand the concurrent
meet its contractual obligations to any of the default.
facilities. • We enforce minimum financial and operating criteria
for participants.
Depending on the size and complexity of the
• We require participants to provide collateral in the form
defaulting counterparty, the default could
of Base margin, and daily variation margin payments.
lead to extremely volatile conditions in global
financial markets. This, along with CSE’s • We have technology and risk policies and procedures
default management strategy, will determine to constantly monitor and manage counterparty
the size of any possible loss sustained by CSE. exposures.
• We have default management strategies that are
regularly fire-drilled.
• We have recovery plans for extreme default scenarios.
Risk The risk and its impact How we are responding
Technology CSE operates critically important financial • We regularly monitor the availability of our systems
Availability market infrastructure which is expected to against targets and test to understand maximum
be open and available at all relevant business throughput capacity.
times. • We monitor the health of critical systems and have
contingency plans in place for disruptions.
A risk to CSE arises where infrastructure
• We replace ageing technology in a phased and
and technology are unreliable and have
planned manner. Recent examples include data center
slow recoverability or insufficient capacity,
upgrade
and where this cannot be quickly increased.
Issues that would heighten this risk are the • We constantly engage with our vendor partners who
prevalence of ageing infrastructure, systems provide some of our critical systems and applications.
or applications that are near their end of life, • We have a regular disaster recovery testing program
and a significant increase in cyber-attack in place.
activity. • We have a cyber security strategy in place and
continually look to improve our capability.
The risk may result in reduced ability or an
• CSE is vigilant in monitoring the cyber threat
inability to deliver CSE’s trading, clearing
environment to ensure that cyber risks are managed
and settlement services, reduced customer
and the regulatory requirements are met. We
service, reduced revenues, unplanned
continually strengthen our defenses and have also
remediation or replacement costs, or further
focused our efforts on recovery and response.
license conditions.
• Our new security analytics capabilities through
machine-learning systems allow for wide coverage of
all anomalous system and user behaviors within the
CSE network, enabling early detection and prompt
response to cybersecurity events.
RISK MANAGEMENT IN 2021 decentralised structure and does not come within a specific regulatory purview.
During the year, as a part of monitoring For the vast majority of investors, stock trading is generally restricted to set
the key risks, the risk management business hours. On the other hand, crypto markets never close, not even on
division: holidays. This makes it easier for people to take new positions and enter or exit
the market whenever they want, regardless of where they live. The recent hype
• Reviewed the risk management in this investment option, technology advancement, investors friendly option and
practices, which were primarily Government positive approach may affect the interest on the traditional stock
focused on the effectiveness of exchange investment interest from the local and foreign investors it may affect
strategic programs in improving the CSE future performance.
our competitive position and • The CSE is highly dependent on the development and operation of its
differentiation in market segments. sophisticated technology and advanced information systems and those of its
• Reviewed the momentum of new third-party services and outsourcing providers. Technology failures potentially
initiatives to achieve our long- leading to system outages and it may impact all stakeholders and the orderly
term business aspirations, our running of markets, data services and distribution. This could adversely affect the
preparedness to address any reputation, the financial condition and the performance of the Exchange. Failure
incident that may cause business to manage the risks associated with the selection, management and oversight of
disruptions to our physical and critical third-party suppliers could impact the CSE’s ability to deliver its strategic
technological infrastructure, objectives which could lead to incurring a material financial loss, higher costs,
strengthening operational and regulatory actions and reputational harm.
internal controls to detect fraudulent • Reviewed operational risk areas including client service level standards,
activity, leadership development and retentions and engagement of employees, reskilling of employees, brand
succession, planning and monitoring attractiveness, women’s safety, physical securities, adequacy of insurance
possible impact of changes in our coverage, succession planning, and business continuity management.
regulatory environment. • Reviewed the risk management practices with distinct focus on impact of COVID -
• Reviewed Technology, Information 19 on the organisational performance, physical security, trading operations, cyber
security risks including cyber-attacks and information security and key measures taken for employee well - being, Due
and threat intelligence and continue to the inherent risks in the Company’s business activities, it is vital that CSE keeps
to monitor the progress of mitigation improving risk management practices to strengthen the organisation through
actions. In addition to this, mitigation informed strategic and business decisions. CSE’s strategic vision for the ERM
plan is executed for data access, function is to embed ERM across processes, business strategy and key decision
its preservation and monitoring making to add significant and strategic organisational value.
measures for internal users is
implemented. Our Risk Heat Map for 2021 (Q4 Revision)
• Reviewed key operational risks and Residual Risk
actions based on inputs from internal Top Organisational Risk 4Q 2021 Review
risk register, external assessment, Severity Risk Level
internal audit findings and incidents. 1 Reputational Risk 15.0 High Risk
• Evaluate on the possible emerging 2 Cyber Security Risk 15.0 High Risk
risks and noted that Competition 3 Business Continuity 15.0 High Risk
and business continuity risk level
4 Competition Risk 12.0 Medium Risk
increased due to emergence of new
sub categories of Third-Party Risk 5 Settlement failure 10.0 Medium Risk
and Crypto currency trading. 6 Information Security & Data Governance Risk 10.0 Medium Risk
• A new generation of online 7 Emerging Technologies 10.0 Medium Risk
marketplaces and mobile investing 8 Talent Management 8.0 Low Risk
apps is making it easier than ever for
9 Deficiencies in Policies and Procedures 8.0 Low Risk
people to invest in assets digitally.
In turn, this has caused a growing 10 Legal and Compliance Risk 6.0 Low Risk
number of investors started to
trading in crypto. Cryptocurrencies
are purely digital assets with a
Delivery vs Payment System
Previous Clearing & Settlement Model

What is DvP?
CDS Balance Delivery vs Payment is a globally

Check Security Delivery accepted settlement mechanism
adopted by the CSE. Under this
T Day mechanism the delivery of
securities from the seller is made
only upon the receipt of the
Sell Client Buy Client payment from the buyer.
With DvP, the shares will be
Fund Payment
moved from the sellers CDS
account to the Buyers CDS
T + 3 Day
account only on the settlement
day, that is on the third day after
Securities are transferred on T Day
the transaction day upon the fund
confirmation from the Buyers
Impact to business divisions Stockbroker. This minimises the
asset commitment risk and
Listing • Amending of listing rules to facilitate the settlement risk.
implementation of DvP
Broker • Amending of Stockbroker rules to facilitate the

Supervision implementation of DvP
Strengthens the overall
Trading • Amending Trading Rules
credibility and integrity of
• Introducing Buy-In Board to the Automated
Trading System the market
• Changes to the operational work to facilitate
the implementation of DVP
Market Data • Amendments to the CSE publications
Globally accepted
CDS • Significant changes to the depository system mechanism
to facilitate DVP settlement
• Implementation of new Risk Management
System
• Introduction of a Margin mechanism
• Changes to the CDS rules
• Changes to the operational work to facilitate Minimises the asset
DVP changes commitment risk of
the seller
DvP Clearing &
Settlement Model
No CDS Security Delivery

Balance Check
T+3 Day
Trade reported in
ATS on T Day
Sell Client Buy Client
Fund Payment
T + 3 Day
No Security transfers on T Day

Securities are transferred after funds received.
Impact to Stakeholders
Upgrades the CSE status
in risk assessments Changes were made to the Broker Order Management
carried out by Systems (OMS) and Broker Back Office Systems (BBO) of
international bodies stockbroking companies..
(Thomas Murray)
No impact to Day trading, transaction fees and the
entitlement date of the Corporate actions, hence minimum
impact to the investors on regular trading.
A step towards Short selling will not be permitted.

establishing a Central
Counter Party System & To ensure a smooth transition extensive testing and
the introduction of new industry-wide mock runs were carried out over a period of
products time, involving all concerned stake holders.
Our passion for excellence
drives us to find new and better
ways to provide value for our
stakeholders.
CORPORATE GOVERNANCE
GRI 102-18
Dear Members,
Sound governance and strong leadership at all levels will be key to navigating the heightened uncertainties that blur the outlook
for 2022 and beyond. Apart from the COVID-19 pandemic related escalations in downside risks, climate risks and social risks
are also gathering momentum necessitating holistic solutions from effective Boards. Enactment of the new SEC Act in 2021 has
also clearly articulated the need for market institutions to act in the public interest. While we believe that we have considered
the public interest in our decisions, the legal requirement makes it necessary for us to review and strengthen our governance
processes to ensure that it is formally assessed in key decisions. In effect, governance has become more nuanced in 2021,
requiring the Board, collectively and individually, to sharpen their insights and objectivity in matters set before the Board.
The new SEC Act also paves the way for demutualisation of the CSE and the Board is reviewing the options to ensure that
proposals for future governance of the CSE are based on sound principles. The Board of CSE continues to work closely with the
SEC to strengthen and stream line processes which benefitted market participants significantly with reduced turnaround times
on many activities without compromising internal controls. Successful digitalisation of processes with due care for stakeholder
concerns has supported a vibrant market.
Implementation of Delivery Vs Payment mechanism to minimise the asset commitment risk to sellers was a key milestone which
necessitated the review and amendment of CDS Rules, ATS Rules, Listing Rules and Stockbroker Rules of the CSE and also the
Articles of Association of the CSE to facilitate the implementation of the DVP Settlement Mechanism and enhanced margining
model. Officials of CSE worked closely with the SEC on obtaining the necessary approvals for these from the SEC. Steering this
key project to implementation with due care was a critical part of the Board’s agenda in 2021.
On behalf of the Board of Directors of the Colombo Stock Exchange, I affirm that the principles of good corporate governance
are applied consistently across the CSE Group and that the Corporate Governance Report provides a fair account of corporate
governance practices within the Group. The Board has voluntarily adopted the Code of Best Practice on Corporate Governance
issued by the Institute of Chartered Accountants of Sri Lanka and our current status in complying with the Code is set out in
this report. Officials of CSE including some members of the Board are part of the committee that is reviewing the proposals to
update the Code which is expected to be released in 2022.
Good governance remains key to growth as we move forward, continuously monitoring the pulse of our key stakeholders to
ensure that their concerns are addressed while ensuring that we continue to act in good faith, maintaining public interest. While
there is no doubt that there will be challenges ahead, principles of good governance will continue to be the compass for the
necessary changes in strategy, policies and processes that will support sustainable growth.
Dumith Fernando
Chairman
21 March 2022
Corporate Governance
GRI 102-18
GOVERNANCE FRAMEWORK
Legal Form CSE Governance Structure
• The Colombo Stock CSE (CSE) is a company
Members
limited by guarantee.
• The CSE is a mutual exchange and has fifteen
Members and fourteen Trading Members, of which Board of Directors
twenty five Members operate as Stockbrokers
for both Equity and Debt and four Members are
Member Evaluation
appointed by the CSE as Trading Members only Risk and Audit Committee
Committee
for Debt.
• All Members are corporate entities.
• Members elect 5 directors and one of whom HR Committee Nominations Committee
is elected as the Chairman of the Board. Four
directors are appointed by the Government on the Dispute Resolution
recommendation of the Securities and Exchange Marketing Committee
Committee
Commission of Sri Lanka.
• CSE has a fully owned subsidiary, Central Consultative Committee of Arbitration & Disciplinary
Depository Systems (Pvt) Ltd.(CDS), whose Board Market Stakeholders (CCMS) Committee
comprises of the same directors as the CSE. CDS
shares a number of resources with the CSE and
Rules Committee
its operations are also headed by the CEO of the
CSE.
CEO
Information Technology
Internal Audit
Steering Committee
Investment Committee
Management Committee
Skills & Experience Tenure on Board of CSE Subcommittee memberships

Less than 1 year 1 -
Trading/Investment banking
2
1-3
Legal 3 -
Economics 3-5 4
Finance 5-7 - 5
Information Technology 7-9 6
Governance At a Glance Highlights 2021
• All Board members are non-executive directors. The Board • Re-appointment of Mr. Dilshan Wirasekara and Mr. Dimuthu
Charter sets out the roles, responsibilities and duties of the Abeyesekera at the AGM held on 23rd June 2021.
Board • Appointment of Mr. Asanga Seneviratne as Director with
• Roles of Chairman and Chief Executive Officer are effect from 23rd September 2021
separated • Appointment of Corporate Services (Private) Limited as
• The appointment and removal of the Company Secretary is Company Secretaries with effect from 01st January 2022
a matter for the entire Board • Board charter amended to accommodate changes to SEC
• The Board and committees of the Board undertake a self- Act and other regulatory measures
evaluation annually • Commenced review of the following to ensure compliance
• The CEO is appraised annually by the Board with the new SEC Act and other developments:
• Directors of the Board serve without remuneration other » Stockbroker Rules
than payment pertaining to meet reasonable expenses » Trading Rules
incur in connection with or about the business or » Listing Rules
management of the Exchange. » CDS Rules
• An annual declaration of director’s interests is obtained from
all directors
• An annual undertaking is obtained from each director to
disclose any conflicts of interest
• A Conflict of Interest form is also circulated at each Board
meeting/Board Committee meeting and directors are
required to disclose any interests they may have on the
matters to be discussed at the meeting
• The Annual General Meeting is the main platform for
engaging with members
• The Board has approved policies on key matters to provide
guidance and direction in the day to day functioning of the
CSE and CDS
Age Diversity
Below 40 -
40-50
>50
CORPORATE GOVERNANCE REPORT Code Ref D.6, D.6.1
CSE encourages high standards of corporate governance in our role as a market operator and have set in place a strong
governance framework to uphold the principles of good governance in its own operations.
The CSE governance framework is based on the following:

• Companies Act No. 7 of 2007
• Relevant provisions of the Securities and Exchange Commission of Sri Lanka Act No. 19 of 2021
• Articles of Association
• Code of Best Practice on Corporate Governance issued by the Institute of Chartered Accountants of Sri Lanka.
This report provides signposts to the Code of Best Practice where relevant.
An Effective Board Code Ref A1.1, A1.5
The Board of Directors is responsible for setting the strategic direction and monitoring performance of the CSE. They appoint
the Chief Executive Officer and approve appointments of Key Management Personnel. The Board also sets in place formal
governance structures and policy frameworks which provide the executive management team guidance in managing their day to
day operations. All Board members bring independent judgement to bear on matters set before the Board.
Board Meetings Code Ref A1.1, A1.6, A6
Regular Board meetings are held monthly with special Board meetings being convened as the need arises. The required quorum
for a meeting is 5 directors with at least two elected and two appointed directors being present. Questions arising shall be
resolved with a majority vote and in the event of equality of votes, the chairman shall have a second or casting vote. A secure
electronic Board paper storage and distribution system is used to circulate meeting agendas and Board papers prior to Board
and Sub-Committee meetings. Agenda and board papers are uploaded giving directors at least 5 days for review of the same.
There is provision for approval of board resolutions by circulation for urgent matters. Minutes are maintained by an Independent
company secretary and directors have access to the archives through the secure electronic platform. Minutes of Board Sub-
Committee meetings are tabled at the following Board meeting and matters arising from the same are deliberated and actioned
as deemed appropriate. In 2021, a provision was included in the Board Charter requiring that a Member of the Board/a Member
of a Board Committee should not be absent for two or more consecutive meetings without obtaining prior concurrence for the
same from the Chairman of the Board or in the case of a Board Committee, the Chairman of such Board Committee in which
he/she is a Member.
Attendance at Board Meetings and Board Committee Meetings are given below.
Governance Regulatory
Board Other
Committees Committees
Special Board
Infrastructure
Nominations
Arbitration &
Risk & Audit
Resolutions
Disciplinary
Evaluations
Technology
Committee
AGM/EGM
Marketing
Meetings
Meetings
Director
Member
Dispute
Market
Others
Board
SEC
HR
Mr. Dumith Fernando 16/16 4/4 1/1 1/1 2/2 1/1 2/2 2/2 2/2 1/1 2/2
Mr Ray Abeywardene 16/16 4/4 1/1 2/2 2/2 0/1 1/1
Mr Dilshan Wirasekara 16/16 4/4 3/3 1/1 2/2 1/1 2/2 2/2 2/2 1/1 1/1
Mr D.S. Abeyesekera 12/16 3/4 2/2 2/2 1/2 1/1 1/1
Mr Jayantha Fernando 16/16 4/4 1/1 2/2 3/3 2/2 2/2 1/1
Mr Arjuna Herath 15/16 4/4 3/3 1/1 2/2 1/1 2/2 2/2
Mr Suren De Silva 16/16 4/4 3/3 1/1 2/2 2/3 1/1 2/2 1/1 1/1
Mr Asanaga Senevirathne 4/4 1/2

Transition of the CSE to a fully remotely operational stock exchange in 2020 supported business continuity amidst lockdowns
as the pandemic continued through 2021. Board meetings were held virtually and physically during the year as a result. Virtual
meetings were conducted on secure platforms and the digitalisation of board papers in previous years supported this process.
Board Responsibilities Code Ref A1.2, A1.3
The Board Charter was approved & adopted by the Board in January 2018. As part of the annual process of review to ensure
it is fit for purpose and incorporates key development. The Charter sets out the roles and responsibilities of the Board as
summarised below.
Role Responsibilities Duties
• Leadership • Optimal use of skills and expertise. • Fiduciary duty of integrity,
• Strategic guidance • Implement strategic plans and policies. transparency and in best
interest of all stakeholders.
• Independent oversight • Monitor operational performance.
• Protect and promote CSE
• Ultimate decision making body • Develop sound internal controls
image
• Ensure compliance with regulation.
• Confidentiality of information
• Risk management
• Evaluate social and environmental impact.
• Appointment of the Chief Executive Officer (CEO)
• Implementing the terms of appointments and KPIs for
evaluation of CEO.
The Board reviewed the Strategic Plan developed by the Management and reviewed performance against the same on a
quarterly basis.
The Board ensures that the CEO and the Key Management Personnel (KMP) have the required skills and expertise to implement
business strategy and uphold the corporate values of CSE with assistance from the HR Committee. The HR Committee reviews
talent pipelines within CSE to facilitate optimal performance and succession. Performance management systems in place
facilitate assessment of development needs provide a basis for rewarding performance through approved incentive schemes.
The Board ensures that affairs of CSE arre conducted in accordance with legislative and regulatory requirements. Directors have
the ability to request for professional advice on matters considered material and relevant to the Company.
Role of Company Secretary Code Ref A1.4, A1.5
• Provide guidance to the Board on matters of governance;

• Assist the Chairman in organizing the activities of the Board
• Ensure Board compliance regulatory requirements and the articles of association
• Assist the Board in self-evaluations processes
• Maintain register of conflicts of interest
• Carry out any other duties as may be assigned by the Board
Company Secretary
Company secretarial services are provided by an Independent Law Firm with a full time representative to assist and advise
the Board of directors. Responsibilities of the Company Secretary are summarised in the adjacent column. Appointment and
removal of the Company Secretary is a matter for the Board as a whole.
The Board has delegated authority to facilitate smooth operations of the CSE and has set in place an appropriate organisation
structure and a comprehensive policy framework to ensure compliance with regulatory requirements and realization of its
short, medium and long term goals. The Directors have no vested interests and take decisions on matters before them using
independent judgment. It has also appointed Sub Committees to assist in the discharge of their duties which have oversight
responsibility for defined areas as set out below.
Board Sub committees

Composition and areas of oversight by the sub-committees are given below:
Board Sub Committees Composition Objective
Regulatory
Rules Committee 4 members • Ensure that the rules of the CSE achieve the purpose of maintenance of a market
in which securities can be issued and traded in an orderly and fair manner.
Arbitration and 4 Members • To hear all doubts and disputes arising between the members of the Exchange in
Disciplinary Committee the course of business as well as all matters of a disciplinary nature.
Dispute Resolution 4 Members • To adjudicate any decision of the CSE secretariat pertaining to a client complaint
Committee against a Stockbroker firm upon an appeal being made by a party to the dispute
who is not satisfied with the relevant decision of the CSE secretariat.
Member Evaluation 3 Members • Evaluates the suitability/acceptability of the new shareholders of an existing
Committee stockbroker firm in the event of a significant change of shareholding relating to
such firm.
Governance
Risk and Audit 4 members • Ensure the establishment of an appropriate risk management framework within
the CSE including its enforcement.
• Monitor the integrity of financial statement and review internal controls and work
of internal/ external audit functions
Nomination Committee 3 members • Review and evaluate any nomination deposited with the CSE by a member for the
election as a Director, in terms of the CSE Articles and recommend the approval
or disapproval of such nomination to the Board.
• Review and evaluate any nomination for reelection as a Director, in instances
where a Director, being eligible, wishes to offer himself/herself for re-election and
recommend the approval or disapproval of such nomination to the Board
HR Committee 3 members • To evaluate, assess, decide, and recommend to the CSE Board on any matter
that may affect the Human Resource Management of the CSE.
Other
Marketing Committee 5 members • To determine the marketing initiatives of the CSE
Other committees
Consultative Committee 16 members • Provide policy direction to the market development strategies
of Market Stakeholders
Board Committee Activities During the Year
Arbitration and • Handled six (06) disciplinary matters pertaining to Stockbroker Firms.
Disciplinary Committee
Dispute Resolution • Handled five (05) appeals pertaining to investor complaints.
Committee
Nomination Committee • Evaluated two (02) director re-appointments.
Member Evaluation • Reviewed significant Shareholding changes of four (o4) Stockbroker Firms and recommended
Committee them for the approval of the Board
Risk and Audit • Approve the annual internal audit plan.
• Oversee the progress of the internal audit function.
• Review internal audit reports and determine whether critical risks are mitigated.
• Recommend the appointment of external auditors and review their performance.
• Reviewed the Investment Policy Statement and Investment Procedure Manual the recommended
changes to the approval of the Board of Directors
HR • Review and recommend the CEO’s compensation, including incentive, bonus, benefit and
retirement plans, to the Board for approval.
• Review and recommend the Company’s compensation philosophy, strategy, and guidelines.
• Review major changes in the organisational structure of management as proposed by the CEO.
• In consultation with the CEO, review and recommend the appointment of and compensation,
including incentive, bonus, benefit and retirement plans, for the senior management.
• Review with the CEO existing senior management resources, and performance evaluations,
including recruitment and training programs, to ensure that compensation is linked to
performance.
Marketing • Provided guidance for local and foreign investor focused awareness drive on broad-basing the
investor base.
Director Induction & Training Code Ref A1.8
The elected Directors are all industry experts currently serving in top Executive level capacities in their respective firms. The
Appointed Directors are all professionals who have served in the organisation for over many years and are well versed with the
industry. An orientation meeting normally conducts for newly appointed directors. Further, the Directors participate in numerous
forums where they receive presentations on matters related to their roles which support them in discharging their roles
Role of Chairman Code Ref A.2, A.3
The Chairman of the Board is elected from among the Elected Directors annually and may be re-elected provided that no
Chairman shall hold office for more than three consecutive years from the date of his appointment unless re-elected unanimously
by the Board. The roles of Chairman and CEO are separated and the Chairman is a non-executive director who presided over all
meetings. He leads the Board and is appointed annually.
• Effective participation of both elected and appointed directors.

• Effective contribution of all directors
• Balance of power between elected and appointed directors.
• Views of all directors are considered on issues.
• Promote a constructive relationship with the Board directors and management.
• Ensure the Board has complete control on CSE affairs
Composition of the Board Code Ref A.4, A.5
The Board comprises nine non-executive directors with five directors elected by the fifteen Members. Four directors are
appointed by the subject minister on the recommendation of the Securities and Exchange Commission of Sri Lanka. The
Profiles of Board members setting out their experience and skills are given on page 33 of this report. The board directors have
gained extensive experience due to their academic and professional background and all of them possess financial acumen and
knowledge. The Chief Executive Officer is responsible for implementing strategy and managing the day to day operations of the
CSE Secretariat and is accountable to the Board of Directors for its performance.
Appointment, Re-election & Independence Code Ref A.7, A.8
In terms of Article 50 of the Articles of Association of the CSE, the Directors who should retire by rotation are determined on
the basis of the two directors who have been longest in office since their last election and they may stand for re-election by the
members at the Annual General Meeting. The nominations committee evaluates director nominations presented by the members
and of the directors opting for re-election prior to making recommendations to the Board. Based on the recommendations, the
Board recommends directors to SEC. New directors and directors to be re-elected need to provide declaration forms assuring
that he/she is fit and proper to hold office based on factors such as past performance, skills, technical knowledge, instances of
past/pending disciplinary or administrative action by regulators or judiciary system.
Appraisal of Performance Code Ref A.9, A.11
The Board conducts annual an appraisal of its performance and that of its sub-committees. As per the Board charter, the
effectiveness of the Board is evaluated in areas of composition, accountability, responsibility and conduct encompassing matters
set out in Board Charter. The Board evaluates its performance at least annually based on a performance evaluation checklist.
The Board appraises the performance of the CEO annually against pre-defined targets that have been agreed prior to
commencement of the year. The targets include financial and non-financial goals.
Directors’ Remuneration Code Ref B
Directors of the Board serve without remuneration. However, CSE repays any reasonable expenses incurred on the business or
management of the exchange.
Managing Conflicts
It’s a requirement for directors to act in the best interest of the exchange that enhance public confidence and impartiality of the
board. As per the Board charter, the directors are advised to discuss annually at a Board Meeting, the hypothetical situations
leading to conflicts of interest. In addition, an annual undertaking to disclose any conflicts of interest should be signed by the
Board directors and a ‘Conflicts of Interest Disclosure From’ is circulated at each Board meeting/Board Committee meetings to
identify instances of conflicts of interest.
In the event of a conflict of interest:

1. The director is required to submit written application form disclosing the conflict of interest.
2. Obtain advice and guidance of the Chairman in the event of uncertainty of conflict of interest.
3. Board director cannot participate in the decision-making process.
4. The disclosure of the decision on whether a conflict exists and how the conflict was managed are documented in meeting
minutes.
Relations with Members Code Ref C.1, C.2, C.3
The Board directly engages with the members who are licensed stockbrokers at frequent meetings. Minutes are maintained
of these meetings and feedback is given on how concerns raised are being addressed. During the year several regular
consultations were held on matters relating to Members, regulatory matters and market development matters.
The Annual Report, Notice of Annual General Meeting, Resolutions and voting procedures are sent to members within the
required time period prior to the AGM, as it can be 21 days or 15 working days’ prior notice, whichever is longer facilitating
participation and review of matters presented. Proxy forms are also included on page 190 of this report enabling members
to participate via proxy. The CSE has a mechanism to record all proxy votes and proxy votes lodged for each resolution.
Separate resolutions are proposed at the AGM for each substantially separate issue facilitating voting on each substantial issue.
Accordingly the adoption of the report and accounts is proposed as a separate resolution. The Board, including the Chairmen of
all the sub committees, are present at the AGM to answer any questions.
The CSE’s future strategies and their potential impact have been disclosed in the following sections of this Annual Report.
• Chairman’s Massage on pages 26 to 28.
• CEO’s Massage on pages 29 to 32.
• Operational Review on pages 72 to 127.
The Annual Report Code Ref D.1
This Annual Report provides a balanced view of CSE’s position, performance for the year ended 31st December 2021 and its
prospects. The Directors’ Report on page 130 contains the following as specified by the Code:
Requirement Page Ref.
Statement that all material interests in contracts involving the Company have been declared and that they refrained 132
from voting on matters in which they were materially interested
Statement confirming review of the internal controls and obtaining assurance on its effective operation 132
Statement setting out the responsibilities of the Board for the preparation and presentation of financial statements 130
Statement by the Auditors about their reporting responsibilities 130
Report/Statement on Internal Control 132
Management Discussion & Analysis 130
Statement that the business is a going concern 131
Related party transactions 132
Accountability & Audit Code Ref D.2, D.3
The Risk & Audit Committee has oversight responsibility for approval of appropriate accounting policies, CSE’s internal control
framework and risk management processes. It comprises of 4 independent non-executive directors as set out in the report of
the Risk & Audit Committee which also summarises the responsibilities of the Audit Committee and activities undertaken during
the year. They are supported by Internal Audit who reports directly to the Risk & Audit Committee reviewing the efficacy of
internal controls. Additionally, the committee also reviews risk management processes of the CSE which is supported by ERM
Division within the defined risk appetite approved by the Board. The Risk & Audit Committee also meets with external auditors to
discuss audit plans, matters arising from the audit, audit reports and management letters including an in-camera meeting.
Members Code Ref E, F
CSE is a mutual exchange comprising fifteen Members and fourteen Trading Members, all of whom are corporate entities.
Twenty five Members operate as Stockbrokers for both Equity & Debt while four members trade solely in Debt securities. It is a
company limited by guarantee as per provisions of the Companies Act No.7 of 2007. The Annual General Meeting is the main
forum for dialogue with the members on relevant matters of concern to the general membership. Feedback obtained from
members on areas of concern during the year are communicated to the Board by the CEO.
Internet of Things & Cybersecurity Code Ref G
The Board allocates sufficient time for discussion of information technology and cyber risk as it is a critical capital for the
functioning of our business. CSE complies with Information Security (ISO 27001) standard aspires to maintain high levels of
cyber-security taking in to account peer exchange practices and the rapid evolution of technology.
Sustainability Reporting Code Ref H
This Annual Report is an Integrated Report prepared according to the IR Framework published by the International Integrated
Reporting Council, integrating sustainability information with governance and financial information.
Requirement Page Ref.
Economic sustainability 7
The Environment 120
Labour Practice 96
Society 44
Stakeholder identification, engagement and effective communication 44
Formalise Sustainability Reporting processes 8
We have leveraged on the trust
that has been placed upon us to
travel further amid
the new normal.
FINANCIAL REVIEW
The CSE had a remarkable year, successfully navigating the post pandemic environment to
record its highest ever Group profit during the year under review. The growth trajectory that
was observed in 2020, continued in 2021 with the CSE recording a Profit Before Tax of
Rs. 1,882 Mn, in a year marked by volatility in the domestic economy. Profit after tax
amounted to Rs. 1,672 Mn and the income tax expenses amounted to Rs. 240 Mn compared
to Rs. 41 Mn last year. The growth in performance was supported by the low interest rate
environment that was prevalent for the most part of 2021 and the growth of corporate
earnings during the year.
Our focus was on ensuring that market users had uninterrupted access to the market and
our services, while driving operational excellence and strengthening our business model.
CSE was able to meet its strategic goals and grow the balance sheet by an impressive 74%
to Rs. 7,188 Mn in 2021, enabling the Group to move into 2022 with financial resources to
strengthen its business model and stakeholder value propositions.
FINANCIAL PERFORMANCE
2020 2021 %
Rs. Mn Rs. Mn Change
Group Revenue 965 2,567 166%
Total Income 1,041 2,697 159%
Net Finance Income 279 265 -5%
Operating expenses 863 1,080 25%
Profit/loss before tax 458 1,882 312%
Profit/loss after tax 417 1,642 294%
Other comprehensive Income for the year 392 1,672 326%
Revenue
The revenue of the CSE increased by 166% to Rs. 2,567 Mn from Rs. 965 Mn recorded in 2020 as investor interest fuelled
issuer interest to grow ASPI by 80.5%. Low interest rates supported buoyancy of the market as local investors sought to
maximise returns on capital. The proactive efforts of the CSE together with the SEC, to increase awareness on the capital
market as well as the digitalisation drive also contributed to the increased market activity during the year. The digitalisation
drive enhanced the convenience for market participants through seamless connectivity and end to end digital onboarding of
particpants. As a result we were able to extend our reach to a broader segment of investors. The active investor base in 2021
rose to 63,000 boosted by 37,000 new accounts.
CSE and CDS fees are the main source of revenue which increased in significance as it accounted for 91% in 2021 compared
to 82% in 2020. Revenue from all business segments of CSE recorded an increase due to the exceptional market performance.
During the year, the CSE saw 29 new listings including 13 IPOs, 01 Equity Introduction, 1 debt Introduction and 14 debt IPOs
which contributed to the increase in listing fees from 90 Mn in 2020 to 111 Mn during 2021. The CSE is also looking to diversify
its revenue streams to increase non-trading revenue in the future.
Movements in Revenue vs ASPI Revenue by Business Segments
Rs. Bn %
200 40.00 CSE & CDS Fees

Listing Fees
30.00
150 Quoatation Fees
20.00 Brokers’ Fees
100 10.00 Charges for Remote Data Link
Charges for Computer Information
0.00
50 Listed Company Fees
(10.00)
2021
0 (20.00)
2020
Jul
Sep
Apr
Nov
Oct
Feb
Mar
Jun
May
Aug
Jan
Dec
Market turnover ASPI Growth
Total Costs
The total costs of the CSE during the year, amounted to Rs. 1,080 Mn compared to Rs. 863 Mn last year. Staff costs which
accounted for 47% of the total expenses, amounted to Rs. 511 Mn while depreciation and amortization expenses increased by
26% and amounted to Rs. 199 Mn. Other operating expenses also increased from Rs. 313 Mn to Rs. 368 Mn during the period
under review. However, the CDS statement expense and the stationery expense which saw a decline last year, recorded the
same trend this year, which can be attributed to the digitalisation drive that is being carried out across the organisation.
Focussed optimisation of costs through digitalisation and streamlining of processes, without reduction of staff costs or
downsizing supported the cost to income ratio of the CSE.
Breakdown of Operating Costs Operational Efficiency

Rs. Mn Rs. Mn
1,200 1,100 1.8

1.6
1,000 1,050
1.4
800 1,000 1.2
1.0
600 950
0.8
400 900 0.6
0.4
200 850
0.2
0 800 0
2019 2020 2021 2019 2020 2021
Staff costs Depreciation Total Costs Cost to Income ratio

Other operating expenses
Financial Review
Net Finance Income

The net finance income of the CSE decreased by 5% to Rs. 265 Mn during the year. This decrease can be attributed to the low
interest rate environment that was prevalent in order to support the economy. The finance cost decreased from Rs. 22 Mn to
Rs. 19 Mn while the finance income decreased from Rs. 301 Mn to Rs. 283 Mn.
Net Finance Income
FINANCIAL POSITION Rs. Mn
2020 2021 % 350

Rs. Mn Rs. Mn Change 300
Total Assets 4,142 7,188 74% 250
Non-Current Assets 1,271 1,604 26% 200

150
Current Assets 2,871 5,584 94%
100
Total Liabilities 793 2,167 173%
50
Non-Current Liabilities 114 316 177%
0
Current Liabilties 680 1,852 172% 2020 2021
Net Assets 3348 5,020 50% Finance Income Finance Costs
Assets
Total assets of the CSE increased by 74% during the year. The non current assets Asset Composition (Rs. Mn)
which forms 22% of the tota asset value, increased by 26%, mainly due to the
increase in intangible assets and additions to the PPE. The intangible assets
comprises of application software used in trading, clearing, settlement and other
services of the exchange together with implementation of Delivery Vs Payment (DVP)
mechanism at the Exchange and the website which underwent major improvements
during the year due to the digitalisation drive of the CSE. The CSE also maintains a
portfolio of investments with 13% of the investments on long term listed debentures
and fixed deposit and the remainder being short term investments.
2021
During the year, the current assets increased by 94% to Rs. 5,584 Mn and 2020
represented 78% of the Group assets. This increase in current assets was mainly
due to the increase in the portfolio of current investments of the CSE, which consists Current Assets Non-current Assets
of investments in fixed deposits, treasury bills, money market funds and listed
debentures. The significant increase in cash and cash equivalents also contributed Key Components of Liabilities
to the increase in repo investment on broker margin as at the end of the year. Rs. Mn
2,000
Liabilities
Total liabilities increased by 173% to Rs. 2,167 Mn. Current liabilities which 1,500
forms 85% of total liabilities increased by 172% to Rs. 1,852 Mn. This increase
is attributable to increase in the cash deposits maintained by broker firms as part 1,000
of their liquidity requirements due to the increase in market trading activity. Non-
current liabilities increased by 177% to Rs. 316 Mn mainly due to the increase in the 500
lease liability of the right of use assets, recognition of government grant and deferred
Tax liability. However, the employee benefit liability decreased during the year. 0
2020 2021
Equity Employee Benefits

The net assets position of the CSE increased by 50% to Rs. 5,020 Mn compared to Lease Liabilities on Right-to-use
Rs. 3,348 Mn recorded last year. The CSE had an exceptional year with the reported of Asset (Current and Non-current)
profitability of the exchange surpassing expectations and enabling an increase in the Brokers’ Deposits in lieu of Bank
accumulated fund during the year. There was no change in the other reserves during Guarantee (Current and Non-current)
the year.
Business Line Reviews
LISTING
We connect our stakeholders through four business lines: Listing, Trading, Market data and Depository services.
The Listing Division facilitates the 296 companies

raising of debt or equity capital representing 20 GICS
industry groups
through the Listing Boards by
reviewing applications and granting
approval to entities who comply Our Market Capitalisation
with the relevant rules.
Clients of Rs. 5,489 Bn
4 Listing Platforms
Our Role
Creating innovative listing boards
Reviewing the existing listing criteria

and ensuring its effectiveness is
maintained
Maintaining a transparent listing

process 27 17 Revenue
Share Splits Rights Issues Rs. 111 Mn
Facilitating the listing of various

debt and equity securities
14 Capital 3
Private Placements
Providing diverse products such as New Listings Rs. 124 Bn
Equity, Debt and REIT’s
Looking after investor interest by

ensuring entities disclose sufficient
information
The SEC has delegated authority

for the approval of IPO’s to the CSE
Colombo Stock Exchange • Annual Report 2021 • Accountability 75

Performance Review Two new companies were listed through
Key Initiatives
The Listing Department had a busy introductions while 3 companies de-
We were able to work with the
year despite the prolonged impact listed during the year. It is noteworthy
regulators and stockbrokers during
of the pandemic and the extremely to mention that the CSE had a SME
the year to implement structural
challenging economic environment. company listing for the very first time
changes in the market, ensuring that
Issuers continued to utilise the CSE to on its Empower Board. This board
CSE is fit for the future. Key initiatives
raise capital as the market was active allows SME’s to access a pool of
implemented were as follows:
throughout the year. The number of funds required for expansion as well as
listed companies increased from 283 in benefitting from post listing support and Amended the listing rules to
2020 to 296 in 2021. recognition. streamline the process for
rights issues and facilitate the
With the Government incentivising We introduced a new listing platform. implementation of DvP.
the use of the capital market and Although there were no listings on this
the simplification of listing rules the platform during the year, we believe it is Adopted a 100% on-line
primary market for debt and equity saw a good opportunity for the development mechanism to process listing
increased activity during the year. of the real estate market and expect applications.
new entrants in the near future.
Streamlined the listing application
Issuers elected to raise capital through review process by eliminating the
the CSE amounting to Rs. 124 Bn in Outlook
We plan to roll out multi-currency listing dual review process involving the
2021 compared to Rs. 61 Bn raised last SEC and CSE.
year. There were thirteen Equity IPOs of shares by local companies in 2022
during the year raising Rs. 13 Bn of which will allow local companies to
Maintained close dialogue with
equity capital. An additional Rs. 24 Bn list dollar-denominated shares on the
investment banks including a
was raised through Rights issues by CSE. This will allow local companies,
chairman’s forum providing them
17 companies. There was a relatively particularly exporters who are seeking
an opportunity to voice their views
high number of share splits during the overseas currency capital. The
pertaining to the listing rules.
year with 27 companies subdividing regulatory framework, which has been
the shares to increase the market recently approved by the SEC, subject Worked on getting more listings
liquidity. Private placements amounted to a few amendments, will allow local into the CSE by conducting
to Rs. 2,458 Mn in 2021 for 3 entities. companies to list dollar-denominated surveys of unlisted companies by
Investors benefitted from 12 scrip shares on the CSE. The product has working with the EDB and BOI.
issues which served to increase market been strategized over a period of more In addition, engaged with the
liquidity. than 15 months, under the guidance Government to discuss getting
and support of the Central Bank of Sri state-owned enterprises (SOEs)
Breakdown of New Listings Lanka. For non-resident investors, who listed.
No. will be eligible to invest in such shares,
a dollar-based listing method would The listing department will continue
50
reduce the conversion risk as well, as to work on new initiatives which will
40 the shares will be traded and settled in enhance the trust in the market while
USD on the CSE and CDS respectively. improving the flexibility and efficiency
30 of operations.
20
Main Board Empower Board
10 Entities with a minimum stated Enables SME’s to list at the CSE and
0 capital of Rs. 500 Mn at the point gain access to a range of capital
2019 2020 2021 of listing can list on the main board raising methods
provided they meet the other listing
Equity IPO Rights Issues Debt IPO
requirements Multi- Currency Board
Companies listed in a foreign
Debt IPOs amounted to Rs. 84 Bn
Diri Savi Board exchange are able to obtain a dual
contributing to 68% of the CSE capital
This board is for companies with a listing and raise capital through this
raising arrangements. The state owned
minimum stated capital of Board
Ceylon Electricity Board issued a Listed
Rs. 100 Mn
Public debenture.
76 Accountability • Annual Report 2021 • Colombo Stock Exchange

hSenid Business Solutions rings the bell to debut trading on CSE. The first enterprise software company listed on the Stock Exchange
Endorsement on listing in CSE Chrissworld Limited rang the market opening bell to commence trading at the first ever
fully Virtual Market Opening Ceremony organised by the CSE. Chrissword was also the
first company listed on the Empower Board of the CSE

TRADING OPERATIONS
675,309 Investors
The Trading Division facilitates share

trading by creating a vibrant and
652,645 Local Individuals
secure secondary market for new
and existing investors both global
and local to optimise their wealth
Our 12,002 Local
Clients Institutional
4,895 Foreign
Individuals
Our Role
Driving the market by attracting 5,767 Foreign

new investors Institutional
Building investor confidence by

developing reliable and robust
platforms and market infrastructure Number of Shares Trading Fee ASPI Growth
137 Bn Rs. 2,332 Mn 80.48%
Strict market surveillance and
balanced regulation of the market Dividend Yield Daily Market Turnover
2.17% Rs. 4,888 Bn
Providing timely and credible
information
Offering a convenient and reliable

service
Creating liquidity in the market
Routine inspection of market

participants

Performance Review The CSE presented an attractive
Key Initiatives
The Stock Market was buoyant opportunity for wealth creation for local
Several initiatives were carried out
throughout the year with the CSE investors, particularly in view of the low
during the year to create awareness
recording a market capitalisation of interest rate regime that prevailed during
in the market and sustain market
Rs. 5,489 Bn as at December 2021 the year. It is noteworthy that the ASPI
activity, making it accessible to all in
compared to the Rs. 2,961 Bn has continued its upward trajectory
the post COVID-19 environment.
recorded in 2020. Daily Average growing at 80% despite the recent
turnover increased by a record 157% upward trend in policy and market
Launched the second phase
to Rs. 4,888 Mn while market turnover interest rates. The S&P SL20 index,
of the digitalisation of the stock
increased by 196% to Rs. 1,173 Bn which includes the 20 largest and most
exchange including enhances to
during the year. Total local investor liquid stocks also marked a 60 percent
the CSE mobile app
contribution to market turnover was growth in 2021.
93.92% compared to the 80.10% in Introduced the Delivery vs
2020. AWDR vs ASPI and S&P SL20 Payment (DvP) mechanism
This is a noticeable increase in local 100 Introduced Over The Counter

investor activity despite a Central Platform (OTC) for REPO
80
Bank policy rate cut and unpredictable Transactions on Listed Corporate
economic conditions. However, foreign 60 Debt Securities
investor activity continued to decline
40 In addition, improvements were done
recording a net outflow of 52,602 Mn at
to the market surveillance process.
the end of the year when compared to 20
The CSE strives to ensure investor
51,041 Mn in 2020.
0 confidence is maintained by carrying
Jan
Feb
Mar
Apr
May
June
July
Aug
Sep
Oct
Nov
Dec
Investor Activity out regular inspections and strict

Axis Title regulations and surveillance of the
670,000 AWDR ASPI Index S&P SL20 Index market.
665,000
660,000
655,000
650,000
645,000
640,000
635,000
630,000
625,000
620,000
2020 2021

The improved performance of the ASPI Digitalisation Drive
and S&P SL20 is largely attributable The positive performance during the
to the low interest regime, improved year could be partly attributed to the A Strong Pipeline
market liquidity and increased number market digitalisation efforts carried
of investors which spurred high levels out by the CSE and the financial • Multi-currency listing of shares
of trading activity in 2021. The number intermediaries towards the end of last • Trading of paper gold
of trades increased from 3 Mn trades in year. We were able to successfully
• Stock borrowing & Lending
2020 to 9 Mn in 2021. convert operations to a digital format
allowing trading and other market • Listings by Special Purpose
The sharp rise in the share market was activities to continue without a halt. Acquisition Companies
also driven by the strong performance • Perpetual Bonds
of the corporates. Corporate balance We were also able to implement Delivery • Green Bonds
sheets have generally strengthened, vs Payment mechanism which mitigated
• Islamic based products
and profitability has improved. During the risk associated for the seller of the
the year market PER increased to 13.63 securities and strengthened the overall • Central Counterparty System
times when compared to 11.25 times credibility and integrity of the market
in 2020. Price to book value increased (See page 24 for more details on DvP)
to 1.67 times compared to 1.13 and
dividend yields improved to 2.17% Outlook
compared to 2.66% recorded last year. The CSE is looking to maintain the
growth momentum achieved in 2020
27 companies opted for share splits and 2021. We will be expanding the
thereby injecting liquidity into the value proposition to investors by
market. introducing new products into the
market. We also hope to facilitate the
There was a significant number of new trading of paper gold which will act as a
account with 28,096 accounts being hedging mechanism for investors while
openings since the electronic account benefiting the economy at large. Other
opening facility was enabled and the products in the pipeline inlucde Stock
daily volume of new accounts opened borrowing and lending (SBL), Listing of
doubled. A noticeable increase in shares by Special Purpose Acquisition
interest by the younger demographic Companies (SPACs), Perpetual bonds,
was also observed. Green bonds and Central Counterparty
System (CCP).
New Accounts Opened
The second phase of the CSE digitalisation
Rs. Mn process was launched at the Presidential
The CSE has provided a strong Secretariat under the patronage of President
40,000
foundation for equity and debt products Gotabaya Rajapaksa.
in its 35-year history and the CSE Board
30,000
has been focused on a transformative
product and strategy expansion
20,000
roadmap that is currently in the process.
This will allow us to significantly evolve
10,000
and establish a comprehensive and
multi-product Securities Exchange.
0
2017 2018 2019 2020 2021

Digitalisation Highlights
• Tri Language Facility

• Account opening of Foreign Individuals
• e-IPO Application Submission
• CDS e-connect Access
• Easy access to research reports
Enhancements to the • MY CSE Feature
CSE Mobile App • Investo Tri Language Chatbot
• My favorites to track favorite Stocks
• Track gain/ loss of the portfolio
• Report request facility
• Google and Siri voice assistant
• Launch of Digital Account opening for

Local Companies via the web
• Launch of e-connect access to
Investor Front End
institutional Investors via web
Digitalisation Activities
• Launch of IPO applications via web
• Use of Robotic Process Automation to

end to end automate the backend
operations of CDS including e-KYC
investor on boarding process
• Implementation of business Intelligence
dashboards for faster analysis and
data driven decision making
• Implementation of Risk Management
Digital
Transformation of System for monitoring of settlement
Internal Processes risks of market participants
• Digital feed of corporate
announcements for direct connectivity
to broker Order Management systems
• Implementation of incident and service
management tracking system for
efficient tracking of IT and corporate
services requests

DIGITAL INVESTOR JOURNEY
Know the Market On Boarding Market Information Investor Services Communications
The Youtube CSE Mobile App The Tri language CSE Mobile App CDS E-Connect accessible Notifications via CSE
Channel of facilitates end to acts as a 360-degree information hub via CSE Mobile App Mobile app
CSE provides end e-KYC on for investors. The app contains provides array of digital
comprehensive boarding process • CSE News services including CSE mobile app
learning videos for Local and • Latest Business News of Listed • Access to Portfolios provides real
in tri language Foreign individuals Companies • Viewing of past time notifications
providing an to open CDS transactions and monthly for corporate
• Latest Business Videos
opportunity to Accounts statements announcements and
learn about the • Market Reviews price alerts for your
• Request changes to
stock market • Broker Research Videos favorite stocks
master file data
• Micro Insights and Reports
The Youtube • Research Reports
• Exchange rates/Repo and
channel could be • Purchase of custom
Treasury Bill Rates
accessed via CSE statements
Mobile App • Intra- transfers
Investors can track their favorite
stocks conveniently via CSE Mobile
App and receive price threshold alerts e- IPO submissions via CSE
Mobile App
Investors now can track gain/ loss of
their portfolio via the CSE Mobile App
Online seminars Digital on boarding The CSE website provides www.cds.lk Facilitates SMS Alerts
CSE uses various process for Local comprehensive information on the E-connect access to Daily Trade Alerts and
platforms such as Companies market and daily, weekly, monthly Institutional investors which
CDS transaction alerts
Zoom, Youtube to open CDS and quarterly publications provide facilitates are send to investors
and Facebook Accounts is information on listed entities, trading • Access to investor enabling tracking of their
Live to engage facilitated via activities, supporting analysis for portfolios portfolio movements
with the investors. www.cds.lk decision making by investors. • Viewing of past due to
Programmes are transactions and monthly • Sale of shares
carried out virtually MyCSE statements • Purchase of shares
in partnership Access MyCSE Feature via CSE
• Request changes to • Inter/Intra account
with a number of Mobile App or CSE Website enables
master files transfer
institutions. investors educate themselves and
• Research Reports • Deposit of share
understand the companies and their
information gaining the knowledge • Purchase of custom certificate(s)
from a single place to make informed statements • Direct upload/
investment decisions • Intra- transfers deposit of shares
• Withdrawal of shares
Investo Chatbot Siri and Google AI Assistants e-IPO Portal via www.cds.lk E - Statements
The Tri Language AI Assistants “Siri” and "Google allows submit of applications The CDS account
enabled CSE Assistant" provides real time for IPOs for non-mobile holders receive an
chatbot (via CSE market movements information and savvy users single integrated
MobileApp or CSE corporate announcements through e-statement for both
Website) provides verbal interactions debenture and equity
answers to balances
frequently asked
queries about the
stock market
Facebook and Twitter Mobile and Internet based
Provides real time updates on Market Trading platforms enables
information and updates investors to place orders
anywhere on the go

DIGITAL ADAPTATION INDICES
Indicator / Year 2021 2020
New Investor Acquisition / Onboarding (Digital KYC)
Onboarding (Digital KYC) % of total Onboarding 81.8% 30.9%
Turnover % Generated through Digital Channels 8.7% 0.8%
Digital Adaptation - CDS E-Connect Access 7,511 2,927
Digital Adaptation - e-IPO Applications 15,717 580
DIGITAL CAPITAL MARKET ECOSYSTEM

By building a better digital ecosystem, stakeholders can reduce costs, comply more easily and effectively with regulation and
ultimately, become better providers of capital markets services to the end investors and the digital economy.
Investor Listed Corporates Broker Firms The Exchange Employees Settlement Banks
Digital Touchpoints Corporate Broker Reporting End to end Remote work which Digital signature
• CSE Mobile APP Announcement System that automation has enabled greater based settlement
• CSE Website System enables all of the e-KYC work life balance reports through
The Corporate Stockbroker Account opening lanka sign eases
• CDS Website
Announcement Firms to digitally process through Leveraging on the communication
• Investo Chatbot System enables all submit all Robotic Process digital the mobile with banks
• You Tube listed companies periodic reporting Automation based Medical
• Facebook submit their requirements to the Reimbursement
corporate CSE Business solution provides
• Twitter
announcements, Intelligence seamless real
• Siri and Google quarterly accounts Digital Front Desk dashboards time access to
AI Assistants digitally. The Provides the digital provides the medical records for
• Mobile and system seamlessly platform for the management employees
Internet publishes all submission of information for an
based Trading approved e-KYC related efficient operation e-HRM System
platforms information on documents to the improves
the CSE Website exchange Integrated productivity
and Mobile App Compliance of employees
seamlessly Digital feed Surveillance and and keep track
of corporate Risk Management of employee
announcements for solutions helps performance
direct connectivity the exchange
to Broker Order to meet their
Management growing regulatory
systems obligations
OTC Platform to
conduct REPO
Transactions on
Debt Securities

Central Depository System
Value of Securities
(Rs. Bn)
The Central Depository Systems

(Pvt) Limited acts as the custodian
for 97% of listed equity shares and
100% listed corporate debt in the
capital market of Sri Lanka. It is the Local Institutional Foreign Individual
clearing and settlement arm of the Local lndividual Foreign institutional
CSE. The CDS is the first
depository in the South Asian
region and the seventh in the World.
Our Stakeholders
CDS participants
• 29 Stockbrokers
• 16 Custodian banks Depository Operations
• Opening and maintaining of CDS

CDS account holders accounts
• 652,645 local individual • Transfer, deposit and withdrawal of
shares
accounts, 12,002 institutional • Preparation of CDS reports for listed
accounts issuers
• 4,895 foreign individual accounts, • Corporate actions
5,767 institutional accounts • Providing stockbroker training
• E-statements and SMS alerts
• On line service offerings
Vendors and Service Partners
Company Secretaries & Registrars
Issuers
• 296 Listed issuers
De-Mat Compliance and Risk
Investment Managers • Conducting daily audits

• Maintaining quality reports
• Routine operational compliance

Income
Rs. Mn
Highlights of 2021 700,000
600,000
New accounts opened
37,405 500,000
400,000
Years of operations 300,000
30 200,000
Advanced technology and 100,000

robust systems in place 0
2017 2018 2019 2020 2021
Other Value Added Services

Core Depository Income
Corporate Solutions
• Providing registrar services for client

ledger management
• Facilitating corporate action related
Client Relationship Management services including dividend payments,
rights issues, subdivisions and virtual
• Onboarding new clients for new AGMs.
businesses • E-IPO and bureau services
• Managing relationships with existing
clients
• Stakeholder engagement and
networking
Clearing and Settlement
• Facilitation of the Securities Settlement

• Facilitation of the Fund Settlement
• Post Trade Risk Management
• Trade Affirmation/ Rejection
• Default Handling

Performance Review
Key Initiatives
Depository Services
We have decentralised operations to enable
The CDS recorded a remarkable performance this year with increased
stockbroker firms to open accounts. This move
activity of stakeholders contributing to the good financial performance.
lifts the standards of the industry by assuring
For the Central Depository System, the largest income source is the core
investors of timely returns, compliance with
function of depository services which contributes to almost 90% of its
regulations and secure sharing of investor
revenue.
information.
During the year, the value of securities held on custody at the CDS, was
The CDS is the first to introduce the e-dividend
at Rs. 5,503 Bn when compared to the Rs. 2,939 Bn last year, while the
concept in the South Asian region which
volume of securities grew by 20%. There was an increase in new investor
enables investors to receive their dividends on
accounts with 37,405 investors opening accounts during the year.
time.
Corporate Solutions
This year we also relaunched CDS e-connect
CDS played a key role in implementing infrastructure in line with the CSE
with the participation of the president,
plans and performed a commendable role with launching many ground
introducing advanced features such as intra-
breaking initiatives.
transfer facilities, the research portal, access
to monthly statements and a host of other
Traditionally the CDS provided only depository services. However, we value-added services. This is set to enhance
have expanded our services to offer other value-added services in line the customer convenience by eliminating the
with other depositories across the world. The corporate solutions service need for physical visits. Our goal is to ensure
offered by the CDS catered to 110 new clients during the year. There that our services are accessible and convenient
was an increase in revenue of 54% from this division due to the demand to all stakeholders.
created for the value-added services in the post COVID-19 environment.
Other key initiatives during the year:
During the year we worked on improving the level of service offered to
our clients. We conducted a gap analysis and identified the areas of Digitalisation of depository operations
stakeholder concern and dissatisfaction in order to create value for all
Expansion of business using digitalised
stakeholders. Following the gap analysis, we expanded our operations
solutions
to focus on a broader set of stakeholders which includes both listed and
unlisted corporates. Strengthening of international relations and
facilitating the exchange of information and
Outlook knowledge through the 5MOUs signed with
The CDS hopes to provide an umbrella of end-to-end solutions to all other depositories
stakeholders under one roof while being at the forefront of technology,
innovation and reforms. We want to enhance the infrastructure in place Carrying out cross training sessions with
while diversifying our services to meet the additional needs of a wider foreign depositories
group of stakeholders.
Integration of technology to improve
operations (RPA, new systems)
Inhouse system developments
Finalizing the appropriate terms and

conditions in relation to:
• Extending the online onboarding facility to
local corporate and foreign individuals
• Enabling CDS eConnect, e-IPO and
e-Rights services
• The use of the online facility provided by
the CDS to carry out private transfers

MARKET DATA
98,487 Followers
We support market users to make

informed decisions by developing
15,300 Followers
the infrastructure necessary to
disseminate high quality data and
providing real time access to such
data in a readily understandable Our Reach on
21,600 Followers
and convenient manner. Social Media
Platforms
Our Role 5,169 Followers
Ensuring the availability of real time

market data
58,833 Followers
Maintaining and enhancing the

quality of market data
Expanding the reach of the CSE
Building networks with media and

data vendors in order to strengthen
the dissemination of information
CSE Website CSE Mobile App

Pageviews Downloads
9,256,239 147,757
No. Of Data Revenue

Vendors Rs. 31 Mn
7

Highlights releases through these platforms,
During the year, the CSE worked to help investors make informed Features introduced to the CSE
extensively to ensure the availability investment decisions. Despite the travel mobile app during the year
of real time information through our and other restrictions in place due to •
media channels. We were able to attract the pandemic, through the social media • Launch of trilingual facility
potential investors while maintaining platforms the CSE was able to carry out
• Allowing foreign individuals to
the confidence of existing investors bell ringing ceremonies and real time live
open CDS accounts
by helping them make informed sessions in instances where the public
required clarifications regarding the • Introduction of the e-IPO
decisions through access to up-to-date
market. submission process
information via our numerous platforms
and the robust technology in place. • Connects to CDS e-connect
Data Commercialisation • Provides a platform for
The revenue earned from market data Stock exchanges across the World stockbrokers to securely share
recorded an increase with a growth of are embracing the commercialization their research with their clients
12% during the year. We worked with of data services and relying on these • My CSE feature which provides
our existing data vendors including services as an alternative revenue detailed information to educate
Bloomberg Finance LP, Direct FN source in comparison to traditional investors
limited, Refinitiv Limited, Six Financial means, such as listing and trading
• Ability to track the gain/ loss of
Information and Factset Research income. Considering these factors,
the investor’s portfolio
System Inc, to expand our client the CSE has embarked on a project
network. Our foreign data vendors are a to improve data sales policies and • Connects to Google and Siri voice
source of foreign exchange inflow which products while identifying new data assistant
contributed to the increase in revenue commercialisation opportunities. The • Allows the tracking of favourite
during the year. project aims to restructure and improve stocks conveniently and receive
the sale of data and information price threshold alerts
We are committed to providing media at the exchange to strengthen the
access to information and interaction revenue potential of the data sales
with the capital market. The CSE has business and to elevate the data and Other Key Initiatives
published a total of 161 media releases information sales policy to be on par
Strengthening of information
in 2021. In addition, 20 interviews were with international standards. Through
security with the implementation
conducted on print and electronic this project we hope to identify new
of security operating center
media, along with exclusive placements data commercialisation opportunities
on print media during the year. that can be offered to users of the Introduced the CSE chatbot
Sri Lankan financial market data both “Investo” which guides the
Our Digital Access Points locally and globally. website user by answering
Given the challenging business queries, popular topics and
environment caused by the pandemic, Outlook making the overall experience
the digital media platforms remained a We will continue to work on upgrading efficient and effective
vital channel in communicating with our the technology in place and enhancing
stakeholders. the quality of the market data provided
to investors. Ensuring the availability
In addition to the social media of quality market data is vital to build
platforms, our clients can also reach a vibrant capital market as it enables
us through the CSE official website investors make informed decisions.
and Mobile App. We onboarded social We are focused on expanding our
media influencers to promote the mobile followership base across our digital
app and create awareness amongst the media platforms as a large client base
investors. These digital access points helps to maintain the activity of the
play a vital role in the dissemination of capital market. In 2022, we will also
information to our clients. We provide be focusing on the implementation
high quality market data including of the 3rd phase of the digitalisation
commentaries on the capital market, initiative while looking into expanding
access to corporate filings and press our revenue streams through data
commercialisation.

We place our values above all,
forming the pillars that are set
upon a strong foundation, as we
uphold the integrity and respect
of the CSE.
MANAGING OUR CAPITALS
DIGITAL SOCIAL & HUMAN

CAPITAL RELATIONSHIP CAPITAL CAPITAL
STOCK CAPITALS
Investors:
AT THE START
Net book value of IT assets: 647,584

336 Mn Issuers:
145 Employees
Acc. Depreciation: 283
395 Mn Trading members:
30
• Conducting Investor • 8 promotions

• Implementation of DvP
education workshops and
HOW IT IS NUTURED
mechanism • Rs. 1.3 Mn spent on training

Investor forums
and development
• Fully online mechanism for
the listing process • Strategic sponsorships
• 8.36 training hours per
• MoU’s with foreign stock employee
• Total capital expenditure of
Rs. 323 Mn exchanges
• Rs. 551 Mn remuneration
• Trading commissions and and benefits paid
• Campaign to popularize
mobile app brokerage fees
• Active engagement during
• Offering Diploma courses and the year
• Active social media presence MBA’s
Upgrades to IT infrastructure enhanced the

TRADE OFFS
MBA programs and Diploma’s offered

efficiency, availability and accessibility of enhances social and relationship capital
our operations to our stakeholders. while also generating revenue to the
+Digital Capital exchange
+Social & Relationship capital +Social & Relationship Capital
-Financial capital +Financial Capital

STOCK CAPITALS
Investors: 157 Employees

AT THE END
Net book value of IT assets: 675,309

25 New recruitments
567 Mn Issuers:
296 Retention 92%
Acc. Depreciation:
Rs. 933 Mn Trading members: Return to work from
29 maternity 67%

INTELLECTUAL FINANCIAL NATURAL
CAPITAL CAPITAL CAPITAL
Total Assets:
4,142 Mn
Value of Intangible assets: Total Liabilities: Paper consumption:
134 Mn 794 Mn 1,380 Kg
Accumulated Fund:
3,348 Mn
• Developed new products and

services
• Energy conservation through
• Revision of rules according to • Revenue of Rs. 2,567 Mn efficient usage and energy
the amended SEC Act • Profit Before Tax of saving initiatives
• Providing high quality market Rs. 1,882 Mn • Promotion of green and
data sustainable initiatives
• Profit After Tax of
• Recognised by LMD/Brand • Reduction of paper usage
Finance as a Top 100 Rs. 1,672 Mn
Valuable Company
Training and Development of staff Digitized processes and increased

enhanced the value delivered to clients environmental awareness reduced
while increasing efficiency of operations paper consumption
+Human Capital +Natural Capital
+Intellectual capital +Digital Capital
-Financial Capital -Financial Capital
Total Assets:
Rs. 7,188 Mn
Value of Intangible assets: Total Liabilities: Paper consumption:
387 Mn Rs. 2,167 Mn 639 Kg
Accumulated Fund:
Rs. 5,020 Mn

REPORTING ON GENDER DIVERSITY AND
INCLUSIVITY
GRI 401-3 | 405-1
This part of the report seeks to comply with the Gender Reporting Framework of the Institute of Chartered Accountants of
Sri Lanka. While there is more work to be done to achieve gender parity not just in the workplace but also amongst listed
companies, we believe that at CSE we have built a strong foundation and made a conscious effort to progress towards
achieving gender parity in the workplace and beyond.
INTRODUCTION TO THE FRAMEWORK

Gender parity in the workplace is an important tool to improve business productivity and competitiveness of any organisation.
The Institute of Chartered Accountants of Sri Lanka has taken the initiative to introduce a framework with voluntary disclosure
requirements on gender parity reporting. The framework is made up of four pillars and is set to enhance the gender reporting
practices in Sri Lanka.
Enabler Composition Responsible Brand Gender Gap Indicators
Enablers
Gender parity has been a key area of
focus for the CSE, and our procedures
and practices reflect this stance. Over
the years, CSE has remained strongly
focused on creating an enabling
culture for women working within the
organisation by ensuring that workplace
related policies are gender sensitive
and equal. We are also one of the few
employers in the industry to provide 100
days of maternity leave, encouraging
women to remain in employment after
childbirth.
Celebrating International Women’s Day, IFC, a member of the World Bank Group, joined the Colombo
Stock Exchange (CSE) for the sixth consecutive year to ‘Ring the Bell for Gender Equality.’ The annual
global event highlights how women’s participation in the economy can spur sustainable private sector
development. The opening bell was rung by Ms. Kasturi Chellaraja Wilson, Executive Director Group CEO
Hemas Holdings PLC

Enablers
Requirements as per framework How we comply
Strategies and Goals for Gender Parity As an equal opportunity employer, CSE is committed to providing
opportunities to talented people inline with its skills requirements,
irrespective of gender. Additionally, CSE recognises the need
for conscious action to ensure the work place is conducive to
retaining talented people of both genders. Accordingly, we have
set in place a framework of policies supporting gender parity at
CSE.
Gender Parity Policies • Our compendation policy focuses on gender pay equality
• Diversity & inclusion policies • Policy against harassment
• Gender pay equity policy • Up to 100 days maternity leave
• Specific policies on sexual harassment in the workplace • Two hours Nursing Interval Benefit
Parental Leave
We provide maternity leave of upto 100 working days, which
is above the stipulated regulatory minimum. This provides new
mothers a longer period to adjust to motherhood. We also have
a nursing hour benefit, which grants mothers the opportunity to
work two hours less than the regular working hours upon returning
to work, until the baby turns one.
Parental Leave 2021
Employees entitled to parental leave 69
Employees that took Parental leave 3
Number of employees that returned to work in the 2
reporting period after parental leave ended
Total number of employees that returned to work after 2
parental leave ended that were still employed
12 months after their return to work
Return to work rate of employees that took parental 66%
leave
Retention rate of employees that took parental leave 100%
Systems and Processes • There is a Formal and Informal grievance mechanism in place
• Process to handle grievance mechanisms for sexual which can be used for sexual harassment as well.
harassment at workplace • Pregnant staff members were given special leave during the
• Workplace practices to promote gender parity pandemic situation and was not called for work during the
entire period of their pregnancy.

Composition GRI 102-8 | 401-1 | 404-1
The strongest testimony to support effective policies and a conducive workplace for people of all genders is the fact that we
have 44% females in our team which is well above the national average of 32.8%
Employees by Gender Employee Categories by Gender

44% 56%
Non-executives
41% 59%
42% 58%
Executive level
2021
Middle Management
2020
2019
Senior leadership
0 20 40 60
Female Male Female Male
Promotions by Gender New Recruits by Gender Turnover by Gender
Female Female Female
Male Male Male
0 2 4 6 0 5 10 15 20 5.5 6 6.5 7 7.5
Division Wise Gender Composition
Legal
Internal Audit
CEO’s Office
CRO’s Office
Regulatory Policy and Compliance
Enterprise Risk Management & Post Trade Settlement
Broker Supervision
Corporate Affairs
Listing
Human Resources
Trading Operations & Market Surveillance
Finance & Administration
Central Depository Systems
Information Technology
Research & Strategy
Marketing
0 5 10 15 20 25 30 35
Female Male

Gender Composition by Location
Branches
Average
Training Hours
by Gender
Colombo
0 20 40 60 80 Sri Lanka Labour Force Survey Annual

Bulletin 2020 by the Department of Census
Female Male Female Male and Statistics
Responsible Brand
• Evaluation of Gender Bias in Advertising and Communications
According to IFC, % of women
• Activities that Support Gender Parity in the Supply Chain
among Board members of listed
entities in Sri Lanka is 9.5%
As a responsible brand, CSE works with local and international organisations to
advocate for the greater participation of women in the Sri Lankan workforce, in
corporate leadership and in entrepreneurship. CSE has over the years continued to
support global initiatives such as the Ring the Bell for Gender Equality which aims to
foster gender equality at all levels.
Women’s Empowerment Principles

(WEPS) by UN Global Compact
During the year, CSE adopted the Women’s Empowerment Principles as part of its commitment to creating a diverse and
inclusive environment for women to rise to their full potential, both in the workplace and the community.
The WEPS is a set of seven globally endorsed principles offering guidance to businesses on how to promote gender equality
and women’s empowerment in the workplace, marketplace and community.
• The WEPs will act as a platform for CSE to further expand on its women empowerment activities both within the
organisation and in the community
• It will act as a strong platform to empower and improve the skillsets of female employees in the Exchange, which could
result in increased motivation, productivity and an optimally inclusive working environment.
• It will offer the CSE access to a number of internationally accepted tools, resources and learning programmes to drive
Women Empowerment. E.g. Gender Gap Analysis Tool, Gender Action Plan Template etc.
• It will also help CSE measure its gender empowerment driven initiatives against international best practices.

REPORT ON VALUE CREATED FOR
STAKEHOLDERS
GRI 102-8 | 405-1
FOR THE CSE TEAM

Team Profile
Behind our 36 years of long-term success is a team of 157 highly skilled knowledge based employees who drive our
organisational strategy in creating wealth and value to all our stakeholders. Our team is diverse in their gender, age, ethnicity
and cultural backgrounds. As an equal opportunity employer we value people's diversity and recognise this as a vital asset in
driving value creation. During the year, our employees stepped up to overcome multiple challenges posed by the post COVID-19
environment by adapting to the new norm and enabling the CSE deliver impressive results. With the facilities provided by the
CSE our workforce was able to operate even under a completely remote work environment.
Employees by Length of Service Employees by Category
35% 3% 5%
33%
30% 6%
23%
35% 6%
19%
Work Location 2%
2%
2021
Analysis
2020
38%
2019
39%
24%
Colombo 82% Above 30 years Top management 11%

Ambalantota 3% 20-30 years Middle management 15%
Anuradhapura 2% 10-20 years Exceutive level 62%
Jaffna 2% 5-10 years Non-executive 12%
Negombo 3% Less than 5 years
Kurunegala 3%
Kandy 3%
Ratnapura 2%
Matara 3%
Movements During the Year

Our recruitment strategy ensures that we identify and recruit the best people through a comprehensive process that seeks to
provide equal opportunity to talented individuals with requisite skills and experience. As the sole Stock Exchange in the country,
CSE has been able to attract skilled talent through its robust recruitment mechanisms and transparent processes which leaves
no room for any form of discrimination.
In order to nurture a strong pipeline of talent, improve retention and provide more career opportunities within the company, we
promoted 08 staff members during the year keeping also in line with the business requirements. During the year 13 employees
have resigned marking an attrition rate of 8% whilst there were no retirements recorded.
New Recruits by Age New Recruits by Region
Above 50 years
Branches
30-50 years
Colombo
Less than 30 years
0 10 20 30 0 10 20 30

GRI 401-1
Employee Turnover by Age Employee Turnover by Region
Above 50 years
Branches
30-50 years
Colombo
Less than 30 years
0 2 4 6 8 10 0 5 10 15
Management Approach
The CSE’s comprehensive HR policies and procedures have been structured in compliance with all regulatory requirements and
industry best practices. Our conducive work environment and employee value proposition has continued to enable the attraction
and retention of high performing individuals. During the year, the HR division focused on several key areas in order to nurture and
create value for our people.
HR Governance Structure
HR Committee/ Board of Directors CEO Head of HR
Changes to the
HR Policy Framework
Introduced in 2021
• Whistleblower policy
• Employee guidelines and policies on special support for Covid 19 victims
• Mobile Phone Benefit Policy
• Industrial Trainee Policy
Policy revisions in progress

• Performance Management Policy
• Promotion Policy
• Leave and Attendance Policy
• Compensation and Benefit policy
• Anti-Harassment Policy (Sexual Harassment, Bullying and Descrimination)
• Health and Safety Policy

How We Create Value for Employees
Remuneration and Benefits Paid Investmentment in Training and

Mn Rs. Mn Development
600,000 3.0
Training Hours
2.5
per Employee
400,000 2.0 8.36
1.5
200,000 1.0
08
0.5 Employees Active
promoted in Engagement
0 0
2017 2018 2019 2020 2021 2019 2020 2021 2021
Remuneration,
Training & Development Career
Recognition &
Opportunities Progression
Rewards
44% female
representation
Diversity &
Enabling Work Inclusivity
Environment
An Enabling Work Environment

CSE is committed to providing a safe and conducive work environment that empowers and enables employees effectively carry
out assigned roles whilst encouraging them to pursue their career goals. Reinforcement of corporate values, ethics and conduct
and CSE’s own focus on compliance are the foundations for creating an enabling workplace, aligning personal and corporate
values. A mentoring and peer learning culture at CSE supports on the job learning and career advancement.
Our staff have extensively engaged in remote working since the start of the pandemic with many projects and day-to-day tasks
being delivered remotely. Considering this, and the fact that many global corporations have announced plans to embrace some
form of remote working beyond the pandemic, the CSE is looking into the most suitable model and mechanism to extend
flexible working considering our unique business model as it adds a new dimension to the employee value proposition.

GRI 401-2 | 404-2
Health and Safety Ensuring active monitoring of employee health and performing necessary
Health and Safety of our employees
contact tracing
is of paramount importance to us,
particularly due to the pandemic. Frequent disinfection of office premises over the weekends to minimise risks
Extensive digitalisation of operations
enabled the CSE to operate even Strict enforcement of employee rosters
during lockdowns and this enabled us
to minimise risks to employees at the Closure of the CSE trading floor for the public
workplace. Measures taken to ensure
Advising employees to avoid public transport to minimise risk of exposure
health and safety of staff during the
year, are given alongside. Continuous Establishment of a comprehensive Covid guideline for employees in line with
monitoring and encouragement by the government health guidelines
management assisted in 99% of our
employees being fully vaccinated. Enabling full-time work from home for pregnant mothers and employees with
critical illnesses
The employee Health and Safety policy
is currently being revised and improved Encouraging employees to get fully vaccinated through constant awareness
in order to ensure it is up to date. campaigns
Provision of psychological support in the form of webinars to support

mental health
Additional benefits granted to employees due to the COVID-19 pandemic are given below.
• Paid leave/flexible working arrangements for those under self-quarantine
• Facilities to work from home
• Reimbursement of PCR/Antigen testing costs
• Reimbursement of data voice expenses
• Reimbursement of fuel and parking expenses
• Enhanced staff medical insurance covers
• Financial support for Intensive care facilities for employees who contracted COVID
• Welfare support to staff families during quarantine period

GRI 404-3
ISO 9001-2015 Quality Management System Certification

The CSE is one of the very few corporates who have obtained an ISO Certification for the Human Resources division.
ISO 9001-2015 ensures quality and accuracy of the daily A total of 19 HR operational processes including
operations of HR, through consistent and streamlined processes such as Recruitment, Selection & Appointment,
practices, policies and procedures built to create a safe Commencement & Employee Onboarding, Training &
and conducive work environment for employees. Development, Salary Administration and Performance
Management are covered under the ISO certification
ensuring that our practices are in compliance with laws and
regulations of the country.
Remuneration, Recognition and Rewards

Performance Management
Annual Performance Appraisals and predefined Key Performance Indicators (KPIs) are the key components of our holistic and
equitable performance management policies/practices through which the CSE strives to nurture a performance driven culture
within organisation. These mechanisms ensures that the goals/objectives of individuals in all levels are linked with the corporate
strategy. The Annual Performance Appraisal is the main tool in deciding employee rewards, variable pay, increments, bonus and
promotions. The performance management and promotion policies are currently being reviewed with the objective of further
strengthening our performance management system.

Attractive Remuneration & Unique Benefits
As part of our strong employee value proposition, we aim to provide a competitive and attractive remuneration for all of our
employees. During the year, there were no pay cuts or reductions of salaries. Our remuneration package is linked to employee
performance and is on par with industry standards. We do not discriminate based on gender when it comes to determining the
remuneration of our employees. During the year, we have made payments of Rs. 366 Mn to our employees as staff costs.
Staff Loans and Vehicle Loans

with lowest interest rates
Interest free educational

loans and reimbursements of
educational expenses
Reimbursement of membership fees

related to professional qualifications
Reimbursement of expenses due to

mobile phone purchases
Comprehensive Hospitalisation
Insurance Packages
Life Insurance, Personal Accident,

Critical Illness Covers
Automated OPD and Spectacle

reimbursement mechanisms
Parental Leave above

the statutory minimums
Corporate Gym Membership facility

from a leading 5-Star Hotel in Colombo
for Senior Management Members
Meal reimbursements granted for

staff working beyond regular
office hours
Paid transport facilities for staff

working beyond regular office hours
Fully-sponsored Membership for

employees attached to the CSE
Toastmasters Club
Gift vouchers for employees on their
birthdays and after the birth of
a newborn

Employee Recognition
The CSE’s rewards/recognition schemes facilitate a performance driven culture via attractive and equitable compensation to
all employees. As a company with 36 years of long history, the CSE recognises its employees in an unique way with extrinsic
and intrinsic rewards schemes. The Employee Recognition Awards Ceremony is one of the grand events that CSE conducts
annually. For the first time in the history of the CSE, the Employee recognition event was held virtually as we were unable to host
physical events due to health restrictions. The CSE recognises its employees for their longstanding service to the Organisation
at this event. Accordingly a total of 34 employees were recognised for awards completing 10, 15, 20, 25, 30 and 35 years of
service. Further, a special award was presented to an employee in gratitude and recognition of his exemplary support to the
Organisation amidst the pandemic lockdowns.
Training & Development Opportunities

Providing ongoing opportunities for training and development is a key apect of our employee value proposition. We offer
opportunities for on-the-job training as well as cross-exchange related training programs. However during the year, the training
and development activities for staff was low as there was limited interaction between individuals due to the restrictions caused
by the pandemic. Most training programmes that were conducted were held virtually. During the year total investment in training
amounted to Rs. 1.28 Mn while a total of 141 employees underwent 1313.14 hours of training.
Training Hours per Employee
12
10 Type & Scope
8 of Training
Programs
6
4
2
0
2019 2020 2021
Technical Programs Behavioural Programs
Transition assistance programs provided to facilitate recruit onboardings and role

changes are as follows.
Employee induction sessions-Carried out virtually during the first working week of
the new recruits.
Job descriptions are issued to new recruits within the first two working days
New recruits are inducted and introduced to cross divisional operations to enable
them understand overall organisational operations and easily identify where their
job role fits in the larger picture.
The CEO, Head of HR and the HR team conducts an HR induction session on the
first working week to further introduce the employee to the policies, practices and
culture of the organisation
The training budget for the next year has been increased in order to facilitate the
training and development of staff as the 2022 Organisational Development plans
revolve around talent development. We want to ensure the continuous upskilling
of talent by promoting a learning culture and a robust training and development
programme.

Career Progression morale and engagement and reduce
Our success depends on the skills, the monotony of working from home,
knowledge and experience of our we successfully hosted several new
employees, across all areas and engagement initiatives during the year,
business lines. We encourage and most of which were conducted online.
facilitate our team to achieve their Engagement Events for 2021
full potential by supporting and • January 1st New Year Celebrations
empowering them. Our highly skilled • Sinhala and Tamil New Year
human capital base qualified both Celebrations
academically and professionally are
• Awurudu decorations competition
further encouraged to peruse their
higher education goals through our • Womens day celebrations
unique benefit schemes. Over the years • Online Engagement Activities
many employees have continued to • Annual Battle of the Brains quiz
benefit through the educational support competition
benefits offered to them. • Awareness sessions in line with
Womens day
• Kiddies talent showcase
Kiddies Talent Showcaase
• Awareness sessions on mental,
Distribution physical & psychological wellbeing of
of Highest employees
Qualifications • Townhall sessions in partnership with
SLIC and Ayubo.Life
• Online Vesak Bhakthi Gee
• Online Year-end Staff Recognition
Event
Masters 18%
Degree 49% • Online Christmas carols
Professionally qualified 6%
Undergraduate 3%
Diploma 7%
Secondary education 17%
Active Engagement
We believe in fostering an open and
conducive work culture through
high level of staff engagement and
involvement. However, due to the
pandemic most of the scheduled
Awurudu Decoration Competition
engagement initiatives were organised
virtually/online as majority of the year
was spent working from home. Due
to the pandemic the majority of the
year was spent working from home.
As a result physical engagement
was low during the year. Employee
communication forums that are usually
held physically had to be conducted
virtually due to the work from home
conditions. Certain major annual staff
events had to be differed/cancelled
during the year due to health concerns.
However in order to maintain employee Online Christmas Carols

New Year
Online Bhakthi Gee
CSE Employee Awards 2021
Sinhala Tamil New Year

Organisational Culture
Learning Culture Open Door Policy
We have adopted a learning culture Our employees have the freedom to

supported by strong policies and approach even the highest authority in
practices, specialised career paths and the hierarchy without any hesitation.
job security. During the year, we introduced a
whistleblower policy to encourage and
enable employees and others to raise
serious concerns within the
Organisation.
OUR
CULTURE
Equal Opportunity Employer
We pride ourselves in being an equal

opportunity employer nurturing a diverse
and inclusive team within the
organisation

INVESTORS Investor Growth & Profile
Investor interest is critical for for a
vibrant market and CSE undertakes Investors by Type in 2021
a range of activities to facilitate
their effective participation in the 700,000
development of capital markets. 600,000
These functions range from ensuring a Investors by 500,000
framework that protects their interest, Age Group 400,000
market surveillance and a compliance
300,000
function to deployment of user friendly
200,000
technology and investor education.
CSE continues to enhance its value 100,000
proposition to investors, driving growth 0
Local Local Foreign Foreign
of its investor base and growth of the Below 30 years 94% Above 30 years 6% Retail Corporate Retail Corporate
country’s capital markets.
Investor Depository Accounts Local vs Foreign Investor Participation

%
1.2 40,000 700,000

1 35,000 600,000
30,000 500,000
0.8 25,000
400,000
0.6 20,000
300,000
0.4 15,000
10,000 200,000
0.2 5,000 100,000
0 0 0
2019 2020 2021 2018 2019 2020 2021
CDS Accounts Openings % Increase Foreign Investors Local Investors

HOW WE CREATE VALUE FOR INVESTORS
Active presence in
Investor education
social media
programmes
platforms
117%
40%
Growth in registered
E-statements and
investors
e-dividend system
4%
Reliable and
Market Investor Disseminating
Convenient
Growth education Information
Service
Amendments to
the rules to
ASPI Growth
comply with the
80%
SEC Act
Access to
Investment Fair markets
Opportunities
Access to Investment Opportunities

CSE seeks to provide access to investment opportunities for investors by creating
robust trading platforms for defined financial instruments/products. Participating
investors have the potential to earn returns on their investment through capital gains
and also through income streams that are directly attributable to the instrument
such as dividends and interest. Capital gains are determined by the movements in
the share price or other instrument which is driven by the performance of the entity
issuing the instrument and forecasts of various factors that impact demand for the
instrument during the year.
The CSE had a remarkable year in 2021, with the ASPI climbing to an all time high
as it gained 80% despite the challenging economic environment. The S&P SL20
which monitors the most liquid stocks also recorded an increase of 60% during
the year. The combined impact of low interest rates and lower tax rates supported
business resilience during the year although interest rates commenced an upward
movement during the year. A number of business sectors adapted successfully
to the post COVID-19 environment seizing the opportunities that every crisis
offers, recording improved corporate earnings year on year. This supported higher Conducted a Facebook Live Session on “Rules
pertaining to IPO and Related Matters”
valuations and stable dividend income which supported the buoyancy of the market.

2021 2020 2019 2018 2017
ASPI 12,226.01 6,774.22 6,129.21 6,052.37 6,369.26
Change (%) 80.48% 10.52% 1.27% -4.98% 2.30%
S&P SL20 4,233.25 2,638.10 2,936.96 3,135.18 3,671.72
Change (%) 60.47% -10.18% -6.32% -14.61% 5.00%
Market PER (times) 13.63 11.25 10.83 9.65 10.6
Price to Book Value (times) 1.67 1.13 1.14 1.18 1.30
Dividend Yield (%) 2.17% 2.66 3.17% 3.10% 3.20%
Market Growth
Vibrancy of the bourse supported sustained growth in investors with the investor
Equity trading products
base growing by 4% to 675,309 registered investors. Active participation of
investors also improved significantly with 9% of registered investors being active. We Debt trading products
continued to invest in upgrading technology and updating frameworks to support
market growth. Our focus areas were on offering new products and creating liquidity Closed end funds
for the existing products in the secondary market.
Real Estate Investment Trusts
We continue to enhance the investment experience and cater to evolving needs
REPO transactions on Listed Debt
of the investors by offering a diverse range of products and services. The range of
securities carried out through the
products we currently offer is presented alongside.
OTC platform
We have implemented several strategies In order to create liquidity in the market Foreign currency denominated shares
by broadening our investor base, increasing market participation through the
enhancement of financial literacy of investors and potential investors as well as
improving the accessibility of the stock market to the users.
To broaden our Investor base To enhance financial literacy To improve customer accessibility
• Local investor participation • 408 Awareness Programs • Market Digitalisation Drive

increased by 80% conducted during the year • 5 Digital access points
• Investor profiling • Updated CSE mobile app
During the year, the CSE signed a MoU

with the CHEC Port City Colombo, to
develop the capital market in Sri Lanka
and establish a regionally recognised
financial exchange within the country’s
borders. The MoU was signed with
the objective of working on a collective
mission to establish an International
Multi-Currency Exchange within the Port
City Colombo.
The Colombo Stock Exchange (CSE) and CHEC Port City Colombo signed a Memorandum of
Understanding (MoU) to enhance the capital markets in Sri Lanka.

CHEC Port City and the CSE will actively collaborate to identify and attract a global stock exchange to partner the Colombo
Stock Exchange in establishing a modern world-class trading exchange, which will position Sri Lanka as a hub for capital raising
in the South Asian and the ASEAN region. The CSE will work with the regulator in providing a conducive environment for a well-
functioning market while introducing state-of-the-art modern technology, which will drive liquidity and seamlessly introduce new
products and services at the exchange.
The exchange will serve as a gateway for both regional and global investors, whilst also providing an ideal platform for
Sri Lankans and overseas corporates to issue foreign currency bonds and equities as well as developing other financing and risk
management instruments across asset classes.
Fair Markets Rules

Fair and transparent operation of markets is key to safeguarding investor interests as
well as those of other market participants. While the SEC Act sets out the regulatory
• Stockbroker Rules
framework which CSE operates within and matters such as Insider Trading, CSE
has in place the frameworks, processes and mechanisms to facilitate the fair • Listing Rules
operation of markets. • Trading Rules
• CDS Rules
CSE has rules for stockbrokers, listed entities, for trading and CDS participants
which set out the obligations of these stakeholders, supporting the operation of
Market Surveillance
fair and transparent markets. These are supported by market surveillance activities
through which the trading activities are monitored. Any irregularities observed are
investigated and where necessary, reported to the regulator. In addition, the Broker
Supervision function monitors whether the stockbrokers act in conformity with the
applicable rules. Appropriate disciplinary action is initiated when breach of rules Supervision Function
are detected. Further, the Corporate Affairs function would monitor whether the
listed companies act in compliance with the continuous disclosure and corporate
governance requirements.
Information for Investors
The CSE website, MyCSE app and daily, weekly, monthly and quarterly publications
provide information on listed entities and trading activities, supporting analysis and
decision making by investors.
Investor interests are further protected by specific grievance mechanisms in place Grievance Mechanisms
which enable investors to make complaints against stockbrokers, listed entities or
to submit tips related to market manipulations or violations of rules. Furthermore, • Compaints against stockbrokers
the CSE in consultation with the SEC, is in the process of revamping the investor • Complaints against listed entities
grievance handling process. The proposed procedure would have an Índependent
• Market Manipulations
panel’ constituting members who are independent from the CSE/CDS with
necessary expertise in the relevant field and having personal experience in the
Disciplinary Matters
Sri Lankan Capital Market. During 2021, the CSE Legal Division handled 4
complaints made by investors in terms of Section 10 of the CSE Stockbroker Rules
against their respective Stockbrokers which is a significant reduction in the number • The CSE Legal Division assisted
of complaints when compared to a few years ago. the Arbitration and Disciplinary
Committee of the CSE in handling
During the year, we introduced the DVP mechanism which reduces the risk of the 6 disciplinary matters.
investor selling shares, since the ownership of the shares are transferred only after • Handled 11 litigation matters, out
the seller receives the payment. The introduction of DVP strengthens the overall of which CDS is also a party in
credibility and integrity of the market, minimising the asset commitment risk of the one matter.
investors.
• 140 Agreements/Addendums/
MOUs have been entered into by
During the year, changes were done to the SEC Act in order to strengthen investor
the CSE/CDS during the year.
protection. These were the activities carried out by the CSE to align with the
changes. The harmonization of the rules to the new SEC Act is expected to be
completed in 2022.
Applying for a new license as a
Revision of rules Changes to the governance structures
clearing house for CDS

Investor Education 500 investor education programmes
During the year several initiatives were carried out to increase investor interest and
in 2021 targetted at different investor
educate them, facilitating informed decision making in managing their investment
groups
portfolios. Investor education benefits not only the investor, but also the CSE, as it
has a direct impact on trading by creating interest in the market activities. Expanded the breadth of
programmes to cover personal
We leveraged the geographical reach of the branch network to educate the financial planning
investors. The branch network of the CSE, comprising of 08 branches conducted
398 educational and awareness progammes for investors, potential investors and Head office and 8 branches
inactive investors during the year. Face to face sessions were limited this year were involved in the education
as well, due to the fear of COVID-19 outbreaks and our concern for employee programmes
health and safety as well as the safety of the participants. As a result there was
a noticeable shift to host programmes virtually and sustain the interest that was
evident in 2020 and throughout 2021. CSE was also active on social media
complementing investor education. The marketing department used various
platforms such as Zoom, Youtube and Facebook live to engage with the investors.
402 Programmes were carried out virtually during the year in partnership with a
number of institutions enhancing participation and reach.
CSE CEO Mr. Rajeeva Bandaranaike in

conversation with HNB Bank PLC Managing
Director/CEO Mr. Jonathan Alles on latest
developments, the investment case and future
outlook of the company.
Stock pulse
This is a series introduced during the year, interviewing the S&P 20 CEO’s. So far
8 of these have been completed and is available to watch on Youtube as well as
on the mobile app.
Investor Forums
• We conducted the Invest Sri Lanka Forum In Dubai which was a joint
collaboration with the SEC. This was held on the 5th of November and was a
success.
• A virtual Investor Forum was held for foreign investors together with the
Chamber of Commerce, BOI and the CSE with the attendance of The
President, Prime minister and other dignitaries.
• Virtual Program on Tax Reforms - The CSE with the support of the Inland
Revenue Department of Sri Lanka, PWC Sri Lanka and First Capital Holdings
(Pvt) Ltd, conducted an online forum to discuss the tax reforms that have been
proposed by the Sri Lankan Government. The Forum themed “Understanding
Recent Tax Reforms - How it affects Investors and Businesses” focused on the
salient features of the proposals, including tax exemptions, taxable income,
relevant provisions in the context of amendments, understanding practical We conducted the Invest Sri Lanka Forum In
Dubai which was a joint collaboration with
implications of indirect tax, tax benefits of listing on the CSE and the recent tax the SEC.
reforms.

Advanced Diploma in Financial
Markets (ADFM)
The Advanced Diploma in Financial
Markets (ADFM) offered by the CSE
commenced its fourth intake in
June 2021. The ADFM program is a
diploma level qualification offered by
the CSE, and the main purpose of
the program enhance the knowledge
of individuals on financial markets
with specified focus on capital
market operations.
ADFM
Duration: 9 months
Conducted by: Experienced panel of lecturers including industry experts and
senior CSE professionals to offer exclusive insights on the modules
Objective: To provide a stepping-stone for students who are interested in
embarking on a journey towards becoming a professional in financial markets
Recognised by: The Chartered Institute of Management Accountants (CIMA) and
the Certified Management Accountants (CMA)
Due to the pandemic the CSE converted the program to a fully online one
which has enabled individuals from overseas as well to follow the program. The
CSE uses a unique LMS (Learning Management System) specially designed to
improve a student’s education experience making it more flexible and seamless
in keeping with the CSE’s Digitalisation initiative.
Executive Program offered by CSE in collaboration with UCW

The CSE has signed a MOU with the University of Canada West introducing an
executive Program targeting those who are currently involved in the financial
industry. This programme is designed to provide training and skills development
in areas such as Investment analysis & management, Global financial institutions
management and Business analytics.
Reliable & Convenient Service

We offer a robust and up to date trading platform for investors at every stage of the
process, that is, pre-trade, trade and post trade. Fast service and ease of access to Launch of trilingual facility in the
the market was a key concern in relation to the investor community which is why we Mobile App
have digitalised the entire process, providing seamless access to a diverse pool of
Launch of digital account opening for
over 675K investors.
local companies via the web
Our digital access points include the CSE mobile app, website and social media Launch of e-connect access to
platforms through which the investors can easily access the stock exchange and our institutional investors via the website
services. We are continuously working on making improvements to these access
points so that investors are provided with a reliable and convenient service.

E-statements and e-dividends disclosures by listed entities and trading
During the first phase of the activities. The level of knowledge and
digitalisation drive of the CSE, it was information we provide has created
decided to convert paper based opportunities to attract knowledgeable
statements into electronic form and investors while achieving meaningful
to facilitate payments of dividends broadbasing of the market.
electronically to the shareholders. The
Stock broker rules were amended to
make it mandatory to dispatch bought
and sold notes and statements of
accounts by electronic means to their
clients. Investors were presented
the option to receive dividends via
Investors are provided with a reliable and electronic payment by providing their CSE Publications
convenient service through the CSE Mobile App. bank account details in a secure
manner. Receiving dividends via direct
Currently through the CSE Mobile deposits to the bank account of the
App, we have extended the online shareholders brings about a seamless
onboarding facility to the CDS for local process as opposed to payments via
corporates and foreign individuals. cheques, which may face unexpected
This year, we introduced this feature interruptions such as postal delays and
for local companies as well. This has the inconvenience of visiting the banks
removed barriers to entry for new to deposit the cheques.
investors, allowing any prospective Mobile App
investor convenient access to opening a Disseminating information
CDS account without needing to visit a We work extensively in ensuring the
branch physically. Investors can instantly quality of market data provided to
open their accounts and begin trading investors is up to date and relevant.
anywhere and anytime while also The CSE has leveraged various
monitoring the market activity through physical and digital channels through
the real time information we provide. which investors can access real time
This has enabled an end-to-end digital information which they require in
experience for the investor. making informed decisions. Our digital 8 Branches
platforms are up to date and technology
The new CSE Mobile App is a friendly providing investors with an
comprehensive investor platform, array of resources to make decisions.
granting access to investor portfolios Investors have access to research
from any part of the world. The investor reports and interactive educational
community can handle their day to day content which is specifically designed
CDS transactions with ease through to aid informed investment related
the digital platform. It enables viewing decision making. Companies Circulate
of past transactions and monthly media releases, corporate videos and CSE Website
statements as well as providing much more to create an engaging
investors a host of other benefits, platform for everyone involved. The CSE
including the ability to request changes daily, weekly, monthly and quarterly
to master files, research reports and publications are a another key method
content that aims at significantly of disseminating information. Market
simplifying the investment experience Announcements/Disclosures made
while creating greater value for by Listed Companies are published
investors, as well as for the long-term on the CSE website and the investors
development of the market. can access the announcements and
disclosures as soon as it its published. Social Media
Publications
These alert investors with information

ISSUERS
Issuers are an important stakeholder group to the CSE, as they play a pivotal role in creating liquidity in the market. Building
confidence in the effective operation of capital markets with our issuers is important for our growth. We work together with the
SEC to nurture confidence issuers have in the efficiency and effectiveness of our systems in supporting access to capital and
broadbasing risks undertaken by entrepreneurs/owners. The CSE supports issuers in raising capital via various mechanisms
including the issuance of shares and debt in a cost-effective manner. The exchange is actively developing new mechanisms that
further strengthen and broaden the methods by which issuers can raise capital given the evolving external environment.
Profile of Issuers
Number of Listed Issuers
296
300
295
290
Issuers across 285
20 industries 280
275
2019 2020 2021
How We Create Value for Issuers

50% tax reduction
for the firs t year and
14% for the
subsequent 3 years
Enhancing
Broadbasing Price Government
the brand
the risk Discovery incentives
image
Over 39 individual
and group
Capital Raised in sessions
2021
LKR 124 Bn
Knowledge
sharing,
Awareness
Access to
sessions &
finance
Support

Access to Finance for Companies We are also looking to make the listing for companies as it enables access
of all Sizes process efficient & transparent for to lower cost of funding and more
The CSE provides issuers the issuers. Prior to 2021, there was a dual attractive terms for various stakeholder
opportunity to access finance from a review process between the CSE and partnerships.
large pool of international and domestic the SEC to review and evaluate new
capital, irrespective of the size of listing applications prior to granting Government Incentives
the company. We assist entities to approval to raise funds. A fully online Another way through which the CSE
access the market and raise funds by mechanism was introduced during the creates value for our stakeholders is by
creating listing boards and developing year, eliminating the need for the dual advocating for Government incentives
progressive and innovative financial review and streamlining the application for listed corporates. Issuers during
instruments including both debt and process. This has enabled entities to the year were able to capitalise on the
equity. get their applications processed and preferential tax treatments accorded to
approved with relative ease in a more companies that chose to raise funds
Our services are available not only to timely manner. via the exchange prior to the end of
large corporates and multi-national 2021. This included a 50% break for
companies, but also, to smaller nascent Furthermore, the listing rules the first year of listing and a flat tax
entities via the different boards available were amended to facilitate the rate of 14% for the ensuing three
for listing. In an effort to provide access implementation of the DvP mechanism years. These incentives strengthened
to finance for SME’s the CSE launched and to enhance the regulatory the ability to attract new issuances,
the Empower Board, a listing platform framework pertaining to rights issues. which supported long-term growth of
providing SMEs around the country We continuously make improvements to the market and contributed to greater
seeking a more versatile and flexible the rules and processes of the CSE and investor participation. The CSE is
method to raise funds for growth. CDS to ensure that we are better able in continuous engagement with the
Raising funds through the exchange is to meet the needs of our stakeholders, relevant government authorities to bring
now more accessible to companies at while remaining transparent and about a multi-year incentive structure,
various stages of growth, which enables ensuring the integrity of the market. similar to those at exchanges globally,
our entrepreneurs and businesses a to encourage further listings and ensure
more flexible and cost-effective method Broadbasing Risk and the development of a flexible and robust
to access capital in comparison to Funding Lines local capital market.
traditional methods. Issuers are able to diversify and
broadbase their risk through a listing Knowledge Sharing, Awareness
Our capital market continues to attract on the stock exchange. This is a great Sessions and Support
investors while recording performance method for entrepreneurs to raise The CSE conducted various
exceeding that of most global indices. funds as it provides an opportunity to knowledge sharing and awareness
We provide issuers with financial share the risk with other investors who sessions for issuers in order to
flexibility and improved access to capital have a higher risk appetite. Further, showcase the opportunities available
and liquidity, making it a more attractive raising capital via the exchange enables to them and present the CSE as an
source of funding. Our priorities during a company to diversify away from attractive destination to meet funding
the year were to launch new financial traditional methods which can be requirements. Areas particularly
products that would increase financial restrictive in nature. This provides a highlighted include lower cost and
market efficiency and access to capital. company greater control and flexibility flexibility associated with listing,
on how best to manage cashflows. demystifying myths regarding listing
In line with this, we are hoping to and the importance of listing for
introduce multi-currency listing of shares Price Discovery family businesses in order to ensure
by local companies during Q1 2022, A listing on the stock exchange helps generational survivability. We provide
which will allow local companies to list stakeholders understand the value post listing support through
foreign currency-denominated shares of the company through the share one-on-one meetings, circulars,
on the CSE. This new listing method price and its movement. The share awareness sessions, compliance
would be extremely attractive to local price performs a signalling function, monitoring reviews and public
companies, both listed or unlisted, refelecting the sentiments of the market consultations. Due to the restrictive
who may require foreign currency- and how the market perceives the environment created by the pandemic,
based funding for projects, especially value of the company based on its sessions which would have otherwise
outside Sri Lanka. The mechanism will ongoing performance and future growth been carried out physically were
be an attractive proposition for both potential. This is an important indicator conducted virtually through webinars.
companies and investors, as currency
risk exposure is eliminated.
During the year:
The Origination and Issuer Relations unit facilitated several webinars on a stand-alone basis and with the partnership of
industry associations, such as the FCCISL, to highlight the opportunities available for companies who seek capital funding
through the exchange.
The CSE created awareness on the listing rules and listing process through webinars, interviews and articles.
Facilitated regional virtual events for SMEs, which resulted in over 130 entrepreneurs benefiting. These virtual forums targeted
small business owners who would qualify to list on the Empower board. The sessions resulted in several new listing applications.
Partnered with the Federation of Information Technology Industry Sri Lanka (FITIS) and the Information and Communication
Technology Agency (ICTA) to conduct a webinar on how companies in the IT industry can consider a stock exchange listing in
view of the changes to CSE listing eligibility that were finalised.
Partnered with The Institute of Chartered Accountants of Sri Lanka to conduct a webinar on the newly introduced Real Estate
Investment Trusts (REITs) Framework. The discussion highlighted key features of REIT’s that can be a catalyst for multiple
benefits for property owners, investors and the economy at large.
Founder to Family Forum Virtual Program on Tax Reforms

The Founder to Family Forum was The CSE with the support of the Inland Revenue Department of Sri Lanka, PWC
conducted in March 2021 to raise Sri Lanka and First Capital Holdings (Pvt) Ltd, conducted an online forum to
awareness on the benefits of listing discuss the tax reforms that have been proposed by the Sri Lankan Government.
for family owned businesses. This was The Forum themed “Understanding Recent Tax Reforms - How it affects Investors
a success with over 80 family owned and Businesses” focused on the salient features of the proposals, including tax
businesses participating, following exemptions, taxable income, relevant provisions in the context of amendments,
which we continued our drive to raise understanding practical implications of indirect tax, tax benefits of listing on the CSE
awareness by highlighting key areas and the recent tax reforms.
including long-term cost effectiveness
of listing, benefits of listing vs. traditional MoU with the Sri Lanka Association for Software Services Companies
methods of financing, demystifying (SLASSCOM)
the myths associated with listing and The CSE signed an MoU with SLASSCOM to create awareness among SLASSCOM
conducting closed sessions with members of the options available for IT-BPM companies to list on the stock
companies to aid them through the exchange. We hope to jointly develop a framework to help members understand
process of listing. the benefits of listing on the CSE, as well as understand their capital market
requirements.
Forum on Corporate governance
A two-part forum under the theme
‘Beyond Basics: Excellence in
Corporate Governance’ was held
offering participants an in-depth
understanding on the importance of
good corporate governance practices
and how it would increase investor
confidence through transparency and
accountability. A number of relevant
and timely issues on corporate
best practices, effective investor CSE in association with the SEC engaged family businesses with the Issuer Forum hosted on the theme
communication and business continuity ‘Founder to Family - Leveraging Going Public.’
practices were also discussed at the
forum, given the unstable environment
brought about by the global pandemic.

COVID-19 Support Enhancing Brand Image
The CSE extended special support to corporates due to the COVID-19 pandemic. A listing on the Colombo Stock
1. Time lines for the submission of financial statements was extended during the Exchange enhances the brand image of
year. If the listed company was unable to submit the Annual Reports or the the company by affirming the company’s
Interim Financial statements to the CSE on the due dates specified in the listing commitment towards ensuring the
rules, the said listed company was required to make a disclosure to the market, highest standards of corporate
on or before the due dates specified in the listing rules, setting out the reasons governance and transparency. It is the
for the delay. ultimate recognition of a company’s
achievements in terms of growth and
2. The listed companies were required to make a disclosure to the market prestige. CSE has signed MoU’s and
regarding the impact of COVID-19. The CSE with the CA Sri Lanka task force partnerships with various organisations
on COVID-19 issued a corporate disclosure guidance note to listed companies and regional exchanges in order to
setting out how the listed companies should make the disclosure. The said promote the exchange and build
disclosure was required to capture the following information: stronger ties with market stakeholders.
• The impact of COVID-19 pandemic on the business/operations of the listed This enhances the international visibility
company. of the entities listed on the stock
• The listed company’s response to the impact of the COVID-19 pandemic. exchange.
• The listed company’s expectation of the future impact of COVID-19 on the
company’s future operations and the financial condition.
3. The CSE published a guidance note on the hosting of Annual General Meeting
(AGM) during the pandemic. The guidance note covered the methods of hosting
the AGM such as Virtual and Hybrid and the measures to be taken by the listed
companies in hosting the AGMs.
4. The CSE allowed listed companies to send the Corporate Disclosures/ Financial CSE and the University of Kelaniya, Sri Lanka
statements via email if the listed companies did not have the facility to log in to (UOK) signed a Memorandum of Understanding
(MoU) to formalise collaborative efforts.
the CSE announcement portal from home.

COUNTRY
The CSE plays a major role in shaping the socioeconomic progress of the country, as the only authorized stock exchange. We
engage with the Government to share our expertise and insight and assist in addressing national challenges such as policy
setting, regulations and rulings. This year too the Government had to face unique challenges in adapting to the post pandemic
environment and we were ready to volunteer our services. Further, by developing a robust and vibrant platform for raising funds,
the CSE enhances accessibility to capital and contributes to a more competitive financial services sector.
How We Create Value for the Country
Investor participation Investment in CSR

Rs. 5 Mn
Channelling Formalising
Domestic Community
Savings to the Engagement
Capital Market and CSR
Share Transaction Levy

collected and remitted to
the Government Rs. 7 Bn.
Promoting High
Standards of
Promoting Corporate
Sri Lanka as a Governance
preferred
Investment
Destination

Promoting Sri Lanka as a Preferred Investment Destination
CSE promotes Sri Lanka as an attractive investment destination by creating awareness and interest in the capital market.
Sri Lanka Investment Invest Sri Lanka

Forum 2021 Forum 2021
•
• This was a 3 day virtual event jointly organised by the • The Invest Sri Lanka Forum was conducted in Dubai
Ceylon Chamber of Commerce, BOI and the CSE and organised by the SEC and the CSE in collaboration
with the attendance of The President, Prime minister with the Embassy of Sri Lanka in UAE and the
and other dignitaries. The forum provided an overall Consulate General of Sri Lanka to Dubai and Northern
experience and understanding on foreign direct Emirates.
investments and the capital market opportunities in • This was held on the 5th of November 2021 and made
Sri Lanka. a strong case for foreign investment flows to Sri Lanka.
• 108 local and foreign dignitaries, leading entrepreneurs The event drew a strong turnout and a full house of
and global experts joined the forum, sharing information leading Dubai-based Sri Lankans across multiple
on foreign investment opportunities in Sri Lanka. industries and was graced by Hon. Ajith Nivard Cabraal
The conference facilitated over 100 one-to-one as the keynote speaker.
meetings between investors and 20 listed companies
and promoted Sri Lanka as a preferred investment
destination.
• Foreign participants - 2200 participants from 85
countries
• Local participants - 2500 participants
• No of sessions - 118 insightful sessions
The ‘Invest Sri Lanka’ Investor Forum organised by the SEC and CSE, in
association with the Embassy of Sri Lanka in UAE and the Consulate General
of Sri Lanka to Dubai and Northern Emirates was held at the
Sheraton Grand Hotel Dubai.
A 3 day virtual event jointly organised by the Ceylon Chamber of Commerce,

BOI and the CSE.

GRI 413-1
Channelling Domestic Savings to the Capital Market

The CSE channels domestic savings into the capital market by presenting an attractive value proposition to local investors. The
low interest rate environment that was prevalent during the year, created an attractive oppportunity for the local investors to
channel their savings into the capital market.
Promoting ESG Among the Corporates
High Standards of Sustainability Collaboration Partnership with CA

Corporate Governance Reporting Guide with GRI Annual Report Awards
High Standards of Corporate Governance

The lisitng rules of the CSE requires companies to adhere to the highest standards of corporate governance and transparency.
The CSE continuously updates the listing rules in order to ensure the creation and maintenance of a market in which securities
can be issued and traded in an orderly and fair manner.
Sustainability Reporting Guide

As an advocator of sustainability practices and a member of the United Nations Sustainable Stock Exchanges Initiative since
2015, we understand that our role extends beyond our business operations. We play an active role in advocating sustainable
business practices, transparency, accountability and good governance amongst the corporates within the country. We issue
Environmental, Social and Governance guidelines in order to help corporates integrate sustainability into their corporate
strategies while encouraging them to publish sustainability reports with balanced disclosures. Our connections with a wide range
of issuers across many industries has helped us influence many in the corporate sector. We have released the second version
of the sustainability reporting guide titled, “Communicating Sustainability Six Recommendations for Listed Companies” which
serves as a guide for listed companies on communicating sustainability by integrating perspectives and standards of the Global
Reporting Initiative.
Colloboration with GRI

In June 2021, we collaborated with the Global Reporting Initiative and conducted a three part technical workshop titled
“Preparing a sustainability report”. This was exclusively for the relevant departments of the Listed companies and Large
corporates in Sri Lanka who would contribute to preparing the sustainability report of the organisation.
Partnership with CA Annual Reports Awards

The Annual Report Awards, organised by the Institute of Chartered Accountants
of Sri Lanka (CA Sri Lanka), is recognised as one of the country’s prestigious and
celebrated corporate events, which has continuously elevated the benchmark
for excellence among Sri Lankan corporates. High quality and internationally
comparable corporate reporting plays a fundamental role in achieving the
Sustainable Development Goals (SDGs) by contributing to key components of
sustainable development such as financial stability, good governance, as well as
socially and environmentally responsible practices. The CSE partnered with the CSE was Strategic Partner for the 56th Annual
56th Annual Report Awards organised by CA Sri Lanka, in the capacity of strategic Report Awards competition organised by the CA
Sri Lanka.
partner, for the 06th successful year of partnership.

GRI 413-1
Formalising Community Engagement and CSR

We have set up a cross-functional community engagement group with the representation of multiple business area in order to
drive community engagement and Corporate Social Responsibility. During the year, expenditure on CSR amounted to Rs. 4.8 Mn.
Projects implemented this year include:
Capital Market Donation Drive Social Media Campaigns
• Donation of Rs.9.6Mn worth COVID-19 related With the emergance of the third wave in Sri Lanka, the
medical equipent to 10 hospitals around the CSE engaged with the community though social
country. This donation drive was successful in media, where we used our platform to create public
providing vital equipment and supply needs of the awareness on COVID-19 mitigation
District General Hospital of Avissawella, District
General Hospital of Mannar, District General
Hospital of Polonnaruwa, Homagama Base
Hospital, Kinniya Base Hospital, North Colombo
Teaching Hospital, Teaching Hospial Karapitiya,
Teaching Hospital Mahamodara, the National
Hospital and Weligama Diision Hospital.
• CSR project initiated by all 8 branches of the CSE

to donate computers to schools in rual areas while
converting an existing building to a computer
laboratory, colour washing with CSE brand
colours, wiring and CSE messaging using digital
prints. In total 40 computers were donated
through this initative.
Colombo Stock Exchange, Broker Companies and Sri Lanka Security and Exchange Commission employees together donated Rs. 9.6 Mn worth COVID-19 related
medical equipment to 10 hospitals.

Commitment to the Environment
Our direct impact on the environment is limited to the consumption of paper and energy. As a responsible organisation and
an advocator of sustainability practices, we have implemented several initiatives within the organisation that have contributed
towards minimising the negative impact on the environment while improving efficiencies in our processes. We also promote an
environmentally friendly culture among our employees through regular awareness sessions.
The conversion of paper-based statements to the electronic format and the digitalisation of processes towards a paperless office
helped us achieve a significant reduction in the usage of paper.
Paper Consumption Energy Consumption

Kg KWH
2,500 700,000
600,000
2,000
500,000
1,500 400,000
1,000 300,000
200,000
500
100,000
0 0
2019 2020 2021 2019 2020 2021

REGULATOR
CSE works closely with the market regulator, the Securities and Exchange Commission, to create a vibrant stock exchange
which is key to economic growth. A collaborative approach supports development of the market, increased ease of doing
business and drives operational efficiencies through streamlined operations.
How we create value for the Regulator
40 suspected
market
manipulations Supporting
reported to the SEC in
Regulatory
Functions
Market
Surveillance
SEC fees/SEC
cess paid
Rs. 1,554 Mn
A Partner for
Developing
Capital Collector of
Markets in the SEC Cess
Country
A Partner for Developing Capital Markets in the Country

CSE continuously strives to develop the capital market by carrying out market development and promotion activities. We work
together with the SEC to develop a vibrant capital market and drive the confidence of stakeholders in the market mechanisms.
Partnership with Junior National Law Conference 2021

The CSE partnered as the Gold Sponsor of the Junior National Law Conference in 2021. Representatives of SEC and CSE
joined the conference to discuss about the SEC ACT and the new developments in the capital market.

Market Surveillance Timely and relevant corporate
The CSE's Market surveillance function facilitates the operation of fair and orderly
disclosures
Markets. The market surveillance divisions has in place mechanisms to i Identify
Market misconducts and to refer to SEC for necessary action. The Market
Detection of market Prohibited
surveillance function also has mechanisms to detect unusual market activity in order
conducts
to build stakeholder confidence. During the year 40 suspected market misconducts
were reported to the regulators the SEC for action.
Review of listed entity financial
statements to ensure compliance
Corporate Affairs Division with disclosure requirements
Reviews the Financial Statement of Listed Companies to ensure compliance with
disclosure requirements and Listing Rules, Risk Based review of financial statements
Risk based review of financial
of Listed Companies, handling of Complaints against the Listed Companies and
statements of the listed entities
carrying out enforcement action against the Listed Companies which are non
compliant with the CSE Rules.
Supporting in Regulatory Functions

The CSE has a self regulatory function and its dedicated Regulatory Policy and Compliance division ensures that applicable
laws, rules and regulations are complied with. CSE worked closely with the SEC in ensuring that the SEC Act was fit for purpose
in the development stage and is now rolling out a comprehensive plan to ensure that new provisions are integrated into its
structures, operational frameworks, systems and processes. The enactments of the SEC Act No.19 of 2021 necessitated the
review of all rules for stockbrokers, listed entities, trading and CDS which is ongoing at present.
The Regulatory Policy Team formulated regulatory policies to facilitate the introduction of a range of new products to the CSE
and to support enhanced business operations of the CSE/CDS upon obtaining the approval of the SEC in terms of the new SEC
Act. In formulating the same, the CSE ensured that the rules adequately facilitated the product concerned and benchmarked
such rules with the requirements of stock exchanges, central depositories and clearing houses in foreign jurisdictions, where
applicable. Further, all necessary approvals from the SEC and other regulators such as the CBSL were obtained in order to
ensure such rules are in compliance with all applicable laws, rules and regulations of Sri Lanka.
Collector of SEC Cess SEC Cess

The Securities and Exchange Mn
Commission earns a revenue through 8,000

the activities of the CSE. During the 7,000
year, Rs. 1,554 Mn was paid to the SEC 6,000
as fees/SEC cess. 5,000
4,000
3,000
2,000
1,000
0
2019 2020 2021

MEMBERS & TRADING MEMBERS
The CSE is a mutual exchange comprising of 15 members and 14 trading members out of which 25 entities are licensed
stockbrokers for equity and debt and the remaining 4 are licensed to trade in debt securities only. The Members and the Trading
Members play a multi-faced role in sustaining market activity and ensuring the continuity of operations. We maintain close
dialogue with the members and trading members and create value for them in many ways.
Member Profile
Members dealing
Members &
in Debt & Equity
Trading members
vs Only Debt
Trading members 14 Members 15 Debt & Equity 25 Debt 4
How we create value for Members
MoU with the

Pakistan Stock
Exchange
Providing a Carrying out

secure & reliable market
platform for promotion
trading activities
Trading Amendments to
commissions of Stockbroker
Rs. 14 Bn Rules
A Sound Setting the rules

Business and framework
Proposition for trading

A Sound Business Proposition Trading Commission to Trading
CSE was founded by its members to create a market place for trading of equities, Members
facilitating access to capital for companies and access to investment opportunities
for investors, which is the fundamental value proposition for members who are 16
licensed stock brokers. Trading members earn brokerage fee on trading of shares 14
conducted from their clients who are investors. They also strengthen the market 12
through advisory services, relationship management and research, broadening the 10
value proposition for investors. The trading commissions earned by our trading 8
members amounted to Rs. 14 Bn during 2021 compared to Rs. 5 Bn last year, 6
representing a growth in the value created to trading members. 4
2
0
2019 2020 2021
Providing a Secure and Reliable Platform for Trading

Over the years, the CSE has built a state-of-the-art platform through which members and other stakeholders are able to access
end to end digitalised trading solutions. Although there was a disruption during the initial COVID-19 wave, the CSE was able to
leverage its robust platform and facilitate remote functionality to continue operations uninterrupted thereafter. Our competent
and dedicated Information Technology division provided necessary support by ensuring that Stockbroker Firm's systems are
seamlessly integrated with the CDS and CSE systems.
Information Security
With the shift to digitalisation we are Implementation of Security Operating Center with Security Events and Incident
aware that the risks related to IT and Management
cyber security have increased. The CSE
continuously updates its systems and Compliance to ISO 27001 Information Security standards for the 9th year
enhances the IT security infrastructure
in place to ensure it is able to effectively Compliant with GDPR which is iinline with EU regulations
respond to IT security threats and
provide an uninterrupted service Conducting penetration testing
to stakeoholders. Some of the key
highlights in this regard include; Carrying out continuous audits and vulnerability testing by External Auditors
Commissioning of the state of art Data centre of the CSE

During the year, the CSE invested in upgrading the existing legacy data centre. We
have transitioned into a state of the art integrated server room which will bring in
significant energy efficiencies and cost reductions to the members.
Carrying Out Market Promotion Activities

CSE carries out market promotion activities to attract investors and issuers,
strengthening Sri Lanka’s capital markets and foreign inflows. Last year, CSE signed
a Memorandum of Understanding with the Pakistan Stock Exchange Limited (PSX)
in order to broaden the mutual understanding and create a strategic partnership
which promotes both exchanges. Several areas of cooperation such as maintaining
channels of communication, joint workshops for exchange of information,
experience & knowledge and developing a close relationship between the two
exchanges were covered under this.
CSE and the Pakistan Stock Exchange

Limited (PSX) jointly announced the signing of
a Memorandum of Understanding (MoU) to
formalize collaborative efforts. A special virtual bell
ringing ceremony was organised to commemorate
the collaboration between the two stock
exchanges.

Setting the Rules and Framework for Trading
CSE has developed a framework of rules in consultation with the regulator and
Stockbroker Firms that enable the orderly, transparent and efficient operation of
markets which ensure compliance with the regulatory framework. During the year, all
CSE and CDS rules including the rules for stockbrokers were reviewed and updated
to ensure that they are compliant and fit for purpose.
In 2021, amendments were made to the Stockbroker Rules were also amended to
facilitate DVP to facilitate Multi-currency and DvP.
The new SEC Act no.19 of 2021 will also require amendments to rules to ensure
compliance. CSE has commenced the process for updating the same which will be
circulated to members for comments prior to finalising.

FINANCIAL INTERMEDIARIES
Financial intermediaries play a keyrole in sustaining and developing the stock Financial Intermediaries
exchange as they manage relationships, advise and effect transactions with
investors and issuers. • Unit trusts
• Custodian banks
• Margin providers
• Investment banks
• Settlement banks
How We Create Value for Financial Intermediaries

Elimination of the
Harmonising of rules
dual review process
to the new SEC Act
for listing
An Active & Fair Efficient

Market Processes
E-IPO
E-dividends
Drawing
Fit for Purpose
Technology
An Active and Fair Market

As a recognised stock exchange, CSE maintains an active and fair market which benefits all stakeholders. Please refer page 57
for more details on market growth and fair markets.
Efficient Processes
The CSE has embarked on a journey of digital transformation and digitalisation through which internal processes of the
exchange are being transformed in order to ensure efficiency of the operations. During the year, the SEC delegated the authority
for the approval of IPO’s to the CSE and eliminated the dual review process which was in place. This rationalisation of the IPO
process made processes efficient, paving the way for the introduction of 13 equity IPO’s during the year.
Fit for Purpose Technology

We have invested in cutting edge technology and innovation in order drive the CSE to be agile and competitive while providing
an efficient and robust platform for the financial intermediaries to carry out their activities. The introduction of e-IPO and
e-dividend services has enabled a seamless transformation of operations from a manual process to a digital form.

Our leadership is exemplary
and vital during these adverse
times to guide us through the
storm to clearer waters.
FINANCIAL REPORTS
Annual Report of the Board of Directors on the Affairs of the Company 130
Directors’ Responsibility for Financial Reporting 134
Risk and Audit Committee Report 135
Independent Auditor’s Report 137
Statement of Profit or Loss and Other Comprehensive Income 139
Statement of Financial Position 140
Statement of Changes in Equity 141
Statement of Cash Flows 142
Notes to the Financial Statements 143
ANNUAL REPORT OF THE BOARD OF DIRECTORS
ON THE AFFAIRS OF THE COMPANY
The Board of Directors of the Colombo Directors are elected by the fifteen Review on pages 72 to 127 the Annual
Stock Exchange (CSE) has pleasure in Members, while the Government on Report 2021. These reports form an
presenting their Annual Report to the the recommendation of Securities integral part of the Annual Report.
Members, together with the audited Exchange Commission appoint four.
consolidated Financial Statements and FINANCIAL STATEMENTS
Auditors’ Report on those Financial The CSE Secretariat, headed by the The Financial Statement of the
Statements for the financial year ended Chief Executive Officer is responsible Company and its subsidiary have been
31st December 2021. for the operations of the CSE, and is prepared in accordance with Sri Lanka
accountable to the Board of Directors. Accounting Standards prefixed SLFRS
This Annual Report on the affairs of and LKAS, the Companies Act No. 07
the Company contains the information Vision, Mission and Corporate Conduct of 2007 and other applicable statutory
required in terms of the Companies Act The Vision and Mission statements are and regulatory requirements.
No. 07 of 2007. given on Page 4 of the Annual Report.
The business activities of the group are The Financial Statement of the
The Financial Statements were reviewed conducted in keeping with the highest Company and its Subsidiary for the
and approved by the Board of Directors level of ethical standards in achieving its year ended 31st December 2021, duly
on 02nd March 2022. Vision and Mission. signed by the Senior Vice President-
Finance and Administration and two of
GENERAL PRINCIPAL ACTIVITIES the Directors of the Company on pages
The Colombo Stock Exchange (CSE) The principal activity of the Company 139 to 181 form an integral part of the
is a company limited by guarantee, is the operation of a Stock Exchange Annual Report of the Board of Directors.
incorporated in Sri Lanka on 02 under license from the Securities and
December 1985, under the Companies Exchange Commission of Sri Lanka. DIRECTORS’ RESPONSIBILITY
Act No.17 of 1982 and is licensed The fully-owned subsidiary, Central FOR FINANCIAL REPORTING
by the Securities and Exchange Depository Systems (Pvt) Ltd. (CDS)
The Statement of Directors’
Commission of Sri Lanka (SEC). The acts as a depository for listed securities
Responsibility for the Financial
CSE was re-registered as per the and performs the corporate actions
Reporting given on page 134 forms an
Companies Act No.7 of 2007 on 13 services and registrar services in
integral part of the Annual Report of the
May 2008 with GL 12 as the new addition to Depository functions.
Board of Directors.
number assigned to the Company.
There were no significant changes in
AUDITOR’S REPORT
The CSE is a mutual exchange and the nature of principal activities of the
has fifteen Members and fourteen Company and its subsidiary during the Messrs. KPMG, the Auditors of the
Trading Members, of which twenty five financial year under review. Company carried out the audit on the
Members operate as Stockbrokers for Consolidated Financial Statements for
both Equity and Debt and four Members REVIEW OF OPERATION the year ended 31 December 2021 and
are appointed by the CSE as Trading their report on those statements which
A review of the activities of the CSE
Members only for Debt. All Members are forms an integral part of the Report of
during the year is contained in the
corporate entities. The CSE became the the Board of Directors, on page 137 of
Chairman’s Statement on pages 26 to
first South Asian member of the World this Annual Report.
28 and the Chief Executive Officer’s
Federation of Exchanges (WFE) in 1998. Review on pages 29 to 32 and the
CSE is also a member of the South SIGNIFICANT ACCOUNTING
Operational Review on pages 72 to 127
Asian Federation of Exchanges (SAFE) POLICIES
the Annual Report 2021. These reports
and Member of Association of National form an integral part of the Annual The significant accounting policies
Numbering Agencies (ANNA). The fully- Report. adopted in preparation of the Financial
owned subsidiary, Central Depository Statements are given on pages 143 to
Systems (Pvt) Ltd is a Member of Asia- 150.
FUTURE DEVELOPMENTS
Pacific Central Securities Depository
Group (ACG). An overview of the future development
of the CSE is given in the Chairman’s
The policy making body of the Statement on pages 26 to 28 and the
CSE is the Board of Directors Chief Executive Officer’s Review on
composed of nine members. Five pages 29 to 32 and the Operational
130 Financial Reports • Annual Report 2021 • Colombo Stock Exchange

GOING CONCERN RESERVES
The Board is satisfied that the Company A summary of the consolidated reserves is given below.
has adequate resources to continue As at 31st December 2021 2020
its operations in the foreseeable future. Rs. 000 Rs. 000
Therefore, we continue to adopt the
“going-concern” basis in preparing Accumulated Fund 4,920,356 3,248,052
these Financial Statements. Other Reserve 166 166
Capital Reserve 99,975 99,975
INCOME Total 5,020,497 3,348,193
The income of the Group for 2021
was Rs. 2,697 Mn (2020: Rs. 1,041 CAPITAL EXPENDITURE AND CAPITAL COMMITMENTS
Mn) while the Company’s income was
The total capital expenditure on acquisition of property and equipment and
Rs. 2,104 Mn (2020: Rs. 831 Mn). An
intangible assets of the Group amounted to Rs. 621 Mn (2020: Rs. 200 Mn). Details
analysis of the income is given in Note
of property and equipment are given in Note 10 and 11 to the Financial Statements.
04 & 05 to the Financial Statements.
The capital expenditure approved and contracted for and not contracted for as at
31st December 2021 is given in Note 30 to the Financial Statements.
FINANCIAL RESULTS AND
APPROPRIATIONS
PROPERTY AND EQUIPMENT
The Group has recorded a Profit before
Details of property and equipment are given in Note 10 to the financial statements.
tax of Rs. 1,882 Mn (2020: Profit before
tax Rs. 458 Mn) and Profit after tax
of Rs. 1,642 Mn (2020: Rs. 417 Mn)
DONATIONS
for the year 2021. The Company has During the year Company made donations amounting to Rs. 5 Mn. (Rs. Nil in 2020).
recorded a Profit before tax of Rs. 1,402
Mn (2020: Profit before tax Rs. 318 STATUTORY PAYMENTS
Mn) and Profit after tax of Rs. 1,272 Mn The Directors, to the best of their knowledge and belief, are satisfied that all
(2020: Profit after tax Rs. 318 Mn) for statutory payments in relation to the Government and the employees have been
the year 2021. made up to date.
The Group’s total other comprehensive OUTSTANDING LITIGATION

income for the year 2021 was Rs. 30
In the opinion of the Directors and the Company’s Lawyers, pending litigation
Mn (total other comprehensive Expense
against the Company disclosed in Note 29 of the Financial Statements will not have
of Rs. 25 Mn in 2020) while the
a material impact on the financial position of the Company or its future operations.
Company has recorded a total other
comprehensive income of Rs. 26 Mn
EVENTS AFTER THE REPORTING DATE
for the year 2021 (total other
comprehensive expense of Rs. 25 Mn Events after the Reporting Date has been disclosed in Note 33 of the Financial
in 2020). Statements.
TAXATION BOARD OF DIRECTORS

The income tax rate applicable on the The following Directors held office as at the Statement of Financial Position date:
Company and the subsidiary company Name of the Directors
was 24% (2020-28%). Mr. Dumith Fernando (Chairman)
Mr. Ray Abeywardena
DIVIDEND Mr. Dilshan Wirasekara
Mr. Dimuthu Abeyesekera
The Board of Directors of the CSE
Mr. Arjuna Herath
has not recommended a Dividend in
Mr. Jayantha Fernando
compliance with the Companies Act No.
Mr. Suren De Silva
07 of 2007 and Articles of Association
Mr. Asanga C. Seneviratne (Appointed to the Board on 23rd September 2021)
of the CSE.
Colombo Stock Exchange • Annual Report 2021 • Financial Reports 131

Annual Report of the Board of Directors on the Affairs of
the Company
Mr. Dumith Fernando and Mr. Ray RELATED PARTY There is an ongoing process for
Abeywardena retire by rotation at TRANSACTIONS identifying, recording, evaluating and
the conclusion of the Annual General managing the risks that are faced
The Directors have also disclosed
Meeting in terms of Article 50 of the by the Company, and the Directors
transactions if any, that could be
Articles of Association, and being have reviewed this process, through
classified as related party transactions
eligible and offering himself for re- the Board Audit and Risk Committee
in terms of LKAS 24 “Related Party
election. including internal reviews, internal audits
Disclosures” which is adopted in the
and system audits.
preparation of the financial statements.
The details of the Directors’ meetings
Those transactions disclosed by the
which comprise Board meetings, CORPORATE GOVERNANCE
Directors are given in Note 32 to the
Special Board Meetings, Risk & Audit The Directors and Management of
financial statements forming part of the
Committee Meetings, HR Committee the CSE have placed emphasis on
Annual Report of the Board of Directors.
Meetings, Nominations Committee conforming to the best corporate
meetings, Arbitration & Disciplinary governance practices and procedures.
DIRECTORS’ REMUNERATION
Committee Meetings, Dispute A separate report on Corporate
Resolution Committee Meetings, In compliance with the provisions of the
Governance is given on pages 61 to 70
Member Evaluation Committee Articles of Association, the CSE has
in the Annual Report.
Meetings, Marketing Committee not made any payments on account
Meetings, Consultative Committee of Directors’ remuneration other than
payment pertaining to meet out of AUDITORS
Meetings and Rules Committee
Meetings and the attendance of pocket expenses for attending Board The Company’s Auditor’s during the
Directors at these meetings are given on Meeting as given in Note 32 to the period under review was Messrs KPMG,
page 62 of the Annual Report. financial statements. Chartered Accountants. Audit Fees
and reimbursement of expenses paid
ENVIRONMENTAL PROTECTION to KPMG during the year under review
BOARD SUB COMMITTEE
by the Company and its subsidiary
The composition of the Board sub To the best of knowledge of the Board,
amounted to Rs. 1,331,602
committees, comprising of the Company has complied with
(Rs. 1,079,000 in 2020). Further
Non-Executive Directors is provided on the relevant environmental laws and
Rs. 497,799 (Rs. 794,949 in 2020) was
page 66. regulations. The Company has not
paid on account of tax related services.
engaged in any activity that is harmful or
The detail of their remuneration is given
The report of the Board Risk and Audit hazardous to the environment.
in Note 7 to the Financial Statements.
Committee is given on pages 135 to
136. RISK MANAGEMENT AND
As far as the Directors are aware the
INTERNAL CONTROL
Auditors do not have any interest with
DIRECTORS’ INTEREST Risk Management the CSE or its subsidiary other than
REGISTER The Company has an ongoing process those disclosed above.
The CSE maintains a Directors’ in place to identify, evaluate and
Interests Register in compliance with manage the risks that are faced by the The Auditors have expressed their
the provision of the Companies Act No. Company. A separate report on risk willingness to continue in office. A
7 of 2007. The Directors of the CSE management is given on pages 50 resolution to re appoint the Auditors and
have disclosed their interests in other to 54. authorise the Directors to determine
companies to the Board and those their remuneration will be proposed at
interests are recorded in the Interests Internal Control the Annual General Meeting.
Register conforming to the provisions of The strong internal controls are integral
the Companies Act No.7 of 2007. The to the sound management of the NOTICE OF MEETING
particulars of those entries are set out Company, hence the Board committed The 37th Annual General Meeting of
on Note 32 to the Financial Statements to maintain strict financial, operational the CSE will be held on 23rd June 2022
and form an integral part of the Annual and risk management controls over at 4.30 p.m. at the Colombo Stock
Report of the Board of Directors. all its activities including safeguard the Exchange, Auditorium, 4-1, West Block,
assets of the Company and prevent and World Trade Center, Colombo 01.
detect frauds.

ACKNOWLEDGEMENT OF THE CONTENTS OF THE REPORT
As required by Section 168 (1) (k) of the Companies Act No. 07 of 2007, the Board
of Directors hereby acknowledges the contents of this Annual Report.
For and on behalf of the Board of Directors.
Dumith Fernando Arjuna Herath

Chairman Director
Corporate Services (Private) Limited

Secretaries
21st March 2022

Colombo

DIRECTORS’ RESPONSIBILITY FOR
FINANCIAL REPORTING
The responsibility of the Directors, in The Directors confirm that the Consolidated Financial Statements of the CSE and its
relation to the Financial Statements, is Subsidiary CDS for the year ended 31st December 2021 presented in this Annual
set out in the following statement. The Report have been prepared in accordance with the Sri Lanka Accounting Standards
responsibility of the Auditors, in relation prefixed SLFRS and LKAS ,Companies Act No: 7 of 2007 and Sri Lanka Accounting
to Financial Statements, is set out in the and Auditing Standards Act No: 15 of 1995.
Report of the Auditors’ on the Annual
Report. The Directors have adopted the going concern basis in preparing the Financial
Statements. The Directors are of the view that the CSE and CDS have adequate
As per the provisions of the Companies resources to continue in operation.
Act No. 7 of 2007 the Directors
are required to prepare Financial The Directors have taken reasonable steps to safeguard the assets of the CSE
Statements for each financial year and and its subsidiary CDS and in this regard to give proper consideration to the
place them before a General Meeting. establishment of appropriate internal control systems with a view of preventing and
The Financial Statements comprise detecting fraud and other irregularities. Further, the Directors have a responsibility to
the Statement of Financial Position ensure that the Company maintains sufficient accounting records to disclose, with
as at 31st December 2021, and the reasonable accuracy.
Statement of Comprehensive Income,
Statement of Changes in Equity and Directors are required to prepare the Financial Statements and to provide the
Cash Flows for the year then ended and Company’s External Auditors, Messrs KPMG, with every opportunity to carry out any
Notes thereto. reviews and tests that were considered appropriate and necessary for expressing
their independent audit opinion on the Financial Statements.
The Financial Statements of the
Company and its Subsidiary give a true The Financial Statements of the Company and its Subsidiary have been certified
and fair view of: by the Company’s Senior Vice President-Finance and Administration, the officer
the state of affairs of the Company and responsible for their preparation, as required by the Sections 150 (1) (b) and 152
its Subsidiary as at the Statement of (1) (b) of the Companies Act. Also the Financial Statements of the Company and its
Financial Position date and the Profit or Subsidiary have been signed by two Directors on 02nd March 2022 as required by
Loss of the Company and its Subsidiary Sections 150 (1) (c) and 152 (1) (c) of the Companies Act No.7 of 2007.
for the financial year ended on the
Statement of Financial Position date. The Directors to the best of their knowledge and belief, are satisfied that all statutory
payments in relation to all relevant regulatory and statutory authorities which were
The Directors have ensured that, in due and payable by the CSE and its subsidiary CDS as at the Statement of Financial
preparing these Financial Statements: Position date have been paid or where relevant provided for.
1. The appropriate accounting policies
have been selected and applied The Directors are of the view that they have discharged their responsibilities as set
in a consistent manner. Material out in this statement.
departures, if any have been
disclosed and explained; By order of the Board
2. All applicable accounting standards
as relevant have been followed;
3. Judgments and estimates have
been made which are reasonable
Secretaries
and prudent.
21st March 2022

Colombo

RISK AND AUDIT COMMITTEE REPORT
COMPOSITION OF THE • To review significant accounting and reporting issues, including complex or
COMMITTEE unusual transactions, recent professional and regulatory pronouncements, and
understand their impact on financial statements of the Company.
The Risk and Audit Committee of
the Colombo Stock Exchange (CSE) • To review the effectiveness of the Company’s internal control systems.
comprises of 2 appointed Directors and • To monitor and review the effectiveness of the Company’s internal audit function,
1 elected Director. in the context of the overall financial control and risk management system of the
Company.
The members of the Risk and Audit • To assess independence and objectivity of the external auditor.
Committee appointed by the Board are;
• To make recommendations to the Board of Directors on the appointment,
reappointment and removal of the CSE’s external auditor.
Mr. Arjuna Herath-Chairman
Mr. Suren De Silva
Mr. Dilshan Wirasekara MEETINGS OF THE COMMITTEE
During the year, three (3) Risk and Audit Committee meetings were held to discuss
All 3 members of the Risk and Audit relevant matters including, but not limited to, Enterprise Risk Management, Budgets,
Committee are Non-Executive Directors. and Investments, reports of the Internal and External Auditors and Annual/Quarterly
accounts. The Company Secretary functions as the Secretary to the Risk and Audit
The Chief Executive Officer, Senior Vice Committee. Minutes of each committee meeting were recorded and submitted for
President- Finance & Administration, confirmation at the immediate subsequent committee meeting and subsequently
Vice President -Internal Audit, Vice presented to the Board for ratification.
President -Enterprise Risk Management
& Post Trade Settlement, other relevant RISK MANAGEMENT
Senior Management members and The Committee is tasked with the monitoring the effectiveness and implementation
External Auditors & Internal Auditors of the Enterprise Risk Management (ERM) Policy and Framework in the CSE which
attend the meetings of the Risk and ensure potential risks are identified, measured, monitored and managed or mitigated
Audit Committee on invitation. within the defined risk tolerance levels approved by the Board.
RESPONSIBILITIES AND DUTIES The Committee reviewed the Annual update to the ERM Framework and ERM
OF THE COMMITTEE Policy. The Committee recommended to evolve existing risks inventory and Risk
The responsibilities and duties of the Assessment Methodology, with emerging risks and changes required to Risk
Committee were based on the Terms Assessment Methodology in line with the current business context. The committee
of Reference (TOR) adopted by the also highlighted the importance of maintaining an incident report capturing all the
Company in terms of best practices. near misses of risk materialising requiring all the divisions in CSE to update on a
The TOR as approved by the Board regular basis any near misses which could lead to process/control failures or risks
of Directors, include the following materializing which will assist in managing risks proactively and further strengthening
functions: risk mitigating action plans. The unexpected and undesirable events/scenarios not
• To ensure that adequate and efficient consistent with the policies, process and regulatory framework of the CSE are also
processes are in place to identify, covered in this report.
report and monitor risks.
Considering the prevalent of the pandemic throughout the year, the committee
• To benchmark risk management
also specifically looked at business continuity risk and cyber security risk due to
exposure of the CSE against other
remote working and working from home arrangements which involved review,
exchanges
discussions and recommending action plans to mitigate these risks. The Committee
• To advise the Board on the risk recommended to capture and monitor “Third Party Risk” as the CSE has a high
profile and appetite of the Company dependency on the development and operation of its sophisticated technology
and as part of this process, to platform and advanced information systems and third-party services and
oversee the risk assurance within the outsourcing service providers in relation to these.
CSE.
• To act on behalf of the Board of The Risk and Audit committee involved in review, discussion and preparation of
Directors to ensure that appropriate action plans to mitigate the overall risks of the organisation during the annual and
mechanisms are in place with quarterly risk reviews.
respect to risk identification, risk
assessment, risk assurance and
overall risk management.

Risk and Audit Committee Report
INTEGRITY OF FINANCIAL INTERNAL AUDIT

STATEMENTS The Internal Audit Charter governing the Mission, Purpose, Responsibilities, Scope
The Committee reviewed the and Accountability of the Internal Audit Division was presented to the Risk and Audit
appropriateness of the accounting Committee Meeting in November 2020. Subsequent to its review it was decided
policies used and the financial to further review the charter subsequent to the Internal Audit Quality Assurance
statements of the group to assess Program initiated with an independent 3rd party professional organisation.
their integrity and compliance with
Accounting Standards. The Committee The Purpose of the Internal Audit Division as highlighted in the Internal Audit Charter
reviewed and discussed with the is as follows:
management, the quarterly financial
statements and recommended the • Overall Risk Management Process
same for approval of the Board. • Strengthen the Internal Controls in all areas
• Ensure Compliance with Policies, Procedures and Regulations
INTERNAL CONTROLS
• Recommend opportunities for Process Improvement and enhancing Efficiency
The Committee reviewed the
• Enhancing System Controls
effectiveness of the Group’s internal
control systems and recommended,
In-line with the above requirements, an internal audit plan was developed
where necessary, appropriate remedial
and executed with the approval of the Risk and Audit Committee. Improved
measures.
Policies, Procedures and Controls arising from the audits were recommended for
implementation. The findings of the internal auditor together with management
EXTERNAL AUDIT
comments and agreed action plans were reviewed by the Committee during the
The independence of the External year and approved for implementation.
Auditor was evaluated by the
Committee and the Committee also Internal Audit Division complies with Internal Audit Standards in carrying out all its’
reviewed the non-audit services operations. Quality Assurance and Improvement program is also implemented at
provided by the Auditors to ensure CSE’s Internal Audit Division where all work done by Internal Audit staff are reviewed
that the provision of such services regularly to ensure adherence to globally accepted Internal Audit Standards.
does not impair the External Auditors’
independence. The Committee met On behalf of the Risk and Audit Committee;
with the External Auditor during the
year to discuss their audit approach
and procedures, including matters
relating to the scope of the audit and Arjuna Herath
Auditor’s independence. The Risk Chairman - Risk and Audit Committee
and Audit Committee reviewed the
Consolidated Financial Statements Colombo
audited by the External Auditor for the 21st March 2022
financial year ended 31st December
2021 and recommended the Financial
Statements for submission to the
Board. The Committee also reviewed
and recommended to the Board of
Directors the Letter of Representation to
be given to the External Auditors for the
year 2021.
The Risk and Audit Committee

recommended for approval at the
Annual General Meeting, the re-
appointment of the External Auditor
and for the Board of Directors to fix the
Auditors’ remuneration.

INDEPENDENT AUDITOR’S REPORT
TO THE SHAREHOLDERS OF COLOMBO STOCK EXCHANGE

Report on the Audit of the Financial Statements
Opinion
We have audited the accompanying financial statements of Colombo Stock Exchange, (“the Company”), and the consolidated
financial statements of the Company and its Subsidiaries (“the Group”), which comprise the statement of financial position as at
31 December 2021, and the statements of profit or loss and other comprehensive income, changes in equity and cash flows for
the year then ended, and a summary of significant accounting policies and other explanatory information.
In our opinion, the consolidated financial statements give a true and fair view of the financial position of the Group as at
31 December 2021, and of its financial performance and cash flows for the year then ended in accordance with Sri Lanka
Accounting Standards.
Basis for Opinion

We conducted our audit in accordance with Sri Lanka Auditing Standards (SLAuSs). Our responsibilities under those standards
are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are
independent of the Group in accordance with the Code of Ethics issued by CA Sri Lanka (Code of Ethics), and we have fulfilled
our other ethical responsibilities in accordance with the Code of Ethics. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Other Information
Management is responsible for the other information. These financial statements do not include the other information.
Responsibilities of Management and Those Charged with Governance for the Financial Statements
Management is responsible for the preparation of financial statements that give a true and fair view in accordance with Sri Lanka
Accounting Standards, and for such internal control as management determines is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless
management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s and the Group’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SLAuSs will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or
in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these
financial statements.
As part of an audit in accordance with SLAuSs, we exercise professional judgment and maintain professional skepticism
throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and
perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide
a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the
Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate,
to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the
financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
Report on Other Legal and Regulatory Requirements

As required by section 163 (2) of the Companies Act No. 07 of 2007, we have obtained all the information and explanations
that were required for the audit and, as far as appears from our examination, proper accounting records have been kept by the
Company.
CHARTERED ACCOUNTANTS
Colombo, Sri Lanka
09 March 2022

STATEMENT OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME
Group Company
For the Year Ended 31 December, 2021 2020 2021 2020
Note Rs. Rs. Rs. Rs.
Revenue 4 2,567,177,092 964,510,388 1,953,324,968 728,818,757

Other Income 5 129,989,160 76,930,710 151,114,212 102,231,225
2,697,166,252 1,041,441,098 2,104,439,180 831,049,982
Staff Cost 6 (511,385,637) (389,424,128) (447,702,900) (342,578,444)
Depreciation & Amortization (198,600,520) (158,009,759) (198,600,520) (157,937,098)
Other Operating Expenses 7 (367,797,461) (313,471,711) (270,493,154) (231,501,703)
Impairment Charges and Other Credit Losses on (2,294,677) (1,903,182) (460,715) (1,959,373)
Financial Assets
Net Finance Income 8 264,522,913 279,378,134 214,462,662 221,357,403
Profit before Taxation 1,881,610,870 458,010,452 1,401,644,553 318,430,767
Income Tax Expense 9 (239,827,816) (40,771,620) (129,421,508) -
Profit for the year 1,641,783,054 417,238,832 1,272,223,045 318,430,767
Other Comprehensive Income

Items that will never be reclassified to Profit or Loss
Actuarial Gain/(Loss) on defined benefit plans 25 30,520,471 (24,908,241) 26,531,312 (24,908,241)
Total Other Comprehensive Income/(Expense), Net of Tax 30,520,471 (24,908,241) 26,531,312 (24,908,241)
Total Comprehensive Income/(Expense) for the Year 1,672,303,525 392,330,591 1,298,754,357 293,522,526
The accounting policies and notes annexed form an integral part of these Financial Statements.
Figures in brackets indicate deductions.

STATEMENT OF FINANCIAL POSITION
Group Company
As at 31 December, 2021 2020 2021 2020
ASSETS
Non Current Assets
Property and Equipment 10 496,732,335 327,485,615 496,732,291 327,485,571
Intangible Assets 11 387,042,821 133,971,103 387,042,821 133,971,102
Capital Work in Progress 12 35,055,373 125,136,332 35,055,373 125,136,332
Investments in Subsidiary 13 - - 25,000 25,000
Financial Investments at Amortised Cost 14 383,680,982 383,221,774 383,680,982 383,221,774
Other Investments 15 200,319,846 200,333,651 200,319,846 200,333,651
Investment in LFSB 16 1,165,965 1,165,965 - -
Settlement Guarantee Fund 17 100,000,000 100,000,000 100,000,000 100,000,000
Total Non Current Assets 1,603,997,322 1,271,314,440 1,602,856,313 1,270,173,430
Current Assets
Inventories 2,712,468 2,324,944 2,552,294 2,157,737
Trade and Other Receivables 19 339,489,036 318,128,966 239,387,710 262,186,167
Tax Assets - 35,074,691 - 35,074,691
Financial Assets at FVTPL 20 151,359,242 1,081,243,254 101,063,363 460,493,995
Financial Investments at Amortised Cost 14 - 377,380,132 - 377,380,132
Other Investments 15 3,527,999,894 424,865,714 2,656,743,046 424,865,714
Cash and Cash Equivalents 21 1,562,132,724 631,823,007 303,238,847 488,678,057
Total Current Assets 5,583,693,364 2,870,840,708 3,302,985,260 2,050,836,493
Total Assets 7,187,690,686 4,142,155,147 4,905,841,573 3,321,009,923
EQUITY AND LIABILITIES

Accumulated Fund 4,920,355,640 3,248,052,115 3,913,510,671 2,614,756,314
Other Reserves 22 100,140,965 100,140,965 - -
Total Equity 5,020,496,605 3,348,193,080 3,913,510,671 2,614,756,314
Non Current Liabilities

Brokers’ Deposits in lieu of Bank Guarantee 23 939,970 939,970 939,970 939,970
Deferred grants 24 21,660,882 - 21,660,882 -
Employee Benefits 25 91,948,992 106,392,758 91,948,992 106,392,758
Lease Liabilities on Right-to-use of Asset 26 180,805,376 6,866,741 180,805,376 6,866,741
Deferred Tax Liabilities 18 20,262,039 - 20,262,039 -
Total Non Current Liabilities 315,617,259 114,199,469 315,617,259 114,199,469
Current Liabilities
Brokers’ Deposits in lieu of Bank Guarantee 23 1,202,221,434 379,233,736 24,036,426 291,733,154
Other Payables 27 392,726,981 190,786,222 375,007,523 186,839,863
Amounts due to Related Company 28 - - 106,234,683 31,909,028
Tax Liability ` 159,278,174 28,170,545 74,084,778 -
Lease Liabilities on Right-to-use of Asset 26 97,350,233 81,572,095 97,350,233 81,572,095
Total Current Liabilities 1,851,576,822 679,762,598 676,713,643 592,054,140
Total Equity and Liabilities 7,187,690,686 4,142,155,147 4,905,841,573 3,321,009,923
These Financial Statements have been prepared and presented in compliance with the requirements of the Companies Act No.07 of 2007.
Kusal Nissanka
Senior Vice President- Finance & Administration
The Board of Directors is responsible for the preparation and presentation of these Financial Statements.
Approved and signed on behalf of the Board;
Dumith Fernando Arjuna Herath

Chairman Director
02 March 2022
Colombo.
STATEMENT OF CHANGES IN EQUITY
GROUP Accumulated Other Capital Total
Fund Reserves Reserve Equity
Rs. Rs. Rs. Rs.
Balance as at 01 January 2020 2,855,721,524 165,965 99,975,000 2,955,862,489
Total Comprehensive Income

Profit for the Year 417,238,832 - - 417,238,832

Actuarial Loss on Employee Benefits (24,908,241) - - (24,908,241)
Total Other Comprehensive Expense for the Year (24,908,241) 165,965 - (24,908,241)
Total Comprehensive Income/(Expense) for the Year 392,330,591 165,965 - 392,330,591
Balance as at 31 December 2020 3,248,052,115 165,965 99,975,000 3,348,193,080
Balance as at 01 January 2021 3,248,052,115 165,965 99,975,000 3,348,193,080

Profit for the Year 1,641,783,054 - - 1,641,783,054

Actuarial Gain on Employee Benefits 30,520,471 - - 30,520,471
Total Other Comprehensive Income for the Year 30,520,471 - - 30,520,471
Total Comprehensive Income for the Year 1,672,303,525 - - 1,672,303,525
Balance as at 31 December 2021 4,920,355,640 165,965 99,975,000 5,020,496,605
COMPANY Accumulated Other Total Equity

Fund Reserves
Rs. Rs. Rs.
Balance as at 01 January 2020 2,321,233,788 - 2,321,233,788

Profit for the Year 318,430,767 - 318,430,767

Actuarial Loss on Employee Benefits (24,908,241) - (24,908,241)
Total Other Comprehensive Expense for the Year (24,908,241) - (24,908,241)

Total Comprehensive Expense for the Year 293,522,526 - 293,522,526
Balance as at 31 December 2020 2,614,756,314 - 2,614,756,313
Balance as at 01 January 2021 2,614,756,314 - 2,614,756,314

Profit for the Year 1,272,223,045 - 1,272,223,045

Actuarial Gain on Employee Benefits 26,531,312 - 26,531,312
Total Other Comprehensive Income for the Year 26,531,312 - 26,531,312
Total Comprehensive Income for the Year 1,298,754,357 - 1,298,754,357
Balance as at 31 December 2021 3,913,510,671 - 3,913,510,671

STATEMENT OF CASH FLOWS
Group Company
Cash Flows from Operating Activities

Profit/before Taxation 1,881,610,870 458,010,452 1,401,644,553 318,430,767
Adjustments For:
Depreciation/Amortisation 10/11 198,600,520 158,009,759 198,600,520 157,937,098
Interest Income 08 (212,529,225) (178,509,796) (191,085,700) (177,716,093)
Interest on Lease Liabilities on Right-to-use of Asset 26 9,953,203 11,457,574 9,953,203 11,457,574
Fair Value Gain on Financial Assets Measured at FVTPL 08 (58,925,203) (108,250,556) (29,024,409) (49,539,018)
Profit/on Sale of Property & Equipment 05 (20,002) (79,200) (20,002) (79,200)
Gratuity Provision 25 18,880,772 18,309,521 16,388,440 12,292,745
Gratuity Provision - Transfer to/(Reversal from) Subsidiary 25 - - (1,496,827) 6,016,779
Provision/for Impairment of Trade receivables 2,990,892 1,998,322 1,157,281 2,054,513
Impairment Charges on Financial Assets (696,215) (95,141) (696,566) (95,141)
Operating Profit/ before Working Capital Changes 1,839,865,612 360,850,935 1,405,420,493 280,760,024
Decrease/(Increase) in Inventories (387,523) 521,577 (394,556) 526,915

Decrease/(Increase) in Trade and Other Receivables (22,009,449) (64,462,016) 21,627,420 (32,233,942)
Increase /(Decrease) in Other Payables 223,601,641 103,034,088 209,828,542 102,874,284
Increase/(Decrease) in Amounts due to Related Company - - 74,325,655 (54,272,730)
Increase/(Decrease) in Brokers’ Deposit 822,987,698 288,495,616 (267,696,728) 213,786,426
Cash Generated from Operating Activities 2,864,057,979 688,440,200 1,443,110,826 511,440,977
Income Tax, ESC,WHT and Dividend Tax Paid (53,383,454) (9,767,788) - (686,652)
Gratuity Paid 25 (2,804,067) (11,197,173) (2,804,067) (11,197,173)
Net Cash Generated from Operating Activities 2,807,870,458 667,475,239 1,440,306,759 499,557,152
Cash Flows from Investing Activities

Interest Income 08 227,456,717 192,965,157 220,594,400 192,184,239
Purchase of Property & Equipment and Intangible Assets 10 (326,167,972) (190,348,114) (326,167,972) (190,348,114)
Proceeds from Sale of Property & Equipment 125,444 105,453 125,444 105,453
Decrease/(Increase) in Fixed Deposit (1,450,000,000) 125,000,000 (1,250,000,000) 125,000,000
Decrease in Corporate Debenture Investments 350,000,000 - 350,000,000 -
Decrease/(Increase) in Investments in Unit Trusts 988,809,215 (130,977,575) 388,455,041 (80,000,000)
Increase in treasury Bill investment (1,642,772,246) - (983,740,982) -
Capital Work in Progress 12 90,080,959 (44,102,454) 90,080,959 (44,102,454)
Net Cash Generated from/(Used in) Investing Activities (1,762,467,883) (47,357,533) (1,510,653,110) 2,839,124
Cash Flows from Financing Activities

Lease Payments on Right-to-use of Asset 26 (115,092,858) (107,952,674) (115,092,858) (107,952,674)
(115,092,858) (107,952,674) (115,092,858) (107,952,674)
Net Increase/(Decrease) in Cash and Cash Equivalents 930,309,717 512,165,032 (185,439,210) 394,443,602
Cash and Cash Equivalents at beginning of the Year 631,823,007 119,657,975 488,678,057 94,234,455
Net Cash and Cash Equivalents at End of the Year 21 1,562,132,724 631,823,007 303,238,847 488,678,057
Analysis of Cash and Cash Equivalents at End of the year

Cash in Hand 325,050 325,050 250,050 250,050
Cash at Bank 44,338,743 26,955,775 41,642,797 25,906,007
RTGS Account 17,600 17,600 - -
Short Term investment in Overnight Repos 1,517,451,331 604,524,582 261,346,000 462,522,000
Cash & Cash Equivalents 1,562,132,724 631,823,007 303,238,847 488,678,057
Net Cash & Cash Equivalents at End of the Year 21 1,562,132,724 631,823,007 303,238,847 488,678,057

NOTES TO THE FINANCIAL STATEMENTS
1. REPORTING ENTITY 2.2. Basis of Measurement 3. SIGNIFICANT

1.1. Domicile and Legal Form The Financial Statements of the Group ACCOUNTING POLICIES
Colombo Stock Exchange is a have been prepared on the historical The accounting policies set out below
Company Limited by Guarantee cost basis except for the following have been applied consistently to all
incorporated & domiciled in Sri Lanka. material items in the statement of periods presented in these consolidated
The registered office of the Company financial position: financial statements, and have been
is located at 4 - 01, West Block, World applied consistently by Group entities.
Trade Center, Echelon Square, Colombo • Financial assets at Fair Value through
01, and the principal place of business Profit or Loss (FVTPL) are measured
3.1 Basis of Consolidation
is also situated at the same place. at fair value;
The Financial Statements of the
• Financial assets at Fair Value through Company and Group comprise the
The Consolidated Financial Statements Other Comprehensive Income Financial Statements of the Company
of the Company as at and for the year (FVTOCI) are measured at fair value; and its Subsidiary for the year ended
ended 31 December 2021 comprise and 31 December 2021. The Financial
the Company and Central Depository • Liabilities for defined benefit Statements of the Company’s
Systems (Private) Limited which was obligations are measured at its Subsidiary for the purpose of
incorporated on 02 September 1991 as present value. consolidation is prepared for the same
a wholly owned subsidiary of Colombo reporting year as that of Colombo Stock
• Right to use of Assets & Lease
Stock Exchange. Exchange, using consistent accounting
Liability on Right to use of Assets are
measured at present value of future policies.
1.2. Principal Activities and cash flows
Nature of Operations 3.1.1 Business Combinations
The principal activity of the Company 2.3 Functional and Presentation Business combinations are accounted
is the operation of a Stock Exchange. for using the acquisition method as
Currency
The subsidiary operates a clearing at the acquisition date - i.e. when
The Financial Statements are presented
and settlement of securities system for control is transferred to the Group.
in Sri Lanka Rupees, which is the
equities and debt instruments traded in The consideration transferred in the
Group’s functional currency. Financial
the Colombo Stock Exchange and acts acquisition is generally measured at fair
information presented in Sri Lanka
as a depository for such securities. value, as are the identifiable net assets
Rupees has been rounded to the
nearest rupee. acquired. Any goodwill that arises is
tested annually for impairment. Any gain
2. BASIS OF PREPARATION 2.4 Significant Accounting on a bargain purchase is recognised in
2.1. Statement of Compliance profit or loss immediately. Transaction
Judgments, Estimates and
The Consolidated Financial Statements costs are expensed as incurred, except
Assumptions
which comprise the Statement of if they are related to the issue of debt or
The preparation of Financial Statements
Financial Position, Statement of Profit equity securities.
requires management to make
or Loss and Other Comprehensive judgments, estimates and assumptions
Income, Statement of Changes in that affect the application of accounting The consideration transferred does
Equity, Statement of Cash Flows and policies and the reported amounts not include amounts related to the
Notes to the Financial Statements of Assets, Liabilities, Income and settlement of pre-existing relationships.
thereto have been prepared in Expenses. Actual results may differ from Such amounts are generally recognised
accordance with the Sri Lanka these estimates. in profit or loss.
Accounting Standards (SLFRSs and
LKASs) laid down by the Institute of Estimates and underlying assumptions Any contingent consideration payable is
Chartered Accountants of Sri Lanka are reviewed on an ongoing basis. measured at fair value at the acquisition
and comply with the requirements of Revisions to accounting estimates are date. If the contingent consideration
Companies Act No. 07 of 2007. recognised in the period in which the is classified as equity, then it is
estimate is revised and in any future not remeasured, and settlement is
The Financial Statements of Colombo periods affected. accounted for within equity. Otherwise,
Stock Exchange for the year ended 31 subsequent changes in the fair value
December 2021 were authorized for of the contingent consideration are
issue in accordance with a resolution recognised in profit or loss.
of the Board of Directors on 02 March
2022.
Notes to the Financial Statements
3.1.2 Non-Controlling Interests 3.2 Foreign Currency which case all affected financial assets
NCI are measured at their proportionate Transactions are reclassified on the first day of the
share of the acquiree’s identifiable net Transactions in foreign currencies are first reporting period following the
assets at the acquisition date. Changes translated to Sri Lankan Rupees at the change in the business model.
in the Group’s interest in a subsidiary foreign exchnge rate ruling at the date
that do not result in a loss of control are of the transaction. Monetary assets A financial asset is measured at
accounted for as equity transactions. and liabilities denominated in foreign amortised cost if it meets both of
currencies at the Reporting Date are the following conditions and is not
3.1.3 Subsidiaries translated to Sri Lankan Rupees at the designated as at FVTPL:
‘Subsidiaries’ are investees controlled foreign exchange rates ruling at that • it is held within a business model
by the Group. The Group ‘controls’ an date. Foreign exchange differences whose objective is to hold assets to
investee if it is exposed to, or has rights arising on translation are recognised in collect contractual cash flows; and
to, variable returns from its involvement the profit or loss.
• its contractual terms give rise on
with the investee and has the ability
specified dates to cash flows that
to affect those returns through its 3.3 Financial Instruments
are solely payments of principal and
power over the investee. The financial 3.3.1 Recognition and initial
interest on the principal amount
statements of subsidiaries are included measurement
outstanding.
in the consolidated financial statements Trade receivables and debt securities
from the date on which control issued are initially recognised when
A debt investment is measured at
commences until the date when control they are originated. All other financial
FVOCI if it meets both of the following
ceases. assets and financial liabilities are initially
conditions and is not designated as at
recognised when the Group becomes a
FVTPL:
3.1.4 Loss of control party to the contractual provisions of the
When the Group loses control over a instrument. • it is held within a business model
subsidiary, it derecognises the assets whose objective is achieved by both
and liabilities of the subsidiary, and any A financial asset (unless it is a trade collecting contractual cash flows and
related NCI and other components receivable without a significant financing selling financial assets; and
of equity. Any resulting gain or loss is component) or financial liability is initially • its contractual terms give rise on
recognised in profit or loss. Any interest measured at fair value plus, for an item specified dates to cash flows that
retained in the former subsidiary is not at fair value through profit or loss are solely payments of principal and
measured at fair value when control is (FVTPL), transaction costs that are interest on the principal amount
lost. directly attributable to its acquisition outstanding.
or issue. A trade receivable without
3.1.5 Transactions eliminated on a significant financing component is On initial recognition of an equity
consolidation initially measured at the transaction investment that is not held for trading,
Intra-group balances and transactions, price. the Group may irrevocably elect to
and any unrealised income and present subsequent changes in the
expenses (except for foreign currency 3.3.2 Classification and subsequent investment’s fair value in OCI. This
transaction gains or losses) arising from measurement of financial election is made on an investment-by-
intra-group transactions, are eliminated assets investment basis.
in preparing the consolidated financial On initial recognition, a financial
statements. Unrealized gains and losses asset is classified as measured at: All financial assets not classified as
resulting from transactions between amortised cost; fair value through other measured at amortised cost or FVOCI
the Group and its Associates are also comprehensive income (FVOCI) - debt as described above are measured
eliminated in preparing the consolidated investment; fair value through other at FVTPL. This includes all derivative
financial statements to the extent of the comprehensive income (FVOCI) - equity financial assets. On initial recognition,
Group’s interests in the Associates. investment; or fair value through profit or the Group may irrevocably designate
Unrealized losses are eliminated in the loss (FVTPL). a financial asset that otherwise meets
same way as unrealised gains, but only the requirements to be measured at
to the extent that there is no evidence of Financial assets are not reclassified amortised cost or at FVOCI as at FVTPL
impairment. subsequent to their initial recognition if doing so eliminates or significantly
unless the Group changes its business reduces an accounting mismatch that
model for managing financial assets, in would otherwise arise.

3.3.3 Financial assets - Business 3.3.4 Financial assets-Assessment whether contractual cash flows are solely
model assessment payments of principal and interest
The Group makes an assessment of For the purposes of this assessment, ‘principal’ is defined as the fair value of the
the objective of the business model financial asset on initial recognition. ‘Interest’ is defined as consideration for the
in which a financial asset is held at a time value of money and for the credit risk associated with the principal amount
portfolio level because this best reflects outstanding during a particular period of time and for other basic lending risks and
the way the business is managed, and costs (e.g. liquidity risk and administrative costs), as well as a profit margin.
information is provided to management.
The information considered includes: In assessing whether the contractual cash flows are solely payments of principal and
interest, the Group considers the contractual terms of the instrument. This includes
• the stated policies and objectives
assessing whether the financial asset contains a contractual term that could change
for the portfolio and the operation
the timing or amount of contractual cash flows such that it would not meet this
of those policies in practice. These
condition. In making this assessment, the Group considers:
include whether management’s
strategy focuses on earning • contingent events that would change the amount or timing of cash flows;
contractual interest income, • terms that may adjust the contractual coupon rate, including variable-rate
maintaining a particular interest rate features;
profile, matching the duration of
• prepayment and extension features; and
the financial assets to the duration
of any related liabilities or expected • terms that limit the Group’s claim to cash flows from specified assets (e.g. non-
cash outflows or realising cash flows recourse features).
through the sale of the assets;
A prepayment feature is consistent with the solely payments of principal and
• how the performance of the portfolio
interest criterion if the prepayment amount substantially represents unpaid
is evaluated and reported to the
amounts of principal and interest on the principal amount outstanding, which may
Group’s management;
include reasonable additional compensation for early termination of the contract.
• the risks that affect the performance Additionally, for a financial asset acquired at a discount or premium to its contractual
of the business model (and the par amount, a feature that permits or requires prepayment at an amount that
financial assets held within that substantially represents the contractual par amount plus accrued (but unpaid)
business model) and how those risks contractual interest (which may also include reasonable additional compensation
are managed; for early termination) is treated as consistent with this criterion if the fair value of the
• how managers of the business prepayment feature is insignificant at initial recognition.
are compensated - e.g. whether
compensation is based on the fair 3.3.5 Financial assets - Subsequent measurement and gains and losses
value of the assets managed or the Financial assets These assets are subsequently measured at fair value. Net
contractual cash flows collected; and at FVTPL gains and losses, including any interest or dividend income,
• the frequency, volume and timing are recognised in profit or loss.
of sales of financial assets in prior Financial assets These assets are subsequently measured at amortised cost
periods, the reasons for such sales at amortised cost using the effective interest method. The amortised cost
and expectations about future sales is reduced by impairment losses. Interest income, foreign
activity. exchange gains and losses and impairment are recognised
in profit or loss. Any gain or loss on derecognition is
Transfers of financial assets to third recognised in profit or loss.
parties in transactions that do not Debt investments These assets are subsequently measured at fair value.
qualify for derecognition are not at FVOCI Interest income calculated using the effective interest
considered sales for this purpose, method, foreign exchange gains and losses and impairment
consistent with the Group’s continuing are recognised in profit or loss. Other net gains and losses
recognition of the assets. are recognised in OCI. On derecognition, gains and losses
accumulated in OCI are reclassified to profit or loss.
Financial assets that are held for Equity investments These assets are subsequently measured at fair value.
trading or are managed and whose at FVOCI Dividends are recognised as income in profit or loss unless
performance is evaluated on a fair value the dividend clearly represents a recovery of part of the cost
basis are measured at FVTPL. of the investment. Other net gains and losses are recognised
in OCI and are never reclassified to profit or loss.

Classification and subsequent 3.4 Property and Equipment are depreciated from the date they are
measurement of financial liabilities 3.4.1 Recognition and Measurement available for use or, in respect of self-
At the inception the Group determines Property and equipment are stated at constructed assets, from the date that
the classification of its financial liabilities. cost less accumulated depreciation and the asset is completed and ready for
Accordingly, financial liabilities are any impairment losses. use.
classified as:
Cost includes expenditure that is The estimated useful lives of the
i) Financial liabilities at fair value
directly attributable to the acquisition of Property & Equipment of the Group as
through profit or loss (FVTPL)
the asset. The cost of self - constructed at 31st December 2021 are as follows:
• Financial liabilities held for trading assets includes the costs of materials Rate
• Financial liabilities designated at fair and direct labour, any other costs Furniture & Fittings 10 years
value through profit or loss directly attributable to bringing the asset
Hardware & Software 5 - 15 years
to a working condition for its intended
ii) Financial liabilities at amortized cost. use, and the cost of dismantling and Office Equipment 5 years
The subsequent measurement of removing the items and restoring Motor Vehicles 5 years
financial liabilities depends on their the site on which they are located. Telephones 4 years
classification Purchased software that is integral Right to use of Assets Agreement
to the functionality of the related period
3.3.6 Non-Derivative Financial equipment is capitalised as part of that
Liabilities equipment.
The depreciation rates are determined
All financial liabilities are recognised
separately for each significant part of
initially on the trade date, which is the Where parts of an item of property and
an item of Property & Equipment and
date that the Group becomes a party equipment have different useful lives,
commence to depreciate when it is
to the contractual provisions of the they are accounted for as separate
available for use, i.e. when it is in the
instrument. The Group derecognizes items (major components) of property
location and condition necessary for
a financial liability when its contractual and equipment.
it to be capable of operating in the
obligations are discharged, cancelled or
manner intended by the management.
expire. Gains and losses on disposal of an
Depreciation of an assets ceases at
item of property and equipment are
the earlier of the date that the assets
The Group classifies non-derivative determined by comparing the proceeds
is classified as held for sale or the date
financial liabilities into the other financial from disposal with the carrying amount
that the asset is derecognised.
liabilities category. Such financial of property and equipment, and are
liabilities are recognised initially at fair recognised net within the “other
3.4.4 Capital Work-in-Progress
value less any directly attributable income” in profit or loss.
Capital work-in-progress is stated at
transaction costs.
cost. These are expenses of a capital
3.4.2 Subsequent Costs
nature directly incurred for system
Subsequent to initial recognition, The cost of replacing part of an item of
development.
these financial liabilities are measured property and equipment is recognised
at amortized cost using the effective in the carrying amount of the item, if it
is probable that the future economic
3.5 Intangible Assets
interest method.
Intangible Assets consist of application
benefits embodied within the part will
software used in trading, clearing,
Other financial liabilities comprise flow to the Group and its cost can be
settlement, surveillance, accounting,
of bank overdrafts, trade and other measured reliably. The costs of the
mail systems and the web site of the
payables and brokers’ liquidity deposits day - to - day servicing of property and
Colombo Stock Exchange.
payables. equipment are recognised in the profit
or loss as incurred.
3.5.1 Basis of Recognition
An Intangible Asset is recognised if it is
3.4.3 Depreciation
probable that future economic benefits
Depreciation is charged to the profit or
that are attributable to the asset will
loss on a straight-line basis over the
flow to the enterprise and the cost of
estimated useful lives of each part of
the asset can be measured reliably
an item of property and equipment.
in accordance with the LKAS 38,
Items of property, plant and equipment
Intangible Assets.

3.5.2 Subsequent Expenditure recognition of an intangible asset are At commencement or on modification
Subsequent expenditure on intangible measured as the difference between the of a contract that contains a lease
assets is capitalised only when it net disposals proceed and the carrying component, the Company allocates the
increases the future economic benefits amount of the asset and are recognised consideration in the contract to each
embodied in the specific assets to in profit or loss. lease component on the basis of its
which it relates. All other expenditure is relative stand-alone price.
expensed as incurred. 3.6 Leases
The Company initially applied SLFRS 16 However, for leases of property the
3.5.3 Amortization Leases from 1 January 2019. Company has elected not to separate
Intangible Assets are amortized on a non-lease components and account
straight-line basis to profit or loss, from The Company applied SLFRS 16 using for the lease and associated non-
the date when the asset is available for the modified retrospective approach. lease components as a single lease
use, over the best estimate of its useful component.
economic life. 3.6.1 Definition of a lease
Previously, the Company determined 3.6.3 As a lessor
3.5.4 Research and Development at contract inception whether an The Company leases out its right-of-use
Costs arrangement was or contained a lease assets. The Company has classified
Expenditure on research activities, under IFRIC 4 Determining whether an these leases as operating leases. The
undertaken with the prospect of Arrangement contains a Lease. The Company is not required to make any
gaining new scientific or technical Company now assesses whether a adjustments on transition to SLFRS 16
knowledge and understanding, is contract is or contains a lease based on for leases in which it acts as a lessor,
recognised in profit or loss as incurred. the definition of a lease. except for a sub-lease.
Development activities involve a plan
or design for the production of new or On transition to SLFRS 16, the The Company sub-leases some of its
substantially improved products and Company elected to apply the properties. Under LKAS 17, the head
processes. Development expenditure practical expedient to grandfather the lease and sub-lease contracts were
is capitalised only if development costs assessment of which transactions classified as operating leases. The
can be measured reliably, the product or are leases. The Company applied Company assessed the classification of
process is technically and commercially SLFRS 16 only to contracts that the sub-lease contracts with reference
feasible, future economic benefits are were previously identified as leases. to the rightof-use asset rather than the
probable, and the Group intends to and Contracts that were not identified as underlying asset and concluded that
has sufficient resources to complete leases under LKAS 17 and IFRIC 4 were they are operating leases under SLFRS
development and to use or sell the not reassessed for whether there is a 16. The Company has also entered into
asset. The expenditure capitalised lease under SLRFS 16. Therefore, the a sub-lease during 2019, which has
includes the cost of materials, direct definition of a lease under SLRFS 16 been classified as a finance lease.
labour, overhead costs that are directly was applied only to contracts entered
attributable to preparing the asset for its into or changed on or after 1 January The Company has applied SLFRS
intended use, and capitalised borrowing 2019. 15 Revenue from Contracts with
costs. Other development expenditure Customers to allocate consideration in
is recognised in profit or loss as 3.6.2 As a lessee the contract to each lease and non-
incurred. As a lessee, the Company’s leased lease component.
assets include property and building.
Capitalized development expenditure The Company previously classified 3.7 Inventories
is measured at cost less accumulated leases as operating leases based on Inventories include stationeries, stamps
amortization and any accumulated its assessment of whether the lease and data wall spares and measured
impairment losses. transferred significantly all of the risks at the lower of cost and net realizable
and rewards incidental to ownership of value.
3.5.5 De recognition of Intangible the underlying asset to the Company.
Assets Under SLFRS 16, the Company
Intangible assets are derecognised on recognises right-of-use assets and
disposal or when no future economic lease liabilities for most of these leases -
benefits are expected from their i.e. these leases are on-balance sheet.
use. Gain or losses arising from de

3.8 Impairment of Assets to the timing and amount of write-off 3.10.2 Defined Contribution Plan -
3.8.1 Non-derivative Financial Assets based on whether there is a reasonable Employees’ Provident Fund
Financial instruments and contract expectation of recovery. The Group and Employees’ Trust Fund
assets expects no significant recovery from the A defined contribution plan is a post
Loss allowances for trade receivables is amount written off. However, financial employment benefit plan under which
always measured at an amount equal to assets that are written off could still an entity pays fixed contribution into
lifetime ECLs. be subject to enforcement activities separate entity and will have no legal
in order to comply with the Group’s or constructive obligation to pay further
When determining whether the credit procedures to recovery of amount due. amounts.
risk of a financial asset has increased
significantly since initial recognition 3.9 Government Grant All employees who are eligible for
and when estimating ECLs, the Group Government grants are assistance by Employees’ Provident Fund and
considers reasonable and supportable government in the form of transfers Employees’ Trust Fund are covered by
information that is relevant and of resources to an entity in return for relevant contributions to the defined
available without undue cost or effort. past or future compliance with certain contribution plans and are recognised
This includes both quantitative and conditions relating to the operating as an expense in profit or loss when
qualitative information and analysis, activities of the entity. Grants related to incurred.
based on the Group’s historical assets are government grants whose
experience and informed credit primary condition is that an entity (a) Employees’ Provident Fund
assessment and including forward- qualifying for them should purchase, The Company and employee contribute
looking information. construct or otherwise acquire long- 12% and 8% respectively on the
term assets. Government grants related basic salary of each employee to the
The Group assumes that the credit to assets, including non-monetary employees’ approved provident fund.
risk on a financial asset has increased grants at fair value, shall be presented in
significantly if it is more than 90 days the statement of financial position either (b) Employees’ Trust Fund
past due. by setting up the grant as deferred
The Company contributes 3% of the
income or by deducting the grant in
basic salary of each employee to the
The Group considers a financial asset to arriving at the carrying amount of the
employee’s trust fund.
be in default when: asset.
Company has recognised the grant on
• the Customer is unlikely to pay its 3.10.3 Defined Benefits Plan -
SEC Receivables relates to DVP project
credit obligations to the Group in full, Gratuity
and it is set up as deferred income.
without recourse by the Group to As required by LKAS -19 “Employee
actions such as realizing security (if Benefits”, which the Company has
any is held); or 3.10 Employee Benefits provided for gratuity liability based on
3.10.1 Short - Term Employee projected unit credit method.
• the financial asset is more than 90
Benefits
days past due.
Short-term employee benefit obligations However, under the Payment of Gratuity
are measured on an undiscounted basis Act No.12 of 1983, the liability to an
Presentation of allowance for ECL in
and are expensed as the related service employee arises only on completion of
the statement of financial position
is provided. A liability is recognised five years of continued service.
Loss allowances for financial assets
for the amount expected to be paid
measured at amortised cost are
under short-term cash bonus plans The Group recognizes all Actuarial
deducted from the gross carrying
if the Group has a present legal or Gains / (Losses) arising from Defined
amount of the assets.
constructive obligation to pay this Benefit plans immediately in Other
amount as a result of past service Comprehensive Income and Expenses
Write-off
provided by the employee, and the related to Defined Benefit in employee
The gross carrying amount of a financial
obligation can be estimated reliably. benefits in profit or loss.
asset is written off when the Group
has no reasonable expectations of
recovering a financial asset in its entirety The liability is not externally funded.
or a portion thereof. For corporate
customers, the Group individually
makes an assessment with respect

3.11 Provisions 3.12.6 Listed Company Fees 3.13.2 Deferred Taxation
A provision is recognised if the Group Listed Company Fee is charged based Deferred tax assets are reviewed at
has a present legal or constructive on the number of trades and Rs. 15/- each reporting date and are reduced to
obligation as a result of a past event, will be charged per trade, subject to a the extent that it is no longer probable
and it is probable that an outflow of minimum charge of Rs. 25,000/- and a that the related tax benefit will be
economic benefits will be required to maximum charge of Rs. 750,000/- per realized. Deferred tax is recognised
settle the obligation. annum. in respect of temporary differences
between the carrying amounts of assets
3.12 Revenue 3.12.7 Other Income and liabilities for financial reporting
Revenue is recognised to the extent that • Dividend from unit trust is recognised purposes and the amounts used for
it is probable that the economic benefits in profit or loss on an accrual basis taxation purposes.
will flow to the group and the revenue when the Company’s right to receive
can be reliably measured. the dividend is established. The measurement of deferred tax
• Interest income is recognised in reflects the tax consequences that
3.12.1 CSE & CDS Fees profit or loss as it accrues, using the would follow the manner in which
CSE & CDS fees on securities traded on effective interest method. the Group expects, at the end of the
the stock exchange are recognised on a reporting period, to recover or settle
• Gain on disposal of property, and
trade date basis. the carrying amount of its assets and
equipment have been accounted for
liabilities. For investment property that is
in profit or loss, after deducting from
3.12.2 Listing Fees measured at fair value, the presumption
the net sales proceeds on disposal of
Annual listing fees are recognised on an that the carrying amount of the
the carrying amount of such assets.
accrual basis and charged annually from investment property will be recovered
listed companies a fee of Rs. 100,000/- through sale has not been rebutted.
or 0.003% of the market capitalisation 3.13 Taxation
of the Listed Entity as at 31st December As per Sri Lanka Accounting Standard
Deferred tax is measured at the tax
2021 of the year immediately preceding, (LKAS 12) - “Income taxes”, tax
rates that are expected to be applied
whichever is higher, subject to a expense is the aggregate amount
to temporary differences when they
maximum of Rs. 2,000,000/- included in determination of profit or
reverse, using tax rates enacted or
loss for the period in respect of current
substantively enacted at the reporting
3.12.3 Quotation Fees and deferred taxes. Income tax expense
date.
The initial listing fee payable when the is recognised in the income statement.
ordinary voting shares of an Entity are Deferred tax assets and liabilities are
listed on the Exchange and recognised 3.13.1 Current Taxation
offset if there is a legally enforceable
upon the listing of an applicant. Current tax is the expected tax payable
right to offset current tax liabilities and
on the taxable income for the year,
assets, and they relate to taxes levied
Additional listing fees are recognised using tax rates enacted or substantively
by the same tax authority on the same
for a further issue of Securities by way enacted on the Reporting Date, and any
taxable entity, or on different tax entities,
of rights issue of shares, issues of adjustment to tax payable in respect of
but they intend to settle current tax
shares credited as fully paid-up by way previous years. Provision for taxation is
liabilities and assets on a net basis or
of capitalisation of reserves, issues of based on the profit for the year adjusted
their tax assets and liabilities will be
shares through private placements, for taxation purposes in accordance
realized simultaneously.
scrip dividend, share swaps & ESOP as with the provision of the Inland Revenue
per listing rules. Act No. 24 of 2017 and subsequent
A deferred tax asset is recognised for
amendments thereto.
unused tax losses, tax credits and
3.12.4 Brokers’ Fees
deductible temporary differences to
Monthly subscription fees from brokers The Company is Liable for income tax at
the extent that it is probable that future
are recognised on an accrual basis. the rate of 24% on the taxable profit.
taxable profits will be available against
which they can be utilised. Deferred tax
3.12.5 Charges for Computer
assets are reviewed at each reporting
Information
date and are reduced to the extent that
The CDS charge a fee on a
it is no longer probable that the related
pre-determined basis from listed
tax benefit will be realised.
companies for the service rendered
pertaining to providing information and
fees are recognised on an accrual basis.

3.13.3 Other Tax Exposures 3.16 New Accounting Standards

In determining the amount of current Issued but not Effective
and deferred tax, the Group takes The Institute of Chartered Accountants
into account the impact of uncertain of Sri Lanka has issued number of
tax positions and whether additional new Sri Lanka Accounting Standards
taxes and interest may be due. This (SLFRSs/ LKASs) and amendments
assessment relies on estimates and that are effective for annual periods
assumptions and may involve a series beginning after the current financial year.
of judgments about future events. New Accordingly these standards have not
information may become available been applied in preparing these financial
that causes the Group to change its statements and the Company plans to
judgment regarding the adequacy of apply these standards if applicable as
existing tax liabilities; such changes to and when they become effective.
tax liabilities will impact tax expense in
the period that such a determination is Company does not expect the
made. following new Accounting standards,
amendments and interpretations
3.13.3.1 Value Added Tax (VAT) that will become effective for future
Value Added Tax is calculated in accounting periods will have a
accordance with Value Added Tax Act No significant impact on the Company’s
14 of 2002 and subsequent amendments financial statements.
thereto. VAT is payable at 8%.
• Amendments to references to
3.14 Related Party Transactions conceptual framework in Sri Lanka
Disclosure has been made in respect Financial Reporting Standards
of the transactions in which one party • Amendments to Sri Lanka
has the ability to control or exercise Accounting Standard - LKAS
significant influence over the financial 1 “Presentation to Financial
and operating policies/decisions of the Statements” and Sri Lanka
other, irrespective of whether a price is Accounting Standard - LKAS 8
being charged “Accounting Policies, Changes in
Accounting Estimates and Errors”
3.15 Statement of Cash Flows • Amendments to Sri Lanka
The Statement of Cash Flows has been Accounting Standard - SLFRS 3
prepared by using the ‘Indirect Method’ Business Combinations
of preparing cash flows in accordance • Sri Lanka Accounting Standard -
with the Sri Lanka Accounting Standard SLFRS 17 Insurance Contracts
- LKAS 7 on ‘Statement of Cash Flow’,
• Amendments to SLFRS 9, LKAS
whereby operating activities, investing
39, and SLFRS 7 - Interest rate
activities and financing activities are
benchmark reforms.
separately recognised. Cash and cash
equivalents comprise of short-term, • Amendments to Sri Lanka
highly liquid investments that are readily Accounting Standard - SLFRS
convertible to known amounts of cash 10 “Presentation to Financial
and are subject to an insignificant risk of Statements” and Sri Lanka
changes in value. Accounting Standard - LKAS 28
“Investments in Associates and Joint
Ventures”

04. REVENUE
Group Company
Rs. Rs. Rs. Rs.
CSE & CDS Fees 2,332,008,352 793,550,363 1,813,519,608 616,245,922

Listing Fees 111,039,991 89,842,404 111,039,991 89,842,404
Quotation Fees 13,104,369 8,997,400 13,104,369 8,997,400
Brokers’ Fees 14,725,000 12,825,631 14,725,000 12,825,631
Charges for Remote Data Link 936,000 907,400 936,000 907,400
Charges for Computer Information 20,910,250 17,473,280 - -
Listed Company Fees 74,453,130 40,913,910 - -
2,567,177,092 964,510,388 1,953,324,968 728,818,757
05. OTHER INCOME

Group Company
Rs. Rs. Rs. Rs.
High Speed Data Signal Charges 31,146,500 27,884,683 31,146,500 27,884,683

Data Communication Income 7,581,055 8,449,474 7,581,055 8,449,474
Sponsorship Income - 245,443 - (7,311)
CDS Rental Income - - 64,731,029 43,371,405
Management Fee - - 9,112,006 7,994,913
Profit/(Loss) on Disposal of Property & Equipment 20,002 79,200 20,002 79,200
Deferred Grant Amortisation 555,407 - 555,407 -
Custodian Bank Fees 21,103,800 10,200,150 - -
Broker Reactivation Fee 13,888,889 - 13,888,889 -
Miscellaneous Income 55,693,507 30,071,760 24,079,324 14,458,861
129,989,160 76,930,710 151,114,212 102,231,225
06. STAFF COST

Group Company
Rs. Rs. Rs. Rs.
Salaries 333,719,029 299,670,178 294,646,040 266,467,387

Staff Bonus 131,197,006 48,516,451 113,616,891 44,050,684
Terminal Benefits (Gratuity) 18,880,772 18,309,521 16,388,440 12,292,745
Staff Welfare 10,466,605 7,210,331 8,845,689 6,313,495
Medical & Insurance Expenses 13,940,222 12,365,714 11,305,045 10,664,065
Transport & Travelling 3,182,003 3,351,933 2,900,795 2,790,068
511,385,637 389,424,128 447,702,900 342,578,444
The Number of Employees at the end of the Year 2021 were 157 (149 in 2020).

07. OTHER OPERATING EXPENSES

Group Company
Rs. Rs. Rs. Rs.
Administration Expenses 39,324,706 36,396,396 21,434,750 15,790,754

Data Communication Charges 19,511,372 18,793,889 15,196,231 14,598,416
CDS Statement Expenses 522,223 6,406,396 - -
Stationery Expenses 524,185 1,055,147 377,498 886,163
Maintenance Expenses 157,528,401 140,389,640 126,534,803 113,135,535
Issuer Marketing Expenses 1,470,718 123,202 1,147,160 96,098
Donations 4,801,877 - 4,801,877 -
Training Expenses 1,275,597 633,748 1,228,197 627,848
Disallowed VAT 31,479,090 27,897,155 18,412,337 18,121,384
Investor Education & Foreign Road Show Expenses 31,259,263 13,969,663 24,361,165 10,901,061
Publication & Website Expenses 15,525,757 9,834,162 12,120,084 7,685,100
Incentive Scheme for Brokers Back Office Systems 2,829,099 22,747,497 2,829,099 22,747,497
Directors’ Expenses 4,036,000 3,756,000 4,036,000 3,756,000
Auditors’ Remuneration 1,331,602 1,079,000 734,000 667,000
Fees Paid to Auditors for Non-Audit Services 497,799 794,949 396,279 600,646
Legal Fees 1,510,000 1,534,310 1,510,000 1,534,310
Professional Charges & Subscription 34,243,921 22,796,371 28,041,754 18,734,675
Other Project Cost 20,125,851 5,264,185 7,331,920 1,619,216
367,797,461 313,471,711 270,493,154 231,501,703
08. NET FINANCE INCOME

Group Company
Rs. Rs. Rs. Rs.
08.1 Finance Income

Fair Value Gain on Financial Assets Measured at FVTPL 58,925,203 108,250,556 29,024,409 49,539,018
Interest Income on Investment 212,529,225 178,509,796 191,085,700 177,716,093
Interest Income on Staff Loan 11,875,308 14,086,717 11,875,308 14,086,717
Finance Income on the net investment in the lease 23,567 191,176 23,567 191,176
283,353,303 301,038,245 232,008,984 241,533,004
08.2 Finance Cost

Interest on Lease Liabilities on Right-to-use of Asset 9,953,203 11,457,574 8,669,135 9,973,064
Interest Expense on Staff Loan 8,877,187 10,202,537 8,877,187 10,202,537
18,830,390 21,660,111 17,546,322 20,175,601
Net Finance Income 264,522,913 279,378,134 214,462,662 221,357,403

09. TAXATION
Group Company
Rs. Rs. Rs. Rs.
09.1 Income tax Expense

Current tax expense (Note 09.2) 225,389,696 40,771,620 109,159,469 -
Over Provision (5,823,918) - - -
Deferred Tax (Note 18) 20,262,039 - 20,262,039 -
239,827,816 40,771,620 129,421,508 -
09.2 Reconciliation on Accounting Profit/Loss to Income Tax

Accounting Profit/(Loss) before taxation 1,881,610,870 458,010,452 1,401,644,553 318,430,767
Adjustment on Disallowable Expenses 333,999,010 191,513,042 329,672,716 185,479,796

Exempt Income (859,803) (859,803)
Adjustment on Allowable Expenses (327,744,373) (189,704,947) (327,744,373) (189,704,947)
Investment Income (211,669,422) (182,585,152) (190,225,897) (181,791,449)
Business Income 1,675,336,282 277,233,395 1,212,487,196 132,414,167
Investment Income 211,669,422 182,585,152 190,225,897 181,791,449
Assessable Income 1,887,005,704 459,818,547 1,402,713,093 314,205,616
Assessable Income 1,887,005,704 459,818,547 1,402,713,093 314,205,616

Tax Loss Utilised (947,881,972) (314,205,616) (947,881,972) (314,205,616)
Taxable Income 939,123,732 145,612,932 454,831,121 -
Income Tax at 24% (2020-28%) (Note 09.3) 225,389,696 40,771,621 109,159,469 -

Income Tax on Current year Profit 225,389,696 40,771,621 109,159,469 -
09.3 Tax has been provided at the rate of 24% in respect of CSE & CDS for the Financial Year 2021 (28% in 2020).
Tax for the year has been calculated in accordance with the provisions of the Inland Revenue Act No. 24 of 2017.

10. PROPERTY & EQUIPMENT

10.1 Group
Right-of-use lease Furniture & Computers Office Motor Telephones Total
assets - Land and Fittings Equipment Vehicles
Building
Rs. Rs. Rs. Rs. Rs. Rs. Rs.
Cost
As at 01 January 2021 261,327,199 167,214,970 596,577,217 48,741,191 12,190,987 12,715,835 1,098,767,399
Additions 289,918,678 3,974,115 14,555,339 2,427,131 - 1,285,804 312,161,067
Disposals/Transfers (252,619,700) (660,334) (2,756,620) (524,699) - - (256,561,353)
As at 31 December 2021 298,626,177 170,528,751 608,375,936 50,643,623 12,190,987 14,001,639 1,154,367,113
Accumulated Depreciation
As at 01 January 2021 184,990,678 120,838,472 395,006,764 45,603,711 12,190,984 12,651,175 771,281,784
Charge for the year 93,642,670 11,199,954 36,257,965 1,450,886 - 257,429 142,808,905
Disposals/Transfers (252,619,700) (554,931) (2,756,588) (524,692) - - (256,455,911)
As at 31 December 2021 26,013,648 131,483,495 428,508,141 46,529,905 12,190,984 12,908,604 657,634,778
Net Book Value

As at 31 December 2021 272,612,529 39,045,256 179,867,795 4,113,718 3 1,093,035 496,732,335
As at 31 December 2020 76,336,522 46,376,498 201,570,453 3,137,480 3 64,660 327,485,615
10.1.1 Based on the assessment carried out internally, by the Board of Directors no provision was required for the potential
impairment of fixed assets as at 31 December 2021.
10.1.2 Gross carrying amount of fully depreciated assets as at 31 December 2021 is Rs. 597,902,694/- (2020 Rs. 579,369,449/-)
10.1.3 There were no restrictions on the title of the Property and Equipment as at 31 December 2021.
10.1.4 There were no items of Property and Equipment pledged as security as at 31 December 2021.

10.2 Company
Right-of-use lease Furniture & Computers Office Motor Telephones Total
assets - Land and Fittings Equipment Vehicles
Building
Rs. Rs. Rs. Rs. Rs. Rs. Rs.
Cost
As at 01 January 2021 261,327,199 166,823,653 593,705,779 48,615,473 12,190,987 12,654,985 1,095,318,076
Additions 289,918,678 3,974,115 14,555,339 2,427,131 - 1,285,804 312,161,067
Disposals/Transfers (252,619,700) (660,334) (2,756,620) (524,699) - (256,561,353)
As at 31 December 2021 298,626,177 170,137,434 605,504,498 50,517,905 12,190,987 13,940,789 1,150,917,789
Accumulated Depreciation
As at 01 January 2021 184,990,678 120,447,179 392,135,341 45,477,996 12,190,984 12,590,327 767,832,505
Charge for the year 84,874,878 11,199,954 36,257,965 1,450,886 - 257,429 134,041,112
Provision transferred
to Subsidiary 8,767,792 8,767,792
Disposals/Transfers (252,619,700) (554,931) (2,756,588) (524,692) (256,455,911)
As at 31 December 2021 26,013,648 131,092,202 425,636,718 46,404,190 12,190,984 12,847,756 654,185,498
Net Book Value

As at 31 December 2021 272,612,529 39,045,232 179,867,780 4,113,715 3 1,093,033 496,732,291
As at 31 December 2020 76,336,521 46,376,474 201,570,438 3,137,477 3 64,658 327,485,571
10.2.1 Based on the assessment carried out internally, by the Board of Directors no provision was required for the potential
impairment of fixed assets as at 31 December 2021.
10.2.2 Gross carrying amount of fully depreciated assets as at 31 December 2021 is Rs. 594,453,415/- (2020 Rs. 575,487,431/-)
10.2.3 There were no restrictions on the title of the Property, and Equipment as at 31 December 2021.
10.2.4 There were no items of Property and Equipment pledged as security as at 31 December 2021.

11. INTANGIBLE ASSETS

Group Company
As at 31 December, 2021 2020 2021 2020
Rs. Rs. Rs. Rs.
Cost
Balance as at 01 January 582,179,630 556,337,426 581,746,935 555,904,731
Acquisition and Transfers during the year 308,863,335 25,936,134 308,863,335 25,936,134
Disposals & Transfers During the Year - (93,930) - (93,930)
Balance as at 31 December 891,042,965 582,179,630 890,610,270 581,746,935
Accumulated Amortisation
Charge for the year 55,791,616 36,028,124 55,791,616 35,955,463
Disposals & Transfers During the Year - (87,105) - (87,105)
Net Book Value 387,042,821 133,971,103 387,042,821 133,971,102
Intangible Assets consist of application software used in trading, clearing, settlement, surveillance, accounting, mail systems and
the web site of the Colombo Stock Exchange.
12. CAPITAL WORK IN PROGRESS

Group Company
As at 31 December, 2021 2020 2021 2020
Rs. Rs. Rs. Rs.

Incurred during the year 151,925,067 145,213,957 151,925,067 145,213,957
Transfers (242,006,026) (101,111,503) (242,006,026) (101,111,503)
13. INVESTMENT IN SUBSIDIARY

Group Company
As at 31 December, 2021 2020 2021 2020
Rs. Rs. Rs. Rs.
Central Depository Systems (Pvt) Ltd.

(10,000,000 Ordinary Shares- 100% Ownership) - - 25,000 25,000
- - 25,000 25,000

14. FINANCIAL INVESTMENTS AT AMORTISED COST
Group Company
As at 31 December, 2021 2020 2021 2020
Rs. Rs. Rs. Rs.
Investment in Listed Debenture of HNB PLC - 200,000,000 - 200,000,000

Investment in Listed Debenture of Sampath Bank PLC 200,000,000 350,000,000 200,000,000 350,000,000
Investment in Listed Debenture of Nations Trust Bank PLC 160,000,000 160,000,000 160,000,000 160,000,000
360,000,000 710,000,000 360,000,000 710,000,000
Interest Receivable 23,702,135 51,162,667 23,702,135 51,162,667

383,702,135 761,162,667 383,702,135 761,162,667
Less : Impairment Charges on Financial Assets (21,153) (560,761) (21,153) (560,761)

383,680,982 760,601,906 383,680,982 760,601,906
Financial Investments at Amortised Cost - Current - 377,380,132 - 377,380,132

Financial Investments at Amortised Cost - Non Current 383,680,982 383,221,774 383,680,982 383,221,774
15. OTHER INVESTMENTS

Group Company
As at 31 December, 2021 2020 2021 2020
Rs. Rs. Rs. Rs.
Investments in Fixed Deposits 2,050,000,000 600,000,000 1,850,000,000 600,000,000

Investments in Treasury Bills 1,642,772,246 - 983,740,982 -
Interest Receivable 35,558,082 25,366,560 23,332,147 25,366,560
3,728,330,328 625,366,560 2,857,073,129 625,366,560
Less : Impairment Charges on Financial Assets (10,588) (167,195) (10,237) (167,195)

3,728,319,740 625,199,365 2,857,062,892 625,199,365
Financial Investments at Amortised Cost - Current 3,527,999,894 424,865,714 2,656,743,046 424,865,714

Financial Investments at Amortised Cost - Non Current 200,319,846 200,333,651 200,319,846 200,333,651
3,728,319,740 625,199,365 2,857,062,892 625,199,365
16. INVESTMENT IN LFSB

Group Company
As at 31 December, 2021 2020 2021 2020
Rs. Rs. Rs. Rs.
Ordinary Shares 1,000,000 1,000,000 - -

1,000,000 1,000,000 - -
Fair Value Gain on Financial Assets Measured at FVTOCI 165,965 165,965 - -

1,165,965 1,165,965 - -
This represents 100,000 Ordinary Shares purchased from Lanka Financial Services Bureau Ltd (LFSB) by the Central Depository
Systems (Pvt) Ltd. LFSB is the SWIFT Service Bureau for Sri Lanka which facilitates inter-bank transactions.

17. SETTLEMENT GUARANTEE FUND

Group Company
As at 31 December, 2021 2020 2021 2020
Rs. Rs. Rs. Rs.
Settlement Guarantee Fund 100,000,000 100,000,000 100,000,000 100,000,000

100,000,000 100,000,000 100,000,000 100,000,000
This fund was established as a Trust on 22 May 1988 to guarantee the settlement of trades between clearing members of the
Central Depository System of the Colombo Stock Exchange and to provide for matters connected therewith and incidental
thereto. Current trustees of the fund are Securities Exchange Commission of Sri Lanka (SEC) and Colombo Stock Exchange
(CSE). The CSE has decided to transfer Rs. 100 Million to strengthen the Settlement Guarantee Fund subsequent to the fund
meeting held on 20 December 2011 and transferred the funds on 18 January 2012.
18. DEFERRED TAX LIABILITIES

Group Company
As at 31 December, 2021 2020 2021 2020
Rs. Rs. Rs. Rs.
Deferred Tax Liabilities 109,087,143 73,162,093 109,087,143 73,162,093

Deferred Tax Assets (88,825,104) (73,162,093) (88,825,104) (73,162,093)
20,262,039 - 20,262,039 -
Deferred tax assets and liabilities are as follows;

Group Company
2021 2020 2021 2020
Rs. Rs. Rs. Rs.
Property, Equipment & Intangible Assets 43,660,136 51,787,867 43,660,136 51,787,867

Right of Use Asset 65,427,007 21,374,226 65,427,007 21,374,226
Deferred Tax Liabilities 109,087,143 73,162,093 109,087,143 73,162,093
Lease Liability (66,757,346) (24,762,874) (66,757,346) (24,762,874)

Retirement Benefit Obligation (22,067,758) (29,789,972) (22,067,758) (29,789,972)
Brought Forward Tax Loss - (18,609,246) - (18,609,246)
Deferred Tax Assets (88,825,104) (73,162,093) (88,825,104) (73,162,093)

Unrecognised Deferred Tax Assets Group Company
2021 2020 2021 2020
Rs. Rs. Rs. Rs.
Tax Losses - 266,931,529 - 266,931,529
Deferred tax assets and liabilities have been calculated at the rate of 24% for the financial year 2021. (28%-2020)

19. TRADE & OTHER RECEIVABLES
Group Company
As at 31 December, 2021 2020 2021 2020
Rs. Rs. Rs. Rs.
Trade Receivables 123,713,333 76,219,045 27,917,372 18,660,216

Provision for Impairment (20,045,982) (17,055,090) (11,632,337) (10,475,056)
103,667,351 59,163,955 16,285,035 8,185,160
Net Investment in the Lease 3,165,814 - 3,165,814 -
CSE & CDS Fees Receivable 40,908,375 16,900,273 31,817,628 13,144,658
Prepayments 36,771,413 83,143,153 36,755,668 83,122,968
Advance Payments 1,046,517 456,786 1,084,917 456,761
Refundable Deposits 47,501,113 46,174,513 47,501,113 46,174,513
Sundry Debtors 33,007,458 27,647,449 31,732,725 26,480,183
Other Receivable 272,128 272,129 269,628 269,628
Interest Receivable 2,415,069 73,552 41,384 55,140
Staff Loans 57,239,338 67,665,727 57,239,338 67,665,727
Prepaid Staff Cost 10,809,114 16,567,429 10,809,114 16,567,429
WHT Receivable 64,000 64,000 64,000 64,000
Pre paid lease rental 2,621,346 - 2,621,346 -
339,489,036 318,128,966 239,387,710 262,186,167
20. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (FVTPL)

Group Company
As at 31 December 2021 2020 2021 2020
Rs. Rs. Rs. Rs.
JB Vantage Money Market Fund 50,295,879 242,403,033 - 61,562,189

Guardian Acuity Money Market Fund - 113,767,617 - -
First Capital Money Market Fund 50,500,169 241,900,210 50,500,169 127,428,851
Capital Alliance Investment Grade Fund 50,563,194 241,313,328 50,563,194 241,313,328
NDB Wealth Money Plus Fund - 241,859,066 - 30,189,627
151,359,242 1,081,243,254 101,063,363 460,493,995

20.1 Financial Assets at Fair Value Through Profit or Loss (FVTPL)

Group 2021 2020
No. of Units Rs. No. of Units Rs.
CSE
JB Vantage Money Market Fund - - 2,243,831 61,562,189
First Capital Money Market Fund 24,749 50,500,169 67,178 127,428,851
Capital Alliance Investment Grade Fund 2,387,872 50,563,194 12,224,648 241,313,328
NDB Wealth Money Plus Fund - - 1,287,355 30,189,627
2,412,621 101,063,363 15,823,012 460,493,995
CDS
JB Vantage Money Market Fund 1,711,617 50,295,879 6,591,323 180,840,844
Guardian Acuity Money Market Fund - - 5,628,160 113,767,617
First Capital Money Market Fund - - 60,347 114,471,359
NDB Wealth Money Plus Fund - - 9,026,069 211,669,439
1,711,617 50,295,879 21,305,899 620,749,259
Total 4,124,238 151,359,242 37,128,911 1,081,243,254
21. CASH & CASH EQUIVALENTS

Group Company
2021 2020 2021 2020
Rs. Rs. Rs. Rs.
Overnight Repos 1,517,451,331 604,524,582 261,346,000 462,522,000

Cash at Bank 44,338,743 26,955,775 41,642,797 25,906,007
RTGS Account 17,600 17,600 - -
Cash in Hand 325,050 325,050 250,050 250,050
Favorable balance 1,562,132,724 631,823,007 303,238,847 488,678,057
Bank Overdraft - - - -
Cash & Cash Equivalents in the Statement of Cash Flows 1,562,132,724 631,823,007 303,238,847 488,678,057
22. OTHER RESERVES

Group Company
2021 2020 2021 2020
Rs. Rs. Rs. Rs.
Capital Reserve (Note 22.1) 99,975,000 99,975,000 - -

Other Reserve (Note 22.2) 165,965 165,965 - -
100,140,965 100,140,965 - -
22.1 Capital Reserve

This represents 4,997,500 Ordinary Shares issued by CDS on capitalisation of its Revenue Reserves in Year 2004 and the
transfer of its Capital Redemption Reserve in Year 2009.
22.2 Other Reserve

This represents the reserves generated from valuation of financial assets measured at Fair Value Through Other Comprehensive
Income (FVTOCI). Refer Note 16.

23. BROKERS’ DEPOSITS IN LIEU OF BANK GUARANTEE
Group Company
2021 2020 2021 2020
Rs. Rs. Rs. Rs.
Non Current Liability

Deposits for Computer Facility 111,670 111,670 111,670 111,670
Entrance Deposits 640,000 640,000 640,000 640,000
Deposits for Telephones 188,300 188,300 188,300 188,300
939,970 939,970 939,970 939,970
Current Liability
Broker Deposits (Note 23.1) 24,036,426 291,733,154 24,036,426 291,733,154
Dex Liquidity Deposits (Note 23.2) - 295,000 - -
Margin Deposit (Note 23.3) 1,178,185,008 87,205,582 - -
1,202,221,434 379,233,736 24,036,426 291,733,154
23.1 Rule applicable for 2020

This is the cash deposit maintained by broker firms as part of their Liquidity Requirement in terms of 5.4 of the Colombo Stock
Exchange Stock Broker rules.
Rule applicable for 2021

This is the cash deposit maintained by broker firms as part of their Liquidity Requirement in terms of 8.6 of the Colombo Stock
Exchange Stock Broker rules.

This is the cash deposit maintained by broker firms as part of their Liquidity Requirement in terms of Section 18 of CDS
Regulations of the Colombo Stock Exchange.

This is the cash deposit maintained by broker firms as part of their Liquidity Requirement in terms of Section 9.1 and 9.2 of the
Central Depository Systems (Private) Limited.

This is the cash deposit maintained by broker firms as part of their Liquidity Requirement in terms of Section 5 of CDS
Regulations of the Colombo Stock Exchange.

This is the cash deposit (Base Margin and Daily Margin) maintained by broker firms as part of their Liquidity Requirement in
terms of Section 9.1 and 9.2 of the Central Depository Systems (Private) Limited.
24. DEFERRED GRANTS

Group Company
2021 2020 2021 2020
Rs. Rs. Rs. Rs.
Government Grant Received 22,216,289 - 22,216,289 -

Recognised in Profit or Loss (555,407) - (555,407) -
21,660,882 - 21,660,882 -
Government grant has been received from Securities and Exchange Commission of Sri Lanka for the implementation of Delivery
Vs Payment (DVP) mechanism at the Exchange .

25. EMPLOYEE BENEFITS

Group Company
2021 2020 2021 2020
Rs. Rs. Rs. Rs.

Charge for the year 7,564,136 9,488,099 6,765,677 8,488,838
Interest for the year 11,316,636 4,464,870 9,622,763 3,803,907
Actuarial (Gains)/Losses recognised in OCI (30,520,471) 29,264,796 (26,531,312) 24,908,241
Provision transferred to Subsidiary - - (1,496,827) 6,016,779
Payments made during the year (2,804,067) (11,197,173) (2,804,067) (11,197,173)
As required by the Sri Lanka Accounting Standard LKAS 19 - “Employee Benefits”, the Company and its subsidiary have
provided gratuity liability based on the Projected Unit Credit Method.
The principal assumptions used to arrive above gratuity liability are as follows;
2021 2020
Expected Annual Average Salary Increment 8.00% 8.32%

Discounting Rate/Interest Rate 11.00% 7.00%
Staff Turnover Factor 8.00% 8.05%
25.1 Sensitivity of Assumptions used in calculating Employee Benefits Liability.

Assumptions regarding discount rate and salary increment rate have a significant effect on the amounts recognised in profit or
loss and statement of financial position.
Following table demonstrates the sensitivity to a reasonably possible change in the key assumptions employed with all other
variables held constant in the employment benefit liability measurement.
Discount Rate Discount Rate Salary Increases Salary Increases

+1% -1% +1% -1%
Effect on the Aggregate Service and Interest Cost 447,444 (388,715) 652,404 (602,016)
Effect on Defined Benefit Obligation (5,905,070) 6,445,163 6,568,826 (6,116,053)
26. LEASE LIABILITIES ON RIGHT-TO-USE OF ASSET

Group Company
As at 31 December, 2021 2020 2021 2020
Rs. Rs. Rs. Rs.
Balance as at 1 January 2021 88,438,836 175,010,411 88,438,836 175,010,411

Additions 294,856,428 9,923,525 294,856,428 9,923,525
Accretion of interest 9,953,203 11,457,574 8,669,135 9,973,064
Provision transferred to Subsidiary - - 1,284,068 1,484,510
Payments (115,092,858) (107,952,674) (115,092,858) (107,952,674)
Balance as at 31 December 2021 278,155,609 88,438,836 278,155,609 88,438,836
Lease Liabilities on Right-to-use of Asset - Current 97,350,233 81,572,095 97,350,233 81,572,095

Lease Liabilities on Right-to-use of Asset - Non Current 180,805,376 6,866,741 180,805,376 6,866,741

27. OTHER PAYABLES
Group Company
As at 31 December, 2021 2020 2021 2020
Rs. Rs. Rs. Rs.
Interest Payable to Brokers 8,615,110 2,334,443 358,840 2,316,956

Payments Received in Advance 5,598,137 3,272,835 5,582,590 3,249,810
Deferred Grant to be recognised
on the receipt of SEC dues (Note 27.1) 23,096,801 - 23,096,801 -
Sundry Creditors & Accrued Expenses 355,416,933 185,178,944 345,969,292 181,273,097
392,726,981 190,786,222 375,007,523 186,839,863
27.1 The above reflects the amount due from Securities and Exchange Commission of Sri Lanka for the implementation of
Delivery Vs Payment (DVP) mechanism at the Exchange .
28. AMOUNTS DUE TO RELATED COMPANY

Relationship
Central Depository Systems (Pvt) Limited Subsidiary - - 106,234,683 31,909,028

- - 106,234,683 31,909,028
29. CONTINGENCIES & COMMITMENTS

29.1 Litigation Against the CSE
1) Mr.I.B.Isaac (Plaintiff) claimed Rs. 21,784,454.97 (Including consequential damages) from the CSE stating that the CSE has
failed to properly execute duty, was negligent and failed to exercise due diligence (Prior to the announcement of 2006 bonus
issue of Touchwood Investments PLC) to safeguard Plaintiff’s interest and thereby lead to cause direct loss and damage to
the plaintiff.
On 17th October 2016, the District Court of Colombo pronounced the judgement in favour of the Plaintiff granting him the reliefs
prayed under a,c and d of prayer to the plaint, namely,
• An amount of Rs. 11,784,454.97 with interest in respect of the losses incurred by him due to the investments in shares of
Touchwood;
• The aggregate interest up until the settlement of the dues as prescribed above; and,
• Legal fees.
The CSE, on 09 December 2016, filed a petition of Appeal in the High Court of Civil Appeal of the Western Province praying to
set aside the judgement of the District Court dated 17 October 2016.
The appeal No.WP/HCCA/COL/115/16 was scheduled for judgement on 06th May 2022.
Based on the legal advice, the directors do not expect outcome of the pending litigations to have material effect on the
Statement of Financial Position.
29.2 Tax Assessments Against the CSE

The Department of Inland Revenue has issued assessment notices for income tax amounting to Rs. 16.1 million for the Year
of Assessment 2005/2006, Rs. 17.6 million for the Year of Assessment 2006/2007, Rs. 0.3 million for the Year of Assessment
2007/2008, Rs. 0.4 million for the Year of Assessment 2009/2010 and 12.2 million for the Year of Assessment 2017/2018. In
addition to the above the Department of Inland Revenue has issued taxes in default notice for income tax amounting to

Rs. 2.84 million, Rs. 0.04 million, Rs. 0.027 million & Rs. 4.5 million for the Year of Assessment 1997/1998, 1999/2000,
2003/2004, 2008/2009 respectively. The CSE has appealed to quash the income tax assessments issued by the Department of
Inland Revenue. Based on the consultant opinion, Board of Directors of the Company is of the view that, no liability would arise
to the Company since the said assessments are outside the scope of chargeability of taxation.
29.3 Tax Assessments Against the CDS

The Department of Inland Revenue has issued assessment notices for income tax amounting to Rs. 3.94 million for the Year
of Assessment 2008/2009, Rs. 3.03 million for the Year of Assessment 2009/2010,Rs. 3.3 million for the Year of Assessment
2016/17 and Rs. 4.7 million for the Year of Assessment 2017/18 respectively. The CDS has appealed to quash the income tax
assessment issued by the Department of Inland Revenue. Based on the consultant opinion, Board of Directors of the Company
is of the view that, no liability would arise to the Company since the said assessments are outside the scope of chargeability of
taxation.
30. CAPITAL COMMITMENTS

The Group and the Company has following purchase commitments in the ordinary course of business as at 31 December;
Group Company
As at 31 December, 2021 2020 2021 2020
Rs. Rs. Rs. Rs.
Property and Equipment

- approved & contracted 10,628,717 45,070,050 10,628,717 45,070,050
10,628,717 45,070,050 10,628,717 45,070,050
31. FINANCIAL INSTRUMENTS

31.1 Financial Risk Management
Overview
The Group has exposure to the following risks from financial instruments:
a) Credit Risk
b) Liquidity Risk
c) Market Risk
d) Operational Risk
This note presents information about the Group’s exposure to each of the above risks, the Group’s objectives, policies and
processes for measuring and managing risk, and the Group’s management of capital.
Risk Management Framework

The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management framework.
In discharging its governance responsibility it operates through Risk & Audit Committee. The primary function of the Committee
is to ensure the establishment of appropriate risk management framework within the Group. The Risk & Audit Committee
is assisted in these functions by Internal Audit and the results are reported to the Risk & Audit Committee. The Risk & Audit
Committee provides its assessment on the effectiveness of internal audit and external disclosure of accounting policies and
financial reporting to the Board. Risk management policies and systems are reviewed regularly to reflect changes in market
conditions, products and services offered. The Group has developed an Enterprise Risk Management framework & policy and
currently in the process of reviewing the framework.

(a) Credit Risk
Credit risk is the risk of financial loss to the Group if counterparty to a financial instrument fails to meet its contractual obligations.
The Group is exposed to credit risk primarily from investment in unit trust, investment in fixed deposit, debentures, staff loans
receivable, trade and other receivables which are financial assets and cash and bank balances with financial institutions.
Fact sheets of the unit trusts are observed and reported to investment committee. Fixed deposit investments and debenture
investments are in financial institutions which are having good credit ratings. Receivables are monitored to ensure that exposure
to bad debts are minimised. Staff loans are given to permanent confirmed employees and are deducted from the salaries as per
the terms of granting loans.
(b) Liquidity Risk

Liquidity risk is the risk that the Group will not be able to honor its financial obligations as they fall due.
Finance division monitors the cash flow forecasts of the group to ensure sufficient cash availability to meet operational needs.
The Group is able to meet all working capital requirements with its short term investments in Overnight Repo and money market
unit trusts. Brokers’ Deposits in lieu of Bank Guarantee is the cash deposit maintained by broker firms as part of their Liquidity
Requirement and have been invested in Overnight Repo investments in order to meet liquidity as and when required.
Surplus cash held over and above balance required for working capital management is invested in Overnight Repos and money
market unit trusts.
The following are the remaining contractual maturities at the end of the reporting period of financial assets and liabilities,
including estimated interest payments.

31.1 Financial Risk Management contd.

Group
Non-Derivative Financial Assets Carrying Total 03 Months or 03-12 Over
Amount (Rs.) (Rs.) Less (Rs.) Months (Rs.) 01 Year (Rs.)
31 December 2021
Financial Assets
Cash in hand 325,050 325,050 325,050 - -
Balances with Banks & Financial Institutions 1,561,807,674 1,561,807,674 1,561,807,674 - -
Financial Assets at FVTPL 151,359,242 151,359,242 151,359,242 - -
Financial Investments at Amortised Cost 383,680,981 383,680,982 - - 383,680,982
Investments in LFSB 1,165,965 1,165,965 - - 1,165,965
Other Investments 3,728,319,740 3,728,319,740 3,347,218,535 180,781,359 200,319,846
Trade and Other Receivables 339,489,036 339,489,036 339,489,036 - -
6,166,147,688 6,166,147,689 5,400,199,537 180,781,359 585,166,793
Financial Liabilities
Brokers’ Deposits in lieu of Bank Guarantee 1,203,161,404 1,203,161,404 1,178,185,008 24,036,426 939,970
Trade Payables 392,726,981 392,726,981 392,726,981 - -
Lease Liabilities on Right-to-use of Asset 278,155,609 278,155,609 21,975,198 75,375,035 180,805,376
Bank Overdraft - - - - -
1,874,043,994 1,874,043,994 1,592,887,187 99,411,461 181,745,346
31 December 2020
Financial Assets
Cash in hand 325,050 325,050 325,050 - -
Balances with Banks & Financial Institutions 631,497,957 631,497,957 631,497,957 - -
Financial Assets at FVTPL 1,081,243,254 1,081,243,254 1,081,243,254 - -
Financial Investments at Amortised Cost 760,601,906 760,601,906 - 377,380,132 383,221,774
Investments in LFSB 1,165,965 1,165,965 - - 1,165,965
Other Investments 625,199,365 625,199,365 - 424,865,714 200,333,651
3,418,162,463 3,418,162,463 2,031,195,227 802,245,846 584,721,390
Brokers’ Deposits in lieu of Bank Guarantee 380,173,706 380,173,706 87,205,582 223,000,000 69,968,124
Trade Payables 190,786,222 190,786,222 190,786,222 - -
659,398,764 659,398,764 301,050,941 281,512,958 76,834,865

Company
Non-Derivative Financial Assets Carrying Total 03 Months or 03-12 Over
Amount (Rs.) (Rs.) Less (Rs.) Months (Rs.) 01 Year (Rs.)
31 December 2021
Financial Assets
Cash in Hand 250,050 250,050 250,050 - -
Financial Investments at Amortised Cost 383,680,982 383,680,982 - - 383,680,982
Other Investments 2,857,062,892 2,857,062,892 2,522,358,213 134,384,833 200,319,846
3,884,433,794 3,884,433,794 3,166,048,133 134,384,833 584,000,828
Brokers’ Deposits in lieu of Bank Guarantee 24,976,396 24,976,396 - 24,036,426 939,970
Trade Payable 375,007,523 375,007,523 375,007,523 - -
678,139,528 678,139,528 396,982,721 99,411,461 181,745,346
31 December 2020
Financial Assets
Cash in Hand 250,050 250,050 250,050 - -
Investments in Corporate Debentures 760,601,906 760,601,906 - 377,380,132 383,221,774
Other Investments 625,199,365 625,199,365 - 424,865,714 200,333,651
2,597,159,490 2,597,159,490 1,211,358,219 802,245,846 583,555,425
Brokers’ Deposits in lieu of Bank Guarantee 292,673,124 292,673,124 - 223,000,000 69,673,124
Trade Payable 186,839,863 186,839,863 186,839,863 - -
567,951,823 567,951,823 209,899,000 281,512,958 76,539,865
(c) Market Risk

Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates that will affect the Group’s
income. The objective of the market risk management is to manage and control market risk exposures within acceptable
parameters, while optimizing the return. The CSE has placed a special emphasis on the effect of market risk on fixed income
securities and investments. Further, a board approved investment policy and an investment procedure manual are in place at the
group to mitigate the market risk. The Group has set up a risk management division.
Currency Risk
The Group is exposed to currency risk on purchasing of assets and obtaining of services that are denominated in a currency
other than the respective functional currency of the Group. The currency in which transactions primarily take place are
denominated in U.S. Dollars. The currency risk is limited by the short term nature of the period between the dates of the
purchase and the settlement of the related liability.
However, the Group is not exposed to a significant currency risk due to the reason that there are no foreign currency exposures
as at the reporting date.
31.1 Financial Risk Management contd.

Interest Rate Risk
Interest rate risk arises due to fluctuations in the interest rates resulting in adverse impact to future cash flows or the fair values of
financial instruments of the Group.
The Group’s approach in managing interest rate risk is to continuously monitor positions on a daily basis to a level that are viable
and prudent. When analyzing impacts of interest rate movements on profitability, Management resorted to the techniques of
sensitivity analysis carried out on Group financial assets and liabilities, taking into account various interest rate scenarios.
Given below is a sensitivity analysis carried out as at 31 December 2021 that demonstrates possible impact to Group profitability
due to a given change in interest rates, keeping all other variables constant.
Market Rates up by 1% Market Rates drop by 1%
Effect to the Interest Income Effect to the Interest Income
Effect on Profit or Loss 1,910,857 (1,910,857)
(d) Operational Risk

Operational risk is the risk of direct or indirect loss arising from a wide variety of causes associated with the Group’s involvement
with financial instruments, including processes, personnel, technology, infrastructure and from external factors other than credit,
market and liquidity risks such as those arising from legal and regulatory requirements and generally accepted standards of
corporate behaviour. The Group is in the process of developing the procedure manuals in order to strengthen the systems,
processes and internal controls.

31.2 Accounting Classification and Fair Values
Classification of Financial Assets Financial
Group Note Financial Financial Financial Liabilities Total Fair Value
Assets at Assets at Assets at measured at Carrying
Amortised Cost FVTPL FVOCI Amortized Cost Amount
Rs. Rs. Rs. Rs. Rs. Rs.
As at 31 December 2021
Assets
Cash in Hand 20 325,050 - - - 325,050 325,050
Balances with Banks &
Financial Institutions 20 1,561,807,674 - - - 1,561,807,674 1,561,807,674
Financial Assets at FVTPL 19 - 151,359,242 - - 151,359,242 151,359,242
Financial Investments
at Amortised Cost 13 383,680,982 - - - 383,680,982 383,680,982
Other Investments 14 3,728,319,740 - - - 3,728,319,740 3,728,319,740
Investments in LFSB 15 - - 1,165,965 - 1,165,965 1,165,965
Trade and Other Receivables 18 339,489,036 - - - 339,489,036 339,489,036
Total Financial Assets 6,013,622,482 151,359,242 1,165,965 - 6,166,147,689 6,166,147,689
Liabilities
Due to Customers - - - 7,471,790 7,471,790 7,471,790
Due to Brokers 22 - - - 1,211,776,514 1,211,776,514 1,211,776,514
Due to Banks 20 - - - - - -
Lease Liabilities
on Right-to-use of Asset 24 - - - 278,155,609 278,155,609 278,155,609
Other Financial Liabilities - - - 353,543,280 353,543,280 353,543,280
Total Financial Liabilities - - - 1,850,947,193 1,850,947,193 1,850,947,193

Group Note Financial Financial Financial Liabilities Total Fair Value
Assets `
Cash in Hand 20 325,050 - - - 325,050 325,050
Financial Institutions 20 631,497,957 - - - 631,497,957 631,497,957
Financial Assets at FVTPL 18 - 1,081,243,254 - - 1,081,243,254 1,081,243,254
Financial Investments
at Amortised Cost 13 760,601,906 - - - 760,601,906 760,601,906
Other Investments 19 625,199,365 - - - 625,199,365 625,199,365
Investments in LFSB 14 - - 1,165,965 - 1,165,965 1,165,965
Total Financial Assets 2,335,753,244 1,081,243,254 1,165,965 - 3,418,162,463 3,418,162,463
Liabilities
Due to Customers - - - 60,633,947 60,633,947 60,633,947
Due to Brokers 22 - - - 382,508,149 382,508,149 382,508,149
Lease Liabilities
Total Financial Liabilities - - - 659,398,764 659,398,764 659,398,764
31.2 Accounting Classification and Fair Values

Company Note Financial Financial Financial Liabilities Total Fair Value
Assets
Cash in Hand 20 250,050 - - - 250,050 250,050
Financial Institutions 20 302,988,797 - - - 302,988,797 302,988,797
Financial Investments 13 383,680,982 - - - 383,680,982 383,680,982
Other Investments 14 2,656,743,046 - - - 2,656,743,046 2,656,743,046
Total Financial Assets 3,583,050,585 101,063,363 - - 3,684,113,948 3,684,113,948
Liabilities
Due to Customers - - - 7,441,790 7,441,790 7,441,790
Due to Brokers 22 - - - 25,335,236 25,335,236 25,335,236
Due to Related Parties 26 - - - 106,234,683 106,234,683 106,234,683
Lease Liabilities
Company Note Financial Financial Financial Financial Total Fair Value

Assets at Assets at Assets at Liabilities Carrying
Amortised Cost FVTPL FVOCI measured at Amount
Amortized Cost
Assets
Cash in Hand 20 250,050 - - - 250,050 250,050
Financial Institutions 20 488,428,007 - - 488,428,007 488,428,007
Financial Investments 13 760,601,906 - - - 760,601,906 760,601,906
Other Investments 19 424,865,714 - - - 424,865,714 424,865,714
Total Financial Assets 1,936,331,844 460,493,995 - - 2,396,825,839 2,396,825,839
Liabilities
Due to Customers - - - 60,509,982 60,509,982 60,509,982
Due to Brokers 22 - - - 294,990,080 294,990,080 294,990,080
Due to Related Parties 26 - - - 31,909,028 31,909,028 31,909,028
Lease Liabilities

31.3 Fair Values of Financial Instruments
31.3.1 Valuation Models
The Group measures fair values using the following fair value hierarchy, which reflects the significance of the inputs used in
making the measurements.
• Level 1: Inputs that are quoted market prices (unadjusted) in active markets for identical instruments.
• Level 2: Inputs other than quoted prices included within Level 1 that are observable either directly (i.e. as prices) or indirectly
(i.e. derived from prices). This category includes instruments valued using: quoted market prices in active markets for
similar instruments; quoted prices for identical or similar instruments in markets that are considered less than active;
or other valuation techniques in which all significant inputs are directly or indirectly observable from market data.
• Level 3: Inputs that are unobservable. This category includes all instruments for which the valuation technique includes
inputs not based on observable data and the unobservable inputs that have a significant effect on the instrument’s
valuation. This category includes instruments that are valued based on quoted prices for similar instruments for which
significant unobservable adjustments or assumptions are required to reflect differences between the instruments.
31.3.2 Financial instruments Measured at Fair Value - Fair Value Hierarchy

The following table analyses financial instruments measured at fair value at the reporting date, by the level in the fair value
hierarchy into which the fair value measurement is categorised. The amounts are based on the values recognised in the
statement of financial position.
Group Level 1 Level 2 Level 3 Total

Rs. Rs. Rs. Rs.
31 December 2021
Financial Assets at FVTPL - 151,359,242 - 151,359,242
Investments in LFSB - - 1,165,965 1,165,965
Total Financial Assets - 151,359,242 1,165,965 152,525,207
Liabilities - - - -
31 December 2020
Financial Assets at FVTPL - 1,081,243,254 - 1,081,243,254
Investments in LFSB - - 1,165,965 1,165,965
Total Financial Assets - 1,081,243,254 1,165,965 1,082,409,219
Liabilities - - - -
Financial instruments Measured at Fair Value - Fair Value Hierarchy

Company Level 1 Level 2 Level 3 Total
Rs. Rs. Rs. Rs.
31 December 2021
Total Financial Assets - 101,063,363 - 101,063,363
Liabilities - - - -
31 December 2020
Total Financial Assets - 460,493,995 - 460,493,995
Liabilities - - - -
Level 2 fair Value Measurements

31.3.3.1 Reconciliation
The following table shows a reconciliation from the beginning balances to the ending balances for fair value measurements in
Level 2 of the fair value hierarchy.
Financial Assets at FVTPL
Group Company
Rs. Rs.
Balance at 01 January 2021 1,081,243,255 460,493,995

Total gains or losses:
- in profit or loss 58,925,203 29,024,409
Purchases - -
Redemption (988,809,218) (388,455,042)
Balance at 31 December 2021 151,359,240 101,063,362
Balance at 01 January 2020 842,015,124 330,954,977

Total gains or losses:
- in profit or loss 108,250,556 49,539,018
Purchases 658,000,000 230,000,000
Redemption (527,022,425) (150,000,000)
Balance at 31 December 2020 1,081,243,255 460,493,995

31.3.3.2 Unobservable Inputs Used in Measuring Fair Value
The fair value of Unit Trust investments are determined by the relevant Unit Trust Fund Management Company. The Unit Trust
Fund Management Company provides the fair value of the Group’s investment portfolio monthly.
Financial Instruments Not Measured at Fair Value

This table sets out the fair values of financial instruments not measured at fair value and analyses them by the level in the fair
value hierarchy into which each fair value measurement is categorised.
Level 01 Level 02 Level 03 Total Fair Total Carrying

Values Amount
Group Rs. Rs. Rs. Rs. Rs.
31 December 2021
Assets
Cash & Cash Equivalents - - 325,050 325,050 325,050
Balances with Banks & Financial Institutions - - 1,561,807,674 1,561,807,674 1,561,807,674
Financial Investments at Amortised Cost - - 383,680,982 383,680,982 383,680,982
Other Investments - - 3,728,319,740 3,728,319,740 3,728,319,740
Trade and Other Receivables - - 339,489,036 339,489,036 339,489,036
Total Financial Assets - - 6,013,622,482 6,013,622,482 6,013,622,482
31 December 2021
Liabilities
Due to Customers - - 7,471,790 7,471,790 7,471,790
Due to Brokers - - 1,211,776,514 1,211,776,514 1,211,776,514
Lease Liabilities on Right-to-use of Asset - - 278,155,609 278,155,609 278,155,609
Other Financial Liabilities - - 376,640,081 376,640,081 376,640,081
Total Financial Liabilities - - 1,874,043,994 1,874,043,994 1,874,043,994
31 December 2020
Assets
Balances with Banks & Financial Institutions - - 631,497,957 631,497,957 631,497,957
Other Investments - - 625,199,365 625,199,365 625,199,365
31 December 2020
Liabilities
Due to Customers - - 60,633,947 60,633,947 60,633,947
Due to Brokers - - 382,508,149 382,508,149 382,508,149
Other Financial Liabilities 127,817,832 127,817,832 127,817,832
Total Financial Liabilities - - 659,398,764 659,398,764 659,398,764

31.3.3.3 Financial Instruments Not Measured at Fair Value

This table sets out the fair values of financial instruments not measured at fair value and analyses them by the level in the fair
value hierarchy into which each fair value measurement is categorised.
Company Level 01 Level 02 Level 03 Total Fair Total Carrying

Values Amount
Rs. Rs. Rs. Rs. Rs.
31 December 2021
Assets
Other Investments - - 2,857,062,892 2,857,062,892 2,857,062,892
Liabilities
Due to Customers - - 7,441,790 7,441,790 7,441,790
Due to Brokers - - 25,335,236 25,335,236 25,335,236
Due to Related Parties - - 106,234,683 106,234,683 106,234,683

31 December 2020
Assets
Other Investments - - 625,199,365 625,199,365 625,199,365
Liabilities
Due to Customers - - 60,509,982 60,509,982 60,509,982
Due to Brokers - - 294,990,080 294,990,080 294,990,080
Due to Related Parties - - 31,909,028 31,909,028 31,909,028
Assets for which Fair Value approximates Carrying Value

For Financial assets and Financial liabilities that have a short term maturity (original maturity less than a year), it is assumed that
the carrying amount approximate their values.

32. RELATED PARTY DISCLOSURES
32.1 Transactions with Key Management Personnel
According to Sri Lanka Accounting Standard (LKAS 24) “Related Party Disclosures”, Key Management Personnel, are those
having authority and responsibility for planning, directing and controlling the activities of the entity. Accordingly, the Board of
Directors (including Executive and Non-Executive Directors) and Senior Management who can influence the planning & decision
making process have been classified as Key Management Personnel of the Company.
Close Family Members (CFM) of the KMPs are those family members who may be expected to influence or be influenced by that
KMPs in their dealing with the entity. They may include KMPs domestic partner and children of the KMPs domestic partner and
dependents of the KMPs domestic partner.
There were no transactions made with CFMs during the year ended 31 December 2021
CSE paid Rs. 4,036,000/- during the year as Directors’ Expenses. (Rs. 3,756,000 /- in 2020)
The Company has incurred following costs for the CEO, CRO, CIO, Senior Managers and Managers during the year.
Company
2021 2020
Amount Rs. Amount Rs.
Short Term Employee Benefits 116,739,483 109,952,581

Long Term Employee Benefits 13,942,139 12,399,570

32.2 Transactions with Group Companies and Director Related Entities

2021 2020
Company Relationship Nature of Transaction Amount Amount
Rs. Rs.
a) Mr. Ray Abeywardena
Acuity Chairman CSE Member fee, data communication charges & other charges 1,039,958 1,089,454
Stockbrokers Member fee, data communication &
(Pvt) Ltd other charges receivable 124,913 130,868
Sponsorship for Singapore Investor forum - -
Interest payment for Member Firms’ liquidity deposit 656,696 385,054
Member Firms’ liquidity deposit &
entrance deposit as at year end 1,040,000 20,500,000
Interest payable for Member Firms’ liquidity deposit
as at year end 14,174 146,852
Order Management systems &
Broker Back office Systems - Subsidy 250,000 1,000,000
Broker Back office Systems - Subsidy Payable - 250,000
Broker Donation for Covid -19 200,000 -
Reiumbursement of OMS and BBO system Audit 66,375
CDS Sale of CDS forms & Other CDS Charges 3,294 11,972
Amount receivable on sale of CDS forms as at year end 3,294 -
Interest paid for Member Firms’ margin deposit 1,184,714 6,523
Collateral Management Fee 24,300 -
Collateral Management Fee receivable as at year end 16,200 -
as at year end 464,529 -
Member Firms’ liquidity deposit as at year end 62,909,757 -
Lanka Director CSE Annual listing fee and ISIN Fee 110,160 110,160
Ventures PLC ISIN Fee receivable as at year end 540 1,080
CDS Listed company fees 25,000 27,705
Receipts for computer information & other CDS Charges 12,420 10,800
Amount receivable for computer information provided
as at year end 6,480 7,560
Listed company fees receivable as at year end - 2,705
Softlogic Life Director CSE Annual listing fees - 455,625
Insurance Web Banner ,CSE Mastermind and ISIN Fee - 384,160
PLC Web Banner, CSE Mastermind and ISIN Fee receivable
as at year end - 1,667
CDS Listed Company fee - 139,875
Computer information & other CDS Charges - 9,720
Listed Company fee receivable as at year end - 114,875
as at year end - 5,400
Guardian Director CDS Investment in Unit Trust made during the year - 148,000,000
Acuity Asset Redemption of Unit Trust made during the year 115,585,513 35,000,000
Management Investment in Unit Trust as at year end - 113,767,617
Ltd
LVL Energy Director CSE Annual listing fee and ISIN Fee 194,591 143,654
Fund Ltd ISIN Fee receivable as at year end 1,080 540
CDS Listed Company fee 93,120 126,675
Computer information & other CDS Charges 17,820 11,934
Listed Company fee receivable as at year end 42,690 101,675
as at year end 9,720 5,454

2021 2020
Rs. Rs.
b) Mr. Dilshan Wirasekara
First Capital Director/ CSE Annual Listing Fee 231,907 132,532
Holding PLC CEO Sponsorship, Registration for CSE Quiz, ISIN, Ticker module
and Advertising on CSE web site fee 502,080 166,160
Amount Receivable for Sponsorship, Registration for CSE
Quiz ISIN Fee,Ticker and web advertisement 1,620 540
CDS Charges for computer information 78,840 65,394
CDS Service Charges 337,545 431,625
Amount Receivable for computer information charges 16,200 5,400
Amount Receivable for service charges 147,915 276,900
First Capital Director CSE Investment in Unit Trust - -
Asset Investment as at year end 50,500,169 127,428,851
Management Redemption of Unit Trust 85,541,907 50,000,000
Limited CDS Investment in Unit Trust - 70,000,000
Redemption of Unit Trust 121,869,521 127,000,000
Investment as at year end - 114,471,359
First Capital Director CSE Member fees, Data Link cost - IDC and WAN charges 1,548,662 933,171
Equities (Pvt) Interest paid for Member Firms’ liquidity deposit 274,992 139,417
Limited Member Firms’ liquidity deposit & entrance deposit
as at year end 1,040,000 6,250,000
as at year end 14,174 40,978
Broker Back office Systems - Subsidy 250,000 1,000,000
Broker Back office Systems - Subsidy payable - 333,336
Amount receivable for Member fees,
Data Link cost - IDC and WAN charges 247,209 73,522
Broker Donations 200,000 -
Reiumbursement of OMS and BBO system Audit 66,375 -
CDS Sale of CDS Forms - 12,830
Interest for Member Firms’ liquidity deposit 1,234,533 10,971
Interest payable for Member Firms’ liquidity deposit 493,753 -
Member Firms’ liquidity deposit &
entrance deposit as at year end 46,971,782 -
Computer Information Charges 20,088 -
Computer Information Charges receivable 20,088 -
Collateral Management Fee receivable 10,800 -

2021 2020
Rs. Rs.
First Capital Director/ CSE Annual Listing Fee for the period 228,960 229,500
Treasuries CEO Amount receivable for ISIN fee 12,420 540
PLC Web Banner 150,000 -
Web Banner Receivable as at year end 22,500 -
CDS Charges for computer information 18,360 76,680
CDS Service Charges for the period 47,475 25,000
Amount Receivable for service charges 22,475 -
IPO Service charges 200,313 -
IPO service charges receivable 200,313 -
First Capital Director/ CSE Registration Fee for Training Programme 60,000
Ltd CEO
c) Mr. Dumith Fernando
Singer Director CSE Annual Listing Fee for the period 2,074,143 643,180
(Sri Lanka) Renewal Of Ticker Service and ISIN Fee 74,280 74,820
PLC Amount Receivable for Ticker Service and ISIN Fee 5,940 1,080
Purchasing furniture - 9,944
Amount payable for Purchasing furniture - 9,944
Purchasing AC Machine 937,396
CDS Charges for computer information, Direct Deposit Shares,
New Listing Fee and Charges for mandatory and voluntary
offers 165,955 10,822
Amount Receivable forcomputer information, Direct Deposit
Shares, New Listing Fee and Charges for mandatory and
voluntary offers 5,447 9,789
Amount Receivable for service charges 236,940 146,585
Asia Chairman CSE Member fees, Data Communication charges, photocopy
Securities charges Data Link charges and WAN charges 1,023,239 944,818
(Pvt) Ltd Amount Receivable for Member fees, Data Communication
charges, photocopy charges Data Link charges and WAN
charges 85,385 103,762
Interest paid for Member Firms’ liquidity deposit 1,360,404 678,393
Member Firms’ liquidity deposit & entrance deposit as at
year end 1,040,000 39,000,000
Interest payable for Member Firms’ liquidity deposit as at
year end 14,174 295,977
Order Management systems & Broker Back office Systems
- Subsidy 250,000 1,000,000
Order Management systems & Broker Back office Systems -
Subsidy payable - 333,336
Reiumbursement of OMS and BBO system Audit 66,375 -
Donations for Covid 19 200,000 -

2021 2020
Rs. Rs.
Asia Chairman CDS Sale of CDS Forms - 1,746
Securities Amount Receivable for Sale of CDS Forms - 909
(Pvt) Ltd Payment of interest for Member Firm’s Margin Requirement 2,112,916 174,103
(contd.) Interest Payable for Member Firm’s Margin Requirement 728,696 -
Dex Liquidity Deposit as at year end - -
15% Margin deposit as at year end - 11,994,607
Member Firms’ liquidity deposit 107,724,049 -
Management Collateral fee &
Daily/Weekly Document Charges 27,000
Management Collateral fee &
Daily/Weekly Document Charges as at year end 5,400
Union Director CSE Annual listing fee 582,332 630,064
Assurance Registration for CSE Media Room, CSE Quiz, ISIN and
PLC My CSE 103,160 103,160
Payment for Electricity and Rent 2,141,717 2,090,859
Amount Receivable for CSE Media Room, My CSE and
ISIN Fee 1,620 1,080
Amount payable for Electricity and Rent -
CDS Charges for Computer information charges and
Daily weekly Charges 21,600 18,360
Amount Receivable for service charges 30,345 -
d) Mr. Dimuthu Abeyasekera
Asha Director CSE Photocopy Charges, Broker Fees,SLT Relocation charges,
Securities Ltd My CSE, Mastermind Reg fee and WAN Charges 1,824,849 1,683,882
Payment of interest for Member Firms’ liquidity deposit 1,210,439 592,591
Payment for broker Order Management Systems and
Broker Back office 250,000 1,000,000
Amount receivable for Photocopy Charges, Broker Fees,
SLT Relocation charges, My CSE, Mastermind Reg fee and
WAN Charges 150,770 111,388
Interest payable for Member Firms’ liquidity deposit 14,174 239,704
Member Firms’ liquidity deposit & entrance deposit
as at year end 1,040,000 30,500,000
Broker Back office Systems - Subsidy payable - 416,669
Deposit for Branch at Anuradhapura 81,000 -
Deposit for Branch at Anuradhapura as at year end 81,000 -
Reimbursement of OMS and BBO system Audit 66,375 -
CDS CDS forms & Computer Information 19,467 27,551
Payment of interest for Member Firms’ Margin Requirement 2,003,058 36,921
Amount Receivable for Sale of CDS Forms &
Computer Information 6,323 3,294
Member Firms’ liquidity deposit as at year end 92,045,032 -
Interest for Member Firms’ Margin Requirement
as at year end 701,266 -
Collateral Management Fee as at year end 10,800 -

2021 2020
Rs. Rs.
e) Mr.Murtaza Jafferjee (Untill 16th July 2020 (CSE) & 4th August 2020 (CDS))
Serendib Director CSE Annual listing fees and ISIN Fee - 118,422
Hotels PLC Amount Receivable for ISIN Fee - 1,080
CDS Computer information charges - 16,200
CDS Service Charges - 25,000
Amount Receivable for Computer information charges - 2,160
Amount Receivable for CDS Service Charges - 25,000
JB Securities Director CSE Member fees and Mastermind Registration - 211,680
(Pvt) Ltd Order Management systems & Broker Back office Systems - 583,331
Interest paid for Member Firms’ liquidity deposit - 71,161
Interest payable for Member Firms’ liquidity deposit as at
31st July 2020 - 6,952
Member Firms’ liquidity deposit & entrance deposit as at
31st July 2020 - 1,750,000
Order Management systems & Broker Back office Systems -
Subsidy payable - 83,333
CDS Forms - 3,294
CDS Interest paid for Member Firms’ liquidity deposit - 46,906
J B Financial Director CSE ISIN Fee - 8,640
(Pvt) Ltd Amount Receivable for ISIN Fee - 4,320
Investment in Unit Trust - -
Investments at 31st July 2020 - 29,449,380
CDS Investment in Unit Trust - -
Investment as at 31st July 2020 - 325,360,820
f) Mr. Arjuna Herath
Ernst & Young Partner CSE ISO 27001 Management Systems Internal Audit 582,460 582,460
g) Mr. Asanga Seneviratne (From 23rd September 2021 (CSE) & 29th September 2021 (CDS))
Nation Lanka Chairman CSE Member fees,Data Link cost - IDC and WAN Charges 261,153 -
Equities (Pvt) Member fees,Data Link cost - IDC and WAN Charges
Ltd receivable as at year end 200,673 -
Interest for Member Firms’ liquidity deposit from
september 2021 20,532 -
Interest payable for Member Firms’ liquidity deposit from
september 2021 14,174 -
as at year end 1,040,000 -
CDS Collateral Management Fee 16,115 -
Collateral Management Fee Receivable 24,730 -
Interest for Member Firms’ liquidity deposit 506,274 -
Interest payable for Member Firms’ liquidity deposit 230,847 -
as at year end 28,656,697 -
Anilana Managing CSE Listing Fee, Quatation fee and ISIN Fee 36,540 -
Hotels and Director Listing Fee, Quatation fee and ISIN Fee Receivable 114,480 -
Properties CDS Computer information charges and New listing 2,160
Computer information charges and New listing receivable 77,125 -
CDS Service Charges 81,090 -
CDS Service Charges Receivable 246,545 -

2021 2020
Rs. Rs.
h) Central Fully Fund Transfer In (410,558,460) (261,282,767)
Depository owned Fund Transfer Out 165,490,077 146,485,682
Systems Subsidiary Expenses transferred 99,415,290 120,600,675
(Pvt) Ltd Cheque received on behalf of CDS 5,400 (1,891,535)
Cheque received on behalf of CSE (654,180) 1,440,677
Interest Expense (93,293) (81,119)
CDS Rental Income & Management Fee 72,069,511 49,001,118
33. EVENTS OCCURRING AFTER THE REPORTING PERIOD

There were no material events after the Reporting Period, which require adjustments to or disclosure in the Financial Statements.
34. DIRECTORS’ RESPONSIBILITY STATEMENT

The Board of Directors of the Company and its subsidiary is responsible for the preparation and fair presentation of these
Financial Statements in accordance with LKASs and SLFRSs.
35. COMPARATIVE FIGURES

To facilitate comparison, relevant balances pertaining to the previous year have been reclassified to confirm to current year
classification and presentation where necessary.

10 YEAR SUMMARY
Rs. '000 2012 2013 2014 2015
Income Statement
Revenue 490,944 456,190 732,878 641,617
Other Income 35,847 28,047 37,808 52,888
Staff Cost 205,431 219,060 272,069 293,414
Depreciation & Amortization 75,319 116,386 127,220 98,434
Other Operating Expenses 344,448 408,406 483,915 467,295
Impairment Charges and
other credit Losses on Financial Assets 566 203 2,565 1,336
Net Finance Income 247,257 277,984 175,107 158,258
Profit/(Loss) before Taxation 148,283 18,167 60,025 (7,715)
Income Tax Expense 17,752 22,073 18,848 2,154
Profit/(Loss) for the year 130,531 (3,906) 41,177 (9,869)
Other Comprehensive Income/(Expense) - 5,693 (11,042) 2,213
Total Comprehensive Income/(Expense) for the Year 130,531 1,787 30,136 (7,657)
Statement of Financial Position

Assets
Property & Equipment 211,474 297,210 241,280 210,038
Intangible Assets 161,110 149,408 248,818 218,754
Capital Work in Progress 60,701 111,705 38,894 56,418
Financial Investments at Amortized Cost - - - 185,824
Investments in LFSB 1,000 1,000 1,000 1,000
Settlement Guarantee Fund 100,000 100,000 100,000 100,000
Deferred Tax Assets 3,104 - - -
Inventories 4,426 4,059 3,860 4,017
Trade and Other Receivables 197,068 204,163 250,804 273,932
Tax Assets 12,228 8,887 18,963 24,171
Financial Assets at FVTPL 1,653,183 2,283,472 2,386,225 2,152,111
Other Investments 750,000 - - -
Cash and Cash Equivalents 143,550 120,937 146,354 158,280
Total Assets 3,297,844 3,280,840 3,436,198 3,384,544
Equity
Accumulated Fund 2,945,020 2,955,576 3,000,742 2,973,916
Capital Reserve 148,710 139,942 124,912 144,081
Liabilities
Brokers' Deposits in lieu of Bank Guarantee 96,230 95,770 105,982 115,020
Government Grant - - - -
Retirement Benefit Obligations 39,685 31,733 52,012 61,939
Lease Liabilities on Right-to-use of Asset - - - -
Deferred Tax Liabilities - - - -
Other Payables 57,805 52,046 127,425 88,818
Tax Liability - - 15,130 -
Bank Overdraft 10,394 5,774 9,997 770
Total Equity & Liabilities 3,297,844 3,280,840 3,436,198 3,384,544
182 Supplementary Information • Annual Report 2021 • Colombo Stock Exchange

2016 2017 2018 2019 2020 2021
481,837 557,827 535,554 492,237 964,510 2,567,177

46,369 56,065 83,327 75,871 76,931 129,989
291,687 291,131 327,420 332,961 389,424 511,386
99,688 85,295 72,475 163,535 158,010 198,600
471,231 493,095 498,178 358,913 313,472 367,797
1,380 984 5,219 3,814 1,903 2,295

220,988 269,250 275,228 252,045 279,378 264,523
(114,792) 12,637 (9,183) (39,071) 458,010 1,881,611
4,732 23,705 - 3,893 40,772 239,828
(119,524) (11,068) (9,183) (42,964) 417,239 1,641,783
24,708 (7,450) 14,542 (10,569) (24,908) 30,520
(94,816) (18,518) 5,359 (53,533) 392,331 1,672,303
154,852 134,242 128,892 275,151 327,486 496,732

207,264 186,493 174,701 144,070 133,971 387,043
73,570 78,096 78,096 81,034 125,136 35,055
779,979 779,969 779,623 755,805 760,602 584,001
1,000 1,000 1,166 1,166 1,166 1,166
100,000 100,000 100,000 100,000 100,000 100,000
- - - - - -
4,777 2,123 2,325 2,847 2,325 2,712
245,830 262,426 271,049 255,616 318,129 339,489
23,699 10,386 23,788 37,908 35,075 -
793,240 539,982 154,407 842,015 1,081,243 151,360
152,980 1,031,247 1,376,477 769,407 625,199 3,528,000
758,147 139,777 211,691 122,202 631,823 1,562,133
3,295,339 3,265,740 3,302,214 3,387,219 4,142,155 7,187,691
2,841,750 2,904,291 2,909,254 2,855,722 3,248,052 4,920,356

181,431 100,372 100,141 100,141 100,141 100,141
124,799 89,770 113,902 91,678 380,174 1,203,162

- - - - - 21,661
43,230 58,897 54,364 74,372 106,393 91,949
- - - 175,011 88,439 278,156
- - - - - 20,262
87,594 103,833 116,741 87,752 190,786 392,727
- - - - 28,171 159,278
16,535 8,578 7,812 2,544 - -
3,295,339 3,265,740 3,302,214 3,387,219 4,142,155 7,187,691
Colombo Stock Exchange • Annual Report 2021 • Supplementary Information 183

REGIONAL BRANCH OFFICES
Jaffna
Jaffna Branch Kurunegala Branch
No. 147-2/3, KKS Road, Jaffna. 1st Floor, "Union Assurance Centre",
+94 21 222 1455 No. 6, Rajapihilla Mawatha, Kurunegala.
+94 21 222 1466 +94 37 469 1802/04
[email protected] +94 37 469 1803
Acting Branch Manager [email protected]
Mr. Shanmukananthan Sabananthan Branch Manager
Mr. Thusitha Meegahakumbura
Anuradhapura Branch
2nd Floor, 488/8/2 Town Hall Place, Kandy Branch
Maithripala Senanayake Mw, "Ceybank House",
Anuradhapura. No.88, Dalada Veediya, Kandy.
+94 25 223 5244/33 +94 81 447 4407/09
+94 25 223 5233 +94 81 447 4475
[email protected] [email protected]
Branch Manager Branch Manager
Mr. Tharaka Amarasena Mr. Dhananjaya Abeysiriwardana
Anuradhapura
Negombo Branch
72A, 2/1, Old Chilaw Road, Negombo.
+94 31 222 7859/61
+94 31 222 7860
[email protected]
Branch Manager
Mr. Nuwan Chathuranga
Ratnapura Branch
Level 01, No 131, Colombo Road,
Kurunegala Ratnapura.
+94 45 223 2388 /+94 45 223 2399
Kandy +94 45 223 2388
[email protected]
Negombo
Branch Manager
Mr. Sivananthan Raman
Muthukrishnan
Ambalantota Branch
52, Hambantota Road, Ambalantota.
Ratnapura +94 47 222 5462 / +94 47 222 5463
+94 47 222 5464
[email protected]
Branch Manager
Mr. Kamal Jayaweera
Matara Branch
Ambalantota 1st Floor, E.H. Cooray Tower, No.24,
Anagarika Dharmapala Mawatha,
Matara.
Matara +94 41 222 0094/95
+94 41 439 0546
[email protected]
Branch Manager
Mr. Nirodha Abeygunawardena

MEMBER FIRMS
Members
Bartleet Religare Securities Somerville Stockbrokers S C Securities (Pvt) Ltd.
(Pvt) Ltd. (Pvt) Ltd. 5th Floor, 26 B, Alwis Place,
Level "G", "Bartleet House", 1A, Park Way, Park Road, Colombo 5. Colombo 3.
65, Braybrooke Place, Colombo 2. +94 11 2 502 852 / +94 11 2 502 854 / +94 11 4 711 000 / +94 11 4 711 001
+94 11 5 220 200 +94 11 2 502 858 / +94 11 2 502 862 +94 11 2 394 405
+94 11 2 434 985 +94 11 2 502 852 [email protected]
[email protected] [email protected] http://www.sampathsecurities.lk
http://www.bartleetreligare.com Mr. Chamira Pramod Wijethilaka Mr. Roshantha Fernando
Mr. Sujeewa Peiris Chief Executive Officer Chief Executive Officer
Director / CEO
J B Securities (Pvt) Ltd. CT CLSA Securities (Pvt) Ltd.
Acuity Stockbrokers (Pvt) Ltd. No. 150, St. Joseph Street, 4-14, Majestic City, 10, Station Road,
No. 53, Dharmapala Mawatha, Colombo 14. Colombo 04.
Colombo 3. +94 11 2 490 900 +94 11 2 552 290 - 4
+94 11 2 206 206 +94 11 2 430 070 +94 11 2 552 289
+94 11 2 206 298 / 9 [email protected] [email protected]
[email protected] https://www.jbs.lk http://www.ctclsa.lk
http://www.acuity.lk Mr. Murtaza Jafferjee Mr. Sivashanth Sundararajee
Mr. Prashan Fernando Chief Executive Officer Acting Chief Executive Officer
Director / CEO
Lanka Securities (Pvt) Ltd. First Capital Equities (Pvt) Ltd.
John Keells Stock Brokers 228/1, Galle Road, Colombo 04. No. 2, Deal Place, Colombo 03.
(Pvt) Ltd. +94 11 4 706 757 / +94 11 2 554 942 +94 11 2 639 898
186, Vauxhall Street, Colombo 2. +94 11 4 706 767 +94 11 5 736 264
+94 11 2 306 250 [email protected] [email protected]
+94 11 2 342 068 http://www.lankasecurities.com http://www.firstcapital.lk
[email protected] Mr. Kosala Gamage Mr. Jaliya Wijeratne
http://www.jksb.com Managing Director / CEO Chief Executive Officer
Mr. Tivanka Ratnayake
Chief Executive Officer Asia Securities (Pvt) Ltd. NDB Securities (Pvt) Ltd.
4th Floor, Lee Hedges Tower, Level 2, NDB Capital Building, No. 135,
Asha Securities Ltd. No. 349, Galle Road, Colombo 3. Bauddhaloka Mawatha, Colombo 4.
No. 60, 5th Lane, Colombo 03. +94 11 7 722 000 +94 11 2 131 000
+94 11 2 429 100 +94 11 258 4864 +94 11 2 314 181
+94 11 2 429 199 [email protected] [email protected]
[email protected] http://asiasecurities.net http://www.ndbs.lk
http://www.ashasecurities.net Mr. U L B Ariyaratna Mr. Gihan Cooray
Mr. Dimuthu Abeysekera Chief Executive Officer Chief Executive Officer
Director / CEO
Capital Trust Securities (Pvt) Ltd. Nation Lanka Equities (Pvt) Ltd.
Assetline Securities (Pvt) Ltd. 42, Mohamed Macan Markar Mawatha, No. 44, Guildford Crescent,
No. 120, 120A, Pannipitiya Road, Colombo 3. Colombo 07.
Battaramulla. +94 11 2 174 174 / +94 11 2 174 175 +94 11 789 8302
+94 11 4 700 100 +94 11 2 174 173 [email protected]
+94 11 4 700 101, +94 11 4 700 112 [email protected] http://www.nlequities.com
[email protected] http://www.capitaltrust.lk Mr. Danushka P Samarasinghe
http://assetline.lk/product/stock-broking Mr. Tushan Wickramasinghe Chief Executive Officer
Ms. R. M. A. S. Parakrama Managing Director
Director

Member Firms
Trading Members
Capital Alliance Securities Enterprise Ceylon Capital TRADING MEMBERS - DEBT
(Pvt) Ltd. (Pvt) Ltd. Capital Alliance Ltd.
Level 5, "Millennium House", 46/58 2nd Floor-4B, Liberty Plaza, 250, R. A. Level 5, "Millenium House" 46/58,
Navam Mawatha, Colombo 2. De Mel Mawatha, Colombo 3 Nawam Mawatha, Colombo 2.
+94 11 2 317 777 +94 112 445 644 , 112 301 861/2 +94 11 2 317 777
+94 11 2 3177 88 [email protected] +94 11 2 317 788
[email protected] http://ecc.lk [email protected]
https://cal.lk Ms. Priyani Ratna-Gopal https://cal.lk
Mr. Harinlal Aturupane Managing Director / CEO Mr. Ajith Fernando
Managing Director / CEO Chief Executive Officer
Richard Pieris Securities
Nestor Stock Brokers (Pvt) Ltd. (Pvt) Ltd. Wealthtrust Securities Ltd.
No. 02, Gower Street, No.310, High Level Road, Nawinna, No. 102/1, Dr. N.M. Perera Mawatha,
Colombo 5. Maharagama. Colombo 08.
+94 11 5 388 138 +94 11 4 310 500 +94 11 2 675 091 - 4
+94 11 2 550 100 +94 11 2 802 385 +94 11 2 689 605
[email protected] [email protected] [email protected]
https://www.nestorstockbrokers.lk http://www.arpico.com/
Mr. R. Gomez
Mr. N. N. Jayatillake Mr. Reshan Kurukulasuriya Managing Director
Chief Executive Officer Acting Chief Executive Officer
NSB Fund Management Ltd.
Senfin Securities Ltd. Softlogic Stockbrokers (Pvt) Ltd. No. 400, Galle Road, Colombo 3.
46/58 Nawam Mawatha, Colombo 02. Level 16, One Galle Face Tower, +94 11 242 5010
+94 11 2 359 100 Colombo 02. +94 11 2 574 387
+94 11 2 305 522 +94 11 7 277 000
Mr. D. L. P. Abayasinghe
[email protected] +94 11 7 277 099
Chief Executive Officer
http://www.candor-holdings.com [email protected]
Mr. Ravindra Abeysuriya http://www.softlogicequity.lk
Seylan Bank Plc
Chief Executive Officer Mr. Dihan Dedigama Level3, Seylan Towers, 90, Galle Road,
Director / CEO Colombo 03.
First Guardian Equities (Pvt) Ltd. +94 11 245 6300
32nd Floor, East Tower, World Trade LOLC Securities Ltd. +94 11 245 2215
Centre, Colombo 1. No. 481, T.B.Jayah Mawatha, [email protected]
+94 11 5 884 400 (Hunting) Colombo 10. https://www.seylan.lk/
+94 11 5 884 401 +94 11 5 889 889
Mr. K Shanaka C Perera
[email protected] +94 11 2 662 883
Deputy General Manager - Treasury
http://www.fge.lk [email protected]
Mr. Rohan Goonewardene https://www.lolcsecurities.com
Managing Director / CEO Mr. Sriyan Gurusinghe
Managing Director / CEO
Taprobane Securities (Pvt) Ltd.
2nd Floor, No. 10, Gothami Road, Asia Capital Stock Brokers
Colombo 08. (Pvt) Ltd.
+94 11 5 328 200 / +94 11 5 328 100 No. 46/46, 7th Floor, Greenlanka
+94 11 5 328 177 Towers, Nawam Mawatha, Colombo 02.
[email protected] +94 11 532 0000
http://www.taprobane.lk +94 11 233 1756
Mr. C. A. Kamaladasa [email protected]
Chief Executive Officer http://www.acapstockbrokers.lk
Mr. Thusitha Perera
Chief Executive Officer

GRI INDEX
GRI 102-55
Organisational Profile Page No.

GRI 102 General Disclosures 102-1 Name of the organisation 4
102-2 Activities, brands, products and services 5
102-3 Location of headquarters Inside back cover
102-4 Location of operations Inside back cover
102-5 Ownership and legal form Inside back cover
102-6 Markets served 5
102-7 Scale of the organisation 5
102-8 Information on employees and other workers 96
102-9 Supply chain 47
102-10 Significant changes to the organisation and its supply chain 47
102-11 Precautionary principle or approach 3
102-12 External initiatives 3
102-13 Membership of associations 4
Strategy
GRI 102 General Disclosures 102-14 Statement from senior decision maker 29
Ethics and Integrity
GRI 102 General Disclosures 102-16 Values, principles, standards and norms of behaviour 4
Governance
GRI 102 General Disclosures 102-18 Governance structure 62
Stakeholder Engagement
GRI 102 General Disclosures 102-40 List of stakeholder groups 44
102-41 Collective bargaining agreements Not applicable
102-42 Identifying and selecting stakeholders 44
102-43 Approach to stakeholder engagement 44
102-44 Key topics and concerns raised 44
Reporting Practice
GRI 102 General Disclosures 102-45 Entities included in the consolidated financial statements 3
102-46 Defining report content and topic boundaries 3
102-47 List of material topics 50
102-48 Restatements of information 3
102-49 Changes in reporting 3
102-50 Reporting period 3
102-51 Date of most recent report 3
102-52 Reporting cycle 3
102-53 Contact point for questions regarding the report 3
102-54 Claims of reporting in accordance with the GRI standards 3
102-55 GRI content index 187
102-56 External assurance 3
Economic Topics
GRI 201 Economic Performance 201-1 Direct economic value generated and distributed 7

GRI Index
Organisational Profile Page No.

Environmental Topics
GRI 301 Materials 301-1 Materials used by weight or volume 13
301-2 Recycled input materials used 13
301-3 Reclaimed products and their packaging materials 13
Social Topics
GRI 401 Employment 401-1 New employee hires and employee turnover, by age, gender 94, 97
and region
401-2 Benefits provided to full-time employees that are not provided 99
to temporary or part-time employees
401-3 Parental leave 92
GRI 404 Training and Education 404-1 Average hours of training per year per employee by gender 94
and category
404-2 Programs for upgrading employee skills and transition 99
assistance programs
404-3 Percentage of employees receiving regular performance and 100
career development reviews
GRI 405 Diversity and Equal 405-1 Diversity of governance bodies and employees 92, 96
Opportunity
GRI 413 Local Communities 413-1 Operations with local community engagement, impact 120
assessments, and development programs

NOTICE OF MEETING
The 37th Annual General Meeting of the Colombo Stock Exchange will be held on
23rd June 2022 at 4.30 pm at the Colombo Stock Exchange, Auditorium, 4-1, West
Block, World Trade Center, Colombo 01 for the following purposes.
Agenda
1. To receive and consider the Annual Report of the Directors and Financial
Statement of the Company for the year ended 31st December 2021 together
with the Report of the Auditors thereon.
2. Election / Re-election of Directors

a. To re-elect Mr. Dumith Fernando who retires in terms of Article 50 of the
Articles of Association. (Mr. Dumith Fernando being eligible is offering himself
for re-election).
b. To re-elect Mr. Ray Abeywardena who retires in terms of Article 50 of the
Articles of Association. (Mr. Ray Abeywardena being eligible is offering himself
for re-election).
3. To re-appoint the retiring Auditors Messrs. KPMG, Chartered Accountants,

as the Auditors of the Company, to hold office until the conclusion of the next
Annual General Meeting of the Company, to audit the Financial Statements of
the Company for the ensuing year and authorize the Directors to determine their
remuneration.
4. To authorize the Directors to determine donations for the year ending 31st
December 2022 and up to the date of the next Annual General Meeting.
By order of the Board
CORPORATE SERVICES (PRIVATE) LIMITED

Secretaries to Colombo Stock Exchange
21st March 2022.
Note:
Any member entitled to attend, and vote is entitled to appoint corporate
representative instead (please see attached form of resolution).

NOTES

CORPORATE REPRESENTATION
Colombo Stock Exchange

In terms of Article 46 of the Articles of Association of the Colombo Stock Exchange a body corporate, which is a member of
the Exchange, may by resolution of its Board authorize any such person to act as its representative at a general meeting of the
Exchange.
Specimen Resolution
A certified true copy of a Resolution passed by the Board of Directors of ................................................................................. on
...................................................... day of .................................................................. 2022.
IT IS HEREBY RESOLVED that pursuant to Article 46 of the Articles of Association of Colombo Stock Exchange to appoint
..................................................................................... (holder of National Identity Card No. ................................................) of
...................................................... to act as our representative, to vote for us and to speak on our behalf and to exercise the
same powers on our behalf which we would exercise if we were individual Members of the Colombo Stock Exchange, at the
Annual General Meeting of the Colombo Stock Exchange to be held on .......................................... 2022, and at any
adjournment thereof.
Director Director/Secretary
Note:
A copy of the Board Resolution as set out above, certified as specified by the Articles of the Member Firm should be deposited
at the Office of the Colombo Stock Exchange, 04 - 01, West Block, World Trade Centre, Echelon Square, Colombo 1, either
before or at the time of the meeting.

CORPORATE INFORMATION
Name
Legal Status
A Company Incorporated in Sri Lanka and
Limited by Guarantee
Company Registration Number

GL12
Subsidiary
Central Depository Systems (Private) Limited.
Registered Office
# 04-01, West Block, World Trade Center,
Echelon Square, Colombo 1, Sri Lanka.
Secretaries
Auditors
KPMG
Lawyers
M/s Julius & Creasy, Attorneys-at-Law
M/s FJ and G de Saram, Attorneys-at-Law
Bankers/ Settlement Banks

Bank of Ceylon
Commercial Bank of Ceylon PLC
Hatton National Bank PLC
Sampath Bank PLC

Contact:
Tel : +94 11 2356456
Email : [email protected]
Website : www.cse.lk

Annual Report 2021

Uploaded by

Copyright:

Available Formats

Annual Report 2021

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Annual Report 2021

Uploaded by

Copyright:

Available Formats

COLOMBO STOCK EXCHANGE

ANNUAL REPORT 2021

Sustaining Our Value Creation

2 Overview • Annual Report 2021 • Colombo Stock Exchange

• Integrated Reporting Framework of the International Reporting Council

Mr. Rajeeva Bandaranaike

Colombo Stock Exchange • Annual Report 2021 • Overview 3

GRI 102-1, 13, 16

• Increase the number of

4 Overview • Annual Report 2021 • Colombo Stock Exchange

Primary market/Listing Market Data

Secondary market/Listing Depository Services

Our Business Supporting

• Listing • Finance &

675,309 296 29 157

Colombo Stock Exchange • Annual Report 2021 • Overview 5

The Colombo Stock Exchange (CSE) was

Limited by guarantee, we are a mutual exchange

6 Overview • Annual Report 2021 • Colombo Stock Exchange

2019 2020 2021

Facilitating corporates to Creating opportunities for

Nurturing stable Ensuring strict

Encouraging a sustainability culture with

Colombo Stock Exchange • Annual Report 2021 • Overview 7

GRI 201-1 GRI 201-1

8 Overview • Annual Report 2021 • Colombo Stock Exchange

Colombo Stock Exchange • Annual Report 2021 • Overview 9

COLOMBO STOCK EXCHANGE (CSE) - SOME HIGHLIGHTS IN OUR JOURNEY

1985 1990 1991 1995 1997 1998 2005

Opening of the 1st Board Office - Matara 1998

10 Overview • Annual Report 2021 • Colombo Stock Exchange

2015 2016 2017 2018 2019 2020

CSE launches the

The launch of the CSE adopts

Colombo Stock Exchange • Annual Report 2021 • Overview 11

Revenue Digital Capital

12 Overview • Annual Report 2021 • Colombo Stock Exchange

2019 2020 2021

Investors Paper Consumption

Local Foreign New CDS accounts

Colombo Stock Exchange • Annual Report 2021 • Overview 13

CONSUMER FINANCE INDUSTRY

MATERIALS INDUSTRY INVESTMENT BANKING &

14 Overview • Annual Report 2021 • Colombo Stock Exchange

World Advanced economies DOMESTIC ECONOMIC ENVIRONMENT

Value of Share trading

16 Overview • Annual Report 2021 • Colombo Stock Exchange

Inflation-NCPI The trade deficit in the twelve months

bank remain positive, anticipating the

external sector to improve, with the

2,500 205 10,000,000

0 180 Credit to the Credit to the

Public Sector Private Sector

Broad Money Domestic credit

Colombo Stock Exchange • Annual Report 2021 • Overview 17

Interest Rates ASPI S&P SL20

in history, recording a market turnover of Rs. 1,173 Bn.

AWDR AWPR 365 Day TB

Following the tightening of the