Revised Circular on Submission of Annual Business Plan

CENTRAL BANK OF SEYCHELLES
P. O. Box 701, Victoria, Seychelles
Telephone: [+248] 428 20 00 Ref: FSD/BP/1(g)
Fax: [+248] 432 36 65
E-mail: enquiries@cbs.sc Date: June 26, 2025
To All Banks, Housing Finance Company Limited, Development Bank of Seychelles and Seychelles Credit Union Submission of Annual Business Plan – Revised deadline The Central Bank of Seychelles (CBS) wishes to inform all the above-mentioned institutions that the deadline for the submission of the annual Business Plan has been extended from the end of March to the end of April, effective as of the 2026 reporting cycle. This adjustment aims to provide institutions with additional time to finalise and submit their Business Plans, while ensuring the quality and relevance of the information presented. Furthermore, note that all other provisions stipulated in the original circular shall remain unchanged, with the exception of Section 3.6, which has been subject to minor revisions in alignment with the amended Capital Adequacy Regulation ‘2023’. For further details, kindly refer to the guidelines enclosed herewith. We trust in your co-operation in adhering to this revised deadline. Yours sincerely, B. Commettant (Mr.) First Deputy Governor

Business Plan Requirements
OVERVIEW OF THE BUSINESS PLAN
The business plan should cover in detail, the institution’s business in relation to the next three years of operation and should consist of two parts:
(1) A narrative describing the institution’s business, targeted market, economic conditions, business activities, competition, risk management plans, capital plans, liquidity plans and business plan monitoring; and (2) Pro forma financial statements for the next three financial years of business operations, including balance sheet, profit and loss accounts, and cash flow projections. NARRATIVE Describe the institution’s corporate structure, in words, and show by diagram, the corporate structure, and if the institution is part of a group, then show all entities within the group (parents, subsidiaries, joint ventures and other affiliates). The shareholdings of each entity within the group as well as the type of businesses should also be included. In subsequent years, highlight clearly any major change in the institution’s corporate structure. An Executive summary which includes the visions and mission statement, as well as the key strategic goals for the financial institution and any present plan for future expansion. Provide a basic statement on the nature and scale of the institution’s business. Submit a copy of the sensitivity analysis and feasibility study and analysis thereof, which was relied upon when developing the business plan. List and discuss all assumptions used in preparation of the business plan, financial projections, feasibility analysis and sensitivity analysis.

CONTENT OF BUSINESS PLAN
The business plan will not be considered acceptable unless it addresses, at a minimum, the following assumptions:
3.1. Target Market
Identify and describe the market to be served by the institution and include in that description, information regarding the:
Size and the geographical or other delineation; Population demographics; Economic sectors, industries, and businesses; Existing institutions with which the institution will be competing against; and Identified needs for institution’s business, highlighting those needs that are not currently being met by the competition.
3.2. Economic Conditions
Address current economic conditions in Seychelles and in any other market made relevant by the business plan. Explain the institution’s expectations of future changes, factors influencing such changes, and the impact those expected changes are projected to have on the institution. Address in specific, the expected level of interest rates in the general economy, and the interest rates on the categories of earning assets and interest-bearing liabilities in the business plan. Explain how the business plan and operating results will change as a result of changes in forecasted interest rates. Based on the sensitivity analysis performed by the institution, explain the economic parameters under which the business plan would no longer be considered feasible and the institution’s operations no longer viable.
3.3. Business Activities
For banks in the first year compiling the business plan, list each banking business activity from
section 4 of the Financial Institutions Act 2004, as amended, in which the bank is engaged in

or plans to engage in. In subsequent years, list the bank’s new banking activities. For other supervised institutions, list all business activities in which the institution engage or intends to engage in the first year of completing the business plan. In subsequent years, list the new non￾banking business activities in which the institution will be involved, if applicable. Explain all off-balance sheet activities. Discuss the extent to which each business activity envisaged in the business plan will be engaged. Summarise and support the projections for asset and liability composition and mix. Explain how and why the asset and liability composition and mix is expected to change over time. This discussion should be supported by information which clearly shows the institutions’ capability to undertake those business activities in terms of oversight by the board of directors, management expertise, systems, organisation and staff.
3.4. Competition
Provide information on all competition for the target market.
Show current market share of the competition in the major areas of the institution’s business plan and compare it with expected market share that includes the institution during the three years covered by the plan. Describe the methods that will be used to meet the institution’s market share goals, including interest rate pricing, advertising, and other methods. Describe the effect that the institution expects to have on its competitor when in operation for the next three years.
3.5. Risk Management
Describe the risk profile of the institution when engaged in the business activities envisaged by the plan. Highlight the areas of operation that represent the greatest risk of loss to the institution and explain why. Describe the changes expected to the risk profile over the three years based on the changes planned in the asset and liability composition and mix.

Describe how the risk management processes – risk identification, measurement, monitoring, and control – will be used to control the identified risks specifically addressing: credit, liquidity, interest rate, legal, reputational, foreign exchange and market risk.
3.6. Capital
Show the institution’s capital structure.
Describe the projected earnings and operating results, capital goals, and the institution’s plans for growth over the three years covered by the business plan. Explain the institution’s plans for supporting its risk profile and its plans for growth through adequate advance planning and an adequate capital base and cushion. State all additional sources of capital that are reasonably available should the need arise in the future. Provide any plans that the institution may have in regards to increasing its capital. Explain the dividend policy and state whether any dividends are to be paid during the three years covered by the plan. Show the expected capital ratios, namely the Capital Adequacy Ratio and Core Capital Ratio, in line with ‘regulation 5’ of the Capital Adequacy (Amendment) Regulations 2023.
3.7. Liquidity
List and explain the primary sources of deposits and the methods used to solicit deposits. Describe plans to ensure that the institution maintains adequate liquidity throughout the period covered by the plan. List all funding sources for both normal and adverse circumstances. Explain how the projected cash flow statements that accompany the balance sheet and profit and loss of the business plan were derived. Specifically, explain how the net funding requirements for each period were derived to ensure that all obligations and liabilities are covered by planned funding. Explain how funding requirements are projected to vary based on expected economic and other changes. Describe the results of the sensitivity analysis performed and explain contingency plans for managing liquidity under scenarios of adverse and stress conditions.

State the appropriate actions for senior officers to take in an attempt to alter the behaviour of assets and liabilities for the purpose of adjusting inflows, outflows, and their timing.
3.8. Business Plan Monitoring
Discuss the methods that the Board of Directors will use to regularly monitor both management’s implementation of, and the institution’s performance under the business plan during the three years. Discuss the process by which the business plan will be amended, with the Board of Directors’ approval, to address changes in economic conditions.
3.9. FINANCIAL PROJECTIONS
The impact of the planned business activities on the condition of the institution should be demonstrated in the pro forma financial statements. Based upon the preceding narrative section, submit a pro forma Balance Sheet, Profit and Loss Account, and Cash Flow Statement (and any necessary supporting schedules) for each of the next three years of operation using the attached formats prescribed by the Central Bank. All financial statements should be clearly stated in SR’000. Any assumptions made to determine the figures on the abovementioned statements should be clearly identified. A column in the financial statements labelled as ‘Assumption Reference’ has been included to label each of the assumptions. These references should be stated on a separate page along with the assumptions made.

Below is an example of how the references should be labelled; Assumption Reference Paid-up Capital B1 Other Reserve B2 Interest Expense on Deposits P1 Provision for loan losses P2 Tax Paid for the year C1

The first part of assumption reference will be based on the type of financial statement as shown below;

• B stands for pro forma Balance Sheet
• P stands for pro forma Profit and Loss
• C stands for pro forma Cash Flow Statements
  The numerical part of the reference will be in chronological order.
  4.1. Pro Forma Balance Sheet – format attached
  4.2. Pro Forma Profit and Loss Account – format attached
  4.3. Pro Forma Cash Flow Statement – format attached

PROFORMA STATEMENT OF FINANCIAL POSITION1
NAME OF FINANCIAL INSTITUTION
1 BS Commercial Banks, HFC, DBS
Figures are in SR'000
CAPITAL AND RESERVES - - - -
Paid-up/assigned capital
Statutory reserve fund
Other reserves
Undistributed profit/loss
LIABILITIES - - - -
Deposit liabilities: - - - -
Checkable deposits
Time deposits
Savings deposits
Other deposits
Balances due to: - - - -
Central Bank of Seychelles
Financial institutions in Seychelles (inter bank borrowing only) Financial institutions abroad Provision for taxation Provision for doubtful debts Other liabilities Year 1 Year 2 Year 3 HY1 ASSETS - - - - Cash Statutory reserves with Central Bank of Seychelles Other balances with Central Bank of Seychelles: - - - - DAA RRA Others Amount due from: - - - - Financial institutions in Seychelles; of which Deposits Inter bank lending Local investments: - - - - Treasury bills Treasury bonds Government stocks Others (specify) Loans and advances: - - - - Overdrafts Term loans Mortgage loans Other loans and advances Assets denominated in foreign currency: - - - - Foreign currency Balances due from financial institutions abroad Securities and other investments Fixed assets: - - - - Cost Accumulated depreciation Other assets Year 1 Year 2 Year 3 Assumption Reference

PROFORMA STATEMENT OF FINANCIAL POSITION2
NAME OF FINANCIAL INSTITUTION
2 BS Credit Union
Assumption Year 1 Year 2 Year 3
Reference
ASSETS
Cash
Bank Balances
Short Term Investments: - - -
Bank Deposits
Securities
Total Loan Portfolio: - - -
Loan to members
Loans to employees & Committee members
Loan to subsidiary
Other Loans
Less Loan Loss Allowance
Net Loans - - -
Other Current Assets
Total Current Assets - - -
Fixed Assets: - - -
Land Buildings
Equipment
Vehicles
Less Accumulated Depreciation
Net Fixed Assets - - -
Medium to Long-Term Investments: - - -
Fixed Deposit
Securities
Shares
Other Non-Current Assets
Total Non-Current Asset - - -
Total Assets - - -
LIABILITIES
Deposits: - - -
Time Deposits
Savings Deposit
Others
Bank Overdraft
Proposed Distribution to Members
Other Current Liabilities
Total Current Liabilities - - -
Medium to Long Term Debt
Other Liabilities
Total Non Current Liabilities - - -
Total Liabilities - - -
EQUITY
Member Shares
Co-operative Fund
Other Reserves
Capital Grants
Current unadjusted/unaudited Profit
Retained earnings
Others
Total Equity - - -
Total Liabilities & Equity - - -
Please state any assumptions made to arrive at the given figures

PROFORMA STATEMENT OF COMPREHENSIVE INCOME3
NAME OF FINANCIAL INSTITUTION
3 PL Commercial Banks, HFC, DBS
Assumption Year 1 Year 2 Year 3
Reference
INTEREST INCOME - - -
Loans and advances
Overdrafts
Term loans
Mortgage loans
Other loans and advances
Statutory reserves with Central Bank of Seychelles Other balances with Central Bank of Seychelles Assets denominated in foreign currency Amount due from financial institutions Local investments Treasury bills Treasury bonds Government stocks Others Other interest income INTEREST EXPENSE - - - Deposits Checkable deposits Time deposits Savings deposits Other deposits Balances due to Central Bank of Seychelles, financial institutions in Seychelles and financial institutions abroad Central Bank of Seychelles Financial institutions in Seychelles Financial institutions abroad Other interest expense Net interest income/(expense) - - - NON-INTEREST INCOME Fees, commissions and service charges Profit/(loss) on foreign exchange Others NON-INTEREST EXPENSE - - - Salaries and allowances Occupancy expenses Head office charges Depreciation Training expenses Entertainment Others Net non-interest income/(expense) - - - Provision for loan losses and bad debts written off Net profit before tax - - - Taxation Profit after tax - - -

PROFORMA STATEMENT OF COMPREHENSIVE INCOME4
NAME OF FINANCIAL INSTITUTION
4 PL Credit Union
Assumption Year 1 Year 2 Year 3
Reference
INTEREST INCOME: - - -
Interest income on Loan Portfolio
Interest income on Investments
Other interest income
INTEREST EXPENSE: - - -
Interest Expense Loans
Interest Expense on Subsidized Debt
Interest Expense on Savings/Deposits
Other interest expenses
NET INTEREST INCOME/(EXPENSE) - - -
NON INTEREST INCOME
NON-INTEREST EXPENSE: - - -
Salaries
Training
Audit fees
Consultancy
Repairs and maintenance
Rent
Travel and accommodation
Legal Commissions and Fees
Depreciation
Printing and stationery
Insurance
Other Expenses
NET NON-INTEREST INCOME/(EXPENSE)
NET INCOME/(LOSS) - - -

PROFORMA STATEMENT OF CASH FLOWS5
NAME OF FINANCIAL INSTITUTION
5 CF for all Institutions
Assumption Year 1 Year 2 Year 3
Reference
Profit before tax
Depreciation of property, plant and equipment
Loan loss provision
Other non-cash items
Net cash flows inflow/(outflow) from operating activities - - - - Cash flows from operating activities (Increase)/Decrease in loans and advances Increase/(Decrease) in deposits from banks and customers (Increase)/Decrease in other assets Increase/(Decrease) in other liabilities Tax paid for the year Other cash flows from operating activities Net cash flows inflow/(outflow) from operating activities - - - - Cash flows from investing activities Purchase of property, plant and equipment Purchase of Treasury Bills and Treasury Bonds Other cash flows from investing activities Net cash inflow/(outflow) from investing activities - - - - Cash flows from financing activities Dividend paid Other cash flows from financing activities Net cash inflow/(outflow) from investing activities - - - - Net (decrease)/increase in cash and cash equivalents - - - - Movement in cash and cash equivalents At January 1, (Decrease)/Increase - - - - At December 31,