The Financial Statements of the National Development Bank PLC (the Bank) and the Consolidated Financial Statements of the Bank and its Subsidiaries (the Group) as at 31 December 2013 are prepared and presented in compliance with the following regulatory requirements;

  1. Sri Lanka Accounting Standards (SLFRS/LKAS) issued by The Institute of Chartered Accountants of Sri Lanka
  2. Sri Lanka Accounting and Auditing Standards Act No. 15 of 1995
  3. Companies Act No. 07 of 2007
  4. Banking Act No. 30 of 1998 and amendments thereto
  5. Directions, circulars and guidelines issued to Licensed Commercial Banks by the Central Bank of Sri Lanka including but not limited to Banking Act Direction No. 11 of 2007 (as amended) issued by the Monetary Board of the Central Bank of Sri Lanka on Corporate Governance
  6. Listing Rules of the Colombo Stock Exchange
  7. The Code of Best Practice on Corporate Governance issued jointly by The Institute of Chartered Accountants of Sri Lanka and the Securities and Exchange Commission of Sri Lanka (2013)

The formats used in the presentation of the Financial Statements and disclosures are in compliance with the specified formats for the preparation of the Annual Financial Statements of Licensed Commercial Banks, issued by the Central Bank of Sri Lanka.

The Group’s Accounting Policies are in compliance with Sri Lanka Accounting Standards issued by The Institute of Chartered Accountants of Sri Lanka, which were effected from 01 January 2013. The Accounting Policies are consistently applied by the Group. Significant Accounting Policies and Estimates that involve a high degree of judgment and complexity were discussed with the Board Audit Committee and the External Auditors. Comparative information has been reclassified wherever necessary to comply with the current year’s presentation. All significant items have been disclosed and explained by way of Notes to the Financial Statements. We confirm to the best of our knowledge, that the Financial Statements presented herewith give a true and fair view of the financial position, income statement and the cash flows of the Bank and the Group for the year. We also believe that the Group has adequate resources to continue its operations in the foreseeable future and accordingly adopts a going concern basis for the preparation of the Financial Statements.

The Board of Directors and the Management of the Bank accept responsibility for the integrity and the objectivity of the Financial Statements. The estimates and judgments relating to the Financial Statements were made on a reasonable and prudent basis; in order that the Financial Statements reflect a true and fair view; the form and the substance of transactions and that the Bank’s state of affairs is reasonably presented. To ensure this, the Group has taken proper and sufficient care in implementing internal control systems, with the use of a comprehensive core banking system, for safeguarding assets and for preventing and detecting fraud as well as other irregularities, which is reviewed, evaluated and updated on an ongoing basis. The Bank’s Internal Auditor has conducted periodic audits to provide reasonable assurance that the established policies and procedures of the Group are consistently followed. However, there are inherent limitations that should be recognized in weighing the assurance provided by any system of internal control and accounting.

The Financial Statements of the Group were audited by Messrs Ernst & Young, Chartered Accountants. The Report issued by them is available on this Report. The audit and non-audit services provided by Messrs Ernst & Young are approved by the Board Audit Committee, to ensure that the provision of such services does not contravene with the guidelines issued by the Central Bank of Sri Lanka or impair Messrs Ernst & Young’s independence.

The Board Audit Committee reviews the adequacy and effectiveness of the internal control systems including the effectiveness of the internal controls over financial reporting to provide reasonable assurance that all transactions are accurately and completely recorded in the books of account and the processes by which compliance with Sri Lanka Accounting Standards including SLFRS/LKAS and other regulatory provisions relating to financial reporting and disclosures are ensured. The Board Audit Committee Report is available on this report To ensure complete independence, the External Auditors and the Internal Auditors have full and free access to the members of the Board Audit Committee to discuss any matter of substance.

We confirm to the best of our knowledge that:

  • The Group has complied by all applicable laws, rules, regulations and guidelines
  • There is no material non-compliance
  • There is no material litigation against the Group other than those disclosed in Note 46 of the Financial Statements section of this Report
  • All taxes, duties, levies and all statutory payments by the Group and all contributions, levies and taxes payable on behalf of and in respect of the employees of the Group as at the reporting date have been paid, or where relevant provided for.

 

Rajendra Theagarajah
Chief Executive Officer

 

Faizan Ozman
Chief Financial Officer

13 February 2014