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The Financial Statements of the Commercial Bank Group are prepared in conformity with the requirements of the Sri Lanka Accounting Standards issued by The Institute of Chartered Accountants of Sri Lanka, Companies Act No. 7 of 2007, Sri Lanka Accounting and Auditing Standards Act No. 15 of 1995, Banking Act No. 30 of 1988 and amendments thereto, the Listing Rules of the Colombo Stock Exchange and 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. The formats used in the preparation of the Financial Statements and disclosures made comply with the formats prescribed by the Central Bank of Sri Lanka which is also in compliance with the disclosure requirements of the Sri Lanka Accounting Standard No. 23 on Revenue Recognition and Disclosures in the Financial Statements of Banks.
The Accounting Policies have been consistently applied by the Group and are consistent with those used in the previous year. Significant Accounting Policies and estimates that involve a high degree of judgement and complexity were discussed with the Bank’s external auditors and the Audit Committee. Comparative information has been reclassified wherever necessary to comply with the current presentation and material departures, if any, have been disclosed and explained. We confirm that to the best of our knowledge, the Financial Statements, Significant Accounting Policies and other financial information included in this Annual Report, fairly present in all material respects the financial condition, results of the operations and the cash flows of the Group during the period under review. We also confirm that the Group has adequate resources to continue in operation and have applied the going Concern basis in preparing these Financial Statements.
We are responsible for establishing, implementing and maintaining Internal Controls and Procedures of the Bank and all of its subsidiaries. We ensure that effective Internal Controls and Procedures are in place, ensuring material information relating to the Group are made known to us for safeguarding assets, preventing and detecting fraud and/or error. We have evaluated the Internal Controls and Procedures of the Group for the financial period under review and are satisfied that there were no significant deficiencies and weaknesses in the design or operation of the Internal Controls and Procedures, to the best of our knowledge. We confirm, based on our evaluations that there were no significant deficiencies and material weaknesses in the design or operation of internal controls and fraud that involves management or other employees. The Bank’s Internal Audit Department also conducts periodic reviews to ensure that the Internal Controls and Procedures are consistently followed.
The Bank’s Board Audit Committee, inter alia, reviewed all the Internal and External Audit and Inspection programmes, the efficiency of Internal Control Systems and Procedures and also reviewed the quality of Accounting Policies and their adherence to Statutory and Regulatory requirements, the details of which are given in the Audit Committee Report on pages 60 to 61 of this Annual Report. The Board Audit Committee regularly examined the major decisions taken by the Assets and Liabilities Committee and Credit Policy and Portfolio Review Committee of the Bank, during the year. The Bank has engaged the services of five firms of Chartered Accountants approved by the Central Bank of
Sri Lanka to strengthen the audit and inspection functions. The continuous inspection and audit functions, engagement of firms of Chartered Accountants and effective functioning of Board Audit Committee, ensure that the Internal Controls and Procedures are followed consistently.
The Financial Statements of the Group were audited by Messrs Ernst & Young, Chartered Accountants and their report is given on page 97 of this Annual Report. The Audit Committee pre- approves the audit and non-audit services provided by Messrs Ernst & Young, in order to ensure that the provision of such services does not contravene with the guidelines issued by the Central Bank of Sri Lanka on permitted non-audit services or impair Messrs Ernst & Young’s independence.
We confirm that the Bank and all its subsidiaries have complied with all applicable laws and regulations and guidelines and there are no material litigations against the Group other than those disclosed in Note No. 34.2 of the Financial Statements in this Annual Report.
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A.L. Gooneratne
Managing Director |
K.D.N. Buddhipala
Chief Financial Officer
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Colombo
February 18, 2009 |
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