• Board of Directors
• The Leadership Team
• Senior Management Team
• Group Management Team
• Corporate Governance
• Annual Report of The Board of Directors on the Affairs of the National Development Bank PLC
• Directors' Interests in Contracts with the National Development Bank PLC
• Board Committee Reports
• Statement of Directors’ Responsibilities for Financial Reporting
• Directors’ Statement on Internal Control Over Financial Reporting
• Chief Executive Officer’s and Group Chief Financial Officer’s Responsibility Statement
• Independent Assurance Report

Chief Executive Officer’s and Group Chief Financial Officer’s Responsibility Statement

The Financial Statements of the National Development Bank PLC (the Bank) and the Consolidated Financial Statements
of the Bank and its Group Companies (the Group) as at 31 December 2016 are prepared and presented in compliance with the following regulatory requirements:

• Sri Lanka Accounting Standards (SLFRS/LKAS) issued by The Institute of Chartered Accountants of Sri Lanka
• Sri Lanka Accounting and Auditing Standards Act No. 15 of 1995
• Companies Act No. 07 of 2007
• Banking Act No. 30 of 1988 and amendments thereto
• 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
• Listing Rules of the Colombo Stock Exchange
• 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 Annual Financial Statements of Licensed Commercial Banks, issued by the Central Bank of Sri Lanka.

The Accounting Policies of the Bank and the Group are in compliance with Sri Lanka Accounting Standards issued by The Institute of Chartered Accountants of Sri Lanka. 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, Statement of Profit or Loss and the cash flows of the Bank and the Group for the year. We also believe that the Bank and the Group have adequate resources to continue its operations in the foreseeable future and accordingly adopt the going concern basis for the preparation of the Financial Statements.

The Board of Directors and the Management of the Bank and the Group 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 state of affairs of the Bank and the Group is reasonably presented. To ensure this, the Bank and the Group have 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 Internal Auditors of the Bank and the Group has conducted periodic audits to provide reasonable assurance that the established policies and procedures of the Bank and 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 Bank and the Consolidated Financial Statements of the Bank and its group companies were audited by Messrs Ernst & Young, Chartered Accountants. The Report issued by them is available on page 284 of 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 System 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 pages 269 to 271 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 Bank and the Group have complied with all applicable laws, rules, regulations and guidelines;
• There is no material non-compliance;
• There is no material litigation against the Bank and the Group other than those disclosed in Note 48 on page 357 of the Financial Statements section of this Report;
• All taxes, duties, levies and all statutory payments by the Bank and the Group and all contributions, levies and taxes payable on behalf of and in respect of the employees of the Bank and the Group as at the reporting date have been paid, or where relevant provided for.

P L D N Seneviratne
Chief Executive Officer

F Ozman
Group Chief Financial Officer

21 February 2017
Colombo