Annual Report 2012 - National Savings Bank

211THE RESULTS OF A CHALLENGING YEARNOTES TO THE FINANCIAL STATEMENTS1. Corporate InformationReporting EntityNational Savings Bank (NSB) is a saving Bankincorporated in Sri Lanka. The registeredoffice of the Bank is located at No. 255,‘Saving House’, Galle Road, Colombo - 03,Sri Lanka. The ‘Group’ Financial Statementsfor the year ended 31 December 2012comprise of the Bank (parent) and its fullyownedSubsidiary, NSB Fund ManagementCompany Ltd. The Bank prepares financialstatements of the ‘Bank’ and the ‘Group’for the twelve months period ended31 December each year to be tabled in theParliament.The staff strength of the Bank as at31 December 2012 was 3,128 (2011-3,275).The Financial Statements for the year ended31 December 2012 were authorized forissue on 28th March 2013, by a resolutionof the Board of Directors.The Bank possesses 219 Branches,1,185 school Bank units and 231 ATMsof its service outlets and 641 Post officesand 3,412 sub-post offices as its agencynetwork.2. Main Accounting Policies2.1 Basis of PreparationThe Consolidated Financial Statements havebeen prepared on a historical cost basis,except for available-for-sale investments,derivative financial instruments, otherfinancial assets and liabilities held fortrading, financial assets and liabilitiesdesignated at fair value through profit orloss, which have all been measured atfair value. The Consolidated FinancialStatements are presented in Sri LankanRupees (Rs.) and all values are rounded tothe nearest thousand rupees, except whenotherwise indicated.2.1.1 Statement of complianceThe Financial Statements of the Bank andGroup are prepared in accordance withSri Lanka Accounting Standards (LKASsand SLFRSs) as issued by the Institute ofChartered Accountants of Sri Lanka.2.1.2 Presentation of financial statementsThe Bank and Group presents its statementof financial position broadly in order ofliquidity.2.1.3 Offsetting financial instrumentsFinancial assets and financial liabilities areoffset and the net amount reported in thestatement of financial position if and onlywhen there is a legally enforceable right tooffset the recognised amounts and thereis an intention to settle on a net basis, orto realise the assets and settle the liabilitysimultaneously. Income and expensesare not offset in the income statementunless required or permitted by anyaccounting standard or interpretation, andas specifically disclosed in the accountingpolicies of the Bank.2.1.4 Basis of consolidationThe Financial Statements of the Bank andGroup comprise the financial statementsof the Bank and its Subsidiary for the yearended 31 December 2012. The financialstatements of the Bank’s Subsidiary for thepurpose of consolidation are prepared forthe same reporting year as that of NationalSavings Bank, using consistent accountingpolicies.All intra–group balances, transactions,income and expenses are eliminated in full.Subsidiary are fully consolidated from thedate on which control is transferred to theBank. Control is achieved where the Bankhas the power to govern the financial andoperating policies of an entity so as toobtain benefits from its activities.2.2 Significant Accounting Judgments,Estimates and AssumptionsIn the process of applying the Bank’saccounting policies, management hasexercised judgement and estimates indetermining the amounts recognised in thefinancial statements. The most significantuses of judgements and estimates are asfollows:2.2.1 Going concernThe Bank’s management has made anassessment of its ability to continue as agoing concern and is satisfied that it hasthe resources to continue in businessfor the foreseeable future. Furthermore,management is not aware of any materialuncertainties that may cast significantdoubt upon the Bank’s ability to continueas a going concern. Therefore, the financialstatements continue to be prepared on thegoing concern basis.2.2.2 Fair value of financial instrumentsWhere the fair values of financial assets andfinancial liabilities recorded on the statementNATIONAL SAVINGS BANK . ANNUAL REPORT 2012