| |
|
|
| Note |
|
1. |
Accounting policies |
| |
|
|
The accounting policies and methods of computation are consistent with those policies and methods followed during the previous financial year. |
| |
|
|
| Note |
|
2. |
Accounting for investments in associate companies |
| |
|
2.1 |
Accounted under cost method in Bank’s financial statements. Amounts are based on draft unaudited financial statements of the associate companies. |
| |
|
|
|
| |
|
2.2 |
The financial year of Commercial Bank of Ceylon PLC ends on 31 December and its results are consolidated with DFCC Bank with a three months gap. Thus three months ended 30.06.2008 includes profit of Commercial Bank of Ceylon PLC for the period 01.01.2008 to 31.03.2008 attributable to the Bank. |
| |
|
|
|
| |
|
|
| Note |
|
3. |
Accounting for investments in subsidiary companies |
| |
|
3.1 |
Accounted under cost method in Bank’s financial statements. Amounts are based on draft unaudited financial statements of the subsidiary companies. |
| |
|
|
|
| |
|
3.2 |
The financial year of DFCC Stockbrokers (Pvt) Ltd, DFCC Vardhana Bank Ltd and Synapsys Ltd. ends on 31December and the results of respective companies are consolidated with DFCC Bank with a three months gap. Thus the consolidated results for the period 01.04.2008 to 30.06.2008 include profits of these companies for the period 01.01.2008 to 31.03.2008. |
| |
|
|
| Note |
|
4. |
Non-Interest Income (Bank) |
| |
|
|
|
| |
|
|
| |
30.06.2008
Rs. 000 |
30.06.2007
Rs. 000 |
| |
|
|
| Dividend income |
186,495 |
142,822 |
| Gain on sale of investment securities |
135,298 |
10,531 |
| Other income |
42,507 |
49,016 |
| |
364,300 |
202,369 |
|
|
| |
|
|
|
| |
|
|
Gain on investment securities includes a gain of Rs.135 million in June 2008 arising from sale of shares in Sri Lanka Telecom PLC.
|
| |
|
|
| Note |
|
5. |
Taxation (Bank) |
| |
|
|
|
| |
|
|
| |
30.06.2007
Rs. 000 |
30.06.2006
Rs. 000 |
| |
|
|
| Current Income Tax |
170,859 |
169,922 |
| Deferred tax |
7,469 |
(23,111) |
| |
178,328 |
146,811 |
|
|
| |
|
|
|
| Note |
|
6. |
Post balance sheet events |
| |
|
|
DFCC Bank invested Rs. 250 million in Acuity Partners (Pvt.) Limited on 1 July 2008. Acuity Partners (Pvt.) Limited is a Joint Venture between DFCC Bank and Hatton National Bank PLC with equal ownership.
This investment was financed by the transfer of DFCC Bank’s investment in ordinary shares of DFCC Stockbrokers (Pvt.) Limited and cash.
The profit on transfer of shares in DFCC Stockbrokers (Pvt.) Limited to Acuity Partners (Pvt) Limited on 1 July 2008 was a capital gain of Rs. 85 million which is liable for Financial Services VAT. Consequent to this reconstitution DFCC Stockbrokers (Pvt) Limited ceases to be a direct subsidy of DFCC Bank on 1 July 2008 and becomes a fully owned subsidiary of Acuity Partners (Pvt) Limited.
No other circumstances have arisen which would require disclosure or adjustment in the accounts. |
| |
|
|
| Note |
|
7.
|
Intra group transactions |
| |
|
|
These transactions are eliminated on consolidation where the financial year of subsidiary company coincides with the financial year of the Bank. Short term lending to DFCC Vardhana Bank Ltd outstanding as at 30 June 2008 and not eliminated on consolidation was Rs.192mn. Similarly short-term deposit of USD 9.3mn and EUR 1.7mn have not been eliminated. |
| |
|
|
| Note |
|
8. |
Contingencies |
| |
|
|
The contingent liability of Lanka Ventures Limited (LVL) was Rs. 235,548,863 inclusive of penalty of Rs79,768,400 for the year of assessment 1994/95 and 2001/02. The company has lodged appeal against the assessment and initiated action in Court of Appeal seeking a writ of certiorari to quash the assessment and seek other interim relief. The court of appeal has issued an interim restraining order to prevent recovery of tax in default.
Commissioner General of Inland Revenue has dismissed the appeal by the Company and the Company instituted further action in the court of Appeal for writ of Certiorari to quash the said determination and seeking interim relief by way of a stay order to prevent further action being taken on the determination. On 25 June 2007 the Court of appeal granted a stay order operative till order is delivered by court in the former case. |
| |
|
|
|
| Note |
|
9. |
Restatement of comparative amounts |
| |
|
|
|
| |
|
|
| Associate- Commercial Bank of Ceylon PLC |
Rs.000 |
| |
|
| Profit after Tax – (previously reported) |
256,230 |
| Change in accounting for deferred tax |
( 29,466 ) |
| Profit after Tax – (Restated) |
226,764 |
| |
In the interim financial statements for 31 March 2007, a deferred tax asset was recognized on general provision for doubtful loans, which was reversed subsequently in the financial year ended 31 December 2007. Consequently the comparative period results have been restated in 2008.
Balance of Rs.677, 185 attributable to National Asset Management Limited is not restated.
|
|
|
| |
|
|
|
| Note |
|
10. |
Share Capital |
| |
|
|
Number of shares issued as at 30 June 2008 is 130,718,970 (as at 31 March 2008- 130,195,603)
By Section 7 of the DFCC Bank Act No. 35 of 1955 as amended, the Authorised Capital of the Bank
and the value of a share is fixed at Rs.5,000 million and Rs.10/- respectively.
Thus, the financial statements of the Bank has retained the concept of par value and the Share
Premium account instead of the stated capital introduced by Companies Act No 7 of 2007. |
|
| |
|
|
| |
|
|
Certification |
| |
|
|
We, the undersigned, being the Chairman and the Chief Executive Officer of DFCC Bank certify jointly that.
|
| |
|
| (a) |
the form and contents of the financial statements and supplementary information comply with the requirements and definitions prescribed by the Central Bank of Sri Lanka
|
| (b) |
the information contained in these statements have been extracted from the unaudited financial statements of the Bank unless indicated as audited and
|
| (c) |
the financial statements comply with Sri Lanka Accounting Standards. |
|
| |
|
| |
|
(Sgd.)
J M S Brito
Chairman
30/07/2008
|
(Sgd.)
A.N Fonseka
Ex-officio Director & Chief Executive
|
|
| |
|
|