The Financial Statements of People’s Leasing & Finance PLC (the Company) and the Consolidated Financial Statements of the Company and its subsidiaries (the Group) as at 31 March 2020 are prepared and presented in conformity with the following requirements:
The Group on a quarterly basis presents Interim Financial Statements to its shareholders in compliance with the Listing Rules of the Colombo Stock Exchange.
The Company applied the Sri Lanka Accounting Standard – SLFRS 16 on “Leases” which replaced the Sri Lanka Accounting Standard LKAS 17 on “Leases” with effect from 1 April 2019. The new standard has removed the distinction between operating leases and finance leases. Most contracts classified as operating leases, which were previously recorded off balance sheet, are now recognised as right-of-use (ROU) assets and lease liabilities on the Statement of Financial Position. Lessee measures right-of-use assets similar to other non-financial assets (such as property, plant and equipment) as disclosed in Note 34 on page 227 and lease liabilities similar to other financial liabilities as disclosed in Note 41 on page 238. As a consequence, a lessee recognises depreciation of the right-of-use asset and interest on the lease liability. The depreciation would usually be on a straight-line basis.
IFRIC 23 – Uncertainty over income tax treatment, addresses the accounting for income taxes when tax treatments involve uncertainty that effects the application of LKAS 12 on “Income Taxes”. The Company applies significant judgement in identifying uncertainties over income tax treatments. Since the Company operates in complex environment, it assessed whether the Interpretation had an impact on its Consolidated Financial Statements. The Company determined, based on its tax compliance and transfer pricing study that it is probable that its tax will be accepted by the taxation authorities. The Interpretation did not have an impact on the Financial Statements of the Company.
The accounting policies used in the preparation of the Financial Statements are appropriate and are consistently applied by the Group. There are no departures from the prescribed Accounting Standards in their adoption. Comparative information has been reclassified wherever necessary to comply with the current presentation and material departures, if any, have been disclosed and explained. Significant accounting policies and estimates that involved a high degree of judgement and complexity were discussed with the Company’s External Auditor and the Board Audit Committee.
The Board of Directors and the Management of the Company accept responsibility for the integrity and objectivity of these Financial Statements. The estimates and judgements relating to the Financial Statements were made on a prudent and reasonable basis; in order to ensure that the Financial Statements are reflected in a true and fair manner, the form and substance of transactions and the Company’s state of affairs is reasonably presented. 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.
To ensure this, the Company and the Group have taken proper and sufficient care in installing a system of internal control and accounting records, for safeguarding assets and for preventing and detecting frauds as well as other irregularities, which is reviewed, evaluated and updated on an ongoing basis.
Internal Audit Department has conducted periodic audits to provide reasonable assurance that the established policies and procedures of the Company and the Group were consistently followed. However, there are inherent limitations that should be recognised in weighing the assurances provided by any system of internal controls and accounting.
The Board Audit Committee reviewed all of the internal and external audit and inspection programmes, the efficiency of the internal control systems and procedures, the quality of accounting policies and their adherence to statutory and regulatory requirements, the external audit plan and the management letters and also followed up on any issues raised during the statutory audit, the details of which are given in the “Board Audit Committee Report” on pages 118 and 119 of this Annual Report. The Financial Statements of the Company and Consolidated Financial Statements of the Group were audited by Auditor General and his report is given on pages 145 to 147 of this Annual Report.
We confirm that:
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 as at 31 March 2020 have been paid, or where relevant provided for.
A S Ibrahim
Chief Executive Officer
Chief Manager Finance
8 July 2020