Directors' statement on internal control over financial reporting

Responsibility

In line with the Section 10 (2) (b) of the Finance Companies Direction No. 03 of 2008 as amended by the Finance Companies (Corporate Governance – Amendment) Direction No. 06 of 2013, the Board of Directors present this report on internal control over financial reporting.

The Board of Directors (“the Board”) is responsible for the adequacy and effectiveness of the system of internal control in place at People's Leasing & Finance PLC (“the Company”).

The Board has established an ongoing process for identifying, evaluating, and managing the significant risks faced by the Company and this process includes the system of internal control over financial reporting which is regularly reviewed and enhanced by the Board taking into account the changes in business environment and regulatory guidelines.

The Board is of the view that the system of internal control over financial reporting in place is sound and adequate to provide reasonable assurance regarding the reliability of financial reporting, and that the preparation of Financial Statements for external purposes is in accordance with relevant accounting principles and regulatory requirements.

The Management assists the Board in the implementation of the Board's policies and procedures pertaining to internal control over financial reporting. The Management is in the process of continuously enhancing the documentation of the system of internal control over financial reporting. In assessing the internal control system over financial reporting, identified officers of the Company collated all procedures and controls that are connected with significant accounts and disclosures of the Financial Statements of the Company.

These in turn are being observed and checked by the Internal Audit Department of the Company for suitability of the design and implementation effectiveness, on an on-going basis.

The Company adopts Sri Lanka Accounting Standards comprising SLFRSs and LKAS progressive improvements on processes to comply with requirements of recognition, measurement, classification and disclosure are being made whilst further strengthening of processes will continue in its Financial Reporting and Management information.

Board has given due consideration for requirements of SLFRS 9 – “Financial Instruments”. The required modules have been implemented and progressive improvements on processes and controls are being made to strengthen the processes and controls around the Management information systems and reports required for model validation and compliance in line with SLFRS 9.

The Board also has taken into consideration the requirements of the Sri Lanka Financial Reporting Standard: SLFRS 16 on “Leases” that has been issued effective for Annual Financial Periods from 1 January 2019 by replacing LAKS 17 – “Leases”. All required adjustments have been made in the Financial Statements for the year ended 31 March 2020.

Confirmation

Based on the above processes, the Board of Directors confirms that the financial reporting system of the Company has been designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Financial Statements for external purposes has been done in accordance with Sri Lanka Accounting Standards and regulatory requirements of the Central Bank of Sri Lanka and the Colombo Stock Exchange.

Review of the statement by external auditor

The External Auditors have reviewed the above Directors’ statement on internal control for the year ended 31 March 2020 and reported to the Board that nothing has come to their attention that causes them to believe that the statement is inconsistent with their understanding of the process adopted by the Board in the review of the design and effectiveness of internal control system over the financial reporting of the Company.

By order of the Board,

 

Coralie Pietersz
Chairperson
Board Audit Committee

 

Sujeewa Rajapakse
Chairman

 

Rohan Pathirage
Director

15 July 2020
Colombo