Lanka Cement PLC  

Lanka Cement PLC had not recognized the loss on impairment of its factory buildings and plant and machinery to reflect its carrying value at recoverable amounts in the financial statements for the year ended 31 December 2011. The auditors had qualified their opinion on this issue.

Subsequent to the inquiries made by SLAASMB, the entity undertook to recognize the loss on impairment of the buildings and plant and machinery in the financial statements for the year ended 31 December 2012. This resulted in a decrease in the net assets of the entity by Rs.186 million.

  Austin Gloves (Ceylon) Limited  

Austin Gloves (Ceylon) Limited had not depreciated its buildings and plant and machinery for the year ended 31 March 2013. The auditors had qualified their opinion on this issue.

Subsequent to the inquiries made by SLAASMB, the entity undertook to depreciate buildings and plant and machinery in the financial statements for the year ended 31 March 2014. This resulted in a decrease in net assets of the entity by Rs.101.98 million.

  Almar Trading Company (Pvt) Ltd  

Almar Trading Company (Pvt) Ltd had not presented consolidated financial statements by consolidating the results of its subsidiaries, had not recognized its interest in jointly controlled entity using the proportionate consolidation method or the equity method and had not reduced the carrying value of its current investments to their fair value in the financial statements for the year ended 31 March 2012. The auditors had qualified their opinion on these issues.

Subsequent to the inquiries made by SLAASMB, the entity undertook to present consolidated financial statements, to recognize its interest in jointly controlled entity using the proportionate consolidation method or the equity method and to record its current investments at fair value in the financial statements for the year ended 31 March 2014. Reflecting current investments at fair value resulted in a decrease in net assets of the entity by Rs. 324 million.

  Sri Lanka Cement Corporation  

Sri Lanka Cement Corporation had not presented consolidated financial statements by consolidating the financial statements of its subsidiary, Lanka Cement PLC for the year ended 31 December 2011. Further, the Corporation had not recognized the impairment of the carrying value of the investment in and the long outstanding receivable from the subsidiary to their recoverable amounts in its separate financial statements.The Corporation had also failed to recognize its land held to earn rentals as investment property in the said financial statements. The auditors opinion had been qualified only in respect of the failure to present consolidated financial statements.

Subsequent to the inquiries made by SLAASMB, the Corporation undertook to present the consolidated financial statements and to make the required adjustments in the financial statements for the year ended 31 December 2013. This resulted in a decrease in net assets of the entity by Rs.1.76 billion in the separate financial statements.

 
Shaw Wallace & Hedges PLC

Shaw Wallace & Hedges PLC had not recognised the loss on impairment of the carrying value of investment in its fully-owned subsidiary and had not reduced the carrying value of related party receivables to reflect its recoverable amount in the financial statements for the year ended 31 March 2012. The Auditors had qualified their opinion on this issue.

Subsequent to the inquiries made by SLAASMB, the entity undertook to recognise the loss on impairment of the investment in the subsidiary and to make allowances for doubtful debts from the subsidiary in the financial statements for the year ended 31 March 2013. This resulted in a decrease in the net assets of the entity by Rs. 1.2 Billion.

  Lanka Valliant Developers (Pvt) Ltd.

Lanka Valliant Developers (Pvt) Ltd. had not classified their building held to earn rentals as investment property and had not depreciated property, plant and equipment for the year ended 31 March 2012 and in certain prior years. The Auditors had qualified their opinion only on the issue of non-depreciation of property, plant and equipment.

Subsequent to the inquiries made by SLAASMB, the entity undertook to classify the building held to earn rentals as investment property and to depreciate property plant and equipment in the financial statements for the year ended 31 March 2013. This resulted in a decrease in net assets of the entity by Rs. 56 Million.

  Huejay International Investments PLC

Huejay International Investments PLC had not reduced the carrying value of related party receivables to reflect the recoverable amounts in the financial statements for the year ended 31 March 2012. The Auditors had qualified their opinion on this issue.

Subsequent to the inquiries made by SLAASMB, the entity undertook to reduce the carrying value of the receivables from related parties to its recoverable values in the financial statements for the year ended 31 March 2013. This resulted in a decrease in net assets of the entity by Rs. 30 Million.

 
Entrust Limited

Entrust Limited had not reduced the carrying value of trade receivables to the recoverable amounts in the financial statements for the year ended 31 March 2010. The auditors had qualified their opinion on this issue.

Subsequent to the inquiries made by SLAASMB, the entity undertook and made allowances for doubtful debts in the financial statements for the year ended 31 March 2011. This resulted in a decrease in the net assets of the entity by Rs. 1 Billion.

Samson Rubber Industries (Pvt) Limited

Samson Rubber Industries (Pvt) Limited had not recognised the loss on impairment of the carrying values of investments in subsidiaries in the financial statements for the year ended 31 March 2011. The auditors had qualified their opinion on this issue.

Subsequent to the inquiries made by SLAASMB, the entity undertook to make allowances for impairment of investments in subsidiaries in the financial statements for the year ended 31 March 2012. Impact in the said financial statements was a decrease of net assets by Rs. 34 Million.

Ceylinco Leasing Corporation Limited

Ceylinco Leasing Corporation Limited had not prepared consolidated financial statements consolidating the financial statements of its subsidiary in the financial statements for the year ended 31 March 2010. Further, the Company’s financial statements contained unreconciled differences in the financial statements amounting to Rs. 68 Million. The Auditors had qualified their opinion on these issues.

Subsequent to the inquiries made by SLAASMB, the entity undertook to prepare consolidated financial statements and to reconcile the differences when preparing financial statements for the year ended 31 March 2012.

Somerville Stock Brokers Limited

Somerville Stock Brokers Limited had no evidence for the existence of fixed deposits held in Pan Asia Bank. The auditors had qualified their opinion on this issue.

As a result of the inquiry made by SLAASMB, the entity undertook to make allowance for investments that are doubtful of recovery in the financial statements for the year ended 31 March 2012. This resulted in a decrease in net assets of the Company by Rs. 10 Million.

 

Pradeshiya Sanwardena Bank had recognized a sum of

Rs. 62.8 million as other liabilities by transferring such amounts from retained earnings as staff welfare and staff medical fund without having a present obligation to make such payments to employees. The auditors had not qualified their opinion on this issue.

Subsequent to the inquiries made by SLAASMB, the Bank undertook to reverse this amount from other liabilities by transferring to the general reserve.

 
The Finance Company PLC

The Finance Company PLC had not reflected the investment properties at fair values in the financial statements for the years ended 31 March 2011 and 2012 when the Company’s accounting policy is to use the fair value model. The Auditors had not qualified their opinion on this issue.

As a result of the inquiries made by SLAASMB, the Company undertook to reflect the investment property at its fair value and to provide impairment losses in the financial statements for the year ended 31 March 2013. This resulted in a decrease in net assets of the entity by Rs. 293 Million.

 
Sri Lanka Institute of Textile and Apparel

Sri Lanka Institute of Textile and Apparel, a public corporation had not recognised government grants as income and matched with the related costs in the financial statements for the year ended 31 December 2010. The Auditors had not qualified their opinion on this issue.

As a result of the inquiry made by SLAASMB, the Corporation undertook to recognise the grant as income and to match with the related costs in the financial statements for the year ended 31 December 2012. This resulted in an increase in net assets by Rs. 298 Million.

  Multi Finance PLC

Multi Finance PLC, a registered finance company had not recognised the diminution in value of investment securities in the financial statements for the year ended 31 March 2012. This has resulted in an overstatement of net assets of the entity by Rs. 22 Million. The auditors had not qualified their opinion on this issue.

As a result of the inquiry made by SLAASMB, the entity undertook to recognise investments in quoted shares at fair value in the financial statements for the year ended 31 March 2013.

  National Savings Bank

National Savings Bank had not recognised its obligation on defined benefit plan in the financial statements for the year ended 31 December 2011. The auditors had not qualified their opinion on this issue.

Consequent to inquiries made by SLAASMB, the entity undertook to make the adjustments in the financial statements for the year ended 31 December 2012. This resulted in a decrease in net assets of the entity by Rs. 2 Billion.

  Singalanka Standard Chemicals PLC

Singalanka Standard Chemicals PLC, a listed company, had incorrectly recognised the fair value gain on its investment property as a revaluation surplus in the financial statements for the year ended 31 March 2011. The auditors had not qualified their opinion on this issue.

Consequent to inquiries by SLAASMB, the entity undertook to make the adjustments in the financial statements for the year ended 31 March 2012.

 
Agricultural and Agrarian Insurance Board

Agricultural and Agrarian Insurance Board, a public corporation had not made a provision of Rs. 40 Billion in respect of the actuarial present value of pension and social security benefits of its Farmers’ Pension and Social Security Benefit Scheme in the financial statements for the year ended 31 December 2009. The Auditors had not qualified their report on this issue. Consequent to inquiries by the Board, the entity undertook to make the adjustments in the financial statements for the year ended 31 December 2011.

  Colombo Fort Land and Building PLC

Colombo Fort Land and Building PLC, a listed company, had chosen the revaluation model as its accounting policy for land and buildings in its consolidated financial statements for the year ended 31 March 2007. The land and buildings were carried at an amount based on a valuation carried out in 1980. Sri Lanka Accounting Standards require revaluations to be made with sufficient regularity to ensure that the carrying amount does not differ materially from that which would be determined using fair value at the Balance Sheet date. The auditors had not qualified their report on this issue.

As a result of the inquiry made by the Board, the Company undertook to incorporate a recent revaluation of the said property in the financial statements. This resulted in an increase in net assets by Rs. 652 Million.

  Pelwatte Sugar Industries PLC

Plant and machinery of the subsidiary, had been overvalued by Rs. 461 Million in the consolidated financial statements of Pelwatte Sugar Industries PLC for the year ended 31 March 2010. The Auditors had not modified their report in this regard.

Subsequent to inquiries made by the Board, the Company undertook to reverse the overstatement in the consolidated financial statements for the year ended 31 March 2011.

On reversal, the Group’s retained earnings were reduced by Rs. 230 Million and the minority interest was reduced by Rs. 230 Million.

  Coco Lanka PLC

Coco Lanka PLC, a listed company had recognised a gain from change in ownership of a subsidiary, based on an inappropriate computation in the financial statements for the year ended 31 March 2010. This had resulted in an overstatement of profit for the year by Rs. 47 Million. The auditors had not qualified the report in this regard.

Subsequent to inquiries made by the Board, the Company undertook to incorporate the adjustment in the comparative information in the financial statements for the year ended 31 March 2011.

 

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