ABANS FINANCE PLC
FINANCIAL STATEMENTS
31 MARCH 2022
APAG/KMW/MHM
INDEPENDENT AUDITORS' REPORT
TO THE SHAREHOLDERS OF ABANS FINANCE PLC
Report on the Audit of the Financial statements
Opinion
We have audited the financial statements of Abans Finance PLC ("the Company"), which comprise the statement of financial position as at 31 March 2022, and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.
In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Company as at 31 March 2022, and of its financial performance and its cash flows for the year then ended in accordance with Sri Lanka Accounting Standards.
Basis for opinion
We conducted our audit in accordance with Sri Lanka Auditing Standards (SLAuSs). Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by CA Sri Lanka (Code of Ethics) and we have fulfilled our other ethical responsibilities in accordance with the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in the audit of the financial statements of the current period. These matters were addressed in the context of the audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor's responsibilities for the audit of the financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying financial statements.
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EY2022060113976
Key audit matter | How our audit addressed the key audit matter | ||
Impairment allowances for Loan, Lease | Our audit procedures included amongst others the following. | ||
and Hire purchase receivables: | |||
As at 31 March 2022, Loan , Lease and | ∙ We assessed the level of oversight, review and approval of | ||
Hire purchase receivables net of | impairment allowances policies and procedures by the Board | ||
impairment allowances | amounted | to | and management. |
LKR 8,109 Mn and is | disclosed | in | ∙ We evaluated the design, implementation and operating |
note(s) 19 & 20. These collectively | |||
contributed 77% to the Company's total | effectiveness of internal controls over estimation of the | ||
assets. | impairment allowances, including testing of related system | ||
controls. | |||
Impairment allowances on Loan, Lease | ∙ We checked the completeness, accuracy and classification of | ||
and Hire purchase receivables is a key | |||
audit matter due to: | the underlying data used in the computation of impairment | ||
allowances by agreeing details to relevant source documents | |||
and accounting records of the Company. |
- Materiality of the reported provision
for credit | impairment | which | For Loan, Lease and Hire purchase receivables assessed on a | |||
involved complex calculations: and | collective basis for Impairment: | |||||
∙ Significant | judgements | used | in | − We tested key calculations used in the impairment | ||
assumptions and estimates made by | allowances. | |||||
the management as reflected in | − We assessed whether significant judgements used in | |||||
note 3.1.10, which in the current | ||||||
year was influenced by the need to | assumptions estimates used by the management in the | |||||
assess the change in current | underlying methodology and management overlays were | |||||
economic | conditions | on | forward | reasonable. We also evaluated the reasonableness of | ||
looking | information | and | the | forward looking information used, economic scenarios | ||
continuing impact of Covid-19 debt | considered, and probability weighting assigned to each of | |||||
moratorium relief measures. | those scenarios. Our procedures were based on the best | |||||
available information up to the date of our report. | ||||||
For loans and advances assessed on individual basis for | ||||||
impairment: | ||||||
− We assessed the reasonableness and timeliness of | ||||||
Management's internal assessments of credit quality based | ||||||
on borrower's particular circumstances. | ||||||
− We checked the accuracy of the underlying individual | ||||||
impairment calculations. | ||||||
− We evaluated the reasonableness of key inputs used in the | ||||||
provision for credit impairment made with the particular | ||||||
focus on current economic conditions. Such evaluations were | ||||||
carried out considering value and timing of cash flow | ||||||
forecasts particularly relating to elevated risk industries, | ||||||
status of recovery actions and collateral values. | ||||||
We assessed the adequacy of the related financial statement | ||||||
disclosures set out in note(s) 19 & 20. | ||||||
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Key audit matter | How our audit addressed the key audit matter |
Financial reporting related IT based Internal | |
controls | Our audit procedures included the following; |
A significant part of the Company's financial | ∙ We obtained an understanding of the internal control |
reporting process is primarily reliant on | environment of the processes relating to financial |
multiple IT systems with automated | reporting and related disclosures. |
processes and internal controls. Further, key | |
financial statement disclosures are prepared | ∙ We identified and test checked relevant controls of key |
using data and reports generated by IT | IT systems related to the Company's Financial |
systems, that are compiled and formulated | reporting process. |
with the use of spread sheets. | |
Accordingly, financial reporting related IT | ∙ We evaluated the design and operating effectiveness of |
IT controls, including those related to user access and | |
based Internal controls is considered a key | change management. |
audit matter. | |
∙ We checked key source data of the reports used to | |
generate key disclosures for accuracy and | |
completeness, including review of general ledger | |
reconciliations. |
Other information included in the 2022 Annual Report
Other information consists of the information included in the Company's 2022 Annual Report, other than the financial statements and our auditor's report thereon. Management is responsible for the other information. The Company's 2022 Annual Report is expected to be made available to us after the date of this auditor's report.
Our opinion on the financial statements does- not cover the other information and we will not express any form of assurance conclusion thereon.
Responsibilities of management and those charged with governance for the financial statements
Management is responsible for the preparation of financial statements that give a true and fair view in accordance with Sri Lanka Accounting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company's financial reporting process.
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Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SLAuSs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with SLAuSs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
- identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal controls.
- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
- Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
- Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with ethical requirements in accordance with the Code of Ethics regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
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Abans Finance plc published this content on 02 June 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 02 June 2022 08:31:02 UTC.