Colombo, Sri Lanka – 29 August 2026
Industrial Asphalts (Ceylon) PLC (CSE: ASPH) has released an errata to its Interim Financial Statements for the quarter ended 31 March 2026, originally published on 29 May 2026. The announcement, made through a Colombo Stock Exchange (CSE) filing on 28 August 2026, details several material adjustments impacting the company’s financial position and performance, primarily driven by a revised valuation of its Investment Property and the accrual of legal fees.
Key Adjustments to Financial Statements
The comprehensive errata details amendments across the Statement of Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity, and Statement of Cash Flows. These revisions aim to provide a more accurate representation of the company’s financial standing and operational results.
Impact on Statement of Comprehensive Income
Several figures in the Statement of Comprehensive Income have been adjusted:
- Administrative Expenses: Increased to Rs. 90,380 (previously Rs. 85,380). This adjustment accounts for the accrual of legal fees related to the proposed sale of Investment Property, which the company has now recognized as a liability instead of a contingent liability.
- Gain / (Loss) on Revaluation of Investment Property: Revised significantly downwards to Rs. 122,000 (previously Rs. 525,000). This substantial change is a direct consequence of the updated valuation of the Investment Property, as detailed in Note 5 of the financial statements.
- Tax Expense: Amended to Rs. 49,357 (previously Rs. 169,166) reflecting the deferred tax impact arising from the revised revaluation of the Investment Property.
Changes to the Statement of Financial Position
The company’s balance sheet also reflects notable changes:
- Investment Property: The fair valuation has been adjusted downwards to Rs. 1,447,000 (previously Rs. 1,850,000). This figure is based on the Board of Directors’ adoption of a more conservative valuation approach.
- Deferred Tax Liability: Reduced to Rs. 59,294 (previously Rs. 179,104), a direct outcome of the deferred tax impact from the change in Investment Property revaluation.
- Other Payables: Increased to Rs. 7,222 (previously Rs. 2,222) due to the accrual of legal fees.
- Net Assets Value per Ordinary Share: Adjusted downwards to Rs. 0.39 (previously Rs. 0.47), indicating a material change in shareholder equity.
Revised Net Profit and Cash Flow Categorization
Further adjustments include:
- Net Profit / (Loss) for the period: Revised significantly downwards to Rs. 54,290 (previously Rs. 342,480), reflecting the cumulative effect of the aforementioned changes, particularly the substantial reduction in the gain on revaluation.
- Cash Flow from Operating Activities: Adjusted to incorporate the revised Gain / (Loss) on Revaluation of Investment Property and changes in accrued expenses.
- Cash Flow from Investing Activities: The “Settlement of Payable on Equity Investments” has been re-categorized from operating activities to investing activities, providing a clearer reflection of its nature.
Crucial Clarification on Investment Property Valuation
A key aspect of the errata lies in the detailed explanation provided in Note 5 to the Financial Statements regarding the revaluation of the Investment Property. The company initially obtained a valuation from Mr. N.A.A.D. Siri Nissanka, a Chartered and Incorporated Valuer, which valued the land as compensation land on an effectively freehold basis, resulting in a valuation of Rs. 1,850,000,000 as at 31 March 2026.
Subsequently, Industrial Asphalts (Ceylon) PLC obtained another valuation report from Mr. Thushal De Silva of KPMG Real Estate & Valuation Services (Private) Limited. KPMG’s valuation adopted a different methodology, reflecting the Company’s present leasehold interest in the land for its remaining term of 57.21 years. This approach used the Comparison Method for the leasehold land interest and the Depreciated Replacement Cost (DRC) method for the building, arriving at a total fair valuation of Rs. 1,447,000,000 for the Investment Property as at 31 March 2026.
The Board of Directors, after careful consideration of both valuations and having regard to the Company’s current leasehold interest in the land, decided to adopt the more conservative valuation provided by KPMG Real Estate & Valuation Services (Private) Limited as the basis for the carrying value of the Investment Property.
Industrial Asphalts (Ceylon) PLC, through its secretaries Ninecap Corporate Solutions (Pvt) Ltd, expressed sincere regret for any inconvenience caused to stakeholders by these necessary amendments. Investors are encouraged to review the updated financial statements for a comprehensive understanding of the company’s revised performance and financial position for the quarter ended 31 March 2026.
All figures in the financial statements are presented in LKR thousands.
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