Colombo, Sri Lanka – 07 September 2026 – The Kandy Hotels Company (1938) PLC (KHC) today announced the issuance of an amended Annual Report for the fiscal year ended 31st March 2026. This revision follows the identification of a misstatement in the accounting treatment of the Group’s investment in its joint venture, Suisse Hotel Kandy (Pvt) Ltd. KHC has swiftly addressed the issue, reassuring stakeholders that the corrections do not impact the Group’s reported profit after tax, earnings per share, cash flows, or underlying operations for the period under review.
Details of the Accounting Misstatement
The original Annual Report 2025/26 was uploaded to the Colombo Stock Exchange (CSE) website on 31st August 2026. Subsequent to its publication, an accounting misstatement was identified concerning the Group’s investment in Suisse Hotel Kandy (Pvt) Ltd, which operates the Radisson Hotel Kandy.
The misstatement arose because Suisse Hotel Kandy (Pvt) Ltd adopted a Revaluation Model for its Land and Buildings as of 31st March 2026. Historically, KHC Group had already reflected the joint venture’s Land and Building at fair value in its Consolidated Financial Statements to align with its own fair value accounting policies. Consequently, the revaluation by Suisse Hotel Kandy (Pvt) Ltd was effectively recognised twice in KHC Group’s Consolidated Financial Statements. This led to an overstatement of the carrying value of the investment in the Joint Venture and the related equity reserves.
Unaffected Core Financial Performance
In a crucial clarification for investors and the market, The Kandy Hotels Company (1938) PLC emphasised that these amendments are strictly confined to the recognition and presentation of the Group’s share of other comprehensive income from the joint venture and the corresponding equity balances. Importantly, the Group’s core financial performance remains robust and unchanged, with no alterations to its reported profit after tax, earnings per share, cash flows, or fundamental underlying operations for the year ended 31st March 2026.
Key Financial Adjustments Detailed
The amendments have necessitated changes to specific line items within the financial statements. The following table highlights the published figures and their adjusted counterparts:
| Page No. | Note / Statement Reference | Description | Published (Rs.) | Adjusted (Rs.) |
|---|---|---|---|---|
| 81 | Statement Of Financial Position | Investment in joint venture | 1,396,296,332 | 555,287,926 |
| 81 | Statement Of Financial Position | Revaluation reserve | 8,074,072,098 | 7,233,063,692 |
| 81 | Statement Of Financial Position | Net assets per share (Rs.) | 14.76 | 13.65 |
| 80 | Other Comprehensive Income | Other Equity – accounted investees – share of change of other comprehensive income | 857,838,945 | 16,830,539 |
| 82 | Statement Of Changes In Equity | Equity – accounted investees – share of change of other comprehensive income | 857,838,945 | 16,830,539 |
| 121 | Note 18 | Group’s share of other comprehensive income for the year | 857,838,945 | 16,830,539 |
| 122 | Note 18.3 | Share of adjustments for uniform accounting policy | 1,682,016,809 | – |
| 128 | Note 26 | Group’s share of other comprehensive income for the year | 857,838,945 | 16,830,539 |
Board’s Regret and Commitment to Transparency
Mr. Shalike Karunasena, Director of The Kandy Hotels Co. (1938) PLC, on behalf of the Board, expressed regret for the errors and any inconvenience caused to shareholders and other market participants. The revised Annual Report for the year ended 31st March 2026, which incorporates these adjustments, has been enclosed and will be published to ensure full transparency and accuracy in the company’s financial disclosures.
This commitment to rectifying errors promptly underscores KHC’s dedication to maintaining high standards of financial reporting and corporate governance, essential for a premium listed entity on the CSE.
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