Colombo, Sri Lanka – 14 September 2026 – Janashakthi Finance PLC (JFIN) has informed the Colombo Stock Exchange (CSE) of a substantial financial impact stemming from a qualified audit opinion for its financial year ended 31 March 2026. The company today submitted a Corporate Disclosure – Impact Report, detailing the ramifications of an unreconciled debit balance of LKR 270.5 million.
The disclosure, made in terms of Rule 7.5(d)(ii)(A)(15) of the CSE Listing Rules, outlines the specific issues raised in the Independent Auditor’s Report. Auditors issued a qualified opinion due to an unreconciled debit balance of LKR 270,542,779, categorized under ‘Other Assets’ in the company’s Financial Statements.
Details of the Qualified Audit Opinion
According to the Impact Report, Janashakthi Finance PLC proactively recognized a full provision against this unreconciled balance in its profit or loss for the year ended 31 March 2026, treating it as a disallowable expense for income-tax purposes. The reconciliation process for this balance was not finalized before the approval of the Financial Statements.
The Independent Auditors were unable to gather sufficient and appropriate audit evidence regarding the nature, accuracy, classification, and recoverability of this significant debit balance, nor the accuracy, completeness, and appropriateness of the related provision. Consequently, their audit opinion was qualified.
Significant Financial Impact on Earnings and Assets
The Impact Report provides a comparison of selected financial figures between the interim financial statements and the audited financial statements, highlighting the substantial changes:
- Profit for the Year: The most drastic impact was on the Profit for the year, which plummeted by LKR 338.001 million (an 83.9% reduction) from LKR 402.700 million (as reported in interim statements) to LKR 64.699 million in the audited financials.
- Profit Before Income Tax (PBT): PBT saw a decline of LKR 237.629 million (42.2%), falling from LKR 563.659 million to LKR 326.030 million. The provision alone accounts for LKR 270.5 million of this reduction, representing approximately 48.0% of the interim PBT.
- Other Operating Expenses: These expenses increased significantly by LKR 264.607 million (20.1%), primarily due to the LKR 270.5 million provision against the unreconciled debit balance.
- Operating Profit before Value Added Tax: This metric decreased by LKR 255.619 million (30.9%), moving from LKR 826.539 million to LKR 570.920 million.
- Total Assets: The provision resulted in a 0.7% reduction in Total Assets, from LKR 38,616.4 million to LKR 38,345.9 million.
- Net Assets / Total Equity: Net Assets and Total Equity experienced a 7.0% reduction, moving from LKR 3,877.8 million to LKR 3,607.2 million.
- Earnings Per Share (EPS): The provision equates to an impact of LKR 1.28 per share, representing approximately 67.2% of the LKR 1.91 EPS implied by the previously reported Interim Financial Statements.
The company clarified that there was no direct impact on Total Income or Net Operating Income arising from the recognition of this provision. The reported figures include other year-end and audit finalization adjustments in addition to the provision.
It is important to note that the Independent Auditors were unable to determine whether any further adjustments might be necessary concerning the unreconciled debit balance and the related provision, meaning any additional cumulative impact cannot presently be reliably quantified.
Resolution Efforts Underway
Janashakthi Finance PLC has affirmed its commitment to resolving the issue. The company is actively continuing the reconciliation and corrective actions and intends to complete these remedial measures at the earliest possible time. These actions will be undertaken within the timeframe stipulated under the CSE Listing Rules and will be subject to independent verification by its External Auditors.
Source: Read original document
