Colombo, Sri Lanka – 01 October 2026 – Standard Capital PLC (CSE: SCAP) today announced a pivotal development, confirming the official clearance from the Emphasis of Matter on Going Concern, a significant issue previously highlighted in its audited financial statements. This crucial resolution, effective as of 31st March 2026, marks a decisive step towards strengthening investor confidence and underscores the company’s enhanced financial stability within the Sri Lankan market.
Formal Clearance and Independent Verification
The formal notification was submitted to the Colombo Stock Exchange (CSE) on 1st October 2026, accompanied by comprehensive documentation affirming this positive outcome. Key documents included:
- The Audit Opinion dated 29th September 2026, issued by the company’s independent auditors, M/s Kreston MNS & Co., Chartered Accountants, and published alongside the Financial Statements for the year ended 31st March 2026.
- A confirmation letter dated 1st October 2026 from the Audit Committee Chairman, Mr. A M A Cader, unequivocally stating the clearance from Emphasis of Matter on Going Concern.
- A declaration signed by two Directors of the Company, Mr. W I Arambage (Director/Chairman) and Mr. A M A Cader, on behalf of the Board, confirming the Independent Auditors’ Report clearing the Emphasis of Matter on Going Concern in the Audited Financial Statements for the year ended 31st March 2026.
Understanding the Previous Going Concern Issue
Standard Capital PLC’s securities were transferred to the CSE’s Watch List on 30th July 2026, under section 7.5(d)(ii) of the Listing Rules. This action was prompted by the inclusion of an Emphasis of Matter on Going Concern in the company’s audited financial statements for the years ended 31st March 2024 and 31st March 2025. The concern arose from material uncertainties that cast significant doubt on the Group and Company’s ability to continue as a going concern. As at 31st March 2026, the Group had accumulated losses of Rs. 121,865,708/- and its current liabilities exceeded current assets by Rs. 66,506,548/-. Furthermore, Standard Paints Limited, a subsidiary of the Group, had ceased its operations.
Path to Resolution: Auditor’s Assessment and Strategic Measures
The Independent Auditor’s Report for the year ended 31st March 2026, prepared by M/s Kreston MNS & Co., details the robust measures and improved financial performance that led to the resolution. The auditors thoroughly evaluated management’s assessment and concluded that the use of the going concern basis of accounting is now appropriate for Standard Capital PLC.
Key factors contributing to this clearance, as highlighted in the auditor’s report, include:
- Improved Financial Performance: The Company and Group recorded profits during the current financial year, significantly mitigating the previous concerns over accumulated losses.
- Strategic Investment: The evaluation of a proposed strategic investment and its supporting business plan provided confidence in future operational sustainability.
- Financial Support: The auditors inspected and considered the financial capacity of Standard Industries (Pvt) Ltd, which provided vital financial support undertakings.
- Secured Borrowings: Supporting documentation related to corporate and personal guarantees, along with post-dated cheques for the Company’s bank borrowings, further reinforced its financial position.
- Subsidiary Restructuring: The subsequent disposal of Standard Paints Limited had a positive impact on the Group’s overall financial health and operational structure.
Implications for Standard Capital PLC and Investors
This clearance from the Emphasis of Matter on Going Concern is a monumental achievement for Standard Capital PLC. It signals a restoration of financial health and operational viability, which is crucial for fostering renewed investor confidence. With this resolution, the Directors have formally expressed their opinion that the Entity’s securities should be transferred out of the CSE Watch List, paving the way for a more stable and attractive investment profile on the Colombo Stock Exchange.
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