Directors’ Statement on Internal Control over Financial Reporting
Responsibility
In line with the Finance Companies Direction, No. 03 of 2008, section 10 (2) (b), the Board of Directors presents this report on Internal Control over Financial Reporting.
The Board of Directors (‘Board’) is responsible for the adequacy and effectiveness of the internal control mechanism in place at Citizens Development Business Finance PLC. (‘Company’).
The Board has established an ongoing process for identifying, evaluating and managing the significant risks faced by the Company and this process includes the system of Internal Control over Financial Reporting. The process is regularly reviewed by the Board.
The Board is of the view that the system of Internal Control over Financial Reporting in place is sound and adequate to provide reasonable assurance regarding the reliability of Financial Reporting, and that the preparation of Financial Statements for external purposes is in accordance with relevant accounting principles and regulatory requirements.
The management assists the Board in the implementation of the Board’s policies and procedures pertaining to Internal Control over Financial Reporting. The management is continuously in the process of enhancing the documentation of the system of internal control over Financial Reporting. In assessing the Internal Control System over Financial Reporting, identified officers of the Company collated all procedures and controls that are connected with significant accounts and disclosures of the Financial Statements of the Company. These in turn are being observed and checked by the Internal Auditors of the Company for suitability of design and effectiveness on an on-going basis.
Consequent to full convergence of Sri Lanka accounting standards with International Financial Reporting Standards that became effective from financial year beginning 1st April 2012, the Company implemented a process to make required adjustments to the financial statements prepared under previous accounting standards. The process for making necessary adjustments was carried out manually. The Board recognises the importance of integrating these requirements to existing accounting system to more effectively comply with the requirements of recognition, measurement, classification and disclosures of financial instruments and the necessary steps in this regard will be taken in the future.
Confirmation
Based on the above processes, the Board confirms that the Financial Reporting System of the Company has been designed to provide reasonable assurance regarding the reliability of Financial Reporting and the preparation of Financial Statements for external purposes has been done in accordance with Sri Lanka Accounting Standards and regulatory requirements of the Central Bank of Sri Lanka.
External Auditors Certification
The External Auditors have submitted a certification on the process adopted by the Directors on the system of Internal Controls over Financial Reporting. The matters addressed by the External Auditors will be considered and appropriate steps would be taken to rectify them in the future.
By order of the Board,
(Sgd.)
D H J Gunawardena
Audit Committee
Chairman
(Sgd.)
C M Nanayakkara
Managing Director
(Sgd.)
Damith Tennakoon
Director/CFO
2nd June 2014