Annual Report.CDR - Colombo Stock Exchange

S I G N I F I C A N T A C C O U N T I N G P O L I C I E S
1. GENERALINFORMATION
The Finance Company PLC (“the Company”) is incorporated as a public shareholding company and domiciled in
Sri Lanka. The Company's registered corporate office and principal place of business is located at No. 97, Hyde Park
Corner, Colombo 02.
The Company is a finance company registered under the Finance CompaniesAct No. 78 of 1988.
The principal activity of the Company is providing financial services in Sri Lanka. During the year, the company
was also engaged in land sales and property development.
2. ADOPTION OFNEWAND REVISED SRI LANKA ACCOUNTING STANDARDS
The company has adopted all new and revised Sri Lanka Accounting Standards (SLAS's) issued by the Institute of
Chartered Accountants of Sri Lanka, which were relevant to its operations, and had become effective in the current
financial year.
At the date of authorization of these financial statements, the following standards and interpretations were in issue
but not yet effective:
* SLAS 44 Financial Instruments – Disclosures (effective for accounting periods beginning on or
after 1
st
January 2011) ; and
* SLAS 45 Financial Instruments – Recognition and Measurement (effective for accounting
periods beginning on or after 1
st
January 2011)
The company has not yet determined the potential impact of adopting SLAS 44 and 45,. However, due to its nature
of operation, the directors believe that adoption of these two standards could have a significant impact on the
financial statements.
* SLAS 39 Share based payments - effective for period beginning on or after 1
st
January 2010, will
be adopted for the financial year commencing from 1
st
April 2010. This standard
requires an expenses to be recognized where an entity buys goods or services in
exchange for shares or rights over shares (equity settled transactions), or in exchange for
other assets equivalent in value to a given number of shares or rights over shares (cashsettled
transactions)
The Finance Company PLC is in the process of assessing the effects of adopting the aforesaid standard and the
company policy would be determined accordingly.
3. SIGNIFICANTACCOUNTING POLICIES
3.1. Basis of preparation
The financial statements have been prepared on the historical cost basis except for the revaluation of certain
non-current assets. Assets and liabilities are grouped by nature and listed in an order that reflects their relative
liquidity.
3.2. Statement of compliance
The financial statements have been prepared in accordance with Sri LankaAccounting Standards laid down by
the Institute of CharteredAccountants of Sri Lanka and in compliance with the requirements of the Companies
Act No. 7 of 2007 and the Finance CompaniesAct No. 78 of 1988 and amendments thereto.
3.3. Comparative figures
The accounting policies applied by the company are, unless otherwise stated, consistent with those used in the
previous year. Previous year's figures and phrases have been re-arranged, wherever necessary, to conform to
the current year's presentation.
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