Page No.	
28	Debt instrument - Amortised cost	269	
29	Investments in Subsidiaries	271	
30	Investment Property	273	
31	Other Assets	274	
32	Property, Plant and Equipment	275	
33	Right of use assets	280	
34	Goodwill and Intangible Assets	281	
			
Statement of Financial Position - Liabilities		
35	Due to Banks	283	
36	Due to Customers	285	
37	Debt Securities Issued	287	
38	Other Financial Liabilities	289	
39	Insurance Liabilities and Reinsurance Payable	290	
40	Operating lease liabilities	292	
41	Current Tax Liabilities	293	
42	Other Liabilities	294	
43	Retirement Benefit Obligation	294	
44	Deferred Tax Liabilities / (Assets)	297	
			
Statement of Financial Position - Equity		
45	Stated capital	299	
46	Statutory Reserve Fund	300	
47	Retained Earnings	301	
48	Other Reserves	301	
49	Non - Controlling Interest	302	
			
Other Financial Disclosures		
50	Contingent Liabilities and Commitments	303	
51	Net Assets Value per Ordinary Share	304	
52	Current/Non Current Analysis	305	
53	Financial Reporting by Segment	306	
54	Assets Pledged	308	
55	Related Party Disclosure	308	
56	Risk Management	314	
57	Comparative information	339	
58	Events after the Reporting Period	339	

Financial Statement - Table of Contents

		Page No.	
			
Financial Statements		
	Statement of Profit or Loss	209	
	Statement of Comprehensive Income	210	
	Statement of Financial Position	211	
	Statement of Changes in Equity	212	
	Statement of Cash Flows	214	
			
Notes to the Financial Statement		
1.	Corporate and Group Information	215	
2.	Basis of Preparation and Other Significant Accounting Policies	215	
3	General Accounting Policies	218	
4	Standards issued but not yet effective	222	
			
Statement of Profit or Loss		
5.	Gross income	224	
6.	Net Interest Income	224	
7.	Net Earned Premium	226	
8.	Fee and Commission Income	227	
9.	Net gains/(losses) on financial assets - FVTPL	228	
10.	Other Operating Income	228	
11.	Impairment Charges for Loans and Receivables and Other Losses	229	
12.	Personnel Expenses	232	
13.	Depreciation and Amortisation	232	
14.	Benefits, Claims and Underwriting Expenditure	233	
15.	Other Operating Expenses	234	
16.	Tax on financial services	234	
17.	Income Tax Expense	235	
18.	Basic / Diluted earnings per ordinary share (EPS)	238	
19.	Dividend per Ordinary Share	238	
			
Statement of Financial Position - Assets		
20.	Analysis of Financial Instruments by Measurement Basis	238	
21.	Fair Value of Assets and Liabilities	241	
22	Cash and Cash Equivalents	248	
23	Balances with Banks & Financial Institutions	248	
24	Financial assets -Fair value through profit or loss	249	
25	Loans and receivables - Amortised cost	251	
26	Insurance and Reinsurance Receivables	267	
27	Financial assets - Fair value through other comprehensive income	268	

Statement of Profit or Loss

For the year ended 31st March	

Note	

Page No.	Company	Group	
			2022
Rs. '000	2021
Rs. '000	Change
%	2022
Rs. '000	2021
Rs. '000	Change
%	

Gross income	
5	
224	
26,741,380	
27,103,798	
(1.34)	
32,630,986	
33,645,265	
(3.01)	

Interest income	
6.1	
225	
23,881,526	
24,983,445	
(4.41)	
25,926,792	
26,821,838	
(3.34)	
Less: Interest expense	6.2	225	10,832,186	13,064,310	(17.09)	11,205,126	13,375,197	(16.22)	
Net interest income	6	224	13,049,340	11,919,135	9.48	14,721,666	13,446,641	9.48	

Net earned premium	
7	
226	
-	
-	
-	
4,939,071	
5,028,549	
(1.78)	
Fee and commission income	8	227	1,876,524	1,818,675	3.18	1,321,513	1,198,054	10.30	
Net gains/(losses) on financial assets - FVTPL	9	228	26,783	162,616	(83.53)	86,525	228,258	(62.09)	
Other operating income	10	228	956,547	139,062	587.86	357,085	368,566	(3.12)	
Total operating income			15,909,194	14,039,488	13.32	21,425,860	20,270,068	5.70	
Less: Impairment charges for loans and receivables and other losses	
11	
229	
655,425	
1,043,837	
(37.21)	
951,756	
1,352,489	
(29.63)	
Impairment charges for goodwill	34	281	121,611	99,209	22.58	121,611	99,209	22.58	
Net operating income			15,132,158	12,896,442	17.34	20,352,493	18,818,370	8.15	

Less: Expenses Personnel expenses	

12	

232	

4,002,414	

3,465,373	

15.50	

4,946,747	

4,354,636	

13.60	
Depreciation and amortisation	13	232	700,043	722,994	(3.17)	638,664	647,693	(1.39)	
Benefits, claims and underwriting expenditure	14	233	-	-	-	3,228,475	2,663,347	21.22	
Other operating expenses	15	234	2,134,497	1,612,859	32.34	2,607,480	2,048,058	27.31	
Total operating expenses			6,836,954	5,801,226	17.85	11,421,366	9,713,734	17.58	

Operating profit before taxes on financial services			
8,295,204	
7,095,216	
16.91	
8,931,127	
9,104,636	
(1.91)	
Less : Tax on financial services	16	234	1,645,111	1,222,628	34.56	1,705,797	1,273,966	33.90	
Profit before income tax expense			6,650,093	5,872,588	13.24	7,225,330	7,830,670	(7.73)	
Less : Income tax expense	17	235	1,991,084	1,839,568	8.24	2,407,161	2,234,336	7.73	
Profit for the year			4,659,009	4,033,020	15.52	4,818,169	5,596,334	(13.90)	

Profit attributable to
Equity holders of the Company			

4,659,009	

4,033,020	

15.52	

4,805,731	

5,294,015	

(9.22)	
Non-controlling interest	49	302	-	-	-	12,438	302,319	(95.89)	
Profit for the year			4,659,009	4,033,020	15.52	4,818,169	5,596,334	(13.90)	

Basic / Diluted earnings per ordinary share (Rs.)	
18	
238	
2.47	
2.14	
15.42	
2.55	
2.81	
(9.25)	
Dividend per Ordinary share (Rs.)	19	238	1.25	0.60	108.33				

The Notes appearing on pages 215 to 339 form an integral part of the Financial Statements.

Statement of Comprehensive Income

For the year ended 31st March	

Note	

Page No.	Company	Group	
			2022
Rs. '000	2021
Rs. '000	Change
%	2022
Rs. '000	2021
Rs. '000	Change
%	

Profit for the year			
4,659,009	
4,033,020	
15.52	
4,818,169	
5,596,334	
(13.90)	

Other comprehensive income, net of tax Items to be reclassified to profit or loss in subsequent years (net of tax):									
Net gains/(losses) arising from translating the Financial Statements of the foreign subsidiary	

48.4	

302	

-	

-	

-	

1,439,171	

141,728	

915.45	
Net items to be reclassified to profit or loss in subsequent years			
-	
-	
-	
1,439,171	
141,728	
915.45	

Items not to be reclassified to profit or loss in subsequent years (net of tax):
Net actuarial gains/(losses) on defined benefit plans
Actuarial gains and losses on retirement benefit obligation	

43	

294	

(31,732)	

107,003	

(129.66)	

(28,272)	

106,891	

(126.45)	
Deferred tax effect on actuarial gains and losses	
44.1	
298	
7,616	
(29,961)	
125.42	
7,795	
(27,690)	
128.15	

Financial assets - Fair value through other comprehensive income
Gains/(losses) on re-measuring	

48.3	

302	

(207,831)	

(15,263)	

(1,261.67)	

(207,831)	

(5,512)	

(3,670.52)	
Deferred tax effect on above	44.1	298	49,817	-	100.00	49,817	-	100.00	

Recycling to Statement of Profit or Loss for impairment			

-	

-	

-	

-	

-	

-	
Net items not to be reclassified to profit or loss in subsequent years			
(182,130)	
61,779	
394.81	
(178,491)	
73,689	
342.22	
Other comprehensive income for the year, net of tax			
(182,130)	
61,779	
394.81	
1,260,680	
215,417	
485.23	
Total comprehensive income for the year			4,476,879	4,094,799	9.33	6,078,849	5,811,751	4.60	

Attributable to:
Equity holders of the Company			

(182,130)	

61,779	

394.81	

555,132	

212,979	

160.65	
Non-controlling interest	49	302	-	-	-	705,548	2,438	28,839.62	
Other comprehensive income for the year, net of tax			
(182,130)	
61,779	
394.81	
1,260,680	
215,417	
485.23	
Total comprehensive income for the year			4,476,879	4,094,799	9.33	6,078,849	5,811,751	4.60	

The Notes appearing on pages 215 to 339 form an integral part of the Financial Statements.

As at 31st March	

Note	
Page No.	Company	Group	
			2022
Rs. '000	2021
Rs. '000	Change
%	2022
Rs. '000	2021
Rs. '000	Change
%	

Assets
Cash and cash equivalents	

22	

248	

4,668,830	

2,703,031	

72.73	

5,402,587	

3,844,694	

40.52	
Balances with banks & financial institutions	23	248	5,117,866	5,399,071	(5.21)	9,529,518	8,231,101	15.77	
Financial assets -Fair value through profit or loss	24	249	25,140	109,787	(77.10)	849,298	1,281,753	(33.74)	
Loans and receivables - Amortised cost	25	251	151,274,454	141,387,907	6.99	163,320,846	147,004,004	11.10	
Insurance and reinsurance receivables	26	267	-	-	-	1,322,528	1,024,461	29.10	
Financial assets - Fair value through other comprehensive income	
27	
268	
1,333,278	
309,118	
331.32	
1,632,941	
735,494	
122.02	
Debt instrument - Amortised cost	28	269	9,827,221	6,994,206	40.51	16,013,525	10,931,714	46.49	
Investments in subsidiaries	29	271	3,213,788	3,213,788	-	-	-	-	
Investment property	30	273	-	-	-	820,664	820,664	-	
Other assets	31	274	749,154	575,660	30.14	831,826	932,458	(10.79)	
Property, plant and equipment	32	275	1,413,776	1,049,250	34.74	4,090,682	4,034,265	1.40	
Right of use assets	33	280	1,972,380	2,242,444	(12.04)	1,539,484	1,591,297	(3.26)	
Deferred tax assets	44	297	1,146,726	415,841	175.76	1,444,813	594,495	143.03	
Goodwill and intangible assets	34	281	21,965	146,446	(85.00)	139,603	265,506	(47.42)	
Total assets			180,764,578	164,546,549	9.86	206,938,315	181,291,906	14.15	

Liabilities Due to banks	

35	

283	

11,749,332	

6,439,310	

82.46	

15,300,361	

9,003,873	

69.93	
Due to customers	36	285	103,367,904	101,502,931	1.84	111,453,750	103,743,716	7.43	
Debt securities issued	37	287	17,244,313	13,825,553	24.73	17,103,223	13,684,516	24.98	
Other financial liabilities	38	289	3,636,528	4,132,110	(11.99)	4,043,322	4,111,235	(1.65)	
Insurance liabilities and reinsurance payable	39	290	-	-	-	5,903,363	5,015,885	17.69	
Operating lease liabilities	40	292	2,059,050	2,286,386	(9.94)	1,588,115	1,614,660	(1.64)	
Current tax liabilities	41	293	1,851,676	362,450	410.88	2,098,784	883,900	137.45	
Other liabilities	42	294	1,369,054	1,069,121	28.05	1,399,030	1,156,822	20.94	
Retirement Benefit Obligation	43	294	668,411	587,257	13.82	748,944	657,778	13.86	
Deferred tax liabilities	44	297	-	-	-	323,621	297,568	8.76	
Total liabilities			141,946,268	130,205,118	9.02	159,962,513	140,169,953	14.12	

Equity
Stated capital	

45	

299	

17,071,961	

14,892,036	

14.64	

17,071,961	

14,892,036	

14.64	
Statutory reserve fund	46	300	2,639,946	2,406,995	9.68	2,729,351	2,464,951	10.73	
Retained earnings	47	301	19,481,611	17,159,777	13.53	23,122,852	20,682,106	11.80	
Other reserves	48	301	(375,208)	(117,377)	219.66	897,111	421,319	112.93	
Total equity attributable to equity holders of the Company			38,818,310	34,341,431	13.04	43,821,275	38,460,412	13.94	
Non-controlling interest	49	302	-	-	-	3,154,527	2,661,541	18.52	
Total equity			38,818,310	34,341,431	13.04	46,975,802	41,121,953	14.24	
Total liabilities and equity			180,764,578	164,546,549	9.86	206,938,315	181,291,906	14.15	
Contingent liabilities and commitments	50	303	6,852,234	10,998,111	(37.70)	6,899,223	11,045,100	(37.54)	
Net asset value per ordinary share (Rs.)	51	304	20.57	20.15	2.10	23.22	22.56	2.91	

We certify that these Financial Statements have been prepared in compliance with the requirements of the Companies Act No. 07 of 2007.

Omal Sumanasiri	Shamindra Marcelline
Chief Manager - Finance	Chief Executive Officer

The Board of Directors is responsible for these Financial Statements. Approved and signed for and on behalf of the Board by;

Sujeewa Rajapakse	Rohan Pathirage
Chairman	Director
The Notes appearing on pages 215 to 339 form an integral part of the Financial Statements. 24 June 2022
Colombo

Company	

Capital

Rs. ‘000	

Statutory Reserve
Fund
Rs. ‘000	Other Reserves	

Retained Earnings

Rs. ‘000	

Total Equity

Rs. ‘000	
			Fair Value Reserve

Rs. ‘000			

Balance as at 1st April 2020	
13,915,414	
2,205,344	
(102,114)	
14,227,988	
30,246,632	

Total comprehensive income for the year Profit/(loss) for the year	

-	

-	

-	

4,033,020	

4,033,020	
Other comprehensive income (net of tax)	-	-	(15,263)	77,042	61,779	
Total comprehensive income for the year	-	-	(15,263)	4,110,062	4,094,799	

Transactions with equity holders, recognised directly in equity Transfers to reserves	

-	

201,651	

-	

(201,651)	

-	
Dividend paid - Interim	-	-	-	(162,770)	(162,770)	
-  Final	976,622	-	-	(813,852)	162,770	
Total transactions with equity holders	976,622	201,651	-	(1,178,273)	-	
						
Balance as at 31st March 2021	14,892,036	2,406,995	(117,377)	17,159,777	34,341,431	

Balance as at 1st April 2021	
14,892,036	
2,406,995	
(117,377)	
17,159,777	
34,341,431	

Total comprehensive income for the year Profit/(loss) for the year	

-	

-	

-	

4,659,009	

4,659,009	
Other comprehensive income (net of tax)	-	-	(207,831)	25,701	(182,130)	
Total comprehensive income for the year	-	-	(207,831)	4,684,710	4,476,879	

Transactions with equity holders, recognised directly in equity Transfers to reserves	

-	

232,950	

(50,000)	

(182,950)	

-	
Dividend paid - Interim	2,179,925	-	-	(2,179,925)	-	
Total transactions with equity holders	2,179,925	232,950	(50,000)	(2,362,875)	-	
						
Balance as at 31st March 2022	17,071,961	2,639,945	(375,208)	19,481,612	38,818,310	

The Notes appearing on pages 215 to 339 form an integral part of the Financial Statements.

Group	
Capital

Rs. ‘000	
Statutory Reserve
Fund

Rs. ‘000	Other Reserves	
Retained Earnings

Rs. ‘000	
Total

Rs. ‘000	
Non- controlling Interest

Rs. ‘000	
Total Equity

Rs. ‘000	
			Fair Value Reserve

Rs. ‘000	Foreign currency translation reserve
Rs. ‘000					

Balance as at 1st April 2020	
13,915,414	
2,235,077	
(116,005)	
401,108	
16,517,824	
32,953,418	
2,356,784	
35,310,202	

Total comprehensive income for the year									
Profit/(loss) for the year	-	-	-	-	5,294,015	5,294,015	302,319	5,596,334	
Other comprehensive income (net of tax)	-	-	(5,512)	141,728	76,763	212,979	2,438	215,417	
Total comprehensive income for the year	-	-	(5,512)	141,728	5,370,778	5,506,994	304,757	5,811,751	

Transactions with equity holders, recognised directly in equity
Transfers to reserves	

-	

229,874	

-	

-	

(229,874)	

-	

-	

-	
Dividend paid -   Interim	-	-	-	-	(162,770)	(162,770)	-	(162,770)	
Final	976,622	-	-	-	(813,852)	162,770	-	162,770	
Total transactions with equity holders	976,622	229,874	-	-	(1,206,496)	-	-	-	
									
Balance as at 31st March 2021	14,892,036	2,464,951	(121,517)	542,836	20,682,106	38,460,412	2,661,541	41,121,953	
									
Balance as at 1st April 2021	14,892,036	2,464,951	(121,517)	542,836	20,682,106	38,460,412	2,661,541	41,121,953	

Total comprehensive income for the year Profit/(loss) for the year	

-	

-	

-	

-	

4,805,731	

4,805,731	

12,438	

4,818,169	
Other comprehensive income (net of tax)	-	-	(207,831)	733,623	29,340	555,132	705,548	1,260,680	
Total comprehensive income for the year	-	-	(207,831)	733,623	4,835,071	5,360,863	717,986	6,078,849	

Transactions with equity holders, recognised directly in equity
Transfers to reserves	

-	

264,401	

(50,000)	

-	

(214,401)	

-	

-	

-	
Dividend paid -  Interim	2,179,925	-	-	-	(2,179,925)	-	(225,000)	(225,000)	
Total transactions with equity holders	2,179,925	264,401	(50,000)	-	(2,394,326)	-	(225,000)	(225,000)	
									
Balance as at 31st March 2022	17,071,961	2,729,352	(379,348)	1,276,459	23,122,851	43,821,275	3,154,527	46,975,802	

The Notes appearing on pages 215 to 339 form an integral part of the Financial Statements.

Accounting Policy
The Statement of Cash Flows has been prepared by using the ‘Direct Method’ of preparing cash flows in accordance with the Sri Lanka Accounting Standard – LKAS 7 on ‘Statement of Cash Flows’, whereby operating activities, investing activities and financing activities are separately recognised. Cash and Cash Equivalents comprise of short-term, highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value.

For the year ended 31st March	

Note	
Page No.	Company	Group	
			2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. ‘000	

Cash flows from operating activities Income from cash and cash equivalent	

6.1	

225	

159,743	

73,753	

176,533	

103,501	
Payments to loans and receivables			(123,938,484)	(47,647,269)	(128,649,697)	(51,042,311)	
Receipts from loans and receivables			137,014,283	78,976,592	139,838,871	81,166,978	
Investment in balances with banks & financial institutions			(30,785,830)	(24,145,286)	(34,428,160)	(26,225,019)	
Receipts from balances with banks & financial institutions			31,510,851	22,294,433	34,065,096	25,405,664	
Investment in debt instrument at amortized cost			(31,590,690)	(22,598,347)	(37,483,431)	(23,561,339)	
Receipts from debt instrument at amortized cost			29,316,856	20,089,756	31,022,471	20,339,756	
Payment of due to customers			(122,737,129)	(99,054,813)	(124,719,248)	(97,571,015)	
Receipts from due to customers			116,799,179	83,652,942	124,371,580	83,337,190	
Receipt from other income			2,079	1,711	219,280	216,256	
Investment in financial assets - fair value through profit or loss			(4,573,220)	(8,881,716)	(5,221,552)	(10,028,730)	
Proceeds from financial assets - fair value through profit or loss			4,684,650	9,966,264	5,740,532	10,173,826	
Receipt from Financial assets - fair value through OCI			3,756	-	156,320	979,028	
Investment in Financial assets - fair value through OCI			(1,150,081)	-	(1,175,931)	(264,333)	
Payment for personnel expenses			(3,709,482)	(3,575,458)	(4,653,596)	(4,377,522)	
Payment for operating lease liability			(667,068)	(655,969)	(385,273)	(409,587)	
Payment for other operating activities			(3,444,374)	(872,388)	(3,623,513)	(885,891)	
Premium received from customers			-	-	4,641,005	5,199,021	
Claims paid			-	-	(2,340,996)	(2,712,682)	
Dividend income from investments			711,841	110,673	6,216	918	
Gratuity paid	43	294	(33,471)	(10,353)	(39,309)	(13,148)	
Income tax paid	41.1	294	(1,175,310)	(3,349,938)	(1,958,933)	(3,534,648)	
Net cash generated from/(used in) operating activities			(3,601,901)	4,374,587	(4,841,735)	6,295,913	

Cash flows from investing activities Purchase of property, plant and equipment	

32	

275	

(385,714)	

(104,690)	

(307,456)	

(152,324)	
Proceeds from the sale of property, plant and equipment			14,005	54,832	131,604	210,359	
Purchase of intangible assets	34	281	(10,325)	(360)	(12,835)	(11,661)	
Net cash (used in)/generated from investing activities			(382,034)	(50,218)	(188,687)	46,374	

Cash flows from financing activities Payment for due to banks	

35.1	

283	

(1,946,889)	

(3,886,355)	

(2,504,664)	

(5,315,691)	
Borrowing from due to banks	35.1	283	7,000,000	1,000,000	7,250,000	1,500,000	
Payment for debt securities issued	37.1	287	(8,456,772)	(6,589,468)	(8,440,722)	(6,570,514)	
Borrowing from debt securities issued			10,000,000	-	10,000,000	-	
Dividend paid to shareholders			80	(1,345)	80	(1,345)	
Dividend paid to non-controlling interest			-	-	(150,000)	-	
Net cash (used in)/generated from financing activities			6,596,419	(9,477,168)	6,154,694	(10,387,550)	

Net (decrease) in cash & cash equivalents			
2,612,484	
(5,152,799)	
1,124,272	
(4,045,263)	
Cash and cash equivalents at the beginning of the year			1,986,657	7,139,456	2,952,815	6,998,078	
Cash and cash equivalents at the end of the year			4,599,141	1,986,657	4,077,087	2,952,815	

Cash and cash equivalents			
4,668,831	
2,703,031	
5,402,587	
3,844,694	
Bank overdraft			(69,690)	(716,374)	(1,325,500)	(891,879)	
Cash and cash equivalents at the end of the year			4,599,141	1,986,657	4,077,087	2,952,815	

The Notes appearing on pages 215 to 339 form an integral part of the Financial Statements.

1.	Corporate and Group Information
1.1	Corporate Information
People’s Leasing & Finance PLC (the ‘Company’), is a Public Limited Liability Company incorporated on 22 August 1995 and domiciled in Sri Lanka. It is a licensed finance company under the Finance Business Act No. 42 of 2011. The Company has a primary listing on the Colombo Stock Exchange on 24 November 2011. The Company was re-registered under the Companies Act No. 07 of 2007.

Its registered office and the principal place of the business is at No. 1161, Maradana Road, Colombo 08.

Consolidated Financial Statements
The consolidated financial statements of the Group for the year ended 31 March 2022 comprise People’s Leasing & Finance PLC (Parent Company), its subsidiaries (together referred to as the ‘Group’).

Parent Entity and Ultimate Parent Entity
The Company’s parent entity is People’s Bank which is a Government owned entity.

Number of Employees
The staff strength of the Company and Group as at 31st March 2022 is 2,245 and 3,148 respectively. (2,343 and 3,304 as at 31st March 2021).

1.2	Group Information
Principal Activities and Nature of Operations Company
People’s Leasing & Finance PLC
The principal business activities are providing finance leases, hire-purchase assets financing, term loans, Islamic finance, margin trading, share trading, issue of debt instruments, factoring, gold loans and mobilisation of public deposits.

Name of the Subsidiaries	Principal Activities	Country of Incorporation	% Equity Interest	
			2022	2021	
People’s Leasing Fleet Management Limited	Fleet management, vehicle valuation, sale of vehicles, insurance assessment, and vehicles repairing.	Sri Lanka	100%	100%	
People’s Leasing Property Development Limited	Carrying out mixed development projects and property development activities.	Sri Lanka	100%	100%	
People’s Insurance PLC	Carrying out general insurance business	Sri Lanka	75%	75%	
People's Leasing Havelock Properties Limited	Construct and operate an office complex.	Sri Lanka	100%	100%	
People's Micro- commerce Ltd	Providing non-bank financial services to low income earners and micro enterprises.	Sri Lanka	100%	100%	
Lankan Alliance Finance Limited	Providing lease/loans and advances, issue of debt instruments and mobilization of public deposits	Bangladesh	51%	51%	

Subsidiaries

There were no significant changes in the nature of the principal activities of the Company and the Group during the financial year under review.

2.	Basis of Preparation and Other Significant Accounting Policies
2.1	Statement of Compliance
The consolidated Financial Statements of the Group and Separate Financial Statements
of the Company, as at 31st March 2022 and for the year then ended, have been prepared and presented in accordance with Sri Lanka Accounting Standards (SLFRSs and LKASs),laid down by The Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka) and in compliance with the requirements of the Companies Act No. 07
of 2007, the Finance Business Act No. 42 of 2011, Insurance Industry Act No. 43 of 2000 and the Listing Rules of the Colombo Stock Exchange. These Financial Statements, except for information on cash flows have been prepared following the accrual basis of accounting.

Sri Lanka Accounting Standards are available at 'www.casrilanka.com / www.slaasc.lk'.

The Group did not adopt any inappropriate accounting treatments, which are not in compliance with the requirements of the SLFRSs and LKASs, regulations governing the preparation and presentation of the Financial Statements.

Details of the Group’s General Accounting Policies followed during the year are given in Notes 3 on page 218.

2.2	Responsibility for Financial Statements
The Board of Directors is responsible for these Financial Statements of the Company and the Group as per the provision of the Companies Act No. 07 of 2007 and SLFRSs and LKASs.

The Board of Directors acknowledges their responsibility as set out in the “Annual Report of the Board of Directors on the Affairs of
the Company”, “Directors’ Responsibility for Financial Reporting” and in the certification on the Statement of Financial Position.

These financial statements include the following components:

●	a Statement of Profit or Loss and Statement of Comprehensive Income providing the information on the financial performance of the Company and the Group for the year under review;
●	a Statement of Financial Position
providing the information on the financial position of the Company and the Group as at the year-end;
●	a Statement of Changes in Equity
depicting all changes in shareholders‘ equity during the year under review of the Company and the Group;

2.4   Basis of Measurement
●	
a Statement of Cash Flows providing the information to the users, on the ability of the Company and the Group to generate cash and cash equivalents and the needs of entity to utilise those cash flows;and
●	Notes to the Financial Statements
comprising Accounting Policies and other explanatory information.

2.3   Approval of Financial Statements by the Board of Directors
The Financial Statements of the Company and the Group for the year ended 31 March 2022 (including comparatives) were approved and authorised for issue on 24
June 2022 in accordance with the resolution of the Board of Directors on 24 June 2022.
2.8	
Rounding
The amounts in the Financial Statements have been rounded-off to the nearest Rupees thousands, except where otherwise indicated as permitted by the Sri Lanka Accounting Standard- LKAS 01 on "Presentation of Financial Statements".

2.9	Materiality and Aggregation
In compliance with the Sri Lanka Accounting Standard - LKAS 01 on ‘Presentation of Financial Statements’, each material class of similar items is presented separately in the Financial Statements. Items of dissimilar nature or functions too are presented separately, unless they are immaterial.

2.10	Significant Accounting Judgments, Estimates and Assumptions
The preparation of the Financial Statements

The Financial Statements of the Company and the Group have been prepared on the historical
cost basis except for the following items in the Statement of Financial Position:

Item	Basis of Measurement	Note	
Financial assets -Fair value through profit or loss	Fair Value	24	
Financial assets - Fair value through other comprehensive income	Fair Value	27	
Investment property	Fair Value	30	
Retirement benefit obligation	Liability is recognised as the present value of the retirement benefit obligation, plus actuarial gains and losses .	43	

2.5	Presentation of Financial Statements
The assets and liabilities of the Company and the Group in the Statement of Financial Position are grouped by nature and listed in an order that reflects their relative liquidity and maturity pattern. An analysis regarding recovery or settlement within 12 months after the reporting
date (current) and more than 12 months after the reporting date (non–current) is presented in Note 52 on page 305 (Current/ non-current analysis). No adjustments have been made for inflationary factors affecting the Financial Statements.

2.6	Offsetting
Financial assets and financial liabilities are offset and the net amount reported in the consolidated statement of financial position only when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or to realize the assets and settle the liability simultaneously. Income and expenses are not offset in the consolidated Statement of Profit or Loss unless required or permitted by any accounting standard or interpretation, and as specifically disclosed in the accounting policies of the Group.

2.7	Functional and Presentation Currency
The Financial Statements of the Group and the Company are presented in Sri Lanka Rupees (Rs.), which is the currency of primary economic environment, in which the Group operates (Group functional currency).

of the Company and the Group in conformity with SLFRSs and LKASs requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Further, management is also required to consider key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that have significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. Actual results may differ from these estimates.

Accounting judgments, estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.

The key significant accounting judgments, estimates and assumptions involving uncertainty are discussed below, whereas the respective carrying amounts of such assets and liabilities are as given in related Notes.

Going Concern
The Group’s management has made an assessment of its ability to continue as a going concern and is satisfied that it has the resources to continue in business for a foreseeable future. Furthermore,

management is not aware of any material uncertainties that may cast significant doubt upon the Group’s ability to continue as a going concern. Therefore, the Financial Statements continue to be prepared on the going concern basis.

Going Concern In determining the basis of preparing the financial statements for the year ended 31 March 2022, based on
available information, the management has assessed the existing and anticipated effects of COVID-19 on the Group Companies and the appropriateness of the use of the going concern basis.

Group evaluated the resilience of its businesses considering a wide range of factors under multiple stress tested
scenarios, relating to expected income, cost management, profitability, the ability to defer non-essential capital expenditure ,unused credit lines and the ability to continue providing services to ensure businesses continue as least impacted as possible. Having presented the outlook for each industry of group to the holding company Board and After evaluating the above by the Management, and after due consideration of the range and likelihood of outcomes, the Management is satisfied that the Company have adequate resources to continue in operational existence for the foreseeable future and continue to adopt the going concern basis in preparing and presenting these financial statements.

Classification of Financial Assets and Liabilities
As per SLFRS 9, the Significant Accounting Policies of the Group provides scope
for financial assets to be classified and subsequently measured into different categories, namely, at Amortised Cost, Fair Value through Other Comprehensive Income (FVOCI) and Fair Value Through Profit or Loss (FVTPL) based on the following criteria;

●	The entity’s business model for managing the financial assets as set out in Note 3.5.2 on page 219.
●	The contractual cash flow characteristics
of the financial assets as set out in Note
3.5.2 on page 219.

Impairment losses on Financial Assets The measurement of impairment losses both under SLFRS 9 across all categories of financial assets requires judgement, in particular, the estimation of the amount and timing of future cash flows and collateral
values when determining impairment losses.

The Group/Company assesses at each reporting date, whether there is any objective evidence that a financial asset or a group of financial assets are impaired.

Impairment Losses on Loans and Receivables
Accordingly, the Group reviews its individually significant loans and advances at each reporting date to assess whether an impairment loss should be provided in the Statement of Profit or Loss. In particular, the Management’s judgement is required in the estimation of the amount and timing of future cash flows when determining the impairment loss.

These estimates are based on assumptions about a number of factors and hence actual results may differ, resulting in future changes to the impairment allowance made.

Details of the ‘impairment losses on loans and receivables’ are given in Note 25.6 on page 260 to the financial statements.

Impairment charges on financial investments
Financial investments are categorised under amortised cost subject to Impairment in accordance with SLFRS 9 -Financial Investment. The Company/Group does
not have historical loss experience on debt instruments at amortised cost .Thus the Group considers PDs published by the external sources i.e. – Bloomberg for
external credit rating. LGD for debt securities issued by the Government of Sri Lanka in rupees is considered as 0%, and for all other instruments, industry average is considered as LGD.

Credit risk has not increased significantly relating to financial investments, since initial recognition. Therefore Group did not record expected credit loss in the financial statements for those investments.

Impairment of FVOCI
Details of the ‘Impairment of FVOCI’ are given in Note 27 on page 268 to the financial statements.

Useful Life Time of the Property, Plant and Equipment
The Group reviews the residual values, useful lives and methods of depreciation of property, plant and equipment at each
reporting date. Judgment of the management is exercised in the estimation of these values, rates, methods and hence they are subject to uncertainty.

Useful Life Time of the Intangible Assets Details of the ‘useful life-time of the intangible assets’ are given in Note 34 on page 281 to the financial statements.

GRI | 207-1, 207-2, 207-4

Transfer Pricing Regulation
The Company is subject to income taxes and other taxes including transfer pricing regulations. Prevailing uncertainties with respect to the interpretation of respective transfer pricing regulations, necessitated using management judgment to determine the impact of transfer pricing regulations. Accordingly critical judgments and estimates were used in applying the regulations in
aspects including but not limited to identifying associated undertakings, estimation of
the respective arm’s length prices and selection of appropriate pricing mechanism. The current tax charge is subject to such judgments. Differences between estimated income tax charge and actual payable
may arise as a result of management's interpretation and application of transfer pricing regulation.

GRI | 207-1, 207-2, 207-4

Deferred Tax
Details of the 'deferred tax' are given in Note 44 on page 297 to the financial statements.

Retirement Benefit Obligation
Details of the 'retirement benefit obligation' are given in Note 43 on page 294 to the financial statements.

Valuation of General Insurance Contract Liabilities of Subsidiary People’s Insurance PLC
The estimates of general insurance contracts have to be made both for the expected ultimate cost of claims reported  at the reporting date and for the expected ultimate cost of claims Incurred, But Not yet
Reported, at the reporting date (IBNR). It can take a significant period of time before the ultimate claims cost can be established with certainty. The main assumption underlying estimating the amounts of outstanding claims is the past claims development experience.

Large claims are usually separately addressed, either by being reserved at the face value of loss adjusted estimates or separately projected in order to reflect
their future development. In most cases, no explicit assumptions are made regarding future rates of claims, inflation or loss ratios.

2.11 Comparative Information Comparative information including quantitative, narrative and descriptive information is disclosed in respect of the previous period in the Financial Statements in order to enhance the understanding of the current period’s Financial Statements and
to enhance the inter period comparability. The presentation and classification of the Financial Statements of the previous year are amended, where relevant for better presentation and to be comparable with those of the current year.

3.	General Accounting Policies
3.1	Basis of Consolidation
The Consolidated Financial Statements of the Group for the year ended 31st March 2022 include the Company, its subsidiaries and its associate company. The financial statements of the Company’s subsidiaries and associate are prepared for the same reporting year except for People’s Insurance PLC, a subsidiary of People’s Leasing & Finance PLC, whose financial year ends on December 31st. For consolidation purpose same reporting year has been used.
3.1.1	
Business Combination and Goodwill
Business combinations are accounted for using the Acquisition method as per
the requirements of Sri Lanka Accounting Standard - SLFRS 03 (Business Combinations).

The Group and the Company measure goodwill as the fair value of the consideration transferred including the recognised
amount of any non-controlling interest in the acquiree, less the net recognised amount of the identifiable assets acquired and liabilities assumed, all measured as of the acquisition date. When the excess is negative, a bargain purchase gain is recognised immediately in Statement of Profit or Loss.

Goodwill acquired in a business combination is initially measured at cost, being the excess of the cost of the business combination over the Group’s interest in the net amount of the identifiable assets, liabilities and contingent liabilities acquired.

Following initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is reviewed for impairment annually, or more frequently, if events or changes in circumstances indicate that the carrying value may be impaired.
For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated
to each of the Group’s cash–generating units (CGUs) or group of CGUs, which are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.

Where goodwill forms part of a CGU (or group of CGUs) and part of the operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill
disposed of in this circumstance is measured based on the relative values of the operation disposed of and the portion of the CGU retained.

When subsidiaries are sold, the difference between the selling price and the net assets plus cumulative translation differences and

goodwill is recognised in the Statement of Profit or Loss.

3.1.2	Common Control Business Combination
Common control business combinations are accounted using the guidelines issued
under Statement of Recommended Practice (SoRP) - Merger accounting for common control business combination issued by The Institute of Chartered Accountants of Sri Lanka.

3.1.3	Loss of Control
Upon the loss of control, the Group derecognises the assets and liabilities of the subsidiary any non-controlling interest and the other components of equity related to the subsidiary. Any surplus or deficit arising on the loss of control is recognised in Statement of Profit or Loss. If the Group retains any interest in the previous subsidiary, then such interest is measured at fair value at the date that control is lost.

3.1.4	Transactions Eliminated on Consolidation
Intra-group balances and transactions and any unrealised income and expenses arising from intra-group transactions are eliminated in preparing the Consolidated Financial Statements. Unrealised gains arising from transactions with equity accounted investees are eliminated against the investment to
the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealized gains, but
only to the extent that there is no evidence of impairment.

3.2	Foreign Currency Transactions and Balances
All foreign currency transactions are translated into the functional currency which is Sri Lankan Rupees (Rs.) at the spot exchange rate at the date of the transactions were affected. In this regard, the Group’s practice is to use the middle rate of exchange ruling at the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at the spot rate of exchange at the reporting date. The foreign currency gain or loss on monetary items is the difference between amortised cost in the functional currency

at the beginning of the year adjusted for effective interest and payments during the year and the amortised cost in foreign
currency translated at the exchange rate at the reporting date.

Non–monetary items that are measured in terms of historical cost in a foreign currency are translated using the spot exchange rates as at the date of recognition. Non- monetary items measured at fair value in
a foreign currency are translated using the spot exchange rates at the date when the fair value was determined.

3.3	SLFRS 15 – Revenue from Contracts with Customers
SLFRS 15 replaces revenue recognition guidance, including LKAS 18 on “Revenue”, LKAS 11 on “Construction Contracts” and IFRIC 13 on “Customer Loyalty Programmes” and is effective for annual reporting periods beginning on or after 1 April, 2018.

SLFRS 15 provides a comprehensive framework for determining whether, how much, and when revenue is recognised. SLFRS 15 requires new qualitative and quantitative disclosure aimed at enabling users of Financial Statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers.

Entities are required to apply five-step model to determine when to recognise revenue and at what amount. The model specifies that revenue is recognised when or as an entity transfers control of goods and services to a customer at the amount at which the entity expects to be entitled.

3.4	Due and Amended Standard and Interpretation
In these financial statements, the Group has applied Sri Lanka Accounting Standard - Amendments to SLFRS 9, LKAS 39, SLFRS 7, SLFRS 4 and SLFRS 16 – Interest Rate Benchmark Reform, and Amendments to SLFRS 16  - COVID – 19 Related Rent Concessions for financial reporting which became effective for the annual reporting
periods beginning on or after 1st January 2020, for the first time. The Group has not early adopted any other standard, interpretation
or amendment that has been issued but not effective.
3.4.1	
Amendments to SLFRS 9, LKAS
39, SLFRS 7, SLFRS 4
The amendments to SLFRS 9 & LKAS 39 provide a number of reliefs, which apply to  all hedging relationships that are directly affected by interest rate benchmark reform. A hedging relationship is affected if the reform gives rise to uncertainty about the timing and/or amount of benchmark-based cash flows of the hedged item or the hedging instrument.

IBOR reforms Phase 2 include number of reliefs and additional disclosures.
Amendments supports companies in applying SLFRS when changes are made to contractual cash flows or hedging relationships because of the reform.

These amendments to various standards are effective for the annual reporting periods beginning on or after 01 January 2021. The Company/Group is currently assessing the potential impact on its Financial Statements resulting from this amendment.

3.4.2	Amendments to SLFRS 16 - COVID
– 19 Related Rent Concessions
The amendments provide relief to lessees from applying SLFRS 16 guidance on lease modification accounting for rent concessions arising as a direct consequence of the
Covid-19 Pandemic.

As a practical expedient, a lessee may elect not to assess whether a Covid-19 related rent concession from a lessor is a lease modification. A lessee that makes this election accounts for any change in lease payments resulting from Covid-19 related rent concession the same way it would
account for the change under SLFRS16,if the change were not a lease modification.

The amendment applies to annual reporting periods beginning on or after 01 June 2020. Early application of this amendment was permitted. Incase entity has early adopted this amendment above disclosure should not be included under impending standard note - it may be reflected under the note “Changes in accounting policies /new and amended standards adopted during the year”. The Company/Group is currently assessing the potential impact on its Financial Statements resulting from this amendment.
3.5	
Financial Instruments – Initial Recognition and Subsequent Measurement

3.5.1	Date of Recognition
All financial assets and liabilities except ‘regular way trades’ are initially recognised on the trade date, i.e., the date that the Group becomes a party to the contractual provisions of the instrument. ‘Regular way trades’ means purchases or sales of financial assets that requires delivery of assets within the time frame generally established by regulation or convention in the market place. Those trades are initially recognised on the settlement date.

3.5.2	Classification and Subsequent Measurement of Financial Assets
As per SLFRS 9, the Group classifies all of its financial assets based on the business model for managing the assets and the assets’ contractual terms measured at either;

●	Amortised cost
●	Fair value through other comprehensive
income (FVOCI)
●	Fair value through profit or loss (FVTPL)

The subsequent measurement of financial assets depends on their classification.

Business Model Assessment
With effect from 1 April 2018, the Group makes an assessment of the objective of a business model in which an asset is held at a portfolio level and not assessed on instrument-by- instrument basis because this best reflects the way the business is managed and information is provided to management. The information considered includes:

●	the stated policies and objectives for the portfolio and the operation of those
policies in practice. In particular, whether management’s strategy focuses on earning contractual interest revenue, maintaining a particular interest rate profile, matching the duration of the financial assets to the duration of the liabilities that are funding those assets or realising cash flows through the sale of the assets;
●	how the performance of the portfolio is
evaluated and reported to the Group’s management;

●	the risks that affect the performance of the business model (and the financial assets held within that business model) and how those risks are managed;
●	how managers of the business
are compensated – e.g. whether compensation is based on the fair value of the assets managed or the contractual cash flows collected; and
●	the frequency, volume and timing of
sales in prior periods, the reasons for such sales and its expectations about future sales activity. However, information about sales activity is not considered in isolation, but as part
of an overall assessment of how the Group’s stated objective for managing the financial assets is achieved and how cash flows are realised.

The business model assessment is based on reasonably expected scenarios without taking ‘worst case’ or ‘stress case’ scenarios into account. If cash flows
after initial recognition are realised in a way that is different from the Group’s original expectations, the Group does not change the classification of the remaining financial assets held in that business model, but incorporates such information when assessing newly originated or newly purchased financial assets going forward.

Assessment of Whether Contractual Cash Flows are Solely Payments of Principal and Interest (SPPI test)
As a second step of its classification process the Group assesses the contractual terms of financial assets to identify whether they meet the SPPI test.

For the purposes of this assessment, “principal” is defined as the fair value of the financial asset on initial recognition and may change over the life of the financial asset (for example, if there are repayments of principal or amortisation of the premium/discount).

“Interest” is defined as consideration for the time value of money and for the credit risk associated with the principal amount
outstanding during a particular period of time and for other basic lending risks and costs, as well as profit margin.

In contrast, contractual terms that introduce a more than the minimise exposure to risks or volatility in the contractual cash flows that are unrelated to a basic lending arrangement do not give rise to contractual cash flows that are solely payments of principal and interest on the principal amount outstanding. In such cases, the financial asset is required to be measured at FVTPL.

In assessing whether the contractual cash flows are solely payments of principal and interest on principal amount outstanding, the Group considers the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition. In making the assessment, the Group considers:

●	Contingent events that would change the amount and timing of cash flows;
●	Leverage features;
●	Prepayment and extension terms;
●	Terms that limit the Group’s claim to cash
flows from specified assets; and
●	Features that modify consideration of the
time value of money.

The Group holds a portfolio of long-term fixed rate loans for which the Group has the option to propose to revise the interest rate at periodic reset dates. These reset rights are limited to the market rate at the time of revision. The borrowers have an option to either accept the revised rate or redeem the loan at par without penalty. The Group has determined that the contractual cash flows of these loans are solely payments of principal and interest because the option varies the interest rate in a way that is consideration
for the time value of money, credit risk, other basic lending risks and costs associated with the principal amount outstanding.

Details on different types of financial assets recognised on the SOFP.

Financial Assets Measured at amortised Cost
A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:
●	
The asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and
●	The contractual terms of the financial
asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Financial assets measured at amortised cost are given in Notes 22,23,25,26,28 and 35 to 41 on pages 248,249,251,267,269 and 283
to 293.

Financial Assets Measured at FVOCI Financial assets at FVOCI include debt and equity instruments measured at fair
value through other comprehensive income. Financial assets measured at FVOCI are given in Notes 27 on page 268.

Financial Assets Measured at FVTPL As per SLFRS 9, all financial assets other than those classified at amortised cost or
FVOCI are classified as measured at FVTPL. Financial assets at fair value through profit or loss include financial assets that are held for trading or managed and whose performance is evaluated on a fair value basis as they are neither held to collect contractual cash flows nor held both to collect contractual cash flows and to sell financial assets and financial assets designated upon initial recognition
at fair value through profit or loss which are discussed in Notes 24 on page 249.

Financial Assets Designated at Fair Value Through Profit or Loss
As per SLFRS 9, on initial recognition, the Group may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortised cost or at FVOCI as at FVTPL when such designation eliminates or significantly reduces an accounting mismatch that would otherwise arise from measuring the assets or liabilities or recognising gains or losses on them on a different basis.

The Group has not designated any financial assets upon initial recognition as at fair value through profit or loss as at the end of the reporting period.

3.5.3	Derecognition of Financial Assets and Financial Liabilities

Financial Assets
A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets) is derecognised when;

●	The rights to receive cash flows from the asset which have expired;
●	The Group and Company has transferred
its rights to receive cash flows from the asset or has assumed an obligation
to pay the received cash flows in full without material delay to a third party under a ‘pass–through’ arrangement; and either;

-	The Group and Company has transferred substantially all the risks and rewards of the asset; or
-	The Group and Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

On derecognition of a financial asset, the difference between the carrying amount of the asset and consideration received and any cumulative gain or loss that has been recognised in Statement of Comprehensive Income is recognised in Statement of Profit or Loss.

When the Group and Company has transferred its rights to receive cash flows from an asset or has entered into a pass- through arrangement, and has neither transferred nor retained substantially all of the risks and rewards of the asset nor transferred control of the asset, the asset is recognized to the extent of the group’s continuing involvement in the asset. In that case, the group also recognises an
associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the group has retained.

Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the group could be required to repay.

Financial Liabilities
A financial liability is derecognised when the obligation under the liability is discharged
or cancelled or expired. Where an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange
or modification is treated as a derecognition of the original liability and the recognition of a new liability. The difference between the carrying value of the original financial liability and the consideration paid is recognised in Statement of Profit or Loss.

3.5.4	Offsetting Financial Instruments
Financial assets and financial liabilities are offset and the net amount reported in the Statement of Financial Position if, and only if, there is a currently enforceable
legal right to offset the recognised amounts and there is an intention to settle on a net basis, or to realise the asset and settle the liability simultaneously. This is not generally the case with master netting agreements, therefore, the related assets and liabilities are presented gross in the Statement of Financial Position.

Income and expenses are presented on a net basis only when permitted under LKASs / SLFRSs, or for gains and losses arising from a group of similar transactions such as in the Group’s trading activity.

3.5.5	Determination of Fair Value
The fair value for financial instruments traded in active markets at the reporting date is based on their quoted market price or dealer price quotations (bid price for long positions and ask price for short positions), without any deduction for transaction costs.

An analysis of fair values of financial instruments and further details as to how they are measured are provided in Note 21 on page 241.

3.6	Impairment of Non–financial Assets
The carrying amounts of the Group’s non financial assets, other than deferred tax assets are reviewed at each Reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing of an asset is required, the Group estimates the asset’s

recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash generating unit’s fair value less costs to sell and its value in use. Where the carrying amount of an asset or cash – generating unit exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and risks specific to the asset. In determining fair value less costs to sell, an appropriate valuation model
is used. These calculations are corroborated by valuation multiples, quoted share price for publicly traded subsidiaries or other available fair value indicators.

For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may have decreased. If such indication exists the Group estimates the asset’s or cash-generating unit’s recoverable amount. A previously recognised impairment loss is reversed only if there has been a change  in the assumptions used to determine the asset’s recoverable amount since the last
impairment loss was recognised, the reversal is limited so that the carrying amount of
the asset does not exceed its recoverable amount, nor exceeds the carrying amount that would have been determined, net of depreciation/amortisation, had no impairment loss been recognized for the asset in prior years. Such reversal is recognised in Statement of Profit or Loss.

3.7	Provisions
Provisions are recognised in the Statement of Financial Position when the Group has a present obligation (legal or constructive) as a result of a past event, and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation in accordance with the Sri Lanka Accounting Standard - LKAS 37 on ‘Provision, Contingent Liabilities and Contingent Assets’. The amount recognized is the best estimate of the consideration required to settle the present obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation
at that date. The expense relating to any provision is presented in the Statement of Profit or Loss net of any reimbursement.

3.8	Borrowing Costs
As per Sri Lanka Accounting Standard- LKAS 23 on ‘Borrowing Costs’, the Group capitalizes borrowing costs that are directly attributable to the acquisition, construction or production of qualifying asset as part of the cost of the asset. A qualifying asset is an asset which takes a substantial period of
time to get ready for its intended use or sale. Other borrowing costs are recognised in the Statement of Profit or Loss in the period in which they occur.

GRI | 207-1, 207-2, 207-4
3.9	Income tax
Details of the 'income tax expense' are given in Note 17 on page 235 to the financial statements.

GRI | 207-1, 207-2, 207-4
3.10	Deferred Tax
Details of the 'deferred tax' are given in Note 44 on page 297 to the financial statements.

3.11	Crop Insurance Levy (CIL)
As per the provisions of the Section 14 of the Finance Act No.12 of 2013, the CIL was introduced with effect from April 1, 2013 and is payable to the National Insurance Trust Fund. Currently, the CIL is payable at 1% of the profit after tax.

3.12	Tax on Financial Services
Details of the 'VAT, NBT and Debt repayment Levy on financial services are given in Note 16 on page 234 to the financial statements.
4.	
Standards Issued But Not Yet Effective
The following Sri Lanka Accounting Standards and interpretations were issued by The Institute of Chartered Accountants  of Sri Lanka but not yet effective as at 31st March 2022. Accordingly these accounting standards have not been applied in the preparation of the Financial Statements for the year ended 31 March 2022. Following amendment is not expected to have a material impact on the Financial Statements of the Company/Group in the foreseeable future.

SLFRS 17- Insurance Contracts
SLFRS 17 is a comprehensive new accounting standard for insurance contracts covering recognition and measurement, presentation and disclosure. Once effective, SLFRS 17 will replace IFRS 4 Insurance Contracts (SLFRS 4). SLFRS 17 applies
to all types of insurance contracts (i.e., life, non-life, direct insurance and re-insurance), regardless of the type of entities that issue them, as well as to certain guarantees and financial instruments with discretionary participation features.

SLFRS 17 is effective for annual reporting periods beginning on or after 01 January 2023. Early application is permitted, if the entity is applying both Sri Lanka Accounting Standard - SLFRS 9 “Financial Instruments” and Sri Lanka Accounting Standard - SLFRS 15 “Revenue from Contracts with Customers” on or before the date on which it first apply SLFRS 17.

SLFRS 1 First-time Adoption of Sri Lanka Financial Reporting Standards – Subsidiary as a first-time adopter
As part of its 2018-2020 annual improvements to SLFRS standards process, the Institute of Chartered Accountants
of Sri Lanka (CA Sri Lanka) issued an amendment to SLFRS 1 First-time Adoption of International Financial Reporting Standards (SLFRS 1). The amendment permits a subsidiary that elects to apply paragraph D16(a) of SLFRS 1 to measure cumulative translation differences using the amounts reported by the parent, based on the parent’s date of transition to SLFRS. This amendment is also applied to an associate or joint venture that elects to apply paragraph D16(a) of SLFRS 1.

The amendment is effective for annual reporting periods beginning on or after 1 January 2022 with earlier adoption permitted.

SLFRS 9 Financial Instruments – Fees in the ’10 per cent’ test for derecognition of financial liabilities
As part of its 2018-2020 annual improvements to SLFRS standards process, the Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka) issued an amendment to SLFRS 9 Financial Instruments (SLFRS 9). The amendment clarifies the fees that an entity includes when assessing whether the terms of a new or modified financial liability are substantially different from the terms
of the original financial liability. These fees include only those paid or received between the borrower and the lender, including fees paid or received by either the borrower or lender on the other’s behalf. An entity applies the amendment to financial liabilities that
are modified or exchanged on or after the beginning of the annual reporting period in which the entity first applies the amendment.

Amendments to SLFRS 3
The amendments update SLFRS 3 so that it refers to the 2018 Conceptual Framework instead of the 1989 Framework. They also add to SLFRS 3 a requirement that, for obligations within the scope of LKAS 37,  an acquirer applies LKAS 37 to determine whether at the acquisition date a present obligation exists as a result of past events. For a levy that would be within the scope of
IFRIC 21 Levies, the acquirer applies IFRIC 21 to determine whether the obligating event that gives rise to a liability to pay the levy has occurred by the acquisition date.Finally, the amendments add an explicit statement that an acquirer does not recognise contingent assets acquired in a business combination.

The amendments are effective for business combinations for which the date of acquisition is on or after the beginning of the first annual period beginning on or after 1 January 2022. Early application is permitted if an entity also applies all other
updated references (published together with the updated Conceptual Framework) at the same time or earlier. The Company/Group is currently assessing the potential impact on its Financial Statements resulting from this amendment.

Property, Plant and Equipment: Proceeds before Intended Use – Amendments to LKAS 16
In March 2021, the CA Sri Lanka adopted amenments to LKAS16 - Property, Plant and Equipment — Proceeds before Intended Use, which prohibits entities deducting
from the cost of an item of property, plant and equipment, any proceeds from selling items produced while bringing that asset to the location and condition necessary for it  to be capable of operating in the manner intended by management. Instead, an entity recognises the proceeds from selling such items, and the costs of producing those items, in profit or loss.

The amendment is effective for annual reporting periods beginning on or after 1 January 2022 and must be applied
retrospectively to items of property, plant and equipment made available for use on or after the beginning of the earliest period presented when the entity first applies the amendment. The Company/Group is currently assessing the potential impact on its Financial Statements resulting from this amendment.

Onerous Contracts – Costs of Fulfilling a Contract – Amendments to LKAS 37
In March 2021, the CA Sri Lanka adopted amendments to LKAS 37 to specify which costs an entity needs to include when assessing whether a contract is onerous or loss-making.

The amendments apply a “directly related cost approach”. The costs that relate directly to a contract to provide goods or services include both incremental costs and an allocation of costs directly related to contract activities. General and administrative
costs do not relate directly to a contract and are excluded unless they are explicitly chargeable to the counterparty under the contract.

The amendments are effective for annual reporting periods beginning on or after 1 January 2022. The Group will apply these amendments to contracts for which it has not yet fulfilled all its obligations at the beginning of the annual reporting period in which it first applies the amendments. The Company/ Group is currently assessing the potential impact on its Financial Statements resulting from this amendment.

Amendments to LKAS 1: Classification of Liabilities as Current or Non-current
In March 2021 , CA Sri Lanka adopted amendments to paragraphs 69 to 76 of LKAS 1 which specify the requirements for classifying liabilities as current or non- current. The amendments clarify:

●	What is meant by a right to defer settlement
●	That a right to defer must exist at the end
of the reporting period
●	That classification is unaffected by the
likelihood that an entity will exercise its deferral right
●	That only if an embedded derivative in
a convertible liability is itself an equity instrument would the terms of a liability not impact its classification

The amendments are effective for annual reporting periods beginning on or after
1 January 2022 and must be applied retrospectively. The Company/Group is currently assessing the potential impact on its Financial Statements resulting from this amendment.

5.	Gross Income
Accounting Policy
Income is recognised to the extent that it is probable that the economic benefits will flow to the Company/Group and revenue can be reliably measured. The specific recognition criteria, for each type of income, given under the respective income notes.

For the year ended 31st March	

Note	
Page No.	Company	Group	
			2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	

Interest income	
6.1	
225	
23,881,526	
24,983,445	
25,926,792	
26,821,838	
Net earned premium	7	226	-	-	4,939,071	5,028,549	
Fee and commission income	8	227	1,876,524	1,818,675	1,321,513	1,198,054	
Net gains/(losses) on financial assets - FVTPL	9	228	26,783	162,616	86,525	228,258	
Other operating income	10	228	956,547	139,062	357,085	368,566	
Total			26,741,380	27,103,798	32,630,986	33,645,265	

6.	Net Interest Income
Accounting Policy
Recognition of Income and Expenses
Income is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured.

Interest Income and Expenses
For all financial instruments measured at amortised cost, interest income or expense is recorded using the Effective Interest Rate (EIR). EIR is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument or a shorter period, where appropriate, to the net carrying amount of the financial asset or financial liability. The calculation takes into account all contractual terms of the financial instrument (for example, prepayment options) and includes any fees or incremental costs that are directly attributable to the instrument and are an integral part of the EIR, but not future credit losses.

The carrying amount of the financial asset or financial liability is adjusted if the Group revises its estimates of payments or receipts. The adjusted carrying amount is calculated based on the original EIR and the change in carrying amount is recorded as ‘Interest income’ for financial assets and ‘Interest expense’ for financial liabilities. However, for a reclassified financial asset for which the Company subsequently increases its estimates of future cash receipts as a result of increased recoverability of those cash receipts, the effect of that increase is recognised as an adjustment to the EIR from the date of the change in estimate.

Under SLFRS 9, interest income and Interest expense are recorded using the Effective Interest rate method for all financial assets measured at amortised cost and all financial labilities measured at amortised cost respectively.

Revenue can be recognized only when it is probable that the economic benefit associate with the transaction will flow to the entity. However when uncertainty arise about the recoverability, revenue recognition should be ceased. With the adoption of SLFRS 9 –“Financial instrument”, Customer default point (Uncertainty about the recoverability) has been change to 90 days past due. Accordingly interest income can be recognized only up to 90 days past due in accordance with SLFRS 9.

Interest on Overdue Rentals
Interests from overdue rentals have been accounted for on a cash basis.

For the year ended 31st March	

Note	
Page No.	Company	Group	
			2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	

Interest income	
6.1	
225	
23,881,526	
24,983,445	
25,926,792	
26,821,838	
Interest expenses	6.2	225	10,832,186	13,064,310	11,205,126	13,375,197	
Net interest income			13,049,340	11,919,135	14,721,666	13,446,641	

6.1	Interest income

For the year ended 31st March		
Page	Company	Group	
			2022	2021	2022	2021	
	Note	No.	Rs. '000	Rs. '000	Rs. '000	Rs. '000	

Cash and cash equivalents			
159,743	
73,753	
176,533	
103,501	
Balances with banks & financial institutions			443,816	340,778	587,209	471,229	
Loans and receivables	6.1.1	225	22,633,122	24,190,261	24,170,060	25,589,345	
Debt instrument - Amortised cost			644,845	378,653	992,990	657,763	
Total interest income			23,881,526	24,983,445	25,926,792	26,821,838	

6.1.1	Interest income - Loans and Receivables

	Company	Group	
For the year ended 31st March	2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	

Lease/Ijarah receivable	
12,449,735	
14,176,359	
12,453,101	
14,178,588	
Hire-Purchase/ Murabah receivable	1,628	5,479	791,468	823,834	
Term loans and receivables	10,181,759	10,008,423	10,925,491	10,586,923	
	22,633,122	24,190,261	24,170,060	25,589,345	

6.2	Interest Expenses

			Company	Group	
For the year ended 31st March	
Note	Page
No.	2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	

Due to banks	
6.2.1	
226	
903,595	
671,106	
1,117,531	
949,639	
Due to customers	6.2.1	226	7,802,922	10,228,458	8,057,701	10,316,632	
Debt securities issued	6.2.1	226	1,875,532	1,935,761	1,859,429	1,916,991	
SLFRS 16-Incremantal Borrowing Cost	40	292	250,137	228,985	170,465	191,935	
Total interest expenses			10,832,186	13,064,310	11,205,126	13,375,197	

6.	Net Interest Income Contd...
6.2.1	Interest Expenses - Product Wise

For the year ended 31st March	

Note	
Page No.	Company	Group	
			2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	

Due to banks
Interest on bank overdraft			

1,027	

1,272	

34,866	

25,769	
Interest on short term loan			-	14,963	11	16,372	
Interest on term loan			235,166	4,980	415,253	257,608	
Interest on securitisation			667,402	649,891	667,401	649,890	
Subtotal			903,595	671,106	1,117,531	949,639	

Due to customers Interest cost on deposits			

7,802,922	

10,228,458	

8,057,701	

10,316,632	
Subtotal			7,802,922	10,228,458	8,057,701	10,316,632	

Debt securities issued Interest on debentures	

37.1	

287	

1,875,532	

1,935,761	

1,859,429	

1,916,991	
Subtotal			1,875,532	1,935,761	1,859,429	1,916,991	

Operating lease liabilities
SLFRS 16-Incremantal Borrowing Cost			

250,137	

228,985	

170,465	

191,935	
Subtotal			250,137	228,985	170,465	191,935	
							
Total interest expenses			10,832,186	13,064,310	11,205,126	13,375,197	

7.	Net Earned Premium
Accounting Policy
Product Classification of Insurance and Investment Contracts
SLFRS 4 - “Insurance Contracts”, requires contracts written by insurer to be classified as either ‘Insurance contracts’ or ‘Investment contracts’ depending in the level of insurance risk transferred.

Insurance contracts are those contracts when the Company (the insurer) has accepted significant insurance risk from another party (the policyholders) by agreeing to compensate the policyholders, if a specified uncertain future event (the insured event) adversely affects the policyholders. As a general guideline, the Company determines whether it has significant insurance risk by comparing benefits paid with benefits payable, if the insured event did not occur. Insurance contracts can also transfer financial risk.

Investment contracts are those contracts that transfer significant financial risk, and no significant insurance risk. Financial risk is the risk of a possible future change in one or more of a specified interest rate, financial instrument price, commodity price, foreign exchange rate, index of price or rates, credit rating or credit index or other variables, provided in the case of a non-financial variable that the variable is not specific to a party to the contract.

Once a contract has been classified as an insurance contract, it remains an insurance contract for the remainder of its lifetime, even if the insurance risk reduces significantly during this period, unless all rights and obligations are extinguished or expire. Investment contracts can, however, be reclassified as insurance contracts after inception if insurance risk becomes significant.

All the products sold by the People’s Insurance PLC (Subsidiary of PLC) are insurance contracts and therefore classified as insurance contracts under SLFRS 4 - Insurance Contracts. Thus, the Company does not have any investment contracts within its product portfolio as at the reporting date.

Revenue Recognition of Gross Written Premium
Gross written premium (GWP) represents the premium charged by the Company to underwrite risks. GWP is accounted on accrual basis.

Gross written premium comprises the total premiums received/receivable for the whole period of cover provided by contracts entered into during the accounting period and are recognised on the date on which the policy commences.

Rebates that form part of the premium rate, such as no claim rebates are deducted from GWP.

Insurance - Revenue Recognition Gross Written Premium
Non-life insurance gross written premium comprises the total premiums receivable for the whole period of cover provided by contracts entered into during the accounting period and are recognised on the date on which the policy commences.

Reinsurance Premium
Non-life gross reinsurance premium written comprises the total premium payable for the whole cover provided by contracts entered into the period and are recognised on the date on which the policy incepts. Premium includes any adjustments arising in the accounting period in respect of reinsurance contracts incepting in prior accounting periods.

Unearned Premium Reserve
Unearned premium reserve represents the portion of the premium written in the year but relating to the unexpired term of coverage. Unearned premiums are calculated on the 365 basis.

Unearned Reinsurance Premium Reserve
Unearned reinsurance premium is the proportion of premium written in a year that relate to periods of risk after the reporting date. Unearned reinsurance premiums are deferred over the term of the underlying direct insurance policies.

For the year ended 31st March	Company	Group	
	2022	2021	2022	2021	
	Rs. '000	Rs. '000	Rs. '000	Rs. '000	

Gross written premium	
-	
-	
6,049,693	
6,133,052	
Less : Premium ceded to reinsurers	-	-	1,142,976	956,324	
Less : Change in reserve unearned premium	-	-	(32,354)	148,179	
Total	-	-	4,939,071	5,028,549	

8.	Fee and Commission Income
Accounting Policy
Fee and Commission Income
The Group earns fee and commission income from a diverse range of services it provides to its customers. Commission income is recognised on accrual basis. Fee income can be divided into the following two categories;

Fee Income Earned from Services that are Provided over a Certain Period of Time
Fees earned for the provision of services over a period of time are accrued over that period.

Fee Income from Providing Transaction Services
Fees arising from negotiating or participating in the negotiation of a transaction for a third party, such as the arrangement of the documents and inspection of vehicle are recognised on completion of the underlying transaction. Fees or components of fees that are linked to a certain performance are recognised after fulfilling the corresponding criteria.

8.	Fee and Commission Income (Contd...)

For the year ended 31st March	Company	Group	
	2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	

Service charges	
522,316	
583,452	
160,404	
149,021	
Other fees and commission	1,354,208	1,235,223	1,161,109	1,049,033	
Total	1,876,524	1,818,675	1,321,513	1,198,054	

9.	Net Gains/(Losses) on Financial Assets - FVTPL

For the year ended 31st March	Company	Group	
	2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	

Net gain/(Loss) on financial assets - FVTPL Net mark-to-market (losses)/gain	

(8,496)	

(10,455)	

30,325	

25,864	
Net capital gains	35,279	173,071	56,200	202,394	
Total	26,783	162,616	86,525	228,258	

10.	Other Operating Income
Accounting Policy
Other Operating income includes income earned on other sources ,which are not directly related to the normal operations of the group is recognized on accrual basis.

Dividend Income
Dividend income is recognised when the right to receive the payment is established.

Net Trading Income from Sale of Vehicles
Revenue from the sale of imported vehicles is recognised when the significant risks and rewards of ownership of the vehicles have transferred to the buyer, usually on dispatch of the vehicles.

Operating Lease Income
Income arising on operating leases is accounted for on a straight-line basis over the lease terms on ongoing leases and is recorded in the Statement of Profit or Loss in other operating income.

Gain or Losses on Disposal of Property, Plant & Equipment
Gains or losses resulting from the disposal of property, plant and equipment are accounted for on cash basis in the Statement of Profit or Loss, in the period in which the sale occurs.

Hiring Income
Hiring income from vehicle on hire is recognised in the Statement of Profit or Loss based on the agreement entered between the owner and tenner for the year.

Valuation Income
Valuation income is recognised when they are realised or realisable

Insurance Fee Income
Insurance Policy holders are charged for policy administration services and other contract fees. These fees are recognised as income upon receipt or become due.

Other Income
Other income is recognised on an accrual basis.

For the year ended 31st March	Company	Group	
	2022	2021	2022	2021	
	Rs. '000	Rs. '000	Rs. '000	Rs. '000	

Gain on sale of property, plant and equipment	
17,529	
22,823	
55,778	
74,774	
Hiring income	-	-	2,436	24,939	
Operating leases income	-	-	25,030	27,487	
Rent income from investment property	-	-	75,712	72,248	
Net trading income from sale of vehicles	99	4,620	99	4,620	
Dividend income from - FVOCI	5,591	640	5,591	640	
- Subsidiaries	930,625	110,000	-	-	
- FVTPL	625	33	625	278	
Valuation income	-	-	106,662	92,166	
Insurance fee income	-	-	57,588	55,761	
Other income	2,078	946	27,564	15,653	
Total	956,547	139,062	357,085	368,566	

11.	Impairment Charges for Loans and Receivables and Other Losses
Accounting Policy
The Company and the Group recognise the changes in the impairment provisions for loans and receivables which are assessed as per the SLFRS 9 - Financial Instruments. The methodology adopted by the Company and the Group is explained in Note 25 on page 251 to these financial statements.

Loss on Disposal of Collaterals Including Write Offs
Loans and receivables (and the related impairment allowance accounts) are normally written off, either partially or in full, when there is no realistic prospect of recovery. Where loans and receivables are secured, this is generally after receipt of any proceeds from the realisation of security.

Bad Debts Recovered
Recovery of amounts written off as bad and doubtful debts is recognised on a cash basis.

For the year ended 31st March	

Note	
Page No.	Company	Group	
			2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	

Individual impairment	
11.3/11.4	
231	
487,288	
(148,063)	
487,288	
(260,794)	
Collective impairment	11.3/11.4	231	132,344	665,766	442,868	971,185	
Other receivable			6,760	18,672	(5,623)	55,707	
Loss on disposal of collaterals including write offs			104,746	603,692	104,746	683,057	
Recovery of written-off debts/disposal losses			(75,713)	(96,230)	(77,523)	(96,666)	
Total	11.1/11.2	230	655,425	1,043,837	951,756	1,352,489	

11.	Impairment Charges for Loans and Receivables and Other Losses (Contd...)
11.1	Impairment Charge/(Reversal) for Loans and Other Losses (Detailed Breakdown) - Company

For the year ended 31st March	2022	
	Disposal loss/write- offs (net of
recovery)
Rs. '000	Charge

Rs. '000	(Reversal)

Rs. '000	Net Amount

Rs. '000	

Lease/Ijarah receivable	
28,415	
2,766,525	
(2,187,125)	
607,815	
Hire-Purchase/ Murabah receivable	(6,795)	17,586	(10,232)	559	
Term Loan and receivables	7,413	2,078,221	(2,045,342)	40,292	
Other receivables	-	389,417	(382,658)	6,759	
Total	29,033	5,251,749	(4,625,357)	655,425	

For the year ended 31st March	2021	
	Disposal loss/write- offs (net of
recovery)
Rs. '000	Charge

Rs. '000	(Reversal)

Rs. '000	Net Amount

Rs. '000	

Lease/Ijarah receivable	
293,766	
1,538,226	
(1,733,151)	
98,841	
Hire-Purchase/ Murabah receivable	(5,316)	68,635	(10,712)	52,607	
Term Loan and receivables	219,012	3,096,373	(2,441,668)	873,717	
Other receivables	-	18,672	-	18,672	
Total	507,462	4,721,906	(4,185,531)	1,043,837	

11.2	Impairment Charge/(Reversal) for Loans and Other Losses (Detailed Breakdown) - Group

For the year ended 31st March	2022	
	Disposal loss/write- offs (net of
recovery)
Rs. '000	Charge

Rs. '000	(Reversal)

Rs. '000	Net Amount

Rs. '000	

Lease/Ijarah receivable	
28,415	
2,766,525	
(2,187,125)	
607,815	
Hire-Purchase/ Murabah receivable	(6,795)	73,823	(10,232)	56,796	
Term Loan and receivables	5,603	2,332,507	(2,045,342)	292,768	
Other receivable	-	377,035	(382,658)	(5,623)	
Total	27,223	5,549,890	(4,625,357)	951,756	

For the year ended 31st March	2021	
	Disposal loss/Write- offs (net of
recovery)
Rs. '000	Charge

Rs. '000	(Reversal)

Rs. '000	Net Amount

Rs. '000	

Lease/Ijarah receivable	
293,766	
1,538,226	
(1,733,151)	
98,841	
Hire-Purchase/ Murabah receivable	(5,316)	188,858	(10,712)	172,830	
Term Loan and receivables	297,941	3,168,837	(2,441,667)	1,025,111	
Other receivable	-	55,707	-	55,707	
Total	586,391	4,951,628	(4,185,530)	1,352,489	

11.3	Impairment Charge to the Income Statement – Company

For the year ended 31st March	2022	
	Stage 1
Rs. '000	Stage 2
Rs. '000	Stage 3
Rs. '000	Total
Rs. '000	

Financial assets at amortised cost – Loans and advances
- Individual impairment	

-	

-	

487,288	

487,288	
- Collective impairment	506,739	(222,248)	(152,147)	132,344	
Total	506,739	(222,248)	335,141	619,632	

For the year ended 31st March	2021	
	Stage 1
Rs. '000	Stage 2
Rs. '000	Stage 3
Rs. '000	Total
Rs. '000	

Financial assets at amortised cost – Loans and advances
- Individual impairment	

-	

-	

(148,063)	

(148,063)	
- Collective impairment	156,312	(69,899)	579,353	665,766	
Total	156,312	(69,899)	431,290	517,703	

11.4	Impairment Charge to the Income Statement – Group

For the year ended 31st March	2022	
	Stage 1
Rs. '000	Stage 2
Rs. '000	Stage 3
Rs. '000	Total
Rs. '000	

Financial assets at amortised cost – Loans and advances
- Individual impairment	

-	

-	

487,288	

487,288	
- Collective impairment	720,725	(226,076)	(51,781)	442,868	
Total	720,725	(226,076)	435,507	930,156	

For the year ended 31st March	2021	
	Stage 1
Rs. '000	Stage 2
Rs. '000	Stage 3
Rs. '000	Total
Rs. '000	

Financial assets at amortised cost – Loans and advances
- Individual impairment	

-	

-	

(260,794)	

(260,794)	
- Collective impairment	244,872	(71,348)	797,661	971,185	
Total	244,872	(71,348)	536,867	710,391	

12.	Personnel Expenses
Accounting Policy
Personnel expenses include salaries, bonus, terminal benefit charges and other related expenses. The provision for bonus is recognized when it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made on the amount of the obligation.

Employees are eligible for Employees’ Provident Fund (EPF) contribution and Employees’ Trust Fund (ETF) contributions in accordance with the respective statutes and regulations.

Retirement benefit obligation is recognised in the Statement of Profit or Loss based on an actuarial valuation carried out for the gratuity liability in accordance with Sri Lanka Accounting Standard - LKAS 19 - Employee Benefits.

For the year ended 31st March	

Note	
Page No.	Company	Group	
			2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	

Remuneration			
3,675,122	
3,117,406	
4,536,777	
3,928,410	
Employee benefit - Defined contribution plans - EPF			195,504	188,764	247,093	237,748	
Employee benefit - Defined contribution plans - ETF			48,895	47,461	60,674	58,590	
Employee benefit - Retirement benefit obligation - Gratuity	43	294	82,893	111,742	102,203	129,888	
Total			4,002,414	3,465,373	4,946,747	4,354,636	

13.	Depreciation and Amortisation
Depreciation
Depreciation is recognised in Statement of Profit or Loss on a straight–line basis over the estimated useful lives of each part of an item of property, plant and equipment since this method most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset. Land is not depreciated.

The estimated useful lives are as follows;

Class of asset	% per annum	Period	
Freehold buildings	2	50 years	
Improvement of leasehold property	25	4 years	
Motor vehicles	12.5 - 20	5 - 8 years	
Computer hardware	20	5 years	
Office equipments	10 - 20	5 -10 years	
Furniture and fittings	20	5 years	

The above rates are consistently used by all the Group entities. The depreciation rates are determined separately for each significant part of an item of property, plant and equipment and commence to depreciate when it is available for use, i.e. when it is in the location and condition necessary for it to be capable of operating in the manner intended by the management. Depreciation of an asset ceases at the earlier of the date that the asset is classified as held for sale or the date that the asset is derecognised. Depreciation methods, useful lives and residual values are reassessed at each reporting date and adjusted if appropriate.

All classes of property, plant and equipment together with the reconciliation of carrying amounts and accumulated depreciation at the beginning and at the end of the year are given in Note 32 on page 275.

Amortisation of Right of Use Assets
The right of use asset is subsequently depreciated. Depreciation is over the shorter of the useful life of the asset and the lease term

Amortisation of Intangible Assets
Amortisation is calculated using the straight– line method to write down the cost of intangible assets to their residual values over their estimated useful economic lives at the rates as specified below;

Class of asset	% per annum	Period	
Computer software	20	5 years	

The unamortised balances of intangible assets with finite lives are reviewed for impairment annually and whenever there is an indication for impairment and recognised in Statement of Profit or Loss to the extent that they are no longer probable of being recovered from the expected future benefits.

All classes of intangible assets together with the reconciliation of carrying amounts and accumulated amortisation at the beginning and at the end of the year are given in Note 34 on page 281.

For the year ended 31st March	

Note	
Page No.	Company	Group	
			2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	

Deprecation of property, plant and equipment	
32	
275	
168,564	
167,360	
296,458	
292,245	
Amortisation - Right of use assets	33	280	518,284	543,769	325,327	340,349	
Amortisation of intangible assets	34	281	13,195	11,865	16,879	15,099	
Total			700,043	722,994	638,664	647,693	

14.	Benefits Claims and Underwriting Expenditure
Accounting Policy Recognition of Gross Claims
Gross claims for non-life insurance include all claims occurring during the year, whether reported or not, related external claims handling costs that are directly related to the processing and settlement of claims, a reduction for the value of salvage and other recoveries and any adjustments to claims outstanding from previous years. Claims outstanding are assessed by review of individual claim files and estimating changes in the ultimate cost of settling claims.

Claims expenses and liabilities for outstanding claims are recognised in respect of direct insurance business. The liability covers claims reported but not yet paid, incurred but not reported claims (IBNR) and the anticipated direct and indirect costs of settling those claims. The provision in respect of IBNR is actuarially valued on a quarterly basis to ensure a more realistic estimation of the future liability based on past experience and trends.

While the Directors consider that the provision for claims is fairly stated on the basis of information currently available, the ultimate liability will vary as a result of subsequent information and events. This may result in adjustment to the amounts provided. Such amounts are reflected in the financial statements for that period. The methods used and the estimates made are reviewed regularly.

Recognition of Reinsurance Claims
Reinsurance claims are recognised when the related gross insurance claim is recognised according to the terms of the relevant contract. Claims on assumed reinsurance are recognised as revenue or expenses in the same manner as they would be if the reinsurance were considered direct business, taking into account the product classification of the re-insured business.

For the year ended 31st March	Company	Group	
	2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	

Net Benefits and claims	
-	
-	
2,704,556	
2,109,279	
Underwritings and net acquisition costs	-	-	523,919	554,068	
Total	-	-	3,228,475	2,663,347	

15.	Other Operating Expenses
Accounting Policy
Other operating expenses are recognised in the Statement of Profit or Loss on the basis of a direct association between the cost incurred and the earning of specific items of income. All expenditure incurred in the running of the business and in maintaining the property, plant & equipment in a state of efficiency has been charged to the Statement of Profit or Loss in arriving at the profit for the year.

Crop Insurance Levy (CIL)
As per the provisions of the Section 14 of the Finance Act No.12 of 2013, the CIL was introduced with effect from April 1, 2013 and is payable to the National Insurance Trust Fund. Currently, the CIL is payable at 1% of the profit after tax.

Directors’ Emoluments
Directors’ emoluments include fees paid to Non-Executive Directors.

For the year ended 31st March	Company	Group	
	2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	

Directors' emoluments	
4,939	
3,863	
12,711	
7,919	
Auditors' remunerations	7,385	7,385	14,444	13,321	
Non-audit fees to auditors	1,317	1,888	1,317	2,216	
Professional fees	23,689	12,155	34,112	24,821	
Advertising expenses	12,618	28,473	53,709	63,059	
Legal fees	8,702	11,666	12,829	12,042	
Deposits Insurance Premium	148,678	151,868	148,678	151,868	
Crop Insurance Levy	45,973	36,745	45,973	36,745	
Operational expenses arising from investment property	-	-	11,145	4,465	
Office administration and establishment expenses	1,881,196	1,358,816	2,272,562	1,731,602	
Total	2,134,497	1,612,859	2,607,480	2,048,058	

 GRI | 207-1, 207-2, 207-4 
16.	Tax on Financial Services
Accounting Policy
Vat On Financial Services
VAT on financial services is calculated in accordance with Value Added Tax(VAT) Act No. 14 of 2002 and subsequent amendments thereto. The value base for the computation of value added tax on financial services is calculated by adjusting the economic depreciation computed on rates prescribed by the Department of Inland Revenue to the accounting profit before income tax and emoluments payable. Emoluments payable include cash benefits, non cash benefits including terminal benefits. Vat on financial service was charged at 15% from1st April 2021 to December 2021 and 18% applied with effect from 1 January 2022 (2021 - 15%).

	Company	Group	
For the year ended 31st March	2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	

VAT/NBT on financial services	
1,645,111	
1,222,628	
1,705,797	
1,273,966	
Total	1,645,111	1,222,628	1,705,797	1,273,966	

 GRI | 207-1, 207-2, 207-4 
17.	Income Tax Expense
Accounting Policy
This note also includes the major components of tax expense, the effective tax rates and a reconciliation between the profit before tax and tax expense, as required by the Sri Lanka Accounting Standard – LKAS 12 on “Income Taxes”. As per Sri Lanka Accounting Standard - LKAS 12 “Income Taxes”, tat expense is the aggregate amount included in determination of profit or loss for the period in respect of current and deferred taxation.

Current Tax
Current tax assets and liabilities for the current and prior years are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the reporting date.

Accordingly, provision for taxation is based on the profit for the year adjusted for taxation purposes in accordance with the provisions of the Inland Revenue Act No. 10 of 2006 and the amendments thereto, and the Inland Revenue Act No. 24 of 2017, effective from 1 April 2018 at the rates specified below.

Deferred Taxation
Detailed disclosure of accounting policies and estimate of deferred tax is available in Note 44 on page 297 to the Financial Statements

Company	
Note	Page No.	Tax rate	
			2022	2021	
People’s Leasing & Finance PLC			24%	24%	
People’s Leasing Fleet Management Limited			24%	24%	
People’s Micro-commerce Ltd			24%	24%	
People’s Insurance PLC	17.1	235	24%	24%	
People’s Leasing Property Development Limited	17.2	235	24%	20%-24%	
People’s Leasing Havelock Properties Limited	17.3	236	Exempt	Exempt	
Lankan Alliance Finance Limited	17.4	236	40.00%	40.00%	

17.1	People’s Insurance PLC
Current tax is the expected tax payable on the taxable income for the year using tax rate enacted or substantively enacted on the reporting date and any adjustment to tax payable in respect of previous year. Provision for taxation is based on the profit for the year adjusted for taxation purposes in accordance with the provisions of the Inland Revenue Act No. 24 of 2017.

Current income tax assets and liabilities also include adjustments for tax expected to be payable or recoverable in respect of the previous period. The management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions, where appropriate. The Company is liable for income tax at 24% (2021 - 24%) in terms of the Inland Revenue Act No. 24 of 2017 and amendments thereto.

17.2	People’s Leasing Property Development Limited
Pursuant to the agreement dated 3rd December 2008 entered into by People’s Leasing Property Development Limited with the Board of Investment under Section 17 of the Board of Investment Law, for the business of setting up and operating a mixed development project, the Inland Revenue Act relating to the imposition, payment and recovery of income tax shall not apply for a period of five years reckoned from the year in which the Company makes profit or any year of assessment not later than two years reckoned from the date of commencement of its commercial operations whichever is earliest. The Company is eligible for a 10% concessionary tax rate for a period of 2 years immediately succeeding the last date of tax exemption period and a 20% concessionary tax rate after the expiration of the 10% concessionary tax period. Non BOI income is liable for normal rate of 24%.

17. Income Tax Expense (Contd…)
17.3	People’s Leasing Havelock Properties Limited
Pursuant to the agreement dated 16th December 2010 entered into by People’s Leasing Havelock Properties Limited with the Board of Investment under Section 17 of the Board of Investment Law, for the business of setting up and operating a mixed development project, the Inland Revenue Act relating to the imposition, payment and recovery of income tax shall not apply for a period of five years reckoned from the year in which the Company makes profit or any year of assessment not later than two years reckoned from the date of commencement of its commercial operations whichever is earliest. The Company is eligible for a 10% concessionary tax rate for a period of 2 years immediately succeeding the last date of tax exemption period and a 20% concessionary tax rate after the expiration of the 10% concessionary tax period.

17.4	Lankan Alliance Finance Limited
According to Bangladesh Income Tax Ordinance, 1984 and amendments made thereto, tax rate applicable for Lankan Alliance Finance Limited is 40%.

 GRI | 207-1, 207-2, 207-4 
17.5	Income Tax Expanse

For the year ended 31st March		
Page	Company	Group	
			2022	2021	2022	2021	
	Note	No.	Rs. '000	Rs. '000	Rs. '000	Rs. '000	

Statement of Profit or Loss Current income tax charge	

17.6	

236	

2,664,536	

1,909,079	

3,173,817	

2,505,247	
Deferred tax (reversal)/charge for the year	44	297	(673,452)	(69,511)	(766,656)	(270,905)	
Income tax expense recognised in Statement of Profit or Loss			1,991,084	1,839,568	2,407,161	2,234,336	

Statement of Comprehensive Income Deferred tax charge/(reversal) for the year	

44	

297	

(57,433)	

29,961	

(57,612)	

(27,690)	

Income tax charge/(reversal) recognised in Statement of Comprehensive Income			

(57,433)	

29,961	

(57,612)	

(27,690)	
Effective tax rate (excluding deferred tax )			40.07%	32.51%	43.93%	31.99%	
Effective tax rate			29.94%	31.32%	33.32%	28.53%	

17.6	Reconciliation of Accounting Profit and Taxable Income

For the year ended 31st March	

Note	
Page No.	Company	Group	
			2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	

Profit as per Statement of Profit or Loss			
6,650,092	
5,872,588	
7,225,330	
7,830,670	
Add: Disallowable expenses			3,537,261	3,147,900	4,057,954	4,762,952	
Add: Lease capital recoverable			5,788,713	4,992,617	5,788,713	4,992,617	
Less: Allowable expenses			4,363,762	6,101,406	4,711,073	6,370,337	
Less: Exempted /allowable income			4,483	(6,711)	236,240	62,903	
Statutory income			11,607,821	7,918,410	12,124,684	11,152,999	
Less: Tax loss utilised during the year	17.7	237	-	-	-	7,863	
Assessable income			11,607,821	7,918,410	12,124,684	11,145,136	
Taxable income			11,607,821	7,918,410	12,124,684	11,145,136	
Income tax expense at the statutory income	17.8	237	2,712,280	1,999,971	3,221,561	2,601,127	
(Over)/ under provision- previous years			(47,744)	(90,892)	(47,744)	(95,886)	
Current tax on profits for the year			2,664,536	1,909,079	3,173,817	2,505,241	
Deferred tax charged/(reversal) for the year	44	297	(673,452)	(69,511)	(766,656)	(270,905)	
Tax expense for the year			1,991,084	1,839,568	2,407,161	2,234,336	

17.7	Tax Losses Brought Forward and Utilised during the Year

For the year ended 31st March	Company	Group	
	2022	2021	2022	2021	
	Rs. '000	Rs. '000	Rs. '000	Rs. '000	

Tax Losses Brought Forward and Utilised during the Year Tax losses brought forward	

-	

-	

67,971	

75,834	
Tax losses utilised during the year	-	-	-	(7,863)	
Tax losses not utilised and carried forward	-	-	67,971	67,971	

17.8	Income Tax Expense at the Statutory Income

For the year ended 31st March	Company	Group	
	2022	2021	2022	2021	
	Rs. '000	Rs. '000	Rs. '000	Rs. '000	

People's Leasing & Finance PLC	
2,712,280	
1,999,971	
2,712,280	
1,999,971	
People’s Leasing Fleet Management Limited	-	-	68,653	22,303	
People’s Micro-commerce Ltd	-	-	93,247	71,377	
People’s Insurance PLC	-	-	219,958	422,685	
People’s Leasing Property Development Limited	-	-	26,562	4,269	
Lankan Alliance Finance Limited	-	-	100,861	80,535	
Total income tax at the effective rate	2,712,280	1,999,971	3,221,561	2,601,140	

17.9	Summary of the Taxes Paid During the Year

For the year ended 31st March	Company	Group	
	2022	2021	2022	2021	
	Rs. '000	Rs. '000	Rs. '000	Rs. '000	

Direct taxes Income tax	

1,175,310	

3,349,938	

1,958,933	

3,534,648	
Value added tax on financial services	1,568,235	834,720	1,597,458	864,943	
Nation building tax on financial services	-	-	-	-	
Crop insurance levy	48,509	18,373	60,462	24,679	
Economic service charge	-	-	-	-	
Debt Repayment Levy	-	-	-	-	
Total direct taxes	2,792,054	4,203,031	3,616,853	4,424,270	

Indirect taxes (collected and paid) Value added tax	

148,433	

132,211	

529,610	

556,156	
Nation building tax	-	-	-	-	
Stamp duty	173,443	133,173	181,192	141,036	
Withholding tax on dividend and interest	-	-	-	-	
Paye/APT tax	33,987	29,068	35,394	30,208	
Total indirect taxes	355,863	294,452	746,196	727,400	
Total taxes paid during the financial year	3,147,917	4,497,483	4,363,049	5,151,670	

18.	Basic / Diluted Earnings Per Ordinary Share (EPS)
Accounting Policy
Basic earning per share is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares.

Basic earnings per share is calculated by dividing the net profit for the year attributable to equity holders of the parent by the weighted average number of ordinary shares outstanding during the year , as per Sri Lanka Accounting Standard - LKAS 33 - Earnings per share.

For the year ended 31st March	Company	Group	
	2022	2021	2022	2021	

Profit attributable to equity holders of the Company (Rs.)	
4,659,008,652	
4,033,019,637	
4,805,730,508	
5,294,015,655	
Number of ordinary shares as at 31st March 2022 (Restated-2021)	1,887,195,002	1,887,195,002	1,887,195,002	1,887,195,002	
					
Basic/ Diluted earnings per ordinary share (Rs.)	2.47	2.14	2.55	2.81	

19.	Dividend Per Ordinary Share

For the year ended 31st March	Company	
	2022	2021	

Ordinary shares
Out of normal profits (Rs.)	

-	

976,622,033	
Total cash dividend paid (Rs.)	-	976,622,033	

Scrip/Cash dividend Paid (Rs.)	
2,179,924,683	
976,622,033	
Total dividend paid (Rs.)	2,179,924,683	976,622,033	
			
Dividend per Ordinary share (Rs.)	1.25	0.60	

Subsequent to the reporting date, the Board of Directors of the Company recommended the payment of a final dividend of Rs. 0.50 per share in the form of scrip dividend for the year ended 31 March 2022. This final dividend is yet to be approved at the Annual General Meeting . In accordance with the Sri Lanka Accounting Standard – LKAS 10 (Events After the Reporting Period), this proposed final dividend has not been recognized as a liability as at 31 March 2022. Basic earnings per share is calculated by dividing the net profit for the year attributable to equity holders of the parent by the weighted average number of ordinary shares outstanding during the year, as per Sri Lanka Accounting Standard - LKAS 33 - Earnings per share.

20.	Analysis of Financial Instruments by Measurement Basis
Accounting Policy
Financial instruments are measured on an ongoing basis either at fair value or at amortised cost. The summary of significant accounting policies describes how each category of financial instruments is measured and how income and expenses, including fair value gains and losses, are recognised. The following table analyses the carrying amounts of the financial instruments by category as defined in Sri Lanka Accounting Standard - SLFRS 9 ‘Financial Instruments : Recognition and Measurement’ under the headings of the Statement of Financial Position.

20.1	Company

As at 31st March 2022	

Note	

Page No.	Financial instruments recognised through profit or loss
(FVTPL)
Rs. '000	Financial instruments at amortised
cost (AC)

Rs. '000	Financial instruments at fair value through other
comprehensive income (FVOCI)
Rs. '000	Total

Rs. '000	

Assets
Cash and cash equivalents	

22	

248	

-	

4,668,830	

-	

4,668,830	
Balances with banks & financial institutions	23	248	-	5,117,866	-	5,117,866	
Financial assets -Fair value through profit or loss	24	249	25,140	-	-	25,140	
Loans and receivables	25	251	-	151,274,454	-	151,274,454	
Financial assets - Fair Value through other comprehensive income	27	268	-	-	1,333,278	1,333,278	
Debt Instrument at amortised cost	28	269	-	9,827,221	-	9,827,221	
Other financial assets	31	274	-	108,493	-	108,493	
Total financial assets			25,140	170,996,864	1,333,278	172,355,282	

As at 31st March 2022 Liabilities
Due to banks	

35	

283	

-	

11,749,332	

-	

11,749,332	
Due to customers	36	285	-	103,367,904	-	103,367,904	
Debt securities issued	37	287	-	17,244,313	-	17,244,313	
Other financial liabilities	38	289	-	3,636,528	-	3,636,528	
Lease Liability	40	293		2,059,050		2,059,050	
Total financial liabilities			-	138,057,127	-	138,057,127	

20.2	Company

As at 31st March 2021	

Note	

Page No.	Financial instruments recognised through profit or loss
(FVTPL) Rs. '000	Financial instruments at amortised
cost (AC)

Rs. '000	Financial instruments at fair value through other
comprehensive income (FVOCI)
Rs. '000	Total

Rs. '000	

Assets
Cash and cash equivalents	

22	

248	

-	

2,703,031	

-	

2,703,031	
Balances with banks & financial institutions	23	248	-	5,399,071	-	5,399,071	
Financial assets -Fair value through profit or loss	24	249	109,787	-	-	109,787	
Loans and receivables	25	251	-	141,387,907	-	141,387,907	
Financial assets - Fair Value through other comprehensive income	27	268	-	-	309,118	309,118	
Debt Instrument at amortised cost	28	269	-	6,994,206	-	6,994,206	
Other financial assets	31	274	-	126,949	-	126,949	
Total financial assets			109,787	156,611,164	309,118	157,030,069	

As at 31st March 2021 Liabilities
Due to banks	

35	

283	

-	

6,439,310	

-	

6,439,310	
Due to customers	36	285	-	101,502,931	-	101,502,931	
Debt securities issued	37	287	-	13,825,553	-	13,825,553	
Other financial liabilities	38	289	-	4,132,110	-	4,132,110	
Lease Liability	40	292		2,286,386	-	2,286,386	
Total financial liabilities			-	128,186,290	-	128,186,290	

20. Analysis of Financial Instruments by Measurement Basis (Contd…)
20.3	Group

As at 31st March 2022	

Note	

Page No.	Financial instruments recognised through profit or loss
(FVTPL) Rs. '000	Financial instruments at amortised
cost (AC)

Rs. '000	Financial instruments at fair value through other
comprehensive income (FVOCI)
Rs. '000	Total

Rs. '000	

Assets
Cash and cash equivalents	

22	

248	

-	

5,402,587	

-	

5,402,587	
Balances with banks & financial institutions	23	248	-	9,529,518	-	9,529,518	
Financial assets -Fair value through profit or loss	24	249	849,298	-	-	849,298	
Loans and receivables - Amortised cost	25	251		163,320,846	-	163,320,846	
Insurance and reinsurance receivables	26	267	-	1,322,528	-	1,322,528	
Financial assets - Fair Value through other comprehensive income	27	268	-	-	1,632,941	1,632,941	
Debt Instrument at amortised cost	28	269	-	16,013,525	-	16,013,525	
Total financial assets			849,298	195,589,004	1,632,941	198,071,243	

As at 31st March 2022 Liabilities
Due to banks	

35	

283	

-	

15,300,361	

-	

15,300,361	
Due to customers	36	285	-	111,453,750	-	111,453,750	
Debt securities issued	37	287	-	17,103,223	-	17,103,223	
Other financial liabilities	38	289	-	4,043,322	-	4,043,322	
Insurance liabilities and reinsurance payable	39	290	-	5,903,363	-	5,903,363	
Lease liability	40	292		1,588,115		1,588,115	
Total financial liabilities			-	155,392,134	-	155,392,134	

20.4	Group

As at 31st March 2021	

Note	

Page No.	Financial instruments recognised through profit or loss
(FVTPL) Rs. '000	Financial instruments at amortised
cost (AC)

Rs. '000	Financial instruments at fair value through other
comprehensive income (FVOCI)
Rs. '000	Total

Rs. '000	

Assets
Cash and cash equivalents	

22	

248	

-	

3,844,694	

-	

3,844,694	
Balances with banks & financial institutions	23	248	-	8,231,101	-	8,231,101	
Financial assets -Fair value through profit or loss	24	249	1,281,753	-	-	1,281,753	
Loans and receivables - Amortised cost	25	251	-	147,004,004	-	147,004,004	
Insurance and reinsurance receivables	26	267	-	1,024,461	-	1,024,461	
Financial assets - Fair Value through other comprehensive income	27	268	-	-	735,494	735,494	
Debt Instrument at amortised cost	28	269	-	10,931,714	-	10,931,714	
Total financial assets			1,281,753	171,035,974	735,494	173,053,221	

As at 31st March 2021 Liabilities
Due to banks	

35	

283	

-	

9,003,873	

-	

9,003,873	
Due to customers	36	285	-	103,743,716	-	103,743,716	
Debt Securities issued	37	287	-	13,684,516	-	13,684,516	
Other Financial liabilities	38	289	-	4,111,235	-	4,111,235	
Lease liability	40	292		1,614,660		1,614,660	
Insurance liabilities and reinsurance payable	39	290	-	5,015,885	-	5,015,885	
Total financial liabilities			-	137,173,885	-	137,173,885	

21.	Fair Value of Assets and Liabilities
Accounting Policy
The following is a description of how fair values are determined for financial and non-financial assets and liabilities that are recorded at fair value using valuation techniques. These incorporate the Group’s/Company's estimate of assumptions that a market participant would make when valuing the instruments.

21.1	Financial Assets - Fair Value Through Other Comprehensive Income
Financial assets - Fair Value through other comprehensive income valued using valuation techniques or pricing models primarily consist of quoted investment securities. These quoted investment securities are valued using quoted market price in an active market of each securities.

21.2	Financial assets -Fair Value Through Profit or Loss
Financial assets -Fair value through profit or loss valued using valuation techniques primarily consist of quoted investments. These quoted assets are valued using quoted market price in an active market of each securities.

21.3	Financial Assets and Liabilities Carried at Amortised Cost
The fair value of fixed rate financial assets and liabilities carried at amortised cost are estimated based on the Discounted Cash Flow approach. This approach employs the current market interest rates of similar financial instruments as a significant unobservable input in measuring the fair value and hence it is categorized under level 3 in the fair value hierarchy.

21.4	Property, Plant and Equipment Disclosed at Fair Value
Freehold land and buildings are disclosed at revalued amount, being their fair value at the revaluation date less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

21.5	Valuation Model
For all financial instruments where fair values are determined by referring to externally quoted prices or observable pricing inputs to models, independent price determination or validation is obtained. In an inactive market, direct observation of a traded price may not be possible. In these circumstances, the Company uses alternative market information to validate the financial instrument’s fair value, with greater weight given to information that is considered to be more relevant and reliable.

Valuation Framework
The Company has an established control framework with respect to the measurement of fair values of trading and investment operations and all other significant assets and liabilities. Specific controls include;
●	Periodic (daily, monthly or quarterly) reviewing of fair value measurements against observable market data.
●	Periodic (at least annually) reviewing of fair value measurement models against changes in market conditions, significant judgments and
assumptions.

21.6	Determination of Fair Value and Fair Value Hierarchy
The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

Level 1:  quoted (unadjusted) prices in active markets for identical assets or liabilities
Level 2:  other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly
Level 3:  techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data The following table shows an analysis of assets and liabilities recorded/disclosed at fair value by level of the fair value hierarchy:

21. Fair Value of Assets and Liabilities (Contd…)

Company
31 March 2022	
Note	Page No.	Date of Valuation	Level 1
Rs. ‘000	Level 2
Rs. ‘000	Level 3
Rs. ‘000	Total Rs. ‘000	

Financial Assets
Financial assets - Fair value through other comprehensive income
Quoted Investments	

27	

268	

31.03.2022	

231,838	

-	

-	

231,838	
Debentures			31.03.2022	-	-	1,101,440	1,101,440	
Subtotal				231,838	-	1,101,440	1,333,278	
Financial assets -Fair value through profit or loss Quoted Investments	

24	

249	

31.03.2022	

25,140	

-	

-	

25,140	
Subtotal				25,140	-	-	25,140	
Total				256,978	-	1,101,440	1,358,418	

Non financial assets disclosed at fair value Freehold land & buildings (included under property, plant & equipment).	

32.4	

279		

-	

-	

1,047,943	

1,047,943	
Total				-	-	1,047,943	1,047,943	

Company
31 March 2021	
Note	Page No.	Date of Valuation	Level 1
Rs. ‘000	Level 2
Rs. ‘000	Level 3
Rs. ‘000	Total Rs. ‘000	

Financial Assets
Financial assets - Fair value through other comprehensive income
Quoted Investments	

27	

268	

31.03.2021	

309,118	

-	

-	

309,118	
Subtotal				309,118	-	-	309,118	
Financial assets -Fair value through profit or loss Quoted Investments	

24	

249	

31.03.2021	

9,768	

-	

-	

9,768	
Investment in Unit Trust	24	249	31.03.2021	-	100,019	-	100,019	
Subtotal				9,768	100,019	-	109,787	
Total				318,886	100,019	-	418,905	

Non financial assets disclosed at fair value Freehold lands & buildings (included under property, plant & equipment).	

32.4	

279		

-	

-	

864,058	

864,058	
Total				-	-	864,058	864,058	

The following table shows an analysis of assets and liabilities recorded/disclosed at fair value by level of the fair value hierarchy:

Group
31 March 2022	
Note	Page No.	Date of Valuation	Level 1
Rs. ‘000	Level 2
Rs. ‘000	Level 3
Rs. ‘000	Total Rs. ‘000	

Financial Assets
Financial assets - Fair value through other comprehensive income
Quoted Investments	

27	

268	

31.03.2022	

231,838	

-	

-	

231,838	
Treasury bills	27	268	31.03.2022	-	299,663	-	299,663	
Debentures	27	268	31.03.2022	-	-	1,101,440	1,101,440	
Subtotal				231,838	299,663	1,101,440	1,632,941	

Financial assets -Fair value through profit or loss Quoted Investments	

24	

249	

31.03.2022	

174,801	

-	

-	

174,801	
Investment in Unit Trust	24	249	31.03.2022	-	674,497	-	674,497	
Subtotal				174,801	674,497	-	849,298	

Non financial assets - Investment property Land and building	

30	

273	

31.03.2022	

-	

-	

820,664	

820,664	
Subtotal				-	-	820,664	820,664	
Total				406,639	974,160	1,922,104	3,302,903	
Non financial assets disclosed at fair value Freehold land & buildings (included under property, plant & equipment).	

32.4	

279		

-	

-	

6,297,943	

6,297,943	
Total				-	-	6,297,943	6,297,943	

Group
31 March 2021	
Note	Page No.	Date of Valuation	Level 1
Rs. ‘000	Level 2
Rs. ‘000	Level 3
Rs. ‘000	Total Rs. ‘000	

Financial Assets
Financial assets - Fair value through other comprehensive income
Treasury bills			

31.03.2021	

-	

426,376	

-	

426,376	
Quoted Investments	27	268	31.03.2021	309,118	-	-	309,118	
Subtotal				309,118	426,376	-	735,494	

Financial assets -Fair value through profit or loss Quoted Investments	

24	

249	

31.03.2021	

24,753	

-	

-	

24,753	
Investment in Unit Trust	24	249	31.03.2021		1,257,000		1,257,000	
Subtotal				24,753	1,257,000	-	1,281,753	

Non financial assets - Investment property Land and building	

30	

273	

31.03.2021	

-	

-	

820,664	

820,664	
Subtotal				-	-	820,664	820,664	
Total				333,871	1,683,376	820,664	2,837,911	
								
Non financial assets disclosed at fair value Freehold land & buildings (included under property, plant & equipment).	

32.4	

279		

-	

-	

5,964,058	

5,964,058	
Total				-	-	5,964,058	5,964,058	

21. Fair Value of Assets and Liabilities (Contd…)
There were no material transfers between level 1 and level 2 during the 2021/2022 and 2020/2021. Valuation was carried out for lands and buildings by professionally qualified independent valuer in compliance with Sri Lanka Accounting Standard - SLFRS 13 - Fair Value Measurement.

The following table show total fair value gains/losses recognised in Statement of Profit or Loss during the year relating to assets and liabilities held at the respective year ended.

For the year ended 31st March	Company	Group	
	2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	
Financial Assets
Financial assets -Fair value through profit or loss Quoted Investments	

26,783	

162,616	

86,525	

228,258	
Total	26,783	162,616	86,525	228,258	

Level 3 Fair Value Measurement Reconciliation
The following note shows a reconciliation from the beginning balances to the ending balances of fair value measurements in level 3 of the fair value hierarchy. The Company has disclosed fair value of following non financial assets except investment property which is accounted for fair value in the Financial Statements.

Note	

Page No.	Company	Group	
			Investment property

Rs. ‘000	Freehold
Land Buildings Rs. ‘000	Total

Rs. ‘000	Investment property

Rs. ‘000	Freehold
Land Buildings Rs. ‘000	Total

Rs. ‘000	

Balance as at 1 April 2020			
-	
864,058	
864,058	
1,131,652	
4,782,406	
5,914,058	
Additions			-	-	-	-	-	-	
Disposals / transfers			-	-	-	(310,988)	310,988	-	

Total gains / (losses) recognised in profit or loss;
Depreciation of buildings			

-	

(471)	

(471)	

-	

(63,805)	

(63,805)	
Fair value disclosed during the year			-	471	471	-	113,805	113,805	
Balance as at 31 March 2021	32.4	279	-	864,058	864,058	820,664	5,143,394	5,964,058	
Balance as at 1 April 2021			-	864,058	864,058	820,664	5,143,394	5,964,058	
Additions			-	149,702	149,702	-	149,702	149,702	
Disposals / transfers			-	-	-	-	-	-	

Total gains / (losses) recognised in profit or loss;
Depreciation of buildings			

-	

-	

-	

-	

(63,805)	

(63,805)	
Fair value disclosed during the year			-	34,183	34,183	-	247,988	247,988	
Balance as at 31 March 2022	32.4	279	-	1,047,943	1,047,943	820,664	5,477,279	6,297,943	

Unobservable Inputs Used in Measuring Fair Value
The table below sets out information about significant unobservable inputs used at 31st March 2022 and 31st March 2021 in measuring non financial instruments categorised as level 3 in the fair value hierarchy. The Company has disclosed fair value of following non financial assets except investment property which is accounted for fair value in the Financial Statements.

Type of instrument	Date of Valuation	Fair value Rs. ‘000	Valuation Technique	Significant unobservable inputs	Weighted average range of estimates for unobservable inputs	Fair value measurement sensitivity to unobservable inputs	
Company
As at 31st March 2022 Property, plant and equipment Freehold lands	

31.12.2019
/31.03.2021	

1,005,343	

MCM	

Estimated price per perch	

Rs. 60,000 - 6,000,000	

*	
Freehold buildings	31.12.2019	42,600	MCM	Estimated price per sq.ft	Rs. 1,000 - 4,000	*	
			Income basis	Estimated rental value per sq.ft.	Rs. 20 - 60	*	

As at 31st March 2021 Property, plant and equipment							
Freehold lands	31.12.2019	821,458	MCM	Estimated price per perch	Rs. 60,000 - 6,000,000	*	
Freehold buildings	31.12.2019	42,600	MCM	Estimated price per sq.ft	Rs. 1,000 - 4,000	*	
			Income basis	Estimated rental value per sq.ft.	Rs. 20 - 60	*	

Group
As at 31st March 2022 Investment Property							
Freehold lands	31.12.2021	261,075	MCM	Estimated price per perch	Rs. 600,000 -
13,000,000	*	
Freehold buildings		559,589	MCM	Estimated price per sq.ft	Rs. 200 - 300	*	
			Income basis	Estimated rental value per sq.ft.	Rs. 14,500	*	
Property, plant and equipment							
Freehold lands	31.12.2021	3,209,268	MCM	Estimated price per perch	Rs. 50,000 -
13,000,000	*	
Freehold buildings	31.12.2021	2,268,011	MCM	Estimated price per sq.ft	Rs. 500 - 11,000	*	
			Income basis	Estimated rental value per sq.ft.	Rs. 15 - 250	*	

As at 31st March 2021 Investment Property							
Freehold lands	31.12.2020	261,075	MCM	Estimated price per perch	Rs. 600,000 -
13,000,000	*	
Freehold buildings	31.12.2020	559,589	MCM	Estimated price per sq.ft	Rs. 200 - 300	*	
			Income basis	Estimated rental value per sq.ft.	Rs. 14,500	*	
Property, plant and equipment							
Freehold lands	31.12.2020	3,025,383	MCM	Estimated price per perch	Rs. 50,000 -
13,000,000	*	
Freehold buildings	31.12.2020	2,118,011	MCM	Estimated price per sq.ft	Rs. 500 - 11,000	*	
			Income basis	Estimated rental value per sq.ft.	Rs. 15 - 250	*	

MCM - Market comparable method
*	Significant increases / (decreases) in any of these inputs in isolation would result in a significantly higher / (lower) fair value.
*	

21. Fair Value of Assets and Liabilities (Contd…)
21.7	Fair Value of Assets and Liabilities Not Carried at Fair Value
Set out below is a comparison, by class, of the carrying amount and fair values of the Group’s/Company’s financial instruments that are not carried at fair value in the financial statements. This table does not include the fair value of non-financial assets and non-financial liabilities.

Company
As at 31st March	2022	2021	
	Level 1

Rs. ‘000	Level 2

Rs. ‘000	Level 3

Rs. ‘000	Total fair Value Rs. ‘000	Carrying amount Rs. ‘000	Level 1

Rs. ‘000	Level 2

Rs. ‘000	Level 3

Rs. ‘000	Total fair Value Rs. ‘000	Carrying amount Rs. ‘000	

Financial Assets
Cash and cash equivalents	

-	

4,668,830	

-	

4,668,830	

4,668,830	

-	

2,703,031	

-	

2,703,031	

2,703,031	
Balances with banks & financial institutions	
-	
5,117,307	
-	
5,117,307	
5,117,866	
-	
5,900,872	
-	
5,900,872	
5,399,071	
Loans and receivables (Gross)	-	161,878,020	-	161,878,020	161,162,024	-	163,635,284		163,635,284	150,655,845	
Debt instrument - Amortised cost	
-	
9,804,639	
-	
9,804,639	
9,827,221	
-	
6,984,078	
-	
6,984,078	
6,994,206	
Other financial assets	-	108,493	-	108,493	108,493	-	126,949	-	126,949	126,949	
	-	181,577,289	-	181,577,289	180,884,434	-	179,350,214	-	179,350,214	165,879,102	

Financial Liabilities Due to banks	

-	

11,750,052	

-	

11,750,052	

11,749,332	

-	

6,936,408	

-	

6,936,408	

6,439,310	
Due to customers	-	102,854,237	-	102,854,237	103,367,904	-	102,019,672	-	102,019,672	101,502,931	
Debt Securities issued	-	16,266,084	-	16,266,084	17,244,313	-	14,675,439	-	14,675,439	13,825,553	
Other Financial liabilities	-	3,636,528	-	3,636,528	3,636,528	-	4,131,671	-	4,131,671	4,132,110	
Operating lease liabilities	-	2,072,188	-	2,072,188	2,059,050		2,282,213		2,282,213	2,286,386	
	-	136,579,089	-	136,579,089	138,057,127	-	130,045,403	-	130,045,403	128,186,290	

Group	2022	2021	

As at 31st March	
Level 1
Rs. ‘000	
Level 2
Rs. ‘000	
Level 3
Rs. ‘000	Total fair Value Rs. ‘000	Carrying amount Rs. ‘000	
Level 1
Rs. ‘000	
Level 2
Rs. ‘000	
Level 3
Rs. ‘000	Total fair Value Rs. ‘000	Carrying amount Rs. ‘000	

Financial Assets											
Cash and cash equivalents	-	5,402,587	-	5,402,587	5,402,587	-	3,844,694	-	3,844,694	3,844,694	
Balances with banks & financial institutions	
-	
9,492,331	
-	
9,492,331	
9,529,518	
-	
8,239,912	
-	
8,239,912	
8,231,101	
Loans and receivables (Gross)	-	174,545,177	-	174,545,177	174,162,982	-	166,557,994	-	166,557,994	156,886,200	
Insurance and reinsurance receivables	
-	
1,322,528	
-	
1,322,528	
1,322,528	
-	
1,024,461	
-	
1,024,461	
1,024,461	
Debt instrument - Amortised cost	
-	
15,765,803	
-	
15,765,803	
16,013,525	
-	
11,200,604	
-	
11,200,604	
10,931,714	
	-	206,528,426	-	206,528,426	206,431,140	-	190,867,665	-	190,867,665	180,918,170	

Financial Liabilities Due to banks	

-	

15,389,574	

-	

15,389,574	

15,300,361	

-	

9,739,721	

-	

9,739,721	

9,003,873	
Due to customers	-	110,876,896	-	110,876,896	111,453,750	-	104,256,546	-	104,256,546	103,743,716	
Debt Securities issued	-	16,124,318	-	16,124,318	17,103,223	-	14,522,493	-	14,522,493	13,684,516	
Other Financial liabilities	-	4,043,322	-	4,043,322	4,043,322	-	4,110,795	-	4,110,795	4,111,235	
Insurance liabilities and reinsurance payable	
-	
5,903,363	
-	
5,903,363	
5,903,363	
-	
5,015,885	
-	
5,015,885	
5,015,885	
Operating lease liabilities		1,587,902		1,587,902	1,588,115		1,609,725		1,609,725	1,614,660	
	-	153,925,375	-	153,925,375	155,392,134	-	139,255,165	-	139,255,165	137,173,885	

Fair Value of Financial Assets and Liabilities Not Carried at Fair Value
The valuation techniques used to establish the Group’s fair values are consistent with those used to calculate the fair values of financial instruments carried at fair value. The fair values calculated are for disclosure purposes only and do not have any impact on the Group’s reported financial performance or position. The fair values calculated by the Group may be different from the actual amount that will be received / paid on the settlement or maturity of the financial instrument. As certain categories of financial instruments are not traded there is a significant level of management judgment involved in calculating the fair values.

The following describes the methodologies and assumptions used to determine fair values for those financial instruments which are not already recorded at fair value in the financial statements:

Balances with Banks and Financial Institutions
For financial assets and financial liabilities that have a short term maturity (less than three months) it is assumed that the carrying amounts approximate their fair value. This assumption is also applied to demand deposits, and savings accounts without a specific maturity.

Loan and Receivables
The fair value of loans and advances to customers with a maturity of less than one year generally approximates the carrying value, subject to any significant movement in credit spreads. The estimated fair value of loans and advances with maturity of more than one year represents the discounted amount of future cash flows expected to be received. Expected cash flows are discounted at current market rates (interest rate) to determine fair value.

Due to Customers
The estimated fair value of deposits with no maturity period (Savings Deposits) is the amount repayable on demand. The estimated fair value of fixed interest bearing deposits (Fixed Deposits) without quoted market prices is based on discounting cash flows using the prevailing market rates (interest rate) for debts with a similar risk and remaining maturity.

Due to Banks and Debt Securities Issued
Variable rate is a fair measure which reflects market movements. Hence the carrying value represents the fair value of the variable rate instruments.

The fair value of fixed rate borrowings with a maturity of less than one year generally approximates the carrying value, subject to any significant movement in credit spreads. The estimated fair value of fixed rates borrowing with maturity of more than one year represents the discounted amount of future cash flows expected to be paid. .Expected cash flows are discounted at current market rates to determine fair value.

Lease Liabilities
Estimated fair value of the lease liability represents the discounted amount of lease payment expected to be received in the future. Expected cash flows are discounted using incremental borrowing rate at the reporting date.

22.	Cash and Cash Equivalents
Accounting Policy
Cash and cash equivalents include cash in hand, placements with banks and loans at call and at short notice that are subject to an insignificant risk of changes in their fair value, and are used by the Group in the management of its short-term commitments. They are brought to financial statements at their face values or the gross values, where appropriate. There were no cash and cash equivalent held by the Group companies that were not available for use by the Group.

Cash and cash equivalents are carried at amortised cost in the statement of financial position.

Securities Purchased Under Reverse Repurchase Agreements
Securities purchased under agreements to re-sell at a specified future date are recognised in the Statement of Financial Position. The consideration paid, including accrued interest, is recorded in the Statement of Financial Position, within ‘Cash and cash equivalents’, reflecting the transaction’s economic substance as alone by the Group. The difference between the purchase and resale prices is recorded in ‘Interest income’ and is accrued over the life of the agreement using the EIR.

For the year ended 31st March		
Page	Company	Group	
			2022	2021	2022	2021	
	Note	No.	Rs. '000	Rs. '000	Rs. '000	Rs. '000	

Cash in hand			
1,135,991	
922,568	
1,157,668	
939,766	
Balance with banks	22.1	248	1,693,626	1,573,040	2,202,565	1,788,506	
Savings Account with banks			1,339,182	207,403	1,367,071	338,985	
Saving deposit in foreign currency			31	20	31	20	
Securities under reverse repurchase agreement			500,000	-	675,252	777,417	
Total			4,668,830	2,703,031	5,402,587	3,844,694	
Fair value			4,668,830	2,703,031	5,402,587	3,844,694	

22.1	Balance with Banks

For the year ended 31st March	Company	Group	
	2022	2021	2022	2021	
	Rs. '000	Rs. '000	Rs. '000	Rs. '000	

Local banks	
1,693,626	
1,573,040	
2,202,565	
1,788,506	
Total	1,693,626	1,573,040	2,202,565	1,788,506	

23.	Balances with Banks & Financial Institutions
Accounting Policy
Balances with banks & financial institutions include fixed deposits and deposits in foreign currency. Balances with banks & financial institutions are carried at amortised cost in the statement of financial position.

For the year ended 31st March	Company	Group	
	2022	2021	2022	2021	
	Rs. '000	Rs. '000	Rs. '000	Rs. '000	

Fixed deposits Local currency	

5,117,866	

5,399,071	

9,510,617	

8,230,653	
Foreign currency	-	-	18,901	448	
Total	5,117,866	5,399,071	9,529,518	8,231,101	
Fair value	5,117,307	5,900,872	9,492,331	8,239,912	

24.	Financial Assets -Fair Value Through Profit or Loss
Accounting Policy
The Group classifies financial assets as financial assets recognised through profit or loss (FATPL) when they have been purchased  primarily for short term profit making through trading activities. FATPL are recorded and measured at fair value and changes in fair value are recognised in the Net gains/(losses) on financial assets - FVTPL in the Statement of Profit or Loss.

SLFRS 9 requires financial instruments to be classified based on a combination of the entity’s business model for managing the assets and the instruments’ contractual cash flow characteristics. FATPL include quoted equity securities that have been acquired principally for short term profit making and are recorded at fair value using the market prices published by the Colombo Stock Exchange.

Further as per SLFRS 9, financial assets recognised through profit or loss includes all financial assets other than those classified under FVOCI and amortised cost.

Dividend income or expense is recorded in ‘Net trading income’ according to the terms of the contract, or when the right to receive the payment has been established.

The Group evaluates its portfolio of assets FVOCI, to determine if the intention to sell them in the near future is still appropriate. When the Group can not sell these financial assets due to inactive markets and the management intention to sell them in the foreseeable future significant changes, the Group may choose to reclassify these financial assets. Financial assets FVOCI measure the fair value using the prices obtained from Colombo Stock Exchanges.

For the year ended 31st March		
Page	Company	Group	
			2022	2021	2022	2021	
	Note	No.	Rs. '000	Rs. '000	Rs. '000	Rs. '000	

Quoted equity securities	
24.1	
249	
25,140	
9,768	
174,801	
24,753	
Investment in Unit Trust	24.3	251	-	100,019	674,497	1,257,000	
Total			25,140	109,787	849,298	1,281,753	
Fair value			25,140	109,787	849,298	1,281,753	

24.1	Quoted Equity Securities

As at 31st March

Company	2022	2021	
	
No. of Shares	Total Cost Rs. ‘000	Market Value
Rs. ‘000	No. of Shares
Rs. ‘000	Total Cost Rs. ‘000	Market Value
Rs. ‘000	

Utility Windforce PLC	

1,000,000	

18,489	

15,900	

-	

-	

-	
Subtotal		18,489	15,900		-	-	

Capital Goods
John Keells Holdings PLC	

-	

-	

-	

65,780	

10,310	

9,768	
Hemas Holding PLC	200,000	14,157	9,240	-	-	-	
Subtotal		14,157	9,240		10,310	9,768	
							
Total		32,646	25,140		10,310	9,768	
Mark to market gains/(losses)		(7,506)			(542)		
Market value of equity securities		25,140			9,768		

24. Financial Assets -Fair Value Through Profit or Loss (Contd...)

As at 31st March Group
Shares Listed In Sri lanka	2022	2021	
	
No. of Shares	Total Cost Rs. ‘000	Market Value
Rs. ‘000	No. of Shares
Rs. ‘000	Total Cost Rs. ‘000	Market Value
Rs. ‘000	

Utility Windforce PLC	

1,000,000	

18,489	

15,900	

-	

-	

-	
Subtotal		18,489	15,900		-	-	

Capital Goods
John Keells Holdings PLC	

-	

-	

-	

65,780	

10,310	

9,768	
Hemas Holding PLC	200,000	14,157	9,240	-	-	-	
Subtotal		14,157	9,240		10,310	9,768	

Manufacturing
Piramal Glass Ceylon PLC	

-	

-	

-	

1,350,000	

14,985	

14,985	
Subtotal		-	-		14,985	14,985	

Shares Listed In Bangaladesh
British American Tobacco Bangladesh	

10,000	

22,716	

20,269	

-	

-	

-	
Berger Paints Bangladesh Ltd.	1,000	6,241	6,081	-	-	-	
Beximco Pharma	12,000	8,162	7,332	-	-	-	
BRAC Bank Ltd.	25,000	4,761	4,309	-	-	-	
City Bank Ltd.	100,000	10,116	8,981	-	-	-	
Dutch Bangla Bank Ltd.	50,000	14,253	12,912	-	-	-	
Eastern Bank Ltd.	25,000	3,399	3,329	-	-	-	
Grameenphone Limited	17,300	22,696	19,731	-	-	-	
Marico Bangladesh Ltd.	2,000	16,416	16,334	-	-	-	
Reckitt Benckiser	150	2,949	2,803	-	-	-	
Renata Ltd.	82	376	385	-	-	-	
Square Pharmaceuticals Ltd.	30,000	24,595	22,814	-	-	-	
Summit Power	150,000	24,940	20,286	-	-	-	
Walton Hi-Tech Industries	1,100	4,350	4,105	-	-	-	
							
Subtotal		165,970	149,661		-	-	
Total		198,616	174,801		25,295	24,753	
Mark to market gains/(losses)		(23,815)			(542)		
Market value of equity securities		174,801			24,753		

24.2	Industry/Sector Composition of Equity Securities – Company and Group

As at 31st March	2022	2021	

Company	Total Cost Rs. ‘000	Market Value
Rs. ‘000	
%	Total Cost Rs. ‘000	Market Value
Rs. ‘000	
%	

Utility	
18,489	
15,900	
63.25%	
-	
-	
0.00%	
Capital Goods	14,157	9,240	36.75%	10,310	9,768	100.00%	
Subtotal	32,646	25,140	100.00%	10,310	9,768	100.00%	
Mark to market gains/(losses)	(7,506)			(542)			
Market value of equity securities	25,140			9,768			

Group							
Utility	18,489	15,900	9.10%	10,310	9,768	39.46%	
Capital Goods	14,157	9,240	5.29%	-	-	0.00%	
Manufacturing	-	-	-	14,985	14,985	60.54%	
Shares Listed In Bangaladesh	165,970	149,661	85.61%	-	-	0.00%	
Subtotal	198,616	174,801	100.00%	25,295	24,753	100.00%	
Mark to market gains/(losses)	(23,815)			(542)			
Market value of equity securities	174,801			24,753			

Sensitivity analysis of financial assets - FVTPL - equity is given in Note 56.4.3 on page 335.

24.3	Investment in Unit Trust

		Company		Group	
For the year ended 31st March	
No. of Units	2022
Rs. '000	2021
Rs. '000	
No. of Units	2022
Rs. '000	2021
Rs. '000	

NDB Wealth Money Market Plus Fund	
-	
-	
-	
2,052	
51,679	
387,382	
CAL Investment	-	-	100,019	16,805	362,795	485,447	
JB Vantage Money Market Fund	-	-	-	8,693	260,023	384,171	
Total		-	100,019		674,497	1,257,000	

25.	Loans and Receivables - Amortised Cost
Accounting Policy
Financial assets classified as loans and receivables include non-derivative financial assets with fixed or determinable payments that are not quoted in an active market, other than:

●	Those that the Group and Company intends to sell immediately or in the near term and those that, upon initial recognition, designates as at fair value through profit or loss
●	Those that the Group and Company, upon initial recognition, designates as FVOCI
●	Those for which the Group and Company may not recover substantially all of its initial investment, other than because of credit
deterioration

Loans and receivables’ are measured at amortised cost using the EIR, less allowance for impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees and costs that are an integral part of the EIR. The amortisation is included in ‘Interest income’ in the Statement of Profit or Loss. The losses arising from impairment are recognised in the Statement of Profit or Loss in ‘impairment charges for loans and receivables and other losses’.

25.	Loans and Receivables - Amortised Cost (Contd...)
Leasing
The determination of whether an arrangement is a lease or it contains a lease, is based on the substance of the arrangement and requires an assessment of whether the fulfillment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right of use the asset.

Group/Company as a Lessee
Leases that do not transfer to the Group/Company substantially all the risks and benefits incidental to ownership of the leased items are operating leases. Operating lease payments are recognised as an expense in the Statement of Profit or Loss on a straight line basis over the lease term. Contingent rental payable is recognised as an expense in the period in which they are incurred.

Group/Company as a Lessor
Leases where the Group/Company does not transfer substantially all of the risk and benefits of ownership of the asset are classified as operating leases. Initial direct costs incurred in negotiating operating leases are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income. Contingent rents are recognised as revenue in the period in which they are earned.

Receivables on Lease, Hire Purchase and Islamic Finance
As per SLFRS 16, a lease which transfers substantially all the risks and rewards incidental to ownership of an underlying asset is classified as a finance lease. At the commencement date, the Group recognises assets held under finance lease in the Statement of Financial Position and present them as a lease receivable at an amount equal to the net investment in the lease. Net investment in the lease is arrived by discounting lease payments receivable at the interest rate implicit in the lease, i.e. the rate which causes present value of lease payments to
equal to the fair value of the underlying asset and initial direct costs. The finance income receivable is recognised in “interest income” over the periods of the leases so as to achieve a constant rate of return on the net investment in the leases.

‘Day 1’ Difference for Staff Loans
All staff loans granted at below market interest rates were recognised at fair value. The difference between the fair value and the amount disbursed were treated as ‘day 1’ difference and amortised as staff cost over the loan period by using effective interest rate (EIR). The staff loans were subsequently measured at amortised costs. Refer Note 31.2 on page 275.

Renegotiated Loans and Receivables
Where possible, the Group/Company seeks to restructure loans and receivables rather than to take possession of collateral. This may involve extending the payment arrangements and the agreement of new receivable conditions. Once the terms have been renegotiated, any impairment is measured using the original EIR as calculated before the modification of terms and the receivable is no longer considered past
due. Management continually reviews renegotiated loans and receivables to ensure that all criteria are met and that future payments are likely to occur. The receivable continue to be subject to any criteria are met and that future payments are likely to occur. The loans and receivables continue to be measured at amortised cost using original EIR and subject to an individual or collective impairment assessment.

Impairment Allowance for Loans and Receivable to Customers
Details on the Impairment allowance for loans and receivable to customers desclosed in the 25.6 on page 260.

Reversals of Impairment
If the amount of an impairment loss decreases in a subsequent period, and the decrease can be related objectively to an event occurring after the impairment was recognised, the excess is written back by reducing the impairment allowance account accordingly. The write-back is recognised in the Statement of Profit or Loss.

Written off of Loans and Receivables
Loans and receivables are written off (either partially or in full) when there is no realistic prospect of recovery. This is generally the case when the Group determines that the borrower does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Company’s procedures for recovery of amounts due.

For the year ended 31st March		
Page	Company	Group	
			2022	2021	2022	2021	
	Note	No.	Rs. '000	Rs. '000	Rs. '000	Rs. '000	

Loans and receivables	
25.1.2	
254	
161,162,024	
150,655,845	
174,162,982	
156,886,200	

(Less):
Individual impairment charges	

25.7	

263	

1,655,462	

1,168,174	

1,655,462	

1,168,174	
Collective impairment charges	25.7	263	8,232,108	8,099,764	9,186,674	8,714,022	
Net loans and receivables			151,274,454	141,387,907	163,320,846	147,004,004	
Fair value			161,878,020	163,635,284	174,545,177	166,557,994	

25.1	Analysis
25.1.1	Analysis by Stage Wise

Company - 2022	Stage 1
Rs. ‘000	Stage 2
Rs. ‘000	Stage 3
Rs. ‘000	Total Rs. ‘000	

Loans and receivables	
124,054,490	
16,207,504	
20,900,030	
161,162,024	

(Less):
Individual impairment charges	

-	

-	

1,655,462	

1,655,462	
Collective impairment charges	1,338,223	891,126	6,002,759	8,232,108	
Net loans and receivables	122,716,267	15,316,378	13,241,809	151,274,454	

Company - 2021	Stage 1
Rs. ‘000	Stage 2
Rs. ‘000	Stage 3
Rs. ‘000	Total Rs. ‘000	

Loans and receivables	
91,721,453	
30,256,132	
28,678,260	
150,655,845	

(Less):
Individual impairment charges	

-	

-	

1,168,174	

1,168,174	
Collective impairment charges	831,484	1,113,374	6,154,906	8,099,764	
Net loans and receivables	90,889,969	29,142,758	21,355,180	141,387,907	

Group - 2022	Stage 1
Rs. ‘000	Stage 2
Rs. ‘000	Stage 3
Rs. ‘000	Total Rs. ‘000	

Loans and receivables	
134,631,928	
17,272,072	
22,258,982	
174,162,982	

(Less):
Individual impairment charges	

-	

-	

1,655,462	

1,655,462	
Collective impairment charges	1,745,742	1,036,189	6,404,743	9,186,674	
Net loans and receivables	132,886,186	16,235,883	14,198,777	163,320,846	

Group - 2021	Stage 1
Rs. ‘000	Stage 2
Rs. ‘000	Stage 3
Rs. ‘000	Total Rs. ‘000	

Loans and receivables	
90,178,765	
35,084,515	
31,622,920	
156,886,200	

(Less):
Individual impairment charges	

-	

-	

1,168,174	

1,168,174	
Collective impairment charges	995,233	1,262,265	6,456,524	8,714,022	
Net loans and receivables	89,183,532	33,822,250	23,998,222	147,004,004	

25. Loans and Receivables - Amortised Cost (Contd...)
25.1.2	Analysis by Product

As at 31st March	

Note	
Page No.	Company	Group	
			2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	

By product Lease/Ijarah receivable	

25.5.1/25.4.1	

257/259	

76,836,170	

78,141,725	

76,827,955	

78,131,430	
Hire-Purchase/ Murabah receivable	25.5.2/25.4.2	257/259	204,339	224,793	3,532,661	3,143,356	
Term Loan and receivables	25.5.3/25.4.3	258/260	82,658,604	70,780,167	93,802,366	75,611,414	
Related party receivables	25.2	255	1,462,911	1,509,160	-	-	
Gross total			161,162,024	150,655,845	174,162,982	156,886,200	
Fair value			161,878,020	163,635,284	174,545,177	166,557,994	

25.1.3	Analysis by Currency

	Company	Group	
As at 31st March	2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	

Sri Lankan Rupee	
161,162,024	
150,655,845	
163,098,987	
152,113,916	
Bangladesh Taka	-	-	11,063,995	4,772,284	
Gross total	161,162,024	150,655,845	174,162,982	156,886,200	

25.1.4	Analysis by Industry

As at 31st March	Company	Group	
	2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	

Agriculture, Forestry & Fishing	
32,571,677	
30,661,009	
33,958,216	
31,237,276	
Arts, Entertainment & Recreation	1,314,458	1,406,139	1,314,458	1,406,139	
Construction & Infrastructure Development	9,797,912	10,972,649	10,631,366	9,780,857	
Consumption	8,618,671	7,819,767	10,188,492	7,819,767	
Education	2,090,854	1,888,245	2,090,854	1,888,245	
Financial Services	10,787,171	7,268,787	10,719,757	9,848,580	
Health Care, Social Services & Support Services	9,010,963	12,134,882	11,498,386	13,531,028	
Information Technology And Communication	1,726,877	1,536,108	1,968,838	1,536,108	
Manufacturing	9,441,731	9,094,435	14,135,330	10,625,482	
Professional, Scientific & Technical Activities	13,558,688	10,814,474	14,364,143	10,814,474	
Tourism	3,314,785	3,666,967	3,328,350	3,679,932	
Transportation & Storage	35,116,000	33,506,084	35,254,791	33,611,307	
Wholesale & Retail Trade	20,787,613	18,498,319	21,336,335	19,034,510	
Other	3,024,624	1,387,980	3,373,666	2,072,495	
Gross total	161,162,024	150,655,845	174,162,982	156,886,200	

25.2	Related Party Receivables

As at 31st March	Company	Group	
	2022	2021	2022	2021	
	Rs. '000	Rs. '000	Rs. '000	Rs. '000	

People’s Leasing Property Development Limited	
560,310	
599,301	
-	
-	
People’s Leasing Fleet Management Limited	3,528	-	-	-	
People’s Leasing Havelock Properties Limited	835,187	830,096	-	-	
People’s Micro-commerce Ltd.	1,495	2,700	-	-	
People’s Insurance PLC	35,236	49,908	-	-	
Lankan Alliance Finance Limited	27,155	27,155	-	-	
Total	1,462,911	1,509,160	-	-	

25.3	Movement in Gross Loan and Receivables During the Year (Under SLFRS 9)
Movement in Gross Loan and Receivables 2021/22 - Company

	Stage 1
Rs. ‘000	Stage 2
Rs. ‘000	Stage 3
Rs. ‘000	Total Rs. ‘000	

Gross carrying amount as at 1st April 2021	
91,721,453	
30,256,132	
28,678,260	
150,655,845	
New assets originated or purchased	65,130,966	1,874,077	1,211,963	68,217,006	
Assets derecognised or repaid (excluding write offs)	(37,547,489)	(10,439,345)	(9,718,931)	(57,705,765)	
Transfers to Stage 2 and 3	(8,524,274)	6,540,159	1,984,116	-	
Transfers to Stage 1 and 3	9,306,431	(13,243,054)	3,936,623	-	
Transfers to Stage 1 and 2	3,967,403	1,219,535	(5,186,938)	-	
Amounts written off	-	-	(5,063)	(5,063)	
Gross carrying amount as at 31st March 2022	124,054,490	16,207,504	20,900,030	161,162,024	

Movement in Gross Loan and Receivables 2020/21 - Company

	Stage 1
Rs. ‘000	Stage 2
Rs. ‘000	Stage 3
Rs. ‘000	Total Rs. ‘000	

Gross carrying amount as at 1st April 2020	
85,842,549	
38,427,765	
32,227,432	
156,497,746	
New assets originated or purchased	45,437,659	5,359,775	5,802,633	56,600,067	
Assets derecognised or repaid (excluding write offs)	(34,540,620)	(15,262,704)	(12,491,832)	(62,295,156)	
Transfers to Stage 2 and 3	(15,480,507)	13,868,554	1,611,953	-	
Transfers to Stage 1 and 3	7,993,476	(15,696,865)	7,703,389	-	
Transfers to Stage 1 and 2	2,468,896	3,559,607	(6,028,503)	-	
Amounts written off	-	-	(146,812)	(146,812)	
Gross carrying amount as at 31st March 2021	91,721,453	30,256,132	28,678,260	150,655,845	

25. Loans and Receivables - Amortised Cost (Contd...)
Movement in Gross Loan and Receivables 2021/22 - Group

	Stage 1
Rs. ‘000	Stage 2
Rs. ‘000	Stage 3
Rs. ‘000	Total Rs. ‘000	

Gross carrying amount as at 1st April 2021	
92,517,093	
35,084,515	
31,622,920	
159,224,528	
New assets originated or purchased	74,010,141	2,035,752	1,377,459	77,423,352	
Assets derecognised or repaid (excluding write offs)	(40,640,671)	(13,175,141)	(11,751,546)	(65,567,358)	
Transfers to Stage 2 and 3	(8,694,759)	6,690,802	2,003,957	-	
Transfers to Stage 1 and 3	10,237,075	(13,976,868)	3,739,792	-	
Transfers to Stage 1 and 2	4,364,143	563,448	(4,927,591)	-	
Amounts written off	-	-	(5,063)	(5,063)	
Foreign exchange adjustments	2,838,906	49,564	199,054	3,087,524	
Gross carrying amount as at 31st March 2022	134,631,928	17,272,072	22,258,982	174,162,982	

Movement in Gross Loan and Receivables 2020/21 - Group

	Stage 1
Rs. ‘000	Stage 2
Rs. ‘000	Stage 3
Rs. ‘000	Total Rs. ‘000	

Gross carrying amount as at 1st April 2020	
88,207,562	
41,813,456	
33,283,862	
163,304,880	
New assets originated or purchased	52,415,185	6,131,991	6,371,434	64,918,610	
Assets derecognised or repaid (excluding write offs)	(43,858,513)	(15,048,355)	(12,283,610)	(71,190,478)	
Transfers to Stage 2 and 3	(16,130,403)	14,368,752	1,761,651	-	
Transfers to Stage 1 and 3	7,366,941	(15,816,240)	8,449,299	-	
Transfers to Stage 1 and 2	2,177,993	3,634,911	(5,812,904)	-	
Amounts written off	-	-	(146,812)	(146,812)	
Gross carrying amount as at 31st March 2021	90,178,765	35,084,515	31,622,920	156,886,200	

25.4	Remaining Contractual Maturity Analysis -Company
25.4.1	Lease/Ijarah Receivable

As at 31st March	2022	2021	
	Within one
year Rs. ‘000	
1-5 years
Rs. ‘000	
Over 5 years
Rs. ‘000	
Total Rs. ‘000	Within one
year Rs. ‘000	
1-5 years
Rs. ‘000	
Over 5 years
Rs. ‘000	
Total Rs. ‘000	

Lease/Ijarah receivable Gross rentals receivable	

40,144,122	

55,166,643	

143,004	

95,453,769	

43,999,315	

52,294,392	

53,075	

96,346,783	
Less: Unearned income	9,383,677	9,225,344	6,816	18,615,837	9,942,866	8,256,450	3,185	18,202,501	
Net rentals receivable	30,760,445	45,941,299	136,188	76,837,932	34,056,449	44,037,942	49,891	78,144,282	
Less : Rentals received in advance				1,762				2,557	
Lease/Ijarah receivable before impairment provision				
76,836,170				
78,141,725	

Less : Allowance for impairment losses Individual Impairment									
Stage 1				-				-	
Stage 2				-				-	
Stage 3				-				-	
Total individual impairment				
-				
-	
Collective Impairment									
Stage 1				831,062				407,512	
Stage 2				643,743				646,288	
Stage 3				2,323,037				2,164,642	
Total collective impairment				3,797,842				3,218,442	
Total net rentals receivable	30,760,445	45,941,299	136,188	73,038,328	34,056,449	44,037,942	49,891	74,923,283	

25.4.2	Hire-Purchase/ Murabah Receivable

As at 31st March	2022	2021	
	Within one
year Rs. ‘000	
1-5 years
Rs. ‘000	
Over 5 years
Rs. ‘000	
Total Rs. ‘000	Within one
year Rs. ‘000	
1-5 years
Rs. ‘000	
Over 5 years
Rs. ‘000	
Total Rs. ‘000	

Hire-Purchase/ Murabah receivable Gross rentals receivable	

213,214	

6,822	

-	

220,036	

230,888	

11,686	

-	

242,574	
Less: Unearned income	15,345	178	-	15,523	17,086	522	-	17,608	
Net rentals receivable	197,869	6,644	-	204,513	213,802	11,164	-	224,966	
Less : Rentals received in advance				174				174	
Hire-Purchase/ Murabah receivable before impairment provision				
204,339				
224,792	

Less : Allowance for impairment losses Individual Impairment									
Stage 1				-				-	
Stage 2				-				-	
Stage 3				-				-	
Total individual impairment				-				-	
Collective Impairment									
Stage 1				23				137	
Stage 2				223				671	
Stage 3				190,140				182,224	
Total collective impairment				190,386				183,031	
Total net rentals receivable	197,869	6,644	-	13,953	213,802	11,164	-	41,761	

25. Loans and Receivables - Amortised Cost (Contd...)
25.4.3	Term Loan and Receivables

As at 31st March	2022	2021	
	Within one
year Rs. ‘000	
1-5 years
Rs. ‘000	
Over 5 years
Rs. ‘000	
Total Rs. ‘000	Within one
year Rs. ‘000	
1-5 years
Rs. ‘000	
Over 5 years
Rs. ‘000	
Total Rs. ‘000	

Motor Loans	
15,038,440	
31,941,065	
187,072	
47,166,578	
12,293,886	
27,878,428	
39,835	
40,212,149	
Short and medium loans	5,096,841	5,308,971	100,925	10,506,738	6,074,667	5,810,178	69,797	11,954,642	
Clean Basis Loan Stock	830,176	64,652	-	894,828	817,416	117,173	-	934,589	
Self E Cash Loan	2,315,513	598,809	-	2,914,322	1,951,463	677,058	-	2,628,521	
Fast Track Loan	2,020,498	605,689	-	2,626,187	1,228,751	522,933	-	1,751,684	
Trading Murabah	248,779	59,022	-	307,800	309,166	78,721	-	387,887	
Musharakah	1,491,411	2,744,510	27,526	4,263,447	937,696	1,574,502	-	2,512,198	
Factoring receivable	2,111,469	-	-	2,111,469	2,611,936	-	-	2,611,936	
Margin trading	8,387,793	-	-	8,387,793	4,832,679	-	-	4,832,679	
Staff loans	192,171	418,747	2,993	613,911	191,822	507,272	24,555	723,649	
Sundry loans	1,464,932	1,401,417	-	2,866,349	2,151,099	80,820	-	2,231,919	
Less ; Prepaid Rentals	(819)	-	-	(819)	(1,686)	-	-	(1,686)	
Loan receivable before impairment provision	39,197,205	43,142,882	318,517	82,658,604	33,398,895	37,247,085	134,187	70,780,167	

Less : Allowance for impairment losses Individual Impairment									
Stage 1				-				-	
Stage 2				-				-	
Stage 3				1,655,462				1,168,174	
Total individual impairment				
1,655,462				
1,168,174	
Collective Impairment									
Stage 1				507,138				423,835	
Stage 2				247,160				466,415	
Stage 3				3,489,582				3,808,040	
Total collective impairment				
4,243,880				
4,698,290	
Total net receivable	39,197,205	43,142,882	318,517	76,759,262	33,398,895	37,247,085	134,187	64,913,703	

25.5	Remaining Contractual Maturity Analysis -Group
25.5.1	Lease/Ijarah Receivable

As at 31st March	2022	2021	
	Within one
year Rs. ‘000	
1-5 years
Rs. ‘000	
Over 5 years
Rs. ‘000	
Total Rs. ‘000	Within one
year Rs. ‘000	
1-5 years
Rs. ‘000	
Over 5 years
Rs. ‘000	
Total Rs. ‘000	

Gross rentals receivable	
40,142,275	
55,160,275	
143,005	
95,445,555	
43,996,067	
52,284,615	
53,075	
96,333,758	
Less: Unearned income	9,384,357	9,224,664	6,816	18,615,837	9,941,699	8,254,887	3,185	18,199,771	
Net rentals receivable	30,757,918	45,935,611	136,189	76,829,718	34,054,368	44,029,728	49,891	78,133,987	
Less : Rentals received in advance				1,762				2,557	
Lease/Ijarah receivable before impairment provision				
76,827,956				
78,131,430	

Less : Allowance for impairment losses Individual Impairment									
Stage 1				-				-	
Stage 2				-				-	
Stage 3				-				-	
Total individual impairment				
-				
-	
Collective Impairment									
Stage 1				831,062				407,512	
Stage 2				643,743				646,288	
Stage 3				2,323,037				2,164,642	
Total collective impairment				
3,797,842				
3,218,442	
Total net rentals receivable	30,757,918	45,935,611	136,189	73,030,114	34,054,368	44,029,728	49,891	74,912,988	

25.5.2	Hire-Purchase/ Murabah Receivable

As at 31st March	2022	2021	
	Within one
year Rs. ‘000	
1-5 years
Rs. ‘000	
Over 5 years
Rs. ‘000	
Total Rs. ‘000	Within one
year Rs. ‘000	
1-5 years
Rs. ‘000	
Over 5 years
Rs. ‘000	
Total Rs. ‘000	

Gross rentals receivable	
1,958,654	
2,911,695	
-	
4,870,349	
2,090,271	
2,176,205	
-	
4,266,476	
Less: Unearned income	630,350	707,164	-	1,337,514	570,783	552,164	-	1,122,947	
Net rentals receivable	1,328,304	2,204,531	-	3,532,835	1,519,488	1,624,041	-	3,143,529	
Less : Rentals received in advance				174				174	
Hire-Purchase/ Murabah receivable before impairment provision				
3,532,661				
3,143,355	
Less : Allowance for impairment losses Individual Impairment									
Stage 1				-				-	
Stage 2				-				-	
Stage 3				-				-	
Total individual impairment				-				-	
Collective Impairment									
Stage 1				115,814				91,775	
Stage 2				121,038				99,142	
Stage 3				414,438				396,782	
Total collective impairment				651,290				587,698	
Total net rentals receivable	1,328,304	2,204,531	-	2,881,371	1,519,488	1,624,041	-	2,555,657	

25. Loans and Receivables - Amortised Cost (Contd...)
25.5.3	Term Loan and Receivables

As at 31st March	2022	2021	
	Within one
year Rs. ‘000	
1-5 years
Rs. ‘000	
Over 5 years
Rs. ‘000	
Total Rs. ‘000	Within one
year Rs. ‘000	
1-5 years
Rs. ‘000	
Over 5 years
Rs. ‘000	
Total Rs. ‘000	

Motor Loans	
15,038,440	
31,941,065	
187,072	
47,166,578	
12,293,886	
27,878,428	
39,835	
40,212,149	
Short and medium loans	11,284,775	9,631,763	733,961	21,650,500	8,700,465	8,015,627	69,797	16,785,889	
Clean Basis Loan Stock	830,176	64,652	-	894,828	817,416	117,173	-	934,589	
Self E Cash Loan	2,315,513	598,809	-	2,914,322	1,951,463	677,058	-	2,628,521	
Fast Track Loan	2,020,498	605,689	-	2,626,187	1,228,751	522,933	-	1,751,684	
Trading Murabah	248,779	59,022	-	307,800	309,166	78,721	-	387,887	
Musharakah	1,491,411	2,744,510	27,526	4,263,447	937,696	1,574,502	-	2,512,198	
Factoring receivable	2,111,469	-	-	2,111,469	2,611,936	-	-	2,611,936	
Margin trading	8,387,793	-	-	8,387,793	4,832,679	-	-	4,832,679	
Staff loans	192,171	418,747	2,993	613,911	191,822	507,272	24,555	723,649	
Sundry loans	1,464,932	1,401,417	-	2,866,349	2,151,099	80,820	-	2,231,919	
Less :Prepaid Rentals	(819)	-	-	(819)	(1,686)	-	-	(1,686)	
Loan receivable before impairment provision	45,385,139	47,465,674	951,553	93,802,366	36,024,693	39,452,534	134,187	75,611,414	
Less : Allowance for impairment losses Individual Impairment									
Stage 1				-				-	
Stage 2				-				-	
Stage 3				1,655,462				1,168,174	
Total individual impairment				1,655,462				1,168,174	
Collective Impairment									
Stage 1				798,866				495,946	
Stage 2				271,408				516,835	
Stage 3				3,667,268				3,895,100	
Total collective impairment				4,737,542				4,907,882	
Total net receivable	45,385,139	47,465,674	951,553	87,409,362	36,024,693	39,452,534	134,187	69,535,358	

25.6	Impairment Allowance for Loans and Receivable to Customers
Accounting Policy
As per SLFRS 9, the Group records an allowance for expected credit losses for loans and advances.

Individual Impairment
The Group will separately assess significant customer exposure to determine where there are any signs of impairment. Loans with objective evidence of loss have been classified as Stage 3. Loans with a individually significant amount but not impaired will be collectively assessed for impairment in stage 1 or stage 2 according to the below specified criteria to determine whether significant credit deterioration has occurred since its inception.

Basis of calculating individual impairment is not changed with the adoption of SLFRS 9.

Collective Impairment
A collective impairment provision is established for:
●	groups of homogeneous loans and advances that are not considered individually significant; and
●	groups of assets that are individually significant but that were not found to be individually impaired.
●	

As per SLFRS 9, the Group’s Expected Credit Loss (ECL) calculations are outputs of complex models with a number of underlying assumptions regarding the choice of variable inputs and their interdependencies. Elements of the ECL models that are considered accounting judgments and estimates include:

●	The Group’s criteria for qualitatively assessing whether there has been a significant increase in credit risk and if so allowances for financial assets measured on a Life time expected credit loss (LTECL) basis;
●	The segmentation of financial assets when their ECL is assessed on a collective basis;
●	Development of ECL models, including the various statistical formulas and the choice of inputs
●	Determination of associations between macro-economic inputs, such as GDP growth, inflation, interest rates, exchange rates and
unemployment and the effect on Probability of Default (PDs), Exposure At Default (EAD) and Loss Given Default (LGD);
●	Selection of forward-looking macro-economic scenarios and their probability weightings, to derive the economic inputs into the ECL models.

The Group has established a policy to perform an assessment of whether a financial instrument’s credit risk has increased significantly since initial recognition, by considering the change in the risk of default occurring over the remaining life of the financial instrument. SLFRS 9 outlines a “three-stage” model for impairment based on changes in credit quality since initial recognition.

Stage 1
Loans and receivables that is not originally credit-impaired on initial recognition is classified in Stage 1. Financial instruments in Stage 1 have their ECL measured at an amount equal to the proportion of lifetime expected credit losses (LTECL) that result from default events possible within next 12 months (12M ECL).

Stage 2
If a significant increase in credit risk (SICR) since origination is identified, it is moved to Stage 2 and the Group records an allowance for LTECL.

Stage 3
If a loan is credit impaired, it is moved to Stage 3 and the Group recognises an allowance for LTECL, with probability of default at 100%.

Significant Increase in Credit Risk
When determining whether the risk of default on financial instruments has increased significantly since the initial recognition, the Group will consider reasonable and supportable information that is relevant and available without excessive cost or effort. This includes quantitative and qualitative information analysis based on the Group’s historical experience and expert credit assessment, including forward-looking information.

The Group considers an exposure to have significantly increased credit risk when contractual payments of a customer are more than 30 days past due in accordance with the rebuttable presumption in SLFRS 9.

The Group individually reviews at each reporting date, loans and advances above a predefined threshold to identify whether the credit risk has increased significantly since origination, before an exposure is in default.

Definition of Default and Credit Impaired Assets
The Group considers loans and advances to other customers be defaulted when:

1.	The borrower is unlikely to pay its obligations to the Group in full, without recourse by the Group to actions such as realising security (if any is held); or
2.	The borrower becomes 90 days past due on its contractual payments.

The Group computes ECL using three main components; a probability of default (PD), a loss given default (LGD), and the exposure at default (EAD) under the collective assessment. These parameters are generally derived from internally developed statistical models and historical data are then adjusted to reflect forward-looking information.

1.	PD – The probability of default represents the likelihood of a borrower defaulting on its financial obligation (as per “definition of default and credit impaired” above) either over the next 12 months (12mPD) or over the remaining lifetime (Lifetime PD) of the obligation.

25. Loans and Receivables - Amortised Cost (Contd...)
Two types of PDs are used for calculating ECLs:
●	12-month PDs – This is the estimated probability of default occurring within the next 12 months (or over the remaining life of the financial
instrument if that is less than 12 months). This is used to calculate 12-month ECLs.
●	Lifetime PDs – This is the estimated probability of a default occurring over the remaining life of the financial instrument. This is used to
calculate lifetime ECLs for “Stage 2” and “Stage 3” exposures

2.	Loss given Default (“LGD”) – This is an estimate of the loss arising on default. It is based on the difference between the contractual cash flows due and those that the lender would expect to receive, including from any collateral. It is usually expressed as a percentage of the EAD.
3.	Exposure at Default (“EAD”) – This is an estimate of the exposure at a future default date, taking into account expected changes in the exposure after the reporting date, including repayments of principal and interest, and expected drawdowns on committed facilities.
4.	Discount Rate – This is used to discount an expected loss to a present value at the reporting date using the effective interest rate (EIR) at initial recognition
5.	Economic Factor Adjustment (EFA)-When incorporate forward looking information, an entity should consider forecasted macroeconomic factors to assessing the expected credit loss.

Forward-looking Information
The Group incorporates forward-looking information into both its assessment as to whether the credit risk of an instrument has increased significantly since its initial recognition and its measurement of ECL. The Group also obtained experienced credit judgement to formulate a base case and a worst case scenario. The base case represents a most-likely outcome and is aligned with information used by the Group for strategic planning and budgeting. The Group has identified and documented key drivers of credit risk both quantitative and qualitative for various portfolio segments. Quantitative economic factors are based on economic data and forecasts published by CBSL and supranational organisations such as IMF.

Quantitative Drivers of Credit Risk	Qualitative Drivers of Credit Risk	
Interest rate (AWPLR)	Status of industry business	
GDP growth	Regulatory impact	
Rate of inflation	Government policies	
Unemployment rate	
Exchange rate	

Considering the current volatile macro-economic condition of the country the company amended the scenario weightages as worst-case 60%, best-case 10% and base-case 30%.

Revolving Facilities
The Company offers a revolving facilities such as Fast track, and calculates only the 12-month ECL (12mECL) allowance on these facilities. The EAD is arrived by taking the maximum of either sanction limit adjusted for Credit Conversion Factor (CCF) and the gross carrying amount of the loan (utilised amount). EAD of Stage 3 contracts are limited to the gross carrying amount which is the utilised amount since the Group freeze the limits of those contracts up to the utilised amount. The expected 12-month default probabilities are applied to EAD and multiplied by the expected LGD and discounted by an approximation to the original EIR.

25.7	Movement in Individual And Collective Impairment Charges During the Year
A reconciliation of the allowance for impairment losses for loans and receivables, by class, is as follows:

Company	
Lease Rs. ‘000	Hire Purchase Rs. ‘000	
Ijarah Rs. ‘000	
Term Loans Rs. ‘000	Re-finance
loans Rs. ‘000	
Murabah Rs. ‘000	Trading Murabah Rs. ‘000	
Factoring Rs. ‘000	
Total Rs. ‘000	

At 1st April 2020	
3,170,385	
112,933	
242,982	
4,217,079	
15,622	
12,176	
145,538	
833,520	
8,750,235	
Charge/(Reversal) for the year	(140,595)	61,754	(54,330)	364,494	4,525	(3,831)	(5,155)	290,841	517,703	
At 31st March 2021	3,029,790	174,687	188,652	4,581,573	20,147	8,345	140,383	1,124,361	9,267,938	

Individual impairment										
Stage 1	-	-	-	-	-	-	-	-	-	
Stage 2	-	-	-	-	-	-	-	-	-	
Stage 3	-	-	-	712,308	2,403	-	3,791	449,672	1,168,174	
Total Individual impairment	-	-	-	712,308	2,403	-	3,791	449,672	1,168,174	

Collective impairment Stage 1	

381,601	

124	

25,911	

400,833	

-	

13	

2,363	

20,639	

831,484	
Stage 2	606,640	646	39,648	459,226	-	25	1,674	5,515	1,113,374	
Stage 3	2,041,549	173,917	123,093	3,009,206	17,744	8,307	132,555	648,535	6,154,906	
Total Collective impairment	3,029,790	174,687	188,652	3,869,265	17,744	8,345	136,592	674,689	8,099,764	
	3,029,790	174,687	188,652	4,581,573	20,147	8,345	140,383	1,124,361	9,267,938	

Company	
Lease Rs. ‘000	Hire Purchase Rs. ‘000	
Ijarah Rs. ‘000	
Term Loans Rs. ‘000	Re-finance
loans Rs. ‘000	
Murabah Rs. ‘000	Trading Murabah Rs. ‘000	
Factoring Rs. ‘000	
Total Rs. ‘000	

At 1st April 2021	
3,029,790	
174,687	
188,652	
4,581,573	
20,147	
8,345	
140,383	
1,124,361	
9,267,938	
Charge/(Reversal) for the year	656,967	8,184	(77,567)	(157,665)	3,300	(830)	58,672	128,571	619,632	
Amounts written off	-	-	-	-	-	-	-	-	-	
At 31st March 2022	3,686,757	182,871	111,085	4,423,908	23,447	7,515	199,055	1,252,932	9,887,570	

Individual impairment Stage 1	

-	

-	

-	

-	

-	

-	

-	

-	

-	
Stage 2	-	-	-	-	-	-	-	-	-	
Stage 3	-	-	-	771,042	2,406	-	3,456	878,558	1,655,462	
Total Individual impairment	-	-	-	771,042	2,406	-	3,456	878,558	1,655,462	

Collective impairment Stage 1	

804,513	

15	

26,549	

486,203	

-	

8	

4,311	

16,624	

1,338,223	
Stage 2	628,642	214	15,101	207,247	-	9	263	39,650	891,126	
Stage 3	2,253,602	182,642	69,435	2,959,416	21,041	7,498	191,025	318,100	6,002,759	
Total Collective impairment	3,686,757	182,871	111,085	3,652,866	21,041	7,515	195,599	374,374	8,232,108	
Total	3,686,757	182,871	111,085	4,423,908	23,447	7,515	199,055	1,252,932	9,887,570	

25. Loans and Receivables - Amortised Cost (Contd...)

Group	
Lease Rs. ‘000	Hire Purchase Rs. ‘000	
Ijarah Rs. ‘000	
Term Loans Rs. ‘000	Re-finance
loans Rs. ‘000	
Murabah Rs. ‘000	Trading Murabah Rs. ‘000	
Factoring Rs. ‘000	
Total Rs. ‘000	

At 1st April 2020	
3,170,385	
397,378	
242,982	
4,352,345	
15,622	
12,175	
145,539	
833,520	
9,169,946	
Charge/(Reversal) for the year	(140,595)	181,976	(54,330)	436,960	4,525	(3,830)	(5,156)	290,841	710,391	
Amounts written off	-	-	-	1,859	-	-	-	-	1,859	
At 31st March 2021	3,029,790	579,354	188,652	4,791,164	20,147	8,345	140,383	1,124,361	9,882,196	

Individual impairment Stage 1	

-	

-	

-	

-	

-	

-	

-	

-	

-	
Stage 2	-	-	-	-	-	-	-	-	-	
Stage 3	-	-	-	712,308	2,403	-	3,791	449,672	1,168,174	
Total individual impairment	-	-	-	712,308	2,403	-	3,791	449,672	1,168,174	

Collective impairment Stage 1	

381,601	

91,762	

25,911	

472,944	

-	

13	

2,363	

20,639	

995,233	
Stage 2	606,640	99,117	39,648	509,646	-	25	1,674	5,515	1,262,265	
Stage 3	2,041,549	388,475	123,093	3,096,266	17,744	8,307	132,555	648,535	6,456,524	
Total collective impairment	3,029,790	579,354	188,652	4,078,856	17,744	8,345	136,592	674,689	8,714,022	
Total	3,029,790	579,354	188,652	4,791,164	20,147	8,345	140,383	1,124,361	9,882,196	

Group	
Lease Rs. ‘000	Hire Purchase Rs. ‘000	
Ijarah Rs. ‘000	
Term Loans Rs. ‘000	Re-finance
loans Rs. ‘000	
Murabah Rs. ‘000	Trading Murabah Rs. ‘000	
Factoring Rs. ‘000	
Total Rs. ‘000	

At 1st April 2021	
3,029,790	
579,354	
188,652	
4,791,164	
20,147	
8,345	
140,383	
1,124,361	
9,882,196	
Charge/(Reversal) for the year	656,967	64,421	(77,567)	96,622	3,300	(830)	58,672	128,571	930,156	
Exchange rate variance	-	-	-	29,784	-	-	-	-	29,784	
At 31st March 2022	3,686,757	643,775	111,085	4,917,570	23,447	7,515	199,055	1,252,932	10,842,136	

Individual impairment Stage 1	

-	

-	

-	

-	

-	

-	

-	

-	

-	
Stage 2	-	-	-	-	-	-	-	-	-	
Stage 3	-	-	-	771,042	2,406		3,456	878,558	1,655,462	
Total Individual impairment	-	-	-	771,042	2,406	-	3,456	878,558	1,655,462	

Collective impairment Stage 1	

804,513	

115,806	

26,549	

777,931	

-	

8	

4,311	

16,624	

1,745,742	
Stage 2	628,642	121,029	15,101	231,495	-	9	263	39,650	1,036,189	
Stage 3	2,253,602	406,940	69,435	3,137,102	21,041	7,498	191,025	318,100	6,404,743	
Total Collective impairment	3,686,757	643,775	111,085	4,146,528	21,041	7,515	195,599	374,374	9,186,674	
Total	3,686,757	643,775	111,085	4,917,570	23,447	7,515	199,055	1,252,932	10,842,136	

25.8	Movement in Provision for Impairment During the Year (Under SLFRS 9)
Movement in Impairment 2021/22 - Company

	Stage 1
Rs. ‘000	Stage 2
Rs. ‘000	Stage 3
Rs. ‘000	Total Rs. ‘000	

ECL allowance as at 1st April 2021 under SLFRS 9	
831,484	
1,113,374	
7,323,080	
9,267,938	
New assets originated or purchased	556,956	76,426	442,180	1,075,562	
Assets derecognised or repaid (excluding write offs)	(12,530)	(362,278)	(439,651)	(814,459)	
Transfers to Stage 2 and 3	(203,085)	100,684	102,401	-	
Transfers to Stage 1 and 3	9,270	(105,960)	115,230	18,540	
Transfers to Stage 1 and 2	81,009	27,966	(108,975)	-	
Impact on year end ECL of exposures transferred between stages during the year	
(231,669)	
(24,428)	
28,790	
(227,307)	
Changes to models and inputs used for ECL calculations	306,788	65,342	200,229	572,359	
Amounts written off	-	-	(5,063)	(5,063)	
Balance as at 31st March 2022	1,338,223	891,126	7,658,221	9,887,570	

Movement in Impairment 2020/21 - Company

	Stage 1
Rs. ‘000	Stage 2
Rs. ‘000	Stage 3
Rs. ‘000	Total Rs. ‘000	

ECL allowance as at 1st April 2020 under SLFRS 9	
675,172	
1,183,272	
6,891,791	
8,750,235	
New assets originated or purchased	362,358	108,938	263,483	734,779	
Assets derecognised or repaid (excluding write offs)	360,808	(366,251)	(275,162)	(280,605)	
Transfers to Stage 2 and 3	(761,572)	289,030	472,542	-	
Transfers to Stage 1 and 3	126,562	(620,498)	493,936	-	
Transfers to Stage 1 and 2	26,289	293,663	(319,952)	-	
Impact on year end ECL of exposures transferred between stages during the year	
(227,219)	
(22,819)	
141,534	
(108,504)	
Changes to models and inputs used for ECL calculations	269,086	248,039	(272,310)	244,815	
Amounts written off	-	-	(72,782)	(72,782)	
Balance as at 31st March 2021	831,484	1,113,374	7,323,080	9,267,938	

25.	Loans and Receivables - Amortised Cost (Contd...)
Movement in Impairment 2021/22 - Group

	Stage 1
Rs. ‘000	Stage 2
Rs. ‘000	Stage 3
Rs. ‘000	Total Rs. ‘000	

ECL allowance as at 1st April 2021 under SLFRS 9	
995,233	
1,262,265	
7,624,698	
9,882,196	
New assets originated or purchased	838,601	111,603	488,498	1,438,702	
Assets derecognised or repaid (excluding write offs)	(137,607)	(384,216)	(437,025)	(958,848)	
Transfers to Stage 2 and 3	(207,147)	103,722	103,425	-	
Transfers to Stage 1 and 3	10,196	(119,665)	109,469	-	
Transfers to Stage 1 and 2	89,110	14,417	(103,526)	-	
Impact on year end ECL of exposures transferred between stages during the year	
(236,302)	
(24,672)	
29,079	
(231,896)	
Changes to models and inputs used for ECL calculations	312,924	65,995	202,231	581,150	
Amounts written off	-	-	(5,063)	(5,063)	
Foreign exchange adjustments	80,733	6,740	48,420	135,894	
Balance as at 31st March 2022	1,745,742	1,036,189	8,060,205	10,842,136	

Movement in Impairment 2020/21 - Group

	Stage 1
Rs. ‘000	Stage 2
Rs. ‘000	Stage 3
Rs. ‘000	Total Rs. ‘000	

ECL allowance as at 1st April 2020 under SLFRS 9	
749,718	
1,333,159	
7,087,069	
9,169,946	
New assets originated or purchased	482,566	212,977	205,397	900,940	
Assets derecognised or repaid (excluding write offs)	395,853	(411,288)	(198,112)	(213,547)	
Transfers to Stage 2 and 3	(880,310)	299,071	581,239	-	
Transfers to Stage 1 and 3	125,361	(738,941)	613,580	-	
Transfers to Stage 1 and 2	71,935	311,982	(383,917)	-	
Impact on year end ECL of exposures transferred between stages during the year	
(271,960)	
(25,867)	
147,364	
(150,463)	
Changes to models and inputs used for ECL calculations	322,070	281,172	(283,528)	319,714	
Amounts written off	-	-	(144,394)	(144,394)	
Balance as at 31st March 2021	995,233	1,262,265	7,624,698	9,882,196	

26.	Insurance and Reinsurance Receivables
Accounting Policy
Insurance - Product Classification
Insurance contracts are those contracts when the Group (the insurer) has accepted significant insurance risk from another party (the policyholders) by agreeing to compensate the policyholders, if a specified uncertain future event (the insured event) adversely affects the policyholders. As a general guideline, the Group determines whether it has significant insurance risk, by comparing benefits paid with benefits payable, if the insured event did not occur. Insurance contracts can also transfer financial risk.

Once a contract has been classified as an insurance contract, it remains an insurance contract for the remainder of its lifetime, even if the insurance risk reduces significantly during this period, unless all rights and obligations are extinguished or expired.

Insurance Receivables
Insurance receivables satisfy the contractual cash flow characteristic test (SPPI test) as the return solely represent capital and interest. Even though there were no interest charge for insurance receivables, they satisfy the SPPI test as they are considered to be short term and credit risk doesn’t exist to charge interest. Upon completion of the SPPI test, the management elected the business model of hold to collect the contractual cash flows and measure the instrument at amortised cost as these are short term in nature. Since these are short term balances without a financing component, amortised cost will be equal to carrying value. Based on the three stages; performing (stage 1), under- performing (stage 2), nonperforming (stage 3), the Company provides ECL on 12 months ECL and lifetime ECL weighted among several scenarios.

De-recognition due to substantial Modification of Terms and Conditions
Group de-recognises premium receivables, when the terms and conditions have been re-negotiated to the extent that, substantially, it becomes a new insurance contract, with the difference recognised as a separate asset or liability. The newly recognised insurance contracts are classified as stage 1 for ECL measurement purposes.

When assessing whether or not to de-recognise a insurance premium receivable, amongst others, Group considers the following factors:
●	Loss of insurable interest
●	Change in counterparty

Assessment of Impairment of Insurance Receivables
The Group assessed the impairment provision based on the ECL method.

Reinsurance Receivable
The Company cedes insurance risk to reinsurance in the normal course of business. Reinsurance receivables represent balances due from reinsurance companies. Amounts recoverable from reinsurers are estimated in a manner consistent with the outstanding claims provision or settled claims associated with the reinsurer’s policies and are in accordance with the related reinsurance contract.

Ceded reinsurance arrangements do not relieve the Group from its obligations to policyholders.

According to the characteristics relating to reinsurance receivables, the instruments qualify the contractual cash flow characteristic test (SPPI test) as the return solely represent capital and interest. Even though there were no interest charge for reinsurance receivables, they satisfy the SPPI test as they are considered to be short-term and credit risk doesn’t exist to charge interest. Upon completion of the SPPI test, the management elected the business model of hold to collect the contractual cash flows and measure the instrument at amortised cost as these are short-term in nature. Since these are short-term balances without a financing component, the amortised cost will be equal to carrying value.

Assessment of Impairment of Reinsurance Receivables
Reinsurance receivables of the Company are not qualified for ECL model based on SLFRS 4 - Insurance Contracts, section 20. Impairment losses will be recognised on reinsurance receivables, if and only if, there is no objective evidence, as a result that occurred after initial recognition of the reinsurance assets, that the Company may not receive all amounts due to it under the terms of the contract; and that event has a reliably mesurable impact on the amounts that the Company will receive from the reinsurer.

26.	Insurance and Reinsurance Receivables (Contd...)
Deferred Expenses
Deferred Acquisition Costs (DAC)
Costs of acquiring new businesses including commission, underwriting, marketing and policy issuance expenses which vary with and directly related to production of new businesses are deferred to the extent that these costs are recoverable out of future premiums. All other acquisition costs are recognised as an expense when incurred. Subsequent to initial recognition, deferred acquisition costs (DAC) are amortised over the period on the basis unearned premium is amortised.

Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are accounted for by changing the amortisation period and are treated as a change in an accounting estimate.

DAC are derecognised when the related contracts are either expired or cancelled.

An impairment review of DAC is performed at each reporting date or more frequently when an indication of impairment arises. When the recoverable amount is less than the carrying value, an impairment loss is recognised in the statement of profit or loss. DACs are also considered in the liability adequacy test for each reporting period.

Reinsurance Commissions
Commissions receivable on outwards reinsurance contracts are deferred and amortised on a straight line basis over the term of the expected premiums payable.

As at 31st March	Company	Group	
	2022	2021	2022	2021	
	Rs. '000	Rs. '000	Rs. '000	Rs. '000	

Reinsurance receivables	
-	
-	
606,386	
277,279	
Insurance Receivables	-	-	716,142	747,182	
Total	-	-	1,322,528	1,024,461	
Fair value	-	-	1,322,528	1,024,461	

27.	Financial Assets - Fair Value Through Other Comprehensive Income
Accounting Policy
Upon initial recognition, the Company occasionally elects to classify irrevocably some of its equity investments held for strategic purpose, as equity instruments at FVOCI when they meet the definition of Equity under LKAS 32 “Financial Instruments: Presentation” and are not held for trading. Such classification is determined on an instrument-by-instrument basis.

Gains and losses on these equity instruments are never recycled to profit or loss instead directly transferred to retained earnings at the time of derecognition. Dividends are recognised in profit or loss as other operating income when the right of the payment has been established. Equity instruments at FVOCI are not subject to an impairment assessment.

Unrealised gains and losses were recognised in Equity through OCI in the “Fair value reserve”. When these financial investments were disposed, the cumulative gain or loss previously recognised in fair value reserve transfered to retained earnings. Dividend earned while holding financial assets - FVOCI were recognised in the Income Statement as “Operating income” when the right to receive the payment had been established.

As at 31st March	

Note	
Page No.	Company	Group	
			2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	

Equity securities	
27.1	
269	
231,838	
309,118	
231,838	
309,118	
Treasury bills			-	-	299,663	426,376	
Debentures			1,101,440	-	1,101,440	-	
Total			1,333,278	309,118	1,632,941	735,494	
Fair value			1,333,278	309,118	1,632,941	735,494	

27.1	Equity Investments & Debenture Investments - Company and Group

As at 31st March	

Note	

Page No.	2022	2021	
			
No of Shares	Cost of Investment Rs. ‘000	Market Value Rs. ‘000	
No of Shares	Cost of Investment Rs. ‘000	Market Value Rs. ‘000	

Equity Investments
People’s Merchant Finance PLC			

25,014,002	

237,633	

135,076	

25,014,002	

237,633	

180,100	
Asiri Hospital			500,000	20,730	18,750				
Sanasa Development Bank PLC			2,271,260	213,853	67,002	2,271,260	213,853	129,008	
				472,216	220,828		451,486	309,108	

Credit Information Bureau of Sri Lanka	

27.2.1	

269	

100	

10	

10	

100	

10	

10	
Lanka Credit and business Finance PLC			
5,000,000	
50,000	
11,000	
50,000,000	
50,000	
-	
Subtotal			-	-	231,838	-	-	309,118	

Debenture investments Ceyloan Electricity Board			

9,180,900	

1,000,086	

891,470	

-	

-	

-	
Sampath Bank			2,025,000	211,149	209,970	-	-	-	
Total				1,733,461	1,333,278		501,496	309,118	

27.2	Reconciliation of Fair Value Measurement for Unquoted Equity Securities Under Level 3 Hierarchy
27.2.1 Credit Information Bureau of Sri Lanka

	Company	Group	
As at 31st March	2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	

Balance as at 1st April	
10	
10	
10	
10	
Remeasurement recognised in OCI	-	-	-	-	
Balance as at 31st March	10	10	10	10	

28.	Debt Instrument - Amortised Cost
Accounting Policy
As per SLFRS 9, “Financial investments” are measured at amortised cost if it meets both of the following conditions and is not designated at FVTPL:

●	The asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and
●	The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on
the principal amount outstanding.

After initial measurement, these are subsequently measured at amortised cost (gross carrying amount using the EIR, less provision for impairment). Amortised cost is calculated by taking into account any discount or premium on acquisition and fees and costs that are  an integral part of the EIR. The amortisation is included in “Interest Income” while the losses arising from impairment are recognised in “impairment charges for loans and other losses” in the Income Statement.

28.	Debt Instrument - Amortised Cost (Contd...)

As at 31st March	Company	Group	
	2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	

Treasury bills	
9,827,221	
6,319,142	
9,827,221	
6,319,142	
Treasury bonds	-	675,064	2,750,582	1,539,558	
Unquoted preference shares	-	-	918,504	734,686	
Commercial Paper	-	-	152,475	155,245	
Debentures	-	-	2,364,743	2,183,083	
Total	9,827,221	6,994,206	16,013,525	10,931,714	
Fair value	9,804,639	6,984,078	15,765,803	11,200,604	

28.1 Debentures

			Group	
			2022	2021	
	
Rate	
Maturity date	No. of Debentures	Carrying Value
Rs. ‘000	No. of Debentures	Carrying Value
Rs. ‘000	

Sampath Bank PLC	
8.25%	
14-Dec-19	
-	
-	
-	
-	

Siyapatha Finance PLC	9.90%	18-Nov-20	500,000	-	500,000	-	
	12.50%	20-Mar-23	1,000,000	100,366	1,000,000	100,401	
	13.90%	24-Feb-24	1,000,000	101,152	1,000,000	101,152	
	13.33%	8-Aug-24	1,500,000	162,630	1,500,000	162,632	
National Savings Bank	11.00%	10-Sep-22	1,000,000	105,940	1,000,000	105,941	
National Development Bank PLC	9.40%	24-Jun-20	282,800	-	282,800	-	

DFCC Bank PLC	13.95%	30-Mar-24	2,000,000	200,149	2,000,000	200,163	
	9.40%	10-Jun-20	332,100	-	332,100	-	

Seylan Bank PLC	12.75%	9-Nov-23	1,000,000	104,925	1,000,000	104,925	
	13.00%	29-Mar-25	844,500	84,538	844,500	84,538	
	13.50%	28-03-2024	1,000,000	100,143	1,000,000	100,143	
	11.00%	12-Jun-25	1,190,000	129,415	1,190,000	128,912	
	12.85%	29-Mar-23	750,000	75,026	750,000	75,051	
MTD Walkers PLC	11.75%	30-Sep-19	254,784	26,954	254,784	26,954	
Commercial Bank PLC	10.75%	8-Mar-21	2,000,000	-	2,000,000	-	

Hatton National Bank PLC	12.00%	27-Oct-21	-	-	421,900	44,316	
	12.00%	22-Jul-23	881,700	90,106	881,700	90,106	
	11.25%	28-Mar-21	2,000,000	-	2,000,000	-	

Nations Trust Bank PLC	13.00%	1-Nov-23	193,300	20,332	193,300	20,332	
	12.30%	22-Sep-24	413,300	43,900	413,300	43,900	
	12.65%	8-Nov-21	-	-	2,000,000	209,851	

Hayleys PLC	12.80%	23-Dec-24	2,000,000	206,553	2,000,000	206,568	
	12.50%	31-Jul-23	1,000,000	101,978	1,000,000	101,978	
Ceylon Eletricity Board	9.35%	15-Apr-26	4,000,000	435,694			
LOLC PLC	10.25%	24-Feb-26	3,000,000	302,819	3,000,000	302,819	
Subtotal				2,392,620		2,210,684	
Less : Allowance for expected credit losses				(27,877)		(27,601)	
Total				2,364,743		2,183,083	

Total allowance for expected credit loss stemmed from 12 months ECL since all investments under this category are investment grade instruments.

29.	Investments in Subsidiaries
Accounting Policy
Investments in subsidiaries are stated at cost, net of any impairment losses which are charged to the Statement of Profit or Loss in the Company’s Financial Statements and it is in accordance with the Sri Lanka Accounting Standard LKAS 27 on ‘Consolidated and Separate Financial Statements’.

Subsidiaries are entities that are controlled by the Group/Company. Subsidiaries are consolidated from the date on which control is transferred to the Company and continue to be consolidated until the date when such control ceases. The Company is presumed to control an investee when it is exposed, or has right, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.

Intra-group balances and transactions, income, expenses and any unrealised gains arising from intra-group transactions are eliminated in full in preparing the Consolidated Financial Statements.
Non-controlling interests represent the portion of profit or loss and net assets of subsidiaries not owned, directly or indirectly, by the Company. Non-controlling interests are presented separately in the consolidated Statement of Profit or Loss and within equity in the consolidated
Statement of Financial Position, but separate from parent shareholders’ equity. Any losses applicable to the non-controlling interests are
allocated against the interests of the non-controlling interest even if this results in a deficit balance. Acquisitions of non-controlling interests are accounted for using the parent entity extension method, whereby the difference between the consideration and the fair value of the share of the net assets acquired is recognised as equity.

All subsidiaries of the Company have been incorporated in Sri Lanka other than Lankan Alliance Finance Limited which is incorporated in Bangladesh. A list of subsidiaries with there principal activities are given in the Note 1.2 on page 215.

As at 31st March

Company	2022	2021	

Holding
%	

Cost Rs. ‘000	Directors’/
market valuation Rs. ‘000	

Holding
%	

Cost Rs. ‘000	Directors’/
market valuation Rs. ‘000	

People’s Leasing Fleet Management Limited	
100.00	
175,000	
385,556	
100.00	
175,000	
332,983	
People’s Leasing Property Development Limited	
100.00	
550,000	
985,396	
100.00	
550,000	
1,013,914	
People’s Leasing Havelock Properties Limited	100.00	600,000	728,694	100.00	600,000	626,158	
People’s Micro-commerce Ltd	100.00	150,000	504,701	100.00	150,000	367,437	
People’s Insurance PLC	75.00	600,000	4,515,000	75.00	600,000	2,955,000	
Lankan Alliance Finance Limited	51.00	1,138,788	2,272,595	51.00	1,138,788	1,482,658	
Total		3,213,788	9,391,942		3,213,788	6,778,150	

Subsidiaries are not quoted in the Colombo stock exchange except People’s Insurance PLC. The directors’ valuation of investment in subsidiaries has been carried out on net asset basis. People’s Insurance PLC has been valued at market value basis.

29.	Investments in Subsidiaries (Contd...)
The following table summaries the information relating to the Group’s subsidiary that has a material non-controlling interest (NCI).

For the year ended 31st March	2022	2021	
	
People’s Insurance
PLC Rs. ‘000	Lankan Alliance Finance Limited Rs. ‘000	

Total Rs. ‘000	
People’s Insurance
PLC Rs. ‘000	Lankan Alliance Finance Limited Rs. ‘000	

Total Rs. ‘000	

Non-controlling interest (NCI) percentage	
25%	
49%		
25%	
49%		

Net operating income	
4,562,288	
449,753	
5,012,041	
5,294,873	
361,819	
5,656,692	
Less : Operating expenses	4,254,559	478,043	4,732,602	3,728,072	303,451	4,031,523	
Profit before income tax	307,729	(28,290)	279,439	1,566,801	58,368	1,625,169	
Less : Income tax expense	217,338	(7,556)	209,782	363,208	55,468	418,676	
Profit after tax	90,391	(20,734)	69,657	1,203,593	2,900	1,206,493	
Profit allocated to Non-controlling interest (NCI)	
22,598	
(10,160)	
12,438	
300,898	
1,421	
302,319	

As at 31st March	2022	2021	
	
People’s Insurance
PLC Rs. ‘000	Lankan Alliance Finance Limited Rs. ‘000	

Total Rs. ‘000	
People’s Insurance
PLC Rs. ‘000	Lankan Alliance Finance Limited Rs. ‘000	

Total Rs. ‘000	

Cash and cash equivalents	
642,756	
124,218	
766,974	
1,045,082	
42,604	
1,087,686	
Balances with banks & financial institutions	2,561,413	1,997,930	4,559,343	2,815,391	505,607	3,320,998	
Loans and receivables	2,709,882	10,964,065	13,673,947	2,558,607	4,735,863	7,294,470	
Insurance and reinsurance receivables	1,931,657	-	1,931,657	1,643,629	-	1,643,629	
Financial assets - Fair value through other comprehensive income	
299,663	
-	
299,663	
426,376	
-	
426,376	
Debt Instrument at amortised cost	2,750,582	918,504	3,669,086	864,494	691,274	1,555,768	
Property, plant and equipment & intangible assets	
106,954	
183,036	
289,990	
182,322	
147,778	
330,100	
Other assets	1,099,636	356,326	1,455,962	1,597,954	204,811	1,802,765	
Total assets	12,102,543	14,544,079	26,646,622	11,133,855	6,327,937	17,461,792	

Due to banks	
184,738	
796,993	
981,731	
3,020	
105,449	
108,469	
Due to customers	-	8,665,037	8,665,037	-	2,944,262	2,944,262	
Other financial liabilities	969,610	528,323	1,497,933	691,728	273,396	965,124	
Other liabilities	216,897	97,658	314,554	482,995	97,658	580,653	
Insurance liabilities and reinsurance payable	5,982,246	-	5,982,246	5,089,039	-	5,089,039	
Total liabilities	7,353,491	10,088,011	17,441,501	6,266,782	3,420,765	9,687,547	
Net assets value	4,749,052	4,456,068	9,205,120	4,867,073	2,907,172	7,774,245	
Carrying amount of Non-controlling interest (NCI)	
1,187,263	
2,183,473	
3,370,736	
1,216,768	
1,424,514	
2,641,283	

30.	Investment Property
Accounting Policy
Investment property is property held either to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods or services or for administrative purposes.

Investment properties are initially recognised at cost. Subsequent to initial recognition the investment properties are stated at fair values, which reflect market conditions at the Statement of Financial Position date. Gains or losses arising from changes in fair value are included in the Statement of Profit or Loss in the year in which they arise.

Where Group companies occupy a significant portion of the investment property of a subsidiary, such investment properties are treated as property, plant and equipment in the Consolidated Financial Statements, and accounted for as per Sri Lanka Accounting Standard - LKAS 16 - "Property, Plant and Equipment".

Derecognition
Investment properties are derecognised when either they have been disposed of or when the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gains or losses on the retirement or disposal of an investment property are recognised in the Statement of Profit or Loss in the year of retirement or disposal.

Subsequent Transfers to/from Investment Property
Transfers are made to investment property when, and only when, there is a change in use, evidenced by the end of owner occupation, commencement of an operating lease to another party or completion of construction or development.

Transfers are made from investment property when, and only when, there is a change in use, evidenced by commencement of owner occupation or commencement of development with a view to sale.

For a transfer from investment property to owner occupied property or inventories, the deemed cost of property for subsequent accounting is its fair value at the date of change in use. If the property occupied by the Company as an owner occupied property becomes an investment property, the Company, accounts for such property in accordance with the policy stated under property, plant and equipment up to the date of change in use.

For a transfer from inventories to investment property, any difference between the fair value of the property at that date and its previous carrying amount is recognised in the Statement of Profit or Loss. When the Company completes the construction or development of a  self constructed investment property, any difference between the fair value of the property at that date and its previous carrying amount is recognised in the Statement of Profit or Loss.

Fair Value of Investment Property
Investment property of the Group and Company is reflected at fair value. When current market prices of similar assets are available, such evidences are considered in estimating fair values of these assets. In the absence of such information, the Group and Company determines within a reasonable fair value estimates, amounts that can be attributed as fair values, taking into consideration of the discounted cash flow projections based on the estimates, derived from the evidence such as current market rents for similar properties and using discount rates that reflect uncertainty in the amount and timing of cash flows.

Determining Fair Value
External and independent valuers, having appropriate recognised professional qualifications and recent experience in the location and category of property being valued, values the investment property portfolio every year. In financial periods within that period the fair value is determined by the board of directors.

The fair values are based on market values, being the estimated amount for which a property could be sold in an orderly transaction between market participants at the measurement date.

Investment Property Leased within the Group
Any property leased out to parent or subsidiary is considered as owner-occupied from the perspective of the Group and adjustments are made for consolidation purposes.
Owner Occupied Properties and Investment Property:
In determining if a property qualifies as Investment Property the Group/Company makes a judgment whether the property generates independent cash flows rather than cash flows that are attributable not only to the property but also other assets. Judgment is also applied in determining if ancillary services are significant, so that a property does not qualify as investment property.

30.	Investment Property (Contd...)

As at 31st March	Company	Group	
	2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	

Balance as at 1st April	
-	
-	
820,664	
1,131,596	
Addition during the year	-	-	-	-	
Transfer during the year	-	-	-	(310,932)	
Balance as at 31st March	-	-	820,664	820,664	

Land and building at No. 7 and 9, Havelock Road, Colombo 5 is rented to People’s Bank, People’s Insurance PLC and People’s Leasing & Finance PLC by the People’s Leasing Havelock Properties Limited during the year. In the Group Financial Statements, such property have separated and part rented to People’s Bank has been classified as Investment Property to the Group. Basis for the separation is based on the number of Sq.ft. rented.

The Company carries investment property at Market value. Market valuation of the above investment property was carried out as at 31st December 2021 by Mr K.T.D. Tissera, FRICS (Eng), who is independent valuer not connected with the Company.

Rent income recoginised in respect to the above investment property is disclosed in Note 10 on page 228.

Direct operational expenses recoginised in respect to the above investment property is disclosed in Note 15 on page 234.

31.	Other Assets
Accounting Policy
The Company and the Group classify all their other assets as other financial assets and other non financial assets. Other non financial assets mainly comprises of advance payments, VAT recoverable, inventory and sundry receivables. Advance payments are carried at historical cost.

As at 31st March	

Note	
Page No.	Company	Group	
			2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	

Other financial assets - Insurance Commission			
108,493	
126,949	
-	
-	
Non financial assets	31.1	274	640,661	448,711	831,826	932,458	
Total			749,154	575,660	831,826	932,458	

31.1	Non Financial Assets

As at 31st March	

Note	
Page No.	Company	Group	
			2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	

Advance payments			
111,524	
105,693	
81,928	
68,320	
Dividend receivable			225,000	-	-	-	
Inventories			33,015	58,380	40,815	65,708	
Prepaid Expense			94,605	72,367	100,814	81,759	
Unamortised cost on staff loans (Day 1 difference)	31.2	275	54,211	78,624	54,360	78,924	
Differed expenses			-	-	151,388	210,104	
Other receivables			122,306	133,647	402,521	427,643	
Total			640,661	448,711	831,826	932,458	

31.2	Unamortised Cost On Staff Loans (Day 1 Difference)

As at 31st March	Company	Group	
	2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	

Balance as at 1st April	
78,624	
123,264	
78,924	
123,264	
Charge for the year	(24,413)	(44,640)	(24,564)	(44,340)	
Balance as at 31st March	54,211	78,624	54,360	78,924	

32.	Property, Plant and Equipment
Accounting Policy Basis of Recognition
Property, Plant and Equipment are tangible items that are held for servicing, or for administrative purposes, and are expected to be used during more than one year.

Property, Plant and Equipment is recognised if it is probable that future economic benefits associated with the asset will flow to the Group and cost of the asset can be measured reliably.

Basis of Measurement
An item of Property, Plant and Equipment that qualifies for recognition as an asset is initially measured at its cost. Cost includes expenditure that is directly attributable to the acquisition of the asset and cost incurred subsequently to add to or replace a part of it. The cost of self- constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the asset to a working condition for its intended use and the costs of dismantling and removing the items and restoring at the site on which they are located and capitalised borrowing costs. Purchased software that is integral to the functionality of the related equipment is capitalised as a part of computer equipment.

When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

The Company and Group apply the cost model to property, plant and equipment and records at cost of purchase or construction together with any incidental expenses thereon less accumulated depreciation and any accumulated impairment losses.

Subsequent Costs
The cost of replacing a part of an item of property, plant and equipment is recognized in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Group and its cost can be measured reliably. The cost of day to day servicing of property, plant and equipment are charged to the Statement of Profit or Loss as incurred.

Repairs & Maintenance
Repairs and maintenance are charged to the Statement of Profit or Loss during the financial period in which they are incurred. The cost of major renovations is included in the carrying amount of the assets when it is probable that future economic benefits in excess of the most recently assessed standard of performance of the existing assets will flow to the Company and Group and the renovation replaces an identifiable part of the asset. Major renovations are depreciated during the remaining useful life of the related asset.

Derecognition
Property, Plant and Equipment is derecognised on disposal or when no future economic benefits are expected from its use. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is recognised in ‘Other operating income’ in the Statement of Profit or Loss in the year the asset is derecognised.

Depreciation
Depreciation is recognised in Statement of Profit or Loss on a straight–line basis over the estimated useful lives of each part of an item of property, plant and equipment since this method most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset. Land is not depreciated.

32.	Property, Plant and Equipment (Contd...)
The estimated useful lives are as follows;

Class of asset	% per annum	Period	

Freehold buildings	
2	
50 years	
Improvement of leasehold property	25	4 years	
Motor vehicles	12.5 - 20	5 - 8 years	
Computer hardware	20	5 years	
Office equipments	10 - 20	5 -10 years	
Furniture’s and fittings	20	5 years	

The above rates are consistently used by all the Group entities. The depreciation rates are determined separately for each significant part of an item of property, plant and equipment and commence to depreciate when it is available for use, i.e. when it is in the location and condition necessary for it to be capable of operating in the manner intended by the management. Depreciation of an asset ceases at the earlier of the date that the asset is classified as held for sale or the date that the asset is derecognised. Depreciation methods, useful lives and residual values are reassessed at each reporting date and adjusted if appropriate.

Useful Lives of Property, Plant and Equipment
The Group and Company depreciates the property, plant and equipment, using the straight-line method, over their estimated useful lives after taking into account of their estimated residual values. The estimated useful life reflects management’s estimate of the period that the Group and Company intends to derive future economic benefits from the use of the Group’s property, plant and equipment. The residual value reflects management’s estimated amount that the Group/Company would currently obtain from the disposal of the asset, after deducting the estimated costs of disposal, as if the asset were already of the age and in the condition expected at the end of its useful life. Changes in the expected
level of usage and technological developments could affect the economics, useful lives and the residual values of these assets which could then consequentially impact future depreciation charges.

32.1	Property, Plant and Equipment - Company

	Freehold Land and Buildings Rs. '000	Improvement of Leasehold properties Rs. '000	Motor Vehicles

Rs. '000	Computer Hardware

Rs. '000	Office Equipments

Rs. '000	Furniture and fittings

Rs. '000	Total

Rs. '000	

Cost
Balance as at 1st April 2021	

573,840	

56,872	

225,723	

760,265	

683,850	

459,981	

2,760,531	
Additions	149,702	-	215,101	122,169	39,451	8,993	535,416	
Disposals	-	-	(2,020)	(7,327)	(57,335)	(28,476)	(95,158)	
Transfers	-	-	-	(160)	160	-	-	
Balance as at 31st March 2022	723,542	56,872	438,804	874,947	666,126	440,498	3,200,789	
(Less): Accumulated depreciation
Balance as at 1st April 2021	
3,234	
56,872	
75,255	
612,873	
547,487	
415,560	
1,711,281	
Charge for the year	471	-	23,466	69,806	55,899	18,922	168,564	
Disposals	-	-	(1,052)	(7,016)	(56,294)	(28,470)	(92,832)	
Balance as at 31st March 2022	3,705	56,872	97,669	675,663	547,092	406,012	1,787,013	
Net book value at 31st March 2022	719,837	-	341,135	199,284	119,034	34,486	1,413,776	

	Freehold Land and Buildings Rs. '000	Improvement of Leasehold properties Rs. '000	
Motor Vehicles Rs. '000	
Computer Hardware Rs. '000	
Office Equipments
Rs. '000	
Furniture and fittings Rs. '000	

Total Rs. '000	

Cost
Balance as at 1st April 2020	

573,840	

56,872	

278,163	

766,212	

704,670	

450,446	

2,830,203	
Additions		-		33,922	54,104	16,664	104,690	
Disposals	-	-	(52,440)	(39,869)	(74,924)	(7,129)	(174,362)	
Balance as at 31st March 2021	573,840	56,872	225,723	760,265	683,850	459,981	2,760,531	
(Less): Accumulated depreciation
Balance as at 1st April 2020	
2,763	
56,794	
85,461	
586,278	
556,502	
398,476	
1,686,274	
Charge for the year	471	78	15,841	63,242	64,589	23,139	167,360	
Disposals	-	-	(26,047)	(36,647)	(73,604)	(6,055)	(142,353)	
Balance as at 31st March 2021	3,234	56,872	75,255	612,873	547,487	415,560	1,711,281	
Net book value at 31st March 2021	570,606	-	150,468	147,392	136,363	44,421	1,049,250	

32.2	Property, Plant and Equipment - Group

Freehold Land and Buildings Rs. '000	Improvement
of Leasehold properties Rs. '000	

Motor Vehicles Rs. '000	

Computer Hardware Rs. '000	

Office Equipments
Rs. '000	

Furniture and fittings Rs. '000	

Total Rs. '000	

Cost
Balance as at 1st April 2021	

3,537,387	

58,583	

510,821	

879,870	

1,006,726	

531,985	

6,525,372	
Additions	149,702	-	92,205	137,696	45,225	32,330	457,158	
Disposals	-	-	(177,260)	(7,712)	(57,795)	(29,786)	(272,553)	
Transfers	-	-	-	(160)	160	-	-	
Exchange rate variance	-	-	6,240	9,363	4,178	10,109	29,890	
Fair value adjustments	-	-	-	-	-	-	-	
Balance as at 31st March 2022	3,687,089	58,583	432,006	1,019,057	998,494	544,638	6,739,867	
(Less): Accumulated depreciation
Balance as at 1st April 2021	
381,717	
57,349	
175,372	
700,009	
709,051	
467,609	
2,491,107	
Charge for the year	63,805	-	43,592	84,197	72,835	32,029	296,458	
Disposals	-	-	(71,508)	(7,016)	(56,294)	(28,470)	(163,288)	
Transfers	-	-	-	-	-	-	-	
Exchange rate variance	-	-	1,105	6,210	9,999	7,594	24,908	
Balance as at 31st March 2022	445,522	57,349	148,561	783,400	735,591	478,762	2,649,185	
Net book value at 31st March 2022	3,241,567	1,234	283,445	235,657	262,903	65,876	4,090,682	

32. Property, Plant and Equipment (Contd...)

Freehold Land and Buildings Rs. '000	Improvement
of Leasehold properties Rs. '000	

Motor Vehicles Rs. '000	

Computer Hardware Rs. '000	

Office Equipments
Rs. '000	

Furniture and fittings Rs. '000	

Total Rs. '000	

Cost
Balance as at 1st April 2020	

3,226,454	

58,583	

693,357	

881,755	

999,658	

530,039	

6,389,846	
Additions	-	-	9,440	37,085	81,547	24,252	152,324	
Disposals	(55)	-	(191,976)	(39,869)	(74,924)	(22,599)	(329,423)	
Transfers/adjustments	310,988	-	-	-	-	-	310,988	
Exchange rate variance	-	-	-	899	445	293	1,637	
Balance as at 31st March 2021	3,537,387	58,583	510,821	879,870	1,006,726	531,985	6,525,372	
(Less): Accumulated depreciation
Balance as at 1st April 2020	
317,912	
57,271	
205,642	
658,593	
706,349	
445,709	
2,391,476	
Charge for the year	63,805	78	44,373	74,400	75,807	33,782	292,245	
Disposals	-	-	(74,643)	(33,611)	(73,604)	(11,980)	(193,838)	
Exchange rate variance	-	-	-	627	499	98	1,224	
Balance as at 31st March 2021	381,717	57,349	175,372	700,009	709,051	467,609	2,491,107	
Net book value at 31st March 2021	3,155,670	1,234	335,449	179,861	297,675	64,376	4,034,265	

32.3	Fully Depreciated Property, Plant and Equipment
The initial cost of fully depreciated property, plant and equipment, which are still in use as at reporting date is as follows.

As at 31st March	Company	Group	
	2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	

Improvement of leasehold properties	
56,872	
53,282	
56,872	
53,282	
Motor vehicles	33,013	37,971	33,013	37,971	
Computer hardware	489,153	440,942	548,306	490,175	
Office equipment	359,878	397,383	395,812	431,165	
Furniture and fittings	76,861	327,178	89,089	338,727	
Total	1,015,777	1,256,756	1,123,092	1,351,320	

32.4	Group Freehold Lands and Buildings

Location	

Address	
Date of Valuation	
Method of Valuation	Land Extent
(perches)	
Number of Building	Building
Area (Sq.Ft)	2022
Cost Rs. '000	2022
Revaluation Rs. '000	2021
Revaluation Rs. '000	
										
People's Leasing & Finance PLC Vehicle yards	

Makola	No. 496, Makola North, Makola	
31.12.2019	
MCM	
90	
1	
11,600	
7,632	
49,000	
49,000	

Mabima	No. 225/D, Nayagala Road, Heiyantuduwa, Mabima	

31.12.2019	

MCM	

330.75	

1	

820	

22,532	

75,000	

75,000	

Meegahamulla	Kandepalla, Beligamuwa, Galewala	

31.12.2019	

MCM	

260	

1	

1,836	

27,558	

24,000	

24,000	

Monaragala	No. 10, Pothuwil Road, Monaragala	
31.12.2019	
MCM	
125.9	
1	
1,376	
46,905	
50,000	
50,000	

Administrative purpose	

Bandarawela	No. 35/2D, Welimada Road, Bandarawela	
31.12.2019	
MCM	
8.3	
1	
5,194	
31,257	
45,000	
45,000	

Jaffna	No. 10, Mahathma Gandhi Road, Jaffna	
31.12.2019	
MCM	
44.72	
-	
-	
45,764	
155,063	
155,063	

Matara	No. 367, Anagarila Darmapala Mawatha Matara	

31.12.2019	

MCM	

40	

-	

-	

93,599	

100,000	

100,000	

Kandy	No. 296,
Senanayaka Road, Kandy	

31.12.2019	

MCM	

47.1	

-	

-	

142,711	

183,700	

183,700	

Anuradhapura	No. 50, Maithripala Senanayake Road, Anuradhapura	

31.12.2019	

MCM	

40.51	

-	

-	

155,882	

182,295	

182,295	
Colombo	No 10d/8 Kaduwela	23.03.2021	MCM	94.3			149,702	183,885	-	
Subtotal					5		723,542	1,047,943	864,058	
										
People's Leasing Property Development Limited	

Borella	No. 1161, Maradana
Road, Colombo 08	
31.12.2021	
MCM	
104.9	
2	
127,621	
1,532,414	
2,650,000	
2,500,000	

Subtotal					
2		
1,532,414	
2,650,000	
2,500,000	
										
People's Leasing Havelock Properties Limited	

Colombo 05*	No. 07, Havelock
Road, Colombo 05	
31.12.2021	
MCM	
111.45	
1	
84,024	
2,059,690	
2,600,000	
2,600,000	

Subtotal					
1		
2,059,690	
2,600,000	
2,600,000	
Total					8		4,315,646	6,297,943	5,964,058	

MCM : Market Comparable Method
*	Land and building value of Rs.628,556,600 is clasified as investment property and Rs. 1,431,133,056 is clasified as property, plant and equipment in the group financial statements.
*	

32.	Property, Plant and Equipment (Contd...)
Market valuation of the above Land & Buildings was carried out by Mr K.T.D. Tissera, FRICS (Eng), who is independent valuer not connected with the Company. Investment method, Contractor’s Test method and Comparison method have been used for the valuation. Freehold land and buildings of the Company are considered under Level 3 of fair value hierarchy

Temporarily Idle Property, Plant and Equipment
There were no property, plant and equipment of the Group/Company idle as at 31st March 2022 and 31st March 2021.

Property, Plant and Equipment Retired from Active Use
There were no property, plant and equipment of the Group/Company retired from active use as at 31st March 2022 and 31st March 2021.

Title Restriction on Property, Plant and Equipment
There were no restriction on the title of property, plant and equipment of the Group/Company as at 31st March 2022 and 31st March 2021.

Property, Plant and Equipment Pledged as Security for Liabilities
There were no items of property, plant and equipment of the Group/Company pledged as securities for liabilities other than disclosed in Note 54 on page 308 (asset pledged) to the Financial Statements.

Compensation from Third Parties for Items of Property, Plant and Equipment
There were no compensation received during the year from third parties for items of property, plant and equipment of the Group/Company that were impaired, lost or given up (2021: Nil).

Unobservable Input used in Measuring Fair Value
Significant unobservable input used in measuring non-financial assets categorised as level 3 in fair value hierarchy disclosed in to Note - 21.6 on page 241 to the Financial Statements.

33.	Right of Use Assets Accounting Policy  SLFRS 16 – Leases
Determination of the Lease Term for Lease Contracts with Renewal and Termination Options (Group as a Lessee)
The Group determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised. The Group has several lease contracts for branches/head office that include extension and termination options. The
Group applies judgement in evaluating whether it is reasonably certain whether or not to exercise the option to renew or terminate the lease. That is, it considers all relevant factors that create an economic incentive for it to exercise either the renewal or termination option. After the commencement date, the Group reassesses the lease term if there is a significant event or change in circumstances that is within its control that affects its ability to exercise or not to exercise the option to renew or to terminate (e.g., construction of significant leasehold improvements or significant customisation of the leased asset).

Prepaid lease rentals paid to acquire land use rights are amortised over the lease term in accordance with the pattern of benefits provided. Leasehold property comprising of land use rights and is amortised on a straight line basis over the remaining lease term.

	Company	Group	
	2021/22
Rs. '000	2020/21
Rs. '000	2021/22
Rs. '000	2020/21
Rs. '000	

Cost
Balance as at 1st April	

3,349,114	

2,522,565	

2,290,888	

2,017,197	
Transfer from other asset (Prepaied rentals)	52,790	50,600	52,790	50,600	
	3,401,904	2,573,165	2,343,678	2,067,797	
Additions	239,437	858,510	238,105	292,305	
Disposals	(138,773)	(69,214)	(112,147)	(69,214)	
Transfers	-	(13,347)	-	-	
Balance as at 31st March	3,502,568	3,349,114	2,469,636	2,290,888	
(Less): Accumulated amortisation
Balance as at 1st April	
1,106,670	
583,115	
699,591	
377,715	
	1,106,670	583,115	699,591	377,715	
Amortisation	518,284	543,769	325,327	340,349	
Transfer to net investment in lease	-	(1,741)	-		
Disposal	(94,766)	(18,473)	(94,766)	(18,473)	
Impairment	-	-	-	-	
Balance as at 31st March	1,530,188	1,106,670	930,152	699,591	
Net book value at 31st March	1,972,380	2,242,444	1,539,484	1,591,297	

34.	Goodwill And Intangible Assets
Accounting Policy
The Group’s intangible assets include the goodwill and customer list which acquired in business combination and value of computer software,.

Basis of Recognition
An intangible asset is recognised only when its cost can be measured reliably and it is probable that the expected future economic benefits that are attributable to it will flow to the Group/Company in accordance with the Sri Lanka Accounting Standard- LKAS 38 - ‘Intangible Assets’.

Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are stated in the Statement of Financial Position at cost less any accumulated amortisation and any accumulated impairment losses if any.

Subsequent Expenditure
Subsequent expenditure on intangible assets is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is expensed as incurred.

Useful Economic Lives, Amortisation and Impairment
The useful economic lives of intangible assets are assessed to be either finite or indefinite.

Intangible assets with finite lives are amortised over the useful economic life. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at each financial year. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are accounted for by changing the amortisation period or method, as appropriate, and they are treated as changes in accounting estimates in accordance with LKAS 8. The amortisation expense on intangible assets with finite lives is recognised in the Statement of Profit or Loss in the expense category consistent with the function of the intangible asset.

34.	Goodwill And Intangible Assets (Contd...)
Amortisation is calculated using the straight– line method to write down the cost of intangible assets to their residual values over their estimated useful economic lives at the rates as specified below;

Class of asset	% per annum	Period	
Computer software	20	5 years	

The unamortised balances of intangible assets with finite lives are reviewed for impairment annually and whenever there is an indication for impairment and recognised in Statement of Profit or Loss to the extent that they are no longer probable of being recovered from the expected future benefits.

Goodwill that arises upon the acquisition of subsidiary is included in intangible assets. Goodwill is initially measured at cost. Subsequent to initial recognition, goodwill is measured at cost less accumulated impairment losses. In respect of equity accounted investees, the carrying amount of goodwill is included in the carrying amount of the investment, and an impairment loss in such an investment is not allocated to any asset, including goodwill, that forms part of the carrying amount of the equity accounted investee.

Goodwill with infinite useful lives are assessed for impairment annually. The assessment of infinite life is reviewed annually to determine whether the infinite life continues to be supportable.

Derecognition
Intangible assets are derecognised on disposal or when no future economic benefits are expected from its use. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is recognised in in the Statement of Profit or Loss in the year the asset is derecognised.

	Company	Group	
	Computer software Rs. '000	
Goodwill Rs. '000	
Total Rs. '000	Computer software Rs. '000	
Goodwill Rs. '000	
Total Rs. '000	

Cost
Balance as at 1st April 2021	

199,853	

308,545	

508,398	

233,461	

417,099	

650,560	
Additions	10,325	-	10,325	12,835	-	12,835	
Disposals	-	-	-	-	-	-	
Exchange rate variance	-	-	-	773	-	773	
Balance as at 31st March 2022	210,178	308,545	518,723	247,069	417,099	664,168	
(Less): Accumulated amortisation Balance as at 1st April 2021	
175,018	
186,934	
361,952	
198,120	
186,934	
385,054	
Amortisation	13,195	-	13,195	16,879	-	16,879	
Impairment	-	121,611	121,611	-	121,611	121,611	
Exchange rate variance	-	-	-	1,021	-	1,021	
Balance as at 31st March 2022	188,213	308,545	496,758	216,020	308,545	524,565	
Net book value at 31st March 2022	21,965	-	21,965	31,049	108,554	139,603	

Cost
Balance as at 1st April 2020	

199,914	

308,545	

508,459	

222,221	

417,099	

639,320	
Additions	360	-	360	11,661	-	11,661	
Disposals	421	-	421	421	-	421	
Balance as at 31st March 2021	199,853	308,545	508,398	233,461	417,099	650,560	
(Less): Accumulated amortisation Balance as at 1st April 2020	
163,153	
87,725	
250,878	
183,021	
87,725	
270,746	
Amortisation	11,865	-	11,865	15,099	-	15,099	
Impairment	-	99,209	99,209	-	99,209	99,209	
Balance as at 31st March 2021	175,018	186,934	361,952	198,120	186,934	385,054	
Net book value at 31st March 2021	24,835	121,611	146,446	35,341	230,165	265,506	

Intangible assets include fully amortised software amounting to Rs. 147,975,983 for the company and Rs. 148,877,483 for the Group as at 31st March 2022 (Rs. 139,001,271 for Company and Rs. 139,902,771 for Group as at 31st March 2021), which are still in use as at the reporting date.

Impairment Tests for Goodwill
The Group undertakes an annual test for impairment, based on value in use computation using cash flow projections based on financial budgets approved by the senior management. The discount rate was estimated based on an average percentage of cost of equity of the company. Management believes that no reasonably possible change in any of the key assumptions would cause the carrying value of the units to exceed their recoverable amount.

There were no restrictions existed on the title of the intangible assets of the Group/Company as at the reporting date. Further, there were no items pledged as securities for liabilities. There were no capitalised borrowing costs related to the acquisition of intangible assets during the year 2021/22.

35.	Due to Banks
Accounting Policy
Due to banks include bank overdrafts and long term and short term loans obtained from banks. Subsequent to initial recognition, these are measured at their amortised cost using the EIR method. Amortised cost is calculated by taking into account any discount or premium on the issue and costs that are an integral part of the EIR. The EIR amortisation is included in ‘interest expenses’ in the Statement of Profit or Loss. Gains and losses are recognised in the Statement of Profit or Loss when the liabilities are derecognise as well as through the EIR amortisation process.

Company has not had any defaults of principal, interest or other breaches with regard to Due to Banks during 2021/22 or 2020/21.

As at 31st March	Company	Group	
	2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	

Overdrafts	
69,690	
716,374	
1,325,500	
891,879	
Short term loans	-	-	796,993	105,449	
Long term loans	6,432,218	-	7,930,444	2,283,609	
Asset backed securities	5,247,424	5,722,936	5,247,424	5,722,936	
Total	11,749,332	6,439,310	15,300,361	9,003,873	
Fair value	11,750,052	6,936,408	15,389,574	9,739,721	

35.1	Movement of Due to Banks

As at 31st March	Company	Group	
	2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	

Balance as at 1 April	
5,722,936	
7,938,185	
8,111,994	
10,978,046	
Amount borrowed during the year	7,000,000	1,000,000	7,250,000	1,500,000	
Repayments during the year	(1,946,889)	(3,886,355)	(2,504,664)	(5,315,691)	
Interest expenses during the year	903,595	671,106	1,117,531	949,639	
Subtotal	11,679,642	5,722,936	13,974,861	8,111,994	
Overdrafts	69,690	716,374	1,325,500	891,879	
Balance as at 31 March	11,749,332	6,439,310	15,300,361	9,003,873	

35. Due to Banks (Contd...)
35.2	Long Term Loan Details

Name of the borrower	

Granted date	Facility amount Rs. '000	

Period	
Interest Rate	
Security status	

Commercial Bank of Ceylon PLC	
14.07.2015	
2,000,000	
04 years	
7.25% - 10.5%	
Secured	
Commercial Bank of Ceylon PLC	08.09.2016	1,000,000	04 years	14.00%	Secured	
Sampath Bank PLC	31.12.2014	2,000,000	05 years	7.00% - 8.5%	Secured	
Axis Bank	27.03.2017	150,000	04 years	AWPLR+1.25%	Secured	
Axis Bank	27.03.2017	250,000	04 years	AWPLR+1.25%	Secured	
People's Bank	26.05.2015	4,250,000	04 years	8.50%	Secured	
People's Bank	27.11.2015	2,000,000	04 years	10.00%	Secured	
People's Bank	15.03.2016	2,000,000	04 years	AWPLR+1.75%	Secured	
People's Bank	02.06.2016	2,500,000	04 years	06 month SLIBOR+1.75%	Secured	
Bank of Ceylon	07.07.2016	3,000,000	04 years	11.50%	Secured	
RAK Bank	27.04.2017	5,355,000	03 years	13.50%	Secured	
MCB Bank	26.09.2017	500,000	04 years	AWPLR+1.5%	Secured	
Commercial Bank of Ceylon PLC	11.11.2021	3,000,000	03 years	9.25%	Secured	
Hatton National Bank PLC	16.11.2021	4,000,000	03 years	AWPLR + 0.5%	Secured	

Asset Backed Securities

Name of the borrower	

Granted date	Facility amount Rs. '000	

Period	
Interest Rate *	
Security status	

Bank of Ceylon	
30.09.2016	
2,146,200	
04 years	
13.81%	
Secured	
Deutsche Bank PLC	03.07.2015	3,000,000	04 years	8.82%	Secured	
Deutsche Bank PLC	28.10.2016	1,769,900	04 years	14.47%	Secured	
Deutsche Bank PLC	25.02.2016	4,250,700	04 years	11.75%	Secured	
Hatton National Bank PLC	29.06.2018	2,000,000	05 years	12.27%	Secured	
Hatton National Bank PLC	13.03.2019	2,000,000	05 years	13.08%	Secured	
People's Bank	18.08.2016	3,000,000	04 years	13.32%	Secured	
People's Bank	09.02.2018	1,000,000	02 years	11.71%	Secured	
People's Bank	10.09.2018	2,000,000	02 years	13.15%	Secured	
People's Bank	23.05.2019	1,000,000	03 years	11.16%	Secured	

*	The interest rate for each securitization is given as the weighted average interest rate

Details of the securities disclosed in Note 54 - ‘Asset pledged’ on page 308 to the Financial Statements.

35.3	Contractual Maturity Analysis
35.3.1	Remaining Contractual Maturity Analysis of Due to Bank -Company

As at 31st March 2022	Within one
year Rs. '000	
1-5 years
Rs. '000	
Over 5 years
Rs. '000	
Total Rs. '000	

Overdrafts	
69,690	
-	
-	
69,690	
Long term loans	2,353,092	4,079,126	-	6,432,218	
Asset backed securities	3,111,337	2,136,087	-	5,247,424	
Total	5,534,119	6,215,213	-	11,749,332	

As at 31st March 2021	Within one
year Rs. '000	
1-5 years
Rs. '000	
Over 5 years
Rs. '000	
Total Rs. '000	

Overdrafts	
716,374	
-	
-	
716,374	
Asset backed securities	2,249,108	3,473,828	-	5,722,936	
Total	2,965,482	3,473,828	-	6,439,310	

35.3.2	Remaining Contractual Maturity Analysis of Due to Bank -Group

As at 31st March 2022	Within one
year Rs. '000	
1-5 years
Rs. '000	
Over 5 years
Rs. '000	
Total Rs. '000	

Overdrafts	
1,325,500	
-	
-	
1,325,500	
Short term loans	796,993	-	-	796,993	
Long term loans	3,113,993	4,816,451	-	7,930,444	
Asset backed securities	3,111,337	2,136,087	-	5,247,424	
Total	8,347,823	6,952,538	-	15,300,361	

As at 31st March 2021	Within one
year Rs. '000	
1-5 years
Rs. '000	
Over 5 years
Rs. '000	
Total Rs. '000	

Overdrafts	
891,879	
-	
-	
891,879	
Short term loans	105,449	-	-	105,449	
Long term loans	936,819	1,346,790	-	2,283,609	
Asset backed securities	2,249,108	3,473,828	-	5,722,936	
Total	4,183,255	4,820,618	-	9,003,873	

36.	Due to Customers
Accounting Policy
Due to customers include fixed deposits and savings deposits. Subsequent to initial recognition, these are measured at their amortised cost using the Effective Interest Rate (EIR) method. Amortised cost is calculated by taking into account any discount or premium on the issue and costs that are an integral part of the EIR. The EIR amortisation is included in ‘interest expenses’ in the Statement of Profit or Loss. Gains and losses are recognised in the Statement of Profit or Loss when the liabilities are derecognised.

Deposits of 8.0 billion (2020/21 Rs. 8.1 billion) held as collateral for Loans against deposits were included in Due to customers.

In compliance with the Finance Companies (Insurance of Deposit Liabilities) Direction No. 02 of 2010 all the eligible deposit liabilities have been insured with the Sri Lanka Deposit Insurance and Liquidity Support Scheme, as a safety net measure that will safeguard customer rights and confidence. The company has paid Rs. 148.67 Mn as the premium for the above insurance scheme during the year. (2020/21 -151.87 Mn).

36.	Due to Customers (Contd...)

As at 31st March	Company	Group	
	2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	

Fixed Deposits	
95,145,802	
92,999,765	
103,375,767	
95,378,121	
Savings Deposits	8,222,102	8,503,166	8,077,983	8,365,595	
Total	103,367,904	101,502,931	111,453,750	103,743,716	
Fair value	102,854,237	102,019,672	110,876,896	104,256,546	

36.1	Remaining Contractual Maturity Analysis of Due to Customers - Company

As at 31st March	2022	
	Within one
year Rs. '000	
1-5 years
Rs. '000	
Over 5 years
Rs. '000	
Total Rs. '000	

Fixed Deposits	
78,112,290	
17,033,512	
-	
95,145,802	
Savings Deposits	7,973,377	75,044	173,681	8,222,102	
Total	86,085,667	17,108,556	173,681	103,367,904	

As at 31st March	2021	
	Within one
year Rs. '000	
1-5 years
Rs. '000	
Over 5 years
Rs. '000	
Total Rs. '000	

Fixed Deposits	
74,108,732	
18,891,033	
-	
92,999,765	
Savings Deposits	8,288,671	50,466	164,029	8,503,166	
Total	82,397,403	18,941,499	164,029	101,502,931	

36.2	Remaining Contractual Maturity Analysis of Due to Customers - Group

As at 31st March	2022	
	Within one
year Rs. '000	
1-5 years
Rs. '000	
Over 5 years
Rs. '000	
Total Rs. '000	

Fixed Deposits	
86,149,370	
17,226,397	
-	
103,375,767	
Savings Deposits	7,829,258	75,044	173,681	8,077,983	
Total	93,978,628	17,301,441	173,681	111,453,750	

As at 31st March	2021	
	Within one
year Rs. '000	
1-5 years
Rs. '000	
Over 5 years
Rs. '000	
Total Rs. '000	

Fixed Deposits	
76,487,088	
18,891,033	
-	
95,378,121	
Savings Deposits	8,151,100	50,466	164,029	8,365,595	
Total	84,638,188	18,941,499	164,029	103,743,716	

37.	Debt Securities Issued
Accounting Policy
Debt Securities issued represent the funds borrowed by the Company and Group for long term and short term liquidity fund requirements. Subsequent to initial recognition, these are measured at their amortised cost using the EIR method. Amortised cost is calculated by taking into account any discount or premium on the issue and costs that are an integral part of the EIR. The EIR amortisation is included in ‘interest expenses’ in the Statement of Profit or Loss. Gains and losses are recognised in the Statement of Profit or Loss when the liabilities are derecognised.

As at 31st March	Company	Group	
	2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	

Listed Debentures	
17,244,313	
13,825,553	
17,103,223	
13,684,516	
Total	17,244,313	13,825,553	17,103,223	13,684,516	
Fair value	16,266,084	14,675,439	16,124,318	14,522,493	

37.1	Movement of Debt Securities Issued

As at 31st March	Company	Group	
	2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	

Balance as at 1 April	
13,825,553	
18,479,260	
13,684,516	
18,338,039	
Amount borrowed during the year	10,000,000	-	10,000,000	-	
Redemption of debt securities issued	(6,798,610)	(4,500,657)	(6,798,610)	(4,500,657)	
Interest expenses on debt securities issued	1,875,532	1,935,761	1,859,429	1,916,991	
Interest paid on debt securities issued	(1,658,162)	(2,088,811)	(1,642,112)	(2,069,857)	
Balance as at 31 March	17,244,313	13,825,553	17,103,223	13,684,516	

37.2	Listed Debentures

	Company	Group	

Issued date	
Maturity date	Face value Rs. '000	Interest
rate	Repayment
term	
Type	2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	
Senior, unsecured, redeemable, 'AA(-) rated

16-Nov-2016	

16-Nov-2021	

6,798,610	

12.60%	

Semi Annually	

Type C	

-	

7,108,347	

-	

7,108,347	
18-Apr-2018	18-Apr-2022	704,600	12.40%	Annually	Type A	785,163	784,097	785,163	784,097	
18-Apr-2018	18-Apr-2023	5,295,400	12.80%	Annually	Type B	5,941,109	5,933,109	5,800,019	5,792,072	
5-Aug-2021	5-Aug-2024	2,942,940	8.00%	Annually	Type A	3,087,136	-	3,087,136	-	
5-Aug-2021	5-Aug-2024	2,419,929	8.00%	At Maturity	Type B	2,538,385	-	2,538,385	-	
5-Aug-2021	5-Aug-2026	4,272,360	9.00%	Annually	Type C	4,507,686	-	4,507,686	-	
5-Aug-2021	5-Aug-2026	364,766	9.00%	At Maturity	Type D	384,834	-	384,834	-	
		29,999,995				17,244,313	13,825,553	17,103,223	13,684,516	

37.	Debt Securities Issued (Contd...)
37.2.1 Utilisation of Funds Raised via Capital Market

Objective as per Prospectus	

Amount allocated as per Prospectus in Rs.'000	

Proposed date of utilisation as per Prospectus	

Amount allocated
from proceeds in Rs.'000 (A)	

% of total proceeds	

Amounts utilised in Rs.
(B)	

% of utilisation against allocation
(B/A)	Clarification if not fully utilised including where the funds are invested	
								
Issue of listed, senior, unsecured, redeemable, rated debentures during the year 2015/16	
The funds raised through this Debenture Issue will be utilized to finance working capital requirements to match the medium to long term lending
of PLC and to minimize the interest rate risk.	

6,000,000	

Within the next 12 months from the date of allotment	

6,000,000	

100	

6,000,000	

100	

N/A	

Issue of listed, senior, unsecured, redeemable, rated debentures during the year 2016/17	
The funds raised through this Debenture Issue will be utilized to finance the budgeted lending portfolio and working capital requirements	

8,000,000	

Within the next 12 months from the date of allotment	

8,000,000	

100	

8,000,000	

100	

N/A	

Issue of listed, senior, unsecured, redeemable, rated debentures during the year 2018/19	
The funds raised through this Debenture Issue utilized to repay the short term
facilities obtained to settle the debentures matured on the 26th March 2018 and for Company’s working capital requirements.	

6,000,000	

Within the next 12 months from the date of allotment	

6,000,000	

100	

6,000,000	

100	

N/A	

Issue of listed, senior, unsecured, redeemable, rated debentures during the year 2021/22	
The funds raised through the Debenture Issue will be utilised to expand the lending portfolio of the Company	

10,000,000	

within 06 months from the Date of Allotment	

10,000,000	

100	

10,000,000	

100	

N/A	

Remaining Contractual Maturity Analysis of Debt Security -Company

As at 31st March	2022	
	Within one
year Rs. '000	
1-5 years
Rs. '000	
Over 5 years
Rs. '000	
Total Rs. '000	

Listed Debentures	
1,977,853	
15,266,460	
-	
17,244,313	
Total	1,977,853	15,266,460	-	17,244,313	

As at 31st March	2021	
	Within one
year Rs. '000	
1-5 years
Rs. '000	
Over 5 years
Rs. '000	
Total Rs. '000	

Listed Debentures	
7,835,316	
5,990,237	
-	
13,825,553	
Total	7,835,316	5,990,237	-	13,825,553	

Remaining Contractual Maturity Analysis of Debt Security -Group

As at 31st March	2022	
	Within one
year Rs. '000	
1-5 years
Rs. '000	
Over 5 years
Rs. '000	
Total Rs. '000	

Listed Debentures	
1,962,543	
15,140,680	
-	
17,103,223	
Total	1,962,543	15,140,680	-	17,103,223	

As at 31st March	2021	
	Within one
year Rs. '000	
1-5 years
Rs. '000	
Over 5 years
Rs. '000	
Total Rs. '000	

Listed Debentures	
7,820,059	
5,864,457	
-	
13,684,516	
Total	7,820,059	5,864,457	-	13,684,516	

38.	Other Financial Liabilities
Accounting Policy
Other financial liabilities includes amount payable to suppliers, insurance payable, dividend payable and other payables.These liabilities are non interest bearing and recorded at amounts expected to be payable as at the reporting date.

All other financial liabilities are recognised initially at fair value and Subsequently measured at amortised cost.

Amount Payable to Suppliers
Amount payable to suppliers includes obligation to pay for vehicle suppliiers in the ordinary course of business.

Insurance payable
Insurance payable includes premium amount payble to insurance companies in relation to vehicles.

As at 31st March	Company	Group	
	2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	

Amount payable to suppliers	
2,181,519	
2,923,794	
2,243,619	
2,981,030	
Insurance payable	609,130	619,168	-	-	
Other payables	845,879	589,148	1,799,703	1,130,205	
Total	3,636,528	4,132,110	4,043,322	4,111,235	

39.	Insurance Liabilities and Reinsurance Payable
Accounting Policy
Provision for Net Unearned Premium
Provision for unearned premiums represents premiums received for risks that have not yet expired. Generally, the reserve is released over  the term of the contract and is recognised as premium income. At each reporting date, the Group reviews its unexpired risk and a liability adequacy test is performed to determine whether there is any overall excess of expected claims and deferred acquisition costs over unearned premiums. This calculation uses current estimates of future contractual cash flows after taking account of the investment return expected
to arise on assets relating to the relevant non-life insurance technical provisions. If these estimates show that the carrying amount of the unearned premiums is inadequate, the deficiency is recognised in the statement of profit or loss by setting up a provision for liability adequacy.

As required by SLFRS 4 - Insurance Contracts, the Group performs a liability adequacy test (LAT) in respect of non-life contract liabilities with the assistance of an external actuary.

Provision for Gross Outstanding Claims
Non-life insurance contract liabilities are recognised when contracts are entered into and premiums are charged. These liabilities are known as the outstanding claims provision, which are based on the estimated ultimate cost of all claims incurred but not settled at the reporting date, whether reported or not, together with related claims handling costs and reduction for the expected value of salvage and other recoveries.

The liability is not discounted for the time value of money. No provision for equalisation or catastrophe reserves is recognised. The liabilities are de-recognised when the contract expires, is discharged or is cancelled.

Provision for Gross Incurred but not Reported Claims
Delays can be experienced in the notification and settlement of certain types of claims, therefore the ultimate cost of these cannot be known with certainty at the reporting date. The liability is calculated at the reporting date using a range of standard actuarial claim projection techniques, based on empirical data and current assumptions that may include a margin for adverse deviation.

For non-life insurance contracts, estimates have to be made both for the expected ultimate cost of claims reported at the reporting date and for the expected ultimate cost of claims incurred but not yet reported (IBNR) at the reporting date. It can take a significant period of time before the ultimate claims cost can be established with certainty and for some type of policies, IBNR claims form the majority of the liability in the statement of financial position.

The ultimate cost of outstanding claims is estimated by using a range of standard actuarial claims projection techniques, such as Chain Ladder method, Bornheutter-Ferguson method and Frequency/Severity method.

The main assumption underlying these techniques is that a company’s past claims development experience can be used to project future claims development and hence ultimate claims costs. As such, these methods extrapolate the development of paid and incurred losses, average costs per claim and claim numbers based on the observed development of earlier years and expected loss ratios. Historical claims development is mainly analysed by accident years, but can also be further analysed by geographical area, as well as by significant business lines and claim types. Large claims are usually separately addressed, either by being reserved at the face value of loss adjuster estimates or separately projected in order to reflect their future development. In most cases, no explicit assumptions are made regarding future rates of claims inflation or loss ratios. Instead, the assumptions used are those implicit in the historical claims development data on which the projections are based.

Additional qualitative judgment is used to assess the extent to which past trends may not apply in future, (for example to reflect one-off occurrences, changes in external or market factors such as public attitudes to claiming, economic conditions, levels of claims inflation, judicial decisions and legislation, as well as internal factors such as portfolio mix, policy features and claims handling procedures) in order to arrive at the estimated ultimate cost of claims that present the likely outcome from the range of possible outcomes, taking account of all the uncertainties involved.

Similar judgments, estimates and assumptions are employed in the assessment of adequacy of provisions for unearned premium.

Insurance Contract Liabilities
Non-life Insurance Contract Liabilities
Non-life insurance contract liabilities are recognised when contracts are entered and premiums are charged. These liabilities are known as the outstanding claims provision, which are based on the estimated ultimate cost of all claims incurred but not settled at the reporting date, whether reported or not, together with related claims handling costs and reduction for the expected value of salvage and other recoveries. Delays can be experienced in the notification and settlement of certain types of claims, therefore the ultimate cost of these cannot be known with certainty at the reporting date. The liability is calculated at the reporting date using a range of standard actuarial claim projection techniques. The liability is not discounted for the time value of money. No provision for equalization or catastrophe reserves is recognised. The liabilities are derecognized when the contract expires, is discharged or is canceled.

The provision for unearned premiums represents premiums received for risks that have not yet expired. Generally, the reserve is released over the term of the contract and is recognised as premium income. At each reporting date, the Group reviews its unexpired risk and a liability adequacy test is performed to determine whether there is any overall excess of expected claims and deferred acquisition costs over unearned premiums. This calculation uses current estimates of future contractual cash flows after taking account of the investment return expected to
arise on assets relating to the relevant non-life insurance technical provisions. If these estimates show that the carrying amount of the unearned premiums is inadequate, the deficiency is recognized in the statement of income by setting up a provision for liability adequacy.
De-recognition of Insurance Payable

Insurance payables are derecognised when the obligation under the liability is discharged, canceled or expired.

Unexpired Risk Reserve
The calculation of premium liability requires a comparison between the Company’s held unearned premium reserves less deferred acquisition cost with the expected amount decided based on the significant management judgment. In estimating the unexpired risk liability, assumptions are made on the expected net claim ratio for each of business and claim management expenses incurred whilst these policies remain exposed for claims.

Non-life Insurance Contract Liabilities
For non-life insurance contracts, estimates have to be made both for the expected ultimate cost of claims reported at the reporting date and for the expected ultimate cost of claims incurred but not yet reported at the reporting date (IBNR). It can take a significant period of time before the ultimate claims cost can be established with certainty and for some type of policies.

The ultimate cost of outstanding claims is estimated by using a range of standard actuarial claims projection techniques, such as Chain Ladder and Bornheutter- Ferguson methods and frequency/severity method.

The main assumption underlying these techniques is that a company’s past claims development experience can be used to project future claims development and hence ultimate claims costs. As such, these methods extrapolate the development of paid and incurred losses, average costs per claim and claim numbers based on the observed development of earlier years and expected loss ratios. Historical claims development is mainly analysed by accident periods and significant business lines, but can also be further analysed by geographical area and claim types. Large claims may be separately addressed, either by being reserved at the face value of loss adjuster estimates or separately projected in  order to reflect their future development. In most cases, no explicit assumptions are made regarding future rates of claims inflation or loss ratios. Instead, the assumptions used are those implicit in the historical claims development data on which the projections are based.
Additional qualitative judgment is used to assess the extent to which past trends may not apply in future, (for example to reflect one-off occurrences, changes in external or market factors such as public attitudes to claiming, economic conditions, levels of claims inflation, judicial decisions and legislation, as well as internal factors such as portfolio mix, policy features and claims handling procedures) in order to arrive at the estimated ultimate cost of claims that present the likely outcome from the range of possible outcomes, taking account of all the uncertainties involved.

Similar judgments, estimates and assumptions are employed in the assessment of adequacy of provisions for unearned premium. Judgment is also required in determining whether the pattern of insurance service provided by a contract requires amortisation of unearned premium on a basis other than time apportionment.

All general insurance contracts are subject to a Liability Adequacy Test (LAT). The LAT was carried out by M/s. NMG Financial Services Consulting Pte Limited, Singapore.

Reinsurance liabilities represent balances due to insurance companies. Reinsurance assets or liabilities are de-recognised when the contractual rights are extinguished or expire or when the contract is transferred to another party.

39.	Insurance Liabilities and Reinsurance Payable (Contd...)

As at 31st March	

Note	
Page No.	Company	Group	
			2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	

Insurance Liabilities	
39.1	
292	
-	
-	
5,314,549	
4,717,294	
Reinsurance payables			-	-	588,814	298,591	
Total			-	-	5,903,363	5,015,885	

39.1 Insurance Liabilities

As at 31st March	Company	Group	
	2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	

Insurance Liabilities	
-	
-	
1,652,891	
1,207,374	
Reinsurance payables	-	-	3,661,658	3,509,920	
Total	-	-	5,314,549	4,717,294	

40.	Operating Lease Liabilities
Accounting Policy
The Company recognises lease liabilities measured at present value of lease payments to be made over the lease term at the commencement date of the lease, .In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments.

The Group applied modified retrospective approach in accordance with SLFRS 16 when adopting the standards and used 12.62% as a weighted average incremental borrowing rate in order to record the right of use assets and operating lease liabilities (2021 - 12.45%).

As at 31st March	Company	Group	
	2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	

Balance as at 1st April	
2,286,386	
1,909,098	
1,614,660	
1,594,245	
Additions/renewal of operating lease agreements during the year	239,437	858,510	238,105	292,305	
Accretion of interest	250,137	228,985	170,465	191,935	
Payments to lease creditors	(667,068)	(655,969)	(385,273)	(409,587)	
Expiration of operating lease agreements during the year	(49,842)	(54,238)	(49,842)	(54,238)	
Balance as at 31st March	2,059,050	2,286,386	1,588,115	1,614,660	

Sensitivity Analysis of Lease Liability
The impact arising from the possible changes in the incremental borrowing rate on the lease liability disclosed in Risk Management Disclosure 56.4.1.

Remaining Contractual Maturity Analysis of Lease Liability

Company
As at 31st March	2022	
	Within one
year Rs. '000	
1-5 years
Rs. '000	
Over 5 years
Rs. '000	
Total Rs. '000	

Lease Liability	
440,316	
1,407,356	
211,378	
2,059,050	
	440,316	1,407,356	211,378	2,059,050	

Group
As at 31st March	2022	
	Within one
year Rs. '000	
1-5 years
Rs. '000	
Over 5 years
Rs. '000	
Total Rs. '000	

Lease Liability	
117,807	
1,267,240	
203,068	
1,588,115	
	117,807	1,267,240	203,068	1,588,115	

Company
As at 31st March	2021	
	Within one
year Rs. '000	
1-5 years
Rs. '000	
Over 5 years
Rs. '000	
Total Rs. '000	

Lease Liability	
404,863	
1,509,462	
372,061	
2,286,386	
	404,863	1,509,462	372,061	2,286,386	

Group
As at 31st March	2021	
	Within one
year Rs. '000	
1-5 years
Rs. '000	
Over 5 years
Rs. '000	
Total Rs. '000	

Lease Liability		
	236,268	1,038,946	339,446	1,614,660	
	236,268	1,038,946	339,446	1,614,660	

 GRI | 207-1, 207-2, 207-4 
41.	Current Tax Liabilities
Accounting Policy
The Group and Company is subject to income taxes and other taxes including VAT and NBT on financial services. Significant judgment is required to determine the total provision for current, deferred and other taxes. Uncertainties exist, with respect to the interpretation of the applicability of tax laws, at the time of the preparation of these financial statements.

The Group and Company recognized assets and liabilities for current deferred and other taxes based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters are different from the amounts that were initially recorded, such differences will impact the income, deferred tax amounts in the period in which the determination is made.

As at 31st March	Company	Group	
	2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	

Current tax payable	
1,851,676	
362,450	
2,098,784	
883,900	
Total	1,851,676	362,450	2,098,784	883,900	

41.	Current Tax Liabilities (Contd...)
41.1	Current Tax Liability

As at 31st March	Company	Group	
	2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	

Balance as at 1st April	
362,450	
1,803,309	
883,900	
2,077,418	
Provision for the year	2,712,280	1,999,971	3,221,561	2,601,140	
Under/(Over) provision in respect of previous year	(47,744)	(90,892)	(47,744)	(95,886)	
Payment of income tax	(1,175,310)	(3,349,938)	(1,958,933)	(3,534,648)	
Tax credits(*)	-	-	-	-	
Economic Service Charge	-	-	-	(164,124)	
Balance as at 31st March	1,851,676	362,450	2,098,784	883,900	

41.2	Economic Service Charge (ESC)
As per the provisions of the Economic Service Charge (ESC) Act No. 13 of 2006, and subsequent amendments thereto, the ESC is payable at 0.5% on “Exempt Turnover” and is deductible from the income tax payments. Unclaimed ESC, if any, can be carried forward and set-off against the income tax payable in the three subsequent years. As per Notice published dated January 1, 2020 by the Department of Inland Revenue, ESC was abolished with effect from January 01, 2020.

41.3	Withholding Tax (wht) on Fixed Deposits and Saving Accounts
As per Section 137 of the Inland Revenue Act No. 10 of 2006 and amendments thereto, a company made Fixed Deposit and Savings Accounts interest income on which WHT had been deducted at 10% per annum at the time of payment or credited to the account. This tax deduction can be claimed as tax credit to the income tax payments. As per Section 84 of the Inland Revenue Act No. 24 of 2017, WHT on interest or discount paid to a person rate was reduced to 5% with effect from 1 April 2018. As per Notice dated February 18, 2020 published by the Department of Inland Revenue, requirement to deduct WHT has been removed effective January 1, 2020.

42.	Other Liabilities
Accounting Policy
Other liabilities include VAT on financial services payable,Value Added Tax (VAT) payable, other tax payable and other payable. These Non- Financial Liabilities should be measured at amounts that would rationally be paid to settle the present obligation or amount to transfer it to a third party on the balance sheet date.

As at 31st March	Company	Group	
	2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	

VAT on financial services Payable	
428,150	
351,885	
441,687	
367,928	
Value Added Tax (VAT) payable	6,985	19,590	51,216	61,394	
W.H.T. Payable	-	7,192	178	7,370	
Crop Insurance Levy Payable	13,595	18,372	13,595	16,132	
Amount payable to customers	498,011	320,699	498,650	321,655	
Stamp Duty Payable	62,106	61,790	64,546	64,295	
Other Payable	360,207	289,593	329,158	318,048	
Total	1,369,054	1,069,121	1,399,030	1,156,822	

43.	Retirement Benefit Obligation
Employee Benefits
Retirement Benefit Obligation - Gratuity
The Group/Company measures the present value of the promised retirement benefits for gratuity, which is a retirement benefit plan with the advice of an independent professional actuary using the ‘Projected Unit Credit method’ (PUC) as required by the Sri Lanka Accounting Standard- LKAS 19 - ‘Employee Benefits’.

The Retirement Benefit Plan of the Company was amended due to the increase in retirement age enacted by the Minimum Retirement Age of Workers Act No. 28 of 2021.

Recognition of Actuarial Gains and Losses
The Group/Company recognises the total actuarial gains and losses that arise in calculating the Company’s obligation in respect of the plan in Statement of Comprehensive Income during the period in which it occurs.

Funding Arrangements
The gratuity liability is not externally funded.

Defined Contribution Plans -Employees’ Provident Fund & Defined Contribution Plans - Employees’ Trust Fund
A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity (a fund) and will have no legal or constructive obligation to pay further contributions if the fund does not hold sufficient assets to pay all employee benefits relating to employee services in the current and prior periods as defined in the Sri Lanka Accounting Standard - LKAS 19 (Employee Benefits)

The contribution payable to a defined contribution plan is in proportion to the services rendered to the Company by the employees and is recorded as an expense when they become due. Unpaid contributions are recorded as a liability.

The Group/Company and employees contribute to the Employees’ Provident Fund managed by the Central Bank of Sri Lanka at 12% and 8% respectively on the gross salary of each employee.

The Group/Company contributes to the Employees’ Trust Fund at 3% on the gross salary of each employee.

Retirement Benefit Obligation
The cost of the retirement benefit obligation is determined using actuarial valuation. The actuarial valuation involves making assumptions about discount rates, expected rates of return on assets, future salary increases, mortality rates and future gratuity increases. Due to the long term nature of such obligation, these estimates are subjected to significant uncertainty. All assumptions are reviewed at each reporting date.
The cost of the retirement benefit obligation is determined using actuarial valuation. The actuarial valuation involves making assumptions about discount rates, expected rates of return on assets, future salary increases, mortality rates and future gratuity increases. Due to the long term nature of such obligation, these estimates are subjected to significant uncertainty. All assumptions are reviewed at each reporting date.

As at 31st March	

Note	
Page No.	Company	Group	
			2021/22
Rs. '000	2020/21
Rs. '000	2021/22
Rs. '000	2020/21
Rs. '000	

Balance as at 01st April			
587,257	
592,871	
657,778	
647,929	
Amount recognise in Statement of Profit or Loss	43.1	295	82,893	111,742	102,203	129,888	
Amount recognise in Statement of Comprehensive Income	43.2	296	31,732	(107,003)	28,272	(106,891)	
Benefits paid during the year			(33,471)	(10,353)	(39,309)	(13,148)	
Balance as at 31st March			668,411	587,257	748,944	657,778	

43.1	Amount recognise in Statement of Profit or Loss

As at 31st March	Company	Group	
	2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	

Past service cost	
(20,736)	
-	
(23,590)	
-	
Current service cost	57,412	52,455	94,744	69,823	
Net interest on the net defined benefit liability	46,217	59,287	51,785	60,065	
Total amount recognised in Statement of Profit or Loss	82,893	111,742	102,203	129,888	

43. Retirement Benefit Obligation (Contd...)
43.2	Amount recognise in Statement of Comprehensive Income

As at 31st March	Company	Group	
	2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	

Losses/(Gains) due to changes in assumptions	
9,555	
(38,363)	
22	
(42,779)	
Experience Losses/(Gains) arising during the year	22,177	(68,640)	28,250	(64,112)	
Total actuarial (losses)/gain recognised in Statement of Comprehensive Income	
31,732	
(107,003)	
28,272	
(106,891)	

An actuarial valuation of the retirement benefit obligation was carried out as at 31 March 2022 by Messrs Actuarial & Management Consultants (Private) Limited, a firm of professional actuaries (31 March 2021 by Messrs Actuarial & Management Consultants (Private) Limited. The valuation method used by the actuaries to value the liability is the ‘Projected Unit Credit (PUC), the method recommended by the Sri Lanka Accounting Standard, LKAS 19 - ‘Employee Benefits’.

As at 31st March	2022	2021	

Company /Group Actuarial assumptions
Discount rate	

15.00%	

7.87%	
Future salary increment rate	13.00%	6.00%	
Mortality	A1967/70 ultimate mortality	A1967/70 ultimate mortality	
Disability	Standard RI rates		
Retirement age	60 Years	55 Years	

Expected average working life of the active participants is 8.58 years for the year ended 31st March 2022 (10.68 - 2021).

43.3	Sensitivity of Assumptions Employed in Actuarial Valuation
The following table demonstrates the sensitivity to a reasonably possible change in the key assumptions employed with all other variables held constant in the employment benefit liability measures.

The sensitivity of the Statement of Comprehensive Income and the Statement of Financial Position is the effect of the assumed changes in discount rate & salary increment rate on the employment benefit obligation for the year.

		2022	2021	
		Effect on Statement of Comprehensive
Income increase/ (reduction)
in results for the
year Rs. '000	
Effect on employee benefit obligation increase/
(reduction) in the liability
Rs. '000	Effect on Statement of Comprehensive
Income increase/ (reduction)
in results for the
year Rs. '000	
Effect on employee benefit obligation increase/
(reduction) in the liability
Rs. '000	

Increase/ (decrease) in discount rate	

1%	

46,958	

(46,958)	

37,667	

(37,667)	
	-1%	(53,552)	53,552	(42,606)	42,606	

Increase/ (decrease) in salary Increment	

1%	

(53,830)	

53,830	

(42,735)	

42,735	
	-1%	47,935	(47,935)	38,416	(38,416)	

43.4	Analysis of Retirment Benefit Obligation by Maturity Profile
Following note analysed the defined benefit obligation by expected future working life time of each individual employee. The expected future working life considers the probability of an exit due to withdrawal, death or disability prior to retirement date.

As at 31st March	Company	Group	
	2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	

Within the next 12 months	
54,921	
90,630	
62,636	
92,778	
Between 1-5 years	246,811	197,715	275,960	223,127	
Beyond 5 years	366,679	298,912	410,348	341,873	
Total	668,411	587,257	748,944	657,778	

 GRI | 207-1, 207-2, 207-4 
44.	Deferred Tax Liabilities / (Assets)
Accounting Policy
Deferred tax is provided on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred tax liabilities are recognised for all taxable temporary differences, except:

●	Where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and
●	In respect of taxable temporary differences associated with investments in subsidiaries, where the timing of the reversal of the
temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future

Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised except:

●	Where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and
●	In respect of deductible temporary differences associated with investments in subsidiaries, deferred tax assets are recognised only
to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
Current tax and deferred tax relating to items recognised directly in equity are also recognised in equity and not in the Statement of Profit or Loss. Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax
liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

As at 31st March	Company	Group	
	2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	

Recognised under assets	
(1,146,726)	
(415,841)	
(1,444,813)	
(594,495)	
Recognised under liabilities	-	-	323,621	297,568	
Deferred tax liability/(Asset)	(1,146,726)	(415,841)	(1,121,192)	(296,927)	

Net deferred tax assets/liabilities of one entity cannot set-off against another entity’s assets/liabilities since there is no legally enforceable right to set-off. Therefore net deferred tax assets and liabilities of deferent entities are separately recognised in the Statement of Financial Position.

44.	Deferred Tax Liabilities / (Assets) (Contd...)
44.1 Movement in Deferred Tax

	Company	Group	
	2021/22
Rs. '000	2020/21
Rs. '000	2021/22
Rs. '000	2020/21
Rs. '000	

Balance as at 01st April	
(415,841)	
(376,291)	
(296,924)	
(53,709)	
Charge for the year	(673,452)	(69,511)	(766,656)	(270,905)	
Deferred Tax charge relating to components of Statement of Comprehensive Income	
(57,433)	
29,961	
(57,612)	
27,690	
Balance as at 31st March	(1,146,726)	(415,841)	(1,121,192)	(296,924)	

As at 31st March 2022	Company	Group	

Deferred Tax Assets Rs. '000	
Deferred
Tax Liabilities Rs. '000	
Statement of Profit or
Loss Rs. '000	Statement
of Comprehensive
Income Rs. '000	
Statement of Changes in Equity Rs. '000	

Deferred Tax Assets Rs. '000	
Deferred
Tax Liabilities Rs. '000	
Statement of Profit or
Loss Rs. '000	Statement
of Comprehensive
Income Rs. '000	
Statement of Changes in Equity Rs. '000	

Retirement benefit obligation	
127,122	
-	
39,501	
(7,616)	
(7,616)	
242,236	
-	
(234,413)	
(7,795 )	
(7,795 )	
Carry forward tax losses	-	-	-	-	-	-	-	171,164	-	-	
Impairment allowances for loan receivables	
1,936,823	
787,070	
178,514	
-	
-	
2,127,250	
787,071	
306,055	
-	
-	
Deffered tax on transitional Adjustment	
214,911	
-	
-	
-	
-	
214,911	
-	
13,512	
-	
-	
Accelerated depreciation allowance for tax purpose (Lease)	

-	

382,094	

(862,128)	

-	

-	

-	

382,094	

(862,128)	

-	

-	
Accelerated depreciation allowance for tax purpose (PPE)	

-	

26,322	

(6,363)	

-	

-	

-	

201,939	

(22,111)	

-	

-	
Deferred Tax on SLFRS 16	49,677	36,138	(22,976)	-	-	49,677	36,138	(59,114)	-	-	
Deferred Tax on FVOCI	49,817	-	-	(49,817)	(49,817)	49,817	-	-	(49,817)	(49,817)	
Fair value gains/losses - investment property	
-	
-	
-	
-	
-	
-	
155,457	
(79,621)	
-	
-	
	2,378,350	1,231,624	(673,452)	(57,433)	(57,433)	2,683,891	1,562,699	(766,656)	(57,612)	(57,612)	

Deferred tax effect on Profit or Loss and Other Comprehensive Income for
the year			

(673,452)	

(57,433)				

(766,656)	

(57,612)		
Recognised under equity					(57,433)					(57,612)	
Recognised under assets		(1,146,726)					(1,444,813)				
Recognised under liabilities		-					323,621				
Net deferred tax liability/ (assets) as at 31 March		
(1,146,726)					
(1,121,192)				

As at 31st March 2021	Company	Group	

Deferred Tax Assets Rs. '000	
Deferred
Tax Liabilities Rs. '000	
Statement of Profit or
Loss Rs. '000	Statement
of Comprehensive
Income Rs. '000	
Statement of Changes in Equity Rs. '000	

Deferred Tax Assets Rs. '000	
Deferred
Tax Liabilities Rs. '000	
Statement of Profit or
Loss Rs. '000	Statement
of Comprehensive
Income Rs. '000	
Statement of Changes in Equity Rs. '000	

Retirement benefit obligation	

166,597	

-	

(30,564)	

29,961	

29,961	

171,164	

-	

18,973	

27,690	

27,690	
Carry forward tax losses	-	-	-	-	-	-	-	268	-	-	
Impairment allowances for loan receivables	
1,786,426	
465,774	
172,933	
-	
-	
2,078,889	
465,774	
59,002	
-	
-	
Deffered tax on transitional Adjustment	
214,911	
-	
35,818	
-	
250,729	
228,423	
-	
38,071	
-	
-	
Accelerated depreciation allowance for tax purpose (Lease)	

-	

1,244,197	

(243,171)	

-	

-	

-	

1,244,197	

(243,171)	

-	

-	
Accelerated depreciation allowance for tax purpose (PPE)	

-	

32,685	

28,197	

-	

-	

-	

224,050	

92,393	

-	

-	
Deferred Tax on SLFRS 16	26,701	36,138	(32,724)	-	-	26,701	36,138	(37,787)	-	-	
Fair value gains/losses - investment property	
-	
-	
-	
-	
-	
51,899	
289,990	
(198,654)	
-	
-	
	2,194,635	1,778,794	(69,511)	29,961	280,690	2,557,076	2,260,149	(270,905)	27,690	27,690	

Deferred tax effect on Profit or Loss and Other
Comprehensive Income for the year			

(69,511)	

29,961				

(270,905)	

27,690		
Recognised under equity					280,690					27,690	
Recognised under assets		(415,841)					(594,495)				
Recognised under liabilities		-					297,568				
Net deferred tax liability as at 31 March		
(415,841)					
(296,927)				

Deferred tax assets/liabilities have been calculated at the rate specific to each company.

45.	Stated Capital
Capital
The Company maintains an actively managed capital base to cover risks inherent in the business and is meeting the capital adequacy requirements of the Central Bank of Sri lanka. The adequacy of the Company’s capital is monitored using, among other measures, the rules and ratios established by the Central Bank of Sri lanka .

The Company manages its capital structure and makes adjustments to it according to changes in economic conditions and the risk characteristics of its activities. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividend payment to shareholders, return capital to shareholders or issue capital securities.

Capital management
The primary objectives of the Company’s capital management policy are to ensure that the Company complies with externally imposed capital requirements and maintains strong credit ratings and healthy capital ratios in order to support its business and to maximise shareholder value.

45.	Stated Capital (Contd...)

	Company/Group 2022	Company/Group 2021	
	Number	Rs. '000	Number	Rs. '000	

Balance as at 1 April	
1,704,602,760	
14,892,036	
1,627,703,388	
13,915,414	
Scrip Dividend	182,592,242	2,179,925	76,899,372	976,622	
Balance as at 31 March	1,887,195,002	17,071,961	1,704,602,760	14,892,036	

Rights, Preferences and Restrictions of Classes of Capital
The ordinary shares of the Company are quoted in the Colombo Stock Exchange. The holders of ordinary shares have the right to receive dividend as declared from time to time and are entitled to one vote per share at the Annual General Meeting of the Company.

Regulatory Capital

As at 31st March	2022	2021	
	Actual Rs. '000	Required Rs. '000	Actual Rs. '000	Required Rs. '000	

Tier 1 Capital / Core capital	
36,445,056	
2,000,000	
33,109,148	
2,000,000	
Tier 1 Capital Ratio / Core capital ratio	18.76%	7.00%	17.72%	7.00%	
Total Capital Ratio / Total risk weighted capital ratio	19.67%	11.00%	18.58%	11.00%	

As per Finance Business Act Directions No 3 of 2018, regulatory capital consists of Tier 1 capital, which comprises stated capital, statutory reserved fund, retained earnings including current year profit, general & other reserves less goodwill, other intangible assets, other comprehensive income losses, shortfall of the cumulative impairment to total provisions and interest in suspense and 50% of investment in banking and financial companies.

Even though Finance Business Act Direction No. 2 of 2017 required every Licensed Finance Company to maintain minimum core capital at not less than Rs. 2.5 billion by 1 January 2021, through the letter dated 31 March 2020 issued by the Central Bank of Sri Lanka with the subject
of “Regulatory measures taken by the Central Bank of Sri Lanka to provide flexibility to Licensed Finance Companies to support business and individual affected by the outbreak of Coronavirus Disease (COVID-19)”, concessions were granted to defer the enhancement of minimum core capital requirement of Rs. 2.5 billion until 1 January 2022. Futher such letter has defer the maintenance of capital adequacy requirements which will be to meet the minimum capital requirements by 01.07.2020 and 01.07.2021 in terms of the Finance Business Act Direction No. 3 of 2018 – Capital Adequacy Requirements, until 01.07.2021 and 01.07.2022 respectively.

46.	Statutory Reserve Fund

	Company	Group	
	2021/22
Rs. '000	2020/21
Rs. '000	2021/22
Rs. '000	2020/21
Rs. '000	

Balance as at 1st April	
2,406,995	
2,205,344	
2,464,951	
2,235,077	
Transfer during the year	232,951	201,651	264,400	229,874	
Balance as at 31st March	2,639,946	2,406,995	2,729,351	2,464,951	

People’s Leasing & Finance PLC
According to the Paragraph 3 (a) of Finance Companies (Capital Funds) Direction No.1 of 2003, every finance company shall maintain reserve fund and as per Paragraph 3 (b) (i) of the said direction, so long the capital funds are not less than twenty five (25) per cent of total deposit liabilities, a sum equal to not less than five (5) per cent of the net profits shall be transferred to reserve fund each year.

Since the capital funds are not less than twenty five (25) per cent of total deposit liabilities, company has transferred five (5) per cent of the net profits to reserve fund.

Lankan Alliance Finance Limited
As per Financial regulation 1994, every Non-Banking Financial Institution is required to transfer at least 20% of it’s current years profit to the fund until such reserve fund equal to its paid up share capital and share premium (if any). In conformity with the above requirement the Company transferred 20% of net profit to statutory reserve before declaration of dividend.

47.	Retained Earnings

	Company	Group	
	2021/22
Rs. '000	2020/21
Rs. '000	2021/22
Rs. '000	2020/21
Rs. '000	

Balance as at 1st April	
17,159,777	
14,227,988	
20,682,106	
16,517,824	
Profit for the year	4,659,009	4,033,020	4,805,731	5,294,015	
Comprehensive income	25,701	77,042	29,340	76,763	
Transfers to reserves	(182,950)	(201,651)	(214,401)	(229,874)	
Transfers from reserves	-	-	-	-	
Dividend paid	(2,179,925)	(976,622)	(2,179,925)	(976,622)	
Balance as at 31st March	19,481,611	17,159,777	23,122,852	20,682,106	

48.	Other Reserves
Equity Reserves
The reserves recorded in equity (Statement of Comprehensive Income) on the Statement of Financial Position include;

●	The fair value reserve comprises the cumulative net change in fair value of financial assets measured at fair value through other comprehensive income (Refer Note 48.3 on page 302).
●	General reserve’ represents the amounts set aside by the Directors for general application. The purpose of setting up the General reserve is
to meet the potential future unknown liabilities.
●	Tax equalisation reserve’ comprises an amount set aside by the Directors to meet any tax liabilities that may arise in the future.
●	Revaluation reserve’ relates to revaluation adjustment of investment property transferred from property, plant and equipment.
●	Foreign currency translation reserve

As at the reporting date, the assets and liabilities of the Lankan Alliance Finance Limited a subsidiary of the Company was translated into the presentation currency (Sri Lankan Rupee) at the exchange rate ruling at the reporting date and the Statement of Profit or Loss and Statement of Other Comprehensive Income was translated at the average exchange rate for the period. The exchange differences arising on the translation of these Financial Statement is taken to foreign currency translation reserve through Statement of other comprehensive income (Refer Note
48.4 on page 302).

48.1	Current Year 2022

Note	

Page No.	Company	Group	
			Opening balance at 01-04-2021
Rs. '000	
Movement / transfers Rs. '000	Closing balance at 31-03-2022
Rs. '000	Opening balance at 01-04-2021
Rs. '000	
Movement / transfers Rs. '000	Closing balance at 31-03-2022
Rs. '000	

Fair value reserve	
48.3	
302	
(117,377)	
(257,831)	
(375,208)	
(121,517)	
(257,831)	
(379,348)	
Foreign currency translation reserve	48.4	302	-	-	-	542,836	733,623	1,276,459	
Total			(117,377)	(257,831)	(375,208)	421,319	475,792	897,111	

48.2	Previous Year 2021

Note	

Page No.	Company	Group	
			Opening balance at 01-04-2020
Rs. '000	
Movement / transfers Rs. '000	Closing balance at 31-03-2021
Rs. '000	Opening balance at 01-04-2020
Rs. '000	
Movement / transfers Rs. '000	Closing balance at 31-03-2021
Rs. '000	

Fair value reserve	
48.3	
302	
(102,114)	
(15,263)	
(117,377)	
(116,005)	
(5,512)	
(121,517)	
Foreign currency translation reserve	48.4	302	-	-	-	401,108	141,728	542,836	
Total			(102,114)	(15,263)	(117,377)	285,103	136,216	421,319	

48.	Other Reserves (Contd...)
48.3	Fair Value Reserve
The fair value reserve comprises the cumulative net change in fair value of financial assets measured at fair value through other comprehensive income until such investments are derecognised or impaired.

	Company	Group	
	2021/22
Rs. '000	2020/21
Rs. '000	2021/22
Rs. '000	2020/21
Rs. '000	

Balance as at 01st April	
(117,377)	
(102,114)	
(121,517)	
(116,005)	
Transfer from retain earnings	(50,000)	-	(50,000)	-	
Net fair value gains/(losses) on remeasuring financial investments	(207,831)	(15,263)	(207,831)	(5,512)	
Balance as at 31st March	(375,208)	(117,377)	(379,348)	(121,517)	

48.4	Foreign Currency Translation Reserve
The foreign currency translation reserve comprises all foreign currency differences arising from the translation of the Financial Statements of foreign subsidiary.

	Company	Group	
	2021/22
Rs. '000	2020/21
Rs. '000	2021/22
Rs. '000	2020/21
Rs. '000	

Balance as at 01st April	
-	
-	
542,836	
401,108	
Net gains/(losses) arising from translating the Financial Statements	-	-	1,439,171	141,728	
Transfer to NCI			(705,548)		
Balance as at 31st March	-	-	1,276,459	542,836	

49.	Non -Controlling Interest
Non controlling interest are measured at their proportionate share of the acquiree’s identifiable net assets at the date of acquisition. Changes in the Group’s interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. Non controlling interest represents 25% of net assets of the Subsidiary, People’s Insurance PLC and 49% of net assets of the subsidiary, Lankan Alliance Finance Limited.

As at 31st March	Group	
	2021/22
Rs. '000	2020/21
Rs. '000	

Balance as at 01st April	
2,661,541	
2,356,784	
Profit for the year	12,438	302,319	
Other comprehensive income	705,548	2,438	
Dividend paid for the year	(225,000)	-	
Balance as at 31st March	3,154,527	2,661,541	

50.	Contingent Liabilities and Commitments
Accounting Policy Commitments and Contingencies
Contingent Liabilities are possible obligations whose existence will be confirmed only by uncertain future events or present obligations where the transfer of economic benefit is not probable or cannot be readily measured as defined in the Sri Lanka Accounting Standard- LKAS 37 - ‘Provisions, Contingent Liabilities and Contingent Assets’. Contingent liabilities are not recognised in the Statement of Financial Position but are disclosed unless its occurrence is remote.

As at 31st March	

Note	
Page No.	Company	Group	
			2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	

Contingent liabilities	
50.1	
303	
469,000	
697,502	
515,989	
744,491	
Commitments	50.2	304	6,383,234	10,300,609	6,383,234	10,300,609	
Total			6,852,234	10,998,111	6,899,223	11,045,100	

50.1	Contingent Liabilities
In the normal course of business, the Group and Company makes various irrecoverable commitments and incur certain contingent liabilities with legal recourse to its customers and would be a party to litigation due to its operations. Even though these obligations may not be recognised
in the Statement of Financial Position, they do contain operational risk and therefore form a part of the overall risk profile of the Group and Company. However no material losses are anticipated as a result of these transactions.

As at 31st March	

Note	
Page No.	Company	Group	
			2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	

Litigation against the Company	
50.1.1	
303	
242,797	
182,451	
242,797	
182,451	
Guarantees - Related parties	50.1.2	303	-	300,000	-	300,000	
Guarantees - Others	50.1.3	303	175,250	164,098	175,250	164,098	
Assessment received from Inland Revenue Department	50.1.4	304	50,953	50,953	97,942	97,942	
Pending bill retirements			-	-	-	-	
Total			469,000	697,502	515,989	744,491	

50.1.1	Litigation Against the Company
Litigation is a common occurrence in the finance industry due to the nature of the business undertaken. The Company has formal controls and policies for managing legal claims. Pending legal claims where the Company had already made provisions for possible losses in its Financial Statements or has a reasonable security to cover the damages are not included below as the Company does not expect cash outflows from such claims.

As of the date of the Statement of Financial Position, forty six (46) clients have filed cases against the company. The Company’s legal counsel is of the opinion that litigation which is currently pending will not have a material impact on the reported financial results or future operations of the Company.

50.1.2	Guarantees - Related parties
Guarantee provided by the Company for Micro Commerce Ltd in order to obtain overdraft facility from a bank, The Company assure Bank that Micro Commerce Ltd is unable to make its loan repayments, the company commits to repay the loan on behalf of the subsidiary.

50.1.3	Guarantees - Other
Guarantee provided by the Company with the request of fixed deposits customers to third party and assure to make the obligation at the time of customer is unable to settle the payment.

50.	Contingent Liabilities and Commitments (Contd...)
50.1.4	Assessment Received from Inland Revenue Department
Assessment (VATFS/BFSU/2014/581) received by the Company from the Inland Revenue Department for Year of Assessment 2010/11 is Rs. 50,953,390/- heard and concluded in favour of Inland Revenue Department . This decision has been appealed by the Company at the court of Appeal with reasonable grounds. The tax consultants are appearing for and on behalf of the Company.

50.2 Commitments
The Group/Company has commitments for acquisition of property, plant and equipment, intangible assets and un-utilised facilities incidental to the ordinary course of business as at 31st March as follows:

As at 31st March	Company	Group	
	2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	

Capital Commitments Approved and contracted for	

-	

-	

-	

-	
Approved but not contracted for	1,093,909	1,485,544	1,093,909	1,485,544	
Subtotal	1,093,909	1,485,544	1,093,909	1,485,544	

Un-utilised facilities Margin trading	

4,263,065	

6,646,678	

4,263,065	

6,646,678	
Fast track	577,652	828,677	577,652	828,677	
Factoring	448,608	1,339,710	448,608	1,339,710	
Subtotal	5,289,325	8,815,065	5,289,325	8,815,065	
Total	6,383,234	10,300,609	6,383,234	10,300,609	

In the computation of Expected Credit Loss company consider un utilised amount of revolving facility. Therefore allowance for un utilised facility is included in Note 25.7 on page 263.

51.	Net Assets Value Per Ordinary Share

As at 31st March	Company	Group	
	2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	

Total equity attributable to equity holders of the Company (Rs. '000)	
38,818,310	
34,341,431	
43,821,275	
38,460,412	
Total number of shares	1,887,195,002	1,704,602,760	1,887,195,002	1,704,602,760	
Net assets value per share (Rs.)	20.57	20.15	23.22	22.56	

52.	Current/Non Current Analysis

Company	2022	2021	
	Within 12 months Rs. '000	After 12 months Rs. '000	
Total Rs. '000	Within 12 months Rs. '000	After 12 months Rs. '000	
Total Rs. '000	

Assets
Cash and cash equivalents	

4,668,830	

-	

4,668,830	

2,703,031	

-	

2,703,031	
Balances with banks & financial institutions	5,117,866	-	5,117,866	5,399,071	-	5,399,071	
Financial assets -Fair value through profit or loss	25,140	-	25,140	109,787	-	109,787	
Loans and receivables	59,713,721	91,560,733	151,274,454	60,898,074	80,489,833	141,387,907	
Financial assets - Fair value through other comprehensive income	1,333,268	10	1,333,278	309,108	10	309,118	
Debt instrument - Amortised cost	9,827,221	-	9,827,221	6,994,206	-	6,994,206	
Investments in subsidiaries	-	3,213,788	3,213,788	-	3,213,788	3,213,788	
Other assets	589,938	159,216	749,154	414,777	160,883	575,660	
Property, plant and equipment	-	1,413,776	1,413,776	-	1,049,250	1,049,250	
Right of use assets	-	1,972,380	1,972,380	-	2,242,444	2,242,444	
Deferred tax assets	-	1,146,726	1,146,726	-	415,841	415,841	
Goodwill and intangible assets	-	21,965	21,965	-	146,446	146,446	
Total assets	81,275,984	99,488,594	180,764,578	76,828,054	87,718,495	164,546,549	

Liabilities Due to banks	

5,534,119	

6,215,213	

11,749,332	

2,965,482	

3,473,828	

6,439,310	
Due to customers	86,085,667	17,282,237	103,367,904	82,397,403	19,105,528	101,502,931	
Debt securities issued	1,977,853	15,266,460	17,244,313	7,835,316	5,990,237	13,825,553	
Other financial liabilities	3,636,528	-	3,636,528	4,132,110	-	4,132,110	
Operating lease liabilities	440,316	1,618,734	2,059,050	404,863	1,881,523	2,286,386	
Current tax liabilities	1,851,676	-	1,851,676	362,450	-	362,450	
Other liabilities	1,369,054	-	1,369,054	1,069,121	-	1,069,121	
Retirement Benefit Obligation	54,921	613,490	668,411	90,630	496,627	587,257	
Total liabilities	100,950,134	40,996,134	141,946,268	99,257,375	30,947,743	130,205,118	
Net assets	(19,674,150)	58,492,460	38,818,310	(22,429,321)	56,770,752	34,341,431	

Group	2022	2021	
	Within 12 months Rs. '000	After 12 months Rs. '000	
Total Rs. '000	Within 12 months Rs. '000	After 12 months Rs. '000	
Total Rs. '000	

Assets
Cash and cash equivalents	

5,402,587	

-	

5,402,587	

3,844,694	

-	

3,844,694	
Balances with banks & financial institutions	9,529,518	-	9,529,518	8,231,101	-	8,231,101	
Financial assets -Fair value through profit or loss	849,298	-	849,298	1,281,753	-	1,281,753	
Loans and receivables	69,526,174	93,794,672	163,320,846	61,399,922	85,604,082	147,004,004	
Reinsurance and insurance receivables	1,322,528	-	1,322,528	1,024,461	-	1,024,461	
Financial assets - Fair value through other comprehensive income	1,632,931	10	1,632,941	735,484	10	735,494	
Debt instrument - Amortised cost	12,964,438	3,049,087	16,013,525	9,975,284	956,430	10,931,714	
Investment properties	-	820,664	820,664	-	820,664	820,664	
Other assets	672,610	159,216	831,826	771,575	160,883	932,458	
Property, plant and equipment	-	4,090,682	4,090,682	-	4,034,265	4,034,265	
Right of use assets	-	1,539,484	1,539,484	-	1,591,297	1,591,297	
Deferred tax assets	-	1,444,813	1,444,813	-	594,495	594,495	
Goodwill and intangible assets	-	139,603	139,603	-	265,506	265,506	
Total assets	101,900,084	105,038,231	206,938,315	87,264,274	94,027,632	181,291,906	

Liabilities Due to banks	

8,347,823	

6,952,538	

15,300,361	

4,183,255	

4,820,618	

9,003,873	
Due to customers	93,978,628	17,475,122	111,453,750	84,638,188	19,105,528	103,743,716	
Debt securities issued	1,962,543	15,140,680	17,103,223	7,820,059	5,864,457	13,684,516	
Other financial liabilities	4,043,322	-	4,043,322	4,111,235	-	4,111,235	
Insurance and reinsurance payable	-	5,903,363	5,903,363	-	5,015,885	5,015,885	
Operating lease liabilities	-	1,588,115	1,588,115	-	1,614,660	1,614,660	
Current tax liabilities	117,807	1,470,308	2,098,784	236,268	1,378,392	883,900	
Other liabilities	1,399,030	-	1,399,030	1,156,822	-	1,156,822	
Retirement benefit obligation	62,636	686,308	748,944	92,778	565,000	657,778	
Deferred tax liabilities	-	323,621	323,621	-	297,568	297,568	
Total liabilities	112,010,573	47,951,940	159,962,513	103,122,505	37,047,448	140,169,953	
Net assets	(10,110,489)	57,086,291	46,975,802	(15,858,231)	56,980,184	41,121,953	

53.	Financial Reporting by Segment
Accounting Policy
The group’s segmental reporting is based on the Business Segments.

A segment is a distinguishable component of the Group that is engaged in providing products and services. (Business segment, which is subject to risks and rewards that are different from those of other segments).

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.

The accounting policies adopted for segment reporting are those accounting policies adopted for preparing the Financial Statements of the Group.

Inter-segment transfers are accounted for at competitive fair market prices charged to intercompany counterparts for similar services. Such services are eliminated on consolidation.

As per the provision of Sri Lanka Reporting Standard -SLFRS- 8, the operating segment of the group has been identify based on the product and services offered by the group of which level of risk and rewards are significantly differ from one another.

Top management of the Group consider the operating results and condition of its business segments in their decision making process and performance evaluation. Types of products and services from which each operating segment derives its revenues described as follows;

Lease & Hire-purchase
This segment includes Leasing and Hire Purchase products offered to the customers.

Loans
This segment includes Loan products offered to the customers.

Islamic
This segment includes Ijarah, Murabah, Musharakah and Trading Murabah products offered to the customers.

Insurance business
Insurance business segment includes general insurance

Other business
This segment include all other business activities that group engaged other than above segments.

For the year ended 31st March	Lease &  HP	Loans	Islamic	Insurance	Other	Eliminations	GROUP	
	2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	

Interest income	
12,462,608	
14,076,446	
10,530,761

-	
10,175,781	
1,035,736	
1,180,184	
701,136	
718,734	
1,415,774	
872,270	
(219,223)	
(201,577)	
25,926,792	
26,821,838	
Net earned premium	
-	
-		
-	
-	
-	
5,123,003	
5,198,693	
-	
-	
(183,932)	
(170,144)	
4,939,071	
5,028,549	
Net fee and commission income	

1,120,503	

1,147,474	

946,812	

829,502	

93,122	

96,205	

-	

-	

202,123	

209,887	

(1,041,047)	

(1,085,014)	

1,321,513	

1,198,054	
Net trading income	-	-	-	-	-	-	71,272	65,631	15,253	162,627	-	-	86,525	228,258	
Other operating income	
146,024	
90,553	
123,389	
65,460	
12,136	
7,592	
58,022	
61,820	
1,124,879	
311,463	
(1,107,365)	
(168,322)	
357,085	
368,566	
Gross income	13,729,135	15,314,473	11,600,962	11,070,743	1,140,994	1,283,981	5,953,433	6,044,878	2,758,029	1,556,247	(2,551,567)	(1,625,057)	32,630,986	33,645,265	
Interest expenses	5,366,101	7,114,388	4,534,295	5,142,949	445,963	596,477	-	-	1,077,990	722,960	(219,223)	(201,577)	11,205,126	13,375,197	
Total Operating income	
8,363,034	
8,200,085	
7,066,667	
5,927,794	
695,031	
687,504	
5,953,433	
6,044,878	
1,680,039	
833,287	
(2,332,344)	
(1,423,480)	
21,425,860	
20,270,068	
Credit loss expenses	
785,927	
670,935	
194,519	
693,649	
(23,067)	
(67,802)	
-	
-	
(5,623)	
55,707	
-	
-	
951,756	
1,352,489	
Net operating income	
7,577,107	
7,529,150	
6,872,148	
5,234,145	
718,098	
755,306	
5,953,433	
6,044,878	
1,685,662	
777,580	
(2,332,344)	
(1,423,480)	
20,474,104	
18,917,579	
Depreciation	282,547	343,502	324,649	316,567	29,548	21,563	102,316	97,289	69,411	57,405	(169,807)	(188,633)	638,664	647,693	
Segment result	4,252,022	4,037,333	3,592,909	2,918,564	353,375	338,494	995,844	1,570,221	854,183	410,271	(1,117,206)	(170,247)	8,931,127	9,104,636	
Less : Tax on financial services													

1,705,797	

1,273,966	
Share of (loss) of an  associate
(net of tax)													

-	

-	
Income tax expense													
2,407,161	
2,234,336	
Profit attributable to equity holder													
4,818,169	
5,596,334	

As at 31st March Segment assets	

81,759,467	

82,140,914	

91,065,698	

75,700,016	

8,524,799	

5,156,381	

12,102,543	

11,133,855	

20,032,202	

13,727,582	

(6,546,396)	

(6,566,842)	

206,938,315	

181,291,906	
Total assets	81,759,467	82,140,914	91,065,698	75,700,016	8,524,799	5,156,381	12,102,543	11,133,855	20,032,202	13,727,582	(6,546,396)	(6,566,842)	206,938,315	181,291,906	

Segment liabilities	
63,645,543	
64,265,746	
70,889,964	
59,226,490	
6,636,118	
4,034,271	
7,353,491	
6,266,782	
15,594,039	
10,740,339	
(4,156,642)	
(4,363,675)	-
159,962,513	
140,169,953	
Total liability	63,645,543	64,265,746	70,889,964	59,226,490	6,636,118	4,034,271	7,353,491	6,266,782	15,594,039	10,740,339	(4,156,642)	(4,363,675)	159,962,513	140,169,953	

54.	Assets Pledged
The following assets have been pledged as securities for liabilities.

Nature of Assets	

Nature of Liabilities	Carrying Amount Pledged	

Included under	
		Company	Group		
		31 March
2022
Rs. '000	31 March
2021
Rs. '000	31 March
2022
Rs. '000	31 March
2021
Rs. '000		

Rentals receivables on lease	

Securitisation	

7,472,455	

10,701,499	

7,472,455	

10,701,499	

Loans and receivables	
	Term loan	7,611,638	-	7,611,638	-	Loans and receivables	
	Short term loans	16,307,463	17,408,077	16,307,463	17,408,077	Loans and receivables	

Rentals receivables on hire- purchase	
Securitisation	
-	
-	
-	
-	
Loans and receivables	
	Term loan	-	-	1,037,255	1,037,255	Loans and receivables	
	Short term loans	-	2,340	46,705	49,045	Loans and receivables	

Rentals receivables on loans	

Securitisation	

413,373	

1,315,592	

413,373	

1,315,592	

Loans and receivables	
	Short term loans	9,195,305	3,754,149	9,195,305	3,754,149	Loans and receivables	

Fixed deposits	
Bank guarantee for assessment	
-	
-	
14,553	
14,000	
Contingent liabilities and commitments	
Fixed deposits	Overdrafts	-	-	75,000	75,000	Balances with banks & financial institutions	
Freehold lands and buildings	Term loan	-	-	3,818,007	3,818,007	Property, plant & equipment	

55.	Related Party Disclosure
The Company and the Group carry out transactions in the ordinary course of business with the parties who are defined as related parties in the Sri Lanka Accounting Standards – LKAS 24 (Related Party Disclosure), the details of which are reported below:

55.1	Parent and Ultimate Controlling Party
The immediate Parent of the Company is People’s Bank which is a Government owned entity.

55.2	Transactions with Key Management Personnel (KMP) and their Family Members
As per the Sri Lanka Accounting Standard - LKAS -24) - “Related Party Disclosures”, the KMPs include those who are having authority and responsibility for planning, directing and controlling the activities of the Company. Accordingly, the Board of Directors of the Company, Immediate parent Company and members of the Corporate Management of the Company have been classified as KMPs of the Company.

The Company carries out transactions with KMPs & their close family members in the ordinary course of its business on an arms length basis at commercial rates.

Close family members of KMPs are those family members who may be expected to influence, or be influenced by, those KMPs in their dealing with the entity.

55.2.1	Transactions with Key Management personnel and their Close Family Members Remuneration to Key Management Personnel
(a)	Remuneration to Board of Directors

For the year ended 31st March	Company	Group	
	2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	

Short term employees benefits	
4,939	
3,863	
12,711	
7,919	
Total	4,939	3,863	12,711	7,919	

(b)	Remuneration to Corporate Management

For the year ended 31st March	Company	Group	
	2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	

Short term employees benefits	
163,457	
153,815	
227,342	
213,700	
Post employment benefits	15,529	14,351	17,605	16,235	
Total	178,986	168,166	244,947	229,935	

In addition to the above, the Company has also provided non cash benefits such as Company maintained vehicles to KMPs in line with the approved employment terms of the Company.

55.2.2	Share Transactions with Key management Personnel

For the year ended 31st March	Company	Group	
	2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	

No. of ordinary shares held	
673,685	
1,147,720	
855,185	
1,326,220	
Scrip dividend (No. of shares)	64,892	51,773	69,392	51,773	

55.2.3	Transactions, Arrangements and Agreements Involving Key Management Personnel (KMPs), their Close Family Members (CFMs) and other related entities
(a)	Items in Statement of Profit or Loss

	Board of Directors	Corporate Management	Total	
For the year ended 31st March	2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	

Interest income	
26	
26	
312	
5,488	
338	
5,514	
Interest expense	4,495	9,179	21,702	37,140	26,197	46,319	

55. Related Party Disclosure (Contd...)
(b)	Items in Statement of Financial Position

As at 31 March	Board of Directors	Corporate Management	Total	
	2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	

Assets
Loans and receivables	

-	

-	

8,921	

10,317	

8,921	

10,317	
	-	-	8,921	10,317	8,921	10,317	

Liabilities
Due to customers	

63,263	

59,748	

286,951	

351,430	

350,214	

411,178	
Debt Securities issued	-	-	-	-	-	-	
	63,263	59,748	286,951	351,430	350,214	411,178	

55.3	Net Accommodation and Net Accommodation as a Percentage of Capital Funds

As at 31 March	2022
Rs. '000	2021
Rs. '000	2022
%	2021
%	

People's Bank	
-	
-	
-	
-	
People’s Leasing Property Development Limited	560,310	599,301	1.44	1.75	
People’s Leasing Fleet Management Limited	3,528	-	0.01	-	
People’s Leasing Havelock Properties Limited	835,187	830,096	2.15	2.42	
People’s Microfinance Ltd	1,495	2,700	-	-	
People’s Insurance PLC	35,236	49,908	0.09	0.15	
Lankan Alliance Finance Limited	27,155	27,155	0.07	0.08	
Board of Directors	-	-	-	-	
Corporate management	8,921	10,317	0.02	0.03	
Total net accommodation	1,471,832	1,519,477	3.78	4.42	

55.4	Transactions with Related Entities
Transactions with Government of Sri Lanka and Government Related Entities
The immediate parent of the Company is People’s Bank which is Government owned entity. The Company enters into transactions, arrangements and agreements with Government of Sri Lanka and its related entities. The significant financial dealings during the year and as at the Statement of Financial Position date are as follows:

a)	Items in Statement of Profit or Loss

For the year ended 31st March	Company	Group	
	2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	

Interest income	

7,663	

4,542	

7,663	

4,542	
Interest expenses	746,204	563,910	746,204	563,910	

b)	Items in Statement of Financial Position

As at 31 March	Company	Group	
	2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	

Loans and receivables	
49,571	
28,308	
49,571	
28,308	
Total	49,571	28,308	49,571	28,308	

Liabilities Due to banks	

263,602	

951,073	

263,602	

951,073	
Due to customera	1,031,702	1,128,019	1,031,702	1,128,019	
Debt Securities issued	-	-	-	-	
Total	1,295,304	2,079,092	1,295,304	2,079,092	

Further, transactions as detailed below, relating to the ordinary course of business, are entered into with the Government of Sri Lanka and its related entities

●	Investments in Treasury Bills, Treasury Bonds
●	Payments of statutory rates and taxes
●	Payments for utilities mainly comprising of telephone, electricity and water
●	Payments for employment retirement benefits - ETF
●	Payment of incidentals such as RMV charges and CRIB fees that are paid based on standard rates.

c)	Individual Significant Transactions
There were no individual significant transactions with the Government of Sri Lanka and Government related entities, other than on normal day- to-day business operations.

55.4.1	Company
The Company had the under mentioned financial dealings during the financial year with the following related entities
a)	Items in Statement of Profit or Loss

For the year ended 31st March	Parent	Subsidiaries	
	2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	

Interest income	
1,142,425	
755,692	
153,122	
131,352	
Interest expense	103,669	118,748	162,077	126,096	
Fee & Commission income	-	-	655,763	715,240	
Other operating income	-	-	945,670	110,000	
Benefits, claims and underwriting expenditure	-	-	167,402	-	
Depriciation and amortisation	13,719	22,928	215,791	231,555	
Other operating expenses	-	-	20,561	195,950	

55. Related Party Disclosure (Contd...)
b)	Items in Statement of Financial Position

As at 31 March	Parent	Subsidiaries	
	2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	

Assets
Cash and cash equivalents	

3,500,703	

1,755,592	

-	

-	
Balances with banks & financial institutions	5,117,866	5,399,071	-	-	
Loans and receivables	-	-	1,471,124	1,509,160	
Financial assets - Amortised cost	9,827,221	6,319,142	-	-	
Investments in subsidiaries/associate (net of impairment)	-	-	3,213,788	3,213,788	
Other assets	-	-	376,555	168,802	
Right of use asset	21,753	134,618	584,173	798,632	
Total	18,467,543	13,608,423	5,645,640	5,690,382	

Liabilities Due to banks	

333,018	

1,398,943	

-	

-	
Due to customers	1,031,702	1,128,019	564,298	703,477	
Debt Securities issued	-	-	141,090	141,037	
Other Financial liabilities	-	-	682,454	685,294	
Other liabilities	1,118	3,018	8,769	11,109	
Lease liability	24,424	149,204	647,548	835,759	
Total	1,390,262	2,679,184	2,044,159	2,376,676	

c)	Transactions

	Parent	Subsidiaries	
	2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	

Transaction cost on debenture issue and securitisation	
178	
478	
-	
-	
Purchase of vehicles	-	-	215,100	-	
Building rent paid	27,435	36,231	284,352	282,917	
Building rent received	-	18,293	8,992		
Cash and cash equivalents - Repo investments	48,312,210	4,950,000	-	-	
Cash and cash equivalents - Repo settlements	47,856,467	10,117,940	-	-	
Balances with banks and financial institutions - FD investments	30,785,830	24,145,286	-	-	
Balances with banks and financial institutions - FD withdrawals	31,510,851	22,294,433	-	-	
Loans and receivables - Grantings	-	-	326,170	537,481	
Loans and receivables - Repayments	-	-	348,048	663,796	
Debt instrument - Amortised cost - Investments	31,590,690	22,598,347	-	-	
Debt insturment - Amortised cost - Settlements	28,631,105	20,089,756	-	-	
Due to banks - Borrowings	-	1,000,000	-	-	
Due to banks - Repayment	472,626	1,575,922	-	-	
Due to customers - Investments	389,246	516,030	1,063,578	702,487	
Due to customers - Settlements	292,930	186,774	945,304	441,997	
Other financial liabilities - Services obtained	-	8,489	9,306		
Other financial liabilities - Repayment	-	8,488	9,270		
Dividend paid	1,634,944	732,467	-	-	
Dividend received	-	-	930,625	110,000	
Insurance premium paid in respect of customers introduced by People's Leasing & Finance PLC	
-	
-	
2,959,667	
3,397,566	
Total	221,504,512	108,243,664	7,108,114	6,163,812	

d)	Off- Balance Sheet Items

As at 31 March	Parent	Subsidiaries	
	2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000	

Guarantees	
-	
-	
-	
300,000	
Total	-	-	-	300,000	

55.4.2	Group
The group had the under mentioned financial dealings during the financial year with the following related entities.
a)	Items in Statement of Profit or Loss

For the year ended 31st March	Immediate Parent	
	2022
Rs. '000	2021
Rs. '000	

Interest income	
1,218,355	
800,369	
Interest expenses	112,817	113,534	
Net earned premiums	253,839	404,434	
Fee and commission income	32,987	33,601	
Other operating income	111,796	132,221	
Benefits, claims and underwriting expenditure	25,650	74,736	
Depreciation and amortisation	13,719		
Other operating expenses	-	22,928	

b)	Items in Statement of Financial Position

As at 31 March	Immediate Parent	
	2022
Rs. '000	2021
Rs. '000	

Assets
Cash and cash equivalents	

3,907,522	

2,054,940	
Balances with banks & financial institutions	5,722,035	6,137,065	
Loans and receivables	-	-	
Insurance and reinsurance receivables	190,536	184,548	
Financial assets - Amortised cost	9,827,221	6,319,142	
Investments in subsidiaries/associate (net of impairment)	-	-	
Other assets	7,432	10,166	
Right of use assets	21,753	134,618	
Total	19,676,499	14,840,479	

Liabilities Due to banks	

607,755	

1,524,537	
Debt Securities issued	1,031,702	1,128,019	
Other liabilities	10,126	10,940	
Lease liabilities	24,424	149,204	
Total	1,674,007	2,812,700	

55.	Related Party Disclosure (Contd...)
55.5 Transactions Exceeding 10% of the Gross Income of the Company

Name of the Related party	

Relationship	

Nature of the transaction	
Transaction value	Transaction value as a % of gross income	

Terms and conditions	
			2022
Rs. '000	2021
Rs. '000	2022
Rs. '000	2021
Rs. '000		

People's Bank	
Immediate Parent	
Repo investments	
48,312,210	
4,950,000	
180.66%	
18.26%	
Normal terms	
		Repo settlements	47,856,467	10,117,940	178.96%	37.33%	Normal terms	
		FD withdrawals	31,510,851	22,294,433	117.84%	82.26%	Normal terms	
		Tbill investments	31,590,690	22,598,347	118.13%	83.38%	Normal terms	
		Tbill settlements	28,631,105	20,089,756	107.07%	74.12%	Normal terms	
People's Insuarance PLC	Subsidiary	Insurance premium	2,959,667	3,397,566	11.07%	12.54%	Normal terms	

56.	Risk Management (Company/Group)
56.1	Introduction
Risk is inherent in the Group’s activities, but is managed through a process of ongoing identification, measurement and monitoring, subject to risk limits and other controls. This process of risk management is critical to the Company’s continuing profitability, sustainability and each
individual within the Company is accountable for the risk exposures relating to his or her responsibilities. The Company is primarily exposed to credit risk, liquidity risk and market risk. It is also subject to various operational risks. Detailed risk analysis is given in risk management section.

Risk Management Structure
The Board of Directors is responsible for the overall risk management approach and for approving the risk management strategies and principles.

The Board has appointed a subcommittee, Board Integrated Risk Management Committee (BIRMC), which has the responsibility to monitor the overall risk process within the Company.

The BIRMC has the overall responsibility for the development of the risk strategy and implementing principles, frameworks, policies and limits. The BIRMC is responsible for managing risk decisions and monitoring risk levels and reports on a periodical basis to the Board.

The Risk & Control Department is responsible for monitoring compliance with risk principles, policies and limits across the Company.

Assets and Liabilities Committee (ALCO)
ALCO is chaired by the Chief Executive Officer. Other permanent members of the ALCO include, Senior Deputy General Manager - Operations
, Deputy General Manager-Operations, Deputy General Manager-Risk & Control, Deputy General Manager- Recoveries & Administration, Head of Deposits, Head of Finance, Head of Treasury and the Committee Secretary. The Committee meetings should be held at least once a month to monitor and manage the assets and liabilities of the Company and also overall liquidity position to keep the Company’s liquidity at healthy levels, whilst satisfying regulatory requirements. The Chairman of ALCO upon a request of any permanent member may convene a special meeting of the Committee when an issue arises that cannot wait until the next regularly scheduled meeting.

Executive Integrated Risk Management Committee
Executive Integrated Risk Management Committee (or “the Committee”) has been formed as a management level committee to further strengthen the Risk Governance Structure of the Company and support the Board, Board Sub-Committees and the Corporate Management in managing the risks associated with the business operations of the Company in an integrated manner.

The TOR of the Committee clearly set out the authority, constitution, meeting frequency, accountability and responsibilities, quorum, reporting and other procedures of the Committee. The TOR was updated in 2021 and adopted upon the Board Approval.

EIRMC is chaired by the Head of Risk. The members of the Committee include the members of Corporate Management. All business managers that involved in the operations of the Company can be recognised as “Risk Owners” as they negotiate to assume risk exposures with potential customers within the Board approved Risk Management policies and Risk Tolerance limits. Accordingly, Members of Senior Management involved in business operations can be considered as Senior Risk Owners. Therefore, At IRMOC, it is mandatory to have a higher level of involvement by the Senior Risk Owners of the Company.

The Committee shall focus on reviewing assumed risks at the front-line, specifically focusing on Credit Risk, Operational Risk and Compliance Risk.

The EIRMC shall meet at least monthly and when required. The EIRMC is accountable to the BIRMC. The Committee submitted the highlights of the Minutes of EIRMC Meetings to the BIRMC for seeking the Committee’s views, concurrence and or specific directions.

Operational Risk
The spread of COVID-19 has resulted in work disruptions like never before.. The pandemic has led to some branches closing temporarily as some employees are required to work remotely. The additional operational cost of procuring logistics to equip staff work remotely is expected to impact revenue. Company could also experience delays in orders for laptops, servers and networking equipment which may further impact productivity. Since the scare of COVID-19, there has been a global spike in malware and fraud incidents. The risk of cyber security risk arising from remote access provided to enable WFH was mitigated by VPN access through firewall user authentication, VPN Policy, Password Policy and access control mechanisms, VPN access log reporting and by using PC hardening policies in laptops.

56.2	Credit Risk
Credit risk is the risk that the Company will incur a loss because its customers or counterparties fail to discharge their contractual obligations. The Company manages and controls credit risk by setting limits on the amount of risk it is willing to accept for individual counterparties and group and by monitoring exposures in relation to such limits.

Credit Risk -Impairment Provision as Per ECL for Financial Assets
Locally, the spread of COVID-19 will negatively impact many firms, mainly through potential disruptions in manufacturing supply chains, domestic consumption, tourism and exports, posting downside risks to their earnings prospects. This will in turn impact the capacity of such firms to meet contractual obligations that leads to an increase in NPLs.

Expected Credit Loss at 31 March 2022 was estimated based on a range of forecast economic conditions prevailing as at that date. As the situation continues to evolve and timelines for a normalization of economic activity remains yet an unknown, the impact to our core markets and the Company’s financial results cannot be reasonably estimated or reliably measured based on reasonable and supportable information that is available at the current stage.

In view of the current economic status of the country following adjustments were made in respect to the impairment provision during the year ended 31 March 2022.

●	EFA scenarios were adjusted by decreasing the best case and increasing the worst case.
●	An additional impairment was made in respect of the facilities for which moratorium was granted.
●	Further, specific adjustment was made in respect of the certain impacted industirs such as tourism and passenger transport by moving up
one age bucket from the existing age bucket.

Impairment Assessment
For accounting purposes, the Company uses a collective and individual model for the recognition of losses on impaired financial assets.

Individually Assessed Allowances
The Company determines the allowances appropriate for each individually significant leases, hire purchases and loans on an individual basis, including any overdue payments of interests or credit rating downgrades. Items considered when determining allowance amounts include the sustainability of the counterparty’s business plan, its ability to improve performance if it is in a financial difficulty projected receipts and the availability of other financial support, the realisable value of collateral and the timing of the expected cash flows. Impairment allowances are evaluated at each reporting date.

Collectively Assessed Allowances
Allowances are assessed collectively for losses on leases, hire purchases and loans and for held to maturity debt investments that are not individually significant and for individually significant loans and advances that have been assessed individually and found not to be impaired. Detailed Note on impairment method has disclosed in note 25 on page 251.

56. Risk Management (Company/Group) (Contd...)
56.2.1	Maximum Exposure to Credit Risk Credit Quality by Class of Financial Assets
The Company manages the credit quality of financial assets using internal credit evaluation system. The tables below show the credit quality by the class of asset for all financial assets exposed to credit risk, based on the Company’s internal credit evaluation system. The amounts presented are gross of impairment allowances.

Definition of Past Due
The Company considers that any amounts uncollected one day or more beyond their contractual due date as ‘past due’.

As at 31st March 2022

Company	Neither past
due nor impaired Rs. '000	Past due but not impaired	Individually	Total impaired

Rs. '000	Rs. '000	
		1-30 Days	31-60 days	61-90 days

Rs. '000	Rs. '000	Rs. '000	Over 90 days

Rs. '000		

Cash and cash equivalents (excluding cash in hand)	

3,532,839	

-	

-	

-	

-	

-	

3,532,839	
Balances with banks & financial institutions	
5,117,866	
-	
-	
-	
-	
-	
5,117,866	
Financial assets -Fair value through profit or loss	
25,140	
-	
-	
-	
-	
-	
25,140	
Loans and receivables - Amortised cost	
102,300,917	
21,753,573	
11,454,830	
4,752,674	
18,437,021	
2,463,009	
161,162,024	
Financial assets - Fair value other comprehensive income	
1,333,278	
-	
-	
-	
-	
-	
1,333,278	
Debt instrument - Amortised cost	9,827,221	-	-	-	-	-	9,827,221	
Other financial assets	108,493	-	-	-	-	-	108,493	
Total	122,245,754	21,753,573	11,454,830	4,752,674	18,437,021	2,463,009	181,106,861	

As at 31st March 2021

Company	Neither past
due nor impaired Rs. '000	Past due but not impaired	Individually impaired

Rs. '000	Total

Rs. '000	
		1-30 Days

Rs. '000	31-60 days

Rs. '000	61-90 days

Rs. '000	Over 90 days

Rs. '000			

Cash and cash equivalents (excluding cash in hand)	

1,780,463	

-	

-	

-	

-	

-	

1,780,463	
Balances with banks & financial institutions	
5,399,071	
-	
-	
-	
-	
-	
5,399,071	
Financial assets -Fair value through profit or loss	
109,787	
-	
-	
-	
-	
-	
109,787	
Loans and receivables - Amortised cost	
76,540,202	
15,174,455	
20,580,873	
9,682,055	
26,709,922	
1,968,338	
150,655,845	
Financial assets - Fair value other comprehensive income	
309,118	
-	
-	
-	
-	
-	
309,118	
Debt instrument - Amortised cost	6,994,206	-	-	-	-	-	6,994,206	
Other financial assets	126,949	-	-	-	-	-	126,949	
Total	91,259,796	15,174,455	20,580,873	9,682,055	26,709,922	1,968,338	165,375,439	

As at 31st March 2022

Group	Neither past
due nor impaired Rs. '000	Past due but not impaired	Individually impaired

Rs. '000	Total

Rs. '000	
		1-30 Days

Rs. '000	31-60 days

Rs. '000	61-90 days

Rs. '000	Over 90 days

Rs. '000			

Cash and cash equivalents (excluding cash in hand)	

4,244,919	

-	

-	

-	

-	

-	

4,244,919	
Balances with banks & financial institutions	
9,529,518	
-	
-	
-	
-	
-	
9,529,518	
Financial assets -Fair value through profit or loss	
849,298	
-	
-	
-	
-	
-	
849,298	
Loans and receivables - Amortised cost	
112,406,372	
22,225,556	
12,232,422	
5,039,650	
19,795,973	
2,463,009	
174,162,982	
Insurance and reinsurance receivables	
1,322,528	
-	
-	
-	
-	
-	
1,322,528	
Financial assets - Fair value other comprehensive income	
1,632,941	
-	
-	
-	
-	
-	
1,632,941	
Debt instrument - Amortised cost	16,013,525	-	-	-	-	-	16,013,525	
Total	145,999,101	22,225,556	12,232,422	5,039,650	19,795,973	2,463,009	207,755,711	

As at 31st March 2021

Group	Neither past
due nor impaired Rs. '000	Past due but not impaired	Individually impaired

Rs. '000	Total

Rs. '000	
		1-30 Days	31-60 days

Rs. '000	Rs. '000	61-90 days

Rs. '000	Over 90 days

Rs. '000			

Cash and cash equivalents (excluding cash in hand)	

2,904,928	

-	

-	

-	

-	

-	

2,904,928	
Balances with banks & financial institutions	
8,231,101	
-	
-	
-	
-	
-	
8,231,101	
Financial assets - Held-for-trading	1,281,753	-	-	-	-	-	1,281,753	
Loans and receivables - Amortised cost	
72,927,079	
17,251,686	
24,716,058	
10,368,457	
29,925,440	
1,697,480	
156,886,200	
Insurance and reinsurance receivables	
1,024,461	
-	
-	
-	
-	
-	
1,024,461	
Financial assets - Fair value other comprehensive income	
735,494	
-	
-	
-	
-	
-	
735,494	
Debt instrument - Amortised cost	10,931,714	-	-	-	-	-	10,931,714	
Total	98,036,530	17,251,686	24,716,058	10,368,457	29,925,440	1,697,480	181,995,651	

56. Risk Management (Company/Group) (Contd...)
56.2.2	Analysis of Risk Concentration
The following table shows the risk concentration by industry for the components of the statement of financial position.

Industry Analysis

31 March 2022

Company	Financial Services* Rs. '000	Agriculture

Rs. '000	Manufacturing

Rs. '000	Tourism

Rs. '000	Transport

Rs. '000	Construction

Rs. '000	Traders

Rs. '000	Services

Rs. '000	Industry

Rs. '000	Others

Rs. '000	Total

Rs. '000	

Cash and cash equivalents	
4,668,830	
-	
-	
-	
-	
-	
-	
-	
-	
-	
4,668,830	
Balances with banks & financial institutions	
5,117,866	
-	
-	
-	
-	
-	
-	
-	
-	
-	
5,117,866	
Financial assets -Fair value through profit or loss	
15,900	
-	
9,240	
-	
-	
-	
-	
-	
-	
-	
25,140	
Loans and receivables - Amortised cost	
10,787,171	
32,571,677	
9,441,731	
3,314,785	
35,116,000	
9,797,912	
20,787,613	
24,660,505	
3,041,335	
11,643,295	
161,162,024	
Less - Impairment charges	-	-	-	-	-	-	-	-	-	-	9,887,570	
Net loans and receivables	-	-	-	-	-	-	-	-	-	-	151,274,454	
Financial assets - Fair value other comprehensive income	
1,333,268	
-	
-	
-	
-	
-	
-	
10	
-	
-	
1,333,278	
Debt instrument - Amortised cost	9,827,221	-	-	-	-	-	-	-	-	-	9,827,221	
Other financial assets	108,493	-	-	-	-	-	-	-	-	-	108,493	

31 March 2021

Company	Financial Services* Rs. '000	Agriculture

Rs. '000	Manufacturing

Rs. '000	Tourism

Rs. '000	Transport

Rs. '000	Construction

Rs. '000	Traders

Rs. '000	Services

Rs. '000	Industry

Rs. '000	Others

Rs. '000	Total

Rs. '000	

Cash and cash equivalents	
2,703,031	
-	
-	
-	
-	
-	
-	
-	
-	
-	
2,703,031	
Balances with Banks & financial institutions	
5,399,071	
-	
-	
-	
-	
-	
-	
-	
-	
-	
5,399,071	
Financial assets -Fair value through profit or loss	
109,787	
-	
-	
-	
-	
-	
-	
-	
-	
-	
109,787	
Loans and receivables - Amortised cost	
7,268,787	
30,661,009	
9,094,435	
3,666,967	
33,506,084	
10,972,649	
18,498,319	
24,837,601	
2,942,247	
9,207,747	
150,655,845	
Less - Impairment charges	-	-	-	-	-	-	-	-	-	-	9,267,938	
Net loans and receivables	-	-	-	-	-	-	-	-	-	-	141,387,907	
Financial assets - Fair value other comprehensive income	
309,108	
-	
-	
-	
-	
-	
-	
10	
-	
-	
309,118	
Debt instrument - Amortised cost	6,994,206	-	-	-	-	-	-	-	-	-	6,994,206	
Other financial assets	126,949	-	-	-	-	-	-	-	-	-	126,949	

*	Financial services include banks, finance institutions, insurance companies, stock brokering companies and fund management companies, venture capital companies and investment advisory services companies.
*	

31 March 2022

Group	Financial Services* Rs. '000	Agriculture

Rs. '000	Manufacturing

Rs. '000	Tourism

Rs. '000	Transport

Rs. '000	Construction

Rs. '000	Traders

Rs. '000	Services

Rs. '000	Industry

Rs. '000	Others

Rs. '000	Total

Rs. '000	

Cash and cash equivalents	
5,402,587	
-	
-	
-	
-	
-	
-	
-	
-	
-	
5,402,587	
Balances with banks & financial institutions	
9,529,518	
-	
-	
-	
-	
-	
-	
-	
-	
-	
9,529,518	
Financial assets -Fair value through profit or loss	
840,058	
-	
9,240	
-	
-	
-	
-	
-	
-	
-	
849,298	
Loans and receivables - Amortised cost	
10,719,757	
33,958,216	
14,135,330	
3,328,350	
35,254,791	
10,631,366	
21,336,335	
27,953,383	
3,283,296	
13,562,158	
174,162,982	
Less - Impairment charges											10,842,136	
Net loans and receivables											163,320,846	
Reinsurance and insurance receivable	
-	
-	
-	
-	
-	
-	
-	
-	
-	
1,322,528	
1,322,528	
Financial assets - Fair value other comprehensive income	
1,632,931	
-	
-	
-	
-	
-	
-	
10	
-	
-	
1,632,941	
Debt instrument - Amortised cost	16,013,525	-	-	-	-	-	-	-	-	-	16,013,525	

31 March 2021

Group	Financial Services* Rs. '000	Agriculture

Rs. '000	Manufacturing

Rs. '000	Tourism

Rs. '000	Transport

Rs. '000	Construction

Rs. '000	Traders

Rs. '000	Services

Rs. '000	Industry

Rs. '000	Others

Rs. '000	Total

Rs. '000	

Cash and cash equivalents	
3,844,694	
-	
-	
-	
-	
-	
-	
-	
-	
-	
3,844,694	
Balances with banks & financial institutions	
8,231,101	
-	
-	
-	
-	
-	
-	
-	
-	
-	
8,231,101	
Financial assets -Fair value through profit or loss	
1,257,000	
-	
14,985	
-	
-	
-	
-	
9,768	
-	
-	
1,281,753	
Loans and receivables - Amortised cost	
9,848,580	
31,237,276	
10,625,482	
3,679,932	
33,611,307	
9,780,857	
19,034,510	
26,233,747	
2,942,247	
9,892,262	
156,886,200	
Less - Impairment charges											9,882,196	
Net loans and receivables											147,004,004	
Reinsurance and insurance receivable	
-	
-	
-	
-	
-	
-	
-	
-	
-	
1,024,461	
1,024,461	
Financial assets - Fair value other comprehensive income	
735,484	
-	
-	
-	
-	
-	
-	
10	
-	
-	
735,494	
Debt instrument - Amortised cost	10,931,714	-	-	-	-	-	-	-	-	-	10,931,714	

*	Financial services include banks, finance institutions, insurance companies, stock brokering companies and fund management companies, venture capital companies and investment advisory services companies.
*	

56. Risk Management (Company/Group) (Contd...)
Geographical Distribution of Loans and Receivables
Provincial breakdown for loans and receivable within Sri Lanka is as follows;

Company	Lease/Ijarah receivable

Rs. '000	Hire-Purchase/
Murabah receivable Rs. '000	Term Loan
and receivables Rs. '000	Related party receivables

Rs. '000	Total

Rs. '000	

As at 31 March 2022						
Central	9,549,639	17,421	5,647,598	-	15,214,658	
Eastern	3,718,288	8,610	2,534,747	-	6,261,645	
North Central	4,681,387	9,832	2,653,600	-	7,344,819	
Northern	2,443,490	2,672	2,352,399	-	4,798,561	
North Western	7,775,486	15,733	4,677,244	-	12,468,463	
Sabaragamuwa	5,828,809	9,720	2,637,285	-	8,475,814	
Southern	11,054,270	20,203	7,952,428	-	19,026,901	
Uva	5,389,008	12,211	2,587,964	-	7,989,183	
Western	26,395,793	107,937	51,615,339	1,462,911	79,581,980	
Total	76,836,170	204,339	82,658,604	1,462,911	161,162,024	

As at 31 March 2021						
Central	9,702,115	20,365	4,943,754	-	14,666,234	
Eastern	3,989,744	10,077	1,838,905	-	5,838,726	
North Central	4,574,021	11,640	2,401,930	-	6,987,591	
Northern	2,637,478	3,766	1,724,093	-	4,365,337	
North Western	7,707,196	17,838	4,133,335	-	11,858,369	
Sabaragamuwa	5,776,852	10,063	2,248,670	-	8,035,585	
Southern	11,046,940	21,944	8,134,466	-	19,203,350	
Uva	5,272,230	12,448	2,392,564	-	7,677,242	
Western	27,435,149	116,652	42,962,450	1,509,160	72,023,411	
Total	78,141,725	224,793	70,780,167	1,509,160	150,655,845	

Group	Lease/Ijarah receivable

Rs. ‘000	Hire-Purchase/
Murabah receivable

Rs. ‘000	Term Loan and receivables

Rs. ‘000	Total

Rs. ‘000	

As at 31 March 2022					
Central	9,549,639	714,101	5,649,973	15,913,713	
Eastern	3,718,288	453,915	2,537,929	6,710,132	
North Central	4,681,387	222,938	2,653,966	7,558,291	
Northern	2,443,490	2,672	2,352,399	4,798,561	
North Western	7,775,486	193,126	4,678,347	12,646,959	
Sabaragamuwa	5,828,809	253,047	2,639,164	8,721,020	
Southern	11,054,270	335,304	7,952,940	19,342,514	
Uva	5,389,008	650,187	2,593,942	8,633,137	
Western	26,387,578	707,371	51,679,711	78,774,660	
Bangladesh	-	-	11,063,995	11,063,995	
Total	76,827,955	3,532,661	93,802,366	174,162,982	

As at 31 March 2021					
Central	9,702,115	463,874	4,950,118	15,116,107	
Eastern	3,989,744	377,074	1,849,011	6,215,829	
North Central	4,574,021	332,374	2,408,489	7,314,884	
Northern	2,637,478	3,766	1,728,774	4,370,018	
North Western	7,707,196	310,247	4,143,126	12,160,569	
Sabaragamuwa	5,776,852	269,912	2,253,827	8,300,591	
Southern	11,046,940	320,759	8,154,142	19,521,841	
Uva	5,272,230	570,913	2,424,802	8,267,945	
Western	27,424,854	494,437	42,926,841	70,846,132	
Bangladesh	-	-	4,772,284	4,772,284	
Total	78,131,430	3,143,356	75,611,414	156,886,200	

56.2.3	Fair Value of Collateral and Credit Enhancements Held
As a general principle, the Company endeavors to obtain adequate collateral to secure its credit portfolios. The Company focuses on quality and responsibility of such collateral to mitigate potential credit losses. Management monitors the market value of collateral, and requests additional collateral in accordance with the underlying agreement. A reasonable margin of safety is maintained in collateral values.

The main types of collateral obtained are, as follows:
●	For commercial lending, charges over real estate properties, inventory and trade receivables and transfer of ownership over the vehicles.
●	For retail lending, mortgages over residential properties and transfer of ownership over the vehicles.

The general creditworthiness of significant customers tends to be the most relevant indicator of credit quality of a facility extended to those parties. However, collateral provides additional security and the Company generally requests large borrowers to provide same. The Company may take collateral in the form of a first charge over real estate, floating charges over all corporate assets and other liens and guarantees. As Company’s focus on corporate customers is mainly based on their credit worthiness, business standing and reputation, Company does not insist on updated valuation of collateral from corporate clients. Such valuations will only be called for from corporate clients only if there is a foreseeable deterioration in credit standing or evidence of possible credit risk. Accordingly, the Company does not routinely update the valuation of collateral held against all facilities to significant customers. For impaired facilities, the Company usually obtains the current market value of the collateral, since it may be an input to the impairment measurement.

56. Risk Management (Company/Group) (Contd...)
The following table shows the fair value of collateral and credit enhancements held by the Company.

Company	31 March 2022	31 March 2021	
	Maximum exposure to credit risk Rs. '000	Net exposure

Rs. ‘000	Maximum exposure to credit risk Rs. ‘000	Net exposure

Rs. ‘000	

Cash and cash equivalents (excluding cash in hand)	
3,532,839	
3,532,839	
1,780,463	
1,780,463	
Balances with banks & financial institutions	5,117,866	5,117,866	5,399,071	5,399,071	
Financial assets -Fair value through profit or loss	25,140	25,140	109,787	109,787	
Loans and receivables - Amortised cost	151,274,454	371,104	141,387,907	551,368	
Financial assets - Fair value through other comprehensive income	1,333,278	1,333,278	309,118	309,118	
Debt instrument - Amortised cost	9,827,221	9,827,221	6,994,206	6,994,206	
Other financial assets	108,493	108,493	126,949	126,949	
	171,219,291	20,315,941	156,107,501	15,270,962	

The following table shows the fair value of collateral and credit enhancements held by the Group.

Group	31 March 2022	31 March 2021	
	Maximum exposure to credit risk Rs. '000	Net exposure

Rs. ‘000	Maximum exposure to credit risk Rs. ‘000	Net exposure

Rs. ‘000	

Cash and cash equivalents (excluding cash in hand)	
4,244,919	
4,244,919	
2,904,928	
2,904,928	
Balances with banks & financial institutions	9,529,518	9,529,518	8,231,101	8,231,101	
Financial assets -Fair value through profit or loss	849,298	849,298	1,281,753	1,281,753	
Loans and receivables - Amortised cost	163,320,846	371,104	147,004,004	551,368	
Reinsurance and insurance receivable	1,322,528	1,322,528	1,024,461	1,024,461	
Financial assets - Fair value through other comprehensive income	1,632,941	1,632,941	735,494	735,494	
Debt instrument - Amortised cost	16,013,525	16,013,525	10,931,714	10,931,714	
	196,913,575	31,446,615	172,113,455	23,322,491	

56.2.4	Collateral and Other Credit Enhancements
The below table provides an analysis of the current fair values of collateral held and credit enhancements for stage 3 assets. Dependent on the level of collateral, some Stage 3 exposures may not have individual ECLs when the expected value of the collateral is greater than the LGD, even if the future value of collateral is forecasted using multiple economic scenarios. However, the Stage 3 ECL can be higher than net exposure shown below when the future value of collateral, measured using multiple economic scenarios, is expected to decline.

Type of collateral or credit enhancement	Fair value of collateral and credit enhancements held under the base case scenario			

In Rs.'000	Maximum exposure to credit risk	Movable securities	Immovable securities	Total collateral	Net exposure	Associated
ECL	

Company
As at 31 March 2022 Loans and receivables	

20,900,030	

25,317,181	

17,686,396	

43,003,577	

(22,103,547)	

7,658,221	

As at 31 March 2021 Loans and receivables	

28,678,260	

13,536,876	

31,319,598	

44,856,474	

(16,178,214)	

7,323,080	

Group
As at 31 March 2022 Loans and receivables	

22,258,982	

26,020,062	

17,701,476	

43,721,538	

(21,462,556)	

8,060,205	

As at 31 March 2021 Loans and receivables	

31,622,920	

16,060,082	

31,319,598	

47,379,680	

(15,756,760)	

7,624,698	

56.2.5	Offsetting Financial Assets & Liabilities
Financial assets and financial liabilities are offset and the net amount is presented in the statement of financial position when the group has a legal right to set off the recognised amounts and it intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

56.2.6	Financial Assets & Liabilities Not Subject to Offsetting
Amounts that do not qualify for offsetting include netting arrangements that only permit outstanding transactions with the same counterparty to be offset in an event of default or occurrence of other predetermined events. Such netting arrangements include repurchase agreements and other similar secured lending and borrowing arrangements.

The amount of the financial collateral received or pledged subject to netting arrangements but not qualified for offsetting are disclosed below.

	Company & Group	
As at 31 March	2022	2021	
	Gross amount

Rs. '000	Amount subject to netting but
do not qualify for offsetting Rs. '000	Net amount

Rs. '000	Gross amount

Rs. '000	Amount subject to netting but
do not qualify for offsetting Rs. '000	Net amount

Rs. '000	

Financial Assets							
Loans & receivables	7,984,520	2,990,159	4,994,361	8,115,689	2,724,435	5,391,254	

56. Risk Management (Company/Group) (Contd...)
56.2.7	Sensitivity of Impairment Provision on Loans and Receivables

	Sensitivity on ECL sensitivity effect on Statement of Financial Position [Increase/(Decrease) in impairment provision]	Sensitivity effect on income
(Rs. ’000)	
	Stage 1
(Rs. ’000)	Stage 2
(Rs. ’000)	Stage 3
(Rs. ’000)	Total (Rs. ’000)		

Company - As at 31 March 2022
PD 1% increase across all age buckets	

12,602	

8,450	

-	

21,052	

21,052	
PD 1% decrease across all age buckets	(12,602)	(8,450)	-	(21,052)	(21,052)	
LGD 5% increase	63,010	42,654	180,114	285,778	285,778	
LGD 5% decrease	(63,010)	(42,654)	(180,114)	(285,778)	(285,778)	
Probability weighted Economic Scenarios						
– Base case 10% increase, worst case 5% decrease and best case 5% decrease	
(4,740)	
(2,183)	
-	
(6,923)	
(6,923)	
– Base case 10% decrease, worst case 5% increase and best case 5% increase	
4,740	
2,183	
-	
6,923	
6,923	

	Sensitivity on ECL sensitivity effect on Statement of Financial Position [Increase/(Decrease) in impairment provision]	Sensitivity effect on income
(Rs. ’000)	
	Stage 1
(Rs. ’000)	Stage 2
(Rs. ’000)	Stage 3
(Rs. ’000)	Total (Rs. ’000)		

Group - As at 31 March 2022
PD 1% increase across all age buckets	

13,328	

8,937	

-	

22,265	

22,265	
PD 1% decrease across all age buckets	(13,328)	(8,937)	-	(22,265)	(22,265)	
LGD 5% increase	68,051	46,066	194,523	308,640	308,640	
LGD 5% decrease	(68,051)	(46,066)	(194,523)	(308,640)	(308,640)	
Probability weighted Economic Scenarios						
– Base case 10% increase, worst case 5% decrease and best case 5% decrease	
(4,811)	
(2,216)	
-	
(7,027)	
(7,027)	
– Base case 10% decrease, worst case 5% increase and best case 5% increase	
4,811	
2,216	
-	
7,027	
7,027	

	Sensitivity on ECL sensitivity effect on Statement of Financial Position [Increase/(Decrease) in impairment provision]	Sensitivity effect on income
(Rs. ’000)	
	Stage 1
(Rs. ’000)	Stage 2
(Rs. ’000)	Stage 3
(Rs. ’000)	Total (Rs. ’000)		

Company - As at 31 March 2021
PD 1% increase across all age buckets	

7,876	

10,928	

-	

18,804	

18,804	
PD 1% decrease across all age buckets	(7,876)	(10,928)	-	(18,804)	(18,804)	
LGD 5% increase	39,385	54,963	206,864	301,212	301,212	
LGD 5% decrease	(39,385)	(54,963)	(206,864)	(301,212)	(301,212)	
Probability weighted Economic Scenarios						
– Base case 10% increase, worst case 5% decrease and best case 5% decrease	
(1,515)	
(564)	
-	
(2,079)	
(2,079)	
– Base case 10% decrease, worst case 5% increase and best case 5% increase	
1,515	
564	
-	
2,079	
2,079	

	Sensitivity on ECL sensitivity effect on Statement of Financial Position [Increase/(Decrease) in impairment provision]	Sensitivity effect on income
(Rs. ’000)	
	Stage 1
(Rs. ’000)	Stage 2
(Rs. ’000)	Stage 3
(Rs. ’000)	Total (Rs. ’000)		

Group - As at 31 March 2021
PD 1% increase across all age buckets	

8,330	

11,557	

-	

19,887	

19,887	
PD 1% decrease across all age buckets	(8,330)	(11,557)	-	(19,887)	(19,887)	
LGD 5% increase	42,536	59,360	279,396	381,292	381,292	
LGD 5% decrease	(42,536)	(59,360)	(279,396)	(381,292)	(381,292)	
Probability weighted Economic Scenarios				-	-	
– Base case 10% increase, worst case 5% decrease and best case 5% decrease	
(1,538)	
(572)	
-	
(2,110)	
(2,110)	
– Base case 10% decrease, worst case 5% increase and best case 5% increase	
1,538	
572	
-	
2,110	
2,110	

56.3	Liquidity Risk and Funding Management
Liquidity risk is defined as the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. Liquidity risk arises because of the possibility that the Company might be unable to meet its payment obligations when they fall due under both normal and stress circumstances. To limit this risk, the management has arranged diversified funding sources in addition to its deposit base, and adopted a policy of managing assets with liquidity in mind and monitoring future cash flows and liquidity on a daily basis.

Management considered different possible outcomes to assess the possible impact from Covid 19 to the company’s operations and forecast cash flows in order to absorb sudden liquidity shock to comply financial covenant and CBSL Liquidity Requirement. I.e. consider sufficient cash and unused credit lines, deposits renewal ratio, customer collection ratios, availability of negotiate borrowing facilities to meet short term needs, restructure operations to reduce operating costs and defer capital expenditure.

The Company maintains a portfolio of highly marketable and diverse assets that are assumed to be easily liquidated in the event of an unforeseen interruption of cash flow. The Company also has committed lines of credit that it can access to meet liquidity needs.

To ensure adequate liquidity in the market, Central Bank has intervened by reducing Policy rates in order to inject market liquidity. This may be as a result of the increased withdrawals within affected sectors potentially leading to reduced net inflows in the Company. In addition to providing loan moratoriums, concessionary loans via banks and Non-Banking Financial Institutions (NBFIs) for businesses and individuals impacted by  the COVID-19 lockdown to further provide liquidity and drive the economy.

56. Risk Management (Company/Group) (Contd...)
In compliance with Finance Companies (Liquid Assets) Direction No: 4 of 2013 which shall not as the close of the business on any day, be less than the total of;

(a)	10% of the outstanding value of the time deposits and accrued interest payable at the close of the business on such day and
(b)	15% of outstanding value of the saving deposit and accrued interest payable at the close of the business on such day and
(c)	10% of the total outstanding borrowings

Further the company shall maintainingliquidt assets in the form of Sri Lankan government Treasury Bills & Government securities equivalent to 7.5% of the average of its month end total deposit liabilities and borrowings of the 12 months preceding financial year.

However, due to the Covid 19, Central Bank of Sri Lanka issued Finance Business Act Direction No 02 of 2021 “Amendments to Direction on Liquid Assets” and subcequent amendments through No 07 of 2020 and No 03 of 2021 such requirements have changes as follows untill 30 June 2021.

(a)	6% of the outstanding value of the time deposits and accrued interest payable at the close of the business on such day and
(b)	10% of outstanding value of the saving deposit and accrued interest payable at the close of the business on such day and
(c)	5% of the total outstanding borrowings

Further the company shall maintaining liquid assets in the form of Sri Lankan government Treasury Bills & Government securities equivalent to 5% of the average of its month end total deposit liabilities and borrowings of the 12 months preceding financial year.

The most important of these is to maintain limits on the ratio of net liquid assets to customer liabilities, to reflect market conditions. Net liquid assets consist of cash, balances with banks and financial institutions and investment in Government securities.

The Company stresses the importance of savings accounts as sources of funds to finance lending to customers. They are monitored using the advances to deposit ratio , which compares loans and advances to customers as a percentage of customer savings accounts and fixed deposits.

The ratios at the end of the year was as follows:

Liquidity ratios As at 31 March	Company	Group	
	2022	2021	2022	2021	

Advances to deposit ratios (Times)	
1.46	
1.39	
1.47	
1.44	
Liquidity Assets to Deposit (%)	18	14	20	17	

56.3.1	Analysis of Financial Assets and Liabilities by Remaining Contractual Maturities
The table below summaries the maturity profile of the undiscounted cash flows of the Company’s financial assets and liabilities as at 31 March 2022.

Repayments which are subject to notice are treated as if notice were to be given immediately. However, the Company expects that many customers will not request repayment on the earliest date the Company could be required to pay and the table does not reflect the expected cash flows indicated by the Company’s deposit retention history.

56.3.2	Remaining Contractual Maturities of Undiscounted Cash Flows of Financial Assets and Liabilities

Company

Year ended 31 March 2022	On demand

Rs. '000	Less than 3 months
Rs. '000	3 to 12 months Rs. '000	1 to 3 years Rs. '000	3 to 5 years Rs. '000	Over 5 years Rs. '000	Total

Rs. '000	

Financial Asset
Cash and cash equivalents	

4,168,741	

500,089	

-	

-	

-	

-	

4,668,830	
Balances with banks & financial institutions	-	5,182,401	-	-	-	-	5,182,401	
Financial assets -Fair value through profit or loss	
-	
25,140	
-	
-	
-	
-	
25,140	
Loans and receivables - Amortised cost	8,586,901	29,437,982	48,629,443	81,866,129	24,636,554	2,176,820	195,333,830	
Financial assets - Fair value through other comprehensive income	
-	
1,632,941	
-	
-	
-	
10	
1,632,951	
Debt instrument - Amortised cost	-	9,902,159	-	-	-	-	9,902,159	
Other financial assets	-	108,493	-	-	-	-	108,493	
Total undiscounted financial assets	12,755,642	46,789,205	48,629,443	81,866,129	24,636,554	2,176,830	216,853,804	

Financial liabilities Due to banks	

69,689	

1,300,790	

3,774,480	

8,215,683	

-	

-	

13,360,641	
Due to customers	8,044,009	25,125,453	60,217,662	16,911,741	2,139,728	173,681	112,612,274	
Debt securities issued	-	1,469,782	619,948	13,204,584	5,602,650	-	20,896,963	
Other financial liabilities	-	3,636,528	-	-	-	-	3,636,528	
Operating lease liabilities	-	163,229	493,662	1,138,126	640,089	246,521	2,419,013	
Total undiscounted financial liabilities	8,113,698	31,695,781	65,105,751	39,470,134	8,382,467	420,202	153,188,033	
Net undiscounted financial assets/(liabilities)	4,641,944	15,093,424	(16,476,308)	42,395,995	16,254,088	1,756,628	63,665,771	

Company

As at 31 March 2021	On demand

Rs. '000	Less than 3 months
Rs. '000	3 to 12 months Rs. '000	1 to 3 years Rs. '000	3 to 5 years Rs. '000	Over 5 years Rs. '000	Total

Rs. '000	

Financial Asset
Cash and cash equivalents	

2,703,031	

-	

-	

-	

-	

-	

2,703,031	
Balances with banks & financial institutions	-	5,291,634	116,854	-	-	-	5,408,488	
Financial assets -Fair value through profit or loss	
-	
109,787	
-	
-	
-	
-	
109,787	
Loans and receivables - Amortised cost	9,539,408	28,396,273	47,980,789	78,310,609	18,763,721	389,923	183,380,723	
Financial assets -Fair value through profit or loss	
-	
309,108	
-	
-	
-	
10	
309,118	
Debt instrument - Amortised cost	-	5,200,037	1,885,456	-	-	-	7,085,493	
Other financial assets	-	126,949	-	-	-	-	126,949	
Total undiscounted financial assets	12,242,439	39,433,788	49,983,099	78,310,609	18,763,721	389,933	199,123,589	

Financial liabilities Due to banks	

716,374	

209,970	

909,506	

5,980,493	

-	

-	

7,816,343	
Due to customers	8,265,964	27,414,568	47,916,279	16,918,724	3,774,746	164,029	104,454,310	
Debt securities issued	-	1,189,974	7,230,443	7,442,993	-	-	15,863,410	
Other financial liabilities	-	4,131,671	-	-	-	-	4,131,671	
Operating lease liabilities	-	165,100	504,043	1,327,457	695,916	445,445	3,137,961	
Total undiscounted financial liabilities	8,982,338	33,111,283	56,560,271	31,669,667	4,470,662	609,474	135,403,695	
Net undiscounted financial assets/(liabilities)	3,260,101	6,322,505	(6,577,172)	46,640,942	14,293,059	(219,541)	63,719,894	

56. Risk Management (Company/Group) (Contd...)

Group

Year ended 31 March 2022	On demand

Rs. '000	Less than 3 months
Rs. '000	3 to 12 months Rs. '000	1 to 3 years Rs. '000	3 to 5 years Rs. '000	Over 5 years Rs. '000	Total

Rs. '000	

Financial Asset
Cash and cash equivalents	

4,902,498	

500,089	

-	

-	

-	

-	

5,402,587	
Balances with banks & financial institutions	-	6,253,870	3,223,189	78,302	-	-	9,555,361	
Financial assets -Fair value through profit or loss	
-	
849,298	
-	
-	
-	
-	
849,298	
Loans and receivables - Amortised cost	8,599,309	31,937,318	52,833,034	85,716,401	26,708,214	2,810,238	208,604,513	
Reinsurance and insurance receivable	-	1,268,209	572,030	-	-	-	1,840,239	
Financial assets - Fair value through other comprehensive income	
-	
1,632,931	
-	
-	
-	
10	
1,632,941	
Debt instrument - Amortised cost	-	12,353,948	703,564	2,606,801	1,215,056	-	16,879,369	
Total undiscounted financial assets	13,501,807	54,795,663	57,331,817	88,401,504	27,923,270	2,810,248	244,764,308	

Financial liabilities Due to banks	

254,427	

1,497,161	

4,536,077	

9,353,226	

347,088	

-	

15,987,978	
Due to customers	8,044,009	25,138,573	63,286,787	22,302,243	2,311,242	195,052	121,277,906	
Debt securities issued	-	1,453,682	619,948	13,046,604	5,602,650	-	20,722,884	
Other financial liabilities	-	4,043,322	-	-	-	-	4,043,322	
Insurance and reinsurance payable	5,864,646	38,717	-	-	-	-	5,903,363	
Operating lease liabilities	-	92,144	280,405	744,717	538,804	238,081	1,894,151	
Total undiscounted financial liabilities	14,163,082	32,263,599	68,723,217	45,446,790	8,799,784	433,133	169,829,604	
Net undiscounted financial assets/(liabilities)	(661,275)	22,532,064	(11,391,400)	42,954,714	19,123,486	2,377,115	74,934,704	

Group

As at 31 March 2021	On demand

Rs. '000	Less than 3 months
Rs. '000	3 to 12 months Rs. '000	1 to 3 years Rs. '000	3 to 5 years Rs. '000	Over 5 years Rs. '000	Total

Rs. '000	

Financial Asset
Cash and cash equivalents	

3,844,694	

-	

-	

-	

-	

-	

3,844,694	
Balances with banks & financial institutions	-	6,363,103	1,847,720	78,302	-	-	8,289,125	
Financial assets -Fair value through profit or loss	
-	
1,281,753	
-	
-	
-	
-	
1,281,753	
Loans and receivables - Amortised cost	9,980,624	29,213,835	49,532,596	81,133,788	19,671,995	696,060	190,228,898	
Reinsurance and insurance receivable	-	1,268,209	572,030	-	-	-	1,840,239	
Financial assets - Fair value through other comprehensive income	
-	
735,484	
-	
-	
-	
10	
735,494	
Debt instrument - Amortised cost	-	5,625,023	2,620,586	2,355,800	1,395,109	52,021	12,048,538	
Total undiscounted financial assets	13,825,318	44,487,407	54,572,933	83,567,889	21,067,104	748,091	218,268,741	

Financial liabilities Due to banks	

719,394	

406,341	

1,671,103	

7,118,036	

347,088	

-	

10,261,962	
Due to customers	8,265,964	27,414,774	47,916,668	16,918,724	3,774,746	164,029	104,454,905	
Debt securities issued	-	1,173,874	7,230,443	7,285,013	-	-	15,689,330	
Other financial liabilities	-	4,110,795	-	-	-	-	4,110,795	
Reinsurance and insurance payable	4,977,168	38,717	-	-	-	-	5,015,885	
Operating lease liabilities	-	93,154	283,394	720,481	517,268	411,070	2,025,367	
Total undiscounted financial liabilities	13,962,526	33,237,655	57,101,608	32,042,254	4,639,102	575,099	141,558,244	
Net undiscounted financial assets/(liabilities)	(137,208)	11,249,752	(2,528,675)	51,525,635	16,428,002	172,992	76,710,497	

56.3.3	Commitments and Guarantees
The table below shows the contractual expiry by maturity of the Company’s contingent liabilities and commitments. Each undrawn loan commitment is included in the time band containing the earliest date it can be drawn down.
For issued financial guarantee contracts, the maximum amount of the guarantee is allocated to the earliest period in which the guarantee could be called.

Company	On Demand Rs. '000	Less than 3 months
Rs. '000	3 to 12 months Rs. '000	1 to 5 years Rs. '000	Over 5 years
Rs. '000	Total Rs. '000	

As at 31st March 2022							
Guarantees	-	9,505	157,295	8,450	-	175,250	
Assessment received from Inland Revenue Department	
-	
-	
-	
50,953	
-	
50,953	
Litigation against the Company	-	188,667	54,130	-	-	242,797	
Capital commitment	-	5,562,802	820,432	-	-	6,383,234	
Total commitments and guarantees	-	5,760,974	1,031,857	59,403	-	6,852,234	

As at 31st March 2021							
Guarantees	-	2,500	334,098	127,500	-	464,098	
Assessment received from Inland Revenue Department	
-	
-	
-	
50,953	
-	
50,953	
Letter of credits	-	-	-	-	-	-	
Accidents of leased out vehicles	-	92,110	90,341	-	-	182,451	
Capital commitment	-	9,186,451	1,114,158	-	-	10,300,609	
Total commitments and guarantees	-	9,281,061	1,538,597	178,453	-	10,998,111	

Group	On Demand Rs. '000	Less than 3 months
Rs. '000	3 to 12 months Rs. '000	1 to 5 years Rs. '000	Over 5 years
Rs. '000	Total Rs. '000	

As at 31st March 2022							
Guarantees	-	9,505	157,295	8,450	-	175,250	
Assessment received from Inland Revenue Department	
-	
-	
-	
97,942	
-	
97,942	
Litigation against the Company	-	188,667	54,130	-	-	242,797	
Capital commitment	-	5,562,802	820,432	-	-	6,383,234	
Total commitments and guarantees	-	5,760,974	1,031,857	106,392	-	6,899,223	

As at 31st March 2021							
Guarantees	-	2,500	334,098	127,500	-	464,098	
Assessment received from Inland Revenue Department	
-	
-	
-	
97,942	
-	
97,942	
Letter of credits	-	-	-	-	-	-	
Accidents of leased out vehicles	-	92,110	90,341	-	-	182,451	
Capital commitment	-	9,186,451	1,114,158	-	-	10,300,609	
Total commitments and guarantees	-	9,281,061	1,538,597	225,442	-	11,045,100	

The Company expects that not all of the contingent liabilities or commitments will be drawn before expiry of the commitments.

56. Risk Management (Company/Group) (Contd...)
56.3.4	Total Liquid Assets
The table below sets out the components of the Company’s liquid assets;

As at 31st March	2022
Amount Rs. '000	2021
Amount Rs. '000	

Cash in hand	
1,135,991	
922,568	
Balances in current accounts	725,529	442,176	
Deposits in commercial banks	6,457,079	5,606,470	
Treasury bills and Treasury Bonds	9,801,050	6,955,980	
Other approved securities	500,000	-	
Total liquidity assets	18,619,649	13,927,194	

56.4	Market Risk
Market risk is the risk that the fair value or future cash flows of financial instruments will fluctuate due to changes in market variables such as interest rates, foreign exchange rates and equity prices. Company classifies exposures to market risk into either trading or non–trading portfolios and manages each of those portfolios separately.

Currently, increased volatility and decline in value of many financial asset classes may impact the trading books of most of companies due to the increased market risk. The uncertainty caused by the pandemic could lead to increased pressure on the local currency resulting in higher foreign exchange risk.

Company estimate how the reduction in interest rates will impact their rate sensitive assets and liabilities and the subsequent implication on profitability.

56.4.1	Interest Rate Risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s long-term debt obligations with floating interest rates. The Company policy is to continuously monitor interest rates on regular basis. The Company manages its interest rate risk by having a balanced portfolio of fixed and variable rate financial assets and financial liabilities.

The following table demonstrates the sensitivity of the Company’s Statement of Profit or Loss for the year ended 31st March 2022 and 31st March 2021 to a reasonable possible change in interest rates, with all other variable constant.

As at 31st March	2022
Rs. '000	2021
Rs. '000	

Impact on Statement of Profit or Loss due to interest rate shocks 0.50%	

(16,173)	

5,060	
1%	(32,346)	10,120	
-0.50%	16,173	(5,060)	
-1%	32,346	(10,120)	

Sensitivity of Lease Liability to Key Assumption

Sensitivity to Incremental Borrowing Rates	2022
Rs. ‘000	2021
Rs. ‘000	

Impact on Company's Statement of Financial Position due to interest rate shocks 1%	

(36,398)	

(51,625)	
-1%	37,621	53,585	

Interest Rate Risk Exposure on Financial Asset and Liabilities
The table below analyses the Company’s interest rate risk exposure on non–trading financial assets and liabilities. The Company’s assets and liabilities are included at carrying amount and categorised by the earlier of contractual re–pricing or maturity dates.

Company

2022	Carrying amount Rs. '000	On demand Rs. '000	Less than 3
months Rs. '000	3 to 12 months Rs. '000	1 to 3 years Rs. '000	3 to 5 years Rs. '000	Over 5 years Rs. '000	Non–interest
bearing Rs. '000	

Assets
Cash and cash equivalents	

4,668,830	

1,339,213	

500,000	

-	

-	

-	

-	

2,829,617	
Balances with banks & financial institutions	
5,117,866	
45,085	
5,072,781	
-	
-	
-	
-	
-	
Financial assets -Fair value through profit or loss	
25,140	
-	
-	
-	
-	
-	
-	
25,140	
Loans and receivables - Amortised cost	
161,162,024	
8,500,810	
24,622,184	
38,777,566	
68,688,567	
19,006,788	
1,566,110	
-	
Less - Impairment charges	9,887,570	-	-	-	-	-	-	-	
Net loans and receivables	151,274,454	-	-	-	-	-	-	-	
Financial assets - Fair value through other comprehensive income	

1,333,278	

-	

1,101,440	

-	

-	

-	

-	

231,838	
Debt instrument - Amortised cost	
9,827,221	
130,610	
9,696,611	
-	
-	
-	
-	
-	
Other financial assets	108,493	-	-	-	-	-	-	108,493	
Total	172,355,282	10,015,718	40,993,016	38,777,566	68,688,567	19,006,788	1,566,110	3,195,088	

Liabilities Due to banks	

11,749,332	

5,658,302	

499,284	

1,707,469	

3,884,277	

-	

-	

-	
Due to customers	103,367,904	11,252,713	24,226,715	50,606,239	15,163,949	1,944,607	173,681	-	
Debt securities issued	17,244,313	1,274,585	703,267	-	10,638,106	4,628,354	-	-	
Other Financial liabilities	3,636,528	-	-	-	-	-	-	3,636,528	
Operating lease liabilities	2,059,050	-	104,229	336,087	873,720	533,636	211,378	-	
Total	138,057,127	18,185,600	25,533,496	52,649,795	30,560,053	7,106,597	385,059	3,636,528	
Total interest sensitivity gap	34,298,155	(8,169,882)	15,459,520	(13,872,229)	38,128,514	11,900,191	1,181,051		

56. Risk Management (Company/Group) (Contd...)

Company

2021	Carrying amount Rs. '000	On demand Rs. '000	Less than 3
months Rs. '000	3 to 12 months Rs. '000	1 to 3 years Rs. '000	3 to 5 years Rs. '000	Over 5 years Rs. '000	Non–interest
bearing Rs. '000	

Assets
Cash and cash equivalents	

2,703,031	

207,423	

-	

-	

-	

-	

-	

2,495,608	
Balances with banks & financial institutions	
5,399,071	
48,621	
5,239,950	
110,500	
-	
-	
-	
-	
Financial assets -Fair value through profit or loss	
109,787	
-	
-	
-	
-	
-	
-	
109,787	
Loans and receivables - Amortised cost	
150,655,845	
10,084,836	
23,646,215	
37,222,146	
64,874,601	
14,683,282	
144,765	
-	
Less - Impairment charges	9,267,938	-	-	-	-	-	-	-	
Net loans and receivables	141,387,907	-	-	-	-	-	-	-	
Financial assets - Fair value through other comprehensive income	

309,118	

-	

-	

-	

-	

-	

-	

309,118	
Debt instrument - Amortised cost	
6,994,206	
42,014	
5,136,618	
1,815,574	
-	
-	
-	
-	
Other financial assets	126,949	-	-	-	-	-	-	126,949	
Total	157,030,069	10,382,895	34,022,783	39,148,220	64,874,601	14,683,282	144,765	3,041,462	

Liabilities Due to banks	

6,439,310	

2,044,668	

212,751	

708,063	

3,473,828	

-	

-	

-	
Due to customers	101,502,931	12,983,261	25,217,406	44,196,736	15,373,365	3,568,134	164,029	-	
Debt securities issued	13,825,553	1,047,215	-	6,788,102	5,990,237	-	-	-	
Other financial liabilities	4,132,110	-	-	-	-	-	-	4,131,671	
Lease Liability	2,286,386	-	94,358	310,505	968,680	540,782	372,061	-	
Total	128,186,290	16,075,144	25,524,515	52,003,405	25,806,110	4,108,916	536,090	4,131,671	
Total interest sensitivity gap	28,843,779	(5,692,249)	8,498,268	(12,855,185)	39,068,491	10,574,366	(391,325)		

The table below analyses the Group’s interest rate risk exposure on non–trading financial assets and liabilities. The Group’s assets and liabilities are included at carrying amount and categorised by the earlier of contractual re–pricing or maturity dates.

Group

2022	Carrying amount Rs. '000	On demand Rs. '000	Less than 3
months Rs. '000	3 to 12 months Rs. '000	1 to 3 years Rs. '000	3 to 5 years Rs. '000	Over 5 years Rs. '000	Non–interest
bearing Rs. '000	

Assets
Cash and cash equivalents	

5,402,587	

1,367,124	

675,252	

-	

-	

-	

-	

3,360,210	
Balances with banks & financial institutions	
9,529,518	
165,334	
8,157,504	
1,119,531	
87,149	
-	
-	
-	
Financial assets -Fair value through profit or loss	
849,298	
-	
-	
-	
-	
-	
-	
849,298	
Loans and receivables - Amortised cost	
174,162,982	
8,953,406	
27,386,685	
44,815,404	
70,250,288	
20,557,671	
2,199,528	
-	
Less-Impairment charges	10,842,136	-	-	-	-	-	-	-	
Net loans and receivables	163,320,846	-	-	-	-	-	-	-	
Reinsurance and insurance receivable	
1,322,528	
-	
-	
-	
-	
-	
-	
1,322,528	
Financial assets - Fair value through other comprehensive income	

1,632,941	

-	

1,401,103	

-	

-	

-	

-	

231,838	
Debt instrument - Amortised cost	
16,013,525	
296,309	
12,025,767	
642,362	
1,952,671	
1,096,416	
-	
-	
Total	198,071,243	10,782,174	49,646,311	46,577,297	72,290,108	21,654,087	2,199,528	5,763,874	

Liabilities Due to banks	

15,300,361	

6,927,576	

1,492,648	

2,258,534	

4,621,603	

-	

-	

-	
Due to customers	111,453,750	11,130,114	26,865,248	55,983,266	15,335,463	1,965,978	173,681	-	
Debt securities issued	17,103,223	1,259,276	703,267	-	10,512,326	4,628,354	-	-	
Other financial liabilities	4,043,322	-	-	-	-	-	-	4,043,322	
Insurance liabilities and reinsurance payables	
5,903,363	
-	
-	
-	
-	
-	
-	
5,903,363	
Lease Liability	1,588,115	-	57,568	60,239	735,620	531,620	203,068	-	
Total	155,392,134	19,316,966	29,118,731	58,302,039	31,205,012	7,125,952	376,749	9,946,685	
Total interest sensitivity gap	42,679,109	(8,534,792)	20,527,580	(11,724,742)	41,085,096	14,528,135	1,822,779		

56. Risk Management (Company/Group) (Contd...)

Group

2021	Carrying amount Rs. '000	On demand Rs. '000	Less than 3
months Rs. '000	3 to 12 months Rs. '000	1 to 3 years Rs. '000	3 to 5 years Rs. '000	Over 5 years Rs. '000	Non–interest
bearing Rs. '000	

Assets
Cash and cash equivalents	

3,844,694	

1,116,437	

-	

-	

-	

-	

-	

2,728,257	
Balances with banks & financial institutions	
8,231,101	
155,657	
6,748,376	
1,255,928	
71,139	
-	
-	
-	
Financial assets - Held-for- trading	
1,281,753	
-	
-	
-	
-	
-	
-	
1,281,753	
Loans and receivables - Amortised cost	
156,886,200	
10,920,045	
23,551,567	
39,474,971	
67,417,936	
15,070,779	
450,902	
-	
Less-Impairment charges	9,882,196	-	-	-	-	-	-	-	
Net loans and receivables	147,004,004	-	-	-	-	-	-	-	
Reinsurance and insurance receivable	
1,024,461	
-	
-	
-	
-	
-	
-	
1,024,461	
Financial assets - Fair value through other comprehensive income	

735,494	

-	

426,376	

-	

-	

-	

-	

309,118	
Debt instrument - Amortised cost	
10,931,714	
156,625	
5,621,571	
2,319,808	
1,410,868	
1,375,976	
46,866	
-	
Total	173,053,221	12,348,764	36,347,890	43,050,707	68,899,943	16,446,755	497,768	5,343,589	

Liabilities Due to banks	

9,003,873	

2,224,999	

350,755	

1,469,659	

4,611,372	

347,088	

-	

-	
Due to customers	103,743,716	12,883,575	26,307,059	45,356,462	15,450,062	3,572,101	174,457	-	
Debt securities issued	13,684,516	1,031,957	-	6,788,102	5,864,457	-	-	-	
Other financial liabilities	4,111,235	-	-	-	-	-	-	4,111,235	
Lease Liability	1,614,660	-	54,905	181,364	561,176	477,770	339,446	-	
Insurance liabilities and reinsurance payables	
5,015,885	
-	
-	
-	
-	
-	
-	
5,015,885	
Total	137,173,885	16,140,531	26,712,719	53,795,587	26,487,067	4,396,959	513,903	9,127,120	
Total interest sensitivity gap	35,879,336	(3,791,767)	9,635,171	(10,744,880)	42,412,876	12,049,796	(16,135)		

56.4.2	Currency Risk
Currency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates. Since investments in USD deposits were low, the currency risk od the Company/Group is minimal.
The tables below indicate the currencies to which the Group had significant exposures as at 31st March 2022 and the effect to the Gains/Losses in case of a market exchange rates up/drop by 1%. The analysis calculates the effect of a reasonably possible movement of the currency rate against the LKR, with all other variables held constant, on the Statement of Profit or Loss (due to the fair value of currency sensitive non trading monetary assets and liabilities).

Impact on Statement of Profit or Loss due to Exchange Rate Shocks

Change in currency rate in % Rs. '000	Company	Group	
		2022
Effect on
profit before tax Rs. '000	2021
Effect on
profit before tax Rs. '000	2022
Effect on
profit before tax Rs. '000	2021
Effect on
profit before tax	

USD	
1	
-	
-	
972	
375	
USD	-1	-	-	(972)	(375)	

56.4.3	Equity Price Risk
The sensitivity analysis for equity risk reflects how changes in the fair value of equity securities at the reporting date will fluctuate in response to assumed changes in equity market prices. The movements in the fair value of equity securities monitored by assessing the projected changes in the fair value of equity securities held by the portfolios in response to assumed equity price movements of +/- 1%.

1% increase/decrease in equity market prices	2022	2021	
	Effect on net asset
value Rs. '000	Effect on profit before
tax Rs. '000	Effect on comprehensive
income Rs. '000	Effect on net asset
value Rs. '000	Effect on profit before
tax Rs. '000	Effect on comprehensive
income Rs. '000	

Company
Financial assets - FVTPL	

251	

251	

-	

136	

136	

-	
Financial assets - FVOCI	2,208	-	2,208	3,244	-	3,244	

Group
Financial assets - FVTPL	

1,748	

1,748	

-	

272	

272	

-	
Financial assets - FVOCI	2,208	-	2,208	3,244	-	3,244	

56.4.4	Commodity Price Risk
Commodity price risk refers to the uncertainty of future market value and future income scale caused by commodity price fluctuations. Given the importance of the gold loan to the group, volatility in gold prices may adversely affect Statement of Profit or Loss. Fluctuations in gold prices lead to market risk, which is the main source of credit risk associated with this product.

Following strategies are used to manages the credit and market risks arising from adverse changes in gold prices by the Group.

●	LTV - The Group implements a process of revising the advance payments for each gold sovereign to reflect market value volatility to maintain an ideal loan-to-value ratio.
●	Product Lifetime - As a credit risk management strategy, the Group deliver services in less time, enabling a faster recovery process.
●	

56. Risk Management (Company/Group) (Contd...)
56.5	Operational Risk
Operational risk is the risk of loss arising from systems failure, human error, fraud or external events. When controls fail to operate effectively, operational risks can cause damage to reputation, have legal or regulatory implications, or lead to financial loss.

Operational risk of the Company are managed through a effective operational risk management framework which consists of monitoring and responding to potential risks.

56.6	Insurance Risks
People’s Insurance PLC (PI) is a subsidiary of the Company whose principle line of business is carrying out general insurance business. The following are the risks and their management arising from PI for its statutory year ended 31 March 2022.

56.6.1	Regulatory Framework
Regulators are primarily interested in protecting the rights of policyholders and monitor them closely to ensure that the PI is satisfactorily managing affairs for policyholders’ benefit. At the same time, regulators are also interested in ensuring that the PI maintains an appropriate solvency position to meet unforeseen liabilities arising from economic shocks or natural disasters.

As an insurer, the operations of the PI are subject to regulatory supervision of the Insurance Board of Sri Lanka (IBSL). PI has taken necessary action to comply with and complied with applicable regulations throughout the year.

56.6.2	Nature and Extent of Risks Arising from Insurance Contracts
Objectives, Policies and Processes for Managing Risks Arising from Insurance Contracts
PI willingly assumes risks of other organisations as its prime value creation activity. This is the core of the insurance business and there is no perfect way of measuring the potential impact on insured risk. For non-life insurance business, most significant risks arise from climate changes, natural disasters and terrorist activities.

The above risk exposure is mitigated by diversification across a large portfolio of insurance contracts and geographical areas. PI’s risk management framework focuses on strategic risk, assumed risks and the potential risks. PI identifies and categorises risks in terms of their source, their impact on PI and preferred strategies for dealing with them.

Method used to Manage Risks
Risk Appetite and Risk Tolerance
PI has made a strategic decision to maintain a risk appetite moderately above the average of the insurance market, since it allows the best potential for creating shareholder value at an acceptable risk level. PI manages the volatility and potential downward risk through diversification.

Identification of Shock Losses
There are three areas of risk which have the potential to materially damage economic value that PI identified at present as having the greatest potential for shock losses. They are catastrophe, reserving and equity investment risk. PI manages the risk of shock losses by setting limits on the tolerance for specific risks and on the amount of capital that PI is willing to expose.

The table below sets out the concentration of non-life insurance contract liabilities by type of contract.

	31-Mar-22	31-Mar-21	
	Gross liabilities Rs. '000	Reinsurance receivable Rs. '000	Net liabilities
Rs. '000	Gross liabilities Rs. '000	Reinsurance receivable Rs. '000	Net liabilities Rs. '000	

Motor	
789,121	
18,464	
770,657	
655,925	
70,757	
585,168	
Marine	32,253	19,809	12,444	5,792	5,607	185	
Fire	159,013	99,139	59,874	96,986	120,000	(23,014)	
Miscellaneous	310,487	134,685	175,802	182,361	80,914	101,447	
Total	1,290,874	272,096	1,018,778	941,064	277,278	663,786	

Claims Development Table
The following tables show the estimates of cumulative incurred claims for each quarter, together with cumulative payments to date.

Gross Non-Life Insurance Outstanding Claims Provision for 2022

Accident Period	Current estimate of cumulative claims incurred	
	2010/11
Rs. '000	2011/12
Rs. '000	2012/13
Rs. '000	2013/14
Rs. '000	2014/15
Rs. '000	2015/16
Rs. '000	2016/17
Rs. '000	2017/18
Rs. '000	2018/19
Rs. '000	2019/20
Rs. '000	2020/21
Rs. '000	2021/22
Rs. '000	Total Rs. '000	

2021/22	
(189)	
(3,008)	
15,126	
7,408	
146	
222	
999	
1,026	
591	
16,315	
111,109	
3,268,431	
3,418,177	
2020/21	193	10,771	1,012	685	539	2,236	10,692	11,085	32,949	3,072	3,536,534	-	3,609,768	
2019/20	-	42,085	5,515	1,591	1,014	2,662	4,183	31,282	92,881	3,803,005	-	-	3,984,218	
2018/19	(120)	11,385	51	(8,584)	4,918	(9,647)	21,099	73,912	3,165,480	-	-	-	3,258,494	
2017/18	(844)	4,738	(608)	8,298	5,704	21,071	33,255	2,792,805	-	-	-	-	2,864,419	
2016/17	(945)	(113)	(17,006)	(8,555)	5,397	50,267	2,635,203	-	-	-	-	-	2,664,248	
2015/16	1,703	6,377	(5,165)	35,874	31,044	2,182,704	-	-	-	-	-	-	2,252,537	
2014/15	1,465	1,577	28,391	(15,126)	2,040,473	-	-	-	-	-	-	-	2,056,780	
2013/14	3,148	50,297	(167,837)	2,042,094	-	-	-	-	-	-	-	-	1,927,702	
2012/13	4,224	(58,704)	2,042,934	-	-	-	-	-	-	-	-	-	1,988,454	
2011/12	2,762	1,396,938	-	-	-	-	-	-	-	-	-	-	1,399,700	
2010/11	213,653	-	-	-	-	-	-	-	-	-	-	-	213,653	
Current estimated of cumulative claims incurred	

225,051	

1,462,343	

1,902,413	

2,063,685	

2,089,235	

2,249,515	

2,705,431	

2,910,110	

3,291,901	

3,822,392	

3,647,643	

3,268,431	

29,638,150	

Accident Period	Cumulative payments to date	
	2010/11
Rs. '000	2011/12
Rs. '000	2012/13
Rs. '000	2013/14
Rs. '000	2014/15
Rs. '000	2015/16
Rs. '000	2016/17
Rs. '000	2017/18
Rs. '000	2018/19
Rs. '000	2019/20
Rs. '000	2020/21
Rs. '000	2021/22
Rs. '000	Total Rs. '000	

2021/22	
-	
(58)	
(18,331)	
(8,800)	
(4,385)	
(4,003)	
(6,113)	
(7,021)	
(9,262)	
(6,619)	
(528,921)	
(2,475,612)	
(3,069,125)	
2020/21	(193)	(3,154)	(9,536)	(6,513)	(8,510)	(11,979)	(16,068)	(19,079)	(33,096)	(761,838)	(3,025,348)	-	(3,895,314)	
2019/20	-	(84,791)	(9,222)	(4,101)	(13,820)	(21,259)	(15,975)	(39,809)	(551,787)	(2,956,804)	-	-	(3,697,568)	
2018/19	-	(16,329)	(5,532)	(14,079)	(15,396)	(26,780)	(26,927)	(515,478)	(2,646,682)	-	-	-	(3,267,202)	
2017/18	(2,129)	(8,627)	(10,057)	(10,447)	(13,186)	(30,768)	(468,923)	(2,267,584)	-	-	-	-	(2,811,721)	
2016/17	(390)	(8,262)	(16,478)	(12,958)	(23,979)	(389,878)	(2,129,944)	-	-	-	-	-	(2,581,889)	
2015/16	(1,718)	(16,664)	(53,691)	(28,525)	(395,617)	(1,743,315)	-	-	-	-	-	-	(2,239,530)	
2014/15	(2,329)	(19,215)	(29,760)	(329,993)	(1,586,379)	-	-	-	-	-	-	-	(1,967,676)	
2013/14	(3,495)	(57,574)	(252,384)	(1,621,312)	-	-	-	-	-	-	-	-	(1,934,765)	
2012/13	(5,154)	(311,763)	(1,465,582)	-	-	-	-	-	-	-	-	-	(1,782,499)	
2011/12	(72,227)	(893,615)	-	-	-	-	-	-	-	-	-	-	(965,842)	
2010/11	(134,902)	-	-	-	-	-	-	-	-	-	-	-	(134,902)	
Cumulative payments to date	
(222,537)	
(1,420,052)	
(1,870,573)	
(2,036,728)	
(2,061,272)	
(2,227,982)	
(2,663,950)	
(2,848,971)	
(3,240,827)	
(3,725,261)	
(3,554,269)	
(2,475,612)	
(28,348,034)	
Total Gross claims outstanding	
2,514	
42,292	
31,840	
26,957	
27,963	
21,533	
41,481	
61,139	
51,074	
97,130	
93,374	
792,820	
1,290,117	

56.	Risk Management (Company/Group) (Contd...)
Net Non-Life Insurance Outstanding Claims Provision for 2022

Accident Period	Current estimate of cumulative claims incurred	
	2010/11
Rs. '000	2011/12
Rs. '000	2012/13
Rs. '000	2013/14
Rs. '000	2014/15
Rs. '000	2015/16
Rs. '000	2016/17
Rs. '000	2017/18
Rs. '000	2018/19
Rs. '000	2019/20
Rs. '000	2020/21
Rs. '000	2021/22
Rs. '000	Total Rs. '000	

2021/22	
-	
(7.65)	
15,126	
7,408	
1,541	
1,712	
2,478	
2,220	
5,946	
31,291	
170,895	
2,860,271	
3,098,882	
2020/21	193	10,771	1,012	685	539	2,236	10,139	12,479	34,119	88,484	3,339,422	-	3,500,079	
2019/20	-	321	5,515	1,591	1,014	2,667	4,325	37,666	79,873	3,398,413	-	-	3,531,385	
2018/19	(120)	11,400	51	(11,575)	5,037	(3,500)	24,501	77,270	3,106,289	-	-	-	3,209,354	
2017/18	(844)	9,001	(608)	14,290	5,742	15,721	37,716	2,692,279	-	-	-	-	2,773,296	
2016/17	(945)	(128)	(16,949)	(10,511)	6,864	59,287	2,549,666	-	-	-	-	-	2,587,284	
2015/16	1,599	6,454	(3,982)	34,203	16,076	2,100,737	-	-	-	-	-	-	2,155,087	
2014/15	1,465	2,382	28,151	(15,127)	2,023,094	-	-	-	-	-	-	-	2,039,965	
2013/14	3,157	51,344	(158,485)	2,034,121	-	-	-	-	-	-	-	-	1,930,137	
2012/13	4,239	(15,515)	1,976,422	-	-	-	-	-	-	-	-	-	1,965,146	
2011/12	4,621	1,224,086	-	-	-	-	-	-	-	-	-	-	1,228,707	
2010/11	209,132	-	-	-	-	-	-	-	-	-	-	-	209,132	
Current estimated of cumulative claims incurred	

222,497	

1,300,116	

1,831,127	

2,047,677	

2,058,366	

2,177,148	

2,626,347	

2,819,694	

3,220,281	

3,486,897	

3,339,422	

2,860,271	

28,228,454	

Accident Period	Cumulative payments to date	
	2010/11
Rs. '000	2011/12
Rs. '000	2012/13
Rs. '000	2013/14
Rs. '000	2014/15
Rs. '000	2015/16
Rs. '000	2016/17
Rs. '000	2017/18
Rs. '000	2018/19
Rs. '000	2019/20
Rs. '000	2020/21
Rs. '000	2021/22
Rs. '000	Total Rs. '000	

2021/22	
-	
(57)	
(17,574)	
(8,800)	
(4,385)	
(4,002)	
(6,112)	
(7,020)	
(9,256)	
3,385	
(509,417)	
(2,371,210)	
(2,934,450)	
2020/21	(193)	(3,154)	(9,536)	(6,513)	(8,510)	(11,979)	(15,515)	(18,797)	(19,011)	(508,359)	(2,938,267)	-	(3,539,834)	
2019/20	-	(13,201)	(9,222)	(4,101)	(13,820)	(21,259)	(15,969)	(32,630)	(521,977)	(2,902,120)	-	-	(3,534,299)	
2018/19	-	(16,329)	(5,532)	(11,079)	(15,396)	(26,799)	(25,385)	(492,761)	(2,619,040)	-	-	-	(3,212,322)	
2017/18	(2,129)	(8,627)	(10,057)	(10,432)	(13,132)	(30,608)	(446,918)	(2,209,836)	-	-	-	-	(2,731,738)	
2016/17	(390)	(8,244)	(16,282)	(12,833)	(23,866)	(387,579)	(2,075,965)	-	-	-	-	-	(2,525,159)	
2015/16	(1,614)	(16,664)	(31,860)	(27,883)	(369,486)	(1,756,890)	-	-	-	-	-	-	(2,204,397)	
2014/15	(2,329)	(17,417)	(29,152)	(329,883)	(1,564,956)	-	-	-	-	-	-	-	(1,943,737)	
2013/14	(3,495)	(32,280)	(226,969)	(1,593,260)	-	-	-	-	-	-	-	-	(1,856,004)	
2012/13	(5,123)	(248,760)	(1,424,239)	-	-	-	-	-	-	-	-	-	(1,678,122)	
2011/12	(71,904)	(881,711)	-	-	-	-	-	-	-	-	-	-	(953,615)	
2010/11	(131,282)	-	-	-	-	-	-	-	-	-	-	-	(131,282)	
Cumulative payments to date	
(218,459)	
(1,246,387)	
(1,762,849)	
(1,995,984)	
(2,009,166)	
(2,235,114)	
(2,579,752)	
(2,754,024)	
(3,160,028)	
(3,410,479)	
(2,938,267)	
(2,371,210)	
(27,244,959)	
Total net claims outstanding	
4,038	
53,729	
68,278	
51,693	
49,200	
(57,966)	
46,595	
65,670	
60,253	
76,418	
401,155	
489,061	
983,495	

57.	Comparative Information
Accounting Policy
The accounting policies have been consistently applied by the Company and the Group with those of the previous financial year in accordance with the Sri Lanka Accounting Standard - LKAS 01 - ‘Presentation of Financial Statements’. Comparative information including quantitative, narrative and descriptive information is disclosed in respect of the previous period in the Financial Statements in order to enhance the understanding of the current period’s Financial Statements and to enhance the inter period comparability. The presentation and classification of the Financial Statements of the previous year are amended, where relevant for better presentation and to be comparable with those of the current year..

The presentation and classification of the following items in these financial statements are amended to ensure the comparability with the current year.

	Group	
	As disclosed previously Rs. ‘000	Current Presentation
Rs. ‘000	
Adjustment Rs. ‘000	

Statement of Financial Position
Loans and receivables - Amortised cost	

149,342,332	

147,004,004	

(2,338,328)	
Debt instrument - Amortised cost	8,593,386	10,931,714	2,338,328	

Debenture included in Loans and receivables - Amortised cost reclassified to Debt instrument - Amortised cost

58.	Events After The Reporting Period
No circumstances have arisen since the reporting date which would require adjustments to, or disclosure in the Financial Statements, other than those disclosed below.

58.1	Final Dividend
Subsequent to the reporting date, the Board of Directors of the Company recommended the payment of a final dividend of Rs. 0.50 per share in the form of scrip dividend for the year ended 31 March 2022. This final dividend is yet to be approved at the Annual General Meeting. In accordance with the Sri Lanka Accounting Standard – LKAS 10 (Events After the Reporting Period), this proposed final dividend has not been recognised as a liability as at 31 March 2022.

58.2	Surcharge Tax
The Government of Sri Lanka in its Budget for 2022 proposed a one-time tax, referred to as a surcharge tax, at the rate of 25% to be imposed on any company that have earned a taxable income in excess of LKR 2,000 million for the year of assessment 2020/2021.The tax is imposed by the Surcharge Tax Act No. 14 of 2022 which was passed by the Parliament of Sri Lanka on 7 April 2022.As the law imposing the surcharge tax was enacted after the reporting period end, the financial statements for the year ended 31 March 2022 do not reflect the tax liability that would arise in consequence, the amount of which is best estimated at Rs. 1,947,166,890