Sri Lanka
Financial Reporting Obligations for Companies in Sri Lanka
1. Registry for Submitting Financial Statements
In Sri Lanka, companies are required to submit their financial statements (annual reports) to the Department of Registrar of Companies (ROC) (https://drc.gov.lk/en/) රජිස්ට්රාර් වෙතින් සමාගම් කාර්යාලය). These reports can be submitted electronically via the ROC’s e-ROC platform (https://eroc.drc.gov.lk/).
Public Access to Financial Statements:
In Sri Lanka, financial statements of listed companies are publicly available through the Colombo Stock Exchange (CSE) (https://www.cse.lk/).
However, financial reports of private companies (Pvt Ltd, partnerships and other non-listed entities) are not publicly accessible. Such reports are filed with the Department of Registrar of Companies (ROC) but are not disclosed to the general public.
2. Legal Forms Obliged to Publish Financial Statements
Legal forms in Sri Lanka that are obliged to submit and publish their financial statements (annual reports) include:
- සමාගම් සීමාසහිත (Private Limited Company - Pvt Ltd)
- Must submit annual financial statements to the Department of Registrar of Companies.
- පොදු සමාගම් සීමාසහිත (Public Limited Company - PLC)
- Must submit annual financial statements and undergo mandatory audits regardless of size.
- සීමාසහිත පරමාර්ථ සහගත සමාගම (Company Limited by Guarantee)
- Must submit annual financial statements if the company's turnover or assets exceed specified thresholds.
- අධීක්ෂණය සමාගම (Supervisory Company)
- Must submit financial statements based on the supervisory nature of its operations.
- ආයතනයක් (Institutions/Non-Governmental Organizations - NGOs)
- Must submit annual financial statements if thresholds are met for income or activity levels.
Legal Forms Not Obliged to Publish Financial Statements
Certain legal forms are not required to publish their financial statements but may still need to maintain financial records for tax purposes:
- ඕනෑම විනිමය සමගිතාව (Sole Proprietorships)
- Exempt from publishing financial statements but must maintain financial records for tax purposes.
- අනුශාසන සමගිතාව (Partnerships)
- Exempt from mandatory submission unless turnover or asset thresholds are crossed.
- සමෘද්ධි කර්මාන්ත (Charitable Trusts and Associations)
- Exempt from submission unless conducting business or engaging in activities that exceed certain thresholds.
- විදේශීය සමාගම් ශාඛා (Branches of Foreign Companies)
- Required to submit financial reports based on parent company obligations but with exceptions for non-commercial branches.
3. Companies Requiring Audited Financial Statements
In Sri Lanka, companies are required to have their financial statements audited if they meet specific conditions, which are governed by the Sri Lanka Auditing Standards (SLAuS) (https://www.casrilanka.com/casl/index.php?Itemid=340&id=236&lang=en&option=com_content&view=article) and Sri Lanka Accounting and Auditing Standards Act (https://www.srilankalaw.lk/s/1146-sri-lanka-accounting-and-auditing-standards-act.html). Medium and large companies must generally undergo audits, while smaller entities are exempt unless they meet certain thresholds.
The table below lists the legal forms, the rules regarding audit requirements, and the criteria that companies must meet to be subjected to audits:
|
Legal Form (in Sinhala) |
Audit Rule |
Criteria (must meet at least two of the three) |
|
සමාගම් සීමාසහිත (Private Limited Company - Pvt Ltd) |
Mandatory audit if thresholds are exceeded |
|
|
පොදු සමාගම් සීමාසහිත (Public Limited Company - PLC) |
Audit always required |
No minimum thresholds; audit is always mandatory for PLCs. |
|
සීමාසහිත පරමාර්ථ සහගත සමාගම (Company Limited by Guarantee) |
Audit required if thresholds are exceeded |
|
|
අධීක්ෂණය සමාගම (Supervisory Company) |
Audit always required |
Audits are required based on the nature of the operations. |
|
විදේශීය සමාගම් ශාඛා (Branches of Foreign Companies) |
Audit depends on parent company obligations |
Must follow parent company rules, but also subject to Sri Lankan audit requirements if local thresholds are exceeded. |
|
අනුශාසන සමගිතාව (Partnerships) |
Audit required if thresholds are exceeded |
|
|
සාමාන්ය සමාගම (Ordinary Company) |
Mandatory audit if thresholds are exceeded |
|
Key Criteria for Audit Obligation:
- Turnover Threshold: Companies with a turnover exceeding LKR 100 million must undergo an audit.
- Total Assets Threshold: Companies with total assets exceeding LKR 50 million are subject to audits.
- Employee Threshold: Companies employing more than 100 employees must have their financial statements audited.
Special Considerations:
- Listed Companies: All companies listed on the Colombo Stock Exchange (CSE) (https://cse.lk/) must have their financial statements audited, regardless of their size or thresholds.
- Medium and Large Companies: Companies that meet at least two of the three key criteria (turnover, total assets, and number of employees) are required to undergo audits.
- Small Companies: Small companies that do not meet at least two of the three criteria are generally exempt from mandatory audits but can opt for voluntary audits.
4. Local Stock Exchange and Financial Statements Publication
Companies listed on the local stock exchange, Colombo Stock Exchange (CSE), must publish their financial statements in accordance with exchange regulations.
5. Deadline for Submitting Financial Statements
The deadline to submit financial statements for most legal forms in Sri Lanka is six months after the end of the fiscal year. Listed companies must follow stricter deadlines, as defined by the Colombo Stock Exchange.
6. Companies Submitting Partial Financial Statements
Certain smaller legal entities with lower turnover or total assets (below LKR 15 million) are allowed to submit simplified financial statements.
7. Consequences for Late Submission of Financial Statements
Failure to submit financial statements on time can result in various penalties, including fines and legal actions. Fines range between LKR 10 000 and LKR 100 000. Repeated non-compliance can lead to the company being struck off the Department of Registrar of Companies registry.
8. Requirements for Foreign-Owned Branches and Newly Established Companies
Foreign-owned branches operating in Sri Lanka must submit financial statements according to both Sri Lankan law and the regulations of their parent company. Newly established companies must submit their financial statements by the end of their first fiscal year.
Sources
| Source | Link |
| Department of Registrar of Companies (ROC) | https://drc.gov.lk/en/ |
| e-ROC Portal | https://eroc.drc.gov.lk/ |
| Sri Lanka Auditing Standards (SLAuS) | https://www.casrilanka.com/casl/index.php?Itemid=340&id=236&lang=en&option=com_content&view=article |
| Sri Lanka Accounting and Auditing Standards Act, No. 15 of 1995 | https://www.srilankalaw.lk/s/1146-sri-lanka-accounting-and-auditing-standards-act.html |
| Colombo Stock Exchange (CSE) | https://cse.lk/ |
| Start Companies Search | Order Credit Report |
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