Ministry of Industry and Commerce

Department of Registrar of Companies

Performance Report and Annual Accounts

2010

Head - 297

Samagam Medura

No. 400, D.R.Wijewardena Mawatha,

Colombo 10.

Index

1. Introduction

1.2 Objects and Functions

1.3 Units and their functions

1.4 Priorities

1.5 Facilitation Offices

2. Performance

2.1 Registration of Companies

2.1.1 Company Registration details under the Companies Act No. 07 of

2007

2.1.2 Number of names of companies struck off

2.2 Registration of Societies

2.2.1 Details of Registration of Societies

2.3 Registration of Auditors and Company Secretaries

2.4 Registration of Public Contracts

3. Financial Performance

3.1 Company Fund

3.1.1 Revenue and Expenditure Account

3.1.2 Balance Sheet

3.1.3 Liquidation account of Companies

3.2 Revenue account

3.2.1 Account of Company Registrar

3.2.2 Account of fees of public contract registrar

3.3 Appropriation Account

3.4 Public Officers Advance “B” Account

Vision

“Develop and foster a trusted business environment by making available an effective regulatory regime

capable of instilling a culture of good governance covering the business sector in Sri Lanka”

Mission

“The Department of the Registrar of Companies in accordance with the economic and trade policy of

the Government of Sri Lanka endeavours to give legal form to business and other institutions under

the Acts administered by it and regulate their functions.”

1. Introduction

It is 60 years since the registration of companies was first brought under a Registrar of companies and

established as a separate department. It continues as the main storehouse of information of companies

registered under the Companies Acts. The Registrar General of Companies is the head of the department

in whom the supervisory and regulatory powers of the Companies Act have been vested. One Deputy

Registrar of Companies and four Assistant Registrars constitutes the permanent cadre. An Accountant

and an Administrative Officer appointed from the Combined Service form the management and

administrative team of the department. The support staff comprises 4 Inspectors on its permanent cadre

and 52 Management Assistant service officers and minor staff appointed from the combined service. The

department at present provides an Island wide service in the subjects assigned to it.

1.2 Objects and Functions –

The principal object of the department is to implement, administer and enforce the several pieces of

legislation assigned to it, which are the

(a) The Companies Act No. 7 of 2007

(b) The Societies ordinance chapter 123

(c) The Cheetu Ordinance No.61 of 1935

(d) the Public Contracts Act No. 3 of 1987.

(a) The Companies Act No.7 of 2007 includes the following functions

i. Incorporation of Private Limited Liability Companies

ii. Incorporation of Public Limited Liability Companies.

iii. Registration of Foreign Companies

iv. Incorporation of Unlimited Companies

v. Incorporation of Companies Limited by Guarantee

vi. Incorporation of associations

vii. Conversion of Public corporations and Government owned business undertakings into Public

companies under the Act No.23 of 1987

viii. Registration of Auditors and Company Secretaries

(b) Societies Ordinance Chapter 123

The regulation of societies registered under the ordinance. The number of societies registered as at 30th

September 2011 was 11026.

(c ) Cheetu Ordinance No.61 of 1935

The Cheetu Ordinance provides for the registration and regulation of cheetus.

(d) Public Contracts Act No.3 of 1987

This Act provides for the registration of persons who act as agents, sub agents, representatives or

nominees of any tenderer for a public contract exceeding Rs.5 million.

1.3 Units and their functions

(a) Information Unit

Three experienced and well trained senior officers capable of attending to most inquiries expeditiously have

been appointed to serve in this unit. All documents brought in by the public are scrutinised by them before

they are accepted. This procedure ensures minimum inconvenience and delays in the registration and issue

of certified copies of documents.

(b) (b) Approval of Names and Incorporation of new Companies

Two very senior officers who report directly to the Registrar General of Companies, have been assigned the

task of approving of names of companies and incorporation of new companies. Usually a name is approved

the day after the application is presented and in the case of incorporation the certificate is issued on the day

after the documents are received. The total number of new companies registered under the Companies Act

No.7 of 2007 up to 30th September 2011 is 24052. Total number of companies registered as at 30

th

September 2011 is 5993 and it is an increased of 40.35 % over the same period in 2010. Total number of

existing companies as at 30th September 2011 is 48961.

(c) Registration Units

The registration of documents and issue of certified copies of documents constitutes the bulk of the work of

the department. This work is carried out in four units manned by 24 Public Management Assistant Service

Officers, each unit functioning under an Assistant Registrar.

(d) Liquidation Unit

Liquidation of Companies is a separate subject assigned to one of the assistant registrars. The number of

companies under liquidation at present is 75 while there are 168 companies which are not carrying on

business that are in the process of being struck off the register.

Dissolution and Cancellation of Companies from 1st January 2011 to 30

th September 2011

Members voluntary liquidation 46

Creditors voluntary liquidation 08

Court winding up 20

Striking off under section 394 of the Act 128

Striking off under amalgamation (section 245) 21

Total 223

(e) Re-registration Unit

This unit which was established in May 2007 with the introduction of the Companies Act No. 7 of 2007 to

facilitate the re-registration of companies, has completed the bulk of its work. The unit was headed by an

Assistant Registrar and was manned by 13 clerks specially recruited for the purpose on a temporary basis.

The following figures show the present position.

Applications

received

Number

Registered

Number of Names of

Companies Struck off for

Failing to Reregister

Applications

Pending

26202 24823 35812 1120

(f) Record Room

A Documents Investigation Technology Assistant and nine minor employees man the record room under

the supervision of an Assistant Registrar of Companies. The number of company files in the record room

keeps increasing on a daily basis. The urgent need for automation of the department and particularly the

record room is being felt increasingly.

(g) Prosecution Unit

The department has a cadre of four Inspectors on the permanent staff to handle the prosecution work of

the department. They institute prosecutions against defaulting companies and directors as well as carry

out inspections and assist in inquiries. Currently there are three vacancies that have to be filled. The

number of new prosecutions instituted in 2011 is 13 In addition 859 offences were compounded without

prosecution. Total value of compounding charges is Rs. 2,348,250/=

(h) Accounts and Establishments Units

Two separate units under an Accountant and the Administrative Officer respectively are entrusted with

the accounting and administrative functions of the department. The total income for the year as at 30th

September 2011 was Rs. 133.48 million and the total expenditure Rs.41.5 million.

1.4 Priorities

Automation of the department

The project to computerise the department is gaining momentum. Expressions of Interest have been

invited and they are being processed. It is expected to complete the project in 2012

1.5 Facilitation Offices

A facilitation office was opened in Vavuniya in July of this year under the Government Agent of the

district.

2. Performance

2.1 Registration of Companies

2.1.1 Company Registration details under the Companies Act No. 07 of

2007

Category of Companies 2007 2008 2009 2010 As at

October2011

Private limited liability

companies

Public limited liability

company

Companies limited by

guarantee

Associations

Foreign companies

Off-shore companies

2534

339

21

56

13

00

4075

246

23

154

32

01

3863

199

26

106

28

01

5752

358

37

161

30

03

5239

569

37

104

36

01

Registered companies

Re registration of

companies

2963

1928

4531

9784

4223

7606

6341

3095

5986

2201

Total 4891 14315 11829 9436 8187

Number of functioning

companies

4 891

19206

31035

40471

48658

2.1.2 Number of names of companies struck off

Under the section 394(3) - 535

Creditors voluntary - 29

Members voluntary - 160

Court winding up - 52

Under amalgamation - 55

Under the section 487(3) of Companies Act - 35812

05

2.2 Registration of Societies

2.2.1 Details of Registration of Societies

Category of

Society

Before

2008

2008 2009 2010 As at November

2011

Grameeya

Sanwardana

Isuru

Sanwardana

Kantha Samithi

Mithuru

Sanwardana

Other

Sarvodaya

Viharasthana

54

76

01 -

22

127

88

-

01

- -

05

41

42

-

38

- -

19

93

34

-

22

02

47

40

36

218

Total 10150 368 89 184 365

Total number of Registered Societies as at 30.11.2011 = 11156

2.3 Registration of Auditors and Company Secretaries

Auditors Company Secretaries

2007 2008 2009 2010

47

31

47

65

597

387

493

545

2.4 Registration of Public Contracts

Quantity Revenue

2007 2008 2009 2010

926 2702 2635 2883

463000.00

1351000.00

1358000.00

1482000.00

2.5 Registration of Documents under the Companies Act No. 07 of 2007

2009 2010

Category of Documents Quantity Revenue Quantity Revenue

Amalgamation 240 84000.00 170 59500.00

Court Orders 40 14000.00 32 11200.00

Debenture of Shares 1 750.00

Change of Name 310 108500.00 410 143500.00

Registration of Companies limited by gurantee 147 1755500.00 204 2448000.00

Notice of Share issue 3058 1070300.00 4498 1574300.00

Calls on shares 2 700.00 1 350.00

Notice of Reduction of Stated capital 22 7700.00 20 7000.00

Notice of aquire of redeem its own shares 59 20650.00 92 32200.00

Certificate of Charges 1921 1440750.00 1983 1487250.00

Particulars of Issuing Debentures 1 350.00 1 750.00

Statement of veryfiying the releasment of Charges 52 18200.00 47 16450.00

Change of the Registered office 2226 779100.00 2072 725200.00

Change of the location of company records 452 158200.00 170 59500.00

Annual Returns 21428 53570000.00 23457 58641750.00

Annual Returns ( limited by gurantee) 569 1422500.00 593 1482500.00

Notice of the location of accounting records 4 1400.00 8 2800.00

Change of balance sheet date 20 7000.00 27 9450.00

Consent of director 19201 6720350.00 26903 9416050.00

Consent of Secretary 6233 2181550.00 8586 3005100.00

Notice of the Change of Director / Secretary 10003 3507350.00 9407 3294100.00

Notice 2 700.00 2 700.00

Alteration of details in Off-shore company 4 1400.00

Cessation of business as an Off-shore company 4 1400.00

Court winding up 16 5600.00 12 4200.00

Members voluntary liquidation 43 15050.00 44 15400.00

Creditors voluntary liquidation 5 1750.00 8 2800.00

Receipts and Payments of liquidators account 136 47600.00 102 35700.00

Case of non insolvency 45 15750.00 47 16450.00

Final meeting report of winding up 38 13300.00 30 10500.00

Final meeting report of subscribers and creditors 5 1750.00 9 3150.00

Liquidators report 76 26600.00 40 350.00

Result of the meeting of creditors 2 700.00

Appointment of Administrator 1 350.00

Alteration of details in foreign company 104 36400.00 74 25900.00

Name change of foreign company (a) 1 350.00

Name change of foreign company (b) 4 1400.00 6 2100.00.

Cessation of business as a foreign company 46 16100.00 7 2450.00

Notice of special resolution 1102 385700.00 1378 482300.00

Re registration of public company 17 17000.00 8 8000.00

Local address of a foreign company 31 10850.00 35 12250.00

Particulars of directors in foreign company 30 10500.00 35 12250.00

Particulars of the authorized officer of foreign company,

in this country

31 10850.00 36 12600.00

Fines 841 2511100.00 1179 3180250.00

Financial Statements 2757 964950.00 2728 954800.00

Letters 300 105000.00 391 136850.00

License 62 21700.00 97 33950.00

Search of bonds 197 29550.00 173 25950.00

Approval of names 9376 3281600.00 13165 4607750.00

Renewal of foreign company 1 50000.00 2 100000.00

Prospectus 3 1050.00 12 4200.00

File search 14627 1462700.00 13232 1323200.00

Issuing certified copies 27655 7406848.00 31748 8778819.00

3 FinancialPerformance

3.1 Company Fund

3.1.1 Revenue and Expenditure Account

Company Fund established under the provisions of Companies Act

No 07 of 2007 - Revenue and Expenditure Account

for the year ended 31.12.2010

2010 2009 2008

Revenue Notes

Collected revenue during the year 1 170,497,268 145,348,586 226,210,166

Less : Payments for deputy secretary

of treasury 2 56,417,525 47,399,221 74,980,105

Pay back from revenue 13,567 24,775

Revenue of the Fund 114,079,743 97,935,799 151,205,286

Add : Other revenues 202,841,819 168,458,767 95,792,738

Rent of buildings 3 6,846,000

9,107,312 6,980,000

Interest of Treasury Bills/Bonds 4 195,303,532

159,311,625 88,693,705

Rent of Canteen 5 6,000 6,000 4,000

Other revenue 20 33,830 108,728

Transfer of expired cheques for revenue 686,267 - 6,305

Total revenue 316,921,563 266,394,566 246,998,024

Less: Recurrent expenditure Expenditure of administration and

establishment 32,199,801 55,490,834 37,341,110

Overtime allowances 6 1,004,962 901,395 812,116

Other allowances 7 2,140,200 2,106,400 1,508,490

Travelling Expences - Local 8 80,111 92,957 115,588

Travelling Expences - overseas 409,274 500,000 339,082

Stationary and office necessities 1,472,277 1,135,488 1,348,195

Fuel 306,508 281,937 296,105

Uniforms 43,168 48,220 18,836

Medical supplies 5,000 5,000 5,000

Other 445,492 399,251 399,121

Maintenance of vehicles 418,948 298,810 252,436

Plant and equipments 11 2,598,334 2,500,242 2,378,122

Buildings 395,004 574,323 46,672

Transportation 9 54,185 51,505 20,634

Postal and Telecommunication 10 858,150 653,921 651,781

Electricity and water 12 9,224,240 11,205,891 10,475,838

Amount of Rate 1,525,000 1,524,600 1,688,400

Other 13 5,593,896 30,270,944 7,328,501

Restructureing 2,742,856 0 0

Training 180,000 0 116,613

Depreciation 14 2,702,195 2,939,950 3,350,649

Struck off the nominal value of

treasury bills 0 6,188,931

Surplus 284,721,762 210,903,732 209,656,914

316,921,563 266,394,566 246,998,024

3.1.2 Balance Sheet

Company Fund established under the provisions of Companies Act No. 07 of 2007

Balance Sheet as at 31.12.2010

Assets Notes 2010 2009

Fixed Assets Cost

Accumilated

Depreciation Net value Net value

Office building 14.3

124,646,924

20,073,444

104,573,480

105,568,009

Motor Vehicle 14.5

5,615,058

2,023,119

3,591,938

3,991,043

Office equipments 14.1

5,776,262

2,583,503

3,192,759

3,048,341

Computers and Micro Filming Mechines 14.2

6,489,468

3,199,604

3,289,865

4,781,304

Library books 14.4 281,681

163,661 118,020 201,234

142,809,393

28,043,330

114,766,062

117,589,931

Investments

Treasury Bills/ Bonds 15

1,365,013,782

1,095,777,225

Share Investments

90,275,000

90,275,000

Current Assets

1,570,054,844

1,303,642,156

Receivable interest of Treasury Bills 4

58,573,719

57,310,478

Pre payments 16

589,673

453,178

Receivable electricity and water charges 16

523,457

Receivable rent income of buildings 3

1,711,500

1,517,885

Gurantee deposits of security service

25,000

25,000

Receivable rent of Canteen -

5,500

Current inventory items 23

34,997

Balances of Bank Accounts 17

26,111,315

87,569,661

12,174,429

Total Assets 1,657,624,505

1,375,128,626

Company Fund

Accumulated Fund (Opening balance of the

year) 22

1,358,510,290

1,149,459,998

Add: Excess revenue more than annual

expenditure (Surplus)

284,721,762

210,903,732

1,643,232,052

1,360,363,730

Add/ Less : Repayment from income -

6,305

1,643,232,052

1,360,357,425

Less : Current Liabilities

Accrued expenditure 18

165,850

1,098,185

Receipts for liquidation account 19

13,830,196

13,292,395

Security deposit 20

231,621

236,621

Deposit account 21

164,785

144,000

With holding tax payable to Inland

Revenue

14,392,453

Accumulated fund and current liabilities 1,657,624,505

1,375,128,626

3.1.3 Liquidation account of Companies

2007 2008 2009 2010 2011

Opening balance 12592041.00 12785156.15 12818927.79 13292394.90 13830196.37

Receipts 198115.10 45337.50 473466.96 537801.41

Payments 5000.00 11565.71 - -

Final balance 12785156.15 12818927.79 13292394.90 13830196.37

3.2 Revenue account

3.2.1 Account of Company Registrar

Revenue code - 2003-02-10

Details of Revenue - Fees of Company Registrar

Fundamental

estimation

Revised estimation of

revenue

Collection of net

revenue

42,000,000.00 42,000,000.00 56,504,525.00

3.2.2 Account of fees of public contract registrar Revenue code - 2003-02-12

Details of Revenue - Fees charged under the public contract act

Fundamental

estimation

Rs.

Revised estimation of

revenue

Rs.

Collection of net

revenue

Rs.

1,000,000.00 1,300,000.00 1,482,000.00

3.2.3 Reports of deficiency of revenues as at 30.06.2011

Report of deficiency of Revenues

(i) Statutory Authority:- Department of Registrar of Companies

(ii) Revenue Unit :- Fees of Registrar of Companies

(iii) Revenue No.:- 20.03.02.10

Deficiency of Revenue

As at

31.12.2008 2009 2010

As at

31.12.2011

Causes for

deficiency

The actions taken

for collect

deficiency

Assurance of

availability of

collecting

deficiency

Particulars

Rs. Rs. Rs. Rs.

(1). (2). (3). (4). (5). (6). (7). (8).

20.03.02.10

2,549,167 3,985,833

10,869,167

Not

submition

of Annual

Returns by

registered

companies

* Written notice is

given to directors

and company to

submit annual

returns who are not

submitted, after the

end of the due time

By institution of

prosecution under the

omission against

functioning companies

to collect deficiency,

after being noticed

Fees of

Registrar of

Companies

* Not issuing of

certified copies for

such companies

* Actions are taken

under the section

394 of the Act by

considering as a not

functioning company

Appropriation Account - 2010

Expenditure Head No. 297

Name of Ministry / Department : Department of Registrar of Companies

Pro

gra

mm

e N

um

ber

giv

en i

n A

nn

ual

Est

imate

s

Title of the Programme

given in Budget Estimates

(1) (2) (3) (4) (5) (6)

Provision in

Budget

Estimates

Supplimentary

Provision and

Supplimentary

Estimate

Allocation

Transfers

in terms

F.R. 66 and

69

Total Net

Provision

(1+2+3)

Total

Expenditure

Net Effect

Saving/(Excess)

(4-5)

Rs. Rs. Rs. Rs. Rs. Rs.

1 Administration of the

companies Act

Recurrent

Personal Emoluments 22,900,000 -80,000 22,820,000 21,430,000 1,390,000

Transfers 50,000 80,000 130,000 123,000 7,000

Sub Total (Recurrent) 22,950,000 - 0 22,950,000 21,553,000 1,397,000

Capital

Sub Total (Capital)

Total of Recurrent 22,950,000 - 0 22,950,000 21,553,000 1,397,000

Total of Capital

Grand Total 22,950,000 - 0 22,950,000 21,553,000 1,397,000

3.4 Public Officers Advance “B” Account

Reconciliation statement as at 31.12.2010

Subject No. 29701

Maximum limit of

expenditure

Rs.

Minimum limit of

receipts

Rs.

Maximum limit of

debit balance

Rs.

Approved limit of

appropriation account

Revised limit during the

year

Actual values (297011)

for the year ended

Cross entries among the

heads (297012)

4,500,000.00

-

1,980,598.00

765,500.00

2,100,000.00

-

2,266,837.36

975,918.05

32,000,000.00

-

14,540,571.00

-

Public Officers Advance “B” Account and Control Account

As per departmental books as per treasury books

Rs. Rs.

Opening balance in 2010 14,540,571.00 14,032,422.61

Add

Credits during the year 2010 2,746,098.00 2,746,098.00

Less

Debits during the year 2010 3,242,755.41 3,242,755.41

The total balance at end 14,043,914.24 13,535,765.20

of the year 2010