Industrial Asphalts (Ceylon) PLC · Industrial Asphalts (Ceylon) PLC notice of annual general...
Transcript of Industrial Asphalts (Ceylon) PLC · Industrial Asphalts (Ceylon) PLC notice of annual general...
Industrial Asphalts (Ceylon) PLC
Industrial Asphalts (Ceylon) PLC
C o n t e n t s
Corporate Information ................................ 1
Notice of Annual General Meeting................... 2
Chairman’s Statement ................................ 3
Report of the Directors’ ............................... 4 - 5
Directors’ Responsibilities for the
Preparation of Financial Statements ............ 6
Board of Directors ........................................ 6
Report of the Audit Committee.......................... 7
Report of the Remuneration Committee ......... 7
Corporate Governance ............................... 8 - 9
Risk ............................................................ 10
Independent Auditor’s Statement ............... 11
Statement of Comprehensive Income .......... 12
Statement of Financial Position ................... 13
Statement of Changes in equity .................. 14
Cash Flow Statement ................................. 15
Accounting Policies ..................................... 16-20
Notes to the Accounts ................................ 21-25
Shareholders Information.............................. 26
Form of Proxy
We add value to our customers’
businesses by providing products,
process and services which allow
them to increase efficiency and
quality of their operations
and products.
Industrial Asphalts (Ceylon) PLC
Corporate Information
Legal Status Public Quoted Company with limited liability
Incorporated in Sri Lanka in 1964.
Company Registration No PQ 185
Board of Directors Mr. J V R Joseph (Chairman)
Mr. N E Aluwihare (resigned w.e.f.28.09.2012)
Mr. E W B Dabare (resigned w.e.f.28.09.2012)
Mr. S R Ekanayake.
Mr. M C P Fernando
Registered Address No. 28/1 New Nuge Road,
Peliyagoda
Company Secretaries K H L Corporate Services Ltd
No 02, Deal Place,
Colombo 3
Auditors Cecil Arsecularatne & Company
Chartered Accountants
No 3 Dr Lester James Peris Mawatha
Colombo 5.
Bankers Commercial Bank of Ceylon Plc
Bank of Ceylon
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Industrial Asphalts (Ceylon) PLC
notice of annual general meeting
NOTICE IS HEREBY GIVEN that the FORTY NINTH ANNUAL GENERAL MEETING of Industrial Asphalts (Ceylon)
PLC will be held on Friday 27th September 2013 at 10.00am at The Ceylon Chamber of Commerce Auditorium, 50,
Nawam Mawatha, Colombo 2.
1. To receive the report of the Directors and the Statement of Accounts for the year ended 31st March 2013
together with the Report of the Auditors thereon.
2. To declare a first and final dividend of Rs. 2.00 per share as recommended by the Directors.
3. To re-elect Mr M C P Fernando who retires by rotation in terms of article 90 of the Articles of Association
of the Company and offers himself for re-election as a Director.
4. To reappoint Messrs Cecil Arsecularatne as Auditors of the Company for the ensuing year and to
authorise the Directors to determine their remuneration.
5. To authorise Directors to determine and make contributions towards donations.
By order of the Board
K.H.L Corporate Services Ltd
Secretaries
4 September 2013
NOTES
1 A member entitled to attend and vote is entitled to appoint a proxy to attend instead of them.
A proxy may vote on a poll (and join in demanding a poll) but not on a show of hands.
2. The instrument appointing a proxy should reach the registered address of the Company
No 28/1 New Nuge Road, Peliyagoda by 10.00 am on 25th September 2013.
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Industrial Asphalts (Ceylon) PLC
chairman’s statement
On behalf of the Board of Directors I take pleasure in
welcoming you to the Forty Ninth Annual General Meeting
of the Company and to present the Report of the Directors
and Financial Statements of the Company for the year ended
31st March 2013.
As has been widely documented the economic environment
remained challenging during the year under review and
continues to test the resilience of our strategy and business
model.
Our performance for the year was in the backdrop of an
economy which recorded a year on year growth of 6.4% in
real terms following on from two previous years of over
8% growth. The Central Bank adopted a tight monetary
policy by raising policy interest rates and imposing a ceiling
on lending to contain liquidity and inflation. The high interest
rate regime which was prevalent right through the period
under review impacted on our results adversely as indeed
did the rapidly depreciating value of the Sri Lankan Rupee.
The effects of bad weather are logically spoken of in the
context of its impact on agriculture. This is especially so in
an agricultural led economy such as ours. However
unseasonal rainfall also has a negative effect on our industry
as most applications are carried out outdoors under dry
conditions. Heavy rains in the latter part of the second
quarter prevented any road building or waterproofing
activities thus slowing down demand.
Our turnover for the year dipped very badly due primarily to
a failure in the supply chain during the first quarter of the
year. Stocks of Bitumen from the Country’s duopolies ran
out completely and were not replenished for over 6 weeks.
Such an unplanned stock out had not taken place for a
number of years. This impacted on our operations during
the quarter from which we did not recover over the rest of
the year
Although sales dropped by 11% to Rs 66 million compared
to last year our gross margins improved to 20.3% against
18.2% last year. Improvements in gross margins would have
been even greater if not for the higher utility charges that
we have had to bear, particularly for electricity.
All containable overhead expenditure was strictly controlled
and despite inflationary pressures total overhead
expenditure was below the previous year
However the one exception was the cost of financing. The
cost of Bank interest increased by 58% over the previous
year. This is where businesses up and down the country
are facing a double whammy. On the one hand the bank
rates of interest have increased significantly over the past
eighteen months as one of the mechanisms for containing
inflationary pressures and on the other hand ironically for
the same reason it is becoming increasingly difficult to
ensure payments are received in a timely manner from trade
debts as debtors have fine tuned the art of extending
settlements using various guises. The Commercial Banks
can follow the lead in many developed countries of closing
down accounts of defaulters and establishing a mechanism
for such defaulters not to be able to open accounts in
any other Bank.
Mention has been made in previous reviews too of the
adverse effect the weakness in the Sri Lankan Rupee
has on our cost of production due to the fact that a
significant proportion of raw materials for our coating
manufacture has to be imported. This was true of this
year too.
.
The effective rate of tax for the year was after
considering adjustments for deferred taxation was
28.3% compared to15.5%.
Due to strains in cash resources we were unable to pay
an interim dividend this year. A final dividend of Rs 2.00
per share has been proposed as a first and final dividend.
The payout again reflects the limited liquidity that is at our
disposal at this point in time, in the current regime of high
cost of funding. We are hopeful that we can institute an
interim payment in the next financial year. None the less
we are proud of the fact we have always paid a dividend
to our shareholders on their investments each year since
inception.
We are of the opinion that we need a strong and balanced
board with a broad range of skills and experiences. The
importance of diversity in thought and experience
contributes significantly to the value, quality and depth of
board deliberations and decisions. A recruitment process
is underway that should lead to changes being made to
the Board during the current year to fill the vacancies
created by the retirement of Mr Noel Aluvihare and Mr
Basil Dabare during the year under review. All Board
changes will be announced at the appropriate time.
The outlook is undoubtedly one of surmounting challenges.
IAC is a market and technology leader across its targeted
end user segments. We are innovative with a clear focus
on customer demands. Furthering sustainable revenue
and margin growth will be our objective in the coming
year. We will build on our already well established foot
print in our core businesses as well as trade in a greater
range of bought in products from leading European
manufacturers to complement our range
Finally, on behalf of the Board, I would like to thank all of
our people for the invaluable contribution they make to
our continuing success. Our growth and development
over the years is as a direct result of their persistent
hard work, dedication and achievement of results, and I
believe we all look forward with enthusiasm and
confidence.
J V R Joseph
Chairman
August 28th,2013
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Industrial Asphalts (Ceylon) PLC
annual report of the directors
The Directors present their Report for the year ended 31
March 2013 together with the Statement of Financial
Position and Statement of Comprehensive Income for
the year under review.
PRINCIPAL ACTIVITIES
The Company’s principal activities are the manufacture
and distribution of bituminous products; distribution of
a specialist range of surface coatings and industrial
Chemicals.
There were no significant changes to the principal
activities of the Company during the year under review.
ANNUAL BUSINESS REVIEW
A review of the operations of the Company is described
in the Chairman’s statement.
FINANCIAL STATEMENTS & APPROPRIATIONS
The financial statements for the year ended 31 March
2013 are given on pages 12-25 of the report. The Directors
have recommended the payment of a final dividend of
Rs 2.00 per share amounting to Rs 1,333,124.
RESPONSIBILITY FOR FINANCIAL STATEMENTS
The Directors’ responsibility in relation to the financial
statements Is set out on Page 6.
DIRECTORATE
The Directors of the Company during the period under
review and the changes that took place to date are given
below: J V R Joseph
N E Aluwihare (Resigned with effect from 28 Sept 2012)
E W B Dabare (Resigned with effect from 28 Sept 2012)
S R Ekanayake
M C P Fernando
Brief resume of the Directors are given in page 6.
Mr M C P Fernando retires by rotation under article 90
and is recommended for re-election with the unanimous
support of the Board.
DIRECTOR’S SHAREHOLDING
The Directors during the period under review and their
Shareholdings are as follows :
2013 2012
J V R Joseph 1008 1008
N E Aluwihare 12 12
E W B Dabare –)) –))
S R Ekanayake –)) –))
M C P Fernando –)) –))
INTERESTS REGISTER
The Company maintains the Interests register
since re-registration under the Companies Act
No 7 of 2007. The Directors’ shareholding is
shown above and the remuneration Paid is shown
in Note 3 to the accounts. None of the Directors
had an interest in a contract with the Company.
REMUNERATION COMMITTEE
The Following non-executive Directors are
members of the Remuneration Committee:
M C P Fernando (Chairman)
S R Ekanayake
AUDIT COMMITTEE
The following non-executive Directors are
members of the Audit Committee.
J V R Joseph (Chairman)
M C P Fernando
S R Ekanayake
FIXED ASSETS
Changes to the fixed Assets are shown in Note 8
to the financial statements.
MARKET VALUE OF SHARES
The market value of the Company’s ordinary
shares as at 31 March 2013 was Rs 199.00
(2012 – Rs 395.00)
The highest price the shares traded during
the year was Rs 239.90 (2012 – Rs 558.00)
The lowest price Rs 180.55 (2012 – Rs 310.60)
DIRECTORS REMUNERATION
Remuneration received by the Directors is set
out Note 3 of the financial statements.
STATUTORY PAYMENTS
The Company has made all known statutory
payments.
POST BALANCE SHEET EVENTS
No circumstances have arisen since the Balance
Sheet date, which would require adjustments to,
or disclosure in the Financial Statements other
than those disclosed in Notes to the Financial
Statements.
GOING CONCERN
The financial statements have been prepared on
a going concern basis, as the Directors consider
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Industrial Asphalts (Ceylon) PLC
annual report of the directors
that the Company has sufficient resources and
committed borrowing facil it ies to support its
operations for the foreseeable future.
AUDITORS
The retiring auditors Cecil Arsecularatne & Co have
indicated their willingness to continue in office a
resolution to reappoint them and authorising.
The Directors to fix their remuneration will be
proposed at the Annual General Meeting. As far as
the Directors are aware the Auditors do not have any
relationship or interest in the company other than as
stated. They confirm that they are independent in
accordance with the Code of Ethics of The Institute
of Chartered Accountants of Sri Lanka.
The fees paid for the auditors are disclosed in
Note 3 to the financial statements.
ANNUAL GENERAL MEETING
The Annual General Meeting of the Company will be
held at the on Friday 27th September 2013 at 10.00
am at The Ceylon Chamber of Commerce
Auditorium, 50 Nawam Mawatha, Colombo 2.
By order of the Board
J V R Joseph M C P Fernando
Director Director
K H L Corporate Services Ltd
Secretaries
Colombo this day 4 September 2013.
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Industrial Asphalts (Ceylon) PLC
J V R Joseph MA (Finance) FCMA FCCA FCGMA
Chairman
A Fellow of the Institute of Chartered Management
Accountants (UK) and a Fellow of the Association of
Chartered Certified Accountants (UK). Holds a post
graduate Degree in Finance and has a number of
years of extensive experience at a senior level
internationally both in industry and as a management
consultant
S R Ekanayake B Sc (Hons)
Independent non-executive Director
Holds a Bachelor of Science Degree with Chemistry
specialisation from the University of Ceylon. He has
extensive technical experience in Ink and coatings
technology.
M C P Fernando B Sc (Hons)
Independent Non Executive Director
Joined the Board in 2008. Holds a Bachelor of Science
degree from the University of Sri Lanka. He is an
entrepreneur and is involved in several projects in
the hotel and agricultural sectors .
directors’ responsibilities for the preparation of financial
statements
Board of Directors
The Directors of your company are required by the companies Act no 7 of 2007 to prepare Financial Statements,which give a true and fair view of the state of affairs of the company as at the end of the financial year, and of theProfit and Loss and of the Cash flows of the Company for the financial year
The Directors confirm that the Financial Statements of the Company for the year ended 31st March 2013 presentedin the Report have been prepared in accordance with the Sri Lanka Accounting Standards and the Companies ActNo 7 of 2007. In preparing the Financial Statements, the Directors have selected the appropriate accountingpolicies and have applied them consistently. Reasonable and prudent judgments and estimates have beenmade and applicable accounting standards have been followed and the financial Statement have been preparedon a going concern basis.
The Directors are of the view that adequate funds and other resources are available within the company for theCompany to continue in operation for the foreseeable future.
The Directors have taken all reasonable steps expected from them to safeguard the assets of the Company andto establish appropriate systems of Internal controls in order to prevent, deter and detect any frauds,misappropriation or other irregularities. The Directors have also taken all reasonable steps to ensure that theCompany maintains adequate and accurate accounting books of record, which reflect the transparency oftransactions and provide an accurate disclosure of the Company’s financial position.
As required by Section 56 (2) of Companies Act No 7 of 2007, the Board of Directors have confirmed that theCompany, based on the information available satisfied the Solvency test, immediately after the distribution, inaccordance with Section 57 of the Companies Act of 7 of 2007, and have obtained a certificate from the Auditors.
The Directors are required to provide the Auditors with every opportunity to take whatever steps and undertakewhatever inspection they consider appropriate for the purpose of enabling them to give their Audit Report.The Directors are of the view that they have discharged their responsibilities in this regard.
The Directors confirm that to the best of their knowledge, all taxes and levies payable by the Company and allcontributions, levies and taxes payable on behalf of the employees of the company and all other known statutoryobligations as at the balance sheet date have been paid or provided for in the Financial Statement.
By Order of the BoardK H L Corporate Services Ltd
Secretaries
04th September 2013
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Industrial Asphalts (Ceylon) PLC
report of the remuneration committee
The remuneration Committee comprises Mr M C P Fernando and Mr S R Ekanayake both of whom are considered
to be Independent non-executive Directors. They are responsible for reviewing and recommending the framework
and policy for remuneration of senior management.
The remuneration committee met once during the year.
The policy on remuneration is geared to attract and retain the best professional talent to the Company and to
motivate and encourage them to perform at the highest possible level.
Evaluation of performance ensures equality and fairness without discrimination of gender, age, ethnicity, religion
or any other consideration.
report of the audit committee
The Audit committee comprises Mr J V R Joseph (Chairman) S R Ekanayake and Mr. M C P Fernando. The Audit
Committee is responsible for reviewing, on behalf of the Board, the Group’s accounting and financial policies and
its disclosure practices, internal controls, internal audit and risk management. It is also responsible for overseeing
all matters associated with the appointment, terms, remuneration and performance of the external auditor and for
reviewing the scope and results of the audit. The Committee met four times during the year when all members
attended.
Mr J V R Joseph is a Fellow of the Institute of Chartered Management Accountants (UK) and a Fellow of the
Association of Chartered Certified Accountants (UK) The Finance Executive Officer attends meetings by invitation.
During the year the Committee reviewed the Company’s policies and procedures relating to governance and risk
control. It assisted the Board to fulfil its responsibilities relating to external financial reporting and announcements.
The External Auditors’ letter of engagement, including the scope of the audit, was reviewed and discussed by the
Committee with Management and the External Auditors prior to the commencement of the Audit. Before the
conclusion of the audit, the Committee met with the External Auditors to discuss all audit issues and agree on
their treatment. The Audit Committee is satisfied that the independence of the External Auditors has not been
impaired by any event or service that gives rise to a conflict of interest.
The Audit Committee has recommended to the Board of Directors that Messrs. Cecil Arsecularatne & Co,Chartered
Accountants be re-appointed as External Auditors for the financial year ending 31st March 2014 subject to approval
by the shareholders at the Annual General Meeting of the Company.
Based on the reports submitted by the External Auditors and discussions with management, the Audit Committee
is of the view that the control environment of the Company is satisfactory and provides reasonable assurance that
the financial position of the Company is adequately monitored and its assets are safeguarded
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Industrial Asphalts (Ceylon) PLC
The Board is committed to business integrity, appropriate ethical standards and professionalism in all its operations andactivities. This includes a commitment to high standards in corporate governance, which describes the systems by whichcompanies are directed and controlled at a senior level, including the operation of the Board..
In terms of section 7.10 of the listing rules of the Colombo Stock Exchange, Industrial Asphalts (Ceylon) PLC complied with therelevant provisions under Corporate Governance. The level of compliance is enumerated below
The BoardThe Board of Directors is responsible for the Company’s strategy, policy, monitoring achievement of its business objectives andmaintaining a system of effective corporate governance, which includes responsibility for health, safety, environmental, socialand ethical issues. It monitors the exposure to key business risks
As at 31 March 2013 the Board comprises of three non-executive directors. Once the vacancies caused by recent retirementsfrom the Board are filled it believes that it will be of sufficient size to contain an appropriate balance of skills and experience butnot so large as to be unwieldy.
The non-executive directors bring independent objective judgement to bear on Board decisions by constructively challengingmanagement and helping to develop the company’s strategic objectives. All of the directors have fiduciary responsibilities to theCompany. Collectively, the Board is responsible for leading and directing the long term development of the Company
Two of the non- executive directors are considered by the Board to be independent of the management and free from anybusiness or other relationship that could materially interfere with the exercise of their independent judgement. The Board metfour times during the year. It reviews the management and financial performance of the Company as well as long term strategicplanning and risk assessment. Additionally the Board meets with senior management regularly to review operational mattersand disseminate the Board’s plans for the future.
The Directors have access to the Company Secretary and procedures have been adopted for Directors to obtain access toindependent professional advice at the Company’s expense, where it is deemed necessary in order to discharge theirresponsibilities as a Director of the Company.
No of Meetings
J V R Joseph 4N E Aluvihare (Retired with effect from 28.09.2012) 2E W B Dabare (Retired with effect from 28.09.2012) 2S R Ekanayake 4M C P Fernando 4
Rule 7.10.1 of CSE 3 Directors of the Company are Non-Executive Directors
Rule 7.10.2 of CSE All of the Directors have submitted declarations on their independence or non independence againstthe specified criteria of the CSE. Based on these declarations the independence or non independenceof the Directors is given below:
J V R Joseph Non Executive DirectorS R Ekanayake Independent Non Executive DirectorM C P Fernando Independent Non Executive Director
Accordingly there are two Independent Non Executive Directors at present.Their details are given on Page 6.
Rule 7.10.3 of CSE The Board of Directors determine the independence or non independence of each Non ExecutiveDirector
Remuneration Committee All the members of the Remuneration Committee are IndependentRule 7.10.5 of CSE Non Executive Directors.(balance as previously) The members of the Remuneration Committee as at 31st March 2013 are as follows-
M C P Fernando (Chairman)S R Ekanayake
Mr M C P Fernando is the Chairman of the Remuneration Committee and is an IndependentNon Executive Director
The remunerations committee recommends to the Board the remuneration payable to all Executivesbased on performance appraisals.
corporate governance
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Industrial Asphalts (Ceylon) PLC
A report of the remuneration committee which contains the remuneration policy is given on page 7.
Audit Rule The Audit Committee comprises of a Non Executive Director and two Independent Non ExecutiveCommittee 7.10.6 of Directors. The members of the Audit Committee is as follows:
CSEJ V R Joseph (Chairman)E W B DabareM C P FernandoMr Joseph, a Non Executive Director on the Board is a fellow member of the Chartered Institute ofManagement Accountants (UK) and Institute of Chartered Certified Management Accountants (UK).He is the Chairman of the Audit committee.
The Finance Executive Officer attends the Audit Committee meetings by invitation.
A report of the Audit committee is given on page 7.
Relationship with The Board of Directors ensures that the senior management team posses right skills to deliverstakeholders their best contribution towards the company. The Board has empowered such employees to make
operational decisions and also encourage them to make recommendations to the board on areas ofstrategic importance. The vision, goals and objectives of the company have been formulated and allthe employees have been briefed clearly of their specific job to achieve overall results for thecompany. Staff directly communicate any concerns to the Directors.
The Company maintains a sound relationship with regulatory authorities.
The Shareholders have the right to voice their concerns to the Board of Directors and exercise theirvotes at Annual General Meetings/ Extraordinary General Meetings of the Company. The notice ofsuch meetings, and relevant documents as required by the Companies Act No.07 of 2007 and ListingRules of Colombo Stock Exchange are circulated to all the shareholders at least 15 working daysprior to the date of the meeting.
Disclosure The Board’s policy is to disclose all relevant information to stakeholders, within the bounds ofprudent commercial judgment, in addition to preparing the financial statements in accordance withSri Lanka Accounting Standards, the Companies Act No.07 of 2007 and in conformity with StockExchange disclosure requirements.
corporate governance (continued)
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Industrial Asphalts (Ceylon) PLC
risk
External Market Factors
Economic Environment
The Global economic environment and the levels of activity in the markets and territories in which the Companydoes business in could adversely affect the Company’s revenues, profitability and cash flow.
Currency ExposureA significant proportion of our raw materials are imported. Primarily these are denominated in US Dollars, Eurosand UK Pounds. Fluctuation in exchange rates between the Sri Lankan Rupee and these currencies could causeprofit and balance sheet volatility.
Competitor ActivityThe Company operates in competitive markets both in terms of competitors offering directly comparable andalternative products. The ability of the Company to compete is directly dependent on its ability to developtechnological innovations and deliver high quality products. Demand for our products can be impacted if we failto compete successfully causing loss of market share and margin erosion.
We continue to work closely with our customers and seek to always have the highest quality products available tomeet our proposed delivery schedules. We seek to continuously improve the quality and the performance of ourproducts whilst providing prompt technical support and advice so as to provide high quality application solutionsto our customers.
Technological changeThe Company is dependent on manufacturing and selling high quality products into advanced applications.Demand for these applications and consequently our products could be impacted as new technologies andmaterials are developed.
To maintain and advance our technology skills and knowledge we invest in resources and specialists who workclosely with our customers and end users covering the major market segments of our business so that wemaintain our position as market leaders in our core businesses
Business Specific Factors
Operational disruptionThe Company’s business is dependent on the ongoing operation of our various manufacturing facilities.A significant operational disruption could adversely affect our ability to make and supply products.
We have implemented policies and procedures to efficiently and safely manage all our operations and to maintainour supply of products to our customers, in particular.
Product SpecificationsThe Company’s products are used in highly demanding end use applications. Any failure to supply products inaccordance with their specifications could lead to loss of business and potentially a liability claim.
Our products are manufactured in strict adherence to established specifications and our quality managementprocess is one of continuous improvement which is overseen by senior management.
Insufficient capacityOur customers’ businesses depend on maintaining a consistent supply of high quality products. Any unexpectedupsurge in demand could lead to insufficient capacity to fulfil customers’ needs.
Our stocks of finished goods and raw materials enable us to supply any short term surge in demand from ourcustomers. Furthermore it is our policy to keep capacity well ahead of demand by investing in all aspects of oursupply chain so that our customers can be confident that we can meet their current and future requirements.
Debtor DefaultThere is an ever present risk when granting credit to customers who then delay or default on payments.
The Company has stringent rules in place in evaluating customers who are granted credit and monitoring eachindividual performance on an ongoing basis to avoid potential defaults. An “amber alert” system is inbuilt into ourcredit control procedures to highlight at an early stage potential problem customers so that pre-emptive action istaken to collect dues before default occurs
PersonnelThe technical nature of the business requires trained, experienced and knowledgeable personnel. We endeavorto retain staff with these qualities through a programme of planned career development and opportunities forpromotion and undertaking greater responsibility.
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Industrial Asphalts (Ceylon) PLC
TO THE SHAREHOLDERS OF INDUSTRIAL ASPHALTS (CEYLON) PLC
Report on the Financial Statements
We have audited the accompanying financial statements of Industrial Asphalts (Ceylon) PLC which comprise the
Statement of Financial Position as at March 31, 2013, and the Statement of Comprehensive Income, Statement of
Changes in Equity & Cash Flow Statement for the year then ended, and a summary of significant accounting
policies and other explanatory notes as set out in pages 16 to 25.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance
with Sri Lanka Accounting Standards. This responsibility includes; designing, implementing and maintaining
internal controls relevant to the preparation and fair presentation of financial statements that are free from material
misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making
accounting estimates that are reasonable in the circumstances.
Scope of Audit and Basis of Opinion
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our
audit in accordance with Sri Lanka Auditing Standards. Those standards require that we plan and perform the
audit to obtain reasonable assurance whether the financial statements are free from material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We have obtained all the information and explanations, which to the best of our knowledge and belief were
necessary for the purposes of our audit. We therefore believe that our audit provides a reasonable basis for our
opinion.
OpinionIn our opinion, so far as appears from our examination, the Company maintained proper accounting records for
the year ended March 31, 2013 and the financial statements give a true and fair view of the Company’s State of
affairs as at March 31, 2013 and its Financial Performance for the year then ended in accordance with Sri Lanka
Accounting Standards.
Report on Other Legal and Regulatory Requirements
In our opinion, these financial statements also comply with the requirement of Section 151(2) to the Companies
Act No 07 of 2007.
CHARTERED ACCOUNTANTSColombo22nd August 2013
S/Ng
Independent auditor’s statement
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Industrial Asphalts (Ceylon) PLC
Note 2013 2012
Rs. Rs.
Revenue 01 66,008,732 74,922,979
Cost of Sales (52,527,025) (61,194,697)
Gross Profit 13,481,707 13,728,282
Other Operating Income 02 81,395 189,236
Distribution Cost (3,003,989) (3,229,736)
Administration Cost (5,837,326) (5,966,441)
Profit from Operating Activities 03 4,721,788 4,721,341
Finance Cost 04 (2,751,853) (1,747,511)
Net Profit Before Taxation 1,969,934 2,973,831
Income Tax Expense 05 (557,426) 463,735
Net Profit For the Period 1,412,509 3,437,566
Other Comprehensive Income
Revaluation of Property Plant & Equipment 18,388,988 – ))))
Deferred tax effect on revaluation surplus on Property Plant & Equipment (2,206,679) – ))))
Other Comprehensive Income 16,182,309
Total Comprehensive Income for the Year 17,594,818 3,437,566
Basic earning per share 06 2.12 5.16
Dividend per Share 07 2.00 3.00
The Accounting Policies and Notes on pages 16 to 25 Form an integral part of these Financial Statements.
statement of comprehensive incomeyear ended 31st March 2013
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Industrial Asphalts (Ceylon) PLC
statement of financial positionas at 31st March 2013
As at 31 March As at 31 March As at 01st Apr2013 2012 2011
Note Rs. Rs. Rs.ASSETSNON-CURRENT ASSETSProperty, Plant and Equipment 08 55,891,603 38,774,038 39,623,719Lease Hold Land 09 2,727,900 2,766,870 2,805,840Intangible Assets 10 21,675 –))))) –)))))
58,641,178 41,540,908 42,429,559
CURRENT ASSETSInventories 11 26,682,909 23,745,370 21,529,905Trade & Other Receivables 12 25,780,767 23,450,336 23,719,322Short Term Investment 13 378,522 378,629 1,420,769Cash & Cash Equivalents 14 2,316,752 3,579,658 1,891,286
55,158,950 51,153,994 48,561,282
TOTAL ASSETS 113,800,127 92,694,902 90,990,841
EQUITY AND LIABILITIESCAPITAL AND RESERVESStated Capital 15 6,665,620 6,665,620 6,665,620Revaluation Reserve 46,112,663 29,930,354 29,930,354General Reserve 15,141,299 15,141,299 15,141,299Retained Earnings 18,545,607 19,132,784 17,699,510
Share holders Interest 86,465,189 70,870,057 69,436,783
NON-CURRENT LIABILITIESDeferred Tax Liabilities 16 7,171,808 4,725,745 5,650,863Retirement benefit obligation - Gratuity 17 949,334 864,112 731,285Term Loan 458,210 958,290 1,500,000Commission Retained 140,927 127,523 119,598
8,720,279 6,675,670 8,001,746
CURRENT LIABILITIESTrade & Other Payables 18 1,756,861 1,707,145 1,818,614Term Loan 500,040 500,000 500,000Import Loans 16,357,758 12,942,029 11,233,698
18,614,659 15,149,174 13,552,312
TOTAL EQUITY AND LIABILITIES 113,800,127 92,694,902 90,990,841
I certify that the financial statements have been prepared in compliance with the requirement of the Companies Act No. 7 of 2007.
................................W. M. M. FernandoFinancial Officer
The Board of directors is responsible for the preparation and presentation of these financial statements Signed for and onbehalf of the board by,
...................................... ......................................J. V. R. Joseph M. C. P. Fernando
Director Director
The Accounting Policies and Notes on pages 16 to 25 Form an integral part of these Financial Statements.
13
Industrial Asphalts (Ceylon) PLC
statement of changes in equityfor the year ended 31st March 2013
STATED REVALUATION GENERAL RETAINED TOTAL
CAPITAL RESERVES RESERVES EARNINGS Rs.
As at 1 April 2011 6,665,620 29,930,354 15,141,299 17,697,301 69,675,083
Changes in fair value in investments –))))) –))))) –))))) 2,209 2,209
Adjusted SLFRS balance as at 1 April 2011 6,665,620 29,930,354 15,141,299 17,699,510 69,436,783
Total Comprehensive Income for the Year
Net Profit for the year –))))) –)))) –))))) 3,437,566 3,437,566
Other Comprehensive Income –))))) –)))) –))))) –))))) –)))))
Total Comprehensive Income –))))) –)))) –))))) 3,437,566 3,437,566
Dividend to equity owners - 2010/2011 –))))) –)))) –))))) (2,004,292) (2,004,292)
As at 1 April 2012 6,665,620 29,930,354 15,141,299 19,132,784 70,870,057
Total Comprehensive Income for the Year
Net Profit for the year –))))) –)))) –))))) 1,412,509 1,412,509
Other Comprehensive Income
Revaluation –))))) 16,182,309 –))))) –))))) 16,182,309
Total Comprehensive Income –))))) 16,182,309 –))))) 1,412,509 17,594,819
Dividend to equity owners - 2011/2012 –))))) –)))) –))))) (1,999,686) (1,999,686)
As at 31 March 2013 6,665,620 46,112,663 15,141,299 18,545,607 86,465,189
The Accounting Policies and Notes on pages 16 to 25 Form an integral part of these Financial Statements.
14
Industrial Asphalts (Ceylon) PLC
cash flow statementfor the year ended 31st March 2013
2013 2012Rs. Rs.
Net profit before Tax 1,969,934 2,973,831
AdjustmentsDepreciation 1,593,723) 1,741,039)Interest Income (39,740) (34,832)Provision for Gratuity 204,572) 132,827)Investment income (7) (7)Amortization 60,645) 38,970)Changes in Market value of investment 106) 3,696)Net Finance Cost 2,751,853) 1,747,511)Profit on Sale of Investment –))))) (151,192)
Operating Profit before working capital changes 6,541,086) 6,451,843)
(Increase)/ Decrease in Inventories (2,937,539) (2,215,465)(Increase)/ decrease in Trade & Other Receivables (2,121,988) 211,085)Increase/ (decrease) in Trade & Other Payables 49,715) (103,543)
Cash Generated from Operations 1,531,275) 4,343,920)
Net Finance Cost (2,751,853) (1,747,512)Gratuity paid (119,350) –)))))Income Tax Paid (526,483) (403,483)
Net Cash From Operating Activities (1,866,411) 2,192,925)
Cash Flow from Investing activitiesPurchase of Property, Plant & Equipment (322,300) (891,357)Purchase Software (43,350) –)))))Investment income 7) 7)Sale of Investment –))))) 1,189,637)Interest Income 39,740) 34,832)
Net Cash Generated from Investing Activities (325,903) 333,119)
Cash Flow from Financing activitiesImport Loan 3,415,730) 1,708,331)Commission Retained 13,404) –)))))Term Loan (500,040) (541,710)Dividend Paid (1,999,686) (2,004,292)
Net Cash used in Financing Activities 929,408) (837,671)
Net Increase/Decrease in Cash & Cash Equivalents (1,262,907) 1,688,373)Cash & Cash Equivalents at the beginning of the period 3,579,658) 1,891,286)
Cash & Cash Equivalents at the end of period 2,316,752) 3,579,658)
Note-(A)—Analysis of Cash & Cash EquivalentsCash at Bank & Cash in Hand 2,316,752) 3,579,658)
2,316,752) 3,579,658)
The Accounting Policies and Notes on pages 16 to 25 Form an integral part of these Financial Statements.
15
Industrial Asphalts (Ceylon) PLC
accounting policies31st March 2013
1. Reporting Entity
1.1 Corporate InformationIndustrial Asphalts (Ceylon) PLC is a Public limited liability Company incorporated and domiciled in Sri
Lanka. The registered office and the principal place of the business is located at No. 28/1, New Nuge Road,
Peliyagoda. The financial statements were authorised by the Directors on 22nd August. 2013.
1.2 Principal activities & Nature of OperationsDuring the year, the principal activities were the manufacture and distribution of bituminous products,
distribution of specialist range of surface coating and industrial chemicals.
1.3 Number of Employees
The staff strength of the company as at March 31 2013 was 22 (18 as at March 31 2012)
2 Basis of Preparation
2.1 Statement of Compliance
The financial statements of the Company have been prepared in accordance with Sri Lanka Accounting
Standards comprising SLFRS and LKAS (hereafter referred as “SLFRS”), issued by Institute of Chartered
Accountants of Sri Lanka and in compliance with the requirements of the Companies Act No 07 of 2007.
For all periods up to and including the year ended 31 March 2012, the Company prepared its financial
statements in accordance with SLASs effective up to 31 March 2012. These financial statements for the year
ended 31 March 2013 are the first the Company has prepared in accordance with LKASs (SLFRS and LKAS)
effective for the periods beginning on or after 01 January 2012.
The Company has consistently applied the accounting policies used in preparation of its opening SLFRS
statement of financial position at 01 April 2011 through all periods presented, as if these policies had
always been in effect.
Note discloses the impact of the transition to SLFRS on the Company’s reported financial position and cash
flows, including the nature and effect of significant changes in accounting policies from those used in the
Company’s financial statements for the year ended 31 March 2012 prepared under SLASs.
2.2 Basis of measurementThe financial statements have been prepared on a historical cost basis, Machinery & Motor Vehicle that have
been measured at fair value.
2.3 Functional Currency & Presentation CurrencyThe financial statements are presented in Sri Lankan Rupees except when otherwise indicated.
2.4 Presentation of Financial Statements
The assets and liabilities of the company presented in its Statement of Financial Position are grouped by
nature and listed in an order that reflects their relative liquidity and maturity pattern. No adjustments have
been made for inflationary factors affecting the Financial Statements.
Financial assets and financial liabilities are offset and the net amount reported in the statement of financial
position only when there is a legally enforceable right to offset the recognised amount and there is an
intention to settle on a net basis, or to realise the assets and settle the liability simultaneously. Income and
expenses are not offset in the statement of comprehensive income unless required to be permitted by the
Accounting Standards or interpretation, and specifically disclosed in the Accounting Policies of the company.
2.5 Materiality and AggregationEach material class of similar items is presented separately in the Financial Statements. Items of dissimilar
nature or function are presented separately unless they are immaterial as permitted by Sri Lanka Accounting
Standards LKAS 1 ‘Presentation of Financial Statements.
16
Industrial Asphalts (Ceylon) PLC
accounting policies (continued)
31st March 2013
2.6 OffsettingAssets and Liabilities and income and expenses are not set – off unless permitted by the Sri Lanka
Accounting Standards.
2.7 Significant Accounting Judgment, Estimate and Assumption
2.7.1 Going ConcernThe company’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 the foreseeable future. Furthermore,
management is not aware of any material uncertainties that may cast significant doubt upon the company’s
ability to continue as a going concern. Therefore, the financial statements continue to be prepared on the
going concern basis.
3. Assets and bases of their valuation
3.1 Financial instruments — Initial recognition, Classification and subsequent measurement
3.1.1 Financial Assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets held for trading and financial
assets designated upon initial recognition at fair value through profit or loss.
Fair value has been measured at active market price at each reporting date.
3.2 Taxation
3.2.1 Income TaxProvide for the income tax liability on the basis of the profit for the year as adjusted for taxation purposes in
accordance with the provisions of the Inland Revenue Act No. 10 of 2006 and the amendments thereto.
Current income tax assets and liabilities for the current and prior periods at the amount expected to be
recovered from or paid to the commissioner general of Inland Revenue. The tax rates and tax laws used to
compute the amount are those that are enacted or substantively enacted by the balance sheet date.
3.2.2 Deferred Taxation
Deferred income tax is provided, using the liability method, on all temporary differences at the balance sheet
date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences: except
Where the deferred income tax liability 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
Deferred income tax assets is recognised for all deductible temporary differences, carry-forward of unused
tax assets 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 assets and unused tax
losses can be utilised.
Industrial Asphalts (Ceylon) PLC review the carrying amount of deferred income tax assets at each balance
sheet 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 income tax asset to be utilised.
Company measures Deferred income tax assets and liabilities at the tax rates that are expected to be
applied to 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 balance sheet date.
Company recognises in equity the deferred income tax relating to items recognised directly in equity, and not
in the income statement.
17
Industrial Asphalts (Ceylon) PLC
accounting policies (continued)
31st March 2013
3.3 Post Balance Sheet EventsIndustrial Asphalts (Ceylon) PLC consider all material events occurring after the balance sheet date and,
where necessary we make adjustments or disclosures to these financial statements.
3.4 Cash & Cash EquivalentsCompany considers highly liquid investment instruments with an original maturity of three months or less
to be cash & cash equivalents.
For the purpose of cash flow statement, cash and cash equivalents consist of cash in hand and deposits in
banks net of outstanding bank overdrafts. Investments with short maturities as defined above are also
treated as cash equivalents.
3.5 Property, Plant, & EquipmentCompany states property, plant & equipment at cost, excluding the costs of day to day servicing, less
accumulated depreciation and accumulated impairment in value. Such cost includes the cost of replacing
part of the plant and equipment when that cost is incurred, if the recognition criteria are met.
Subsequent CostThese are costs that are recognised in the carrying amount of an item if it is probable that the future
economic benefits embodied within that part will flow to the company and it can be measured.
Restoration CostExpenditure incurred on replacement, repairs or maintenance of Property, Plant & Equipment in order to
restore or maintain the future economic benefits expected from the originally assessed standard of
performance is recognised as an expense when incurred.
DerecognitionCompany derecognises an item of property, plant and equipment upon disposal or when no future economic
benefits are expected from its use or disposal. 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
included in the income statement in the year the asset is derecognised.
Depreciation
Company calculates the provision for depreciation using written down value basis to write down cost of
property, plant & equipment to their residual values over following useful lives. We do not depreciate land.
Asset Percentage
Plant & Machinery 10%
Office, Computer Equipment 25%
Motor Vehicle 25%
Building 2%
Other Equipment 25%
Company now determines the depreciation charge separately for each significant part of an item of property,
plant and equipment and begins to depreciate when it is available for use, rather than adopting a method
whereby property, plant and equipment are depreciated fully in the year of disposal with no such charge
being accounted for in the year of purchase.
3.6 Intangible Assets
Basis of Recognition
An Intangible Asset is recognized if it is probable that future economic benefits that are attributable to the
asset will flow to the entity and the cost of the asset can be measured reliably in accordance with LKAS 38
‘Intangible Assets’. Accordingly, these assets are stated in the Balance Sheet at cost, less accumulated
amortization and accumulated implement losses, if any.
18
Industrial Asphalts (Ceylon) PLC
accounting policies31st March 2013
Subsequent Expenditure
Subsequent expenditure on Intangible Assets is capitalised only when it increases the future economic
benefits embodied in these assets. All other expenditure is charged to the Income Statement when incurred.
Useful Economic Lives, Amortization and Impairment
The useful lives of Intangible Assets are assessed to be either finite or indefinite. The company does not
possess intangible assets with indefinite useful lives. Useful economic lives, amortization and impairment
of finite and indefinite intangible assets are described below:
Intangible Assets with Finite Lives and Amortization
Intangible Assets with finite lives are amortized over the useful economic lives. The amortization period and
the amortization method for an intangible asset with finite useful life are reviewed at least at each Balance
Sheet date. Changes in the expected useful life or the expected pattern of consumption of future economic
benefit embodied in the asset are accounted for by changing the amortization period or method, as
appropriate, and are treated as changes in accounting estimates. The amortization expense on intangible
assets with finite lives is recognised in the Income Statement as an expense.
Computer Software
All computer software costs incurred, licensed for use by the Company, which are not integrally related to
associated hardware, which can be clearly identified, reliably measured and it Is probable that they will lead
to future economic benefits, are included in the Balance Sheet under the category of intangible assets and
carried at cost, less accumulated amortization and accumulated impairment losses, if any.
Amortization of Intangible Assets
Intangible assets are amortized using the straight line method to write down the cost over its estimated
useful economic lives. Effective rates are as follows:
Class of Assets % per Annum
Software 50%
The unamortized balances of intangible Assets with finite lives are reviewed for impairment whenever there
is an indication for impairment and recognised as expenses in the Income Statement to the extent that they
are no longer probable of being recovered from the expected future benefits.
Derecognition of Intangible Assets
Intangible assets are derecognised on disposal or when no future economic benefits are expected from
its use. Gains or losses arising from recognition of an intangible asset are measured as the difference
between the net disposal proceeds and the carrying amount of the asset and are recognised in the
Income Statement.
3.7 Inventories
Inventories are valued at the lower of cost or net realisable value after making due allowances for obsolete
and slow moving items, Net realisable value is the price at which inventories can be sold in the ordinary
course of business less estimated cost of completion and estimated cost necessary to make the sale.
The cost incurred in bringing inventories to its present location and conditions are accounted using the
following cost formulae;
Raw Material – At actual cost on weighted average cost basis.
Finished Goods
Work in Progress– At the cost of direct materials fixed labour and an appropriate proportion of
manufactory overheads based on normal capacity.
Goods in Transit – At actual cost.
}
19
Industrial Asphalts (Ceylon) PLC
3.8 Liabilities and Provisions
3.8.1 ProvisionsWhen company has a present obligation (legal or constructive) as a result of a past event, where it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation
and the company can reliably estimate the amount of the obligation, we recognise it as a provision in
accordance with LKAS 37 - Provisions, Contingent Liabilities and Contingent Asset.
3.8.2 Retirement Benefit Obligations
a) Defined Benefit Plan – GratuityGratuity is a Defined Benefit Plan. The Company is liable to pay gratuity in terms of the relevant statute.
In order to meet this liability, a provision is carried forward in the balance sheet, in a manner computed
using the prescribed formula in appendix E of LKAS 19. The resulting difference between brought
forward provision at the beginning of a year and the carried forward provision at the end of a year is
dealt within the income statement.
However, under the payment of gratuity Act No. 12 of 1983, the liability to an employee arises only on
completion of 5 years of continued service.
The gratuity liability is not funded nor actuarially valued.
b) Defined Contribution Plans – Employees’ Provident Fund & Employees’ Trust Fund
Employees are eligible for Employees’ Provident Fund Contributions and Employees’ Trust Fund
Contributions in line with the respective statutes and regulations. The Company contributes 12 % and
3 % of gross emoluments of employees to Employees’ Provident Fund and Employees’ Trust Fund
respectively.
3.9 Income Statement
Revenue Recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company
and the revenue and associated costs incurred or to be incurred can be reliably measured. Revenue is
measured at the fair value of the consideration received or receivable net of trade discounts and sales taxes.
The following specific criteria are used for the purpose of recognition of revenue.
a) Sale of Goods
Revenue from the sale of goods is recognised when the significant risks and rewards or ownership of
the goods, have passed to the buyer, usually on dispatch of the goods.
b) Interest
Revenue is recognised on a time proportion basis that takes into account the effective interest rate on
asset.
c) Dividends
Dividend Income is recognised when the shareholders’ right to receive the payment is established.
d) Rental incomeRental income arising on investment properties is accounted for on a straight-line basis over the
lease terms.
h) OthersOther income is recognised on an accrual basis.
accounting policies (continued)
31st March 2013
20
Industrial Asphalts (Ceylon) PLC
notes to the accounts31st March 2013
2013 2012Rs. Rs.
01 REVENUERepresents the final invoiced value of the goods net of all discount & rebate.
Segmental Analysis of SalesManufactured Product 26,221,309) 26,350,830)Traded Product 39,787,423) 48,572,149)
66,008,732) 74,922,979)
02 OTHER OPERATING INCOMEBank interest on the short term deposits, dividend income and profit on sale of investments.Interest on Fixed Deposits 39,740) 34,832)Investment income 7) 7)Profit on Sale of Investment –)))) 151,192)Sundry income 41,755) 6,900)Investment write off (107) (3,695)
81,395) 189,236)
03 OPERATING PROFIT is stated after chargingDirectors Remuneration 90,000) 100,000)Depreciation 1,593,723) 1,741,039)Staff Cost ( Note 03.1 ) 6,625,461) 5,906,493)Audit Fees 101,819) 90,970)
03.1 Staff CostSalaries,Wages,Bonus 5,732,383) 5,208,569)E.P.F. & E.T.F. - Defined Contribution Plan 688,506) 565,097)Gratuity - Defined Benefit Plan 204,572) 132,827)
Total 6,625,461) 5,906,493)
04 FINANCE COSTImport loan interest 2,450,413) 1,658,973)Loan interest 244,769) 18,139)Debit Tax –)))) 10,763)Bank Charges 54,300) 59,637)Overdraft Interest 2,371) –)))))
2,751,853) 1,747,511)
05 INCOME TAX EXPENSECurrent Income tax 12% 318,042) 461,383)Deferred taxation Charge 239,384) (925,118)
557,426) (463,735)
05.1 Reconciliation of the Accounting Profit and Taxable ProfitAccounting Profit 1,969,934) 2,977,526)Aggregate Disallowed Items 1,947,814) 2,143,138)Aggregate Allowable Expenses (1,307,139) (1,310,637)Aggregate Allowable Income 39,740) 34,832)Taxable Profit 2,650,349) 3,844,859)Statutory Income tax Rate % 12%) 12%)Income Tax expenses 318,042) 461,383)Effective tax rate ( Excluding deferred tax ) 16.1) 15.5)
05.2 Deferred Tax has been computed using the current effective tax rate.
21
Industrial Asphalts (Ceylon) PLC
notes to the accounts (continued)
31st March 2013
06 BASIC EARNING PER SHAREBasic earning per share is calculated by dividing the net profit for the year attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year.
2013 2012Rs. Rs.
Amount used as the numeratorNet profit attributable to equity share holders of the company 1,412,509 3,437,566
Number of ordinary shares used as the denominatorWeighted average number of ordinary shares 666,562 666,562Basic Earning Per Share (Rs.) 2.12 5.16
07 DIVIDENDSDividend Interim –)))) 999,843Final 1,333,124 999,843
1,333,124 1,999,686
Dividend per Share Rs.2.00 Rs. 3.00Dividend payout ratio 0.96 0.58
Dividend Proposed/Payable
The proposed first & final dividend of Rs.2.00 for the year ended 31.03.2013.in accordance with Sri lankaAccounting Standards No. 10 (LKAS 10) Event after the balance sheet date this proposed final dividend hasnot been recongnised as a liability at 31.03.2013 however in computing the dividend per share this proposeddividend has been taken into consideration.
08 PROPERTY, PLANT & EQUIPMENT
Plant & Motor Office Total
Building Machinery Vehicles Equipment
FREEHOLD ASSETS
Cost /Valuation
Balance as at 1st April 2012 34,499,999 9,585,134) 5,197,148) 2,457,006 51,739,287)
Additions 30,000 275,709) –))))) 16,591 322,300)
Revaluation –))))) 10,089,657) (1,148,160) –))))) 8,941,497)
Disposals –))))) –))))) –))))) –))))) –)))))
Balance as at 31st March 2013 34,529,999 19,950,500) 4,048,988) 2,473,597 61,003,084)
DepreciationBalance as at 1st April 2012 859,050 7,152,726) 3,151,789) 1,801,685 12,965,250)
Charge for the Period 673,419 244,098) 511,340) 164,866 1,593,723)
Disposals –))))) –))))) –))))) –))))) –)))))
Revaluation –))))) (7,396,824) (2,050,667) –))))) (9,447,491)
Balance as at 31st March 2013 1,532,469 –))))) 1,612,462) 1,966,551 5,111,482)
W.D.V. as at31st March 2012 33,640,949 2,432,408) 2,045,359) 655,321 38,774,038)
W.D.V. as at31st March 2013 32,997,530 19,950,500) 2,436,526) 507,046 55,891,603)
22
Industrial Asphalts (Ceylon) PLC
notes to the accounts (continued)
31st March 2013
8.1 Revaluation of Property Plant & Equipment
The building was revalued during the financial year 2010/2011 and Plant & Machinery, Motor Vehicle were
revalued during the financial year 2012/2013 by an independent valuer. The result of that revaluation was
incorporated in this financial statement. Such assets were valued on an open market value for an existing
use basis. The surplus arising from the revaluation was transferred to revaluation reserve.
The carrying amount of revalued assets, that would have been included in the financial statements, had the
assets been carried at cost are as follows
Class of Asset Cost Cumulative Net Carrying Net Carrying
Rs. Depreciation Amount 2013 Amount 2012Rs. Rs. Rs.
Freehold buildings 8,617,188 2,894,318) 5,722,871) 5,895,214)
Plant & Machinery 9,860,843 7,396,824) 2,464,019) 2,432,408)
Motor Vehicles 5,197,148 3,663,129) 1,534,019) 2,045,359)
For the year ended 31st March 2013 2012 2011Rs. Rs. Rs.
09 OPERATING LEASE
Land 3,858,030) 3,858,030) 3,858,030)
Less: Amortization (1,130,130) (1,091,160) (1,052,190)
Balance as at 31st March 2,727,900) 2,766,870) 2,805,840)
10 INTANGIBLE ASSETS
Software 43,350) –))))) –)))))
Less: Amortization (21,675) –))))) –)))))
Balance as at 31st March 21,675) –))))) –)))))
11 INVENTORIES
Raw Materials 19,801,716) 12,886,029) 9,130,131)Finished Goods 4,859,811) 5,750,832) 8,244,027)Work in Progress 2,021,382) 3,708,562) 4,155,747)Import in Suspense –))))) 1,399,947) –)))))
26,682,909) 23,745,370) 21,529,905)
12 TRADE & OTHER RECEIVABLES
Trade Debtors 22,433,643) 19,885,494) 20,002,390)Defence levy 13,453) 13,452) 13,452)Staff Loan 7,500) –))))) –)))))Income Tax Overpayment 175,797) (32,644) 25,256)Deposits Advances & Prepayments 3,150,374) 3,584,035) 3,678,224)
25,780,767) 23,450,336) 23,719,322)
23
Industrial Asphalts (Ceylon) PLC
notes to the accounts (continued)
31st March 2013
FOR THE YEAR ENDED 31ST MARCH 2013 2012 2011Rs. Rs. Rs.
13 SHORT TERM INVESTMENTFixed Deposit 375,000.00 375,000 375,000
Investment in Equity Securities
Unquoted InvestmentExchemie Limited –))))) –))))) 1,038,445
Quoted InvestmentEquities (Note 13.1) 3,523 3,629 7,324
378,523 378,629 1,420,769
13.1 Equities (Quoted)
As at 31 March 2013 2012 2011No of Cost Market No of Cost Market No of Cost Market
Shares Rs. Value Shares Rs. Value Shares Rs. Value
Union Bank PLC 200 5,000 3,400 200 5,000 3,500 200 5,000 7,160Laughf Gas Ltd 5 115 123 5 115 129 5 115 164
205 5,115 3,523 205 5,115 3,629 205 5,115 7,324
2013 2012 2011Rs. Rs. Rs.
14 CASH & CASH EQUIVALENTSFavourable Balance
Cash at Bank 2,311,792 3,572,656 1,885,286Cash in Hand 4,960 7,002 6,000
2,316,752 3,579,658 1,891,286
15 STATED CAPITAL
Authorised2,500,000 ordinary shares of Rs.10/- each 25,000,000 25,000,000 25,000,000
Issued called up and fully paid666,562 Ordinary Shares of Rs.10/- each 6,665,620 6,665,620 6,665,620
16 DEFERRED TAX LIABILITIES
Balance as at 1st April 4,725,746 5,650,863 3,405,658Deferred tax on revaluation 2,206,679 –))))) 1,918,207Provision / (Reversal) made during the Year 239,384 (925,118) 326,999
7,171,808 4,725,745 5,650,863
17 RETIREMENT BENEFIT OBLIGATION - GRATUITY
Balance as at 1st April 864,112 731,285 692,926Provision made during the year 204,572 132,827 302,608Payment made during the year (119,350) –))))) (264,249)
949,334 864,112 731,285
The Key assumptions used by the actuary includes the followingRate of interest 12% 12% 12%Average Salary increment rate 3% 3% 3%Staff Turnover factor 4% 4% 4%Retirement age 55 years 55 years 55 years
24
Industrial Asphalts (Ceylon) PLC
18 TRADE & OTHER PAYABLESAccrued Expenses 749,504 763,508 874,957E.S.C Payable –))))) –))))) 124,510Security Deposit 58,972 58,972 –)))))Dividend Payables 948,385 884,665 819,147
1,756,861 1,707,145 1,818,614
19 POST BALANCE SHEET EVENTSSubsequent to the Balance sheet date , no circumstances have arisen which require adjustments to ordisclosure in these Financial Statements
20 CAPITAL COMMITMENT & CONTINGENCIESThere were no material capital commitments as at 31st March 2013.
21 EXPLANATION OF TRANSITION TO NEW SRI LANKA ACCOUNTING STANDARDS (SLAS)In preparing its opening new SLAS Statement of Financial Position, the company has adjusted amountsreported previously in Financial Statements prepared in accordance with the previous SLAS. An explanationof how the transition from previous SLAS has affected the company’s financial position and financialperformance is set out in the following tables and notes.
Reconciliation of Equity as at 01 April 2011 (Date of Transition to SLFRS)
Previous Effect of transition New SLFRS/LKAS
SLAS (Rs.) to SLAS (Rs.) (Rs.)
NON-CURRENT ASSETSProperty, Plant and Equipment 39,623,719 –)))) 39,623,719Lease Hold Land 2,805,840 –)))) 2,805,840
TOTAL NON CURRENT ASSETS 42,429,559 –)))) 42,429,559
CURRENT ASSETSInventories 21,529,905 –)))) 21,529,905Trade & Other Receivables 23,694,066 –)))) 23,694,066Short Term Investment 1,418,560 (2,209) 1,420,769Income Tax Refund 265,765 –)))) 265,765Cash & Cash Equivalents 1,891,286 –)))) 1,891,286
TOTAL CURRENT ASSETS 48,799,582 (2,209) 48,801,791
TOTAL ASSETS 91,229,141 (2,209) 91,231,350
EQUITY AND LIABILITIESCAPITAL AND RESERVESStated Capital 6,665,620 –)))) 6,665,620Revaluation Reserve 29,930,354 –)))) 29,930,354General Reserve 15,141,299 –)))) 15,141,299Retained Earnings 17,937,810 (2,209) 17,940,019
Share holders Interest 69,675,083 (2,209) 69,677,292
NON-CURRENT LIABILITIESDeferred Tax Liabilities 5,650,863 –)))) 5,650,863Retirement benefit obligation - Gratuity 731,285 –)))) 731,285Term Loan 1,500,000 –)))) 1,500,000Commission Retained 119,598 –)))) 119,598
TOTAL NON CURRENT LIABILITIES 8,001,746 –)))) 8,001,746
CURRENT LIABILITIESTrade & Other Payables 999,467 –)))) 999,467Dividend Payables 819,147 –)))) 819,147Term Loan 500,000 –)))) 500,000Import Loans 11,233,698 –)))) 11,233,698
TOTAL CURRENT LIABILITIES 13,552,312 –)))) 13,552,312
TOTAL EQUITY AND LIABILITIES 91,229,141 (2,209) 91,231,350
2013 2012 2011Rs. Rs. Rs.
notes to the accounts (continued)
31st March 2013
25
Industrial Asphalts (Ceylon) PLC
Holdings No. of Total % %Shareholders Shareholding 2013 2012
1 - 1,000 409 74,941 11.2 7.4
1,001 - 10,000 30 77,644 11.7 13.7
10,001 - 100,000 2 73,246 11.0 12.8
100,001 - and Over 1 440,731 66.1 66.0
442 666,562 100 100
MAJOR SHAREHOLDERS AS AT 31ST MARCH 2013
Shareholders No. of shares % %
2013 2012 2013 2012
Sigma Holdings (Pvt) Ltd 440,731 440,221 66.1 66.0
Dr T Senthiverl 43,500 43,500 6.5 6.5
K S Somapala 29,746 29,746 4.5 4.5
D S S Kumara 7,436 7,436 1.1 1.1
D P Kumara 7,436 7,436 1.1 1.1
H W M Woodward 6,932 6,932 1.0 1.0
M M A Latiff 6,253 6,253 0.9 0.9
R M S Banda 4,180 800 0.6 0.1
R Udalagama 4,000 4,000 0.6 0.6
Dr M A M Arafath Akram 3,500 –)) 0.5 0.0
R G G Wijesuriya 2,935 –)) 0.4 –)
J Mylvaganam 2,466 2,466 0.4 0.4
The Estate of the late Mr A Y S Gnanam 2,254 2,254 0.3 0.3
S G N Herath 2,222 500 0.3 0.1
D Ekanayake 2,006 2,006 0.3 0.3
C C Gunawardena 2,000 2,000 0.3 0.3
D M Fernando 2,000 2,000 0.3 0.3
E De Silva 1,986 1,986 0.3 0.3
B R M S Gnanaratne 1,960 1,000 0.3 0.2
W H R C Wijesooriya 1,800 3,000 0.3 0.5
2013 2012Rs Rs
NET ASSET VALUE PER SHARE 129.72 106.11
MARKET VALUE PER SHAREHighest during the year 239.90 558.00
Lowest during the year 180.55 310.60
As at 31st March 199.00 395.00
PERCENTAGE OF SHARES HELD BY THE PUBLIC 34% 34%
DISTRIBUTION OF SHAREHOLDERS AS AT 31 MARCH 2013
26
form of proxy
I/We, the undersigned ....................................................................................... being a member/s of Industrial Asphalts
(Ceylon) PLC, hereby appoint ............................................. (name) of ............................................................................
(address)
J V R Joseph of Colombo (or failing him)
S R Ekanayake of Battaramulla (or failing him)
M C P Fernando of Chilaw (or failing him)
as my/our proxy to represent me/us and to vote for me/us and on my/our behalf for/or against the resolution and/or
to speak at the Annual General Meeting of the Company, to be held on 27th September 2013 and at any adjournment
thereof and at every poll which may be taken in consequence thereof
For Against
1. To receive the Audited Financial
Statements and the Report of the Directors
for the year ended 31st March 2013
2. To declare a first and final dividend of . Rs. 2.00 per share
3. To re-elect Mr M C P Fernando who retires pursuant to
to article 90 of the Articles of Association of the Company
4. To reappoint Cecil Arsecularatne & Co as Auditors of the
Company and to authorise the Directors to fix their
remuneration
5. To authorise Directors to determine contributions
towards donations.
............................................................
Signature
Signed this…….. day of ……….… 2013
Instructions as to the completion of Proxy Form
A member is entitled to appoint a proxy to attend and vote in is/her/their place.
A proxy holder need not be a member of the Company.
A member wishing to vote by proxy at the meeting may use the form enclosed and interpolate the ‘right to
speak’.
To be valid, the completed form of proxy must be lodged at the registered office of the Company not less than
48 hours before the meeting.
In the case of a Company /corporation the proxy must be under it’s Common Seal, which should be
affixed and attested in the manner prescribed by its Articles
Industrial Asphalts (Ceylon) PLC